US SB535

Reauthorizes the Child Care and Development Block Grant Act at $14 billion annually for fiscal years 2026-2031 and requires all direct child care services be delivered through child care certificates (vouchers) to parents rather than government contracts

Expands eligibility for relative caregivers (grandparents, aunts, uncles, adult siblings) to receive payment through child care certificates, with payment rates set at minimum 75% of family child care provider rates, and allows married parents where one parent stays home to receive disbursements as relative caregivers

Removes income eligibility cap of 85% of state median income, replacing it with 85% for unmarried working parents and 70% for married two-parent households where both work, with a $1 million family asset limit

Strengthens protections for religious child care providers, allowing them to retain religious character, select employees based on religious beliefs, and maintain exemptions under civil rights laws; creates private right of action for violations

Repeals the federal Child and Dependent Care Tax Credit (IRC Section 21) and establishes $50 million pilot programs for fraud prevention and increasing relative caregiver participation