[Federal Register: November 9, 2004 (Volume 69, Number 216)]
[Proposed Rules]
[Page 64881-64884]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09no04-27]
[[Page 64881]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Part 98
[RIN 0970-AC18]
Child Care and Development Fund State Match Provisions
AGENCY: Administration for Children and Families (ACF), HHS.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This proposed rule revises the Child Care and Development Fund
(CCDF) regulations to permit States to designate multiple public and/or
private entities as eligible to receive private donations that may be
certified as child care expenditures for purposes of receiving Federal
CCDF matching funds. This proposed rule also allows States to use
public pre-kindergarten expenditures for up to 30 percent of the State
match expenditures required to claim their full allotment of Federal
CCDF matching funds.
DATES: Comment Period: You may submit comments through January 10,
2005. We will not consider comments received after this date.
ADDRESSES: You may mail comments to the Administration for Children and
Families, Child Care Bureau, 330 C Street, SW., Room 2046, Washington,
DC 20447. Attention: Shannon Christian, Associate Commissioner.
Commenters may also provide comments on the ACF website. To
transmit comments electronically, or to download an electronic version
of the proposed rule, please go to http://regulations.acf.hhs.gov. We
will have comments available for public inspection Monday through
Friday, 8:30 a.m. to 5 p.m. at the above address.
FOR FURTHER INFORMATION CONTACT: Karen Tvedt, Policy Director, Child
Care Bureau, at (202) 401-5130.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. Child Care and Development Fund
B. Summary of the Statutory Provisions Related to the State
Match Requirement
C. State Match Requirement Regulations
D. Statutory Authority
II. Provisions of Proposed Rule
A. Certifying Private Donations as State Expenditures
1. Summary of the Regulations Regarding Certifying Private
Donations as State Expenditures in the Current Regulations
2. Consultation with States and Other Organizations
3. Changes Made in this Proposed Rule
B. Public Pre-Kindergarten Expenditures
1. Summary of the Regulations Regarding Public Pre-Kindergarten
Expenditures in the Current Regulations
2. Consultation with States and Other Organizations
3. Changes Made in this Proposed Rule
III. Regulatory Impact Analyses
A. Executive Order 12866
B. Regulatory Flexibility Analysis
C. Assessment of the Impact on Family Well-Being
D. Paperwork Reduction Act
E. Unfunded Mandates Reform Act of 1995
F. Congressional Review
G. Executive Order 13132
I. Background
A. Child Care and Development Fund
Administered by the Child Care Bureau, CCDF assists low-income
families, including families receiving or transitioning from Temporary
Assistance for Needy Families (TANF), in the purchase of child care
services, thereby allowing parents to work or attend training or
education. States must spend a portion of their CCDF allotment on
expenditures to improve the quality and availability of child care.
B. Summary of the Statutory Provisions Related to the State Match
Requirement
CCDF is comprised of three funding streams, discretionary funds
subject to annual appropriation by Congress as authorized under Section
658B of the CCDBG Act, 42 U.S.C. 9858, and mandatory and matching funds
appropriated under Section 418 of the Social Security Act (``SSA''), 42
U.S.C. 618. Pursuant to Section 418(a)(2) of the SSA, the Federal CCDF
matching funds are the funds remaining after the mandatory funds have
been distributed to the States. Matching funds are allocated to the
States on the basis of the number of children under age 13 in the State
compared with the number of children under age 13 in the Nation. These
funds must be matched by States at the State's Federal medical
assistance percentage (FMAP) rate.
C. State Match Requirement Regulations
The current CCDF regulations (the ``current regulations'') are
codified at 45 CFR part 98. The relevant matching fund requirements of
the current regulations provide that donated funds from private sources
may be qualified as State expenditures for purposes of receiving
Federal CCDF matching funds, provided that such funds are transferred
to or under the control of the State CCDF Lead Agency or given to the
single entity designated by the State to receive donated funds. 45 CFR
98.53(e) and (f). The relevant matching fund requirements also provide
that States may use public pre-kindergarten expenditures for up to 20
percent of the expenditures serving as maintenance-of-effort and up to
20 percent of the expenditures meeting CCDF matching requirements. 45
CFR 98.53(h). States seeking to use pre-kindergarten expenditures for
between 10 and 20 percent of the expenditures serving as maintenance-
of-effort or meeting CCDF matching requirements must provide a
description of the efforts they will undertake to ensure that pre-
kindergarten programs meet the needs of working families. They must
also demonstrate how they will coordinate their pre-kindergarten and
child care services to expand the availability of child care. 45 CFR
98.53(h)(4).
