New federal money for child care, flowing to the states as a result of the landmark 1990 child care legislation, titled the Child Care and Development Block Grant Act, has prompted states to make significant improvements in state child care programs and policies. Based on a national survey conducted in 1993 by the Children's Defense Fund (CDF), this digest reviews ways that states are using federal funds to invest in child care quality and supply. The digest focuses on eight areas of child care needs: (1) licensing and monitoring; (2) resource and referral services; (3) child care for infants, school-age children, and special needs children; (4) child care for low-income families; (5) comprehensive and enriched services; (6) training for providers; (7) salaries; and (8) statewide planning. The CDF report indicated that block grant money has been used by states to provide grants to providers to help them meet licensing requirements; to expand or improve programs for children with special needs; to raise reimbursement rates to low-income families; to supplement Head Start programs by enriching program services or extending program hours; to fund training for rural providers and pay for providers' coursework toward credentials or degrees; and to create advisory committees for implementing the block grant. Despite these gains, the need for child care assistance remains huge. Federal, state, and local governments must collaborate with the private sector, religious organizations, and volunteer groups to meet the child care needs of low-income families. (BC)