[Federal Register Volume 59, Number 90 (Wednesday, May 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11087]
[[Page Unknown]]
[Federal Register: May 11, 1994]
_______________________________________________________________________
Part II
Department of Health and Human Services
_______________________________________________________________________
Administration for Children and Families
_______________________________________________________________________
45 CFR Part 98, et al.
Child Care and Development Block Grants and Aid to Families With
Dependent Children and Child Care Programs; Proposed Rule
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
45 CFR Part 98
Administration for Children and Families
45 CFR Parts 255, 256 and 257
RIN 0970-AB33
Aid to Families With Dependent Children Child Care Program,
Transitional Child Care and At-Risk Child Care; Child Care and
Development Block Grant
AGENCY: Administration for Children and Families (ACF), HHS.
ACTION: Proposed rule.
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SUMMARY: The Administration for Children and Families (ACF) proposes to
amend the regulations for the Child Care and Development Block Grant
(CCDBG), child care serving Aid to Families with Dependent Children
(AFDC) families, the Transitional Child Care program (TCC), and At-Risk
Child Care program.
The purpose of this proposal is to support States, Territories and
Tribes in their efforts to increase the availability and quality of
federally-subsidized child care, develop more coordinated delivery
systems, and improve child care opportunities for families, providers
and communities.
The proposed rule is presented in a single package because of our
intent to remove regulatory barriers to program coordination, to
increase flexibility across the four programs, and to promote common
goals. The proposed rule addresses certain key areas of mutual concern
for operation of these programs: Accessibility to higher quality care
through amended payment rates; adaptation of payment policies for
children with special needs as a result of the Americans with
Disabilities Act; impact of the Fair Labor Standards Act and other
Federal and State statutes on in-home care; and deletion of provisions,
known as the effects test, which may be construed as minimizing
regulatory protection for children in care concerning State
implementation of health and safety standards.
The proposed amendments to the CCDBG regulations additionally
include technical amendments required by the Juvenile Justice and
Delinquency Prevention Amendments of 1992 and the Older Americans Act
Technical Amendments. Other proposals respond to general concerns about
payment differentials for quality care, children's immunizations,
eligibility of children in foster care, availability of certificates as
a payment mechanism, and cost limitations for administration and
certain other activities.
The proposed amendments to the regulations for child care for AFDC
families, TCC, and At-Risk Child Care promote coordination among these
programs and also with CCDBG to: provide State flexibility in
determining a child's physical or mental incapacity; modify and codify
policy regarding child care during gaps in employment; require States
to define how child care is reasonably related to the parent's work or
other activity; and allow States flexibility to conform family fee
requirements. Additionally, proposed amendments to TCC would give
States the option to provide TCC to families who voluntarily terminate
their AFDC benefit, and address the process of requesting TCC.
DATES: Interested persons and agencies are invited to submit written
comments concerning these proposed regulations no later than July 11,
1994.
ADDRESSES: Comments should be mailed (facsimile transmissions will not
be accepted) to the Assistant Secretary for Children and Families,
Attention: Child Care Comments, OFA/DJP, Fifth Floor, 370 L'Enfant
Promenade, SW., Washington, DC 20447, or delivered to the
Administration for Children and Families, Office of Family Assistance,
Aerospace Building, Fifth Floor East, 901 D Street, SW., Washington, DC
between 8 a.m. and 4:30 p.m. on regular business days. Comments
received may be inspected during the same hours by making arrangements
with the contact persons shown below.
FOR FURTHER INFORMATION CONTACT: For questions concerning the title IV-
A child care programs, please contact Mary Ann Higgins, Director,
Division of JOBS Program, Fifth Floor, 370 L'Enfant Promenade SW.,
Washington, DC 20447, telephone (202) 401-9294. For questions
concerning the Child Care and Development Block Grant, please contact
Helen Morgan Smith, Acting Director, Division of Child Care, Hubert
Humphrey Building, room 352G, 200 Independence Avenue, SW., Washington,
DC 20201, telephone (202) 690-6241. 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:
Background
The Administration for Children and Families (ACF) administers a
number of programs that address the child care needs of low-income
families. In recent years, the scope of ACF-administered child care
programs was broadened to address the child care needs of increasingly
larger segments of the population. ACF's child care programs reflect a
growing awareness of the needs of the family for safe child care that
also attends to the developmental needs of children. They offer the
Nation's low income families an important support in their efforts to
achieve and maintain economic independence.
Child care needs for working families who receive Aid to Families
with Dependent Children (AFDC) benefits were first addressed through
the dependent care disregard. The family's child care expense (up to
$200 a month for a child under age 2 and up to $175 for a child who is
at least age 2) is deducted from the family's earnings when determining
the amount of the family's countable income for the purpose of the
family's eligibility for and amount of AFDC assistance. The dependent
care disregard is used by most States as one method for providing child
care to working AFDC families.
The Social Services Block Grant (title XX of the Social Security
Act) enables States to provide social services which are best suited to
the needs of its residents. These services can include child care, and
most States have used title XX funds to provide child care through
contracts with providers.
The regulatory changes proposed in this rule concern four child
care programs created through two statutes: the Family Support Act of
1988 (Pub. L. 100-485) and the Omnibus Budget Reconciliation Act of
1990 (OBRA 90). A brief description of each program and of the overall
goals of this proposed rule follows.
The Family Support Act of 1988 amended title IV-A of the Social
Security Act at section 402(g), providing a very significant extension
of ACF's ability to fund child care services. The amendment created two
new child care programs. First, it guaranteed necessary child care for
working AFDC recipients, and for AFDC recipients in approved education
or training activities (including the Job Opportunities and Basic
Skills Training (JOBS) Program). This program is often called AFDC
child care. The regulations for AFDC child care are located at 45 CFR
part 255. An amendment concerning applicable child care standards under
45 CFR 255.4 (Allowable Costs and Matching Rates) became effective on
August 4, 1992.
Second, the Family Support Act addressed the need for Transitional
Child Care (TCC) during the 12 months after a family becomes ineligible
for AFDC due to work. The regulations specific to TCC are located at 45
CFR part 256. However, many of the regulations for AFDC child care
(part 255) also apply to TCC.
With OBRA 90, Congress established two additional child care
programs that further extended child care services to the Nation's low-
income families: an optional At-Risk Child Care program (child care for
low-income working families in need of such care and otherwise at risk
of becoming eligible for AFDC) and the Child Care and Development Block
Grant (CCDBG).
Currently, 49 States and the District of Columbia have approval to
operate the At-Risk program. That program, like the other title IV-A
child care programs, requires the State to match Federal funds, but,
unlike the other programs, it is capped and the funds are distributed
according to a formula. The At-Risk Child Care program is located at
section 402(i) of title IV-A of the Social Security Act. The At-Risk
regulations are located at 45 CFR part 257.
In this preamble, we refer to AFDC child care, TCC, and At-Risk
Child Care as the title IV-A programs.
The CCDBG is intended to provide child care services for low-income
families and to increase the availability, affordability, and quality
of child care and development services. That program does not require a
State match. Regulations for the CCDBG program are located at 45 CFR
parts 98 and 99.
The Juvenile Justice and Delinquency Prevention Amendments of 1992,
Public Law 102-586, made various technical changes to the CCDBG. For
example, section 8(a)(1) and (2) of the amendments made changes to
section 658J(c) of the Block Grant Act by replacing ``obligation
period'' with ``expenditure period.'' Other minor technical corrections
to the Block Grant Act are included in the Older Americans Act
Technical Amendments, Public Law 103-171.
Purpose of Proposed Rule
This proposed rule incorporates lessons ACF has learned from our
initial experience with the title IV-A and CCDBG programs. Our purpose
is to remove barriers, promote coordination, foster higher quality
care, and champion the health of our neediest children. We have
evaluated State and Tribal child care program plans, conducted many
child care program field reviews, sponsored two national child care
conferences, held symposia for States and Tribes, and participated in
many other conferences and meetings. We have listened as State
representatives and others voiced desire for remedies of regulatory
barriers to the operation of seamless child care delivery systems and
for the ability to deliver higher quality care. This section of the
preamble gives an overview of our findings and considerations. These
ideas for change are developed in greater detail later in the preamble.
There are four main purposes of this proposed rule. First, it is a
vehicle for responding to changes needed to existing regulations to
achieve consistency with recently enacted law. We thus propose changes
to the CCDBG regulations required by the Juvenile Justice and
Delinquency Prevention Amendments of 1992 and the Older Americans Act
Technical Amendments. We also propose amendments and provide guidance
in the preamble on how payments for special needs children can be made
under both title IV-A child care and CCDBG in light of the Americans
with Disabilities Act (ADA), Public Law 101-336, enacted on July 26,
1990.
Second, these proposals reflect ACF's desire to help States
facilitate operation of the title IV-A and CCDBG programs based on the
experiences of both States and families with existing program policy.
The changes will give States some immediate relief to certain
regulatory barriers. Many of these proposals will permit States to
coordinate the four programs better, making services more seamless for
child care providers and families. Allowing for greater conformity
among the sliding fee scales for title IV-A child care and CCDBG is an
example of this kind of effort. Allowing States to determine physical
or mental incapacity of children to be served under title IV-A
consistent with CCDBG rules is another example.