We propose to revise current regulations to implement a provision
of the President's Good Start, Grow Smart Initiative and give States
more flexibility in making the necessary State expenditures on child
care to earn their full allotment of Federal CCDF matching funds.
Specifically, the President's Good Start, Grow Smart Initiative
provides that the amount of State pre-kindergarten expenditures that
may be used for Federal match will be increased to give States more
flexibility in funding quality activities in support of early learning.
Further, in FY 2001 and FY 2002, five States failed to earn their full
allotment of Federal CCDF matching funds. In recent months, ACF Regions
and the Child Care Bureau have received requests from additional states
for increased flexibility in the use of donated funds and public pre-
kindergarten expenditures to meet CCDF matching requirements.
D. Statutory Authority
This proposed regulation is being issued under the authority
granted to the Secretary of Health and Human Services (HHS) by Section
658E of the CCDBG Act, 42 U.S.C. 9858c.
II. Provisions of Proposed Rule
A. Certifying Private Donations as State Expenditures
1. Summary of the Regulations Regarding Certifying Private Donations as
State Expenditures in the Current Regulations
In order to certify funds donated from private sources that are not
transferred to or under State control as expenditures for the purpose
of receiving Federal CCDF matching funds, the current regulations
provide that States must designate a single entity to receive such
privately donated funds and all such privately donated funds must be
transferred to this single
[[Page 64882]]
designated entity. The specific provisions setting forth this
requirement appear at Sec. 98.53(f) of the current regulations and
provide that funds donated from private sources ``may be given to the
entity designated by the State to receive donated funds'' in the State
Plan.
2. Consultation with States and Other Organizations
Requests have been made by State officials at the Child Care
Bureau's annual meeting of State Administrators and through numerous
written, e-mail, and telephonic correspondence for increased
flexibility in meeting the States' CCDF matching requirements. The
Child Care Bureau has also heard that States find the current
regulations too restrictive when States seek to encourage coordination
among early childhood education programs or to implement the
President's Good Start, Grow Smart Initiative.
3. Changes Made in This Proposed Rule
In order to grant States greater flexibility in meeting the
matching requirements for Federal CCDF matching funds, this proposed
rule provides that States shall be allowed to designate multiple public
and/or private entities to receive privately donated funds that may be
certified as State expenditures for purposes of receiving Federal CCDF
matching funds. We propose to revise Section 98.53(f) to provide that
privately donated funds ``may be given to the public or private
entities designated by the State to implement the child care program in
accordance with Sec. 98.11 provided that such entities are identified
and designated in the State Plan to receive donated funds pursuant to
Sec. 98.16(c)(2).'' Additionally, conforming changes are proposed to
Sections 98.16(c)(2) and 98.53(e)(2)(iv) to reflect the fact that
privately donated funds may be given to ``public or private entities.''
B. Public Pre-Kindergarten Expenditures
1. Summary of the Regulations Regarding Public Pre-Kindergarten
Expenditures in the Current Regulations
The current regulations provide that, once States have met their
maintenance-of-effort requirement, they may use public pre-kindergarten
expenditures for up to 20 percent of their child care expenditures
designated toward meeting CCDF matching requirements. States seeking to
use the full 20 percent of pre-kindergarten expenditures to meet the
matching requirements must provide a description of the efforts they
will undertake to ensure that pre-kindergarten programs meet the needs
of working families. They must also demonstrate how they will
coordinate their pre-kindergarten and child care services to expand the
availability of child care. The specific provisions setting forth this
requirement appear at Section 98.53(h)(3) of the current regulations
and provide that ``[i]n any fiscal year, a State may use other public
pre-K funds for up to 20% of the expenditures serving as the State's
matching funds under this subsection.''
2. Consultation With States and Other Organizations
Requests have been made by State officials at the Child Care
Bureau's annual meeting of State Administrators and through numerous
written, e-mail, and telephonic correspondence for increased
flexibility in meeting the States' CCDF matching requirements. The
Child Care Bureau has also been informed that States are finding the
current regulations to be too restrictive when States seek to encourage
coordination among early childhood education programs or to implement
the President's Good Start, Grow Smart Initiative.
