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WASHINGTON-A surge of legislative proposals would offer employers tax cuts for helping their workers obtain good child care services.

The U.S. Senate and three state legislatures are considering bills offering employers tax credit incentives to establish child care facilities or to provide related services, such as referrals.

"Unequivocally, this country needs more and better child care," said Marguerite W. Sallee, president and chief executive officer of CorporateFamily Solutions in Nashville. "Higher quality care is employer-sponsored care."

However, federal and state lawmakers must weigh the merits of the family-friendly proposals against the value of tax revenue lost through such credits. And the bill must compete against other tax-relief proposals, a consultant noted.

In Congress, Sen. Herbert Kohl, D-Wis., re-introduced his bill last month after an initial introduction in September.

S. 82, "The Child Care Infrastructure Act," would amend the Internal Revenue Code to provide a financial incentive to private businesses that:

Acquire, expand or repair an onsite or near-site day care center, after-hours care facility or sick-child facility.

Subsidize the operating costs of a child care facility.

Fund an employer's contract with a child care resource and referral service.

Reserve child care slots in a licensed child care facility for employees' children.

Train and provide continuing education programs for child care workers.

The bill offers employers a 50% credit on federal taxes for all eligible activities, capped at $150,000 annually. Most provisions would have three-year sunset clauses.

"The legislation gives flexibility to businesses that want to get involved in providing child care for their employees' dependents," Sen. Kohl said last month when he introduced the bill.

Businesses have a very personal stake in helping employees obtain good child care, he said.

"Employees who are happy with their child care situations are better employees. They are more productive, have less absenteeism and are more loyal to their company," Sen. Kohl said when he introduced his bill.

"Good child care is clearly very important for two reasons: It helps parents to work and concentrate on their jobs. It also helps children grow and develop into healthy, happy adults," said Barbara Reisman, executive director of the non-profit Child Care Action Campaign in New York City.

The need is great. In Wisconsin alone, 67% of women with children under six years old are in the workforce, yet there is only one accredited child care center for every 2,800 of these children, Sen. Kohl said in a statement. "Further, it is estimated that 70,000 children will need child care as a result of the work requirements created by Wisconsin's W-2 welfare reform plan," he added.

Nationally, the need for child care slots also is expected to swell as additional aid programs require able-bodied recipients to get jobs.

Even when good child care is available, it is often expensive and creates a financial burden on working parents.

Parents now pay an average of $75 per week for child care, though good-quality care costs $100 to $150, depending on the age of the child, said Ms. Reisman of the New York child care group.

Many large employers realize the situation and are helping workers with the cost of child care.

Most major employers provide employees with some type of child care benefit, primarily through a dependent care spending account, according to a 1996 survey by Hewitt Associates L.L.C. in Lincolnshire, Ill.

Under federal tax law, an employee may be able to obtain tax credits of 20% to 30% of child care expenses, depending upon his or her income and tax liability. The maximum credit is $2,400 for the first child and $4,800 for two or more children.

In addition, an employee typically can fund up to $5,000 of expenses through pretax contributions to flexible spending accounts, but those contributions would be used to offset the amount of the tax credit that would be available.

Proposals now being considered would create a financial incentive for businesses to help by reducing state tax liability.

State legislatures in Indiana, Ohio and Missouri also are considering similar tax credit programs, said Scott Greginski of the National Conference of State Legislators in Denver.

Eighteen states have passed a wide variety of such laws, according to a recent NCSL survey.

The proposals vary in scope and typically go beyond merely providing tax credits for building facilities, according to Mr. Greginski, who has been tracking the measures for the past six years.

For example, the bill pending in Ohio provides a 50% credit on state income or corporate franchise taxes to employers for establishing or operating an offsite center as well as a 50% tax credit to employers that directly reimburse employees for child day care costs. However, a 100% credit applies to employers that establish an onsite facility.

Sen. Kohl's bill is prompting the most comment from employers and consultants.

"My impression is (S. 82) would be a boon to midsized and smaller companies that are unsure of how to handle their employee needs balanced against their profit and loss margins," said a spokesman for AT&T Corp. in Basking Ridge, N.J.

A $150,000 cap, while helpful, is not as beneficial for larger employers like AT&T whose cost for work/family benefits runs into the millions of dollars, he said.

The bill would provide some help for companies such as International Business Machines Corp., Xerox Corp. and AT&T, "but for smaller companies, it could be what tips the balance in favor of offering a program for their people," the AT&T spokesman said.

"This bill will motivate employers to create child care facilities, greatly expanding the supply of child care," said Ms. Sallee of CorporateFamily Solutions. Government can no longer be expected to fund these services, but it can serve as a catalyst for more and better child care, Ms. Sallee continued. Any carrot the government is willing to give will help. This bill "is a wonderful carrot."

"This could make a big difference, especially for small employers," said Ms. Reisman of the New York child care group.

"A positive feature of (Sen. Kohl's) legislation is it seems to be pretty flexible in terms of the services it would allow the credit to be used for," said Frank McArdle, a Washington-based consultant with Hewitt Associates.

However, "there are a lot of tax credit proposals out there now," Mr. McArdle said. Sen. Kohl's bill, "while appealing, hasn't gotten first-tier attention because it is competing with other, more popular proposals," he said. Those other proposals include a $500 per child family tax credit and tax credit for providing health insurance to children needing medical care, he said.

"This (proposal) is interesting and should get an interesting debate under way," said Gwen Morgan, a consultant with WFD, a Boston-based consulting firm focusing on work and family issues. However, "it may be a little more generous to employers than most of the Congress would want."

Sally Roberts contributed to this story.