Child Care and Development Fund (CCDF) Program, 80465-80582 [2015-31883]
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Vol. 80
Thursday,
No. 247
December 24, 2015
Part II
Department of Health and Human Services
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45 CFR Part 98
Child Care and Development Fund (CCDF) Program; Proposed Rule
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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Part 98
[Docket Number ACF–2015–0011]
RIN 0970–AC67
Child Care and Development Fund
(CCDF) Program
Office of Child Care (OCC),
Administration for Children and
Families (ACF), Department of Health
and Human Services (HHS).
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
The Department of Health and
Human Services, Administration for
Children and Families, proposes to
amend the Child Care and Development
Fund (CCDF) regulations. This proposed
rule makes changes to CCDF regulations
to detail provisions of the Child Care
and Development Block Grant Act of
2014 in order to protect the health and
safety of children in child care; help
parents make informed consumer
choices and access information to
support child development; provide
equal access to stable, high quality child
care for low-income children; and
enhance the overall quality of child care
and the early childhood workforce.
DATES: In order to be considered,
written comments on this proposed rule
must be received on or before February
22, 2016.
ADDRESSES: You may submit comments,
identified by docket number ACF–
2015–0011and/or RIN number 0970–
AC67, by either of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Submit comments to the
Office of Child Care, Administration for
Children and Families, 330 C Street
SW., Washington, DC 20201, Attention:
Office of Child Care Policy Division.
Instructions: All submissions received
must include the agency name and
docket number or RIN number for this
rulemaking. To ensure we can
effectively respond to your comment(s),
clearly identify the issue(s) on which
you are commenting. Provide the page
number, identify the column, and cite
the relevant paragraph/section from the
Federal Register document, (e.g., On
page 10999, second column,
§ 98.20(a)(1)(i).). All comments received
are a part of the public record and will
be posted for public viewing on
www.regulations.gov, without change.
That means all personal identifying
information (such as name or address)
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SUMMARY:
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will be publicly accessible. Please do
not submit confidential information, or
otherwise sensitive or protected
information. We accept anonymous
comments. If you wish to remain
anonymous, enter ‘‘N/A’’ in the required
fields.
FOR FURTHER INFORMATION CONTACT:
Andrew Williams, Office of Child Care,
202–205–0750 (not a toll-free call). Deaf
and hearing impaired individuals may
call the Federal Dual Party Relay
Service at 1–800–877–8339 between 8
a.m. and 7 p.m. Eastern Time.
SUPPLEMENTARY INFORMATION:
Contents
I. Executive Summary
I. Background
A. Child Care and Development Fund
(CCDF)
B. Discussion of Changes Made in This
Proposed Rule
C. Effective Date
III. Statutory Authority
IV. Provisions of Proposed Rule
Subpart A—Goals, Purposes and
Definitions
Subpart B—General Application
Procedures
Subpart C—Eligibility for Services
Subpart D—Program Operations (Child
Care Services) Parental Rights and
Responsibilities
Subpart E—Program Operations (Child
Care Services) Lead Agency and Provider
Requirements
Subpart F—Use of Child Care and
Development Funds
Subpart G—Financial Management
Subpart H—Program Reporting
Requirements
Subpart I—Indian Tribes
Subpart J—Monitoring, Non-Compliance,
and Complaints
Subpart K—Error Rate Reporting
V. Paperwork Reduction Act
VI. Regulatory Flexibility Act
VII. Executive Orders 12866 and 13563
VIII. Regulatory Impact Analysis
IX. Unfunded Mandates Reform Act of 1995
X. Executive Order 13045 on Protection of
Children
XI. Congressional Review
XII. Executive Order 13132
XIII. Treasury and General Government
Appropriations Act of 1999
XIV. Executive Order 13175 on Consultation
With Indian Tribes
I. Executive Summary
Overview. On November 19, 2014,
President Barack Obama signed the
Child Care and Development Block
Grant (CCDBG) Act of 2014 (Pub. L.
113–186) into law following its passage
in the 113th Congress. The CCDBG Act
(to be codified, as amended, at 42 U.S.C.
9858 et seq., and hereinafter referred to
as the ‘‘Act’’) (along with Section 418 of
the Social Security Act (42 U.S.C. 618))
authorizes the Child Care and
Development Fund (CCDF), which is the
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primary Federal funding source devoted
to providing low-income families who
are working or participating in
education or training activities with
help paying for child care and
improving the quality of child care for
all children.
The bipartisan CCDBG Act of 2014
made sweeping statutory changes that
will require significant reforms to State
and Territory CCDF programs to raise
the health, safety, and quality of child
care and provide more stable child care
assistance to families. It expanded the
purposes of the CCDF for the first time
since 1996, ushering in a new era for
child care in this country. Since 1996,
a significant body of research has
demonstrated the importance of early
childhood development and how stable,
high quality early experiences can
positively influence that development
and contribute to children’s futures. In
particular, low-income children stand to
benefit the most from a high quality
early childhood experience. Research
has also shown the important role of
child care financial assistance in
helping parents afford reliable child
care in order to get and keep stable
employment or pursue education. The
reauthorized law recognizes CCDF as an
integral program to promote both the
healthy development of children and
parents’ pathways to economic stability.
In Fiscal Year 2014, CCDF provided
child care assistance to 1.4 million
children from nearly 1 million lowincome working families in an average
month. The Congressional
reauthorization of CCDBG made clear
that the prior law was inadequate to
protect the health and safety of children
in care and that more needs to be done
to increase the quality of CCDF-funded
child care. It also recognized the central
importance of access to subsidy
continuity in supporting parents’ ability
to achieve financial stability and
children’s ability to develop nurturing
relationships with their caregivers,
which creates the foundation for a high
quality early learning experience.
Purpose of this Regulatory Action.
The majority of current CCDF
regulations at 45 CFR parts 98 and 99
were last revised in 1998 (with the
exception of some more recent updates
related to State match and error
reporting). This proposed regulatory
action is needed to update the
regulations to accord with the
reauthorized law and to update CCDF
regulations to reflect what has been
learned since 1998 about child care
quality and child development, and
changes in the law. The purposes of the
law, as revised by Congress, have
guided regulation development.
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Legal authority. This proposed
regulation is being issued under the
authority granted to the Secretary of
Health and Human Services by the
CCDBG Act of 1990, as amended, (42
U.S.C. 9858 et seq.) and Section 418 of
the Social Security Act (42 U.S.C. 618).
Major Provisions of the Proposed
Rule. The proposed rule addresses the
CCDBG Act of 2014, which includes
provisions to: (1) Protect the health and
safety of children in child care; (2) help
parents make informed consumer
choices and access information to
support child development; (3) provide
equal access to stable, high quality child
care for low-income children; and (4)
enhance the quality of child care and
the early childhood workforce.
Protect Health and Safety of Children
in Child Care. This proposed rule would
provide detail on the health and safety
standards established in the new law,
including health and safety training,
comprehensive background checks, and
monitoring. The law requires providers
receiving CCDF funds (including those
that are license-exempt) to be
monitored, at least annually, to
determine whether health and safety
practices and standards are being
followed in the child care setting,
including a pre-licensure visit for
licensed providers. Regular monitoring
of child care settings is necessary to
ensure compliance with appropriate
standards that protect the health and
safety of children. The proposed rule
would allow Lead Agencies to develop
alternative monitoring requirements for
CCDF-funded care provided in the
child’s home and would exempt relative
caregivers from the monitoring
requirement at the option of Lead
Agencies.
In this proposed rule, we address the
Act’s (i.e., the Child Care and
Development Block Grant Act’s)
background check requirement by
proposing to require all child care staff
members (including prospective staff
members) of all licensed, regulated, or
registered child care providers and all
child care providers eligible to deliver
CCDF services to have a comprehensive
background check, unless they are
related to all children in their care. We
propose to extend the background check
requirement to all adults residing in
family child care homes. Based on our
interpretation of the statutory
provisions, we believe that all parents,
regardless of whether they receive CCDF
assistance, deserve this basic protection
of knowing that those individuals who
have access to their children do not
have prior records of behavior that
could endanger their children.
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The Act requires Lead Agencies to
establish standards in ten topic areas
related to health and safety that are
fundamental for any child care setting,
such as first aid, CPR, and safe sleep
practices. We propose to add
recognizing and reporting child abuse
and neglect to this list. The Act also
requires Lead Agencies to maintain
records of substantiated parental
complaints about child care. In this
NPRM, we propose requiring Lead
Agencies to designate a hotline or
similar reporting process for parental
complaints. Child care providers would
also be required to report serious
injuries or deaths that occur in child
care settings in order to inform
regulatory or other policy changes to
improve health and safety.
Help Parents Make Informed
Consumer Choices and Access
Information to Support Child
Development. The Act expanded
requirements for the content of
consumer education to be made
available to parents receiving CCDF
assistance, the public, and where
applicable, child care providers. By
adding providers, Congress recognized
the positive role trusted caregivers can
play in communicating and partnering
with parents on a daily basis regarding
their children’s development and
available resources in the community.
Effective consumer education strategies
are important to inform parental choice
of child care and also to engage parents
in the development of their children in
child care settings—a new purpose of
the CCDF. States and Territories have
the opportunity to consider how
information can be best provided to
low-income parents through their
interactions with CCDF, partner
agencies, and child care providers, as
well as through electronic means such
as a Web site. Parents face great
challenges in finding reliable
information and making informed
consumer choices about child care for
their children. The new law strengthens
and builds on a foundational tenet of
CCDF—the primacy of parental choice—
by requiring that Lead Agencies provide
parents information about their child
care options and the quality of child
care providers as available.
The Act requires Lead Agencies to
make available via a consumer-friendly
and easily-accessible Web site,
information on policies and procedures
regarding: (1) Licensing child care
providers; (2) conducting background
checks and the offenses that would keep
a provider from being allowed to care
for children; and (3) monitoring of child
care providers. We are proposing this be
done through a single Web site that is
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easy for families to navigate and
provides widest possible access to
individuals who speak languages other
than English and persons with
disabilities. We propose that Lead
Agencies provide information about the
quality of providers on the consumer
Web site, if available, and give parents
receiving CCDF information about the
quality of their chosen providers.
The law requires Lead Agencies to
make results of monitoring available in
a consumer-friendly and easily
accessible manner. We are proposing
that this include posting at least five
years of full monitoring reports,
beginning with the effective date and
going forward, in a timely manner for
parents and providers. In the case that
full reports are not in plain language,
Lead Agencies must post a plain
language summary or interpretation in
addition to the full monitoring and
inspection report. Parents should not
have to parse through administrative
code or understand advanced legal
terms to determine whether safety
violations have occurred in a child care
setting.
Congress added a number of content
areas that will support parents in their
role as their child’s first and most
important teacher. In keeping with a
new purpose of the CCDF program to
‘‘promote involvement by parents and
family members in the development of
their children in child care settings,’’
the law requires information related to
best practices in child development and
State policies regarding child social and
emotional development, including any
State policies relevant to expulsion of
children under age 5 from child care
settings, be made available. The
reauthorized law also requires that Lead
Agencies provide information that can
help parents identify other financial
benefits and services that may support
their pathway to economic stability.
Families eligible for child care
assistance are often eligible for other
supports, and the law specifies that
information on several public benefit
programs, including Temporary
Assistance for Needy Families (TANF),
Supplemental Nutrition Assistance
Program (SNAP), Medicaid, and the
Children’s Health Insurance Program
(CHIP), be provided to them. In
addition, the law requires information
be provided on the programs and
services that are part of Individuals with
Disabilities Education Act (IDEA), such
as early intervention and special
education services and that parents are
given information on how to obtain a
developmental screening for their child.
Low-income parents deserve to have
easy access to the full range of
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information, programs, and services that
can support them in their parenting
efforts. To ensure equal access for
persons with limited English
proficiency and for persons with
disabilities, Lead Agencies would be
required to provide child care program
information in multiple languages and
alternative formats.
Provide Equal Access to High Quality
Child Care for Low-Income Children.
Congress established requirements that
will provide more stable child care
financial assistance to families,
including extending children’s
eligibility for child care for a minimum
of 12 months, regardless of increases in
parents’ earnings (as long as income
remains at or below the Federal
eligibility limit) and temporary changes
in participation in work, training, or
education. This will make it easier for
parents to maintain employment or
complete education programs and
supports both family financial stability
and the relationship between children
and their caregivers. Under the law,
Lead Agencies that choose to end
assistance prior to 12 months, due to a
non-temporary change in a parent’s
work, training, or education
participation, must continue assistance
for a minimum of three months to allow
for job search activities.
This proposed rule would require a
set of policies intended to stabilize
families’ access to child care assistance
and, in turn, help stabilize their
employment or education and their
child’s care arrangement. These policies
also have the potential to stabilize the
revenue of child care providers who
receive CCDF funds, as they would
experience more predictable, reliable,
and timely payments for services. We
propose to reduce reporting
requirements for families that can result
in them unduly losing their assistance.
Parents often find it difficult to navigate
administrative processes and paperwork
required to maintain their eligibility,
and State policies can be inflexible to
changes in a family’s circumstances.
These provisions also make it easier for
Lead Agencies to align CCDF policies
with other programs, such as SNAP,
Medicaid, CHIP, Early Head Start, and
Head Start. More than half of children
receiving CCDF-funded child care have
incomes under poverty and qualify for
Head Start and significant proportions
of CCDF families are also eligible for
SNAP. In this proposed rule, while
families may be determined to be
ineligible within the minimum 12
month eligibility period if their income
exceeds 85% SMI (taking into account
irregular fluctuations in income) or, at
Lead Agency option, the family
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experiences a non-temporary cessation
in job, training, or education, we clarify
that additional State-imposed eligibility
criteria apply only at the time of initial
eligibility determination and
redetermination and provide examples
of changes in parents’ scheduling and
conditions of employment that meet the
statutory intent of stabilizing assistance
for families through changes in
circumstance. We propose that Lead
Agencies that set their income eligibility
threshold below 85 percent of State
median income (SMI) must allow
parents who otherwise qualify for CCDF
assistance to continue receiving
assistance, at subsequent
redeterminations, until their income
exceeds the Federal income limit (85
percent of SMI for a family of the same
size) or for a period of at least one year
after the point at which the family’s
income exceeds the State eligibility
threshold. This approach promotes
continuity of care for children while
allowing for wage growth for families to
move on a path toward economic
stability. All too often, getting and
keeping CCDF assistance is overly
burdensome for parents, resulting in
short durations of assistance and
churning on and off CCDF as parents
lose assistance and then later return.
This instability disrupts parental
employment and education, harms
children, and runs counter to nearly all
of CCDF’s purposes. We believe this full
set of provisions that facilitates easier
and sustained access to assistance is
necessary to strengthen CCDF as a twogeneration program that supports work,
training, and education, as well as
access to high quality child care.
Congress reaffirmed the core belief
that families receiving CCDF-funded
child care should have equal access to
child care that is comparable to that of
non-CCDF families. The Act requires
Lead Agencies to set provider payment
rates based on a valid market rate survey
or alternative methodology. To allow for
equal access, we propose that Lead
Agencies set base payment rates at least
at a level sufficient to cover the costs to
providers of the health, safety, and
quality requirements included in the
NPRM and provide equal access to child
care available to families with incomes
above 85 percent of SMI. This could be
assured by setting payment rates at the
75th percentile of a recent market rate
survey, which we believe remains an
important benchmark for gauging equal
access. Lead Agencies that set rates
below the 75th percentile would be
required to demonstrate that their
payment rates allow CCDF families to
purchase care that is of comparable
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quality to care that is available to
families with incomes above 85 percent
of SMI. Low payment rates limit access
to high quality care for children
receiving CCDF-funded care and violate
the equal access provision that is central
to CCDF. We believe higher provider
payment rates are necessary to ensure
that providers receiving CCDF funds
have the means to provide high quality
care for our country’s low-income
children. We also propose that Lead
Agencies be required to use some direct
contracts or grants, in addition to
vouchers or certificates, in order to
build the supply of high quality care.
In this NPRM, we provide detail on
the statutory requirements for Lead
Agencies to pay providers in a timely
manner based on generally accepted
payment practices for non-CCDF
providers and that Lead Agencies delink
provider payments from children’s
absences to the extent practicable. We
establish a new Federal benchmark for
affordable parent fees of 7 percent of
family income and allow Lead Agencies
more flexibility to waive co-payments
for vulnerable families. We propose that
Lead Agencies be permitted to increase
parent fees only at redetermination or
during a period of graduated phaseout
when families’ incomes have increased
above the Lead Agency’s initial income
eligibility threshold, but seek comment
around several elements of these
policies.
This proposed rule would require
Lead Agencies to take into consideration
children’s development and learning
and promote continuity of care when
authorizing child care services; offer
increased flexibility for determining
eligibility of vulnerable children; and
clarify that Lead Agencies are not
required to restrict a child’s care to the
hours of a parent’s work or education.
We believe these changes are important
to make the program more child-focused
and ensure that the most vulnerable
children have access to and benefit from
high quality care. These provisions may
be implemented broadly in ways that
best support the goals of Lead Agencies.
Enhance the Quality of Child Care
and the Early Childhood Workforce. In
this NPRM, we provide detail on the
statutory requirement to increase
spending on initiatives that improve the
quality of care. The law increases the
share of CCDF funds directed towards
quality improvement activities,
authorizes a new set-aside for infanttoddler care, and drives investments
towards increasing the supply of high
quality care for infant, toddlers,
children with special needs, children
experiencing homelessness, and other
vulnerable populations including
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children in need of nontraditional hour
care and children in poor communities.
The law requires States and Territories
to submit an annual report on quality
expenditures, including measures
created by the Lead Agency to evaluate
progress on quality improvement. This
proposed rule would require Lead
Agencies to report data on their progress
on those measures. The law also
increases quality through more robust
program standards, including training
and professional development standards
for caregivers, teachers, and directors to
help those working with children
promote their social, emotional,
physical, and cognitive development.
In this rule, we address the law’s
training requirements by proposing that
child care caregivers, teachers, and
directors of CCDF providers receive
training prior to caring for children, or
during an orientation period not to
exceed three months, and on an annual
basis. In order for the health and safety
requirements to be implemented, and
because these are areas that the Lead
Agency will monitor, we propose that
training include 10 basic health and
safety topics identified in the Act, as
well as recognizing and reporting child
abuse and neglect in order to comply
with child abuse reporting
requirements.
Under the proposed regulation, Lead
Agencies must provide for a progression
of professional development for
caregivers, teachers, and directors that
may include postsecondary education.
Through this NPRM, we propose
definitions for six key components of a
professional development framework
and propose, to the extent practicable,
that ongoing training yields continuing
education units or is credit-bearing.
These components advance expert
recommendations to improve the
knowledge and competencies of those
who care for young children, which is
central to children’s learning
experiences and the quality of child
care.
In addition, the Act includes a
number of provisions to improve access
to high quality child care for children
experiencing homelessness. The law
requires Lead Agencies to establish a
grace period that allows children
experiencing homelessness (and
children in foster care) to receive CCDF
services while allowing their families
(including foster families) a reasonable
time to comply with immunization and
other health and safety requirements.
Through this NPRM, we propose to
require Lead Agencies to help families
comply with such requirements and
coordinate with licensing agencies and
other relevant State and local agencies
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to provide referrals and support to help
families experiencing homelessness
comply with immunization and health
and safety requirements. The proposed
rule would also require Lead Agencies
to use the definition of homeless
applicable to school programs from the
McKinney-Vento Act to align with other
Federal early childhood programs (42
U.S.C. 11434a).
The Act does not indicate the extent
to which CCDF provisions apply to
Tribes. Starting in early 2015, OCC
began a series of formal consultations
with Tribal leaders to determine how
the provisions in the newly
reauthorized child care law should
apply to Tribes and Tribal
organizations. We heard from many
Tribal leaders and CCDF Administrators
asking for flexibility to implement child
care programs that meet the individual
needs of their communities. The
proposals included in this NPRM are
intended to increase Tribal Lead Agency
flexibility, in a manner consistent with
the CCDF dual goals of promoting
families’ financial stability and fostering
healthy child development. We are
proposing to differentiate and exempt
some Tribal grantees from a progressive
series of CCDF provisions based on
three categories of CCDF grant
allocations: Large, medium and small.
We are also allowing Tribes flexibility to
consider any Indian child in the Tribe’s
service area to be eligible to receive
CCDF funds, regardless of the family’s
income or work, education, or training
status, if a Tribe’s median income is
below a threshold established by the
Secretary.
Costs, benefits and transfer impacts.
Changes made by the CCDBG Act of
2014 and this proposed rule would have
the most direct benefit for the 1.4
million children and their parents who
use CCDF assistance to pay for child
care. Many of the Act’s changes will
also positively impact children who do
not directly participate in CCDF. Many
children who receive no direct
assistance from CCDF will benefit from
more rigorous health and safety
standards, provider inspections,
criminal background checks for child
care staff, and accessible consumer
information and education for their
parents and caregivers. The attention to
quality goes beyond health and safety.
Caregivers, teachers, and directors of
CCDF providers will be supported in
their ongoing professional development.
Under the Act, States and Territories
must direct an increasingly greater share
of their CCDF grant towards activities
that improve the quality of child care,
including a new share dedicated to
improving the quality of infant and
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toddler care. Low-income parents who
receive CCDF assistance will benefit
from more stable financial assistance as
they work toward economic stability
and their children will benefit from
more continuous relationships with
their caregivers. Providers will benefit
from improved provider payment rates
(by certificate or grant or contract), as
well as payment practices that support
their financial stability. These include
timely payments so that providers can
sustain their operations and quality and
paying providers for a reasonable
number of absent days. The positive
impacts of this law and the proposed
rule will impact children, families, and
providers now and into the future.
The cost of implementing changes
made by the Act and this proposed rule
would vary depending on a State’s
specific situation. There are a significant
number of States and Territories that
have already implemented many of
these policies. ACF conducted a
regulatory impact analysis to estimate
costs and benefits of provisions in the
final rule taking into account current
State practices. We evaluated major
areas of policy change, including
monitoring and inspections (including a
hotline for parental complaints),
background checks, training and
professional development, consumer
education (including Web site and
consumer statement), quality spending,
minimum 12-month eligibility and
related provisions, increased subsidies,
and supply building.
Based on our analysis, annualized
costs associated with these provisions,
averaged over a ten year window, are
$256 million and the annualized
amount of transfers is approximately
$840 million (both estimated using a 3
percent discount rate), which amounts
to a total annualized impact of $1.10
billion. Of that amount, $1.09 billion is
directly attributable to the statute, with
only an annualized cost of $1.6 million
(or less than 1% of the total estimated
impact) attributable to discretionary
provisions of this proposed regulation.
While this analysis does not attempt to
fully quantify the many benefits of the
reauthorization and this NPRM, we do
conduct a breakeven analysis to
compare requirements clarified through
this regulation against a potential
reduction in child fatalities and injuries.
Further detail and explanation can be
found in the regulatory impact analysis.
II. Background
A. Child Care and Development Fund
Nearly 13 million young children,
under age 5, regularly rely on child care
to support their healthy development
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and school success. (Census Bureau,
Who’s Minding the Kids? Child Care
Arrangements, Spring 2011).
Additionally, more than 10 million
children participate in a range of schoolage programs, before- and after-school
and during summers and school breaks.
(Afterschool Alliance, American After
3PM: Afterschool Programs in Demand,
2014) CCDF is the primary Federal
funding source devoted to providing
low-income families with access to
child care and before- and after-school
care and improving the quality of care
and, thus, an integral part of the nation’s
child care and early education system.
Each year, more than $5 billion in
Federal CCDF funding is allocated to
State, Territory and Tribal grantees.
Combined with State funds and
transfers from the Temporary Assistance
for Needy Families (TANF) program,
States and Territories spend nearly $9
billion annually to support child care
services to low-income families and to
improve the quality of child care. More
than $1 billion of this spending is
directed towards supporting child care
quality improvement activities designed
to create better learning environments
and more effective caregivers in child
care centers and family child care
homes across the country.
CCDF was created nearly 20 years ago,
upon the enactment of the Personal
Responsibility and Work Opportunity
Reconciliation Act (PRWORA) in 1996
(Pub. L. 104–193), in which Congress
replaced the former Aid to Families
with Dependent Children with the
framework of TANF block grants, and
established a new structure of
consolidated funding for child care.
This funding, provided under section
418 of the Social Security Act (42 U.S.C.
618), combined with funding from the
Child Care and Development Block
Grant (CCDBG) Act of 1990 (42 U.S.C
9858 et seq.), was designated by HHS as
the Child Care and Development Fund
(CCDF).
The CCDBG Act of 2014 (Pub. L. 13–
186) was the first reauthorization of
CCDBG since 1996. The reauthorized
CCDBG affirms the importance of CCDF
as a two-generation program that
supports parents’ financial success and
children’s healthy development. Since
PRWORA, the focus of CCDF has shifted
from one largely dedicated to the goal of
enabling low-income parents to work to
one that includes a focus on promoting
positive child development as we have
learned a great deal about the value of
high quality child care for young
children. While low-income parents
continue to need access to child care in
order to work and gain economic
independence, policymakers and the
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public now recognize that the quality of
child care arrangements is also critically
important.
Fifteen years ago, HHS (in
collaboration with other federal
agencies and private partners) funded
the National Academies of Sciences to
evaluate and integrate the research on
early childhood development and the
role of early experiences. (National
Research Council and Institute of
Medicine, From Neurons to
Neighborhoods: The Science of Early
Childhood Development, Board on
Children, Youth, and Families,
Commission on Behavioral and Social
Sciences and Education, 2000.) An
overarching conclusion was that early
experiences matter for healthy child
development. Nurturing and stimulating
care given in the early years of life build
optimal brain architecture that allows
children to maximize their enormous
potential for learning. On the other
hand, hardship in the early years of life
can lead to later problems. Interventions
in the first years of life are capable of
helping to shift the odds for those at risk
of poor outcomes toward more positive
outcomes. A multi-site study conducted
by the Frank Porter Graham Child
Development Institute found that, ‘‘. . .
children who experienced higher
quality care are more likely to have
more advanced language, academic, and
social skills,’’ and, ‘‘. . . children who
have traditionally been at risk of not
doing well in school are affected more
by the quality of child care experiences
than other children.’’ (E. PeisnerFeinberg, M. Burchinal, et al., The
Children of the Cost, Quality, and
Outcomes Study Go to School:
Executive Summary, University of North
Carolina at Chapel Hill, Frank Porter
Graham Child Development Center,
1999.)
Evidence continues to mount
regarding the influence children’s
earliest experiences have on their later
success and the role child care can play
in shaping those experiences. The most
recent findings from the National
Institute of Child Health and Human
Development (NICHD) showed that the
quality of child care children received
in their preschool years had small but
detectable associations with their
academic success and behavior into
adolescence. (NICHD, Study of Early
Child Care and Youth Development,
2010) Recent follow-up studies to the
well-known Abecedarian Project, which
began in 1972 and has followed
participants from early childhood
through young adulthood, found that
adults who participated in a high
quality early childhood education
program are still benefiting from their
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early experiences. Abecedarian Project
participants had significantly more
years of education than their control
group peers, were four times more likely
to earn college degrees, and had lower
risk of cardiovascular and metabolic
diseases in their mid-30s. (Campbell,
Pungello, Burchinal, et al., Adult
Outcomes as a Function of an Early
Childhood Educational Program: An
Abecedarian Project Follow-Up, Frank
Porter Graham Child Development
Institute, Developmental Psychology,
2012 and Campbell, Conti, Heckman et
al, Early Childhood Investments
Substantially Boost Adult Health,
Science 28 March 2014, Vol. 343.)
Research also confirms that consistent
time spent in afterschool activities
during the elementary school years is
linked to narrowing the gap in math
achievement, greater gains in academic
and behavioral outcomes, and reduced
school absences. (Auger, Pierce, and
Vandell, Participation in Out-of-School
Settings and Student Academic and
Behavioral Outcomes, presented at the
Society for Research in Child
Development Biennial Meeting, 2013.)
An analysis of over 70 after-school
program evaluations found that
evidence-based programs designed to
promote personal and social skills were
successful in improving children’s
behavior and school performance.
(Durlak, Weissberg, and Pachan, The
Impact of Afterschool Programs that
Seek to Promote Personal and Social
Skills in Children and Adolescents,
American Journal of Community
Psychology, 2010.) After-school
programs also promote youth safety and
family stability by providing supervised
settings during hours when children are
not in school. Parents with school-aged
children in unsupervised arrangements
face greater stress that can impact the
family’s well-being and successful
participation in the workforce. (Barnett
and Gareis, Parental After-School Stress
and Psychological Well-Being, Journal of
Marriage and the Family, 2006.)
CCDF often operates in conjunction
with other programs including Head
Start, Early Head Start, state prekindergarten, and before-and afterschool programs. States and Territories
have flexibility to use CCDF to provide
children enrolled in these programs fullday, full-year care, which is essential to
supporting low-income working
parents. CCDF also funds quality
improvements for settings beyond those
that serve children receiving subsidies.
CCDF has helped lay the groundwork
for development of State early learning
systems. Lead Agencies have used CCDF
funds to make investments in
professional development systems to
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ensure a well-qualified and effective
early care and education workforce.
Lead Agencies have provided
scholarships for child care teachers and
worked closely with higher education,
especially community colleges, to
increase the number of teachers with
training or a degree in early childhood
or youth development. Lead Agencies
have used CCDF funds to build quality
rating and improvement systems (QRIS)
to provide consumer education
information to parents, help providers
raise quality, and create a more systemic
approach to child care quality
improvement efforts and accountability.
These investments have likely also
generated benefits for children enrolled
in unsubsidized child care programs.
Child care is a core early learning and
care program and plays an important
role within a broad spectrum of early
childhood programs supporting young
children. The Administration has
consistently sought to support State and
Territory efforts to improve the
coordination and alignment of early
childhood programs through multiple
efforts, including the Race to the TopEarly Learning Challenge and the Early
Head Start-Child Care Partnerships.
Most recently, ACF published Caring for
our Children Basics, a set of
recommendations intended to create a
common framework to align basic
health and safety efforts across all early
childhood settings. This proposed rule
builds on the alignment and
coordination work that has been
advanced by the Administration. For
example, Lead Agencies would be
required to collaborate with multiple
entities, including State Advisory
Councils on Early Childhood Education
and Care, authorized by the Head Start
Act, or similar coordinating bodies. In
addition, minimum 12-month eligibility
periods will make it easier to align child
care assistance with eligibility periods
for other programs, such as Early Head
Start, Head Start, and state
prekindergarten. Policies that stabilize
access to child care assistance for
families and bring financial stability to
child care providers will play an
important role in supporting the success
of Early Head Start-Child Care
Partnerships.
According to a recent report by the
President’s Council of Economic
Advisors, investments in early
childhood development will reap
economic benefits now and in the
future. Immediate benefits include
increased parental earnings and
employment; future benefits come when
children who experience high quality
early learning opportunities are
prepared for success in school and go on
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to earn higher wages as adults. (Council
of Economic Advisors, Executive Office
of the President of the United States,
The Economics of Early Childhood
Investments, 2014.) Decades of research
show that experiences babies and
toddlers have in their earliest years
shape the architecture of the brain and
have long-term impacts on human
development. At the same time,
increasing the employability and
stability of parents reduces the impact
of poverty on children and sustains our
nation’s workforce and economy.
Studies have shown that access to
reliable child care contributes to
increased employment and earnings for
parents. (National Research Council and
Institute of Medicine, From Neurons to
Neighborhoods: The Science of Early
Childhood Development, Board on
Children, Youth, and Families,
Commission on Behavioral and Social
Sciences and Education, 2000 and
Council of Economic Advisors, The
Economics of Early Childhood
Investments.) In short, high quality
child care is a linchpin to creation of an
educational system that successfully
supports the country’s workforce
development, economic security, and
global competitiveness. Successful
implementation of the CCDBG Act of
2014 will ensure that child care is not
only safe, but also supports children’s
healthy development and their future
academic achievement and success.
Development of Regulation. After
enactment of the law, the Office of Child
Care (OCC) and the Office of the Deputy
Assistant Secretary for Early Childhood
Development in ACF conducted
outreach to engage with a variety of
stakeholders to better understand the
implications of its provisions. OCC
created a CCDF reauthorization page on
its Web site to provide public
information and an email address to
receive questions. OCC received
approximately 650 questions and
comments through this email address,
webinars, inquiries to regional offices,
and meetings with State, Territory and
Tribal Administrators. OCC leadership
and staff participated in more than 21
listening sessions with approximately
675 people representing diverse
national, state, and local stakeholders
regarding the law, held webinars, and
gave presentations at national
conferences. Participants included state
human services agencies, child care
caregivers and providers, parents with
children in child care, child care
resource and referral agencies, national
and State advocacy groups, national
stakeholders including faith-based
communities, after-school and school-
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age caregivers and providers, child care
researchers, State and local early
childhood organizations, provider
associations, labor unions, and Head
Start grantees. In addition, OCC held
five meetings with State and Territory
CCDF administrators and a series of
consultations with Tribal leaders to
describe the law and to gather input
from Federal grantees with
responsibility for operating the CCDF
program. This process informed and
was invaluable to ACF’s development of
this proposed rule.
ACF had previously issued an NPRM
for CCDF in May 2013, prior to passage
of the CCDBG Act of 2014 (78 FR 29442,
May 20, 2013). While that NPRM has
since been withdrawn (80 FR 25260,
May 4, 2015), public comments received
by ACF in 2013 have informed the
development of content for this
proposed rule. Where relevant, we refer
to comments received in response to the
2013 CCDF NPRM in the preamble for
this proposed rule.
Use of terms. Terminology used to
refer to child care settings and the
individuals who provide care for
children vary throughout the early
childhood and afterschool fields. In this
proposed rule, the terms caregiver,
director, and teacher refer to
individuals. The term provider refers to
the entity providing child care services.
This may be a child care program, such
as a child care center, or an individual
in the case of family child care or inhome care. Complete descriptions of
these terms are included in Subpart A
of this proposed rule.
B. Discussion of Changes Made in This
Proposed Rule
The changes included in this
proposed rule provide detail on major
provisions of the CCDBG Act of 2014 to:
(1) Protect the health and safety of
children in child care; (2) help parents
make informed consumer choices and
access information to support child
development; (3) provide equal access
to stable, high quality child care for lowincome children; and (4) enhance the
quality of child care and the early
childhood workforce.
First, Congress established minimum
health and safety standards including
mandatory criminal background checks,
at least annual monitoring of providers,
and health and safety training. Children
in CCDF-funded child care will now be
cared for by caregivers who have had
basic training in health and safety
practices and child development.
Parents will know that individuals who
care for their children do not have prior
records of behavior that endanger their
children. Health and safety is a
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necessary foundation for quality child
care that supports early learning and
development. Research shows that
licensing and regulatory requirements
for child care affect the quality of care
and child development. (Adams, G.,
Tout, K., Zaslow, M., Early care and
education for children in low-income
families: Patterns of use, quality, and
potential policy implications, Urban
Institute, 2007).
Second, Congress increased consumer
education requirements for States and
Territories and made clear that parents
need transparent information about
health and safety practices, monitoring
results, and the quality of child care
providers. Parents will now be able to
easily view on a Web site the standards
a child care provider meets and their
record of compliance. Most States and
Territories administering the CCDF
program have already begun building
QRIS, which make strategic investments
to provide pathways for providers to
reach higher quality standards. Our
proposed rule builds on the
reauthorization and Lead Agency efforts
to inform parents about the quality of
providers by proposing that the
consumer education Web site include
provider-specific quality information, if
available, such as from a QRIS, and that
Lead Agencies provide parents receiving
CCDF with information about the
quality of their chosen provider.
Third, parents need access to stable,
high quality child care for low-income
children and the law affirms that they
should have equal access to settings that
are comparable to those accessible to
non-CCDF families. Through this
proposed rule, we detail the law’s
continuity of care provisions, such as
extending eligibility for child care for a
minimum of 12 months regardless of a
parent’s temporary change in
employment or participation in
education or training. Continuity of
services contributes to improved job
stability and is important to a family’s
financial health. Family economic
stability is undermined by policies that
result in unnecessary disruptions to
receipt of a subsidy due to
administrative barriers or other
processes that make it difficult for
parents to maintain their eligibility and
thus fully benefit from the support it
offers. Continuity also is of vital
importance to the healthy development
of young children, particularly the most
vulnerable. Disruptions in services can
stunt or delay socio-emotional and
cognitive development. Safe, stable
environments allow young children the
opportunity to develop the relationships
and trust necessary to comfortably
explore and learn from their
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surroundings. Research has
demonstrated a relationship between
child care stability and social
competence, behavior outcomes,
cognitive outcomes, language
development, school adjustment, and
overall child well-being. (Adams,
Rohacek, and Danzinger, Child Care
Instability, The Urban Institute, 2010.)
This area includes a number of
proposed changes including
requirements for limiting administrative
burdens on parents and enabling
families to retain their child care
assistance as their income increases in
order to move towards economic
success. We also address the law’s equal
access provisions by requiring that base
payment rates be established at least at
a level that supports implementation of
the health, safety, and quality
requirements in the NPRM and ensure
access to care that is of comparable
quality as care available to families with
incomes above 85 percent of State
median income, ensuring that
copayments are affordable for families,
and establishing provider payment
practices that support access to high
quality child care.
Finally, this proposed rule addresses
improvements in the new law, which
would enhance the quality of child care
and the early childhood workforce.
States and Territories would need to
report on their investments in quality
activities, which will now be a greater
share of CCDF spending. They will also
expand quality investments in infanttoddler care. High quality care for
children under age 3 is the most
expensive and hardest care to find
during the most formative years. The
law requires States and Territories to
have training and professional
development standards in effect for
CCDF caregivers, providers, and we
propose building on this requirement by
outlining the components of a
professional development framework.
Research shows the fundamental
importance of the caregiver in a high
quality early learning setting and this
proposed rule would help ensure that
early childhood professionals have
access to the knowledge and skills they
need to best support young children and
their development.
Through our proposed changes, we
have strengthened program integrity by
proposing changes that address Lead
Agencies’ policies for internal controls,
fiscal management, and processes for
identifying fraud and improper
payments. We have also clarified key
eligibility and payment policies as they
relate to improper payments.
In developing this proposed rule, we
were mindful of CCDF’s purpose to
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allow Lead Agencies maximum
flexibility in developing child care
policies and programs. In some areas,
we have added flexibility in order to
allow Lead Agencies to tailor policies
that better meet the needs of the lowincome families they serve. For
example, we are providing more
flexibility for Lead Agencies to
determine when it is appropriate to
waive a family’s co-pay requirement. In
many areas, we have proposed new
requirements as dictated by the updated
law or because they further advance the
revised purposes of the CCDF program.
Changes in the law, and in this
proposed rule, would impact the State,
Territorial, and Tribal agencies that
administer the CCDF program. The law
requires changes across many areas:
Child care licensing, subsidy, quality,
workforce, and program integrity and
requires coordination across State
agencies. Achieving the full visions of
reauthorization will be challenging, but
this effort is necessary to improve child
care in this country for the benefit of our
children. ACF has and will continue to
consult with State, Territorial, and
Tribal agencies and provide technical
assistance throughout implementation.
In this proposed rule, we have
generally maintained the structure and
organization of the current CCDF
regulations. The preamble in this
proposed rule discusses the changes to
current regulations and contains certain
clarifications based on ACF’s experience
in implementing the prior final rules.
Where language of existing regulations
remains unchanged, the preamble
explanation and interpretation of that
language published with all prior final
rules also is retained, unless specifically
modified in the preamble to this
proposed rule. (See 57 FR 34352, Aug.
4, 1992; 63 FR 39936, Jul. 24, 1998; 72
FR 27972, May 18, 2007; 72 FR 50889,
Sep. 5, 2007).
C. Effective Date
ACF expects provisions included in
the Final Rule to become effective 60
days from the date of publication of the
Final Rule, except for provisions with a
later effective date as defined in the law
(discussed further below). Compliance
with provisions in the Final Rule would
be determined through ACF review and
approval of CCDF Plans, including State
Plan amendments, as well as through
the use of Federal monitoring, including
on-site monitoring visits as necessary.
ACF notes that Lead Agencies must
comply with the provisions of the Child
Care and Development Block Grant
(CCDBG) Act of 1990, as revised by the
CCDBG Act of 2014. Compliance with
key statutorily required implementation
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dates outlined in Program Instruction
CCDF–ACF–PI–2015–02 (https://
www.acf.hhs.gov/programs/occ/
resource/pi-2015-02), dated January 9,
2015, remain in effect. In some cases,
the CCDBG Act of 2014 specifies a
particular date when a provision is
effective. Where the law does not
specify a date, the new requirements
became effective upon the date of
enactment and States and Territories
have until September 30, 2016 to
implement the new statutory
requirement(s). ACF has previously
stated that if a State or Territory cannot
certify compliance with a specific
requirement in the FY 2016–2018 CCDF
Plan, the Lead Agency must provide a
State/Territory-specific implementation
plan for achieving compliance with
such provision(s) no later than
September 30, 2016.
We recognize that, at the time of
publication of this NPRM, States and
Territories are preparing their FY 2016–
2018 CCDF Plans, due March 1, 2016.
States and Territories have been asked
to comply with the law based on their
reasonable interpretation of the
requirements in the revised CCDBG
statute. Once a final rule is issued, any
State or Territory that does not fully
meet the requirements of the regulations
would need to revise its policies and
procedures to come into compliance,
and file appropriate Plan amendments
related to those changes.
We recognize that some of the
proposed changes in this NPRM may
require action on the part of a State’s
legislature or require State-level
rulemaking in order to implement. ACF
welcomes public comment on specific
provisions included in this proposed
rule that may warrant a longer phase-in
period and will take these comments
into consideration when developing the
Final Rule.
ACF has extended CCDF Tribal Plans
for one year. Tribal Lead Agencies will
submit new 3-year Plans for FY 2017–
2019, with an effective date of October
1, 2016. ACF expects that all provisions
related to Tribes included in the Final
Rule would become effective 60 days
from the date of publication of the Final
Rule. Tribal Lead Agencies may also
want to consider ACF’s interpretation of
the CCDBG Act included in this NPRM
as they consider policy changes and
prepare CCDF plans.
III. Statutory Authority
This proposed regulation is being
issued under the authority granted to
the Secretary of Health and Human
Services by the CCDBG Act (42 U.S.C.
9858 et seq.) and Section 418 of the
Social Security Act (42 U.S.C. 618).
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IV. Provisions of Proposed Rule
Subpart A—Goals, Purposes and
Definitions
Goals and Purposes (Section 98.1)
The CCDBG Act of 2014 amended and
expanded the law’s previous ‘‘goals’’
and renamed them ‘‘purposes’’. We are
proposing changes to regulatory
language at 45 CFR 98.1 to describe the
revised purposes of the CCDF program,
according to the updated law.
The first part of the regulations at
§ 98.1(a) mirrors the statutory language
describing the revised purposes of
CCDF. Language revised by the new law
is indicated in italics in this paragraph.
The purposes of CCDF are now: (1) To
allow each State maximum flexibility in
developing child care programs and
policies that best suit the needs of
children and parents within that State;
(2) to promote parental choice to
empower working parents to make their
own decisions regarding the child care
services that best suits their family’s
needs; (3) to encourage States to provide
consumer education information to help
parents make informed choices about
child care services and to promote
involvement by parents and family
members in the development of their
children in child care settings; (4) to
assist States in delivering high quality,
coordinated early childhood care and
education services to maximize parents’
options and support parents trying to
achieve independence from public
assistance; (5) to assist States in
improving the overall quality of child
care services and programs by
implementing the health, safety,
licensing, training, and oversight
standards established in this subchapter
and in State law (including State
regulations); (6) to improve child care
and development of participating
children; and (7) to increase the number
and percentage of low-income children
in high quality child care settings.
The second part at § 98.1(b) further
defines the purposes of this proposed
rule. We no longer refer to this section
as the purposes of CCDF, as in the
current regulations, so as not to create
confusion with the purposes now
established in law. We have retained
much of the previous language in this
paragraph but have made amendments
and additions to reflect the priorities in
this proposed rule of improving the
health, safety, and quality of child care
and supporting pathways to family
economic stability. We have removed
language that was included in the law’s
new purposes so as to avoid
duplication. The new language shown
in italics: (1) Maximize parental choice
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80473
of safe, healthy and nurturing child care
settings through the use of certificates
and through grants and contracts, and
by providing parents with information
about child care programs; (2) Include
in their programs a broad range of child
care providers, including center-based
care, family child care, in-home care,
care provided by relatives and sectarian
child care providers; (3) Improve the
quality and supply of child care and
before- and after-school care services
that meet applicable requirements and
promotes child development and
learning and family economic stability;
(4) Coordinate planning and delivery of
services at all levels, including Federal,
State, Tribal, and local; (5) Design
flexible programs that provide for the
changing needs of recipient families,
and engages families in their children’s
development and learning; (6)
Administer the CCDF responsibly to
ensure that statutory requirements are
met and that adequate information
regarding the use of public funds is
provided; (7) Design programs that
provide uninterrupted service to
families and providers, to the extent
statutorily possible, to support parental
education, training, and employment
and continuity of care that minimizes
disruptions to children’s learning and
development; (8) Provide a progression
of training and professional
development opportunities for
caregivers, teachers, and directors to
increase their effectiveness in
supporting children’s development and
learning and strengthen the child care
workforce.
Definitions (Section 98.2)
We are proposing technical changes to
definitions at § 98.2 and the addition of
six new definitions. In this paragraph,
italics indicate defined terms. First, we
are proposing technical changes by
deleting the definition for group home
child care provider and by making
conforming changes to the definitions
for categories of care, eligible child care
provider, and family child care provider.
The current regulation defines group
home child care provider as meaning
two or more individuals who provide
child care services for fewer than 24
hours per day per child, in a private
residence other than the child’s
residence, unless care in excess of 24
hours is due to the nature of the
parent(s)’ work. Some States,
Territories, and Tribes do not consider
group homes to be a separate category
of care when administering their CCDF
programs or related efforts, such as
child care licensing. According to the
National Association for Regulatory
Administration, at least 13 States do not
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license group homes as a separate
category. Some States and Territories
use alternative terminology (e.g., large
family child care homes), while others
treat all family child care homes
similarly regardless of size. Due to this
variation, we propose to delete the
separate definition for group home child
care provider, which requires a number
of technical changes to the definitions
section. We propose to revise the
definition of categories of care at § 98.2
to delete group home child care. Under
the proposed rule, categories of care
would be defined to include centerbased child care, family child care, and
in-home care (i.e., an individual caring
for a child in the child’s home).
Similarly, we propose to change the
definition for eligible child care
provider at § 98.2 to delete a group
home child care provider. The revised
definition defines an eligible child care
provider as a center-based child care
provider, a family child care provider,
an in-home child care provider, or other
provider of child care services for
compensation. Group home child care
would be considered a family child care
provider for these purposes.
Accordingly, we propose to amend the
definition for family child care provider
at § 98.2 to include larger family homes
or group homes. The existing definition
of family child care provider is limited
to one individual who provides services
as the sole caregiver. The proposed
definition would revise family child
care provider to include one or more
individuals who provide child care
services. The remainder of the
definition stays the same, specifying
that services are for fewer than 24 hours
per day per child, in a private residence
other than the child’s residence, unless
care in excess of 24 hours is due to the
nature of the parent(s)’ work.
Lead Agencies may continue to
provide CCDF services for children in
large family child care homes or group
homes, and this is allowable and
recognized by the revised definition of
family child care provider, which would
now include care in private residences
provided by more than one individual.
This proposed change would eliminate
group homes as a separately-defined
category of care for purposes of
administering the CCDF—thereby
allowing States, Territories, and Tribes
to more easily align their practices with
Federal requirements. Specifically, Lead
Agencies would no longer be required to
report separately on group homes in
their CCDF Plans (for example,
regarding health and safety
requirements), or to consider group
homes as a separate category for
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purposes of meeting parental choice
requirements at § 98.30 and equal access
requirements at § 98.45(b)(1). Rather,
group homes would now be considered
family child care homes for these
purposes.
These changes were proposed in the
2013 CCDF NPRM and received mostly
supportive comments. Several
commenters did not support the
deletion of group home child care. One
commenter said legislation would be
required to remove group home day care
from their State statute and would result
in those providers being classified as
child care centers leading to additional
costs because of higher payment rates.
Another commenter said elimination of
group home care would impact the
market rate for this category of care
since the State surveys group home and
family child care providers separately.
We are clarifying that States and
Territories would not be required to
eliminate group homes from their
categories of care or change the way
they categorize providers for the
purposes of analyzing or setting
provider payment rates.
We are also proposing two additional
changes to current definitions as called
for by new statutory language. We are
amending the definition of eligible child
so that, in addition to being at or below
85 percent of the State median income
for a family of the same size, a member
of the family must certify that the
‘‘family assets do not exceed
$1,000,000’’ as specified in Section
658P(4)(B) of the Act. We are amending
the definition of Lead Agency so that it
may refer to a State, Territorial or Tribal
entity, or a joint interagency office,
designated or established under
§§ 98.10 and 98.16(a) as indicated at
Section 658P(9) of the Act.
Finally, we are proposing to add five
new terms to the definitions due to
statutory changes and to include terms
commonly used in the child care
profession. We propose defining child
with a disability as: A child with a
disability as defined in section 602 of
the Individuals with Disabilities
Education Act (20 U.S.C. 1401); a child
who is eligible for early intervention
services under part C of the Individuals
with Disabilities Education Act (20
U.S.C. 1431 et seq.); a child who is less
than 13 years of age and who is eligible
for services under section 504 of the
Rehabilitation Act of 1973 (29 U.S.C.
794); or a child with a disability, as
defined by the State. This definition is
included in the Act. We changed the
language from ‘‘and’’ to ‘‘or’’ to clarify
that a child only has to meet one of the
four options in order to be considered
a child with a disability. We are
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defining English learner as an
individual who is limited English
proficient, as defined in section 9101 of
the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7801)
or section 637 of the Head Start Act (42
U.S.C. 9832) as defined verbatim in the
Act at Section 658P(5). We are defining
a child experiencing homelessness as
defined in section 725 of Subtitle VII–
B of the McKinney-Vento Act (42 U.S.C.
11434a). While a definition of child
experiencing homelessness was not
included in the CCDBG Act, we
understand the intent of Congress was
to apply the McKinney-Vento definition
here based on a letter sent to HHS
Secretary Sylvia Burwell in February
2015 from Senate and House members
(Senator Lamar Alexander, Senator
Patty Murray, Senator Richard Burr,
Senator Barbara Mikulski,
Representative John Kline,
Representative Robert ‘‘Bobby’’ Scott,
Representative Todd Rokita, and
Representative Marcia Fudge).
We also propose two new terms that
reflect professional recognition for early
childhood and school-age care teachers
and the terms used in the field. We are
defining teacher as a lead teacher,
teacher, teacher assistant or teacher aide
who is employed by a child care
provider for compensation on a regular
basis and whose responsibilities and
activities are to organize, guide and
implement activities in a group or
individual basis, or to assist a teacher or
lead teacher in such activities, to further
the cognitive, social, emotional, and
physical development of children from
birth to kindergarten entry and/or
school-age children and may be a family
child care provider. We recognize that
the responsibilities and qualifications
for lead teachers, teachers, and teacher
assistants are different as set by child
care licensing, state early childhood
professional development systems, and
state teacher licensure policies and have
proposed these definitions for
simplification in relation to
requirements in the law and this
proposed regulation. We strongly
encourage States and Territories to
recognize differentiated roles and
qualifications in their requirements and
systems. We are defining director as a
person who has primary responsibility
for the daily operations management for
a child care provider, which may be a
family child care home, and which may
serve children from birth to
kindergarten entry and/or school-age
children. The definition of caregiver in
the Act and current regulations remains
unchanged.
The proposed definitions for these
terms are based on a white paper
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commissioned by ACF for the proposed
revisions to the U.S. Department of
Labor’s Standard Occupational
Classification. (Proposed Revisions to
the Definitions for the Early Childhood
Workforce in the Standard
Occupational Classification. White
Paper Commissioned by the
Administration for Children and
Families, U.S. Department of Health
and Human Services, prepared by the
Workgroup on the Early Childhood
Workforce and Professional
Development under contract through
the Child Care and Early Education
Policy and Research Analysis, 2005–
2018. June 18, 2014, www.acf.hhs.gov/
sites/default/files/occ/soc_acf_
submittal.pdf).
Subpart B—General Application
Procedures
Lead Agencies have considerable
latitude in administering and
implementing their child care programs.
Subpart B of the regulations describes
some of the basic responsibilities of a
Lead Agency as defined in the statute.
A Lead Agency serves as the single
point of contact for all child care issues,
determines the basic use of CCDF funds
and priorities for spending CCDF funds,
and promulgates the rules governing
overall administration and oversight.
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Lead Agency Responsibilities (Section
98.10)
We are amending language at § 98.10
in accordance with new statutory
language at Section 658D(a) that a Lead
Agency may be a collaborative agency or
a joint interagency office, as designated
or established by the Governor of the
State (or by the appropriate Tribal
leader or applicant). Paragraphs (a)
through (e) remain unchanged. We
propose to add paragraph (f) to require
that, at the option of an Indian Tribe or
Tribal organization in the State, a Lead
Agency should consult, collaborate and
coordinate in the development of the
State Plan with Tribes or Tribal
organizations in the State in a timely
manner pursuant to § 98.14. Because
States also provide CCDF assistance to
Indian children, States benefit by
coordination with Tribes and we
encourage States to be proactive in
reaching out to the appropriate Tribal
officials for collaboration. We’ve added
‘‘consult’’ to recognize the need for
formal, structured consultation with
Tribal governments, including Tribal
leadership, and the fact that many States
and Tribes have consultation policies
and procedures in place.
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Administration Under Contracts and
Agreements (Section 98.11)
Written Agreements. Section 98.11
currently requires Lead Agencies that
administer or implement the CCDF
program indirectly through other local
agencies or organizations to have
written agreements with such agencies
that specify mutual roles and
responsibilities. However, it does not
address the content of such agreements.
We propose amending regulatory
language at § 98.11(a)(3) to specify that,
while the content of the written
agreements may vary based on the role
the agency is asked to assume or the
type of project undertaken, agreements
must, at a minimum, include tasks to be
performed, a schedule for completing
tasks, a budget that itemizes categorical
expenditures consistent with proposed
CCDF requirements at § 98.65(h), and
indicators or measures to assess
performance. Many Lead Agencies
administer the CCDF program through
the use of sub-recipients that have taken
on significant programmatic
responsibilities, including providing
services on behalf of the Lead Agency.
For example, some Lead Agencies
operate primarily through a countybased system, while others devolve
decision-making and administration to
local workforce boards, school readiness
coalitions or community-based
organizations such as child care
resource and referral agencies. Through
working with grantees to improve
program integrity, ACF has learned that
the quality and specificity of written
agreements vary widely, which hampers
accountability and efficient
administration of the program. These
proposed changes represent minimum,
common-sense standards for the basic
elements of those agreements, while
allowing latitude in determining
specific content. The Lead Agency is
ultimately responsible for ensuring that
all CCDF-funded activities meet the
requirements and standards of the
program, and thus has an important role
to play to ensure written agreements
with sub-recipients appropriately
support program integrity and financial
accountability.
We included this proposed provision
in our 2013 NPRM and received a large
number of comments from labor unions
regarding this change, specifically when
a sub-recipient of the Lead Agency
establishes affiliation agreements with
family child care networks to serve
CCDF children. Unions commented that
these requirements should apply in any
and all instances where CCDF funds are
sub-granted or passed through to an
entity, including arrangements between
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intermediary entities and individual
child care providers. Commenters
believed this additional requirement
would increase transparency and
promote greater accountability.
We are clarifying that, as proposed,
this provision applies only to written
agreements between Lead Agencies and
first-level sub-recipients (and not to
agreements between first-level subrecipients and their sub-recipients). The
regulations state that the agreement
‘‘must specify the mutual roles and
responsibilities of the Lead Agency and
the other agencies’’—indicating that the
Lead Agency is a party to the agreement.
This language is intended to be broad as
sub-entities may fulfill any number of
different roles or projects, including
implementing quality improvement
activities, determining eligibility for
families, or providing consumer
education on behalf of the Lead Agency.
We strongly encourage all agreements
between sub-recipients to have similar
provisions, but prefer to leave this as an
area of flexibility to give State and local
agencies discretion over such details,
given the wide-range of conditions and
circumstances involved. Also, we note
that regulations at § 98.67(c)(2) require
Lead Agencies to have in place fiscal
control and accounting procedures that
permit the tracing of funds to a level of
expenditure adequate to establish that
such funds have not been used in
violation of the CCDF rules. Therefore,
we would expect that when Lead
Agencies devolve program
administration to first, second, and
third-level entities they necessarily
must be concerned with the integrity
and transparency of all written
agreements involving CCDF funds.
We appreciate commenters on the
2013 NPRM bringing this issue to our
attention. We are cognizant that some
States and Territories lack strong
requirements to ensure there is
transparency in cases where a subrecipient contracts with a network of
family child care providers to serve
children receiving CCDF. This proposed
rule places a strong emphasis on
implementation of provider-friendly
payment practices, including proposing
that there be a payment agreement or
authorization of services for all
payments received by child care
providers. When a local entity is
contracting with a family child care
network for services, we agree that there
should be a clear understanding from
the outset regarding payment rates for
providers, any fees the provider may be
subject to, and payment policies.
Finally, in § 98.11(b)(5) we propose to
add a reference to the HHS regulations
requiring that Lead Agencies oversee the
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expenditure of funds by sub-grantees
and contractors, in accordance with 75
CFR parts 351 to 353. These regulations
implement the Office of Management
and Budget’s Uniform Administrative
Requirements for Federal awards (see
ACF, Uniform Administrative
Requirements, Cost Principles, and
Audit Requirements, Program
Instruction: CCDF–ACF–PI–2015–01,
January 2015.)
Plan Process (Section 98.14)
Coordination. Currently, § 98.14(a)(1)
requires Lead Agencies to coordinate
the provision of program services with
other Federal, State, and local early care
and development programs, including
the provision of such programs for the
benefit of Indian children. Section
658E(c)(2)(O) of the Act added language
to existing requirements for
coordination of programs that benefit
Indian children requiring Lead Agencies
to also coordinate the provision of
programs that serve infants and toddlers
with disabilities, children experiencing
homelessness and children in foster
care. We include all children with
disabilities, not just infants and
toddlers, in the regulatory language,
given the critical importance of serving
that population of children.
Lead Agencies also are required to
consult and coordinate services with
agencies responsible for public health,
public education, employment services/
workforce development, and TANF. The
CCDBG Act of 2014 added a
requirement for the Lead Agency to
develop the Plan in coordination with
the State Advisory Council on Early
Childhood Education and Care
authorized by the Head Start Act (42
U.S.C. 9831 et seq.) at Section
658E(c)(2)(R).
We propose to amend § 98.14(a)(1) to
add the State Advisory Council on Early
Childhood Education and Care or
similar coordinating body, as well as
additional new entities with which Lead
Agencies would be required to
coordinate the provision of child care
services. We have added parenthetical
language to paragraph (C) public
education to specify that coordination
with public education should also
include agencies responsible for prekindergarten programs, if applicable,
and educational services provided
under Parts B and C of the Individuals
with Disabilities Education Act (IDEA)
(20 U.S.C. 1400). Other proposed new
coordinating entities include agencies
responsible for child care licensing;
Head Start collaboration; Statewide
after-school network or other
coordinating entity for out-of-school
time care; emergency management and
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response; the Child and Adult Care
Food Program (CACFP); Medicaid;
mental health services agencies; services
for children experiencing homelessness,
including State Coordinators for the
Education of Children and Youth
Experiencing Homelessness; and, to the
extent practicable, local liaisons
designated by local educational agencies
(LEAs) in the State as required by the
McKinney-Vento Act (42 U.S.C. 11432)
and the Department of Housing and
Urban Development’s Continuum of
Care and Emergency Solutions Grantees.
Over time, the CCDF program has
become an essential support in local
communities to provide access to early
care and education in before and afterschool settings and to improve the
quality of care. Many Lead Agencies
already work collaboratively to develop
a coordinated system of planning that
includes a governance structure
composed of representatives from the
public and private sector, parents,
schools, community-based
organizations, child care, Head Start and
Early Head Start, child welfare, family
support, public health, and disability
services. Local coordinating councils or
advisory boards also often provide input
and direction on CCDF-funded
programs.
This type of coordination is
frequently facilitated through entities
such as State Advisory Councils on
Early Childhood Education and Care. In
both Head Start and CCDF,
collaboration efforts extend to linking
with other key services for young
children and their families, such as
medical, dental and mental health care;
nutrition; services to children with
disabilities; child support; refugee
resettlement; adult education; family
literacy; and employment training.
These comprehensive services are
crucial in helping families progress
towards economic stability and in
helping parents provide a better future
for their young children.
Implementation of the requirements
of the CCDBG Act of 2014 will require
leadership and coordination between
Lead Agencies and other child- and
family-serving agencies, services, and
supports at the State and local levels,
including those identified above. For
example, in many States, child care
licensing is administered in a different
agency than CCDF. In those States,
implementation of the inspection and
monitoring requirements included in
the CCDBG Act necessitates
coordination across agencies.
We proposed adding most of the
above entities in the 2013 NPRM and
received a large number of comments,
nearly all supportive. Many commenters
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suggested including additional
coordinating partners, such as child care
resource and referral agencies, provider
associations, maternal and child health
home visiting programs, faith-based
organizations, mental health services
agencies, and Affordable Care Act
health care outreach coordinators. With
four exceptions, discussed below, we
are declining to propose additional
agencies as coordinating partners. We
wanted to preserve State, Territory, and
Tribal flexibility and keep requirements
at this section manageable for Lead
Agencies. This is not to devalue the
importance of other coordinating
partners suggested by commenters. Lead
Agencies have the flexibility, and are
encouraged, to engage a wide variety of
cross-sector partners when developing
the CCDF Plan. Some of the
coordinating partners suggested by
commenters, such as provider
associations and faith-based
organizations are already assumed to be
included in existing regulations at
§ 98.14(a)(1), which requires
coordination with child care and early
childhood development programs.
In this proposed rule, we have
included CACFP, which was not
included in our list of proposed entities
for coordination in the 2013 NPRM.
CACFP is a Federal program that
provides assistance to child care
providers, including centers and family
child care homes, for the provision of
nutritious meals and snacks served to
participants. A large number of public
and private nonprofit child care centers,
Head Start programs, before- and afterschool programs, and other providers
that are licensed or approved to provide
child care services, including licenseexempt CCDF providers, participate in
CACFP. More than 3.3 million children
receive nutritious meals and snacks
each day as part of the child care they
receive, and many children supported
by CCDF subsidies attend child care
programs that also participate in
CACFP.
We are proposing to add CACFP
because of its nutritional importance. In
addition, we propose to include CACFP
because some of the training and
inspection requirements for child care
providers participating in CACFP are
similar to those that are now required
for providers receiving CCDF funds.
CACFP requires periodic unannounced
site visits to prevent and identify
management deficiencies, fraud, and
abuse under the program, as well as to
improve program operations. In order to
maximize available resources, we are
proposing to require coordination
between the State/Territory CCDF Lead
Agency and CACFP agency, if they are
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different. In the FY 2014–2015 CCDF
Plans, 43 States and Territories
indicated that they coordinate with
CACFP agencies in administration of the
child care program. For example, one
State described sharing lists of child
care providers receiving CCDF funds
with personnel who have oversight of
CACFP to maximize access to CACFP
services. Another State described
coordinating with CACFP in monitoring
child care services and providing
professional development to child care
caregivers on nutrition and health.
The second entity included above that
was not included in the 2013 NPRM is
the State agency responsible for services
for children experiencing homelessness.
The CCDBG Act of 2014 added a
number of provisions related to
improving access to high quality child
care for children experiencing
homelessness and we believe that
implementing these provisions will
necessitate coordination with State
agencies already overseeing services for
this population.
Third, we also propose to require
coordination with State mental health
services agencies, which were not
proposed for coordination in the 2013
NPRM. We are choosing to propose
these partners because of the desire to
encourage collaboration that will make
comprehensive services available for
children who require mental health
services.
We also propose to include the State/
Territory Medicaid agency, which was
not included in our list of proposed
entities for coordination in the 2013
NPRM. The reauthorized CCDBG
requires Lead Agencies to provide
information on resources and services
for parents to access developmental
screenings for their children, including
through the coordinated use of the Early
and Periodic Screening, Diagnosis, and
Treatment (EPSDT) program, which
would require coordination with the
Medicaid agency.
Finally, existing regulation at
§ 98.14(a)(1)(B) requires Lead Agencies
to coordinate the provision of services
with employment services/workforce
development. We propose to retain this
requirement without change since this
remains a critical area for coordination.
Last year the President signed the
Workforce Innovation and Opportunity
Act (WIOA) into law, replacing the
Workforce Investment Act of 1998.
WIOA authorizes and provides a
strategic framework for Federal
investments in: (1) Employment and
training services for adults, dislocated
workers, and youth and Wagner-Peyser
employment services administered by
the Department of Labor (DOL) through
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formula grants to States; (2) adult
education and literacy programs and
Vocational Rehabilitation State grant
programs that assist individuals with
disabilities in obtaining employment
administered by the Department of
Education (ED); and (3) other programs
administered by DOL, ED, and HHS,
including programs for specific
vulnerable populations such as the Job
Corps, YouthBuild, Indian and Native
Americans, and Migrant and Seasonal
Farmworker programs. Because child
care is an important support for families
engaged in workforce training and
development, we strongly encourage
CCDF Lead Agencies to collaborate with
WIOA implementation efforts as part of
the requirement at § 98.14(a)(1)(B) to
coordinate with employment services/
workforce development.
Combined Funding. In paragraph (3)
of § 98.14(a) we add the statutory
requirement that any Lead Agency that
combines funding for CCDF services
with any other early childhood
programs shall provide a description in
the CCDF Plan of how the Lead Agency
will combine and use the funding
according to Section 658E(c)(2)(O). Lead
Agencies have the option of combining
funding for CCDF child care services
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, children experiencing
homelessness, and children in foster
care. Combining funds could include
blending, layering, or pooling multiple
funding streams in an effort to expand
and/or enhance services for children
and families. For example, Lead
Agencies may use multiple funding
sources to offer grants or contracts to
programs to deliver services; a Lead
Agency may allow county or local
government to use coordinated funding
streams; or policies may be in place that
allow local programs to layer funding
sources to provide full-day, full-year
child care that meets Early Head Start,
Head Start or State/Territory prekindergarten standards in addition to
child care licensing requirements. As
per the OMB Circular A–133
Compliance Supplement 2014, https://
www.whitehouse.gov/omb/circulars/
a133_compliance_supplement_2014,
CCDF funds may be used in
collaborative efforts with Head Start
programs to provide comprehensive
child care and development services for
children who are eligible for both
programs. In fact, the coordination and
collaboration between Head Start and
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CCDF is strongly encouraged by sections
640(g)(1)(D) and (E), 640(h),
641(d)(2)(H)(v), and 642(e)(3) of the
Head Start Act in the provision of full
working day, full calendar year
comprehensive services. In order to
implement such collaborative programs,
which share, for example, space,
equipment or materials, grantees may
blend several funding streams so that
seamless services are provided. Lead
Agencies can layer Early Head Start and
CCDF funds for the same child as long
as there is no duplication in payments
for the exact same part of the service.
This is an option that some Lead
Agencies are already implementing.
Early Head Start-Child Care
Partnerships grants, which allow Early
Head Start programs to partner with
local child care centers and family child
care providers serving infants and
toddlers from low-income families, offer
a new important opportunity for further
utilization of this funding strategy. We
do note that, when CCDF funds are
combined with other funds, § 98.67
continues to require Lead Agencies to
have in place fiscal control and
accounting procedures sufficient to
prepare required reports and trace funds
to a level of expenditure adequate to
establish that such funds have been
used on allowable activities.
Public-Private Partnerships. We
propose to add paragraph (a)(4) to
§ 98.14 in accordance with Section
658E(c)(2)(P), which requires Lead
Agencies to demonstrate in their Plan
how they encourage public-private
partnerships to leverage existing child
care and early education service
delivery systems and to increase the
supply and quality of child care services
for children under age 13, such as by
implementing voluntary shared services
alliance models (i.e., cooperative
agreement among providers to pool
resources to pay for shared fixed costs
and operation). Public-private
partnerships may include partnerships
among State/Territory and public
agencies, Tribal organizations, private
entities, faith based organizations and/
or community-based organizations.
Paragraphs (b) and (c) of this section
would remain unchanged.
Public availability of Plans. We
propose to add a new § 98.14(d) to
require Lead Agencies to make their
CCDF Plan and any Plan amendments
publicly available. Ideally, Plans and
Plan amendments would be available on
the Lead Agency Web site or other
appropriate State/Territory Web sites
(such as the consumer education Web
site required at § 98.33(a)) to ensure that
there is transparency for the public, and
particularly for parents seeking
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assistance, about how the child care
program operates. We believe this is
especially important for Plan
amendments, given that Lead Agencies
often make substantive changes to
program rules or administration during
the Plan period (now three years)
through submission of Plan
amendments (subject to ACF approval),
but are not currently required to
proactively make those amendments
available to the public.
We proposed this provision in the
2013 NPRM and received several
comments requesting that Lead
Agencies be required to make Plans and
Plan amendments publicly available in
multiple languages. We strongly
encourage Lead Agencies to be mindful
of the needs of families, caregivers, and
providers with limited English
proficiency and persons with
disabilities. States should continue to
work with families and community
groups to give them a voice in program
planning and policymaking, for
example, by organizing outreach
meetings with competent interpreters,
recruiting qualified sign language and
multilingual eligibility staff, and
providing accessible vital documents.
Lead Agencies should provide notice of
where persons with limited English
proficiency and persons with
disabilities can obtain an interpretation
or translation of key documents that are
integral to service delivery, which may
include CCDF Plans.
Assurances and Certifications (Section
98.15)
The Act requires Lead Agencies to
provide assurances and certifications in
its Plan. We are proposing to add new
assurances based on new statutory
language.
Lead Agencies are required to provide
assurance that training and professional
development requirements comply with
§ 98.44 and are applicable to caregivers,
teachers, and directors working for child
care providers receiving CCDF funds.
They are also required to provide
assurance that, to the extent practicable,
enrollment and eligibility policies
support the fixed costs of providing
child care services by delinking
provider payment rates from an eligible
child’s occasional absences in
accordance with § 98.45(m). Both of
these requirements are discussed in
detail in later sections of this proposed
rule.
Section 98.15(a)(9) adopts the
statutory requirement for Lead Agencies
to provide assurance that they will
maintain or implement early learning
and developmental guidelines that are
developmentally appropriate for all
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children from birth to kindergarten
entry, describing what children should
know and be able to do, and covering
the essential domains of early childhood
development (cognition, including
language arts and mathematics; social,
emotional and physical development;
and approaches toward learning) for use
statewide by child care providers and
caregivers. Guidelines should be
research-based and developmentally,
culturally, and linguistically
appropriate, building in a forward
progression, and aligned with entry to
kindergarten. Guidelines should be
implemented in consultation with the
State educational agency and the State
Advisory Council on Early Childhood
Education and Care or similar
coordinating body, and in consultation
with child development and content
experts.
Paragraph (a)(10) of § 98.15 details the
new requirement that Lead Agencies
provide assurance that funds received to
carry out this subchapter will not be
used to develop or implement an
assessment for children that will be the
primary or sole basis for a child care
provider being determined to be
ineligible to participate in the program
carried out under this subchapter; will
be used as the primary or sole basis to
provide a reward or sanction for an
individual provider; will be used as the
primary or sole method for assessing
program effectiveness; or will be used to
deny children eligibility to participate
in the program carried out under this
subchapter. The Consolidated and
Further Continuing Appropriations Act
of 2015, Public Law 113–235, made a
correction to the CCDBG statute, adding
that the assessments will not be the
‘‘primary or’’ sole basis for a child care
provider being determined to be
ineligible to participate in CCDF. The
statute lays out the acceptable ways of
using child assessments, including to
support learning or improve a classroom
environment; target professional
development; determine the need for
health, mental health, disability,
developmental delay, or family support
services; obtain information for the
quality improvement process at the
State/Territory level; or conduct a
program evaluation for the purposes of
providing program improvement and
parent information.
Finally, § 98.15(a)(11) requires an
assurance that any code or software for
child care information systems or
information technology that a Lead
Agency, or other agency, expends CCDF
funds to develop must be made
available to other public agencies for
their use in administering child care or
related programs upon request. This
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provision is intended to prevent CCDF
funds from being spent multiple times
on the same, or similar, technology in
order to provide accountability for
public dollars.
Section 98.15(b) requires Lead
Agencies to include certifications in its
CCDF Plan. We are adding new
requirements to reflect the following
new statutory requirements:
• To develop the CCDF plan in
consultation with the State Advisory
Council on Early Childhood Education
and Care (or similar coordinating body);
• to collect and disseminate to
parents of eligible children, the general
public, and, where applicable, child
care providers, consumer education
information that will promote informed
child care choices and information on
developmental screenings, as required
by § 98.33;
• to make public the result of
monitoring and inspections reports, as
well as the number of deaths, serious
injuries, and instances of substantiated
child abuse that occurred in child care
settings as required by § 98.33(a);
• to require caregivers, teachers, and
directors of child care providers to
comply with the State’s, Territory’s or
Tribe’s procedures for reporting child
abuse and neglect as required by section
106(b)(2)(B)(i) of the Child Abuse
Prevention and Treatment Act (42
U.S.C. 5106a(b)(2)(B)(i)), or other child
abuse reporting procedures and laws in
the service area, as required by
§ 98.41(e);
• to have in effect monitoring policies
and practices pursuant to § 98.42; and
• to ensure payment practices of
child care providers receiving CCDF
funds reflect generally accepted
payment practices of child care
providers that serve children who do
not receive CCDF assistance, pursuant
to § 98.45(m).
These requirements are discussed
later in this proposed rule. We are also
removing ‘‘or area served by Tribal Lead
Agency’’ from § 98.15(b)(6), as
redesignated, because we are proposing
distinct requirements for Tribes to
enforce health and safety standards for
child care providers. At § 98.15(b)(12),
as redesignated, we are updating the
reference to § 98.43, which is now
§ 98.45. All other paragraphs in this
section remain unchanged.
Confidentiality Policies. We propose
adding a new paragraph (b)(13)
requiring Lead Agencies to certify in the
CCDF Plan that they have in place
policies to govern the use and
disclosure of confidential and
personally-identifiable information
about children and families receiving
CCDF-funded assistance and child care
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providers receiving CCDF funds.
Currently there are no Federal
requirements either in statute or
regulation governing confidentiality in
CCDF, although there are Federal
requirements governing information that
the CCDF agency may have in its files,
such as child abuse and neglect
information. The Federal Privacy Act is
the primary source of Federal
requirements related to client
confidentiality (5 U.S.C. 552a note);
however the Privacy Act generally
applies to Federal agencies, and is not
applicable to State and local
government agencies, with some
exceptions, such as computer matching
issues and requirements related to the
disclosure and protection of Social
Security numbers. (ACF has previously
issued guidance: Clarifying policy
regarding limits on the use of Social
Security Numbers under the CCDF and
the Privacy Act of 1974, Program
Instruction: ACYF–PI–CC–00–04, 2000,
which remains in effect.)
Through proposed regulatory
language, we would require that Lead
Agencies have in place policies to
govern the use and disclosure of
confidential and personally-identifiable
information (PII) about children and
families receiving CCDF-funded
assistance and child care providers,
which should include their staff,
receiving CCDF funds. We propose to
offer Lead Agencies discretion to
determine the specifics of such privacy
policies because we recognize many
Lead Agencies already have policies in
place and it is not our intention to make
them revise such policies, as long as the
policy is in accordance with existing
Federal confidentiality requirements.
Further, many Lead Agencies are
working on data sharing across Federal
and State programs and it is not our
intention to make these efforts more
challenging by introducing a new set of
confidentiality requirements. This
regulatory addition is not intended to
preclude the sharing of individual, caselevel data among Federal and State
programs that can improve the delivery
of services. The ACF Confidentiality
Toolkit may be a useful resource for
States in addressing privacy and
security in the context of information
sharing (https://www.acf.hhs.gov/sites/
default/files/assets/acf_confidentiality_
toolkit_final_08_12_2014.pdf).
It is important that personal
information not be used for purposes
outside of the administration or
enforcement of CCDF, or other Federal,
State or local programs, and that when
information is shared with outside
entities (such as academic institutions
for the purpose of research) there are
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safeguards in place to ensure for the
non-disclosure of PersonallyIdentifiable Information, which is
information that can be used to link to,
or identify, a specific individual. It is at
the Lead Agency’s discretion whether
they choose to comply with this
proposed provision by writing and
implementing CCDF-specific
confidentiality rules or by ensuring that
CCDF data is subject to existing Federal
or State confidentiality rules. Further,
nothing in this provision should
preclude a Lead Agency from making
publicly available provider-specific
information on the level of quality of a
provider or the results of monitoring or
inspections as described in § 98.33.
Plan Provisions (Section 98.16)
Submission and approval of the CCDF
Plan is the primary mechanism by
which ACF works with Lead Agencies
to ensure program implementation
meets Federal regulatory requirements.
All provisions that are required to be
included in the CCDF Plan are outlined
in § 98.16. Many of the additions to this
section correspond to proposed changes
throughout the regulations, which we
provide explanation for later in this
proposed rule. Paragraph (a) of § 98.16
would continue to require that the Plan
specify the Lead Agency.
Written agreements. A new § 98.16(b)
is proposed to correspond with changes
at § 98.11(a)(3) discussed earlier, related
to administration of the program
through agreements with other entities.
In the CCDF Plan, the proposed change
would require the Lead Agency to
include a description of processes it will
use to monitor administrative and
implementation responsibilities
undertaken by agencies other than the
Lead Agency including descriptions of
written agreements, monitoring, and
auditing procedures, and indicators or
measures to assess performance. This is
consistent with the desire to strengthen
program integrity within the context of
current Lead Agency practices that
devolve significant authority for
administering the program to subrecipients. Current paragraphs (b)
through (f) would be redesignated as
paragraphs (c) through (g). All
paragraphs remain unchanged with the
exception of paragraph (e), as
redesignated, which has been revised by
adding ‘‘and the provision of services’’
to clarify that the Plan’s description of
coordination and consultation processes
should address the provision of services
in addition to the development of the
Plan.
Continuity of Care. A new § 98.16(h)
is proposed to correspond with statutory
changes in subpart C discussed later to
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describe and demonstrate that eligibility
determination and redetermination
processes promote continuity of care for
children and stability for families
receiving CCDF services, including a
minimum 12-month eligibility
redetermination period in accordance
with § 98.21(a); a graduated phaseout for
families whose income exceeds the Lead
Agency’s threshold to initially qualify
for CCDF assistance, but does not
exceed 85 percent of State median
income, pursuant to § 98.21(b);
processes that take into account
irregular fluctuation in earnings,
pursuant to § 98.21(c); procedures and
policies to ensure that parents are not
required to unduly disrupt their
employment, training, or education to
complete eligibility redetermination,
pursuant to § 98.21(d); limiting any
requirements to report changes in
circumstances in accordance with
§ 98.21(e); policies that take into
account children’s development and
learning when authorizing child care
services pursuant to § 98.21(f); and other
policies and practices such as timely
eligibility determination and processing
of applications.
Grants or contracts. We propose to
add language at § 98.16(i)(1), as
redesignated, requiring a Lead Agency
to include a description of how it will
use grants or contracts to address
shortages in the supply of high quality
child care. Grants and contracts can
play an important role in building the
supply and availability of high quality
child care in underserved areas and for
underserved populations, and provide
greater financial stability for child care
providers. This regulatory change
complements proposed changes at
§ 98.30(a)(1) describing parental choice
requirements and § 98.50(a)(3)
describing funding methods for child
care services, discussed later in this
proposed rule.
Under this proposed change, the Lead
Agency would be required to provide a
description that identifies any shortages
in the supply of high quality child care
for specific localities and populations,
includes the data sources used to
identify shortages, and explains how
grants or contracts for direct services
will be used to address such shortages.
To identify supply shortages, the Lead
Agency may analyze available data from
market rate surveys, child care resource
and referral agencies, and other sources.
ACF recommends that the Lead Agency
examine all localities in its jurisdiction,
recognizing that each local child care
market has unique characteristics—for
example, many rural areas face supply
shortages. The Lead Agency also should
consider the supply of child care for
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underserved populations such as infants
and toddlers and children with special
needs. Further, we recommend that the
Lead Agency’s analysis consider all
categories of care, recognizing that a
community with an adequate supply of
one category of care (e.g., centers) may
face shortages for another category (e.g.,
family child care). At § 98.16(i)(2), as
redesignated, is amended to reference
§ 98.30(e)(1)(iii). The remaining
subparagraphs remain unchanged.
Consumer education. We add
language at § 98.16(j), as redesignated, to
reference statutory changes to provide
comprehensive consumer and provider
education, including the posting of
monitoring and inspection reports,
pursuant to § 98.33, changes which are
discussed later in this proposed rule.
Co-payments. We propose to revise
language at § 98.16(k), as redesignated,
requiring Lead Agencies to include a
description of how co-payments are
affordable for families, pursuant to
§ 98.45(k), including a description of
any criteria established by the Lead
Agency for waiving contributions for
families. This proposed change is
discussed later.
Health and safety standards and
monitoring. We add a provision at
§ 98.16(l), as redesignated, requiring
Lead Agencies to provide a description
of any exemptions to health and safety
requirements for relative providers
made in accordance with § 98.41(a)(2),
which is discussed later in this
proposed rule.
We propose adding three new
paragraphs, (m) through (o), requiring
Lead Agencies to describe the child care
standards for child care providers
receiving CCDF funds, that includes
group size limits, child-staff ratios, and
required qualifications for caregivers,
teachers, and directors, in accordance
with § 98.41(d); monitoring and other
enforcement procedures to ensure that
child care providers comply with
applicable health and safety
requirements pursuant to § 98.42; and
criminal background check
requirements, policies, and procedures,
including the process in place to
respond to other States’, Territories’,
and Tribes’ requests for background
check results in order to accommodate
the 45 day timeframe, in accordance
with § 98.43.
Training and Professional
Development. We propose to add
§ 98.16(p) requiring Lead Agencies to
describe training and professional
development requirements for
caregivers, teachers, and directors of
child care providers who receive CCDF
funds in accordance with § 98.44.
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Paragraph (q), as redesignated, remains
unchanged.
Payment rates. We revise § 98.16(r), as
redesignated, to include the option of
using an alternative methodology to set
provider payment rates. This provision
is described later in this proposed rule.
We revise paragraph (s), as
redesignated, to include a detailed
description of the State’s hotline for
complaints. This provision is described
later in the proposed rule. Paragraph (t),
as redesignated (previously paragraph
(n)), remains unchanged.
We revise § 98.16(u), as redesignated
(previously paragraph (o)), to include in
the description of the licensing
requirements, any exemption to
licensing requirements that is applicable
to child care providers receiving CCDF
funds; a demonstration of why this
exemption does not endanger the
health, safety, or development of
children; and a description of how the
licensing requirements are effectively
enforced, pursuant to § 98.42.
Building supply and quality. We also
propose a new § 98.16(x) based on
statutory language at Section
658E(c)(2)(M) requiring the Lead
Agency to describe strategies to increase
the supply and improve the quality of
child care services for children in
underserved areas, infants and toddlers,
children with disabilities, and children
who receive care during nontraditional
hours. As described in the statute,
strategies may include alternative
payment 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 Lead Agency.
Pursuant to § 98.50 as proposed, Lead
Agencies would be required to use
CCDF funds for some direct contracts or
grants for child care services. For
contracts to be effective at increasing the
supply of high quality care, contracts
should be funded at levels that are
sufficient to meet any higher quality
standards associated with that care.
Along with increased rates and
contracts, we encourage Lead Agencies
to consider other strategies, including
training and technical assistance to
child care providers to increase quality
for these types of care.
We add § 98.16(y) requiring Lead
Agencies to describe how they prioritize
increasing access to high quality child
care and development services for
children of families in areas that have
significant concentrations of poverty
and unemployment and that do not
have sufficient numbers of such
programs, pursuant to § 98.46(b). This
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provision is discussed later in this
proposed rule.
Finally, we propose to add § 98.16(z)
reiterating the statutory requirement for
Lead Agencies to describe how they
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. Some child care
providers need support on business and
management practices in order to run
their child care businesses more
effectively and devote more time and
attention to quality improvements.
Improved business practices can benefit
caregivers and children. An example of
a key business practice is providing
paid sick leave for caregivers to keep
children healthy. Without paid time off,
caregivers may come to work sick and
risk spreading illnesses to children in
care. We also encourage child care
providers to provide paid sick leave
because it promotes better health for
child care employees, which is
important to maintaining a stable
workforce as well as consistency of care
for children. According to The Council
of Economic Advisors, ‘‘[Pa]id sick
leave also induces a healthier work
environment by encouraging workers to
stay home when they are sick.’’ (The
Economics of Paid and Unpaid Leave,
The Council of Economic Advisors, June
2014.)
Emergency preparedness. We propose
to add § 98.16(aa) to the regulation,
based on Section 658E(c)(2)(U) of the
Act, to require the Lead Agency to
demonstrate how the Lead Agency will
address the needs of children, including
the need for safe child care, before,
during and after a state of emergency
declared by the Governor or a major
disaster or emergency (as defined by
section 102 of the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5122) through
a Statewide Child Care Disaster Plan (or
Disaster Plan for a Tribe’s service area).
The Disaster Plan must be developed in
collaboration with the State/Territory
human services agency, the State/
Territory emergency management
agency, the State/Territory licensing
agency, local and State/Territory child
care resource and referral agencies, and
the State/Territory Advisory Council on
Early Childhood Education and Care, or
similar coordinating body. Tribes must
have similar Disaster Plans, for their
Tribal service area, developed in
consultation with relevant agencies and
partners. The Disaster Plan must
include guidelines for continuation of
child care subsidies and child care
services, which may include the
provision of emergency and temporary
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child care services and temporary
operating standards for child care
during and after a disaster; coordination
of post-disaster recovery of child care
services; and requirements that
providers receiving CCDF funds and
other child care providers, as
determined appropriate by the Lead
Agency, have in place procedures for
evacuation, relocation, shelter-in-place,
lock-down, communication and
reunification with families, continuity
of operations, accommodations of
infants and toddlers, children with
disabilities, and children with chronic
medical conditions; and procedures for
staff and volunteer emergency
preparedness training and practice
drills, including training requirements
for caregivers of providers receiving
CCDF.
This provision largely reflects
statutory language of Section
658E(c)(2)(U), but we have clarified that
the Plan must apply, at a minimum, to
CCDF providers and may apply to other
providers (such as all licensed
providers) at the Lead Agency option.
We also added language on post-disaster
recovery.
In past disasters, the provision of
emergency child care services and
rebuilding and restoring of child care
facilities and infrastructure emerged as
an essential service. The importance of
the need to improve emergency
preparedness and response in child care
was highlighted in an October 2010
report released by the National
Commission on Children and Disasters.
The Commission’s report included two
primary sets of recommendations for
child care: (1) To improve disaster
preparedness capabilities for child care;
and (2) to improve capacity to provide
child care services in the immediate
aftermath and recovery from a disaster
(2010 Report to the President and
Congress, National Commission on
Children and Disasters, p. 81, October
2010). Child care has also been
recognized by the Federal Emergency
Management Agency (FEMA) as an
essential service and an important part
of disaster response and recovery.
(FEMA Disaster Assistance Fact Sheet
9580.107, Public Assistance for Child
Care Services Fact Sheet, 2013).
Maintaining the safety of children in
child care programs during and after
disaster or emergency situations
necessitates planning in advance by
State/Territory agencies and child care
providers. The reauthorization of the
CCDBG Act, and this proposed rule,
implement the key recommendation of
the National Commission on Children
and Disasters by requiring a child carespecific Statewide Disaster Plan. ACF
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has previously issued guidance (CCDF–
ACF–IM–2011–01) recommending that
Disaster Plans include five key
components: (1) Planning for
continuation of services to CCDF
families; (2) coordinating with
emergency management agencies and
key partners; (3) regulatory
requirements and technical assistance
for child care providers; (4) provision of
temporary child care services after a
disaster, and (5) rebuilding child care
after a disaster. The guidance
recommends that disaster plans for
child care incorporate capabilities for
shelter-in-place, evacuation and
relocation, communication and
reunification with families, staff
training, continuity of operations,
accommodation of children with
disabilities and chronic health needs,
and practice drills. ACF intends to
provide updated guidance and TA to
States, Territories, and Tribes as they
move forward with implementing
Disaster Plans as required by the
reauthorization.
Payment practices. We propose new
§ 98.16(bb), requiring Lead Agencies to
describe payment practices applicable
to child care providers receiving CCDF,
pursuant to § 98.45(m), including
practices to ensure timely payment for
services, to delink provider payments
from children’s occasional absences to
the extent practicable, and to reflect
generally-accepted payment practices.
This is discussed later in this proposed
rule.
Program integrity. We propose new
§ 98.16(cc), requiring Lead Agencies to
describe processes in place to describe
internal controls to ensure integrity and
accountability; processes in place to
investigate and recover fraudulent
payments and to impose sanctions on
clients or providers in response to fraud;
and procedures in place to document
and verify eligibility, pursuant to
§ 98.68. This change corresponds to a
new program integrity section included
in subpart G of the regulations, which
is discussed later in the NPRM.
Outreach and services for families
and providers with limited English
proficiency and persons with
disabilities. We propose to add a new
§ 98.16(dd) to require that the Lead
Agency describe how it would provide
outreach and services to eligible
families with limited English
proficiency and persons with
disabilities, and facilitate participation
of child care providers with limited
English proficiency and disabilities in
CCDF. Currently, the Plan requires Lead
Agencies to describe how they provide
outreach and services to eligible limited
English proficient families and
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providers. In the FY 2014–2015 CCDF
Plans, States and Territories reported a
number of strategies to overcome
language barriers. Forty-nine States and
Territories have bilingual caseworkers
or translators, 44 have applications in
multiple languages, and 18 offer
provider contracts or agreements in
multiple languages. We are proposing to
require that Lead Agencies develop
policies and procedures to clearly
communicate program information such
as requirements, consumer education
information, and eligibility information,
to families and child care providers of
all backgrounds.
Suspension and expulsion policies.
We propose to add a new § 98.16(ee) to
require that the Lead Agency describe
its policies on suspension and
expulsion of children from birth to age
five in child care and other early
childhood programs receiving CCDF
funds, which must be disseminated as
part of consumer and provider
education efforts in accordance with
§ 98.33(b)(1)(v). This requirement is
detailed later in this proposed rule.
Reports of serious injuries or death in
child care. We propose to add new
§ 98.16(ff) to require the Lead Agency to
designate a State, Territorial, or Tribal
entity to which child care providers
must submit reports of any serious
injuries or deaths of children occurring
in child care, regardless of whether or
not they receive CCDF assistance.
Family Engagement. We propose to
add new § 98.16(gg) to require the Lead
Agency to describe how it would
support child care providers in the
successful engagement of families in
children’s learning and development.
Complaints received through the
national hotline and Web site. We
propose to add new § 98.16(hh) to
require the Lead Agency to describe
how it will respond to complaints
received through the national hotline
and Web site, required in the
reauthorized CCDBG Act (Section
658L(b)(2)). The description must
include the designee responsible for
receiving and responding to those
complaints for both licensed and
license-exempt child care providers.
Clear channels of communication are
crucial to ensure that complaints
submitted through the national hotline
or Web site are responded to quickly,
especially when a child’s health or
safety is at risk. This proposed plan
provision is aimed at building those
connections and ensuring that a process
is in place for addressing complaints
regarding both licensed and licenseexempt child care providers.
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Finally, we have redesignated
paragraph (v) as paragraph (ii) with no
other changes.
Approval and Disapproval of Plans and
Plan Amendments (Section 98.18)
This section of the regulations
describes processes and timelines for
CCDF Plan approvals and disapprovals,
as well as submission of Plan
amendments. CCDF Plans are submitted
triennially and prospectively describe
how the Lead Agency will implement
the program. To make a substantive
change to a CCDF program after the Plan
has been approved, a Lead Agency must
submit a Plan amendment to ACF for
approval.
Advance written notice. In
conjunction with the change discussed
at § 98.14(d) to make the Plan and any
Plan amendments publicly available, we
propose to add a provision at
§ 98.18(b)(2) to require Lead Agencies to
provide advance written notice to
affected parties, specifically parents and
child care providers, of changes in the
program made through an amendment
that adversely affect income eligibility,
payment rates, and/or sliding fee scales
so as to reduce or terminate benefits.
The notice should describe the action to
be taken (including the amount of any
benefit reduction), the reason for the
reduction or termination, and the
effective date of the action. The Lead
Agency may choose to issue the
notification in a variety of ways,
including a mailed letter or email sent
to all participating child care providers
and families. We are providing Lead
Agencies with flexibility to determine
an appropriate time period for advance
notice, since this may vary, such as
depending on the type of policy change
being implemented or the effective date
of that policy change. Advance notice
would add transparency to the Plan
amendment process and provide a
mechanism to ensure that affected
parties remain informed of any
substantial changes to the Lead
Agency’s CCDF Plan that may affect
their ability to participate in the child
care program. We note that while we
encourage Lead Agencies to provide
written notice of any changes that affect
income eligibility, payment rates, and/
or sliding fee scales, we would only
require written notice of those that
adversely impact parents or providers.
We would not require the Lead
Agency to hold a formal public hearing
or solicit comments on each Plan
amendment, as is required by current
regulations at § 98.14(c) for the
submission of the CCDF Plan. However,
we encourage solicitation of public
input whenever possible and consider
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this proposed regulatory change to be
consistent with the spirit and intent of
the CCDF Plan public hearing provision.
Paragraph (c) of § 98.18 describing
appeal and disapproval of a Plan or Plan
amendment would remain unchanged.
Requests for Temporary Relief From
Requirements (Section 98.19)
Section 658I(c) of the CCDBG Act
indicates that Lead Agencies are
allowed to submit a request to the
Secretary to waive one or more
requirements contained in the CCDBG
Act to ensure that effective delivery of
services are not interrupted by
conflicting or duplicative requirements,
to allow for a period of time for a State
legislature to enact legislation to
implement the provisions of the Act or
this part, or in response to extraordinary
circumstances, such as a natural disaster
or financial crisis. We are proposing to
extend the waiver option to rules under
this part as well. Prior to the enactment
of the CCDBG Act in 2014, there was no
waiver authority within the CCDF
program.
We propose new § 98.19, Requests for
Temporary Relief from Requirements, to
provide guidance and clarity on: The
eligibility of States, Territories, and
Tribes to request a waiver; what
provisions would not be eligible for
waivers; and how the waiver request
and approval (or disapproval) process
would work. In addition to outlining the
requirements detailed in the CCDBG Act
of 2014, § 98.19 includes clarifying
provisions to provide greater
understanding of the intent and
implementation of the waiver process.
This section details the process by
which the Secretary may waive one or
more of the requirements contained in
the Act or this part, with the exception
of State Match and Maintenance of
Effort requirements, consistent with the
requirements described in section
658I(c)(1) of the Act. In order for a
waiver application to be considered, the
waiver request must: Describe
circumstances that prevent the State,
Territory, or Tribe from complying with
any statutory or regulatory requirements
of this part; demonstrate that the waiver,
by itself, contributes to or enhances the
State’s, Territory’s, or Tribe’s ability to
carry out the purposes of this part; show
that the waiver will not contribute to
inconsistency with the objectives of this
law; and meet the additional
requirements in this section as
described.
We propose to include a delineation
of the types of waivers that States,
Territories, and Tribes can request into
two distinct types: (1) Transitional and
legislative waivers and (2) waivers for
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extraordinary circumstances. States,
Territories, and Tribes may apply for
temporary transitional and legislative
waivers meeting the requirements
described in this section that would
provide temporary relief from
conflicting or duplicative requirements
preventing implementation, or for a
temporary extension in order for a State,
Territorial, or Tribal legislature to enact
legislation to implement the provisions
of this subchapter.
