2024-26909. Increase Flexibility for Tribes in Child Care and Development Fund (CCDF) Eligibility

I. Statutory Authority	3
II. Background	3
Effective Dates	5
Severability	5
III. Development of Regulation	5
IV. Discussion of Comments and Regulatory Provisions	7
V. Regulatory Process Matters	9
Regulatory Flexibility Act	11
Unfunded Mandates Reform Act of 1995	12
Executive Order 13132	12
Assessment of Federal Regulations and Policies on Families	13
Regulatory Review	13
VI. Tribal Consultation Statement	14
List of Subjects in 45 CFR Part 98	14

I. Statutory Authority

This final rule is being issued under the authority granted to the Secretary of Health and Human Services by the Child Care and Development Block Grant (CCDBG) Act of 1990, as amended (42 U.S.C. 9857 et seq.), and section 418 of the Social Security Act (42 U.S.C. 618).

II. Background

In response to requests from Tribal Leaders and Tribal Child Care and Development Fund (CCDF) Lead Agencies for more flexibility on family income eligibility to better meet community needs and to recent statutory changes to eligibility in the Tribal Head Start program, this final rule amends the CCDF regulations to provide all Tribal CCDF Lead Agencies the flexibility to serve Indian children (as defined by the Tribal Lead Agency) in their defined service area regardless of family income or assets. This final rule is also responsive to Executive Order 14112, Reforming Federal Funding and Support for Tribal Nations To Better Embrace Our Trust Responsibilities and Promote the Next Era of Tribal Self-Determination, which directs agencies to “increase the accessibility, equity, flexibility, and utility of Federal funding.” This final rule provides Tribal Nations with more flexibility to better meet community needs, responds to calls for greater Tribal sovereignty and self-determination, and facilitates better alignment between Tribal CCDF and American Indian and Alaska Native (AIAN) Head Start programs.

The CCDBG Act (42 U.S.C. 9857 et seq.), hereafter referred to as the “Act,” together with section 418 of the Social Security Act (42 U.S.C. 618), authorize the CCDF program, which is the primary federal funding source to Tribes, States, and Territories devoted to supporting families access to child care and to increasing the quality of child care for all children. CCDF plays a vital role in supporting child development and family well-being; facilitating parent employment, training, and education; and improving the economic well-being of participating families. In fiscal year (FY) 2024, 264 Tribal Lead Agencies representing 546 federally recognized Tribal Nations received CCDF grants totaling nearly $600 million.^[1] Annual Tribal CCDF awards range from $70,000 to $88 million per year.

The Act does not explicitly apply most of its provisions to the Tribal CCDF program, so with some exceptions and within certain parameters, the Secretary of Health and Human Services has the authority to determine many of the CCDF requirements for Tribal Lead Agencies, including the family income and assets eligibility requirements for children to receive services from Tribal CCDF programs. Previous Tribal CCDF regulations included different family income and assets eligibility requirements and flexibilities based on a Tribal Lead Agency's award allocation size in FY 2016. Tribal Lead Agencies who had allocations under $250,000 in 2016 (155 Tribal Lead Agencies) could serve any Indian child (as defined by the Tribal Lead Agency) in their defined service area, regardless of family income or assets. However, Tribal Lead Agencies with allocations above $250,000 in 2016 were subject to the same CCDF income and assets eligibility standard as States, set forth at § 98.20(a)(2), which meant that family income could not be more than 85 percent of Grantee Median Income (GMI) and family assets could not exceed $1 million.

This final rule extends the existing flexibility for Tribal Lead Agencies with small allocations to disregard family income and assets in determining family eligibility for CCDF to all Tribal Lead Agencies. All Tribal CCDF Lead Agencies may continue to use family income and/or assets criteria for eligibility at their option, but it will no longer be a requirement. Tribal Lead Agencies choosing to use family income or assets criteria for eligibility would have the flexibility to determine the appropriate threshold for their Nation. This final rule does not alter existing flexibilities that permit Tribal Lead Agencies with medium and large allocations to apply categorical eligibility criteria for families under certain conditions.