Third, our objective in proposing these changes is to strengthen
States' capacity to ensure the quality of federally-subsidized child
care services by removing regulatory barriers. We believe the quality
of federally-subsidized child care is important and want to promote
safe and healthy environments for children that foster their
development and overall well-being. We wish to further foster quality
in partnership with the States. Our proposals to foster quality include
eliminating the regulation in the CCDBG that limits payment
differentials within categories of care to no more than 10 percent. We
also propose to allow States to pay the actual charge for higher
quality child care for children in title IV-A programs, without regard
to the 75th percentile of the local cost of care, for child care that
meets State-designated objective standards of quality that exceed the
normal licensing or certification requirements.
Finally, the health of children plays an overwhelmingly important
role in their well-being and their ability to grow and develop into
productive citizens. We therefore propose to amend the CCDBG health and
safety standards to require that children receiving CCDBG services
receive immunizations.
In sum, this proposed rule goes beyond adoption of technical
refinements to ACF-administered child care programs. It represents
ACF's efforts to think more broadly about helping States better serve
low-income families through subsidized child care.
Statutory Authority
Regulations for the title IV-A child care programs are published
under the general authority of 1102 of the Social Security Act which
requires the Secretary to publish regulations that may be necessary for
the efficient administration of the functions for which she is
responsible under the Act. Section 658E of the Child Care and
Development Block Grant Act requires that the Secretary shall by rule
establish the information needed in the Block Grant plan.
Regulatory Impact Analysis
This proposed rule has been reviewed by the Office of Management
and Budget (OMB) pursuant to Executive Order 12866. Executive Order
12866 requires that regulations be reviewed to ensure that they are
consistent with the priorities and principles set forth in the
Executive Order. The Department has determined that this rule is
consistent with these priorities and principles. An assessment of the
costs and benefits of available regulatory alternatives (including not
regulating) demonstrated that the approach taken in the regulation is
the most cost-effective and least burdensome while still achieving the
regulatory objectives.
It was difficult for us to determine the actual cost implications
of the regulation because most of the changes are optional with States.
We did not know how many States would adopt these options, or whether
States would make other programmatic changes which would counteract any
potential increases in costs. Therefore, we are explicitly seeking
comments on the cost implications of the proposed changes.
We are proposing a new requirement that children be immunized in
order to receive services under the Child Care and Development Block
Grant. The CCDBG health and safety regulations currently require States
and Tribes to include provisions about immunizations in their CCDBG
plans and to provide assurances that requirements with respect to
immunizations are in place. In addition, most States already include
immunizations in their child care standards. We do not anticipate that
our proposal will have a significant negative impact on either grantees
or families, since grantees will not be required to provide
immunizations directly and families who receive subsidized child care
are by law eligible for free immunizations under such federally
supported programs as Medicaid, the Early Periodic Screening Diagnosis
and Treatment (EPSDT) Program, and the new Vaccines for Children
program. The immunization provision was considered the most cost-
effective and least burdensome approach because: (1) It helps ensure
that vulnerable young children are immunized; (2) immunization of such
children is highly cost-effective; and (3) it provides flexibility to
grantees in determining how to implement the provision.
Furthermore, it directly supports the President's national
immunization initiative, Vaccines for Children, which calls for greater
mobilization and expansion of immunization resources to protect the
health of our youngest and most vulnerable children.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act (Pub. L. 96-354) requires the
Federal government to anticipate and reduce the impact of rules and
paperwork requirements on small businesses and other small entities.
The primary impact of these final rules is on State, Tribal and
Territorial governments. To a lesser extent the regulation could affect
individuals and small businesses. However, the number of small
businesses affected should be limited, and the expected economic impact
on these businesses would not be so significant that a full regulatory
flexibility analysis is indicated.
First, the regulations retain many provisions designed to
ensure broad participation by small businesses in the program. For
example, the IV-A entitlement programs provide that individuals must be
able to choose among available providers, including family day care
providers. The At-Risk program regulations still require that any
registration requirements States impose on unlicensed and unregulated
providers be simple and timely, and facilitate prompt payment. In the
CCDBG program, the regulations still require that parents have a choice
among a variety of providers including family day care providers. These
and other provisions in the current rules will help ensure that States
exercise restraint in imposing any additional requirements on small
entities providing child care.
The proposed rule contains a number of provisions which
could result in some decreases in the regulatory and economic burdens
on providers who are small businesses. Most importantly, because States
will be able to operate their programs under a more consistent set of
program rules, participating providers should face a simpler and more
streamlined set of regulatory requirements.
Many of the providers who would potentially be affected
are in-home providers. These providers are generally not operating as
small businesses, but as domestic employees; thus, any impact on them
need not be specifically addressed under this Act.
The regulation could ultimately result in some additional
regulatory requirements or health and safety standards for other
providers, such as family day care providers, who are small businesses.
However, the impacts on small businesses, if any, would not be directly
attributable to this regulation. With the possible exception of the
immunization provision, the regulation does not directly propose any
expansion of regulatory requirements or health and safety standards on
providers; thus, any impacts on providers should only arise as the
result of independent State and/or local decisions to impose additional
requirements.
The effects tests may have discouraged States from imposing
additional requirements--beyond those which were generally applicable--
on providers who specifically wanted to participate in these federally
supported child care programs. However, we do not believe States have
much interest in imposing additional requirements on these providers.
First, States and localities know that parents often have difficulty
locating child care providers which meet their needs, and that low-
income parents frequently have more serious access problems. They do
not want to make it appreciably more difficult for providers to
participate in the programs which serve low-income families. Secondly,
States have limited resources for enforcing and monitoring child care
regulations; thus, they are motivated to be selective about imposing
requirements. Thirdly, States have an interest in establishing a
consistent set of requirements for providers, regardless of their
payment sources; differential rules make it more difficult to ensure
regulatory compliance and provide a seamless system of services which
help families make the transition from welfare to self-sufficiency.
Finally, under current rules, State and local governments have full
flexibility to set general regulatory requirements and health and
safety standards for child care providers. If States (or other
grantees) have felt that there was a substantial need for additional
requirements (presumably to protect the well-being of children in
care), we would have expected them to act under this general authority.
While States generally have immunization requirements for children
in child care, the proposed immunization provision might result in some
additional children being subject to immunization requirements or
stronger requirements for some children. However, States have
flexibility in deciding how immunization requirements are to be
implemented. Requirements would not necessarily be imposed on
providers; rather, States can choose to impose them on eligible
families. Thus, the immunization provision in this proposed rule does
not directly affect small businesses. Further, where States do choose
to impose additional requirements on providers related to the
immunization provision, such requirements would be basically
administrative in nature (e.g., documentation); we expect the costs of
immunization to be covered through other funding sources. Thus, this
provision would not have a significant economic impact on affected
providers.
Thus, the number of entities affected, and the net economic impact
on them, should not be significant.
Paperwork Reduction Act
Certain sections of these proposed regulations contain information
collection requirements which are subject to review and approval by OMB
under the Paperwork Reduction Act of 1980 (44 U.S.C. chapter 35). The
proposed revisions for the title IV-A child care programs will produce
only minor changes and additions to the State Supportive Services Plan
(ACF-106).
Specifically, State plans would be required to include: (1)
Policies on ``reasonably related'' (see Sec. 255.1(e)(4) and
Sec. 257.21(a)(6)); (2) definitions of ``mentally or physically
incapable'' (see Secs. 255.1(m) and 256.1(a)(5)); and (3) decisions on
whether States have opted to provide TCC without formal requests,
during gaps, and in voluntary closure situations (Sec. 256.1(a)(6)). If
States take advantage of the other new options available to them, they
would also have to report on their criteria for determining ``higher
quality'' care (Sec. 255.1(i)(2)) and conditions and limitations for
in-home care (Sec. 255.1(n) and Sec. 257.21(o)). The proposed rule
would reduce reporting burden at Sec. 255.1(i) through its elimination
of the requirement for surveys of special needs rates.
These amendments to the IV-A State plans are being submitted to
OMB.
Similarly, the proposed revisions for the CCDBG program will
produce minor changes and additions in the CCDBG plan. Grantee plans
will have to include additional information about immunization policies
pursuant to the amendments at Sec. 98.41(a)(1) (see Sec. 98.16(a)(10)).
Depending on their response to the proposed amendments and
clarifications, Grantees may also be revising plan sections on in-home
policies (Sec. 98.16(a)(7)(ii)), the definition of protective services
(Sec. 98.16(a)(6)(vii)), and payment rate differentials
(Secs. 98.16(a)(12) and 98.43(e)).
Amendments to the CCDBG plans will also be submitted to OMB.
ACF has submitted a copy of this proposed rule to OMB for its
review of these information collection requirements. Other
organizations and individuals desiring to submit comments regarding the
information collection requirements should direct them to the
Administration for Children and Families (address above) and to the
Office of Information and Regulatory Affairs, OMB, room 3208, New
Executive Office Building, Washington, DC 20503, Attn: Laura Oliven,
Desk Officer for ACF.
Order of Preamble and Regulations
The preamble begins with a discussion of four areas where the
proposed regulations for the title IV-A child care programs and CCDBG
address similar issues--payments for higher quality child care,
payments for children with special needs, providing in-home care, and
the effects test. We first discuss these four issues from a common
perspective. But, where needed because the respective statutes for the
programs differ, the general discussion on these topics is followed by
a discussion of the proposed regulatory change in the context of the
specific program, either the Block Grant or the applicable title IV-A
program(s). It is our intent that where these proposals address a
common issue, the proposed changes result in policies that better
enable States to coordinate these programs into a more cohesive child
care system. Comments which identify the potential for conflicting
policy between programs as a result of these proposals are especially
encouraged.
