Child Care Modernization Act of 2025

Bill Number

S. 2828

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Families

Status

Introduced

Latest Action

2026-03-19: Committee on Health, Education, Labor, and Pensions. Hearings held.

Last Updated

2026-07-01T22:09:15Z

AI-Generated Summary

Purpose of the Legislation

The Child Care Modernization Act of 2025 reauthorizes and updates the Child Care and Development Block Grant Act of 1990. Its main goal is to modernize child care services by giving states flexibility to create systems that meet local needs, promote parental choice, improve quality and safety, support child care workers, and expand access—especially for low-income families—to help parents work or pursue education while ensuring children receive high-quality care.

Key Provisions

• Purposes and Structure: Redesignates sections of the Act and outlines seven core purposes, including state flexibility for mixed delivery systems (a combination of public, private, faith-based, and community providers), empowering parents to choose care, providing consumer education, delivering coordinated full-day/full-year services, improving quality through standards, supporting child care staff development, and increasing low-income children's access to high-quality settings.

• Definitions: Updates key terms for clarity and expansion:
• Eligible activity: Broadens to include full- or part-time work, self-employment, job search/training, education (secondary, postsecondary, adult, or English classes), health/mental health/substance use treatment, family violence prevention, specific employment/training under other federal programs (e.g., SNAP, Workforce Innovation and Opportunity Act, TANF), and leave under the Family and Medical Leave Act or similar laws.
• Eligible child: Children under 13 whose family income is at or below 85% of state median income (or higher with a waiver), assets under $1 million, and who live with working/education-seeking parents, are homeless, in kinship/foster care, receiving child protective services, or with a parent over 65.
• Other terms: Defines "family child care provider" (home-based care for less than 24 hours/day per child, or 24 hours for shift workers), "homeless child" (per McKinney-Vento Act), "mixed delivery system" (diverse providers/settings funded publicly/privately), and expands eligibility for Head Start agencies and child care providers caring for their own children alongside others.

• Funding and Authorization: Authorizes "such sums as necessary" for fiscal years 2026–2030 to support child care services (excluding new supply grants). Adds a new Part II for child care supply and facilities grants, authorized for fiscal years 2027–2030, to expand provider capacity and improve facilities for health/safety and child development.

• State Plans and Administration:
• Lead agencies (state entities overseeing child care) must consult parents (especially of priority children like homeless or rural kids), providers, employers, local governments, and tribes when developing plans.
• Plans must support mixed delivery, provide education on care options (including hours/ages served and links to programs like Medicaid or home visiting), focus on professional development (not just training), review health/safety rules for redundancies, prioritize underserved children (e.g., in poverty/unemployment areas, rural, homeless, foster/kinship care, or needing protective services), ensure full workday/year services, use cost-covering payment rates via a new model (see below), and include benchmarks for progress on eligibility, affordability, workforce, and quality.
• Sliding fee scale for families: Based on income, revised periodically, and designed not to block access (reduced for part-time care).

• Payment Rates and Cost Model: By September 30, 2031 (or 5 years after plan submission), states must use a statistically valid cost estimation model for provider payments. Developed with input from providers/administrators, it must cover fixed/operating costs, staff salaries/benefits for recruitment/retention, variations by location (urban/rural), child age/needs (e.g., disabilities), hours (nontraditional), and quality. Reviewed every 2 years with cost-of-living adjustments. The federal government offers guidance but cannot mandate a specific model.

• Quality Improvement: States must spend at least 9% of funds on activities like recruiting/training/retaining child care staff and supporting provider networks/business practices (coordinated with SBA and USDA programs).

• Waivers and Access: Allows states to waive the 85% income limit to serve more families (up to higher thresholds), with streamlined renewal processes (up to 3 years). States must prioritize/continue serving lower-income families and meet plan requirements. Prohibits denying access or raising copays for eligible low-income children due to waivers.

• Reporting and Oversight:
• States submit annual reports on services, spending, and provider types; additional reports on families' child care costs (for non-subsidized eligible families), feasibility to lower copays/increase access, and 10-year progress on benchmarks (e.g., enrollment, affordability, workforce, quality).
• Secretary of Health and Human Services issues biennial reports and submits state data to Congress.
• Audits and integrity measures remain, with technical updates to funding references.

