Bill Summary
The proposed legislation aims to establish the Early Childhood Education Trust Fund within the U.S. Treasury, funded primarily through a percentage of estate tax revenues. Specifically, it appropriates 15% of the estate tax collected each year to this fund, with a mandate that at least 25% of these funds be allocated for specific child care services. The Trust Fund will support child care supply grants awarded by the Secretary of Health and Human Services to assist lead agencies in providing child care services, bypassing certain existing regulatory constraints.
Additionally, the legislation proposes a decrease in the estate and gift tax exemption, lowering the threshold from $15 million to $7 million, effective for estates and gifts after December 31, 2025. This change is intended to increase revenue that can be directed to the newly established Trust Fund.
Overall, the bill aims to enhance funding for early childhood education and child care services while modifying estate tax provisions to support this initiative.
Possible Impacts
Here are three examples of how the proposed legislation to establish the Early Childhood Education Trust Fund could affect people:
1. **Increased Access to Child Care Services**: The establishment of the Early Childhood Education Trust Fund is intended to provide financial support for child care services. This could lead to increased funding for public and private child care programs, making these services more accessible and affordable for families. As a result, parents may have an easier time finding quality child care options, which can alleviate financial burdens and allow more parents to participate in the workforce.
2. **Enhanced Quality of Early Childhood Education**: By directing funds from the Early Childhood Education Trust Fund towards child care services, the legislation could improve the quality of early childhood education programs. This may include funding for training and professional development for child care providers, as well as investments in educational resources and facilities. Improved quality in early childhood education can lead to better developmental outcomes for children, preparing them for future academic success.
3. **Impact on Estate Planning and Wealth Distribution**: The proposed decrease in the estate and gift tax exemption from $15 million to $7 million could significantly affect high-net-worth individuals and families. This change may lead to increased tax liabilities for estates exceeding the new exemption threshold, which could influence decisions regarding wealth transfer and estate planning. Families with estates above the new limit might seek to restructure their assets or make adjustments to their gifting strategies, impacting the distribution of wealth among beneficiaries and potentially reducing the assets available for future generations.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4330 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 4330
To amend the Internal Revenue Code of 1986 to establish the Early
Childhood Education Trust Fund consisting of amounts paid for the
estate tax and made available to fund child care services, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 10, 2025
Ms. Jacobs introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and Workforce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish the Early
Childhood Education Trust Fund consisting of amounts paid for the
estate tax and made available to fund child care services, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EARLY CHILDHOOD EDUCATION TRUST FUND.
(a) In General.--Subchapter A of Chapter 98 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 9512. EARLY CHILDHOOD EDUCATION TRUST FUND.
``(a) Creation of Trust Fund.--There is hereby established in the
Treasury of the United States a trust fund to be known as the Early
Childhood Education Trust Fund, consisting of such amounts as may be
appropriated or credited to such Trust Fund as provided in this section
or section 9602(b).
``(b) Transfer to Trust Fund of Amounts Equivalent to Certain
Taxes.--There are hereby appropriated to the Early Childhood Education
Trust Fund 15 percent of the amount equivalent to the taxes received in
the Treasury under section 2001 in each calendar year, of which not
less than 25 percent shall be made available to carry out subsection
(e).
``(c) Expenditures From Trust Fund.--Amounts in the Early Childhood
Education Trust Fund shall be available to carry out subsection (e).
``(d) Supplemental Appropriation.--Amounts made available under
this section are authorized in addition to any other amounts authorized
to carry out the Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858m).
``(e) Grants.--From the amounts made available under subsection (c)
and under the authority of section 658O of the Child Care and
Development Block Grant Act of 1990 (42 U.S.C. 9858m), the Secretary of
Health and Human Services shall award to each lead agency a child care
supply grant, without regard to the requirements in subparagraphs (C)
and (E) of section 658E(c)(3), and in section 658G, of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(3), 9858e).
Such grant shall be allotted in accordance with section 658O of the
Child Care and Development Block Grant Act of 1990 (42 U.S.C.
9858m).''.
(b) Clerical Amendment.--The table of sections for subchapter A of
chapter 98 of such Code is amended by adding at the end the following
new item:
``Sec. 9512. Early Childhood Education Trust Fund.''.
(c) Effective Date.--The amendments made by this section shall take
effect on December 31, 2025.
SEC. 2. DEINCREASE IN ESTATE AND GIFT TAX EXEMPTION.
(a) In General.--Section 2010(c)(3) of the Internal Revenue Code of
1986 is amended--
(1) in subparagraph (A), by striking ``$15,000,000'' and
inserting ``$7,000,000'', and
(2) in subparagraph (B)--
(A) by striking ``2011'' and inserting ``2026'',
and
(B) in clause (ii), by striking ``2010'' and
inserting ``2025''.
(b) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying and gifts made after December 31,
2025.
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