S. 2828 — Child Care Modernization Act of 2025

This section redesignates section 658A of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9857)—which authorizes formula block grants to states for child care subsidies to low-income working families, quality improvements, and related activities—as section 658 and revises the Act's purposes by (1) adding requirements for states to develop and implement a mixed delivery system (i.e., center-based, family child care, and informal care) tailored to the needs of children and working parents (previously, flexibility in child care programs and policies for children and parents); (2) directing states to deliver high-quality coordinated child care services covering the full workday and work year while supporting continuity of care (previously, early childhood care and education services to maximize parents' options); (3) expanding quality improvement standards to include early learning and development and professional standards (previously, training standards); and (4) replacing the prior purpose of improving child care and child development with assisting states in supporting child care staff's educational and professional development and providers' recruitment, professional development, and retention of a qualified workforce.

This section revises definitions in the Child Care and Development Block Grant Act of 1990 (CCDBG)—which provides federal block grants to states, territories, and tribes for child care subsidies to support low-income working families—by redesignating the definitions section (sec. 658P) as sec. 658A and making the following changes: (1) replaces the definition of "eligible activity" to include full- or part-time employment, self-employment, job search or training, secondary/postsecondary/adult education, health treatment, child abuse/family violence prevention, specified employment and training activities under SNAP/WIOA/TANF, or family/medical leave (previously limited to work, job training/search, or education); (2) replaces the definition of "eligible child" to mean a child under age 13 whose family income does not exceed 85% of state median income (or higher under a waiver), assets do not exceed $1 million, and who resides with a parent in an eligible activity, experiences homelessness (as defined in sec. 725(2) of the McKinney-Vento Homeless Assistance Act, 42 U.S.C. 11434a(2)), is in kinship care or needs child protective services, or resides with a parent over age 65 (previously limited to children under 13 whose parent was working/training or in education/job search, with income/assets tests); (3) expands "eligible child care provider" to expressly include Head Start agencies notwithstanding income eligibility restrictions under the Head Start Act and permits licensed providers eligible under CCDBG to care for their own legal children alongside other subsidized children; (4) replaces the definition of "family child care provider" to mean an individual providing child care in a private residence for fewer than 24 hours per day per child, or 24 hours due to parental work schedules; (5) adds a definition of "homeless child" as an individual described in sec. 725(2) of the McKinney-Vento Act (42 U.S.C. 11434a(2)) (i.e., lacking a fixed, regular, adequate nighttime residence, including those sharing housing due to economic hardship, in motels/shelters, public places, or similar settings; and certain migratory children); (6) adds a definition of "mixed delivery system" as a parental choice-based system delivering services through diverse providers (e.g., faith-based/community-based, family homes, centers, Head Start, schools) supported by public/private funds; and (7) makes technical and conforming changes to definitions of "Indian tribe," "State," and "tribal organization," including minor punctuation and redesignations.

This section revises the authorization of appropriations for the Child Care and Development Block Grant Act of 1990—which provides federal block grants to states, localities, and tribes for child care subsidies and quality improvements primarily serving low-income working families—to such sums as may be necessary for each of FY2026 through FY2030 (from specified amounts of $2.360 billion for FY2015 escalating to $2.749 billion for FY2020), excluding section 658T.

This section revises state lead agency duties under the Child Care and Development Block Grant Act of 1990 by requiring the development of the state plan in meaningful consultation with (1) parents of eligible children, including those in priority populations; (2) child care providers representing various geographic areas and types; (3) employers of various sizes and operations whose employees rely on child care; and (4) local government representatives and, as appropriate, Indian Tribes and Tribal organizations. (Previously, consultation was required only with local government representatives.)

This section revises state plan requirements under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) as follows: (1) in paragraph (2), refines assurances on eligible child definitions, full diversity of child care services (including mixed delivery and home visiting programs), professional development (removing references to training), health and safety reviews (adding a new requirement to identify redundancies with state/local requirements, including under the child and adult care food program (42 U.S.C. 1766)), priority populations for subsidies (adding underserved/poverty areas, homeless/foster/kinship care/protective services children, and rural children), full workday/work year services, enrollment policies supporting fixed/operational costs, developmental guidelines, emergency/disaster coordination, child care business technical assistance (specifying management coaching, shared services, and coordination with other programs), and adding benchmarks tied to performance indicators; (2) in paragraph (3), requires the Secretary to prepare consumer education materials by September 30 each fiscal year (previously not later than such date) and updates priority population references; and (3) in paragraph (4), replaces prior subparagraphs (A)-(B) with a new certification that, by the later of five years after plan submission or September 30, 2031, state payment rates for child care services will be sufficient to cover fixed/operational costs and set via a cost estimation model.

