[House Report 119-591]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 119-591
======================================================================
STOP CHILD CARE FRAUD ACT OF 2026
_______
April 6, 2026.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Walberg, from the Committee on Education and Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 7725]
The Committee on Education and Workforce, to whom was
referred the bill (H.R. 7725) to amend the Child Care and
Development Block Grant Act of 1990 to require States disclose
agency regulatory participation under such Act, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop Child Care Fraud Act of 2026''.
SEC. 2. PROGRAM INTEGRITY AND ACCOUNTABILITY.
Section 658E(c)(2) of the Child Care and Development Block Grant Act
of 1990 (42 U.S.C. 9858c(c)(2)) is amended by adding at the end the
following:
``(W) Program integrity and accountability.--The plan
shall include a description of--
``(i) the State's internal controls to ensure
program integrity and accountability;
``(ii) the processes in place--
``(I) to investigate and recover
fraudulent payments; and
``(II) to impose sanctions on clients
or providers in response to fraud; and
``(iii) the procedures in place to document
and verify eligibility.
Such description shall include how the State utilizes
data within and across other State and local agencies
that have oversight of child care providers that serve
children who receive assistance under this
subchapter.''.
Purpose
The purpose of H.R. 7725, the Stop Child Care Fraud Act of
2026, is to combat siloed data related to child care
administration and monitoring. H.R. 7725 requires states, in
their annual plans submitted to the Department of Health and
Human Services (HHS) in order to receive Child Care and
Development Block Grant (CCDBG) funds, to describe their
internal program integrity controls, list all local agencies
with child care provider oversight responsibilities, and
outline data utilization practices across those local agencies.
Committee Action
119TH CONGRESS
First Session--Hearing
On June 24, 2025, the Committee on Education and Workforce
Subcommittee on Early Childhood, Elementary, and Secondary
Education held a hearing titled ``Child Care and the American
Workforce: Removing Barriers to Economic Growth.'' The purpose
of the hearing was to examine the CCDBG program as a worker
support program and consider reforms that will support existing
child care providers, continue to provide high-quality care to
children, uphold the value and dignity of work to parents, and
make fiscally responsible choices, including public-private
partnerships. Testifying before the Subcommittee were Mrs.
Caitlin Codella Low, Managing Director of Human Capital,
Bipartisan Policy Center, Washington, D.C.; The Honorable Todd
D. Barton, Mayor, City of Crawfordsville, Crawfordsville,
Indiana; Dr. Ruth Friedman, Senior Fellow, The Century
Foundation, Washington, D.C.; and Ms. Celia Hartman Sims,
President and Founder, The Abecedarian Group, Houston, Texas.
Second Session--Hearing
On January 13, 2026, the Committee on Education and
Workforce Subcommittee on Early Childhood, Elementary, and
Secondary Education held a hearing titled ``Who's Watching the
Kids? How Employers, Innovators, and Parents Are Solving
America's Child Care Crunch.'' The purpose of the hearing was
to examine the national child care landscape, including those
aspects governed by CCDBG, and consider fiscally responsible
ways to meet the American workforce's child care needs. At the
hearing, Representative Kevin Kiley (R-CA) stated, ``Protecting
the integrity of child care funding is essential. When bad
actors exploit the system, they divert resources from the
families these programs are meant to serve. Recent events
underscore the need for strong oversight and accountability at
every level.'' Testifying before the Subcommittee were Mr.
Haden Polseno-Hensley, President and Co-Founder, Red Rooster
Coffee Company, LLC, Floyd, Virginia; Ms. Alex Grover, Chief
Executive Officer, i2M, Mountain Top, Pennsylvania; Ms. Amy K.
Matsui, Vice President for Child Care and Income Security,
National Women's Law Center, Washington, D.C.; and Ms. Mary Lou
Burke Afonso, Chief Operating Officer, Bright Horizons, Newton,
Massachusetts.
Legislative Action
On February 26, 2026, Representative Michael A. Rulli (R-
OH) introduced H.R. 7725, the Stop Child Care Fraud Act. On
March 5, 2026, the Committee on Education and Workforce
considered H.R. 7725 in legislative session and reported it
favorably, as amended, to the House of Representatives by a
recorded vote of 35-0. The Committee considered the following
amendments to H.R. 7725:
1. Representative Rulli offered an amendment in the
nature of a substitute to make a technical change to
the bill. The amendment passed by voice vote.
2. Representative Summer Lee (D-PA) offered an
amendment to reauthorize CCDBG. The amendment failed by
a vote of 15-20.
Committee Views
INTRODUCTION
Child care is essential to helping working parents thrive
and to supporting the growth of local economies. CCDBG exists
to help working families access affordable child care, giving
them the freedom to remain in the workforce, increase their
economic opportunity, realize financial freedom, and move
beyond the need for a federal safety net--thriving independent
of government support. According to the National Center for
Education Statistics, there are approximately 12.6 million
children nationally who have nonparental care arrangements
during the week.\1\ Because CCDBG serves approximately 10
percent of children in that private-sector child care market,
all of whom come from low-income families, any waste, fraud,
and abuse in the program is untenable. The Committee considered
H.R. 7725 to deliver accountability and transparency in our
federal child care assistance program.
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\1\https://nces.ed.gov/fastfacts/display.asp?id=4.
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Waste, Fraud, and Abuse Unchecked at the State Level
On December 26, 2025, an independent journalist reported a
number of child care centers licensed by Minnesota were taking
federal funds through CCDBG without serving any children or
families. Certain administrative mismanagement of Minnesota's
child care program had been documented in an HHS Inspector
General report months prior\2\ and in an internal controls
review made by the Minnesota Office of the Legislative Auditor
in 2019.\3\ Essentially admitting responsibility, on February
26, 2026, Minnesota Governor Tim Walz announced a
``comprehensive anti-fraud package to fight fraud in state
programs''\4\ and the Minnesota Office of Program Integrity
released a related ``roadmap'' days earlier.\5\ In fact,
testifying at a House Committee on Oversight hearing on March
4, 2026, Governor Walz admitted that Minnesota had been aware
of fraud in its child care assistance program since 2012.
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\2\https://oig.hhs.gov/reports/all/2025/minnesota-could-better-
ensure-that-childcare-assistance-providers-comply-with-attendance-
requirements/.
\3\https://www.auditor.leg.state.mn.us/sreview/ccapic.pdf.
\4\https://mn.gov/governor/newsroom/press-releases/?id=1055-727986.
\5\https://kstp.com/wp-content/uploads/2026/02/Roadmap-to-Program-
Integrity-and-Fraud-Prevention-2-23-2026.pdf.
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Since 2002, CCDBG has been identified as a program at risk
of significant improper payments. The Office of Management and
Budget first identified CCDBG as such following enactment of
the Improper Payment Act of 2002 (P.L. 107-300).\6\ A series of
subsequent measures aimed at waste, fraud, and abuse prevention
in programs across the federal government have failed to
eliminate improper payments in CCDBG.\7\ A 2020 report by the
Government Accountability Office estimated that improper
payments in CCDBG during the previous fiscal year (FY 2019)
totaled approximately $325 million.\8\ Extrapolating that
number out to include the current funding level and average
improper payment rates, CCDBG could be losing nearly $600
million each year to improper payments. Most recently, HHS
continued to include CCDBG on its list of ``risk susceptible''
programs in the agency's FY 2025 financial report.\9\
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\6\https://georgewbush-whitehouse.archives.gov/omb/circulars/a11/
2002/part2.pdf.
\7\Those include the Improper Payment Information Act of 2002 (P.L.
112-248), the Improper Payments Elimination and Recovery Act of 2010
(P.L. 111-204), the Improper Payments Elimination and Recovery
Improvement Act of 2012 (112-248), and the Payment Integrity
Information Act of 2019 (P.L. 116-117).
\8\https://www.gao.gov/assets/gao-20-227.pdf.
\9\https://www.hhs.gov/sites/default/files/fy-2025-hhs-agency-
financial-report.pdf.
