Child Care Modernization Act of 2026
- Sponsor
- Rep. Mackenzie, Ryan [R-PA-7]
- Committees
- Financial Services Committee (primary)
- Last action
- Jun 9, 2026
Bottom line
The bill reauthorizes and significantly updates the Child Care and Development Block Grant Act, aiming to increase access to affordable, high-quality child care through expanded eligibility, improved payment practices, and new infrastructure grants.
What it actually does
This bill reauthorizes the Child Care and Development Block Grant (CCDBG) Act of 1990, updating its purposes to emphasize parental choice, mixed delivery systems, and workforce support. It expands the definition of eligible activities for parents and introduces a new family asset limit for eligible children. Crucially, it mandates that states adopt statistically valid cost estimation models for child care provider payment rates by 2032 and establishes a new federal grant program for child care supply expansion and facility improvements.
Proponents argue
Supporters argue that the bill is essential for modernizing the nation's child care system, addressing critical issues of affordability, access, and quality. They contend that by mandating cost-based payment rates, the bill will stabilize the child care workforce and ensure providers can offer high-quality care. The new grants for supply and facilities are seen as vital for expanding options, especially in underserved areas, and promoting parental choice through a mixed delivery system.
Opponents contend
Potential critics may raise concerns about the significant increase in federal spending implied by the 'such sums as may be necessary' authorizations, particularly given the new mandates for states to adopt cost-based payment models. Some may also argue that the bill imposes excessive federal mandates on states, potentially increasing administrative burdens and reducing state flexibility, despite provisions aimed at preventing federal control over specific models. The new asset limit for eligible children could also be a point of contention.
The bill is 15 pages long and introduces several significant changes to an existing federal program. An informed reader would require approximately 15-20 minutes to understand its provisions, which is a reasonable amount of time for a bill of this scope.
Section 2. Purposes
Updated Purposes of the Child Care and Development Block Grant Act
This section updates the core objectives of the CCDBG Act. It emphasizes giving states maximum flexibility to create diverse child care systems, promoting parental choice, and encouraging consumer education. The updated purposes also focus on delivering high-quality, coordinated child care that covers full workdays and work years, supporting continuity of care, improving overall quality through health and safety standards, and assisting states in developing and retaining a qualified child care workforce.
Supporters argue
Supporters argue that updating the purposes ensures the CCDBG Act remains relevant and responsive to current child care challenges, such as the need for flexible, high-quality care that supports working families and a stable workforce.
Critics contend
No specific opposition is typically raised against updating the stated purposes of an act, though some might argue that the new language could be interpreted in ways that favor certain types of child care models over others.
Tradeoffs
The bill balances state flexibility with federal priorities for quality and workforce support, aiming to achieve both without being overly prescriptive.
Section 3. Definitions
Expanded Eligible Activities and New Asset Limit for Eligible Children
This section broadens the scope of activities that qualify a parent for child care assistance, including health treatment, child abuse/neglect prevention, SNAP and WIOA employment and training activities, and taking FMLA or equivalent leave. It also introduces a new family asset limit of $1,000,000 for an 'eligible child' to qualify for services, certified by a family member. Additionally, it defines 'mixed delivery system' to promote diverse child care options.
Section 6. Application and Plan
Mandated Cost Estimation Model for Child Care Payment Rates
This provision mandates that by September 30, 2032 (or 5 years after application submission), states must ensure child care payment rates are sufficient to cover the full cost of providing services, including fixed and operational costs. These rates must be set using a statistically valid and reliable cost estimation model. The model must account for service delivery costs, staff salaries and benefits, and variations based on geography, child age, special needs, non-traditional hours, and provider quality. The model must be reviewed and adjusted every two years, including for cost-of-living increases.
Section 6. Application and Plan
Revised Sliding Fee Scale and Support for Fixed Costs
This section requires states to establish and periodically revise a sliding fee scale for parent copayments that is explicitly 'not a barrier that restricts families from accessing child care services'. It also mandates that states implement enrollment and eligibility policies that support the fixed and operational costs of child care providers, moving beyond just variable costs.
