The amount of state legislation dealing with child care issues has significantly increased in the last 5 years. This report focuses on state strategies for expanding and improving the child care system through incentives and support for employers and providers. State policymakers are exploring partnerships of public and private resources for improving child care, including employer-supported child care. Employers who provide assistance with child care benefit from improved recruitment and retention of employees, and reduced absenteeism. State policymakers can provide incentives to employers; these include: (1) loan programs and grants for developing facilities; (2) corporate tax credits; (3) allocation of space by developers for facilities in new buildings; and (4) social insurance programs. Lawmakers are exploring personnel policies, such as job-protected leave for birth or illness of a child and means of providing information referral and technical assistance. Legislators can provide incentives for providers, including loan programs and grants, training programs, removal of zoning barriers, and subsidized provider salaries. Legislators can also encourage the use of state facilities by private providers. A list of enacted family leave legislation for six states is appended. (BC)