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The Need for Sensible Reforms to Protect Taxpayer Dollars
The federal government is right to scrutinize state CCDBG
funds because of the risk that those dollars are being
fraudulently diverted from American families. States' failures
to ensure their programs are complying with statutory
requirements are harming our nation's families. We owe it to
our working families to exercise sufficient oversight and hold
fraudsters accountable.
Data coordination and analytics are key to identifying
where things might be slipping through the cracks. This is
especially true in a complex administration and monitoring
system like child care. In many cases, the warning signs of
fraud are already sitting in state databases. But when multiple
state agencies are involved, data gets siloed; when agencies
fail to coordinate, red flags get missed. H.R. 7725 addresses
this weakness by requiring states to identify participating
agencies in their CCDBG state plans and describe how the state
intends to effectively utilize and streamline agency data
points. This is a simple and sensible fix to prevent waste,
fraud, and abuse and ensure child care assistance dollars are
supporting working families.
Conclusion
No amount of fraud in public programs is acceptable. When
states administer federal programs, we expect a diligent effort
to execute what the law requires. Americans should have
confidence that their taxpayer dollars are funding critical
child care assistance for families in need, not enriching those
seeking to loot public programs for private gain. H.R. 7725
accomplishes this by ensuring states have data sharing
practices in place between relevant agencies in order to better
detect fraud.
Weeding out waste, fraud, and abuse in federal child care
assistance will ensure public trust in CCDBG and allow for more
dollars, economic opportunity, and workforce participation
among America's families.
Summary
H.R. 7725 SECTION-BY-SECTION SUMMARY
Section 1. Short title
States that this Act may be cited as the Stop
Child Care Fraud Act.
Section 2. Program integrity and accountability
Amends section 658E(c)(2) of the Child Care and
Development Block Grant Act of 1990 to require states to
describe their internal program integrity controls, list all
local agencies with child care provider oversight
responsibilities, and outline data utilization practices across
those local agencies in their annual state plans submitted to
HHS.
Explanation of Amendments
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 7725 adds required content to states' annual child
care plans submitted to HHS. H.R. 7725 applies only to states
and does not apply to the legislative branch.
Unfunded Mandate Statement
Pursuant to section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
The Committee reports that because this cost estimate was not
timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 7725.
Earmark Statement
H.R. 7725 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of rule XIII of the Rules
of the House of Representatives, the goal of H.R. 7725 is to
combat siloed data related to child care administration and
monitoring.
Duplication of Federal Programs
No provision of H.R. 7725 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.
Required Committee Hearing
In compliance with clause 3(c)(6) of rule XIII of the Rules
of the House of Representatives, the following hearing held
during the 119th Congress was used to develop or consider H.R.
7725: On June 24, 2025, the Committee on Education and
Workforce Subcommittee on Early Childhood, Elementary, and
Secondary Education held a hearing titled ``Child Care and the
American Workforce: Removing Barriers to Economic Growth.''
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 7725.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when, as with the present report,
the Committee has requested a cost estimate for the bill from
the Director of the Congressional Budget Office.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990
* * * * * * *
TITLE VI--HUMAN SERVICES PROGRAMS
Subtitle A--Authorizations Savings for Fiscal Years 1982, 1983, and
1984
* * * * * * *
CHAPTER 8--COMMUNITY SERVICES PROGRAMS
* * * * * * *
Subchapter C--Child Care and Development Block Grant
* * * * * * *
SEC. 658E. APPLICATION AND PLAN.
(a) Application.--To be eligible to receive assistance under
this subchapter, a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary shall by rule
require, including--
(1) an assurance that the State will comply with the
requirements of this subchapter; and
(2) a State plan that meets the requirements of
subsection (c).
(b) Period Covered by Plan.--The State plan contained in the
application under subsection (a) shall be designed to be
implemented during a 3-year period.
(c) Requirements of a Plan.--
(1) Lead agency.--The State plan shall identify the
lead agency designated or established under section
658D.
(2) Policies and procedures.--The State plan shall:
(A) Parental choice of providers.--Provide
assurances that--
(i) the parent or parents of each
eligible child within the State who
receives or is offered child care
services for which financial assistance
is provided under this subchapter are
given the option either--
(I) to enroll such child with
a child care provider that has
a grant or contract for the
provision of such services; or
(II) to receive a child care
certificate as defined in
section 658P(2);
(ii) in cases in which the parent
selects the option described in clause
(i)(I), the child will be enrolled with
the eligible provider selected by the
parent to the maximum extent
practicable; and
(iii) child care certificates offered
to parents selecting the option
described in clause (i)(II) shall be of
a value commensurate with the subsidy
value of child care services provided
under the option described in clause
(i)(I);
and provide a detailed description of the
procedures the State will implement to carry
out the requirements of this subparagraph.
(B) Unlimited parental access.--Certify that
procedures are in effect within the State to
ensure that child care providers who provide
services for which assistance is made available
under this subchapter afford parents unlimited
access to their children and to the providers
caring for their children, during the normal
hours of operation of such providers and
whenever such children are in the care of such
providers, and provide a detailed description
of such procedures.
(C) Parental complaints.--Certify that the
State maintains a record of substantiated
parental complaints and makes information
regarding such parental complaints available to
the public on request and provide a detailed
description of how such record is maintained
and is made available.
(D) Monitoring and inspection reports.--The
plan shall include a certification that the
State, not later than 1 year after the State
has in effect the policies and practices
described in subparagraph (K)(i), will make
public by electronic means, in a consumer-
friendly and easily accessible format,
organized by provider, the results of
monitoring and inspection reports, including
those due to major substantiated complaints
about failure to comply with this subchapter
and State child care policies, as well as the
number of deaths, serious injuries, and
instances of substantiated child abuse that
occurred in child care settings each year, for
eligible child care providers within the State.
The results shall also include information on
the date of such an inspection, and, where
applicable, information on corrective action
taken.
(E) Consumer and provider education
information.--The plan shall include a
certification that the State will collect and
disseminate (which dissemination may be done,
except as otherwise specified in this
subparagraph, through resource and referral
organizations or other means as determined by
the State) to parents of eligible children, the
general public, and, where applicable,
providers--
(i) information about the
availability of the full diversity of
child care services that will promote
informed child care choices and that
concerns--
(I) the availability of child
care services provided through
programs authorized by this
subchapter and, if feasible,
other child care services and
other programs provided in the
State for which the family may
be eligible, as well as the
availability of financial
assistance to obtain child care
services in the State;
(II) if available,
information about the quality
of providers, as determined by
the State, that can be provided
through a Quality Rating and
Improvement System;
(III) information, made
available through a State Web
site, describing the State
process for licensing child
care providers, the State
processes for conducting
background checks, and
monitoring and inspections, of
child care providers, and the
offenses that prevent
individuals and entities from
serving as child care providers
in the State;
(IV) other programs for which
families that receive child
care services for which
financial assistance is
provided under this subchapter
may be eligible, including the
program of block grants to
States for temporary assistance
for needy families established
under part A of title IV of the
Social Security Act (42 U.S.C.
601 et seq.), Head Start and
Early Head Start programs
carried out under the Head
Start Act (42 U.S.C. 9831 et
seq.), the program carried out
under the Low-Income Home
Energy Assistance Act of 1981
(42 U.S.C. 8621 et seq.), the
supplemental nutrition
assistance program established
under the Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et
seq.), the special supplemental
nutrition program for women,
infants, and children
established under section 17 of
the Child Nutrition Act of 1966
(42 U.S.C. 1786), the child and
adult care food program
established under section 17 of
the Richard B. Russell National
School Lunch Act (42 U.S.C.