Following the discussion of these four issues, we discuss
additional changes specific to the CCDBG (part 98) followed by proposed
changes specific to the title IV-A child care programs (parts 255, 256,
and 257). The proposed regulations follow the order of the Code of
Federal Regulations (CFR) and are presented after the preamble,
beginning with the CCDBG followed by the title IV-A child care
programs.
Proposed Child Care Rule Amendments, 45 CFR Parts 98, 255, 256, and 257
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Topic 45 CFR section
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Joint Issues
Payment Rates for Higher Quality
Care:
CCDBG............................ 98.16, 98.43
Title IV-A....................... 255.1, 255.3, 255.4
Payment Rates for Special Needs
Care:
CCDBG............................ 98.16, 98.43
Title IV-A....................... 255.4
In-Home Care:
CCDBG............................ 98.16
Title IV-A....................... 255.1, 255.3, 255.4, 257.21, 257.40
Effects Test:
CCDBG............................ 98.30, 98.40, 98.41, 98.43, 98.45
Title IV-A....................... 255.4, 257.41
Child Care and Development Block
Grant
Immunizations...................... 98.41
Foster Care........................ Preamble clarification
Certificate Availability........... 98.30
Other Authorized Activities........ 98.13, 98.50, 98.52
Availability of Funds and Reporting 98.2, 98.60, 98.63, 98.70
Title IV-A Child Care
Reasonably Related................. 255.1, 257.21
Determining Incapacity............. 255.1, 255.2, 256.1, 256.2
Gaps in Employment and Continuity 255.2, 256.1, 256.2, 257.30
of Title IV-A Child Care.
Transitional Child Care............ 256.1, 256.2, 256.3, 256.4
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Payments for Higher Quality Child Care
Both the Federal government and the States have an interest in
assuring that the increasing number of the Nation's children who
receive child care services benefit from high quality care. This
interest applies to all children, whether or not in subsidized care.
High quality care provides parents a necessary support service to
enable them to participate in work, education, or training. High
quality care also provides sound developmental support for the children
who comprise our future work force.
Balancing the Federal government's interest in an adequate supply
of child care to meet the needs of family self-sufficiency programs
with the States' responsibility for regulating the quality of that care
is a delicate exercise. We have learned from administering the title
IV-A and CCDBG programs that States wish to have more opportunities to
recognize higher quality care by compensating providers appropriately.
As a result, ACF proposes to amend the payment regulations for both
title IV-A and CCDBG child care programs. Along with other amendments
described in this proposed rule, these payment amendments will enable
States to provide recipients of child care under these programs greater
access to higher quality care.
As described more fully below, we propose to eliminate the
regulation for the CCDBG that limits payment differentials within
categories of care to no more than 10 percent. We also propose to amend
the title IV-A child care regulations to allow States to pay the actual
cost of care, subject only to the statewide limit, for care that meets
the State's definition of higher quality care.
Payments Under CCDBG
We propose to revise Secs. 98.16(a)(12)(ii) and 98.43(e) to remove
the 10 percent cap on payment differentials within a category of care.
In addition, we propose to revise Sec. 98.43(b) (1) and (2) to clarify
that the cost of subsidized child care services must be no more than
the actual amount billed or charged for non-subsidized care.
The Block Grant Act requires that payment rates take into account
the variations in cost of providing child care in different categories,
as defined in Sec. 98.2(h), and to children of different age groups, as
well as the additional costs of providing child care for children with
special needs. Grantees have been required to differentiate among
center-based, group home, family, and in-home child care providers. The
existing regulations permit grantees to differentiate payment rates
within categories of care, if certain conditions are met.
As noted in the preamble to the existing regulations, the limit on
payment rate differentials within a category of care was one of the
more controversial issues of the regulation. That controversy continues
today. In writing the existing regulations, we were persuaded by
grantees and child care advocates that grantees should be permitted to
differentiate within categories of care to account for licensing status
and considerations of quality, as well as coordination with other child
care programs. As a consequence, grantees were permitted to set
differential payment rates, with a 10 percent cap, within categories of
care. However, in the preamble, we indicated that we would consider
amending the regulation if it became apparent that the 10 percent limit
was inappropriate or served no useful purpose.
Since publication of the existing regulations, we have conducted
program reviews in States and non-exempt Tribes, held a number of
meetings attended by States, Territories and Tribes, consulted with
many child care advocacy groups and received numerous letters from the
Congress and other interested parties. In these contacts, we were told
that child care providers meet varying licensing requirements and
provide care at varying levels of quality. Grantees have asked for the
additional flexibility to set payment rates which provide incentives
for becoming licensed and which reflect differences in program quality.
A number of grantees have stated that, in setting payment differentials
within categories of care, they want to recognize and compensate those
child care facilities which have obtained nationally recognized
accreditation along with those child care providers who have earned
Child Development Associates (CDA) credentials. Additionally, grantees
want to take into consideration the differing costs of providing care
in licensed, unlicensed, and license-exempt (e.g., relative) settings,
and of providing care during non-traditional hours (e.g., evenings and
nights).
It has also been pointed out that other child care subsidy programs
allow grantees to differentiate within categories of care without
imposing any limitation on the amount of the payment differential. As a
consequence, some grantees have experienced difficulty in creating a
seamless child care system.
Eliminating the 10 percent limitation will give grantees the
flexibility to address these areas of concern. As a consequence, we
propose to remove the reference to limits on payment differentials in
Secs. 98.16(a)(12) and 98.43(e). We propose to revise Sec. 98.43(e) and
add Sec. 98.16(a)(12)(iii) to require grantees that provide for
variations in the payment rate within a category to include a
description of how the differential rates within categories of care are
determined and to identify the distinctions within categories. Grantees
would still be required to ensure that payment rates are sufficient to
provide access to child care services comparable to those in the non-
subsidized sector.
We are clarifying the regulations at Sec. 98.43(b) (1) and (2) to
read ``amount charged'' instead of costs. We believe this terminology
more clearly reflects Federal policy which prohibit the use of Federal
dollars to pay more for a service than the provider would charge a non-
subsidized family. Oftentimes, the provider may not bill the actual
costs, believing that the parent(s) could not afford them. However,
providers may well provide those ``costs'' when responding to market
surveys or other ``payment rate'' questions concerning costs, resulting
in receipt of payments which exceed those actually charged. We believe
that this revision will eliminate such occurrences. This clarification
does not represent a change in policy.
Payments for Higher Quality Care Under Title IV-A Child Care
Programs
Currently, Federal Financial Participation (FFP) for title IV-A
child care is available for the lowest of the actual charge for care,
the local market rate for that category of care or the applicable
statewide limit. The local market rate is based on the 75th percentile
cost of care in the local area. We continue to believe that the 75th
percentile is a reasonable definition of local market rate. This level
represents a balance between concerns about fiscal accountability and
accessibility to most services. In addition, we believe that requiring
local market rates to be set at the 75th percentile has raised the
general level of reimbursement to providers. We recognize, however,
that the 75th percentile may not be sufficient to purchase some higher
quality care. Therefore, to permit States to recognize and reward
higher quality care, we propose amending Sec. 255.4(a) to define the
actual charge for care that meets the State's objective criteria for
higher quality care as the local market rate for such care. We will
provide FFP for the actual charge for such care, subject to the
statewide limit.
While we recognize that State licensing or regulatory certification
contributes to high quality care, we do not believe that licensing or
regulation is the sole criterion or indicator of a higher quality of
care. The proposed amendment to Sec. 255.4(a) requires that the State-
defined higher quality criteria will be in addition to existing State
licensing or regulatory requirements. For example, the State's
objective criteria for higher quality care might be that providers have
a Child Development Associate (CDA) credential coupled with lower than
regulatory staff/child ratios, or the State could choose the Head Start
Program Performance Standards or other nationally or State-recognized
criteria as its criteria for higher quality. We do not propose a
national standard or definition for higher quality care.
Similarly, it is not the intention that this regulation be used to
circumvent the regulation at Sec. 255.4(a)(2)(iii) which establishes
local market rates at the 75th percentile based on a survey of
providers in an area. We expect that, because the State's criteria for
higher quality care will be above the licensing and regulatory
standards generally in effect, the State will make payments at the
actual cost (subject only to the statewide limit) under this provision
less frequently than payments are made at the 75th percentile. Payments
for higher quality care would apply, then, to only a few providers in
an area, not the majority of providers. These providers still would be
included in local market rate surveys. We are also proposing to amend
Sec. 255.1(i) to require States to specify in the Supportive Services
Plan their objective criteria for higher quality care.
To be consistent in our terminology, we propose to amend
Sec. 255.4(a)(2)(iii) to replace ``type'' with ``category'' when
referring to various kinds of providers. We propose the same revision
for Secs. 255.1(i) and 255.3(c).
Payments for Child Care for Children With Special Needs
For the purposes of this section only, in discussing payments for
child care, we use the term ``special needs'' to mean children with
mental or physical impairments that substantially limit one or more of
the major life activities, i.e., ``disabilities'' as the term is used
in the Americans with Disabilities Act (ADA). Special needs in this
preamble discussion does not mean foster care, protective services,
bilingual/cultural needs or other broader considerations sometimes
attached to the term, for example, for the purpose of targeting as
required by the CCDBG regulations at Sec. 98.44(b).