Transitional and legislative waivers
are designed to provide States,
Territories, and Tribes at most one full
legislative session to enact legislation to
implement the provisions of the Act or
this part, and are limited to a one-year
initial period and at most, an additional
one-time, one-year renewal from the
date of approval of the extension (which
may be appropriate for a State with a
two-year legislative cycle, for example).
Waivers for extraordinary
circumstances would address temporary
circumstances or situations, such as a
natural disaster or financial crisis.
Extraordinary circumstance waivers are
limited to an initial period of no more
than two years from the date of
approval, and at most, an additional
one-year renewal from the date of
approval of the extension.
Both types of waivers are
probationary, subject to the decision of
the Secretary to terminate a waiver at
any time if the Secretary determines,
after notice and opportunity for a
hearing, that the performance of a State,
Territory, or Tribe granted relief under
this subsection has been inadequate, or
if such relief is no longer necessary to
achieve its original purposes.
In order to request a waiver, the Lead
Agency must submit a written request,
indicating which type of waiver the
State, Territory, or Tribe is requesting
and why. The request must also provide
detail on which provision(s) the State,
Territory, or Tribe is seeking relief from
and how relief from that sanction or
provision, by itself, will improve
delivery of child care services for
children and families. If a transitional
waiver, the Lead Agency should
describe the steps being taken to address
the barrier to implementation (i.e., a
timeline for legislative action).
Furthermore, and importantly, in the
written request, the State, Territory, or
Tribe must certify and demonstrate that
the health, safety, and well-being of
children served through assistance
received under this part will not be
compromised as a result of the waiver.
Within 90 days of submission of the
request, the Secretary would notify the
State, Territory, or Tribe of the approval
or disapproval. If rejected, the Secretary
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would provide the State, Territory, or
Tribe, the Committee on Education and
the Workforce of the House of
Representatives, and the Committee on
Health, Education, Labor, and Pensions
of the Senate of the reasons for the
disapproval and give the State,
Territory, or Tribe the opportunity to
amend the request. If approved, the
Secretary would notify and submit a
report to the Committee on Education
and the Workforce of the House of
Representatives and the Committee on
Health, Education, Labor, and Pensions
of the Senate on the circumstances of
the waiver including each specific
sanction or provision waived, the reason
as given by the State, Territory, or Tribe
of the need for a waiver, and the
expected impact of the waiver on
children served under this program.
No later than 30 days prior to the
expiration date of the waiver, a State,
Territory, or Tribe, at its option, may
make a formal written request to recertify the provisions described in this
section, which must explain the
necessity of additional time for relief
from such sanction(s) or provisions. The
Secretary may approve or disapprove a
request from a State, Territory, or Tribe
for a one-time renewal of an existing
waiver under this part for a period no
longer than one year. The Secretary
would adhere to the same approval or
disapproval process for the renewal
request as the initial request.
The goal of all the proposed
inclusions at § 98.19 is to make
continuity of the effective delivery of
child care services a priority throughout
the implementation process or in times
of extraordinary circumstances. We are
seeking comment on ways to ensure
efficient and timely relief, when
appropriate, for States, Territories, and
Tribes impacted by extraordinary
circumstances, such as natural disasters.
Therefore, we ask for feedback about
making the application process for
waivers for extraordinary circumstances
straightforward to provide States,
Territories, and Tribes with minimal
obstacles while they are likely in the
preparedness, response, and recovery
stages of handling the circumstances
that prompted the initial request.
Subpart C—Eligibility for Services
This subpart establishes parameters
for a child’s eligibility for CCDF
assistance and for Lead Agencies’
eligibility and redetermination
procedures. Congress made significant
changes to CCDBG that emphasize
stable financial assistance and
continuity of care through CCDF
eligibility policies, including
establishing minimum 12-month
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eligibility for all children. In this
subpart, we propose to restate these
changes in regulation and provide
additional clarification where
appropriate.
A Child’s Eligibility for Child Care
Services (Section 98.20)
A child’s eligibility for child care
services: This proposed rule clarifies at
§ 98.20(a) that eligibility criteria apply
only at the time of eligibility
determination or redetermination based
on statutory language at Section
658E(c)(2)(N)(i) of the Act, which
establishes a minimum 12-month
eligibility period by affirmatively stating
that the child ‘‘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 local entity redetermines the eligibility of the child.’’
(We discuss minimum 12-month
eligibility at greater length below.)
Income eligibility. We propose
revising § 98.20(a)(2) by adding a
sentence to clarify that the State median
income (SMI) used to determine the
eligibility threshold level must be based
on the most recent SMI data that is
published by the U.S. Census Bureau.
This clarification would provide for use
of the most current and valid data. It is
important for Lead Agencies to use
current data as, once determined
eligible, children may continue to
receive CCDF assistance until their
household income exceeds 85 percent of
SMI for a family of the same size,
pursuant to § 98.21(a)(1) discussed
further below, or at Lead Agency option,
the family experiences a non-temporary
cessation of work, training, or
education. Using the most recent SMI
data also allows for consistency for
cross-State comparisons and a better
understanding of income eligibility
thresholds nationally. SMI data may not
be available from the Census Bureau for
some Territories, in which case an
alternative source (subject to ACF
approval through the CCDF State/
Territory Plan process) may be used.
The Act does not specify whether States
should use the SMI with a single year
estimate, a two-year average, or a threeyear average (which is used by the Low
Income Home Energy Assistance
Program (LIHEAP)). We are requesting
comment on whether ACF should
provide additional guidance and
specificity on the SMI used to determine
eligibility.
Tribes are already allowed to use
Tribal median income (TMI) (pursuant
to § 98.81(b)(1)) and this would
continue to be allowable under this
proposed rule. ACF also recognizes that
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some Lead Agencies establish eligibility
thresholds that vary by geographic area
and that some Lead Agencies use Area
median income (AMI) to calculate
income eligibility for different regions
in order to account for cost of living
variations across geographic areas. Lead
Agencies may use AMI in their
calculations, but must also report the
threshold in terms of SMI in their Plan,
and ensure that thresholds based on
AMI are at or below 85 percent of SMI.
Asset limit. The Act revised the
definition of eligible child at Section
658P(4)(B) so that in addition to being
at or below 85 percent of SMI for a
family of the same size, a member of the
family must certify that the ‘‘family
assets do not exceed $1,000,000 (as
certified by a member of such family),’’
which we include in the proposed rule
at § 98.20(a)(2)(ii). We interpret this
language to mean that this requirement
can be met solely through selfcertification by a family member, with
no further need for additional
documentation. This new requirement
provides assurance that CCDF funds are
being used for families with the greatest
need, but is not intended to impose an
additional burden on families. In this
proposed rule, we are not defining
‘‘family assets,’’ but instead would
allow the Lead Agency flexibility to
determine what assets to count toward
the asset limit.
Protective Services. Section 658P(4) of
the CCDBG Act indicates that, for CCDF
purposes, an eligible child includes a
child who is receiving or needs to
receive protective services. We are
proposing to add language at
§ 98.20(a)(3)(ii) to clarify that the
protective services category may include
specific populations of vulnerable
children as identified by the Lead
Agency. Children do not need to be
formally involved with child protective
services or the child welfare system in
order to be considered eligible for CCDF
assistance under this category. Because
the statute references children who
‘‘need to receive protective services,’’
we believe the intent of this language
was to provide services to at-risk
children, not to limit this definition to
serve children already in the child
protective services system. It is
important to note that including
additional categories of vulnerable
children in the definition of protective
services is only relevant for the
purposes of CCDF eligibility and does
not mean that those children should
automatically be considered to be in
official protective service situations for
other programs or purposes. It is critical
that policies be structured and
implemented so these children are not
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identified as needing formal
intervention by the CPS agency, except
in cases where that is appropriate for
reasons other than the inclusion of the
child in the new categories of
vulnerable child for purposes of CCDF
eligibility.
Similarly, we propose to remove the
requirement that case-by-case
determinations of income and copayment fees for this eligibility category
must be made by, or in consultation
with, a child protective services (CPS)
worker. While consulting with a CPS
worker would no longer be a
requirement, it would not be prohibited;
a Lead Agency may consult with or
involve a CPS caseworker as
appropriate. We encourage collaboration
with the agency responsible for children
in protective services, especially when a
child also is receiving CCDF assistance.
These changes would provide Lead
Agencies with additional flexibility to
offer services to those who have the
greatest need, including high-risk
populations, and reduce the burden
associated with eligibility determination
for vulnerable families.
Under current regulations at
§ 98.20(a)(3)(ii)(B), at the option of the
Lead Agency, this category may include
children in foster care. The regulations
allow that children deemed eligible
based on protective services may reside
with a guardian or other person
standing ‘‘in loco parentis’’ and that
person is not required to be working or
attending job training or education
activities in order for the child to be
eligible. In addition, the existing
regulations allow grantees to waive
income eligibility and co-payment
requirements as determined necessary
on a case-by-case basis, by, or in
consultation with, an appropriate
protective services worker for children
in this eligibility category. This
proposed change would clarify, for
example, that a family living in a
homeless shelter may not meet certain
eligibility requirements (e.g., work or
income requirements), but, because the
child is in a vulnerable situation, could
be considered eligible and benefit from
access to high quality child care
services.
This change was also included in the
2013 NPRM and received broad support
in public comments. One commenter
wrote this change ‘‘recognizes the
particular challenges and barriers to
assistance that these children [from
other vulnerable populations] face and
the importance of stable, supportive
child care.’’ Several commenters
requested that the term ‘‘vulnerable
populations’’ be defined at the Federal
level and suggested several specific
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populations to be included in the
definition—such as teen parents, the
children of parents or guardians with
disabilities who are unable to work,
children with disabilities who have
Individual Family Service Plans (IFSPs)
or Individual Education Plans (IEPs),
and children who are experiencing
homelessness. While we encourage Lead
Agencies to consider these vulnerable
populations in their definitions and
policies, we are declining to specifically
define ‘‘vulnerable populations’’ in this
proposed rule in order to allow Lead
Agencies the flexibility to define the
term in a way that is most responsive to
the particular needs of their
communities.
We note that this new provision
would not require Lead Agencies to
expand their definition of protective
services. It merely provides the option
to include other high-needs populations
in the protective services category solely
for purposes of CCDF, as many Lead
Agencies already choose to do.
Additional eligibility criteria. Under
existing regulations, Lead Agencies are
allowed to establish eligibility
conditions or priority rules in addition
to those specified through Federal
regulation so long as they do not
discriminate, limit parental rights, or
violate priority requirements (these are
described in full at § 98.20(b)). This
proposed rule revises this section to add
that any additional eligibility conditions
or priority rules established by the Lead
Agency cannot ‘‘impact eligibility other
than at the time of eligibility
determination or redetermination.’’ This
revision was made to be consistent with
the aforementioned change to § 98.20(a)
which says that eligibility criteria apply
only at the time of determination or
redetermination. It follows that the same
would be true of additional criteria
established at the Lead Agency’s option.
We propose to add paragraph (c)
clarifying that only the citizenship and
immigration status of the child, the
primary beneficiary of CCDF, is relevant
for the purposes of determining
eligibility under PRWORA and that a
Lead Agency, or other administering
agency, may not condition eligibility
based upon the citizenship or
immigration status of the child’s parent.
Under title IV of PRWORA, CCDF is
considered a program providing Federal
public benefits and thus is subject to
requirements to verify citizenship and
immigration status of beneficiaries. In
1998, ACF issued a Program Instruction
(ACYF–PI–CC–98–08) which
established that ‘‘only the citizenship
status of the child, who is the primary
beneficiary of the child care benefit, is
relevant for eligibility purposes.’’ This
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proposal codifies this policy in
regulation and clarifies that Lead
Agencies are prohibited from
considering the parent’s citizenship and
immigration status.
ACF has previously clarified that
when a child receives Early Head Start
or Head Start services that are supported
by CCDF funds and subject to the Head
Start Performance Standards, the
PRWORA verification requirements do
not apply. Verification requirements
also do not apply to child care settings
that are subject to public educational
standards. These policies remain in
effect. (ACYF–PI–CC–98–09)
Eligibility Determination Processes
(Section 98.21)
We propose to add a new section at
§ 98.21 to address the processes by
which Lead Agencies determine and
redetermine a child’s eligibility for
services.
Minimum 12-month eligibility. At
§ 98.21, we reiterate the statutory
change made in Sec. 658E(c)(2)(N)(i) of
the Act, which establishes minimum 12month eligibility periods for all CCDF
families, regardless of changes in
income (as long as income does not
exceed the Federal threshold of 85
percent of SMI) or temporary changes in
participation in work, training, or
education activities. Under the law,
Lead Agencies may not terminate CCDF
assistance during the 12-month period if
a family has an increase in income that
exceeds the Lead Agency’s income
eligibility threshold but not the Federal
threshold, or if a parent has a temporary
change in work, education or training.
We note that during the minimum 12month eligibility period Lead Agencies
also may not end or suspend child care
authorizations or provider payments
due to a temporary change in a parent’s
work, training, or education status. In
other words, once determined eligible,
children are expected to receive a
minimum of 12 months of child care
services, unless family income rises
above 85% SMI or, at Lead Agency
option, the family experiences a nontemporary cessation of work, education,
or training.
These requirements apply to both the
initial eligibility period and any
subsequent eligibility periods. Under
the law, other than income exceeding 85
percent of SMI (unless the increase in
income is considered temporary,
pursuant with the irregular fluctuations
in earning requirement discussed
below), a family is considered to meet
eligibility criteria for the entire 12month period, though the Lead Agency
has the option of also considering a
status change due to non-temporary
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changes in employment, education, or
training status (discussed below.)
As the statutory language states that a
child determined eligible will not only
be considered to meet all eligibility
requirements, but also ‘‘will receive
such assistance,’’ Lead Agencies may
not offer authorization periods shorter
than 12 months as that would
functionally undermine the statutory
intent that, barring limited
circumstances, eligible children shall
receive a minimum of 12 months of
CCDF assistance. We note that, despite
the language that the child ‘‘will receive
such assistance,’’ the receipt of such
services remains at the option of the
family. The law does not require the
family to continue receiving services
nor would it force the family to remain
with a provider if the family no longer
chooses to receive such services.
We propose to define ‘‘temporary
change’’ in the rule at § 98.21(a)(1)(ii) to
include, at a minimum: (1) Any timelimited absence from work for employed
parents for periods of family leave
(including parental leave) or sick leave;
(2) any interruption in work for a
seasonal worker who is not working
between regular industry work seasons;
(3) any student holiday or break for a
parent participating in training or
education; (4) any reduction in work,
training or education hours, as long as
the parent is still working or attending
training or education; and (5) any
cessation of work or attendance at a
training or education program that does
not exceed three months or a longer
period of time established by the Lead
Agency.
The above circumstances represent
temporary changes to the parents’
schedule or conditions of employment,
but do not constitute permanent
changes to the parents’ status as being
employed or attending a job training or
educational program. This definition is
in line with Congressional intent to
stabilize assistance for working families.
Lead Agencies must consider all
changes on this list to be temporary, but
should not be limited by this definition
and may consider additional changes to
be temporary.
At § 98.21(a)(1)(ii)(F), we clarify that a
child should retain eligibility despite
any change in age, including turning 13
years old during the eligibility period.
This is consistent with the statutory
requirement that a child shall be
‘‘considered to meet all eligibility
requirements’’ until the next
redetermination. This allows Lead
Agencies to avoid terminating access to
CCDF assistance immediately upon a
child’s 13th birthday in a manner that
may be detrimental to positive youth
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development and academic success or
that might abruptly put the child at-risk
if a parent cannot be with the child
before or after school.
At § 98.21(a)(1)(ii)(G), we propose that
a child retain eligibility despite ‘‘any
change in residency within the State,
Territory, or Tribal service area.’’ This
would provide stability for families
who, under current practice, may lose
child care assistance despite
maintaining their State, Territory or
Tribal residency. This may require
coordination between localities within
States, Territories, or Tribes or
necessitate some Lead Agencies to
change practices for allocating funding.
We believe this level of coordination is
essential, as the State, Territory, or Tribe
is the entity responsible for CCDF
assistance.
Nothing in this rule prohibits Lead
Agencies from establishing eligibility
periods longer than 12 months or
lengthening eligibility periods prior to a
redetermination. We encourage (but do
not require) Lead Agencies to consider
how they can use this flexibility to align
CCDF eligibility policies with other
programs serving low-income families,
including Head Start, Early Head Start,
Medicaid, or SNAP. For example, once
determined eligible, children in Head
Start remain eligible until the end of the
succeeding program year. Children in
Early Head Start are considered eligible
throughout the course of the program.
Consistent with existing ACF guidance
(ACYF–PIQ–CC–99–02) a Lead Agency
could establish eligibility periods longer
than 12 months for children enrolled in
Head Start and receiving CCDF in order
to align eligibility periods between
programs. Similarly, a Lead Agency
could establish longer eligibility periods
during an infant or toddler’s enrollment
in Early Head Start or in other
collaborative models, such as Early
Head Start-Child Care Partnerships.
Operationalizing alignment across
programs can be challenging,
particularly if families enroll in
programs at different times. While the
Lead Agency must ensure that eligibility
is not redetermined prior to 12 months,
it could align with other benefit
programs by ‘‘resetting the clock’’ on the
eligibility period to extend the child’s
CCDF eligibility by starting a new 12month period if the Lead Agency
receives information, such as
information pursuant to eligibility
determinations or recertifications in
other programs, that confirms the
child’s eligibility and current copayment rate. Alignment promotes
conformity across Federal programs,
such as SNAP, and can simplify
eligibility and reporting processes for
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families and administering agencies.
However, it should be noted that a Lead
Agency cannot terminate assistance for
a child prior to the end of the minimum
12-month period if the recertification
process of another program reveals a
change in the family’s circumstances,
unless those changes impact CCDF
eligibility (e.g., a change in income over
85 percent of SMI or, at the option of the
Lead Agency, a non-temporary change
in the work, job training, or educational
status of the parent).
Continued Assistance. If a parent
experiences a non-temporary job loss or
cessation of education or training, Lead
Agencies have the option—but are not
required—to terminate assistance prior
to 12 months. Per the Act, prior to
terminating assistance, the Lead Agency
must provide a period of continued
assistance of at least three months to
allow parents to engage in job search
activities. At the end of the minimum
three-month period of continued
assistance, if the parent is engaged in an
eligible work, education, or training
activity, assistance should not be
terminated and the child should either
continue receiving assistance until the
next scheduled redetermination or be
redetermined eligible for an additional
12-month period. In this proposed rule,
we clarify that assistance must be
provided ‘‘at the same level’’ during the
period. This clarification is important
because reducing levels of assistance
during this period would undermine the
statutory intent to provide stability for
families during times of increased need
or transition.
It is important to note that the Act
allows Lead Agencies to continue child
care assistance for the full 12-month
eligibility period even if the parent
experiences a non-temporary job loss or
cessation of education or training. The
default policy is that a child remains
eligible for the full minimum 12-month
eligibility period, but the Lead Agency
has the option to terminate assistance
under these particular conditions. A
Lead Agency may choose not to
terminate assistance for any families
prior to a redetermination at 12 months.
If a Lead Agency chooses to terminate
assistance under these conditions, it has
the option of doing so for all CCDF
families or for only a subset of CCDF
families. For example, a Lead Agency
could choose to allow priority families
(e.g., children with special needs,
children experiencing homelessness) to
remain eligible through their eligibility
period despite a parent’s loss of work or
cessation of attendance at a job training
or educational program, but terminate
assistance (with a period of continued
assistance) for families who do not fall
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in a priority category. Or, a Lead Agency
may choose to allow families in certain
types of care, such as high quality care,
to remain eligible regardless of a
parent’s work or education activity.
While the Lead Agency must provide
continued assistance for at least three
months, there is no requirement to
document that the parent is engaged in
a job search or other activity related to
resuming attendance in an education or
training program during that time. In
fact, we strongly discourage such
policies as they would be an additional
burden on families and be inconsistent
with the purposes of CCDF and this
proposed rule.
If a Lead Agency does choose to
terminate assistance under these
circumstances, it should allow families
that have been terminated to reapply as
soon as they are eligible again instead of
making the family wait until their
original eligibility period would have
ended in order to reapply.
A policy that provides continuous
eligibility, regardless of non-temporary
changes, would reduce the burden on
families and the administrative burden
on Lead Agencies by minimizing
reporting and the frequency of eligibility
adjustments. Retention of eligibility
during periods of family instability
(such as losing a job) can alleviate some
of the stress on families, facilitate a
smoother transition back into the
workforce, and support children’s
development by maintaining continuity
in their child care. Moreover, studies
show that the same families that leave
CCDF often return to the program after
short periods of ineligibility. A report
published by the Assistant Secretary for
Planning and Evaluation (ASPE) at
HHS, Child Care Subsidy Duration and
Caseload Dynamics: A Multi-State
Examination, found that ‘‘many families
receive subsidies sporadically over time
and frequently return to the subsidy
programs after they exit.’’ Short periods
of subsidy receipt can be the result of a
variety of factors, including eligibility
policies and procedures. The
‘‘churning’’ present in CCDF
demonstrates that families often lose
their child care assistance for conditions
that are temporary, which is detrimental
for the family and child and inefficient
for the Lead Agency.
Lead Agencies considering the option
to terminate assistance in response to
‘‘non-temporary’’ changes are
encouraged to use administrative data to
understand the extent to which CCDF
families currently cycle on and off the
program, to make a determination as to
whether it is in the interest of anyone
(child, parent, or agency) to terminate
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assistance for families who may
ultimately return to the program.
We understand that some Lead
Agencies include in their definition of
allowable work activities a period of job
search and allow children to qualify for
CCDF assistance based on their parent(s)
seeking employment. It is not our
intention to discourage Lead Agencies
from allowing job search activities as
qualifying work. We believe that it is in
line with the intent of the statute to
allow Lead Agencies the option to end
assistance prior to a redetermination if
the parent(s) has not secured
employment or educational or job
training activities, as long as assistance
has been provided for no less than three
months. In other words, if a child
qualifies for child care assistance based
on a parent’s job search, the Lead
Agency has the option to end assistance
after a minimum of three months if the
parent has still has not found
employment. Lead Agencies could
choose, however, to provide additional
months of job search to families as well
or to continue assistance for the full
minimum 12-month eligibility period.
We are soliciting comment on
whether there are any additional
circumstances other than those
discussed above under which a Lead
Agency should be allowed to end a
child’s assistance (after providing three
months of continued assistance) prior to
the minimum 12-month period.
Commenters should remember that
since these regulations must comply
with statutory requirements, any
suggestions must remain within the
bounds of the CCDBG Act in order to be
considered.
Based on feedback from States and
various stakeholders, ACF has already
considered possible exceptions to the
minimum 12-month eligibility period
for certain populations, such as children
in families receiving TANF and children
in protective services, but has decided
that such special considerations would
be in conflict with the CCDBG Act,
which clearly provides 12-month
eligibility for all children.
Co-payments. At § 98.21(a)(3) we
clarify that a Lead Agency cannot
increase family co-payment amounts
within the minimum 12-month
eligibility period as raising co-payments
within the eligibility period would not
be consistent with the statutory
requirement that the child ‘‘receive such
assistance’’ for not less than 12 months.
Protecting co-payments levels within
the eligibility period provides stability
for families and reduces administrative
burden for Lead Agencies. We propose
an exception to this rule for families
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that are eligible as part of the graduated
phaseout provision discussed below.
In addition, we propose requiring the
Lead Agency to allow families the
option to report changes, particularly
because we want to permit families to
report those changes that could be
beneficial to the family’s co-payment or
subsidy level. The Lead Agency must
act upon such reported changes if doing
so would reduce the family’s copayment or increase the subsidy. The
Lead Agency would be prohibited from
acting on the family’s self-reported
changes if it would reduce the family’s
benefit, such as increasing the copayment or decreasing the subsidy.
We believe that the limitation on
raising copayments, by protecting the
child’s benefit level for the minimum 12
month eligibility period, is consistent
with the statutory requirement at
658E(c)(2)(N) that once deemed eligible,
a child shall ‘‘receive such assistance,
for not less than 12 months.’’ Raising copayments earlier that the 12 month
period could potentially destabilize the
child’s access to assistance and has the
unintended consequence of forcing
working parents to choose between
advancing in the workplace and child
care assistance. This is discussed further
below in the section on reporting
changes in circumstances.
Graduated phaseout. New statutory
language at Section 658E(c)(2)(N)(iv)
requires Lead Agencies to have policies
and procedures in place to continue
child care assistance at the time of
redetermination for children of parents
who are working or attending a job
training or educational program and
whose income has risen above the Lead
Agency’s initial income eligibility
threshold to qualify for assistance but
remains at or below 85 percent of State
median income. We are interpreting this
provision to mean that children
receiving CCDF assistance would
remain income-eligible for CCDF until
their family income exceeds 85 percent
of SMI. Section 98.21(b)(1), as proposed,
requires Lead Agencies that set their
initial income eligibility level below 85
percent of SMI for a family of the same
size to provide for a graduated phaseout
of assistance by implementing one of
two approaches: (1) Two-tiered
eligibility (an initial, entry-level income
threshold and a higher exit-level income
threshold for families already receiving
assistance) with the exit threshold set at
85 percent of SMI. If a Lead Agency’s
initial eligibility threshold is set at 85
percent of SMI, it would be exempt from
this requirement; or (2) using the tiered
eligibility approach in (1) but for a
limited period of not less than an
additional 12 months.
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Lead Agencies retain the authority to
establish their initial income eligibility
threshold at or below 85 percent of SMI.
This rule proposes to give Lead
Agencies the option to decide between
allowing children, who are otherwise
eligible, to stay on CCDF until their
income exceeds 85 percent of SMI for a
family of the same size or to adopt this
approach for at least one additional
year. This provision promotes
continuity of care and is consistent with
the statutory requirement that families
retain child care assistance during an
eligibility period as their income
increases as long as it remains at or
below 85 percent of SMI. We are seeking
comments on the anticipated impacts of
the proposed graduated phaseout
provision, including suggestions for
possible alternative approaches to
consider that would also promote
continuity of care for children and
family financial stability.
Pursuant to § 98.21(a)(3) as proposed,
Lead Agencies are prohibited from
increasing family copayments within
the minimum 12-month eligibility
period. We propose, in paragraph (b)(2),
that Lead Agencies be permitted to
adjust family co-payment amounts
during the proposed graduated phaseout
period to help families transition off of
child care assistance. ACF encourages
Lead Agencies to ensure that copayment
increases are gradual in proportion to a
family’s income growth and do not
constitute too high a cost burden for
families so as to ensure stability as
family income increases.
Income eligibility policies play an
important role in promoting pathways
to financial stability for families.
Currently, 16 Lead Agencies use twotiered income eligibility. However, even
with higher exit-level eligibility
thresholds in these States/Territories, a
small increase in earnings may result in
families becoming ineligible for
assistance before they are able to afford
the full cost of care. An unintended
consequence of low eligibility
thresholds is that low income parents
may pass up raises or job advancement
in order to retain their subsidy, which
undermines a key goal of CCDF to help
parents achieve independence from
public assistance. As proposed, this rule
would allow low-income families to
continue child care assistance as their
income grows to 85 percent of State
median income in order to support
financial stability.
Irregular fluctuations in earnings. In
§ 98.21(c), we propose to reiterate
statutory language at Sec.
658E(c)(2)(N)(i)(II) that Lead Agencies
establish processes for initial
determination and redetermination of
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eligibility that take into account parents’
irregular fluctuations in earnings. We
clarify that temporary increases in
income should not affect eligibility or
family copayments, including monthly
income fluctuations that show
temporary increases, which when taken
in isolation, may incorrectly indicate
that a family is above the federal
threshold of 85 percent of SMI, when in
actuality their annual income remains at
or below 85% SMI.
Lead Agencies retain broad flexibility
to set their policies and procedures for
income calculation and verification. We
propose, as examples, several
approaches Lead Agencies may take to
account for irregular fluctuations in
earnings. Lead Agencies may average
family earnings over a period of time
(e.g., 12 months) to better reflect a
family’s financial situation; Lead
Agencies may adjust documentation
requirements to better account for
average earnings, for example, by
requesting the earnings statement that is
most representative of the family’s
income, rather than the most recent
statement; or Lead Agencies may choose
to discount temporary increases in
income provided that a family
demonstrates that an isolated increase
in pay (e.g., short-term overtime pay,
lump sum payments such as tax credits,
etc.) is not indicative of a permanent
increase in income.
Undue disruption. Pursuant to section
658E(c)(2)(N)(i)(II) of the CCDBG Act,
we are adding § 98.21(d), which requires
the Lead Agency to establish procedures
and policies to ensure that parents,
especially parents receiving TANF
assistance, are not required to unduly
disrupt their education, training, or
employment in order to complete the
eligibility redetermination process. This
provision of the law seeks to protect
parents from losing assistance for failure
to meet renewal requirements that place
unnecessary barriers or burdens on
families, such as requiring parents to
take leave from work in order to submit
documentation in person or requiring
parents to resubmit documents that
have not changed (e.g., children’s birth
certificates).
To meet this provision, Lead Agencies
could offer a variety of family-friendly
mechanisms through which parents
could submit required documentation
(e.g., phone, email, online forms,
extended submission hours, etc.). Lead
Agencies could also consider strategies
that inform families, and their
providers, of an upcoming
redetermination and what is required of
the family. Lead Agencies could
consider only asking for information
necessary to make an eligibility
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determination or only asking for
information that has changed and not
asking for documentation to be resubmitted if it has been collected in the
past (e.g., children’s birth certificates;
parents’ identification, etc.) or is
available from other electronic data
sources. Lead Agencies can prepopulate renewal forms and have
parents confirm that information is
accurate.
In general, ACF strongly encourages
Lead Agencies to adopt reasonable
policies for establishing a family’s
eligibility that minimize burdens on
families. Given the new eligibility
provisions established by
reauthorization, Lead Agencies are
encouraged to re-evaluate processes for
verifying and tracking eligibility to
simplify eligibility procedures and
reduce duplicative requirements across
programs. Simplifying and streamlining
eligibility processes along with other
proposed changes in the subpart may
require significant change within the
CCDF program. Lead Agencies should
provide appropriate training and
guidance to ensure that caseworkers and
other relevant child care staff (including
those working for designated entities)
clearly understand new policies and are
implementing them correctly.
Reporting changes in circumstance.
Currently, many Lead Agencies have
policies in place to monitor eligibility
on an ongoing basis to ensure that at any
given point in time a family is eligible
for services, often called changereporting or interim-reporting. As the
revised statute provides that children
may retain eligibility through changes in
circumstance, it is our belief that
comprehensive reporting of changes in
circumstance is not only unnecessary
but runs counter to CCDF’s goals of
promoting continuity of care and
supporting families’ financial stability.
Additionally, there are challenges
associated with interim monitoring and
reporting, including costs to families
trying to balance work or education and
family obligations and costs to Lead
Agencies administering the program.
Overly burdensome reporting
requirements can also result in
increased procedural errors, as even
parents who remain eligible may face
difficulties complying with onerous
reporting rules.
Lead Agencies should significantly
reduce change reporting requirements
for families within the eligibility period,
and limit the reporting requirements to
changes that impact CCDF eligibility.
Under this proposed rule, a Lead
Agency would be required to specify in
its Plan any requirements for families to
notify the Lead Agency (or its designee)
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of changes in circumstances between
eligibility periods, and describe efforts
to ensure such requirements do not
impact continuity for eligible families
between redeterminations (§ 98.21(e)).
Under paragraph (e)(1), the Lead
Agency must require families to report
a change at any point during the
minimum 12-month period only in
circumstances where the family’s
income exceeds 85% of SMI, taking into
account irregular income fluctuations.
At the option of the Lead Agency, the
Lead Agency may require families to
report changes where the family has
experienced a non-temporary cessation
of work, training, or education.
In paragraph (e)(2), we specify that
any notification requirements shall not
constitute an undue burden on families
and propose that compliance with
requirements must include a range of
notification options (e.g., phone, email,
online forms, extended submission
hours) and not require an in-person
office visit to accommodate the needs of
parents.
We also propose limiting notification
requirements only to items that impact
a family’s eligibility (e.g., income
changes over 85 percent of SMI, and at
Lead Agency option, the status of the
child’s parent as working or attending a
job training or educational program) or
those that are necessary for the Lead
Agency to contact the family or pay
providers (e.g., a family’s change of
address or a change in the parent’s
choice of provider). Nothing in this rule
or the law precludes Lead Agencies
from examining additional eligibility
criteria at the time of the next
redetermination.
In paragraph (e)(4), we propose
requiring Lead Agencies to allow
families the option of reporting of
information on an ongoing basis,
particularly to allow families to report
information that would be beneficial to
their assistance (such as an increase in
work hours that necessitates additional
child care hours or a loss of earnings
that could result in a reduction of the
family copayment). While we encourage
limiting reporting requirements for
families, it was not our intent to limit
the family’s ability to report changes in
circumstances, particularly in cases
where they may have entered into more
stressful or vulnerable situations or
would be eligible for additional child
care assistance.
Moreover, as proposed in
§ 98.21(e)(4), if a family reports changes
on an ongoing basis to the Lead Agency
that do not make the family ineligible,
the Lead Agency must act on these
provisions if it would increase the
family’s benefit, but cannot act on any
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information that would reduce the
family’s benefit. All of the above
provisions would apply to any entities
that perform eligibility functions in the
CCDF program on the Lead Agency’s
behalf.
Finally, some Lead Agencies currently
use electronic data from other State/
Territory and Federal databases to verify
or monitor CCDF eligibility. Lead
Agencies may continue this practice,
which is particularly useful in reducing
the burden on families at the time of
initial determination or
redetermination. However, Lead
Agencies should ensure any such data
that is acted upon during the minimum
12-month eligibility period conform to
the above requirements for change
reporting and all CCDF rules.
We recognize that some States
currently send interim reporting forms
to families during the eligibility period
to request that families verify or update
information. Some States use such
interim reporting to align with processes
in other programs, such as semi-annual
SNAP simplified change reporting. We
believe that such periodic reporting
forms are contrary to the spirit of the
law, which provides for minimum 12month eligibility between
redeterminations. We ask for comments
on whether States should have the
option for 6-month interim reporting
forms for CCDF, and if such reports are
allowed, the best way to structure them
so as to promote continuity of services
for the minimum 12-month eligibility
period for eligible families, consistent
with the law. We also ask for comment
on whether States should be able to
adjust co-payments or otherwise act on
verified information (e.g., updated
income information) received from
other programs or sources. As discussed
earlier, acting on information received
pursuant to eligibility determinations or
recertifications in other programs allows
CCDF Lead Agencies to extend a child’s
eligibility by ‘‘resetting the clock’’ and
starting a new 12-month period. We ask
for comments on whether the benefits of
this approach outweigh the impact of
any co-payment increases, if allowed,
during the minimum 12-month period,
and whether those benefits would be a
reason to allow Lead Agencies to act on
verified information from other
programs.
Program integrity. It is important to
ensure that CCDF funds are effectively
and efficiently targeted towards eligible
low-income families. Policies to
promote continuity, such as lengthening
eligibility periods and allowing a child
to remain eligible between
redetermination periods, are consistent
with and support a strong commitment
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to program integrity. ACF expects Lead
Agencies to have rigorous processes in
place to detect fraud and improper
payments, but these should be
reasonably balanced with familyfriendly practices.
In order to remain consistent with the
requirements in this subpart, we are
proposing to add § 98.21(a)(4) to
affirmatively state that because a child
meeting eligibility requirements at the
most recent eligibility determination or
redetermination is considered eligible
between redeterminations as described
in paragraph (a)(1), any payment for
such a child shall not be considered an
error or improper payment under
subpart K due to the family’s
circumstances. This clarifies that
compliance with the policies in this
Subpart do not constitute an error and
Lead Agencies will not be held
accountable for payments within these
parameters.
When implementing their CCDF
programs, Lead Agencies must balance
ensuring compliance with eligibility
requirements with other considerations,
including administrative feasibility,
program integrity, promoting continuity
of care for children, and aligning child
care with Head Start, Early Head Start,
and other early childhood programs.
These proposed changes are intended to
remove any uncertainty regarding
applicability of Federal eligibility
requirements for CCDF and the threat of
potential penalties or disallowances that
otherwise may inhibit a Lead Agencies’
ability to balance these priorities in a
way that best meets the needs of
children.
Some Lead Agencies currently use
‘‘look back’’ and recoupment policies as
part of eligibility redeterminations.
These review a family’s eligibility for
the prior eligibility period to see if the
family was ineligible during any portion
of that time and recoup benefits for any
period where the family had been
ineligible. ACF would like to clarify that
there is no Federal requirement for Lead
Agencies to recoup CCDF
overpayments, except in instances of
fraud. We also strongly discourage such
policies as they may impose a financial
burden on low-income families that is
counter to CCDF’s long-term goal of
promoting family economic stability.
The Act affirmatively states an eligible
child ‘‘will be considered to meet all
eligibility requirements’’ for a minimum
of 12 months regardless of increases in
income (as long as income remains at or
below 85 percent of SMI) or temporary
changes in parental employment or
participation in education and training.
Therefore, there are very limited
circumstances in which a child would
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not be considered eligible after an initial
eligibility determination. We encourage
Lead Agencies instead to focus program
integrity efforts on the largest areas of
risk to the program, which tend to be
intentional violations and fraud
involving multiple parties.
Existing regulations at § 98.60
indicate that Lead Agencies shall
recover child care payments that are the
result of fraud from the responsible
party. While ACF does not define the
term fraud and leaves flexibility to Lead
Agencies, fraud in this context typically
involves knowing and willful
misrepresentation of information to
receive a benefit. We urge Lead
Agencies to carefully consider what
constitutes fraud, particularly in the
case of individual families.
Taking into consideration children’s
development and learning. The
proposed rule affirms that both the
child’s development and the parent’s
need to work or attend school or
training are factors in the child care
needs of each family. This proposed
rule would amend § 98.21 to add
paragraph (f) to require that ‘‘Lead
Agencies must take into consideration
children’s development and learning
and promote continuity of care when
authorizing child care services.’’ There
are myriad ways in which this provision
could be incorporated into Lead
Agencies’ eligibility, intake,
authorization, and CCDF policies and
practices. ACF intends to work with
Lead Agencies to provide technical
assistance and identify a variety of
strategies to fit different eligibility
processes. As an example, in serving a
preschool-aged child (e.g., age 3 or 4),
the Lead Agency may consider whether
or not the child has access to a high
quality preschool setting and how CCDF
can make enrollment in a high quality
preschool more likely. Lead Agencies
could partner with Head Start, prekindergarten, or other high quality
programs to build an intentional
package of arrangements for the child
that allows for attendance at preschool
and a second arrangement that
accommodates the parent’s work
schedule. For infants and toddlers, a
Lead Agency may want to coordinate
services with Early Head Start, while
also maintaining a secondary child care
arrangement to preserve the relationship
with a familiar caregiver, as it is
particularly important for infants and
toddlers to build and maintain secure
relationships with caregivers. A Lead
Agency could also offer parents the
choice to select high quality infant slots
that are funded through contracts or
grants. For children of all ages,
providing more intensive case
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management for families with children
with multiple risk factors can increase
the likelihood that the family will find
a stable, quality child care provider that
is willing to work with other service
providers in assisting the child and
family.
The intent of this provision is that the
Lead Agency has some mechanism in
place to consider the child’s
development and learning, but a Lead
Agency has broad flexibility to
determine how this is done. At a
minimum, we would expect Lead
Agencies to collect sufficient
information during the CCDF intake
process in order to make necessary
referrals for services. For example, a
Lead Agency could make sure there is
an automatic referral of eligible children
to Early Head Start or Head Start. A
Lead Agency could include in their
eligibility determination process a
question about whether or not the child
has an Individualized Education
Program (IEP) or Individual Family
Service Plan (IFSP), so that the parent
could be provided with information on
providers that are equipped to provide
services that meet the child’s individual
needs.
ACF encourages Lead Agencies to
engage in public-private partnerships so
that responsibility for implementing this
provision does not fall solely on CCDF
eligibility workers. Partnerships with
child care resource and referral
agencies, early intervention agencies,
and others may mean that a few wellchosen questions during the intake
process can prompt the eligibility
worker (or automated system if the
process is online) to direct the family to
appropriate resources. This proposed
requirement does not require a
developmental screening of every child
as part of the eligibility process;
however, child care agencies should
partner to ensure that children in the
CCDF subsidy system can access
appropriate screening and follow-up.
We recognize that given constraints
on funding, limited human resource
capacity, and the inadequate supply of
high quality care, a perfect arrangement
will not be found in all cases. Rather,
we expect Lead Agencies to consider
how they can best meet the
developmental and learning needs of
children in their policies and practices
and to encourage partnerships among
high quality providers, child care
resource and referral agencies, and case
management partners to strengthen
CCDF’s capacity to fulfill its child
development mission for families.
No requirement to limit authorized
care to parent schedule. The proposed
rule would clarify at § 98.21(g) that
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‘‘Lead Agencies are not required to limit
authorized child care services strictly
based on the work, training, or
educational schedule of the parent(s) or
the number of hours the parent(s) spend
in work, training, or educational
activities.’’ Tying child care subsidy
authorizations closely to parental work
hours may limit access to high quality
settings and does not support the fixed
costs of providing care. In particular, it
creates challenges for parents with
variable schedules and inhibits their
children from accessing a consistent
child care arrangement. This provision
clarifies that ‘‘matching’’ the hours of
child care to a parent’s hours of work is
not required. ACF believes that, in some
cases, such ‘‘matching’’ works against
the interests of the parent or child.
Lead Agencies are encouraged to
authorize adequate hours to allow
children to participate in a high quality
program, which may be more hours than
the parent is working or in education or
training. For example, if most local high
quality early learning programs offer
only full-time slots, a child whose
parent is working part-time may need
authorization for full-time care.
Subpart D—Program Operations (Child
Care Services) Parental Rights and
Responsibilities
Two of the Act’s purposes are ‘‘to
promote parental choice to empower
working parents to make their own
decisions regarding the child care
services that best suits their family’s
needs’’ and ‘‘to encourage States to
provide consumer education
information to help parents make
informed choices about child care
services and to promote involvement by
parents and family members in the
development of their children in child
care settings.’’ Subpart D of the
regulations describes parental rights and
responsibilities and provisions related
to parental choice, including parental
access to their children, requirements
that Lead Agencies maintain a record of
parental complaints, and consumer
education activities conducted by Lead
Agencies to increase parental awareness
of the range of child care options
available to them.
Parental Choice (Section 98.30)
Group home child care. As discussed
earlier, we are proposing a technical
change to delete group home child care
from the variety of child care categories
at § 98.30(e) from which parents
receiving a certificate for child care
service must be able to choose.
In-home care. We propose to revise
§ 98.30(f)(2) to explicitly allow for Lead
Agencies to adopt policies that may
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limit parental access to in-home care.
This change aligns with current policy
as discussed in the preamble to the 1998
Final Rule. Specifically, the preamble
documented Lead Agencies’ ‘‘complete
latitude to impose conditions and
restrictions on in-home care.’’ (63 FR
39950) As discussed in the 1998
preamble, monitoring the quality of care
and the appropriateness of payments to
in-home providers poses special
challenges for Lead Agencies. We
continue to urge Lead Agencies to
consider the factors that may lead
parents to choose in-home care,
including the need for care at nontraditional hours or care for children
with special needs, when deciding
whether to put limitations on in-home
care. It is crucial that parents have
access to the types of care necessary for
them to work and for their children to
be in a safe and enriching environment.
While this proposed change codifies
Lead Agencies’ ability to impose limits
on the use of in-home care, it does not
allow for Lead Agencies to flatly
prohibit the use of in-home care. As this
is longstanding policy, we do not expect
the proposed change to have a
significant impact on families or Lead
Agencies.
Parental choice and child care
quality. In order to be meaningful, we
believe the parental choice requirements
included in this section should give
parents access to a range of child care
providers that foster healthy
development and learning for children.
Many Lead Agencies have invested a
significant amount of CCDF funds to
implement quality rating and
improvement systems (QRIS) to promote
high quality child care and education
programs, and some have expressed
concerns that the current regulatory
language related to parental choice
inhibits their ability to link the child
care subsidy program to these systems.
ACF published a Policy Interpretation
Question (CCDF–ACF–PIQ–2011–01)
clarifying that parental choice
provisions do not preclude a Lead
Agency from implementing policies that
require child care providers serving
children receiving CCDF funds to meet
certain quality requirements, including
those specified within a quality
improvement system. As long as
parental choice conditions are met, a
Lead Agency could require that, in order
to provide care to children receiving
CCDF, the provider chosen by the
parent must meet requirements
associated with a specified level in a
quality improvement system.
We propose to incorporate this policy
interpretation into regulation by adding
paragraph (g) at § 98.30 clarifying that as
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long as parental choice provisions at
paragraph (f) of this section are met,
parental choice provisions should not
be construed as prohibiting a Lead
Agency from establishing policies that
require child care providers that serve
children receiving subsidies to meet
higher standards of quality as defined in
a QRIS or other transparent system of
quality indicators.
When establishing such policies, we
encourage Lead Agencies to assess the
availability of care across categories and
types, and availability of care for
specific subgroups (e.g., infants, schoolage children, families who need
weekend or evening care) and within
rural and underserved areas, to ensure
that eligible parents have access to the
full range of categories of care and types
of providers before requiring them to
choose providers that meet certain
quality levels. Should a Lead Agency
choose to implement a quality
improvement system that does not
include the full range of providers, the
Lead Agency would need to have
reasonable exceptions to the policy to
allow parents to choose a provider that
is not eligible to participate in the
quality improvement system (e.g.,
relative care). As an example, a Lead
Agency may implement a system that
incorporates only center-based and
family child care providers. In cases
where a parent selects a center-based or
family child care provider, the Lead
Agency may require that the provider
meet a specified level or rating.
However, the policy also must allow
parents to choose other categories, such
as in-home care, and types of child care
providers, such as relative providers,
that may not be eligible to participate in
the quality improvement system. This is
particularly important for geographic
areas lacking an adequate supply of
child care or when a parent has
scheduling, transportation, or other
issues that prevent the use of a preferred
provider within the system.
Lead Agencies should ensure
adequate time and support for providers
before implementing a policy that
requires providers to meet a certain
level of quality in order to be eligible to
serve CCDF children. While most States
and Territories have implemented a
QRIS, the number of providers
participating varies significantly. In
order to implement the policy at
§ 98.30(g), Lead Agencies should ensure
that an adequate number of child care
providers are included in the QRIS to
provide parents with a variety of
settings and high quality child care
options from which to choose.
Furthermore, it is important to ensure
that providers have been given the
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financial, technical, and professional
development supports necessary to meet
high quality standards.
Similarly, we propose adding
paragraph (h) at § 98.30 to clarify that
Lead Agencies may provide parents
with information and incentives that
encourage the selection of high quality
child care without violating parental
choice provisions. For example, Lead
Agencies may provide brochures or
other products that encourage parents to
select a high quality provider without
violating parental choice provisions.
This provision would allow, but not
require, Lead Agencies to adopt policies
that incentivize parents to choose high
quality providers as determined by a
system of quality indicators and we
strongly encourage that they do so. We
believe this policy change would help
Lead Agencies leverage the CCDF
quality funds that have been invested in
QRIS and ensure that more children
receiving CCDF are in high quality child
care, which is in line with the new
purposes and provisions in the statute.
Lead Agencies would have the
flexibility to determine what types of
information and incentives to use to
encourage parents to choose high
quality providers. One option is to
lower parental copayments for parents
that choose a high quality provider. We
encourage Lead Agencies, or their
partners such as child care resource and
referral agencies, to use information
from a QRIS or other system of quality
indicators to make recommendations
and help parents make informed child
care decisions, for example, by listing
the highest rated providers at the top of
a referral list and providing information
about the importance of high quality
child care. Lead Agencies are not
limited to these examples and should
design information sharing and
incentives in a way that best fits the
families they serve with CCDF.
Parental Access (Section 98.31)
We propose a technical change at
§ 98.31 to specify that Lead Agencies
shall provide a detailed description ‘‘in
the Plan’’ of how they ensure that
providers allow parents to have
unlimited access to their children while
the children are in care. This
corresponds to the provision at
§ 98.16(t).
Parental Complaints (Section 98.32)
Hotline for parental complaints.
Section 658E(c)(2)(C) of the CCDBG Act
requires Lead Agencies to maintain a
record of substantiated parental
complaints, make information regarding
such parental complaints available to
the public on request, and provide a
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detailed description of how such record
is maintained and is made available.
Current language at § 98.32 mirrors the
statutory requirement. We elaborate on
the statutory requirement by proposing
§ 98.32(a), which would require Lead
Agencies to ‘‘establish or designate a
hotline or similar reporting process for
parents to submit complaints about
child care providers.’’ In connection
with this change we have added a
provision at § 98.33(d), to require Lead
Agencies to include in the consumer
statement for CCDF parents disclosure
of the hotline number or other reporting
process pursuant to this requirement.
Lead Agencies should identify the
capability for the parental complaint
hotline to be accessible to persons with
limited English proficiency and persons
with disabilities, such as through the
provision of interpretation services and
auxiliary aids.
The purpose of the proposed parental
complaint hotline is to provide parents
with an easy way to submit complaints
about a child care provider or their staff.
The current process for complaint
submission varies widely across Lead
Agencies, with some lacking any system
at all. According to an analysis of FY
2014–2015 CCDF Plans, as well as State/
Territory child care and licensing Web
sites, 18 States/Territories have a
parental complaint hotline that covers
all CCDF providers, 22 States/Territories
have a parental complaint hotline that
covers some child care providers, and
16 States/Territories do not have a
parental complaint hotline. Maintaining
and sharing substantiated complaints is
a statutory requirement and establishing
a clear, easily-accessible way for parents
to file complaints is an important part
of meeting that requirement.
The value of parental complaint
hotlines is illustrated by the
longstanding national hotline
established for the Department of
Defense (DOD) military child care
program. The Military Child Care Act of
1989 (Pub. L. 101–189) required the
creation of a national 24 hour, toll-free
hotline that allows parents to submit
complaints about military child care
centers anonymously. DOD has found
the hotline to be an important tool in
engaging parents in child care. In
addition, complaints received through
the hotline have helped DOD identify
problematic child care programs.
(Campbell, N., Appelbaum, J.,
Martinson, K., Be All That We Can Be:
Lessons from the Military for Improving
Our Nation’s Child Care System,
National Women’s Law Center, 2000).
Lead Agencies can meet the proposed
requirement at § 98.32(a) by establishing
a telephone hotline or other type of
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system, such as a web-based system for
accepting parental complaints about
child care providers. However, we
discourage reliance on only a web-based
system as some families may have
limited access to the Internet. We
strongly encourage a parental complaint
system that includes multiple
submission platforms such as both
telephonic and web-based submission.
Regardless of the type of system
utilized, Lead Agencies are encouraged
to establish multilingual options and to
ensure access for those with hearing and
vision impairments.
The Lead Agency may choose a
different agency at the State, Territory,
Tribal, or local level to manage the
parental complaint system or find ways
to combine the process for collecting
parental complaints with already
existing hotlines. For example, in some
States/Territories the licensing agency
handles complaints of licensed
providers and a different agency
handles license-exempt providers. Lead
Agencies may choose to devolve
management of a complaint system to
the local level in order to facilitate more
prompt and timely follow-up. We leave
it to the discretion of the Lead Agency
to determine the best way to manage the
hotline.
We also strongly encourage Lead
Agencies to implement a single point of
entry (e.g., one toll-free hotline number)
as the most straightforward way for
parents to file a complaint. There
should not be a burden for the parent in
finding the correct hotline number or
Web page address. Many parents may
not know whether the provider is
licensed or license-exempt, for example,
and therefore will not know which
hotline to call if there are separate
contact points for providers. Lead
Agencies that choose to combine
existing lines or devolve responsibility
to local agencies should set-up a single
point of entry with a process to
immediately refer the call to the
appropriate agency.
Lead Agencies should widely
publicize the process for submitting a
complaint about a provider and
consider requiring child care providers
to publicly post the process, including
the hotline number and/or URL for the
web-based complaint system, in their
center or family child care home. Other
areas for posting may be on the Web site
required by § 98.33(a), through a child
care resource and referral network, at
local agencies where parents apply for
benefits, or other consumer education
materials distributed by the Lead
Agency. In addition to making sure this
information is made widely available to
the public, the hotline or other reporting
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process must be disclosed to parents
receiving CCDF as part of their
consumer statement at § 98.33(d). To be
most useful, parents should be able to
file a complaint at any time. We strongly
recommend that a telephonic hotline be
operational 24 hours a day, or at
minimum include a voicemail system
that allows parents to leave complaints
when an operator is not available. We
encourage Lead Agencies to have a
complaint response plan in place that
includes appropriate time frames for
following up on a complaint depending
on the urgency or severity of the
parent’s concern and other relevant
factors. We are not requiring Lead
Agencies to do a monitoring visit in
response to a complaint. However,
inspections and monitoring visits may
be necessary in order to substantiate the
complaints received through the
proposed hotline. Therefore, Lead
Agencies should have a process for
substantiating those complaints. We
strongly recommend this process
include unannounced visits in response
to a complaint pertaining to the health
and safety of children in the care of
child care providers receiving CCDF. As
discussed in Subpart E of this preamble,
we are seeking comment on whether the
final rule should include a requirement
that Lead Agencies conduct an
unannounced monitoring visit in
response to a complaint, and whether
this requirement should apply to
providers receiving CCDF funds or
additional providers.
We propose a technical change at
§ 98.32(c), which we propose to
redesignate as § 98.32(d), to specify that
Lead Agencies shall provide a detailed
description ‘‘in the Plan’’ of how they
will maintain and make available to the
public a record of substantiated parental
complaints. This corresponds to the
provision at § 98.16(s).
Consumer and Provider Education
(Section 98.33)
In the 2014 reauthorization, Congress
expanded the requirements related to
consumer and provider education.
Section 658E(c)(2)(E) of the CCDBG Act
requires Lead Agencies to collect and
disseminate, through child care resource
and referral organizations or other
means as determined by the Lead
Agency, to parents of eligible children,
the general public, and, where
applicable, providers, consumer
education information that will promote
informed child care services. In
addition, Section 658E(c)(2)(D) requires
monitoring and inspection reports of
child care providers to be made
available electronically. This focus on
consumer education as a crucial part of
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parental choice has laid the foundation
for a more transparent system, helping
parents to better understand their child
care options and encouraging providers
to improve the quality of their services.
Every interaction parents have with
the subsidy system is an opportunity to
engage them in consumer education to
help them make informed decisions
about their child care providers, as well
as provide resources that promote child
development. We propose that
consumer education services be directly
included as part of the intake and
eligibility process for families applying
for child care assistance. Parents of
eligible children often lack the
information necessary to make informed
decisions about their child care
arrangement. Low-income working
families may face additional barriers
when trying to find information about
child care providers, such as limited
access to the internet, limited literacy
skills, limited English proficiency, or
disabilities. Lead Agencies can play an
important role in bridging the gap
created by these barriers by providing
information directly to families
receiving CCDF subsidies to ensure they
fully understand their child care options
and are able to assess the quality of
providers.
When implementing proposed
consumer and provider education
provisions, we recommend Lead
Agencies consider three target
audiences: Parents, the general public,
and child care providers. While some
components are aimed at ensuring
parents have the information they need
to choose a child care provider, others
are equally important for caregivers who
interact with parents on a regular basis
and can serve as trusted sources of
information.
Lead Agencies should ensure that all
materials are consumer-friendly and
easily accessible; this includes using
plain language and considering the
abilities, languages, and literacy levels
of the targeted audiences. Lead Agencies
should consider translation of materials
into multiple languages, as well as the
use of ‘‘taglines’’ on consumer
education materials for frequently
encountered non-English languages and
to inform persons with disabilities how
they can access auxiliary aids or
services and receive information in
alternate formats at no cost.
Consumer education Web site. We
propose amending paragraph (a) of
§ 98.33 to require Lead Agencies ‘‘to
collect and disseminate consumer
education information to parents of
eligible children, the general public, and
providers through a consumer-friendly
and easily accessible Web site.’’ The
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Web site must, at a minimum, include
five components: (1) Lead Agency
policies and procedures, (2) providerspecific information, (3) aggregate
number of deaths, serious injuries, and
instances of substantiated child abuse in
child care settings each year (4) referral
to local child care resource and referral
organizations, and (5) directions on how
parents can contact the Lead Agency, or
its designee, and other programs to
better understand information on the
Web site. The specifics of each
component are discussed in detail
below.
The statute requires the Web site to be
consumer-friendly and easily accessible.
To ensure that the Web site is accessible
for all families, we propose to require
that it provide for the widest possible
access to services for families who speak
languages other than English and
persons with disabilities. Lead Agencies
should make sure the Web site meets all
Federal and State laws regarding
accessibility, including the Americans
with Disabilities Act (ADA) of 1990 (42
U.S.C. 12101, et seq.), to ensure that
individuals with disabilities are not
excluded, denied services, segregated or
otherwise treated differently because of
the absence of auxiliary aids and
services. We recommend Lead Agencies
follow the guidelines laid out by section
508 of the Rehabilitation Act of 1973, as
amended (29 U.S.C. 794d), when
designing their Web sites. Section 508
requires that individuals with
disabilities, who are members of the
public seeking information or services
from a Federal agency, have access to
and use of information and data that is
comparable to that provided to the
public who are not individuals with
disabilities. The US Department of
Justice has provided guidance and
resources on how to create an accessible
site at https://www.ada.gov/
Websites2.htm.
Parents should be able to access all
consumer information they need to
make an informed choice through a
simple, single online source. We
encourage Lead Agencies to review
current systems and redesign if needed
to allow for a single point of entry,
especially if the systems are funded
with CCDF funds. However, we
recognize that Lead Agencies have made
significant investments in databases and
other web-based applications. For many
States/Territories, the CCDF Lead
Agency and the licensing agency may
not be the same, leading to multiple
data systems with different ownership.
We do not intend to require completely
new systems be built. Rather, the Web
site would be a single starting point for
parents to access the various sources of
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public information required by the
statute, including health and safety
information, licensing history, and other
related provider information. In the case
where this information is already
available on multiple Web sites, such as
in a locally-administered State where
each county has its own Web site, the
Lead Agency could choose to create a
single Web page that includes links to
each of these Web sites, provided that
each of the Web sites meets all the
criteria at § 98.33(a). Similarly, if there
are two Web sites, one that includes
licensed providers and another that
includes CCDF providers, we strongly
encourage Lead Agencies to create a
single Web site through which parents
can access information.
The first statutorily required
component of the consumer education
Web site is a description of Lead Agency
policies and procedures relating to child
care. This includes explaining how the
Lead Agency licenses child care
providers including the rationale for
exempting providers from licensing
requirements, as described at § 98.40;
the procedure for conducting
monitoring and inspections of child care
providers, as described at § 98.42;
policies and procedures related to
criminal background checks for staff
members of child care providers, as
described at § 98.43; and the offenses
that prevent individuals from being
employed by a child care provider or
receiving CCDF funds. The information
about Lead Agency policies and
procedures included on the consumer
education Web site should be in plain
language.
The second proposed component is
provider-specific information in several
categories for all eligible and licensed
child care providers, excluding those
related to all children in their care.
These categories include a localized list
of all providers that is searchable by zip
code and differentiates whether they are
licensed or license-exempt providers;
information about the quality of a
provider as determined by the Lead
Agency, if the information is available
for that provider; and the results of
monitoring and inspection reports,
including those due to major
substantiated complaints about failure
to comply with health and safety
provisions and Lead Agency policies, if
available; and the number of serious
injuries and deaths of children
occurring in that child care setting.
When making information public, Lead
Agencies should ensure that the privacy
of individual caregivers and children is
maintained, consistent with State and,
local, and tribal laws.
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While not required, we recommend
that Lead Agencies include additional
information with provider profiles,
beyond what is required by statute,
including contact information,
enrollment capacity, years in operation,
education and training of caregivers,
and languages spoken by caregivers. We
also suggest that the quality information
and monitoring reports be included in
the initial search results.
The Act requires the Secretary to
operate a national Web site for
consumer education and submission of
complaints. (Section 658L(b)(2)). The
statute requires several components be
included in the Web site, including
many of the same requirements of the
Lead Agency consumer education Web
sites. We are proposing to incorporate
all requirements of the national Web site
into the requirements of the Lead
Agency consumer education Web site,
including the localized list of child care
providers searchable by zip code
proposed at § 98.33(a)(2)(i). The statute
allows for the national Web site to
provide the information either ‘‘directly
or through linkages to State databases.’’
It is not feasible or sensible for HHS to
recreate databases many States have
already created. Therefore, we are
proposing to require Lead Agencies to
include these components in their
databases and Web sites to which we
plan to link the national Web site. We
welcome comments regarding this
proposed provision and suggestions for
having the national Web site link to
State/Territory-level databases and Web
sites.
The Web site must include providerspecific quality information as
determined by the Lead Agency, in
accordance with Section
658E(c)(2)(E)(i)(II) of the Act. Lead
Agencies may choose the best method
for differentiating the quality levels of
child care providers. In this proposed
rule, we are not requiring that Lead
Agencies have a QRIS. However, we
strongly encourage Lead Agencies to use
a QRIS, or other transparent system of
quality indicators, to collect the quality
information proposed at § 98.33(a)(2)(ii).
Lead Agencies that have a QRIS should
use information from the QRIS to
provide parents with provider-specific
quality information. By transparent
system of quality indicators we mean a
method of clear, research-based
indicators that are appropriate for
different types of providers, including
child care centers and family child care
homes, and appropriate for providers
serving different age groups of children,
including infants, toddlers, preschool,
and school-age children. The system
should help families easily understand
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whether a provider offers services
meeting Lead Agency-determined best
practices and standards to promote
children’s development, or is meeting a
nationally recognized, research-based
set of criteria, such as Head Start or
national accreditation. We encourage
Lead Agencies to incorporate mandatory
licensing requirements as the
foundation of any system of quality
indicators, as a baseline of information
for parents. By building on licensing
structures, Lead Agencies may have an
easier transition to a more sophisticated
system that differentiates between
indicators of quality.
Because not all eligible and licensed
non-relative child care providers may be
included in a transparent system of
quality indicators, the proposed
regulation clarifies that providerspecific quality information must only
be posted on the consumer Web site if
it is available for the individual
provider, which is a caveat included in
statute. We recognize that it takes time
to build a comprehensive system that is
inclusive of a large number of providers
across a wide geographic area. However,
in order for the quality information
provided on the Web site to be
meaningful and useful for parents it
should include as many providers as
possible. We are not proposing a
specific participation rate, but the
public should have contextual
information regarding the extent of
participation by providers in a system of
quality indicators.
In designing a mechanism for
differentiating child care quality, we
suggest considering the following key
principles: Provide outreach to targeted
audiences; ensure indicators are
research-based and incorporate the use
of validated observational tools when
feasible; ensure assessments of quality
include program standards that are
developmentally appropriate for
different age groups; incorporate
feedback from child care providers and
families; make linkages between
consumer education and other familyspecific issues such as care for children
with special needs; engage community
partners; and establish partnerships that
build upon the strengths of child care
resource and referral programs and
other public agencies that serve lowincome parents.
The majority of States/Territories
reported in their FY 2014–2015 CCDF
Plans that they have at least started to
implement a QRIS. HHS has established
a Priority Performance Goal to track the
number of States that implement a QRIS
meeting recommended benchmarks,
and, as of FY 2014, 29 States/Territories
met the benchmark, and 27 States/
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Territories have made progress on
implementing a high quality QRIS that
meets HHS benchmarks since the goal
was establish in FY 2011.
While ACF encourages Lead Agencies
to implement a systemic framework for
evaluating, improving, and
communicating the level of quality in
child care programs, we are not limiting
Lead Agencies to a QRIS as the only
mechanism for collecting the required
quality information. Lead Agencies have
the flexibility to implement more
limited, alternative systems of quality
indicators. For example, Lead Agencies
could choose to use a profile or report
card of information about a child care
provider that could include compliance
with State/Territory licensing or health
and safety requirements, information
about ratios and group size, average
teacher training or credentials, type of
curriculum used, any private
accreditations held, and presence of
caregivers to work with young English
learners or children with special needs.
Lead Agencies could also build on
existing professional development
registries or other training systems to
provide parents with information about
caregiver training.
Section 658E(c)(2)(D) of the Act
requires Lead Agencies to also include
provider-specific results of monitoring
and inspection reports, including those
reports that are due to major
substantiated complaints (as defined by
the Lead Agency) about a provider’s
failure to comply with health and safety
requirements and other Lead Agency
policies. The definition of ‘‘major
substantiated complaint’’ varies across
the country. Therefore, we are not
proposing a standard definition.
However, the proposed rule would
require Lead Agencies to explain how
they define it on their consumer
education Web sites. This proposed
requirement ensures that the results of
proposed monitoring and inspection
requirements at § 98.42 are available to
parents when they are deciding on a
child care provider.
We propose requiring Lead Agencies
to post full monitoring and inspection
reports. In order for inspection results to
be consumer-friendly and easily
accessible, Lead Agencies would be
required to use plain language for
parents and child care providers and
caregivers to understand. Often
monitoring and inspection reports are
long and include jargon and references
to codes or regulations without any
explanation. Reports that include
complicated references and lack
explanation are not consumer-friendly,
limiting a parent’s ability to make an
informed decision about a child care
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provider. In the case that full reports are
not in plain language, Lead Agencies
must post a plain language summary or
interpretation in addition to the full
monitoring and inspection report. We
encourage Lead Agencies to consider
simplifying and translating their
monitoring and inspection reports in
order to create more consumer-friendly
documents.
We propose to require that results be
posted in a timely manner and include
information about the date of
inspection, information about any
corrective actions taken by the Lead
Agency and child care provider, where
applicable, and include at least five
years of results, where available going
forward. A single year of results could
mask patterns of infractions and is
insufficient for a parent to judge the
safety of the environment. We do not
expect Lead Agencies to post reports
retrospectively or prior to the effective
date of this provision (November 17,
2017). We expect Lead Agencies to keep
five years of results posted once they are
available, beginning with the November
17, 2017 effective date (unless a
provider has been providing services for
less time). We believe five years is a
reasonable amount of time to include on
the Web site. As adding new results to
the completed Web site should not be a
burden for the Lead Agency, we expect
all reports to remain on the Web site.
Finally, while not required, if earlier
reports are available, we encourage Lead
Agencies to post them on the Web site
in order to provide more information for
parents.
Posting results and corrective actions
in a timely manner is crucial to ensuring
parents have updated information when
making their provider decisions. We
recommend Lead Agencies update
results as soon as possible and no later
than 90 days after an inspection or
corrective action is taken. We are
interested in comments on whether this
is an appropriate amount of time.
However, we are not in the proposed
rule defining timely in the regulatory
language. Rather, the proposed rule
would leave it to the discretion of the
Lead Agency to determine a reasonable
amount of time based on the needs of
its families and its capacity for
updating.
In following the statutory language at
Section 658E(c)(2)(D), Lead Agencies
must post the monitoring and
inspections results for child care
providers, as defined at § 98.2. This
means that the Web site must include
any provider subject to the monitoring
requirements at § 98.42, as well as all
licensed child care providers and all
child care providers eligible to deliver
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CCDF services. Lead Agencies would be
required to post inspection reports for
child care providers that do not receive
CCDF, if available. However, if
information is not available, such as if
a provider is not being inspected and
there is no inspection report, the
requirement does not apply.
Lead Agencies with concerns
regarding providers’ privacy could use a
unique identifier, such as a licensing
number, to include on the profile.
Parents interested in a certain provider
can ask the provider or the Lead Agency
for the identifier in order to look up
more information about health and
safety requirements met by a certain
provider on the Web site. Lead Agencies
also may choose to provide only limited
information about a provider, such as
provider name and zip code to make it
easier for parents to identify their
chosen provider.
We strongly support Lead Agencies
implementing policies that are fair to
providers, including protections related
to the consumer education Web site.
Lead Agencies should establish an
appeals process for providers that
receive violations. This appeals process
should include timeframes for filing the
appeal, for the investigation, and for
removal of any violations from the Web
site determined on appeal to be
unfounded. Lead Agencies also must
ensure that the consumer education
Web site is updated regularly. Some
Lead Agencies currently allow providers
to review monitoring and inspection
results prior to posting on a public Web
site. Nothing in this proposed rule
should be taken as prohibiting that
practice moving forward. However, the
proposed requirement that information
be posted in a timely manner means that
Lead Agencies may need to limit the
amount of time providers have to review
the results prior to posting.
Finally, we propose to require that
Lead Agencies post provider-specific
information about the number of serious
injuries (as defined by the State) and
deaths that occurred in child care for all
eligible child care providers on the
consumer education Web site. This
information should be included as part
of the child care provider’s profile
discussed earlier. This proposed
requirement works in conjunction with
the proposed provision at § 98.42(b)(4),
which would require child care
providers to report serious injuries or
deaths occurring in child care. Because
Lead Agencies have different
definitions, we are not proposing to
define serious injury in this proposed
rule.
Whether a provider has a history of
serious injuries or deaths of children
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while in their care is a crucial piece of
information that parents must have
access to in order to make an informed
decision about a provider. In addition,
learning that a provider does not have
a history of violations may provide
parents additional peace of mind when
leaving their children with a provider.
We recognize that not all serious
injuries or deaths of children that occur
in child care are the fault of the child
care provider. We recommend that Lead
Agencies include additional information
about the context of the serious injuries
and deaths to ensure that parents have
the full picture when looking at these
numbers on the consumer education
Web site.
We are not proposing to require
provider-specific information on
substantiated cases of child abuse and
neglect that occurred while a child was
in the care of the provider. The Child
Abuse Prevention and Treatment Act
(CAPTA) (42 U.S.C. 5106a(b)(2)(B)(viii)–
(ix)) requires States to preserve the
confidentiality of all child abuse and
neglect reports and records to protect
the privacy of the child and the child’s
parent or guardian. We believe that
requiring provider-specific information
on occurrences of child abuse and
neglect may violate some of those
privacy requirements. However, we
think it is important for parents to have
access to this information as well. We
request comment on whether this
information should be included and
suggestions for ensuring the information
does not violate privacy rules.
The third statutorily required
component of the consumer education
Web site is posting of the aggregate
number of deaths, serious injuries, and
instances of substantiated child abuse
that occurred in child care settings each
year, for eligible child care providers.
This proposed requirement is associated
with the provider setting and therefore
it should include information about any
child in the care of a provider eligible
to receive CCDF, not just children
receiving subsidies. As with serious
injuries, we are choosing not to define
substantiated child abuse in this
proposed rule. We encourage Lead
Agencies to use their State or Territory
child welfare agency’s definition of
substantiated child abuse for consistent
reporting across programs. Because of
the wide variation in how child abuse
in child care settings is reported and
counted, we are requesting comments
and examples about best practices for
ensuring accurate data is collected and
posted on the consumer education Web
site. Lead Agencies may choose how the
data are presented on the Web site. We
encourage them to include the data with
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the results of an annual review of all
serious injuries and deaths occurring in
child care, as proposed at § 98.53(f)(4).
The fourth proposed component of
the consumer education Web site is the
ability to refer to local child care
resource and referral organizations,
which is also a requirement of the
national Web site discussed earlier. The
Web site should include contact
information, as well as any links to Web
sites for any local child care resource
and referral organizations.
The final component of the consumer
education Web site is information on
how parents can contact the Lead
Agency, or its designee, or other
programs that can help the parent
understand information included on the
consumer education Web site. The
proposed consumer education Web site
at § 98.33(a) represents a significant step
in making it easier for parents to access
information about the child care system
and potential child care providers.
However, the amount of information
may be difficult to understand or find.
In addition, parents searching for child
care may prefer to speak with a person
directly as they make decisions about
their child’s care. Therefore, we propose
that the Web site include information
about how to contact the Lead Agency,
or its designee such as a child care
resource and referral agency, to answer
any questions parents might have after
reviewing the Web site.
Additional consumer education. We
propose to incorporate statutory
requirements at Section 658E(c)(E)(i) by
adding new paragraph (b) at § 98.33,
which requires Lead Agencies to
provide additional consumer education
to eligible parents, the general public,
and, where applicable, child care
providers. The consumer education may
be done through child care resource and
referral organizations or other means as
determined by the Lead Agency, and
can be delivered through the consumer
education Web site at § 98.33(a). We
strongly encourage Lead Agencies to use
additional means to provide this
information including through direct
conversations with case workers and
information sessions for parents and
child care providers, outreach and
counseling available at intake from
eligibility workers, and to and through
child care providers to parents.
The statute requires consumer
education to include: Information about
the availability of child care services
through CCDF, other programs for
which families might be eligible, and
the availability of financial assistance to
obtain child care services; other
programs for which families receiving
CCDF may be eligible; programs carried
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out under Section 619 and Part C of the
Individuals with Disabilities Education
Act (IDEA) (20 U.S.C. 1419, 1431 et
seq.); research and best practices
concerning children’s development,
including meaningful parent and family
engagement and physical health and
development; and policies regarding the
social-emotional behavioral health of
children, which are described below
and included in the proposed rule at
§ 98.33(b)(1).
The first required piece of information
is about the availability of child care
services through CCDF and other
programs that parents may be eligible
for, as well as any other financial
assistance that may be available to help
parents obtain child care services. Lead
Agencies should provide information
about any other Federal, State/Territory/
Tribal, or local programs that may pay
for child care or other early childhood
education programs, such as Head Start,
Early Head Start and state-funded prekindergarten that would meet the needs
of parents and children. It should also
explain how other forms of child care
assistance, including CCDF, are
available to cover additional hours the
parent might need due to their work
schedule.
The second statutory requirement is
for consumer education to include
information about other assistance
programs for which families receiving
child care assistance may be eligible.
These programs include: Temporary
Assistance for Needy Families (TANF)
(42 U.S.C. 601 et seq.); Head Start and
Early Head Start (42 U.S.C. 9831 et seq.);
Low-Income Home Energy Assistance
Program (LIHEAP) (42 U.S.C. 8621 et
seq.); Supplemental Nutrition
Assistance Program (SNAP) (7 U.S.C.
2011 et seq.); Special Supplemental
Nutrition Program for Women, Infants,
and Children (WIC) (42 U.S.C. 1786);
Child and Adult Care Food Program
(CACFP) (42 U.S.C. 1766); and Medicaid
and the State Children’s Health
Insurance Programs (CHIP) (42 U.S.C.
1396 et seq., 1397aa et seq.).
In providing consumer education,
Lead Agencies may consider the most
appropriate and effective ways to reach
families, which may include
information in multiple languages and
partnerships with other agencies and
organizations, including child care
resource and referral. Lead Agencies
should also coordinate with workforce
development entities that have direct
contacts with parents in need of child
care. Some Lead Agencies co-locate
services for families in order to assist
with referrals or enrollment in other
programs.
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Families eligible for child care
assistance are often eligible for other
programs and benefits but many parents
lack information on accessing the full
range of programs available to support
their children. More than half of infants
and toddlers in CCDF have incomes
below the federal poverty level, making
them eligible for Early Head Start. Lead
Agencies can work with Early Head
Start programs, including those
participating in Early Head Start-Child
Care Partnerships, to direct children
who are eligible for Early Head Start to
available programs.
Despite considerable overlap in
eligibility among the major work
support programs, historically, many
eligible working families have not
received all public benefits for which
they qualify. For example, more than 40
percent of children who are likely to be
eligible for both SNAP and Medicaid or
CHIP fail to participate in both programs
(Rosenbaum, D. and Dean, S. Improving
the Delivery of Key Work Supports:
Policy & Practice Opportunities at A
Critical Moment, Center on Budget and
Policy Priorities, 2011). A study using
2001 data found that only 5 percent of
low-income working families obtained
Medicaid or CHIP, SNAP, and child care
assistance (Mills, G., Compton, J. and
Golden, O., Assessing the Evidence
about Work Support Benefits and LowIncome Families, Urban Institute, 2011).
In addition to informing families
about the availability of these programs,
some Lead Agencies have streamlined
parents’ access to other benefits and
services by coordinating and aligning
eligibility criteria or processes and/or
documentation or verification
requirements across programs. This
benefits both families and administering
agencies by reducing administrative
burden and inefficiencies. Lead
Agencies also coordinate to share data
across programs so families do not have
to submit the same information to
multiple programs. Finally, Lead
Agencies have created online Web sites
or portals to allow families to screen for
eligibility and potentially apply for
multiple programs. We recommend
Lead Agencies consider alignment
strategies that help families get
improved access to all benefits for
which they are eligible.
Thirdly, consumer education must
also include information about
programs for children with disabilities
carried out under Part B Section 619
and Part C of the Individuals with
Disabilities Education Act (IDEA) (20
U.S.C. 1419, 1431 et seq.).
The fourth piece of required
consumer education is information
about research and best practices
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concerning children’s development, and
meaningful parent and family
engagement. It must also include
information about physical health and
development, particularly healthy
eating and physical activity. This
information may be included on the
consumer education Web site, as well as
be provided through brochures, in
person meetings, and other trainings.
While this information is important
for parents and the general public, we
encourage Lead Agencies to target this
information to child care providers as
well. Each of these components is
crucial for caregivers to understand in
order to provide an enriching learning
environment and build strong
relationships with parents. Lead
Agencies may choose to include
information about family engagement
frameworks in their provider education.
Many States and communities have
employed these frameworks to promote
caregiver skills and knowledge through
their QRIS, professional development
programs, or efforts to build
comprehensive early childhood
systems. States have used publiclyavailable tools, including from the
Office of Head Start. The Head Start
Parent, Family, and Community
Engagement framework is a researchbased approach to program change that
shows how different programs can work
together as a whole—across systems and
service areas—to support parent and
family engagement and children’s
learning and development.
Understanding research and best
practices concerning children’s
development is an essential component
for the health and safety of children,
both in and outside of child care
settings. Caregivers should be
knowledgeable of important
developmental milestones not only to
support the healthy development of
children in their care, but also so they
can be a resource for parents and
provide valuable parent education.
Knowledge of developmental stages and
milestones also reduces the odds of
child abuse and neglect by establishing
more reasonable expectations about
normative development and child
behavior. This requirement is associated
with the proposed requirement at
§ 98.44(b)(1) that orientation or preservice for child care caregivers,
teachers and directors include training
on child development.
Lastly, consumer education must
include provision of information about
policies regarding social-emotional
behavioral health of children, which
may include positive behavioral health
intervention and support models for
birth to school-age or as age-
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appropriate, and policies on suspension
and expulsion of children birth to age
five in child care and other early
childhood programs as described in the
Plan at § 98.16(ee).
Social-emotional development is
fostered through securely attached
relationships; and learning, by
extension, is fostered through frequent
cognitively enriching social interactions
within those securely attached
relationships. Studies indicate that
securely attached children are more
advanced in their cognitive and
language development, and show
greater achievement in school. In 2015,
ACF issued an information
memorandum detailing research and
policy options related to children’s
social-emotional development. (CCDF–
ACF–IM–2015–01, https://
www.acf.hhs.gov/sites/default/files/occ/
ccdf_acf_im_2015_01.pdf). By providing
consumer education on social-emotional
behavioral health policies, Lead
Agencies are helping parents, the
general public, and caregivers
understand the importance of socialemotional and behavioral health and
how the Lead Agency is encouraging the
support of children’s ability to build
healthy and strong relationships.
In conjunction with this consumer
education requirement, we are
proposing to add § 98.16(ee) to require
Lead Agencies to provide a description
of their policies on suspension and
expulsion of children birth to age five in
child care and other early childhood
programs receiving CCDF assistance.
Ensuring that parents and providers
understand suspension and expulsion
policies for children birth to age five is
particularly important. In 2014, the U.S.
Departments of Health and Human
Services and Education jointly released
a policy statement addressing expulsion
and suspension in early learning
settings and highlighting the importance
of social-emotional and behavioral
health (https://www.acf.hhs.gov/sites/
default/files/ecd/expulsion_suspension_
final.pdf). The policy statement affirms
the Departments’ attention to socialemotional and behavioral health and
includes several recommendations to
States and early childhood programs,
including child care programs, to assist
in their efforts. It strongly encourages
States to establish statewide policies,
applicable across settings, including
publicly and privately funded early
childhood programs, to promote
children’s social-emotional and
behavioral health and to eliminate or
severely limit the use of expulsion,
suspension, and other exclusionary
discipline practices. These policies may
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be included in State child care licensing
regulations, as some States have done.
Information about developmental
screenings. The reauthorized CCDBG
Act requires at Section 658E(c)(2)(E)(ii)
that consumer education about
developmental screenings be provided
to parents, the general public, and,
when applicable, child care providers.
Specifically, it should include (1)
information on existing resources and
services the Lead Agency can use in
conducting developmental screenings
and providing referrals to services for
children who receive child care
assistance; and (2) a description of how
a family or eligible child care provider
may use those resources and services to
obtain developmental screenings for
children who receive child care
assistance and may be at risk for
cognitive or other developmental
delays, including social, emotional,
physical, or linguistic delays. The
information about the resources may
include the State or Territory’s
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 IDEA (20 U.S.C. 1419, 1431
et seq.). We propose to reiterate the
statutory requirements and add new
paragraph (c) at § 98.33 to require Lead
Agencies to provide information on
developmental screenings as part of
their consumer education efforts during
the intake process for families receiving
CCDF assistance and to caregivers,
teachers, and directors through training
and education. Information on
developmental screenings, as other
consumer education information,
should be accessible for individuals
with limited English proficiency and
individuals with disabilities.
Educating parents and caregivers on
what resources are available for
developmental screenings, as well as
how to access these screenings, is
crucial to ensuring that developmental
delays or disabilities are identified
early. Some children may require a
more thorough evaluation by specialists
and additional services and supports.
Lead Agencies should ensure that all
providers are knowledgeable on how to
access resources to support
developmental and behavioral
screening, and make appropriate
referrals to specialists, as needed, to
ensure that children receive the services
and supports they need as early as
possible.
While we are not proposing that all
children be required to receive a
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developmental screening, we strongly
recommend that Lead Agencies develop
strategies to ensure all children receive
a developmental and behavioral
screening within 45 days of enrollment
in CCDF, which aligns with Head Start
standards. With regular screenings,
families, teachers, and other
professionals can assure that young
children get the services and supports
they need, as early as possible to help
them thrive alongside their peers. Birth
to 5: Watch Me Thrive, a coordinated
Federal effort to encourage universal
developmental and behavioral screening
for children and to support their
families and caregivers, has information
and resources at www.acf.hhs.gov/
programs/ecd/watch-me-thrive. In
addition to research-based
developmental and behavioral
screenings, Lead Agencies should
encourage parents and child care
providers to use the tools and resources
developed by the Centers for Disease
Control and Prevention as part of their
‘‘Learn the Signs. Act Early.’’ campaign.
These resources help parents and child
care providers to become familiar with
and keep track of the developmental
milestones of children. These resources
are available at https://www.cdc.gov/
ncbddd/actearly/. The resources
provided through this campaign are not
a substitute for regular developmental
screenings, but help to improve early
identification of children with autism
and other developmental disabilities so
children and families can get the
services and support they need as early
as possible.
Consumer statement for families. In
addition to consumer education for
parents, the general public, and where
applicable, child care providers, we
have a special interest in helping
parents receiving CCDF select high
quality child care because we know
from research that low-income children
have the most to gain from such settings
and because the care is publicly
subsidized. We propose adding a new
paragraph (d) to § 98.33 to require Lead
Agencies to provide families receiving
CCDF assistance with easily
understandable information on the child
care provider they choose, including
health and safety requirements met by
the provider, any licensing or regulatory
requirements met by the provider, date
the provider was last inspected, any
history of violations of these
requirements, and any quality standards
met by the provider. Lead Agencies also
should provide information necessary
for parents and providers to understand
the components of a comprehensive
background check, and whether the
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child care staff members of their
provider have received such a check.
We also propose to require this
consumer statement to include
information about the hotline for
parental complaints about possible
health and safety violations and
information describing how CCDF
assistance is designed to promote equal
access to comparable child care in
accordance with § 98.45.
If a parent chooses a provider that is
legally-exempt from regulatory
requirements or exempt from CCDF
health and safety requirements (e.g.,
relatives at the Lead Agency option), the
Lead Agency or its designee should
explain the exemption to the parent.
Lead Agencies that choose to use an
alternative monitoring system for inhome providers, as proposed at
§ 98.42(b)(2)(v)(B), should describe this
process for parents that choose in-home
care. When a parent chooses a relative
or in-home child care provider, the Lead
Agency should explain to the parent the
health and safety policies associated
with relative or in-home care. The Lead
Agency should provide the parents with
resources about health and safety
trainings should the parent wish for the
relative to obtain training regardless of
the exemption.
There is a great deal of variation in
how Lead Agencies handle intake for
parents receiving child care subsidies.
Therefore, we propose flexibility for
Lead Agencies to implement the
proposed consumer statement in the
way that best fits both their
administrative needs and the needs of
the parents. This means that the
consumer statement may be presented
as a hard copy or electronically. When
providing this information, a Lead
Agency may provide it by referring to
the Web site required by § 98.33(a). In
such cases, the Lead Agency should
ensure that parents have access to the
Internet or provide access on-site in the
subsidy office. While we recognize the
need for Lead Agency flexibility in this
area, we have concerns about relying
solely on electronic consumer
statements. Parents may not have access
to the Internet or may have questions
about the consumer statement that need
to be answered by a person. If a parent
is filing an application online, we
encourage the inclusion of a phone
number, directed to either the Lead
Agency or another organization such as
a child care resource and referral
agency, to ensure parents can have their
questions answered. We also
recommend that intake done over the
phone should include the offer to either
email or mail the consumer statement to
the parent; and, that information on
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consumer statements should be
accessible by individuals with limited
English proficiency and individuals
with disabilities.
We realize, in some cases, a parent
has chosen their provider prior to the
intake process. If the parent comes in
with a provider already chosen, the
parent should be given the consumer
statement on that provider. When a
parent has not chosen a child care
provider prior to intake, Lead Agencies
should ensure that the parent receives
information about available child care
providers and general consumer
education information proposed at
§ 98.33(a), (b), and (c). This information
should include a description of health
and safety requirements and licensing or
regulatory requirements for child care
providers, processes for ensuring
requirements are met, as well as
information about the background check
process for child care staff members of
providers, and what offenses may
preclude a provider from serving
children. Once the parent selects a
provider, this proposed provision would
require the Lead Agency to provide a
consumer statement to the parent with
information about the provider they
have selected, such as by mail or email.
Finally, we encourage Lead Agencies
to provide parents receiving CCDF
assistance with updated information on
their child care provider on a periodic
basis, such as by providing an updated
consumer statement at the time of the
family’s next eligibility redetermination.
Ties between the CCDF Lead Agency
and the licensing agency can help to
ensure that families are notified when
providers are seriously out-ofcompliance with health and safety
requirements, and that placement of
children and payment of CCDF funds do
not continue where children’s health
and safety may be at-risk.
An area we want to highlight is child
care consumer education for families
receiving TANF. Commenters on our
2013 NPRM expressed concern that
families receiving TANF are not given
the support needed to identify high
quality child care and that there should
be a more coordinated, seamless process
for TANF families to access consumer
information on the availability of high
quality providers. We strongly
recommend that Lead Agencies provide
parents receiving TANF and child care
assistance, whether through CCDF or
TANF, with the necessary support and
consumer education in choosing child
care. We strongly encourage social
service agencies, child care licensing
agencies, child care resource and
referral agencies, and other related
programs to work closely to ensure that
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parents receiving TANF are provided
with the information and support
necessary for them to make informed
child care decisions.
CCDF plan. We propose a technical
change at § 98.33(f) to change the
reference to a biennial Plan to a
triennial Plan as established in the
statute at Section 658E(b).
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Subpart E—Program Operations (Child
Care Services) Lead Agency and
Provider Requirements
Subpart E of the regulations describes
Lead Agency and provider requirements
related to applicable State/Territory and
local regulatory and health and safety
requirements, monitoring and
inspections, and criminal background
checks. It addresses training and
professional development requirements
for caregivers, teachers, and directors
working for CCDF providers. It also
includes provisions requiring the Lead
Agency to ensure that payment rates to
providers serving children receiving
subsidies ensure equal access to the
child care market, to establish a sliding
fee scale that provides for affordable
cost-sharing for families receiving
assistance, and to establish priorities for
who receives child care services.
Compliance With Applicable State/
Territory and Local Regulatory
Requirements (Section 98.40)
Section 658E(c)(2)(F) of the Act
maintains the requirement that every
Lead Agency has in effect licensing
requirements applicable to child care
services within its jurisdiction. The Act
now requires Lead Agencies, if they
exempt any CCDF providers from
licensing requirements, to describe
‘‘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.’’
We include a corresponding change in
the proposed rule at § 98.40(a)(2), and
we provide clarification that the Lead
Agency’s description must include a
demonstration of how such exemptions
do not endanger children and that such
descriptions and demonstrations must
include any exemptions based on
provider category, type, or setting;
length of day; providers not subject to
licensing because the number of
children served falls below a Lead
Agency-defined threshold; and any
other exemption to licensing
requirements. This relates to the
corresponding CCDF Plan provision
proposed at § 98.16(u).
To clarify, this requirement does not
compel the Lead Agency to offer
exemptions from licensing requirements
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to providers. Rather, it requires that, if
the Lead Agency chooses to do so, it
must provide a rationale for that
decision. We also note that these
exemptions refer to exemptions from
licensing requirements, but that licenseexempt CCDF providers continue to be
subject to the health and safety
requirements applicable to all CCDF
providers in the Act. The only allowable
exception to CCDF health and safety
requirements is for providers who care
only for their own relatives, which we
discuss further below.
Health and Safety Requirements
(Section 98.41)
The Act requires Lead Agencies to
have in effect health and safety
requirements for providers and
caregivers caring for children receiving
CCDF assistance that relate to ten health
and safety topics: (i) Prevention and
control of infectious diseases (including
immunization); (ii) prevention of
sudden infant death syndrome and use
of safe sleeping practices; (iii)
administration of medication, consistent
with standards for parental consent; (iv)
prevention 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); (viii) handling and
storage of hazardous materials and the
appropriate disposal of bio
contaminants; (ix) appropriate
precautions in transporting children, if
applicable; and (x) first aid and
cardiopulmonary resuscitation.
The Act says that health and safety
topics ‘‘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’’
(Section 658E(c)(2)(I)(ii)), which we
restate at § 98.41(a)(1)(xii). While these
topics are optional in this proposed
rule, we strongly encourage Lead
Agencies to include them in basic
health and safety requirements.
Educating caregivers on appropriate
nutrition, including age-appropriate
feeding, and physical activity for young
children is essential to prevent longterm negative health implications and
assist children in reaching
developmental milestones. We also
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propose to add ‘‘caring for children with
special needs’’ as an optional topic on
this list.
Lead Agencies are responsible for
establishing standards in the above
areas for CCDF providers and should
require providers to develop policies
and procedures that comply with these
standards. We encourage Lead Agencies
to adopt these standards for all
caregivers and providers regardless of
whether they currently receive CCDF
funds. The Act requires health and
safety training on the above topics to be
completed pre-service or during an
orientation period and on an ongoing
basis. This training requirement is
discussed in greater detail below in
§ 98.44 on training and professional
development.
ACF recently released Caring for Our
Children Basics (CfoC) Basics, https://
www.acf.hhs.gov/programs/ecd/caringfor-our-children-basics). CfoC Basics is a
set of recommendations, which is
intended to create a common framework
to align basic health and safety efforts
across all early childhood settings. CfoC
Basics, represent minimum, baseline
standards for health and safety. CfoC
Basics is based on Caring for Our
Children: National Health and Safety
Performance Standards; Guidelines for
Early Care and Education Programs, 3rd
Edition, produced with the expertise of
researchers, physicians, and
practitioners. (American Academy of
Pediatrics, American Public Health
Association, National Resource Center
for Health and Safety in Child Care and
Early Education. (2011). Caring for our
children: National health and safety
performance standards; Guidelines for
early care and education programs. 3rd
edition, American Academy of
Pediatrics; Washington, DC: American
Public Health Association.)
Lead Agencies looking for guidance
on establishing health and safety
standards should consult ACF’s CfoC
Basics. The list of health and safety
topics required by the Act is aligned
with, but not fully reflective of, health
and safety recommendations from both
CfoC Basics as well as Caring for Our
Children: National Health and Safety
Performance Standards. Lead Agencies
can be confident that if their standards
are aligned with CfoC Basics, they
would be considered to have adequate
minimum standards. Lead Agencies are
encouraged, however, to go beyond
these baseline standards to develop a
comprehensive and robust set of health
and safety standards that cover
additional areas related to program
design, caregiver safety, and child
developmental needs, using the full
Caring for Our Children: National
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Health and Safety Performance
Standards guidelines.
We propose reiterating these new
health and safety requirements at
§ 98.41(a) and propose some
clarifications. These include specifying
that the health and safety requirements
be appropriate to the age of the children
served in addition to the provider
setting. Lead Agency requirements
should reflect necessary content
variation, within the required topic
areas, depending on the provider’s
particular circumstances. For example,
prevention of sudden infant death
syndrome and safe sleep training would
only be necessary if a caregiver cares for
infants. Similarly, if an individual is
caring for children of different ages,
training in first-aid and CPR should
include elements that take into account
that practices differ for infants and older
children. We also clarify that, in
addition to having these requirements in
effect, they must be ‘‘implemented and
enforced,’’ and that these requirements
are subject to monitoring pursuant to
§ 98.42. This is intended to help ensure
that requirements are put into practice
and that providers are held accountable
for meeting them. The required health
and safety topics are included at
§ 98.41(1).
Immunizations and Tribal programs.
This proposed rule amends the
regulatory language at § 98.41(a)(1)(i)(A)
by replacing ‘‘States and Territories’’
with ‘‘Lead Agencies’’ to be inclusive of
Tribes. Minimum Tribal health and
safety standards under effect currently
address immunization in a manner that
is consistent with the requirements of
this section. As a result, there is no
longer a compelling reason to continue
to exempt Tribes from this requirement.
We have made a corresponding change
to the regulations at § 98.83(d) in
subpart I and further discus this and
other changes regarding health and
safety requirements as they pertain to
Tribes.
Immunization and in-home care. We
also propose to add ‘‘provided there are
no other unrelated children who are
cared for in the home’’ to the existing
exemption to the immunization
requirement for children who receive
care in their own homes at
§ 98.41(a)(1)(i)(B)(2). Such children may
continue to be exempt from
requirements, provided that they are not
in care with other unrelated children,
which could endanger the health of
those children.
Children experiencing homelessness
and children in foster care. In
§ 98.41(a)(1)(i)(C), we restate the new
statutory requirement that Lead
Agencies establish a grace period for
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children experiencing homelessness and
children in foster care to allow such
children to receive CCDF services while
their families (including foster families)
are given a reasonable time to take any
necessary action to comply with
immunization and other health and
safety requirements. We clarify that any
payment for such child during the grace
period shall not be considered an error
or improper payment under 45 CFR part
98, subpart K. We propose adding
§ 98.41(a)(1)(i)(C)(2) to allow Lead
Agencies the option of establishing
grace periods for other children who are
not homeless or in foster care consistent
with current regulations, which allow
the establishment of grace periods more
broadly. This was included in the last
CCDF regulation due to significant
feedback that requiring immunizations
to be completely up-to-date prior to
receiving services could constitute a
barrier to working. This provision was
added to offer additional State
flexibility and we believe that adding
the a specific grace period provision in
the statute was not intended to limit
State’s abilities to establish these
policies, but rather to ensure that at a
minimum this policy existed for
children experiencing homelessness and
children in foster care.
The intent of this provision was to
reduce barriers to enrollment given the
uniquely challenging circumstances of
homeless and foster children, not to
undermine children’s health and safety.