This final rule will benefit Tribal Nations by better aligning family income eligibility rules in the Tribal CCDF with Head Start programs and providing necessary flexibility to determine how early childhood program ( print page 90606) family income or assets determinations can best support their communities. This alignment is particularly salient because many American Indian and Alaskan Native (AIAN) Head Start grant recipients administer a Tribal CCDF program. At the request of Tribal Nations and the Biden-Harris Administration, the Further Consolidated Appropriations Act, 2024 (Public Law (Pub. L.) 118-47, Div. D, Tit. II, Sec. 238) included changes to AIAN Head Start eligibility criteria, to make eligible for Head Start services all age-eligible children in an AIAN program's service area regardless of income. The Head Start Act, unlike the CCDBG Act, required legislative action to make this change.

Effective Dates

This final rule will become effective on the date of publication to expedite Tribal Lead Agencies' ability to implement the flexibilities included in this final rule.

Severability

The provisions of this final rule are intended to be severable, such that, in the event a court were to invalidate any particular provision or deem it to be unenforceable, the remaining provisions would continue to be valid.

III. Development of Regulation

ACF published a notice of proposed rulemaking (NPRM) in the Federal Register on July 16, 2024, (89 FR 57835) proposing revisions to CCDF regulations. We provided a 60-day comment period during which interested parties could submit comments in writing electronically.

ACF received 18 comments on the proposed rule (public comments on the proposed rule are available for review on www.regulations.gov), including Tribal Nations and Tribal organizations, a state CCDF Lead Agency, non-profit and research organizations, parents, and individual members of the public. Public comments informed the development of content for this final rule.

Tribal consultation and comments. ACF is committed to consulting with Tribal Nations prior to promulgating any regulation that has Tribal implications. ACF held a formal consultation session virtually in August 2024 with Tribal leaders and authorized representatives to discuss the impact of the proposed regulations on Tribes. Tribes and Tribal organizations were informed of these events through formal letters to Tribal leaders and announcements to Tribal CCDF administrators. ACF also distributed materials specifically addressing the impact of the proposed rule on Tribes. ACF will publish a consultation report, which will be posted as a supplemental document in the Federal Register and will include information on consultation attendees as well as their specific comments. During consultation, ACF received testimony from one authorized representative who expressed strong support for the proposed change. This final rule was informed by this testimony.

In addition, prior to the development of the NPRM, OCC sought feedback from Tribal Nations and other interested parties on areas where more flexibility and/or different program rules would better serve children, families, and Tribal Nations through a formal Request for Information (RFI), published in the Federal Register at 88 FR 48409 (July 27, 2023). Through the RFI process, many Tribal Lead Agencies expressed support for changing eligibility requirements so they can serve Indian children (as defined by the Tribal Lead Agency), regardless of family income. OCC also received feedback on the need for flexibility in eligibility determination at the ACF Tribal Early Childhood Consultation held in July 2024. This final rule was informed by this feedback.

This final rule maintains the structure and organization of the current CCDF regulations. Where language of previous 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 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; 81 FR 67438, Sept. 30, 2016; 89 FR 15366, Mar. 1, 2024).

IV. Discussion of Comments and Regulatory Provisions

This final rule amends § 98.81(b)(1) to provide all CCDF Tribal Lead Agencies the flexibility to determine family eligibility for CCDF without regard to family income and assets. Specifically, the rule revises § 98.81(b)(1)(ii) so that all Tribal Lead Agencies may disregard family income and assets requirements described in § 98.20(a)(2), while retaining the ability for Tribal Lead Agencies with a Tribal median income below a level determined by the Secretary to deem any child in their service area categorically eligible, regardless of work, or training status. Previously, the 40 percent of Tribal Lead Agencies with medium and large allocations were subject to the requirements at § 98.20(a)(2) that children must be in families with incomes below 85 percent Grantee Median Income (GMI) and with assets under $1 million to be eligible for CCDF. Tribes with small allocations were already exempt from the requirements at § 98.20(a)(2). Extending the flexibility to serve any Indian child in the service area regardless of family income or assets to all Tribal Lead Agencies gives the Lead Agencies the authority to better meet the needs of Tribal Nations and their communities and supports Tribal sovereignty and self-determination. It also creates better opportunities for Tribes to align CCDF programs with other Tribal early childhood programs, including Tribal home visiting, Early Head Start, Head Start preschool, and tribally or state funded preschool.