• New Supply and Facilities Grants (Part II):
• Grants to states, territories, tribes for subgrants to "qualified" providers (eligible or applying to serve subsidized children).
• Up to 10% for state admin/technical assistance; rest for subgrants.
• Startup/Expansion Subgrants: Cover costs to start/expand, meet health/safety/ratio/licensing/quality standards, build networks, or address shortages (e.g., nontraditional hours, disabilities). Providers commit to ongoing service for eligible children.
• Facilities Subgrants: Fund remodeling/renovation/construction of child care buildings (overrides some prior limits). No federal property interest in private family homes; limited 10-year interest in others. Providers commit to ongoing eligible service.
• Priorities: Providers serving underserved children (e.g., rural, homeless).
• States post funding notices/criteria online; ensure rural/suburban/urban access via technical assistance.
• Reporting: Annual state data on providers/slots added, subgrant details, usage; Secretary reports nationally to Congress.
• Funds supplement (not replace) other public spending.

• Other: Revises USDA rules to exclude licensed child care providers from certain loan restrictions.

Significant Changes to Existing Law

• Expansions: Broadens eligible activities/children (e.g., adds leave, treatment, postsecondary education; includes kinship/homeless/protective services kids without parental work requirement; raises asset limit to $1M). Introduces mixed delivery emphasis and new supply/facilities grants (previously limited).
• Payment Reforms: Mandates cost-based models (none before), ensuring rates cover full costs including workforce needs, with biennial reviews—replacing vague "market rate" surveys.
• Workforce and Quality: Shifts from "training" to "professional development"; requires minimum 9% spending on recruitment/retention (up from variable); adds business support and network initiatives.
• Priorities and Reporting: Adds specific underserved populations (e.g., rural, kinship); requires new reports on costs/access/progress/benchmarks; streamlines waiver renewals for income thresholds.
• Structural: Redesignates sections, adds Part II; removes some time limits on spending/consultations; ensures no federal control over cost models.
• Facilities: Allows construction/renovation funding (previously restricted to minor improvements).

Potential Impacts

• On Citizens: Increases affordable child care access for low-income/working families, potentially reducing barriers to employment/education, supporting family stability, and improving child outcomes through quality/safety standards. Expands options in shortages (e.g., rural/nontraditional hours), benefiting ~11 million eligible children, especially vulnerable groups.
• On Government Agencies: States face new planning/reporting burdens (e.g., cost models, benchmarks) but gain flexibility/funding for supply growth. Federal agencies (HHS, USDA) handle more oversight/grants/reports; tribes/territories get direct allotments. Could strain state budgets initially but enable long-term efficiency via reduced redundancies.
• On International Relations: None mentioned; focuses on domestic U.S. child care.

Main Stakeholders Affected

• Families and Children: Low-income working parents/guardians and children under 13, particularly priority groups (homeless, foster/kinship care, rural, protective services, disabilities).
• Child Care Providers: Centers, family homes, faith-based/community programs, Head Start agencies—gains funding for expansion/training but must meet standards and serve eligible kids.
• States and Lead Agencies: Responsible for plans, models, subgrants, consultations; receive block grants.
• Indian Tribes and Tribal Organizations: Eligible for direct grants/allotments, supporting culturally appropriate care.
• Employers: Benefit from reliable child care for employees, especially in varied work schedules.
• Federal Government: HHS oversees implementation/reports; USDA adjusts loan rules.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces federalism by granting state flexibility (e.g., no mandated cost model elements) while requiring certifications for funds, avoiding overreach. Ensures supplement-not-supplant rule to prevent displacing state funds; clarifies no denial of access for low-income via waivers, promoting equity under existing anti-discrimination laws (e.g., ADA for disabilities).
• Constitutional: Aligns with spending power for welfare (e.g., supporting work/education to reduce public assistance); no apparent free speech/religion issues, as mixed delivery includes faith-based providers without endorsement.
• Political: Bipartisan introduction (Fischer, Gillibrand, Collins, Hickenlooper) signals broad support for family/workforce policies. Emphasizes parental choice and workforce development, potentially appealing across ideologies, but new mandates (e.g., cost models by 2031) could spark debates on federal strings vs. state autonomy. Authorizations through 2030 provide long-term stability without specified amounts, leaving funding to appropriations process.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Fischer, Deb [R-NE]

Cosponsors (5)

Sen. Gillibrand, Kirsten E. [D-NY], Sen. Collins, Susan M. [R-ME], Sen. Hickenlooper, John W. [D-CO], Sen. Kelly, Mark [D-AZ], Sen. Britt, Katie Boyd [R-AL]

Recent Actions

• 2026-03-19: Committee on Health, Education, Labor, and Pensions. Hearings held.
• 2025-09-17: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
• 2025-09-17: Introduced in Senate

Bill Versions

• Child Care Modernization Act of 2025 — issued 2025-09-17 — PDF (43 pages)

Related Bills

• H.R. 9224 (119th Congress)