Therefore, we do not believe that the
intent was for those children to be
permanently exempt from
immunization and other health and
safety requirements. For that reason, we
propose adding at § 98.41(a)(1)(i)(C)(3),
which would require the Lead Agency
to coordinate with licensing agencies
and other relevant State/Territory and
local agencies to provide referrals and
support to help families experiencing
homelessness and foster children
comply with immunization and other
health and safety requirements. This
would help children, once enrolled and
receiving CCDF services, to obtain
necessary services and the proper
documentation in a timely fashion.
Emergency preparedness and
response. Section 658E(c)(2)(I)(i)(VII) of
the Act indicates that CCDF health and
safety requirements should include
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) as defined under section
602(a)(1) of the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5195a(a)(1)).
We propose to include this provision at
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§ 98.41(a)(1)(vii) and to include
additional language drawn from Section
658E(c)(2)(U) of the Act regarding
Statewide Disaster Plans. According to
the Act, Statewide Disaster Plans should
address: Evacuation, relocation, shelterin-place, and lock-down procedures;
procedures for staff and volunteer
emergency preparedness training and
practice drills; 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.
Communication and reunification with
families should include procedures that
identify entities with responsibility for
temporary care of children in instances
where the child care provider is unable
to contact the parent or legal guardian
in the aftermath of a disaster.
Accommodation of infants and toddlers,
children with disabilities, and children
with chronic medical conditions should
include plans that address multiple
facets, including ensuring adequate
supplies (e.g., formula, food, diapers,
other essential items) in the event that
sheltering-in-place is necessary. In
addition to being addressed in the
Statewide Disaster Plan, we would
require that health and safety
requirements for CCDF providers
include these topics so that child care
providers and staff would be adequately
prepared in the event of a disaster.
Guidance in Caring for Our Children:
National Health and Safety Performance
Standards, includes recommended
standards for written evacuation plans
and drills, planning for care for children
with medical conditions, and
emergency procedures related to
transportation and emergency contact
information for parents. The former
National Association of Child Care
Resource and Referral Agencies (now
Child Care Aware of America) and Save
the Children published Protecting
Children in Child Care During
Emergencies: Recommended State and
National Standards for Family Child
Care Homes and Child Care Centers,
that includes recommended State
regulatory standards related to
emergency preparedness for family
child care homes and child care centers.
Group Size Limits and Child-Staff
Ratios. Section 658E(c)(2)(H) of the Act
requires Lead Agencies to establish
group size limits for specific age
populations and appropriate child-staff
ratios that will provide healthy and safe
conditions for children receiving CCDF
assistance and meet children’s
developmental needs. It also requires
Lead Agencies to address required
qualifications for caregivers, teachers,
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and directors, which is discussed at
§ 98.44. Consistent with these
requirements, § 98.41(d) of the proposed
rule would require the Lead Agency to
establish standards for CCDF child care
services that promote the caregiver and
child relationship in the type of child
care setting involved and provide for the
safety and developmental needs of the
children served.
Ratio and group size standards are
necessary to ensure that the
environment is conducive to safety and
learning. Child-staff ratios should be set
such that caregivers can demonstrate the
capacity to meet health and safety
requirements and to evacuate all of the
children in their care in a timely
manner. A low child-staff ratio allows
for stronger relationships between a
child and their caregiver, which is a key
component of quality child care. Studies
of high quality early childhood
programs found that group size and
ratios mattered to the safety and the
quality of children’s experiences, as
well as to children’s health. (13
Indicators of Quality Child Care:
Research Update, presented to Office of
the Assistant Secretary for Planning and
Evaluation and Health Resources and
Services Administration/Maternal and
Child Health Bureau U.S. Department of
Health and Human Services, 2002 and
National Institute of Child Health and
Human Development (NICHD). 2006.
The NICHD study of early child care
and youth development: Findings for
children up to age 41⁄2 years. Rockville,
MD: NICHD.).
CARING FOR OUR CHILDREN BASICS
MAXIMUM CHILD:STAFF RATIOS FOR
CHILD CARE CENTERS BY AGE OF
CHILDREN
Age
≤12 months ...........................
13–23 months .......................
24–35 months .......................
3-year-olds ............................
4- to 5-year-olds ...................
Maximum
child:staff ratio
4:1
4:1
4:1–6:1
9:1
10:1
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While we are not establishing a
Federal requirement for group size and
child-staff ratios, there are resources
that Lead Agencies can use when
developing their standards. CfoC Basics
recommends:
Appropriate ratios should be kept during
all hours of program operation. Children with
special health care needs or who require
more attention due to certain disabilities may
require additional staff on-site, depending on
their special needs and the extent of their
disabilities. In center-based care, child-staff
ratios should be determined by the age of the
majority of children and the needs of
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children present. In family child care homes,
the caregivers’ children as well as any other
children in the home temporarily requiring
supervision should be included in the childstaff ratio. In family child care settings where
there are mixed age groups that include
infants and toddlers, a maximum ratio of 6:1
should be maintained and no more than two
of these children should be 24 months or
younger. If all children in care are under 36
months, a maximum ratio of 4:1 should be
maintained and no more than two of these
children should be 18 months or younger. If
all children in care are 3 years old, a
maximum ratio of 7:1 should be preserved.
If all children in care are 4 to 5 years of age,
a maximum ratio of 8:1 should be
maintained.
As stated earlier, these represent
baseline recommendations and Lead
Agencies should not feel limited by
them. ACF encourages Lead Agencies to
consider the group size and child-staff
ratios outlined in Caring for Our
Children: National Health and Safety
Performance Standards and the Head
Start and Early Head Start standards for
child-staff ratios, especially in light of
partnerships between Head Start and
child care. The Head Start program
performance standards set forth ratios
and group size requirements for the
center-based, combination program, and
family child care options for Head Start
and Early Head Start providers. Early
Head Start requires a ratio of one staff
person for every four infants and
toddlers in center based programs with
a maximum group size of eight. The
requirement for family child care homes
when an adult is working alone is two
children under two years old in a
maximum group of 6. When there is a
teacher and an assistant, the maximum
group size is 12 children, with no more
than four of the 12 children under two
years old. Head Start requires a ratio of
one staff person for every eight children
in center-based programs with a
maximum group size of 17 children for
3 year olds and 20 children for 4 year
olds.
Another resource for determining
appropriate child-staff ratios and group
sizes is NFPA 101: Life Safety Code from
The National Fire Protection
Association (NFPA), which
recommends that small family child
care homes with one caregiver serve no
more than two children incapable of
self-preservation. For large family child
care homes, the NFPA recommends that
no more than three children younger
than 2 years of age be cared for where
two caregivers are caring for up to 12
children. (National Fire Protection
Association, NFPA 101: Life Safety
Code, 2009)
Compliance with Child Abuse
Reporting Requirements. Section
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658E(c)(2)(L) of the Act requires Lead
Agencies to certify in its plan that child
care providers comply with procedures
for reporting child abuse and neglect as
required by section 106(b)(2)(B)(i) of the
Child Abuse Prevention and Treatment
Act (CAPTA) (42 U.S.C.
5106a(b)(2)(B)(i)). That provision of
CAPTA requires that ‘‘the State has in
effect and is enforcing a State law, or
has in effect and is operating a statewide
program, relating to child abuse and
neglect that includes . . . provisions or
procedures for an individual to report
known and suspected instances of child
abuse and neglect, including a State law
for mandatory reporting by individuals
required to report such instances.’’
Thus, Lead Agencies must certify that
caregivers, teachers, and directors of
child care providers will be required to
report child abuse and neglect as
individuals or mandatory reporters,
whether or not the State explicitly
identifies these persons as mandatory
reporters.
Because the CAPTA requirement
above is not applicable to Tribes or, in
some circumstances, to Territories, we
propose to expand upon this provision
at § 98.41(e) by requiring Lead Agencies
to certify that caregivers, teachers, and
directors of child care providers within
the State (or service area) will comply
with the State’s, Territory’s or Tribe’s
child abuse reporting requirements as
required by section 106(b)(2)(B)(i) of
CAPTA or other child abuse reporting
procedures and laws in the service area.
We propose adding this last phrase to be
consistent with any other child abuse
reporting procedures and laws that may
apply in the service area. Territories and
Tribes may have their own reporting
procedures and mandated reporter laws.
Also, some Tribes may work with States
to use the State’s reporting procedures.
Further, the Federal Indian Child
Protection and Family Violence
Prevention Act requires mandated
reporters to report child abuse occurring
in Indian country to local child
protective services agency or a local law
enforcement agency (18 U.S.C. 1169).
While State, Territory, and Tribal laws
about when and to whom to report vary,
child care providers and staff are often
considered mandatory reporters of child
abuse and neglect and responsible for
notifying the proper authorities in
accordance with applicable laws and
procedures. Regardless, the provision is
intended for the Lead Agency to ensure
that caregivers, teachers, and directors
follow all relevant child abuse and
neglect reporting procedures and laws,
regardless of whether a child care
caregiver or provider is considered a
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mandatory reporter under existing child
abuse and neglect laws. We note that
this requirement applies to caregivers,
teachers, and directors of all child care
providers, regardless of whether they
receive CCDF funds.
To support this statutory requirement,
we propose adding ‘‘recognition and
reporting of child abuse and neglect’’ to
the list of health and safety topics at
§ 98.41(a)(1)(xi) to ensure that
caregivers, teachers, and directors are
properly trained to be able to recognize
the manifestations of child
maltreatment. Child abuse and neglect
training can be used to educate and
establish child abuse and neglect
prevention and recognition measures for
children, parents, and caregivers. While
caregivers, teaches, and directors are not
expected to investigate child abuse and
neglect, it is important that all of these
individuals be aware of common
physical and emotional signs and
symptoms of child maltreatment.
According to the FY 2014–2015 CCDF
Plans, 31 States and Territories have a
pre-service training requirement on
mandatory reporting of suspected abuse
or neglect for staff in child care centers
and 25 States and Territories require
pre-service training in this area for
family child care.
Enforcement of Licensing and Health
and Safety Requirements (Section 98.42)
The majority of § 98.42 is new, based
on requirements added in the
reauthorized statute. Lead Agencies
receiving CCDF funds are required to
have child care licensing systems in
place and must ensure child care
providers serving children receiving
subsidies meet certain health and safety
requirements.
Procedures to ensure compliance with
health and safety requirements. Current
regulations, formerly at § 98.41(d),
require that the Lead Agency must have
procedures in effect to ensure that child
care providers of services for which
assistance is made available in
accordance with this part, within the
service area served by the Lead Agency,
comply with all applicable State, local,
or Tribal requirements. Through this
proposed rule, we clarify at § 98.42(a)
that these requirements must include
the health and safety requirements
described in § 98.41.
Monitoring requirements. Section
658E(c)(2)(K) of the Act requires that
Lead Agencies conduct monitoring
visits for all child care providers
receiving CCDF funds, including
license-exempt providers (except, at
Lead Agency option, those that serve
relatives). The Act requires Lead
Agencies to certify that licensed child
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care providers receive one pre-licensure
inspection for compliance with health,
safety, and fire standards and at least
one, annual, unannounced licensing
inspection for compliance with
licensing standards, including health,
safety, and fire standards. Licenseexempt CCDF providers (except at Lead
Agency option, those serving relatives)
must receive at least one annual
inspection for compliance with health,
safety, and fire standards at a time
determined by the Lead Agency. We
propose to restate these requirements at
§ 98.42(b). For existing licensed
providers already serving CCDF
children, we will consider the Lead
Agency to have met the pre-licensure
requirement through completion of the
first, annual on-site inspection.
We propose to add clarification at
§ 98.42(b)(2) that would require annual
inspections for both licensed and
license-exempt CCDF providers to
include, but not be limited to, those
health and safety requirements
described in § 98.41. We also clarify that
Tribes would be subject to the
monitoring requirements, unless a
Tribal Lead Agency requests an
alternative monitoring methodology in
its Plan and provides adequate
justification, subject to ACF approval,
pursuant to § 98.83(d)(2).
Pre-licensure inspections. The vast
majority of States and Territories
already require inspections for all child
care providers prior to licensure, which
we strongly encourage. Only one State
does not require pre-licensure
inspections for child care centers and
seven States do not require prelicensure inspections for family child
care. In States/Territories without prelicensure inspections, it is unclear how
to apply this statutory requirement
specifically to CCDF providers as it may
be unknown whether a child care
provider will be a CCDF provider at
some time in the future at the time of
seeking licensure. In this NPRM, we are
interpreting the pre-licensure inspection
requirement as an indication that an onsite inspection is necessary for licensed
child care providers prior to providing
CCDF-funded child care. Therefore, any
licensed provider that did not
previously receive a pre-licensure
inspection must be inspected prior to
caring for a child receiving CCDF. We
are interested in comments on whether
there should be a specified time period
for the inspection (i.e. within the
previous 12 months).
Annual Inspections of Licensed
Providers. The Act and this NPRM
would require annual inspections of
licensed child care providers receiving
CCDF funds; however, we strongly
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encourage Lead Agencies to conduct
annual, unannounced visits of all
licensed child care providers, including
those not receiving CCDF funds.
Research supports the use of regular,
unannounced inspections for
monitoring compliance with health and
safety standards and protecting
children. A recent series of Department
of Health and Human Services’ (HHS)
Office of Inspector General (OIG) audits
identified deficiencies with health and
safety protections for children in child
care in several states, including in
Arizona, Connecticut, Louisiana, Maine,
Michigan, Minnesota, Nebraska, and
Pennsylvania. For example, an OIG
audit in one State examined the
monitoring of 20 family child care home
providers and found 17 in violation of
at least one licensing requirement,
including four providers who did not
comply with background check
requirements. Another found 19 out of
20 licensed family child care home
providers in violation of at least one
State licensing requirement related to
the health and safety of children. (HHS
Office of the Inspector General, Some
Minnesota Childcare Home Providers
Did Not Always Comply With State
Health and Safety Licensing
Requirements (A–05–14–00021), 2015;
HHS Office of the Inspector General,
Some Pennsylvania Family Child Day
Care Home Providers Did Not Always
Comply With State Health and Safety
Requirements, A–03–14–00250, 2015).
In addition to concerns about
safeguarding children’s well-being, ACF
is very concerned that if all licensed
child care providers are not subject to at
least annual inspections, CCDF families
would be restricted from accessing a
portion of the provider population
(those that have not been inspected
annually), effectively denying children
access to some providers, limiting
parental choice, and resulting in a
bifurcated system. We are soliciting
comments on this concern and
suggestions for addressing it to ensure
equal access to child care for CCDF
families.
Annual Inspections of LicenseExempt Providers. The law does not
require that inspections for licenseexempt providers be unannounced, but
ACF strongly encourages some use of
unannounced visits, as they have been
found effective in promoting
compliance with health and safety
requirements. (R. Fiene, Unannounced
vs. announced licensing inspections in
monitoring child care programs,
Pennsylvania Office of Children, Youth
and Families, 1996; American Academy
of Pediatrics, American Public Health
Association, National Resource Center
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for Health and Safety in Child Care and
Early Education; Caring for our
children: National health and safety
performance standards; Guidelines for
early care and education programs. 3rd
edition.) However, there may be
situations in which a Lead Agency
cannot be sure that a provider and
children will be present (e.g., when a
provider is caring for a child whose
parent has a variable work schedule). In
such situations, advance notification of
a visit may be necessary. The Lead
Agency may also choose to inform
providers before monitoring staff depart
for unannounced visits that involve
significant travel time, such as those in
rural areas, to avoid staff visits when the
provider or children are not present.
Lead Agencies are encouraged to make
reasonable efforts to conduct visits
during the hours providers are caring for
children and ensure that providers who
care for children on the evenings and
weekends are monitored so that the
supply of non-traditional hour care is
not reduced. ACF intends to provide
technical assistance to CCDF Lead
Agencies on best practices for
monitoring license-exempt providers,
including the use of unannounced
inspections.
Monitoring in response to complaints.
Section 658E(c)(2)(C) of the Act requires
Lead Agencies to maintain a record of
substantiated parental complaints and
we have proposed at § 98.32 that Lead
Agencies establish a reporting process
for parental complaints. We believe a
logical extension of these requirements
would be for Lead Agencies to monitor
in response to complaints, in particular
those of greatest concern to children’s
health and safety. Unannounced
inspections allow for an investigation of
the situation and, if the threat is
substantiated, may prevent future
incidences. A majority of States already
conduct inspections in response to
complaints for licensed child care
providers. We believe that threats to any
child’s health and safety in child care
warrant investigation, regardless of
whether the provider is licensed,
regulated, or receiving CCDF funds. We
have not proposed a requirement for
monitoring in response to complaints
but are seeking comments on whether
the final rule should include a
requirement for Lead Agencies to
conduct unannounced inspections in
response to complaints and whether this
requirement should apply to providers
receiving CCDF funds or additional
providers.
Coordination of Monitoring. We
propose at § 98.42(b)(2)(iii) to require
Lead Agencies to coordinate, to the
extent practicable, with other Federal,
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State/Territory, and local entities that
conduct similar on-site monitoring.
Possible partners include licensing,
QRIS, Head Start, and the CACFP.
Coordinating with other monitoring
agencies can be beneficial to both
agencies as they prevent duplication of
services. As an example of current
interagency coordination, one State
holds monthly meetings with
representation from its licensing
division, CCDF Lead Agency, CACFP,
and other public agencies with child
care monitoring responsibilities. These
divisions and agencies identify areas of
overlap in monitoring and coordinate
accordingly to leverage combined
resources and minimize duplication of
efforts. It is important that any shared
costs be properly allocated between the
organizations participating and
benefiting from the partnership.
To the extent that other agencies
provide an on-site monitoring
component that may satisfy or partially
satisfy the new monitoring requirement
under the statute and this proposed
rule, the Lead Agency is encouraged to
pursue collaboration, which may
include sharing information and data as
well as coordinating resources.
However, the Lead Agency is ultimately
responsible for meeting these
requirements and ensuring that any
collaborative monitoring efforts satisfy
all CCDF requirements.
Differential monitoring. At
§ 98.42(b)(2)(iv)(A), we propose giving
Lead Agencies the option of using
differential monitoring, or a risk-based
monitoring approach, provided that the
monitoring visit is representative of the
full complement of health and safety
standards and is conducted for all
applicable providers annually, as
required in statute.
A white paper developed by HHS’s
Office of the Assistant Secretary for
Planning and Evaluation (ASPE), found
the following:
Many states are using differential
monitoring to make monitoring more
efficient. As opposed to ‘one size fits all’
systems of monitoring, differential
monitoring determines the frequency and
depth of needed monitoring from an
assessment of the provider’s history of
compliance with standards and regulations.
Providers who maintain strong records of
compliance are inspected less frequently,
while providers with a history of noncompliance may be subject to more
announced and unannounced inspections. In
some states, more frequent inspections are
conducted for providers who are on a
corrective action plan, or after a particularly
egregious violation. (Trivedi, P. A. (2015).
Innovation in monitoring in early care and
education: Options for states. Washington,
DC: Office of the Assistant Secretary for
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Planning and Evaluation, U.S. Department of
Health and Human Services).
Differential monitoring often involves
monitoring programs using a subset of
requirements to determine compliance.
There are two methods used to identify
rules for differential monitoring:
• Key Indicators: An approach that
focuses on identifying and monitoring
those rules that statistically predict
compliance with all the rules; and
• Risk Assessment: An approach that
focuses on identifying and monitoring
those rules that place children at greater
risk of mortality or morbidity if
violations or citations occur.
The key indicators approach is often
used to determine the rules to include
in an abbreviated inspection. A risk
assessment approach is often used to
classify or categorize rule violations and
can be used to identify rules where
violations pose a greater risk to
children, distinguish levels of regulatory
compliance, or determine enforcement
actions based on categories of
violations. Note that monitoring
strategies that rely on sampling of
providers or allow for a monitoring
frequency of less than once per year for
providers are not allowable as every
child care provider must receive at least
one inspection annually, in accordance
with the Act.
ACF encourages Lead Agencies to
consider the use of differential
monitoring as a method for determining
the scheduling and priority for
unannounced monitoring visits. This
may be based on an assessment of the
child care provider’s past level of
compliance with health and safety
requirements, information received that
could indicate violations, or the
occurrence of a monitoring visit from
another program. Differential
monitoring allows Lead Agencies to
prioritize monitoring of providers that
have previously been found out of
compliance or the subject of parental
complaints or that have not been
monitored through other programs.
Lead Agencies should use data to
make necessary adjustments to
differential monitoring or the frequency
of monitoring visits over time. For
example, if widespread or significant
compliance issues are found under
existing monitoring protocol, the Lead
Agency could consider increasing the
frequency of monitoring visits. As
discussed in Innovations in Monitoring,
Lead Agencies should be intentional
and cautious in their use of differential
monitoring and not replace routine
inspection of all licensed providers,
including those with good compliance
records.
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Monitoring in-home care. At
§ 98.42(b)(2)(iv) we propose that Lead
Agencies have the option to ‘‘develop
alternate monitoring requirements for
care provided in the child’s home that
are appropriate to the setting.’’ A child’s
home may not meet the same standards
as other child care facilities and this
provision gives Lead Agencies
flexibility in conducting a more
streamlined and targeted inspection.
This flexibility cannot be used to bypass
the monitoring requirement altogether.
We are actively soliciting comments on
this proposal.
Licensing inspector qualifications.
Section 658E(c)(2)(K)(i)(I) of the Act
requires Lead Agencies to ‘‘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.’’ We
propose restating this statutory
requirement at § 98.42(b)(1) and clarify
that such training should include, at a
minimum, the areas listed in § 98.41 as
well as all aspects of State, Territory, or
Tribal licensure requirements. As
inspectors must monitor the health and
safety requirements in § 98.41, it follows
that the training of inspectors should
include these standards.
We also propose to clarify that
inspectors be trained in health and
safety requirements ‘‘appropriate to
provider setting and age of children
served.’’ Inspecting care for children of
different ages, and in different settings,
may require specialized training in
order to understand differences in care.
We also encourage Lead Agencies to
consider the cultural and linguistic
diversity of caregivers when addressing
inspector competencies and training.
Caring for Our Children: National
Health and Safety Performance
Standards recommends that licensing
inspectors have ‘‘pre-qualified’’
education and experience about the
types of child care they will be assigned
to inspect and in the concepts and
principles of licensing and inspections.
When hired, the standards recommend
at least 50 clock hours of competencybased orientation training and 24 annual
clock hours of competency-based
continuing education.
Licensing Inspector-Provider Ratios.
Section 658E(c)(2)(K)(i)(III) of the Act
requires Lead Agencies to have policies
in place to ensure the ratio of inspectors
to providers is sufficient to ensure visits
occur in accordance with Federal, State,
and local law. We expand on this
requirement at § 98.42(b)(3) to ensure
applicability with Federal, State,
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Territory, Tribal, and local law. Large
caseloads make it difficult for inspectors
to conduct valid and reliable
inspections. While the Act does not
require a specific ratio, Lead Agencies
can refer to the National Association of
Regulatory Agencies recommendation of
a maximum workload for inspectors of
50–60 facilities. (NARA and Amie LappPayne. (May 2011). Strong Licensing:
The Foundation for a Quality Early Care
and Education System: Preliminary
Principles and Suggestions to
Strengthen Requirements and
Enforcement for Licensed Child Care.)
Reporting of serious injuries and
deaths. At § 98.42(b)(4), we propose
requiring Lead Agencies to require child
care providers to ‘‘report to a designated
State, Territorial, or Tribal entity any
serious injuries or deaths of children
occurring in child care.’’ This
complements § 98.53(f)(4)), which
requires States and Territories to submit
a report describing any changes to
regulations, enforcement mechanisms,
or other policies addressing health and
safety based on an annual review and
assessment of serious child injuries and
any deaths occurring in child care
programs serving CCDF children and, to
the extent possible, other regulated and
unregulated child care settings. States,
Territories, and Tribes would be
required to apply this reporting
requirement to all child care providers,
regardless of subsidy receipt, to report
incidents of serious child injuries or
death to a designated agency. This is
also consistent with the statutory
requirement at Section 658E(c)(2)(D),
which requires Lead Agencies to collect
and disseminate aggregate number of
deaths, serious injuries, and instances of
substantiated child abuse that occurred
in child care settings each year, for
eligible providers.
The Lead Agency may, at their option,
have providers report to a ‘‘designated
entity’’ as proposed at § 98.16(ff), which
offers some flexibility on the
implementation of the requirement. If
there are existing structures in place
that look at child morbidity, the Lead
Agency would be able to work within
that structure to establish a designated
entity. The reporting mechanism can be
tailored to fit with existing policies and
procedures. Our purpose is the
reporting of incidents so that the Lead
Agency and other responsible entities
can make the appropriate response.
Exemption for relative providers.
Current regulations at § 98.41(e) allow
Lead Agencies to exempt relative
caregivers, including grandparents,
great-grandparents, siblings (if such
providers live in a separate residence),
and aunts or uncles from health and
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safety and monitoring requirements
described in this section. This relative
exemption remains at § 98.42(c). We
propose adding language that would
require Lead Agencies, if they choose to
exclude such providers from any of
these requirements, to ‘‘provide a
description and justification in the
CCDF Plan, pursuant to § 98.16(l), of
requirements, if any, that apply to these
providers.’’ Asking Lead Agencies to
describe and justify relative exemptions
from health and safety requirements and
monitoring would provide
accountability that any exemptions are
issued in a thoughtful manner that does
not endanger children.
Criminal Background Checks (Section
98.43)
The reauthorization added Section
658H on requirements for
comprehensive, criminal background
checks, which are a basic safeguard
essential to protect the safety of children
in child care and reduce children’s risk
of harm. Parents have the right to be
confident that their children’s
caregivers, and others who come into
contact with their children, do not have
a record of violent offenses, sex
offenses, child abuse or neglect, or other
behaviors that would disqualify them
from caring for children. A GAO report
found several cases in which
individuals convicted of serious sex
offenses had access to children in child
care facilities as employees, because
they were not subject to a criminal
history check prior to employment
(GAO, Overview of Relevant
Employment Laws and Cases of Sex
Offenders at Child Care Facilities, GAO–
11–757, 2011).
Comprehensive background checks
have been a long-standing ACF policy
priority. According to an analysis of the
FY 2014–2015 CCDF Plans, all States
and Territories require that child care
center staff undergo at least one type of
criminal background check, and
approximately 44 require a FBI
fingerprint check for centers. Fifty-four
States and Territories require family
child care providers to have a criminal
background check, and approximately
42 require an FBI fingerprint check. For
some States and Territories, these
requirements are currently limited to
licensed providers, rather than all
providers that serve children receiving
CCDF subsidies.
Background check implementation.
The statute requires that States ‘‘shall
have in effect requirements, policies,
and procedures to require and conduct
criminal background checks for child
care staff members (including
prospective child care staff members) of
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child care providers. . . .’’ Having
procedures in place to conduct
background checks on child care staff
members will require coordination
across public agencies. The CCDF Lead
Agency must work with other agencies,
such as the Child Welfare office and the
State Identification Bureau, to ensure
the checks are conducted in accordance
with the law. In recognition of this
effort, we propose to add to the law’s
language at § 98.43(a)(1) to clarify that
these requirements involve multiple
State, Territorial, or Tribal agencies.
Tribes and background checks. ACF
is proposing that Tribal Lead Agencies
be subject to the background check
requirements described in this section,
with some flexibility as discussed later
in subpart I.
Applicability of background checks
requirements. The statutory language
identifying which providers must
conduct background checks on child
care staff members is unclear. It is our
interpretation of the statute that all
licensed, regulated, and registered child
care providers and all child care
providers eligible to deliver CCDF
services (with the exception of those
individuals who are related to all
children for whom child care services
are provided) are subject to the Act’s
background check requirements. At
§ 98.43(a)(1)(i), we propose to apply this
requirement to all licensed, regulated, or
registered providers, regardless of
whether they receive CCDF funds and
all license-exempt CCDF providers
(with the exception of individuals who
are related to all children for whom
child care services are provided).
We acknowledge that the statutory
language is not clear about the universe
of staff and providers subject to the
background check requirement;
however, we believe that our
interpretation aligns with the general
intent of the statute to improve the
overall safety of child care services and
programs. Furthermore, there is
justification for applying this
requirement in the broadest terms for
two important reasons. First, all parents
using child care deserve this basic
protection of having confidence that
those who are trusted with the care of
their children do not have criminal
backgrounds that may endanger the
well-being of their children. Second,
limiting those child care providers who
are subject to background checks has the
potential to severely restrict parental
choice and equal access for CCDF
children, two fundamental tenets of
CCDF. If not all child care providers are
subject to comprehensive background
checks, providers could opt to not serve
CCDF children, thereby restricting
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access. Creating a bifurcated system in
which CCDF children have access to
only a portion of child care providers
who meet applicable standards would
be incongruous with the purposes of the
CCDBG Act and would not serve to
advance the important goal of serving
more low-income children in high
quality care. We would like to invite
comment on the anticipated impacts of
requiring background checks for child
care staff members of all licensed,
regulated, and registered child care
providers and all child care providers
eligible to deliver CCDF services (other
than an individual who is related to all
children for whom child care services
are provided) based on current State
practices and policies.
The law defines a child care staff
member as someone (other than an
individual who is related to all children
for whom child care services are
provided) who is employed by the child
care provider for compensation or
whose activities involve unsupervised
access to children who are cared for by
the child care provider. We are
proposing at § 98.43(a)(2)(ii) to include
contract and self-employed individuals
in the definition of child care staff
members as they may have direct
contact with children. We propose to
require individuals, age 18 or older,
residing in a family child care home be
subject to background checks, as well as
the disqualifying crimes and appeals
processes. We asked for comment on
individuals 18 or older in family child
care homes receiving background
checks in the 2013 NPRM and received
support from commenters who agreed
this was important for ensuring the
safety of children in child care. Fortythree States require some type of
background check of family members 18
years of age or older that reside in the
family child care home (Leaving Child
Care to Chance: NACCRRA’s Ranking of
State Standards and Oversight for Small
Family Child Care Homes, National
Association of Child Care Resource and
Referral Agencies, 2012).
We are asking for comment on
whether additional individuals in the
family child care home should be
subject to the background check
requirements. Volunteers who have not
had background checks should not be
left with children unsupervised. We
encourage Lead Agencies to require that
volunteers who have not had
background checks be easily identified
by children and parents, for example
through visible name tags or clothing.
Components of a criminal background
check. The CCDBG Act outlines five
components of a criminal background
check: (1) A search of the State criminal
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and sex offender registry in the State
where the staff member resides and each
State where the staff member has
resided for the past five years; (2) a
search of the State child abuse and
neglect registry in the State where the
staff member resides and each State
where the staff member has resided for
the past five years; (3) a search of the
National Crime Information Center; (4) a
Federal Bureau of Investigation (FBI)
fingerprint check using the Integrated
Automated Fingerprint Identification
System; and (5) a search of the National
Sex Offender Registry.
After extensive consultation with the
FBI and other subject-matter experts, we
propose technical changes to address
duplication among these components.
We propose to consolidate the list of
required components in the regulations
at § 98.43(b) to:
• A search of the National Crime
Information Center’s National Sex
Offender Registry;
• A Federal Bureau of Investigation
fingerprint check using Next Generation
Identification; and
• A search of the following registries,
repositories, or databases in the State
where the child care staff member
resides and each State where such staff
member resided during the preceding 5
years:
Æ State criminal registry or repository
using fingerprints;
Æ State sex offender registry or
repository; and
Æ State-based child abuse and neglect
registry and database.
The National Crime Information
Center (NCIC) is a law enforcement tool
consisting of 21 files, including the
National Sex Offender Registry (NSOR).
The 21 files contain seven property files
that help track missing property and 14
person files with information relevant to
law enforcement (e.g., missing persons
or wanted persons). State criminal
records are not stored in the NCIC. We
believe that the only file with
information that would aid in
determining whether an individual
could be hired as a child care employee
is the NSOR. The other files do not
appear to contain information on the
disqualifying crimes listed in the
statute. Further, the FBI has advised that
a general search of the NCIC database
will return records that cannot be made
privy to individuals outside of law
enforcement (i.e. the Known or
Appropriately Suspected Terrorist File).
Therefore, we are clarifying that a check
of the NCIC will only need to search the
NSOR file.
ACF has identified a number of
potential challenges in requiring an
NCIC check. It is our understanding that
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an NCIC check has not been included in
any other non-criminal background
check law applicable to States to date
and so resolving these challenges is in
many ways unchartered territory. First,
access to the NCIC, including, in some
cases, physical access to computers
capable of searching the NCIC, is
limited, and it is primarily available to
law enforcement agencies. Therefore, to
conduct this check, Lead Agencies will
have to partner with a State, Tribal, or
local law enforcement agency. Because
the NCIC has not been used this way,
we do not know of examples of other
State agencies partnering in this way or
what such partnerships would entail.
We also do not know the implications
for Lead Agencies that use third-party
vendors to conduct background checks.
Third-party vendors do not have
authorized access to conduct namebased checks for noncriminal justice
purposes. Secondly, the NCIC is a namebased check, rather than finger-print
based. Hit verification of name-based
checks may be labor intensive,
especially when searching for
individuals with common names. While
we are concerned about the burden on
Lead Agencies to conduct this check, we
recognize that the NCIC was included in
the statute, and we are concerned about
the potential for missing sex offenders
by not conducting a comprehensive
search. We are very interested in
comments on the feasibility of a search
of the NCIC as proposed and the level
of burden required by Lead Agencies.
The FBI fingerprint check using Next
Generation Identification (NGI)
(formerly the Integrated Automated
Fingerprint Identification SystemIAFIS) will provide a person’s criminal
history record information and will
search ten of the NCIC person files,
including the NSOR, providing certain
identifying information has been
entered into the NSOR record. The
change in the language from IAFIS to
NGI is a technical change and should
not impact Lead Agency background
check processes. The NGI is the
biometric identification system that has
now replaced the older IAFIS.
Based on consultation with the FBI,
we understand there is significant
overlap between the FBI fingerprint
check and the NSOR check (via the
NCIC), yet there are a number of
individuals in the NSOR who are not
identified by solely conducting an FBI
fingerprint search. The FBI links
fingerprint records to the NSOR records
via a Universal Control Number, but a
small percentage of cases are missing
the fingerprints. In some cases,
individuals were not fingerprinted at
the time of arrest, or the prints were
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rejected by the FBI for poor quality. This
small percentage of records can be
accessed through a name-based search
of the NCIC, and a number of those
individuals may also be identified by a
search of the State sex offender
registries.
Although we do not believe it is
required, we also encourage an
additional search of the National Sex
Offender Public Web site (NSOPW) at
www.nsopw.gov. The NSOPW acts as a
pointer for each State, Territory, and
Tribally run sex offender registry. The
registries are updated and kept in real
time and may be searched by name, but
other identifying information may be
limited in these records.
It is our understanding that there is
some duplication between the NCIC,
FBI fingerprint searches, and searches of
State criminal, sex offender, and child
abuse and neglect registries. An FBI
fingerprint check provides access to
national criminal history record
information across State lines on people
arrested for felonies and some
misdemeanors under State, Federal, or
Tribal law. However, there are instances
where information is contained in State
databases, but not in the FBI database.
A search of the State criminal records
and a FBI fingerprint check returns the
most complete record and better
addresses instances where individuals
are not forthcoming regarding their past
residences or committed crimes in a
State in which they did not reside.
We are also proposing to require that
the search of the State criminal records
include a fingerprint check. The 2013
NPRM also proposed to require States to
use a fingerprint check when checking
the State’s criminal history records.
Fingerprint searches reduce instances of
false positives and also help capture
records filed under aliases. We do not
believe that a fingerprint search of the
State repository would be an additional
burden. States can use the same set of
fingerprints to check both the State
criminal history check and the FBI
fingerprint check.
In addition to gaps in the State
criminal records, there are a number of
instances in which an individual may
be listed in the State sex offender
registry and not in NSOR, and vice
versa. For example, some States have
statutes that disallow the removal of
offenders, regardless of offender status,
while in the NSOR the agency owning
the record is required to remove the
offender from active status once his/her
sentencing is completed. In addition,
federal, juvenile, and international sex
offender records may be included in the
NSOR; whereas, State laws may prohibit
the use of this information in the State
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sex offender registry. Because of these
discrepancies, we believe that it is
important to check the State sex
offender registries in addition to an FBI
fingerprint check and a check of the
NCIC NSOR.
The final component of a
comprehensive background check
included in the new law is the search
of the State child abuse and neglect
registries. We recognize that
implementation of this critically
important component of protecting
children will vary across States. Every
State has procedures for maintaining
records of child abuse and neglect, but
only 41 States, the District of Columbia,
American Samoa, Guam, and Puerto
Rico require central registries by statute.
The type of information contained in
central registries and department
records differ from State to State. Some
States maintain all investigated reports
of abuse and neglect, while others
maintain only substantiated reports. The
length of time the information is held
and the conditions for expunction also
vary. Access to information maintained
in registries and departments also varies
by State and some States may need to
make internal changes to meet the
requirement to search the State’s own
child abuse and neglect registry.
Approximately 31 States and the
District of Columbia allow or require a
check of the central registry or
department records for individuals
applying to be child or youth care
providers. (Establishment and
Maintenance of Central Child Abuse
Registries, Children’s Bureau, July
2014).
The law requires States to check the
State criminal registry or repository; sex
offender registry or repository; and child
abuse and neglect registry and database
for every State that a child care staff
member has lived in for the past five
years. Based on our preliminary
conversations with States, the
requirement to conduct cross-state
background checks of the three different
repositories is another unexplored area
for Lead Agencies. We have heard
concerns about how to obtain and
interpret the results and protect the
privacy of individuals. We are asking for
comments on whether States have any
best practices or strategies to share and
how ACF can support Lead Agencies in
meeting the cross-State background
check requirements.
In particular, we have heard concern
about cross-State checks of the child
abuse and neglect registries. We
understand that States have developed
their own requirements for submitting
requests, and there is not a uniform
method of responding. In addition,
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some States prohibit the use of child
abuse and neglect registries for
employment purposes. As the statute
requires cross-state checks, we are
soliciting comments on how States will
meet this requirement and respond to
other State requests.
The cross-State background check
requirement has similarities to language
at Section 152(a)(1)(C) of the Adam
Walsh Child Protection and Safety Act
of 2006 (42 U.S.C. 671(a)(1)(C)) for foster
or adoptive parents: ‘‘the State shall
check any child abuse and neglect
registry maintained by the State for
information on any prospective foster or
adoptive parent and on any other adult
living in the home of such a prospective
parent, and request any other State in
which any such prospective parent or
other adult has resided in the preceding
five years, to enable the State to check
any child abuse and neglect registry
maintained by such State for such
information, before the prospective
foster or adoptive parent may be finally
approved for placement of a child . . .’’
We are requesting comment from States
about whether these systems for foster
or adoptive parents could be used to
support cross-State background checks
for prospective child care staff members
as well. It is impossible to know exactly
how many individuals will require a
check from another State. As discussed
later in the Regulatory Impact Analysis,
Census data on geographic mobility
shows an out of state mobility rate of
approximately 2 percent for employed
adults.
While ACF is still working to
understand how we can support crossState background checks, this rule
proposes a couple of provisions to help
create transparency around the process.
At § 98.43(a)(1)(iii), we propose that
Lead Agencies must have
‘‘requirements, policies, and procedures
in place to respond as expeditiously as
possible to other States’, Territories’,
and Tribes’ requests for background
check results in order to accommodate
the 45 day timeframe.’’ We also propose
that Lead Agencies include the process
by which another Lead Agency may
submit a background check request on
the Lead Agency’s consumer education
Web site, along with all of the other
background check policies and
procedures. In addition, this proposed
rule would require at § 98.16(o) that
Lead Agencies describe in their Plans
the procedures in place to respond to
other State, Territory, or Tribal requests
for background check results within the
45 day timeframe. ACF will use this
question in the Plan to help ensure
compliance with the background check
requirements in the law. These
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proposals are intended to minimize
confusion about the correct contact
information for background check
requests and ensure that there are
processes in place for timely responses.
Disqualifications. The law specifies a
list of disqualifications for child care
providers and staff members who are
serving children receiving CCDF
assistance. Unlike the other
requirements in the background check
section of the statute, the restriction
against employing ineligible child care
staff members would only apply to child
care providers receiving CCDF
assistance. These employment
disqualifications specifically do not
apply to child care staff members of
licensed providers who do not serve
children receiving CCDF subsidies. We
believe this gives Lead Agencies the
flexibility to impose similar restrictions
upon child care providers who are
licensed, regulated, or registered and do
not receive CCDF funds. These
proposed disqualification requirements
appear at §§ 98.43(a)(1)(ii) and 98.43(c).
We are not proposing any additional
disqualifications.
The Act did not include child abuse
and neglect findings in the list of
disqualifying crimes. Because there is so
much variation in the information
maintained in each registry, we are
allowing Lead Agency flexibility in how
to handle findings on the child abuse
and neglect registries. We believe that
the value of findings in these registries
is in the identification of patterns of
negative behavior.
Even though the law includes a
specific list of disqualifications, it also
allows Lead Agencies to prohibit
individuals’ employment as child care
staff members based on their
convictions for other crimes that may
impact their ability to care for children.
If a Lead Agency does disqualify an
individual’s employment, they must, at
a minimum, give the individual the
same rights and remedies described in
§ 98.43(e). This language from Section
658H(h) of the Act is restated in the
proposed rule at § 98.43(h), and we have
not proposed any changes. We strongly
encourage Lead Agencies that chose to
consider other crimes as disqualifying
crimes for employment to ensure that a
robust waiver and appeals process is in
place. A waiver and appeals process
should conform to the recommendations
of the U.S. Equal Employment
Opportunity Commission, including the
ability to waive findings based on
factors as inaccurate information,
certificate of rehabilitation, age when
offense was committed, time since
offense, and whether the nature of
offense is a threat to children. (U.S.
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Equal Employment Opportunity
Commission, Enforcement Guidance on
the Consideration of Arrest and
Conviction Records in Employment
Decisions under Title VII of the Civil
Rights Act of 1964, https://
www.eeoc.gov/laws/guidance/upload/
arrest_conviction.pdf). Moreover, we
strongly discourage Lead Agencies from
considering additional disqualifying
crimes for other household members in
family child care homes.
Lead Agencies may also consider
requiring applicant self-disclosure for
child care staff in order to avoid
unnecessary checks on individuals who
disclose information that would
preclude them from passing a
background check.
Frequency of Background Checks.
Section 658H(d) of the Act requires
child care providers to submit requests
for background checks for each staff
member. The requests must be
submitted prior to when the individual
becomes a staff member and must be
completed at least once every five years.
These requirements are included in the
regulations at § 98.43(d)(1) and (2). For
staff members employed prior to the
enactment of the CCDBG Act, the
provider must request a background
check prior to September 30, 2017 (the
last day of the second full fiscal year
after the date of enactment) and at least
once every five years.
Although not a requirement, we
encourage Lead Agencies to enroll child
care staff members in rap back
programs. A rap back program works as
a subscription notification service. An
individual is enrolled in the program,
and the State Identification Bureau
receives a notification if that individual
is arrested or convicted of a crime.
States can specify which events trigger
a notification. Rap back programs
provide authorizing agencies with
notification of subsequent criminal and,
in limited cases, civil activity of
enrolled child care staff members so that
background check information is not out
of date. However, unless the rap back
program includes all the components of
a comprehensive background check
under the law, the Lead Agency is
responsible for ensuring that child care
staff members complete all other
components at least once every five
years.
Section 658H(d)(4) of the Act
specifies instances in which a child care
provider does not need to submit a
background check for a staff member.
Staff members do not need background
check requests if they satisfy three
requirements: (1) The staff member
received a background check that
included the five required parts within
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the past five years while employed by,
or seeking employment by, another
child care provider in the State; (2) the
State gave a qualifying result to the first
provider for the staff member; and (3)
the staff member is employed by a child
care provider within the State or has
been separated from employment from a
child care provider for less than 180
days. These requirements are included
in the proposed rule at § 98.43(d)(3).
Lead Agencies should consider how to
facilitate tracking this type of
information and maintaining records of
individual providers so that
unnecessary checks are not repeated.
Provisional Employment. The law
requires child care providers to submit
a request for background check results
prior to a staff member’s employment
but does not describe instances of
provisional employment while waiting
for the results of the background check.
We received many comments on this
issue in the 2013 NPRM, with
commenters expressing concern that the
background check requirements could
prevent parents from accessing the
provider of their choice, if the
provider’s staff has not already received
a background check. Parents often need
to access child care immediately, for
example, as they start new jobs, and
commenters were worried that this
could lead to delays in accessing care.
In recognition of the possible
logistical constraints and barriers to
parents accessing the care they need,
ACF proposes to allow prospective staff
members to provide services to children
on a provisional basis, while the
background checks are being processed.
We are proposing at § 98.43(d)(4) that a
prospective staff member may begin
work for a child care employer after a
background check request has been
submitted as long as: The staff member
is continually supervised by an
individual who has already completed
the background check requirements.
Prospective staff members in family
child care homes may work under the
continual supervision of a family child
care provider, or other caregiver, who
has completed the required checks. We
encourage Lead Agencies to require
child care providers to inform parents
about background check policies and
any provisional hires they may have.
Allowing provisional hiring does offer
more flexibility, but it is also important
that Lead Agencies ensure that any
provisional status is limited in scope
and implemented with transparency.
Completion of Background Checks.
Once a child care provider submits a
background check request, Section
658H(e)(1) of the law requires the Lead
Agency to carry out the request as
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quickly as possible. The process must
not take more than 45 days after the
request was submitted. These
requirements are included in the
proposed rule at § 98.43(e)(1). While we
expect checks to be completed in the
timeframe established by the law, we
propose allowing Lead Agencies
discretion on procedures in the event
that all of the components of a
background check are not complete
within 45 days.
We have heard from Lead Agencies
that are concerned about not being able
to meet the 45 day timeframe. Lead
Agencies must work together with the
relevant State/Territory entities to
minimize delays. After the FBI receives
electronic copies of fingerprints, they
typically turn around background check
results within 24 hours. There can be
delays when the submitted fingerprint
image quality is poor. Some States use
hard copy fingerprints that need to be
made electronic for submission to the
FBI, which can lead to delays. We
encourage Lead Agencies to adopt
electronic fingerprinting, which allows
for background check results to be
processed more quickly.
We encourage Lead Agencies to
leverage existing resources to build and
automate their background check
systems. One potential resource for
States is the National Background Check
Program (NBCP), as established by the
Patient Protection and Affordable Care
Act, which aims to create a nationwide
system for conducting comprehensive
background checks on applicants for
employment in the long-term care (LTC)
industry. The NBCP is an open-ended
funding opportunity that can award up
to $3 million dollars (with a $1 million
dollar State match) to each State to
support building State background
check infrastructure. The Centers for
Medicare & Medicaid Services (CMS)
administers the NBCP and since 2010,
has awarded nearly $57 million in grant
funds to participating States to design,
implement, and operate background
check programs that meet CMS’s
criteria.
Privacy of Results. Section 658H(e)(2)
of the Act requires the Lead Agency to
make determinations regarding a child
care staff member’s eligibility for
employment. The Lead Agency must
provide the results of the background
check to the child care provider in a
statement that indicates only whether
the staff member is eligible or ineligible,
without revealing specific disqualifying
information. If the staff member is
ineligible, the Lead Agency must
provide information about each
disqualifying crime specific to the staff
member, as well as information on how
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to appeal the results of the background
check to challenge the accuracy and
completeness. We have not proposed
any additions to the statutory language,
and this requirement is found at
§ 98.43(e)(2) of the proposed
regulations.
In order for a Lead Agency to conduct
FBI fingerprint checks, there must be
statutory authority to authorize the
checks. The CCDBG law may be used an
authority to conduct FBI background
checks, but Lead Agencies may continue
to use other statutes as authorities to
conduct FBI background checks on
child care staff as well. Most Lead
Agencies currently use Public Law 92–
544 or the National Child Protection
Act/Volunteers for Children Act (NCPA/
VCA) (42 U.S.C. 5119a) as the authority
to conduct FBI background checks.
Public Law 92–544, enacted in 1972,
gave the FBI authority to conduct
background checks for employment and
licensing purposes. The majority of
States are using Public Law 92–544 as
authority to conduct background
checks, but a few States use the NCPA/
VCA.
Public Law 92–544 is similar to the
CCDBG statute and only allows the State
to notify the provider whether an
individual is eligible or ineligible for
employment. Similarly, the NCPA/VCA
requires dissemination of the results to
a governmental agency, unless the State
has implemented a Volunteer and
Employee Criminal History System
(VECHS) program. Thus, a major
difference between the CCDBG statute
and the NCPA/VCA with a VECHS
program is in the protection of privacy
of results. Through the NCPA/VCA
VECHS program, Lead Agencies may
share an individual’s specific
background check results with the child
care provider, providing the individual
has given consent. Lead Agencies have
the flexibility to continue to use these
statutes as authority to complete the FBI
fingerprint check, as long as the
employment determination process
required by the CCDBG statute is
followed. That is, Lead Agencies must
make employment eligibility
determinations in accordance with the
requirements in the CCDBG Act, but
they also may exercise the flexibility
allowed through the NCPA/VCA VECHS
program to share results of background
checks with child care providers.
Appeal and Review Process. Section
658H(e)(3) of the Act requires Lead
Agencies to have a process for child care
staff members (including prospective
staff members) to appeal the results of
a background check by challenging the
accuracy or completeness of the
information contained in their criminal
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background report. An appeals process
is an important aspect of ensuring due
process for providers. According to
statute, each child care staff member
should be given notice of the
opportunity to appeal and receive
instructions about how to complete the
appeals process if the child care staff
member wishes to challenge the
accuracy or completeness of their
background report. The appeals process
must be completed in a timely manner.
The statute’s appeal requirements
appear at § 98.43(e)(3) of the proposed
rule. We are not proposing any
additional requirements here.
Section 658H(e)(4) of the Act, which
is reiterated at § 98.43(e)(4) of the
proposed rule, allows Lead Agencies to
allow for a review process through
which the Lead Agency may determine
that a child care staff member (including
a prospective child care staff member)
convicted of a disqualifying drug-related
offense, committed during the preceding
five years, may be eligible for
employment by a provider receiving
CCDF funds. The review process must
be consistent with Title VII of the Civil
Rights Act of 1964 (42 U.S.C. 2000e et
seq.), which prohibits employment
discrimination based on race, color,
religion, sex and national origin. Lead
Agencies may consider in their review
process the nature of the conviction, age
at the time of the conviction, length of
time since the conviction, and
relationship of the conviction to the
ability to care for children, or other
extenuating circumstances. Lead
Agencies can consult the U.S. Equal
Employment Opportunity Commission’s
guidance on the consideration of
criminal records in employment
decisions to ensure compliance with
Title VII’s prohibition against
employment discrimination (U.S. Equal
Employment Opportunity Commission,
Enforcement Guidance on the
Consideration of Arrest and Conviction
Records in Employment Decisions under
Title VII of the Civil Rights Act of 1964,
https://www.eeoc.gov/laws/guidance/
upload/arrest_conviction.pdf). Finally,
Section 658H(e)(5) of the Act notes that
‘‘nothing in this section shall be
construed to create a private right of
action if a provider has acted in
accordance with this section.’’
Background Check Fees. Lead
Agencies have the flexibility to
determine who pays for background
checks (e.g., the provider, the applicant,
or the Lead Agency) but Section 658H(f)
of the Act requires that the fees charged
for completing a background check may
not exceed the actual cost of processing
and administration. The cost of
conducting background checks varies
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across States and Territories. The FBI
fee is $14.75 to conduct a national
fingerprint check, and, according to
CCDF State Plan data, most Lead
Agencies report low costs to check State
registries.
ACF recognizes the important role
that fees play in sustaining a
background check system. While States
and Territories cannot profit from
background check fees, we do not want
to prevent fees that support the
necessary infrastructure. Fees cannot
exceed costs and result in return to State
general funds, but they can be used to
build and maintain background check
infrastructure. Further, we expect that
Lead Agencies using third party
contractors to conduct background
checks will ensure that these contractors
are not charging excessive fees that
would result in huge profits. ACF does
not want background check fees to be a
barrier or burden for entry into the child
care workforce. At Lead Agency
discretion, CCDF funds may be used to
pay the costs of background checks.
Consumer education Web site. The
statute requires States and Territories to
ensure that their background check
policies and procedures are published
on their Web sites. These policies and
procedures should be included on the
consumer education Web site discussed
in detail in subpart D at § 98.33(a). We
propose that States and Territories also
include information on the process by
which a child care provider or other
State or Territory may submit a
background check request in order to
increase transparency about the process.
Training and Professional Development
(Section 98.44)
Section 658E(c)(2)(G) of the Act
requires Lead Agencies to describe in
their CCDF Plan their training and
professional development requirements
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 caregivers, teachers, and
directors in working with children and
their families, which are applicable to
child care providers receiving CCDF
assistance.
At § 98.44 we elaborate on the
statute’s provisions for professional
development at Section 658E(c)(2)(G),
provider training on health and safety at
Section 658E(c)(2)(I)(i)(XI), and provider
qualifications at Section
658E(c)(2)(H)(i)(III), as a cohesive
approach to training and professional
development. Our proposed regulations
build on the pioneering work of States
on professional development and reflect
current State policies.
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Caregiver, Teacher and Director. As
discussed earlier, we have added
definitions for ‘‘teacher’’ and ‘‘director’’
to § 98.2. We believe adding these terms
promotes professional recognition for
early childhood and school-age care
teachers and directors and aligns with
terms used in the field. The Act uses the
terms ‘‘caregiver’’ and ‘‘provider’’ and
we maintain the use of those terms
throughout this section as appropriate.
We also use the terms ‘‘teacher’’ and
‘‘director’’ to recognize the different
professional roles and their
differentiated needs for training and
professional development. For example,
teachers provide direct services to
children and need knowledge of
curricula and health, safety, and
developmentally appropriate practices.
In addition, directors need skills to
manage and support staff and perform
other administrative duties.
Framework and progression of
professional development. At § 98.44(a),
we propose that Lead Agencies describe
in their CCDF Plan the State or Territory
framework for training, professional
development and postsecondary
education based on statutory language at
Section 658E(c)(2)(G)(i). The statute
requires the framework to be developed
in consultation with the State Advisory
Council on Early Childhood Education
and Care (SAC). We propose at
§ 98.44(a)(1) that frameworks be
developed in consultation with SACs or
similar coordinating body. SAC grants,
funded by the American Recovery and
Reinvestment Act, along with Race to
the Top-Early Learning Challenge
grants, leveraged CCDF funds to develop
and implement comprehensive
professional development systems. An
inclusive process for the design of a
professional development system with a
range of stakeholders (child care
resource and referral agencies, State/
Territory and local professional
associations, entities that grant
credentials and certificates, higher
education institutions, workforce
registries, QRIS administrators, for
example) will result in a more effective
and credible framework.
Section 658E(c)(2)(G)(ii)(II) allows the
Lead Agency to ‘‘engage training
providers in aligning training
opportunities with the State’s training
framework,’’ which we restate in the
proposed rule at § 98.44(a)(2). We
encourage the participation of the full
range of training and professional
development providers, including
higher education and entities that grant
certificates and credentials in early
childhood education, to align with the
framework. Training and professional
development may be provided through
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institutions of higher education, child
care resource and referral agencies,
worker organizations, early childhood
professional associations, and other
entities. This alignment may lead to a
more coherent and accessible sequence
of professional development for
individuals to meet Lead Agency
requirements and progress in their
professional development and to
maximize the use of professional
development resources.
Proposed § 98.44(a)(3) describes the
components of a professional
development framework. We propose
that Lead Agencies address six
components (described below) in their
professional development framework
based on recommendations by the
National Child Care Information Center
and the National Center on Child Care
Professional Development Systems and
Workforce Initiatives (former technical
assistance projects of the Office of Child
Care), and national early childhood
professional associations, including the
National Association for the Education
of Young Children. The recent report of
the National Academies of Sciences’
expert panel on the early childhood
workforce speaks to the intentional and
multifaceted system of supports that
will be needed to ensure that every
caregiver, teacher, and director can
provide high quality development and
learning to the diversity of children in
child care and early childhood
programs. (Institute of Medicine and
National Research Council, 2015.
Transforming the workforce for children
birth through age 8: A unifying
foundation. Washington, DC: The
National Academies Press). The six
proposed components are: Professional
standards and competencies, career
pathways, advisory structures,
articulation, workforce information, and
financing. These components are
discussed below. In the FY 2014–2015
CCDF Plans, the majority of States and
Territories indicated that they have
implemented the same components of a
professional development framework
system. We provide for flexibility on the
strategies, breadth and depth with
which States and Territories will
develop and implement a framework
that includes these components.
1. Core knowledge and competencies.
Caregivers, teachers, and directors need
a set of knowledge and skills to be able
to provide high quality child care and
school-age care. The foundational core
knowledge—what all early childhood
professionals should know and be able
to do—should be supplemented with
specialized competencies and
professional development that
recognizes different professional roles,
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ages of children being served, and
special needs of children. According to
the FY 2014–2015 CCDF Plans, 49
States and all but one Territory have
developed core knowledge and
competencies aligned to professional
standards.
2. Career pathways. Section
658E(c)(2)(G)(ii)(I) of the Act requires
Lead Agencies to create a progression of
professional development, which may
include encouraging postsecondary
education. This progression is in
essence a career pathway, also known as
a career lattice or career ladder. The
National Academies of Sciences’ report,
Transforming the Early Childhood
Workforce: A Unifying Framework, calls
for States to implement ‘‘phased,
multiyear pathways to transition to a
minimum bachelor’s degree requirement
with specialized knowledge and
competencies’’ for all early childhood
teachers working with children from
birth through age eight. (Institute of
Medicine (IOM) and National Research
Council (NRC). 2015. Transforming the
workforce for children birth through age
8: A unifying foundation. Washington,
DC: The National Academies Press).
According to the FY 2014–2015 CCDF
Plans, nearly all States and Territories
have developed a career pathway that
includes qualifications, specializations,
and credentials by professional role.
Although we do not propose that States
set any particular credential as a
licensing qualification or a point on the
career pathway, the pathway should
form a transparent, efficient sequence of
stackable credentials from entry level
that can build to more advanced
professional competency recognition.
One model of professional development
is the Registered Apprenticeship,
providing job-embedded professional
development and coursework that leads
to a Child Development Associate (CDA)
credential. In many apprenticeships,
this is done through an agreement with
the community college to carry credit
toward an Associate degree. The costs of
tuition, books, and the CDA evaluation
fee is covered by the apprenticeship.
The CDA is often a first professional
step on an early childhood education
career ladder that can lead to better
compensation and a pathway to higher
levels of education.
3. Advisory structures. Because
professional development and training
opportunities and advancement may cut
across multiple agencies, it is important
to have a formal communication and
coordination effort. For example,
professional development resources for
individuals providing special education
services for preschools and infants and
toddlers may not be administered by the
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CCDF Lead Agency. Policies for higher
education institutions are generally
made by the State higher education
board or board of education. Many
States use the SACs as an advisory body
for professional development systems
policy and coordination.
(Administration for Children and
Families, U.S. Department of Health and
Human Services, Early Childhood State
Advisory Councils Final Report, 2015)
We encourage the advisory body to
include representatives of different
types of professional development
providers (such as higher education,
child care resource and referral, QRIS
coaches and technical assistance
providers) as well as CCDF providers
through membership on the advisory or
participation in subcommittees or
advisory groups.
4. Articulation. Articulation of
coursework, when one higher education
institution matches its courses or
coursework requirements with other
institutions, prevents students from
repeating coursework when changing
institutions or advancing toward a
higher degree. Transfer agreements,
another type of articulation, allow the
credit earned for an associate degree to
count toward credits for a baccalaureate
degree. States and Territories can
encourage articulation and transfer
agreements between two- and four-year
higher education degree programs, as
well as articulation with other
credentials and demonstrated
competencies. In their FY 2014–2015
Plans, 45 States and Territories reported
having articulation agreements in place
across and within institutions of higher
education and 39 States and Territories
reported having articulation agreements
that translate training and/or technical
assistance into higher education credit.
5. Workforce information. It is
important to collect and evaluate data to
identify gaps in professional
development accessibility, affordability,
and quality. Information may be
gathered from different sources, such as
child care resource and referral
agencies, scholarship granting entities,
higher education institutions, Head
Start Program Information Report data,
and early childhood workforce
registries. Information about the
characteristics of the workforce, access
to and availability of different types of
training and professional development,
compensation, and turnover can help
the advisory body and other
stakeholders make policy and financing
decisions.
6. Financing. Financing of the
framework and of individuals to access
training and professional development,
including postsecondary education, is
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critical. Many Lead Agencies use CCDF
funds to finance the professional
development infrastructure and the
costs of training and professional
development, including postsecondary
education, for caregivers, teachers, and
directors. States and Territories report
using their SAC grants and Race to the
Top-Early Learning Challenge grants to
leverage and expand CCDF funds for
workforce improvement and retention.
Twenty-eight States/Territories reported
that they used SAC grants to complete
a workforce study; 29 States/Territories
used SAC grants to create or enhance
their Core Knowledge and
Competencies framework; and 18
States/Territories used SAC grants to
develop or enhance their workforce
registries. We encourage Lead Agencies
to leverage CCDF funds with other
public and private resources to
accelerate professional development
efforts.
Qualifications. Section
658E(c)(2)(H)(i)(III) of the Act requires
Lead Agencies to set qualifications for
CCDF providers. We propose to include
that requirement at § 98.44(a)(4) and
clarify that such qualifications should
be designed to enable caregivers,
teachers, and directors to promote the
full range of children’s development:
Social, emotional, physical, and
cognitive development. States and
Territories currently set minimum
qualifications for teacher assistants,
teachers, directors, and other roles in
centers, family child care, and schoolage care settings in their licensing
standards. We encourage Lead Agencies
to consider the linkage between these
minimum qualifications and higher
qualifications in the progression of
professional development or career
pathways. According to Section
658E(c)(2)(G)(ii)(I) of the Act,
professional development should be
conducted on an ongoing basis, provide
for a progression of professional
development (which may include
encouraging the pursuit of
postsecondary education), and reflect
current research and best practices
relating to the skills necessary for the
caregivers, teachers, and directors to
meet the developmental needs of
participating children and engage
families. These requirements are
proposed in paragraphs (5) and (6) of
§ 98.44(a).
Quality, Diversity, Stability and
Retention of the Workforce. Section
658E(c)(2)(G)(ii)(I) of the Act also
requires assurances in the Plan that
training and professional development
will improve the quality of, and stability
within, the child care workforce. At
§ 98.44(a)(7) we propose adding that the
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training and professional development
requirements must also improve the
quality and diversity of caregivers,
teachers, and directors. Maintaining
diverse and qualified caregivers,
teachers, and directors is a benefit to
serving children of all backgrounds. We
also propose to add that such
requirements improve the retention
(including financial incentives) of
caregivers, teachers, and directors
within the child care workforce, based
on the high turnover rate in child care
that can disrupt continuity of care for
children. In order for children to benefit
from high quality child care, it is
important to retain caregivers, teachers,
and directors who have the knowledge
and skills to provide high quality
experiences. In 2012, the average annual
turnover rate of classroom staff was 13
percent, and the turnover rate among
centers (child care, Head Start and
schools) that experienced any turnover
was 25 percent. (Whitebook, M.,
Phillips, D. & Howes, C. (2014.)) Worthy
work, STILL unlivable wages: The early
childhood workforce 25 years after the
National Child Care Staffing Study.
Berkeley, CA: Center for the Study of
Child Care Employment, University of
California, Berkeley)
Aligning training and professional
development with the professional
development framework. We propose at
§ 98.44(b) to require each Lead Agency
to describe in the Plan its requirements
for training and professional
development for caregivers, teachers,
and directors of CCDF providers that, to
the extent practicable, align with the
State or Territory’s training and
professional development framework
required by § 98.44(a).
Pre-service or orientation health and
safety training. Section
658E(c)(2)(I)(i)(XI) of the Act requires
Lead Agencies to set ‘‘minimum health
and safety training, to be completed preservice or during an orientation period
in addition to ongoing training,
appropriate to the provider setting
involved’’ that addresses the specific
topic areas listed in the proposed rule
at § 98.41(a)(1). All caregivers, teachers,
and directors in programs receiving
CCDF funds must receive this training.
Many States and Territories already
have pre-service and orientation
training requirements for licensed
providers. We have placed this
requirement in the professional
development section of the proposed
rule because we see preliminary health
and safety training requirements as a
part of a continuum of professional
development. We propose that preservice or orientation training include
the major domains of child development
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in addition to the Act’s requirement for
health and safety training.
Understanding child development is
integral to providing high quality child
care.
The Act allows an orientation period
during which staff can fulfill the
training requirement. Lead Agencies
will have broad flexibility to determine
what training is required ‘‘pre-service’’
and what training may be completed
during an ‘‘orientation’’ period. We
propose that all orientation training be
completed within three months of
caring for children as recommended by
CfoC Basics. We encourage providers to
document completion of the pre-service
or orientation training so that caregivers,
teachers, and directors do not need to
repeat foundational training when they
change employment. This
documentation can be useful for the
State’s or Territory’s licensing agency
and career pathway.
We expect variability in how Lead
Agencies will implement this provision.
There are a number of low or no cost
resources available, including online
resources, which cover many of these
trainings. We do not advocate the
exclusive use of online trainings, but
believe that a mixed delivery training
system that includes both online and inperson trainings can meet the varied
needs of child care caregivers, teachers,
and directors. We encourage Lead
Agencies to permit individuals to use
certificates and credentials that include
a demonstration of competence in any
or all of the health, safety, and child
development topics to fulfill, partially
or in full, the training requirements.
Ongoing Professional Development:
Section 658E(c)(2)(G)(ii)(I) of the Act
requires the Plan to include assurances
that training and professional
development will be conducted on an
ongoing basis, which we restate at
§ 98.44(b)(2) with a number of
parameters. At § 98.44(b)(2)(i), we
propose that ongoing training maintain
and update the health and safety
training standards described at
§ 98.41(a)(1).
Section 658E(c)(2)(G)(iii) of the Act
requires each Lead Agency’s Plan to
include the number of hours of training
for eligible providers and caregivers to
engage in annually, as determined by
the Lead Agency. We propose to
reiterate this requirement at
§ 98.44(b)(2) by requiring Lead Agencies
to establish the minimum annual
requirement for hours of training and
professional development for caregivers,
teachers and directors of CCDF
providers. While Lead Agencies have
flexibility to set the number of hours,
Caring for Our Children: National
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Health and Safety Performance
Standards, Guidelines for Early Care
and Education Programs, 3rd Edition,
recommends that teachers and
caregivers receive between 24 and 30
hours of ongoing training annually.
The Act also specifies that the
ongoing professional development must:
Incorporate knowledge and application
of the Lead Agency’s early learning and
developmental guidelines (where
applicable) and the Lead Agency’s
health and safety standards; incorporate
social-emotional behavior intervention
models, which may include positive
behavior intervention and support
models; be accessible to providers
supported by Tribal organizations or
Indian Tribes that receive CCDF
assistance; and be appropriate for
different populations of children, to the
extent practicable, including different
ages of children, English learners,
children with disabilities, Native
Americans and Native Hawaiians. We
have re-stated these areas within
§ 98.44(b)(2)(iii) through (v) and (vii)
with some elaboration. We propose at
§ 98.44(b)(2)(v) that the Plan promote, to
the extent practicable, ongoing
professional development opportunities
that earn Continuing Education Units
(CEUs) or are credit-bearing. Too often,
early childhood educators participate in
professional development that is not
accepted by a credential or degree
program or does not link to the career
pathway. In some instances, this type of
training is necessary, but often it results
in an inefficient use of resources that
does not help individuals advance
professionally. CEUs and college credits
are quality accountability mechanisms
because they require some form of
assessment of adult learning. CEUs may
be accepted in some articulation
agreements, particularly if granted by a
higher education institution or
accredited by the International
Association for Continuing Education
and Training (IACET). They also can
facilitate articulation with degree
programs, preventing individuals from
repeating coursework for which they
have already expended private funds or
taken out loans. We encourage, as part
of the State or Territory framework, a
process for individuals to receive career
and professional development
advisement so that they can make
informed choices about ongoing
professional development opportunities.
Equal Access (Section 98.45)
Section 658E(c)(4) of the Act requires
the Lead Agency to certify in its CCDF
Plan that payment rates for CCDF
subsidies are sufficient to ensure equal
access for eligible children to child care
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services that are comparable to child
care services provided to children
whose parents are not eligible to receive
child care assistance. In this NPRM, we
are interpreting the comparison group as
families whose incomes exceed 85
percent of SMI. Many families with
income above 85 percent of SMI have
higher quality child care options
available to them and we propose that
families receiving CCDF should have
access to child care of comparable
quality. The statute requires the CCDF
Plan to provide a summary of the facts
the Lead Agency used to determine that
payment rates are sufficient to ensure
equal access. This proposed rule
modifies three key elements in the
current regulation, now at § 98.45(b),
used to determine that a CCDF program
provides equal access for eligible
families and proposes five additional
elements consistent with statutory
provisions on equal access and rate
setting at Section 658E(c)(4) and
payment practices at Section
658E(c)(2)(S) of the Act. As proposed,
the summary of data and facts would
include: (1) Choice of the full range of
providers; (2) adequate payment rates,
based on the most recent market rate
survey or alternative methodology; (3)
base payment rates established at least
at a level sufficient to support
implementation of the health, safety and
quality requirements in the NPRM; (4)
payment rates that are sufficient to
provide parental choice for families
receiving CCDF subsidies to access care
that is of comparable quality to care that
is available to families with incomes
above 85 percent of State Median
Income; (5) the cost of higher quality
child care; (6) payment practices that
support equal access to a range of
providers; (7) affordable copayments;
and (8) any additional facts considered
by the Lead Agency. All of these
proposed changes are discussed further
below.
Market Rate Survey or Alternative
Methodology. We propose adding
paragraph (c) based on new statutory
language at Section 658E(c)(4)(B) of the
Act requiring Lead Agencies to conduct,
no earlier than two years before the
submission of their CCDF Plan, a
statistically valid and reliable market
rate survey or an alternative
methodology, such as a cost estimation
model. Previously, the conducting of a
market rate survey was a regulatory
requirement, not statutory. ACF is not
defining valid and reliable within this
proposed rule but is proposing a set of
benchmarks, largely based on CCDFfunded research to identify the
components of a valid and reliable
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market rate survey. (Grobe, D., Weber,
R., Davis, E., Kreader, L., and Pratt, C.,
Study of Market Prices: Validating Child
Care Market Rate Surveys, Oregon Child
Care Research Partnership, 2008)
ACF will consider a market rate
survey valid if it meets the following
benchmarks:
• Includes the priced child care
market. The survey includes child care
providers within the priced market (i.e.,
providers that charge parents a price
established through an arm’s length
transaction). In an arm’s length
transaction, the parent and the provider
do not have a prior relationship that is
likely to affect the price charged. For
this reason, some unregulated, licenseexempt providers, particularly providers
who are relatives or friends of the
child’s family, are generally not
considered part of the priced child care
market and therefore are not included in
a market rate survey. These providers
typically do not have an established
price that they charge the public for
services, and the amount that the
provider charges is often affected by the
relationship between the family and the
provider. In addition, from a practical
standpoint, many Lead Agencies are
unable to identify a comprehensive
universe of license-exempt providers
since individuals frequently are not
included on lists maintained by
licensing agencies, resource and referral
agencies, or other sources. In the
absence of findings from a market rate
survey, Lead Agencies often use other
facts to establish payment rates for
providers outside of the priced market
(e.g., license-exempt providers); for
example, many Lead Agencies set these
payment rates as a percentage of the
rates for providers in the priced market.
• Provides complete and current data.
The survey uses data sources (or
combinations of sources) that fully
capture the universe of providers in the
priced child care market. The survey
should use lists or databases from
multiple sources, including licensing,
resource and referral, and the subsidy
program, if necessary, for completeness.
In addition, the survey should reflect
up-to-date information for a specific
time period (e.g., all of the prices in the
survey are collected within a threemonth time period).
• Represents geographic variation.
The survey includes providers from all
geographic parts of the State, Territory,
or Tribal service area. It also should
collect and analyze data in a manner
that links prices to local geographic
areas.
• Uses rigorous data collection
procedures. The survey uses good data
collection procedures, regardless of the
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method (mail, telephone, or web-based
survey; administrative data). This
includes a response from a high
percentage of providers (generally, 65
percent or higher is desirable and below
50 percent is suspect). Some research
suggests that relatively low response
rates in certain circumstances may be as
valid as higher response rates. (Curtin
R., Presser S., Singer E., The Effects of
Response Rate Changes on the Index of
Consumer Sentiment, Public Opinion
Quarterly, 2000; Keeter S., Kennedy C.,
Dimock M., Best J., Craighill P., Gauging
the Impact of Growing Nonresponse on
Estimates from a National RDD
Telephone Survey, Public Opinion
Quarterly, 2006) Therefore, in addition
to looking at the response rate, it is
necessary to implement strong sample
designs and conduct analyses of
potential response bias to ensure that
the full universe of providers in the
child care market is adequately
represented in the data and findings.
Lead Agencies should consider
surveying in languages in addition to
English based on the languages used by
child care providers, and other
strategies to ensure adequate responses
from key populations.
• Analyzes data in a manner that
captures market differences. The survey
should examine the price per child care
slot, recognizing that all child care
facilities should not be weighted equally
because some serve more children than
others. This approach best reflects the
experience of families who are
searching for child care. When
analyzing data from a sample of
providers, as opposed to the complete
universe, the sample should be
appropriately weighted so that the
sample slots are treated proportionally
to the overall sample frame. The survey
should collect and analyze price data
separately for each age group and
category of care to reflect market
differences.
The purpose of the market rate survey
is to guide Lead Agencies in setting
payment rates within the context of
market conditions so that rates are
sufficient to provide equal access to the
full range of child care services,
including high quality child care.
However, the child care market itself
often does not reflect the actual costs of
providing child care and especially of
providing high quality child care
designed to promote healthy child
development. Financial constraints of
parents prevent child care providers
from setting their prices to cover the full
cost of high quality care, which is
unaffordable for many families. As a
result, a market rate survey may not
provide sufficient information to assess
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the actual cost of quality care.
Therefore, it’s often important to
consider a range of data, including, but
not limited to, market rates, to
understand prices in the child care
market. In this proposed rule, we clarify
that the market rate survey is intended
to be an examination of prices and that
Lead Agencies have flexibility to use
data collection methodologies other
than a survey so long as the data are
reflective of the current child care
market. For example, Lead Agencies
may use administrative data from
resource and referral agencies or other
sources, which may be used to
determine payment rates.
We propose that the market rate
survey also include information on the
extent to which child care providers are
participating in CCDF and any barriers
to participation, including barriers
related to CCDF payment rates and
practices. We expect that Lead Agencies
would include questions related to
identifying such barriers in their survey.
Previous surveys and focus groups with
child care providers have found that
low payment rates as well late or
delayed payments and other hassles
may force some providers to stop
serving or limit the number of children
receiving subsidies in their care. Other
providers may choose to not serve CCDF
children at all. (Adams, G., Rohacek, M.,
and Snyder, K., Child Care Voucher
Programs: Provider Experiences in Five
Counties, 2008) We think it is important
to publicize information from child care
providers on the extent to which
barriers related to payment rates and
practices deter providers from
participating in CCDF and therefore
limit equal access for children receiving
CCDF. While we propose this
requirement as part of the market rate
survey, we encourage Lead Agencies
that choose to use an alternative ratesetting methodology in lieu of a market
rate study, discussed below, to find
ways of collecting and publicizing
information on barriers to CCDF
participation from child care providers
through survey or other means.
The revised law allows a Lead Agency
to base payment rates on an alternative
methodology, such as a cost estimation
model, in lieu of a market rate survey.
A cost estimation model is one such
alternative approach in which a Lead
Agency can estimate the cost of
providing care at varying levels of
quality based on resources a provider
needs to remain financially solvent. The
Provider Cost of Quality Calculator is a
publicly available Web-based tool that
calculates the cost of quality-based on
site-level provider data for any
jurisdiction. Many States, working with
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the Alliance for Early Childhood
Finance and Augenblick, Palaich and
Associates (APA), contributed to the
development of the cost calculator
methodology that preceded the online
tool, and was funded by the Office of
Child Care through the support of the
Child Care Technical Assistance
Network. The tool helps policymakers
understand the costs associated with
delivering high quality child care and
can inform payment rate setting.
In our 2013 NPRM, ACF proposed
allowing Lead Agencies to use an
alternative rate-setting methodology in
lieu of a market rate study. We received
many comments opposed to the
proposal, including those expressing
concern that alternative methodologies
were an unproven approach that may be
used to justify existing low payment
rates. Due to concern about alternative
methodologies and because they are
new (in comparison to the long-standing
use of market rate surveys), we propose
that any alternative methodology used
by a Lead Agency must receive advance
approval by ACF. To obtain approval,
we anticipate that the Lead Agency will
need to demonstrate how the alternative
methodology provides a sound basis for
setting payment rates that promote
equal access and support a basic level
of health, safety and quality, as
discussed below. ACF approval will
only be necessary if the Lead Agency
plans to replace the market rate survey
with an alternative methodology.
Approval will not be required if the
Lead Agency plans to implement both a
market rate survey and an alternative
methodology. After enactment of a final
rule, ACF will provide guidance to Lead
Agencies regarding the process for
proposing an alternative methodology,
including criteria and a timeline for
approval. We will also consider whether
to provide a list of recommended
methodologies.
We propose adding paragraph (d)
based on the updated law, which
requires that the market rate survey
reflect variations by geographic location,
provider, and child’s age. We propose
applying the same requirement to any
alternative methodology used by a Lead
Agency. Lead Agencies must include in
their Plan how and why they
differentiate their rates based on these
factors.
We propose adding paragraph (e) that
reflects new statutory language
requiring the Lead Agency to consult
with the State’s Early Childhood
Advisory Council or similar
coordinating body, child care directors,
local child care resource and referral
agencies, and other appropriate entities
prior to conducting a market rate survey
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or alternative methodology. Lead
Agencies should consult with members
of the public in the development of their
survey or methodology, including
worker organizations representing child
care caregivers, teachers, and directors.
In accordance with §§ 98.81(b)(5) and
98.83(d)(1)(v), we propose to exempt
Tribal grantees from the requirement to
conduct a market rate survey or
alternative methodology. However, in
their CCDF Plans, Tribes must still
describe their payment rates; how they
are established; and how they support
quality and, where applicable, cultural
and linguistic appropriateness. Tribes,
at their option, may still conduct a
market rate survey or alternative
methodology or use the State’s market
rate survey or alternative methodology
when setting payment rates.
Setting Payment Rates. We propose
adding § 98.45(f)(1) reflecting the
statutory requirement for a Lead Agency
to prepare and make widely available a
detailed report containing results of its
survey or alternative methodology.
Section 658E(c)(4)(B)(ii) of the Act
requires this report be available 30 days
after completion of the survey or
alternative methodology. Because we
consider analysis and preparation of the
report to be part of completing a survey,
we are clarifying that Lead Agencies
have 30 days from completion of the
report to make the information
available.
We propose adding language that
would require Lead Agencies to indicate
in their report the estimated price or
cost of care necessary to support child
care providers’ implementation of the
health, safety, and quality requirements
at §§ 98.41, 98.42, 98.43, and 98.44,
including any relevant variation by
geographic location, category of
provider, or age of child. We expect that
payment rates, at a minimum, should be
sufficient to ensure compliance with
applicable licensing and regulatory
requirements, health and safety
standards, training and professional
development standards, and appropriate
child to staff ratio and group size limits
(that Lead Agencies define) as required
by the Act. We intend to ask Lead
Agencies in their Plans to indicate the
estimated price or cost of care necessary
to support child care providers’
implementation of these health, safety,
and quality requirements, as well as
how that baseline corresponds with
licensing requirements and levels of a
quality rating and improvement system
or other transparent system of quality
indicators. We also strongly encourage
Lead Agencies to consider the costs
associated with implementation of
higher quality standards, such as those
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in Caring for Our Children Basics, the
Head Start program performance
standards, or various levels of QRIS,
when establishing base payment rates.
Section 658E(c)(4)(B)(iii) of the Act
requires Lead Agencies to set payment
rates in accordance with the result of
the market rate survey or alternative
methodology, taking into consideration
the cost of providing higher quality care.
We interpret this statutory provision to
mean that Lead Agencies must use
results of the most recent market rate
survey or alternative methodology to set
payment rates and propose language in
§ 98.45(f)(2)(i) to clarify this. Payment
rates should reflect the current child
care market. Setting payment rates
based on older market rate surveys that
reflect outdated prices, results in
insufficient payment rates that do not
reflect current market conditions and
undermine the statutory requirement of
equal access. This proposal would
effectively require Lead Agencies to
reevaluate their payment rates at least
every three years. Where updated data
from a market rate survey or alternative
methodology indicate that prices or
costs have increased, Lead Agencies
must update their rates as a result.
Moreover, we encourage Lead Agencies
to consider annual increases in rates
that keep pace with regular increases in
the costs of providing child care. While
we anticipate that payment rates will
differ by types of care, ages of children
and geographic location, among other
factors, we expect that Lead Agencies
will ensure that rates for all provider
categories and age groups similarly
provide equal access for children served
by CCDF.
The preamble to the 1998 Final Rule
reminds Lead Agencies of the general
principle that Federal subsidy funds
cannot pay more for services than is
charged to the general public for the
same service. (63 FR 39959). While this
principle remains in effect, we are
clarifying that Lead Agencies may pay
amounts above the provider’s private
pay rate to support quality. A Lead
Agency also may peg a higher payment
rate to the provider’s cost of doing
business at a given level of quality. For
example, an analysis of the cost of
providing high quality care (i.e., at the
top levels of a QRIS) using a cost
estimation model or other method could
show the cost of providing the service
is greater than the price charged in the
market. Recognizing that private pay
rates are often not sufficient to support
high quality, many Lead Agencies have
already implemented tiered subsidy
payments that support quality.
Payments may exceed private pay rates
if they are designed to pay providers for
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additional costs associated with offering
higher quality care or types of care that
are not produced in sufficient amounts
by the market (e.g., non-standard hour
care, care for children with disabilities
or special health care needs, etc.).
In paragraphs (f)(2)(ii) and (iii), we
propose new parameters for determining
whether payment rates are set at levels
that allow eligible families equal access
to child care that is comparable to child
care access by families who are not
eligible for CCDF. We propose, as
mentioned above, that Lead Agencies
set payment rates, at a minimum, at
levels sufficient to support
implementation of health, safety, and
quality requirements as described in
this NPRM. We also propose that Lead
Agencies set payment rates at levels that
provide parental choice to families
receiving CCDF subsidies to access care
that is of comparable quality to care that
is available to families with incomes
above 85 percent of State Median
Income. The preamble to the 1998 Final
Rule indicated that payments
established at least at the 75th
percentile of prices charged in the
private-pay child care market would be
regarded as providing equal access (63
FR 39959). We believe the 75th
percentile remains an important
benchmark for gauging equal access and
recognize that Lead Agencies and other
stakeholders are familiar with this rate
as a proxy for equal access. To establish
payments at the 75th percentile, rates
within categories from the market rate
survey are arranged from lowest to
highest. The 75th percentile is the
number separating the 75 percent of
lowest rates from the 25 percent that are
highest. Setting rates at the 75th
percentile demonstrates that CCDF
families have access to at least threequarters of all available child care,
including care available to families with
incomes above 85 percent of State
median income. While it is true that the
price of child care does not always
correlate with the quality of child care,
we believe it is essential that CCDF
families have access to a majority of the
care available to families with incomes
above 85 percent of income, which
would be accomplished with rates
established at the 75th percentile.
Retaining this benchmark also allows
for accountability and comparability
across States using a market rate survey
approach, which can be useful in
gauging equal access and monitoring
trends in rates and access to quality care
over time. We recognize that this
benchmark is an imperfect proxy for the
affordability of higher quality care. In
order for providers to offer high quality
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care that meets the needs of children
from low-income families, they need
sufficient funds to be able to recruit and
retain qualified staff, use intentional
approaches to promoting learning and
development using curriculum and
engaging families, and provide safe and
enriching physical environments. ACF
plans to continue monitoring rates and
equal access, which may lead to
improved rate setting approaches and
benchmarks in future years.
Currently, nearly all Lead Agencies
set rate ceilings that are below the 75th
percentile and in many cases
significantly below that benchmark.
This is of great concern to ACF both
because inadequate rates may violate
the statutory requirement for equal
access and because CCDF is serving a
large number of vulnerable children
who would benefit from access to high
quality care and for whom payment
rates even higher than the 75th
percentile may be necessary to afford
access to such care. Low rates simply do
not provide sufficient resources to cover
costs associated with the provision of
high quality care or to attract and retain
qualified caregivers, teachers, and
directors. Low rates may also impact the
willingness of child care providers to
serve CCDF children thereby restricting
access. Currently, even in States and
Territories that pay higher rates for
higher quality care, base rates are so
inadequate that even the highest
payment levels are often below the 75th
percentile. While rates vary by category
of care, locality, and other factors, 22
States/Territories reported in their FY
2014–2015 CCDF Plans they had at least
some base rates below the 10th
percentile of a market rate survey. This
means that CCDF families are unable to
access a significant portion of the child
care market, including higher quality
care accessed by families with incomes
over 85 percent of SMI.
While we are not requiring that Lead
Agencies pay providers at the 75th
percentile, we strongly discourage Lead
Agencies from paying providers less
than the 75th percentile. Further, Lead
Agencies that set rates below the 75th
percentile would be required to
demonstrate that their payment rates
allow CCDF families to purchase care
that is of comparable quality to care that
is available to families with incomes
above 85 percent of SMI. This should
include data about the quality of care
that CCDF families can purchase and
that is available to families above 85
percent of SMI. For example, a State
could provide data on the share of
licensed providers in the State or
service area that meet established
quality benchmarks, as well as the share
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of CCDF providers meeting those
standards and the share of children
receiving CCDF in care that meets an
established quality level. States could
use information on QRIS participation
and ratings, national accreditation or
other quality benchmarks for providers.
ACF intends to enhance its
monitoring of rates through the CCDF
Plan approval process. ACF may deny
Plans or take penalties under the equal
access provision of this law if base rates
do not give access to a minimum level
of quality. Lead Agencies that set their
rates at the 75th percentile of the most
recent market rate survey will be
assured approval by ACF that rates
provide equal access. ACF will apply
scrutiny in its review to rates set below
that threshold, as well as to rates that
appear to be below a level to meet
minimum quality standards based on
alternate methodologies.
We recognize that at the present time
in many States and Territories the
available quality data on child care
providers is limited and we are
requesting comments on how to best
assess the comparability of child care
quality between that accessed by
families receiving CCDF and that
available to families above 85 percent of
SMI, including parameters and
requirements for any data collection.
ACF intends to examine the integrity of
reported data and provide assistance to
Lead Agencies in assessing
comparability. We are also seeking
comments on a possible benchmark or
metric for measuring the adequacy of
rates set by alternative methodologies,
as comparable to the 75th percentile.
Finally, any alternative methodology or
market rate survey that results in
stagnant or reduced payment rates will
result in further increased scrutiny by
ACF in its review, and the Lead Agency
will need to provide a justification for
how such rates result in improving
access to higher quality child care.
We propose adding paragraph
(f)(2)(iii) in accordance with the new
statutory requirement for Lead Agencies
to take into consideration the cost of
providing higher quality care than was
provided prior to the reauthorization
when setting payment rates. Lead
Agencies may take different approaches
to meeting this provision, including
increasing base payment rates, using
pay differentials or higher rates for
higher quality care, or other strategies,
such as direct grants or contracts that
pay higher rates for child care services
that meet higher quality standards. As
stated, ACF acknowledges that rates
above the benchmark of 75th percentile
may be required to support the costs
associated with high quality care.
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We propose adding paragraph
(f)(2)(iv) reflecting new language in the
law that requires Lead Agencies set
payment rates without reducing the
number of families receiving assistance,
to the extent practicable. ACF
recognizes the limitations of Lead
Agencies’ abilities to increase rates
under resource constraints and that
Lead Agencies must balance competing
priorities. We recognize that greater
budgetary resources are needed to serve
all children eligible for CCDF. While we
do not want to see a reduction in
children served, it is our belief that
current payment rates for CCDF-funded
care in many cases do not support equal
access to a minimum level of quality for
CCDF children and should be increased.
Current regulations prohibit Lead
Agencies from differentiating payment
rates based on a ‘‘family’s eligibility
status or circumstance’’. This provision
is intended to prevent Lead Agencies
from establishing different payment
rates for child care for low-income
working families as payments for
children from TANF families or families
in education or training. We believe that
such a prohibition remains relevant and
that differentiating payment rates, based
on an eligibility status (such as
receiving TANF or participation in
education or training), would violate the
equal access provision. In order to
clarify that this prohibition does not
conflict with the ability of Lead
Agencies to differentiate payments
based on the needs of particular
children, for example paying higher
rates for higher quality care for children
experiencing homelessness, we have
removed the word ‘‘circumstance’’ in
paragraph (g) so that this provision only
refers to the conditions of eligibility and
not the needs or circumstance of
children. We do not believe that setting
lower payment rates based on the
eligibility status of the child is
consistent with Congress’ intent to
allow for differentiation of rates or that
establishing different payment rates for
low-income families and TANF families
furthers the goals of the Act or support
access to high quality care for lowincome children.
Finally, we propose, in paragraph (i),
to add, ‘‘if the Lead Agency acted in
accordance with’’ this regulation, to the
existing language that nothing in this
section shall be construed to create a
private right of action in accordance
with statutory language.
Section 658E(c)(4)(C) of the Act states
that Lead Agencies may not be
prevented from differentiating payment
rates based on geographic location of
child care providers, age or particular
needs of children (such as children with
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disabilities and children served by child
protective services), whether child care
providers provide services during
weekend or other non-traditional hours;
or a Lead Agency’s determination that
differential payment rates may enable a
parent to choose high quality child care.
Section 98.45(j)(2) proposes to add
children experiencing homelessness to
this list of children with particular
needs. Paying higher rates for higher
quality care is an important strategy as
it provides resources necessary to cover
the costs of quality improvements in
child care programs. Lead Agencies
should also consider differentiating
rates for care that is in low supply, such
as infant-toddler care and care during
nontraditional hours, as an incentive for
providers.
Parent Fees. Section 658E(c)(5)
requires Lead Agencies to establish and
periodically revise a sliding fee scale
that provides for cost-sharing for
families receiving CCDF funds. The
reauthorization added language that
cost-sharing should not be a barrier to
families receiving CCDF assistance. In
this proposed rule, we have moved the
regulatory language on sliding fee scales
(previously § 98.42) under this section,
recognizing affordable copayments as an
important aspect of equal access.
We propose amending the previous
regulatory language, now § 98.45(k) by
adding language that the cost-sharing
should not be a barrier to families
receiving assistance. Lead Agencies
have flexibility in establishing their
sliding fee scales and determining what
constitutes a cost barrier for families.
The preamble to the 1998 Final Rule
established the Federal benchmark of 10
percent of family income as an
affordable copayment. As in the past,
we are declining from defining
affordable in regulation but we are
revising this established benchmark
through this preamble. It is our view
that a fee that is no more than 7 percent
of a family’s income is a better measure
of affordability. According to the U.S.
Census Bureau, the percent of monthly
income families spend on child care on
average has stayed constant between
1997 and 2011, at around 7 percent.
Poor families on average spend
approximately four times the share of
their income on child care compared to
higher income families. Who’s Minding
the Kids? Child Care Arrangements:
Spring 2011, U.S. Census Bureau, 2013.)
As CCDF assistance is intended to offset
the disproportionately high share of
income that low-income families spend
on child care in order to support parents
in achieving economic stability, it is our
belief that CCDF families should not be
expected to pay a greater share of their
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income on child care than reflects the
national average. For the majority of
CCDF families receiving assistance, this
new Federal benchmark would not
result in a change in the amount of
copay charged. The average percentage
of family income spent on CCDF
copayments, among families with a
copayment, is 6.2 percent.
According to § 98.21(a)(3), as
proposed, Lead Agencies would be
unable to increase family copayments
within the minimum 12-month
eligibility period unless the family’s
income is in a graduated phaseout of
care as described at § 98.21(b)(2). When
designing fee scales, we encourage Lead
Agencies to consider how their fee
scales address affordability for families
at all income levels. Lead Agencies
should ensure that small increases in
earnings, during the graduated phaseout
period, do not trigger large increases in
copayments, in order to ensure stability
for families as they improve their
economic circumstance and transition
off child care assistance.
In addition, we propose to add
language to provide that Lead Agencies
may not use the cost, price of care, or
subsidy payment rate as a factor in
setting co-payment amounts. This
corrects a contradiction between the
1992 and 1998 preamble discussions.
The 1992 preamble stated that
‘‘Grantees may take into account the
cost of care in establishing a fee scale,’’
(57 FR 34380), while the 1998 preamble
states that ‘‘As was stated in the
preamble to the regulations published
on August 4, 1992, basing fees on the
cost or category of care is not allowed.’’
(63 FR 39960) This proposed change
would correct this discrepancy by
stating that Lead Agencies may not use
the cost or price of care when setting
their co-pay amounts, which could
violate the statutory requirements to
preserve equal access and parental
choice by incentivizing families to use
lower cost care.
Finally, current CCDF regulations at
§ 98.42(c) state that ‘‘Lead Agencies may
waive contributions from families
whose incomes are at or below the
poverty level for a family of the same
size.’’ This provision would remain in
effect and we encourage Lead Agencies
to implement it. We propose amending
this section so that Lead Agencies can
waive contributions from families ‘‘that
meet other criteria established by the
Lead Agency.’’ Lead Agencies have
often requested more flexibility to waive
copayments beyond just those families
at or below the poverty level. This
change would increase flexibility to
determine waiver criteria that the Lead
Agency believes would best serve
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subsidy families. For example, a Lead
Agency could use this flexibility to
target particularly vulnerable
populations, such as homeless families,
migrant workers, or families receiving
TANF. Lead Agencies may choose to
waive copayments for children in Head
Start and Early Head Start, which is an
important alignment strategy. Head Start
and Early Head Start are provided at no
cost to eligible families, who cannot be
required to pay any fees for Head Start
services. Waiving CCDF fees for families
served by both Head Start/Early Head
Start and CCDF can support continuity
for families. While we are allowing Lead
Agencies to define criteria for waiving
co-payments, the criteria must be
described and approved in the CCDF
Plan. Lead Agencies may not use this
revision as an authority to eliminate the
co-payment requirement for all families
receiving CCDF assistance. We continue
to expect that Lead Agencies would
have co-payment requirements for a
substantial number of families receiving
CCDF subsidies. We included this
proposal on increasing Lead Agency
flexibility on waiving co-payments in
our 2013 NPRM and many commenters
supported this policy revision.
We propose adding paragraph (l) that
requires Lead Agencies to prohibit child
care providers receiving CCDF funds
from charging parents additional
mandatory fees above the family copayment based on the Lead Agencies’
sliding fee scale. According to the 2015–
2016 CCDF Plans, 41 Lead Agencies
have policies allowing providers to
charge families the difference between
the maximum payment rate and their
private pay rate. In some States/
Territories, parents may be asked to pay
the difference only in certain
circumstances or for certain types of
providers. For example, Lead Agencies
that allow providers to charge parents
may prohibit providers from charging
families who are exempt from
copayments, or may only allow
providers who have met an established
quality level to charge families the
difference in rates. (Minton, S., Durham,
C., and Giannarelli, L., The CCDF
Policies Database Book of Tables: Key
Cross-State Variations in CCDF Policies
as of October 1, 2013, OPRE Report
2014–72, U.S. Department of Health and
Human Services, 2014). We believe that
requiring families to pay above the
established copayment may make care
unaffordable for families and may be a
barrier to families receiving assistance.