3. Changes Made in This Proposed Rule
In order to grant States greater flexibility in meeting the
matching requirements for Federal CCDF matching funds, this proposed
rule provides that once States have met their maintenance-of-effort
requirement, they may designate a portion of their public pre-
kindergarten expenditures as their expenditures toward Federal CCDF
matching funds; provided that the portion of public pre-kindergarten
expenditures designated as State matching funds may not exceed 30
percent of the amount of expenditures required by States to earn their
full allotment of Federal CCDF matching funds. We propose to revise
Section 98.53(h)(3) to provide that, ``[i]n any fiscal year, a State
may use other public pre-K funds as expenditures serving as State
matching funds under this subsection; such public pre-K funds used as
State expenditures may not exceed 30% of the amount of a State's
expenditures required to earn the State's full allotment of Federal
matching funds available under this subsection.'' Additionally,
conforming changes would be made to Sections 98.53(h)(4) to provide
that the CCDF Plan ``shall reflect the State's intent to use public
pre-K funds in excess of 10%, but not for more than 20% of its
maintenance-of-effort or 30% of its State matching funds in a fiscal
year.''
III. Regulatory Impact Analyses
A. Executive Order 12866
Executive Order 12866 requires that regulations be drafted to
ensure that they are consistent with the priorities and principles set
forth in Executive Order 12866. The Department has determined that this
proposed rule is consistent with these priorities and principles.
Executive Order 12866 encourages agencies, as appropriate, to
provide the public with meaningful participation in the regulatory
process. As described earlier, the Child Care Bureau and ACF regional
offices have been contacted by numerous States expressing their desire
for greater flexibility in meeting their matching requirement for
Federal CCDF matching funds. This rule addresses these concerns. In
addition, we are providing a 60-day public comment period.
This rule is considered a ``significant regulatory action'' under
Executive Order 12866 and therefore has been reviewed by the Office of
Management and Budget.
B. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. Ch. 6) (RFA) requires the
Federal government to anticipate and reduce the impact of rules and
paperwork requirements on small businesses and other small entities.
Small entities are defined in the RFA to include small businesses,
small non-profit organizations, and small governmental entities. This
rule will affect only the 50 States and the District of Columbia.
Therefore, the Secretary certifies that this rule will not have a
significant impact on small entities.
C. Assessment of the Impact on Family Well-Being
We certify that we have made an assessment of this proposed rule's
impact on the well-being of families, as required under Section 654 of
the Treasury and General Appropriations Act of 1999. This proposed rule
will make it easier for States to receive their full allotment of
Federal matching funds through CCDF. These funds are to be used by
States to assist low-income families in purchasing child care services,
to provide comprehensive consumer education to parents and the public,
and to improve the quality and availability of child care.
D. Paperwork Reduction Act
In order for States to use the increased flexibility provided by
the proposed rule, Lead Agencies must amend their Lead Agency Plans,
the information
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requirements of which are set forth in Section 98.16 of the current
regulations. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507 (d)), the Administration for Children and Families has
submitted a copy of this section, together with a copy of this notice
of proposed rulemaking to the Office of Management and Budget (OMB) for
its review.
Title: Amendment to State/Territorial Plan Pre-Print (ACF-118) for
the Child Care and Development Fund (Child Care and Development Block
Grant).
Description: The legislatively-mandated plans serve as the
agreement between the Lead Agency and the Federal Government as to how
CCDF programs will be administered in conformance with legislative
requirements, pertinent Federal regulations, and other applicable
instructions and guidelines issued by ACF. This information is used for
Federal oversight of the Child Care and Development Fund. Because the
State Plans must accurately reflect the manner in which a State meets
the matching requirements for Federal CCDF matching funds, in order for
a State to use the increased flexibility provided by this proposed
rule, it must submit an amendment to its plan reflecting the change in
the manner in which it meets the matching requirement for Federal CCDF
matching funds. Because the information required to take advantage of
the provisions of this proposed regulation are already collected in the
ACF-118, a new information collection document will not be necessary.
ACF expects to publish proposed revisions to the ACF-118 in the Federal
Register in October. These proposed changes should reach OMB in January
2005.
Respondents: State and territorial governments.
Burden Estimates:
Estimated Number of Likely Respondents: 22*.
Number of Responses Per Respondent: 1.
Average Burden Hours Per Response: 2.
Estimated Total Burden Hours: 44.
*Estimate based upon the total number of States using private
donations and/or their public pre-kindergarten expenditures as their
expenditures toward Federal CCDF matching funds in FY2002, plus an
additional number of States that are expected to take advantage of the
increased flexibility in using private donations and/or public pre-
kindergarten expenditures to meet their State CCDF matching
requirement.
