H.R. 7794

[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.

_______________________________________________________________________

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

_______________________________________________________________________

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.
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