We are also concerned that such
policies require families to make up the
difference for Lead Agencies’ low
payment rates. To ensure that providers
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are informed about this provision, Lead
Agencies should include this
prohibition in any written information
given to providers and/or written
provider agreements. Lead Agencies
may want to consider what methods
they would use to monitor compliance
with this prohibition. This policy does
not preclude providers from charging
families optional fees, such as those to
participate in field trips or other nonmandatory activities. We anticipate that
any fiscal impact on providers from this
policy change would be reduced or
eliminated by the expectation that Lead
Agencies increase and regularly update
their payment rates and improve their
payment policies pursuant to
§ 98.45(f)(2) and (m). We solicit
comments on the impact of this
proposal for both parents and providers,
including whether ACF should provide
a phase-in period for implementation.
Provider Payment Practices. Section
658E(c)(2)(S) of the Act requires Lead
Agencies to certify that payment
practices for child care providers
receiving CCDF funds reflect generally
accepted payment practices of child
care providers in the State/Territory that
serve children who do not receive
CCDF-funded assistance in order to
support stability of funding and
encourage more child care providers to
serve children receiving CCDF funds. It
also requires the Lead Agency, to the
extent practicable, to implement
enrollment and eligibility policies that
support the fixed costs of providing
child care services by delinking
provider payment rates from an eligible
child’s occasional absences due to
holidays or unforeseen circumstances,
such as illness. Section 658E(c)(4)(iv)
requires Lead Agencies to describe how
they will provide for the timely
payment for child care services
provided by CCDF funds.
In addition to payment rates, policies
governing provider payments are an
important aspect of equal access and
supporting the ability of providers to
provide high quality care. Currently,
many States closely link provider
payments to the hours a child attends
care. A child care provider may not be
paid for days or hours when a child is
absent, resulting in a loss of income.
Moreover, the instability that results
from such payment practices makes it
difficult for providers to meet fixed
costs of providing child care (such as
rent, utilities and salaries) and to plan
for investments in quality. Surveys and
focus groups with child care providers
have found that some providers
experience problems with late
payments, including issues with
receiving the full payment on time and
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difficulties resolving payment disputes.
(Adams, G., Rohacek, M., and Snyder,
K., Child Care Voucher Programs:
Provider Experiences in Five Counties,
2008) This research also found that
delayed payments creates significant
financial hardships for the impacted
providers, and forces some providers to
stop serving or limit the number of
children receiving child care subsidies.
Generally accepted payment practices
typically require parents who pay
privately for child care to pay their
provider a set fee based on their child’s
enrollment, often in advance of when
services are provided. Payments are not
altered due to child absences. While
Lead Agencies have flexibility to
determine payment processes for
subsidies, we believe that it is
appropriate to set some Federal
benchmarks for what constitutes timely
payments, delinking of payments and
absent days, and generally accepted
payment practices. We are interested in
receiving comments on whether these or
other benchmarks should be included in
a final rule.
At § 98.45(m)(1), we propose that
Lead Agencies ensure timely provider
payments by either paying prospectively
prior to the delivery of services or
paying providers retrospectively within
no more than 21 days of the receipt of
invoice for services. We strongly
encourage Lead Agencies to pay
prospectively where possible. For Lead
Agencies that choose to reimburse
providers for services, we provide 21
days as a maximum period of time but
encourage Lead Agencies to provide
payment sooner if possible. We do not
expect this requirement to be
burdensome for Lead Agencies.
According to their FY 2014–2015 CCDF
Plans, 37 States/Territories had an
established timeframe for provider
payments ranging from 3 to 35 days, the
majority of which were shorter than 21
days. Administrative improvements
such as automated billing and payment
mechanisms, including direct deposit
and web-based electronic attendance
and billing systems can help facilitate
timely payments to providers.
At § 98.45(m)(2), we propose three
examples for how Lead Agencies could
meet the statutory requirement to
support the fixed costs of providing
child care services by delinking
provider payment rates from an eligible
child’s occasional absences due to
holidays or unforeseen circumstances
such as illness, to the extent practicable.
This may include: (1) By paying
providers based on a child’s enrollment,
rather than attendance; (2) by providing
a full payment to providers as long as
a child attends for 85 percent of the
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authorized time; or (3) by providing full
payment to providers as long as a child
is absent for five or fewer days in a four
week period. We recognize that these
three examples represent different levels
of stringency; however, we have
provided flexibility in
acknowledgement of the ways that
States structure their policies. Lead
Agencies that do not choose one of these
three approaches must describe their
approach in the State Plan, including
how the approach is not weaker than
one of the three listed above.
We are establishing 85 percent, or five
or fewer days, as a benchmark for when
providers should receive a full payment,
regardless of the reason for the absence
(e.g., whether it is approved or
unapproved). We selected 85 percent (or
five or fewer days) as a threshold based
in part on Head Start policy, which
currently requires center-based
programs to maintain a monthly 85
percent attendance rate and to analyze
absenteeism if monthly average daily
attendance falls below that threshold.
New proposed Head Start Performance
Standards, issued in June 2015, would
require programs to take actions (which
could include additional home visits or
the provision of support services) to
increase child attendance when
children have four or more consecutive
unexcused absences or are frequently
absent. While Head Start policy
informed the development of this
proposal, our proposed provisions differ
in several ways. We are not requiring
CCDF child care providers to take action
to address individual or systemic
absenteeism, although Lead Agencies
may encourage CCDF providers to take
this approach and consider how child
care providers may be supported in
addressing high rates of absenteeism
among families. Chronic absenteeism
from high quality programs is a concern
because it may lessen the impact on
children’s school readiness and may
signal that a family is in need of
additional supports.
We are proposing using a common
threshold to encourage alignment and
because it seems to reasonably allow for
routine absences, such as due to illness,
that occur among children. Lead
Agencies retain discretion to allow for
additional excused and/or unexcused
absences and to provide for the full
payment for services in those
circumstances. Many Lead Agencies
have invested in electronic time and
attendance systems linked to provider
payments. These systems may be used
to track whether a child is enrolled and
attending care; however, Lead Agencies
should ensure that such systems do not
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link attendance and payment so tightly
as to violate this provision.
The law requires Lead Agencies to
implement this provision ‘‘to the extent
practicable.’’ We interpret this language
as setting a limit on the extent to which
Lead Agencies must act, rather than
providing a justification for not acting at
all. We are not requiring Lead Agencies
to pay for all days when children are
absent, although that would most
closely mirror private pay practices, but
each Lead Agency is expected to
implement a policy that accomplishes
the goals of the statute. A refusal to
implement any such policies as being
‘‘impracticable’’ will not be accepted.
We are asking for comment on
alternatives to the three identified
approaches that States may want to use
to meet this requirement.
At § 98.45(m)(3), we propose
minimum requirements for complying
with the provision of ‘‘generallyaccepted payment practices.’’ Unless a
Lead Agency is able to prove that the
following policies are not generallyaccepted in its particular State,
Territory, or service area, or among
particular types of providers, we
propose requiring Lead Agencies to pay
providers based on established part-time
or full-time rates, rather than paying for
hours of service or smaller increments
of time. We also propose that Lead
Agencies pay for mandatory fees that
the provider charges to private-paying
parents. This would include initial or
annual registration fees. It is not meant
to include optional fees charged to
families, such as those to participate in
optional field trips or program activities.
In addition, there are certain
generally-accepted payment practices
that we propose to require of all Lead
Agencies. In paragraphs (m)(4) through
(6) we propose requiring Lead Agencies
to ensure that child care providers
receive payment for any services in
accordance with a payment agreement
or authorization for services, receive
prompt notice of changes to a family’s
eligibility status that may impact
payment, and establish timely appeal
and resolution processes for any
payment inaccuracies and disputes.
While these practices are unique to the
subsidy system, they are analogous to
generally-accepted payment practices in
the private pay market, such as
establishing contracts between
providers and parents and providing
adequate advance notice of changes that
impact payments. We believe the
appeals and resolution process is
important in fairness to providers.
Finally, Lead Agencies should ensure
that payment practices for each type of
provider reflect generally accepted
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payment practices for such providers in
order to ensure that families have access
to a range of child care options. We note
that these benchmarks represent
minimum generally accepted practices.
Lead Agencies may consider additional
policies that are fair to providers,
promote the financial stability of
providers and encourage more providers
to serve CCDF eligible children. Such
policies may include paying providers
based on the provider’s established
procedures for private-pay families (i.e.,
a flat monthly rate rather than paying by
the day or week), providing information
on payment practices in multiple
languages to promote the participation
of diverse child care providers;
implementing dedicated phone lines,
web portals, or other access points for
providers to easily reach the subsidy
agency for questions and assistance
regarding payments; and periodically
surveying child care providers to
determine their satisfaction with
payment practices and timeliness, and
to identify potential improvements.
Priority for Services (Section 98.46)
The reauthorization included several
provisions to increase access to CCDF
services for children and families
experiencing homelessness. Consistent
with the spirit of these additions, we are
proposing to add ‘‘children
experiencing homelessness’’ to the
Priority for Services section at § 98.46.
Lead Agencies have flexibility as to
how they offer priority to these
populations, including by prioritizing
enrollment, waiving copayments,
paying higher rates for access to higher
quality care, or using grants or contracts
to reserve slots for priority populations.
Section 658E(c)(3)(B)(ii) of the Act
requires ACF to report to Congress on
whether Lead Agencies are prioritizing
services to children experiencing
homelessness, children with special
needs, and families with very low
incomes.
The Section 658E(c)(2)(Q) of the Act
also requires Lead Agencies to describe
the process by which they propose to
prioritize investments for increasing
access to high quality child care for
children of families in areas that have
significant concentrations of poverty
and unemployment and lack such
programs. We propose reiterating this
requirement in the proposed rule in
§ 98.46(b). It is our interpretation that
the investments referred to in the statute
may include direct child care services
provided under § 98.50(a) and activities
to improve the quality of child care
services under § 98.50(c).
While Lead Agencies have flexibility
in implementing this new statutory
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language, ACF encourages Lead
Agencies to target investments based on
analysis of data showing poverty,
unemployment and supply gaps. Lead
Agencies may also consider how to best
support parent’s access to workforce
development and employment
opportunities (such as allowing job
search as a qualifying activity for
assistance and allowing broader access
to assistance for education and training
by reducing eligibility restrictions),
which would support the child care
needs of families in areas with high
poverty and unemployment.
Subpart F—Use of Child Care and
Development Funds
Subpart F of CCDF regulations
establishes allowable uses of CCDF
funds related to the provision of child
care services, activities to improve the
quality of child care, administrative
costs, Matching fund requirements,
restrictions on the use of funds, and cost
allocation.
Child Care Services (Section 98.50)
This proposed rule includes a
technical change to § 98.50(a) which we
propose to redesignate as new paragraph
(g) at § 98.50. The proposed change
requires Lead Agencies to spend a
substantial portion of the funds
remaining after applying provisions at
paragraphs (a) through (f) of this section
to provide direct child care services to
low-income working families.
We also make a clarifying change at
current paragraph (b) in this section,
which we propose to redesignate as
paragraph (a). We propose to specify
that proposed paragraph (a) is
describing use of funds for direct child
care services. These proposed changes
work in conjunction to clarify that the
reference to ‘‘a substantial portion of
funds’’ applies to direct services, as
opposed to other types of activities.
Section 658G(a)(2) of the CCDBG Act
increases the percentage of total CCDF
funds (including mandatory funding)
that Lead Agencies must spend on
activities to improve the quality of child
care services. Paragraphs (b), (d), (e),
and (f), respectively, require Lead
Agencies to spend a minimum of nine
percent of funds (phased in over five
years) on activities to improve the
quality of care and three percent
(beginning in FY 2017) to improve the
quality of care for infants and toddlers;
not more than five percent for
administrative activities; not less than
70 percent of the Mandatory and
Matching funds to meet the needs of
families receiving TANF, families
transitioning from TANF, and families
at-risk of becoming dependent on
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TANF; and, after setting aside funds for
quality and administrative activities, at
least 70 percent of remaining
Discretionary funds on direct services.
These provisions are all based on
statute.
Grants and contracts. We propose to
add language at § 98.50(a)(3) which
would require that funding methods
used by States and Territories include
some use of grants or contracts for direct
services based on an assessment of
shortages in the supply of high quality
care. The statute references the use of
grants or contracts in multiple places
and we believe they are a critical aspect
of an effective CCDF system and
promote the fundamental principles of
equal access and parental choice. Note
that this proposal would not impact the
requirement that the Lead Agency
operate a certificate (or voucher)
program and that eligible families be
offered a certificate. Rather, the
proposed change would require Lead
Agencies to incorporate grants or
contracts into their CCDF program, with
specific consideration for how they can
be used to address shortages in the
supply of high quality child care.
According to preliminary FY 2013
CCDF administrative data,
approximately 90 percent of children
receiving CCDF-funded child care were
served through certificates. According to
analysis of the FY 2014–2015 CCDF
Plans, only 20 States and Territories
provide services through grants or
contracts for child care slots, meaning
parents in the majority of States/
Territories do not have a choice other
than certificates.
While child care certificates may also
support parental choice, demand-side
mechanisms like certificates are only
fully effective when there is an adequate
supply of child care. Grants or contracts
can play a role in building the supply
and availability of child care,
particularly high quality care, in
underserved areas and for special
populations in order to expand parental
choice. For example, Lead Agencies
may use grants or contracts to
incentivize providers to open in an area
they might not otherwise consider, or to
serve children for whom care is more
costly. Grants and contracts are paid
directly to the provider so long as slots
are adequately filled, which is a more
predictable funding source than
vouchers or certificates. Stable funding
can incent providers to pay the fixed
costs associated with providing high
quality child care, such as adequate
salaries to attract qualified staff, or to
provide higher cost care, such as for
infants and toddlers or children with
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special needs, or to locate in lowincome or rural communities.
We want to emphasize that this
proposed addition is not meant to limit
or discourage the use of certificates to
provide assistance to families. As noted
in the Senate Committee report,
certificates ‘‘offer eligible parents the
broadest array of options and afford
parents maximum choice.’’ (S. Rept. No.
113–138, at 12). We expect a substantial
number of CCDF children would
continue to be served through
certificates or vouchers. However, we
believe a mixed funding system that
includes certificates, grants or contracts,
and private pay families is the most
sustainable option for the CCDF
program and for child care providers.
Further, a mixed funding system is a
straightforward interpretation of
language in the CCDBG statute, which
clearly states that parents are to be given
the option of child care funded by
grants and contracts, as well as
certificates. While Section 658Q(b) of
the Act provides that ‘‘Nothing in this
subchapter shall be construed in a
manner (1) to favor or promote the use
of grants and contracts for the receipt of
child care services under this
subchapter over the use of child care
certificates,’’ Congress chose not to
change the language at Section
658E(c)(2)(A) of the Act, requiring Lead
Agencies to, ‘‘provide assurances that (i)
the parent or parents of each eligible
child within the State who receives or
is offered child care service for which
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.’’
Lead Agencies are strongly
encouraged to contract with multiple
types of settings, including child care
centers and family child care networks
or systems, to maximize parental choice.
Family child care networks or systems
are groups of associated family child
care providers who pool funds to share
some costs of operating and staff who
provide supports to providers often to
manage their businesses and enhance
quality. Contracting directly with family
child care networks allows for more
targeted use of funds with providers that
benefit from additional supports that
can improve quality. Research shows
affiliation with a staffed family child
care network is a strong predictor of
quality in family child care homes,
when providers receive visits, training,
materials, and other supports from the
network through a specially trained
coordinator. (Bromer, J., et al., Staffed
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Support Networks and Quality in
Family Child Care: Findings from the
Family Child Care Network Impact
Study, Erikson Institute, 2008)
Faith-based or religious organizations
may be funded through a grant or
contract, although they may not use the
funding for religious purposes. Pursuant
to existing regulations at § 98.54(d),
which we propose to redesignate as
§ 98.56(d), funds provided through
grants or contracts to providers may not
be expended for any sectarian purpose
or activity, including sectarian worship
or instruction. These provisions are
designed to promote the participation of
faith-based organizations in the CCDF
program in a manner consistent with
applicable Federal statutes. In many
States, faith-based organizations play a
key role in the delivery of child care
services, and this proposed rule fully
supports their continued participation.
We do not expect Lead Agencies
currently using direct grants or contracts
to necessarily make changes to current
grants or contracts. However, we
strongly encourage these Lead Agencies
to examine their current approach to
ensure grants and contracts are focused
on increasing the supply of high quality
care, especially for underserved
populations and communities.
Expenditures on activities to improve
the quality of child care. Both the
quality activity set-aside and the setaside for infants and toddlers codified
in § 98.50(b) apply to the Lead Agency’s
full CCDF award, which includes
Discretionary, Mandatory, and Federal
and State shares of Matching Funds.
Non-Federal maintenance-of-effort
funds are not subject to the quality and
infant and toddler set-asides. These
amounts are minimum requirements.
Lead Agencies may reserve a larger
amount of funding than is required at
paragraphs (b)(1) and (2) for these
activities.
We also propose to revise paragraph
(c), which relates to the quality activity
funds. First, the proposed rule would
require use of the quality funds to align
with an assessment of the Lead
Agency’s need to carry out such
services. As part of this assessment, we
expect Lead Agencies to review current
expenditures on quality, assess the need
for quality investment in comparison
with revised purposes of the law,
including the placement of more lowincome children in high quality child
care, and determine the most effective
and efficient distribution of funding
among and across the categories
authorized by the statute. Second, the
activities must include measurable
indicators of progress in accordance
with the required measures proposed at
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§ 98.53(f). We recognize that some
activities may have the same indicators
of progress. However, each activity must
be reported on and linked to some
indicator(s). Finally, the proposed rule
allows for quality activities to be carried
out by the Lead Agency or through
grants and contracts with local child
care resources and referral organizations
or other appropriate entities.
Funding for Direct Services. The
proposed rule includes a technical
change at paragraph (e) to clarify that
the provision applies to the Mandatory
and Federal and State share of Matching
Funds. This proposed change simply
formalizes current policy. We propose
to redesignate current paragraph (f) as
paragraph (h) without changes.
We propose to replace current
paragraph (f) with new regulatory
language to restate requirements
included in the Act. The proposed
regulatory language would require at
least 70 percent of any Discretionary
funds left after the Lead Agency sets
aside funding for quality and
administrative activities to be used to
fund direct services.
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Services for Children Experiencing
Homelessness (Section 98.51)
We propose a new section at § 98.51
that codifies new statutory language at
658E(c)(3)(B)(i) of the Act, which
requires Lead Agencies to spend at least
some CCDF funds on activities that
improve access to quality child care
services for children experiencing
homelessness. The proposed regulatory
language would require Lead Agencies
to have procedures for allowing
children experiencing homelessness to
be determined eligible and enroll prior
to completion of all required
documentation. The proposed
regulation also clarifies that if a child
experiencing homelessness is found
ineligible, after full documentation, any
CCDF payments made prior to the final
eligibility determination should not be
considered errors or improper payments
and any payments owed to a child care
provider for services should be paid.
Lead Agencies would also be expected
to provide training and technical
assistance on identifying and serving
children and families experiencing
homelessness and outreach strategies.
Child Care Resource and Referral
System (Section 98.52)
The law authorizes use of CCDF funds
for child care resource and referral
services to assist with consumer
education and specifies functions of
such entities. Consistent with this
provision, this proposed rule would
revise § 98.52 to include statutory
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language that allows Lead Agencies to
spend funds to establish or support a
system of local or regional child care
resource and referral organizations that
is coordinated, to the extent determined
by the Lead Agency, by a statewide
public or private nonprofit, communitybased or regionally based, local child
care resource and referral organization.
The statute permits, but does not
require, Lead Agencies to fund a child
care resource and referral system. We
recommend Lead Agencies give
consideration to the expanded
requirements for consumer education at
§ 98.33 and how best to meet those
requirements, including whether
existing child care resource and referral
agencies and/or additional partners can
assist in reaching low-income parents of
children receiving subsidies, providers,
and the general public.
Proposed paragraph (b) specifies a list
of resource and referral activities that
the statute says should be at the
direction of the Lead Agency. Therefore,
if the Lead Agency does not need the
child care resource and referral
organization to carry out a certain
activity, the organization does not have
to carry out that activity.
Activities To Improve the Quality of
Child Care (Section 98.53)
As noted above, reauthorization
increased the percent of expenditures
Lead Agencies must spend on quality
activities. We strongly encourage Lead
Agencies to develop a carefully
considered framework for quality
expenditures that takes into account the
activities specified by the law, and uses
data on gaps in quality of care and the
workforce, as well as effectiveness of
existing quality enhancement efforts, to
target these resources. Lead Agencies
should also coordinate quality activities
with the statutory requirement to spend
at least three percent of expenditures on
improving quality and access for infants
and toddlers, beginning in FY 2017.
Section 658G(b) of the Act includes a
new list of 10 allowable quality
activities and requires that Lead
Agencies spend their quality funds on at
least one of the 10 activities. This
proposed rule incorporates and expands
on the list of allowable activities at
§ 98.53(a) with details described below.
1. Supporting the training,
professional development, and
postsecondary education of the child
care workforce as part of a progression
of professional development. We
propose restating the statutory language
specifying training and professional
development as an allowable quality
improvement expenditure at
§ 98.53(a)(1). The Act references the
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section of the Plan requiring assurances
related to training and professional
development, which is elaborated in the
proposed rule at § 98.44. We encourage
Lead Agencies to align the uses of funds
for training, professional development,
and postsecondary education with the
State or Territory’s framework and
progression of professional development
to maximize resources. Training and
professional development may be
provided through institutions of higher
education, child care resource and
referral agencies, worker organizations,
early childhood professional
associations, and other entities. The Act
also lists additional areas for
investments in training and professional
development, which we include with
additional detail at § 98.53(a)(1)(i)
through (vii) as follows:
(a) Offering training, professional
development and post-secondary
education that relate to the use of
scientifically based, developmentally,
culturally, and age appropriate
strategies to promote all of the major
domains of child development and
learning, including those related to
nutritional nutrition and physical
activity and specialized training for
working with populations of children,
including different age groups, English
learners, children with disabilities, and
Native Americans and Native
Hawaiians, to the extent practicable, in
accordance with the Act.
(b) Incorporating the effective use of
data to guide program improvement and
improve opportunities for caregivers,
teachers and directors to advance on
their progression of training,
professional development, and
postsecondary education. We expanded
upon the statutory language to include
opportunities for caregivers, teachers
and directors to advance professionally
as there are a variety of data collected
(such as information from licensing
inspectors, quality rating and
improvement systems, or accreditation
assessments) that can guide program
improvement by helping providers
make adjustments in the physical
environment and teaching practices.
(c) Including effective behavior
management strategies and training,
including positive behavior
interventions and support models for
birth to school-age or age-appropriate,
that promote positive social and
emotional development and reduce
challenging behaviors, including
reducing suspensions and expulsions of
children under age five for such
behaviors.
(d) Providing training and outreach on
engaging parents and families in
culturally and linguistically appropriate
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ways to expand their knowledge, skills,
and capacity to become meaningful
partners in supporting their children’s
positive development.
(e) Providing training in nutrition and
physical activity needs of young
children.
(f) Providing training or professional
development for caregivers, teachers
and directors regarding the early
neurological development of children;
and
(g) Connecting caregivers, teachers
and directors of child care providers
with resources to assist them in
pursuing relevant postsecondary
education.
2. Improving upon the development or
implementation of the early learning
and development guidelines. We restate
at § 98.53(a)(2) statutory language to
allow the use of CCDF quality funds to
provide technical assistance to eligible
child care providers on the development
or implementation of early learning and
development guidelines. Early learning
and development guidelines should be
developmentally appropriate for all
children from birth to kindergarten
entry, describing what such children
should know and be able to do, and
cover the essential domains of early
childhood development. Most States
and Territories already have such
guidelines, but may need to update
them or better integrate them into their
professional development system
proposed at § 98.44. Section 658E(c)(G)
of the Act requires Lead Agencies to
describe training and professional
development, including the ongoing
professional development on early
learning guidelines. In June 2015, ACF
released the newly revised Head Start
Early Learning Outcomes Framework:
Ages Birth to Five (HSELOF, 2015. The
HSELOF provides research-based
expectations for children’s learning and
development across five domains from
birth to age 5. As States and Territories
undertake revisions to their early
learning guidelines, we encourage them
to crosswalk their guidelines with the
HSELOF to ensure they are
comprehensive and aligned.
Coordinating between State/Territory
early learning and development
guidelines and the HSELOF can help
build connections between child care
programs and Early Head Start/Head
Start programs. We also encourage Lead
Agencies to consider expanding
learning and development guidelines for
school-age children, either through
linkages to programs already in place
through the State department of
education or local educational agencies
(LEAs), or by adapting current early
learning and development guidelines to
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be age-appropriate for school-age
children.
3. Developing, implementing, or
enhancing a tiered quality rating and
improvement system (QRIS). We
propose to incorporate this allowable
activity at § 98.53(a)(3). The statute lists
seven activities that Lead Agencies may
choose to include when funding a QRIS
with quality funds, which we expand
upon:
(a) Support and assess the quality of
child care providers in the State,
Territory, or Tribe. QRIS should include
training and technical assistance to
child care providers to help them
improve the quality of care and on-site
quality assessments appropriate to the
setting;
(b) Build on licensing standards and
other regulatory standards for such
providers. We encourage Lead Agencies
to incorporate their licensing standards
and other regulatory standards as the
first level or tier in their QRIS. Making
licensing the first tier facilitates
incorporating all licensed providers into
the QRIS;
(c) Be designed to improve the quality
of different types of child care providers
and services. We encourage Lead
Agencies to implement QRIS that are
applicable to all child care sectors and
address the needs of all children,
including children of all ages, families
of all cultural-socio-economic
backgrounds, and practitioners. One
way to provide support for different
types of care is providing quality funds
to established family child care
networks that can work with individual
family child care providers to improve
the quality in those settings.
(d) Describe the safety of child care
facilities. Health and safety are the
foundation of quality, and should not be
treated as wholly separate requirements.
Including the safety of child care
facilities as part of a QRIS helps to
reinforce this connection.
(e) Build the capacity of early
childhood programs and communities
to support parents’ and families’
understanding of the early childhood
system and the ratings of the programs
in which the child is enrolled. This
capacity may be built through a robust
consumer and provider education
system, as described at § 98.33. Lead
Agencies should provide clear
explanations of quality ratings to
parents. In addition to the Web site,
Lead Agencies may have providers post
their quality rating or have information
explaining the rating system available at
child care centers and family child care
homes. This information should also be
accessible to parents with low literacy
or limited English proficiency;
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(f) Provide to the maximum extent
practicable, financial incentives and
other supports designed to expand the
full diversity of child care options and
help child care providers improve the
quality of services. Research has found
that significant financial incentives are
needed to make the quality
improvements necessary for providers
to move up levels in the QRIS. In order
to ensure that providers continue to
improve their quality and help move
more low-income children into high
quality child care, we recommend Lead
Agencies to make these incentives a
focus of investment; and
(g) Accommodate a variety of
distinctive approaches to early
childhood education and care,
including but not limited to, those
practices in faith-based settings,
community based settings, childcentered settings, or similar settings that
offer a distinctive approach to early
childhood development. Parental choice
is a very important part of the CCDF
program, and parents often consider a
variety of factors, including religious
affiliation, when choosing a child care
provider. Lead Agencies should take
these factors into account when setting
quality standards and levels in their
QRIS, as well as designing how the
information will be made available to
the public.
4. Improving the supply and quality of
child care programs and services for
infants and toddlers. The statute
includes improving the supply and
quality of child care programs and
services for infants and toddlers as an
allowable quality activity, which we
propose to reiterate at § 98.53(a)(4). Lead
Agencies may use any quality funds for
infant and toddler quality activities, in
addition to the required three percent
infant and toddler quality set-aside.
Lead Agencies are encouraged to pay
special attention to what is needed to
enhance the supply of high quality care
for infants and toddlers in developing
their quality investment framework and
coordinate activities from the main and
targeted set asides to use resources most
effectively. The statute and proposed
rule state that allowable activities may
include:
(a) Establishing or expanding high
quality community or neighborhoodbased family and child development
centers, which may serve as resources to
child care providers in order to improve
the quality of early childhood services
provided to infants and toddlers from
low-income families and to help eligible
child care providers improve their
capacity to offer high quality, ageappropriate care to infants and toddlers
from low-income families. We interpret
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this provision to encourage the
provision of resources to high quality
child care providers or other qualified
community-based organizations that
serve as hubs of support to providers in
the community (by providing coaching
or mentoring opportunities, lending
libraries, etc.);
(b) Establishing or expanding the
operation of community or
neighborhood-based family child care
networks. As discussed earlier,
established family child care networks
can help improve the quality of family
child care providers. Lead Agencies may
choose to use the quality funds to help
networks cover overheard and quality
enhancement costs, such as providing
access to coaches or health consultants;
(c) Promoting and expanding child
care providers’ ability to provide
developmentally appropriate services
for infants and toddlers;
(d) If applicable, developing infant
and toddler components within the
Lead Agency’s QRIS for child care
providers for infants and toddlers, or the
development of infant and toddler
components in the child care licensing
regulations or early learning and
development guidelines;
(e) Improving the ability of parents to
access transparent and easy to
understand consumer education about
high quality infant and toddler care as
described at § 98.33; and
(f) Carrying out other activities
determined by the Lead Agency to
improve the quality of infant and
toddler care provided, and for which
there is evidence that the activities will
lead to improved infant and toddler
health and safety, infant and toddler
cognitive and physical development, or
infant and toddler well-being, including
providing health and safety training
(including training in safe sleep
practices, first aid, and
cardiopulmonary resuscitation for
providers and caregivers).
5. Establishing or expanding a
statewide system of child care resource
and referral services. We propose to
reiterate the statutory language by
adding § 98.53(a)(5) to include
establishing or expanding a statewide
system of child care resource and
referral services as an allowable quality
activity. Activities that may be done by
child care resource and referral
organizations are included at § 98.52.
6. Facilitating compliance with health
and safety. We restate the statutory
language at § 98.53(a)(6) that includes
facilitating compliance with Lead
Agency requirements for inspection,
monitoring, training, and health and
safety, and with licensing standards.
While it is likely Lead Agencies will
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need to use quality funding for
implementation and enforcement of the
new minimum health and safety
requirements for child care providers in
the law, we urge them to consider
expenditures on this purpose
foundational to enhancing quality, but
not sufficient to meet the purposes of
this reauthorization. For example, Lead
Agencies should consider linking
quality expenditures for health and
safety to the quality framework
discussed earlier in this preamble, such
that a Lead Agency may establish a
QRIS that ties eligibility for providers to
participate directly to licensing as the
base level.
7. Evaluating and assessing the
quality and effectiveness of child care
programs and services offered,
including evaluating how such
programs positively impact children.
The statutorily allowable list of quality
activities includes at § 98.53(a)(7)
evaluating and assessing the quality and
effectiveness of child care programs and
services offered, including evaluating
how such programs positively impact
children. We propose at § 98.53(f)(3) to
require Lead Agencies to report on the
measures they will use to evaluate
progress in improving the quality of
child care programs and services.
Including evaluation as an allowable
quality activity recognizes that
evaluating progress may take additional
investments, for which Lead Agencies
may use quality funds. A good
evaluation design can provide
information critical to improving a
quality initiative at many points in the
process, and increase the odds of its
ultimate success. (Government
Accountability Office, Child Care: States
Have Undertaken a Variety of Quality
Improvement Initiatives, but More
Evaluations of Effectiveness Are
Needed, GAO–02–897)
8. Supporting child care providers in
the voluntary pursuit of accreditation by
a national accrediting body with
demonstrated, valid, and reliable
program standards of high quality. We
propose to restate statutory language at
§ 98.53(a)(8) supporting child care
providers in the voluntary pursuit of
accreditation by a national accrediting
body with demonstrated, valid and
reliable program standards of high
quality as an allowable quality activity.
Accreditation is one way to differentiate
the quality of child care providers. In
order to gain accredited, child care
centers and family child care homes
must meet certain quality standards
outlined by accrediting organizations.
9. Supporting efforts to develop or
adopt high quality program standards
relating to health, mental health,
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nutrition, physical activity, and physical
development. We restate statutory
language at § 98.53(a)(9) supporting
Lead Agency or local efforts to develop
or adopt high quality program standards
relating to health, mental health,
nutrition, physical activity, and
physical development for children as an
allowable quality activity. We
recommend Lead Agencies look to Head
Start for strong program standards in
comprehensive services and consider
how these standards may be translated
into child care program standards. This
could include adding the standards to
licensing, encouraging standards
through QRIS, or embedding them in
the requirements of grants or contracts
for direct services. We encourage Lead
Agencies that choose to use their quality
funds for this activity to focus on
research-based standards and work with
specialists to develop age appropriate
standards in these areas.
10. Carrying out other activities,
including implementing consumer
education provisions, determined by the
Lead Agency. We propose to restate
statutory language at § 98.53(a)(10) that
carrying out other activities, including
implementing consumer education
provisions at § 98.33, determined by the
Lead Agency to improve the quality of
child care services provided and for
which measurement of outcomes
relating to improvement of provider
preparedness, child safety, child wellbeing, or entry to kindergarten is
possible, are considered allowable
quality activities This tenth allowable
activity provides Lead Agencies the
flexibility they need to invest in quality
activities that best suit the needs of
parents, children, and providers in their
area. Over the years, Lead Agencies
have been innovative in how they spent
their quality funds, creating novel ways
for improving quality of care, such as
QRIS, that are now widely used tools for
quality improvement. Therefore, we
encourage Lead Agencies to experiment
with the types of quality activities in
which they invest. However, it is critical
that Lead Agencies ensure that these
new quality activities are focused and
represent a smart investment of limited
resources, which is why any activity
that falls in the ‘‘other’’ category must
have measurable outcomes that relate to
provider preparedness, child safety,
child well-being, or entry to
kindergarten. Lead Agencies are
encouraged to establish research-based
measures for evaluating the outcomes of
these quality activities. Lead Agencies
will report on these measures and
activities on an annual basis through the
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proposed Quality Progress Report at
§ 98.53(f).
Quality activities not restricted to
CCDF children. This proposed rule adds
new paragraph (d) to clarify that
activities to improve the quality of child
care are not restricted to children
meeting eligibility requirements under
§ 98.20 or to the child care providers
serving children receiving subsidies.
Thus, CCDF quality funds may be used
to enhance the quality and increase the
supply of child care for all families,
including those who receive no direct
assistance. This proposed provision
clarifies existing policy regarding CCDF
quality expenditures.
Targeted funds and quality minimum.
The proposed rule adds paragraph (e) at
§ 98.53 to codify longstanding ACF
policy that targeted funds for quality
improvement and other activities
included in appropriations law may not
count towards meeting the minimum
quality spending requirement, unless
otherwise specified by Congress.
Beginning in FY 2000, Congress
included in annual appropriations
legislation for CCDF discretionary funds
a requirement for Lead Agencies to
spend portions of such funds on
specified quality activities. Changes to
the minimum quality spending
requirement and the addition of a setaside for infant and toddler care
included in reauthorization may lead to
changes or removal of targeted funds
from annual appropriations legislation.
However, we have chosen to propose
this provision, as we did in the 2013
NPRM, to formalize the policy, in the
event that targeted funds are included in
future appropriations.
Reporting on quality activities.
Sections 658G(c) and (d) of the Act
require Lead Agencies to report total
expenditures on quality activities,
certify that those expenditures met the
minimum quality expenditure
requirement, and describe the quality
activities funded. We propose to
incorporate these reporting
requirements into the regulation
§ 98.53(f), which would require Lead
Agencies to prepare and submit annual
reports, including a quality progress
report and expenditure report, to the
Secretary, which must be made publicly
available. We also propose to require
that Lead Agencies detail the measures
used to evaluate progress in improving
the quality of child care programs and
services, and data on the extent to
which the Lead Agency has met these
measures. Additionally, Lead Agencies
would describe any changes to
regulations, enforcement mechanisms,
or other policies addressing health and
safety based on an annual review and
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assessment of serious child injuries and
any deaths occurring in child care
programs serving children. While Lead
Agencies are required to include child
care programs serving children
receiving CCDF, we encourage the
inclusion of other regulated and
unregulated child cares and family child
care homes, to the extent possible.
Currently, States and Territories
report their categorical expenditures
through the ACF 696 reporting form.
This form is used to determine if the
Lead Agency has met the minimum
quality expenditure amount and is
referenced at § 98.65(g) in this proposed
rule. We expect to continue to use the
ACF 696 form to determine whether a
Lead Agency has met expenditure
requirements at § 98.50(b), including
both the quality set-aside and the setaside to improve quality for infants and
toddlers.
We propose to capture information on
the quality activities and the measures
and data used to determine progress in
improving the quality of child care
services through a Quality Progress
Report. This report would replace the
Quality Performance Report that was an
appendix to the Plan. The Quality
Performance Report has played an
important role in increasing
transparency on quality spending. The
new Quality Progress Report would
continue to gather detailed information
about quality activities, but include
more specific data points to reflect the
new quality activities required by the
statute. The Quality Progress Report
would be a new annual data collection
and would require a public comment
and response period as part of the
Paperwork Reduction Act process,
which will give Lead Agencies and
others the opportunity to comment on
the specifics of the report.
As part of the Quality Progress Report,
we propose to include a requirement
that States and Territories describe any
changes to regulations, enforcement
mechanisms, or other policies
addressing health and safety based on
an annual review and assessment of
serious injuries and any deaths
occurring in child care programs serving
children receiving child care assistance,
and in other regulated and unregulated
child cares and family child care homes,
to the extent possible. This proposed
provision complements § 98.41(d)(4),
discussed earlier in the preamble, which
requires child care providers to report to
a designated State, Territorial, or Tribal
entity any serious injuries or deaths of
children occurring in child care. States
and Territories would consider any
serious injuries and deaths reported by
providers and other information as part
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of their annual review and assessment.
This report also works in conjunction
with the proposed requirements at
§ 98.33(a)(1)(iv) that Lead Agencies post
provider-specific information about the
number of serious injuries and deaths of
children that occurred while in the care
of that provider and at § 98.33(a)(3) that
Lead Agencies post the aggregate
number of deaths and serious injuries to
their consumer education Web sites.
This proposed provision would
require Lead Agencies to list and
describe the annual number of child
injuries and fatalities in child care and
to describe the results of an annual
review of all serious child injuries and
deaths occurring in child care. The
primary purpose of this change is the
prevention of future tragedies.
Sometimes, incidents of child injury or
death in child care are preventable. For
example, one State recently reviewed
the circumstances surrounding a
widely-publicized, tragic death in child
care and identified several opportunities
to improve State monitoring and
enforcement that might otherwise have
identified the very unsafe circumstances
surrounding the child’s death and
prevented the tragedy. The State moved
quickly to make several changes to its
monitoring procedures. It is important
to learn from these tragedies to better
protect children in the future. Lead
Agencies should review all serious child
injuries and deaths in child care,
including lapses in health and safety
(e.g., unsafe sleep practices for infants,
transportation safety, issues with
physical safety of facilities, etc.), to help
identify appropriate responses, such as
training needs.
The utility of this assessment is
reliant upon the Lead Agency obtaining
accurate, detailed information about any
child injuries and deaths that occur in
child care. Therefore, ACF strongly
encourages Lead Agencies to work with
the State or Territory entity responsible
for child care licensing in conducting
the review and also with their
established Child Death Review systems
and with the National Center for the
Review and Prevention of Child Death
Review (www.childdeathreview.org).
The National Center for the Review and
Prevention of Child Death Review,
which is funded by the Maternal and
Child Health Bureau in the Health
Resources and Services Administration
(HRSA), reports that all 50 States and
the District of Columbia already review
child deaths through 1,200 State and
local Child Death Review panels.
(National Center for Child Death
Review, Keeping Kids Alive: A Report
on the Status of Child Death Review in
the United States, 2011) The Child
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Death Review system is a process in
which multidisciplinary teams of
people meet to share and discuss case
information on deaths in order to
understand how and why children die
so that they can take action to prevent
other deaths. These review systems vary
in scope and in the types of death
reviewed, but every review panel is
charged with making both policy and
practice recommendations that are
usually submitted to the State governor
and are publicly available. The National
Center for the Review and Prevention of
Child Death Review provides support to
local and State teams throughout the
child death review process through
training and technical assistance
designed to strengthen the review and
the prevention of future deaths.
Lead Agencies also may work in
conjunction with the National
Commission to Eliminate Child Abuse
and Neglect Fatalities, established in
2013 by the Protect Our Kids Act. (Pub.
L. 112–275) The Commission, consisting
of 12 members appointed by the
President and Congress, will work to
develop recommendations to reduce the
number of children who die from abuse
and neglect. The Commission will hold
hearings and gather information about
current Federal programs and
prevention efforts in order to
recommend a comprehensive strategy to
reduce and prevent child abuse and
neglect fatalities nationwide. Although
this Commission will only be studying
a subsection of child injuries and
deaths, it is important that the
commissioners examine the issue of
child abuse and neglect in child care
settings.
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Administrative Costs (Section 98.54)
Section 658E(c)(3)(C) of the Act and
regulations proposed at redesignated
§ 98.54(a) prohibit Lead Agencies from
spending more than five percent of
CCDF funds for administrative
activities, such as salaries and related
costs of administrative staff and travel
costs. Section 98.54(b) provides that this
limitation applies only to States and
Territories. (Note that a 15 percent
limitation applies to Tribes under
§ 98.83(g)). At § 98.54(b) we propose a
list of activities that should not be
counted towards the limitation on
administrative expenditures. As stated
in the preamble to the 1998 CCDF Final
Rule, the Conference Agreement (H.R.
Rep. 104–725 at 411) that accompanied
the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996
indicated that these activities should
not be considered administrative costs.
We propose to incorporate this list into
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the regulation itself for clarity and easy
reference.
Administrative costs and subrecipients. We propose to add new
paragraph (e) at § 98.54 to clarify that,
if a Lead Agency enters into agreements
with sub-recipients for operation of the
CCDF program, the amount of the
contract or grant attributable to
administrative activities as described at
§ 98.54(a) (or § 98.83(g) for Tribes) shall
be counted towards the administrative
cost limit. Current CCDF regulations at
§ 98.52(a), which we propose to
redesignate as § 98.54(a), provide a
listing of activities that may constitute
administrative costs and defines
administrative costs to include
administrative services performed by
grantees or sub-grantees or under
agreements with third-parties.
We have received questions from
Lead Agencies to clarify whether
activities performed through subrecipients or contractors are subject to
the five percent administrative cost
limitation. Our interpretation is that
sub-recipients (contractors or subgrantees) that receive funds from the
Lead Agency are not individually bound
by this requirement. However, the Lead
Agency continues to be responsible for
ensuring that the program complies
with all Federal requirements and is
required to oversee the expenditures of
funds by sub-recipients. While we do
not, as a technical matter, separately
apply the administrative cap to funds
provided to each sub-recipient, the Lead
Agency must ensure that the total
amount of CCDF funds expended on
administrative activities—regardless of
whether it is expended by the Lead
Agency directly or via sub-grant,
contract, or other mechanism—does not
exceed the administrative cost limit.
To clarify, the administrative costs
cap only applies to activities related to
administering the CCDF program in a
State, Territory, or Tribe. It does not
apply to administration of child care
services in an individual child care
center or family child care home. Any
costs related to administration of
services by a provider, even if that
provider is being paid through a
contract, are considered direct services.
However, if a sub-recipient provides
services that are part of administering
the CCDF program, as defined at
§ 98.54(a) as redesignated, then those
administrative costs would count
toward the administrative cost limit.
Determining whether a particular
service or activity provided by a subrecipient under a contract, sub-grant, or
other mechanisms would count as an
administrative activity towards the five
percent administrative cost limitation
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depends on the function or nature of the
contract, sub-grant, or other mechanism.
If a Lead Agency provides a contract or
sub-grant for direct services, the entire
cost of the contract could potentially be
counted as direct services if there is no
countable administrative component.
On the other hand, if the entire subgrant or contract provided services to
administer the CCDF program (e.g., for
payroll services for Lead Agency
employees), then the entire cost of the
contract would count towards the
administrative cost cap. If a sub-grant/
contract includes a mix of
administrative and programmatic
activities, the Lead Agency must
develop a method for attributing an
appropriate share of the sub-grant/
contract costs to administrative costs.
Lead Agencies should refer to the list of
activities that are exempt from the
administrative cost cap proposed at
§ 98.54(b) when determining what
components must be included in the
administrative cost limit.
Restrictions on the Use of Funds
(Section 98.56)
Current CCDF regulations at
§ 98.54(b)(1), which we propose to
redesignate as § 98.56(b)(1), indicate
that States and local agencies, may not
spend CCDF funds for the purchase or
improvement of land or for the
purchase, construction, or permanent
improvement of any building or facility.
However, funds may be expended for
minor remodeling, and for upgrading
child care facilities to assure that
providers meet State and local child
care standards, including applicable
health and safety requirements. Tribal
Lead Agencies may request approval to
use CCDF funds for construction and
major renovation of child care facilities
(§ 98.84).
We propose to modify § 98.54(b)(1),
redesignated as § 98.56(b)(1), to indicate
that improvements or upgrades to a
facility that are not specified under the
definitions of construction or major
renovation at § 98.2 may be considered
minor remodeling and are, therefore, not
prohibited. This proposed addition
would formally incorporate ACF’s longstanding interpretation into regulatory
language.
When we proposed this addition in
the 2013 NPRM, several commenters
requested the regulation clarify that
funds may be used to ensure facilities
comply with the on-going requirements
of the Americans with Disabilities Act
(ADA) of 1990 (42 U.S.C. 12101, et seq.)
In response, we want to note that
current CCDF regulations at § 98.54(b)
allow for funds to be expended for
upgrading child care facilities to assure
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that providers meet State and local
health and safety standards, which may
include assisting providers in meeting
requirements of the ADA. States and
Territories may use CCDF funds for
minor renovations related to meeting
the requirements of the ADA. However,
funds may not be used for major
renovation or construction for purposes
of meeting the requirements of the ADA.
We propose making a technical
change at § 96.54(e) by adding that
CCDF may not be used as the nonFederal share for other Federal grant
programs, unless explicitly authorized
by statute.
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Subpart G—Financial Management
The focus of subpart G is to ensure
proper financial management of the
CCDF program, both at the Federal level
by HHS and the Lead Agency level. The
proposed changes to this section
include: Addressing the amount of
CCDF funds the Secretary may set-aside
for technical assistance, research and
evaluation, a national toll-free hotline
and Web site; incorporating targeted
funds that have been included in
appropriations language (but are not in
the current regulations); inclusion of the
details of required financial reporting by
Lead Agencies; and clarifying
requirements related to obligations.
Lastly, we propose a new section on
program integrity.
Availability of Funds (Section 98.60)
Technical Assistance; Research and
Evaluation; National Toll-free Hotline
and Web site. Prior to reauthorization,
the CCDBG Act allowed the Secretary to
provide technical assistance to help
Lead Agencies carry out the CCDF
requirements. Under current regulations
at § 98.60(b)(1), the Secretary may
withhold one quarter of one percent of
a fiscal year’s appropriation for
technical assistance.
Reauthorization added greater
specificity to the Act regarding the
provision of technical assistance.
Specifically, Section 658I(a)(3) of the
Act requires the Secretary to provide
technical assistance, such as technical
assistance to improve the business
practices of child care providers, (which
may include providing technical
assistance on a reimbursable basis)
which shall be provided by qualified
experts on practices grounded in
scientifically valid research, where
appropriate. Section 658I(a)(4) requires
the Secretary to disseminate, for
voluntary informational purposes,
information on practices that
scientifically valid research indicates
are most successful in improving the
quality of programs that receive CCDF
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assistance. Section 658G requires the
Secretary to offer technical assistance
which may include technical assistance
through the use of grants or cooperative
agreements, on activities funded by
quality improvement expenditures.
Section 658O(a)(4) indicates that the
Secretary shall reserve up to 1⁄2 of 1
percent of the amount appropriated for
the CCDBG Act to support these
technical assistance and dissemination
activities.
Section 658O(a)(5) of the Act also
provides that the Secretary may reserve
up to 1⁄2 of 1 percent of the amount
appropriated for the Act to conduct
research and demonstration activities,
as well as periodic external,
independent evaluations of the impact
of the CCDF program on increasing
access to child care services and
improving the safety and quality of
child care services, using scientifically
valid research methodologies, and to
disseminate the key findings of those
evaluations widely and on a timely
basis. For over a decade, annual
appropriations law has included a setaside of approximately $10 million a
year for research. The reauthorization
for the first time includes research
funding in the CCDBG Act itself.
Over the years, this research funding
has increased our knowledge of what
child care services work best, has
disseminated that knowledge
throughout the country, and has been
integral to improving the quality of care
provided to children. It has funded
numerous research projects, including
the recent implementation of the
National Survey of Early Care and
Education to provide national estimates
of utilization of child care and early
education, parental preferences and
choices of care, and characteristics of
programs and of the teaching and caregiving staff. This research funding will
be critical in informing and evaluating
the implementation of the reauthorized
statute and these implementing
regulations.
In addition, section 658O(a)(3) of the
Act indicates that the Secretary may
reserve up to $1.5 million for the
operation of a national toll-free hotline
and Web site. Annual appropriations
law has provided funding for a national
hotline and Web site in prior years, but
this funding is now authorized through
the Act with an expanded scope and
requirements. As authorized by section
658L(b), this national hotline and Web
site will develop and disseminate
publicly available child care consumer
education information for parents, and
help parents access safe and quality
child care services in their community.
The hotline and Web site will also allow
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persons to report suspected child abuse
or neglect, or violations of health and
safety requirements, occurring in child
care settings.
In this proposed rule at § 98.60(b), we
do not specify a particular funding
amount for technical assistance,
research and evaluation, or the national
hotline and Web site. Rather, we say
that ‘‘a portion’’ of CCDF funds will be
made available for these purposes.
Because appropriations law has
addressed the amount of funding for
some of these activities in the past, we
want to leave flexibility to accommodate
any future decisions by Congress. As we
indicate in the proposed regulatory
language, funding for these activities is
subject to the availability of
appropriations, and will be made in
accordance with relevant statutory
provisions and the apportionment of
funds from the Office of Management
and Budget.
Obligations. We propose to add a
paragraph at § 98.60(d)(7) to clarify that
the transfer of funds from a Lead
Agency to a third party or sub-recipient
counts as an obligation, even when
these funds will be used for issuing
child care certificates. Some Lead
Agencies contract with local units of
government or non-governmental third
parties, such as child care resource and
referral agencies, to administer their
CCDF programs. The functions included
in these contracts could include
eligibility determination, subsidy
authorization, and provider payments.
The contracting of some of these duties
to a third party has led to many policy
questions as to whether CCDF funds
that are used by third parties to
administer certificate programs are
considered obligated at the time the subgrant or contract is executed between
the Lead Agency and the third party
pursuant to current regulation at
§ 98.60(d)(5), or rather at the time the
voucher or certificate is issued to a
family pursuant to current regulation at
§ 98.60(d)(6).
The preamble to the August 4, 1992
CCDBG Regulations (57 FR 34395) helps
clarify the intent of § 98.60(d). It states,
‘‘The requirement that State and
Territorial grantees obligate their funds
[within obligation timeframes] applies
only to the State or Territorial grantee.
The requirement does not extend to the
Grantee’s sub-grantees or contractors
unless State or local laws or procedures
require obligation in the same fiscal
year.’’ It follows that, in the absence of
State or local laws or procedure to the
contrary, § 98.60(d)(6) would not apply
when the issuance of a voucher or
certificate is administered by a third
party because the funds used to issue
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the vouchers or certificates would have
already been obligated by the Lead
Agency. Based on this language, we
have interpreted the obligation to take
place at the time of contract execution
between the Lead Agency and the third
party. The addition of proposed
paragraph (d)(7) simply codifies current
ACF policy, and does not change
existing obligation and liquidation
requirements. Note that a local office of
the Lead Agency, and certain other
entities specified in regulation at
§ 98.60(d)(5) are not considered third
parties. A third party must be a wholly
separate organization with and cannot
be subordinate or superior offices of the
Lead Agency, or under the same
governmental organization as the Lead
Agency.
Finally, we propose a number of
technical changes. At § 98.60(d)(4)(ii),
we update a reference to HHS
regulations on expenditures and
obligations to reflect new rules issued
by HHS that implement the Office of
Management and Budget’s Uniform
Administrative Requirements for
Federal awards. At § 98.60(d)(6), we
clarify that the provision regarding the
obligation of funds used for certificates
applies specifically ‘‘in instances where
the Lead Agency issues child care
certificates.’’ We also propose to make a
technical change at § 98.60(h) to
eliminate a reference to § 98.51(a)(2)(ii)
of the regulation which would
otherwise become obsolete since this
proposed rule proposes to delete it. This
technical change does not change the
meaning or the substance of paragraph
(h), which specifies that repayment of
loans made to child care providers as
part of a quality improvement activity
may be made in cash or in services
provided in-kind.
Allotments From Discretionary Funds
(Section 98.61)
Tribal funds. To address amended
section 658O(a)(2) of the Act, we
propose to revise § 98.61(c) to indicate
that Indian Tribes and Tribal
organizations will receive an amount
‘‘not less than’’ two percent of the
amount appropriated for the Child Care
and Development Block Grant (i.e.,
CCDF Tribal Discretionary Funds).
Under prior law and regulation, Tribes
received ‘‘up to’’ two percent. Under the
new law, the Secretary may only reserve
an amount greater than 2 percent for
Tribes if two conditions are met: (1) The
amount appropriated is greater than the
amount appropriated in FY 2014, and
(2) the amount allotted to States is not
less than the amount allotted in FY
2014. It is important to note that
reauthorization of the Act allows for a
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potential increase in the Tribal
Discretionary funds, but it does not
affect the Tribal Mandatory funds.
Tribes may only be awarded up to 2
percent of the Mandatory Funds, per
Section 418(a)(4) of the Social Security
Act (42 U.S.C. 618(a)(4)). Recognizing
the needs of Tribal communities, ACF
increased the Tribal CCDF Discretionary
set-aside from 2 percent to 2.5 percent
for FY 2015, and we encourage Tribes
to use any increased funds for activities
included in reauthorization, such as
health and safety, continuity of care,
and consumer education. ACF has
consulted with Tribes regarding future
funding levels and plans to make that
determination, taking into consideration
unique Tribal needs and circumstances,
including the need for sufficient
funding to provide care that address
culture and language in Tribal
communities. We welcome comments
on the specific, appropriate funding
level for Tribes, but we do not intend to
include that decision in the regulatory
language in order to allow for
adjustments over time as conditions
warrant.
Targeted funds. We propose to add
§ 98.61(f) to reference funds targeted
through annual appropriations law.
Since FY 2000, annual appropriations
law has required the use of specified
amounts of CCDF funds for targeted
purposes (i.e., quality, infant and
toddler quality, school-age care and
resource and referral). The reauthorized
CCDBG Act includes increased quality
spending requirements; however, we
propose this regulatory addition in the
event that Congress provide for
additional targeted funds in the future.
This proposed addition is for
clarification so that the regulations
provide a complete picture of CCDF
funding parameters. New paragraph (f)
provides that Lead Agencies shall
expend any funds set-aside for targeted
activities as directed in appropriations
law.
Audits and Financial Reporting (Section
98.65)
We propose a technical change at
§ 98.65(a) regarding the requirement for
the Lead Agency to have an audit
conducted in accordance with the
Single Audit Act Amendments of 1996.
In this paragraph, we propose to replace
a reference to OMB Circular A–133 with
a reference to 45 CFR part 75, subpart
F, which is the new HHS regulation
implementing the audit provisions in
the Office of Management and Budget’s
Uniform Administrative Requirements
for Federal awards.
We propose revising § 98.65(g), which
currently provides that the Secretary
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shall require financial reports as
necessary, to specify that States and
Territories must submit quarterly
expenditure reports for each fiscal year.
Currently, States and Territories file
quarterly expenditure reports (ACF–
696); however, the current regulations
do not describe this reporting in detail.
Under proposed paragraph (h), States
and Territories will be required to
include the following information on
expenditures of CCDF grant funds,
including Discretionary (which includes
any reallocated funds and funds
transferred from the TANF block grant),
Mandatory, and Matching funds; and
State Matching and Maintenance-ofEffort (MOE) funds: (1) Child care
administration; (2) Quality activities,
including any sub-categories of quality
activities as required by ACF; (3) Direct
services; (4) Non-direct services
including: (i) Computerized information
systems, (ii) Certificate program cost/
eligibility determination, (iii) All other
non-direct services; and (6) Such other
information as specified by the
Secretary.
We propose adding greater specificity
to the regulation in light of the
important role expenditure data play in
ensuring compliance with the quality
expenditure requirements at § 98.51(a),
administrative cost cap at § 98.52(a),
and obligation and liquidation
deadlines at § 98.60(d). Additionally,
expenditure data provide us with
important details about how Lead
Agencies are spending both their
Federal and State CCDF funds,
including what proportion of funds are
being spent on direct services to
families or how much has been invested
in quality activities. These reporting
requirements do not create an additional
burden on Lead Agencies because we
are simply updating the regulations to
reflect current expenditure reporting
processes.
Tribal financial reporting. We propose
to add paragraph (i) at § 98.65 that
would require Tribal Lead Agencies to
submit annual expenditure reports to
the Secretary (ACF–696T). As with State
and Territorial grantees, these
expenditure reports help us to ensure
that Tribal grantees comply with
obligation and liquidation deadlines at
§ 98.60(e), the fifteen percent
administrative cap at § 98.83(g), and the
quality expenditure requirement at
§ 98.51(a). This reporting requirement is
current practice.
Program Integrity. We propose to add
a new section § 98.68 Program Integrity,
which would include requirements that
Lead Agencies have effective procedures
and practices that ensure integrity and
accountability in the CCDF program.
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These proposed changes formalize
changes made to the CCDF Plan which
require Lead Agencies to report in these
areas. The Plan now includes questions
on internal controls, monitoring subrecipients, identifying fraud and errors,
methods of investigation and collection
of identified fraud, and sanctions for
clients and providers who engage in
fraud. ACF has been working with State,
Territorial, and Tribal CCDF Lead
Agencies to strengthen program
integrity to ensure that funds are
maximized to benefit eligible children
and families. For example, ACF issued
a Program Instruction (CCDF–ACF–PI–
2010–06) that provides stronger policy
guidance on preventing waste, fraud,
and abuse and has worked with States
to conduct case record reviews to
reduce administrative errors. The
requirements proposed in this section
build on these efforts and are designed
to reduce errors in payment and
minimize waste, fraud, and abuse to
ensure that funds are being used for
allowable program purposes and for
eligible beneficiaries.
At § 98.68(a) we propose to require
Lead Agency internal controls to
include processes to ensure sound fiscal
management, processes to identify areas
of risk, and regular evaluation of
internal control activities. Examples of
internal controls include practices that
identify and prevent errors associated
with recipient eligibility and provider
payment such as: Checks and balances
that ensure accuracy and adherence to
procedures; automated checks for red
flags or warning signs; and established
protocols and procedures to ensure
consistency and accountability. The
Grantee Internal Control Self
Assessment Instrument is available as a
resource for assisting Lead Agencies in
assessing how well their policies and
procedures meet the CCDF regulatory
requirements for supporting program
integrity and financial accountability.
At § 98.68(b)(1) we propose to require
Lead Agencies to describe in their Plan
the processes that are in place to
identify fraud and other program
violations associated with recipient
eligibility and provider payment. These
processes may include, but are not
limited to, record matching and
database linkages, review of attendance
and billing records, quality control or
quality assurance reviews, and staff
training on monitoring and audit
processes. Lead Agencies may wish to
use unique identifiers to crosscheck
information provided by parents and
providers across State and national data
systems. For example, income reported
on the application for child care
assistance may be checked with State
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quarterly wage databases or other
benefit programs (i.e., SNAP, TANF, or
Medicaid). Many such data systems can
be structured to automatically flag
potential improper payments. Lead
Agencies should also provide training to
caseworkers responsible for eligibility
determination and redetermination and
make efforts to simplify forms.
We also propose regulatory language
at § 98.68(b)(2) that would require Lead
Agencies to describe in their Plans the
processes that are in place to investigate
and recover fraudulent payments and to
impose sanctions on clients or providers
in response to fraud. This provision
complements the existing requirement
at § 98.60(h)(1) that requires Lead
Agencies to recover child care payments
that are made as the result of fraud;
these payments must be recovered from
the party responsible for committing the
fraud. The proposed new provision
ensures that Lead Agencies have the
necessary processes in place to identify
fraud and program violations so that
recovery can be pursued and so that the
Lead Agency can better design practices
and procedures that prevent fraud from
occurring in the first place. We
recommend that each Lead Agency
include staff dedicated to program
integrity efforts and that these staff
should partner with law enforcement as
appropriate to address fraud.
We urge Lead Agencies to carefully
consider what constitutes fraud,
particularly in the case of individual
families. In cases not involving fraud,
recouping overpayments from lowincome families is often
administratively inefficient, and
contrary to the goal of promoting
economic stability, particularly for
families already living in vulnerable
conditions. The parents typically did
not receive a cash benefit, but rather the
child care provider received
reimbursement for the delivery of
services. We are concerned about the
ramifications for families if Lead
Agencies try to recoup overpayments
that resulted from small changes in
family circumstances, such as modest
changes in hours worked or income.
The goals of CCDF—putting families on
a pathway to financial stability and
creating better developmental
opportunities for children—are
undermined by recoupment policies
that burden low-income families with
large debts. Given limited
administrative resources, Lead Agencies
should focus program integrity efforts
on the largest areas of risk to the
program, which tend to be intentional
violations and fraud involving multiple
parties.
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At § 98.68(c) we propose to require
Lead Agencies to describe in their Plans
the procedures that are in place for
documenting and verifying that children
meet eligibility criteria at the time of
eligibility determination and
redetermination. Lead Agencies are
responsible for ensuring that all
children served in CCDF are eligible at
the time of eligibility determination or
redetermination. Lead Agencies should,
at a minimum, verify or maintain
documentation of the child’s age, family
income, and require proof that parents
are engaged in eligible activities. Income
documentation may include, but is not
limited to, pay stubs, tax records, child
support enforcement documentation,
alimony court records, government
benefit letters, and receipts for selfemployed applicants. Documentation of
participation in eligible activities may
include school registration records,
class schedules, or job training forms.
Lead Agencies are encouraged to use
automated verification systems and
electronic recordkeeping practices to
reduce paperwork. In addition, Lead
Agencies may use client information
collected and verified by other State
programs (e.g., through the use of
consolidated application forms) to
streamline the eligibility determination
process for CCDF. This new amendment
would require Lead Agencies to
institute procedures that ensure
eligibility is appropriately verified and
to monitor State, local, and nongovernmental agencies directly engaged
in eligibility determination and would
provide additional safeguards to ensure
that children receiving child care
subsidies are eligible pursuant to
requirements found at § 98.20. While
documentation and verification of
eligibility is generally required, Section
658P(4)(b) of the Act indicates that
compliance with the $1,000,000 limit on
family assets included as part of
eligibility requirements at
§ 98.20(a)(2)(ii) shall be ‘‘certified by a
member of such family.’’ Therefore, the
Lead Agency should not seek
documentation or conduct verification
of the amount of family assets beyond
the family member’s certification.
Proposed § 98.68(c) would clarify that
because a child meeting eligibility
requirements at the most recent
eligibility determination or
redetermination is considered eligible
during the period between
redeterminations as described in
§ 98.21(a)(1), the Lead Agency shall pay
any amount owed to a child care
provider for services provided to such a
child during this period in accordance
with a payment agreement or
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authorization. Under this provision, the
Lead Agency should not attempt to
recoup payments for such services
provided during this period for a child’s
whose eligibility was correctly
determined at the most recent
determination or redetermination.
Further, the regulation provides that any
CCDF payment made during this period
to such child shall not be considered an
error or improper payment under 45
CFR part 98, subpart K, due to a change
in the family’s circumstances, as set
forth at § 98.21(a).
The program integrity efforts required
by proposed § 98.68 can help ensure
that limited program dollars are going to
low-income eligible families for which
assistance is intended; however, it is
important to ensure that these efforts do
not inadvertently reduce access for
eligible families. The Administration
has emphasized that efforts to reduce
improper payments and fraud must be
undertaken with consideration for
impacts on eligible families seeking
benefits. In November 2009, the
President issued Executive Order 13520,
which underscored the importance of
reducing improper payments in Federal
programs while protecting access to
programs by their intended beneficiaries
(74 FR 62201). It states, ‘‘The purpose of
this order is to reduce improper
payments by intensifying efforts to
eliminate payment error, waste, fraud,
and abuse in the major programs
administered by the Federal
Government, while continuing to ensure
that Federal programs serve and provide
access to their intended beneficiaries.’’
It is important to have a strategic and
intentional planning process to
formalize mechanisms that promote
program integrity and financial
accountability while balancing quality
and access for eligible families. Efforts
to promote program integrity and
financial accountability should not
compromise child care access for
eligible children and families. A
foundation for accountability should be
policies and procedures that help lowincome parents’ access child care
assistance to support their work and
training and promote children’s success
in school. Once a Lead Agency has
established policies and procedures,
steps should be taken to implement the
program with fidelity and to include a
variety of checks to detect areas both
where there may be vulnerability to
error or fraud and areas in which the
system is failing to serve families well.
Lead Agencies also can promote
program integrity by clearly
communicating specific policies to staff,
parents, and providers. When policies
are easily understood by the public and
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clearly communicated, parents and
providers can better understand
reporting requirements and deadlines.
Subpart H—Program Reporting
Requirements
Section 658K of the Act requires that
Lead Agencies submit specified
monthly case-level data (submitted on a
quarterly basis) and annual aggregate
data on the children and families
receiving CCDF services. The Act
included a number of changes to the
administrative data reporting
requirements for CCDF. To address
these changes and to improve data
collection and reporting, ACF has
separately proposed changes to the
CCDF quarterly family case-level
administrative data report (ACF–801)
and the CCDF annual aggregate data
report (ACF–800). The proposed
revisions were available for two rounds
of public comment under the Paperwork
Reduction Act. Proposed revisions in
this Subpart reflect changes made to the
ACF–801 and ACF–800 forms.
Content of Reports (Section 98.71)
Section 98.71 describes
administrative data elements that Lead
Agencies are required to report to ACF,
including basic demographic data on
the children served, the reason they are
in care, and the general type of care. The
ACF–801 report includes a data element
on the total monthly family income and
family size used for determining
eligibility. Current regulations as
§ 98.71(a)(1) do not include family size
so we propose to amend this paragraph
to align the regulations with the
reporting requirements in effect. This
does not represent any change in how
Lead Agencies currently report family
income.
At § 98.71(a)(2) we propose to add zip
code data to both the family and the
child care provider records. These new
elements will allow States and
Territories and ACF to identify the
communities where CCDF families and
providers are located, including the type
and quality level of providers. Sections
658E(a)(2)(M) and 658E(a)(2)(Q) of the
CCDBG Act require States and
Territories to address the needs of
certain populations regarding supply
and access to high quality child care
services in underserved areas including
areas that have significant
concentrations of poverty and
unemployment.
Section 658K(a)(1)(E) of the Act
prohibits the monthly case-level report
from containing personally identifiable
information. As a result, we are
proposing to amend § 98.71(a)(13) by
deleting Social Security Numbers
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(SSNs) and instead requiring a unique
identifying number from the head of the
family unit receiving assistance and
from the child care provider. It is
imperative that the unique identifier
assigned to each head of household be
used consistently over time—regardless
of whether the family transitions on and
off subsidy, or moves within the State
or Territory. This will allow Lead
Agencies and ACF to identify unique
families over time in the absence of the
Social Security Number (SSN). A Lead
Agency may still use personally
identifiable information, such as SSNs,
for its own purposes, but this
information cannot be reported on the
ACF–801. We also remind CCDF Lead
Agencies that, under the Privacy Act (5
U.S.C. 552a note), Lead Agencies cannot
require families to disclose SSNs as a
condition of receiving CCDF.
We propose a new § 98.71(a)(15) to
indicate whether a family is
experiencing homelessness based on
statutory language at Section
658K(a)(1)(B)(xi) that requires Lead
Agencies to report whether children
receiving CCDF assistance are
experiencing homelessness.
We propose a new § 98.71(a)(16) to
indicate whether the parent(s) are in the
military service. The Administration has
taken a number of actions to increase
services and supports for members of
the military and their families. This
element will identify if the parent is
currently active duty (i.e., serving fulltime) in the U.S. Military or a member
of either a National Guard unit or a
Military Reserve unit. This data will
allow Lead Agencies and ACF to
determine the extent to which military
families are accessing the CCDF
program.
We propose a new § 98.71(a)(17) to
indicate whether a child is a child with
a disability. Section 658E(c)(3)(B)
requires a Lead Agency’s priority for
services to include children with special
needs. ACF is required to determine
annually whether Lead Agencies use
CCDF funds in accordance with priority
for services requirements, including the
priority for children with special needs.
While Lead Agencies have flexibility to
define ‘‘children with special needs’’ in
their CCDF Plans, many include
children with disabilities in their
definitions. This data will help ACF
determine, as required by law, whether
Lead Agencies are in compliance with
priority for service requirements.
Additionally, the reauthorization added
several other provisions related to
ensuring children with disabilities have
access to subsidies, and that the child
care available meets the needs of these
children and this proposed data element
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will provide information about the
extent to which the CCDF program is
serving children with disabilities.
We propose a new § 98.71(a)(18) to
add a new data element on the primary
language spoken in the child’s home,
using responses that are consistent with
data reporting requirements for the
Head Start program. The reauthorized
Act includes provisions that support
services to English learners.
Specifically, Section 658E(c)(2)(G) of the
Act requires Lead Agencies to assure
that training and professional
development of child care providers
address needs of certain populations to
the extent practicable, including English
learners. Under Section 658G, allowable
quality activities include providing
training and outreach on engaging
parents and families in culturally and
linguistically appropriate ways to
expand their knowledge, skills, and
capacity to become meaningful partners
in supporting their children’s positive
development. Furthermore, Title VI of
the Civil Rights Act of 1964 requires
federally assisted programs to take
reasonable steps to provide meaningful
access for persons who have limited
English proficiency. The new data
element on the ACF–801 will allow
CCDF Lead Agencies to track provision
of CCDF services to families who speak
languages other than English. By
collecting information on the language
spoken at home by families, the CCDF
Lead Agency will be able to design
outreach and consumer education
materials that meet the needs of
populations in their service areas.
We propose a new § 98.71(a)(19) to
indicate for each child care provider
currently providing services to a CCDF
child, the date of the most recent
inspection for compliance with health,
safety, and fire standards (including
licensing standards for licensed
providers) as described in § 98.42(b).
Lead Agencies will need to track
inspection dates to ensure that CCDF
providers are monitored at least
annually. If the Lead Agency uses more
than one visit to check for compliance
with these standards, the Lead Agency
should report the most recent date on
which all inspections were completed.
Finally, we propose to add new
§ 98.71(a)(20) to require Lead Agencies
to submit an indicator of the quality of
the child care provider as part of the
quarterly family case-level
administrative data report. This change
will allow ACF and Lead Agencies to
capture child-level data on provider
quality for each child receiving a child
care subsidy. This addition is in line
with one of the Act’s new purposes,
which is to increase the number and
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percentage of low-income children in
high quality child care. States and
Territories currently report on the
quality of child care provider(s) based
on several indicators—including: QRIS
participation and rating, accreditation
status, compliance with State prekindergarten standards or Head Start
performance standards, and other Statedefined quality measure. However,
previously, States and Territories were
required to report on at least one of the
quality elements for a portion of the
provider population. This resulted in
limited quality data, often for only a
small portion of child care providers in
a State or Territory. This change would
require quality information for every
child care provider. Working with States
and Territories to track this data will
give us a key indicator on the progress
we are making toward the goal of
increasing the number of low-income
children in high quality care. Lead
Agencies must also take into
consideration the cost of providing
higher quality care when setting
payment rates pursuant to § 98.44(f)(iii).
To ensure that the CCDF program is
providing meaningful access to high
quality care, it is essential for Lead
Agencies to have data on the quality of
CCDF providers. Current paragraph
(a)(15) would be redesignated as
paragraph (a)(21) but otherwise is
unchanged.
We propose a new § 98.71(b)(5) to
report the number of child fatalities by
type of care as required by section
658K(a)(2)(F) of the CCDBG Act. This
should include the number of fatalities
occurring among children while in the
care and facility of child care providers
serving CCDF children (regardless of
whether the child who dies was
receiving CCDF). Current paragraph
(b)(5) would be redesignated as
paragraph (b)(6) but otherwise is
unchanged.
We are revising paragraph (c),
regarding reporting requirements for
Tribal Lead Agencies, to specify that the
Tribal Lead Agency’s annual report
shall include such information as the
Secretary shall require. We intend to
revisit requirements for all Tribal Lead
Agencies, pursuant to proposed changes
in Subpart I, at a later date. Proposed
reporting requirements will be subject to
public comment under the Paperwork
Reduction Act.
Subpart I—Indian Tribes
This subpart addresses requirements
and procedures for Indian Tribes and
Tribal organizations applying for or
receiving CCDF funds. This section
describes provisions of Subpart I and
serves as the Tribal summary impact
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statement as required by Executive
Order 13175. CCDF currently provides
funding to approximately 260 Tribes
and Tribal organizations that, either
directly or through consortia
arrangements, administer child care
programs for approximately 520
federally-recognized Indian Tribes.
Tribal CCDF programs are intended for
the benefit of Indian children, and these
programs serve only Indian children.
With few exceptions, Tribal CCDF
grantees are located in rural and
economically challenged areas. In these
communities, the CCDF program plays a
crucial role in offering child care
options to parents as they move toward
economic stability, and in promoting
learning and development for children.
In many cases, Tribal child care
programs also emphasize traditional
culture and language. Below we discuss
the proposed Tribal CCDF framework
and proposed regulatory changes.
The CCDBG Act is not explicit in how
its provisions apply to Tribes. ACF
traditionally issues regulations to define
how the law applies to Tribes. These
proposed regulations are the result of
several months of consultation on the
new law with Tribes, as well as past
consultations and Tribal comments on
our 2013 NPRM. We heard from many
Tribal leaders and CCDF Administrators
asking for flexibility to implement child
care programs that meet the needs of
individual communities. The proposals
included in this NPRM are designed to
increase Lead Agency flexibility, while
balancing the CCDF dual goals of
promoting families’ financial stability
and fostering healthy child
development.
Funding. Tribal CCDF funding is
comprised of two funding sources: (1)
Discretionary Funds, authorized by the
Act and annually appropriated by
Congress; and (2) Tribal Mandatory
Funds, provided under Section 418(a)(4)
of the Social Security Act (42 U.S.C.
618(a)(4)). Reauthorization of the Act
allows for a potential increase in the
Tribal Discretionary funds, but does not
affect the Tribal Mandatory funds.
Tribes may only be awarded up to two
percent of the Mandatory Funds, per the
Social Security Act.
According to Section 658O(a)(2) of the
Act, Tribes will receive not less than
two percent of the Discretionary CCDF
funding. The Secretary may reserve an
amount greater than two percent for
Tribes if two conditions are met: 1) The
amount appropriated is greater than the
amount appropriated in FY 2014, and 2)
the amount allotted to States is not less
than the amount allotted in FY 2014.
Recognizing the needs of Tribal
communities, ACF increased the Tribal
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CCDF Discretionary set-aside from two
percent to 2.5 percent for FY 2015,
which increased total Tribal CCDF
Funding from $107 million to $119
million. As part of the consultations on
the law (see below), ACF asked for
Tribal input on the funding level for
future years. We encouraged Tribes to
use the increased funding on activities
included in reauthorization, such as
health and safety, continuity of care,
and consumer education. In light of the
proposals in this NPRM for how the law
will apply to Tribes, ACF continues to
ask for comment on the Tribal CCDF
Discretionary set-aside, including the
process to be used to determine the
amount of the discretionary set-aside if
the above-listed conditions are met to
reserve a greater set-aside.
Tribal consultation. ACF is
committed to consulting with Tribes
and Tribal leadership to the extent
practicable and permitted by law, prior
to promulgating any regulation that has
Tribal implications. As this proposed
rule has been developed, ACF has
engaged with Tribes through multiples
means. The requirements in this
proposed rule were informed by past
consultations, listening sessions, and
meetings with Tribal representatives on
related topics. Starting in early 2015, we
began a series of formal consultations,
conducted in accordance with the ACF
Tribal Consultation Policy (76 FR
55678) with Tribal leaders to determine
how the provisions in the Act apply to
Tribes and Tribal organizations. Tribal
CCDF administrators and staff were also
invited to attend. In addition to an
informal listening session in February,
from March to May, OCC held three
formal conference calls and an inperson consultation session with Tribal
leaders and Tribal CCDF administrators
to discuss the impact of reauthorization
on Tribes. Tribes and Tribal
organizations were informed of these
consultations and conference calls
through letters to Tribal leaders. Much
of the testimony and dialogue focused
on the vast differences among Tribes
and Tribal organizations. This proposed
rule was informed by these
conversations and continues to balance
flexibility for Tribes with the need to
ensure accountability and quality child
care for children.
102–477 Programs. We note that
Tribes continue to have the option to
consolidate their CCDF funds under a
plan authorized by the Indian
Employment, Training and Related
Services Demonstration Act of 1992
(Pub. L. 102–477). This law permits
Tribal governments to integrate a
number of their federally-funded
employment, training, and related
services programs into a single,
coordinated comprehensive program.
ACF publishes annual program
instructions providing directions for
Tribes wishing to consolidate CCDF
funds under an Indian Employment,
Training, and Related Services plan.
The Department of the Interior has lead
responsibility for administration of Pub.
L. 102–477 programs.
Dual Eligibility of Indian Children.
Census data indicates over 60 percent of
American Indian and Alaskan Native
80529
families do not reside on reservations or
other Native lands; therefore, significant
numbers of eligible Indian children and
families are served by State Lead
Agencies. Eligible Indian children who
reside in Tribal service areas continue to
have dual eligibility to receive child
care services from either the State or
Tribal CCDF program in accordance
with existing regulation at § 98.80(d).
Section 658O(c)(5) of the Act mandates
that, for child care services funded by
CCDF, the eligibility of Indian children
for a Tribal program does not affect their
eligibility for a State program.
Tribal CCDF Framework. We propose
that Tribes shall be subject to the CCDF
requirements in Part 98 and 99 based on
the size of their CCDF allocation. CCDF
Tribal allocations vary from less than
$25,000 to over $12 million. We
recognize that Tribes receiving smaller
CCDF grants may not have sufficient
resources or infrastructure to effectively
operate a program that complies with all
CCDF requirements. Therefore, we are
proposing three categories of CCDF
Tribal grants, with thresholds
established by the Secretary: Large
allocations, medium allocations, and
small allocations. Each category is
paired with different levels of CCDF
requirements, with those Tribes
receiving the largest allocations
expected to meet most CCDF
requirements. Tribes receiving smaller
allocations are exempt from specific
provisions in order to account for the
size of the grant awards (see table
below).
Medium allocations
Small allocations
• Subject to the majority of CCDF requirements.
• Exempt from some requirements, including:
Consumer education Web site, use of grants
or contracts, the requirement to have licensing for child care services, and market rate
survey or alternative methodology (but still
required to have rates that support quality).
• Subject to the monitoring requirements, but
allowed the flexibility to propose an alternative monitoring methodology in their Plan.
• Subject to the background check requirement to check other adults in a family child
care home, but allowed to request an exemption in their Plan.
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Large allocations
• Allowed the same exemptions as the large
allocation category.
• Exempt from operating a certificate program.
• Exempt from the majority of CCDF requirements, including those exemptions for large
and medium allocation categories.
• Must spend their funds in alignment with
CCDF goals and purposes.
• Only subject to:
• If providing direct services: The health
and safety requirements, the monitoring
requirements, and the background
check requirements;
• Quality spending requirements;
• The 15% admin cap;
• Fiscal, audit, and reporting requirements; and
• Any other requirement defined by the
Secretary.
• Submit an abbreviated Plan.
ACF proposes that grants over $ 1
million would be considered large
allocations. In FY 2015, this category
would include 18 Tribes. Grants
between $1 million and $250,000 would
be considered medium allocations. For
FY 2015, this category would include 79
Tribes. Grants of less than $250,000
would be considered small allocations.
In FY 2015, this category would include
162 Tribes. We are not proposing to set
the allocation thresholds through
regulation so that they may be updated
or revised at a later date through
consultation and notice. We discuss the
exemptions further below.
In keeping with the goals of this
NPRM and the intent of the law, ACF
believes that ensuring the health and
safety of children in child care and
promoting quality to support child
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development are of the utmost
importance. As such, we are proposing
that all Tribes providing direct services
be subject to the health and safety
requirements at § 98.41 (as well as the
monitoring and background check
requirements, discussed later in this
preamble) and that all Tribes be
required to meet the quality spending
requirements at §§ 98.50(b) and 98.53.
Health and Safety. We propose that
all Tribes providing direct services are
required to meet the requirements at
§ 98.41(a), which include requirements
around a list of health and safety topics;
health and safety training; setting group
size limits and ratios; and compliance
with child abuse reporting
requirements. These health and safety
requirements create a baseline essential
to protecting children in child care. (In
addition, as discussed below, we
propose that Tribes be subject to the
immunization requirements that
previously only applied to States and
Territories.)
The Act, at Section 658O(c)(2)(D),
continues to require HHS to develop
minimum child care standards for
Indian Tribes and Tribal organizations
receiving funds under CCDF. After three
years of consultation with Tribes, Tribal
organizations, and Tribal child care
programs, health and safety standards
were first published in 2000. The
standards were updated and reissued in
2005. The HHS minimum standards are
voluntary guidelines that represent the
baseline from which all programs
should operate to ensure that children
are cared for in healthy and safe
environments and that their basic needs
are met. Many Tribes already exceed the
minimum Tribal standards issued by
HHS, and some have used the minimum
standards as the starting point for
developing their own more specific
standards.
These minimum standards will need
to be revised and updated to align with
new requirements of the law and this
proposed rule. In the preamble to
Subpart E, ACF recommends that Lead
Agencies consult the recently published
Caring for Our Children Basics (CfoC
Basics) for guidance on establishing
health and safety standards. CfoC Basics
represents a baseline for health and
safety standards and would fulfill the
need for updated HHS minimum
standards for Tribes. However, before
updating or replacing the HHS
minimum standards, ACF is committed
to consulting with Tribes. We welcome
comments on whether the CfoC Basics
should replace the current HHS
minimum standards as the new health
and safety guidelines for Tribes.
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Quality improvement activities. We
propose that all Tribes and Tribal
organizations be subject to the quality
spending and quality improvement
activities requirements described at
§§ 98.50(b) and 98.53. Current
regulations at § 98.83(f) exempt Tribes
and Tribal organizations with smaller
allocations (total CCDF allocations less
than $500,000) from the requirement to
spend four percent on quality activities.
We propose to amend § 98.83(f) by
deleting paragraph (f)(3) so that all
Tribes, regardless of their allocation
size, are now required to meet quality
spending requirements included at
§ 98.50(b). The law requires Lead
Agencies to spend increasing minimum
amounts on quality activities, reaching
nine percent in 2020. In addition, Lead
Agencies must spend at least three
percent on quality activities to support
infants and toddlers.
In the 2013 NPRM, we also proposed
a similar change to make Tribal
grantees, regardless of size, meet the
quality spending requirements and we
received a positive response from
commenters. A primary goal of this
proposed rule is to promote high quality
child care to support children’s learning
and development. We want to ensure
that Indian children and Tribes benefit
from the increased recognition of the
importance of high quality child care.
Because the quality requirement is
applied as a percentage of the Tribe’s
CCDF expenditures, the amount
required will be relatively small.
However, we are requesting comments
on this provision, in particular as it
relates to Tribes that receive small
allocations.
There are a wide range of quality
improvement activities that Tribes have
the flexibility to implement, and the
scope of these efforts can be adjusted
based on the resources available so that
even smaller Tribal Lead Agencies can
effectively promote the quality of child
care. Most Tribal Lead Agencies are
likely already engaged in activities that
would count as quality improvement.
We will provide technical assistance to
help Tribes identify current activities
that may count towards meeting the
quality spending requirement, as well as
appropriate new opportunities for
quality spending.
The revisions to § 98.53 (Activities to
Improve the Quality of Child Care),
discussed earlier in this preamble,
provide a systemic framework for
organizing, guiding, and measuring
progress of quality improvement
activities. We recognize that this
systemic framework may be more
relevant for States than for many Tribes,
given the unique circumstances of
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Tribal communities. However, Tribes
may implement selected components of
the quality framework at § 98.53, such
as training for caregivers, teachers, and
directors or grants to improve health
and safety.
The revisions to § 98.53 in no way
restrict Tribes’ ability to spend CCDF
quality dollars on a wide range of
quality improvement activities. Under
existing § 98.53(a), Tribes continue to
have the flexibility to use quality dollars
for activities that include, but are not
limited to: Activities designed to
provide comprehensive consumer
education to parents and the public;
activities that increase parental choice;
and activities designed to improve the
quality and availability of child care. As
is currently the case, these activities
could include: Child care resource and
referral activities, consumer education,
grants or loans to assist providers,
training and technical assistance for
providers and caregivers, improving
salaries of caregivers, teachers and
directors, monitoring or enforcement of
health and safety standards, and other
activities to improve the quality of child
care, including native language lesson
and cultural curriculum development.
While Tribes have broad flexibility, to
the degree possible, Tribes should plan
strategically and systemically when
implementing their quality initiatives in
order to maximize the effectiveness of
those efforts.
We also are working with Tribes on
creating a culturally appropriate quality
vision and framework specifically for
Tribes. The framework will include a
range of quality improvement activities,
including activities that integrate native
culture and language into child care, in
order to encompass both large and small
Tribes. We look forward to working
with Tribes on this quality framework,
and we will provide opportunities for
Tribes to give feedback.
In addition, we encourage strong
Tribal-State partnerships that promote
Tribal participation in States’ systemic
initiatives, as well as State support for
Tribal initiatives. For example, Tribes
and States can work together to ensure
that quality initiatives in the State are
culturally relevant and appropriate for
Tribes, and to encourage Tribal child
care providers to participate in State
initiatives such as QRIS and
professional development systems.
General Procedures and Requirements
(Section 98.80)
Section 98.80 provides an
introduction to the general procedures
and requirements for CCDF Tribal
grantees. As discussed above, ACF
proposes to modify § 98.80(a) so that
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Tribes are subject to CCDF requirements
based on the size of their CCDF
allocation.
Application and Plan Procedures
(Section 98.81)
Section 98.81 addresses the
application and Plan procedures for
Tribal CCDF grantees, and much of the
new proposed regulatory language in
this section, particularly the Plan
exemptions listed at §§ 98.81(b)(6) and
(9), reflects the changes made in § 98.80
(General procedures and requirements)
and § 98.83 (Requirements for Tribal
programs). These exemptions will be
discussed in greater detail later in the
preamble. Tribes receiving large or
medium allocations will continue to fill
out a traditional Tribal CCDF Plan,
proposed at § 98.81(b), and Tribes
receiving small allocations will fill out
an abbreviated Plan, proposed at
§ 98.81(c). The Plan periods will now be
three years, as required by the new
statute.
Tribal Median Income. At
§ 98.81(b)(1), the regulations require that
the Plan must include the basis for
determining family eligibility. ACF
proposes at § 98.81(b)(1)(i) to allow a
Tribe, whose Tribal Median Income
(TMI) is below a level established by the
Secretary, the option of considering any
Indian child in the Tribe’s service area
to be eligible to receive CCDF funds,
regardless of the family’s income, work,
or training status. We believe that this
flexibility allows Tribes to create
opportunities to align CCDF programs
with other Tribal early childhood
programs, including Tribal home
visiting, Early Head Start, and Head
Start. We are considering setting the
threshold at 85 percent of State median
income (SMI) and would welcome
comment on whether this is an
appropriate threshold. Using 85 percent
of SMI mirrors other thresholds set by
the CCDBG law and would allow the
majority of CCDF Tribes to exercise this
option, if they choose. We are choosing
not to set this threshold through
regulation to allow the level to be
updated in the future though
consultation and notice.
We also propose to move the
requirement at § 98.80(f) to
§ 98.81(b)(1)(ii). Under this revised
provision, if a Tribe chooses not to
exercise the option at § 98.81(b)(1)(i) or
has a higher TMI, the Tribe would need
to determine eligibility for services in
accordance with § 98.20(a)(2). Tribes
will continue to have the option of
using either 85 percent of SMI or 85
percent of TMI.
Payment Rates. ACF proposes to
exempt all Tribes from the requirement
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to use a market rate survey or alternative
methodology to set provider payment
rates (discussed later in this preamble).
However, at § 98.81(b)(5), we propose
that Plans submitted by Tribes receiving
large or medium allocations include a
description of the Tribe’s payment rates;
how they are established; and how they
support quality, and where applicable,
cultural and linguistic appropriateness.
While market rate surveys or alternative
methodologies do not necessarily make
sense for Tribal communities, it is
important for Tribal Lead Agencies to
have rates sufficient to provide equal
access to the full range of child care
services, including high quality child
care.
Plan Exemptions. At § 98.81(b)(6),
ACF proposes three new Plan
exemptions for Tribes receiving large or
medium allocations. Such Tribal Lead
Agencies would be exempt from
including in their Plans descriptions of
the market rate survey or alternative
methodology; the licensing
requirements applicable to child care
services; and the early learning
guidelines. These requirements should
not apply to Tribal communities.
At § 98.81(b)(9), ACF proposes that
Plans for Tribes receiving medium
allocations would be exempt from the
requirement to include a description of
the child care certificate program,
unless the Tribe choses to include those
services. This exemption corresponds
with the exemption in § 98.83 discussed
later in the preamble.
Plans for Tribes Receiving Small
Allocations. ACF proposes to exempt
Tribes receiving small allocations (less
than $250,000) from the majority of
CCDF requirements. These Tribes would
only be subject to core CCDF
requirements. As such, we propose at
§ 98.81(c) that these Tribes fill out an
abbreviated CCDF Plan, tailored to these
core requirements. A shorter Plan
application is more aligned with the
level of funding that these Tribes
receive. All of the Plan exemptions
described in § 98.81(b) for Tribes
receiving large or medium allocations
will also apply to Tribes receiving small
allocations. ACF will release a Program
Instruction defining the elements that
will be included in the abbreviated Plan
for Tribes receiving small allocations.
Coordination (Section 98.82)
Section 98.82 currently requires
Tribal Lead Agencies to coordinate with
State CCDF programs and with other
Federal, State, local, and Tribal child
care and child development programs.
Tribal Lead Agencies must also
coordinate with the entities listed at
§§ 98.12 and 98.14. We propose to add
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language at § 98.82(a) that would require
Tribal Lead Agencies to coordinate the
development of the Plan and the
provision of services with the entities
listed at §§ 98.12 and 98.14. This
addition does not change existing
policy; it serves as a clarification of the
regulatory language.
The regulations at § 98.82(a) currently
require Tribal Lead Agencies to
coordinate with the entities described at
§ 98.14 in the development of their
Plans. This list includes newly added
child care licensing, Head Start
collaboration, State Advisory Councils
on Early Childhood Education and Care
or similar coordinating bodies,
statewide afterschool networks,
emergency management and response,
CACFP, services for children
experiencing homelessness, Medicaid,
and mental health services. While we
are not making any Tribally-specific
changes to §§ 98.14 or 98.82, we do
recognize that Tribes may not always
have access or connections with these
entities. Many of these agencies,
especially the State Advisory Councils
and the statewide afterschool networks,
interact primarily on the State level.
Others, including child care licensing
and Head Start, may not exist in the
Tribe’s service area.
Tribes should coordinate with these
agencies to the extent possible. The
Tribal Plan pre-print will ask Tribes to
describe their efforts to coordinate with
all the entities listed at § 98.14, but if
coordination is not applicable, then the
Tribes may simply say so in their Plans.
We will support Tribal Lead Agency
efforts to coordinate with these entities
and plan to provide technical assistance
to both Tribes and States to promote
Tribal access and participation.
Tribes should also take note of two
new provisions in the CCDBG law,
included in this NPRM, which require
State coordination with Tribes. First, at
§ 98.10(f), State Lead Agencies must
collaborate and coordinate with the
Tribes, at the Tribes’ option, in a timely
manner in the development of the State
Plan. We encourage States to be
proactive in reaching out to the Tribal
officials for collaboration.
Second, State Lead Agencies must
have training and professional
development in place 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
child care caregivers, teachers, and
directors in working with children and
their parents. Section 98.44(b)(2)(vi)
would require this training and
professional development be accessible
to caregivers, teachers, and directors of
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CCDF child care providers supported
through Indian Tribes or Tribal
organizations. Section 98.44(b)(2)(iv)
would provide that the training and
professional development should also,
to the extent practicable, be appropriate
for Native American children. Tribes
should work with States to help ensure
that these statutory requirements are
met. Tribal CCDF programs should also
coordinate with other childhood
development programs located in the
Tribal service area, including any
programs that support the preservation
and maintenance of Native languages.
Requirements for Tribal Programs
(Section 98.83)
Section 98.83 addresses specific
requirements for Tribal CCDF programs.
In recognition of the unique social and
economic circumstances in many Tribal
communities, Tribal Lead Agencies are
exempt from a number of CCDF
requirements. At paragraph (d)(1), we
propose to exempt all Tribes, regardless
of allocation size, from the requirements
for licensing applicable to child care
services at § 98.40; a consumer
education Web site at § 98.33(a); the
market rate survey or alternative
methodology and the related
requirements at § 98.45(b)(2); the use of
some grants or contracts at § 98.50(a)(3);
the professional development
framework at § 98.44(a); and the quality
progress report at § 98.53(f). Tribes that
receive medium or small CCDF
allocations are also exempt from the
requirements of operating a certificate
program at § 98.30(a) and (d). Tribes that
receive small allocations would be
exempt from the majority of the new
CCDF requirements to give these Tribes
more flexibility in how they spend their
CCDF funds. Finally, several provisions
would apply to all Tribes providing
direct services, unless the Tribe
describes an alternative in its Plan:
monitoring of child care providers and
facilities at § 98.42(b)(2) and conducting
background checks on other individuals
residing in family child care homes at
§ 98.43(a)(2)(ii)(C).
We propose to remove previouslyexisting language on immunizations so
that Tribes must now assure that
children receiving CCDF services are
age-appropriately immunized. We also
propose to add regulatory language to
add clarity to the previously-existing
exemptions; this language does not
change the previous policy. ACF also
proposes two new paragraphs at (d)(2)
and (d)(3) giving Tribes more flexibility
around the monitoring inspections
requirements and the requirement for
comprehensive background checks on
other individuals in family child care
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homes. At paragraph (e), ACF proposes
to exempt Tribes receiving medium or
small CCDF allocations from the
requirement to operate a certificate
program. At paragraph (f), ACF proposes
more flexibility for Tribes receiving
small allocations by only subjecting
them to core CCDF requirements.
Service Area. We propose a technical
addition at § 98.83(b) to clarify that
Tribes (with the exception of Tribes
located in Alaska, California, or
Oklahoma) must operate their CCDF
programs on or near Indian reservations.
ACF has long-standing policy guidance
that clarifies that a Tribe’s service area
must be ‘‘on or near the reservation,’’
and therefore must be within a
reasonably close geographic proximity
to the delineated borders of a Tribe’s
reservation. Tribes that do not have
reservations must establish service areas
within reasonably close geographic
proximity to the area where the Tribe’s
population resides. ACF will not
approve an entire State as a Tribe’s
service area. This policy clarification
does not impact States’ jurisdiction over
child care licensing. Tribal service areas
are also addressed in the regulations at
§ 98.81(b)(2)(ii), and the same policy
guidance applies.
Licensing for Child Care Services.
ACF proposes to exempt all Tribes from
the requirement to have in effect
licensing requirements applicable to
child care services at § 98.40. This is a
pre-existing statutory and regulatory
requirement that was re-affirmed by the
reauthorized CCDBG law. The majority
of CCDF Tribal grantees do not have
their own licensing requirements. Many
Tribes certify in their Plans that they
have adopted their State’s licensing
standards, but these requirements may
not be appropriate for Tribal
communities. In addition, we believe
that requiring Tribes to have licensing
requirements is counter to t Section
658O(c)(2)(D) of the Act, which states,
‘‘In lieu of any licensing and regulatory
requirements under State or local law,
the Secretary, in consultation with
Indian Tribes and Tribal organizations,
shall develop minimum child care
standards that shall be applicable to
Indian Tribes and Tribal organization
receiving assistance under this
subchapter.’’ Tribes may instead use the
voluntary guidelines issued by HHS,
described earlier in the preamble.