The new flexibility included in this final rule is at the option of the Tribal Lead Agency. Therefore, Tribal Lead Agencies with medium and large allocations may choose to continue using income and/or assets when determining if a child is eligible for CCDF. Tribal Lead Agencies who choose to keep income and/or assets as eligibility criteria are not limited to setting the income threshold at or below 85 percent GMI, or an asset limit at $1 million and may set these thresholds higher.

This final rule does not make any other changes to Tribal CCDF regulations. No other changes were made to family eligibility rules, including existing Tribal categorical eligibility flexibilities, which remain unchanged.

Comment: Commenters unanimously expressed support for the proposed change to provide all Tribal Lead Agencies the flexibility to serve all Indian children (as defined by the Lead Agency) in their service area regardless of family income or assets. Commenters noted that the change is a step toward promoting Tribal sovereignty and enabling Tribal Nations to implement the CCDF program in a way that meets the unique needs of each community. They also noted that the change better aligns with eligibility rules of other early childhood programs, including Head Start, which may lead to more inclusive and equitable services for Native families.

Response: We acknowledge that commenters supported the proposed change and agree that this change supports Tribal sovereignty and have retained the provision as proposed with one minor addition to clarify that Tribal Lead Agencies may disregard eligibility requirements for assets, in addition to ( print page 90607) those required for income, which has always been the intent of the rule.

Comment: While all commenters supported the change, some noted that all Tribal Lead Agencies may not have the funding to serve all Indian children in their service areas.

Response: This regulatory change provides a new flexibility for all Tribal Lead Agencies. The rule does not impact Congressionally appropriated funds or Tribal CCDF allocations. Disregarding income and assets as eligibility criteria is an option for Tribal Lead Agencies, not a requirement. Tribal Lead Agencies have flexibility to establish income and asset requirements that balance the needs of the community and resources available.

V. Regulatory Process Matters

Paperwork Reduction Act

Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq., as amended), all Departments are required to submit to the Office of Management and Budget (OMB) for review and approval any reporting or recordkeeping requirements inherent in a proposed or final rule. As required by this Act, we will submit all revised data collection requirements to OMB for review and approval.

The final rule modifies the previously approved ACF-118-A CCDF Tribal Plan information collection (OMB #0970-0198). ACF initiated the process to receive OMB approval to revise and extend approval of the ACF-118-A CCDF Tribal Plan. This began with the initial 60-day comment period, which started on July 2, 2024, (89 FR 54827) and the first comment period ended on September 3, 2024. ACF will include the changes that result from this final rule in the revision request that is submitted to OMB for review and approval. This includes updates to the information collection and the associated burden estimates. This process will include publication of a second Federal Register notice soliciting public comments over a 30-day period on the revisions to the ACF-118-A CCDF Tribal Plan.

CCDF title/code	Relevant section in the proposed rule	OMB control No.	Expiration date	Description
ACF-118-A (CCDF Tribal Plan) Part I and Part II	§ 98.81	0970-0198	4/30/2025	This final rule provides new flexibilities which Tribal lead agencies with medium and large allocations will be required to report on in the CCDF plans.

The table below provides current approved annual burden hours and estimated annual burden hours for these existing information collections that are modified by this final rule.

Annual Burden Estimates

Instrument	Total number of respondents	Total number of responses per respondent	Current approved average burden hours per response	Current annual burden hours	Estimated average burden hours per response based on final rule	Estimated annual burden hours based on final rule
ACF-118A Part I (for all tribes)	265	1	120	10,600	120	10,600
ACF-118-A Part II (for medium and large Tribes only)	106	1	24	848	24	848