1766), and the Medicaid and
State children's health
insurance programs under titles
XIX and XXI of the Social
Security Act (42 U.S.C. 1396 et
seq., 1397aa et seq.);
(V) programs carried out
under section 619 and part C of
the Individuals with
Disabilities Education Act (20
U.S.C. 1419, 1431 et seq.);
(VI) research and best
practices concerning children's
development, including social
and emotional development,
early childhood development,
and meaningful parent and
family engagement, and physical
health and development
(particularly healthy eating
and physical activity); and
(VII) the State policies
regarding the social-emotional
behavioral health of young
children, which may include
positive behavioral
intervention and support
models, and policies on
expulsion of preschool-aged
children, in early childhood
programs receiving assistance
under this subchapter; and
(ii) information on developmental
screenings, including--
(I) information on existing
(as of the date of submission
of the application containing
the plan) resources and
services the State can deploy,
including the coordinated use
of the Early and Periodic
Screening, Diagnosis, and
Treatment program under the
Medicaid program carried out
under title XIX of the Social
Security Act (42 U.S.C. 1396 et
seq.) and developmental
screening services available
under section 619 and part C of
the Individuals with
Disabilities Education Act (20
U.S.C. 1419, 1431 et seq.), in
conducting developmental
screenings and providing
referrals to services, when
appropriate, for children who
receive assistance under this
subchapter; and
(II) a description of how a
family or eligible child care
provider may utilize the
resources and services
described in subclause (I) to
obtain developmental screenings
for children who receive
assistance under this
subchapter who may be at risk
for cognitive or other
developmental delays, which may
include social, emotional,
physical, or linguistic delays.
(F) Compliance with state licensing
requirements.--
(i) In general.--The plan shall
include a certification that the State
involved has in effect licensing
requirements applicable to child care
services provided within the State, and
provide a detailed description of such
requirements and of how such
requirements are effectively enforced.
(ii) License exemption.--If the State
uses funds received under this
subchapter to support a child care
provider that is exempt from the
corresponding licensing requirements
described in clause (i), the plan shall
include a description stating why such
licensing exemption does not endanger
the health, safety, or development of
children who receive services from
child care providers who are exempt
from such requirements.
(G) Training and professional development
requirements.--
(i) In general.--The plan shall
describe the training and professional
development requirements that are in
effect within the State designed to
enable child care providers to promote
the social, emotional, physical, and
cognitive development of children and
to improve the knowledge and skills of
the child care workforce. Such
requirements shall be applicable to
child care providers that provide
services for which assistance is
provided in accordance with this
subchapter.
(ii) Requirements.--The plan shall
provide an assurance that such training
and professional development--
(I) shall be conducted on an
ongoing basis, provide for a
progression of professional
development (which may include
encouraging the pursuit of
postsecondary education),
reflect current research and
best practices relating to the
skills necessary for the child
care workforce to meet the
developmental needs of
participating children, and
improve the quality of, and
stability within, the child
care workforce;
(II) shall be developed in
consultation with the State
Advisory Council on Early
Childhood Education and Care
(designated or established
pursuant to section
642B(b)(1)(A)(i) of the Head
Start Act (42 U.S.C.
9837b(b)(1)(A)(i))), and may
engage training providers in
aligning training opportunities
with the State's training
framework;
(III) incorporates knowledge
and application of the State's
early learning and
developmental guidelines (where
applicable), the State's health
and safety standards, and
incorporates social-emotional
behavior intervention models,
which may include positive
behavior intervention and
support models;
(IV) shall be accessible to
providers supported through
Indian tribes or tribal
organizations that receive
assistance under this
subchapter; and
(V) to the extent
practicable, are appropriate
for a population of children
that includes--
(aa) different age
groups;
(bb) English
learners;
(cc) children with
disabilities; and
(dd) Native
Americans, including
Indians, as the term is
defined in section 4 of
the Indian Self-
Determination and
Education Assistance
Act (25 U.S.C. 450b)
(including Alaska
Natives within the
meaning of that term),
and Native Hawaiians
(as defined in section
6207 of the Elementary
and Secondary Education
Act of 1965).
(iii) Information.--The plan shall
include the number of hours of training
required for eligible providers and
caregivers to engage in annually, as
determined by the State.
(iv) Construction.--The Secretary
shall not require an individual or
entity that provides child care
services for which assistance is
provided in accordance with this
subchapter to acquire a credential to
provide such services. Nothing in this
section shall be construed to prohibit
a State from requiring a credential.
(H) Child-to-provider ratio standards.--
(i) Standards.--The plan shall
describe child care standards for child
care services for which assistance is
made available in accordance with this
subchapter, appropriate to the type of
child care setting involved, to provide
for the safety and developmental needs
of the children served, that address--
(I) group size limits for
specific age populations, as
determined by the State;
(II) the appropriate ratio
between the number of children
and the number of providers, in
terms of the age of the
children in child care, as
determined by the State; and
(III) required qualifications
for such providers, as
determined by the State.
(ii) Construction.--The Secretary may
offer guidance to States on child-to-
provider ratios described in clause (i)
according to setting and age group, but
shall not require that the State
maintain specific group size limits for
specific age populations or child-to-
provider ratios for providers who
receive assistance in accordance with
subchapter.
(I) Health and safety requirements.--The plan
shall include a certification that there are in
effect within the State, under State or local
law, requirements designed to protect the
health and safety of children that are
applicable to child care providers that provide
services for which assistance is made available
in accordance with this subchapter. Such
requirements--
(i) shall relate to matters including
health and safety topics consisting
of--
(I) the prevention and
control of infectious diseases
(including immunization) and
the establishment of a grace
period that allows homeless
children and children in foster
care to receive services under
this subchapter while their
families (including foster
families) are taking any
necessary action to comply with
immunization and other health
and safety requirements;
(II) prevention of sudden
infant death syndrome and use
of safe sleeping practices;
(III) the administration of
medication, consistent with
standards for parental consent;
(IV) the prevention of and
response to emergencies due to
food and allergic reactions;
(V) building and physical
premises safety, including
identification of and
protection from hazards that
can cause bodily injury such as
electrical hazards, bodies of
water, and vehicular traffic;
(VI) prevention of shaken
baby syndrome and abusive head
trauma;
(VII) emergency preparedness
and response planning for
emergencies resulting from a
natural disaster, or a man-
caused event (such as violence
at a child care facility),
within the meaning of those
terms under section 602(a)(1)
of the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act (42 U.S.C.
5195a(a)(1));
(VIII) the handling and
storage of hazardous materials
and the appropriate disposal of
biocontaminants;
(IX) for providers that offer
transportation, if applicable,
appropriate precautions in
transporting children;
(X) first aid and
cardiopulmonary resuscitation;
and
(XI) minimum health and
safety training, to be
completed pre-service or during
an orientation period in
addition to ongoing training,
appropriate to the provider
setting involved that addresses
each of the requirements
relating to matters described
in subclauses (I) through (X);
and
(ii) may include requirements
relating to nutrition, access to
physical activity, or any other subject
area determined by the State to be
necessary to promote child development
or to protect children's health and
safety.
(J) Compliance with state and local health
and safety requirements.--The plan shall
include a certification that procedures are in
effect to ensure that child care providers
within the State, that provide services for
which assistance is made available in
accordance with this subchapter, comply with
all applicable State and local health and
safety requirements as described in
subparagraph (I).
(K) Enforcement of licensing and other
regulatory requirements.--
(i) Certification.--The plan shall
include a certification that the State,
not later than 2 years after the date
of enactment of the Child Care and
Development Block Grant Act of 2014,
shall have in effect policies and
practices, applicable to licensing or
regulating child care providers that
provide services for which assistance
is made available in accordance with
this subchapter and the facilities of
those providers, that--
(I) ensure that individuals
who are hired as licensing
inspectors in the State are
qualified to inspect those
child care providers and
facilities and have received
training in related health and
safety requirements, and are
trained in all aspects of the
State's licensure requirements;
(II) require licensing
inspectors (or qualified
inspectors designated by the
lead agency) of those child
care providers and facilities
to perform inspections, with--
(aa) not less than 1
prelicensure
inspection, for
compliance with health,
safety, and fire
standards, of each such
child care provider and
facility in the State;
and
(bb) not less than
annually, an inspection
(which shall be
unannounced) of each
such child care
provider and facility
in the State for
compliance with all
child care licensing
standards, which shall
include an inspection
for compliance with
health, safety, and
fire standards
(inspectors may inspect
for compliance with all
3 standards at the same
time);
(III) require the ratio of
licensing inspectors to such
child care providers and
facilities in the State to be
maintained at a level
sufficient to enable the State
to conduct inspections of such
child care providers and
facilities on a timely basis in
accordance with Federal, State,
and local law; and
(IV) require licensing
inspectors (or qualified
inspectors designated by the
lead agency) of child care
providers and facilities to
perform an annual inspection of
each license-exempt provider in
the State receiving funds under
this subchapter (unless the
provider is an eligible child
care provider as described in
section 658P(6)(B)) for
compliance with health, safety,
and fire standards, at a time
to be determined by the State.