Consumer Education Web site. We
propose to exempt all Tribes from the
requirement for a consumer education
Web site at § 98.33(a). We propose this
exemption due to the administrative
cost of building a Web site, as well as
the lack of reliable high-speed internet
in some Tribal areas. Furthermore, in
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some instances, the small number of
child care providers in the Tribe’s
service area may not warrant the
development and maintenance of a Web
site. However, where appropriate, we
encourage Tribes to implement Web
sites for consumer education and to
work with entities, such as States or
child care resource and referral agencies
that maintain provider-specific
information on a Web site. For example,
in cases where Tribal child care
providers are licensed by the State,
information about compliance with
health and safety requirements should
be available on the State’s Web site.
Market Rate Survey or Alternative
Methodology. At § 98.83(d)(1)(iv), we
propose to exempt all Tribes from
conducting a market rate survey or
alternative methodology and all of the
related requirements. In many Tribal
communities, the child care market is
extremely limited. Also, many Tribes
are located in rural, isolated areas and
conducting a market rate survey or
alternative methodology would be
difficult. Furthermore, we have
proposed at § 98.83(f) that Tribes
receiving CCDF allocations of $1 million
or less (medium and small allocations)
be exempt from operating a certificate
program, and therefore, these Tribes are
not required to offer the full range of
child care services. For these Tribes
especially, market rate surveys are not
relevant. Despite exempting Tribes from
these requirements, we believe that
setting payment rates to support quality
is essential to providing equal access to
child care services. Tribes receiving
large or medium allocations, will be
asked in their Plans how rates were set
and how these rates support quality.
Grants or Contracts. We propose to
exempt all Tribes from the requirement
at § 98.50(a)(3), which would require
direct services to be provided using
funding methods provided for in § 98.30
(i.e., grant or contract, certificate), which
must include some use of grants or
contracts, with the extent of such
services determined by the Lead Agency
after consideration of the shortages in
the supply of high quality care. We
recognize that some Tribes, particularly
those receiving smaller CCDF grant
allocations, may lack the resources
necessary to provide services through
grants or contracts. In addition, we
recognize that many Tribes directly
administer their own Tribally-operated
child care facilities, rather than
purchasing slots through a grant or
contract. These Tribally-operated
centers can accomplish many of the
same goals as the use of grants and
contracts (e.g., building supply,
strengthening quality). The provision of
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services by Tribal Lead Agencies
through certificates is already separately
addressed at § 98.83(f) and is discussed
in this preamble further below.
Training and Professional
Development Framework. We propose
to exempt Tribes from the requirement
at § 98.44(a) to describe in their CCDF
Plan the State framework for
professional development. This
requirement is State-specific and not
relevant for Tribes. We note, however,
as required by the law at Section
658E(c)(2)(G)(ii)(IV), ongoing State
professional development must be
accessible to caregivers supported
through Indian Tribes and Tribal
organizations. The trainings must also
be, to the extent practicable, appropriate
for populations of Native American and
Native Hawaiian children. Tribes are
encouraged to work with States to help
States meet these statutory
requirements.
Quality Progress Report. We propose
that Tribal Lead Agencies be exempt
from completing the Quality Progress
Report (QPR) at § 98.53(f), which is a
revised version of the former Plan
appendix, the Quality Performance
Report. In the future, we may consider
adding additional questions on quality
improvement activities to the Tribal
Plan, ACF–700 or ACF–696T, but we
will discuss these changes with Tribes
and provide opportunity for public
comment.
The QPR includes a report describing
any changes to State regulations,
enforcement mechanisms, or other
policies addressing health and safety
based on an annual review and
assessment of serious child injuries and
any deaths occurring in child care
programs. Under this provision, Tribes
are exempt from completing the QPR,
including the review and assessment of
serious injuries and deaths.
Notwithstanding, we encourage Tribal
Lead Agencies to complete a similar
process to the one described in the QPR
and to review the reported serious
injuries or deaths and make policy or
programmatic changes that could
potentially save a child’s life.
Immunization requirement.
Consistent with the proposed rule’s
overall focus on promoting high quality
care that supports children’s learning
and development, we propose to revise
§ 98.83(d) to extend coverage of CCDF
health and safety requirements related
to immunization so that the
requirements would apply to Tribes,
whereas previously Tribes were exempt.
At the time the current regulations were
issued in 1998, minimum Tribal health
and safety standards had not yet been
developed and released by HHS.
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However, the minimum Tribal
standards have subsequently been
developed and released, and the
standards address immunization in a
manner that is consistent with the
requirements at § 98.41(a)(1)(i). As a
result, there is no longer a compelling
reason to continue to exempt Tribes
from this regulatory requirement. We
believe that many Tribes have already
moved forward with implementing
immunization requirements for children
receiving CCDF assistance. By extending
the requirement to Tribes, we will
ensure that Indian children receiving
CCDF assistance are age-appropriately
immunized as part of efforts to prevent
and control infectious diseases.
As with States and Territories, Tribes
would have flexibility to determine the
method to implement the immunization
requirement. For example, they may
require parents to provide proof of
immunization as part of CCDF eligibility
determinations, or they may require
child care providers to maintain proof of
immunization for children enrolled in
their care. As indicated in the
regulation, Lead Agencies have the
option to exempt the following groups:
(1) children who are cared for by
relatives; (2) children who receive care
in their own homes; (3) children whose
parents object on religious grounds; and
(4) children whose medical condition
requires that immunizations not be
given. In determining which
immunizations will be required, a Tribal
Lead Agency has flexibility to apply its
own immunization recommendations or
standards. Many Tribes may choose to
adopt recommendations from the Indian
Health Service or the State’s public
health agency.
Monitoring Inspections. We propose
that all Tribes providing direct services,
regardless of allocation size, be subject
to the monitoring requirements at
§ 98.42(b)(2), which reflect the
requirements in the law. However, a
Tribal Lead Agency may describe an
alternative monitoring approach in its
Plan, subject to ACF approval, and must
provide adequate justification for the
approach. Section 658E(c)(2)(K) of the
Act requires at least one pre-licensure
inspection and annual unannounced
monitoring for licensed child care
providers. License-exempt providers are
subject to annual monitoring on health,
safety, and fire standards. The proposed
rule would also allow Lead Agencies to
use differential monitoring strategies
and to develop alternate monitoring
requirements for care provided in the
child’s home.
In our 2013 NPRM, we also proposed
that Tribal Lead Agencies would be
subject to monitoring requirements, and
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we received many comments asking for
more flexibility for Tribes. As with the
2013 NPRM, we believe that the
monitoring requirements in the law and
the additional requirements proposed in
this NPRM may not be culturally
appropriate for some Tribal
communities. By allowing Tribes to
describe alternative monitoring
strategies in their Plans, we wanted to
give Tribal Lead Agencies some
flexibility in determining which
monitoring requirements should apply
to child care providers. Tribes cannot
use this flexibility to bypass the
monitoring requirement altogether, but
may introduce a monitoring strategy
that is culturally appropriate for their
communities. Tribes may also use this
flexibility to partner with other agencies
that may already be conducting
monitoring visits, such as State Lead
Agencies, the Indian Health Service, or
the Child and Adult Care Food Program.
Coordinating and partnering with
existing agencies can help lessen the
financial and administrative burden.
Comprehensive Background Checks.
We propose that Tribal Lead Agencies
be subject to the background check
requirements at § 98.43, including the
requirement for comprehensive
background checks on other individuals
residing in family child care homes. A
comprehensive background check
includes an FBI fingerprint check; a
search of the National Crime
Information Center; and a search of the
following registries in the State where
the child care staff member lives and
each State where the staff member has
lived for the past five years: State
criminal registry using fingerprints,
state sex offender registry, and the state
child abuse and neglect registry, as
described at § 98.43(b).
We note that in order to conduct an
FBI fingerprint check using Next
Generation Identification, Lead
Agencies must act under an authority
granted by a Federal statute. States, as
described in subpart E, may choose
among three federal laws that grant
authority for FBI background checks for
child care staff. These three statutes are:
the CCDBG Act, Public Law 92–544, and
the National Child Protection Act/
Volunteers for Children Act. These three
laws give States the authority to conduct
FBI fingerprint checks, but none of them
specifically grant that same authority to
Tribes. In order for Tribes to conduct
FBI background checks, they may use
the Indian Child Protection and Family
Violence Prevention Act, which to date
only covers those individuals who are
being considered for employment by the
Tribe in positions that have regular
contact with, or control over, Indian
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children. Otherwise, Tribes will need to
work with States to complete the FBI
background check using a State’s
authority under an approved Public Law
92–544 statute or under procedures
established pursuant to the National
Child Protection Act/Volunteers for
Children Act (NCPA/VCA). We
understand that this may present
difficulties for Tribes, especially for
those that do not currently have a
partnership with the State. We believe
that comprehensive background checks
are important for ensuring children’s
health and safety in child care. We are
asking for comments on Tribes’
experiences obtaining FBI fingerprint
checks.
ACF does want to offer some
flexibility for Tribes around the
background check requirements. We are
proposing at § 98.83(d)(3) to allow
Tribes to use an alternative approach to
conducting full background checks on
other individuals residing in a family
child care home if the Tribal Lead
Agency provides an adequate
justification in its Plan, subject to ACF
approval. We have heard through our
consultation sessions that many Tribal
families reside in households with
several generations. Requiring all
members of the household to complete
all five components of a comprehensive
background check could be burdensome
for the family and for the Tribal Lead
Agency. Therefore, we are proposing to
allow a Tribal Lead Agency to use an
alternative strategy to conduct
background checks on other individuals
in a family child care home. ACF
expects that Tribal Lead Agencies will
conduct some components of a
background check for these individuals.
In its justification, a Tribe must describe
how the alternative background check
strategy is appropriately comprehensive
and protects the health and safety of
children in care.
Certificate Program. We propose at
§ 98.83(e) that Tribes that receive
medium or small allocations be exempt
from operating a certificate program. We
recognize that small Tribal grantees may
not have sufficient resources or
infrastructure to effectively operate a
certificate program. In addition, many
smaller Tribes are located in lesspopulated, rural communities that
frequently lack the well-developed child
care market and supply of providers that
is necessary for a certificate program.
Tribes that receive large allocations will
still be required to offer all categories of
care through a certificate program.
Under current regulations, Tribes
receiving smaller CCDF grants are
exempt from operating a certificate
program. The dollar threshold for
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determining which Tribes are exempt
from operating a certificate program is
established by the Secretary. It was set
at $500,000 in 1998 and has not
changed. By proposing to exempt Tribes
receiving medium or small allocations
from operating a certificate program, we
are effectively proposing to raise the
dollar threshold to $1 million. As
discussed earlier, we are proposing to
consider medium allocations to be
grants between $250,000 and $1 million
and small allocations to be grants of less
than $250,000. These proposals would
expand the number of Tribes that are
exempt from operating a certificate
program. We believe that this higher
threshold will allow Tribes with smaller
CCDF allocations to focus on
implementing the new requirements
proposed in this NPRM, specifically
concentrating on the health and safety
and quality requirements.
Small Allocations Requirements. ACF
believes that the Tribes receiving the
smallest CCDF allocations should not be
subject to the same requirements as the
Tribes receiving larger grant awards.
ACF is proposing to exempt Tribes
receiving small allocations (less than
$250,000) from the majority of the CCDF
requirements to give these Tribes more
flexibility in how they spend their
CCDF funds and to focus these funds on
health and safety and quality spending.
At § 98.83(f), we propose that Tribal
Lead Agencies receiving small
allocations spend their CCDF funds in
alignment with the goals and purposes
of CCDF as described in § 98.1. We
propose that Tribes that provide direct
services comply with the health and
safety requirements, monitoring
requirements; background checks
requirements, and quality spending
requirements. The proposed language at
§ 98.83(f) defines the only CCDF
provisions that would apply to Tribes
with small allocations.
We believe that this proposal allows
Tribes with small allocations the
flexibility to spend their CCDF funds in
ways that would most benefit their
communities. Tribes could choose to
spend all of their CCDF funds on quality
activities, or they could invest all of
their funds into a Tribally-operated
center. If a Tribe that receives a small
allocation chooses to spend funds on
direct services, then the Tribe would be
required to meet the health and safety
requirements, including the monitoring
and background check requirements, as
discussed earlier. Tribes that receive
small allocations would also continue to
be required to meet the fiscal, audit, and
reporting requirements in the rule. To
align with these limited CCDF
requirements, Tribes with small
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allocations will complete an abbreviated
Plan, as discussed earlier. This proposal
balances increased flexibility with
accountability, and ACF encourages
these Tribes to focus their CCDF
spending on ensuring health and safety
and quality for children in child care.
Base amount. Beginning with FY
2017, OCC is proposing to increase the
base amount from $20,000 to $30,000 to
account for inflation that has eroded the
value of the base amount since it was
originally established in 1998. Each
year, Tribal CCDF grantees’ CCDF
allocations are based on a Discretionary
base amount, as well as a Discretionary
and Mandatory amount based on the
number of children submitted in the
child count.
OCC first notified Tribes of our
proposal to increase the base amount
through our 2013 NPRM. The base
amount is not included in regulation,
and does not require regulatory change.
However, OCC wanted to give Tribes the
opportunity to comment on this change
through the public comment period
associated with the proposed rule, and
the comments received were largely
supportive.
The increase in the Discretionary base
amount will result in a lower
Discretionary per child amount than
would occur without the change in base
amount. An increase in the base amount
benefits smaller Tribes and consortia,
and OCC hopes it will encourage
capacity building, especially in Tribal
consortia. Larger Tribes will receive less
funding then they would have in the
absence of this change; however, this
impact could largely be offset by the
overall increase in CCDF funding for
Tribes and by an increase in the Tribal
Discretionary set-aside, described above.
Therefore, OCC anticipates stable or
increased funding for most Tribal Lead
Agencies.
Construction and Renovation of Child
Care Facilities (Section 98.84)
Section 98.84 currently describes the
procedures and requirements around
Tribal construction or renovation of
child care facilities. The CCDBG Act
reaffirmed Tribes’ ability to request to
use CCDF funds for construction or
renovation purposes. Section
658O(c)(6)(C) of the Act continues to
disallow the use of CCDF funds for
construction or renovation if it will
result in a decrease in the level of child
care services. However, the law now
allows for a waiver for this clause if the
decrease in the level of child care
services is temporary. A Tribe will also
need to submit a plan to ACF that
demonstrates that after the construction
or renovation is completed the level of
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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
child care services will increase or the
quality of child care services will
improve. In order for a Tribe to use
CCDF funds on construction or
renovation while decreasing the level of
direct services, the Tribe must certify
that, after the construction is completed,
the number of children served will
increase or the quality of care will
increase. ACF added this language from
the law to the regulations at
§ 98.84(b)(3).
ACF also issued a Program Instruction
to describe the application process for
using CCDF funds on construction or
renovation. This Program Instruction
will also be updated to reflect the new
requirements in the law. The Program
Instruction expands upon and describes
the statutory and regulatory
requirements. In the event that the
CCDF regulations do not address a
specific issue, then we will look to Head
Start and HHS’s generally-accepted
construction and renovation guidelines.
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Subpart J—Monitoring, NonCompliance, and Complaints
Subpart J contains provisions
regarding HHS monitoring of Lead
Agencies to ensure compliance with
CCDF requirements, processes for
examining complaints and for
determining non-compliance, and
penalties and sanctions for noncompliance.
Penalties and Sanctions (Section 98.92)
Current regulations allow HHS to
impose penalties and other appropriate
sanctions for a Lead Agency’s failure to
substantially comply with the Act, the
implementing regulations, or the Plan.
Such penalties and sanctions may
include the disallowance or
withholding of CCDF funds in
accordance with § 98.92. These
regulations remain in effect.
In addition, we propose to add new
provisions at § 98.92(b) in accordance
with two penalties added by the
reauthorization of the Act. New section
658E(c)(3)(B)(ii) requires HHS to
annually prepare a report that contains
a determination about whether each
Lead Agency uses CCDF funding in
accordance with priority for services
provisions. These priority provisions are
reiterated at § 98.44(a) of these proposed
regulations, and require Lead Agencies
to give priority to children with special
needs, children from families with very
low incomes, and children experiencing
homelessness. The Act requires HHS to
impose a penalty on any Lead Agency
failing to meet the priority for services
requirements. We propose to implement
this new penalty through a new
regulatory provision at § 98.92(b)(3). In
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accordance with the statute, the
proposed rule provides that a penalty of
not more than five percent of the CCDF
Discretionary Funds shall be withheld if
the Secretary determines that the Lead
Agency has failed to give priority for
service in accordance with § 98.44. This
penalty will be withheld no earlier than
the first full Fiscal Year following the
determination to apply the penalty, and
the penalty will not be applied if the
Lead Agency corrects its failure to
comply and amends its CCDF Plan
within six months of being notified of
the failure. The Secretary may waive a
penalty for one year in the event of
extraordinary circumstances, such as a
natural disaster.
The second new penalty was added
by section 658H(j)(3) of the Act and is
related to the new criminal background
check requirements. We propose to
implement this penalty through new
regulatory language at § 98.92(b)(4). In
accordance with the statute, the
proposed rule provides that a penalty of
not more than five percent of the CCDF
Discretionary Funds for a Fiscal Year
shall be withheld if the Secretary
determines that the State, Territory, or
Tribe has failed to comply substantially
with the criminal background check
requirements at § 98.43. We propose to
add that this penalty will be withheld
no earlier than the first full Fiscal Year
following the determination to apply the
penalty, and this penalty will not be
applied if the State, Territory or Tribe
corrects the failure before the penalty is
to be applied or if it submits a plan for
corrective action that is acceptable to
the Secretary.
Subpart K—Error Rate Reporting
On September 5, 2007, ACF published
a Final Rule that added subpart K to the
CCDF regulations. This subpart, which
was effective October 1, 2007,
established requirements for the
reporting of error rates in the
expenditure of CCDF grant funds by the
50 States, the District of Columbia, and
Puerto Rico. The error reports were
designed to implement provisions of the
Improper Payments Information Act of
2002 (IPIA; Pub. L. 107–300). In July
2010, the President signed into law the
Improper Payments Elimination and
Recovery Act (IPERA) (Pub. L. 111–204),
which amended the IPIA of 2002 and
provided a renewed focus on
government-wide efforts to control
improper payments. In recent years,
ACF has provided technical assistance
and guidance to CCDF Lead Agencies to
assist their efforts in preventing and
controlling improper payments. These
program integrity efforts help ensure
that limited program dollars are going to
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80535
low-income eligible families for which
assistance is intended.
This proposed rule retains the error
reporting requirements at subpart K, but
proposes changes which are discussed
below. In addition to the regulatory
requirements at subpart K, details
regarding the error rate reporting
requirements are contained in forms and
instructions that are established through
the Office of Management and Budget’s
(OMB) information collection process.
Error Rate Reports and Content of Error
Rate Reports (Sections 98.100 and
98.102)
Interaction with eligibility
requirements. We propose to add
language at § 98.100(d), which defines
an improper payment, to clarify that
because a child meeting eligibility
requirements at the most recent
eligibility determination or
redetermination is considered eligible
between redeterminations as described
in § 98.20(a)(1), any payment for such a
child shall not be considered an error or
improper payment due to a change in
the family’s circumstances, as set forth
at § 98.21(a).
Corrective action plan. We propose to
add § 98.102(c) to require that any Lead
Agency with an improper payment rate
that exceeds a threshold established by
the Secretary must submit a
comprehensive corrective action plan,
as well as subsequent reports describing
progress in implementing the plan. This
is a conforming change to match new
requirements for corrective action plans
that were contained in the recent
revisions to the forms and instructions.
The corrective action plan must be
submitted within 60-days of the
deadline for submission of the Lead
Agency’s standard error rate report
required by § 98.102(b). The corrective
action plan must include: identification
of a senior accountable official,
milestones that clearly identify actions
to be taken to reduce improper
payments and the individual
responsible for completing each action,
a timeline for completing each action
within one year of ACF approval of the
plan and for reducing improper
payments below the threshold
established by the Secretary, and targets
for future improper payment rates.
Subsequent progress reports must be
submitted as requested by the Assistant
Secretary. Failure to carry out actions
described in the approved corrective
action plan will be grounds for a penalty
or sanction under § 98.92.
This requirement will strengthen
CCDF program integrity and
accountability. Existing CCDF
regulations at § 98.102(a)(6) and (8)
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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
currently require all 50 States, the
District of Columbia, and Puerto Rico to
report error rate targets for the next
reporting cycle and to describe actions
that will be taken to correct causes of
improper payments. However, the
information reported by Lead Agencies
sometimes lacks detail or specificity, is
only reported on a three-year cycle, and
does not include status updates about
the Lead Agency’s progress in
implementing corrective action. More
specific and timely requirements are
necessary for Lead Agencies with high
improper payment rates. Therefore, any
Lead Agency exceeding a threshold of
improper payments will be required to
submit a formal, comprehensive
corrective action plan with a detailed
description and timeline of action steps
of how it will meet targets for
improvement. The corrective action
plan should also address any relevant
findings from annual audits required by
existing regulation at § 98.65(a) and the
Single Audit Act. The Lead Agency
would also be required to submit
subsequent reports, on at least an
annual basis, describing progress in
implementing corrective action. These
requirements will ensure that Lead
Agencies engage in a strategic and
thoughtful planning process for
reducing improper payments, take
action in a timely fashion, and provide
information on action steps that is
transparent and available to the public.
The proposed rule indicates that the
improper payment threshold, which
triggers the requirement for a corrective
action plan, will be established by the
Secretary. Although the proposed rule
provides flexibility to adjust the
threshold in the future, the initial
threshold would be an improper
payment rate of 10 percent or higher. In
other words, if a Lead Agency indicates
that its improper payment rate reported
in accordance with § 98.102(a)(3) equals
or exceeds 10 percent, the Lead Agency
would be subject to corrective action
under proposed § 98.102(b). This 10
percent threshold is consistent with the
IPERA which indicates that an improper
payment rate of less than 10 percent for
a Federal program is necessary for
V. Paperwork Reduction Act
A number of sections in this proposed
rule refer to collections of information.
These collections of information are
subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(the PRA) (44 U.S.C. 3501 et seq.). In
some instances (listed in the table
below), the collections of information
for the relevant sections of this
proposed rule have been previously
approved under a series of OMB control
numbers, or are currently in the OMB
approval process.
Relevant section in the proposed
rule
ACF–118 (CCDF State and Territory Plan).
§§ 98.14, 98.15, and 98.16 (and
related provisions).
0970–0114
05/13/2016
ACF–800 (Annual Aggregate Data
Reporting—States and Territories).
§ 98.71 ............................................
0970–0150
06/30/2015
ACF–801 (Monthly Case-Level
Data Reporting—States and Territories).
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CCDF title/code
§ 98.71 ............................................
0970–0167
04/30/2015
ACF–403, ACF–404, ACF–405
(Error Rate Reporting).
§§ 98.100 and 98.102 ....................
0970–0323
09/30/2015
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OMB control
number
compliance. Under IPERA, ACF must
submit a corrective action plan if the
national improper payment rate for
CCDF exceeds 10 percent. Since CCDF
is administered by State and Territory
Lead Agencies and the error rate review
process is executed by States, the only
effective way for ACF to achieve and
maintain an improper payment rate
below the 10 percent threshold is to
hold Lead Agencies accountable.
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Expiration date
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Description
The Act and this proposed rule
add new requirements which
States and Territories will be required to report in the CCDF
Plans, including provisions related to health and safety requirements,
consumer
education, and eligibility policies.
State and Territorial compliance
with the final rule will be determined in part through the review
of CCDF Plans and Plan
amendments. ACF has published Federal Register notices
seeking public comment on this
proposed information collection
and the annual burden estimate.
The Act and this proposed rule
adds new data reporting requirements which States and Territories will be required to on the
ACF–800. ACF has published
Federal Register notices seeking public comment on this proposed information collection and
the annual burden estimate.
The Act and this proposed rule
adds new data reporting requirements which States and Territories will be required to on the
ACF–800. ACF has published
Federal Register notices seeking public comment on this proposed information collection and
the annual burden estimate.
The proposed rule does not make
changes to this information collection.
24DEP2
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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
CCDF title/code
Relevant section in the proposed
rule
ACF–700 (Administrative Data Report—Tribes).
§ 98.71 ............................................
0980–0241
10/31/2016
ACF–696–T (Financial ReportingTribes).
§ 98.65 ............................................
0970–0195
05/31/2016
In other instances, which are listed
below, the proposed rule modifies
several previously-approved
information collections, but ACF has
not yet initiated the OMB approval
OMB control
number
Expiration date
process to implement these changes.
ACF will publish Federal Register
notices soliciting public comment on
specific revisions to those information
collections and the associated burden
Relevant section in the proposed
rule
Quality Progress Report (QPR)—
States and Territories.
§ 98.53 ............................................
0970–0114
05/13/2016
ACF–696
States).
Reporting-
§ 98.65 ............................................
0970–0163
05/31/2016
ACF–118–A (CCDF Tribal Plan) ....
§§ 98.14, 98.16, 98.18, 98.81, and
98.83 (and related sections).
0970–0198
05/31/2016
CCDF–ACF–PI–2013–01
(Tribal
Application
for
Construction
Funds).
§ 98.84 ............................................
0970–0160
03/31/2016
The table below provides annual
burden estimates for these existing
information collections that are
The proposed rule does not make
changes to this information collection.
If
ACF
proposes
changes in the future, it will publish Federal Register notices
seeking public comment.
The proposed rule does not make
changes to this information collection.
estimates, and will make available the
proposed forms and instructions for
review.
CCDF title/code
(Financial
OMB control
number
Description
Expiration date
modified by this proposed rule. These
estimates reflect the total burden of each
Description
The Act and the proposed rule require States and Territories to
submit reports on quality improvement, and measures to
evaluate progress. The QPR is
currently approved as an appendix to the CCDF State Plan.
ACF intends to propose a revised QPR through a separate
information collection.
The proposed rule would modify
this information collection to require any sub-categories of quality activities as required by ACF.
The rule changes requirements
that Tribes and Tribal organizations will be required to report in
the CCDF Plans, and indicates
that Plan and application requirements will vary based on
the size of a Tribe’s allocation.
Tribal compliance with the final
rule will be determined in part
through the review of Tribal
CCDF Plans and Plan amendments.
The Act and the proposed rule
change requirements related to
maintaining the level of child
care services as a condition of
using funds for construction and
renovation.
information collection, including the
changes made by this proposed rule.
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ANNUAL BURDEN ESTIMATES
Number of
respondents
Instrument
Quality Progress Report (QPR)—States and Territories .................................
ACF–696 (Financial Reporting-States) ............................................................
ACF–118–A (CCDF Tribal Plan) .....................................................................
CCDF–ACF–PI–2013–01 (Tribal Application for Construction Funds) ...........
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Number of
annual
responses per
respondent
56
56
257
5
E:\FR\FM\24DEP2.SGM
1
4
0.33
1
24DEP2
Average
burden hours
per response
50
5.5
120
20
Total burden
hours
2,800
1,232
10,177
100
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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
Finally, this proposed rule contains 2
new information collection
requirements, and the table below
provides an annual burden hour
estimate for these collections. First,
§ 98.33 requires Lead Agencies to collect
and disseminate consumer education
information to parents of eligible
children, the general public, and
providers through a consumer-friendly
and easily accessible Web site. This
Web site will include information about
State or Territory policies (related to
licensing, monitoring, and background
checks) as well as provider-specific
information, including results of
monitoring and inspection reports and,
if available, information about quality.
This requirement applies to the 50
States, the District of Columbia, and 5
Territories that receive CCDF grants. In
estimating the burden estimate, we
considered the fact that many States
already have existing Web sites. Even in
States without an existing Web site,
much of the information will be
available from licensing agencies,
quality rating and improvement
systems, and other sources. The burden
hour estimate below reflects an average
estimate, recognizing that there will be
significant State variation. The estimate
is annualized to encompass initial data
entry as well as updates to the Web site
over time.
Second, § 98.42 requires Lead
Agencies to establish procedures that
require child care providers that care for
children receiving CCDF subsidies to
report to a designated State, Territorial,
or Tribal entity any serious injuries or
deaths of children occurring in child
care. This is necessary to be able to
examine the circumstances leading to
serious injury or death of children in
child care, and, if necessary, make
adjustments to health and safety
requirements and enforcement of those
requirements in order to prevent any
future tragedies. The requirement would
potentially apply to the nearly 390,000
child care providers who serve children
receiving CCDF subsidies, but only a
portion of these providers would need
to report, since our burden estimate
assumes that no report is required in the
absence of serious injury or death. Using
currently available aggregate data on
child deaths and injuries, we estimated
the average number of provider
respondents would be approximately
10,000 annually. In estimating the
burden, we considered that more than
half the States already have reporting
requirements in place as part of their
licensing procedures for child care
providers. States, Territories, and Tribes
have flexibility in specifying the
particular reporting requirements, such
as timeframes and which serious
injuries must be reported. While the
reporting procedures will vary by
jurisdiction, we anticipate that most
providers will need to complete a form
or otherwise provide written
information.
ANNUAL BURDEN ESTIMATES
Number of
responses per
respondent
Number of respondents
Consumer Education Website ........................
Reporting of Serious Injuries and Death ........
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Instrument
56 States/Territories .......................................
10,000 child care providers ............................
We will consider public comments
regarding information collection in the
following areas: (1) Evaluating whether
the proposed collection is necessary for
the proper performance of the CCDF
program, including whether the
information will have practical utility;
(2) evaluating the accuracy of the
estimated burden of the proposed
collection; (3) enhancing the quality,
usefulness, and clarity of the
information to be collected; and (4)
minimizing the burden of the collection
of information, including the use of
appropriate technology.
Written comments regarding
information collection should be sent to
ACF and to the Office of Management
and Budget, Office of Information and
Regulatory Affairs (Attention: Desk
Officer for the Administration for
Children and Families) by email to:
oira_submissions@omb.eop.gov, or by
fax to (202) 395–7285.
VI. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA),
as amended by the Small Business
Regulatory Enforcement Fairness Act, (5
U.S.C. 605(b)) requires federal agencies
to determine, to the extent feasible, a
rule’s economic impact on small
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entities, explore regulatory options for
reducing any significant economic
impact on a substantial number of such
entities, and explain their regulatory
approach.
This NPRM will not result in a
significant economic impact on a
substantial number of small entities.
This rule is intended to implement
provisions of the Act, and is not
duplicative of other requirements. The
reauthorization of the Act and these
implementing regulations are intended
to better balance the dual purposes of
the CCDF program by adding provisions
that ensure that healthy, successful
child development is a consideration for
the CCDF program (e.g., preserving
continuity in child care arrangements;
ensuring that child care providers meet
basic standards for ensuring the safety
of children, etc.).
The primary impact of the Act and
this proposed rule is on State, Territory,
and Tribal CCDF grantees because the
rule articulates a set of expectations for
how grantees are to satisfy certain
requirements in the Act. To a lesser
extent the rule would indirectly affect
small businesses and organizations,
particularly family child care providers,
as discussed in more detail in the
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1
1
Average
burden hours
per response
300
1
Total burden
hours
16,800
10,000
Regulatory Impact Analysis below. In
particular, requirements for
comprehensive criminal background
checks and health and safety training in
areas such as first-aid and CPR may
impact child care providers caring for
children receiving CCDF subsidies.
However, the rule will not have a
significant economic impact on a
substantial number of child care
providers. The estimated cost of a
comprehensive criminal background
check is $55 per check. For the required
health and safety training, a number of
low-cost or free training options are
available. Many States use CCDF quality
dollars or other funding to fully or
partially cover the costs of background
checks and trainings. The health and
safety provisions in the rule will
primarily impact those CCDF providers
currently exempt from State licensing
that are not relatives—which account
for only about 22 percent of CCDF
providers nationally. Finally, we note
that the proposed rule contains many
provisions that will benefit child care
providers by providing more stable
funding through the subsidy program
(e.g., eligibility provisions that promote
continuity and improved payment
practices).
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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
VII. Executive Orders 12866 and 13563
Executive Orders 12866 and 13563
direct federal agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). The Orders require federal
agencies to submit significant regulatory
actions to the Office of Management and
Budget (OMB) for approval. Section
3(f)(1) of Executive Order 12866 defines
‘‘significant regulatory actions,’’
generally as any regulatory action that is
likely to result in a rule that may (1)
have an annual effect on the economy
of $100 million or more or adversely
affect in a material way the economy, a
sector of the economy, productivity,
competition, jobs, the environment,
public health or safety, or State, local,
or Tribal governments or communities;
(2) create a serious inconsistency or
otherwise interfere with an action taken
or planned by another agency; (3)
materially alter the budgetary impact of
entitlements, grants, user fees, or loan
programs or the rights and obligations of
recipients thereof; or (4) raise novel
legal or policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
We estimate that the reauthorized
CCDBG Act and this NPRM will have an
annual effect on the economy of more
than $100 million. Therefore, this
NPRM represents a significant
regulatory action within the meaning of
section 3(f)(1) of Executive Order 12866.
Given both the directives of Executive
Orders 12866 and 13563 and the
importance of understanding the
benefits, costs, and savings associated
with these proposed changes, we
describe the costs and benefits
associated with the proposed changes
and available regulatory alternatives
below in the Regulatory Impact
Analysis.
VIII. Regulatory Impact Analysis
We have conducted a Regulatory
Impact Analysis (RIA) to estimate and
describe expected costs and benefits
resulting from the reauthorized CCDBG
Act and this NPRM. This included
evaluating State-by-State policies in
major areas of policy change, including
monitoring and inspections (including a
80539
hotline for parental complaints),
background checks, training and
professional development, consumer
education (including Web site and
consumer statement), quality spending,
minimum 12-month eligibility and
related provisions, increased subsidies,
and supply building (see Table 1).
The State policies described in this
RIA, including information from the
FY2014–2015 CCDF Plans, represent
policies that were in place prior to the
reauthorization of the CCDBG Act. This
is consistent with Office of Management
and Budget (OMB) Circular A–4 which
indicates that in cases where substantial
portions of a rule simply restate
statutory requirements that would be
self-implementing, even in the absence
of the regulatory action, the RIA should
use a pre-statute baseline (i.e.,
comparison point for determining
impacts). In conducting the analysis, we
also took into account the statutory
effective dates for various provisions. A
number of States have already begun
changing their policies toward
compliance with the CCDBG Act, which
passed in November of 2014, but data
on those changes is not yet available
and are not factored into this analysis.
TABLE 1—OVERVIEW OF MAJOR PROVISIONS
Relevant provisions of CCDBG Act
Provisions of proposed rule
Health and Safety
Background checks ...........................................
Monitoring and inspections (including a hotline
for parental complaints).
Training and Professional Development (Preservice, orientation, and ongoing training).
658H .................................................................
658E(c)(2)(J), 658E(c)(2)(C) ............................
§ 98.43.
§ 98.42, § 98.32.
658E(c)(2)(G), 658E(c)(2)(I) .............................
§ 98.44.
Consumer Education
Consumer education website ............................
Consumer statement .........................................
658E(c)(2)(D), 658E(c)(2)(E) ............................
658E(c)(2)(D), 658E(c)(2)(E) ............................
§ 98.33.
§ 98.33.
Quality Spending
Quality, infant and toddler spending .................
658G .................................................................
§§ 98.53, 98.50(b).
Continuity of Care
Minimum 12-month eligibility and related provisions.
658E(c)(2)(N) ....................................................
§§ 98.20, 98.21.
Increased subsidy and supply building
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Increased subsidy ..............................................
Supply building ..................................................
658E(c)(4), 658(c)(2)(S) ...................................
658E(c)(2)(A), 658E(c)(2)(M) ...........................
§ 98.45.
§ 98.50(a)(3).
Need for regulatory action. CCDF has
far reaching implications for America’s
low-income children, and the
reauthorized CCDBG Act and these
proposed regulations shine a new light
on the role that child care plays in child
development and making sure children
are ready for school. The law and this
proposed rule takes important steps
toward ensuring that children’s health
and safety is being protected in child
care settings. Both the Department of
Health and Human Services’ (HHS)
Office of Inspector General (OIG) and
the Government Accountability Office
(GAO) have identified serious
deficiencies with health and safety
protections for children in child care.
Prior to reauthorization of the CCDBG
Act, there was a wide range of health
and safety standards across States. For
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example, ten States lacked even the
most basic first aid and CPR
requirements, and many did not have
requirements in other vital areas such as
safe sleep practices and recognition and
reporting of suspected child abuse and
neglect. In addition, without any
monitoring requirement prior to CCDBG
reauthorization, 24 States allowed
license-exempt family child care
providers to self-certify that they met
health and safety requirements without
any documentation or other verification.
As discussed throughout this proposed
rule, minimum health and safety
standards included in the new law and
this proposed rule are essential to help
prevent children from being exposed to
child care settings that put their health
and safety at risk. The importance of
such standards and the inherent risks
are discussed at length in Caring for Our
Children (Caring for Our Children:
National Health and Safety Performance
Standards; Guidelines for Early Care
and Education Programs, 3rd Edition,
which was produced with the expertise
of researchers, physicians, and
practitioners. (American Academy of
Pediatrics, American Public Health
Association, National Resource Center
for Health and Safety in Child Care and
Early Education. (2011).
Parental choice is a foundational tenet
of the CCDF program—to ensure parents
are empowered to make their own
decisions regarding the child care that
best meets their family’s needs. Prior to
reauthorization, CCDF rules required
Lead Agencies to promote informed
child care choices by collecting and
disseminating consumer education
information to parents and the general
public. Over the years, economists have
researched and written about the
problem of information asymmetry in
the child care market and the resulting
impact both on the supply of high
quality care and a parent’s ability to
access high quality care. (Blau, D., The
Child Care Problem: An Economic
Analysis, 2001; Mocan, N., The Market
for Child Care, National Bureau of
Economic Research, 2002) In order for
parental choice to be meaningful,
parents need to have access to
information about the choices available
to them in the child care market and
have some way to gauge the level of
quality of providers. The CCDBG Act
and this proposed rule strengthen
consumer education requirements to
make information about child care
providers more accessible and
transparent for parents and the general
public.
Stable relationships between a child
and their caregiver are an essential
aspect of quality. Yet, under current
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policies, clients ‘‘churn’’ on and off of
CCDF assistance every few months,
even when they remain eligible. Some
studies show that many families appear
to remain eligible for the subsidies after
they leave the program, suggesting that
child care subsidy durations also are
likely influenced by factors unrelated to
employment (Grobe, D., R. B. Weber and
E. E. Davis (2006). Why do they leave?:
Child care subsidy use in Oregon.).
Many State subsidy policies make it
overly burdensome for parents to keep
their subsidy, or are not flexible enough
to allow for temporary or minor changes
in a family’s circumstances. This is
supported by a study that featured a
series of interviews with state and local
child care administrators and identified
a number of administrative practices
that appear to reduce the duration of
child care subsidy usage (Adams, G., K.
Snyder and J. R. Sandfort (2002)
Navigating the child care subsidy
system: Policies and practices that affect
access and retention.) The study found
that families often faced considerable
administrative burden when trying to
apply for or recertify their eligibility
status. For example, families sometimes
had to interact with more than one
agency during the application process,
had to make more than one trip to an
administrative office, and sometimes
had to wait for weeks or months to get
an appointment with a social worker. In
addition, families receiving Temporary
Assistance for Needy Families (TANF)
sometimes had additional difficulties
with redetermination because of the
temporary nature of their employment
or training activities. The study also
found that agencies had different
policies regarding the ways in which
families could recertify their eligibility
status including mail, phone, or fax.
Parents often find it difficult to navigate
administrative processes and paperwork
required to maintain their eligibility
when policies are inflexible to changes
in a family’s circumstances. Policies
that make it difficult for parents to keep
their subsidy threaten the employment
stability of parents and can disrupt
children’s continuity of care. This
proposed rule establishes a number of
family-friendly policies that benefit
CCDF families by promoting continuity
in subsidy receipt and child care
arrangements.
Changes made by the CCDBG Act and
this proposed rule, consistent with the
revised purposes of the Act, are needed
to: Protect the health and safety of
children in child care; help parents
make informed consumer choices and
access information to support child
development; provide equal access to
stable, high quality child care for low-
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income children; and enhance the
quality of child care and the early
childhood workforce. For the purposes
of estimating the costs of these new
requirements, the analysis makes a
number of assumptions. We welcome
comment on all aspects of the analysis,
but throughout the narrative, we
specifically request comment in areas
where there is uncertainty.
One overarching assumption that is
consistent across all the estimates is that
we are assuming that the current
caseload of children in the CCDF
program (approximately 1.4 million
children) remains constant. Due to
inflation and the potential for erosion in
the value of the subsidy over time,
funding increases will likely be
necessary to maintain the caseload;
however, those changes are not reflected
in this RIA since they are not directly
associated with this proposed rule.
While the estimate cannot fully
predict how States and Territories will
design policies in response to these new
requirements or who would be
responsible for paying certain costs, we
do recognize that absent additional
funding, these costs could impact the
CCDF caseload. This point is discussed
in greater detail below.
A. Analysis of Costs
In our analysis of costs, we
considered any claims on resources that
would be made as a result of the
proposed rule that would not have
occurred absent the rule. This includes
new requirements that are merely
reiterating changes made in the
reauthorized CCDBG Act of 2014, which
were effective upon the date of
enactment of November 19, 2014. This
RIA discusses the potential impact of
the following major provisions in the
statute and in the proposed rule:
• Monitoring and inspections
(including State hotlines for parental
complaints);
• background checks;
• health and safety training;
• consumer education (Web site and
consumer statement);
• minimum 12-month eligibility
periods;
• administrative and IT/infrastructure
costs;
• increased subsidy rates per child
associated with increasing continuity
and equal access; and
• supply building.
We conducted a State-by-State
analysis of these major provisions. It
should be noted that due to insufficient
data, the health and safety portions of
this cost estimate do not include
Territories and Tribes. This omission
should not minimize the fact that
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requirements of the CCDBG Act and the
proposed rule would still have a
significant programmatic and financial
impact on Territories and Tribes. For
the purposes of a national cost estimate,
however, Territories and Tribes
comprise a relatively small percentage
of the CCDF population and therefore
excluding the Territories and Tribes
from analysis should not significantly
impact the overall cost of the proposal.
This is particularly the case since Tribes
are exempt from, or subject to a
modified version of, a number of these
new requirements. However, we
welcome public comment on the
anticipated financial impact of the
CCDBG Act and this proposed rule on
Territories and Tribes.
In order to determine State practices,
we relied on information from statesubmitted FY 2014–2015 CCDF Plans,
as well as the 2011–13 Child Care
Licensing Study (prepared by the
National Association for Regulatory
Administration). If a State already met
or exceeded an individual requirement,
we assumed no additional cost
associated with the proposed rule. For
example, a State that has an annual
monitoring requirement for its licensed
centers would be assigned no additional
cost to implement that part of the
proposed regulatory requirement.
We used data on requirements within
a State by child care setting type (center,
family home, group home, child’s home)
and licensing status, to project costs
based on specific features of a State’s
existing requirements. When possible, if
a State partially met the requirement we
applied a partial implementation cost.
For example, some States already
conduct comprehensive background
checks that include all components of a
comprehensive background check
except an FBI fingerprint check. Costs
were assigned accordingly (assumptions
about partial costs are explained in
greater detail in the discussions below).
The proposed rule offers significant
flexibility in implementing various
provisions, therefore in the RIA we
identified a range of implementation
options to establish lower and upper
bound estimates and chose a middle-ofthe-road approach in assessing costs.
This RIA takes statutory effective
dates into account within a 10-year
window. The analysis and accounting
statements distinguish between average
annual costs in years 1–5 during which
some of the provisions will be in
varying stages of implementation and
the average annual ongoing costs in
years 6–10 when all the requirements
would be fully implemented. Some
costs will be higher during the initial
period due to start-up costs, such as
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building a consumer Web site, and costs
associated with bringing current child
care providers into compliance with
health and safety requirements.
However, significant costs, such as the
requirement to renew background
checks every five years, would not be
realized until later. These compounding
requirements account for the escalation
in costs in the out years of the analysis.
Throughout this RIA, we calculate
two kinds of costs: Money costs and
opportunity costs. Any new
requirements that have budgetary
impacts on States or involve an actual
financial transaction are referred to as
money costs. For example, there is a fee
associated with conducting a
background check, which is a money
cost regardless of who pays for the fee.
For purposes of this analysis, we
examined what additional resource
claims would be made as a result of the
reauthorized Act and proposed rule
regardless of who incurs the cost or
from what source it is paid (which
varies widely by State). In some
instances, money costs will be incurred
by the State and may require States to
redistribute how they use CCDF funds
in a way that has a budgetary impact. In
other cases, money costs will be
incurred by child care providers or
parents.
Alternatively, claims that are made for
resources where no exchange of money
occurs are identified as opportunity
costs. Opportunity costs are monetized
based on foregone earnings and would
include, for example, a caregiver’s time
to attend health and safety trainings
when they might otherwise be working.
Each year, more than $5 billion in
federal funding is allocated to State,
Territory, and Tribal CCDF grantees.
Activities in the proposed rule are all
allowable costs within the CCDF
program and we expect many activities
to be paid for using CCDF funds. For
example, although some States may
supplement funding, others may choose
to redistribute funding from a current
use to address start-up costs or new
priorities. We received a number of
comments from States in response to the
2013 NPRM that, in the absence of
additional funding, meeting
requirements in the proposed rule
would result in a reduction in the CCDF
caseload. Therefore, we anticipate some
money costs will result in this type of
re-distributive budgetary impact within
the CCDF program.
However, to make the costs of the rule
concrete, we provide analysis on the
economic impact of the rule if the child
care caseload were to remain constant.
While we recognize that there may be a
decrease in caseload due to the financial
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realities of the new requirements,
applying that decrease in caseload to
this analysis would only lessen the
estimated cost, which would result in a
probable underestimate. While the costs
estimated in this analysis represent the
costs required, (regardless of who pays
for the requirement) to meet the new
requirements for the current caseload of
1.4 million children, it is not, and
should not be interpreted as, our
projection of future caseload.
Overall, based on our analysis,
annualized costs associated with these
provisions, averaged over a ten year
window, are $256 million and the
annualized amount of transfers is
approximately $840 million (both
estimated using a 3 percent discount
rate), which amounts to a total
annualized impact of $1.10 billion. Of
that amount, $1.09 billion is directly
attributable to the statute, with only an
annualized cost of $1.6 million (or less
than 1% of the total estimated impact)
attributable to discretionary provisions
of this proposed regulation. While this
analysis does not attempt to fully
quantify the many benefits of the
reauthorization and this NPRM, we do
conduct a breakeven analysis to
compare requirements clarified through
this regulation against a potential
reduction in child fatalities and injuries.
Further detail and explanation on the
impact of each of the provisions is
available below.
1. Health and Safety Provisions
Per the new requirements in the
CCDBG Act, this proposed rule includes
several provisions focused on improving
the health and safety of child care. We
estimated costs associated with the
following three requirements:
Monitoring and inspections at § 98.42;
comprehensive background checks at
§ 98.43; and health and safety training at
§ 98.41(a)(2).
Implementation costs of health and
safety provisions, specifically the startup costs, in the proposed rule will
depend primarily on the number of
child care providers in a State and
current State practice in areas covered
by the proposed rule. We used data from
the FY 2014 ACF–800 administrative
data report to estimate that
approximately 269,000 providers caring
for children receiving CCDF subsidies
would be subject to CCDF health and
safety requirements. In addition to these
CCDF providers, this analysis also
includes approximately 110,000
licensed providers who are not
currently receiving CCDF subsidies but
would be subject to the background
check and certain reporting
requirements.
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These figures exclude relative care
providers since States may exempt these
providers from CCDF health and safety
requirements. According to OCC’s 2014
administrative data, there are
approximately 115,000 relative care
providers receiving CCDF assistance.
States vary widely on what they require
of relatives, with 18 States/Territories
requiring that relative providers meet all
health and safety requirements, 4
exempting relatives for all requirements,
and 34 indicating that relative providers
were exempt from some but not all
requirements.
It is difficult to forecast State behavior
in response to new requirements since
Lead Agencies have the option to
exempt relatives from these
requirements. Even those States that
currently apply requirements to
relatives may keep those requirements
at current levels rather than expanding
to meet new requirements. To provide a
general estimate of potential costs, if
States were to apply half of all the new
health and safety requirements to half of
the current number of relative
providers, the annualized cost (using a
3% discount rate) would be
approximately $30 million (averaged
over a 10 year window). However, since
applying the new requirements to
relatives is not a legal requirement, we
are not including costs associated with
relative providers in the accounting
statement for this regulatory impact
analysis. We do request comment on the
extent to which Lead Agencies
anticipate applying new requirements to
relative providers.
It should be noted that, based on a
longitudinal analysis of OCC’s
administrative data, the number of child
care providers serving CCDF children
has declined by nearly 50 percent
between 2004 and 2014, an average
decrease of 4 percent per year. The
greatest decline occurred in settings
legally operating without regulation,
specifically family child care; however,
both regulated and license-exempt child
care centers also saw declines. This
analysis is based on current provider
counts, but assuming that the number of
CCDF providers will continue to
steadily decrease, this estimate of the
number of providers, and resulting costs
associated with implementing health
and safety provisions, may be an
overestimate.
Many States’ licensing requirements
for child care providers already meet or
exceed components of the minimal
health and safety requirements for CCDF
providers in this proposed rule. For
example, training in first-aid and CPR
and background checks are commonly
included as part of State licensing, with
approximately 40 States already meeting
this requirement for licensed providers
(centers, group home, and family child
care).
Many licensed CCDF providers
already meet many of the other health
and safety requirements as well. For
example, more than 40 States already
require annual monitoring of all their
licensed providers, with even more
already requiring pre-inspections of
their licensed providers. In the case of
licensed centers, more than 45 States
already require pre-inspections. For
those States whose licensing
requirements do not meet CCDF health
and safety requirements, there will be
costs incurred. However, the largest cost
will be incurred for those CCDF
providers that are currently exempt
from State licensing that are not
relatives—approximately 85,000
providers nationally. (Table 2 below
provides a national picture of the types
of CCDF providers.) We used an
expanded State-by-State version of this
table to estimate costs for meeting
health and safety requirements. As
stated above, the proposed rule allows
States to exempt relatives from health
and safety requirements, including
background checks, health and safety
training, and monitoring. Therefore,
ACF did not attribute any cost
associated with these requirements to
relative CCDF providers, though we
welcome comment on predicted State
policies in this area.
TABLE 2—SUMMARY OF CCDF PROVIDERS (FY2014) *
Licensed CCDF providers
Centers
Family
home
CCDF providers legally operating without regulation (license-exempt)
Child’s home
(in-home)
Group
home
Relative
81,352 ..............................
70,165
32,130
38,670
Family and group home
Total
Centers
Non-relative
Relative
27,739
Non-relative
77,958
50,330
7,355
385,699
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* Source: ACF–800, Report 13.
It should be noted that we include
group home providers in this analysis
because our current data includes a
separate category for group homes.
However, the proposed rule would
remove ‘‘group home child care
provider’’ from our definitions and data
reporting, so group homes would no
longer be included in the data going
forward. In the future, according to the
proposed rule, those providers currently
designated as group home providers
would now fall into the category of
‘‘family child care providers’’
Monitoring and pre-inspections. The
CCDBG Act requires that States conduct
monitoring visits for all CCDF providers
including all license exempt providers
(except, at Lead Agency option, those
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that serve relatives). While States must
begin monitoring no later than
November 19, 2016, the full cost of this
requirement will not be in effect until
2017. Therefore, we are projecting some
period of phase-in, with 25% of
providers subject to monitoring in 2015
and an additional 50% (a total of 75%)
subject to monitoring requirements in
2016. The costs of these requirements
will be fully realized from 2017 on.
The CCDBG Act specified different
monitoring requirements for providers
who are licensed and providers who are
license-exempt.
• For Licensed Child Care Providers—
States must conduct one pre-licensure
inspection for health, safety, and fire
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standards and at least annual,
unannounced inspections.
• For License-Exempt Providers
(except, at Lead Agency option, those
serving relatives)—States must conduct
at least annual inspections for
compliance with health, safety, and fire
standards at a time determined by the
State.
For this estimate, if a State reported
that they conduct at least one annual
monitoring visit for licensed child care
providers (pre-licensure inspections are
discussed separately below), we
assumed no additional cost for those
providers because it met or exceeded
the frequency required by the statute
and proposed rule. The majority of
States already monitor licensed CCDF
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providers annually (more than 40 across
all settings—centers, family child care,
and group homes). A subset of States
that currently have annual monitoring
requirements do not conduct
unannounced visits. However, we did
not assign a cost for States changing
their policy from announced to
unannounced monitoring. We
acknowledge that there may be an
administrative cost to such a change,
but for the purposes of this estimate, we
consider that to be included in the
overall administrative cost allocation
discussed below. However, we welcome
public comment on specific costs
associated with moving from announced
to unannounced inspections.
This cost estimate takes into account
three major components of the new
monitoring requirements: (1) Annual
monitoring, (2) Pre-inspections, and (3)
a Hotline for parental complaints.
The annual monitoring estimate
includes the following variables
analyzed on a State-by-State basis:
• Current State Practice: We collected
State-level data from the 2014–15 CCDF
State plans and the NARA 2011–13
Child Care Licensing Study to determine
which States already met annual
inspection requirements. Data was
collected for the following settings:
Licensed CCDF providers (family, group
home, and centers) and license-exempt
CCDF providers (non-relative).
• Current Provider Counts: Using
2014 CCDF administrative data, we
collected the number of providers
within each setting for each State.
Using these data we arrived at an
estimate of the number of providers
within each State that would newly
require an annual monitoring visit. We
then estimated the number of new
licensing inspectors and supervisors
that would be required to monitor the
projected number of providers newly
subject to monitoring, based on a
projected caseload of child care
providers for each licensing staff. To
estimate the actual cost, we calculated
the cost of employing (salary and
overhead) the estimated number of
necessary new licensing staff (inspectors
and supervisors).
The CCDBG Act requires States to
have a ratio of licensing inspectors to
child care providers and facilities that is
sufficient to conduct effective
inspections on a timely basis, but there
is no federally required ratio. The
current range of annual caseloads per
licensing inspector is large, from 1:33 to
1:231. We used the following range to
estimate the impact:
• Lower bound: 50th percentile of
current licensing caseloads (weighted by
the number of providers in each State),
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which produced an adjusted caseload of
1:126 providers per monitoring staff.
• Upper bound: A 1:50 ratio of
providers to monitoring staff, as
recommended by the National
Association of Regulatory
Administration.
Our final cost estimate represents the
midpoint between the lower and upper
bound estimate. To calculate the
number of required supervisory staff, we
assumed a ratio of one supervisor per
seven monitoring staff, which is the
current average across States as reported
in the NARA 2011–13 Child Care
Licensing Study.
To generate the actual cost associated
with this staffing increase, we
multiplied the number of new staff by
salary and overhead costs for full-time
equivalent (FTE) staff based on Bureau
of Labor Statistics (BLS) data from the
National Occupation and Wage
Estimates from May 2013. The same
FTE costs were applied to all States. The
salary applied was $42,690 for each
monitoring line staff (see Community
and Social Service Specialists, All
Other: Code 21–1099) and $65,750 for
each supervisor (see Social and
Community Service Managers: Code 11–
9151), which was then multiplied by 2
to account for benefits and overhead.
(Data from the Bureau of Economic
Analysis’s National Income and Product
Accounts shows that in 2013, wages and
salaries are approximately 50 percent of
total compensation.). Using this
methodology, the estimated present
value cost of meeting this annual
monitoring requirement over the 10 year
period examined in this rule, using a
3% discount rate, is approximately $1.2
billion. The annualized money cost of
meeting the monitoring requirements is
$137 million, also estimated using a 3
percent discount rate.
We anticipate that annual monitoring
in States could result in additional
follow-up visits, which can be expected
if problems were identified in the initial
visit. Because we do not have data on
this with which to estimate potential
impacts, we welcome comment on the
percentage of providers that would
require a follow-up visit as a result of
new annual monitoring visits.
Opportunity costs for the monitoring
requirements account for the fact that to
successfully pass a monitoring visit,
there would presumably be a number of
administrative costs (in terms of time;
an opportunity cost) for providers and
caregivers. For example, providers must
read the new rules, change their current
practices to comply, and obtain and
track paperwork to make sure they are
in compliance. For the purposes of this
following analysis, we made several
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assumptions about the amount of time
required to prepare for and comply with
the monitoring requirement, but we
welcome comment on these
assumptions. To calculate the
opportunity cost of these visits, we
assumed that time spent doing
administrative tasks equals the length of
the monitoring visit plus an additional
1.5 and 2.0 hours of preparation per
hour of the visit, for family child care
and center providers respectively.
Based on one State reporting that their
monitoring visits for licensure took
between 2.5 and 5 hours, we used 2.5
hours as the basis for our lower bound
and 4 hours as the basis for our upper
bound. We used 4 hours instead of 5 for
our upper bound estimate because 5
hours is the amount reported for a
licensing visit, but what is required in
the proposed rule is generally much less
extensive than what is generally
required for licensure. As such, our
lower bound estimate uses 6.25 and 7.5
hours of preparation for family child
care and center providers, respectively,
and our upper bound uses 10 and 12
hours of preparation for family child
care and center providers, respectively.
According to BLS, for child care
workers, one hour equals $18.80 after
accounting for benefits and overhead
(we include overhead because
administrative preparation time occurs
during work hours). We estimated the
opportunity cost of preparation time for
monitoring to be an average of $5.2
million annually (estimated using a 3%
discount rate) during the two-year
phase-in period (assumes States begin to
ramp-up monitoring, but not fully
implemented) and an annualized
opportunity cost of $9.5 million
(estimated using a 3% discount rate)
over the entire 10 year window. Note
that the phase-in period discussed here
covers a two year period and is different
from the phase in period in the table
below, which shows a phase-in period
of 5 years (after which all requirements
would be fully implemented).
Some proportion of providers will
require remedial work to meet CCDF
health and safety requirements after an
annual visit. For example, a provider
may be out of compliance with building
safety or not have up-to-date
immunization records, and costs in
terms of time as well as material
resources would be necessary to come
into compliance. However, it is difficult
to quantify these effects because the
specific remediation required will vary
by provider and other circumstances.
Therefore, we did not attempt to
monetize the cost of providers’
remediation efforts. In addition, there
are also benefits to be reaped (in terms
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of child health and safety) as providers
makes changes to come into compliance
with health and safety requirements as
a result of this rule, but that are not
quantified in this analysis.
Next we estimate cost of pre-licensure
inspections required by the CCDBG Act.
This requirement, as proposed, applies
only to licensed CCDF providers. Using
the same methodology that we used for
annual monitoring, we determined how
many States already met this
requirement and used CCDF
administrative data to determine the
number of licensed CCDF providers (by
setting type) that did not previously but
would now require pre-licensure visits.
The proposed rule allows States to
grandfather all existing providers—thus
there is no start-up cost or backlog of
providers that need a pre-inspection.
There are not good data to estimate how
many new providers a State would need
to pre-inspect on an annual basis, but
anecdotal evidence suggests the number
is relatively small. Of the States that do
not currently require pre-inspections (1
for centers, 6 for group homes, and 7 for
family child care), we estimated (based
on information shared by a few States)
that a lower bound of five percent of
family child care and four percent of
center care would be new each year
(lower bound). For the upper bound, we
estimate that 12 percent of family child
care and 7 percent of child care centers
would be new each year.
Using a caseload of 88 providers per
monitoring staff (the midpoint of the
50th percentile of current caseload data
and the recommended caseload of 50:1),
and using the same salary and benefits
data as the monitoring estimates, the
estimated present value cost of meeting
this requirement over the 10 year period
examined in this rule, using a 3%
discount rate, is approximately $6
million. Ongoing average annual preinspection costs are estimated to be
approximately $1 million (estimated
using a 3% discount rate), but would
not begin until 2017.
Monetized caregiver time to prepare
for pre-inspections is considered an
opportunity cost and is estimated to be
approximately $200,000 annually, a
relatively small amount because this
only applies to new licensed providers
in the few States that don’t already
require pre-licensure inspections.
Though some of the opportunity cost
would be incurred prior to the actual
inspection visit, for the purposes of this
estimate, we considered all costs for
pre-inspections as beginning after the
end of the phase-in period. We used the
same methodology used to calculate
annual inspections to determine the
opportunity cost of pre-inspections.
However, recognizing that preparing
for an initial licensing inspection may
require additional time, we used the
midpoint of the estimate time for an
annual visit and doubled it for an
estimated 16.25 hours for family child
care and group homes and 19.5 hours
for centers. Again, we welcome
comment on these assumptions if there
is additional data on the amount of time
required to prepare for and participate
in an inspection.
This cost analysis also includes the
‘‘parental complaint hotline’’ as part of
the monitoring requirements. Per the
CCDBG Act, the proposed rule would
require at § 98.32(a) Lead Agencies to
establish or designate a hotline or
similar reporting method for parents to
submit complaints about child care
providers. Lead Agencies have
flexibility in how they implement this
requirement, including whether the
system is telephonic or through a
similar reporting process, whether the
hotline is toll-free, and whether the
hotline is managed at the State or local
level. Based on an examination of
several States that already have
comparable hotlines in place, this
estimate for the parental complaint
hotline includes multiple components
that might be associated with the
implementation and maintenance of a
telephonic hotline.
These components include the onetime purchase of an automatic call
distribution (ACD) system at $45,000;
the use of a digital channel on a T1 line
ranging from $204 to $756 per year;
2,000 minutes of incoming call time at
$0.06 per minute; and salary and
benefits for one FTE to manage the
hotline at $67,000. States vary in how
they collect parental complaints.
According to an analysis of the FY
2014–2015 CCDF Plans and review of
State child care and licensing Web sites,
18 States/Territories have a parental
complaint hotline that covers all CCDF
providers, 22 States/Territories have a
parental complaint hotline that covers
some child care providers, and 16
States/Territories do not have a parental
complaint hotline. (Note that unlike the
other health and safety provisions, this
estimate does include Territories).
States that had hotlines for both
licensing and CCDF were considered as
meeting the full requirement for a
parental complaint hotline and had no
additional costs. States that only had
one hotline (e.g., only for licensed
providers) were considered as partially
meeting the requirement for the hotline
and had 0.5 FTEs applied. The full
amount was applied to States that did
not have anything in place that met the
requirements of the hotline.
We used a range of options to estimate
the impact of the parental complaint
hotline requirement based on the cost of
the TI line and whether the hotline is
toll-free and chose the mid-point as the
primary estimate. Using this
methodology, the estimated present
value cost of meeting this requirement
over the 10 year period examined in this
rule, using a 3% discount rate, is
approximately $16.6 million. Average
annual costs during the phase-in period
are estimated to be approximately $2.6
million during the first year (different
than the phase-in figure in Table 3
below) and an average of $1.8 million
for each year after. The estimate
assumed slightly higher startup costs
during the first year because States and
Territories may need to purchase and
install an ACD system.
TABLE 3—ESTIMATED IMPACTS OF MONITORING PROVISIONS
tkelley on DSK3SPTVN1PROD with PROPOSALS2
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized cost
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Money Costs ($ in millions)
Annual monitoring .....................................
Preinspection new facilities .......................
Hotline .......................................................
123.4
0.5
2.0
154.3
0.9
1.8
138.9
0.7
1.9
136.9
0.7
1.9
134.1
0.7
1.9
1,388.7
7.3
18.8
1,202.5
6.2
16.6
1,007.8
5.1
14.3
Subtotal ..............................................
125.9
157.0
141.5
139.5
136.7
1,414.7
1,225.3
1,027.2
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TABLE 3—ESTIMATED IMPACTS OF MONITORING PROVISIONS—Continued
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized cost
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Opportunity Costs ($ in millions)
Annual monitoring .....................................
Preinspection new facilities .......................
8.5
0.1
10.7
0.2
9.6
0.2
9.5
0.2
9.3
0.2
95.9
1.9
83.0
1.6
69.6
1.3
8.7
10.9
9.8
9.6
9.4
97.7
84.6
70.9
Total ............................................
tkelley on DSK3SPTVN1PROD with PROPOSALS2
Subtotal ..............................................
134.6
167.9
151.2
149.1
146.1
1,512.5
1,309.9
1,098.1
Comprehensive background checks.
The CCDBG Act added a new section at
658H on requirements for
comprehensive, criminal background
checks that draw on federal and State
information sources. The CCDBG Act
outlines five components of a criminal
background check, which we restate in
§ 98.43 of the proposed rule. There are
several aspects of the background check
requirements that must be taken into
account in a cost estimate. This includes
the background checks for existing child
care staff members (who do not already
have them), the new federal requirement
that child care staff members receive a
background check every five years,
background checks for family members
living in family child care homes, and
checks with other States if a child care
staff member has lived in another State.
This cost estimate does not take into
account the cost of the requirement at
§ 98.43(b)(2) for a search of the National
Crime Information Center. ACF is
currently in discussions with the FBI to
determine the logistics behind States
meeting this requirement. We welcome
comment on the cost of meeting this
requirement.
Similar to the methodology used for
monitoring, the first step of the cost
estimate was to determine current State
practice. We used CCDF 2014–15 State
Plan data (which included State-byState data on four distinct background
check components organized by
provider type) to determine which
States already met certain components
of the background check requirement.
After identifying the areas where States
would need to implement new
requirements we applied the provider
counts to determine the number of child
care staff members that would need to
meet these new background check
requirements.
Because our administrative data on
the number of CCDF providers represent
the number of child care programs
serving CCDF children, not the
individual child care staff members in
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these settings that would need to receive
a background check, we estimate the
number of individual child care staff
members that would be affected by this
provision by applying a multiplier to
each provider type (centers, family
home, and group home).
We propose to require individuals,
age 18 or older, residing in a family
child care home be subject to
background checks. It is reasonable to
assume that these individuals may have
unsupervised access to children.
Because we are including these
individuals in the definition of child
care staff members, they will be subject
to the same requirements and will be
allowed the same appeals process as
employees.
To generate an estimated number of
staff per child care center, we used data
from the National Survey of Early Care
and Education (NSECE), which
indicated that the median number of
children per center nationally is
approximately 50. We then used the
following data sources: (1) ACF–801
CCDF administrative data, which
provides a detailed breakdown of the
number of CCDF children by age group;
and (2) Caring for our Children, which
has a recommended staff-child ratio for
centers by age group. (Caring for Our
Children’s recommended staff-child
ratios are an overestimate because not
all States have adopted the standard.)
Using these figures, a weighted average
was generated that takes into account
the national age-distribution of CCDF
children served and recommended
child-staff ratios for an average center.
This resulted in a baseline multiplier of
11 staff members per child care center
receiving CCDF-funded subsidies, 8 of
whom are caregivers and 3 are
additional staff members or individuals
who may have unsupervised contact
with children.
We estimated the number of other
adult household members residing in
family child care homes (persons other
than the caregiver) and relevant staff
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members and added this to our cost
estimate. We assumed each family child
care and group home provider had an
average of 1 additional household
member. (This assumption is informed
by consultation with State
administrators, who stated that most
frequently there is 1 other adult over the
age of 18 in a family child care home
that must undergo a background check).
Using these multipliers, we estimated
the cost for background checks for staff
members newly subject to the
requirements. This includes both the
cost of obtaining the background check
and the opportunity cost for child care
staff members to meet the required
components. The opportunity cost
represents the value of time (measured
as foregone earnings) of child care staff
members during the time, they spend to
complete a background check.
Many States already require some, if
not most, of the background check
components. To determine the existing
need, we compared the requirements
described in this proposed rule against
current background check requirements,
as reported in the CCDF 2014–2015
Plans. According to the FY 2014–2015
CCDF Plans, nearly 30 States require
that licensed child care center staff
undergo a State criminal background
check that includes a fingerprint. More
States already have requirements for a
State criminal background check
without a fingerprint, but for this
estimate, we only counted States that
required a fingerprint as meeting the
requirement. For licensed centers, more
than 40 already require an FBI
fingerprint check, nearly all already
require a check with a child abuse and
neglect registry, and more than 35
require a check with a sex offender
registry. Nearly 30 States require
licensed family child providers to have
a State criminal background check that
includes a fingerprint, more than 40
already require an FBI fingerprint check,
more than 30 require a check with the
child abuse and neglect registry, and
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more than 35 require a check against a
sex offender registry.
Fewer States meet the background
check requirements for unlicensed
CCDF providers. According to our State
Plan data, only fewer than 25 States
already have FBI fingerprint check
requirements in place for its unlicensed
providers and only six require those
providers to have a State background
check that includes a fingerprint.
Using this data, we identified gaps in
existing State policies as compared to
the newly-required background check
components. These gaps were matched
with CCDF ACF–800 administrative
data showing the number of providers
per setting type by State, and then using
the methodology above calculated the
number of child care staff members
requiring background checks.
As mentioned above, there are two
costs of a background check: the fee to
conduct the check and the time it takes
for individuals to get the check. With
regard to the fee, Lead Agencies have
flexibility to determine who pays for
background checks. According to the FY
2014–2015 CCDF Plans, more than
States require the child care provider to
pay for the background check,
approximately 10 States indicated the
cost was split, and fewer than 10 States
indicated they pay the fees associated
with the cost of conducting a
background check. However, regardless
of how costs are assigned, an impact
analysis must include the overall
monetary and opportunity cost impacts.
In their CCDF Plans, Lead Agencies
described their costs associated with
conducting background checks,
including cost information on
individual components of the
background check. This information,
combined with information we received
from the FBI regarding costs of FBI
fingerprint checks, was used to derive
an estimated average cost of each
background check component for a total
of $55 for each set of four background
checks. We applied this cost (or a partial
cost) to the number of individuals in
need of some or all of the background
check components, determined after
identifying State-by-State practices for
different types of providers.
Next, we estimated the average annual
ongoing cost of administering
background checks to new child care
staff members (as opposed to start-up
costs associated with bringing existing
staff members into compliance). Child
care provider departure rates cited in
the literature vary widely from as low as
10 percent to 20 percent (The Early
Childhood Care and Education
Workforce: Challenges and
Opportunities, Institute of Medicine and
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the National Research Council, 2012).
We used these as the lower and upper
bounds, respectively for our estimated
turnover rate. We then reduced this
estimate by another 10 percent to
account for the fact that the law requires
some portability of background checks
for certain staff members in a State,
meaning that if a staff member has
already passed a background check
within the past five years, then that
individual is not required to get another
background check when changing
employment from one child care
provider to another.
Based on this approach, the estimated
present value cost of meeting these
background check requirements (for
existing and new providers) over the 10
year period examined in this rule, using
a 3% discount rate, is approximately
$58.6 million. ACF estimated that
during the three year phase-in period
background check fees would have an
average annual money cost of $10.8
million (also estimated using a 3%
discount rate), as States bring existing
providers into compliance. (Note again
that this phase-in period is different
than the five year period indicated in
the table below). We estimate the
average annual ongoing money costs
associated with background checks for
new staff members of approximately $4
million (estimated using a 3% discount
rate).
The CCDBG Act requires that all child
care staff members receive a background
check every five years. Through the
2014–15 CCDF State Plans, States report
on how frequently licensed providers
are required to receive each component
of the background check. This data was
available both by individual background
check component and by provider type.
If a State already required that a
particular background check be renewed
every five years (or more frequently), we
did not include it in this cost estimate.
While we know that States have similar
policies in place for unlicensed
providers, we do not have data for this
subset of the provider population.
Therefore, we considered the renewal of
background checks for unlicensed
providers to be a fully new cost to all
States, understanding that this is more
likely than not an overestimate.
Since not all background checks will
be conducted in the same year, we
spread these costs evenly over a five
year period to show that the costs would
not be incurred all at once. We
recognize that in practice these costs
may not be evenly distributed over the
five year period, depending on how
States choose to conduct background
checks during the initial
implementation period. However, any
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uneven distribution of costs over time
only negligibly affects the total dollar
amount. The estimated present value
cost of renewing background checks for
all individuals over the 10 year period
examined in this rule, using a 3%
discount rate, is approximately $55.4
million, with the average annual
ongoing money costs of this five year
renewal requirement (once it begins in
year six of the ten year window) to be
$13.6 million. However, since provider
counts have been in steady decline (as
discussed earlier), this may be an overestimate.
Another feature of the background
check requirement is that States are
required to check the State-based
criminal, sex offender, and child abuse
and neglect registries for any States
where an individual resided during the
preceding five years. To estimate how
many individuals would require an
additional State background check, we
used data from the U.S. Census Bureau,
which conducts a Current Population
Survey that includes data on Migration
and Geographic Mobility (Current
Population Survey Data on Migration/
Geographic Mobility, U.S. Census
Bureau). Mobility data on employed
individuals (inclusive of all races and
genders) ages 25 to 64 show an out of
State mobility rate of approximately two
percent. Given that this data measures
mobility in a given year and our
requirement is for a five year window,
we use a 10% mobility rate for this
calculation. We assume that 10% of all
child care staff members will require a
check with another State and assign a
prorated cost of the background checks
minus the FBI check accordingly. We
estimate the average annual ongoing
money costs of this requirement to
check other States to be less than a
million dollars.
Next, we monetized child care staff
member time spent obtaining a
comprehensive background check such
as completing paperwork or other
activities necessary to complete the
check. We assumed that a check of the
child abuse neglect registry takes 30
minutes, and that the other three
components of a comprehensive
background check take 1 hour combined
(or 20 minutes each) for a total of 1.5
hours. We also assumed that each hour
is worth $12.80, assuming $10 per hour
for a child care staff member multiplied
by 1.28 to account for benefits.
(Employer Cost for Employee
Compensation database, Bureau of
Labor Statistics, adjusted to reflect the
number of child care providers that are
self-employed) ACF estimated average
annual opportunity costs (using a 3%
discount rate) for all the background
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check components of $6.3 million
during the 3 year phase in period and
an annualized cost of $7.1 million over
the 10 year window.
More extensive background checks
will lead to greater numbers of job
applicants and other associated people
being flagged as risky, thus leading to
additional types of cost. For example, a
hiring search would need to be
extended if the otherwise top candidate
is revealed by a background check to be
unsuitable to work with children. These
costs that result from background
checks are correlated with benefits;
indeed, if this category of costs is zero,
then the background check provisions of
this proposed rule would have no
benefits. However, due to lack of data,
we have not attempted to quantify either
this type of costs or the associated
benefits and request comments that
could inform such quantification.
TABLE 4—ESTIMATED IMPACTS OF BACKGROUND CHECK PROVISIONS
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Money Costs ($ in millions)
Background Checks ..................................
Background Check Renewals ...................
Background Checks with Other States .....
8.4
0.0
0.5
4.5
13.6
0.8
6.5
6.8
0.7
6.7
6.3
0.6
6.9
5.7
0.6
64.6
68.1
6.5
58.6
55.4
5.7
52.2
42.6
4.8
Subtotal ..............................................
8.9
18.9
14.0
13.6
13.2
139.2
119.7
99.6
Opportunity Costs ($ in millions)
5.8
0.0
0.5
3.1
4.4
0.4
4.4
2.2
0.5
4.6
2.0
0.5
4.8
1.8
0.5
44.0
22.1
4.7
40.3
18.0
4.1
35.9
13.8
3.6
Subtotal ..............................................
6.3
7.9
7.1
7.1
7.1
71.2
62.4
53.3
Total ............................................
tkelley on DSK3SPTVN1PROD with PROPOSALS2
Background Checks ..................................
Background Check Renewals ...................
Background Checks with Other States .....
15.2
26.8
21.1
20.7
20.3
210.4
182.1
152.9
Caregiver, teacher and director
training. The CCDBG Act and this
proposed rule require Lead Agencies to
establish training requirements for
caregivers, teachers, and directors of
CCDF providers. The Act (section
658E(c)(2)(I)) and the proposed rule
(§ 98.41(a)(1)) require pre-service or
orientation training and on-going
training in health and safety topics,
including first aid and CPR, safe sleep
practices, and other specified areas. In
addition, the law (section 658E(c)(2)(G))
and proposed rule (§ 98.44) require
training and professional development,
including training on child
development.
For this analysis, we estimated costs
in the following areas: current number
of CCDF caregivers, teachers, and
directors (using FY 2014 data) to meet
new pre-service or orientation training
requirements; on-going training for
caregivers, teachers, and directors
(which includes new incoming
caregivers); and pre-service or
orientation training for new caregivers,
teachers, and directors.
To establish a baseline, ACF used
information reported by States in their
FY 2014–2015 CCDF Plans and
information from the 2011–13 Child
Care Licensing Study to determine—for
each of the training areas—which
trainings were already required by State
policy for the following providers:
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centers, family homes, and group
homes. The available data allowed us to
distinguish between requirements for
licensed providers and unlicensed
providers, allowing us to further refine
the cost estimate. Once current
requirements for each State were
identified, we were able to determine
which new trainings would be required,
and then apply the cost of receiving the
balance of trainings.
We reviewed the health and safety
training delivery models in multiple
States with a range of available training
requirements to get a better sense of the
range of costs for training. We found a
wide range, from training provided at
no-cost, to training packages that cost
up to $170. Using these figures as a
basis, a lower bound of $60 and an
upper bound of $140 was established for
the total training package per caregiver.
This range is informed by the fact that
many no-cost online training courses
have already been developed, and thus
are truly no cost, but even States taking
advantage of no-cost online trainings
would most likely have to use
additional trainings with costs
associated in order to meet all the
requirements.
Training costs were broken into three
components: first-aid & CPR training,
child development training, and then a
package of all other basic health and
safety requirements. For the purposes of
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this estimate, we created these
groupings to better reflect the available
cost information that we gathered
through our research. First-aid and CPR
are the most commonly offered
trainings, so their costs were easier to
identify. We separated child
development training from the rest of
the package to reflect the fact that the
delivery of trainings in this area are
more likely to be tied to broader ongoing professional development
curricula or programs, and may have a
higher cost. Breaking the trainings down
in this way allowed us to apply a prorated amount, based on what was
currently required by States.
This training requirement only
applies to child care providers receiving
CCDF subsidies. However, as with the
background check estimate, another
factor in the calculation was the number
of caregivers, teachers and directors per
provider that would need to receive the
training, since the ACF–800 data
captures the number of child care
providers serving CCDF children not
individual caregivers, teachers, or
directors in these settings that would
need to receive training. To compensate
we applied a multiplier to each setting
type (centers, family home, and group
home). We used the same methodology
described in the background check
section above (based on data from the
NSECE, ACF–801, and Caring for our
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Children child-staff ratios), to create a
weighted average of nine caregivers/
teachers/directors per child care center.
Unlike the background check
requirement, the training would only
apply to those providing care for
children. For family child care homes,
we estimate that one caregiver per site
would be required to receive training,
and two caregivers per group home.
Next, we assumed that some
caregivers, teachers, and directors may
already have training in some of the
topics, though they were not previously
required, and reduced the total estimate
by 10 percent. After applying these
assumptions, to gaps in current State
practice, we were able to estimate the
present value cost of compliance with
the new pre-service and orientation
training requirement. A basic
explanation of the calculation is ‘‘the
number of trainings required for
compliance (by State and by provider
type) multiplied by number of
individuals trained multiplied by the
cost per training (up to $140 per
individual). We also assumed that some
portion of individuals will have already
received trainings that could apply to
the new requirements, so we reduced
the final estimate by ten percent. Using
a 3% discount rate, the estimated cost
is approximately $61 million over the
10 year period examined in this rule, or
an annualized value of $7 million. We
estimated that during the phase-in
period, the required pre-service or
orientation health and safety training
has an average annual money cost of
$18.8 million for the initial two year
phase-in period and $3.0 million in
subsequent years. The increased cost in
the initial years is due to the high cost
of bringing current providers into
compliance during the phase-in period
while in subsequent years, the preservice and orientation trainings would
only apply to new providers. To
estimate the ongoing cost of providing
health and safety training in the
required topic areas pursuant to the
CCDBG Act to newly entering
caregivers, teachers, and directors of
CCDF providers who would not
otherwise have been required to receive
training, we had to predict turnover
within the provider population. We took
the midpoint of the turnover number we
used for background checks—15
percent. Since, according to the NSECE,
many caregivers new to a care setting
are not new to the profession, we further
reduced that estimate by 20 percent to
account for the fact that some new
caregivers, teachers, and directors will
be coming from other CCDF care
settings, and thus bring their training
credentials with them. (Number and
Characteristics of Early Care and
Education (ECE) Teachers and
Caregivers: Initial Findings from the
National Survey of Early Care and
Education (NSECE), OPRE Report
#2013–38)
To generate a cost of ongoing training,
based on anecdotal evidence from State
administrators, we assumed that
ongoing trainings (e.g., maintaining
competencies and certificates) would be
the equivalent of approximately 20% of
the total cost of pre-service and
orientation training to the entire CCDF
provider population and used that as
our annual estimate. The estimated
present value cost of renewing
background checks for all individuals of
ongoing training for existing providers
over the 10 year period examined in this
rule, using a 3% discount rate, is
approximately $54 million. We
estimated that on an ongoing basis,
average annualized money costs for
training would be $6.2 million
(estimated using a 3% discount rate).
Next we monetized caregiver/teacher/
director time spent completing the
requisite health and safety trainings.
The National Center on Child Care
Professional Development Systems and
Workforce Initiatives funded by ACF
reported that the training topics together
would require a minimum of 20 hours.
However, most caregivers will require
only a subset of the training topics (e.g.,
SIDS training is only for caregivers that
serve infants; transportation and child
passenger safety is only as applicable).
Using that as a baseline, for the
purposes of this calculation we used a
lower bound estimate of 15 hours and
an upper bound of 30 hours to complete
the required trainings. We used the
midpoint of these two estimates for the
final estimate. We assumed that each
hour of staff time equals $12.80, the
same as we did for background checks
($10 for child care caregivers multiplied
by 1.28 to account for benefits, but not
overhead). (Employer Cost for Employee
Compensation database, Bureau of
Labor Statistics, adjusted to reflect the
number of child care providers that are
self-employed) We then applied a 10
percent reduction to account for
caregivers who have fulfilled some
training requirements that were not
previously required. Using these
assumptions, during the initial two year
phase-in period (different than the 5
year phase-in period indicated in the
table below) the average annual
opportunity cost of monetized caregiver
time on trainings is estimated to be
approximately $63.2 million. The
average annual opportunity cost after
full implementation (years 3 and on) is
estimated to be $25.4 million.
TABLE 5—ESTIMATED IMPACTS OF TRAINING PROVISIONS
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Money Costs ($ in millions)
9.8
5.6
3.5
7.0
6.6
6.3
7.0
6.2
7.5
6.1
66.4
62.9
61.4
54.4
56.0
45.5
Subtotal ..............................................
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Pre-Service & Orientation .........................
On-going (existing providers) ....................
15.4
10.5
12.9
13.2
13.6
129.3
115.8
101.5
Opportunity Costs ($ in millions)
Pre-Service & Orientation .........................
On-going (existing providers) ....................
27.8
15.9
10.0
19.9
18.9
17.9
19.9
17.6
21.2
17.3
189.2
179.2
174.9
155.0
159.5
129.7
Subtotal ..............................................
43.8
29.9
36.8
37.6
38.5
368.4
329.9
289.2
Total ............................................
59.2
40.4
49.7
50.7
52.1
497.7
445.7
390.7
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Administrative and information
technology (IT) startup. Compliance
with these health and safety provisions
will require States to incur
administrative costs and develop or
expand their information technology
systems and capacity. Given that there
will be significant variation at the State
level on these costs, rather than attempt
to quantify the related costs for each
provision, we applied a percentage of
the total health and safety money costs
(minus the hotline for parental
complaints) to estimate the costs of both
administrative and IT/infrastructure
costs. This analysis assumes 5 percent
for administrative costs and an
additional 5 percent for IT/
Infrastructure costs. Since the
annualized amount of all total health
and safety money costs (minus the
hotline for parental complaint) is
approximately $165 million, five
percent of that would be approximately
$8.3 million per year (using a 3%
discount rate).
Our 5 percent estimate for
Administrative costs is based on Sec.
658E(c)(3)(C) of the Act, which places a
5 percent limit 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.’’
The 5 percent estimate for IT/
Infrastructure costs is based on OCC’s
expenditure data (ACF–696), which
shows that Lead Agencies reported
using a total of $68 million or
approximately 1 percent of expenditures
on computer information systems.
Given the expected increase in IT costs
associated with implementing the new
rule, including possible costs associated
with consultation, we increased that to
5 percent, which we considered a
reasonable estimate given current
expenditure levels.
The estimated present value cost of
both administrative costs and IT/
Infrastructure costs over the 10 year
period examined in this rule, using a
3% discount rate, is $72.4 million for
each. This amounts to an annualized
cost of approximately $8.3 million each
for administrative and IT/Infrastructure
costs.
TABLE 6—ESTIMATED IMPACTS OF HEALTH AND SAFETY PROVISIONS
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Money Costs ($ in millions)
Monitoring ..................................................
Background Checks ..................................
Training .....................................................
Admin ........................................................
IT & Infrastructure .....................................
125.9
9.0
15.4
7.5
7.5
157.0
18.9
10.5
9.2
9.2
141.5
13.9
12.9
8.3
8.3
139.5
13.6
13.2
8.2
8.2
136.7
13.3
13.5
8.1
8.1
1,414.7
139.2
129.3
83.4
83.4
1,225.3
119.7
115.8
72.4
72.4
1,027.2
99.6
101.5
60.9
60.9
Subtotal ..............................................
165.3
205.0
185.1
182.9
179.9
1,851.6
1,606.8
1,351.1
Opportunity Cost ($ in millions)
Monitoring ..................................................
Background Checks ..................................
Training .....................................................
8.7
6.3
43.8
10.9
7.9
29.9
9.8
7.1
36.8
9.6
7.1
37.6
9.4
7.1
38.5
97.7
71.1
368.4
84.6
62.4
330.0
70.9
53.3
289.3
Subtotal ..............................................
58.8
48.7
53.7
54.3
55.0
537.2
477.0
413.5
Total ............................................
224.1
253.7
238.8
237.2
234.9
2,388.8
2,083.8
1,764.6
tkelley on DSK3SPTVN1PROD with PROPOSALS2
2. Consumer Education Provisions
The CCDBG Act and the proposed
rule includes several provisions related
to improving transparency for parents
and helping them to make better
informed child care choices. Some of
these provisions may require new
investments by the States, Territories,
and Tribes, including a consumer
education Web site at § 98.33(a) and a
consumer statement at § 98.33(d).
Greater discussion of each of the
provisions can be found at Subpart D.
All costs associated with
implementation of consumer education
requirements are considered money
costs (as opposed to opportunity costs)
since they would involve an actual
money transaction.
Consumer education Web site. The
proposed rule, per the CCDBG Act,
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would amend paragraph (a) of § 98.33 to
require Lead Agencies to create a
consumer-friendly and easily accessible
Web site as part of their consumer
education activities. The Web site must
at a minimum include five main
components: (1) Lead Agency policies
and procedures, (2) provider-specific
information for all eligible and licensed
child care providers (other than an
individual who is related to all children
for whom child care services are
provided), (3) aggregate number of
deaths, serious injuries, and instances of
substantiated child abuse in child care
settings each year for eligible providers,
(4) referral to local child care resource
and referral organizations, and (5)
directions on how parents can contact
the Lead Agency, or its designee, and
other programs to help the parent
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understand information included on the
Web site. We established our estimate
based on current State practice and the
market price of building a Web site that
fulfills the requirements in this
proposed rule.
ACF conducted a comprehensive
review of State Web sites and found 35
States and Territories already have Web
sites that meet at least some of the new
requirements. Based on an analysis of
current State consumer education Web
sites, we assumed that any of the States
that did not meet any of the new
requirements would have all new costs.
For States that met some of the
requirements, we determined the
percentage of work needed for the Web
site to meet the requirements and
multiplied the percentage of work
needed by the cost estimate for building
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and implementing a consumer
education Web site. Components of a
Web site that we looked for and
included in our estimate were: The
scope of the Web site in terms of which
providers were included (e.g., whether
it included licensed providers and
unlicensed CCDF providers); health and
safety requirements; posting the date of
last inspection, including any history of
violations or compliance actions taken
against a provider; posting providerspecific information about the number
of serious injuries and fatalities that
occurred while in their care;
information on the quality of the
provider; and aggregate data on number
of fatalities, serious injuries, and
substantiated cases of child abuse that
occurred in child care. From this
review, we determined the amount of
work needed for all States and
Territories to build and implement the
requirements of the consumer education
Web site. We also consulted several
organizations familiar with building
Web sites to establish an upper and
lower bounds for the estimate based on
the proposed rule that covered the full
range of implementation, from planning
and initial set-up to beta testing. The
upper and lower bound estimates
include features that would make the
Web site more user-friendly but may not
be included in the proposed rule,
including advanced search functions,
such as a map feature, to make it easier
for parents to find care.
Building and implementing a new
Web site would require some start-up
costs, so the cumulative estimated costs
are higher during the initial five-year
phase-in period. We established a lower
bound estimate to include the web
developer costs of planning, creating
supporting documentation, site and
infrastructure set-up, static page
creation, initial data imports, the
creation of basic and advanced search
functions and data management
systems, and testing. The upper bound
adds development and improvement
activities to modernize the Web site as
technologies change. Ongoing annual
costs include quality control and
maintenance, providing customer
support, and monthly data updates to
the Web site. All of these estimates
include salaries and overhead for the
Web site developers and staff, weighted
by the number of CCDF providers in
each State.
Based on our research, we used the
same salary and overhead information
($67,000 for line staff) for all States.
However, we believe that there will be
different levels of effort depending on
the number of providers in a State, so
we assumed different FTEs based on the
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total number of child care providers in
a State: States with more than 8,000
providers (3.0 FTE), states with between
3,000 and 8,000 providers (2.50 FTE),
and States with less than 3,000
providers (2.0 FTE). 11 States had over
8,000 providers; 16 States and
Territories had between 3,000 and 8,000
providers; and 29 States and Territories
had fewer than 3,000 providers.
Over the five-year phase-in period, we
estimated an average annual money cost
(estimated using a 3% discount rate) for
just the building and maintenance of
Web sites of $12.8 million and ongoing
money costs of $11.8 million annually.
The proposed consumer education
Web site would require a list of
available providers and providerspecific monitoring reports, including
any corrective actions taken. The costs
associated with collecting the
information necessary to provide this
information on the Web site is included
in other parts of this RIA. For example,
this RIA includes an estimate for the
cost of implementing proposed
monitoring and inspection
requirements. There may also be effort
associated with translating information
from monitoring and inspection reports
for an online format. However, since the
monitoring cost assumes the full salary
for monitoring staff and supervisors, we
believe that it is reasonable to assume
that the duties of these employees
would include processing licensing
information/findings.
However, one of the proposed
components of the consumer education
Web site at § 98.33(a)(2)(ii) is
information about the quality of the
provider as determined by the State
through a quality rating and
improvement system (QRIS) or other
transparent system of quality indicators,
if the information is available for the
provider. For Lead Agencies that do not
currently have a means for
differentiating quality of care, there may
be new money costs associated with
creating the system of quality indicators
necessary to obtain quality information
on providers. Therefore, we are
incorporating the cost of implementing
a system of quality indicators into the
cost estimate for the consumer
education Web site.
In order to estimate the costs of
implementing the transparent system of
quality indicators for the consumer
education Web site, we modeled a
sample system of quality indicators
using the QRIS Cost Estimation Model
(developed by the National Center on
Child Care Quality Improvement funded
by ACF). Costs were associated with the
following components included in the
cost estimation model: Quality
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assessment, monitoring and
administration, and data and other
systems administration. For each State,
we identified the components of the
sample system of quality indicators that
each individual State or territory was
missing. Costs were applied only in the
areas that were lacking for States and
territories with partial compliance.
States and territories not meeting any of
the components of the model had all
new costs associated with each
component. Using information from the
CCDF FY 2014–2015 State Plans and the
National Center on Child Care Quality
Improvement, ACF determined which
States had a system for differentiating
the quality of care available in the state,
which States could then use to provide
information on the consumer education
Web site. In order for States to be
considered as already meeting this
requirement, the State needed to have
reported having a means for measuring
and differentiating quality between
child care providers. ACF recommends
this system be a QRIS that meets high
quality benchmarks, but as this NPRM
does not propose requiring a QRIS, we
counted other systems of quality
indicators, such as tiered
reimbursement based on quality, as
meeting the proposed components of
the consumer Web site. More than 45
States have sufficient means for
differentiating quality and therefore we
assumed no cost for those States.
ACF estimates that during the fiveyear phase-in period the total national
cost associated with implementing
transparent systems of quality indicators
has an average annual cost of $2.2
million. This estimate has been added to
the cost of designing and implementing
the consumer education Web site, with
an estimated present value cost over the
10 year period examined in this rule,
using a 3% discount rate, of $116.4
million, with an annualized cost of
$13.3 million.
Consumer statement. The proposed
rule at § 98.33(d) would require Lead
Agencies to provide parents receiving
CCDF subsidies with a consumer
statement that includes information
specific to the child care provider they
select. The consumer statement must
include health and safety, licensing or
regulatory requirements met by the
provider, the date the provider was last
inspected, any history of violations, and
any voluntary quality standards met by
the provider. It also must disclose the
number for the hotline for parents to
submit complaints about child care
providers, as well as contact
information for local resource and
referral agencies or other communitybased supports that can assist parents in
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finding and enrolling in quality child
care.
The information included in the
consumer statement overlaps with much
of the information required on the
consumer education Web site. In their
FY 2014–2015 CCDF Plans, 42 States
and Territories report using their Web
sites to convey consumer education
information to parents about how their
child care certificate permits them to
choose from a variety of child care
categories. Since many States and
Territories are already using their Web
sites to make available provider-specific
information, we assume they would use
their Web sites to begin building
consumer statements. We assumed the
consumer education Web site already
includes the majority of information
required in the consumer statement,
including, if available, information
about provider quality. However, Lead
Agencies may have costs to pay for
updates to their Web sites, including
compiling information on the hotline
and creating printable forms for hard
copies of the consumer statement, if
desired. This estimate also takes into
account the number of providers in each
State or Territory. During the five-year
phase-in period, we estimated an
average annual cost of the consumer
statement provisions to be
approximately $1 million and an
average ongoing cost of $775,000
annually.
TABLE 7—ESTIMATED IMPACTS OF CONSUMER EDUCATION PROVISIONS
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Money Costs ($ in millions)
Consumer education website ....................
Consumer statement .................................
12.8
1.0
11.8
0.8
12.3
0.9
12.4
0.9
12.5
0.9
123.0
8.8
108.6
7.8
93.6
6.8
Total ...................................................
13.8
12.6
13.2
13.3
13.4
131.8
116.4
100.4
tkelley on DSK3SPTVN1PROD with PROPOSALS2
3. Increased Average Subsidy per Child
The reauthorized statute and this
proposed rule include several policies
aimed at increasing access to quality
care for low-income children, as well as
creating a fairer system for child care
providers. As Lead Agencies implement
these new policies, we expect that there
will be an increase in the amount paid
to child care providers, representing a
budget impact on Lead Agencies. While
we expect these changes to cause an
increase in payments, we lack data on
the amounts associated with each of
these policies, and request comments
about whether Lead Agencies expect
these policies to cause an increase in the
subsidy payment rates.