Americans With Disabilities Act
The Americans with Disabilities Act, enacted on July 26, 1990,
provides comprehensive civil rights protections to individuals with
disabilities in the areas of employment, public accommodations, State
and local government services, and telecommunications. The ADA is
administered by the U.S. Department of Justice (DOJ). However, most
States have established a central contact, usually in the office of the
Governor or Attorney General, and questions about the ADA should be
referred to that contact first. In addition, DOJ has established a
technical assistance Information Line for public inquiries. The
Information Line is available 24 hours daily at (202) 514-0301 (voice)
or (202) 514-0381 (TDD). (This number will be replaced with a toll free
800 number in the future.) Lastly, written inquiries about the ADA may
be directed to: U.S. Department of Justice, Civil Rights Division,
Public Access Section, P.O. Box 66738, Washington, DC 20035-6738.
Of particular consequence in the context of paying for child care
is title III of the ADA which prohibits discrimination on the basis of
disability by private entities in places of public accommodation. The
ADA defined public accommodations as facilities whose operations affect
commerce and fall within twelve specified categories, including social
service center establishments. The implementing regulations for the
ADA, issued on July 26, 1991, specifically include ``day care centers''
as public accommodations and clarified that places of public
accommodation located in a private residence are covered by the ADA.
The ADA uses the term ``day care center'' as a generic term for all
categories of out-of-home child care providers. In contrast to many
other Federal non-discrimination laws, a public accommodation does not
have to receive Federal funding to be covered by the requirements of
the ADA. Thus, with a few very limited exceptions specified in the ADA,
all child care providers who provide services to the public are covered
by the ADA. While most provisions of the ADA have been well understood,
there has been considerable confusion about its impact on payments for
child care, particularly when such payment is subsidized. In light of
the ADA, we believe it is important to discuss the payments for child
care for children with special needs under ACF-administered child care
programs. We are therefore proposing clarifications to the regulations
which address payments for child care for children with special needs.
The ADA regulation at 28 CFR 36.301(c) states: ``A public
accommodation may not impose a surcharge on a particular individual
with a disability * * * to cover the costs of measures, such as the
provision of auxiliary aids, barrier removal, alternatives to barrier
removal, and reasonable modification in policies, practices or
procedures, that are required to provide that individual * * * with the
non-discriminatory treatment required by the Act * * *.''
In response to ``whether day care centers may charge for extra
services provided to individuals with disabilities,'' the preamble
noted that Sec. 36.301(c) ``is intended only to prohibit charges for
measures necessary to achieve compliance with the ADA.'' (56 FR 35564,
July 26, 1991.) Thus, the ADA and its implementing regulations do allow
caregivers to charge higher rates for special needs, provided those
higher charges are for services beyond those required by the ADA and
are not for the purpose of recouping the cost of measures required by
the ADA.
States need the flexibility to determine on an individual basis how
best to meet the needs of children with special needs. It is our intent
that such children receive quality child care in developmentally
appropriate settings so that they may reach their maximum potential and
grow into responsive and responsible adults. Providers should be
compensated, within the ADA regulations, for those developmentally
appropriate child care services provided to children with special needs
in order to ensure that these children do not go unserved and the
quality of care is not affected. (At the same time, such compensation
must be consistent with the cost principles applicable to expenditures
under the program.)
Payments for Child Care for Children With Special Needs Under CCDBG
The CCDBG program uses the term ``special needs'' in two different
contexts. But as stated earlier for the purpose of payment rate
discussion, the term ``children with special needs'' will be used to
refer to children with mental or physical impairments that
substantially limit one or more of the major life activities.
Because the ADA stresses the need for making decisions on
accommodations on an individual basis, it is inconsistent to require
grantees to set a single or overall payment rate for children with
special needs. We believe that grantees must have the flexibility to
set payment amounts on a case-by-case basis. As a consequence, we
propose to revise Sec. 98.16(a)(12)(ii) by removing the requirement
that grantees justify a decision not to have different rates based on
the additional amount charged for child care services provided to a
child with special needs. We also propose revising Sec. 98.43(b)(2) to
reflect that additional charges for providing child care for a child
with special needs must be for services not required as an
accommodation under the ADA.
Payments for Child Care for Children With Special Needs Under Title
IV-A
The existing regulations governing payments for title IV-A child
care require States to conduct local market surveys to establish rates
for such care, including care for children with special needs, where
applicable. Further, although the regulations for the CCDBG do not
require that grantees conduct such market surveys, many grantees have
adopted the title IV-A local market rates established by these surveys.
The ADA does not explicitly prevent States and grantees from continuing
to conduct and use such surveys as a method of establishing rates for
payment of special needs child care. However, given the emphasis of the
ADA on accommodating persons with disabilities on an individualized
basis, ACF strongly believes that local market surveys, for the purpose
of establishing rates for special needs care, are no longer useful or
accurate.
Because the ADA stresses that decisions on accommodations for a
person's disability must be made on an individual, case-by-case basis,
we propose at Sec. 255.4(a)(2) that in lieu of a local market survey to
establish rates for special needs care, States must use the following
method for determining payments to providers of care to special needs
children: when a provider charges a special needs child, on an
individual basis, a rate that exceeds the local market rate for a child
of the same age and category of care, that charge would be the local
market rate for that special needs child. The State would pay that
charge, subject to the statewide limit and applicable cost principles,
if it is for services which are not required as an accommodation under
the ADA.
Other than the statewide limit, our regulations do not provide for
or authorize additional limitations on charges for children whose needs
go beyond those accommodated under ADA. We had concerns that such
limitations could violate the ADA principle of individual
accommodation, and we did not want to entangle welfare agencies in
decisions about what are appropriate accommodations under ADA. Further,
it is our belief that the general cost principles applicable in these
programs protect both Federal and State governments against provider
charges that are unreasonable. Nevertheless, we are interested in
comments in this area.
It should be noted that States may continue to establish higher
statewide limits for children with special needs.
As discussed above, we believe that States cannot establish valid
local market rates for children with special needs because, under the
ADA, any higher charges must be based on the individual child's and
provider's circumstances; these would not be known or taken into
account by a survey. Accordingly, we also propose to remove the
reference to differentiating local market rates for children with
special needs from Sec. 255.4(a)(3)(ii).
In-Home Care
The CCDBG and title IV-A child care regulations currently mandate
that States and other grantees offer in-home care as an option to
parents whose child care is subsidized by these programs. However, the
provisions for in-home care in the two sets of regulations lack
compatibility and impede seamless program administration. CCDBG
grantees are allowed to limit the availability of in-home care to those
situations in which the payment is reasonably similar to payments for
other categories of care. The title IV-A regulations contain no such
provision for limiting the availability of in-home care and, unlike the
CCDBG, require that States establish local market rates for this
category.
To increase the compatibility between CCDBG and IV-A regulations we
are proposing to: (1) Allow States and other grantees the same degree
of flexibility under both programs; (2) give both programs greater
latitude in setting the terms and conditions under which in-home care
will be offered; and (3) allow States to establish the minimum wage as
the in-home payment rate for care subsidized under title IV-A without
conducting a market survey. We believe that these proposals will give
States and other grantees greater control and flexibility over the use
of in-home care while protecting parental choice and ensuring that
specific family needs can be met.
Because this category of care occurs in the child's own home, it
has unique characteristics. First, it is affected by the interaction
with other laws and regulations. For example, in-home providers are
classified as domestic service workers under the Fair Labor Standards
Act (FLSA) (29 U.S.C. 206(a)) and are therefore covered under minimum
wage and tax requirements. Second, child care administrators have faced
greater challenges in monitoring the quality of care and the
appropriateness of payments to in-home providers. These unique
characteristics and the experience of States, Territories and Tribes
over the past several years indicate a need for greater flexibility as
well as consistent policies across funding streams.
The mandatory inclusion of in-home care in current CCDBG and IV-A
regulations is intended to ensure a full range of options to meet
families' needs and to accurately reflect the child care market.
However, because in-home care is not required by statute and because
States and other grantees have requested greater flexibility and
consistency across policies, we considered proposing that in-home care
be made optional in both programs. However, we were concerned that,
because in-home care presents a number of administrative challenges,
some States would unduly restrict the availability of care for families
who particularly need this type of setting or who lack other options.
We therefore decided not to make in-home care optional but to give
States and other grantees greater flexibility.
We are mindful that in-home care plays a valid and important role
in the child care market place and that many participants in subsidized
care programs rely on care in their own homes to meet their family
needs. Access to care which meets the needs of individual families is
critically important to parents and children, to schools and the
workplace, and to other community institutions which interface with the
family. While in-home care represents only a small proportion of all
available care in most communities, it may be the best or only option
for some families and may prove valuable, necessary and cost-effective
when compared to other options. Despite the challenges cited above, in-
home care is being successfully offered and has proven to be an
important resource. For these reasons, we expect States and Tribes to
consider family and community circumstances carefully in establishing
any conditions which will limit the availability of in-home care. We
are thus proposing that grantees include in their CCDBG plans a
discussion of their policies for in-home care and a rationale for their
policy decisions.
There are a number of conditions under which in-home care may be
the most practical solution to a family's child care needs. For
example, the child's own home may be the only practical setting in
rural areas or in areas where transportation is particularly difficult.
