Child Care Modernization Act of 2026

The Child Care Modernization Act of 2026 reauthorizes and updates the Child Care and Development Block Grant Act of 1990 through fiscal year 2031, expanding definitions of eligible activities and children, increasing quality spending requirements, and creating a new grant program for child care supply and facilities.

Sec. 2, Purposes: The bill updates the purposes of the law to emphasize state flexibility in mixed delivery systems, parental choice, consumer education, support for full workday and work year care, quality improvement, workforce development, and increasing low-income children in high-quality settings.

Sec. 3, Definitions: The bill expands the definition of 'eligible activity' to include self-employment, job search, education, health treatment, family violence prevention, SNAP and WIOA activities, TANF work activities, and family/medical leave. It defines 'eligible child' as under 13, with family income at or below 85% of state median income (or higher with a waiver) and assets under $1,000,000, and who meets certain residency or risk criteria. It also allows Head Start agencies as eligible providers and ensures a provider who is a legal parent remains eligible if also caring for other eligible children.

Sec. 4, Authorization of Appropriations: Authorizes such sums as necessary for fiscal years 2027 through 2031 for the child care services part of the Act.

Sec. 5, Lead Agency: Requires the lead agency to develop the state plan in meaningful consultation with parents of eligible children (including priority populations), eligible providers representing diverse areas and types, employers of various sizes and hours, and local government and Tribal representatives.

Sec. 6, Application and Plan: Amends state plan requirements to include information on hours/days of operation and ages served, coordination with home visiting programs, professional development (not just training), a review of health and safety requirements for redundancies, and priority populations including children in underserved, rural, homeless, foster, kinship care, or child protective services. It also requires full workday and work year services, enrollment policies supporting fixed costs, and developmental guidelines.

Sec. 7, Activities to Improve Quality: Requires states to include activities to help providers recruit, train, and retain a qualified workforce. It increases the minimum quality spending from 7% to 9% of funds each fiscal year.

Sec. 8, Waivers of Income Requirement: Allows states to request a waiver to raise the maximum income standard above 85% of state median income, subject to conditions including serving all eligible children below the standard, meeting state plan requirements, and using a cost estimation model for payment rates. Renewals are allowed for up to 3 years. The waiver cannot be used to deny or limit access or increase copayments for children below the standard.

Sec. 9, Reports and Audits: Requires states to submit annual reports and additional reports with their state plan on the percentage of income families spend on child care, a feasibility study on lowering copayments and increasing access, and a progress report on benchmarks over the preceding 10 years. The Secretary must report this information to Congress.

Sec. 10, Reports, Hotline, and Website: Requires the Secretary to report biennially instead of by a specific date.

Sec. 11, Technical Amendments: Makes technical corrections to cross-references in the Act.

Sec. 12, Child Care Supply and Facilities Grants: Creates a new grant program for fiscal years 2028-2031 to expand the supply and capacity of qualified child care providers and ensure facilities are healthy, safe, and support development. Grants are allotted to states, territories, and Tribes with approved plans. State plans must describe how funds will be used, ensure rural/suburban/urban access, prioritize subgrants, and make information public.

Sec. 13, Department of Agriculture Loan Restrictions: Directs the Secretary of Agriculture to revise a regulation to exclude businesses licensed as child care providers from certain loan restrictions.