We expect the following policies and
practices to impose budget impacts on
Lead Agencies:
• Setting payment rates based on the
most recent market rate survey and at
least at a level to cover health, safety,
and quality requirements in the NPRM,
and that provide families receiving
CCDF subsidies access to care of
comparable quality to care available to
families with incomes above 85 percent
State Median Income. Lead Agencies
must also take into consideration the
cost of providing higher quality child
care services (§ 98.45(f));
• Delinking provider payments from a
child’s occasional absences by either
paying based on a child’s enrollment,
providing full payment if a child attends
at least 85 percent of authorized time, or
providing full payment if a child is
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absent for five or fewer days in a month
(§ 98.45(m)(2)); and,
• Adopting the generally-accepted
payment practices of child care
providers who do not receive CCDF
subsidies, including paying on a parttime or full-time basis (rather than
paying for hours of service or smaller
increments of time) and paying for
mandatory fees that the provider
charges to private-paying parents
(§ 98.45(m)(3)).
Lead Agencies are required to
implement each of these policies;
however, several of them have a few
options from which Lead Agencies may
choose. We do not know which options
Lead Agencies will choose, and
therefore are not certain of which
policies will impose budget impacts on
which Lead Agencies. These impacts
will also vary by Lead Agency
depending on how many of the policies
the Lead Agency adopted prior to this
NPRM. We request comment on how
Lead Agencies may choose to
implement these different payment
policies and practices.
Because of the multiple policy
options available to Lead Agencies and
limited data on the effects of individual
policies, it is difficult to estimate new
impacts associated with each policy
listed. However, we recognize that
implementing these new policies will
impact Lead Agency budgets and
contribute to an increase in the amount
of cost per child of child care assistance
per child. Therefore, despite our
uncertainty regarding specific effects,
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we would be overlooking a potentially
significant new impact if we did not
include an analysis of payment policies
and practices in this RIA.
These payment policies and practices
will each have varying effects, but once
they are put together, one likely
outcome is an increase in the average
annual subsidy amount per child.
Therefore, in order to estimate the
possible payment effects associated with
these policies, we are bundling them
together and estimating their total
impact on the average annual subsidy
per child. The actual impact will
depend on how many of the policies the
Lead Agency currently has in place and
how the Lead Agency chooses to
implement these new policies.
The average annual subsidy rate per
child in FY 2013 was $4,735. This
amount is the starting point for our
estimate. The average annual subsidy
rate per child has historically increased
each year. Therefore, we have built in a
2.59% increase for each of the ten years
included in this cost estimate. This
increase represents the historical
increases in the average annual subsidy
per child that were used to estimate the
rate at which the subsidy would
increase without this NPRM.
This subsidy amount, including the
increase that would be expected to
happen regardless of reauthorization
and this NPRM, provides the baseline
for our ten year estimate. This average
represents all settings, all types of care,
all ages, and all localities, which masks
great variation across the States/
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Territories based on different costs of
living or the higher costs associated
with providing care to infants and
toddlers. For example, the highest
average annual subsidy per child paid
by a State/Territory was $8,244 in FY
2013, while the lowest average annual
subsidy per child paid by a State/
Territory was $2,100. States/Territories
with subsidy payments substantially
lower than the average subsidy payment
are likely to see higher increases in the
subsidy rate than States/Territories with
subsidy payments closer to the average.
To calculate the impacts, we
estimated a phased-in increase in the
average annual subsidy per child above
the baseline, which includes the
expected increase in the average annual
subsidy per child regardless of this
proposed rule. We expect that there will
be a phase-in of the subsidy increase as
Lead Agencies phase-in the new
policies in reauthorization and this
NPRM. The phase-in is expected from
FY 2016 to FY 2018, with the increase
in the subsidy being $165 in FY 2016,
$265 in FY 2017, and $515 in FY 2018.
This represents the increase on top of
the regular annual average subsidy per
child, and not the estimated subsidy
itself. Following the new market rate
survey or alternative methodology that
may lead to setting higher payment
rates, we estimate the subsidy would
increase by $765 in FY 2019, and stay
steady in FY 2020 and FY 2021. With
the new market rate survey or
alternative methodology in FY 2022, we
expect an additional increase in the
subsidy of $1,015, and estimate the
subsidy will stay steady in FY 2023 and
FY 2024.
These estimated increases to average
annual subsidy are based on our
assumptions about how quickly Lead
Agencies may implement the policies,
and the reality that the average annual
subsidy will likely grow incrementally.
Because of limited data, we chose to
estimate a modest increase to the
average annual subsidy per child.
However, given the uncertainty
regarding exactly how much the average
annual subsidy per child may increase
each year, we request comments and
estimates regarding these new costs and
how they may impact the subsidy rate
in each State/Territory.
The estimated increases included in
this RIA are not recommendations for
what ACF believes to be appropriate
levels to set rates in States/Territories
and should not be considered as the
amount needed to provide an acceptable
level of health and safety, or to provide
high quality care. As mentioned earlier
in this NPRM, ACF is very concerned
about States’/Territories’ current low
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payment rates. As stated earlier in this
NPRM, ACF continues to stand behind
the 75th percentile of current market
rates, which remains an important
benchmark for gauging equal access for
children receiving CCDF-funded child
care.
The per child calculations used here
are not recommendations for a per child
subsidy, but rather represent an
estimated cost of increasing the current
national average annual subsidy per
child as a result of these new policies.
This is likely an underestimate of the
payment amounts necessary to raise
provider payment rates to a level that
supports access to high quality child
care for low-income children. We
welcome comments on what provider
payment rates may be necessary to
support high quality child care.
To calculate the estimated total
increase in the average annual subsidy
per child and the impacts associated
with the new payment policies in this
NPRM, we multiplied the estimated
increase in the average annual subsidy
per child (described above) by the FY
2013 CCDF caseload of 1.4 million
children. Based on this formula, we
estimate the average annual impact to be
$437 million during the initial five year
period, with the estimated present value
over the full ten year period of $844.9
million (estimated using a 3% discount
rate).
As discussed above, there is a high
level of uncertainty associated with this
estimate. However, not including an
estimate of the Lead Agency budget
impacts associated with these policies
would overlook significant policies in
the legislation and this NPRM and fail
to give an accurate picture of the costs
associated with them. We appreciate
any comments that provide additional
information about State/Territory
practice and costs associated with the
proposed policies that could help to
refine this analysis.
OMB Circular A–4 notes the
importance of distinguishing between
costs to society as a whole and transfers
of value between entities in society. The
increases in subsidy payments just
described impose budget impacts on
Lead Agencies, but from a society-wide
perspective, they only generate costs to
the extent that they lead to new
resources being devoted to quantity or
quality of child care. Although we
acknowledge this potential increase in
resource use, for the technical purposes
of this regulatory impact analysis, we
will refer to the estimated subsidy
payment impacts as transfers from Lead
Agencies to entities bearing the existing
cost burden (mostly child care providers
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who typically have low earnings), rather
than societal costs.
Supply building. This estimate takes
into account costs associated with
developing the supply of child care,
which may include financial incentives
and the use of grants and contracts to
stabilize and/or target the supply of
child care. For the purposes of this
analysis, we are estimating the cost of
grants and contracts, because the
proposed rule at § 98.16(i)(1) requires
Lead Agencies to describe how they will
address supply shortages through the
use of grants or contracts in their CCDF
Plans. The proposed rule at § 98.50(b)(3)
requires States and Territories to use
some grants or contracts to provide
direct services based on consideration of
supply shortages of high quality care.
Based on the FY 2014–2015 CCDF
Plans, we identified States and
Territories that currently make some use
of grants and contracts, and those that
do not. If a State currently uses grants
or contracts, the State is already in
compliance, and there is no cost
associated with implementing this
provision. Seventeen States, two
Territories, and the District of Columbia
currently use grants or contracts for
direct services. For States without grants
or contracts, there are two
administrative costs: (1) The cost of
identifying or analyzing supply
shortages; and (2) the cost of awarding,
overseeing and monitoring the grants or
contracts. The value of the subsidy is
not included as a cost since, in the
absence of grants or contracts, the
services would have been delivered
through an alternate mechanism (e.g.,
certificates or vouchers). This value is
more appropriately considered as a
potential transfer. ACF has no
information with which to calculate the
value of potential transfers associated
with the legislation and regulations.
Building the supply of high quality care
will require paying increased subsidy
amounts, but this is addressed
separately in the section above on
Increased Average Subsidy per Child.
ACF estimated that money costs
associated with implementing the
provisions at §§ 98.16(i)(1) and
98.50(b)(3) are approximately $4.0
million on average over the phase-in
period (which for this particular
provision is three years, which is
different than the phase-in period in the
table below) and $7.0 million on average
thereafter. During the phase-in period,
we expect the costs of these provisions
to depend on State assessment of supply
gaps and costs associated with
implementing the infrastructure
necessary to manage the grants and
contracts. As an ongoing cost, we
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assumed that small States would have
50 contracted sites, medium States
would have 100 contracted sites, and
large States would have 150 contracted
sites. The estimate also assumes
identification or analysis of supply
shortages is ongoing and occurs every
two years. States have readily-available
supply data from market rate surveys,
child care resource and referral
agencies, and other sources, so the cost
of analysis is relatively low if done inhouse using existing data.
While using grants and contracts can
build supply by providing stable
payment and practices, there are other
methods for building the supply quality
child care. These include funding for
start-up costs and financial incentives
via attractive subsidy rates and Lead
Agencies will be encouraged to consider
a range of options for addressing supply
shortages in their State.
TABLE 8—ESTIMATED IMPACTS OF INCREASED SUBSIDY AND SUPPLY BUILDING
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized
(over 10 years)
Ongoing
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Transfers from Lead Agencies to Child Care Providers ($ in millions)
Increased Subsidy .....................................
478.8
1,281.0
880.0
839.1
786.1
8,799.0
7,372.4
5,907.7
Money Costs ($ in millions)
Supply Building .........................................
5.1
6.8
6.0
5.8
5.7
59.5
51.3
42.9
Total (Transfers and Costs) ...............
483.9
1,287.8
885.9
844.9
791.8
8,858.5
7,423.7
5,950.6
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B. Analysis of Benefits
The changes made by the CCDBG Act
and the proposed rule have three
primary beneficiaries: Children in care
funded by CCDF (currently 1.4 million),
their families who need the assistance to
work, pursue education or to go to
school/training, and the roughly
415,000 child care providers that care
for and educate these children. But the
effect of these changes will go far
beyond those children who directly
participate in CCDF and will accrue
benefits to children, families, and
society at large. Many providers who
serve children receiving CCDF subsidies
also serve private-paying families, and
all children in the care of these
providers will be safer because of the
new CCDF health and safety
requirements. Further, the requirements
for background checks and monitoring
extend beyond just CCDF providers. The
public at large also benefits when there
is stable, high quality child care in cost
savings due to greater family work
stability; lower rates of child morbidity
and injury; fewer special education
placements and less need for remedial
education; reduced juvenile
delinquency; and higher school
completion rates.
In 2012, approximately 60 percent of
children age 5 and younger not enrolled
in kindergarten were in at least one
weekly non-parental care arrangement.
(U.S. Department of Education, Early
Childhood Program Participation, from
the National Household Education
Surveys Program of 2012, August 2013).
We know that many child care
arrangements are low quality and lack
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basic safeguards. A 2006 study
conducted by the National Institute of
Child Health and Development (NICHD)
found that, ‘‘most child care settings in
the United States provide care that is
‘‘fair’’ (between ‘‘poor’’ and ‘‘good’’) and
fewer than 10 percent of arrangements
were rated as providing very high
quality child care.’’ (U.S. Department of
Health and Human Services, National
Institutes of Health, Study of Early Child
Care and Youth Development, 2006)
More recently, both the Department of
Health and Human Services’ (HHS)
Office of Inspector General (OIG) and
the Government Accountability Office
(GAO) have identified serious
deficiencies with health and safety
protections for children in child care
settings. (HHS Office of the Inspector
General, Child Care and Development
Fund: Monitoring of Licensed Child
Care Providers, OEI–07–10–00230,
November 2013) (Early Alert
Memorandum Report: License-Exempt
Child Care Providers in the Child Care
and Development Fund Program, HHS
OIG, 2013). (Government Accountability
Office, Overview of Relevant
Employment Laws and Cases of Sex
Offenders at Child Care Facilities,
GAO–11–757, 2011) We also know from
a growing body of research that in
addition to the importance of quality to
health and safety on a child’s immediate
and long term future health, quality is
important for children’s long term
success in school and in life (as
described elsewhere in this section).
While there are many benefits to
children, families, providers and society
from affordable, higher quality child
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care, there are challenges to quantifying
their impact. CCDF provides flexibility
to States, Territories, and Tribes in
setting health and safety standards,
eligibility, payment rates, and quality
improvements. As a result, there is
much variation in CCDF programs
across States. Therefore, we do not have
a strong basis for estimating the
magnitude of the benefits of the CCDBG
Act and the proposed rule in dollar
amounts. While we are not quantifying
benefits in this analysis, we welcome
comment on ways to measure the
benefit that the Act and the proposed
rule will have on children, families,
child care providers, and the public.
As shown in the discussion below,
there is evidence that the CCDBG Act
and proposed rule’s improvements to
health and safety, quality of children’s
experiences, and stability of assistance
for parents and providers will have a
significant positive return on the
public’s investment in child care. We
discuss these benefits as ‘‘packages’’ of
improvements: (1) Health and safety; (2)
consumer information and education;
(3) family work stability; (4) child
outcomes; and (5) provider stability.
1. Health and Safety
One of the most substantial changes
made by this proposed rule is a package
of health and safety improvements,
including health and safety
requirements in specific topic areas,
health and safety training, background
checks, and monitoring and preinspections.
Health and Safety Requirements. The
CCDBG Act requires Lead Agencies to
set requirements in baseline areas of
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health and safety, such as CPR and first
aid, and safe sleeping practices for
infants. At their core, health and safety
standards in this proposed rule are
intended to make child care safer and
thus lower the risk of harm to children.
The CCDBG Act and the proposed
rule are expected to lead to a reduction
in the risk of child morbidity and
injuries in child care. The most recent
study on fatalities occurring in child
care found 1,326 child deaths from 1985
through 2003. The study also showed
variation in fatality rates based on
strength of licensing requirements and
suggested that licensing not only raises
standards of quality, but serves as an
important mechanism for identifying
high-risk facilities that pose the greatest
risk to child safety. (Dreby, J., Wrigley,
J., Fatalities and the Organization of
Child Care in the United States, 1985–
2003, American Sociological Review,
2005) ACF collects data about the
number of child care injuries and
fatalities through the Quality
Performance Report (QPR) in the CCDF
Plan (ACF–118). In 2014, there were 93
child deaths in child care based on data
reported by 50 States and Territories.
The number of serious injuries to
children in child care in 2014 was
11,047, with 35 States and Territories
reporting.
Various media outlets have also
conducted investigations of unsafe child
care and deaths of children. In
Minnesota, the Star Tribune in
Minneapolis reported in a series of
articles in 2012 that the number of
children dying in child care facilities
‘‘had risen sharply in the past five years,
from incidents that include asphyxia,
sudden infant death syndrome (SIDS)
and unexplained causes.’’ The report
found 51 children died in Minnesota
over the five-year period. (Star Tribune,
The Day Care Threat, 2012) In Indiana,
an investigation by the Indianapolis Star
found, ‘‘21 deaths at Indiana day cares
from 2009 to June 2013, and 10 more
child deaths have since been reported.’’
(Indianapolis Star, How Safe are
Indiana Day Cares, 2013) Indiana
recently passed legislation that raises
standards for child care programs. In
Kansas, the high incidence of fatalities
prompted the Kansas legislature to
implement new procedures to guide
investigations of serious injury or
sudden, possibly unexplained deaths in
child care, particularly infants. (Kansas
Blue Ribbon Panel on Infant Mortality,
Road Map for Preventing Infant
Mortality in Kansas, 2011) The case of
Lexie Engelman was a rally cry of
advocates for better health and safety
requirements. The 13-month old child
suffered fatal injuries in a registered
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family child care home in 2004 due to
lack of supervision. As a result, Kansas
enacted new protections such as
requiring all providers to be licensed
and regularly inspected, training for
providers, and new rules of supervision.
Since implementing ‘‘Lexie’s Law,’’
Kansas jumped from 46th to 3rd in the
Child Care Aware of America annual
ranking of State policies, and State
officials have been able to use data to
target regulatory action and provide
information to the public in a much
more timely way. State officials report
that more stringent regulations have
greatly enhanced State capacity to
protect children.
With respect to morbidity, 20 percent
of SIDS deaths occur while children are
in child care. (Moon, R.Y., Sprague,
B.M., and Patel, K.M., Stable Prevalence
but Changing Risk Factors for Sudden
Infant Death Syndrome in Child Care
Settings in 2001, 2005) Many of these
deaths are preventable by safe sleep
practices. Local review teams in one
State found that 83 percent of SIDS
deaths could have been prevented.
(Arizona Child Fatality Review Program,
Twentieth Annual Report, November
2013) As part of health and safety
training requirements, the CCDBG Act
and proposed rule require that
caregivers, teachers, and directors
serving CCDF children receive training
in safe sleep practices. According to the
FY 2014–2015 CCDF Plans,
approximately 27 States and Territories
already have safe sleep and SIDS
prevention pre-service training
requirements for child care centers, and
26 States and Territories have SIDS
prevention pre-service training
requirements for family child care
homes. Requiring the remaining States
and Territories to have safe sleep
training for child care providers will
likely help change provider practice and
lower the risk of SIDS-related deaths for
infants.
Health and Safety Training. The
proposed rule codifies the requirement
of the CCDBG Act that CCDF caregivers,
teachers, and directors undergo a preservice or orientation training, as well as
receive ongoing training, in the health
and safety standards. The proposed rule
also adds child development as a
required topic for required training,
consistent with the professional
development and training provisions of
the law. Knowledge of child
development is important to
understanding and implementing safety
and health practices and conditions.
Training in health and safety standards,
particularly prevention of SIDS, should
reduce child fatalities and injuries in
child care. For example, the rate of SIDS
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in the U.S. has been reduced by more
than 50 percent since the campaign in
the early 1990s by the American
Academy of Pediatrics on safe sleep
practices with infants. (National
Institutes of Health, Eunice Kennedy
Shriver National Institute of Child
Health and Human Development. Back
to Sleep Public Education Campaign)
Only 24 States currently require preservice or orientation training to include
SIDS prevention.
Background Checks. The new
background check requirements are
expected to prevent individuals with
criminal records from working for child
care providers. Data from two States
show that 5 to 10 percent and 3 to 4
percent, respectively, of background
checks result in criminal record ‘‘hits’’
that disqualify the provider. To the
extent that these individuals would
have otherwise worked in child care
settings, thereby increasing the risk of
maltreatment or injury to a child, we
assume that background checks yield a
positive benefit for child health and
safety. That is, background checks serve
a real purpose in preventing a small
proportion of potentially dangerous
individuals from providing care to
children.
Monitoring. The CCDBG Act and this
proposed rule require States to conduct
monitoring visits for all child care
providers, including license-exempt
providers (except, at the Lead Agency
option, those that serve relatives).
Licensed providers must receive a prelicensure inspection and annual,
unannounced inspections. Licenseexempt CCDF providers (except at the
Lead Agency option those that serve
relatives) must have annual inspections
for health, safety and fire standards.
Currently, 15 States do not conduct a
licensing pre-inspection visit of family
child care; 12 States do not conduct preinspections on group homes; and one
State does not pre-inspect child care
centers. Nineteen States do not inspect
family child care providers each year,
22 States do not conduct annual visits
for group homes, and 10 States do not
visit child care centers on an annual
basis. It is reasonable to expect that
more stringent health and safety
standards and their enforcement
through pre-inspections and annual
licensing inspections will result in
fewer serious injuries and child
fatalities in child care.
Child Abuse Reporting and Training.
Nationally, there are approximately 12.5
million children in child care settings.
With a rate of over 10 children per
thousand being victims of substantiated
abuse or neglect, there are over 100,000
children estimated to be victims of
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abuse in child care settings. This
proposed rule contains a number of
provisions designed to prevent child
abuse and neglect. Under the CCDBG
Act and this proposed rule, Lead
Agencies must certify that child care
caregivers, teachers, and directors
comply with child abuse reporting
requirements of the Child Abuse
Prevention and Treatment Act. The
proposed rule also requires training on
‘‘recognition and reporting of suspected
child abuse and neglect’’, which would
equip caregivers, teachers, and directors
with training necessary to report
potential abuse and neglect. The rule
also requires training in child
development for CCDF caregivers,
teachers, and directors. From a
protection standpoint, research has
shown that improving parental
understanding of child development
reduces the incidence of child abuse
and neglect cases. (Daro, D. and
McCurdy, K., Preventing Child Abuse
and Neglect: Programmatic
Interventions, Child Welfare, 1994)
(Reppucci, N., Britner, P., and Woodard,
J., Preventing Child Abuse and Neglect
Through Parent Education, Child
Welfare, 1997) To the extent that this
training would have a similar effect on
caregivers, teachers, and directors of
CCDF providers, we expect there to be
some decrease in child abuse within
child care settings.
In addition to the tragedy of injuries
and fatalities in child care, there are
tangible costs such as medical care, a
parent’s absence from work to tend to an
injured child, the loss for the family,
and loss of lifetime potential earnings
for society. According to the 2014
Quality Performance Report, there were
11,407 injuries (defined as needing
professional medical attention) and 93
fatalities reported in child care. We
believe these numbers are lower than
the actual incidences because some
Lead Agencies have difficulty accessing
this information collected by other
agencies.
2. Consumer Information and Education
As one research study said, ‘‘Child
care markets would work more
effectively if parents had access to more
information about program quality and
help finding a suitable situation. This
would cut the cost of searching for care
and increase the likelihood of more
comparison shopping by parents.’’
(Helburn, S. and Bergmann, B.,
America’s Child Care Problem: The Way
Out, 2002) The CCDBG Act and
proposed rule require the Lead Agency
to provide consumer education to
parents of eligible children, the general
public, and child care providers. This
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includes a consumer-friendly and easily
accessible Web site about relevant Lead
Agency processes and provider-specific
information. The CCDBG Act and the
proposed rule also require a range of
information for parents, including the
availability of child care services and
other assistance for which they might be
eligible, best practices relating to child
development, how to access
developmental screening, and policies
on social-emotional behavioral health
and expulsion. The proposed rule also
requires a consumer statement for
families receiving subsidies. Taken
together, these provisions should
improve parents’ ability to make fully
informed choices about child care
arrangements.
The consumer education package also
provides benefits to parents in regards
to the value of their time. Most parents
want to know about health and safety
records, licensing compliance, and
quality ratings when deciding on a child
care provider. However, this research
can be very time consuming because of
barriers to accessing the information
needed to make a fully informed
decision. For example, while all Lead
Agencies must make substantiated
complaints available to the public, some
States previously required that people
go to a government office during regular
business hours to access these records.
It is not reasonable to expect a parent
who is working to take that time to
navigate these bureaucratic
requirements.
The proposed rule’s package of
consumer education provisions,
including the consumer-friendly Web
site, addresses the aforementioned
information barrier by helping to
provide parents with important
resources in a manner that fits their
needs.
3. Family Work Stability/Improved
Labor Force Productivity
The CCDBG Act and the proposed
rule promote continuity of care in the
CCDF program through family-friendly
policies—it requires Lead Agencies to
implement minimum 12-month
eligibility redetermination periods,
ensures that parents who lose their jobs
do not immediately lose their subsidy,
minimizes requirements for families to
report changes in circumstances, and
provides more flexibility to serve
vulnerable populations, such as
children experiencing homelessness,
without regard to income or work
requirements.
Benefits to employers. There is a
strong relationship between the stability
of child care and the stability of the
workforce for employers. The cost to
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businesses of employee absenteeism due
to disruptions in child care is estimated
to be $3 billion annually. (Shellenback,
K., Child Care & Parent Productivity:
Making the Business Case, Cornell
University: Ithaca, NY. 2004) The
eligibility provisions of the CCDBG Act
and this proposed rule will allow
parents to work for longer stretches
without interruptions to their child care
subsidy, and will benefit parents by
limiting disruptions to their child care
arrangements. These policies in turn
also provide benefits to employers
seeking to maintain a stable workforce.
Studies show a relationship between
child care instability and employers’
dependability of a stable workforce. In
one study, 54 percent of employers
reported that child care services had a
positive impact on employee
absenteeism, reducing missed workdays
by as much as 20 to 30 percent.
(Friedman, D.E., Child Care for
Employees’ Kids, Harvard Business
Review, 1986) In addition, 63 percent of
employees surveyed at American
Business Collaboration (ABC)
companies in 10 communities across the
country reported improved productivity
when a parent was using high quality
dependent care, and 40 percent of
employees reporting spending less time
worrying about their families, 35
percent were better able to concentrate
on work, and 30 percent had to leave
work less often to deal with family
situations. (Abt Associates, National
Report on Work and Family, 2000) A
2010 study examined the impact of
child care subsidy receipt by New York
City employees and employees of
subcontracted agencies in the health
care sector. The study looked at the
variables of attendance, work
performance, productivity, and
retention of employees. Results showed
that subsidy receipt had a positive
impact on work performance; whereas,
the loss of the subsidy had a negative
effect. After the subsidy period ended
and parents were faced with less stable
child care arrangements, participants
self-reported a decrease in their work
performance and in their work
productivity coupled with an increase
in tardiness and work/family conflict.
(Wagner, K.C., Working Parents for a
Working New York Study, Cornell and
New York Child Care Coalition, 2010)
Benefits to parents. The lack of
reliable and dependable child care
arrangements negatively affects parents’
income, hours worked, work
performance, and advancement
opportunities. To the extent that these
new requirements will reduce barriers
to retaining child care assistance for
CCDF families, the new rule will
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mitigate some of the disruption
currently experienced by low-income
families. Studies have shown that many
parents face child care issues that can
disrupt work, impacting both the parent
and their employers. One researcher,
using data from the Survey of Income
and Program Participation (SIPP), found
that 9–12 percent of families reported
losing work hours as a result of child
care disruptions. (Boushey, H., Who
Cares? The Child Care Choices of
Working Mothers, Center for Economic
and Policy Research Data, 2003)
Another study showed that 29 percent
of parents experienced a breakdown in
their child care arrangement in the last
3 months. (Bond, J., Galinsky, E., and
Swanberg, J., The 1997 National Study
of the Changing Workforce, 1998)
These child care disruptions can
negatively impact parental employment.
For example, a survey of over 200
mothers working in the restaurant
industry in five cities: Chicago,
Washington, DC, Detroit, Los Angeles,
and New York found that instability in
child care arrangements negatively
affected their ability to work desirable
shifts or to move into better paying
positions at the restaurant. More than
half of the mothers surveyed lacked
alternative child care options, which
could lead to being late or having to
leave early from work if there was a
problem with their child care.
(Restaurant Opportunities Centers
United, et al., The Third Shift: Child
Care Needs And Access For Working
Mothers In Restaurants, Restaurant
Opportunities Centers United, 2013)
4. Child Outcomes and Human Capital
Development
Beyond implementing health and
safety standards, the CCDBG Act states
that two of the purposes of the grants
are improving child development of
participating children and increasing
the number and percentage of lowincome children in high-quality child
care settings. This proposed rule places
significant emphasis on policies that
support those goals.
Child care continuity. The eligibility
and redetermination provisions benefit
children as well as parents and
employers. Continuity in child care
arrangements can have a positive impact
on a child’s cognitive and socioemotional development. (Raikes, H.
Secure Base for Babies: Applying
Attachment Theory Concepts to the
Infant Care Setting, Young Children 51,
no. 5, 1996) Young children need to
have secure relationships with their
caregivers in order to thrive.
(Schumacher, R. and Hoffmann, E.,
Continuity of Care: Charting Progress for
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Babies in Child Care Research-Based
Rationale, 2008) Children with fewer
changes in child care arrangements are
less likely to exhibit behavior problems.
(de Schipper, J.C., Van Ijzendoorn, M. &
Tavecchio, L., Stability in Center Day
Care: Relations with Children’s Wellbeing and Problem Behavior in Day
Care, Social Development, 2004)
Conversely, larger numbers of changes
have been linked to less outgoing and
more aggressive behaviors among fourand five-year-old children. (Howes, C. &
Hamilton, C.E., Children’s Relationships
with Caregivers: Mothers and Child Care
Teachers, Child Development, 1992)
Continuity of care policies support
children’s ability to develop nurturing,
responsive, and continuous
relationships with their caregivers. For
school-age children, continuity of care
is important because it provides
additional exposure to programming
that can lead to improved school
attendance and academic outcomes.
(Welsh, M. Russell, C., Willimans, I.,
Promoting Learning and School
Attendance through After-School
Programs, Policy Studies Associates,
2002.)
Child care quality beyond health and
safety. Health and safety form the
foundation of quality but are not
sufficient for high quality development
and learning experiences. When
children have high quality early care
and education, there are benefits to the
child and to society. (Yoshikawa, H., et
al., Investing in Our Future: The
Evidence Base on Preschool Education,
2013) The North Carolina Abecedarian
Project demonstrated both categories of
benefits. The Project enrolled very lowincome children from infancy to
kindergarten in full day, full year child
care with high quality staff,
environments, and curricula. A
longitudinal study following them
through age 21 found significant returns
on the investment in terms, such as
greater school readiness that led to
fewer special education and remedial
education placements, higher rates of
high school completion and jobs, fewer
teen pregnancies, and lower rates of
juvenile delinquency. (Masse, Leonard
N. and Barnett, Steven W., A Benefit
Cost Analysis of the Abecedarian Early
Childhood Intervention, National
Institute for Early Education Research;
New Brunswick, NJ). Other cost-benefit
analyses of other publicly funded
preschool programs with similarly high
quality standards, such as the Chicago
Child Parent Centers, demonstrated a
high return to society on the public
investment. (‘‘Age 21 Cost-Benefit
Analysis of the Title I Chicago Child-
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Parent Centers.’’ Educational Evaluation
and Policy Analysis, 24(4): 267–303.)
Recognizing the importance of quality
as well as access, the CCDBG Act and
this proposed rule promote efforts to
improve the quality of child care. Chief
among these changes is the increased
portion of the grant that a Lead Agency
must use, at a minimum, for quality
improvements. The reauthorized Act
increases the prior minimum four
percent quality spending requirement to
nine percent over time. It also requires
States to invest in quality by spending
an additional 3 percent for infant and
toddler quality. States use the quality
dollars for a range of activities that
benefit children and providers assisted
with CCDF funds and for early
childhood systems as a whole, such as
State early learning guidelines,
professional development, technical
assistance such as coaching and
mentoring as part of the quality rating
and improvement system, scholarships
for postsecondary education, and
upgrades to materials and equipment.
A critical element in the quality of
child care is the knowledge and skill of
the child care workforce. The CCDBG
Act and the proposed rule emphasize
the importance of States creating and
supporting a progression of professional
development, starting with pre-service,
and which may include postsecondary
education. Quality professional
development is critical to creating a
workforce that can support children’s
readiness for success in school and in
later years.
States have a variety of ways to build
the supply of high quality care
including financial incentives and the
use of grants and contracts. The CCDBG
Act requires the Plan to provide
assurances that parents of eligible
children who receive or are offered
child care assistance are given the
option of enrolling with a provider that
has a grant or contract or a child care
certificate. Without limiting or
discouraging the use of certificates to
provide assistance to families, the
proposed rule does note the role that
grants or contracts can play in building
the supply and quality of child care,
particularly in underserved areas and
for special populations. Currently 20
States are using grants or contracts along
with certificates as part of a mixed
funding system. Some provide grants or
contracts to increase the supply of
providers serving children with special
needs, infants and toddlers, school-age
children, or underserved geographic
areas. Other States are providing grants
or contracts to providers that meet and
sustain higher standards of quality.
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As detailed above, there is a growing
amount of evidence and recognition that
children who experience high quality
early childhood programs are more
likely to be better prepared in language,
literacy, math and social skills when
they enter school, and that these may
have lasting positive impacts through
adulthood. Because of the strong
relationship between early experiences
and later success, investments in
improving the quality of early
childhood and before- and after-school
programs can pay large dividends.
5. Provider Stability
The CCDBG Act and proposed rule
include provisions to strengthen the
stability of providers serving CCDFassisted children. Studies that have
interviewed child care providers
participating in the subsidy system have
shown the importance of policies that
improve and stabilize payments to the
providers. (Sandstrom, H, Grazi, J., and
Henly, J.R., Clients’ Recommendations
for Improving the Child Care Subsidy
Program, Urban Institute: Washington,
DC, 2015; Adams, G., Snyder, Katherine,
and Tout, Kathryn, Essential But Often
Ignored: Child care providers in the
subsidy system, Urban Institute:
Washington, DC 2003; Oliveira, Peg,
The Child Care Subsidy Program Policy
and Practice: Connecticut Child Care
Providers Identify the Problems,
Connecticut Voices for Children, 2006)
In addition to rates that reflect the
cost of providing quality services, the
manner in which providers are paid is
important to the stability of the child
care industry. Provider instability has a
domino effect that can lead to parent
employment instability, an outcome that
undercuts the CCDBG Act’s core
principle of ensuring that CCDF
children have equal access to child care
that is comparable to non-CCDF
families.
The CCDBG Act and the proposed
rule require Lead Agencies to pay
providers in a timely manner based on
generally accepted payment practices
for non-CCDF providers. Lead Agencies
also must de-link provider payments
from children’s absences to the extent
practicable. Child care providers have
many fixed costs, such as salaries,
utilities, rent or mortgage.
Surveys and focus groups with child
care providers have found that some
providers experience problems with late
payments, including issues with
receiving the full payment on time and
difficulties resolving payment disputes.
(Adams, G., Rohacek, M., and Snyder,
K., Child Care Voucher Programs:
Provider Experiences in Five Counties,
2008) This research has also found that
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delayed payments creates significant
financial hardships for the impacted
providers, and forces some providers to
stop serving or limit the number of
children receiving child care subsidies.
Thus, lack of timely payments and rules
on payments that lead to disincentives
to taking children with chronic illnesses
or other reasons for absences undercut
the equal access provision. By
addressing these issues, these
provisions of the law and proposed rule
will provide increased stability and
benefits for CCDF providers and the
families they serve.
Market Rate or Alternative
Methodology. The child care market
often does not reflect the actual costs of
providing child care, let alone the
higher costs of quality child care.
Financial constraints of low-income
parents prevent child care providers
from setting their prices to fully cover
the cost of care (National Women’s Law
Center, Building Blocks: State Child
Care Assistance Policies, 2015; Child
Care Aware, Parents and the High Cost
of Child Care, 2014. Currently, relative
to the cost of providing quality care,
CCDF subsidy payment rates are low in
many States.
A report from the National Women’s
Law Center on State subsidy policies
states that, ‘‘only one state had
reimbursement rates at the federally
recommended level in 2014, a slight
decrease from the three states with rates
at the recommended level in 2013, and
a significant decrease from the twentytwo states with rates at the
recommended level in 2001. Thirtyseven States had higher reimbursement
rates for higher-quality providers in
2014—an increase from thirty-three
states in 2013. However, in more than
three-quarters of these states, even the
higher rates were below the federally
recommended level in 2014.’’ (Turning
the Corner: State Child Care Policies
2014. Schulman, K. and Blank, H.
National Women’s Law Center,
Washington, DC 2014) The CCDBG Act
and the proposed rule require Lead
Agencies to set provider payment rates
based on the current, valid market rate
survey or alternative methodology. To
allow for equal access, the rule proposes
that Lead Agencies set base payment
rates sufficient to support
implementation of the health, safety and
quality requirements in the NPRM.
Establishing base rates at these levels is
important to ensure that providers have
the resources they need to meet
minimum requirements and that
providers are not discouraged from
serving CCDF children. With subsidy
payments higher than the
aforementioned base rate, providers can
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exceed the minimum requirements of
health and safety and quality. In doing
so, more providers will be able to serve
CCDF-assisted children and more
quality providers may decide to
participate in the subsidy system—
giving parents more choices for their
children’s care. Currently there has been
a downward trend in the number of
CCDF providers, and providing for a
stronger base rate will help mitigate this
effect.
C. Distributional Effects
As part of our regulatory analysis, we
considered whether changes would
disproportionately benefit or harm a
particular subpopulation. As discussed
above, benefits accrue both directly and
indirectly to society. In order to
implement the requirements of the
CCDBG Act and the NPRM, States may
have to make key decisions about the
allocation of resources, and some may
shift priorities during the start-up phase
and possibly continuing in later years
once the State is fully implementing
these requirements. The true impact
partially depends on the overall funding
level. The President’s FY2016 Budget
request includes additional funding to
help States implement the policies
required by the reauthorized CCDBG
Act and this proposed rule, as well as
significant new resources across a ten
year period to expand access to child
care assistance for all eligible families
with children under age four years of
age. If funding increases sufficiently,
both quality and access could be
improved.
While, depending on State behavior,
there may be some distributional effect
related to any cost, below is a
discussion of two policy areas that
represent specific distributional effects.
The first—changes to subsidy policy
required by the CCDBG Act—may result
(depending on how the State chooses to
implement the policy) in families
receiving subsidies for a longer period
of time, while other families may not be
able to access subsidies (absent an
increase in funding for the CCDF
program). The second area—increased
statutory quality spending
requirements—may result in a change in
which families receive benefits, or how
they receive them, by shifting resources
away from direct services to quality
spending.
Minimum 12-month eligibility and
related provisions. In order to reduce
administrative burden and to improve
the stability and continuity of care in
the CCDF program, the CCDBG Act and
this proposed rule at §§ 98.20 and 98.21
require Lead Agencies to adopt a
number of eligibility policies, including
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a 12-month minimum period for
families to recertify their eligibility.
This package of eligibility policies will
allow families to maintain their
eligibility regardless of temporary
changes in work or training/education
status or income changes (as long as
income remains below 85% of State
Median Income). Subsidy receipt is also
predictive of more stable child care
arrangements. (Brooks, et. al., Impacts of
child care subsidies on family and child
well-being, Early Childhood Research
Quarterly, 2002) Stability of child care
arrangements can affect children’s
healthy development, especially for
vulnerable children who may be at
special risk of poor developmental
outcomes. (Adams, G., and Rohacek, M.,
Child Care Instability: Definitions,
Context and Policy Implications, Urban
Institute, 2010) Prior to reauthorization,
about half the States had eligibility
periods less than 12 months—typically
providing only six months of
eligibility—and families churned on and
off the caseload.
Based on qualitative research and
discussions with CCDF participants, we
expect that longer eligibility periods,
and the related policies in the Act and
this rule, will increase the average
length of time that participating families
receive child care subsidies. As part of
this RIA, we used CCDF administrative
data to model the policy change in the
Act and proposed rule wherein all
States would have a minimum of 12month eligibility periods, to predict
whether CCDF families would have
longer participation durations and
whether there would be any impact on
the unduplicated number of families
receiving CCDF assistance. The
calculations in this estimate are
informed by a demonstration project
that randomly assigned working Illinois
families with moderate incomes (i.e.,
above the normal eligibility thresholds)
to one of three groups. (Michalopoulos,
C., Lundquist, E., and Castells, N., The
Effects of Child Care Subsidies for
Moderate Income Families in Cook
County, Illinois, MDRC, 2010) Although
two of the three groups were both
eligible for child care subsidies, one of
the groups required recertification every
six-months and the other required
recertification every 12-months. Over a
24-month follow-up period, the families
assigned to 12-month recertification
periods received child care subsidies an
average of 2.5 months more than
families assigned to 6-month
recertification periods.
We also examined a ‘‘natural
experiment’’ in Georgia, which changed
its recertification period from six
months to 12 months in April 2009. A
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preliminary analysis found that families
had longer spell lengths after the policy
change than families that entered care
before the policy change. Although it is
uncertain what the driving factor for
this was, these findings from Georgia
support the hypothesis that longer
recertification periods increase the
number of months that recipient
families participate in the program.
Assuming that States will maintain
their average monthly caseloads once
they implement the 12-month
recertification periods, but will serve
fewer unique children over that time
period because of longer subsidy
participation durations, we estimated
the number of families that could be
impacted at current funding levels.
Decreased churn would not decrease the
amount of assistance given, but may
result in a decrease in the total number
of families served over the course of a
given year. We used disaggregated CCDF
administrative data from FY 2010 (to
determine the ratio between unique
annual counts and average monthly
caseloads) and average monthly
caseload totals from FY 2012 (which
showed 609,800 children being served
in an annual month in the 25 States
with eligibility periods less than 12
months). With this data, we estimated
the unique caseload size of each State in
FY 2012, which is the last year for
which we have caseload estimates and
documentation of policies (which
showed 1,053,773 unique children
received services at some point during
the year in the 25 States). Based on
these assumptions and using the results
from the Illinois study to estimate the
impact on length of subsidy receipt, we
estimate that the reduction in unique
children served in a given year after the
policy change will be approximately
162,000 children.
Increase in Quality Set-aside. As
discussed above in the analysis of
benefits, the increased quality set-aside
and the new infant and toddler set-aside
required in reauthorization will benefit
children and, when coupled with
training and higher rates, child care
providers. Lead Agencies are not
required to use quality funds to support
the quality of care for only CCDF
children. Thus, quality investments
often support the entire child care
system in the State, especially because
of the high investments in licensing,
training, and quality rating and
improvement systems. Therefore, these
increased investments will have an
impact broader than families receiving
CCDF assistance, and will continue to
improve the quality of care available to
all children, regardless of subsidy
receipt.
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We do not expect the increase the
quality set-aside to have a significant
impact on caseload, particularly since
the majority of states are already
spending more than the new 9% quality
set-aside requirement (see Table 9
below). Others will have time to phasein the increases and will likely use these
additional increases to cover several of
the new health and safety and
professional development requirements.
Therefore, any caseload impact would
have already been included in the costs
associated with those provisions.
However, we recognize some Lead
Agencies will have to reallocate funds
currently being used for other activities,
including direct services, so we are
discussing possible distributional effects
here. Currently, about 12 percent of
CCDF expenditures are spent on quality
improvement activities, including
targeted funds included in
appropriations. This amount is
equivalent to the full percentage to be
set aside for the quality and infant and
toddler set-asides in FY 2020, once fully
phased-in. Therefore, we do not expect
a significant change in the national
percentage of funds spent on quality
activities, including those targeted at
infants and toddlers. However, this is a
national figure and may not provide a
complete picture of how many States
and Territories might have to adjust
their quality expenditures to meet new
requirements.
Using FY 2011 CCDF expenditure
data, we did an analysis of the number
of States and Territories that will have
to increase their quality expenditures in
order to meet the requirements in the
CCDBG Act and incorporated into this
proposed rule at § 98.50(b)(1). (Note:
Compliance with spending
requirements is determined after a full
grant award is complete. States and
Territories have three years to complete
their grant awards. Therefore, the most
recent award year for which we have
data is FY 2011.) We included regular
quality expenditures as well as the
amount of funds spent for the ‘‘quality
expansion’’ and ‘‘school-age/resource
and referral’’ targeted funds. The infant
and toddler targeted funds were not
included in this analysis because they
have now been incorporated into the
statute. Instead, we have a separate
analysis of the new infant and toddler
set-aside below. Below is a summary of
the number of States and Territories at
different amounts of quality
expenditures:
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D. Analysis of Regulatory Alternatives
In developing this proposed rule, we
Number of
considered alternative ways to meet the
% Quality expenditures
states and
(FY 2013)
purposes of the reauthorized CCDBG
territories
Act. There are areas of the CCDBG Act
<7% ......................................
5 that we are interpreting and proposing
7% (effective FY 2016 and
to clarify through this rule. Our
FY 2017) ...........................
5 interpretation of the law remains within
8% (effective FY 2018 and
the legal parameters of the statute and
FY 2019) ...........................
7
is consistent with the goals and
9% (effective FY 2020 and
succeeding years) .............
4 purposes of the law. Below we include
>9% ......................................
35 a discussion of areas that we clarified
through the proposed rule: Background
checks for regulated and registered
Based on this data, 39 States will not
providers and background checks for
have to adjust the percent of funds they
non-caregivers.
expend on quality activities, while five
For the purposes of this analysis, we
States and Territories will have to
increase the percent of funds they spend are discussing the costs, benefits, and
on quality activities by FY 2016. For the potential caseload impacts related to
meeting these new requirements.
other States and Territories, it varies
However, it is particularly difficult to
when each will need to change the
predict caseload impact due to a variety
amount they spend on quality
of unknown factors, including future
activities—10 States will have to adjust
federal funding levels. Even if we were
by FY 2018 to meet the eight percent
to assume level federal funding, States
requirement; and 17 States will have to
could allocate new funds, redirect
adjust by FY 2020 to meet the nine
current quality spending (e.g., by
percent requirement.
In addition to the primary set-aside
changing quality activities to focus on
for quality activities, this NPRM
health & safety), shift costs to parents or
incorporates at § 98.50(b)(2) a new
providers, or use a combination of these
requirement of the CCDBG Act that,
approaches to pay for new
beginning in FY 2017 and each
requirements. The caseload estimates in
succeeding fiscal year, Lead Agencies
the following discussion are based on
must expend at least three percent of
the assumption that the entire cost of
their full awards (including
meeting this requirement are covered by
discretionary, mandatory, and federal
redistributing funds that would
and State matching funds) on activities
otherwise be used for direct services.
that relates to the care of infants and
Therefore, these caseload impact figures
toddlers. Since FY 2001, federal
should be considered upper bound
appropriations law has included a
estimates and are mostly likely
requirement for Lead Agencies to spend significant overestimates.
a certain amount of discretionary funds
Background Checks for Regulated and
on activities to improve the quality of
Registered Providers: At § 98.43(a)(1)(i),
care for infants and toddlers. In FY
we propose to apply the requirements to
2015, this set-aside was $102 million.
all child care staff members (including
The new three percent reservation
prospective child care staff members) of
represents an increase to about $237
all licensed, regulated, or registered
million based on FY 2011 State and
child care providers and all child care
Territory expenditures.
providers eligible to deliver CCDF
Lead Agencies do not currently report services. This language includes all
how much of their general quality funds licensed, regulated, or registered
are spent on activities targeted to
providers, regardless of whether they
improving care for infants and toddlers. receive CCDF funds and all licenseTherefore, we only have the amount of
exempt CCDF providers (with the
targeted funds they spent on infant and
exception of those related to all children
toddler activities, which for all but five
in their care).
States and Territories is below the new
The alternative to this policy would
three percent requirement. The increase be to limit background checks to only
necessary ranges from State to State,
providers receiving CCDF assistance.
from $38,000 for Idaho to $21 million
While we acknowledge that others may
for New York. The average increase will interpret the statute differently;
be $2.5 million per State. However, as
however, we firmly believe that there is
these estimates do not include any
justification for applying this
regular quality funds currently used to
requirement in the broadest terms for
improve the quality of care for infants
two important reasons. First, it is our
and toddlers, they are likely
strong belief that all parents using child
overestimating the required increases
care deserve this basic protection of
for the majority of States and Territories. knowing that those who are trusted with
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TABLE 9—QUALITY EXPENDITURES
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the care of their children do not have
criminal backgrounds that may
endanger the well-being of their
children.
Second, limiting those child care
providers who are subject to background
checks, has the potential to severely
restrict parental choice and equal access
for CCDF children. If all child care
providers are not subject to
comprehensive background checks,
providers could opt to not serve CCDF
children thereby restricting access.
Creating a bifurcated system in which
CCDF children have access to only a
portion of child care providers who
meet applicable standards would be
incongruous with the purposes of the
CCDBG Act and would not serve to
advance the important goal of serving
more low-income children in high
quality care.
Choosing this would present
additional costs to the alternative of
limiting background checks to only
CCDF providers. The cost of the
background check requirement for only
CCDF providers would be
approximately $11.9 million per year
(estimated using a 3% discount rate).
Using the methodology discussed in
detail in the background check section
of the preamble, we estimate the
additional cost of requiring background
checks of all licensed and regulated
providers, rather than just those who are
eligible to deliver CCDF services, to be
approximately $1.7 million annually
(estimated using a 3% discount rate),
which would amount to an upper bound
caseload impact of about 300 fewer
children served per year.
Background Checks for NonCaregivers: The law defines a child care
staff member as someone (unless they
are related to all children in care) who
is employed by the child care provider
for compensation or whose activities
involve unsupervised access to children
who are cared for by the child care
provider. We propose to require
individuals, age 18 or older, residing in
a family child care home be subject to
background checks. The alternative to
this would be to not require background
checks of other individuals living in the
family child care home. However, we
chose this policy because it is
reasonable to assume that these
individuals may have unsupervised
access to children. Because we are
including these individuals in the
definition of child care staff members,
they will be subject to the same
requirements and will be allowed the
same appeals process as employees.
More than forty States require some
type of background check of family
members 18 years of age or older that
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reside in the family child care home
(Leaving Child Care to Chance:
NACCRRA’s Ranking of State Standards
and Oversight for Small Family Child
Care Homes, National Association of
Child Care Resource and Referral
Agencies, 2012).
While the total cost of the background
check requirement is approximately
$13.6 million, we can isolate the costs
of applying the background checks to
non-caregiver individuals, we estimate
the cost to be approximately $3 million
annually (estimated using a 3%
discount rate), which would amount to
a upper bound caseload impact of
approximately 550 fewer children
served per year.
E. Break Even Analysis for Reductions
in Injuries and Deaths
This section estimates the potential
benefits associated with the elimination
of injuries and deaths in child care
settings in the United States, and the
proportion of fatalities and injuries,
which, if eliminated by the provisions
discussed here, would justify their costs
on their own. Standard methods are
used to monetize the value of these
potential benefits. Although children
receiving subsidies through the Child
Care and Development Fund (CCDF) are
the individuals that will likely benefit
most from the rule’s overall health and
safety provisions, we conduct this break
even analysis using data on children in
all child care settings since children in
non-CCDF arrangements will directly
benefit from the extension of
background check requirements and
may see additional benefits as a result
of other health and safety and quality
provisions in the proposed rule. As
described above, the primary regulatory
alternative in implementing health and
safety provisions would be to restrict
background checks provisions.
Therefore, this analysis discusses the
costs and benefits of the proposed rule
relative to that alternative.
The benefits estimated for this
analysis are derived from voluntary data
reporting on fatalities and injuries in the
child care setting to ACF in a Quality
Performance Report (QPR). These
figures are supplemented by data from
several other sources. Although many
States contribute data to the QPR report,
data on fatalities and injuries is not
available for all States. To estimate
fatalities and injuries in the child care
setting at the national level in 2014
using the QPR data, we impute
estimated fatalities and injuries for
States with incomplete reports. For
States with no reported data for 2014,
we assume that the injury or fatality rate
per provider is equal to the average
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injury or fatality rate per provider across
States with available 2014 data.
To monetize benefits from reductions
in injury rates, we rely on data on the
cost of injury from the Centers for
Disease Control (CDC). In particular, we
use CDC data to calculate the cost of
non-fatal injuries resulting in emergency
room treatment and/or hospitalization
for children age 12 and under, which
includes medical costs as well as lost
productivity costs for caretakers, based
on 2012 data.1 After adjusting for
inflation using the Gross Domestic
Product (GDP) deflator from the Bureau
of Economic Analysis (BEA), the cost
per injury for children age 12 and under
is $8,095 in 2014 dollars. The benefit of
a reduction in the injury rate, then, is
the reduction in the medical costs and
productivity losses associated with the
reduction in injuries. Note that this does
not include the dollar value of any
changes in health status for the injured
individuals, which implies that these
estimates understate the value of
reductions in injuries in the child care
setting. Based on QPR data, we estimate
that there were 18,209 injuries in child
care settings in 2014. To calculate the
monetary value of a reduction in the
injury rate in child care settings due to
this rule, we multiplied the expected
number of avoided injuries in each year
by the value of eliminating each injury.
For simplicity, we assume that the
number of prevented injuries is the
same in each year after implementation
of the requirements, and that the cost of
injury, in 2014 dollars, is constant over
time. This method implies that the
present value of eliminating all injuries
in the child care setting over the period
examined in this rule, using a 3%
discount rate, is approximately $1.30
billion.
To monetize the value of reductions
in mortality rates, we use estimates of
the number of child fatalities in child
care settings and information on the
value of a statistical life for children.
The number of child fatalities in the
child care setting is estimated by
combining two numbers: (1) The
number of fatalities due to Sudden
Infant Death Syndrome (SIDS), and (2)
the number of fatalities due to causes
other than SIDS. These two numbers are
estimated separately because SIDS is
one type of fatality that is likely to be
impacted by the health and safety
provisions in the law and because the
1 CDC provided updated estimates of the cost of
injury based on Cost of Injury Reports 2005 and
2012 data on non-fatal injuries. For more
information, see https://www.cdc.gov/injury/
wisqars/cost/cost-learn-more.html.
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Centers for Disease Control (CDC) 2
publishes accurate estimates for this
type of death.3 According to CDC, there
were 1,563 deaths due to SIDS in 2011.
Research from a study in 2000 estimated
that 14.8 percent 4 of SIDS fatalities took
place in a family child care or a child
care center. After applying the 14.8
percent to the 1,563 SIDS deaths, we
estimate that the number of SIDS deaths
in child care settings were 231 in 2014.
The number of non-SIDS deaths in
2014 is estimated based on QPR data.
Information on cause of death were
reported for 18 deaths in the 2014 QPR
data, of which 5 were due to SIDS and
13 were due to other causes. Based on
this information, we estimate that 72
percent of deaths in child care settings
reported in QPR data were due to causes
other than SIDS. After adding the 82
fatalities from non-SIDS as reported in
the QPR data to the 231 fatalities from
SIDS, we arrive at a sum of 313 fatalities
in child care settings.
A 2010 study estimates that the value
of a statistical life for children to be
$12–15 million.5 After taking the mean
of this range and adjusting it for
inflation using the GDP deflator, we
arrive at $14.5 million in 2014 dollars
per fatality. For simplicity, we assume
that the potential number of lives saved
is the same in each year after
implementation of the requirements. We
follow Department of Transportation
(DOT) guidance 6 to adjust the value of
a statistical life for real income growth,
increasing it by 1.07 percent each year.
To calculate the dollar value of
reductions in mortality, we calculate the
number of statistical lives saved, and
multiply that number by the relevant
value of a statistical life. This method
implies that the present value of
eliminating all deaths in the child care
setting over the period examined in this
rule, using a 3 percent discount rate, is
approximately $44.4 billion.
Next, we estimate the proportion of
fatalities and injuries which, if
2 For more information, see https://
wonder.cdc.gov.
3 Our review of the QPR data conclude that the
number of deaths and injuries reported are likely
to be undercounts because some states do not
collect data from some types of child care
providers.
4 Moon, Rachel Y., Kantilal M. Patel, and Sarah
J. McDermott Shaefer. ‘‘Sudden infant death
syndrome in child care settings.’’ Pediatrics 106.2
(2000): 295–300.
5 Hammitt, James K., and Kevin Haninger.
‘‘Valuing fatal risks to children and adults: Effects
of disease, latency, and risk aversion.’’ Journal of
Risk and Uncertainty 40.1 (2010): 57–83 (estimate
derived using stated-preference surveys inquiring
about willingness to pay to reduce risks to one’s
child).
6 For more information, see https://www.dot.gov/
sites/dot.dev/files/docs/VSL%20Guidance.doc.
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eliminated by these provisions that
extend background checks would justify
their costs on their own. Based on the
assumptions and methodologies
described above, the present value of
the injury and mortality rate reduction
benefits of the rule, using a 3% discount
rate, would equal the costs of these
provisions if fatalities and injuries were
reduced by less than 1 percent over the
period examined in this rule. Note that
this does not include other benefits
associated with this rule.
F. Accounting Statement—Table of
Quantified Money Costs and
Opportunity Costs
As required by OMB Circular A–4, we
have prepared an accounting statement
table showing the classification of the
impacts associated with implementation
of this proposed rule.
TABLE 10—QUANTIFIED MONEY COSTS, OPPORTUNITY COSTS, AND TRANSFERS
[$ in millions]
Phase-in
annual
average
(years 1–5)
Annualized
(over 10 years)
On-going
annual
average
(years 6–10)
Total
(over 10 years)
Discounted
Discounted
Undiscounted
Undiscounted
3%
7%
3%
7%
Money Costs ($ in millions)
Health and Safety:
Monitoring ..........................................
Bkgd Checks ......................................
Training ..............................................
Admin* ................................................
IT and Infra-structure* ........................
Consumer Education:
Website ..............................................
Statement ...........................................
Supply Building .........................................
125.9
9.0
15.4
7.5
7.5
141.5
13.9
12.9
8.3
8.3
139.5
13.6
13.2
8.2
8.2
136.7
13.3
13.5
8.1
8.1
1,414.7
139.2
129.3
83.4
83.4
1,225.3
119.7
115.8
72.4
72.4
1,027.2
99.6
101.5
60.9
60.9
12.8
1.0
5.1
11.8
0.8
6.8
12.3
0.9
6.0
12.4
0.9
5.8
12.5
0.9
5.7
123.0
8.8
59.5
108.6
7.8
51.3
93.6
6.8
42.9
184.2
Money Costs Total .............................
157.0
18.9
10.5
9.2
9.2
224.2
204.1
201.8
198.8
2,041.3
1,773.3
1,493.4
Opportunity Costs ($ in millions)
Health and Safety:
Monitoring ..........................................
Bkgd Checks ......................................
Training ..............................................
8.7
6.3
43.8
10.9
7.9
29.9
9.8
7.1
36.8
9.6
7.1
37.6
9.4
7.1
38.5
97.7
71.1
368.4
84.6
62.4
330.0
70.9
53.3
289.3
Opportunity Costs Total .....................
58.8
48.7
53.7
54.3
55.0
537.2
477.0
413.5
Cost Total ...................................
243.0
272.9
257.8
256.1
253.8
2,578.5
2,250.3
1,906.9
Transfers ($ in millions)
Increased Subsidy .....................................
478.8
1,281.0
879.9
839.1
786.1
8,799.0
7,372.4
5,907.7
Transfers Total ...................................
478.8
1,281.0
879.9
839.1
786.1
8,799.0
7,372.4
5,907.7
1,095.2
1,039.9
11,377.5
9,622.7
7,814.6
Grand Total ($ in millions)
Costs and Transfers ..................................
721.8
1,553.9
1,137.7
* Administrative and IT/Infrastructure costs are only applied to Health and Safety requirements. Other costs have administrative costs already built into their cost
estimates.
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XII. Executive Order 13132; Federalism
Impact Statement
Executive Order 13132 requires
Federal agencies to consider the impact
of their regulatory actions on State and
local governments. Where such actions
have federalism implications, agencies
are directed to provide a statement for
inclusion in the preamble to the
regulations describing the agency’s
considerations.
Consultations with State and local
officials. After passage of the CCDBG
Act of 2014, the Office of Child Care
(OCC) in the Office of the Deputy
Assistant Secretary for Early Childhood
Development in ACF conducted
outreach to engage with a variety of
stakeholders to better understand the
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implications of its provisions. OCC
created a reauthorization page on its
Web site to provide public information
and a specific email address to submit
general questions. OCC received
approximately 650 questions and
comments through this email address,
webinars, inquiries to regional offices,
and meetings with grantees. OCC
leadership and staff participated in
more than 21 listening sessions with
approximately 675 people representing
diverse national, State, and local
stakeholders regarding the law, held
webinars and gave presentations at
national conferences. Participants
included State human services agencies,
child care providers, parents with
children in child care, child care
resource and referral agencies, national
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and State advocacy groups, national
stakeholders including faith-based
communities, after-school and schoolage child care providers, child care
researchers, State and local early
childhood organizations, provider
associations, labor unions, and National
Head Start Association members. In
addition, OCC held five meetings with
State and Territory CCDF administrators
and a series of consultations with Tribal
leaders to describe the law and to gather
input from federal grantees with
responsibility for operating the CCDF
program. In addition, ACF reviewed the
records of comments received after
issuing a now withdrawn NPRM for
CCDF in May 2013 prior to passage of
the CCDBG Act of 2014 by Congress.
Many, but not all, of the key
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tkelley on DSK3SPTVN1PROD with PROPOSALS2
components of the Act are in alignment
with provisions included in that NPRM.
Nature of concerns and the need to
issue this proposed rule. State,
Territorial and Tribal CCDF Lead
Agencies want to provide familyfriendly child care assistance and
support increased quality of child care
services, but are concerned about the
cost of the proposed rule and need for
grantee flexibility. While noting that
this proposed rule implements a law
that was enacted by Congress and
signed by the President, we seriously
considered these views in developing
the proposed rule. We also completed a
Regulatory Impact Analysis to fully
assess costs and benefits of the new
requirements. We recognize that a
number of the new regulatory
provisions will require some State,
territory, and Tribal child care agencies
to re-direct CCDF funds to implement
specific provisions.
Extent to which we meet those
concerns. The federal government
provides annually to States, Territories,
and Tribes $5.3 billion in annual
funding to implement the CCDF
program. Further, in large part, the
changes included in the Act and this
proposed rule are based upon practices
already implemented by many States.
Finally, in several areas, the proposed
rule increases the flexibility available to
States, Territories, and Tribes in
administering the program (e.g., waiving
family copayments, defining protective
services).
XIII. Treasury and General
Government Appropriations Act of
1999
Section 654 of the Treasury and
General Government Appropriations
Act of 1999 (Pub. L. 105–277) requires
federal agencies to determine whether a
regulation may negatively impact family
well-being. If the agency determines a
policy or regulation negatively affects
family well-being, then the agency must
prepare an impact assessment
addressing seven criteria specified in
the law. This rule will not have a
negative impact on the autonomy or
integrity of the family as an institution.
Accordingly, we conclude that it is not
necessary to prepare a family
policymaking assessment. In fact, the
proposed rule will have positive
benefits by improving health and safety
protections and the quality of care that
children receive, as well as improving
transparency for parents about the child
care options available to the so they can
make more informed child care
decisions. This rule also increases
continuity of care and stability through
family-friendly practices.
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XIV. Executive Order 13175 on
Consultation with Indian Tribes
Executive Order 13175 requires
agencies to consult with Tribal leaders
and Tribal officials early in the process
of developing regulations and prior to
the formal promulgation of the
regulations. Agencies also must include
a Tribal impact statement, which
includes a description of the agency’s
prior consultation with Tribal officials,
a summary of the nature of their
concerns and the agency’s position
supporting the need to issue the
regulation, and a statement of the extent
to which the concerns of Tribal officials
have been met. ACF is committed to
continued consultation and
collaboration with Tribes, and this
proposed rule meets the requirements of
Executive Order 13175. The discussion
of subpart I in section IV of the
preamble serves as the Tribal impact
statement and contains a detailed
description of the consultation and
outreach on this proposed rule.
List of Subjects in 45 CFR Part 98
Child care, Grant programs-social
programs.
(Catalog of Federal Domestic Assistance
Program Number 93.575, Child Care and
Development Block Grant; 93.596, Child Care
Mandatory and Matching Funds)
Mark H. Greenberg,
Acting Assistant Secretary for Children and
Families.
Approved: October 28, 2015.
Sylvia M. Burwell,
Secretary.
For the reasons set forth in the
preamble, we propose to amend part 98
of 45 CFR as follows:
PART 98—CHILD CARE AND
DEVELOPMENT FUND
1. The authority citation for part 98
continues to read as follows:
■
Authority: 42 U.S.C. 618, 9858.
■
2. Revise § 98.1 to read as follows:
§ 98.1
Purposes.
(a) The purposes of the CCDF are:
(1) To allow each State maximum
flexibility in developing child care
programs and policies that best suit the
needs of children and parents within
that State;
(2) To promote parental choice to
empower working parents to make their
own decisions regarding the child care
services that best suits their family’s
needs;
(3) To encourage States to provide
consumer education information to help
parents make informed choices about
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Fmt 4701
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child care services and to promote
involvement by parents and family
members in the development of their
children in child care settings;
(4) To assist States in delivering highquality, coordinated early childhood
care and education services to maximize
parents’ options and support parents
trying to achieve independence from
public assistance;
(5) To assist States in improving the
overall quality of child care services and
programs by implementing the health,
safety, licensing, training, and oversight
standards established in this subchapter
and in State law (including State
regulations);
(6) To improve child care and
development of participating children;
and
(7) To increase the number and
percentage of low-income children in
high-quality child care settings.
(b) The purpose of these regulations is
to provide the basis for administration
of the Fund. These regulations provide
that State, Territorial, and Tribal Lead
Agencies:
(1) Maximize parental choice of safe,
healthy and nurturing child care
settings through the use of certificates
and through grants and contracts, and
by providing parents with information
about child care programs;
(2) Include in their programs a broad
range of child care providers, including
center-based care, family child care, inhome care, care provided by relatives
and sectarian child care providers;
(3) Improve the quality and supply of
child care and before- and after-school
care services that meet applicable
requirements and promote child
development and learning and family
economic stability;
(4) Coordinate planning and delivery
of services at all levels, including
Federal, State, Tribal, and local;
(5) Design flexible programs that
provide for the changing needs of
recipient families and engage families in
their children’s development and
learning;
(6) Administer the CCDF responsibly
to ensure that statutory requirements are
met and that adequate information
regarding the use of public funds is
provided;
(7) Design programs that provide
uninterrupted service to families and
providers, to the extent statutorily
possible, to support parental education,
training, and employment and
continuity of care that minimizes
disruptions to children’s learning and
development;
(8) Provide a progression of training
and professional development
opportunities for caregivers, teachers,
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and directors to increase their
effectiveness in supporting children’s
development and learning and
strengthen the child care workforce.
■ 3. Amend § 98.2 by:
■ a. Revising the definitions of
Categories of care, Eligible child,
Eligible child care provider, Family
child care provider, Lead Agency,
Programs, and Sliding fee scale;
■ b. Removing the definition of Group
home child care provider; and
■ c. Adding in alphabetical order the
definitions of Child experiencing
homelessness, Child with a disability,
Director, English learner, and Teacher.
The revisions and additions read as
follows:
§ 98.2
Definitions.
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*
*
*
*
*
Categories of care means center-based
child care, family child care, and inhome care;
*
*
*
*
*
Child experiencing homelessness
means a child who is homeless as
defined in section 725 of Subtitle VII–
B of the McKinney-Vento Act (42 U.S.C.
11434a);
Child with a disability means:
(1) A child with a disability, as
defined in section 602 of the Individuals
with Disabilities Education Act (20
U.S.C. 1401);
(2) A child who is eligible for early
intervention services under part C of the
Individuals with Disabilities Education
Act (20 U.S.C. 1431 et seq.);
(3) A child who is less than 13 years
of age and who is eligible for services
under section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794); or
(4) A child with a disability, as
defined by the State, Territory or Tribe
involved;
*
*
*
*
*
Director means a person who has
primary responsibility for the daily
operations management for a child care
provider, which may be a family child
care home, and which may serve
children from birth to kindergarten
entry and children in school-age child
care;
*
*
*
*
*
Eligible child means an individual:
(1) Who is less than 13 years of age;
(2) Whose family income does not
exceed 85 percent of the State median
income for a family of the same size,
and whose family assets do not exceed
$1,000,000 (as certified by a member of
such family); and
(3) Who—
(i) Resides with a parent or parents
who are working or attending a job
training or educational program; or
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(ii) Is receiving, or needs to receive,
protective services and resides with a
parent or parents not described in
paragraph (3)(i) of this definition;
Eligible child care provider means:
(1) A center-based child care provider,
a family child care provider, an in-home
child care provider, or other provider of
child care services for compensation
that—
(i) Is licensed, regulated, or registered
under applicable State or local law as
described in § 98.40; and
(ii) Satisfies State and local
requirements, including those referred
to in § 98.41 applicable to the child care
services it provides; or
(2) A child care provider who is 18
years of age or older who provides child
care services only to eligible children
who are, by marriage, blood
relationship, or court decree, the
grandchild, great grandchild, siblings (if
such provider lives in separate
residence), niece, or nephew of such
provider, and complies with any
applicable requirements that govern
child care provided by the relative
involved;
English learner means an individual
who is limited English proficient, as
defined in section 9101 of the
Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7801) or section
637 of the Head Start Act (42 U.S.C.
9832);
*
*
*
*
*
Family child care provider means one
or more individual(s) who provide child
care services for fewer than 24 hours per
day per child, in a private residence
other than the child’s residence, unless
care in excess of 24 hours is due to the
nature of the parent(s)’ work;
*
*
*
*
*
Lead Agency means the State,
territorial or tribal entity, or joint
interagency office, designated or
established under §§ 98.10 and 98.16(a)
to which a grant is awarded and that is
accountable for the use of the funds
provided. The Lead Agency is the entire
legal entity even if only a particular
component of the entity is designated in
the grant award document;
*
*
*
*
*
Programs refers generically to all
activities under the CCDF, including
child care services and other activities
pursuant to § 98.50 as well as quality
activities pursuant to § 98.51;
*
*
*
*
*
Sliding fee scale means a system of
cost-sharing by a family based on
income and size of the family, in
accordance with § 98.45(k);
*
*
*
*
*
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80563
Teacher means a lead teacher,
teacher, teacher assistant, or teacher
aide who is employed by a child care
provider for compensation on a regular
basis and whose responsibilities and
activities are to organize, guide, and
implement activities in a group or
individual basis, or to assist a teacher or
lead teacher in such activities, to further
the cognitive, social, emotional, and
physical development of children from
birth to kindergarten entry and children
in school-age child care and may be a
family child care provider;
*
*
*
*
*
■ 4. Amend § 98.10 by revising the
introductory text and paragraphs (d) and
(e) and adding paragraph (f) to read as
follows:
§ 98.10
Lead Agency responsibilities.
The Lead Agency (which may be an
appropriate collaborative agency), or a
joint interagency office, as designated or
established by the Governor of the State
(or by the appropriate Tribal leader or
applicant), shall:
*
*
*
*
*
(d) Hold at least one public hearing in
accordance with § 98.14(c);
(e) Coordinate CCDF services
pursuant to § 98.12; and
(f) Consult, collaborate, and
coordinate in the development of the
State Plan in a timely manner with
Indian Tribes or tribal organizations in
the State (at the option of the Tribe or
tribal organization).
■ 5. Amend § 98.11 by adding a
sentence to the end of paragraph (a)(3)
and revising paragraph (b)(5) to read as
follows:
§ 98.11 Administration under contracts
and agreements.
(a) * * *
(3) * * * The contents of the written
agreement may vary based on the role
the agency is asked to assume or the
type of project undertaken, but must
include, at a minimum, tasks to be
performed, a schedule for completing
tasks, a budget which itemizes
categorical expenditures consistent with
CCDF requirements at § 98.65(h), and
indicators or measures to assess
performance.
(b) * * *
(5) Oversee the expenditure of funds
by subgrantees and contractors, in
accordance with 75 CFR parts 351
through 353;
*
*
*
*
*
■ 6. Amend § 98.12 by revising
paragraph (c) to read as follows:
§ 98.12
*
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*
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*
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(c) Coordinate, to the maximum
extent feasible, per § 98.10(f) with any
Indian Tribes in the State receiving
CCDF funds in accordance with subpart
I of this part.
■ 7. Amend § 98.14 by revising
paragraphs (a)(1) introductory text,
(a)(1)(C), and (a)(1)(D) and adding
paragraphs (a)(1)(E), (F), (G), (H), (I), (J),
(K), (L), and (M), (a)(3) and (4), and (d)
to read as follows:
§ 98.14
Plan process.
tkelley on DSK3SPTVN1PROD with PROPOSALS2
*
*
*
*
*
(a)(1) Coordinate the provision of
services funded under this part with
other Federal, State, and local child care
and early childhood development
programs (including such programs for
the benefit of Indian children, infants
and toddlers, children with disabilities,
children experiencing homelessness,
and children in foster care) to expand
accessibility and continuity of care as
well as full-day services. The Lead
Agency shall also coordinate the
provision of services with the State, and
if applicable, tribal agencies responsible
for:
*
*
*
*
*
(C) Public education (including
agencies responsible for prekindergarten services, if applicable, and
educational services provided under
Part B and C of the Individuals with
Disabilities Education Act (20 U.S.C.
1400));
(D) Providing Temporary Assistance
for Needy Families;
(E) Child care licensing;
(F) Head Start collaboration, as
authorized by the Head Start Act (42
U.S.C. 9831 et seq.);
(G) State Advisory Council on Early
Childhood Education and Care
(designated or established pursuant to
the Head Start Act (42 U.S.C. 9831 et
seq.)) or similar coordinating body;
(H) Statewide after-school network or
other coordinating entity for out-ofschool time care (if applicable);
(I) Emergency management and
response;
(J) Child and Adult Care Food
Program (CACFP) authorized by the
National School Lunch Act (42 U.S.C.
1766);
(K) Services for children experiencing
homelessness, including State
Coordinators of Education for Homeless
Children and Youth (EHCY State
Coordinators) and, to the extent
practicable, local liaisons designated by
Local Educational Agencies (LEAs) in
the State as required by the McKinneyVento Act (42 U.S.C. 11432) and
Continuum of Care grantees;
(L) Medicaid authorized by title XIX
of the Social Security Act; and
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(M) Mental health services.
*
*
*
*
(3) If the Lead Agency elects to
combine funding for CCDF services with
any other early childhood program,
provide a description in the CCDF Plan
of how the Lead Agency will combine
and use the funding.
(4) Demonstrate in the CCDF Plan
how the State, Territory, or Tribe
encourages partnerships among its
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 for child care and development
services and to increase the supply and
quality of 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 service alliance models.
*
*
*
*
*
(d) Make the Plan and any Plan
amendments publicly available.
■ 8. Amend § 98.15 by:
■ a. Revising paragraph (a)(6);
■ b. Adding paragraphs (a)(7), (8), (9),
(10), and (11); and
■ c. Revising paragraph (b).
The revisions and additions read as
follows:
*
§ 98.15
Assurances and certifications.
(a) * * *
(6) That if expenditures for preKindergarten services are used to meet
the maintenance-of-effort requirement,
the State has not reduced its level of
effort in full-day/full-year child care
services, pursuant to § 98.55(h)(1).
(7) Training and professional
development requirements comply with
§ 98.44 and are applicable to caregivers,
teaching staff, and directors working for
child care providers of services for
which assistance is provided under the
CCDF.
(8) To the extent practicable,
enrollment and eligibility policies
support the fixed costs of providing
child care services by delinking
provider payment rates from an eligible
child’s occasional absences in
accordance with § 98.45(m).
(9) The State will maintain or
implement early learning and
developmental guidelines that are
developmentally appropriate for all
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 (cognition,
including language arts and
mathematics; social, emotional and
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physical development; and approaches
toward learning) for use statewide by
child care providers and caregivers.
Such guidelines shall—
(i) Be research-based and
developmentally, culturally, and
linguistically appropriate, building in a
forward progression, 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)) or
similar coordinating body, and in
consultation with child development
and content experts; and
(iii) Be updated as determined by the
State.
(10) 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 primary or 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.
(11) Any code or software for child
care information systems or information
technology that a Lead Agency or other
agency expends CCDF funds to develop
must be made available upon request to
other public agencies for their use in
administering child care or related
programs.
(b) The Lead Agency shall include the
following certifications in its CCDF
Plan:
(1) The State has developed the CCDF
Plan in consultation with 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))) or similar
coordinating body, pursuant to
§ 98.14(a)(1)(G);
(2) In accordance with § 98.31, it has
procedures in place to ensure that
providers of child care services for
which assistance is provided under the
CCDF, afford parents unlimited access
to their children and to the providers
caring for their children, during the
normal hours of operations and
whenever such children are in the care
of such providers;
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(3) As required by § 98.32, the State
maintains a record of substantiated
parental complaints and makes
information regarding such complaints
available to the public on request;
(4) It will collect and disseminate to
parents of eligible children, the general
public and, where applicable, child care
providers, consumer education
information that will promote informed
child care choices, information on
access to other programs for which
families may be eligible, and
information on developmental
screenings, as required by § 98.33;
(5) In accordance with § 98.33(a), that
the State makes public through a
consumer-friendly and easily accessible
Web site the results of monitoring and
inspection reports, as well as the
number of deaths, serious injuries, and
instances of substantiated child abuse
that occurred in child care settings;
(6) There are in effect licensing
requirements applicable to child care
services provided within the State,
pursuant to § 98.40;
(7) There are in effect within the State
(or other area served by the Lead
Agency), under State or local (or tribal)
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 under the CCDF,
pursuant to § 98.41;
(8) In accordance with § 98.42(a),
procedures are in effect to ensure that
child care providers of services for
which assistance is provided under the
CCDF comply with all applicable State
or local (or tribal) health and safety
requirements;
(9) Caregivers, teachers, and directors
of child care providers comply with the
State’s, Territory’s, or Tribe’s
procedures for reporting child abuse
and neglect as required by section
106(b)(2)(B)(i) of the Child Abuse
Prevention and Treatment Act (42
U.S.C. 5106a(b)(2)(B)(i)) or other child
abuse reporting procedures and laws in
the service area, as required by
§ 98.41(e);
(10) There are in effect monitoring
policies and practices pursuant to
§ 98.42;
(11) Payment rates for the provision of
child care services, in accordance with
§ 98.45, are sufficient to ensure equal
access for eligible children to
comparable child care services in the
State or sub-State area that are provided
to children whose parents are not
eligible to receive assistance under this
program or under any other Federal or
State child care assistance programs;
(12) Payment practices of child care
providers of services for which
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assistance is provided under the CCDF
reflect generally accepted payment
practices of child care providers that
serve children who do not receive CCDF
assistance, pursuant to § 98.45(m); and
(13) There are in effect policies to
govern the use and disclosure of
confidential and personally-identifiable
information about children and families
receiving CCDF assistance and child
care providers receiving CCDF funds.
■ 9. Revise § 98.16 to read as follows:
§ 98.16
Plan provisions.
A CCDF Plan shall contain the
following:
(a) Specification of the Lead Agency
whose duties and responsibilities are
delineated in § 98.10;
(b) A description of processes the
Lead Agency will use to monitor
administrative and implementation
responsibilities undertaken by agencies
other than the Lead Agency including
descriptions of written agreements,
monitoring and auditing procedures,
and indicators or measures to assess
performance pursuant to § 98.11(a)(3);
(c) The assurances and certifications
listed under § 98.15;
(d)(1) A description of how the CCDF
program will be administered and
implemented, if the Lead Agency does
not directly administer and implement
the program;
(2) Identification of the public or
private entities designated to receive
private donated funds and the purposes
for which such funds will be expended,
pursuant to § 98.55(f);
(e) A description of the coordination
and consultation processes involved in
the development of the Plan and the
provision of services, including a
description of public-private
partnership activities that promote
business involvement in meeting child
care needs pursuant to § 98.14;
(f) A description of the public hearing
process, pursuant to § 98.14(c);
(g) Definitions of the following terms
for purposes of determining eligibility,
pursuant to §§ 98.20(a) and 98.46:
(1) Special needs child;
(2) Physical or mental incapacity (if
applicable);
(3) Attending (a job training or
educational program);
(4) Job training and educational
program;
(5) Residing with;
(6) Working;
(7) Protective services (if applicable),
including whether children in foster
care are considered in protective
services for purposes of child care
eligibility; and whether respite care is
provided to custodial parents of
children in protective services.
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(8) Very low income; and
(9) In loco parentis;
(h) A description and demonstration
of eligibility determination and
redetermination processes to promote
continuity of care for children and
stability for families receiving CCDF
services, including:
(1) An eligibility redetermination
period of no less than 12 months in
accordance with § 98.21(a);
(2) A graduated phaseout for families
whose income exceeds the Lead
Agency’s threshold to initially qualify
for CCDF assistance, but does not
exceed 85 percent of State median
income, pursuant to § 98.21(b);
(3) Processes that take into account
irregular fluctuation in earnings,
pursuant to § 98.21(c);
(4) Procedures and policies to ensure
that parents are not required to unduly
disrupt their education, training, or
employment to complete eligibility
redetermination, pursuant to § 98.21(d);
(5) Limiting any requirements to
report changes in circumstances in
accordance with § 98.21(e);
(6) Policies that take into account
children’s development and learning
when authorizing child care services
pursuant to § 98.21(f); and
(7) Other policies and practices such
as timely eligibility determination and
processing of applications;
(i) For child care services pursuant to
§ 98.50:
(1) A description of such services and
activities, including how the Lead
Agency will address supply shortages
through the use of grants and contracts.
The description should identify
shortages in the supply of high quality
child care providers, including for
specific localities and populations, list
the data sources used to identify
shortages, and explain how grants or
contracts for direct services will be used
to address such shortages;
(2) Any limits established for the
provision of in-home care and the
reasons for such limits pursuant to
§ 98.30(e)(1)(iii);
(3) A list of political subdivisions in
which such services and activities are
offered, if such services and activities
are not available throughout the entire
service area;
(4) A description of how the Lead
Agency will meet the needs of certain
families specified at § 98.50(e);
(5) Any additional eligibility criteria,
priority rules, and definitions
established pursuant to § 98.20(b);
(j) A description of the activities to
provide comprehensive consumer and
provider education, including the
posting of monitoring and inspection
reports, pursuant to § 98.33, to increase
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parental choice, and to improve the
quality of child care, pursuant to
§ 98.53;
(k) A description of the sliding fee
scale(s) (including any factors other
than income and family size used in
establishing the fee scale(s)) that
provide(s) for cost-sharing by the
families that receive child care services
for which assistance is provided under
the CCDF and how co-payments are
affordable for families, pursuant to
§ 98.45(k). This shall include a
description of the criteria established by
the Lead Agency, if any, for waiving
contributions for families;
(l) A description of the health and
safety requirements, applicable to all
providers of child care services for
which assistance is provided under the
CCDF, in effect pursuant to § 98.41, and
any exemptions to those requirements
for relative providers made in
accordance with § 98.42(c);
(m) A description of child care
standards for child care providers of
services for which assistance is
provided under the CCDF, in
accordance with § 98.41(d), that
includes group size limits, child-staff
ratios, and required qualifications for
caregivers, teachers, and directors;
(n) A description of monitoring and
other enforcement procedures in effect
to ensure that child care providers
comply with applicable health and
safety requirements pursuant to § 98.42;
(o) A description of criminal
background check requirements,
policies, and procedures in accordance
with § 98.43, including of description of
the requirements, policies, and
procedures in place to respond to other
States’, Territories’, and Tribes’ requests
for background check results in order to
accommodate the 45 day timeframe;
(p) A description of training and
professional development requirements
for caregivers, teaching staff, and
directors of providers of services for
which assistance is provided in
accordance with § 98.44;
(q) A description of the child care
certificate payment system(s), including
the form or forms of the child care
certificate, pursuant to § 98.30(c);
(r) Payment rates and a summary of
the facts, including a biennial local
market rate survey or alternative
methodology relied upon to determine
that the rates provided are sufficient to
ensure equal access pursuant to § 98.45;
(s) A detailed description of the
State’s hotline for complaints, its
process for responding to complaints,
how the State maintains a record of
substantiated parental complaints, and
how it makes information regarding
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those complaints available to the public
on request, pursuant to § 98.32;
(t) A detailed description of the
procedures in effect for affording
parents unlimited access to their
children whenever their children are in
the care of the provider, pursuant to
§ 98.31;
(u) A detailed description of the
licensing requirements applicable to
child care services provided, any
exemption to licensing requirements
that is applicable to child care providers
of services for which assistance is
provided under the CCDF and a
demonstration why such exemption
does not endanger the health, safety, or
development of children, and a
description of how such licensing
requirements are effectively enforced,
pursuant to § 98.40;
(v) Pursuant to § 98.33(e), the
definitions or criteria used to implement
the exception, provided in section
407(e)(2) of the Social Security Act, to
individual penalties in the TANF work
requirement applicable to a single
custodial parent caring for a child under
age six;
(w)(1) When any Matching funds
under § 98.55(b) are claimed, a
description of the efforts to ensure that
pre-Kindergarten programs meet the
needs of working parents;
(2) When State pre-Kindergarten
expenditures are used to meet more
than 10% of the amount required at
§ 98.55(c)(1), or for more than 10% of
the funds available at § 98.55(b), or both,
a description of how the State will
coordinate its pre-Kindergarten and
child care services to expand the
availability of child care;
(x) A description of the Lead Agency’s
strategies (which may include
alternative payment rates to child care
providers, the provision of direct grants
or contracts, offering child care
certificates, or other means) to increase
the supply and improve the quality of
child care services for children in
underserved areas, infants and toddlers,
children with disabilities as defined by
the Lead Agency, and children who
receive care during nontraditional
hours;
(y) A description of how the Lead
Agency prioritizes increasing access to
high quality child care and development
services for children of families in areas
that have significant concentrations of
poverty and unemployment and that do
not have sufficient numbers of such
programs, pursuant to § 98.46;
(z) A description of how the Lead
Agency develops and implements
strategies to strengthen the business
practices of child care providers to
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expand the supply, and improve the
quality of, child care services;
(aa) A demonstration of how the State,
Territory or Tribe will address the needs
of children, including the need for safe
child care, before, during and after a
state of emergency declared by the
Governor or a major disaster or
emergency (as defined by section 102 of
the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42
U.S.C. 5122) through a Statewide
Disaster Plan (or Disaster Plan for a
Tribe’s service area) that:
(1) For a State, is developed in
collaboration with the State human
services agency, the State emergency
management agency, the State licensing
agency, the State health department or
public health department, local and
State child care resource and referral
agencies, 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))) or similar
coordinating body; and
(2) Includes the following
components:
(i) Guidelines for continuation of
child care subsidies and child care
services, which may include the
provision of emergency and temporary
child care services during a disaster,
and temporary operating standards for
child care after a disaster;
(ii) Coordination of post-disaster
recovery of child care services; and
(iii) Requirements that child care
providers of services for which
assistance is provided under the CCDF,
as well as other child care providers as
determined appropriate by the State,
Territory or Tribe, have in place:
(A) Procedures for evacuation,
relocation, shelter-in-place, lock-down,
communication and reunification with
families, continuity of operations,
accommodations of infants and
toddlers, children with disabilities, and
children with chronic medical
conditions; and
(B) Procedures for staff and volunteer
emergency preparedness training and
practice drills, including training
requirements for child care providers of
services for which assistance is
provided under CCDF at
§ 98.41(a)(1)(vii);
(bb) A description of payment
practices applicable to providers of
child care services for which assistance
is provided under this part, pursuant to
§ 98.45(m), including practices to ensure
timely payment for services, to delink
provider payments from children’s
occasional absences to the extent
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practicable, and to reflect generallyaccepted payment practices;
(cc) A description of internal controls
to ensure integrity and accountability,
processes in place to investigate and
recover fraudulent payments and to
impose sanctions on clients or providers
in response to fraud, and procedures in
place to document and verity eligibility,
pursuant to § 98.68;
(dd) A description of how the Lead
Agency will provide outreach and
services to eligible families with limited
English proficiency and persons with
disabilities and facilitate participation
of child care providers with limited
English proficiency and disabilities in
the subsidy system;
(ee) A description of policies on
suspension and expulsion of children
birth to age five in child care and other
early childhood programs receiving
assistance under this part, which must
be disseminated as part of consumer
and provider education efforts in
accordance with § 98.33(b)(1)(v);
(ff) Designation of a State, territorial,
or tribal entity to which child care
providers must submit reports of any
serious injuries or deaths of children
occurring in child care, in accordance
with § 98.42(b)(4);
(gg) A description of how the Lead
Agency will support child care
providers in the successful engagement
of families in children’s learning and
development;
(hh) A description of how the Lead
Agency will respond to complaints
submitted through the national hotline
and Web site, required in the CCDBG
Act of 2014 (Section 658L(b)(2)),
including the designee responsible for
receiving and responding to such
complaints regarding both licensed and
license-exempt child care providers;
and
(ii) Such other information as
specified by the Secretary.
■ 10. Amend § 98.17 by revising
paragraph (a) to read as follows:
§ 98.17
Period covered by Plan.
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(a) For States, Territories, and Indian
Tribes the Plan shall cover a period of
three years.
*
*
*
*
*
■ 11. Amend § 98.18 by revising
paragraph (b) to read as follows:
§ 98.18 Approval and disapproval of Plans
and Plan amendments.
*
*
*
*
*
(b) Plan amendments. (1) Approved
Plans shall be amended whenever a
substantial change in the program
occurs. A Plan amendment shall be
submitted within 60 days of the
effective date of the change. Plan
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amendments will be approved not later
than the 90th day following the date on
which the amendment is received,
unless a written agreement to extend
that period has been secured.
(2) Lead Agencies must ensure
advanced written notice is provided to
affected parties (i.e., parents and child
care providers) of substantial changes in
the program that adversely affect
income eligibility, payment rates, and/
or sliding fee scales.
*
*
*
*
*
■ 12. Add § 98.19 to subpart B to read
as follows:
§ 98.19 Requests for temporary relief from
requirements.
(a) The Secretary may waive one or
more of the requirements contained in
the Act or this part, with the exception
of State Match and Maintenance of
Effort requirements for a State,
consistent with the conditions described
in section 658I(c)(1) of the Act, provided
that the waiver request:
(1) Describes circumstances that
prevent the State, Territory, or Tribe
from complying with any statutory or
regulatory requirements of this part;
(2) By itself, contributes to or
enhances the State’s, Territory’s, or
Tribe’s ability to carry out the purposes
of the Act and this part;
(3) Will not contribute to
inconsistency with the purposes of the
Act or this part, and;
(4) Meets the requirements set forth in
paragraphs (b) through (g) of this
section.
(b) Types of waivers include:
(1) Transitional and legislative
waivers. Lead Agencies may apply for
temporary waivers meeting the
requirements described in paragraph (a)
of this section that would provide
transitional relief from conflicting or
duplicative requirements preventing
implementation, or an extended period
of time in order for a State, territorial,
or tribal legislature to enact legislation
to implement the provisions of this
subchapter. Such waivers are:
(i) Limited to a one-year initial period;
(iii) May be extended, in accordance
with paragraph (f) of this section, for at
most one additional year from the date
of approval of the extension,
(iii) Are designed to provide States,
Territories and Tribes at most one full
legislative session to enact legislation to
implement the provisions of the Act or
this part, and;
(iv) May be terminated by the
Secretary at any time in accordance
with paragraph (e) of this section.
(2) Waivers for extraordinary
circumstances. States, Territories and
Tribes may apply for waivers meeting
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the requirements described in paragraph
(a) of this section, in cases of
extraordinary circumstances, which are
defined as temporary circumstances or
situations, such as a natural disaster or
financial crisis. Such waivers are:
(i) Limited to an initial period of no
more than 2 years from the date of
approval;
(ii) May be extended, in accordance
with paragraph (f) of this section, for at
most one additional year from the date
of approval of the extension, and;
(iii) May be terminated by the
Secretary at any time in accordance
with paragraph (e) of this section.
(c) Waiver requests must be submitted
to the Secretary in writing and:
(1) Indicate which type of waiver, as
detailed in paragraph (b) of this section,
the State, Territory or Tribe is
requesting;
(2) Detail each sanction or provision
of the Act or regulations that the State,
Territory or Tribe seeks relief from;
(3) Describe how a waiver from that
sanction or provision will, by itself,
improve delivery of child care services
for children; and
(4) Certify and describe how the
health, safety, and well-being of
children served through assistance
received under this part will not be
compromised as a result of the waiver.
(d) Within 90 days after receipt of the
waiver request or, if additional followup information has been requested, the
receipt of such information, the
Secretary will notify the Lead Agency of
the approval or disapproval of the
request.
(e) Termination. The Secretary shall
terminate approval of a request for a
waiver authorized under the Act or this
section if the Secretary determines, after
notice and opportunity for a hearing,
that the performance of a State,
Territory or Tribe granted relief under
this section has been inadequate, or if
such relief is no longer necessary to
achieve its original purposes.
(f) Renewal. The Secretary may
approve or disapprove a request from a
State, Territory or Tribe for renewal of
an existing waiver under the Act or this
section for a period no longer than one
year. A State, Territory or Tribe seeking
to renew their waiver approval must
inform the Secretary of this intent no
later than 30 days prior to the expiration
date of the waiver. The State, Territory
or Tribe shall re-certify in its extension
request the provisions in paragraph (a)
of this section, and shall also explain
the need for additional time of relief
from such sanction(s) or provisions.
(g) Restrictions. The Secretary may
not:
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(1) Permit Lead Agencies to alter the
eligibility requirements for eligible
children, including work requirements,
job training, or educational program
participation, that apply to the parents
of eligible children under this part;
(2) Waive anything related to the
Secretary’s authority under this part; or
(3) Require or impose any new or
additional requirements in exchange for
receipt of a waiver if such requirements
are not specified in the Act.
■ 13. Amend § 98.20 by:
■ a. Revising paragraphs (a) and (b)
introductory text; and
■ b. In paragraph (b)(2), removing
‘‘Subpart D; or’’ and adding in its place
‘‘subpart D of this part;’’;
■ c. In paragraph (b)(3):
■ i. Removing ‘‘§ 98.44’’ and adding
‘‘§ 98.46’’ in its place; and
■ ii. Removing the period at the end of
the paragraph and adding ‘‘; or’’ in its
place; and
■ d. Adding paragraphs (b)(4) and (c).
The revisions and additions read as
follows:
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§ 98.20 A child’s eligibility for child care
services.
(a) In order to be eligible for services
under § 98.50, a child shall, at the time
of eligibility determination or
redetermination:
(1)(i) Be under 13 years of age; or,
(ii) At the option of the Lead Agency,
be under age 19 and physically or
mentally incapable of caring for himself
or herself, or under court supervision;
(2)(i) Reside with a family whose
income does not exceed 85 percent of
the State’s median income (SMI), which
must be based on the most recent SMI
data that is published by the Bureau of
the Census, for a family of the same size;
and
(ii) Whose family assets do not exceed
$1,000,000 (as certified by such family
member); and
(3)(i) Reside with a parent or parents
who are working or attending a job
training or educational program; or
(ii) Receive, or need to receive,
protective services, which may include
specific populations of vulnerable
children as identified by the Lead
Agency, and reside with a parent or
parents other than the parent(s)
described in paragraph (a)(3)(i) of this
section.
(A) At grantee option, the
requirements in paragraph (a)(2) of this
section may be waived for families
eligible for child care pursuant to this
paragraph, if determined to be necessary
on a case-by-case basis.
(B) At grantee option, the waiver
provisions in paragraph (a)(3)(ii)(A) of
this section apply to children in foster
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care when defined in the Plan, pursuant
to § 98.16(g)(7).
(b) A grantee or other administering
agency may establish eligibility
conditions or priority rules in addition
to those specified in this section and
§ 98.46, which shall be described in the
Plan pursuant to § 98.16(i)(5), so long as
they do not:
*
*
*
*
*
(4) Impact eligibility other than at the
time of eligibility determination or
redetermination.
(c) For purposes of implementing the
citizenship eligibility verification
requirements mandated by title IV of the
Personal Responsibility and Work
Opportunity Reconciliation Act, 8
U.S.C. 1601 et seq., only the citizenship
and immigration status of the child,
who is the primary beneficiary of the
CCDF benefit, is relevant. Therefore, a
Lead Agency or other administering
agency may not condition a child’s
eligibility for services under § 98.50
based upon the citizenship or
immigration status of their parent or the
provision of any information about the
citizenship or immigration status of
their parent.
■ 14. Add § 98.21 to subpart C to read
as follows:
§ 98.21 Eligibility determination
processes.
(a) A Lead Agency shall redetermine
a child’s eligibility for child care
services no sooner than 12 months
following the initial determination or
most recent redetermination, subject to
the following:
(1) During the period of time between
redeterminations, if the child met all of
the requirements in § 98.20(a) on the
date of the most recent eligibility
determination or redetermination, the
child shall be considered to be eligible
and will receive services, regardless of:
(i) A change in family income, if that
family income does not exceed 85
percent of SMI for a family of the same
size; or
(ii) A temporary change in the
ongoing status of the child’s parent as
working or attending a job training or
educational program. A temporary
change shall include, at a minimum:
(A) Any time-limited absence from
work for an employed parent for periods
of family leave (including parental
leave) or sick leave;
(B) Any interruption in work for a
seasonal worker who is not working
between regular industry work seasons;
(C) Any student holiday or break for
a parent participating in training or
education;
(D) Any reduction in work, training or
education hours, as long as the parent
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is still working or attending training or
education;
(E) Any other cessation of work or
attendance at a training or education
program that does not exceed three
months or a longer period of time
established by the Lead Agency;
(F) Any change in age, including
turning 13 years old during the
eligibility period; and
(G) Any change in residency within
the State, Territory, or Tribal service
area.