Employees who work nights, swing shifts, rotating shifts, weekends or
other non-standard hours may experience considerable difficulty in
locating and maintaining satisfactory center-based or family day care
arrangements. Part-time employees often find it more difficult to make
child care arrangements than do those who work full-time. Similarly,
families with more than one child or children of very different ages
might be faced with multiple child care arrangements if in-home care
were unavailable. Many families also believe that very young children
are often best served in their own homes. Given the general paucity of
school-age child care in many communities, in-home supervision may
enable some families to avoid latchkey situations before school, after
school, and when school is not in session. For many families, in-home
care by relatives also represents an important cultural value and may
promote stability, cohesion and self-sufficiency in nuclear and
extended families.
We also urge child care administrators to consider the capacity of
local child care markets to meet existing demand and the role that in-
home care may play in the ability of parents to manage work and family
life. Although in-home care does not represent a large share of the
national supply, it plays an important role in the structure and
functioning of local child care markets by extending the ability of
parents to care for children within their own families, closing gaps in
the supply of community facilities, and creating a bridge between adult
care and self- or sibling-care as children near adolescence.
Some States may choose to limit in-home care because of cost
factors governed by minimum wage provisions of the FLSA and other
Federal and State requirements. For example, a State might determine
that minimum wage requirements result in payments for in-home care
serving only one or two children that are much higher than the local
market rate for other categories. Therefore, the State could elect to
limit in-home care to families in which three or more children require
care. The payment to the in-home provider would then be similar to the
payment for care of the three children in other settings. This ability
to limit in-home care allows States to recognize the same cost
restraints that families whose care is unsubsidized must face.
ACF recognizes that giving the States greater latitude to impose
conditions and restrictions on in-home care may affect parents' ability
to make satisfactory arrangements and thus their ability to participate
in work, education or training. We also recognize the challenges of
implementing health and safety requirements in the child's own home, of
monitoring in-home providers, and of complying with federal wage and
tax laws governing domestic workers. Therefore, we are seeking focused
comments on our regulatory proposals for in-home care and would
especially appreciate suggestions on how to balance parental choice,
cost effectiveness, and adherence to other Federal and State
provisions, such as the FLSA, that are unique to in-home settings.
In-Home Care and the CCDBG
We propose to revise Sec. 98.16(a)(7)(ii) to require that grantees
include in their CCDBG plans a specification of their policies for in-
home care and the rationale for those policies.
In-Home Care and Title IV-A Child Care
We propose to amend Secs. 255.3(c) and 257.40(b) to give States the
flexibility to specify the conditions and limitations under which the
State will make in-home care available. Therefore, we propose to add
State plan requirements at Secs. 255.1(n) and 257.21(o) to ascertain
any conditions and limitations the State has placed on in-home care.
Establishing the Local Market Rate for In-Home Providers
ACF proposes to amend Sec. 255.4(a)(3) (i) and (v) to give States
the flexibility to eliminate the local market survey, required by
Sec. 255.4(a)(2), as the basis for establishing local market rates for
in-home care providers. The proposed amendment provides that the local
market rate for in-home providers must be at a level no lower than the
level required by Federal and State provisions which govern domestic
service workers. The State may choose to establish the local market
rate at such a level without conducting the survey specified under
Sec. 255.4(a)(2). As an alternative, the State has the option to
conduct a local market rate survey for in-home care if the State
believes that the local market rate for such care is higher than that
required by the FLSA and other Federal and State statutes.
The Effects Test and CCDBG
Section 658E(c)(2)(A) of the Block Grant Act requires States to
provide assurances that parents are given the option of (1) enrolling
their children with a provider who has a grant or contract to provide
services, or (2) receiving a child care certificate with which to pay
the provider of their choice. The Act also requires that children who
are to be enrolled in contracted slots must be placed with the provider
of their parents' choice whenever possible. For the CCDBG program,
Congress clearly expected that parents would be able to choose from a
wide variety of child care arrangements, including care in private
homes by relatives or family providers; in churches, synagogues or
temples; in community centers and schools; and in employer-provided
facilities.
In addition to the expectation that parents would be offered child
care options, Congress clearly intended that CCDBG grantees ensure the
safety of children in care. Therefore, grantees are also required by
statute to promulgate health and safety regulations which adequately
protect children.
We believe that Congress intended grantees to balance these
provisions. In issuing the CCDBG regulations, ACF attempted to regulate
how grantees would implement this balance. In order to protect
children, grantees were mandated to ensure that health and safety
requirements were in effect for all providers receiving funds under the
CCDBG. Simultaneously, ACF promulgated additional provisions, known as
the ``effects test,'' which withheld CCDBG funds if the grantees
adopted requirements or procedures which had the effect of
significantly limiting parental access to a category of care or type of
provider.
Many grantees and advocates in the field of child care have pointed
out the potential tension between these regulatory provisions. In
addition, many questions have been raised regarding the practical
implementation of the effects test and the criteria by which to judge
that health and safety standards have actually limited parental choice.
Most compelling among such arguments has been the noted absence of
statutory references to the effects test.
We are now proposing to eliminate the effects test. We do not
intend and do not believe this proposal will weaken parental choice. In
subpart D of the CCDBG regulations, Secs. 98.30-98.34 delineate
parental rights and responsibilities. We are not proposing to change
anything in these sections that would in any way minimize the
importance of parental choice. Parental choice remains a requirement
for CCDBG at Sec. 98.30.
Based on two years of experience in the implementation of these
programs, we do not believe that the effects test is necessary to
protect parental choice. We have substantial evidence that grantees are
indeed offering parents a choice of eligible providers through the
design and operation of their certificate programs. In addition to
information gathered from administrative staff during 33 on-site
program reviews, we heard from parents and providers in focus group
settings. Parents as well as providers spoke favorably about the
choices that parents exercise in making arrangements for their
children. The findings of these program reviews, along with our ongoing
review of child care plans, reveal that grantees are operating
certificate programs which fulfill the statutory parental choice
directives. However, based on the experience of grantees attempting to
balance these provisions, we are seeking focused comments on the
potential impact of this proposal.
We propose that the CCDBG rule be amended by removing Sec. 98.30(g)
which sets forth the effects test and by removing related references at
Secs. 98.40(b)(2) (State and local regulatory requirements), 98.41(b)
(health and safety requirements), 98.43(c) (payment rates), and
98.45(d) (registration).
The Effects Test and Title IV-A
There is no specific statutory commitment to the principle of
parental choice of providers in the title IV-A child care programs as
there is for the CCDBG program. Parental choice, however, is addressed
in the current title IV-A regulations. If more than one category of
care is available, the regulations require the State to provide the
parent or caretaker relative with an opportunity to choose the
arrangement. Also, the State IV-A agency is required to establish at
least one method by which self-arranged care may be paid.
To be compatible with the current CCDBG regulations, the existing
title IV-A child care regulations include an effects test concerning
the regulatory provisions that allow States to adopt the health and
safety requirements of other Federal or State child care programs.
Additionally, they contain an effects test concerning the At-Risk
provider registration provisions which States must adopt. The title IV-
A child care effects test is the same as the effects test contained in
the CCDBG regulations, i.e., that a State's requirements and procedures
in those areas may not have the effect of excluding any categories of
child care providers. For the same reasons given for removing the CCDBG
effects test provisions, however, ACF proposes to remove the title IV-A
effects tests requirements at Secs. 255.4(c)(2)(iii), 257.41(a)(3), and
257.41(b)(2)(v). We do not propose to, and do not believe this action
will, delete or weaken the current title IV-A parental choice
provisions.
Part 98--Child Care and Development Block Grant
Immunizations
We are proposing to amend the CCDBG health and safety regulations
to require that grantees establish rules requiring children receiving
CCDBG services to be immunized. While this change affects only the
CCDBG regulations, grantees may apply the immunization requirement to
title IV-A child care programs for a more seamless child care system.
The CCDBG statute currently includes references to immunizations.
Section 658E(c)(2)(F) requires grantees to provide assurances that
provider requirements are in effect to protect the health and safety of
children receiving services under Secs. 98.50 and 98.51, including
``the prevention and control of infectious diseases (including
immunizations).''
Section 658E(c)(2)(G) of the Block Grant Act also requires grantees
to assure that procedures are in effect which ensure that child care
providers comply with all applicable health and safety requirements
described in paragraph (F) of section 658E. However, section 658P(5)(B)
allows grantees to exclude grandparents, aunts or uncles from provider
health and safety requirements. The current CCDBG regulations reiterate
these statutory requirements.
Surveys of licensed child care facilities indicate that the
majority of States require some proof of immunizations for children
enrolled in licensed or regulated child care centers and family day
care homes. However, individual States differ in their specific
requirements and regulatory approaches. In addition, requirements for
the immunization of children in legally unlicensed care vary widely.
Consequently, there is concern that current immunization policies and
practices may be inadequate to protect large numbers of young children.
Preventable diseases that were practically eliminated years ago are
again infecting our youngest and most vulnerable children. More than
55,000 measles cases were reported to the Centers for Disease Control
and Prevention (CDC) between 1989 and 1991. In 1990, 64 deaths from
measles were reported, the highest number in two decades. A survey
conducted by the CDC in 1991 found that only 37-56% of two-year-old
children were fully vaccinated. (``Childhood Immunizations Fact
Sheet,'' Department of Health and Human Services, Washington, DC,
February 12, 1993.) Since a large percentage of children receiving
assistance under the Block Grant program are under 5 years of age, we
believe that the proposed requirements will assist in reducing the
incidence of infectious diseases among preschool age children.