(ii) Construction.--The Secretary may
offer guidance to a State, if requested
by the State, on a research-based
minimum standard regarding ratios
described in clause (i)(III) and
provide technical assistance to the
State on meeting the minimum standard
within a reasonable time period, but
shall not prescribe a particular ratio.
(L) Compliance with child abuse reporting
requirements.--The plan shall include a
certification that child care providers within
the State will comply with the child abuse
reporting requirements of section
106(b)(2)(B)(i) of the Child Abuse Prevention
and Treatment Act (42 U.S.C.
5106a(b)(2)(B)(i)).
(M) Meeting the needs of certain
populations.--The plan shall describe how the
State will develop and implement strategies
(which may include alternative reimbursement
rates to child care providers, the provision of
direct contracts or grants to community-based
organizations, offering child care certificates
to parents, or other means determined by the
State) to increase the supply and improve the
quality of child care services for--
(i) children in underserved areas;
(ii) infants and toddlers;
(iii) children with disabilities, as
defined by the State; and
(iv) children who receive care during
nontraditional hours.
(N) Protection for working parents.--
(i) Minimum period.--
(I) 12-month period.--The
plan shall demonstrate that
each child who receives
assistance under this
subchapter in the State will be
considered to meet all
eligibility requirements for
such assistance and will
receive such assistance, for
not less than 12 months before
the State or designated local
entity redetermines the
eligibility of the child under
this subchapter, regardless of
a temporary change in the
ongoing status of the child's
parent as working or attending
a job training or educational
program or a change in family
income for the child's family,
if that family income does not
exceed 85 percent of the State
median income for a family of
the same size.
(II) Fluctuations in
earnings.--The plan shall
demonstrate how the State's or
designated local entity's
processes for initial
determination and
redetermination of such
eligibility take into account
irregular fluctuations in
earnings.
(ii) Redetermination process.--The
plan shall describe the procedures and
policies that are in place to ensure
that working parents (especially
parents in families receiving
assistance under the program of block
grants to States for temporary
assistance for needy families under
part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.))
are not required to unduly disrupt
their employment in order to comply
with the State's or designated local
entity's requirements for
redetermination of eligibility for
assistance provided in accordance with
this subchapter.
(iii) Period before termination.--At
the option of the State, the plan shall
demonstrate that the State will not
terminate assistance provided to carry
out this subchapter based on a factor
consisting of a parent's loss of work
or cessation of attendance at a job
training or educational program for
which the family was receiving the
assistance, without continuing the
assistance for a reasonable period of
time, of not less than 3 months, after
such loss or cessation in order for the
parent to engage in a job search and
resume work, or resume attendance at a
job training or educational program, as
soon as possible.
(iv) Graduated phaseout of care.--The
plan shall describe the policies and
procedures that are in place to allow
for provision of continued assistance
to carry out this subchapter, at the
beginning of a new eligibility period
under clause (i)(I), for children of
parents who are working or attending a
job training or educational program and
whose family income exceeds the State's
income limit to initially qualify for
such assistance, if the family income
for the family involved does not exceed
85 percent of the State median income
for a family of the same size.
(O) Coordination with other programs.--
(i) In general.--The plan shall
describe how the State, in order to
expand accessibility and continuity of
care, and assist children enrolled in
early childhood programs to receive
full-day services, will efficiently,
and to the extent practicable,
coordinate the services supported to
carry out this subchapter with programs
operating at the Federal, State, and
local levels for children in preschool
programs, tribal early childhood
programs, and other early childhood
programs, including those serving
infants and toddlers with disabilities,
homeless children, and children in
foster care.
(ii) Optional use of combined
funds.--If the State elects to combine
funding for the services supported to
carry out this subchapter with funding
for any program described in clause
(i), the plan shall describe how the
State will combine the multiple sets of
funding and use the combined funding.
(iii) Rule of construction.--Nothing
in clause (i) shall be construed to
affect the priority of children
described in clause (i) to receive
full-day prekindergarten or Head Start
program services.
(P) Public-private partnerships.--The plan
shall demonstrate how the State encourages
partnerships among State agencies, other public
agencies, Indian tribes and tribal
organizations, and private entities, including
faith-based and community-based organizations,
to leverage existing service delivery systems
(as of the date of the submission of the
application containing the plan) for child care
and development services and to increase the
supply and quality of child care services for
children who are less than 13 years of age,
such as by implementing voluntary shared
services alliance models.
(Q) Priority for low-income populations.--The
plan shall describe the process the State
proposes to use, with respect to investments
made to increase access to programs providing
high-quality child care and development
services, to give priority for those
investments to children of families in areas
that have significant concentrations of poverty
and unemployment and that do not have such
programs.
(R) Consultation.--The plan shall include a
certification that the State has developed the
plan in consultation with the State Advisory
Council on Early Childhood Education and Care
designated or established pursuant to section
642B(b)(1)(A)(i) of the Head Start Act (42
U.S.C. 9837b(b)(1)(A)(i)).
(S) Payment practices.--The plan shall
include--
(i) a certification that the payment
practices of child care providers in
the State that serve children who
receive assistance under this
subchapter reflect generally accepted
payment practices of child care
providers in the State that serve
children who do not receive assistance
under this subchapter, so as to provide
stability of funding and encourage more
child care providers to serve children
who receive assistance under this
subchapter; and
(ii) an assurance that the State
will, to the extent practicable,
implement enrollment and eligibility
policies that support the fixed costs
of providing child care services by
delinking provider reimbursement rates
from an eligible child's occasional
absences due to holidays or unforseen
circumstances such as illness.
(T) Early learning and developmental
guidelines.--
(i) In general.--The plan shall
include an assurance that the State
will maintain or implement early
learning and developmental guidelines
(or develop such guidelines if the
State does not have such guidelines as
of the date of enactment of the Child
Care and Development Block Grant Act of
2014) that are appropriate for children
from birth to kindergarten entry,
describing what such children should
know and be able to do, and covering
the essential domains of early
childhood development for use statewide
by child care providers. Such
guidelines shall--
(I) be research-based,
developmentally appropriate,
and aligned with entry to
kindergarten;
(II) be implemented in
consultation with the state
educational agency and the
State Advisory Council on Early
Childhood Education and Care
(designated or established
pursuant to section
642B(b)(I)(A)(i) of the Head
Start Act (42 U.S.C.
9837b(b)(1)(A)(i)); and
(III) be updated as
determined by the State.
(ii) Prohibition on use of funds.--
The plan shall include an assurance
that funds received by the State to
carry out this subchapter will not be
used to develop or implement an
assessment for children that--
(I) will be the sole basis
for a child care provider being
determined to be ineligible to
participate in the program
carried out under this
subchapter;
(II) will be used as the
primary or sole basis to
provide a reward or sanction
for an individual provider;
(III) will be used as the
primary or sole method for
assessing program
effectiveness; or
(IV) will be used to deny
children eligibility to
participate in the program
carried out under this
subchapter.
(iii) Exceptions.--Nothing in this
subchapter shall preclude the State
from using a single assessment as
determined by the State for children
for--
(I) supporting learning or
improving a classroom
environment;
(II) targeting professional
development to a provider;
(III) determining the need
for health, mental health,
disability, developmental
delay, or family support
services;
(IV) obtaining information
for the quality improvement
process at the State level; or
(V) conducting a program
evaluation for the purposes of
providing program improvement
and parent information.
(iv) No federal control.--Nothing in
this section shall be construed to
authorize an officer or employee of the
Federal Government to--
(I) mandate, direct, control,
or place conditions (outside of
what is required by this
subchapter) around adopting a
State's early learning and
developmental guidelines
developed in accordance with
this section;
(II) establish any criterion
that specifies, defines,
prescribes, or places
conditions (outside of what is
required by this subchapter) on
a State adopting standards or
measures that a State uses to
establish, implement, or
improve such guidelines,
related accountability systems,
or alignment of such guidelines
with education standards; or
(III) require a State to
submit such guidelines for
review.