Section 12. Child Care Supply and Facilities Grants
New Child Care Supply and Facilities Grant Program
This section establishes a new federal grant program to provide funds to states, territories, and Indian Tribes for expanding the supply and capacity of qualified child care providers and improving child care facilities. It authorizes 'such sums as may be necessary' for fiscal years 2028 through 2031. States must submit plans detailing how they will use funds for state-level activities (up to 10%) and subgrants to providers for startup/expansion costs, meeting health/safety/licensing standards, establishing family child care networks, and supporting care in shortage areas. Subgrants are also available for remodeling, renovation, repair, or construction of child care facilities, with limitations on federal interest in real property.
Section 9. Reports and Audits
Additional State Reporting Requirements
This section adds new annual reporting requirements for states. They must submit information on the percentage of income families spend on child care, including those eligible but not receiving assistance, and conduct a feasibility study on how to lower copayments and increase access over the next five years. States must also submit a progress report analyzing their performance over the preceding 10 years against benchmarks related to child and family eligibility, affordability, parental choice, payment rates, workforce, quality, and program integrity.
Introduces a family asset limit of $1,000,000 for an 'eligible child' to qualify for child care assistance, with certification by a family member.
Section 3(a)(3)(E)
Why it matters:While definitions sections are common places for eligibility criteria, the introduction of a specific asset limit is a substantive policy change that could easily be overlooked by a casual reader focusing on broader program reauthorization.
Case for: Proponents would argue that this asset limit ensures that federal child care subsidies are targeted to families with genuine financial need, preventing those with substantial wealth from accessing programs intended for lower-income working families.
Case against: Critics might argue that an asset limit, particularly one that includes non-liquid assets like home equity, could unfairly exclude families who are income-eligible but have accumulated modest wealth, creating a 'cliff effect' and adding administrative complexity for states.
Estimated impact: Potentially excludes a subset of families who are income-eligible but possess assets exceeding $1,000,000, shifting resources to families with fewer assets.
Requires states to implement enrollment and eligibility policies that explicitly 'support the fixed and operational costs' of child care providers.
Section 6(c)(2)(S)(ii)
Why it matters:This is a technically phrased but substantively important shift. It's standard legislative practice to include such operational details in plan requirements, but its impact on state policy and provider stability is significant.
Case for: Proponents would argue that this ensures state policies directly contribute to the financial stability of child care providers, recognizing that fixed costs (like rent, utilities, and staff salaries) are incurred regardless of full enrollment, which is crucial for maintaining supply and quality.
Case against: No specific opposition is typically raised against this provision, as it aims to support provider stability, which is a widely shared goal. However, some might express concern if it leads to increased costs for states without adequate federal funding.
Estimated impact: Encourages states to design subsidy and enrollment policies that better reflect the economic realities of child care businesses, potentially leading to more stable provider operations.
Limits the federal interest in real property for facilities constructed, renovated, or improved with new grant funds. Specifically, it states federal law regarding federal interest shall not apply to privately owned family child care homes, and for other facilities, the federal interest shall not be retained for more than 10 years.
Section 12(f)(4)(C)
Why it matters:This is a technical but crucial detail for property owners and providers. It's buried because it addresses a specific legal and financial aspect of property ownership when federal funds are involved, rather than the primary policy goal of facility improvement.
Case for: Proponents argue that limiting federal interest removes a significant barrier for private child care providers, especially family child care homes, to utilize federal funds for facility improvements, encouraging greater participation in the grant program.
Case against: Some might argue that a longer federal interest period ensures greater accountability for federal investments in infrastructure, preventing facilities from being converted to other uses shortly after receiving public funds.
Estimated impact: Reduces financial and legal risk for private child care providers receiving facilities grants, potentially increasing uptake of the new grant program.