The Administration for Children and Families will consider comments
by the public on this proposed collection of information in the
following areas:
(1) Evaluating whether the proposed collection is necessary for the
proper performance of the functions of ACF, including whether the
information will have practical utility;
(2) Evaluating the accuracy of the ACF's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) Enhancing the quality, usefulness, and clarity of the
information to be collected; and
(4) Minimizing the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technology, e.g., permitting
electronic submission of responses.
OMB is required to make a decision concerning the collection of
information contained in these proposed regulations between 30 and 60
days after publication of this document in the Federal Register.
Therefore, a comment is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not affect the
deadline for the public to comment to the Department on the proposed
regulations. Written comments to OMB for the proposed information
collection should be sent directly to the following: Office of
Management and Budget, Paperwork Reduction Project, Washington DC,
katherine_t._astrich@omb.eop.gov.
E. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that a covered agency prepare a budgetary impact statement
before promulgating a rule that includes any Federal mandate that may
result in the expenditure by State, local, and Tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year.
This proposed rule will not result in the expenditure by State,
local, and Tribal governments, in the aggregate, or by the private
sector, of $100 million or more in any one year. Expenditures made to
meet the requirements for Federal CCDF matching funds are made entirely
at the option of the State or Tribal government seeking the Federal
CCDF matching funds.
F. Congressional Review
This proposed rule is not a major rule as defined in 5 U.S.C. 804.
G. Executive Order 13132
Executive Order 13132 guarantees ``the division of governmental
responsibilities between the national government and the States that
was intended by the Framers of the Constitution, to ensure that the
principles of federalism established by the Framers guide the executive
departments and agencies in the formulation and implementation of
policies, and to further the policies of the Unfunded Mandates Reform
Act.''
The Secretary certifies that this proposed rule does not have a
substantial direct effect on States, on the relationship between the
Federal government and the States, or on the distribution of power and
responsibilities among the various levels of government. This proposed
rule does not preempt State law and does not impose unfunded mandates.
This proposed rule does not contain regulatory policies with
federalism implications that would require specific consultations with
State or local elected officials.
List of Subjects in 45 CFR Part 98
Child Care, Grant programs--social programs.
(Catalogue of Federal Domestic Assistance Programs: 93.575, Child
Care and Development Block Grant; 93.596, Child Care Mandatory and
Matching Funds)
Dated: March 16, 2004.
Wade F. Horn,
Assistant Secretary for Children and Families.
Approved: July 21, 2004.
Tommy G. Thompson,
Secretary, Department of Health and Human Services.
For the reasons set forth in the preamble, the Administration for
Children and Families proposes to amend part 98 of title 45 of the Code
of Federal Regulations as follows:
PART 98--CHILD CARE AND DEVELOPMENT FUND
1. The authority for part 98 continues to read:
Authority: 42 U.S.C. 618, 9858.
2. Amend Sec. 98.16 by revising paragraph (c)(2) as follows:
Sec. 98.16 Plan provisions.
* * * * *
(c) * * *
(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 Sec. 98.53(f);
* * * * *
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3. Amend Sec. 98.53 by revising paragraphs (f), (h)(3), and (h)(4)
to read as follows:
Sec. 98.53 Matching fund requirements.
* * * * *
(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 subsection.
They may be given to the public or private entities designated by the
State to implement the child care program in accordance with Sec.
98.11 provided that such entities are identified and designated in the
State Plan to receive donated funds pursuant to Sec. 98.16(c)(2).
* * * * *
(h) * * *
(3) In any fiscal year, a State may use public pre-K funds for up
to 20% of the funds serving as maintenance-of-effort under this
subsection. In addition, in any fiscal year, a State may use other
public pre-K funds as expenditures serving as State matching funds
under this subsection; such public pre-K funds used as State
expenditures may not exceed 30% of the amount of a State's expenditures
required to earn the State's full allotment of Federal matching funds
available under this subsection.
(4) If applicable, the CCDF Plan shall reflect the State's intent
to use public pre-K funds in excess of 10%, but not for more than 20%
of its maintenance-of-effort or 30% of its State matching funds in a
fiscal year. Also, the Plan shall describe how the State will
coordinate its pre-K and child care services to expand the availability
of child care.
* * * * *
[FR Doc. 04-24944 Filed 11-8-04; 8:45 am]
BILLING CODE 4184-01-P