For these reasons, we propose amending Sec. 98.41(a)(1) to require
that grantees' health and safety plans include specific provisions
requiring children to be immunized in order to receive services under
the CCDBG. State and Territorial health and safety plans must
incorporate (by reference or otherwise) the latest recommendations for
childhood immunizations of the respective State or Territorial
Department of Public Health. Since there may not be a similar public
health authority for Tribes to follow regarding immunization standards,
we are proposing to allow Tribes the option to determine the
immunization standards to be followed for children to receive CCDBG
services. Tribes may choose standards set forth by the State Public
Health Department or the Indian Health Service. Tribes will be required
to identify the source of these standards in their CCDBG plans. In
addition, we propose that all grantees consider requirements which
include provisions for documenting regular updates of the child's
immunizations.
Grantees have flexibility in the method of implementing this
requirement. For example, grantees may require parents to provide proof
of immunization as part of the initial eligibility determination and
again at redetermination, or grantees may require child care providers
to maintain proof of immunization for children enrolled in their care.
However, the requirements established by the grantee must apply to all
children receiving CCDBG assistance and in all child care settings,
unless the child is in one of the exempt groups cited below.
While we propose to require children to be immunized in order to
receive services, grantees may continue to exempt:
(1) Children who are cared for by relatives (defined as
grandparents, aunts and uncles);
(2) Children who receive care in their own homes;
(3) Children whose parents object for religious reasons; and
(4) Children whose medical condition contraindicates immunization.
In proposing that children be immunized, we considered that parents
may not always have had access to immunizations. However, we believe
that the increasing national focus on immunization will ease this
difficulty. The President has made vaccine delivery a national priority
and has signed into law the Vaccine for Children program which provides
free vaccines to States for the inoculation of uninsured children,
children eligible for Medicaid, and Native American children.
Underinsured children whose health insurance does not cover
immunizations are also eligible to be served by Federally Qualified
Health Centers and Rural Health Clinics. The new program will also
allow federally purchased vaccine to be distributed to private
physicians to vaccinate eligible children.
Where grantees impose burdens on providers to check on the
immunization status of children in their care and to ensure that
necessary immunizations are received, we would expect grantees to
assist providers in meeting these requirements. At a minimum, the
assistance should include: (1) Provision of updated immunization
schedules; (2) information on the availability of free vaccines; and
(3) information on locations where parents of eligible children can be
referred for immunizations. These expectations are consistent with
section 658E(c)(2)(G) of the CCDBG statute which requires that
procedures be in place to ensure that providers comply with applicable
health and safety requirements.
We also expect that some children may not have all of the required
immunizations at the time eligibility is determined. In order to ensure
that children eligible to receive services under the Block Grant are
not denied services, we recommend that grantees establish a grace
period in which children can receive services while taking the
necessary actions to comply with the requirements. Grantees will be
required to describe the grace period allowed to these families in
their CCDBG plan.
The health of all children is important, and we therefore strongly
encourage immunizations for children receiving title IV-A child care.
However, we believe that there is no authority under the Social
Security Act to require immunizations for children receiving title IV-A
child care and therefore we cannot propose a parallel regulation for
title IV-A child care. Unlike the CCDBG statutory mandate for State
requirements for the prevention and control of infectious diseases,
including immunization, for all providers, the Social Security Act is
silent. Nevertheless, we wish to emphasize that States already have the
necessary flexibility to choose to require immunizations for children
receiving title IV-A care under the existing title IV-A applicable
standards regulations. The application to title IV-A child care of the
proposed immunization requirement would facilitate the seamless
delivery of child care services across programs.
The applicable standards regulations at Secs. 255.4 and 257.41
require title IV-A child care providers to meet any generally
applicable standard of State, local or Tribal law. Additionally, the
applicable standards regulations allow States to deny payment for care
that does not meet the additional standards used in other Federal
(e.g., CCDBG) or State child care programs in the area of prevention
and control of infectious diseases, including immunizations. Thus
additional Federal regulations are not necessary for title IV-A child
care for States to have the ability to require consistent health and
safety standards, including the proposed immunization requirement.
Foster Care
We are clarifying that CCDBG grantees have the flexibility to
include foster care in their definition of protective services. The
preamble to the existing regulations distinguishes between protective
services cases and children placed in foster care by allowing child
care subsidies for foster care cases only if the foster parent is
working, in education or in training. The distinction made in the
preamble was an interpretation of the regulatory language. The
regulation discusses child protective services only; it is silent on
foster care. This change in interpretation does not require a
regulatory change.
In many States, foster care is an integral part of the protective
services system. It is one of the many services provided to children
and families who, for a variety of reasons, may need protective
intervention. A child is placed in foster care when remaining in the
home places him or her at risk. States, acting in loco parentis, may
provide on-going supportive services to meet the developmental needs
and redress developmental delays which may exist as a result of neglect
or abuse. These services are available both for a child who remains in
his or her own home and for a child in a foster placement. For purposes
of protective services benefits, some grantees do not differentiate
between the protective services for families who remain intact and for
those children who are in a foster placement.
In the preamble to the existing regulations, a child in a family
that is receiving, or needs to receive, some type of protective,
interventive services can be eligible for child care subsidies under
CCDBG if he or she remains in his or her own home even if the parent is
not working, in education or in training. However, such therapeutic
child care outside of the home may be a necessary part of the
individual child's supportive services plan regardless of the child's
living situation. In these cases, child care is needed to carry out the
social services plan for the child and the family--not necessarily
because the parent is working, in education or in training. Therefore
we are changing our interpretation of the regulation to allow States
the option of including children in foster care in the State's
definition of protective services cases.
Allowing CCDBG grantees to include foster care in their definition
of protective services not only gives grantees the flexibility to work
within existing child protective services systems, it is also
consistent with the goals of the recently enacted Family Support and
Preservation Act. This Act promotes integrated and comprehensive
services for families already receiving supportive and/or interventive
assistance from social services agencies.
Grantees electing to include foster care in their definition of
protective services will be required to state this in their Block Grant
Plan. Those grantees choosing to exclude foster care from their
definition of protective services must define eligibility for
participation in CCDBG child care subsidies in terms of the foster
parent working, in education or in training.
Certificate Availability
Section 658E(c)(2)(A) of the CCDBG Act requires States to provide
assurances that parents are given the option of (1) Enrolling their
children with a provider who has a grant or contract to provide
services, or (2) receiving a child care certificate with which to pay
the provider of their choice. The Act also requires that children who
are to be enrolled in contracted slots must be placed with the provider
of their parents' choice whenever possible.
The CCDBG regulation elaborates on the choice between grant/
contract child care and a child care certificate by requiring that a
certificate must be offered when child care services under Sec. 98.50
are made available to a parent. We do not propose any changes to this
requirement which is stated both at Sec. 98.30(a) and Sec. 98.30(e).
However, we do propose removing Sec. 98.30(e) because it is redundant
to a clearer and more expanded presentation of parental choice set
forth in Sec. 98.30(a) (1) and (2).
We are also using the opportunity provided by this proposed rule to
clarify the certificate requirement and to offer examples of grantee
systems which have successfully met this requirement.
Our restatement of the regulatory position that certificates must
be available whenever services under Sec. 98.50 are offered does not
preclude grantees from entering into grants or contracts for child care
services. Depending upon the child care needs of the eligible
population in discrete geographic areas of service, grants and
contracts may be necessary to provide stable child care for
participating populations or specific communities. In essence, the
provision requires a good faith effort by the grantee to balance the
allocation of funds between grants/contracts and certificates to ensure
that parents have optimum choice among quality child care options as
stipulated in the legislation and reinforced in the existing
regulation.
In conducting on-site program reviews over the past two years, we
have found that grantees are operating certificate programs which offer
parental choice. Some grantees are offering only certificates. Others
are committing funds on a proportional basis between certificates and
contracts based on the particular needs of individual areas or
populations. Some grantees, however, have experienced that stable child
care is more difficult to find in rural or inner-city areas, for
infants, or for children with special needs and have therefore
contracted with competent providers to specifically address these
shortages.
In planning the distribution of funds for grants/contracts and
certificates, grantees should establish sufficient fiscal flexibility
to ensure that parents who choose certificates are not placed on a
waiting list while substantial numbers of contracted slots in the same
area remain un-utilized.
However, most grantees are reporting that the need for subsidized
low-income child care far exceeds the available funding. Thus, if
certificate funds are fully reserved for children who are already
enrolled, and no subsidized slots are available (either filled or not
part of the grantee's program), it may be necessary to begin a waiting
list for certificates. Similarly, because many grantees are allocating
funds on a locality by locality basis, waiting lists may result in some
parts of the State while services are still available in other areas.
We want to clarify that although certificates must be an option for
parents whenever Sec. 98.50 services are offered, it is not necessary
to offer certificates whenever Sec. 98.50 services are being used. For
example, if all CCDBG funds available in a community are ``reserved''
for specific children in contracted and certificate-funded slots, the
grantee is not actually offering services and need not offer additional
certificates. Thus, a local program might not offer new child care
services during some portion of the program year because all available
funds have been assigned to specific children and are being used or
``reserved'' for those specific children.
Other Authorized Activities
Currently, CCDBG grantees may spend up to 10 percent of CCDBG funds
authorized under Sec. 98.50 (the 75 percent monies) for program
administration and activities to improve the availability and quality
of child care services. If expenditures for operating the certificate
program and related consumer education equal or exceed 10 percent,
grantees may petition for an additional five percent for other
authorized activities, for a total of 15 percent.
