S. 1285 — Building Child Care for a Better Future Act

This section revises funding, allocation procedures, and related requirements for the Child Care Entitlement to States (CCES) under section 418 of the Social Security Act (i.e., mandatory funding transferred to CCDBG lead agencies for child care subsidies serving low-income working families). Specifically, it (1) sets the appropriation at $20 billion for FY2026 and, for each subsequent fiscal year, the greater of the prior year's amount or that amount increased by the CPI for all urban consumers (replacing the prior CPI-indexed appropriation from a lower base of approximately $3 billion), reserving 5% for Indian tribes and tribal organizations, 4% for territories, up to 0.5% for technical assistance and dissemination, and 0.5% for research, demonstrations, and evaluations; (2) requires redistribution of unused tribal grant amounts to other tribes and tribal organizations able to obligate them; (3) permits states to use current federal medical assistance percentages (FMAPs) for the federal share of expenditures (removing the prior requirement to use FMAPs as in effect on September 30, 1995, thus increasing the federal share for states with higher current FMAPs); and (4) makes technical and conforming amendments, including requiring CCES funds for states, territories, tribes, and tribal organizations to be subject to CCDBG Act requirements, and defining "Indian tribe," "State" (the 50 states and DC), "territory" (Puerto Rico, USVI, Guam, American Samoa, Northern Mariana Islands), and "tribal organization."

This section establishes grants to improve child care workforce, supply, quality, and access in areas of particular need by adding a new subsection (e) to section 418 of the Social Security Act (42 U.S.C. 618), exempt from other provisions of that section. (As background, section 418 authorizes Child Care and Development Block Grant (CCDBG) funding to states, territories, tribes, and tribal organizations to subsidize child care for low-income families and support quality improvements.) The section appropriates $5 billion annually for the grants, reserving (1) 5% for Indian tribes and tribal organizations, (2) 4% for territories, (3) up to 0.5% for technical assistance and dissemination under CCDBG, (4) 0.5% for a required evaluation, and (5) up to 3% for Department of Health and Human Services administrative expenses. It directs the Secretary to allot reservations for tribes and territories proportional to their respective needs and the remainder to states proportional to their CCDBG allotments under subsection (a). To receive a grant, a state's, territory's, tribe's, or tribal organization's lead agency must include in its CCDBG plan (or an amendment) (1) criteria and data for identifying areas of particular need; (2) community engagement to identify needs (e.g., diverse care types, infant/toddler care, multilingual care, nontraditional hours); (3) descriptions of targeted areas, including locations, scope, and age groups; and (4) planned uses of funds, such as contracting for child care slots with compensation expectations, expanding family child care networks, providing start-up funding and technical assistance, recruiting and training providers and staff (including apprenticeships, scholarships, and wage supplements), and supporting business practices and licensing.