(U) Disaster preparedness.--
(i) In general.--The plan shall
demonstrate the manner in which the
State will address the needs of
children in child care services
provided through programs authorized
under this subchapter, including the
need for safe child care, for the
period before, during, and after a
state of emergency declared by the
Governor or a major disaster or
emergency (as such terms are defined in
section 102 of the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5122)).
(ii) Statewide child care disaster
plan.--Such plan shall include a
statewide child care disaster plan for
coordination of activities and
collaboration, in the event of an
emergency or disaster described in
clause (i), among the State agency with
jurisdiction over human services, the
agency with jurisdiction over State
emergency planning, the State lead
agency, the State agency with
jurisdiction over licensing of child
care providers, the local resource and
referral organizations, the State
resource and referral system, and the
State Advisory Council on Early
Childhood Education and Care as
provided for under section 642B(b) of
the Head Start Act (42 U.S.C.
9837b(b)).
(iii) Disaster plan components.--The
components of the disaster plan, for
such an emergency or disaster, shall
include--
(I) evacuation, relocation,
shelter-in-place, and lock-down
procedures, and procedures for
communication and reunification
with families, continuity of
operations, and accommodation
of infants and toddlers,
children with disabilities, and
children with chronic medical
conditions;
(II) guidelines for the
continuation of child care
services in the period
following the emergency or
disaster, which may include the
provision of emergency and
temporary child care services,
and temporary operating
standards for child care
providers during that period;
and
(III) procedures for staff
and volunteer emergency
preparedness training and
practice drills.
(V) Business technical assistance.--The plan
shall describe how the State will develop and
implement strategies to strengthen the business
practices of child care providers to expand the
supply, and improve the quality of, child care
services.
(W) Program integrity and accountability.--
The plan shall include a description of--
(i) the State's internal controls to
ensure program integrity and
accountability;
(ii) the processes in place--
(I) to investigate and
recover fraudulent payments;
and
(II) to impose sanctions on
clients or providers in
response to fraud; and
(iii) the procedures in place to
document and verify eligibility.
Such description shall include how the State
utilizes data within and across other State and
local agencies that have oversight of child
care providers that serve children who receive
assistance under this subchapter.
(3) Use of block grant funds.--
(A) General requirement.--The State plan
shall provide that the State will use the
amounts provided to the State for each fiscal
year under this subchapter in accordance with
subparagraphs (B) through (D).
(B) Child care services and related
activities.--
(i) In general.--The State shall use
amounts provided to the State for each
fiscal year under this subchapter for
child care services on a sliding fee
scale basis, activities that improve
the quality or availability of such
services, activities that improve
access to child care services,
including the use of procedures to
permit enrollment (after an initial
eligibility determination) of homeless
children while required documentation
is obtained, training and technical
assistance on identifying and serving
homeless children and their families,
and specific outreach to homeless
families, and any other activity that
the State determines to be appropriate
to meet the purposes of this subchapter
(which may include an activity
described in clause (ii)), with
priority being given for services
provided to children of families with
very low family incomes (taking into
consideration family size) and to
children with special needs.
(ii) Report by the assistant
secretary for children and families.--
(I) In general.--Not later
than September 30 of the first
full fiscal year after the date
of enactment of the Child Care
and Development Block Grant Act
of 2014, and September 30 of
each fiscal year thereafter,
the Secretary (acting through
the Assistant Secretary for
Children and Families of the
Department of Health and Human
Services) shall prepare a
report that contains a
determination about whether
each State uses amounts
provided to such State for the
fiscal year involved under this
subchapter in accordance with
the priority for services
described in clause (i).
(II) Penalty for
noncompliance.--For any fiscal
year that the report of the
Secretary described in
subclause (I) indicates that a
State has failed to give
priority for services in
accordance with clause (i), the
Secretary shall--
(aa) inform the State
that the State has
until the date that is
6 months after the
Secretary has issued
such report to fully
comply with clause (i);
(bb) provide the
State an opportunity to
modify the State plan
of such State, to make
the plan consistent
with the requirements
of clause (i), and
resubmit such State
plan to the Secretary
not later than the date
described in item (aa);
and
(cc) if the State
does not fully comply
with clause (i) and
item (bb), by the date
described in item (aa),
withhold 5 percent of
the funds that would
otherwise be allocated
to that State in
accordance with this
subchapter for the
first full fiscal year
after that date.
(III) Waiver for
extraordinary circumstances.--
Notwithstanding subclause (II)
the Secretary may grant a
waiver to a State for one year
to the penalty applied in
subclause (II) if the Secretary
determines there are
extraordinary circumstances,
such as a natural disaster,
that prevent the State from
complying with clause (i). If
the Secretary does grant a
waiver to a State under this
section, the Secretary shall,
within 30 days of granting such
waiver, submit a report to the
appropriate congressional
committees on the circumstances
of the waiver including the
stated reason from the State on
the need for a waiver, the
expected impact of the waiver
on children served under this
program, and any such other
relevant information the
Secretary deems necessary.
(iii) Child care resource and
referral system.--
(I) In general.--A State may
use amounts described in clause
(i) to establish or support a
system of local or regional
child care resource and
referral organizations that is
coordinated, to the extent
determined appropriate by the
State, by a statewide public or
private nonprofit, community-
based or regionally based, lead
child care resource and
referral organization.
(II) Local or regional
organizations.--The local or
regional child care resource
and referral organizations
supported as described in
subclause (I) shall--
(aa) provide parents
in the State with
consumer education
information referred to
in paragraph (2)(E)
(except as otherwise
provided in that
paragraph), concerning
the full range of child
care options (including
faith-based and
community-based child
care providers),
analyzed by provider,
including child care
provided during
nontraditional hours
and through emergency
child care centers, in
their political
subdivisions or
regions;
(bb) to the extent
practicable, work
directly with families
who receive assistance
under this subchapter
to offer the families
support and assistance,
using information
described in item (aa),
to make an informed
decision about which
child care providers
they will use, in an
effort to ensure that
the families are
enrolling their
children in the most
appropriate child care
setting to suit their
needs and one that is
of high quality (as
determined by the
State);
(cc) collect data and
provide information on
the coordination of
services and supports,
including services
under section 619 and
part C of the
Individuals with
Disabilities Education
Act (20 U.S.C. 1431, et
seq.), for children
with disabilities (as
defined in section 602
of such Act (20 U.S.C.
1401));
(dd) collect data and
provide information on
the supply of and
demand for child care
services in political
subdivisions or regions
within the State and
submit such information
to the State;
(ee) work to
establish partnerships
with public agencies
and private entities,
including faith-based
and community-based
child care providers,
to increase the supply
and quality of child
care services in the
State; and
(ff) as appropriate,
coordinate their
activities with the
activities of the State
lead agency and local
agencies that
administer funds made
available in accordance
with this subchapter.
(C) Limitation on administrative costs.--Not
more than 5 percent of the aggregate amount of
funds available to the State to carry out this
subchapter by a State in each fiscal year may
be expended for administrative costs incurred
by such State to carry out all of its functions
and duties under this subchapter. As used in
the preceding sentence, the term
``administrative costs'' shall not include the
costs of providing direct services.
(D) Assistance for certain families.--A State
shall ensure that a substantial portion of the
amounts available (after the State has complied
with the requirement of section 418(b)(2) of
the Social Security Act with respect to each of
the fiscal years 2015 through 2020 to the State
to carry out activities under this subchapter
in each fiscal year is used to provide
assistance to low-income working families
including or in addition to families with
children described in clause (i), (ii), (iii),
or (iv) of paragraph (2)(M).
(E) Direct services.--From amounts provided
to a State for a fiscal year to carry out this
subchapter, the State shall--
(i) reserve the minimum amount
required to be reserved under section
658G, and the funds for costs described
in subparagraph (C); and
(ii) from the remainder, use not less
than 70 percent to fund direct services
(provided by the State) in accordance
with paragraph (2)(A).