Based on information provided by grantees in their annual reports
and during on-site program reviews, we now propose to allow grantees to
use up to 15 percent of funds authorized under Sec. 98.50 for ongoing
activities related to program administration, quality and availability
without further justification.
In proposing this change, we acknowledge the cost implications of
complex interrelationships among program administration, quality
services and availability of child care options in the context of
rapidly increasing family and community needs. Many States and
localities want to develop more cohesive, integrated and sophisticated
child care management, delivery and payment systems. Activities
undertaken under Sec. 98.50(d) can contribute to the development of
child care systems which more effectively support informed consumer
choice and the delivery of quality care through community-based
providers. This change will provide grantees with the flexibility to
balance priorities and develop more responsive child care programs.
Accordingly, we propose that the CCDBG rules be amended to specify
that the amount generally allowed for activities related to
administration, quality and availability is 15 percent at
Sec. 98.50(d)(2)(ii). Therefore, the amount specified for direct
services is at least 85 percent at Sec. 98.50(d)(2)(i). The change will
also remove Sec. 98.50(d)(3) which requires grantees to petition for
the additional five percent and remove a reference to Sec. 98.50(d)(3)
which occurs in Sec. 98.52(c). It will also remove a related reference
at Sec. 98.13(a)(6)(ii).
Availability of Funds
In the Juvenile Justice and Delinquency Prevention Amendments of
1992, section 658J(c) of the CCDBG Act was amended to eliminate the
time restrictions on obligation and to extend the length of time
grantees have to expend funds received each fiscal year.
Block Grant funds awarded to States and Territories had previously
been available for obligation by the grantee in the fiscal year in
which the grant funds were awarded and in the succeeding fiscal year
(year 2). Unliquidated obligations at the end of year 2 were to be
liquidated during the next fiscal year (year 3).
The statutory amendments eliminate the restrictions on obligation
of funds by States and Territories by providing that CCDBG funds are
expendable in the fiscal year in which they are awarded and in the
three (3) succeeding fiscal years. For Tribal grantees, the amendments
also extend the expenditure period from three (3) fiscal years to four
(4) fiscal years. Thus, the expenditure period for all grantees
(States, Territories, exempt Tribes and non-exempt Tribes) now extends
to four (4) fiscal years.
The amendments were not effective in time to remove the September
30, 1992, obligation restriction on FY 1991 grant funds awarded to
States and Territories. However, the amendments do provide an
additional year to expend funds for obligations made with FY 1991
funds, so that States and Territories now have until September 30, 1994
(rather than September 30, 1993), to expend FY 1991 funds which were
obligated by September 30, 1992.
Tribal grantees who received FY 1991 funds were required to expend
their funds by September 30, 1993. Because the amendments provide an
additional year during which FY 1991 funds may be expended, Tribal
grantees have until September 30, 1994, to expend their FY 1991 grants.
In summary, for all grantees (States, Territories and Tribes), FY
1992 and subsequent fiscal years' funds must be expended by the end of
the expenditure period (the fiscal year in which the funds are awarded
plus the three succeeding fiscal years). To reflect these changes, we
propose amending Sec. 98.2 by removing and reserving paragraph (z) and
revising paragraphs (y) and (cc) and Sec. 98.60 by revising paragraphs
(d)(1), (d)(4), (h)(1), and (h)(3) and removing paragraphs (d)(2),
(d)(3), (e), and (h)(2).
Financial Reporting
We propose revising Sec. 98.63(a)(1) and (b) to change the dates by
which States must report funds for reallotment to other State grantees.
Reallotment rules do not affect Territories or Tribal grantees since
those grantees may not receive reallotted funds.
Each fiscal year, States must specify the amount of any CCDBG funds
which will be available for reallocation or else report that all funds
will be expended. The deadline for submission of this information was
previously April 1 of the second fiscal year of the obligation period.
As a result of the extension of the expenditure deadline by section 8
of the Juvenile Justice and Delinquency Prevention Amendments of 1992,
the date by which States must report CCDBG funds for reallotment has
been extended to April 1 of the fourth (and last) fiscal year of the
expenditure period.
Since the amendments did not remove the September 30, 1992
obligation deadline for FY 1991 grant funds, this change in reporting
did not affect FY 1991 awards. For FY 1992 funds, States must report on
the availability of funds for reallotment by April 1, 1995. Funds
reallotted from one fiscal year's grant are subject to the same period
of availability as the grant year from which the funds were awarded.
Thus, FY 1992 funds, if any, reallotted in May of 1995 must be expended
by September 30, 1995.
Annual Report Requirement
In Sec. 98.70, the CCDBG rule requires grantees to submit annual
reports to the Secretary by December 31. This provision is not affected
by the extension of the expenditure period by section 8 of the Juvenile
Justice and Delinquency Prevention Amendments of 1992. Each report must
specify expenditures made by September 30 of the year in which the
report is submitted to the Secretary, with each fiscal year's funds
accounted for separately. However, we are proposing to revise
Sec. 98.70 to more clearly state the requirement and to delete those
requirements no longer applicable.
PART 255--CHILD CARE AND OTHER WORK RELATED SUPPORTIVE SERVICES
DURING PARTICIPATION IN EMPLOYMENT, EDUCATION AND TRAINING
Child Care That Is ``Reasonably Related'' To Parent's Activities
Under the regulations for title IV-A child care, a State must
assure in the State Supportive Services Plan that child care provided
or claimed for reimbursement is reasonably related to the hours of
participation in JOBS or in other State-approved education and training
(for care under part 255) or employment (for care under parts 255, 256
and 257). ACF recognized that many individuals would participate in
education, training and employment on less than a full-time basis, but
decided not to regulate a definition of what constitutes child care
that is reasonably related to the parent's hours of participation or
employment. Rather, we gave States the flexibility and, we believed,
the authority to develop their own policies.
During our discussions with States, however, we learned that there
is some misunderstanding or disagreement about who has the
responsibility for establishing policies on what constitutes an amount
of child care that is reasonably related to the parent's training or
employment. For example, internal or external reviews or audits have
questioned how a State determined that the child care under review was
reasonably related to the parent's activity.
ACF continues to maintain that State IV-A agencies should establish
their own policies for what constitutes a ``reasonably related'' amount
of child care. Therefore, we propose to have the State include in its
Supportive Services Plan a description of its policy on what
constitutes child care that is reasonably related to the parent's hours
of participation in education, training or employment by revising
Secs. 255.1(e)(4) and 257.21(a)(6).
Including the State's ``reasonably related'' child care policy in
the federally approved Supportive Services Plan will clarify the IV-A
agency's role in developing and articulating the State's policy in this
area. By having written policy on ``reasonably related,'' States should
avoid such disputes with potential reviewers.
In proposing this regulation, we wish to clarify the difference
between a policy which addresses paying for child care when a child is
absent from regularly scheduled care (e.g. due to illness) and a policy
which describes what is reasonably related child care.
A ``reasonably related'' child care policy correlates the parent's
activities with the amount of child care that the IV-A agency views as
necessary based on the parent's activities and in consideration of
other factors that the agency regards as significant. For example,
States may wish to include such factors as the individual needs of the
recipient family, the availability or lack of care alternatives in a
local market area, need for continuity of care by a specific caregiver,
or the needs of a Head Start Agency to meet operating expenses for
wrap-around child care.
In contrast to the ``reasonably related'' policy which relates the
parent's activity to an amount of child care, an absence policy
addresses the fact that children will occasionally miss child care
especially due to illness. A State's absence policy would establish
when a State would pay for child care even when the child is absent.
FFP is available for payments made in accordance with a State's absence
policy.
The ``reasonably related'' policy the State describes in its
approved Supportive Services Plan will become the standard against
which actual payments will be judged, for example, for audit purposes.
We therefore advise the State to articulate its policy clearly to all
individuals responsible for approving the payment or reimbursement of
child care services.
Determination of Physical or Mental Incapacity
Under the regulations for AFDC child care at part 255 and
Transitional Child Care (TCC) at part 256, the determination of mental
or physical incapacity for a child over age 13 can only be made by a
``physician or a licensed or certified psychologist.''
The existing policy was adopted to be consistent with the
regulations concerning exemption from participation in the Job
Opportunities and Basic Skills Training (JOBS) program found in part
250. Exemptions from participation in JOBS are available for a number
of reasons, including physical or mental incapacity. Since incapacity
would provide a long and perhaps permanent period of exemption from
activities that would prepare an individual for entry into the work
force, a high standard of professional verification by a physician or
licensed or certified psychologist was adopted. After experience with
the child care programs, we do not believe that receiving child care
services under parts 255 and 256 requires such rigorous verification.
In addition, when the CCDBG program and the At-Risk Child Care
program were implemented after JOBS, both programs, by regulation,
provided for care of a child over age 13 who is physically or mentally
incapable of caring for himself or herself. The regulations for those
programs at parts 98 and 257, respectively, permit the State to make
the determination of physical or mental incapacity. Those regulations
also require States to include a definition of the term ``physically or
mentally incapable of caring for himself or herself'' in the applicable
State Plan.
We propose to amend the child care regulations at parts 255 and 256
to be compatible with the regulations of the other child care programs.
These proposed changes will ease State administration of child care
programs while continuing to ensure that eligibility is properly
documented. We therefore propose to amend Secs. 255.2(a) and 256.2(a)
to provide State flexibility in determining physical or mental
incapacity. We also propose to add Secs. 255.1(m) and 256.1(a)(5) to
require the State to provide its definitions of physical or mental
incapacity in the applicable State Plan.