This section revises state reservation requirements for Child Care and Development Block Grant (CCDBG) funds to improve child care quality by (1) requiring states to include, in such activities, developing and expanding initiatives to assist child care providers in recruiting, training, and retaining a qualified workforce; (2) setting the minimum reservation at not less than 9% of funds for each fiscal year (from 7% for the first and second full fiscal years after November 19, 2014; 8% for the third and fourth full fiscal years after that date; and 9% for the fifth and succeeding full fiscal years); and (3) applying the additional 3% reservation for infant and toddler care quality activities to funds received for each fiscal year (from those received not later than the second full fiscal year after November 19, 2014, and each succeeding full fiscal year). (Thus, states must now reserve a minimum of 12% of CCDBG funds for quality activities in all fiscal years, including earlier years previously subject to lower minimums.)

This section revises waiver authority under the Child Care and Development Block Grant Act of 1990 (CCDBG) (i.e., federal block grants to states for child care subsidies to low-income working families, with income eligibility generally capped at 85% of state median income for a family of the same size). Specifically, it (1) adds a new basis for waiver to exceed that 85% cap if the state is already at the cap and seeks to raise it; (2) requires waiver applications for such purpose to include the proposed new income standard, evidence of serving all eligible children below the current cap, compliance with specified state plan requirements, and use of a cost estimation model for payment rates; (3) establishes streamlined renewals of such income waivers for up to three years (with notice 30 days prior to expiration and re-certification of application elements, which the Secretary must approve if accurate); and (4) prohibits states from denying access to services or increasing copayments for eligible children below the waived income threshold as a result of the waiver. (As background, CCDBG waivers previously were limited to three years and did not include this basis for exceeding the income cap.)

This section modifies state reporting requirements under the Child Care and Development Block Grant Act of 1990 (CCDBG)—which provides federal funds to states for child care subsidies to low-income families to promote parental employment, job training, and education—by (1) revising the annual aggregate data report in paragraph (2) to require ongoing annual preparation and submission by states (eliminating the initial due date of one year after November 19, 2014) and updating cross-references from section 658P(6) to section 658A(7) and from section 658P(6)(B) to section 658A(7)(B); and (2) adding paragraph (3) to require, with each state plan under section 658E, (A) a report on the percentage of income spent on child care by families with eligible but unserved children, available affordable child care options for such families, and a feasibility study on lowering those families' copayments and increasing access for all eligible children over the next five years; (B) a progress report analyzing the prior 10 years' advancement on state plan benchmarks across nine indicators (child and family eligibility and enrollment; affordability; parental choice and equal access; payment rates and practices; recruiting, retaining, and compensating the child care workforce; quality improvement; lead agency coordination and partnerships; family outreach and consumer education; and program integrity and accountability); and (C) a Secretary's report to the Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Education and the Workforce compiling state-submitted information under (A) and (B).

This section revises the timing of the Secretary of Health and Human Services' reports to Congress on state child care programs under the Child Care and Development Block Grant Act (CCDBG Act) to require biennial submission (from not later than July 31, 2016, and biennially thereafter). (As background, the CCDBG Act provides formula block grants to states to subsidize child care for low-income working families, improve quality, and support provider training; the reports summarize state data, assess access to affordable child care, and determine state compliance with service priorities.)

This section makes technical amendments to the reservations under the Child Care and Development Block Grant Act by replacing references to the amount appropriated under "this subchapter" with "section 658B" (i.e., CCDF appropriations authorization) in provisions for (1) territories and possessions (up to 0.5%), (3) national toll-free hotline and website (up to $1.5 million), (4) technical assistance (up to 0.5%), and (5) research, demonstration, and evaluation (up to 0.5%).

This section establishes a new Child Care Supply and Facilities Grant program under the Child Care and Development Block Grant Act of 1990 (CCDBG), which provides federal funds to states, territories, and tribes primarily for child care subsidies to low-income working families. (As background, CCDBG also supports provider quality improvements and services for children eligible under programs such as Temporary Assistance for Needy Families.) The program authorizes appropriations of such sums as necessary for FY2027 through FY2030 to award grants to states, territories described in CCDBG section 658O(a)(1), Indian tribes, and tribal organizations. The Secretary of Health and Human Services reserves up to 1% of funds for federal administration and allots the remainder to eligible lead agencies using CCDBG section 658O(a)(1)-(2) formulas, consistent with state requirements. To receive grants, states must submit plans describing (1) use of funds for state-level activities; (2) ensuring access for rural, suburban, and urban qualified child care providers (i.e., CCDBG-eligible providers serving or committing to serve eligible children), including technical assistance; (3) subgrant prioritization; (4) public notice of funding and criteria; and (5) required service duration. Lead agencies reserve up to 10% of grant funds for administering subgrants and technical assistance and use the remainder for startup and supply expansion subgrants to qualified providers. Such subgrants support (1) startup and expansion costs; (2) meeting health, safety, ratio, licensing, regulatory, and quality rating standards; (3) establishing family child care networks; and (4) addressing child care shortages.

This section directs the Secretary of Agriculture to revise regulations governing the Single Family Housing Guaranteed Loan Program—under which USDA guarantees loans made by private lenders to low- and moderate-income households for homes in eligible rural areas—to exclude businesses licensed, regulated, or registered as child care providers under state law.