Child Care Modernization Act of 2025

The Child Care Modernization Act of 2025 amends the Child Care and Development Block Grant Act of 1990 to reauthorize and update the program. It revises the purposes, definitions, state planning, quality activities, waivers, reporting, and adds a new grant program for child care supply and facilities.

Sec. 2, Purposes: The bill restates the purposes of the child care block grant, emphasizing state flexibility, parental choice, consumer education, high-quality coordinated services, quality improvement, workforce support, and increasing the number of low-income children in high-quality care.

Sec. 3, Definitions: The bill updates definitions. 'Eligible activity' now includes a broad list such as employment, self-employment, job search, training, education, health treatment, family violence prevention, SNAP employment and training, Workforce Innovation and Opportunity Act activities, TANF work activities, and family leave. 'Eligible child' is defined as under 13, with family income at or below 85% of state median income (or higher with a waiver) and family assets under $1,000,000, and who resides with a parent in an eligible activity or is a child experiencing homelessness, in kinship care, or receiving child protective services. It also clarifies that a licensed provider who is a legal parent remains eligible for assistance for their own children if they also care for other eligible children.

Sec. 4, Authorization of Appropriations: The bill authorizes such sums as necessary for fiscal years 2026 through 2030 to carry out the child care services subchapter.

Sec. 5, Lead Agency: The lead agency developing the state plan must consult with parents of eligible children (including those in priority populations), eligible providers representing various areas and types, employers of various sizes and hours, and appropriate local government and Tribal representatives.

Sec. 6, Application and Plan: The bill makes numerous amendments to the state plan requirements. It adds 'eligible child' language, requires consumer education information on hours, days, and ages served, and references home visiting programs. It revises professional development provisions, requires a review of health and safety requirements to reduce redundancies, updates priority populations to include children in underserved, rural areas and those in foster care or kinship care, and mandates full workday and full work year services. It also requires enrollment and eligibility policies that support fixed and operational costs, and mandates implementation of developmental guidelines.

Sec. 7, Activities to Improve the Quality of Child Care: States must include activities to help providers recruit, train, and retain a qualified workforce. States must spend at least 9% of their quality funds on these activities each fiscal year.

Sec. 8, Waivers of Income Requirement: The bill revises waiver rules. A state can request a waiver to raise its income standard if it already meets the 85% standard. Renewal requests for income waivers can be for up to 3 years, and the Secretary must grant the renewal if the state re-certifies certain provisions. The waiver cannot be used to deny or limit access or increase copayments for children below the maximum income standard.

Sec. 9, Reports and Audits: States must prepare annual reports on child care providers. Additional reports are required on the percentage of income families spend on child care and a feasibility study on lowering copayments and increasing access. States must also submit a progress report on benchmarks over the preceding 10 years. The Secretary must report this information to Congress.

Sec. 10, Reports, Hotline, and Website: The Secretary must submit biennial reports to Congress on child care.

Sec. 11, Technical Amendments: The bill makes technical corrections to references in the Act.

Sec. 12, Child Care Supply and Facilities Grants: The bill creates a new grant program for states, territories, and Tribes to expand the supply and capacity of qualified child care providers and ensure facilities are safe and support child development. Funds are authorized for fiscal years 2027 through 2030. The Secretary reserves up to 1% for federal administration and allots the rest to lead agencies with approved plans. State plans must describe how funds will be used, ensure access for providers in rural, suburban, and urban areas, and prioritize subgrants.

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