(4) Payment rates.--
(A) In general.--The State plan shall certify
that payment rates for the provision of child
care services for which assistance is provided
in accordance with this subchapter are
sufficient to ensure equal access for eligible
children to child care services that are
comparable to child care services in the State
or substate area involved that are provided to
children whose parents are not eligible to
receive assistance under this subchapter or to
receive child care assistance under any other
Federal or State program, and shall provide a
summary of the facts relied on by the State to
determine that such rates are sufficient to
ensure such access.
(B) Survey.--The State plan shall--
(i) demonstrate that the State has,
after consulting with the State
Advisory Council on Early Childhood
Education and Care designated or
established in section 642B(b)(1)(A)(i)
of the Head Start Act (42 U.S.C.
9837b(b)(1)(A)(i)), local child care
program administrators, local child
care resource and referral agencies,
and other appropriate entities,
developed and conducted (not earlier
than 2 years before the date of the
submission of the application
containing the State plan) a
statistically valid and reliable survey
of the market rates for child care
services in the State (that reflects
variations in the cost of child care
services by geographic area, type of
provider, and age of child) or an
alternative methodology, such as a cost
estimation model, that has been
developed by the State lead agency;
(ii) demonstrate that the State
prepared a detailed report containing
the results of the State market rates
survey or alternative methodology
conducted pursuant to clause (i), and
made the results of the survey or
alternative methodology widely
available (not later than 30 days after
the completion of such survey or
alternative methodology) through
periodic means, including posting the
results on the Internet;
(iii) describe how the State will set
payment rates for child care services,
for which assistance is provided in
accordance with this subchapter--
(I) in accordance with the
results of the market rates
survey or alternative
methodology conducted pursuant
to clause (i);
(II) taking into
consideration the cost of
providing higher quality child
care services than were
provided under this subchapter
before the date of enactment of
the Child Care and Development
Block Grant Act of 2014; and
(III) without, to the extent
practicable, reducing the
number of families in the State
receiving such assistance to
carry out this subchapter,
relative to the number of such
families on the date of
enactment of that Act; and
(iv) describe how the State will
provide for timely payment for child
care services provided under this
subchapter.
(C) Construction.--
(i) No private right of action.--
Nothing in this paragraph shall be
construed to create a private right of
action if the State acted in accordance
with this paragraph.
(ii) No prohibition of certain
different rates.--Nothing in this
subchapter shall be construed to
prevent a State from differentiating
the payment rates described in
subparagraph (B)(iii) on the basis of
such factors as--
(I) geographic location of
child care providers (such as
location in an urban or rural
area);
(II) the age or particular
needs of children (such as the
needs of children with
disabilities and children
served by child protective
services);
(III) whether the providers
provide child care services
during weekend and other
nontraditional hours; or
(IV) the State's
determination that such
differentiated payment rates
may enable a parent to choose
high-quality child care that
best fits the parent's needs.
(5) Sliding fee scale.--The State plan shall provide
that the State will establish and periodically revise,
by rule, a sliding fee scale that provides for cost
sharing (that is not a barrier to families receiving
assistance under this subchapter) by the families that
receive child care services for which assistance is
provided under this subchapter.
(d) Approval of Application.--The Secretary shall approve an
application that satisfies the requirements of this section.
* * * * * * *
MINORITY VIEWS
INTRODUCTION
H.R. 7725, the Stop Child Care Fraud Act, introduced by
Rep. Michael Rulli (R-OH), codifies the inclusion of certain
information in state plans under the Child Care and Development
Block Grant (CCDBG) Act, including a description of the state's
internal controls, processes, and procedures to prevent fraud.
States are generally already required to include much this
information in their state plans pursuant to regulation.\1\ As
such, while Committee Democrats do not oppose this bill, taken
together with the other bills marked up by the Committee on
March 5, 2026, could have the overall effect of upending the
child care system to address a problem that has not been proven
to exist.
---------------------------------------------------------------------------
\1\45 C.F.R. Sec. 98.16(ff).
---------------------------------------------------------------------------
REPUBLICANS REFUSE TO FOCUS ON THE CHILD CARE CRISIS ACTUALLY AFFECTING
AMERICAN FAMILIES
Child care is a necessity for millions of American
families.\2\ In many parts of the country, the cost of child
care, when families can find it, can be as much as, or more
than their rent or mortgage payments.\3\ In many communities,
child care simply does not exist in sufficient supply to meet
demand.\4\ As a direct result, our economy loses an estimated
$122 billion in earnings, productivity, and revenue every
year.\5\ This is not a personal failure on the part of parents
or providers--it is a market failure that demands a policy
response. The Child Care and Development Block Grant (CCDBG) is
a federal program designed to provide child care assistance to
low-income families and is administered through block grants to
states.\6\ CCDBG funds, along with other federal funds not
under the jurisdiction of this Committee, make up the Child
Care Development Fund (CCDF), the largest federal source of
child care funding.\7\ Yet, according to the most recent
publicly available information, federal child care funds cover
only about 15 percent of federally eligible children.\8\
Assuming that Congress provided sufficient resources cover the
remaining 85% of eligible children, that would still leave many
families--who are not eligible for the program--with the burden
of unaffordable or unavailable child care.
---------------------------------------------------------------------------
\2\Fact Sheet: Child Care and the Economy, First Five Years Fund
(Mar. 6, 2026), https://www.ffyf.org/2024/03/06/fact-sheet-child-care-
and-the-economy/.
\3\Child Care Aware of America, ``Annual Child Care Landscape
Analysis'', https://www.childcareaware.org/price-landscape24/ (last
visited Jan. 28, 2026).
\4\See U.S. Child Care Deserts, Ctr. for Am. Prog., https://
childcaredeserts.org/ (last visited Mar. 13, 2026).
\5\How a Lack of Affordable Child Care Impacts the Economy, First
Five Years Fund (Mar. 13, 2025), https://www.ffyf.org/resources/2025/
03/how-a-lack-of-affordable-child-care-impacts-the-economy/.
\6\Nina Chien, Estimates of Child Care Subsidy Eligibility &
Receipt for Fiscal Year 2021, Off. of Hum. Svcs Pol'y (Sep. 11, 2024),
https://aspe.hhs.gov/sites/default/files/documents/
a91fd97aa80b53fa52a52d38cd323509/cy2021-child-care-subsidy-
eligibility.pdf.
\7\Rebecca Daugherty, Child Care and Development Fund: CCDBG and
CCES, Explained, Bipartisan Pol'y Ctr. (Feb. 24, 2025) https://
bipartisanpolicy.org/explainer/child-care-and-development-fund-ccdbg-
cces/.
\8\Chien, supra note 6, at 1.
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In response to this reality, Committee Democrats have
championed legislation focused on increasing the federal
investment in child care. Specifically, this Congress, Ranking
Member Robert C. ``Bobby'' Scott (D-VA) re-introduced H.R.
4418, the Child Care for Working Families Act.\9\ The Child
Care for Working Families Act would tackle the child care
crisis head-on: ensuring families can afford the child care
they need, expanding access to more high-quality options,
stabilizing the child care sector, and helping ensure child
care workers taking care of our nation's kids are paid livable
wages. The bill provides grants to states to help expand the
supply and capacity of eligible child care providers and aims
to provide working families a range of high-quality, affordable
child care options, in a variety of settings, that meet their
unique needs, with no family paying more than seven percent of
their income for child care costs.
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\9\H.R. 4418, 119th Cong. (2025).
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H.R. 4418 would promote the stability of the child care
sector by providing a source of stable funding to eligible
child care providers to help offset their operating expenses.
It would support sustained and increased wages for early
childhood educators or other staff eligible providers, in order
to stabilize and grow the child care workforce. It would
support access to child care services for communities facing a
particular shortage of child care options, including child care
services for infants and toddlers, child care services during
nontraditional or extended hours, and inclusive child care
services for children with disabilities. Language similar to
H.R 4418 was included in the Build Back Better Act, which
passed the House in November 2021.\10\
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\10\H.R. 5376 Sec. 23001, 117th Cong. (as passed by House, Nov. 19,
2021).