(2) Lead Agencies have the option, but
are not required, to discontinue
assistance due to a parent’s loss of work
or cessation of attendance at a job
training or educational program that
does not constitute a temporary change
in accordance with paragraph (a)(1)(ii)
of this section. However, if the Lead
Agency exercises this option, it must
continue assistance at the same level for
a period of not less than three months
after such loss or cessation in order for
the parent to engage in job search and
resume work, or resume attendance at a
job training or educational activity.
(3) Lead Agencies cannot increase
family co-payment amounts, established
in accordance with § 98.45(k), within
the minimum 12-month eligibility
period except as described in paragraph
(b)(2) of this section.
(4) Because a child meeting eligibility
requirements at the most recent
eligibility determination or
redetermination is considered eligible
between redeterminations as described
in paragraph (a)(1) of this section, any
payment for such a child shall not be
considered an error or improper
payment under subpart K of this part
due to a change in the family’s
circumstances.
(b) Lead Agencies that establish
family income eligibility at a level less
than 85 percent of SMI for a family of
the same size (in order for a child to
initially qualify for assistance) must
provide a graduated phaseout by
implementing two-tiered eligibility
thresholds.
(1) This can be accomplished either
by:
(i) Establishing the second tier of
eligibility at 85 percent of SMI for a
family of the same size and considering
children to be eligible (pursuant to
paragraph (a) of this section) if their
parents, at the time of redetermination,
are working or attending a job training
or educational program even if their
income exceeds the Lead Agency’s
income limit to initially quality for
assistance, but does not exceed the
second eligibility threshold; or
(ii) Using the approach specified in
paragraph (b)(1)(i) of this section but
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only for a limited period of not less than
an additional 12 months.
(2) Lead Agencies may gradually
adjust co-pay amounts for families that
are determined eligible under the
conditions described in paragraph (b) of
this section to help families transition
off of child care assistance.
(c) The Lead Agency shall establish
processes for initial determination and
redetermination of eligibility that take
into account irregular fluctuation in
earnings, including policies that ensure
temporary increases in income,
including temporary increases that
result in monthly income exceeding 85
percent of SMI (calculated on a monthly
basis), do not affect eligibility or family
co-payments.
(d) The Lead Agency shall establish
procedures and policies to ensure
parents, especially parents receiving
assistance through the Temporary
Assistance for Needy Families (TANF)
program, are not required to unduly
disrupt their education, training, or
employment in order to complete the
eligibility redetermination process.
(e) The Lead Agency shall specify in
the Plan any requirements for parents to
notify the Lead Agency of changes in
circumstances during the minimum 12month period, and describe efforts to
ensure such requirements do not impact
continuity for eligible families between
redeterminations.
(1) The Lead Agency must require
families to report a change at any point
during the minimum 12-month period,
limited to:
(i) If the family’s income exceeds 85%
of SMI, taking into account irregular
income fluctuations; or
(ii) At the option of the Lead Agency,
the family has experienced a nontemporary cessation of work, training, or
education.
(2) Any requirement for parents to
provide notification of changes in
circumstances to the Lead Agency or
entities designated to perform eligibility
functions shall not constitute an undue
burden on families. Any such
requirements shall:
(i) Limit notification requirements to
items that impact a family’s eligibility
(e.g., only if income exceeds 85 percent
of SMI, or there is a non-temporary
change in the status of the child’s parent
as working or attending a job training or
educational program) or those that
enable the Lead Agency to contact the
family or pay providers;
(ii) Not require an office visit in order
to fulfill notification requirements; and
(iii) Offer a range of notification
options (e.g., phone, email, online
forms, extended submission hours) to
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accommodate the needs of working
parents;
(3) During a period of graduated
phase-out, the Lead Agency may require
additional reporting on changes in
family income in order to gradually
adjust family co-payments, if desired, as
described in paragraph (b)(2) of this
section.
(4) Lead Agencies must allow families
the option to voluntarily report changes
on an ongoing basis.
(i) Lead Agencies are required to act
on this information provided by the
family if it would reduce the family’s
co-payment or increase the family’s
subsidy.
(ii) Lead Agencies are prohibited from
acting on information that would reduce
the family’s subsidy unless the
information provided indicates the
family’s income exceeds 85 percent of
SMI for a family of the same size, taking
into account irregular income
fluctuations, or, at the option of the
Lead Agency, the family has
experienced a non-temporary change in
the work, training, or educational status.
(f) Lead Agencies must take into
consideration children’s development
and learning and promote continuity of
care when authorizing child care
services.
(g) Lead Agencies are not required to
limit authorized child care services
strictly based on the work, training, or
educational schedule of the parent(s) or
the number of hours the parent(s) spend
in work, training, or educational
activities.
■ 15. Amend § 98.30 by revising
paragraphs (e)(1), (f) introductory text,
and (f)(2) and adding paragraphs (g) and
(h) to read as follows:
§ 98.30
Parental choice.
*
*
*
*
*
(e)(1) For child care services,
certificates under paragraph (a)(2) of
this section shall permit parents to
choose from a variety of child care
categories, including:
(i) Center-based child care;
(ii) Family child care; and
(iii) In-home child care, with
limitations, if any, imposed by the Lead
Agency and described in its Plan at
§ 98.16(i)(2). Under each of the above
categories, care by a sectarian provider
may not be limited or excluded.
*
*
*
*
*
(f) With respect to State and local
regulatory requirements under § 98.40,
health and safety requirements under
§ 98.41, and payment rates under
§ 98.45, CCDF funds will not be
available to a Lead Agency if State or
local rules, procedures or other
requirements promulgated for purposes
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of the CCDF significantly restrict
parental choice by:
*
*
*
*
*
(2) Having the effect of limiting
parental access to or choice from among
such categories of care or types of
providers, as defined in § 98.2, with the
exception of in-home care; or
*
*
*
*
*
(g) As long as provisions at paragraph
(f) of this section are met, parental
choice provisions shall not be construed
as prohibiting a Lead Agency from
establishing policies that require
providers of child care services for
which assistance is provided under this
part to meet higher standards of quality,
such as those identified in a quality
improvement system or other
transparent system of quality indicators.
(h) Parental choice provisions shall
not be construed as prohibiting a Lead
Agency from providing parents with
information and incentives that
encourage the selection of high quality
child care.
■ 16. Revise § 98.31 to read as follows:
§ 98.31
Parental access.
The Lead Agency shall have in effect
procedures to ensure that providers of
child care services for which assistance
is provided afford parents unlimited
access to their children, and to the
providers caring for their children,
during normal hours of provider
operation and whenever the children
are in the care of the provider. The Lead
Agency shall provide a detailed
description in the Plan of such
procedures.
■ 17. Revise § 98.32 to read as follows:
§ 98.32
Parental complaints.
The State shall:
(a) Establish or designate a hotline or
similar reporting process for parents to
submit complaints about child care
providers;
(b) Maintain a record of substantiated
parent complains;
(c) Make information regarding such
parental complaints available to the
public on request; and
(d) The Lead Agency shall provide a
detailed description in the Plan of how
such record is maintained and is made
available.
■ 18. Revise § 98.33 to read as follows:
§ 98.33
Consumer and provider education.
The Lead Agency shall:
(a) Certify that it will collect and
disseminate consumer education
information to parents of eligible
children, the general public, and
providers through a consumer-friendly
and easily accessible Web site that
ensures the widest possible access to
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services for families who speak
languages other than English and
persons with disabilities, including:
(1) Lead Agency processes, including:
(i) The process for licensing child care
providers pursuant to § 98.40;
(ii) The process for conducting
monitoring and inspections of child care
providers pursuant to § 98.42:
(iii) Policies and procedures related to
criminal background checks for child
care providers pursuant to § 98.43; and
(iv) The offenses that prevent
individuals from serving as child care
providers.
(2) Provider-specific information for
all eligible and licensed child care
providers (other than an individual who
is related to all children for whom child
care services are provided), including:
(i) A localized list of child care
providers, differentiating between
licensed and license-exempt providers,
searchable by zip code;
(ii) The quality of a provider as
determined by the Lead Agency through
a quality rating and improvement
system or other transparent system of
quality indicators, if such information is
available for the provider;
(iii) Results of monitoring and
inspection reports for child care
providers, including those required at
§ 98.42 and those due to major
substantiated complaints about failure
to comply with provisions at § 98.41
and Lead Agency child care policies.
Lead Agencies shall post in a timely
manner full monitoring and inspection
reports, either in plain language or with
a plain language summary, for parents
and child care providers to understand.
Such results shall include:
(A) Information on the date of such
inspection;
(B) Information on corrective action
taken by the State and child care
provider, where applicable; and
(C) A minimum of 5 years of results,
where available.
(iv) The number of serious injuries
and deaths of children that occurred
while in the care of the provider.
(3) Aggregate number of deaths,
serious injuries, and instances of
substantiated child abuse that occurred
in child care settings each year, for
eligible providers.
(4) Referrals to local child care
resource and referral organizations.
(5) Directions on how parents can
contact the Lead Agency or its designee
and other programs to help them
understand information included on the
Web site.
(b) Certify that it will collect and
disseminate, through resource and
referral organizations or other means as
determined by the State, including, but
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not limited to, through the Web site at
§ 98.33(a), to parents of eligible children
and the general public, and where
applicable providers, information about:
(1) The availability of the full
diversity of child care services to
promote informed parental choice,
including information about:
(i) the availability of child care
services under this part and other
programs for which families may be
eligible, as well as the availability of
financial assistance to obtain child care
services;
(ii) Other programs for which families
that receive assistance under this part
may be eligible, including:
(A) Temporary Assistance for Needy
Families (TANF) (42 U.S.C. 601 et seq.);
(B) Head Start and Early Head Start
(42 U.S.C. 9831 et seq.);
(C) Low-Income Home Energy
Assistance Program (LIHEAP) (42 U.S.C.
8621 et seq.);
(D) Supplemental Nutrition
Assistance Program (SNAP) (7 U.S.C.
2011 et seq.);
(E) Special supplemental nutrition
program for women, infants, and
children (42 U.S.C. 1786);
(F) Child and Adult Care Food
Program (CACFP) (42 U.S.C. 1766);
(G) Medicaid and the State children’s
health insurance programs (42 U.S.C.
1396 et seq., 1397aa et seq.);
(iii) Programs carried out under
section 619 and part C of the
Individuals with Disabilities Education
Act (IDEA) (20 U.S.C. 1419, 1431 et seq.)
(iv) Research and best practices
concerning children’s development, and
meaningful parent and family
engagement, and physical health and
development, particularly healthy
eating and physical activity; and
(v) State policies regarding socialemotional behavioral health of children
which may include positive behavioral
health intervention and support models
for birth to school-age or ageappropriate, and policies on suspension
and expulsion of children birth to age
five in child care and other early
childhood programs, as described in the
Plan pursuant to § 98.16(ee), receiving
assistance under this part.
(2) [Reserved]
(c) Provide information on
developmental screenings to parents as
part of the intake process for families
receiving assistance under this part, and
to providers through training and
education, including:
(1) Information on existing resources
and services the State can make
available in conducting developmental
screenings and providing referrals to
services when appropriate for children
who receive assistance under this part,
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including the coordinated use of the
Early and Periodic Screening, Diagnosis,
and Treatment program (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.); and
(2) A description of how a family or
eligible child care provider may utilize
the resources and services described in
paragraph (c)(1) of this section to obtain
developmental screenings for children
who receive assistance under this part
who may be at risk for cognitive or other
developmental delays, which may
include social, emotional, physical, or
linguistic delays.
(d) For families that receive assistance
under this part, provide specific
information about the child care
provider selected by the parent,
including health and safety
requirements met by the provider
pursuant to § 98.41, any licensing or
regulatory requirements met by the
provider, date the provider was last
inspected, any history of violations of
these requirements, and any voluntary
quality standards met by the provider.
Information must also describe how
CCDF subsidies are designed to promote
equal access in accordance with § 98.45,
how to submit a complaint through the
hotline at § 98.32(a), and how to contact
local resource and referral agencies or
other community-based supports that
assist parents in finding and enrolling in
quality child care.
(e) Inform parents who receive TANF
benefits about the requirement at
section 407(e)(2) of the Social Security
Act that the TANF agency make an
exception to the individual penalties
associated with the work requirement
for any single custodial parent who has
a demonstrated inability to obtain
needed child care for a child under six
years of age. The information may be
provided directly by the Lead Agency,
or, pursuant to § 98.11, other entities,
and shall include:
(1) The procedures the TANF agency
uses to determine if the parent has a
demonstrated inability to obtain needed
child care;
(2) The criteria or definitions applied
by the TANF agency to determine
whether the parent has a demonstrated
inability to obtain needed child care,
including:
(i) ‘‘Appropriate child care’’;
(ii) ‘‘Reasonable distance’’;
(iii) ‘‘Unsuitability of informal child
care’’;
(iv) ‘‘Affordable child care
arrangements’’;
(3) The clarification that assistance
received during the time an eligible
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parent receives the exception referred to
in paragraph (e) of this section will
count toward the time limit on Federal
benefits required at section 408(a)(7) of
the Social Security Act.
(f) Include in the triennial Plan the
definitions or criteria the TANF agency
uses in implementing the exception to
the work requirement specified in
paragraph (e) of this section.
■ 19. § Amend 98.40 by redesignating
paragraph (a)(2) as (a)(3), revising newly
redesignated paragraph (a)(3), and
adding paragraph (a)(2) to read as
follows:
§ 98.40 Compliance with applicable State
and local regulatory requirements.
(a) * * *
(2) Describe in the Plan exemption(s)
to licensing requirements, if any, for
child care services for which assistance
is provided, and a demonstration for
how such exemption(s) do not endanger
the health, safety, or development of
children who receive services from such
providers. Lead Agencies must provide
the required description and
demonstration for any exemptions based
on:
(i) Provider category, type, or setting;
(ii) Length of day;
(iii) Providers not subject to licensing
because the number of children served
falls below a State-defined threshold;
and
(iv) Any other exemption to licensing
requirements; and
(3) Provide a detailed description in
the Plan of the requirements under
paragraph (a)(1) of this section and of
how they are effectively enforced.
*
*
*
*
*
■ 20. Revise § 98.41to read as follows:
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§ 98.41
Health and safety requirements.
(a) Each Lead Agency shall certify that
there are in effect, within the State (or
other area served by the Lead Agency),
under State, local or tribal law,
requirements (appropriate to provider
setting and age of children served) that
are designed, implemented, and
enforced to protect the health and safety
of children. Such requirements must be
applicable to child care providers of
services, for which assistance is
provided under this part. Such
requirements, which are subject to
monitoring pursuant to § 98.42, shall:
(1) Include health and safety topics
consisting of:
(i) The prevention and control of
infectious diseases (including
immunizations); with respect to
immunizations, the following
provisions apply:
(A) As part of their health and safety
provisions in this area, Lead Agencies
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shall assure that children receiving
services under the CCDF are ageappropriately immunized. Those health
and safety provisions shall incorporate
(by reference or otherwise) the latest
recommendation for childhood
immunizations of the respective State,
territorial, or tribal public health
agency.
(B) Notwithstanding paragraph
(a)(1)(i) of this section, Lead Agencies
may exempt:
(1) Children who are cared for by
relatives (defined as grandparents, great
grandparents, siblings (if living in a
separate residence), aunts, and uncles).
(2) Children who receive care in their
own homes, provided there are no other
unrelated children who are cared for in
the home.
(3) Children whose parents object to
immunization on religious grounds.
(4) Children whose medical condition
contraindicates immunization.
(C) Lead Agencies shall establish a
grace period that allows children
experiencing homelessness and children
in foster care to receive services under
this part while providing their families
(including foster families) a reasonable
time to take any necessary action to
comply with immunization and other
health and safety requirements.
(1) Any payment for such child
during the grace period shall not be
considered an error or improper
payment under subpart K of this part.
(2) The Lead Agency may also, at its
option, establish grace periods for other
children who are not experiencing
homelessness or in foster care.
(3) Lead Agencies must coordinate
with licensing agencies and other
relevant State and local agencies to
provide referrals and support to help
families of children receiving services
during a grace period comply with
immunization and other health and
safety requirements;
(ii) Prevention of sudden infant death
syndrome and use of safe sleeping
practices;
(iii) Administration of medication,
consistent with standards for parental
consent;
(iv) Prevention and response to
emergencies due to food and allergic
reactions;
(v) Building and physical premises
safety, including identification of and
protection from 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
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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)) that shall include
procedures for evacuation, relocation,
shelter-in-place and lock down, staff
and volunteer emergency preparedness
training and practice drills,
communication and reunification with
families, continuity of operations, and
accommodation of infants and toddlers,
children with disabilities, and children
with chronic medical conditions;
(viii) Handling and storage of
hazardous materials and the appropriate
disposal of biocontaminants;
(ix) Appropriate precautions in
transporting children, if applicable;
(x) First aid and cardiopulmonary
resuscitation;
(xi) Recognition and reporting of child
abuse and neglect, in accordance with
the requirement in paragraph (e) of this
section; and
(xii) May include requirements
relating to:
(A) Nutrition (including ageappropriate feeding);
(B) Access to physical activity;
(C) Caring for children with special
needs; or
(D) Any other subject area determined
by the Lead Agency to be necessary to
promote child development or to protect
children’s health and safety.
(2) Include minimum health and
safety training on the topics above, as
described in § 98.44.
(b) Lead Agencies may not set health
and safety standards and requirements
other than those required in paragraph
(a) of this section that are inconsistent
with the parental choice safeguards in
§ 98.30(f).
(c) The requirements in paragraph (a)
of this section shall apply to all
providers of child care services for
which assistance is provided under this
part, within the area served by the Lead
Agency, except the relatives specified at
§ 98.42(c).
(d) Lead Agencies shall describe in
the Plan standards for child care
services for which assistance is
provided under this part, appropriate to
promoting the adult and child
relationship in the type of child care
setting involved, to provide for the
safety and developmental needs of the
children served, that address:
(1) Group size limits for specific age
populations;
(2) The appropriate ratio between the
number of children and the number of
caregivers, in terms of age of children in
child care; and
(3) Required qualifications for
caregivers in child care settings as
described at § 98.44(a)(4).
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(e) Lead Agencies shall certify that
caregivers, teachers, and directors of
child care providers within the State or
service area will comply with the
State’s, Territory’s, or Tribe’s child
abuse reporting requirements as
required by section 106(b)(2)(B)(i) of the
Child Abuse and Prevention and
Treatment Act (42 U.S.C.
5106a(b)(2)(B)(i)) or other child abuse
reporting procedures and laws in the
service area.
■ 21. Revise § 98.42 to read as follows:
tkelley on DSK3SPTVN1PROD with PROPOSALS2
§ 98.42 Enforcement of licensing and
health and safety requirements.
(a) Each Lead Agency shall certify in
the Plan that procedures are in effect to
ensure that child care providers of
services for which assistance is made
available in accordance with this part,
within the area served by the Lead
Agency, comply with all applicable
State, local, or tribal health and safety
requirements, including those described
in § 98.41.
(b) Each Lead Agency shall certify in
the Plan it has monitoring policies and
practices applicable to all child care
providers and facilities eligible to
deliver services for which assistance is
provided under this part. The Lead
Agency shall:
(1) Ensure individuals who are hired
as licensing inspectors are qualified to
inspect those child care providers and
facilities and have received training in
related health and safety requirements
appropriate to provider setting and age
of children served. Training shall
include, but is not limited to, those
requirements described in § 98.41, and
all aspects of the State, Territory, or
Tribe’s licensure requirements;
(2) Require inspections of child care
providers and facilities, performed by
licensing inspectors (or qualified
inspectors designated by the Lead
Agency), as specified below:
(i) For licensed child care providers
and facilities:
(A) Not less than one pre-licensure
inspection for compliance with health,
safety, and fire standards, and
(B) Not less than annually an
unannounced inspection for compliance
with all child care licensing standards,
which shall include an inspection for
compliance with health and safety,
(including, but not limited to, those
requirements described in § 98.41) and
fire standards (inspectors may inspect
for compliance with all three standards
at the same time); and
(ii) For license-exempt child care
providers and facilities, an annual
inspection for compliance with health
and safety (including, but not limited to,
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those requirements described in
§ 98.41), and fire standards;
(iii) Coordinate, to the extent
practicable, monitoring efforts with
other Federal, State, and local agencies
that conduct similar inspections.
(iv) The Lead Agency may, at its
option:
(A) Use differential monitoring or a
risk-based approach to design annual
inspections, provided that the contents
covered during each monitoring visit is
representative of the full complement of
health and safety requirements;
(B) Develop alternate monitoring
requirements for care provided in the
child’s home that are appropriate to the
setting; and
(3) Ensure the ratio of licensing
inspectors to such child care providers
and facilities is maintained at a level
sufficient to enable the State, Territory,
or Tribe to conduct effective inspections
on a timely basis in accordance with the
applicable Federal, State, Territory,
Tribal, and local law;
(4) Require child care providers to
report to a designated State, Territorial,
or Tribal entity any serious injuries or
deaths of children occurring in child
care.
(c) For the purposes of this section
and § 98.41, Lead Agencies may exclude
grandparents, great grandparents,
siblings (if such providers live in a
separate residence), aunts, or uncles,
from the term ‘‘child care providers.’’ If
the Lead Agency chooses to exclude
these providers, the Lead Agency shall
provide a description and justification
in the CCDF Plan, pursuant to § 98.16(l),
of requirements, if any, that apply to
these providers.
§§ 98.43 through 98.47
[Redesignated as §§ 98.45 through
98.49]
■ 22. Redesignate §§ 98.43 through
98.47 of subpart E as §§ 98.45 through
98.49.
■ 23. Add § 98.43 to subpart E to read
as follows:
§ 98.43
Criminal background checks
(a)(1) States, Territories, and Tribes,
through coordination of the Lead agency
with other State, territorial, and tribal
agencies, shall have in effect:
(i) Requirements, policies, and
procedures to require and conduct
criminal background checks for child
care staff members (including
prospective child care staff members) of
all licensed, regulated, or registered
child care providers and all child care
providers eligible to deliver services for
which assistance is provided under this
part as described in paragraph (a)(2) of
this section;
(ii) Licensing, regulation, and
registration requirements, as applicable,
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that prohibit the employment of child
care staff members as described in
paragraph (c) of this section; and
(iii) Requirements, policies, and
procedures in place to respond as
expeditiously as possible to other
States’, Territories’, and Tribes’ requests
for background check results in order to
accommodate the 45 day timeframe
required in paragraph (e)(1) of this
section.
(2) In this section:
(i) Child care provider means a centerbased child care provider, a family child
care provider, or another provider of
child care services for compensation
and on a regular basis that:
(A) Is not an individual who is related
to all children for whom child care
services are provided; and
(B) Is licensed, regulated, or registered
under State law or eligible to receive
assistance provided under this
subchapter; and
(ii) Child care staff member means an
individual age 18 and older (other than
an individual who is related to all
children for whom child care services
are provided):
(A) Who is employed by a child care
provider for compensation, including
contract employees or self-employed
individuals;
(B) Whose activities involve the care
or supervision of children for a child
care provider or unsupervised access to
children who are cared for or supervised
by a child care provider; or
(C) Any individual residing in a
family child care home who is age 18
and older.
(b) A criminal background check for
a child care staff member under
paragraph (a) of this section shall
include:
(1) A Federal Bureau of Investigation
fingerprint check using Next Generation
Identification;
(2) A search of the National Crime
Information Center’s National Sex
Offender Registry; and
(3) A search of the following
registries, repositories, or databases in
the State where the child care staff
member resides and each State where
such staff member resided during the
preceding five years:
(i) State criminal registry or repository
using fingerprints;
(ii) State sex offender registry or
repository; and
(iii) State-based child abuse and
neglect registry and database.
(c)(1) A child care staff member shall
be ineligible for employment by child
care providers of services for which
assistance is made available in
accordance with this part, if such
individual:
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(i) Refuses to consent to the criminal
background check described in
paragraph (b) of this section;
(ii) Knowingly makes a materially
false statement in connection with such
criminal background check;
(iii) Is registered, or is required to be
registered, on a State sex offender
registry or repository or the National
Sex Offender Registry; or
(iv) Has been convicted of a felony
consisting of:
(A) Murder, as described in section
1111 of title 18, United States Code;
(B) Child abuse or neglect;
(C) A crime against children,
including child pornography;
(D) Spousal abuse;
(E) A crime involving rape or sexual
assault;
(F) Kidnapping;
(G) Arson;
(H) Physical assault or battery; or
(I) Subject to paragraph (e)(4) of this
section, a drug-related offense
committed during the preceding 5 years;
or
(v) Has been convicted of a violent
misdemeanor committed as an adult
against a child, including the following
crimes: child abuse, child
endangerment, sexual assault, or of a
misdemeanor involving child
pornography.
(2) A child care provider described in
paragraph (a)(2)(i) of this section shall
be ineligible for assistance provided in
accordance with this subchapter if the
provider employs a staff member who is
ineligible for employment under
paragraph (c)(1) of this section.
(d)(1) A child care provider covered
by paragraph (a)(2)(i) of this section
shall submit a request, to the
appropriate State, Territorial, or Tribal
agency, defined clearly on the State or
Territory Web site described in
paragraph (g) of this section, for a
criminal background check described in
paragraph (b) of this section, for each
child care staff member (including
prospective child care staff members) of
the provider.
(2) Subject to paragraph (d)(3) of this
section, the provider shall submit such
a request:
(i) Prior to the date an individual
becomes a child care staff member of the
provider; and
(ii) Not less than once during each 5year period for any existing staff
member.
(3) A child care provider shall not be
required to submit a request under
paragraph (d)(2) of this section for a
child care staff member if:
(i) The staff member received a
background check described in
paragraph (b) of this section:
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(A) Within 5 years before the latest
date on which such a submission may
be made; and
(B) While employed by or seeking
employment by another child care
provider within the State;
(ii) The State provided to the first
provider a qualifying background check
result, consistent with this subchapter,
for the staff member; and
(iii) The staff member is employed by
a child care provider within the State,
or has been separated from employment
from a child care provider within the
State for a period of not more than 180
consecutive days.
(4) A prospective staff member may
begin work for a child care provider
described in paragraph (a)(2)(i) of this
section after the provider has submitted
such a request if the staff member is
supervised at all times by an individual
who received a qualifying result on a
background check described in
paragraph (b) of this section within 5
years of the request.
(e)(1) Background check results. The
State, Territory, or Tribe shall carry out
the request of a child care provider for
a criminal background check as
expeditiously as possible, but not to
exceed 45 days after the date on which
the provider submitted the request, and
shall provide the results of the criminal
background check to such provider and
to the current or prospective staff
member.
(2) States, Territories, and Tribes shall
ensure the privacy of background check
results by:
(i) Providing the results of the
criminal background check to the
provider in a statement that indicates
whether a child care staff member
(including a prospective child care staff
member) is eligible or ineligible for
employment described in paragraph
(c)(1) of this section, without revealing
any disqualifying crime or other related
information regarding the individual.
(ii) If the child care staff member is
ineligible for such employment due to
the background check, the State,
Territory, or Tribe will, when providing
the results of the background check,
include information related to each
disqualifying crime, in a report to the
staff member or prospective staff
member.
(iii) No State, Territory, or Tribe shall
publicly release or share the results of
individual background checks, except
States and Tribes may release aggregated
data by crime as listed under paragraph
(c)(1)(iv) of this section from
background check results, as long as
such data is not personally identifiable
information.
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(3) States, Territories, and Tribes shall
provide for a process by which a child
care staff member (including a
prospective child care staff member)
may appeal the results of a criminal
background check conducted under this
section to challenge the accuracy or
completeness of the information
contained in such member’s criminal
background report. The State, Territory,
and Tribe shall ensure that:
(i) Each child care staff member is
given notice of the opportunity to
appeal;
(ii) A child care staff member will
receive instructions about how to
complete the appeals process if the
child care staff member wishes to
challenge the accuracy or completeness
of the information contained in such
member’s criminal background report;
and
(iii) The appeals process is completed
in a timely manner for each child care
staff member.
(4) States, Territories, and Tribes may
allow for a review process through
which the State, Territory, or Tribe may
determine that a child care staff member
(including a prospective child care staff
member) disqualified for a crime
specified in paragraph (c)(1)(iv)(I) of this
section is eligible for employment
described in paragraph (c)(1) of this
section, notwithstanding paragraph
(c)(2) of this section. The review process
shall be consistent with title VII of the
Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.);
(5) Nothing in this section shall be
construed to create a private right of
action if a provider has acted in
accordance with this section.
(f) Fees that a State, Territory, or Tribe
may charge for the costs of processing
applications and administering a
criminal background check as required
by this section shall not exceed the
actual costs for the processing and
administration.
(g) The State or Territory must ensure
that its policies and procedures under
§ 98.43, including the process by which
a child care provider or other State may
submit a background check request, are
published in the Web site of the State
or Territory as described in § 98.33(a)
and the Web site of local lead agencies.
(h)(1) Nothing in this section shall be
construed to prevent a State, Territory,
or Tribe from disqualifying individuals
as child care staff members based on
their conviction for crimes not
specifically listed in this section that
bear upon the fitness of an individual to
provide care for and have responsibility
for the safety and well-being of children.
(2) Nothing in this section shall be
construed to alter or otherwise affect the
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rights and remedies provided for child
care staff members residing in a State
that disqualifies individuals as child
care staff members for crimes not
specifically provided for under this
section.
■ 24. Add § 98.44 to subpart E to read
as follows:
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§ 98.44 Training and professional
development.
(a) The Lead Agency must describe in
the Plan the State or Territory
framework for training, professional
development, and postsecondary
education for caregivers, teachers, and
directors that:
(1) Is 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)))
or similar coordinating body;
(2) May engage training providers in
aligning training opportunities with the
State’s framework;
(3) To the extent practicable,
addresses professional standards and
competencies, career pathways,
advisory structure, articulation, and
workforce information and financing;
(4) Establishes qualifications in
accordance with § 98.41(d)(3) designed
to enable child care providers that
provide services for which assistance is
provided in accordance with this part to
promote the social, emotional, physical,
and cognitive development of children
and improve the knowledge and skills
of caregivers, teachers and directors in
working with children and their
families;
(5) Is conducted on an ongoing basis,
providing a progression of professional
development (which may include
encouraging the pursuit of
postsecondary education);
(6) Reflects current research and best
practices relating to the skills necessary
for caregivers, teachers, and directors to
meet the developmental needs of
participating children and engage
families; and
(7) Improves the quality, diversity,
stability, and retention (including
financial incentives) of caregivers,
teachers, and directors.
(b) The Lead Agency must describe in
the Plan its established requirements for
pre-service or orientation (i.e., to be
completed within three months) and
ongoing professional development for
caregivers, teachers, and directors of
child care providers of services for
which assistance is provided under the
CCDF that, to the extent practicable,
align with the State framework:
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(1) Accessible pre-service or
orientation, training in health and safety
standards, addressing each of the
requirements relating to matters
described in § 98.41(a)(1)(i) through (xi)
and, at the Lead Agency option, in
§ 98.41(a)(1)(xii), and child
development, including the major
domains (cognitive, social, emotional,
physical development and approaches
to learning) appropriate to the age of
children served;
(2) Ongoing, accessible professional
development, aligned to a progression of
professional development, including the
minimum annual requirement for hours
of training and professional
development for eligible caregivers,
teachers and directors that:
(i) Maintains and updates health and
safety training standards described in
Sec. 98.41(a)(1)(i) through (xi), and at
the Lead Agency option, in
§ 98.41(a)(1)(xii);
(ii) Incorporates knowledge and
application of the State’s early learning
and developmental guidelines for
children birth to kindergarten (where
applicable);
(iii) Incorporates social-emotional
behavior intervention models for
children birth through school-age,
which may include positive behavior
intervention and support models
including preventing and reducing
expulsions and suspensions of
preschool-aged and school-aged
children;
(iv) To the extent practicable, are
appropriate for a population of children
that includes:
(A) Different age groups;
(B) English learners;
(C) Children with developmental
delays and disabilities; and
(D) 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 7207 of
the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7517));
(v) To the extent practicable, awards
continuing education units or is creditbearing; and
(vi) Shall be accessible to caregivers,
teachers, and directors supported
through Indian tribes or tribal
organizations that receive assistance
under this subchapter.
■ 25. Amend newly redesignated
§ 98.45 by:
■ a. Revising paragraph (b);
■ b. Redesignating paragraphs (c)
through (e) as (g) through (i);
■ c. Revising newly redesignated
paragraphs (g) and (i); and
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d. Adding paragraphs (c), (d), (e), (f),
(j), (k), (l), and (m).
The revisions and additions read as
follows:
■
§ 98.45
Equal access.
*
*
*
*
*
(b) The Lead Agency shall provide in
the Plan a summary of the data and facts
relied on to determine that its payment
rates ensure equal access. At a
minimum, the summary shall include
facts showing:
(1) How a choice of the full range of
providers is made available;
(2) How payment rates are adequate
and have been established based on the
most recent market rate survey or
alternative methodology conducted in
accordance with paragraph (c) of this
section;
(3) How base payment rates support
health, safety, and quality in accordance
with paragraphs (f)(1)(i) and (f)(2)(ii) of
this section;
(4) How payment rates provide
parental choice for families receiving
CCDF subsidies to access care that is of
comparable quality to care that is
available to families with incomes above
85 percent of State Median Income;
(5) How the Lead Agency took the
cost of higher quality into account in
accordance with paragraph (f)(2)(iii) of
this section;
(6) How copayments based on a
sliding fee scale are affordable, as
stipulated at paragraph (k) of this
section;
(7) How the Lead Agency’s payment
practices support equal access to a range
of providers by providing stability of
funding and encouraging more child
care providers to serve children
receiving CCDF subsidies, in accordance
with paragraph (m) of this section;
(8) How and on what factors the Lead
Agency differentiates payment rates;
and
(9) Any additional facts the Lead
Agency considered in determining that
its payment rates ensure equal access.
(c) The Lead Agency shall
demonstrate in the Plan that it has
developed and conducted, not earlier
than two years before the date of the
submission of the Plan, either:
(1) A statistically valid and reliable
survey of the market rates for child care
services (that also includes information
on the extent to which child care
providers are participating in the CCDF
subsidy program and any barriers to
participation, including barriers related
to payment rates and practices); or
(2) An alternative methodology, such
as a cost estimation model, that has
been:
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(i) Proposed by the Lead Agency in
accordance with uniform procedures
and timeframes established by ACF; and
(ii) Approved in advance by ACF.
(d) The market rate survey or
alternative methodology must reflect
variations by geographic location,
category of provider, and age of child.
(e) Prior to conducting the market rate
survey or alternative methodology, the
Lead Agency must consult with:
(1) 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)) or
similar coordinating body, local child
care program administrators, local child
care resource and referral agencies, and
other appropriate entities; and
(2) Organizations representing child
care caregivers, teachers, and directors.
(f) After conducting the market rate
survey or alternative methodology, the
Lead Agency must:
(1) Prepare a detailed report
containing the results, and make the
report widely available, including by
posting it on the Internet, not later than
30 days after the completion of the
report.
(i) The report must indicate the
estimated price or cost of care necessary
to support child care providers’
implementation of the health, safety,
and quality requirements at §§ 98.41
through 98.44, including any relevant
variation by geographic location,
category of provider, or age of child.
(ii) [Reserved]
(2) Set payment rates for CCDF
assistance:
(i) In accordance with the results of
the most recent market rate survey or
alternative methodology conducted
pursuant to paragraph (c) of this section;
(ii) With base payment rates
established at least at a level sufficient
to support implementation of health,
safety and quality requirements in
accordance with paragraph (f)(1)(i) of
this section;
(iii) That provides parental choice to
families receiving CCDF subsidies to
access care that is of comparable quality
to care that is available to families with
incomes above 85 percent of State
Median Income;
(iv) Taking into consideration the cost
of providing higher quality child care
services; and
(v) Without, to the extent practicable,
reducing the number of families
receiving CCDF assistance.
(g) A Lead Agency may not establish
different payment rates based on a
family’s eligibility status, such as TANF
status.
*
*
*
*
*
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(i) Nothing in this section shall be
construed to create a private right of
action if the Lead Agency acted in
accordance with the Act and this part.
(j) Nothing in this part shall be
construed to prevent a Lead Agency
from differentiating payment rates on
the basis of such factors as:
(1) Geographic location of child care
providers (such as location in an urban
or rural area);
(2) Age or particular needs of children
(such as the needs of children with
disabilities, children served by child
protective services, and children
experiencing homelessness);
(3) Whether child care providers
provide services during the weekend or
other non-traditional hours; or
(4) The Lead Agency’s determination
that such differential payment rates may
enable a parent to choose high-quality
child care that best fits the parents’
needs.
(k) Lead Agencies shall establish, and
periodically revise, by rule, a sliding fee
scale(s) for families that receive CCDF
child care services that:
(1) Helps families afford child care
and enables choice of a range of child
care options;
(2) Is based on income and the size of
the family and may be based on other
factors as appropriate, but may not be
based on the cost of care or amount of
subsidy payment;
(3) Provides for affordable family copayments that are not a barrier to
families receiving assistance under this
part;
(4) Allows for co-payments to be
waived for families whose incomes are
at or below the poverty level for a family
of the same size, that have children who
receive or need to receive protective
services, or that meet other criteria
established by the Lead Agency.
(l) Lead Agencies must have a policy
that prohibits child care providers of
services for which assistance is
provided under the CCDF from charging
parents additional mandatory fees above
the family co-payment determined in
accordance with the sliding fee scale.
(m) The Lead Agency shall
demonstrate in the Plan that it has
established payment practices for CCDF
child care providers that:
(1) Ensure timeliness of payment by
either:
(i) Paying prospectively prior to the
delivery of services; or
(ii) Paying within no more than 21
days of the receipt of invoice for
services.
(2) To the extent practicable, support
the fixed costs of providing child care
services by delinking provider payments
from a child’s occasional absences. A
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80575
Lead Agency must describe its approach
in the State Plan, including justification
for an alternative approach that is not
one of the following:
(i) Paying based on a child’s
enrollment rather than attendance;
(ii) Providing full payment if a child
attends at least 85 percent of the
authorized time; or
(iii) Providing full payment if a child
is absent for five or fewer days in a
month.
(3) Reflect generally accepted
payment practices of child care
providers that serve children who do
not receive CCDF subsidies, which must
include (unless the Lead Agency
provides evidence in the Plan that such
practices are not generally-accepted in
the State or service area):
(i) Paying on a part-time or full-time
basis (rather than paying for hours of
service or smaller increments of time);
and
(ii) Paying for mandatory fees that the
provider charges to private-paying
parents, such as fees for registration:
(4) Ensure child care providers
receive payment for any services in
accordance with a payment agreement
or authorization for services;
(5) Ensure child care providers
receive prompt notice of changes to a
family’s eligibility status that may
impact payment;
(6) Include timely appeal and
resolution processes for any payment
inaccuracies and disputes.
■ 26. Revise newly redesignated § 98.46
to read as follows:
§ 98.46
Priority for child care services.
(a) Lead Agencies shall give priority
for services provided under § 98.50(a)
to:
(1) Children of families with very low
family income (considering family size);
(2) Children with special needs,
which may include any vulnerable
populations as defined by the Lead
Agency; and
(3) Children experiencing
homelessness.
(b) Lead Agencies shall prioritize
increasing access to high quality child
care and development services for
children of families in areas that have
significant concentrations of poverty
and unemployment and that do not
have a sufficient number of such
programs.
■ 27. Revise § 98.50 to read as follows:
§ 98.50
Child care services.
(a) Direct child care services shall be
provided:
(1) To eligible children, as described
in § 98.20;
(2) Using a sliding fee scale, as
described in § 98.45(k);
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(3) Using funding methods provided
for in § 98.30 which must include some
use of grants or contracts for the
provision of direct services, with the
extent of such services determined by
the Lead Agency after consideration of
shortages in the supply of high quality
care described in the Plan pursuant to
§ 98.16(i)(1) and other factors as
determined by the Lead Agency; and
(4) Based on the priorities in § 98.46.
(b) Of the aggregate amount of funds
expended (i.e., Discretionary,
Mandatory, and Federal and State share
of Matching Funds):
(1) No less than seven percent in
fiscal years 2016 and 2017, eight percent
in fiscal years 2018 and 2019, and nine
percent in fiscal year 2020 and each
succeeding fiscal year shall be used for
activities designed to improve the
quality of child care services and
increase parental options for, and access
to, high-quality child care as described
at § 98.53; and
(2) No less than three percent in fiscal
year 2017 and each succeeding fiscal
year shall be used to carry out activities
at § 98.53(a)(4) as such activities relate
to the quality of care for infants and
toddlers.
(3) Nothing in this section shall
preclude the Lead Agency from
reserving a larger percentage of funds to
carry out activities described in
paragraphs (b)(1) and (2) of this section.
(c) Funds expended from each fiscal
year’s allotment on quality activities
pursuant to paragraph (b) of this section:
(1) Must be in alignment with an
assessment of the Lead Agency’s need to
carry out such services and care as
required at § 98.53(a);
(2) Must include measurable
indicators of progress in accordance
with § 98.53(f); and
(3) May be provided directly by the
Lead Agency or through grants or
contracts with local child care resource
and referral organizations or other
appropriate entities.
(d) Of the aggregate amount of funds
expended (i.e., Discretionary,
Mandatory, and Federal and State share
of Matching Funds), no more than five
percent may be used for administrative
activities as described at § 98.54.
(e) Not less than 70 percent of the
Mandatory and Federal and State share
of Matching Funds shall be used to meet
the child care needs of families who:
(1) Are receiving assistance under a
State program under Part A of title IV of
the Social Security Act;
(2) Are attempting through work
activities to transition off such
assistance program; and
(3) Are at risk of becoming dependent
on such assistance program.
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(f) From Discretionary amounts
provided for a fiscal year, the Lead
Agency shall:
(1) Reserve the minimum amount
required under paragraph (b) of this
section for quality activities, and the
funds for administrative costs described
at paragraph (d) of this section; and
(2) From the remainder, use not less
than 70 percent to fund direct services
(provided by the Lead Agency).
(g) Of the funds remaining after
applying the provisions of paragraphs
(a) through (f) of this section the Lead
Agency shall spend a substantial
portion funds to provide direct child
care services to low-income families
who are working or attending training or
education.
(h) Pursuant to § 98.16(i)(4), the Plan
shall specify how the State will meet the
child care needs of families described in
paragraph (e) of this section.
§§ 98.51 through 98.55
[Redesignated as §§ 98.53 through
98.57]
■ 28. Redesignating §§ 98.51 through
98.55 of subpart F as §§ 98.53 through
98.57.
■ 29. Add § 98.51 to subpart F to read
as follows:
§ 98.51 Services for children experiencing
homelessness.
Lead Agencies shall expend funds on
activities that improve access to quality
child care services for children
experiencing homelessness, including:
(a) The use of procedures to permit
enrollment (after an initial eligibility
determination) of children experiencing
homelessness while required
documentation is obtained;
(1) If, after full documentation is
provided, a family experiencing
homelessness is found ineligible:
(i) The Lead Agency shall pay any
amount owed to a child care provider
for services provided as a result of the
initial eligibility determination.
(ii) Any CCDF payment made prior to
the final eligibility determination shall
not be considered an error or improper
payment under subpart K of this part;
and
(2) [Reserved]
(b) Training and technical assistance
for providers and appropriate Lead
Agency (or designated entity) staff on
identifying and serving children
experiencing homelessness and their
families; and
(c) Specific outreach to families
experiencing homelessness.
■ 30. Add § 98.52 to subpart F to read
as follows:
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§ 98.52 Child care resource and referral
system.
(a) A Lead Agency may expend funds
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 Lead Agency, by a
statewide public or private nonprofit,
community-based or regionally based,
lead child care resource and referral
organization.
(b) If a Lead Agency uses funds as
described in paragraph (a) of this
section, the local or regional child care
resource and referral organizations
supported shall, at the direction of the
Lead Agency:
(1) Provide parents in the State with
consumer education information
referred to in § 98.33 (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;
(2) 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
paragraph (b)(1) of this section, 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 Lead Agency);
(3) 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));
(4) 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;
(5) 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
(6) 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 part.
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31. Revise newly redesignated § 98.53
to read as follows:
■
tkelley on DSK3SPTVN1PROD with PROPOSALS2
§ 98.53 Activities to improve the quality of
child care.
(a) The Lead Agency must expend
funds from each fiscal year’s allotment
on quality activities pursuant to
§ 98.50(b) in accordance with an
assessment of need by the Lead Agency.
Such funds must be used to carry out at
least one of the following quality
activities to increase the number of lowincome children in high-quality child
care:
(1) Supporting the training,
professional development, and
postsecondary education of the child
care workforce as part of a progression
of professional development through
activities such as those included at
§ 98.44, in addition to:
(i) Offering training, professional
development, and postsecondary
education opportunities for child care
caregivers, teachers and directors that:
(A) Relate to the use of scientificallybased, developmentally-appropriate,
culturally-appropriate, and ageappropriate strategies to promote the
social, emotional, physical, and
cognitive development of children,
including those related to nutrition and
physical activity; and
(B) Offer specialized training,
professional development, and
postsecondary education for caregivers,
teachers and directors caring for those
populations prioritized at
§ 98.44(b)(2)(iv), and children with
disabilities;
(ii) Incorporating the effective use of
data to guide program improvement and
improve opportunities for caregivers,
teachers and directors to advance on
their progression of training,
professional development, and
postsecondary education;
(iii) Including effective behavior
management strategies and training,
including positive behavior
interventions and support models for
birth to school-age or age-appropriate,
that promote positive social and
emotional development and reduce
challenging behaviors, including
reducing suspensions and expulsions of
children under age five for such
behaviors;
(iv) Providing training and outreach
on engaging parents and families in
culturally and linguistically appropriate
ways to expand their knowledge, skills,
and capacity to become meaningful
partners in supporting their children’s
positive development;
(v) Providing training corresponding
to the nutritional and physical activity
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needs of children to promote healthy
development;
(vi) Providing training or professional
development for caregivers, teachers
and directors regarding the early
neurological development of children;
and
(vii) Connecting child care caregivers,
teachers, and directors with available
Federal and State financial aid, or other
resources, that would assist these
individuals in pursuing relevant
postsecondary education, such as
programs providing scholarships and
compensation improvements for
education attainment and retention.
(2) Improving upon the development
or implementation of the early learning
and development guidelines at
§ 98.15(a)(9) by providing technical
assistance to eligible child care
providers in order to enhance the
cognitive, physical, social, and
emotional development and overall
well-being of participating children.
(3) Developing, implementing, or
enhancing a tiered quality rating and
improvement system for child care
providers and services to meet
consumer education requirements at
§ 98.33, which may:
(i) Support and assess the quality of
child care providers in the State,
Territory, or Tribe;
(ii) Build on licensing standards and
other regulatory standards for such
providers;
(iii) Be designed to improve the
quality of different types of child care
providers and services;
(iv) Describe the safety of child care
facilities;
(v) Build the capacity of early
childhood programs and communities
to promote parents’ and families’
understanding of the early childhood
system and the rating of the program in
which the child is enrolled;
(vi) Provide, to the maximum extent
practicable, financial incentives and
other supports designed to expand the
full diversity of child care options and
help child care providers improve the
quality of services; and
(vii) Accommodate a variety of
distinctive approaches to early
childhood education and care,
including but not limited to, those
practiced in faith-based settings,
community-based settings, childcentered settings, or similar settings that
offer a distinctive approach to early
childhood development.
(4) Improving the supply and quality
of child care programs and services for
infants and toddlers through activities,
which may include:
(i) Establishing or expanding highquality community or neighborhood-
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based family and child development
centers, which may serve as resources to
child care providers in order to improve
the quality of early childhood services
provided to infants and toddlers from
low-income families and to help eligible
child care providers improve their
capacity to offer high-quality, ageappropriate care to infants and toddlers
from low-income families;
(ii) Establishing or expanding the
operation of community or
neighborhood-based family child care
networks;
(iii) Promoting and expanding child
care providers’ ability to provide
developmentally appropriate services
for infants and toddlers through, but not
limited to:
(A) Training and professional
development for caregivers, teachers
and directors, including coaching and
technical assistance on this age group’s
unique needs from statewide networks
of qualified infant-toddler specialists;
and
(B) Improved coordination with early
intervention specialists who provide
services for infants and toddlers with
disabilities under part C of the
Individuals with Disabilities Education
Act (20 U.S.C. 1431. et seq.);
(iv) If applicable, developing infant
and toddler components within the
Lead Agency’s quality rating and
improvement system described in
paragraph (a)(3) of this section for child
care providers for infants and toddlers,
or the development of infant and
toddler components in the child care
licensing regulations or early learning
and development guidelines;
(v) Improving the ability of parents to
access transparent and easy to
understand consumer information about
high-quality infant and toddler care as
described at § 98.33; and
(vi) Carrying out other activities
determined by the Lead Agency to
improve the quality of infant and
toddler care provided, and for which
there is evidence that the activities will
lead to improved infant and toddler
health and safety, infant and toddler
cognitive and physical development, or
infant and toddler well-being, including
providing health and safety training
(including training in safe sleep
practices, first aid, and
cardiopulmonary resuscitation for
providers and caregivers.
(5) Establishing or expanding a
statewide system of child care resource
and referral services.
(6) Facilitating compliance with Lead
Agency requirements for inspection,
monitoring, training, and health and
safety, and with licensing standards.
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(7) Evaluating and assessing the
quality and effectiveness of child care
programs and services offered,
including evaluating how such
programs positively impact children.
(8) Supporting child care providers in
the voluntary pursuit of accreditation by
a national accrediting body with
demonstrated, valid, and reliable
program standards of high-quality.
(9) Supporting Lead Agency or local
efforts to develop or adopt high-quality
program standards relating to health,
mental health, nutrition, physical
activity, and physical development.
(10) Carrying out other activities,
including implementing consumer
education provisions at § 98.33,
determined by the Lead Agency to
improve the quality of child care
services provided, and for which
measurement of outcomes relating to
improvement of provider preparedness,
child safety, child well-being, or entry
to kindergarten is possible.
(b) Pursuant to § 98.16(j), the Lead
Agency shall describe in its Plan the
activities it will fund under this section.
(c) Non-Federal expenditures required
by § 98.55(c) (i.e., the maintenance-ofeffort amount) are not subject to the
requirement at paragraph (a) of this
section.
(d) Activities to improve the quality of
child care services are not restricted to
activities affecting children meeting
eligibility requirements under § 98.20 or
to child care providers of services for
which assistance is provided under this
part.
(e) Unless expressly authorized by
law, targeted funds for quality
improvement and other set-asides that
may be included in appropriations law
may not be used towards meeting the
quality expenditure minimum
requirement at § 98.50(b).
(f) States shall annually prepare and
submit reports, including a quality
progress report and expenditure report,
to the Secretary, which must be made
publicly available and shall include:
(1) An assurance that the State was in
compliance with requirements at
§ 98.50(b) in the preceding fiscal year
and information about the amount of
funds reserved for that purpose;
(2) A description of the activities
carried out under this section to comply
with § 98.50(b);
(3) The measures the State will use to
evaluate its progress in improving the
quality of child care programs and
services in the State, and data on the
extent to which the State had met these
measures; and
(4) A report describing any changes to
State regulations, enforcement
mechanisms, or other State policies
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addressing health and safety based on
an annual review and assessment of
serious child injuries and any deaths
occurring in child care programs serving
children receiving assistance under this
part, and in other regulated and
unregulated child care centers and
family child care homes, to the extent
possible.
■ 32. Amend newly redesignated
§ 98.54 by:
■ a. Revising paragraphs (a)
introductory text and (a)(6);
■ b. Redesignating paragraphs (b) and
(c) as (c) and (d);
■ c. Revising newly redesignated
paragraph (d); and
■ d. Adding paragraphs (b) and (e).
The revisions and additions read as
follows:
§ 98.54
Administrative costs.
(a) Not more than five percent of the
aggregate funds expended by the Lead
Agency from each fiscal year’s
allotment, including the amounts
expended in the State pursuant to
§ 98.55(b), shall be expended for
administrative activities. These
activities may include but are not
limited to:
*
*
*
*
*
(6) Indirect costs as determined by an
indirect cost agreement or cost
allocation plan pursuant to § 98.57.
(b) The following activities do not
count towards the five percent
limitation on administrative
expenditures in paragraph (a) of this
section:
(1) Establishment and maintenance of
computerized child care information
systems;
(2) Establishing and operating a
certificate program;
(3) Eligibility determination and
redetermination;
(4) Preparation/participation in
judicial hearings;
(5) Child care placement;
(6) Recruitment, licensing, inspection
of child care providers;
(7) Training for Lead Agency or subrecipient staff on billing and claims
processes associated with the subsidy
program;
(8) Reviews and supervision of child
care placements;
(9) Activities associated with payment
rate setting;
(10) Resource and referral services;
and
(11) Training for child care staff.
*
*
*
*
*
(d) Non-Federal expenditures
required by § 98.55(c) (i.e., the
maintenance-of-effort amount) are not
subject to the five percent limitation at
paragraph (a) of this section.
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(e) If a Lead Agency enters into
agreements with sub-recipients for
operation of the CCDF program, the
amount of the contract or grant
attributable to administrative activities
as described in this section shall be
counted towards the five percent limit.
■ 33. Amend newly redesignated
§ 98.55 by revising paragraphs (e)(2)(iv),
(f), (g)(2), and (h)(2) to read as follows:
§ 98.55
Matching fund requirements.
*
*
*
*
*
(e) * * *
(2) * * *
(iv) Shall be certified both by the Lead
Agency and by the donor (if funds are
donated directly to the Lead Agency) or
the Lead Agency and the entity
designated by the State to receive
donated funds pursuant to § 98.55(f) (if
funds are donated directly to the
designated entity) as available and
representing funds eligible for Federal
match; and
*
*
*
*
*
(f) Donated funds need not be
transferred to or under the
administrative control of the Lead
Agency in order to qualify as an
expenditure eligible to receive Federal
match under this section. They may be
given to the public or private entities
designated by the State to implement
the child care program in accordance
with § 98.11 provided that such entities
are identified and designated in the
State Plan to receive donated funds in
accordance with § 98.16(d)(2).
(g) * * *
(2) Family contributions to the cost of
care as required by § 98.45(k).
(h) * * *
(2) May be eligible for Federal match
if the State includes in its Plan, as
provided in § 98.16(w), a description of
the efforts it will undertake to ensure
that pre-K programs meet the needs of
working parents.
*
*
*
*
*
■ 34. Amend newly redesignated
§ 98.56 by adding a sentence to the end
of paragraph (b)(1) and revising
paragraphs (d) and (e) to read as follows:
§ 98.56
Restrictions on the use of funds.
*
*
*
*
*
(b) * * * (1) * * * Improvements or
upgrades to a facility which are not
specified under the definitions of
construction or major renovation at
§ 98.2 may be considered minor
remodeling and are, therefore, not
prohibited.
*
*
*
*
*
(d) Sectarian purposes and activities.
Funds provided under grants or
contracts to providers may not be
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expended for any sectarian purpose or
activity, including sectarian worship or
instruction. Assistance provided to
parents through certificates is not a
grant or contract. Funds provided
through child care certificates may be
expended for sectarian purposes or
activities, including sectarian worship
or instruction when provided as part of
the child care services.
(e) The CCDF may not be used as the
non-Federal share for other Federal
grant programs, unless explicitly
authorized by statute.
■ 35. Amend § 98.60 by:
■ a. Revising paragraphs (b)
introductory text, (b)(1), (d)(2)(i),
(d)(4)(ii), (d)(6) introductory text, and
(h);
■ b. Redesignating paragraph (d)(7) as
(d)(8); and
■ c. Adding paragraph (d)(7).
The revisions and addition read as
follows:
§ 98.60
Availability of funds.
tkelley on DSK3SPTVN1PROD with PROPOSALS2
*
*
*
*
*
(b) Subject to the availability of
appropriations, in accordance with
relevant statutory provisions and the
apportionment of funds from the Office
of Management and Budget, the
Secretary:
(1) May withhold a portion of the
CCDF funds made available for a fiscal
year for the provision of technical
assistance, for research, evaluation, and
demonstration, and for a national tollfree hotline and Web site;
*
*
*
*
*
(d) * * *
(2)(i) Mandatory Funds for States
requesting Matching Funds per § 98.55
shall be obligated in the fiscal year in
which the funds are granted and are
available until expended.
*
*
*
*
*
(4) * * *
(ii) If there is no applicable State or
local law, the regulation at 45 CFR 75.2,
Expenditures and Obligations.
*
*
*
*
*
(6) In instances where the Lead
Agency issues child care certificates,
funds for child care services provided
through a child care certificate will be
considered obligated when a child care
certificate is issued to a family in
writing that indicates:
*
*
*
*
*
(7) In instances where third party
agencies issue child care certificates, the
obligation of funds occurs upon entering
into agreement through a subgrant or
contract with such agency, rather than
when the third party issues certificates
to a family.
*
*
*
*
*
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(h) Repayment of loans made to child
care providers as part of a quality
improvement activity pursuant to
§ 98.53, may be made in cash or in
services provided in-kind. Payment
provided in-kind shall be based on fair
market value. All loans shall be fully
repaid.
*
*
*
*
*
■ 36. Amend § 98.61 by revising
paragraph (c) introductory text and
adding paragraph (f) to read as follows:
§ 98.61
Fund.
Allotments from the Discretionary
*
*
*
*
*
(c) For Indian Tribes and tribal
organizations, including any Alaskan
Native Village or regional or village
corporation as defined in or established
pursuant to the Alaska Native Claims
Settlement Act (43 U.S.C. 1601 et seq.)
not less than two percent of the amount
appropriated for the Child Care and
Development Block Grant shall be
reserved.
*
*
*
*
*
(f) Lead Agencies shall expend any
funds that may be set-aside for targeted
activities pursuant to annual
appropriations law as directed by the
Secretary.
■ 37. Amend § 98.63 by revising
paragraphs (b) and (c) to read as follows:
§ 98.63
Fund.
Allotments from the Matching
*
*
*
*
*
(b) For purposes of this section, the
amounts available under section
418(a)(3) of the Social Security Act
excludes the amounts reserved and
allocated under § 98.60(b)(1) for
technical assistance, research and
evaluation, and the national toll-free
hotline and Web site and under
§ 98.62(a) and (b) for the Mandatory
Fund.
(c) Amounts under this section are
available pursuant to the requirements
at § 98.55(c).
■ 38. Amend § 98.64 by revising
paragraph (c)(1) to read as follows:
§ 98.64
funds.
Reallotment and redistribution of
*
*
*
*
*
(c)(1) Any portion of the Matching
Fund granted to a State that is not
obligated in the period for which the
grant is made shall be redistributed.
Funds, if any, will be redistributed on
the request of, and only to, those other
States that have met the requirements of
§ 98.55(c) in the period for which the
grant was first made. For purposes of
this paragraph (c)(1), the term ‘‘State’’
means the 50 States and the District of
Columbia. Territorial and tribal grantees
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80579
may not receive redistributed Matching
Funds.
*
*
*
*
*
■ 39. Amend § 98.65 by revising
paragraphs (a) and (g) and adding
paragraphs (h) and (i) to read as follows:
§ 98.65
Audits and financial reporting.
(a) Each Lead Agency shall have an
audit conducted after the close of each
program period in accordance with 45
CFR part 75, subpart F, and the Single
Audit Act Amendments of 1996.
*
*
*
*
*
(g) Lead Agencies shall submit
financial reports, in a manner specified
by ACF, quarterly for each fiscal year
until funds are expended.
(h) At a minimum, a State or
territorial Lead Agency’s quarterly
report shall include the following
information on expenditures under
CCDF grant funds, including
Discretionary (which includes realloted
funding and any funds transferred from
the TANF block grant), Mandatory, and
Matching funds (which includes
redistributed funding); and State
Matching and Maintenance-of-Effort
(MOE) funds:
(1) Child care administration;
(2) Quality activities, including any
sub-categories of quality activities as
required by ACF;
(3) Direct services;
(4) Non-direct services, including:
(i) Establishment and maintenance of
computerized child care information
systems;
(ii) Certificate program cost/eligibility
determination;
(iii) All other non-direct services; and
(5) Such other information as
specified by the Secretary.
(i) Tribal Lead Agencies shall submit
financial reports annually in a manner
specified by ACF.
■ 40. Add § 98.68 to subpart G to read
as follows:
§ 98.68
Program integrity.
(a) Lead Agencies are required to
describe in their Plan effective internal
controls that are in place to ensure
integrity and accountability in the CCDF
program. These shall include:
(1) Processes to ensure sound fiscal
management;
(2) Processes to identify areas of risk;
and
(3) Regular evaluation of internal
control activities.
(b) Lead Agencies are required to
describe in their Plan the processes that
are in place to:
(1) Identify fraud or other program
violations, which may include, but are
not limited to the following:
(i) Record matching and database
linkages;
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(ii) Review of attendance and billing
records;
(iii) Quality control or quality
assurance reviews; and
(iv) Staff training on monitoring and
audit processes.
(2) Investigate and recover fraudulent
payments and to impose sanctions on
clients or providers in response to fraud.
(c) Lead Agencies must describe in
their Plan the procedures that are in
place for documenting and verifying
that children receiving assistance under
this part meet eligibility criteria at the
time of eligibility determination and
redetermination. Because a child
meeting eligibility requirements at the
most recent eligibility determination or
redetermination is considered eligible
during the period between
redeterminations as described in
§ 98.21(a)(1):
(1) The Lead Agency shall pay any
amount owed to a child care provider
for services provided for such a child
during this period under a payment
agreement or authorization for services;
and
(2) Any CCDF payment made for such
a child during this period shall not be
considered an error or improper
payment under subpart K of this part
due to a change in the family’s
circumstances, as set forth at § 98.21(a).
■ 41. Amend § 98.71 by:
■ a. Revising paragraphs (a)(1), (2), and
(13) and (c);
■ b. Redesignating paragraphs (a)(15)
and (b)(5) as (a)(21) and (b)(6);
■ c. Removing the word ‘‘and’’ from the
end of paragraphs (a)(14) and (b)(4); and
■ d. Adding paragraphs (a)(15), (16),
(17), (18), (19), and (20) and (b)(5).
The revisions and additions read as
follows:
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§ 98.71
Content of reports.
(a) * * *
(1) The total monthly family income
and family size used for determining
eligibility;
(2) Zip code of residence of the family
and zip code of the location of the child
care provider;
*
*
*
*
*
(13) Unique identifier of the head of
the family unit receiving child care
assistance, and of the child care
provider;
*
*
*
*
*
(15) Whether the family is homeless;
(16) Whether the parent(s) are in the
military service;
(17) Whether the child has a
disability;
(18) Primary language spoken at
home;
(19) Date of the child care provider’s
most recent health, safety and fire
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inspection meeting the requirements of
§ 98.42(b)(2);
(20) Indicator of the quality of the
child care provider; and
*
*
*
*
*
(b) * * *
(5) The number of child fatalities by
type of care; and
*
*
*
*
*
(c) A Tribal Lead Agency’s annual
report, as required in § 98.70(c), shall
include such information as the
Secretary shall require.
■ 42. Amend § 98.80 by revising
paragraphs (a) and (c)(1) and (2) and
removing paragraph (f) to read as
follows:
§ 98.80 General procedures and
requirements.
*
*
*
*
*
(a) An Indian Tribe applying for or
receiving CCDF funds shall be subject to
the requirements under this part as
specified in this section based on the
size of the awarded funds. The Secretary
shall establish thresholds for Tribes’
total CCDF allotments pursuant to
§§ 98.61(c) and 98.62(b) to be divided
into three categories:
(1) Large allocations;
(2) Medium allocations; and
(3) Small allocations.
*
*
*
*
*
(c) * * *
(1) The consortium adequately
demonstrates that each participating
Tribe authorizes the consortium to
receive CCDF funds on behalf of each
Tribe or tribal organization in the
consortium;
(2) The consortium consists of Tribes
that each meet the eligibility
requirements for the CCDF program as
defined in this part, or that would
otherwise meet the eligibility
requirements if the Tribe or tribal
organization had at least 50 children
under 13 years of age;
*
*
*
*
*
■ 43. Amend § 98.81 by revising
paragraphs (b) introductory text, (b)(1),
(5), and (6), and (c) and adding
paragraph (b)(9) to read as follows:
§ 98.81
Application and Plan procedures.
*
*
*
*
*
(b) Tribal Lead Agencies with large
and medium allocations shall submit a
CCDF Plan, as described at § 98.16, with
the following additions and exceptions:
(1) The Plan shall include the basis
for determining family eligibility.
(i) If the Tribe’s median income is
below a certain level established by the
Secretary, then, at the Tribe’s option,
any Indian child in the Tribe’s service
area shall be considered eligible to
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receive CCDF funds, regardless of the
family’s income, work, or training
status.
(ii) If the Tribe’s median income is
above the level established by the
Secretary, then a tribal program must
determine eligibility for services
pursuant to § 98.20(a)(2). A tribal
program, as specified in its Plan, may
use either:
(A) 85 percent of the State median
income for a family of the same size; or
(B) 85 percent of the median income
for a family of the same size residing in
the area served by the Tribal Lead
Agency.
*
*
*
*
*
(5) The Plan shall include a
description of the Tribe’s payment rates,
how they are established, and how they
support quality including, where
applicable, cultural and linguistic
appropriateness.
(6) The Plan is not subject to the
following requirements:
(i) A definition of very low income at
§ 98.16(g)(8);
(ii) A description at § 98.16(i)(4) of
how the Lead Agency will meet the
needs of certain families specified at
§ 98.50(e);
(iii) The description of the market rate
survey or alternative methodology at
§ 98.16(r);
(iv) The licensing requirements
applicable to child care services at
§ 98.15(b)(6); and
(v) The early learning and
developmental guidelines requirement
at § 98.15(a)(9).
*
*
*
*
*
(9) Plans for Tribal Lead Agencies
with medium allocations are not subject
to the following requirements unless the
Tribe chooses to include such services,
and, therefore, the associated
requirements, in its program:
(i) The assurance at § 98.15(a)(2)
regarding options for services;
(ii) A description of any limits
established for the provision of in-home
care at § 98.16(i)(2); or
(iii) A description of the child care
certificate payment system(s) at
§ 98.16(q).
(c) Tribal Lead Agencies with small
allocations shall submit an abbreviated
CCDF Plan, as described by the
Secretary.
■ 44. Revise § 98.82 to read as follows:
§ 98.82
Coordination.
(a) Tribal applicants shall coordinate
the development of the Plan and the
provision of services as required by
§§ 98.12 and 98.14 and:
(1) To the maximum extent feasible,
with the Lead Agency in the State or
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States in which the applicant will carry
out the CCDF program; and
(2) With other Federal, State, local,
and tribal child care and childhood
development programs.
(b) [Reserved]
■ 45. Amend § 98.83 by:
■ a. Revising paragraphs (b), (c)(1), and
(d);
■ b. Redesignating paragraphs (g) and
(h) as (h) and (i), paragraph (e) as (g),
and paragraph (f) as (e);
■ c. Revising newly redesignated
paragraphs (e), (g), (h), and (i); and
■ d. Adding paragraph (f).
The revisions and additions read as
follows:
§ 98.83
Requirements for tribal programs.
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*
*
*
*
*
(b) With the exception of Alaska,
California, and Oklahoma, programs and
activities for the benefit of Indian
children shall be carried out on or near
an Indian reservation.
(c) * * *
(1) A brief description of the direct
child care services funded by CCDF for
each of their participating Tribes shall
be provided by the consortium in their
three-year CCDF Plan; and
*
*
*
*
*
(d)(1) Tribal Lead Agencies shall not
be subject to:
(i) The requirement to have licensing
applicable to child care services at
§ 98.40;
(ii) The requirement to produce a
consumer education Web site at
§ 98.33(a). Tribal Lead Agencies still
must collect and disseminate the
provider-specific consumer education
information described at § 98.33(a)
through (e), but may do so using
methods other than a Web site;
(iii) The requirement that Lead
Agencies shall give priority for services
to children of families with very low
family income at § 98.46(a);
(iv) The market rate survey or
alternative methodology described at
§ 98.45(b)(2) and the related
requirements at § 98.45(c), (d), (e), and
(f);
(v) The requirement to use some
grants or contracts for the provision of
direct services at § 98.50(a)(3);
(vi) The requirement for a training
and professional development
framework at § 98.44(a);
(vii) The requirements about
Mandatory and Matching Funds at
§ 98.50(e);
(viii) The requirement to complete the
quality progress report at § 98.53(f);
(ix) The requirement that Lead
Agencies shall expend no more than
five percent from each year’s allotment
on administrative costs at § 98.54(a);
and
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(x) The Matching fund requirements
at §§ 98.55 and 98.63.
(2) Tribal Lead Agencies with large,
medium, and small allocations shall be
subject to the provision at § 98.42(b)(2)
to require inspections of child care
providers and facilities, unless a Tribal
Lead Agency describes an alternative
monitoring approach in its Plan and
provides adequate justification for the
approach.
(3) Tribal Lead Agencies with large,
medium, and small allocations shall be
subject to the requirement at
§ 98.43(a)(2)(ii)(C) to conduct
comprehensive criminal background
checks on other individuals residing in
a family child care home, unless the
Tribal Lead Agency describes an
alternative background check approach
for such individuals in its Plan and
provides adequate justification for the
approach.
(e) Tribal Lead Agencies with medium
and small allocations shall not be
subject to the requirement for
certificates at § 98.30(a) and (d).
(f) Tribal Lead Agencies with small
allocations must spend their CCDF
funds in alignment with the goals and
purposes described in § 98.1. These
Tribes shall have flexibility in how they
spend their CCDF funds and shall be
subject to the following requirements:
(1) If providing direct services:
(i) The health and safety requirements
described in § 98.41;
(ii) The monitoring requirements at
§§ 98.42 and 98.83(d)(2); and
(iii) The background checks
requirements described in §§ 98.43 and
98.83(d)(3);
(2) The requirements to spend funds
on activities to improve the quality of
child care described in §§ 98.50(b) and
98.53;
(3) The use of funds requirements at
§ 98.56 and cost allocation requirement
at § 98.57;
(4) The financial management
requirements at subpart G of this part
that are applicable to Tribes;
(5) The reporting requirements at
subpart H of this part that are applicable
to Tribes;
(6) The 15 percent limitation on
administrative activities at § 98.83(h);
(7) The monitoring, non-compliance,
and complaint provisions at subpart J of
this part; and
(8) Any other requirement established
by the Secretary.
(g) The base amount of any tribal
grant is not subject to the administrative
cost limitation at paragraph (h) of this
section or the quality expenditure
requirement at § 98.53(a). The base
amount may be expended for any costs
consistent with the purposes and
requirements of the CCDF.
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Frm 00117
Fmt 4701
Sfmt 4702
80581
(h) Not more than 15 percent of the
aggregate CCDF funds expended by the
Tribal Lead Agency from each fiscal
year’s (including amounts used for
construction and renovation in
accordance with § 98.84, but not
including the base amount provided
under paragraph (g) of this section) shall
be expended for administrative
activities. Amounts used for
construction and major renovation in
accordance with § 98.84 are not
considered administrative costs.
(i)(1) CCDF funds are available for
costs incurred by the Tribal Lead
Agency only after the funds are made
available by Congress for Federal
obligation unless costs are incurred for
planning activities related to the
submission of an initial CCDF Plan.
(2) Federal obligation of funds for
planning costs, pursuant to paragraph
(i)(1) of this section is subject to the
actual availability of the appropriation.
■ 46. Amend § 98.84 by adding a
sentence at the end of paragraph (b)(3)
and paragraphs (b)(3)(i) and (ii) and
revising paragraphs (d)(1), (2), (3), (4),
(5), and (6) to read as follows:
§ 98.84 Construction and renovation of
child care facilities.
*
*
*
*
*
(b) * * *
(3) * * * The Secretary shall waive
this requirement if:
(i) The Secretary determines that the
decrease in the level of child care
services provided by the Indian tribe or
tribal organization is temporary; and
(ii) The Indian tribe or tribal
organization submits to the Secretary a
plan that demonstrates that after the
date on which the construction or
renovation is completed:
(A) The level of direct child care
services will increase; or
(B) The quality of child care services
will improve.
*
*
*
*
*
(d) * * *
(1) Federal share requirements and
use of property requirements at 45
CFR75.318;
(2) Transfer and disposition of
property requirements at 45 CFR
75.318(c);
(3) Title requirements at 45 CFR
75.318(a);
(4) Cost principles and allowable cost
requirements at subpart E of this part;
(5) Program income requirements at
45 CFR 75.307;
(6) Procurement procedures at 45 CFR
75.326 through 75.335; and
*
*
*
*
*
■ 47. Amend § 98.92 by revising
paragraph (a)(1) and adding paragraphs
(b)(3) and (4) to read as follows:
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Penalties and sanctions.
§ 98.93
tkelley on DSK3SPTVN1PROD with PROPOSALS2
(a) * * *
(1) The Secretary will disallow any
improperly expended funds;
*
*
*
*
*
(b) * * *
(3)(i) A penalty of not more than five
percent of the funds allotted under
§ 98.61 (i.e., the Discretionary Funds)
for a Fiscal Year shall be withheld if the
Secretary determines that the Lead
Agency has failed to give priority for
service in accordance with § 98.46(a);
(ii) This penalty will be withheld no
earlier than the first full Fiscal Year
following the determination to apply the
penalty;
(iii) This penalty will not be applied
if the Lead Agency corrects its failure to
comply and amends its CCDF Plan
within six months of being notified of
the failure; and
(iv) The Secretary may waive a
penalty for one year in the event of
extraordinary circumstances, such as a
natural disaster.
(4)(i) A penalty of not more than five
percent of the funds allotted under
§ 98.61 (i.e., the Discretionary Funds)
for a Fiscal Year shall be withheld if the
Secretary determines that the State,
Territory, or Tribe has failed to comply
substantially with the criminal
background check requirements at
§ 98.43;
(ii) This penalty will be withheld no
earlier than the first full Fiscal Year
following the determination to apply the
penalty; and
(iii) This penalty will not be applied
if the State, Territory, or Tribe corrects
the failure before the penalty is to be
applied or if it submits a plan for
corrective action that is acceptable to
the Secretary.
*
*
*
*
*
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[Amended]
48. Amend § 98.93, in paragraph (b),
by removing ‘‘, 370 L’Enfant Promenade,
SW., Washington, DC 20447’’.
■ 49. Amend § 98.100 by adding a
sentence at the end of paragraph (d)(2)
and revising paragraph (e) to read as
follows:
■
§ 98.100
Error Rate Report.
*
*
*
*
*
(d) * * *
(2) * * * Because a child meeting
eligibility requirements at the most
recent eligibility determination or
redetermination is considered eligible
between redeterminations as described
in § 98.21(a)(1), any payment for such a
child shall not be considered an error or
improper payment due to a change in
the family’s circumstances, as set forth
at § 98.21(a).
(e) Costs of Preparing the Error Rate
Report—Provided the error rate
calculations and reports focus on client
eligibility, expenses incurred by the
States, the District of Columbia and
Puerto Rico in complying with this rule,
including preparation of required
reports, shall be considered a cost of
direct service related to eligibility
determination and therefore is not
subject to the five percent limitation on
CCDF administrative costs pursuant to
§ 98.54(a).
■ 50. Amend § 98.102 by revising
paragraph (a)(5) and adding paragraph
(c) to read as follows:
§ 98.102
Content of Error Rate Reports.
(a) * * *
(5) Estimated annual amount of
improper payments (which is a
projection of the results from the sample
to the universe of cases statewide during
the 12-month review period) calculated
by multiplying the percentage of
PO 00000
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Fmt 4701
Sfmt 9990
improper payments by the total dollar
amount of child care payments that the
State, the District of Columbia or Puerto
Rico paid during the 12-month review
period;
*
*
*
*
*
(c) Any Lead Agency with an
improper payment rate that exceeds a
threshold established by the Secretary
must submit to the Assistant Secretary
for approval a comprehensive corrective
action plan, as well as subsequent
reports describing progress in
implementing the plan.
(1) The corrective action plan must be
submitted within 60 days of the
deadline for submitting the Lead
Agency’s standard error rate report
required by paragraph (b) of this section.
(2) The corrective action plan must
include the following:
(i) Identification of a senior
accountable official;
(ii) Milestones that clearly identify
actions to be taken to reduce improper
payments and the individual
responsible for completing each action;
(iii) A timeline for completing each
action within 1 year of the Assistant
Secretary’s approval of the plan, and for
reducing the improper payment rate
below the threshold established by the
Secretary; and
(iv) Targets for future improper
payment rates.
(3) Subsequent progress reports must
be submitted as requested by the
Assistant Secretary.
(4) Failure to carry out actions
described in the approved corrective
action plan will be grounds for a penalty
or sanction under § 98.92.
[FR Doc. 2015–31883 Filed 12–18–15; 8:45 am]
BILLING CODE 4150–28–P
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Agencies
[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)]
[Proposed Rules]
[Pages 80465-80582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31883]
[[Page 80465]]
Vol. 80
Thursday,
No. 247
December 24, 2015
Part II
Department of Health and Human Services
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45 CFR Part 98
Child Care and Development Fund (CCDF) Program; Proposed Rule
Federal Register / Vol. 80 , No. 247 / Thursday, December 24, 2015 /
Proposed Rules
[[Page 80466]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 98
[Docket Number ACF-2015-0011]
RIN 0970-AC67
Child Care and Development Fund (CCDF) Program
AGENCY: Office of Child Care (OCC), Administration for Children and
Families (ACF), Department of Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: The Department of Health and Human Services, Administration
for Children and Families, proposes to amend the Child Care and
Development Fund (CCDF) regulations. This proposed rule makes changes
to CCDF regulations to detail provisions of the Child Care and
Development Block Grant Act of 2014 in order to protect the health and
safety of children in child care; help parents make informed consumer
choices and access information to support child development; provide
equal access to stable, high quality child care for low-income
children; and enhance the overall quality of child care and the early
childhood workforce.
DATES: In order to be considered, written comments on this proposed
rule must be received on or before February 22, 2016.
ADDRESSES: You may submit comments, identified by docket number ACF-
2015-0011and/or RIN number 0970-AC67, by either of the following
methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Submit comments to the Office of Child Care,
Administration for Children and Families, 330 C Street SW., Washington,
DC 20201, Attention: Office of Child Care Policy Division.
Instructions: All submissions received must include the agency name
and docket number or RIN number for this rulemaking. To ensure we can
effectively respond to your comment(s), clearly identify the issue(s)
on which you are commenting. Provide the page number, identify the
column, and cite the relevant paragraph/section from the Federal
Register document, (e.g., On page 10999, second column, Sec.
98.20(a)(1)(i).). All comments received are a part of the public record
and will be posted for public viewing on www.regulations.gov, without
change. That means all personal identifying information (such as name
or address) will be publicly accessible. Please do not submit
confidential information, or otherwise sensitive or protected
information. We accept anonymous comments. If you wish to remain
anonymous, enter ``N/A'' in the required fields.
FOR FURTHER INFORMATION CONTACT: Andrew Williams, Office of Child Care,
202-205-0750 (not a toll-free call). Deaf and hearing impaired
individuals may call the Federal Dual Party Relay Service at 1-800-877-
8339 between 8 a.m. and 7 p.m. Eastern Time.
SUPPLEMENTARY INFORMATION:
Contents
I. Executive Summary
I. Background
A. Child Care and Development Fund (CCDF)
B. Discussion of Changes Made in This Proposed Rule
C. Effective Date
III. Statutory Authority
IV. Provisions of Proposed Rule
Subpart A--Goals, Purposes and Definitions
Subpart B--General Application Procedures
Subpart C--Eligibility for Services
Subpart D--Program Operations (Child Care Services) Parental
Rights and Responsibilities
Subpart E--Program Operations (Child Care Services) Lead Agency
and Provider Requirements
Subpart F--Use of Child Care and Development Funds
Subpart G--Financial Management
Subpart H--Program Reporting Requirements
Subpart I--Indian Tribes
Subpart J--Monitoring, Non-Compliance, and Complaints
Subpart K--Error Rate Reporting
V. Paperwork Reduction Act
VI. Regulatory Flexibility Act
VII. Executive Orders 12866 and 13563
VIII. Regulatory Impact Analysis
IX. Unfunded Mandates Reform Act of 1995
X. Executive Order 13045 on Protection of Children
XI. Congressional Review
XII. Executive Order 13132
XIII. Treasury and General Government Appropriations Act of 1999
XIV. Executive Order 13175 on Consultation With Indian Tribes
I. Executive Summary
Overview. On November 19, 2014, President Barack Obama signed the
Child Care and Development Block Grant (CCDBG) Act of 2014 (Pub. L.
113-186) into law following its passage in the 113th Congress. The
CCDBG Act (to be codified, as amended, at 42 U.S.C. 9858 et seq., and
hereinafter referred to as the ``Act'') (along with Section 418 of the
Social Security Act (42 U.S.C. 618)) authorizes the Child Care and
Development Fund (CCDF), which is the primary Federal funding source
devoted to providing low-income families who are working or
participating in education or training activities with help paying for
child care and improving the quality of child care for all children.
The bipartisan CCDBG Act of 2014 made sweeping statutory changes
that will require significant reforms to State and Territory CCDF
programs to raise the health, safety, and quality of child care and
provide more stable child care assistance to families. It expanded the
purposes of the CCDF for the first time since 1996, ushering in a new
era for child care in this country. Since 1996, a significant body of
research has demonstrated the importance of early childhood development
and how stable, high quality early experiences can positively influence
that development and contribute to children's futures. In particular,
low-income children stand to benefit the most from a high quality early
childhood experience. Research has also shown the important role of
child care financial assistance in helping parents afford reliable
child care in order to get and keep stable employment or pursue
education. The reauthorized law recognizes CCDF as an integral program
to promote both the healthy development of children and parents'
pathways to economic stability.
In Fiscal Year 2014, CCDF provided child care assistance to 1.4
million children from nearly 1 million low-income working families in
an average month. The Congressional reauthorization of CCDBG made clear
that the prior law was inadequate to protect the health and safety of
children in care and that more needs to be done to increase the quality
of CCDF-funded child care. It also recognized the central importance of
access to subsidy continuity in supporting parents' ability to achieve
financial stability and children's ability to develop nurturing
relationships with their caregivers, which creates the foundation for a
high quality early learning experience.
Purpose of this Regulatory Action. The majority of current CCDF
regulations at 45 CFR parts 98 and 99 were last revised in 1998 (with
the exception of some more recent updates related to State match and
error reporting). This proposed regulatory action is needed to update
the regulations to accord with the reauthorized law and to update CCDF
regulations to reflect what has been learned since 1998 about child
care quality and child development, and changes in the law. The
purposes of the law, as revised by Congress, have guided regulation
development.
[[Page 80467]]
Legal authority. This proposed regulation is being issued under the
authority granted to the Secretary of Health and Human Services by the
CCDBG Act of 1990, as amended, (42 U.S.C. 9858 et seq.) and Section 418
of the Social Security Act (42 U.S.C. 618).
Major Provisions of the Proposed Rule. The proposed rule addresses
the CCDBG Act of 2014, which includes provisions to: (1) Protect the
health and safety of children in child care; (2) help parents make
informed consumer choices and access information to support child
development; (3) provide equal access to stable, high quality child
care for low-income children; and (4) enhance the quality of child care
and the early childhood workforce.
Protect Health and Safety of Children in Child Care. This proposed
rule would provide detail on the health and safety standards
established in the new law, including health and safety training,
comprehensive background checks, and monitoring. The law requires
providers receiving CCDF funds (including those that are license-
exempt) to be monitored, at least annually, to determine whether health
and safety practices and standards are being followed in the child care
setting, including a pre-licensure visit for licensed providers.
Regular monitoring of child care settings is necessary to ensure
compliance with appropriate standards that protect the health and
safety of children. The proposed rule would allow Lead Agencies to
develop alternative monitoring requirements for CCDF-funded care
provided in the child's home and would exempt relative caregivers from
the monitoring requirement at the option of Lead Agencies.
In this proposed rule, we address the Act's (i.e., the Child Care
and Development Block Grant Act's) background check requirement by
proposing to require all child care staff members (including
prospective staff members) of all licensed, regulated, or registered
child care providers and all child care providers eligible to deliver
CCDF services to have a comprehensive background check, unless they are
related to all children in their care. We propose to extend the
background check requirement to all adults residing in family child
care homes. Based on our interpretation of the statutory provisions, we
believe that all parents, regardless of whether they receive CCDF
assistance, deserve this basic protection of knowing that those
individuals who have access to their children do not have prior records
of behavior that could endanger their children.
The Act requires Lead Agencies to establish standards in ten topic
areas related to health and safety that are fundamental for any child
care setting, such as first aid, CPR, and safe sleep practices. We
propose to add recognizing and reporting child abuse and neglect to
this list. The Act also requires Lead Agencies to maintain records of
substantiated parental complaints about child care. In this NPRM, we
propose requiring Lead Agencies to designate a hotline or similar
reporting process for parental complaints. Child care providers would
also be required to report serious injuries or deaths that occur in
child care settings in order to inform regulatory or other policy
changes to improve health and safety.
Help Parents Make Informed Consumer Choices and Access Information
to Support Child Development. The Act expanded requirements for the
content of consumer education to be made available to parents receiving
CCDF assistance, the public, and where applicable, child care
providers. By adding providers, Congress recognized the positive role
trusted caregivers can play in communicating and partnering with
parents on a daily basis regarding their children's development and
available resources in the community. Effective consumer education
strategies are important to inform parental choice of child care and
also to engage parents in the development of their children in child
care settings--a new purpose of the CCDF. States and Territories have
the opportunity to consider how information can be best provided to
low-income parents through their interactions with CCDF, partner
agencies, and child care providers, as well as through electronic means
such as a Web site. Parents face great challenges in finding reliable
information and making informed consumer choices about child care for
their children. The new law strengthens and builds on a foundational
tenet of CCDF--the primacy of parental choice--by requiring that Lead
Agencies provide parents information about their child care options and
the quality of child care providers as available.
The Act requires Lead Agencies to make available via a consumer-
friendly and easily-accessible Web site, information on policies and
procedures regarding: (1) Licensing child care providers; (2)
conducting background checks and the offenses that would keep a
provider from being allowed to care for children; and (3) monitoring of
child care providers. We are proposing this be done through a single
Web site that is easy for families to navigate and provides widest
possible access to individuals who speak languages other than English
and persons with disabilities. We propose that Lead Agencies provide
information about the quality of providers on the consumer Web site, if
available, and give parents receiving CCDF information about the
quality of their chosen providers.
The law requires Lead Agencies to make results of monitoring
available in a consumer-friendly and easily accessible manner. We are
proposing that this include posting at least five years of full
monitoring reports, beginning with the effective date and going
forward, in a timely manner for parents and providers. In the case that
full reports are not in plain language, Lead Agencies must post a plain
language summary or interpretation in addition to the full monitoring
and inspection report. Parents should not have to parse through
administrative code or understand advanced legal terms to determine
whether safety violations have occurred in a child care setting.
Congress added a number of content areas that will support parents
in their role as their child's first and most important teacher. In
keeping with a new purpose of the CCDF program to ``promote involvement
by parents and family members in the development of their children in
child care settings,'' the law requires information related to best
practices in child development and State policies regarding child
social and emotional development, including any State policies relevant
to expulsion of children under age 5 from child care settings, be made
available. The reauthorized law also requires that Lead Agencies
provide information that can help parents identify other financial
benefits and services that may support their pathway to economic
stability. Families eligible for child care assistance are often
eligible for other supports, and the law specifies that information on
several public benefit programs, including Temporary Assistance for
Needy Families (TANF), Supplemental Nutrition Assistance Program
(SNAP), Medicaid, and the Children's Health Insurance Program (CHIP),
be provided to them. In addition, the law requires information be
provided on the programs and services that are part of Individuals with
Disabilities Education Act (IDEA), such as early intervention and
special education services and that parents are given information on
how to obtain a developmental screening for their child. Low-income
parents deserve to have easy access to the full range of
[[Page 80468]]
information, programs, and services that can support them in their
parenting efforts. To ensure equal access for persons with limited
English proficiency and for persons with disabilities, Lead Agencies
would be required to provide child care program information in multiple
languages and alternative formats.
Provide Equal Access to High Quality Child Care for Low-Income
Children. Congress established requirements that will provide more
stable child care financial assistance to families, including extending
children's eligibility for child care for a minimum of 12 months,
regardless of increases in parents' earnings (as long as income remains
at or below the Federal eligibility limit) and temporary changes in
participation in work, training, or education. This will make it easier
for parents to maintain employment or complete education programs and
supports both family financial stability and the relationship between
children and their caregivers. Under the law, Lead Agencies that choose
to end assistance prior to 12 months, due to a non-temporary change in
a parent's work, training, or education participation, must continue
assistance for a minimum of three months to allow for job search
activities.
This proposed rule would require a set of policies intended to
stabilize families' access to child care assistance and, in turn, help
stabilize their employment or education and their child's care
arrangement. These policies also have the potential to stabilize the
revenue of child care providers who receive CCDF funds, as they would
experience more predictable, reliable, and timely payments for
services. We propose to reduce reporting requirements for families that
can result in them unduly losing their assistance. Parents often find
it difficult to navigate administrative processes and paperwork
required to maintain their eligibility, and State policies can be
inflexible to changes in a family's circumstances. These provisions
also make it easier for Lead Agencies to align CCDF policies with other
programs, such as SNAP, Medicaid, CHIP, Early Head Start, and Head
Start. More than half of children receiving CCDF-funded child care have
incomes under poverty and qualify for Head Start and significant
proportions of CCDF families are also eligible for SNAP. In this
proposed rule, while families may be determined to be ineligible within
the minimum 12 month eligibility period if their income exceeds 85% SMI
(taking into account irregular fluctuations in income) or, at Lead
Agency option, the family experiences a non-temporary cessation in job,
training, or education, we clarify that additional State-imposed
eligibility criteria apply only at the time of initial eligibility
determination and redetermination and provide examples of changes in
parents' scheduling and conditions of employment that meet the
statutory intent of stabilizing assistance for families through changes
in circumstance. We propose that Lead Agencies that set their income
eligibility threshold below 85 percent of State median income (SMI)
must allow parents who otherwise qualify for CCDF assistance to
continue receiving assistance, at subsequent redeterminations, until
their income exceeds the Federal income limit (85 percent of SMI for a
family of the same size) or for a period of at least one year after the
point at which the family's income exceeds the State eligibility
threshold. This approach promotes continuity of care for children while
allowing for wage growth for families to move on a path toward economic
stability. All too often, getting and keeping CCDF assistance is overly
burdensome for parents, resulting in short durations of assistance and
churning on and off CCDF as parents lose assistance and then later
return. This instability disrupts parental employment and education,
harms children, and runs counter to nearly all of CCDF's purposes. We
believe this full set of provisions that facilitates easier and
sustained access to assistance is necessary to strengthen CCDF as a
two-generation program that supports work, training, and education, as
well as access to high quality child care.
Congress reaffirmed the core belief that families receiving CCDF-
funded child care should have equal access to child care that is
comparable to that of non-CCDF families. The Act requires Lead Agencies
to set provider payment rates based on a valid market rate survey or
alternative methodology. To allow for equal access, we propose that
Lead Agencies set base payment rates at least at a level sufficient to
cover the costs to providers of the health, safety, and quality
requirements included in the NPRM and provide equal access to child
care available to families with incomes above 85 percent of SMI. This
could be assured by setting payment rates at the 75th percentile of a
recent market rate survey, which we believe remains an important
benchmark for gauging equal access. Lead Agencies that set rates below
the 75th percentile would be required to demonstrate that their payment
rates allow CCDF families to purchase care that is of comparable
quality to care that is available to families with incomes above 85
percent of SMI. Low payment rates limit access to high quality care for
children receiving CCDF-funded care and violate the equal access
provision that is central to CCDF. We believe higher provider payment
rates are necessary to ensure that providers receiving CCDF funds have
the means to provide high quality care for our country's low-income
children. We also propose that Lead Agencies be required to use some
direct contracts or grants, in addition to vouchers or certificates, in
order to build the supply of high quality care.
In this NPRM, we provide detail on the statutory requirements for
Lead Agencies to pay providers in a timely manner based on generally
accepted payment practices for non-CCDF providers and that Lead
Agencies delink provider payments from children's absences to the
extent practicable. We establish a new Federal benchmark for affordable
parent fees of 7 percent of family income and allow Lead Agencies more
flexibility to waive co-payments for vulnerable families. We propose
that Lead Agencies be permitted to increase parent fees only at
redetermination or during a period of graduated phaseout when families'
incomes have increased above the Lead Agency's initial income
eligibility threshold, but seek comment around several elements of
these policies.
This proposed rule would require Lead Agencies to take into
consideration children's development and learning and promote
continuity of care when authorizing child care services; offer
increased flexibility for determining eligibility of vulnerable
children; and clarify that Lead Agencies are not required to restrict a
child's care to the hours of a parent's work or education. We believe
these changes are important to make the program more child-focused and
ensure that the most vulnerable children have access to and benefit
from high quality care. These provisions may be implemented broadly in
ways that best support the goals of Lead Agencies.
Enhance the Quality of Child Care and the Early Childhood
Workforce. In this NPRM, we provide detail on the statutory requirement
to increase spending on initiatives that improve the quality of care.
The law increases the share of CCDF funds directed towards quality
improvement activities, authorizes a new set-aside for infant-toddler
care, and drives investments towards increasing the supply of high
quality care for infant, toddlers, children with special needs,
children experiencing homelessness, and other vulnerable populations
including
[[Page 80469]]
children in need of nontraditional hour care and children in poor
communities. The law requires States and Territories to submit an
annual report on quality expenditures, including measures created by
the Lead Agency to evaluate progress on quality improvement. This
proposed rule would require Lead Agencies to report data on their
progress on those measures. The law also increases quality through more
robust program standards, including training and professional
development standards for caregivers, teachers, and directors to help
those working with children promote their social, emotional, physical,
and cognitive development.
In this rule, we address the law's training requirements by
proposing that child care caregivers, teachers, and directors of CCDF
providers receive training prior to caring for children, or during an
orientation period not to exceed three months, and on an annual basis.
In order for the health and safety requirements to be implemented, and
because these are areas that the Lead Agency will monitor, we propose
that training include 10 basic health and safety topics identified in
the Act, as well as recognizing and reporting child abuse and neglect
in order to comply with child abuse reporting requirements.
Under the proposed regulation, Lead Agencies must provide for a
progression of professional development for caregivers, teachers, and
directors that may include postsecondary education. Through this NPRM,
we propose definitions for six key components of a professional
development framework and propose, to the extent practicable, that
ongoing training yields continuing education units or is credit-
bearing. These components advance expert recommendations to improve the
knowledge and competencies of those who care for young children, which
is central to children's learning experiences and the quality of child
care.
In addition, the Act includes a number of provisions to improve
access to high quality child care for children experiencing
homelessness. The law requires Lead Agencies to establish a grace
period that allows children experiencing homelessness (and children in
foster care) to receive CCDF services while allowing their families
(including foster families) a reasonable time to comply with
immunization and other health and safety requirements. Through this
NPRM, we propose to require Lead Agencies to help families comply with
such requirements and coordinate with licensing agencies and other
relevant State and local agencies to provide referrals and support to
help families experiencing homelessness comply with immunization and
health and safety requirements. The proposed rule would also require
Lead Agencies to use the definition of homeless applicable to school
programs from the McKinney-Vento Act to align with other Federal early
childhood programs (42 U.S.C. 11434a).
