Stop Child Care Funding Fraud Act of 2026

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 7794 Introduced in House (IH)]

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119th CONGRESS 2d Session H. R. 7794

To amend the Child Care and Development Block Grant Act of 1990 to provide transparency and accountability in the administration of Federal child care funds expended by the States.

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IN THE HOUSE OF REPRESENTATIVES

March 4, 2026

Mr. Kennedy of Utah introduced the following bill; which was referred to the Committee on Education and Workforce

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A BILL

To amend the Child Care and Development Block Grant Act of 1990 to provide transparency and accountability in the administration of Federal child care funds expended by the States.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Child Care Funding Fraud Act of 2026''.

SEC. 2. AMENDMENTS.

(a) State Reports and Audits.--Section 658K of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858i) is amended by adding at the end the following: ``(c) State Improper Payments.-- ``(1) State reports of improper payments.--Not later than June 30 of the each program period referred to in section 658E(d), a State shall submit to the Secretary a report on the rate of the improper payments made by such State with funds received under this subchapter during such period and the a breakdown of actions the State will take to lower such rate in subsequent program periods. ``(2) Incentive penalties to reduce improper payments.--If a State report submitted under paragraph (1) identifies a rate of improper payments for program period referred to in section 658E(d) that-- ``(A) exceeds 6 percent but is less than 8 percent, then the Secretary shall reduce by 5 percent the aggregate amount of funds such State would otherwise receive under this subchapter for each subsequent program period; ``(B) is at least 8 percent but is less than 10 percent, then the Secretary shall reduce by 10 percent the aggregate amount of funds such State would otherwise receive under this subchapter each subsequent program period; and ``(C) equals or exceeds 10 percent, then the Secretary shall reduce by 15 percent the aggregate amount of funds such State would otherwise receive under this subchapter for each subsequent program period; until the Secretary certifies that such State has implemented a corrective action plan submitted under paragraph (3) and submitted to the Secretary all data required under such plan. ``(3) State corrective action plans.--If for any such period the State report submitted under paragraph (1) identifies a rate of improper payments that exceeds 6 percent, such State shall complete, and submit to the Secretary not later than 60 days after submission of such report, a payment corrective action plan to reduce the report such rate to not more than 6 percent. Such plan shall contain verified child attendance documentation for subsidized child care services provided with funds received under this subchapter, in an aggregated format that does not contain personally identifiable information and that does not disclose identifiable child-level data. ``(4) Definition.--For purposes of this subsection, the term `improper payment' means a payment made under this subchapter for child care services provided to a child, that does not comply with this subchapter because-- ``(A) such payment exceeds the amount that should have been paid to provide such services to such child; ``(B) such payment is less than the amount that should have been paid to provide such services to such child; ``(C) such payment is made to provide such services to such child who is not eligible to receive such services; or ``(D) such payment is made for such services in an amount that cannot be verified to be in compliance with this subchapter. ``(5) Rule of construction.--Nothing in this subsection shall be construed to prevent the Secretary from withholding from a State funds such State would otherwise receive under this subchapter if the Secretary determines such State has violated a provision of this subchapter or a regulation issued to carry out this subchapter.''. (b) Report by Secretary.--The 1st sentence of section 658L(a) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858j) is amended-- (1) by inserting ``disaggregated by State'' after ``report''; and (2) by inserting ``(including a State-by-State breakdown showing the improper payment rate of each State and the actions taken by each State to lower its improper payment rates)'' after ``analysis''.

SEC. 3. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take effect 1 year after the date of the enactment of this Act. <all>