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Instead of working to fix the child care supply and demand
issue, the Trump Administration's actions have only created
additional uncertainty for the child care sector, parents, and
children.\11\ Almost immediately after President Trump took
office in January 2025, the Office of Management and Budget
announced that it was directing federal agencies to
``temporarily pause all activities related to obligation or
disbursement of all Federal financial assistance . . .''.\12\
This funding pause was later rescinded,\13\ but it initially
caused significant confusion and consternation among federal
fund recipients in the child care community. These recipients
are overwhelmingly non-profit organizations which generally
operate with no more than a few days of reserve funds.\14\
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\11\Hailey Gibbs & Casey Peeks, Trump's Attack on Child Care
Funding Undermines Early Educators, Shortchanges Children, and
Increases Costs for Families, Ctr. for Am. Prog. (Jan. 12, 2026),
https://www.americanprogress.org/article/trumps-attack-on-child-care-
funding-undermines-early-educators-shortchanges-children-and-increases-
costs-for-families/.
\12\Read the Memo Pausing Federal Grants and Loans, N.Y. Times
(Jan. 27, 2026), https://www.nytimes.com/interactive/2025/01/27/us/omb-
memo.html.
\13\New Administration Highlights: Freeze on Federal Funds
Rescinded, and Trump Signs Law to Ease Path to Deportations, N.Y.
Times, https://www.nytimes.com/live/2025/01/29/us/trump-
federal-freeze-funding-news?smid=url-share#federal-freeze-grants (last
updated Nov. 18, 2025).
\14\Press Release, Child Care Aware of America, Child Care Aware of
America Reacts to Federal Funding Pause (Jan. 28, 2026), https://
info.childcareaware.org/media/child-care-aware-of-america-reacts-to-
federal-funding-freeze.
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Further, the Trump Administration has undermined Department
of Health and Human Services staff, specifically those
responsible for administering CCDF and providing support to
states administering CCDBG and related programs. As the Center
for Law and Social Policy summarized the issue,
[p]robationary staff at the Office of Head Start (OHS)
and the Office of Child Care (OCC) were laid off in
February, resulting in a reduction of approximately 20
percent of staff. This was followed by the mass layoffs
announced on April 1, resulting in an overall reduction
of 40-50 percent of staff in OHS and OCC and the
closure of five regional offices, which provided
training and technical assistance, administrative
support in ensuring grants reached facilities, and
served as a liaison between program administrators and
the federal government. These offices in Boston,
Chicago, New York, San Francisco, and Seattle oversaw
grantees in 23 states and five territories, and
comprised half of the total regional offices across the
country.\15\
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\15\Shira Small, Federal Cuts to Child Care and Head Start are an
Attack on Families with Low Incomes, Ctr. on L. & Soc. Pol'y (Apr. 23,
2025), https://www.clasp.org/blog/federal-cuts-child-care-head-start/.
Regrettably, the Majority has followed this
Administration's lead. Instead of considering bills to help
address the crisis by increasing the supply of child care,
making child care more affordable, or increasing the wages of
child care workers, the Committee considered H.R. 7725 and
seven other bills to address alleged and unproven widespread
fraud in the child care sector.\16\ None of these bills will
create one more additional child care slot. Instead, these
bills complement each other by throwing sand into the gears of
CCDF, increasing the chances that states will be capriciously
disqualified from federal child care assistance not due to
widespread fraud, but non-compliance with red tape.
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\16\H.R. 7720, the Child Care Payment Integrity and Fraud
Accountability Act, H.R. 7721, Combating Regulatory Abuse, Closing
Known Deficiencies, and Overseeing Waste Nationwide (CRACKDOWN) Act,
H.R. 7722, Child Care Integrity Monitoring Act, H.R. 7723, Safeguarding
Taxpayer Dollars in Child Care Act, H.R. 7724, No Waivers for Fraud
Act, H.R. 7725, Stop Child Care Fraud Act, H.R. 7677, Closing the
Provider Fraud Gap Act, and H.R. 7726, No Funds for Repeat Child Care
Violation Act Before the H. Comm. on Educ. & Workforce, 119th Cong.
(Mar. 5, 2026).
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THE MAJORITY SEEKS TO UPEND THE EXISTING CHILD CARE SYSTEM OVER
UNPROVEN ALLEGATIONS OF WIDESPREAD FRAUD
National Attention on Alleged Widespread Fraud in Child Care
In late December 2025, a publicly posted video surfaced
that purported to show ``proof'' that several day care centers
in Minnesota were committing fraud. The video alleged these
centers were taking federal child care funds, administered
through the state, without actually caring for children.\17\
Despite the fact that the Minnesota agency administering CCDF
found that the child care centers were operating as expected at
the time of the video,\18\ some media outlets and Republican
officials brought national attention to the story.\19\ The
Trump Administration then announced an immediate freeze on all
child care funds to Minnesota\20\ and engaged its ``Defend the
Spend'' system nationwide--requiring grantees to provide
detailed documentation and proof of payment before receiving
reimbursement for all funds distributed through the
Administration for Children and Families at the Department of
Health and Human Services (HHS).\21\ Soon thereafter, HHS
announced suspension of five states' access to nearly $10
million through CCDF, the Temporary Assistance for Needy
Families, and the Social Services Block Grant.\22\ HHS provided
no evidence of fraud in these five states--California,
Colorado, Illinois, Minnesota, and New York-- beyond the fact
they are led by Democratic Governors. HHS claims this action
was taken due to ``concerns about widespread fraud and misuse
of taxpayer dollars in state-administered programs'' and
concerns that these funds may have gone to those not eligible
due to their immigration status.\23\ Thankfully, courts have
blocked this funding freeze\24\ but it is extremely concerning
that the Administration sought to punish states without proof
of such allegations.
---------------------------------------------------------------------------
\17\Ken Bensinger & Ernesto Londono, An Intense White House
Response From a Single Viral Video, N.Y. Times (Dec. 31, 2025), https:/
/www.nytimes.com/2025/12/31/business/media/trump-conservatives-videos-
viral-loop.html.
\18\Phil Helsel & Julia Ainsley, Minnesota department finds child
care centers targeted in viral video operating normally, NBC News (Jan.
2, 2026), https://www.nbcnews.com/news/us-news/minnesota-department-
finds-child-care-centers-targeted-viral-video-ope-rcna252013.
\19\Bensinger & Londono, supra note 17.
\20\Id.
\21\Sakshi Venkatraman & Max Matza, Trump administration says it's
withholding childcare funds from Minnesota amid fraud allegations, BBC
(Dec. 30, 2025), https://www.bbc.com/news/articles/c75xnndvlyko.
\22\Press Release, U.S. Dep't of Health & Hum. Svcs., HHS Freezes
Child Care and Family Assistance Grants in Five States for Fraud
Concerns (Jan 6, 2026), https://www.hhs.gov/press-room/hhs-freezes-
child-care-family-assistance-grants-five-states-fraud-concerns.html.
\23\Id. (emphasis added).
\24\Minho Kim & Zach Montague, Judge Extends Block on Trump
Officials Slashing Funds to Democratic States, N.Y. Times (Feb. 6,
2026), https://www.nytimes.com/2026/02/06/us/politics/blue-states-
trump-funding-lawsuit.html.
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Unfortunately, it is under the same unproven allegations
and general theories of ``widespread fraud'' that the Majority
chose to consider eight bills purporting to address fraud in
CCDBG.\25\ Like the Administration, the Majority did not
produce any evidence of widespread fraud in the program,
presenting only vague and unfounded allegations. Similarly, the
Majority has chosen not to engage with (or even meaningfully
acknowledge) the processes HHS already has in place, as
required by law, charging states to prevent and catch fraud.
---------------------------------------------------------------------------
\25\Press Release, Committee on Education & Workforce Republicans,
Chairman Walberg Delivers Opening Statement at Markup to Crackdown on
Child Care Fraud (Mar 5, 2026), https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=413157.