The Act does not indicate the extent to which CCDF provisions apply
to Tribes. Starting in early 2015, OCC began a series of formal
consultations with Tribal leaders to determine how the provisions in
the newly reauthorized child care law should apply to Tribes and Tribal
organizations. We heard from many Tribal leaders and CCDF
Administrators asking for flexibility to implement child care programs
that meet the individual needs of their communities. The proposals
included in this NPRM are intended to increase Tribal Lead Agency
flexibility, in a manner consistent with the CCDF dual goals of
promoting families' financial stability and fostering healthy child
development. We are proposing to differentiate and exempt some Tribal
grantees from a progressive series of CCDF provisions based on three
categories of CCDF grant allocations: Large, medium and small. We are
also allowing Tribes flexibility to consider any Indian child in the
Tribe's service area to be eligible to receive CCDF funds, regardless
of the family's income or work, education, or training status, if a
Tribe's median income is below a threshold established by the
Secretary.
Costs, benefits and transfer impacts. Changes made by the CCDBG Act
of 2014 and this proposed rule would have the most direct benefit for
the 1.4 million children and their parents who use CCDF assistance to
pay for child care. Many of the Act's changes will also positively
impact children who do not directly participate in CCDF. Many children
who receive no direct assistance from CCDF will benefit from more
rigorous health and safety standards, provider inspections, criminal
background checks for child care staff, and accessible consumer
information and education for their parents and caregivers. The
attention to quality goes beyond health and safety. Caregivers,
teachers, and directors of CCDF providers will be supported in their
ongoing professional development. Under the Act, States and Territories
must direct an increasingly greater share of their CCDF grant towards
activities that improve the quality of child care, including a new
share dedicated to improving the quality of infant and toddler care.
Low-income parents who receive CCDF assistance will benefit from more
stable financial assistance as they work toward economic stability and
their children will benefit from more continuous relationships with
their caregivers. Providers will benefit from improved provider payment
rates (by certificate or grant or contract), as well as payment
practices that support their financial stability. These include timely
payments so that providers can sustain their operations and quality and
paying providers for a reasonable number of absent days. The positive
impacts of this law and the proposed rule will impact children,
families, and providers now and into the future.
The cost of implementing changes made by the Act and this proposed
rule would vary depending on a State's specific situation. There are a
significant number of States and Territories that have already
implemented many of these policies. ACF conducted a regulatory impact
analysis to estimate costs and benefits of provisions in the final rule
taking into account current State practices. We evaluated major areas
of policy change, including monitoring and inspections (including a
hotline for parental complaints), background checks, training and
professional development, consumer education (including Web site and
consumer statement), quality spending, minimum 12-month eligibility and
related provisions, increased subsidies, and supply building.
Based on our analysis, annualized costs associated with these
provisions, averaged over a ten year window, are $256 million and the
annualized amount of transfers is approximately $840 million (both
estimated using a 3 percent discount rate), which amounts to a total
annualized impact of $1.10 billion. Of that amount, $1.09 billion is
directly attributable to the statute, with only an annualized cost of
$1.6 million (or less than 1% of the total estimated impact)
attributable to discretionary provisions of this proposed regulation.
While this analysis does not attempt to fully quantify the many
benefits of the reauthorization and this NPRM, we do conduct a
breakeven analysis to compare requirements clarified through this
regulation against a potential reduction in child fatalities and
injuries. Further detail and explanation can be found in the regulatory
impact analysis.
II. Background
A. Child Care and Development Fund
Nearly 13 million young children, under age 5, regularly rely on
child care to support their healthy development
[[Page 80470]]
and school success. (Census Bureau, Who's Minding the Kids? Child Care
Arrangements, Spring 2011). Additionally, more than 10 million children
participate in a range of school-age programs, before- and after-school
and during summers and school breaks. (Afterschool Alliance, American
After 3PM: Afterschool Programs in Demand, 2014) CCDF is the primary
Federal funding source devoted to providing low-income families with
access to child care and before- and after-school care and improving
the quality of care and, thus, an integral part of the nation's child
care and early education system. Each year, more than $5 billion in
Federal CCDF funding is allocated to State, Territory and Tribal
grantees. Combined with State funds and transfers from the Temporary
Assistance for Needy Families (TANF) program, States and Territories
spend nearly $9 billion annually to support child care services to low-
income families and to improve the quality of child care. More than $1
billion of this spending is directed towards supporting child care
quality improvement activities designed to create better learning
environments and more effective caregivers in child care centers and
family child care homes across the country.
CCDF was created nearly 20 years ago, upon the enactment of the
Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) in 1996 (Pub. L. 104-193), in which Congress replaced the
former Aid to Families with Dependent Children with the framework of
TANF block grants, and established a new structure of consolidated
funding for child care. This funding, provided under section 418 of the
Social Security Act (42 U.S.C. 618), combined with funding from the
Child Care and Development Block Grant (CCDBG) Act of 1990 (42 U.S.C
9858 et seq.), was designated by HHS as the Child Care and Development
Fund (CCDF).
The CCDBG Act of 2014 (Pub. L. 13-186) was the first
reauthorization of CCDBG since 1996. The reauthorized CCDBG affirms the
importance of CCDF as a two-generation program that supports parents'
financial success and children's healthy development. Since PRWORA, the
focus of CCDF has shifted from one largely dedicated to the goal of
enabling low-income parents to work to one that includes a focus on
promoting positive child development as we have learned a great deal
about the value of high quality child care for young children. While
low-income parents continue to need access to child care in order to
work and gain economic independence, policymakers and the public now
recognize that the quality of child care arrangements is also
critically important.
Fifteen years ago, HHS (in collaboration with other federal
agencies and private partners) funded the National Academies of
Sciences to evaluate and integrate the research on early childhood
development and the role of early experiences. (National Research
Council and Institute of Medicine, From Neurons to Neighborhoods: The
Science of Early Childhood Development, Board on Children, Youth, and
Families, Commission on Behavioral and Social Sciences and Education,
2000.) An overarching conclusion was that early experiences matter for
healthy child development. Nurturing and stimulating care given in the
early years of life build optimal brain architecture that allows
children to maximize their enormous potential for learning. On the
other hand, hardship in the early years of life can lead to later
problems. Interventions in the first years of life are capable of
helping to shift the odds for those at risk of poor outcomes toward
more positive outcomes. A multi-site study conducted by the Frank
Porter Graham Child Development Institute found that, ``. . . children
who experienced higher quality care are more likely to have more
advanced language, academic, and social skills,'' and, ``. . . children
who have traditionally been at risk of not doing well in school are
affected more by the quality of child care experiences than other
children.'' (E. Peisner-Feinberg, M. Burchinal, et al., The Children of
the Cost, Quality, and Outcomes Study Go to School: Executive Summary,
University of North Carolina at Chapel Hill, Frank Porter Graham Child
Development Center, 1999.)
Evidence continues to mount regarding the influence children's
earliest experiences have on their later success and the role child
care can play in shaping those experiences. The most recent findings
from the National Institute of Child Health and Human Development
(NICHD) showed that the quality of child care children received in
their preschool years had small but detectable associations with their
academic success and behavior into adolescence. (NICHD, Study of Early
Child Care and Youth Development, 2010) Recent follow-up studies to the
well-known Abecedarian Project, which began in 1972 and has followed
participants from early childhood through young adulthood, found that
adults who participated in a high quality early childhood education
program are still benefiting from their early experiences. Abecedarian
Project participants had significantly more years of education than
their control group peers, were four times more likely to earn college
degrees, and had lower risk of cardiovascular and metabolic diseases in
their mid-30s. (Campbell, Pungello, Burchinal, et al., Adult Outcomes
as a Function of an Early Childhood Educational Program: An Abecedarian
Project Follow-Up, Frank Porter Graham Child Development Institute,
Developmental Psychology, 2012 and Campbell, Conti, Heckman et al,
Early Childhood Investments Substantially Boost Adult Health, Science
28 March 2014, Vol. 343.)
Research also confirms that consistent time spent in afterschool
activities during the elementary school years is linked to narrowing
the gap in math achievement, greater gains in academic and behavioral
outcomes, and reduced school absences. (Auger, Pierce, and Vandell,
Participation in Out-of-School Settings and Student Academic and
Behavioral Outcomes, presented at the Society for Research in Child
Development Biennial Meeting, 2013.) An analysis of over 70 after-
school program evaluations found that evidence-based programs designed
to promote personal and social skills were successful in improving
children's behavior and school performance. (Durlak, Weissberg, and
Pachan, The Impact of Afterschool Programs that Seek to Promote
Personal and Social Skills in Children and Adolescents, American
Journal of Community Psychology, 2010.) After-school programs also
promote youth safety and family stability by providing supervised
settings during hours when children are not in school. Parents with
school-aged children in unsupervised arrangements face greater stress
that can impact the family's well-being and successful participation in
the workforce. (Barnett and Gareis, Parental After-School Stress and
Psychological Well-Being, Journal of Marriage and the Family, 2006.)
CCDF often operates in conjunction with other programs including
Head Start, Early Head Start, state pre-kindergarten, and before-and
after-school programs. States and Territories have flexibility to use
CCDF to provide children enrolled in these programs full-day, full-year
care, which is essential to supporting low-income working parents. CCDF
also funds quality improvements for settings beyond those that serve
children receiving subsidies. CCDF has helped lay the groundwork for
development of State early learning systems. Lead Agencies have used
CCDF funds to make investments in professional development systems to
[[Page 80471]]
ensure a well-qualified and effective early care and education
workforce. Lead Agencies have provided scholarships for child care
teachers and worked closely with higher education, especially community
colleges, to increase the number of teachers with training or a degree
in early childhood or youth development. Lead Agencies have used CCDF
funds to build quality rating and improvement systems (QRIS) to provide
consumer education information to parents, help providers raise
quality, and create a more systemic approach to child care quality
improvement efforts and accountability. These investments have likely
also generated benefits for children enrolled in unsubsidized child
care programs.
Child care is a core early learning and care program and plays an
important role within a broad spectrum of early childhood programs
supporting young children. The Administration has consistently sought
to support State and Territory efforts to improve the coordination and
alignment of early childhood programs through multiple efforts,
including the Race to the Top-Early Learning Challenge and the Early
Head Start-Child Care Partnerships. Most recently, ACF published Caring
for our Children Basics, a set of recommendations intended to create a
common framework to align basic health and safety efforts across all
early childhood settings. This proposed rule builds on the alignment
and coordination work that has been advanced by the Administration. For
example, Lead Agencies would be required to collaborate with multiple
entities, including State Advisory Councils on Early Childhood
Education and Care, authorized by the Head Start Act, or similar
coordinating bodies. In addition, minimum 12-month eligibility periods
will make it easier to align child care assistance with eligibility
periods for other programs, such as Early Head Start, Head Start, and
state prekindergarten. Policies that stabilize access to child care
assistance for families and bring financial stability to child care
providers will play an important role in supporting the success of
Early Head Start-Child Care Partnerships.
According to a recent report by the President's Council of Economic
Advisors, investments in early childhood development will reap economic
benefits now and in the future. Immediate benefits include increased
parental earnings and employment; future benefits come when children
who experience high quality early learning opportunities are prepared
for success in school and go on to earn higher wages as adults.
(Council of Economic Advisors, Executive Office of the President of the
United States, The Economics of Early Childhood Investments, 2014.)
Decades of research show that experiences babies and toddlers have in
their earliest years shape the architecture of the brain and have long-
term impacts on human development. At the same time, increasing the
employability and stability of parents reduces the impact of poverty on
children and sustains our nation's workforce and economy. Studies have
shown that access to reliable child care contributes to increased
employment and earnings for parents. (National Research Council and
Institute of Medicine, From Neurons to Neighborhoods: The Science of
Early Childhood Development, Board on Children, Youth, and Families,
Commission on Behavioral and Social Sciences and Education, 2000 and
Council of Economic Advisors, The Economics of Early Childhood
Investments.) In short, high quality child care is a linchpin to
creation of an educational system that successfully supports the
country's workforce development, economic security, and global
competitiveness. Successful implementation of the CCDBG Act of 2014
will ensure that child care is not only safe, but also supports
children's healthy development and their future academic achievement
and success.
Development of Regulation. After enactment of the law, the Office
of Child Care (OCC) and the Office of the Deputy Assistant Secretary
for Early Childhood Development in ACF conducted outreach to engage
with a variety of stakeholders to better understand the implications of
its provisions. OCC created a CCDF reauthorization page on its Web site
to provide public information and an email address to receive
questions. OCC received approximately 650 questions and comments
through this email address, webinars, inquiries to regional offices,
and meetings with State, Territory and Tribal Administrators. OCC
leadership and staff participated in more than 21 listening sessions
with approximately 675 people representing diverse national, state, and
local stakeholders regarding the law, held webinars, and gave
presentations at national conferences. Participants included state
human services agencies, child care caregivers and providers, parents
with children in child care, child care resource and referral agencies,
national and State advocacy groups, national stakeholders including
faith-based communities, after-school and school-age caregivers and
providers, child care researchers, State and local early childhood
organizations, provider associations, labor unions, and Head Start
grantees. In addition, OCC held five meetings with State and Territory
CCDF administrators and a series of consultations with Tribal leaders
to describe the law and to gather input from Federal grantees with
responsibility for operating the CCDF program. This process informed
and was invaluable to ACF's development of this proposed rule.
ACF had previously issued an NPRM for CCDF in May 2013, prior to
passage of the CCDBG Act of 2014 (78 FR 29442, May 20, 2013). While
that NPRM has since been withdrawn (80 FR 25260, May 4, 2015), public
comments received by ACF in 2013 have informed the development of
content for this proposed rule. Where relevant, we refer to comments
received in response to the 2013 CCDF NPRM in the preamble for this
proposed rule.
Use of terms. Terminology used to refer to child care settings and
the individuals who provide care for children vary throughout the early
childhood and afterschool fields. In this proposed rule, the terms
caregiver, director, and teacher refer to individuals. The term
provider refers to the entity providing child care services. This may
be a child care program, such as a child care center, or an individual
in the case of family child care or in-home care. Complete descriptions
of these terms are included in Subpart A of this proposed rule.
B. Discussion of Changes Made in This Proposed Rule
The changes included in this proposed rule provide detail on major
provisions of the CCDBG Act of 2014 to: (1) Protect the health and
safety of children in child care; (2) help parents make informed
consumer choices and access information to support child development;
(3) provide equal access to stable, high quality child care for low-
income children; and (4) enhance the quality of child care and the
early childhood workforce.
First, Congress established minimum health and safety standards
including mandatory criminal background checks, at least annual
monitoring of providers, and health and safety training. Children in
CCDF-funded child care will now be cared for by caregivers who have had
basic training in health and safety practices and child development.
Parents will know that individuals who care for their children do not
have prior records of behavior that endanger their children. Health and
safety is a
[[Page 80472]]
necessary foundation for quality child care that supports early
learning and development. Research shows that licensing and regulatory
requirements for child care affect the quality of care and child
development. (Adams, G., Tout, K., Zaslow, M., Early care and education
for children in low-income families: Patterns of use, quality, and
potential policy implications, Urban Institute, 2007).
Second, Congress increased consumer education requirements for
States and Territories and made clear that parents need transparent
information about health and safety practices, monitoring results, and
the quality of child care providers. Parents will now be able to easily
view on a Web site the standards a child care provider meets and their
record of compliance. Most States and Territories administering the
CCDF program have already begun building QRIS, which make strategic
investments to provide pathways for providers to reach higher quality
standards. Our proposed rule builds on the reauthorization and Lead
Agency efforts to inform parents about the quality of providers by
proposing that the consumer education Web site include provider-
specific quality information, if available, such as from a QRIS, and
that Lead Agencies provide parents receiving CCDF with information
about the quality of their chosen provider.
Third, parents need access to stable, high quality child care for
low-income children and the law affirms that they should have equal
access to settings that are comparable to those accessible to non-CCDF
families. Through this proposed rule, we detail the law's continuity of
care provisions, such as extending eligibility for child care for a
minimum of 12 months regardless of a parent's temporary change in
employment or participation in education or training. Continuity of
services contributes to improved job stability and is important to a
family's financial health. Family economic stability is undermined by
policies that result in unnecessary disruptions to receipt of a subsidy
due to administrative barriers or other processes that make it
difficult for parents to maintain their eligibility and thus fully
benefit from the support it offers. Continuity also is of vital
importance to the healthy development of young children, particularly
the most vulnerable. Disruptions in services can stunt or delay socio-
emotional and cognitive development. Safe, stable environments allow
young children the opportunity to develop the relationships and trust
necessary to comfortably explore and learn from their surroundings.
Research has demonstrated a relationship between child care stability
and social competence, behavior outcomes, cognitive outcomes, language
development, school adjustment, and overall child well-being. (Adams,
Rohacek, and Danzinger, Child Care Instability, The Urban Institute,
2010.) This area includes a number of proposed changes including
requirements for limiting administrative burdens on parents and
enabling families to retain their child care assistance as their income
increases in order to move towards economic success. We also address
the law's equal access provisions by requiring that base payment rates
be established at least at a level that supports implementation of the
health, safety, and quality requirements in the NPRM and ensure access
to care that is of comparable quality as care available to families
with incomes above 85 percent of State median income, ensuring that
copayments are affordable for families, and establishing provider
payment practices that support access to high quality child care.
Finally, this proposed rule addresses improvements in the new law,
which would enhance the quality of child care and the early childhood
workforce. States and Territories would need to report on their
investments in quality activities, which will now be a greater share of
CCDF spending. They will also expand quality investments in infant-
toddler care. High quality care for children under age 3 is the most
expensive and hardest care to find during the most formative years. The
law requires States and Territories to have training and professional
development standards in effect for CCDF caregivers, providers, and we
propose building on this requirement by outlining the components of a
professional development framework. Research shows the fundamental
importance of the caregiver in a high quality early learning setting
and this proposed rule would help ensure that early childhood
professionals have access to the knowledge and skills they need to best
support young children and their development.
Through our proposed changes, we have strengthened program
integrity by proposing changes that address Lead Agencies' policies for
internal controls, fiscal management, and processes for identifying
fraud and improper payments. We have also clarified key eligibility and
payment policies as they relate to improper payments.
In developing this proposed rule, we were mindful of CCDF's purpose
to allow Lead Agencies maximum flexibility in developing child care
policies and programs. In some areas, we have added flexibility in
order to allow Lead Agencies to tailor policies that better meet the
needs of the low-income families they serve. For example, we are
providing more flexibility for Lead Agencies to determine when it is
appropriate to waive a family's co-pay requirement. In many areas, we
have proposed new requirements as dictated by the updated law or
because they further advance the revised purposes of the CCDF program.
Changes in the law, and in this proposed rule, would impact the
State, Territorial, and Tribal agencies that administer the CCDF
program. The law requires changes across many areas: Child care
licensing, subsidy, quality, workforce, and program integrity and
requires coordination across State agencies. Achieving the full visions
of reauthorization will be challenging, but this effort is necessary to
improve child care in this country for the benefit of our children. ACF
has and will continue to consult with State, Territorial, and Tribal
agencies and provide technical assistance throughout implementation.
In this proposed rule, we have generally maintained the structure
and organization of the current CCDF regulations. The preamble in this
proposed rule discusses the changes to current regulations and contains
certain clarifications based on ACF's experience in implementing the
prior final rules. Where language of existing regulations remains
unchanged, the preamble explanation and interpretation of that language
published with all prior final rules also is retained, unless
specifically modified in the preamble to this proposed rule. (See 57 FR
34352, Aug. 4, 1992; 63 FR 39936, Jul. 24, 1998; 72 FR 27972, May 18,
2007; 72 FR 50889, Sep. 5, 2007).
C. Effective Date
ACF expects provisions included in the Final Rule to become
effective 60 days from the date of publication of the Final Rule,
except for provisions with a later effective date as defined in the law
(discussed further below). Compliance with provisions in the Final Rule
would be determined through ACF review and approval of CCDF Plans,
including State Plan amendments, as well as through the use of Federal
monitoring, including on-site monitoring visits as necessary. ACF notes
that Lead Agencies must comply with the provisions of the Child Care
and Development Block Grant (CCDBG) Act of 1990, as revised by the
CCDBG Act of 2014. Compliance with key statutorily required
implementation
[[Page 80473]]
dates outlined in Program Instruction CCDF-ACF-PI-2015-02 (https://www.acf.hhs.gov/programs/occ/resource/pi-2015-02), dated January 9,
2015, remain in effect. In some cases, the CCDBG Act of 2014 specifies
a particular date when a provision is effective. Where the law does not
specify a date, the new requirements became effective upon the date of
enactment and States and Territories have until September 30, 2016 to
implement the new statutory requirement(s). ACF has previously stated
that if a State or Territory cannot certify compliance with a specific
requirement in the FY 2016-2018 CCDF Plan, the Lead Agency must provide
a State/Territory-specific implementation plan for achieving compliance
with such provision(s) no later than September 30, 2016.
We recognize that, at the time of publication of this NPRM, States
and Territories are preparing their FY 2016-2018 CCDF Plans, due March
1, 2016. States and Territories have been asked to comply with the law
based on their reasonable interpretation of the requirements in the
revised CCDBG statute. Once a final rule is issued, any State or
Territory that does not fully meet the requirements of the regulations
would need to revise its policies and procedures to come into
compliance, and file appropriate Plan amendments related to those
changes.
We recognize that some of the proposed changes in this NPRM may
require action on the part of a State's legislature or require State-
level rulemaking in order to implement. ACF welcomes public comment on
specific provisions included in this proposed rule that may warrant a
longer phase-in period and will take these comments into consideration
when developing the Final Rule.
ACF has extended CCDF Tribal Plans for one year. Tribal Lead
Agencies will submit new 3-year Plans for FY 2017-2019, with an
effective date of October 1, 2016. ACF expects that all provisions
related to Tribes included in the Final Rule would become effective 60
days from the date of publication of the Final Rule. Tribal Lead
Agencies may also want to consider ACF's interpretation of the CCDBG
Act included in this NPRM as they consider policy changes and prepare
CCDF plans.
III. Statutory Authority
This proposed regulation is being issued under the authority
granted to the Secretary of Health and Human Services by the CCDBG Act
(42 U.S.C. 9858 et seq.) and Section 418 of the Social Security Act (42
U.S.C. 618).
IV. Provisions of Proposed Rule
Subpart A--Goals, Purposes and Definitions
Goals and Purposes (Section 98.1)
The CCDBG Act of 2014 amended and expanded the law's previous
``goals'' and renamed them ``purposes''. We are proposing changes to
regulatory language at 45 CFR 98.1 to describe the revised purposes of
the CCDF program, according to the updated law.
The first part of the regulations at Sec. 98.1(a) mirrors the
statutory language describing the revised purposes of CCDF. Language
revised by the new law is indicated in italics in this paragraph. The
purposes of CCDF are now: (1) To allow each State maximum flexibility
in developing child care programs and policies that best suit the needs
of children and parents within that State; (2) to promote parental
choice to empower working parents to make their own decisions regarding
the child care services that best suits their family's needs; (3) to
encourage States to provide consumer education information to help
parents make informed choices about child care services and to promote
involvement by parents and family members in the development of their
children in child care settings; (4) to assist States in delivering
high quality, coordinated early childhood care and education services
to maximize parents' options and support parents trying to achieve
independence from public assistance; (5) to assist States in improving
the overall quality of child care services and programs by implementing
the health, safety, licensing, training, and oversight standards
established in this subchapter and in State law (including State
regulations); (6) to improve child care and development of
participating children; and (7) to increase the number and percentage
of low-income children in high quality child care settings.
The second part at Sec. 98.1(b) further defines the purposes of
this proposed rule. We no longer refer to this section as the purposes
of CCDF, as in the current regulations, so as not to create confusion
with the purposes now established in law. We have retained much of the
previous language in this paragraph but have made amendments and
additions to reflect the priorities in this proposed rule of improving
the health, safety, and quality of child care and supporting pathways
to family economic stability. We have removed language that was
included in the law's new purposes so as to avoid duplication. The new
language shown in italics: (1) Maximize parental choice of safe,
healthy and nurturing child care settings through the use of
certificates and through grants and contracts, and by providing parents
with information about child care programs; (2) Include in their
programs a broad range of child care providers, including center-based
care, family child care, in-home care, care provided by relatives and
sectarian child care providers; (3) Improve the quality and supply of
child care and before- and after-school care services that meet
applicable requirements and promotes child development and learning and
family economic stability; (4) Coordinate planning and delivery of
services at all levels, including Federal, State, Tribal, and local;
(5) Design flexible programs that provide for the changing needs of
recipient families, and engages families in their children's
development and learning; (6) Administer the CCDF responsibly to ensure
that statutory requirements are met and that adequate information
regarding the use of public funds is provided; (7) Design programs that
provide uninterrupted service to families and providers, to the extent
statutorily possible, to support parental education, training, and
employment and continuity of care that minimizes disruptions to
children's learning and development; (8) Provide a progression of
training and professional development opportunities for caregivers,
teachers, and directors to increase their effectiveness in supporting
children's development and learning and strengthen the child care
workforce.
Definitions (Section 98.2)
We are proposing technical changes to definitions at Sec. 98.2 and
the addition of six new definitions. In this paragraph, italics
indicate defined terms. First, we are proposing technical changes by
deleting the definition for group home child care provider and by
making conforming changes to the definitions for categories of care,
eligible child care provider, and family child care provider. The
current regulation defines group home child care provider as meaning
two or more individuals who provide child care services for fewer than
24 hours per day per child, in a private residence other than the
child's residence, unless care in excess of 24 hours is due to the
nature of the parent(s)' work. Some States, Territories, and Tribes do
not consider group homes to be a separate category of care when
administering their CCDF programs or related efforts, such as child
care licensing. According to the National Association for Regulatory
Administration, at least 13 States do not
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license group homes as a separate category. Some States and Territories
use alternative terminology (e.g., large family child care homes),
while others treat all family child care homes similarly regardless of
size. Due to this variation, we propose to delete the separate
definition for group home child care provider, which requires a number
of technical changes to the definitions section. We propose to revise
the definition of categories of care at Sec. 98.2 to delete group home
child care. Under the proposed rule, categories of care would be
defined to include center-based child care, family child care, and in-
home care (i.e., an individual caring for a child in the child's home).
Similarly, we propose to change the definition for eligible child care
provider at Sec. 98.2 to delete a group home child care provider. The
revised definition defines an eligible child care provider as a center-
based child care provider, a family child care provider, an in-home
child care provider, or other provider of child care services for
compensation. Group home child care would be considered a family child
care provider for these purposes. Accordingly, we propose to amend the
definition for family child care provider at Sec. 98.2 to include
larger family homes or group homes. The existing definition of family
child care provider is limited to one individual who provides services
as the sole caregiver. The proposed definition would revise family
child care provider to include one or more individuals who provide
child care services. The remainder of the definition stays the same,
specifying that services are for fewer than 24 hours per day per child,
in a private residence other than the child's residence, unless care in
excess of 24 hours is due to the nature of the parent(s)' work.
Lead Agencies may continue to provide CCDF services for children in
large family child care homes or group homes, and this is allowable and
recognized by the revised definition of family child care provider,
which would now include care in private residences provided by more
than one individual. This proposed change would eliminate group homes
as a separately-defined category of care for purposes of administering
the CCDF--thereby allowing States, Territories, and Tribes to more
easily align their practices with Federal requirements. Specifically,
Lead Agencies would no longer be required to report separately on group
homes in their CCDF Plans (for example, regarding health and safety
requirements), or to consider group homes as a separate category for
purposes of meeting parental choice requirements at Sec. 98.30 and
equal access requirements at Sec. 98.45(b)(1). Rather, group homes
would now be considered family child care homes for these purposes.
These changes were proposed in the 2013 CCDF NPRM and received
mostly supportive comments. Several commenters did not support the
deletion of group home child care. One commenter said legislation would
be required to remove group home day care from their State statute and
would result in those providers being classified as child care centers
leading to additional costs because of higher payment rates. Another
commenter said elimination of group home care would impact the market
rate for this category of care since the State surveys group home and
family child care providers separately. We are clarifying that States
and Territories would not be required to eliminate group homes from
their categories of care or change the way they categorize providers
for the purposes of analyzing or setting provider payment rates.
We are also proposing two additional changes to current definitions
as called for by new statutory language. We are amending the definition
of eligible child so that, in addition to being at or below 85 percent
of the State median income for a family of the same size, a member of
the family must certify that the ``family assets do not exceed
$1,000,000'' as specified in Section 658P(4)(B) of the Act. We are
amending the definition of Lead Agency so that it may refer to a State,
Territorial or Tribal entity, or a joint interagency office, designated
or established under Sec. Sec. 98.10 and 98.16(a) as indicated at
Section 658P(9) of the Act.
Finally, we are proposing to add five new terms to the definitions
due to statutory changes and to include terms commonly used in the
child care profession. We propose defining child with a disability as:
A child with a disability as defined in section 602 of the Individuals
with Disabilities Education Act (20 U.S.C. 1401); a child who is
eligible for early intervention services under part C of the
Individuals with Disabilities Education Act (20 U.S.C. 1431 et seq.); a
child who is less than 13 years of age and who is eligible for services
under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); or
a child with a disability, as defined by the State. This definition is
included in the Act. We changed the language from ``and'' to ``or'' to
clarify that a child only has to meet one of the four options in order
to be considered a child with a disability. We are defining English
learner as an individual who is limited English proficient, as defined
in section 9101 of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 7801) or section 637 of the Head Start Act (42 U.S.C. 9832)
as defined verbatim in the Act at Section 658P(5). We are defining a
child experiencing homelessness as defined in section 725 of Subtitle
VII-B of the McKinney-Vento Act (42 U.S.C. 11434a). While a definition
of child experiencing homelessness was not included in the CCDBG Act,
we understand the intent of Congress was to apply the McKinney-Vento
definition here based on a letter sent to HHS Secretary Sylvia Burwell
in February 2015 from Senate and House members (Senator Lamar
Alexander, Senator Patty Murray, Senator Richard Burr, Senator Barbara
Mikulski, Representative John Kline, Representative Robert ``Bobby''
Scott, Representative Todd Rokita, and Representative Marcia Fudge).
We also propose two new terms that reflect professional recognition
for early childhood and school-age care teachers and the terms used in
the field. We are defining teacher as a lead teacher, teacher, teacher
assistant or teacher aide who is employed by a child care provider for
compensation on a regular basis and whose responsibilities and
activities are to organize, guide and implement activities in a group
or individual basis, or to assist a teacher or lead teacher in such
activities, to further the cognitive, social, emotional, and physical
development of children from birth to kindergarten entry and/or school-
age children and may be a family child care provider. We recognize that
the responsibilities and qualifications for lead teachers, teachers,
and teacher assistants are different as set by child care licensing,
state early childhood professional development systems, and state
teacher licensure policies and have proposed these definitions for
simplification in relation to requirements in the law and this proposed
regulation. We strongly encourage States and Territories to recognize
differentiated roles and qualifications in their requirements and
systems. We are defining director as a person who has primary
responsibility for the daily operations management for a child care
provider, which may be a family child care home, and which may serve
children from birth to kindergarten entry and/or school-age children.
The definition of caregiver in the Act and current regulations remains
unchanged.
The proposed definitions for these terms are based on a white paper
[[Page 80475]]
commissioned by ACF for the proposed revisions to the U.S. Department
of Labor's Standard Occupational Classification. (Proposed Revisions to
the Definitions for the Early Childhood Workforce in the Standard
Occupational Classification. White Paper Commissioned by the
Administration for Children and Families, U.S. Department of Health and
Human Services, prepared by the Workgroup on the Early Childhood
Workforce and Professional Development under contract through the Child
Care and Early Education Policy and Research Analysis, 2005-2018. June
18, 2014, www.acf.hhs.gov/sites/default/files/occ/soc_acf_submittal.pdf).
Subpart B--General Application Procedures
Lead Agencies have considerable latitude in administering and
implementing their child care programs. Subpart B of the regulations
describes some of the basic responsibilities of a Lead Agency as
defined in the statute. A Lead Agency serves as the single point of
contact for all child care issues, determines the basic use of CCDF
funds and priorities for spending CCDF funds, and promulgates the rules
governing overall administration and oversight.
Lead Agency Responsibilities (Section 98.10)
We are amending language at Sec. 98.10 in accordance with new
statutory language at Section 658D(a) that a Lead Agency may be a
collaborative agency or a joint interagency office, as designated or
established by the Governor of the State (or by the appropriate Tribal
leader or applicant). Paragraphs (a) through (e) remain unchanged. We
propose to add paragraph (f) to require that, at the option of an
Indian Tribe or Tribal organization in the State, a Lead Agency should
consult, collaborate and coordinate in the development of the State
Plan with Tribes or Tribal organizations in the State in a timely
manner pursuant to Sec. 98.14. Because States also provide CCDF
assistance to Indian children, States benefit by coordination with
Tribes and we encourage States to be proactive in reaching out to the
appropriate Tribal officials for collaboration. We've added ``consult''
to recognize the need for formal, structured consultation with Tribal
governments, including Tribal leadership, and the fact that many States
and Tribes have consultation policies and procedures in place.
Administration Under Contracts and Agreements (Section 98.11)
Written Agreements. Section 98.11 currently requires Lead Agencies
that administer or implement the CCDF program indirectly through other
local agencies or organizations to have written agreements with such
agencies that specify mutual roles and responsibilities. However, it
does not address the content of such agreements. We propose amending
regulatory language at Sec. 98.11(a)(3) to specify that, while the
content of the written agreements may vary based on the role the agency
is asked to assume or the type of project undertaken, agreements must,
at a minimum, include tasks to be performed, a schedule for completing
tasks, a budget that itemizes categorical expenditures consistent with
proposed CCDF requirements at Sec. 98.65(h), and indicators or
measures to assess performance. Many Lead Agencies administer the CCDF
program through the use of sub-recipients that have taken on
significant programmatic responsibilities, including providing services
on behalf of the Lead Agency. For example, some Lead Agencies operate
primarily through a county-based system, while others devolve decision-
making and administration to local workforce boards, school readiness
coalitions or community-based organizations such as child care resource
and referral agencies. Through working with grantees to improve program
integrity, ACF has learned that the quality and specificity of written
agreements vary widely, which hampers accountability and efficient
administration of the program. These proposed changes represent
minimum, common-sense standards for the basic elements of those
agreements, while allowing latitude in determining specific content.
The Lead Agency is ultimately responsible for ensuring that all CCDF-
funded activities meet the requirements and standards of the program,
and thus has an important role to play to ensure written agreements
with sub-recipients appropriately support program integrity and
financial accountability.
We included this proposed provision in our 2013 NPRM and received a
large number of comments from labor unions regarding this change,
specifically when a sub-recipient of the Lead Agency establishes
affiliation agreements with family child care networks to serve CCDF
children. Unions commented that these requirements should apply in any
and all instances where CCDF funds are sub-granted or passed through to
an entity, including arrangements between intermediary entities and
individual child care providers. Commenters believed this additional
requirement would increase transparency and promote greater
accountability.
We are clarifying that, as proposed, this provision applies only to
written agreements between Lead Agencies and first-level sub-recipients
(and not to agreements between first-level sub-recipients and their
sub-recipients). The regulations state that the agreement ``must
specify the mutual roles and responsibilities of the Lead Agency and
the other agencies''--indicating that the Lead Agency is a party to the
agreement. This language is intended to be broad as sub-entities may
fulfill any number of different roles or projects, including
implementing quality improvement activities, determining eligibility
for families, or providing consumer education on behalf of the Lead
Agency. We strongly encourage all agreements between sub-recipients to
have similar provisions, but prefer to leave this as an area of
flexibility to give State and local agencies discretion over such
details, given the wide-range of conditions and circumstances involved.
Also, we note that regulations at Sec. 98.67(c)(2) require Lead
Agencies to have in place fiscal control and accounting procedures that
permit the tracing of funds to a level of expenditure adequate to
establish that such funds have not been used in violation of the CCDF
rules. Therefore, we would expect that when Lead Agencies devolve
program administration to first, second, and third-level entities they
necessarily must be concerned with the integrity and transparency of
all written agreements involving CCDF funds.
We appreciate commenters on the 2013 NPRM bringing this issue to
our attention. We are cognizant that some States and Territories lack
strong requirements to ensure there is transparency in cases where a
sub-recipient contracts with a network of family child care providers
to serve children receiving CCDF. This proposed rule places a strong
emphasis on implementation of provider-friendly payment practices,
including proposing that there be a payment agreement or authorization
of services for all payments received by child care providers. When a
local entity is contracting with a family child care network for
services, we agree that there should be a clear understanding from the
outset regarding payment rates for providers, any fees the provider may
be subject to, and payment policies.
Finally, in Sec. 98.11(b)(5) we propose to add a reference to the
HHS regulations requiring that Lead Agencies oversee the
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expenditure of funds by sub-grantees and contractors, in accordance
with 75 CFR parts 351 to 353. These regulations implement the Office of
Management and Budget's Uniform Administrative Requirements for Federal
awards (see ACF, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements, Program Instruction: CCDF-ACF-PI-2015-01,
January 2015.)
Plan Process (Section 98.14)
Coordination. Currently, Sec. 98.14(a)(1) requires Lead Agencies
to coordinate the provision of program services with other Federal,
State, and local early care and development programs, including the
provision of such programs for the benefit of Indian children. Section
658E(c)(2)(O) of the Act added language to existing requirements for
coordination of programs that benefit Indian children requiring Lead
Agencies to also coordinate the provision of programs that serve
infants and toddlers with disabilities, children experiencing
homelessness and children in foster care. We include all children with
disabilities, not just infants and toddlers, in the regulatory
language, given the critical importance of serving that population of
children.
Lead Agencies also are required to consult and coordinate services
with agencies responsible for public health, public education,
employment services/workforce development, and TANF. The CCDBG Act of
2014 added a requirement for the Lead Agency to develop the Plan in
coordination with the State Advisory Council on Early Childhood
Education and Care authorized by the Head Start Act (42 U.S.C. 9831 et
seq.) at Section 658E(c)(2)(R).
We propose to amend Sec. 98.14(a)(1) to add the State Advisory
Council on Early Childhood Education and Care or similar coordinating
body, as well as additional new entities with which Lead Agencies would
be required to coordinate the provision of child care services. We have
added parenthetical language to paragraph (C) public education to
specify that coordination with public education should also include
agencies responsible for pre-kindergarten programs, if applicable, and
educational services provided under Parts B and C of the Individuals
with Disabilities Education Act (IDEA) (20 U.S.C. 1400). Other proposed
new coordinating entities include agencies responsible for child care
licensing; Head Start collaboration; Statewide after-school network or
other coordinating entity for out-of-school time care; emergency
management and response; the Child and Adult Care Food Program (CACFP);
Medicaid; mental health services agencies; services for children
experiencing homelessness, including State Coordinators for the
Education of Children and Youth Experiencing Homelessness; and, to the
extent practicable, local liaisons designated by local educational
agencies (LEAs) in the State as required by the McKinney-Vento Act (42
U.S.C. 11432) and the Department of Housing and Urban Development's
Continuum of Care and Emergency Solutions Grantees.
Over time, the CCDF program has become an essential support in
local communities to provide access to early care and education in
before and after-school settings and to improve the quality of care.
Many Lead Agencies already work collaboratively to develop a
coordinated system of planning that includes a governance structure
composed of representatives from the public and private sector,
parents, schools, community-based organizations, child care, Head Start
and Early Head Start, child welfare, family support, public health, and
disability services. Local coordinating councils or advisory boards
also often provide input and direction on CCDF-funded programs.
This type of coordination is frequently facilitated through
entities such as State Advisory Councils on Early Childhood Education
and Care. In both Head Start and CCDF, collaboration efforts extend to
linking with other key services for young children and their families,
such as medical, dental and mental health care; nutrition; services to
children with disabilities; child support; refugee resettlement; adult
education; family literacy; and employment training. These
comprehensive services are crucial in helping families progress towards
economic stability and in helping parents provide a better future for
their young children.
Implementation of the requirements of the CCDBG Act of 2014 will
require leadership and coordination between Lead Agencies and other
child- and family-serving agencies, services, and supports at the State
and local levels, including those identified above. For example, in
many States, child care licensing is administered in a different agency
than CCDF. In those States, implementation of the inspection and
monitoring requirements included in the CCDBG Act necessitates
coordination across agencies.
We proposed adding most of the above entities in the 2013 NPRM and
received a large number of comments, nearly all supportive. Many
commenters suggested including additional coordinating partners, such
as child care resource and referral agencies, provider associations,
maternal and child health home visiting programs, faith-based
organizations, mental health services agencies, and Affordable Care Act
health care outreach coordinators. With four exceptions, discussed
below, we are declining to propose additional agencies as coordinating
partners. We wanted to preserve State, Territory, and Tribal
flexibility and keep requirements at this section manageable for Lead
Agencies. This is not to devalue the importance of other coordinating
partners suggested by commenters. Lead Agencies have the flexibility,
and are encouraged, to engage a wide variety of cross-sector partners
when developing the CCDF Plan. Some of the coordinating partners
suggested by commenters, such as provider associations and faith-based
organizations are already assumed to be included in existing
regulations at Sec. 98.14(a)(1), which requires coordination with
child care and early childhood development programs.
In this proposed rule, we have included CACFP, which was not
included in our list of proposed entities for coordination in the 2013
NPRM. CACFP is a Federal program that provides assistance to child care
providers, including centers and family child care homes, for the
provision of nutritious meals and snacks served to participants. A
large number of public and private nonprofit child care centers, Head
Start programs, before- and after-school programs, and other providers
that are licensed or approved to provide child care services, including
license-exempt CCDF providers, participate in CACFP. More than 3.3
million children receive nutritious meals and snacks each day as part
of the child care they receive, and many children supported by CCDF
subsidies attend child care programs that also participate in CACFP.
We are proposing to add CACFP because of its nutritional
importance. In addition, we propose to include CACFP because some of
the training and inspection requirements for child care providers
participating in CACFP are similar to those that are now required for
providers receiving CCDF funds. CACFP requires periodic unannounced
site visits to prevent and identify management deficiencies, fraud, and
abuse under the program, as well as to improve program operations. In
order to maximize available resources, we are proposing to require
coordination between the State/Territory CCDF Lead Agency and CACFP
agency, if they are
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different. In the FY 2014-2015 CCDF Plans, 43 States and Territories
indicated that they coordinate with CACFP agencies in administration of
the child care program. For example, one State described sharing lists
of child care providers receiving CCDF funds with personnel who have
oversight of CACFP to maximize access to CACFP services. Another State
described coordinating with CACFP in monitoring child care services and
providing professional development to child care caregivers on
nutrition and health.
The second entity included above that was not included in the 2013
NPRM is the State agency responsible for services for children
experiencing homelessness. The CCDBG Act of 2014 added a number of
provisions related to improving access to high quality child care for
children experiencing homelessness and we believe that implementing
these provisions will necessitate coordination with State agencies
already overseeing services for this population.
Third, we also propose to require coordination with State mental
health services agencies, which were not proposed for coordination in
the 2013 NPRM. We are choosing to propose these partners because of the
desire to encourage collaboration that will make comprehensive services
available for children who require mental health services.
We also propose to include the State/Territory Medicaid agency,
which was not included in our list of proposed entities for
coordination in the 2013 NPRM. The reauthorized CCDBG requires Lead
Agencies to provide information on resources and services for parents
to access developmental screenings for their children, including
through the coordinated use of the Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) program, which would require
coordination with the Medicaid agency.
Finally, existing regulation at Sec. 98.14(a)(1)(B) requires Lead
Agencies to coordinate the provision of services with employment
services/workforce development. We propose to retain this requirement
without change since this remains a critical area for coordination.
Last year the President signed the Workforce Innovation and Opportunity
Act (WIOA) into law, replacing the Workforce Investment Act of 1998.
WIOA authorizes and provides a strategic framework for Federal
investments in: (1) Employment and training services for adults,
dislocated workers, and youth and Wagner-Peyser employment services
administered by the Department of Labor (DOL) through formula grants to
States; (2) adult education and literacy programs and Vocational
Rehabilitation State grant programs that assist individuals with
disabilities in obtaining employment administered by the Department of
Education (ED); and (3) other programs administered by DOL, ED, and
HHS, including programs for specific vulnerable populations such as the
Job Corps, YouthBuild, Indian and Native Americans, and Migrant and
Seasonal Farmworker programs. Because child care is an important
support for families engaged in workforce training and development, we
strongly encourage CCDF Lead Agencies to collaborate with WIOA
implementation efforts as part of the requirement at Sec.
98.14(a)(1)(B) to coordinate with employment services/workforce
development.
Combined Funding. In paragraph (3) of Sec. 98.14(a) we add the
statutory requirement that any Lead Agency that combines funding for
CCDF services with any other early childhood programs shall provide a
description in the CCDF Plan of how the Lead Agency will combine and
use the funding according to Section 658E(c)(2)(O). Lead Agencies have
the option of combining funding for CCDF child care services 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, children experiencing homelessness, and children in
foster care. Combining funds could include blending, layering, or
pooling multiple funding streams in an effort to expand and/or enhance
services for children and families. For example, Lead Agencies may use
multiple funding sources to offer grants or contracts to programs to
deliver services; a Lead Agency may allow county or local government to
use coordinated funding streams; or policies may be in place that allow
local programs to layer funding sources to provide full-day, full-year
child care that meets Early Head Start, Head Start or State/Territory
pre-kindergarten standards in addition to child care licensing
requirements. As per the OMB Circular A-133 Compliance Supplement 2014,
https://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2014, CCDF funds may be used in
collaborative efforts with Head Start programs to provide comprehensive
child care and development services for children who are eligible for
both programs. In fact, the coordination and collaboration between Head
Start and CCDF is strongly encouraged by sections 640(g)(1)(D) and (E),
640(h), 641(d)(2)(H)(v), and 642(e)(3) of the Head Start Act in the
provision of full working day, full calendar year comprehensive
services. In order to implement such collaborative programs, which
share, for example, space, equipment or materials, grantees may blend
several funding streams so that seamless services are provided. Lead
Agencies can layer Early Head Start and CCDF funds for the same child
as long as there is no duplication in payments for the exact same part
of the service. This is an option that some Lead Agencies are already
implementing. Early Head Start-Child Care Partnerships grants, which
allow Early Head Start programs to partner with local child care
centers and family child care providers serving infants and toddlers
from low-income families, offer a new important opportunity for further
utilization of this funding strategy. We do note that, when CCDF funds
are combined with other funds, Sec. 98.67 continues to require Lead
Agencies to have in place fiscal control and accounting procedures
sufficient to prepare required reports and trace funds to a level of
expenditure adequate to establish that such funds have been used on
allowable activities.
Public-Private Partnerships. We propose to add paragraph (a)(4) to
Sec. 98.14 in accordance with Section 658E(c)(2)(P), which requires
Lead Agencies to demonstrate in their Plan how they encourage public-
private partnerships to leverage existing child care and early
education service delivery systems and to increase the supply and
quality of child care services for children under age 13, such as by
implementing voluntary shared services alliance models (i.e.,
cooperative agreement among providers to pool resources to pay for
shared fixed costs and operation). Public-private partnerships may
include partnerships among State/Territory and public agencies, Tribal
organizations, private entities, faith based organizations and/or
community-based organizations.
Paragraphs (b) and (c) of this section would remain unchanged.
Public availability of Plans. We propose to add a new Sec.
98.14(d) to require Lead Agencies to make their CCDF Plan and any Plan
amendments publicly available. Ideally, Plans and Plan amendments would
be available on the Lead Agency Web site or other appropriate State/
Territory Web sites (such as the consumer education Web site required
at Sec. 98.33(a)) to ensure that there is transparency for the public,
and particularly for parents seeking
[[Page 80478]]
assistance, about how the child care program operates. We believe this
is especially important for Plan amendments, given that Lead Agencies
often make substantive changes to program rules or administration
during the Plan period (now three years) through submission of Plan
amendments (subject to ACF approval), but are not currently required to
proactively make those amendments available to the public.
We proposed this provision in the 2013 NPRM and received several
comments requesting that Lead Agencies be required to make Plans and
Plan amendments publicly available in multiple languages. We strongly
encourage Lead Agencies to be mindful of the needs of families,
caregivers, and providers with limited English proficiency and persons
with disabilities. States should continue to work with families and
community groups to give them a voice in program planning and
policymaking, for example, by organizing outreach meetings with
competent interpreters, recruiting qualified sign language and
multilingual eligibility staff, and providing accessible vital
documents. Lead Agencies should provide notice of where persons with
limited English proficiency and persons with disabilities can obtain an
interpretation or translation of key documents that are integral to
service delivery, which may include CCDF Plans.
Assurances and Certifications (Section 98.15)
The Act requires Lead Agencies to provide assurances and
certifications in its Plan. We are proposing to add new assurances
based on new statutory language.
Lead Agencies are required to provide assurance that training and
professional development requirements comply with Sec. 98.44 and are
applicable to caregivers, teachers, and directors working for child
care providers receiving CCDF funds. They are also required to provide
assurance that, to the extent practicable, enrollment and eligibility
policies support the fixed costs of providing child care services by
delinking provider payment rates from an eligible child's occasional
absences in accordance with Sec. 98.45(m). Both of these requirements
are discussed in detail in later sections of this proposed rule.
Section 98.15(a)(9) adopts the statutory requirement for Lead
Agencies to provide assurance that they will maintain or implement
early learning and developmental guidelines that are developmentally
appropriate for all children from birth to kindergarten entry,
describing what children should know and be able to do, and covering
the essential domains of early childhood development (cognition,
including language arts and mathematics; social, emotional and physical
development; and approaches toward learning) for use statewide by child
care providers and caregivers. Guidelines should be research-based and
developmentally, culturally, and linguistically appropriate, building
in a forward progression, and aligned with entry to kindergarten.
Guidelines should be implemented in consultation with the State
educational agency and the State Advisory Council on Early Childhood
Education and Care or similar coordinating body, and in consultation
with child development and content experts.
Paragraph (a)(10) of Sec. 98.15 details the new requirement that
Lead Agencies provide assurance that funds received to carry out this
subchapter will not be used to develop or implement an assessment for
children that will be the primary or sole basis for a child care
provider being determined to be ineligible to participate in the
program carried out under this subchapter; will be used as the primary
or sole basis to provide a reward or sanction for an individual
provider; will be used as the primary or sole method for assessing
program effectiveness; or will be used to deny children eligibility to
participate in the program carried out under this subchapter. The
Consolidated and Further Continuing Appropriations Act of 2015, Public
Law 113-235, made a correction to the CCDBG statute, adding that the
assessments will not be the ``primary or'' sole basis for a child care
provider being determined to be ineligible to participate in CCDF. The
statute lays out the acceptable ways of using child assessments,
including to support learning or improve a classroom environment;
target professional development; determine the need for health, mental
health, disability, developmental delay, or family support services;
obtain information for the quality improvement process at the State/
Territory level; or conduct a program evaluation for the purposes of
providing program improvement and parent information.
Finally, Sec. 98.15(a)(11) requires an assurance that any code or
software for child care information systems or information technology
that a Lead Agency, or other agency, expends CCDF funds to develop must
be made available to other public agencies for their use in
administering child care or related programs upon request. This
provision is intended to prevent CCDF funds from being spent multiple
times on the same, or similar, technology in order to provide
accountability for public dollars.
Section 98.15(b) requires Lead Agencies to include certifications
in its CCDF Plan. We are adding new requirements to reflect the
following new statutory requirements:
To develop the CCDF plan in consultation with the State
Advisory Council on Early Childhood Education and Care (or similar
coordinating body);
to collect and disseminate to parents of eligible
children, the general public, and, where applicable, child care
providers, consumer education information that will promote informed
child care choices and information on developmental screenings, as
required by Sec. 98.33;
to make public the result of monitoring and inspections
reports, as well as the number of deaths, serious injuries, and
instances of substantiated child abuse that occurred in child care
settings as required by Sec. 98.33(a);
to require caregivers, teachers, and directors of child
care providers to comply with the State's, Territory's or Tribe's
procedures for reporting child abuse and neglect as required by section
106(b)(2)(B)(i) of the Child Abuse Prevention and Treatment Act (42
U.S.C. 5106a(b)(2)(B)(i)), or other child abuse reporting procedures
and laws in the service area, as required by Sec. 98.41(e);
to have in effect monitoring policies and practices
pursuant to Sec. 98.42; and
to ensure payment practices of child care providers
receiving CCDF funds reflect generally accepted payment practices of
child care providers that serve children who do not receive CCDF
assistance, pursuant to Sec. 98.45(m).
These requirements are discussed later in this proposed rule. We
are also removing ``or area served by Tribal Lead Agency'' from Sec.
98.15(b)(6), as redesignated, because we are proposing distinct
requirements for Tribes to enforce health and safety standards for
child care providers. At Sec. 98.15(b)(12), as redesignated, we are
updating the reference to Sec. 98.43, which is now Sec. 98.45. All
other paragraphs in this section remain unchanged.
Confidentiality Policies. We propose adding a new paragraph (b)(13)
requiring Lead Agencies to certify in the CCDF Plan that they have in
place policies to govern the use and disclosure of confidential and
personally-identifiable information about children and families
receiving CCDF-funded assistance and child care
[[Page 80479]]
providers receiving CCDF funds. Currently there are no Federal
requirements either in statute or regulation governing confidentiality
in CCDF, although there are Federal requirements governing information
that the CCDF agency may have in its files, such as child abuse and
neglect information. The Federal Privacy Act is the primary source of
Federal requirements related to client confidentiality (5 U.S.C. 552a
note); however the Privacy Act generally applies to Federal agencies,
and is not applicable to State and local government agencies, with some
exceptions, such as computer matching issues and requirements related
to the disclosure and protection of Social Security numbers. (ACF has
previously issued guidance: Clarifying policy regarding limits on the
use of Social Security Numbers under the CCDF and the Privacy Act of
1974, Program Instruction: ACYF-PI-CC-00-04, 2000, which remains in
effect.)
Through proposed regulatory language, we would require that Lead
Agencies have in place policies to govern the use and disclosure of
confidential and personally-identifiable information (PII) about
children and families receiving CCDF-funded assistance and child care
providers, which should include their staff, receiving CCDF funds. We
propose to offer Lead Agencies discretion to determine the specifics of
such privacy policies because we recognize many Lead Agencies already
have policies in place and it is not our intention to make them revise
such policies, as long as the policy is in accordance with existing
Federal confidentiality requirements. Further, many Lead Agencies are
working on data sharing across Federal and State programs and it is not
our intention to make these efforts more challenging by introducing a
new set of confidentiality requirements. This regulatory addition is
not intended to preclude the sharing of individual, case-level data
among Federal and State programs that can improve the delivery of
services. The ACF Confidentiality Toolkit may be a useful resource for
States in addressing privacy and security in the context of information
sharing (https://www.acf.hhs.gov/sites/default/files/assets/acf_confidentiality_toolkit_final_08_12_2014.pdf).
It is important that personal information not be used for purposes
outside of the administration or enforcement of CCDF, or other Federal,
State or local programs, and that when information is shared with
outside entities (such as academic institutions for the purpose of
research) there are safeguards in place to ensure for the non-
disclosure of Personally-Identifiable Information, which is information
that can be used to link to, or identify, a specific individual. It is
at the Lead Agency's discretion whether they choose to comply with this
proposed provision by writing and implementing CCDF-specific
confidentiality rules or by ensuring that CCDF data is subject to
existing Federal or State confidentiality rules. Further, nothing in
this provision should preclude a Lead Agency from making publicly
available provider-specific information on the level of quality of a
provider or the results of monitoring or inspections as described in
Sec. 98.33.
Plan Provisions (Section 98.16)
Submission and approval of the CCDF Plan is the primary mechanism
by which ACF works with Lead Agencies to ensure program implementation
meets Federal regulatory requirements. All provisions that are required
to be included in the CCDF Plan are outlined in Sec. 98.16. Many of
the additions to this section correspond to proposed changes throughout
the regulations, which we provide explanation for later in this
proposed rule. Paragraph (a) of Sec. 98.16 would continue to require
that the Plan specify the Lead Agency.
Written agreements. A new Sec. 98.16(b) is proposed to correspond
with changes at Sec. 98.11(a)(3) discussed earlier, related to
administration of the program through agreements with other entities.
In the CCDF Plan, the proposed change would require the Lead Agency to
include a description of processes it will use to monitor
administrative and implementation responsibilities undertaken by
agencies other than the Lead Agency including descriptions of written
agreements, monitoring, and auditing procedures, and indicators or
measures to assess performance. This is consistent with the desire to
strengthen program integrity within the context of current Lead Agency
practices that devolve significant authority for administering the
program to sub-recipients. Current paragraphs (b) through (f) would be
redesignated as paragraphs (c) through (g). All paragraphs remain
unchanged with the exception of paragraph (e), as redesignated, which
has been revised by adding ``and the provision of services'' to clarify
that the Plan's description of coordination and consultation processes
should address the provision of services in addition to the development
of the Plan.
Continuity of Care. A new Sec. 98.16(h) is proposed to correspond
with statutory changes in subpart C discussed later to describe and
demonstrate that eligibility determination and redetermination
processes promote continuity of care for children and stability for
families receiving CCDF services, including a minimum 12-month
eligibility redetermination period in accordance with Sec. 98.21(a); a
graduated phaseout for families whose income exceeds the Lead Agency's
threshold to initially qualify for CCDF assistance, but does not exceed
85 percent of State median income, pursuant to Sec. 98.21(b);
processes that take into account irregular fluctuation in earnings,
pursuant to Sec. 98.21(c); procedures and policies to ensure that
parents are not required to unduly disrupt their employment, training,
or education to complete eligibility redetermination, pursuant to Sec.
98.21(d); limiting any requirements to report changes in circumstances
in accordance with Sec. 98.21(e); policies that take into account
children's development and learning when authorizing child care
services pursuant to Sec. 98.21(f); and other policies and practices
such as timely eligibility determination and processing of
applications.
Grants or contracts. We propose to add language at Sec.
98.16(i)(1), as redesignated, requiring a Lead Agency to include a
description of how it will use grants or contracts to address shortages
in the supply of high quality child care. Grants and contracts can play
an important role in building the supply and availability of high
quality child care in underserved areas and for underserved
populations, and provide greater financial stability for child care
providers. This regulatory change complements proposed changes at Sec.
98.30(a)(1) describing parental choice requirements and Sec.
98.50(a)(3) describing funding methods for child care services,
discussed later in this proposed rule.
Under this proposed change, the Lead Agency would be required to
provide a description that identifies any shortages in the supply of
high quality child care for specific localities and populations,
includes the data sources used to identify shortages, and explains how
grants or contracts for direct services will be used to address such
shortages. To identify supply shortages, the Lead Agency may analyze
available data from market rate surveys, child care resource and
referral agencies, and other sources. ACF recommends that the Lead
Agency examine all localities in its jurisdiction, recognizing that
each local child care market has unique characteristics--for example,
many rural areas face supply shortages. The Lead Agency also should
consider the supply of child care for
[[Page 80480]]
underserved populations such as infants and toddlers and children with
special needs. Further, we recommend that the Lead Agency's analysis
consider all categories of care, recognizing that a community with an
adequate supply of one category of care (e.g., centers) may face
shortages for another category (e.g., family child care). At Sec.
98.16(i)(2), as redesignated, is amended to reference Sec.
98.30(e)(1)(iii). The remaining subparagraphs remain unchanged.
Consumer education. We add language at Sec. 98.16(j), as
redesignated, to reference statutory changes to provide comprehensive
consumer and provider education, including the posting of monitoring
and inspection reports, pursuant to Sec. 98.33, changes which are
discussed later in this proposed rule.
Co-payments. We propose to revise language at Sec. 98.16(k), as
redesignated, requiring Lead Agencies to include a description of how
co-payments are affordable for families, pursuant to Sec. 98.45(k),
including a description of any criteria established by the Lead Agency
for waiving contributions for families. This proposed change is
discussed later.
Health and safety standards and monitoring. We add a provision at
Sec. 98.16(l), as redesignated, requiring Lead Agencies to provide a
description of any exemptions to health and safety requirements for
relative providers made in accordance with Sec. 98.41(a)(2), which is
discussed later in this proposed rule.
We propose adding three new paragraphs, (m) through (o), requiring
Lead Agencies to describe the child care standards for child care
providers receiving CCDF funds, that includes group size limits, child-
staff ratios, and required qualifications for caregivers, teachers, and
directors, in accordance with Sec. 98.41(d); monitoring and other
enforcement procedures to ensure that child care providers comply with
applicable health and safety requirements pursuant to Sec. 98.42; and
criminal background check requirements, policies, and procedures,
including the process in place to respond to other States',
Territories', and Tribes' requests for background check results in
order to accommodate the 45 day timeframe, in accordance with Sec.
98.43.
Training and Professional Development. We propose to add Sec.
98.16(p) requiring Lead Agencies to describe training and professional
development requirements for caregivers, teachers, and directors of
child care providers who receive CCDF funds in accordance with Sec.
98.44. Paragraph (q), as redesignated, remains unchanged.
Payment rates. We revise Sec. 98.16(r), as redesignated, to
include the option of using an alternative methodology to set provider
payment rates. This provision is described later in this proposed rule.
We revise paragraph (s), as redesignated, to include a detailed
description of the State's hotline for complaints. This provision is
described later in the proposed rule. Paragraph (t), as redesignated
(previously paragraph (n)), remains unchanged.
We revise Sec. 98.16(u), as redesignated (previously paragraph
(o)), to include in the description of the licensing requirements, any
exemption to licensing requirements that is applicable to child care
providers receiving CCDF funds; a demonstration of why this exemption
does not endanger the health, safety, or development of children; and a
description of how the licensing requirements are effectively enforced,
pursuant to Sec. 98.42.
Building supply and quality. We also propose a new Sec. 98.16(x)
based on statutory language at Section 658E(c)(2)(M) requiring the Lead
Agency to describe strategies to increase the supply and improve the
quality of child care services for children in underserved areas,
infants and toddlers, children with disabilities, and children who
receive care during nontraditional hours. As described in the statute,
strategies may include alternative payment 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 Lead Agency.
Pursuant to Sec. 98.50 as proposed, Lead Agencies would be
required to use CCDF funds for some direct contracts or grants for
child care services. For contracts to be effective at increasing the
supply of high quality care, contracts should be funded at levels that
are sufficient to meet any higher quality standards associated with
that care. Along with increased rates and contracts, we encourage Lead
Agencies to consider other strategies, including training and technical
assistance to child care providers to increase quality for these types
of care.
We add Sec. 98.16(y) requiring Lead Agencies to describe how they
prioritize increasing access to high quality child care and development
services for children of families in areas that have significant
concentrations of poverty and unemployment and that do not have
sufficient numbers of such programs, pursuant to Sec. 98.46(b). This
provision is discussed later in this proposed rule.
Finally, we propose to add Sec. 98.16(z) reiterating the statutory
requirement for Lead Agencies to describe how they 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. Some child care providers need support on business and
management practices in order to run their child care businesses more
effectively and devote more time and attention to quality improvements.
Improved business practices can benefit caregivers and children. An
example of a key business practice is providing paid sick leave for
caregivers to keep children healthy. Without paid time off, caregivers
may come to work sick and risk spreading illnesses to children in care.
We also encourage child care providers to provide paid sick leave
because it promotes better health for child care employees, which is
important to maintaining a stable workforce as well as consistency of
care for children. According to The Council of Economic Advisors,
``[Pa]id sick leave also induces a healthier work environment by
encouraging workers to stay home when they are sick.'' (The Economics
of Paid and Unpaid Leave, The Council of Economic Advisors, June 2014.)
Emergency preparedness. We propose to add Sec. 98.16(aa) to the
regulation, based on Section 658E(c)(2)(U) of the Act, to require the
Lead Agency to demonstrate how the Lead Agency will address the needs
of children, including the need for safe child care, before, during and
after a state of emergency declared by the Governor or a major disaster
or emergency (as defined by section 102 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5122) through a
Statewide Child Care Disaster Plan (or Disaster Plan for a Tribe's
service area). The Disaster Plan must be developed in collaboration
with the State/Territory human services agency, the State/Territory
emergency management agency, the State/Territory licensing agency,
local and State/Territory child care resource and referral agencies,
and the State/Territory Advisory Council on Early Childhood Education
and Care, or similar coordinating body. Tribes must have similar
Disaster Plans, for their Tribal service area, developed in
consultation with relevant agencies and partners. The Disaster Plan
must include guidelines for continuation of child care subsidies and
child care services, which may include the provision of emergency and
temporary
[[Page 80481]]
child care services and temporary operating standards for child care
during and after a disaster; coordination of post-disaster recovery of
child care services; and requirements that providers receiving CCDF
funds and other child care providers, as determined appropriate by the
Lead Agency, have in place procedures for evacuation, relocation,
shelter-in-place, lock-down, communication and reunification with
families, continuity of operations, accommodations of infants and
toddlers, children with disabilities, and children with chronic medical
conditions; and procedures for staff and volunteer emergency
preparedness training and practice drills, including training
requirements for caregivers of providers receiving CCDF.
This provision largely reflects statutory language of Section
658E(c)(2)(U), but we have clarified that the Plan must apply, at a
minimum, to CCDF providers and may apply to other providers (such as
all licensed providers) at the Lead Agency option. We also added
language on post-disaster recovery.
In past disasters, the provision of emergency child care services
and rebuilding and restoring of child care facilities and
infrastructure emerged as an essential service. The importance of the
need to improve emergency preparedness and response in child care was
highlighted in an October 2010 report released by the National
Commission on Children and Disasters. The Commission's report included
two primary sets of recommendations for child care: (1) To improve
disaster preparedness capabilities for child care; and (2) to improve
capacity to provide child care services in the immediate aftermath and
recovery from a disaster (2010 Report to the President and Congress,
National Commission on Children and Disasters, p. 81, October 2010).
Child care has also been recognized by the Federal Emergency Management
Agency (FEMA) as an essential service and an important part of disaster
response and recovery. (FEMA Disaster Assistance Fact Sheet 9580.107,
Public Assistance for Child Care Services Fact Sheet, 2013).
Maintaining the safety of children in child care programs during
and after disaster or emergency situations necessitates planning in
advance by State/Territory agencies and child care providers. The
reauthorization of the CCDBG Act, and this proposed rule, implement the
key recommendation of the National Commission on Children and Disasters
by requiring a child care-specific Statewide Disaster Plan. ACF has
previously issued guidance (CCDF-ACF-IM-2011-01) recommending that
Disaster Plans include five key components: (1) Planning for
continuation of services to CCDF families; (2) coordinating with
emergency management agencies and key partners; (3) regulatory
requirements and technical assistance for child care providers; (4)
provision of temporary child care services after a disaster, and (5)
rebuilding child care after a disaster. The guidance recommends that
disaster plans for child care incorporate capabilities for shelter-in-
place, evacuation and relocation, communication and reunification with
families, staff training, continuity of operations, accommodation of
children with disabilities and chronic health needs, and practice
drills. ACF intends to provide updated guidance and TA to States,
Territories, and Tribes as they move forward with implementing Disaster
Plans as required by the reauthorization.
Payment practices. We propose new Sec. 98.16(bb), requiring Lead
Agencies to describe payment practices applicable to child care
providers receiving CCDF, pursuant to Sec. 98.45(m), including
practices to ensure timely payment for services, to delink provider
payments from children's occasional absences to the extent practicable,
and to reflect generally-accepted payment practices. This is discussed
later in this proposed rule.
Program integrity. We propose new Sec. 98.16(cc), requiring Lead
Agencies to describe processes in place to describe internal controls
to ensure integrity and accountability; processes in place to
investigate and recover fraudulent payments and to impose sanctions on
clients or providers in response to fraud; and procedures in place to
document and verify eligibility, pursuant to Sec. 98.68. This change
corresponds to a new program integrity section included in subpart G of
the regulations, which is discussed later in the NPRM.
Outreach and services for families and providers with limited
English proficiency and persons with disabilities. We propose to add a
new Sec. 98.16(dd) to require that the Lead Agency describe how it
would provide outreach and services to eligible families with limited
English proficiency and persons with disabilities, and facilitate
participation of child care providers with limited English proficiency
and disabilities in CCDF. Currently, the Plan requires Lead Agencies to
describe how they provide outreach and services to eligible limited
English proficient families and providers. In the FY 2014-2015 CCDF
Plans, States and Territories reported a number of strategies to
overcome language barriers. Forty-nine States and Territories have
bilingual caseworkers or translators, 44 have applications in multiple
languages, and 18 offer provider contracts or agreements in multiple
languages. We are proposing to require that Lead Agencies develop
policies and procedures to clearly communicate program information such
as requirements, consumer education information, and eligibility
information, to families and child care providers of all backgrounds.
Suspension and expulsion policies. We propose to add a new Sec.
98.16(ee) to require that the Lead Agency describe its policies on
suspension and expulsion of children from birth to age five in child
care and other early childhood programs receiving CCDF funds, which
must be disseminated as part of consumer and provider education efforts
in accordance with Sec. 98.33(b)(1)(v). This requirement is detailed
later in this proposed rule.
Reports of serious injuries or death in child care. We propose to
add new Sec. 98.16(ff) to require the Lead Agency to designate a
State, Territorial, or Tribal entity to which child care providers must
submit reports of any serious injuries or deaths of children occurring
in child care, regardless of whether or not they receive CCDF
assistance.
Family Engagement. We propose to add new Sec. 98.16(gg) to require
the Lead Agency to describe how it would support child care providers
in the successful engagement of families in children's learning and
development.
Complaints received through the national hotline and Web site. We
propose to add new Sec. 98.16(hh) to require the Lead Agency to
describe how it will respond to complaints received through the
national hotline and Web site, required in the reauthorized CCDBG Act
(Section 658L(b)(2)). The description must include the designee
responsible for receiving and responding to those complaints for both
licensed and license-exempt child care providers. Clear channels of
communication are crucial to ensure that complaints submitted through
the national hotline or Web site are responded to quickly, especially
when a child's health or safety is at risk. This proposed plan
provision is aimed at building those connections and ensuring that a
process is in place for addressing complaints regarding both licensed
and license-exempt child care providers.
[[Page 80482]]
Finally, we have redesignated paragraph (v) as paragraph (ii) with
no other changes.
Approval and Disapproval of Plans and Plan Amendments (Section 98.18)
This section of the regulations describes processes and timelines
for CCDF Plan approvals and disapprovals, as well as submission of Plan
amendments. CCDF Plans are submitted triennially and prospectively
describe how the Lead Agency will implement the program. To make a
substantive change to a CCDF program after the Plan has been approved,
a Lead Agency must submit a Plan amendment to ACF for approval.
Advance written notice. In conjunction with the change discussed at
Sec. 98.14(d) to make the Plan and any Plan amendments publicly
available, we propose to add a provision at Sec. 98.18(b)(2) to
require Lead Agencies to provide advance written notice to affected
parties, specifically parents and child care providers, of changes in
the program made through an amendment that adversely affect income
eligibility, payment rates, and/or sliding fee scales so as to reduce
or terminate benefits. The notice should describe the action to be
taken (including the amount of any benefit reduction), the reason for
the reduction or termination, and the effective date of the action. The
Lead Agency may choose to issue the notification in a variety of ways,
including a mailed letter or email sent to all participating child care
providers and families. We are providing Lead Agencies with flexibility
to determine an appropriate time period for advance notice, since this
may vary, such as depending on the type of policy change being
implemented or the effective date of that policy change. Advance notice
would add transparency to the Plan amendment process and provide a
mechanism to ensure that affected parties remain informed of any
substantial changes to the Lead Agency's CCDF Plan that may affect
their ability to participate in the child care program. We note that
while we encourage Lead Agencies to provide written notice of any
changes that affect income eligibility, payment rates, and/or sliding
fee scales, we would only require written notice of those that
adversely impact parents or providers.
We would not require the Lead Agency to hold a formal public
hearing or solicit comments on each Plan amendment, as is required by
current regulations at Sec. 98.14(c) for the submission of the CCDF
Plan. However, we encourage solicitation of public input whenever
possible and consider this proposed regulatory change to be consistent
with the spirit and intent of the CCDF Plan public hearing provision.
Paragraph (c) of Sec. 98.18 describing appeal and disapproval of a
Plan or Plan amendment would remain unchanged.
Requests for Temporary Relief From Requirements (Section 98.19)
Section 658I(c) of the CCDBG Act indicates that Lead Agencies are
allowed to submit a request to the Secretary to waive one or more
requirements contained in the CCDBG Act to ensure that effective
delivery of services are not interrupted by conflicting or duplicative
requirements, to allow for a period of time for a State legislature to
enact legislation to implement the provisions of the Act or this part,
or in response to extraordinary circumstances, such as a natural
disaster or financial crisis. We are proposing to extend the waiver
option to rules under this part as well. Prior to the enactment of the
CCDBG Act in 2014, there was no waiver authority within the CCDF
program.
We propose new Sec. 98.19, Requests for Temporary Relief from
Requirements, to provide guidance and clarity on: The eligibility of
States, Territories, and Tribes to request a waiver; what provisions
would not be eligible for waivers; and how the waiver request and
approval (or disapproval) process would work. In addition to outlining
the requirements detailed in the CCDBG Act of 2014, Sec. 98.19
includes clarifying provisions to provide greater understanding of the
intent and implementation of the waiver process.
This section details the process by which the Secretary may waive
one or more of the requirements contained in the Act or this part, with
the exception of State Match and Maintenance of Effort requirements,
consistent with the requirements described in section 658I(c)(1) of the
Act. In order for a waiver application to be considered, the waiver
request must: Describe circumstances that prevent the State, Territory,
or Tribe from complying with any statutory or regulatory requirements
of this part; demonstrate that the waiver, by itself, contributes to or
enhances the State's, Territory's, or Tribe's ability to carry out the
purposes of this part; show that the waiver will not contribute to
inconsistency with the objectives of this law; and meet the additional
requirements in this section as described.
We propose to include a delineation of the types of waivers that
States, Territories, and Tribes can request into two distinct types:
(1) Transitional and legislative waivers and (2) waivers for
extraordinary circumstances. States, Territories, and Tribes may apply
for temporary transitional and legislative waivers meeting the
requirements described in this section that would provide temporary
relief from conflicting or duplicative requirements preventing
implementation, or for a temporary extension in order for a State,
Territorial, or Tribal legislature to enact legislation to implement
the provisions of this subchapter.
Transitional and legislative waivers are designed to provide
States, Territories, and Tribes at most one full legislative session to
enact legislation to implement the provisions of the Act or this part,
and are limited to a one-year initial period and at most, an additional
one-time, one-year renewal from the date of approval of the extension
(which may be appropriate for a State with a two-year legislative
cycle, for example).
Waivers for extraordinary circumstances would address temporary
circumstances or situations, such as a natural disaster or financial
crisis. Extraordinary circumstance waivers are limited to an initial
period of no more than two years from the date of approval, and at
most, an additional one-year renewal from the date of approval of the
extension.
Both types of waivers are probationary, subject to the decision of
the Secretary to terminate a waiver at any time if the Secretary
determines, after notice and opportunity for a hearing, that the
performance of a State, Territory, or Tribe granted relief under this
subsection has been inadequate, or if such relief is no longer
necessary to achieve its original purposes.
In order to request a waiver, the Lead Agency must submit a written
request, indicating which type of waiver the State, Territory, or Tribe
is requesting and why. The request must also provide detail on which
provision(s) the State, Territory, or Tribe is seeking relief from and
how relief from that sanction or provision, by itself, will improve
delivery of child care services for children and families. If a
transitional waiver, the Lead Agency should describe the steps being
taken to address the barrier to implementation (i.e., a timeline for
legislative action). Furthermore, and importantly, in the written
request, the State, Territory, or Tribe must certify and demonstrate
that the health, safety, and well-being of children served through
assistance received under this part will not be compromised as a result
of the waiver.
Within 90 days of submission of the request, the Secretary would
notify the State, Territory, or Tribe of the approval or disapproval.
If rejected, the Secretary
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would provide the State, Territory, or Tribe, the Committee on
Education and the Workforce of the House of Representatives, and the
Committee on Health, Education, Labor, and Pensions of the Senate of
the reasons for the disapproval and give the State, Territory, or Tribe
the opportunity to amend the request. If approved, the Secretary would
notify and submit a report to the Committee on Education and the
Workforce of the House of Representatives and the Committee on Health,
Education, Labor, and Pensions of the Senate on the circumstances of
the waiver including each specific sanction or provision waived, the
reason as given by the State, Territory, or Tribe of the need for a
waiver, and the expected impact of the waiver on children served under
this program.
No later than 30 days prior to the expiration date of the waiver, a
State, Territory, or Tribe, at its option, may make a formal written
request to re-certify the provisions described in this section, which
must explain the necessity of additional time for relief from such
sanction(s) or provisions. The Secretary may approve or disapprove a
request from a State, Territory, or Tribe for a one-time renewal of an
existing waiver under this part for a period no longer than one year.
The Secretary would adhere to the same approval or disapproval process
for the renewal request as the initial request.
The goal of all the proposed inclusions at Sec. 98.19 is to make
continuity of the effective delivery of child care services a priority
throughout the implementation process or in times of extraordinary
circumstances. We are seeking comment on ways to ensure efficient and
timely relief, when appropriate, for States, Territories, and Tribes
impacted by extraordinary circumstances, such as natural disasters.
Therefore, we ask for feedback about making the application process for
waivers for extraordinary circumstances straightforward to provide
States, Territories, and Tribes with minimal obstacles while they are
likely in the preparedness, response, and recovery stages of handling
the circumstances that prompted the initial request.
Subpart C--Eligibility for Services
This subpart establishes parameters for a child's eligibility for
CCDF assistance and for Lead Agencies' eligibility and redetermination
procedures. Congress made significant changes to CCDBG that emphasize
stable financial assistance and continuity of care through CCDF
eligibility policies, including establishing minimum 12-month
eligibility for all children. In this subpart, we propose to restate
these changes in regulation and provide additional clarification where
appropriate.
A Child's Eligibility for Child Care Services (Section 98.20)
A child's eligibility for child care services: This proposed rule
clarifies at Sec. 98.20(a) that eligibility criteria apply only at the
time of eligibility determination or redetermination based on statutory
language at Section 658E(c)(2)(N)(i) of the Act, which establishes a
minimum 12-month eligibility period by affirmatively stating that the
child ``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 local entity re-determines the eligibility
of the child.'' (We discuss minimum 12-month eligibility at greater
length below.)
Income eligibility. We propose revising Sec. 98.20(a)(2) by adding
a sentence to clarify that the State median income (SMI) used to
determine the eligibility threshold level must be based on the most
recent SMI data that is published by the U.S. Census Bureau. This
clarification would provide for use of the most current and valid data.
It is important for Lead Agencies to use current data as, once
determined eligible, children may continue to receive CCDF assistance
until their household income exceeds 85 percent of SMI for a family of
the same size, pursuant to Sec. 98.21(a)(1) discussed further below,
or at Lead Agency option, the family experiences a non-temporary
cessation of work, training, or education. Using the most recent SMI
data also allows for consistency for cross-State comparisons and a
better understanding of income eligibility thresholds nationally. SMI
data may not be available from the Census Bureau for some Territories,
in which case an alternative source (subject to ACF approval through
the CCDF State/Territory Plan process) may be used. The Act does not
specify whether States should use the SMI with a single year estimate,
a two-year average, or a three-year average (which is used by the Low
Income Home Energy Assistance Program (LIHEAP)). We are requesting
comment on whether ACF should provide additional guidance and
specificity on the SMI used to determine eligibility.
Tribes are already allowed to use Tribal median income (TMI)
(pursuant to Sec. 98.81(b)(1)) and this would continue to be allowable
under this proposed rule. ACF also recognizes that some Lead Agencies
establish eligibility thresholds that vary by geographic area and that
some Lead Agencies use Area median income (AMI) to calculate income
eligibility for different regions in order to account for cost of
living variations across geographic areas. Lead Agencies may use AMI in
their calculations, but must also report the threshold in terms of SMI
in their Plan, and ensure that thresholds based on AMI are at or below
85 percent of SMI.
Asset limit. The Act revised the definition of eligible child at
Section 658P(4)(B) so that in addition to being at or below 85 percent
of SMI for a family of the same size, a member of the family must
certify that the ``family assets do not exceed $1,000,000 (as certified
by a member of such family),'' which we include in the proposed rule at
Sec. 98.20(a)(2)(ii). We interpret this language to mean that this
requirement can be met solely through self-certification by a family
member, with no further need for additional documentation. This new
requirement provides assurance that CCDF funds are being used for
families with the greatest need, but is not intended to impose an
additional burden on families. In this proposed rule, we are not
defining ``family assets,'' but instead would allow the Lead Agency
flexibility to determine what assets to count toward the asset limit.
Protective Services. Section 658P(4) of the CCDBG Act indicates
that, for CCDF purposes, an eligible child includes a child who is
receiving or needs to receive protective services. We are proposing to
add language at Sec. 98.20(a)(3)(ii) to clarify that the protective
services category may include specific populations of vulnerable
children as identified by the Lead Agency. Children do not need to be
formally involved with child protective services or the child welfare
system in order to be considered eligible for CCDF assistance under
this category. Because the statute references children who ``need to
receive protective services,'' we believe the intent of this language
was to provide services to at-risk children, not to limit this
definition to serve children already in the child protective services
system. It is important to note that including additional categories of
vulnerable children in the definition of protective services is only
relevant for the purposes of CCDF eligibility and does not mean that
those children should automatically be considered to be in official
protective service situations for other programs or purposes. It is
critical that policies be structured and implemented so these children
are not
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identified as needing formal intervention by the CPS agency, except in
cases where that is appropriate for reasons other than the inclusion of
the child in the new categories of vulnerable child for purposes of
CCDF eligibility.
Similarly, we propose to remove the requirement that case-by-case
determinations of income and co-payment fees for this eligibility
category must be made by, or in consultation with, a child protective
services (CPS) worker. While consulting with a CPS worker would no
longer be a requirement, it would not be prohibited; a Lead Agency may
consult with or involve a CPS caseworker as appropriate. We encourage
collaboration with the agency responsible for children in protective
services, especially when a child also is receiving CCDF assistance.
These changes would provide Lead Agencies with additional
flexibility to offer services to those who have the greatest need,
including high-risk populations, and reduce the burden associated with
eligibility determination for vulnerable families.
Under current regulations at Sec. 98.20(a)(3)(ii)(B), at the
option of the Lead Agency, this category may include children in foster
care. The regulations allow that children deemed eligible based on
protective services may reside with a guardian or other person standing
``in loco parentis'' and that person is not required to be working or
attending job training or education activities in order for the child
to be eligible. In addition, the existing regulations allow grantees to
waive income eligibility and co-payment requirements as determined
necessary on a case-by-case basis, by, or in consultation with, an
appropriate protective services worker for children in this eligibility
category. This proposed change would clarify, for example, that a
family living in a homeless shelter may not meet certain eligibility
requirements (e.g., work or income requirements), but, because the
child is in a vulnerable situation, could be considered eligible and
benefit from access to high quality child care services.
This change was also included in the 2013 NPRM and received broad
support in public comments. One commenter wrote this change
``recognizes the particular challenges and barriers to assistance that
these children [from other vulnerable populations] face and the
importance of stable, supportive child care.'' Several commenters
requested that the term ``vulnerable populations'' be defined at the
Federal level and suggested several specific populations to be included
in the definition--such as teen parents, the children of parents or
guardians with disabilities who are unable to work, children with
disabilities who have Individual Family Service Plans (IFSPs) or
Individual Education Plans (IEPs), and children who are experiencing
homelessness. While we encourage Lead Agencies to consider these
vulnerable populations in their definitions and policies, we are
declining to specifically define ``vulnerable populations'' in this
proposed rule in order to allow Lead Agencies the flexibility to define
the term in a way that is most responsive to the particular needs of
their communities.
We note that this new provision would not require Lead Agencies to
expand their definition of protective services. It merely provides the
option to include other high-needs populations in the protective
services category solely for purposes of CCDF, as many Lead Agencies
already choose to do.
Additional eligibility criteria. Under existing regulations, Lead
Agencies are allowed to establish eligibility conditions or priority
rules in addition to those specified through Federal regulation so long
as they do not discriminate, limit parental rights, or violate priority
requirements (these are described in full at Sec. 98.20(b)). This
proposed rule revises this section to add that any additional
eligibility conditions or priority rules established by the Lead Agency
cannot ``impact eligibility other than at the time of eligibility
determination or redetermination.'' This revision was made to be
consistent with the aforementioned change to Sec. 98.20(a) which says
that eligibility criteria apply only at the time of determination or
redetermination. It follows that the same would be true of additional
criteria established at the Lead Agency's option.
We propose to add paragraph (c) clarifying that only the
citizenship and immigration status of the child, the primary
beneficiary of CCDF, is relevant for the purposes of determining
eligibility under PRWORA and that a Lead Agency, or other administering
agency, may not condition eligibility based upon the citizenship or
immigration status of the child's parent. Under title IV of PRWORA,
CCDF is considered a program providing Federal public benefits and thus
is subject to requirements to verify citizenship and immigration status
of beneficiaries. In 1998, ACF issued a Program Instruction (ACYF-PI-
CC-98-08) which established that ``only the citizenship status of the
child, who is the primary beneficiary of the child care benefit, is
relevant for eligibility purposes.'' This proposal codifies this policy
in regulation and clarifies that Lead Agencies are prohibited from
considering the parent's citizenship and immigration status.
ACF has previously clarified that when a child receives Early Head
Start or Head Start services that are supported by CCDF funds and
subject to the Head Start Performance Standards, the PRWORA
verification requirements do not apply. Verification requirements also
do not apply to child care settings that are subject to public
educational standards. These policies remain in effect. (ACYF-PI-CC-98-
09)
Eligibility Determination Processes (Section 98.21)
We propose to add a new section at Sec. 98.21 to address the
processes by which Lead Agencies determine and redetermine a child's
eligibility for services.
Minimum 12-month eligibility. At Sec. 98.21, we reiterate the
statutory change made in Sec. 658E(c)(2)(N)(i) of the Act, which
establishes minimum 12-month eligibility periods for all CCDF families,
regardless of changes in income (as long as income does not exceed the
Federal threshold of 85 percent of SMI) or temporary changes in
participation in work, training, or education activities. Under the
law, Lead Agencies may not terminate CCDF assistance during the 12-
month period if a family has an increase in income that exceeds the
Lead Agency's income eligibility threshold but not the Federal
threshold, or if a parent has a temporary change in work, education or
training. We note that during the minimum 12-month eligibility period
Lead Agencies also may not end or suspend child care authorizations or
provider payments due to a temporary change in a parent's work,
training, or education status. In other words, once determined
eligible, children are expected to receive a minimum of 12 months of
child care services, unless family income rises above 85% SMI or, at
Lead Agency option, the family experiences a non-temporary cessation of
work, education, or training.
These requirements apply to both the initial eligibility period and
any subsequent eligibility periods. Under the law, other than income
exceeding 85 percent of SMI (unless the increase in income is
considered temporary, pursuant with the irregular fluctuations in
earning requirement discussed below), a family is considered to meet
eligibility criteria for the entire 12-month period, though the Lead
Agency has the option of also considering a status change due to non-
temporary
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changes in employment, education, or training status (discussed below.)
As the statutory language states that a child determined eligible
will not only be considered to meet all eligibility requirements, but
also ``will receive such assistance,'' Lead Agencies may not offer
authorization periods shorter than 12 months as that would functionally
undermine the statutory intent that, barring limited circumstances,
eligible children shall receive a minimum of 12 months of CCDF
assistance. We note that, despite the language that the child ``will
receive such assistance,'' the receipt of such services remains at the
option of the family. The law does not require the family to continue
receiving services nor would it force the family to remain with a
provider if the family no longer chooses to receive such services.
We propose to define ``temporary change'' in the rule at Sec.
98.21(a)(1)(ii) to include, at a minimum: (1) Any time-limited absence
from work for employed parents for periods of family leave (including
parental leave) or sick leave; (2) any interruption in work for a
seasonal worker who is not working between regular industry work
seasons; (3) any student holiday or break for a parent participating in
training or education; (4) any reduction in work, training or education
hours, as long as the parent is still working or attending training or
education; and (5) any cessation of work or attendance at a training or
education program that does not exceed three months or a longer period
of time established by the Lead Agency.
The above circumstances represent temporary changes to the parents'
schedule or conditions of employment, but do not constitute permanent
changes to the parents' status as being employed or attending a job
training or educational program. This definition is in line with
Congressional intent to stabilize assistance for working families. Lead
Agencies must consider all changes on this list to be temporary, but
should not be limited by this definition and may consider additional
changes to be temporary.
At Sec. 98.21(a)(1)(ii)(F), we clarify that a child should retain
eligibility despite any change in age, including turning 13 years old
during the eligibility period. This is consistent with the statutory
requirement that a child shall be ``considered to meet all eligibility
requirements'' until the next redetermination. This allows Lead
Agencies to avoid terminating access to CCDF assistance immediately
upon a child's 13th birthday in a manner that may be detrimental to
positive youth development and academic success or that might abruptly
put the child at-risk if a parent cannot be with the child before or
after school.
At Sec. 98.21(a)(1)(ii)(G), we propose that a child retain
eligibility despite ``any change in residency within the State,
Territory, or Tribal service area.'' This would provide stability for
families who, under current practice, may lose child care assistance
despite maintaining their State, Territory or Tribal residency. This
may require coordination between localities within States, Territories,
or Tribes or necessitate some Lead Agencies to change practices for
allocating funding. We believe this level of coordination is essential,
as the State, Territory, or Tribe is the entity responsible for CCDF
assistance.
Nothing in this rule prohibits Lead Agencies from establishing
eligibility periods longer than 12 months or lengthening eligibility
periods prior to a redetermination. We encourage (but do not require)
Lead Agencies to consider how they can use this flexibility to align
CCDF eligibility policies with other programs serving low-income
families, including Head Start, Early Head Start, Medicaid, or SNAP.
For example, once determined eligible, children in Head Start remain
eligible until the end of the succeeding program year. Children in
Early Head Start are considered eligible throughout the course of the
program. Consistent with existing ACF guidance (ACYF-PIQ-CC-99-02) a
Lead Agency could establish eligibility periods longer than 12 months
for children enrolled in Head Start and receiving CCDF in order to
align eligibility periods between programs. Similarly, a Lead Agency
could establish longer eligibility periods during an infant or
toddler's enrollment in Early Head Start or in other collaborative
models, such as Early Head Start-Child Care Partnerships.
Operationalizing alignment across programs can be challenging,
particularly if families enroll in programs at different times. While
the Lead Agency must ensure that eligibility is not redetermined prior
to 12 months, it could align with other benefit programs by ``resetting
the clock'' on the eligibility period to extend the child's CCDF
eligibility by starting a new 12-month period if the Lead Agency
receives information, such as information pursuant to eligibility
determinations or recertifications in other programs, that confirms the
child's eligibility and current co-payment rate. Alignment promotes
conformity across Federal programs, such as SNAP, and can simplify
eligibility and reporting processes for families and administering
agencies. However, it should be noted that a Lead Agency cannot
terminate assistance for a child prior to the end of the minimum 12-
month period if the recertification process of another program reveals
a change in the family's circumstances, unless those changes impact
CCDF eligibility (e.g., a change in income over 85 percent of SMI or,
at the option of the Lead Agency, a non-temporary change in the work,
job training, or educational status of the parent).
Continued Assistance. If a parent experiences a non-temporary job
loss or cessation of education or training, Lead Agencies have the
option--but are not required--to terminate assistance prior to 12
months. Per the Act, prior to terminating assistance, the Lead Agency
must provide a period of continued assistance of at least three months
to allow parents to engage in job search activities. At the end of the
minimum three-month period of continued assistance, if the parent is
engaged in an eligible work, education, or training activity,
assistance should not be terminated and the child should either
continue receiving assistance until the next scheduled redetermination
or be redetermined eligible for an additional 12-month period. In this
proposed rule, we clarify that assistance must be provided ``at the
same level'' during the period. This clarification is important because
reducing levels of assistance during this period would undermine the
statutory intent to provide stability for families during times of
increased need or transition.
It is important to note that the Act allows Lead Agencies to
continue child care assistance for the full 12-month eligibility period
even if the parent experiences a non-temporary job loss or cessation of
education or training. The default policy is that a child remains
eligible for the full minimum 12-month eligibility period, but the Lead
Agency has the option to terminate assistance under these particular
conditions. A Lead Agency may choose not to terminate assistance for
any families prior to a redetermination at 12 months. If a Lead Agency
chooses to terminate assistance under these conditions, it has the
option of doing so for all CCDF families or for only a subset of CCDF
families. For example, a Lead Agency could choose to allow priority
families (e.g., children with special needs, children experiencing
homelessness) to remain eligible through their eligibility period
despite a parent's loss of work or cessation of attendance at a job
training or educational program, but terminate assistance (with a
period of continued assistance) for families who do not fall
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in a priority category. Or, a Lead Agency may choose to allow families
in certain types of care, such as high quality care, to remain eligible
regardless of a parent's work or education activity.
While the Lead Agency must provide continued assistance for at
least three months, there is no requirement to document that the parent
is engaged in a job search or other activity related to resuming
attendance in an education or training program during that time. In
fact, we strongly discourage such policies as they would be an
additional burden on families and be inconsistent with the purposes of
CCDF and this proposed rule.
If a Lead Agency does choose to terminate assistance under these
circumstances, it should allow families that have been terminated to
reapply as soon as they are eligible again instead of making the family
wait until their original eligibility period would have ended in order
to reapply.
A policy that provides continuous eligibility, regardless of non-
temporary changes, would reduce the burden on families and the
administrative burden on Lead Agencies by minimizing reporting and the
frequency of eligibility adjustments. Retention of eligibility during
periods of family instability (such as losing a job) can alleviate some
of the stress on families, facilitate a smoother transition back into
the workforce, and support children's development by maintaining
continuity in their child care. Moreover, studies show that the same
families that leave CCDF often return to the program after short
periods of ineligibility. A report published by the Assistant Secretary
for Planning and Evaluation (ASPE) at HHS, Child Care Subsidy Duration
and Caseload Dynamics: A Multi-State Examination, found that ``many
families receive subsidies sporadically over time and frequently return
to the subsidy programs after they exit.'' Short periods of subsidy
receipt can be the result of a variety of factors, including
eligibility policies and procedures. The ``churning'' present in CCDF
demonstrates that families often lose their child care assistance for
conditions that are temporary, which is detrimental for the family and
child and inefficient for the Lead Agency.
Lead Agencies considering the option to terminate assistance in
response to ``non-temporary'' changes are encouraged to use
administrative data to understand the extent to which CCDF families
currently cycle on and off the program, to make a determination as to
whether it is in the interest of anyone (child, parent, or agency) to
terminate assistance for families who may ultimately return to the
program.
We understand that some Lead Agencies include in their definition
of allowable work activities a period of job search and allow children
to qualify for CCDF assistance based on their parent(s) seeking
employment. It is not our intention to discourage Lead Agencies from
allowing job search activities as qualifying work. We believe that it
is in line with the intent of the statute to allow Lead Agencies the
option to end assistance prior to a redetermination if the parent(s)
has not secured employment or educational or job training activities,
as long as assistance has been provided for no less than three months.
In other words, if a child qualifies for child care assistance based on
a parent's job search, the Lead Agency has the option to end assistance
after a minimum of three months if the parent has still has not found
employment. Lead Agencies could choose, however, to provide additional
months of job search to families as well or to continue assistance for
the full minimum 12-month eligibility period.
We are soliciting comment on whether there are any additional
circumstances other than those discussed above under which a Lead
Agency should be allowed to end a child's assistance (after providing
three months of continued assistance) prior to the minimum 12-month
period. Commenters should remember that since these regulations must
comply with statutory requirements, any suggestions must remain within
the bounds of the CCDBG Act in order to be considered.
Based on feedback from States and various stakeholders, ACF has
already considered possible exceptions to the minimum 12-month
eligibility period for certain populations, such as children in
families receiving TANF and children in protective services, but has
decided that such special considerations would be in conflict with the
CCDBG Act, which clearly provides 12-month eligibility for all
children.
Co-payments. At Sec. 98.21(a)(3) we clarify that a Lead Agency
cannot increase family co-payment amounts within the minimum 12-month
eligibility period as raising co-payments within the eligibility period
would not be consistent with the statutory requirement that the child
``receive such assistance'' for not less than 12 months. Protecting co-
payments levels within the eligibility period provides stability for
families and reduces administrative burden for Lead Agencies. We
propose an exception to this rule for families that are eligible as
part of the graduated phaseout provision discussed below.
In add