This report covers the major issues that states will face during the implementation of the Family Support Act (FSA) and outlines the relevant FSA provisions. Additionally, the experiences of states that have implemented work-welfare programs with child care provisions are discussed. A general introduction and an overview of the FSA precede the report's six main chapters. Chapter 1 covers assessment of the demand for child care. Chapter 2 addresses ways to build the child care system in response to the demands created by work-welfare programs. Chapter 3 focuses on the primary factors involved in state child care costs: federal funding and state reimbursement levels. Chapter 4 outlines options for child care delivery systems and chapter 5 focuses on transitional child care--one of the focal points of welfare reform. Chapter 6 discusses quality in child care, addressing the coordination of early intervention services, such as Head Start, within state welfare reform efforts. A concluding section explores the expected impact of the FSA on state child care systems, Aid to Families with Dependent Children parents, and the children of participants. (RH)