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Existing Program Integrity Requirements
Generally, federal agencies must protect against improper
payments in grant programs. The Payment Integrity Information
Act of 2019 (PIIA) requires Executive Branch agencies to
determine if improper payment rates for programs have exceeded
significant thresholds.\26\ Agencies are considered
noncompliant if any relevant program has an ``improper payment
rate'' of more than 10 percent.\27\ Improper payments include
any payment made for an incorrect amount, to an ineligible
recipient, or for an ineligible service. In the context of
federal child care funds, an example of an improper payment
would be a payment to a provider that was made in an incorrect
amount (overpayment or underpayment) or that should not have
been made at all.\28\ However, the term ``improper payments''
does not automatically denote ``fraud''. As stated in a
Government Accountability Office Q&A report to the House
Appropriations Committee, ``[w]hile all fraudulent payments are
considered improper, not all improper payments are due to
fraud.''\29\ PIIA directs federal agencies to, at least every
three years, assess their programs to consider factors that may
increase the risk of improper payments, including their
susceptibility to fraud.\30\
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\26\31 U.S.C. Sec. 3352. The statute defines significant as either
$10 million and 1.5 percent of total program outlays or $100 million
overall. Id.
\27\31 U.S.C. Sec. 3351.
\28\See, e.g., 45 C.F.R. Sec. 98.100(d).
\29\U.S. Gov't Accountability Off., GAO-24-107482, Improper
Payments: Key Concepts and Information on Programs with High Rates or
Lacking Estimates 5 (2024), https://www.gao.gov/assets/gao-24-
107482.pdf.
\30\31 U.S.C. Sec. 3352.
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HHS generally assesses states' compliance with law and
regulations through its review and approval of a state's CCDF
plan, which ``serves as the Lead Agency's [the agency in a
state or territory that administers the CCDF program]
application for a three-year cycle of CCDF funds and is the
primary mechanism OCC uses to determine Lead Agency compliance
with the requirements of CCDBG and its regulations''.\31\ In
its review of the plan, HHS can identify places where a state
is out of compliance and provides a state with the opportunity
to address the particular issue or face penalties.\32\
---------------------------------------------------------------------------
\31\FY 2025-2027 Child Care and Development Fund (CCDF) Plan for
States and Territories, Off. of Child Care, https://acf.gov/occ/policy-
guidance/fy-2025-2027-ccdf-plan-states-and-territories-ccdf-acf-pi-
2024-01 (last updated July 15, 2024).
\32\Id.
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More specifically, the CCDBG Act and its regulations
already provide HHS with enforcement authority to ensure that
states are complying with the program's requirements. For
example, the law gives HHS the authority to ensure states
``comply substantially'' with the law.\33\ Further, ``after
reasonable notice to a State and opportunity for a hearing'',
HHS may disallow improperly spent funds, deduct improperly
spent funds from subsequent allotments, take some combination
of the those actions, or impose other sanctions.\34\
Regulations make clear HHS ability to monitor these programs
for compliance with law and addresses the process HHS and
states may take when a ``review or investigation reveals
evidence'' that a state's child care agency or ``an entity
providing services under contract or agreement with'' a lead
agency has ``failed to substantially comply'' with the law,
regulations, or provisions and requirements set out in the
state's plan.\35\ It is also worth noting that law and
regulation require states to arrange independent audits of
their programs and require states to repay the federal
government for funds that are found to be misspent or HHS can
deduct these amounts from future payments to the state.\36\
These are examples of ways the law and regulation aim to
provide for program integrity.
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\33\E.g., 42 U.S.C. Sec. 9858g(b)(2).
\34\Id.
\35\45 C.F.R. Sec. 98.90.
\36\CCDBG Act Sec. 658K(b), 42 U.S.C. Sec. 9858i; 45 C.F.R.
Sec. 98.65.
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Additionally, as the Government Accountability Office (GAO)
noted in 2020, ``[the Office of Child Care (OCC) at HHS]
oversees states'' improper payment risks through a process that
includes a requirement for states to submit corrective action
plans (CAP) when they estimate their annual payment error [or
improper] rates are at or above 10 percent.''\37\ Additionally,
OCC conducts on-site monitoring reviews of each state for each
three-year period.\38\ HHS recently began the practice of
posting oversight reports resulting from these visits.\39\
---------------------------------------------------------------------------
\37\U.S. Gov't Accountability Off., GAO-20-227, Office of Child
Care Should Strengthen Its Oversight and Monitoring of Program-
Integrity Risks, (2020), https://www.gao.gov/assets/gao-20-227-
highlights.pdf.
\38\FFY 2025-2027 CCDF Federal Onsite Monitoring & Oversight
Visits, Off. of Child Care, https://acf.gov/occ/report/ffy-2025-2027-
monitoring-reports-oversight-visits (last updated Mar. 2, 2026).
\39\Id.
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Changes have been made over the years to improve program
integrity. For example, in 2020, GAO published a report
entitled ``Child Care and Development Fund: Office of Child
Care Should Strengthen Its Oversight and Monitoring of Program-
Integrity Risks'' that explained the need for HHS to assess
fraud risks to the fund and highlighted nine recommendations to
better protect the integrity of the fund.\40\ GAO later
indicated that HHS had addressed all nine of these
recommendations.\41\ However, regardless of any recent
improvements that have been made, the Trump Administration's
reductions-in-force in 2025 did nothing to improve program
integrity as fewer staff were now available to help monitor the
program.
---------------------------------------------------------------------------
\40\U.S. Gov't Accountability Off., supra note 37.
\41\Id.
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Cases of Actual Fraud Should Be Addressed, Not Politicized
Fraud in child care should be taken seriously, not
politicized. The Majority have proposed bills--including H.R.
7725, the Stop Child Care Fraud Act--that, taken together,
could have the overall effect of upending the child care system
to address a problem that has not been proven to exist. We
recognize that the amendments to CCDBG offered by H.R. 7725
will not cause the same harm as the other bills marked up by
the Committee on March 5. However, the markup as a whole
reinforced the Majority's narrative that the biggest issue
facing federal child care delivery is not the meager amount
spent on it, but fraud in the system that it has not proven.
H.R. 7725 CODIFIES EXISTING REQUIREMENTS
H.R. 7725, the Stop Child Care Fraud Act, requires state
plans under CCDBG to include a description of the state's
internal controls, processes, and procedures to prevent fraud.
Plans would also need to include a description of how the state
``utilizes data within and across other State and local
agencies that have oversight of child care providers that serve
children'' under CCDBG. States are generally required to
include most of this information in their state plans pursuant
to regulation.\42\ We have no objection to it now being
required by law.
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\42\45 C.F.R. Sec. 98.16(ff).
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DEMOCRATIC AMENDMENTS OFFERED DURING MARKUP OF H.R. 7725
Recognizing that H.R. 7725 does nothing to materially
improve the delivery of child care, Rep. Summer Lee (D-PA)
offered an amendment designed to ensure that no family pays
more than seven percent of their income for child care costs.
The language from this amendment mirrors language in H.R. 4418,
the Child Care for Working Families Act,\43\ which would make
high-quality child care affordable for families and address the
child care shortages that have, in many cases, made it
impossible for families to even find an open child care slot.
Language substantially similar to H.R. 4418 was included in the
Build Back Better Act, which passed the House in November
2021.\44\ Families are demanding real solutions to affordable
child care. This amendment's goal was to move us meaningfully
closer to the dream of affordable, accessible, high-quality
care for every family. Committee Republicans rejected the
amendment on a party-line vote.
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\43\H.R. 4418, 119th Cong. (2025).
\44\H.R 5376 Sec. 23001, 117th Cong. (as passed by House, Nov. 19,
2021).
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CONCLUSION
Committee Democrats unanimously supported H.R. 7725 when
the Committee on Education and Workforce considered it on March
5, 2026. It is important to address any instance of fraud with
federal funds designed to support child care programs, and this
bill codifies existing requirements that support program
integrity without adding new burdens to states and providers.
We urge the House of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Joe Courtney,
Frederica Wilson,
Suzanne Bonamici,
Mark DeSaulnier,
Jahana Hayes,
Ilhan Omar,
Adelita Grijalva,
Members of Congress.
[all]