Gaps in Employment and Child Care Under Title IV-A
We propose to modify the regulatory language at Sec. 255.2(d)(2) to
allow States the additional option to continue child care for families
that lose a job but are searching for another job. Under the proposed
regulation at Sec. 255.2(d)(2)(ii) care can be continued for up to one
month of job search if the care arrangements would otherwise be lost.
This is an expansion of the existing regulation which provides for a
continuation of care for up to one month only if an activity is
scheduled to begin within that month and the arrangements would
otherwise be lost.
We believe that giving States this additional option to continue
child care for a limited period of job search is supportive of families
who may have to change employment and recognizes that it is not always
possible to secure another job immediately following a job loss. Under
the existing regulations, States have had the option to extend child
care services that would otherwise be lost for a limited period both
when another activity is already scheduled to begin within that period
and when there is a short period of absence from an on-going job. The
proposed regulation broadens the State's ability to serve families for
whom continuity of care would assist their movement towards self-
sufficiency.
We also propose to amend the At-Risk regulations at Sec. 257.30(c)
to be consistent with the proposed change at Sec. 255.2(d)(2)(ii) to
allow States the option to continue child care for up to one month for
families that lose a job but are searching for another job.
Additionally, we propose to amend Sec. 257.30(c) to delete the
requirement that child care for the two-week period prior to the start
of a job may be provided only if ``the child care arrangements would
otherwise be lost.'' We believe that the two-week period may be needed
to provide child care in order to prepare for employment. We propose
that at State option child care may be available for up to two weeks
before employment without restriction.
In making these changes to the regulations at Secs. 255.2(d) and
257.30(c), we recognized that the existing regulations for care under
part 256 (TCC) are silent on the provision of child care during gaps
between jobs. In JOBS-FSA-AT-90-8, dated June 29, 1990, we clarified
that families are eligible for TCC during gaps in employment. This
proposed rule at Sec. 256.2(f) thus codifies existing policy and
mirrors the amended policy concerning gaps in employment in parts 255
and 257. Care provided during a break in employment, that is, when the
family is not working, does not extend the family's 12-month
eligibility period.
We propose to make a corresponding amendment to the regulations at
Sec. 256.1(a) for the State Supportive Services Plan which addresses
Transitional Child Care. We propose that the plan reflect whether the
State has elected to allow child care during gaps in employment under
TCC pursuant to the proposed Sec. 256.2(f).
PART 256--TRANSITIONAL CHILD CARE
Determination of Physical or Mental Incapacity
We propose to amend the regulations of the TCC program at
Sec. 256.2(a) to allow the State to determine ``physical or mental
incapacity'' and at Sec. 256.1(a) to allow the State to define the term
in the State's Supportive Services Plan. Our reasons are further
explained in the preamble to the proposed changes for part 255.
Voluntary Cessation of AFDC and Eligibility for TCC
We propose to amend Sec. 256.2(b)(1) by adding a new subparagraph
(ii) to allow States the option of making families who voluntarily
terminate receipt of an AFDC benefit eligible for TCC. Under this
option, working families that receive AFDC could request that their
AFDC be terminated and still become eligible for TCC, provided that
they meet all other TCC eligibility requirements.
The existing regulation, which we propose to redesignate as
Sec. 256.2(b)(1)(i), requires that a family's eligibility for TCC is
based on a loss of eligibility for AFDC due to the increased hours of
employment, increased income from employment or loss of the income
disregards due to time limits. In our consultations we have heard
concerns that some working families find themselves ineligible for TCC
because they voluntarily leave AFDC when they are still entitled to a
grant. Therefore, we propose to allow the State the option to provide
TCC to those working families who voluntarily request that their AFDC
be terminated because their hours or income from employment have
increased or they have lost the income disregards due to time limits,
but are still eligible for AFDC. This policy, coupled with our proposal
to give States the option to eliminate the need for a request for TCC,
should allow States to provide TCC to more families, while easing the
administrative burden on them to provide that service.
We are not proposing to require States to provide TCC in voluntary
closure cases because we are unsure of the administrative and fiscal
impacts on States. At the same time, we want our regulations to support
families who take the initiative to get jobs and move off AFDC.
Therefore, we are interested in receiving comments as to whether it
would be more appropriate to allow or to require States to provide TCC
in voluntary closure cases.
We propose to revise the regulations concerning the State
Supportive Services Plan at Sec. 256.1(a)(6) to include information on
whether the State elects to provide TCC to working families who
voluntarily cease to receive AFDC.
Requesting TCC
The existing regulations require States to provide information to
families about their potential eligibility for TCC, the steps they need
to take to request TCC services, and their rights and responsibilities
under the program. States must provide this information during initial
application for AFDC, during orientation to the JOBS program, at
redetermination of eligibility for AFDC benefits and at termination of
AFDC benefits. ACF issued an Action Transmittal (CC-ACF-AT-92-3), dated
June 16, 1992, that reiterated the necessity for all families to be
informed about TCC ``in writing, and orally as appropriate, at the time
they become ineligible for AFDC.''
The existing regulations also require that all families request TCC
before services are provided. ACF did not regulate the nature of the
request or application process. Rather we encouraged States to make the
process simple, citing the example of a current recipient for whom the
State might approve TCC through a recertification process if the
necessary information was on file.
We have, however, heard concerns that the requirement for the
family to request services may have discouraged some families from
seeking TCC or caused disruption in child care arrangements. This
requirement is especially frustrating for families when necessary
information is already on file with the State agency.
Therefore, we propose at Sec. 256.2(b)(3) to give States the option
to provide TCC, without requiring a request, to eligible families. We
believe that such a policy would be most applicable to families who
were approved for child care services under part 255. For example, an
AFDC recipient reports her newly-begun job to her AFDC case manager. At
that time, the case manager determines that the family will remain
eligible for AFDC until the time limitations on the income disregard at
Sec. 233.20(a)(11) cause the family to lose AFDC eligibility. Because
the case manager recognizes that the family will be eligible for TCC in
four months, if circumstances remain the same, she obtains the
necessary information with which to determine eligibility and establish
the level of the family's fee for TCC, if any. Continuing child care
services in this instance would be possible because all the appropriate
information is available to determine TCC eligibility, including fees,
when the family loses eligibility for AFDC and transitions to TCC.
Adopting this option can make the delivery of title IV-A child care
services more seamless for the family. Additionally, the transition
from child care services provided under part 255 to TCC services may
well be ``transparent'' to the family if the State also adopts the
proposed option to waive TCC fees for those families who are at or
below the poverty level.
However, in adopting the option to continue child care services
without a request for TCC, the State must still provide all of the
required notifications, including appeals rights, regarding the
termination of AFDC benefits and child care services pursuant to
Secs. 205.10 or 250.36 as appropriate. The family must also be notified
of the requirements for their continued eligibility for TCC, including
the payment of fees if applicable, pursuant to the requirements at
Secs. 256.2, 256.3 and 256.4.
We propose amending Sec. 256.1(a)(6)(i) to have States specify in
their Supportive Services Plan whether they have adopted this option.
In proposing this option we recognize that, in some cases (e.g.,
where a State does not have current or complete information on a
family), a State may find it difficult to provide TCC in the absence of
a request. Therefore, the State will still need a mechanism in place to
collect the information necessary to determine eligibility and
payments. For many families, the need for child care will not arise
until they get a job which terminates their AFDC eligibility. Other
families who leave AFDC due to employment may not need child care at
that time (e.g., because their child is enrolled in Head Start), but
may need care subsequently. Whenever the need for child care arises,
the State must make a prompt determination of eligibility for TCC in
order to assist the family. ACF remains concerned that States have not
established such timely, efficient procedures. The request or
application process should be simple so as not to hinder the
applicant's ability to accept work or continue working.
Because we continue to hear concerns that the requirement for a
request for TCC is problematic and that TCC utilization is low, we are
requesting comments on whether: (1) This provision to make requests
optional is a sufficient response; (2) the request requirement
constitutes a serious barrier to the receipt of TCC; and (3) other
changes should be made to make TCC more accessible to eligible
families.
Retroactive Requests for TCC
The existing rule at Sec. 256.2(c) specifically provides for
families to receive TCC ``notwithstanding when the family requests
assistance under this Part * * *.'' States have asked whether they may
establish a cut-off date for TCC requests as they have received
requests after the family's 12-month period of TCC eligibility has
expired. There is no existing Federal policy which addresses a cut-off
date for TCC requests following the 12-month eligibility period. We
believe a cut-off date should be a State decision. We propose to revise
Sec. 256.2(c) and add a new paragraph Sec. 256.2(g) to provide States
the authority to establish a reasonable time limit for accepting TCC
requests following the close of the eligibility period.
We also propose to amend Sec. 256.4(c) to require States which have
elected to establish a time limit for accepting requests for TCC,
pursuant to Sec. 256.2(g), to notify families of the time limit.
Fee Requirement
In order to be compatible with the At-Risk Child Care Program at
Sec. 257.31(c) and CCDBG at Sec. 98.42(c), we propose to amend the TCC
regulation that requires some level of contribution to the cost of TCC
by all recipients. Section 402(g)(1)(A)(vii) of the Act requires a
family to contribute to the cost of TCC according to its ability to
pay. The existing regulations at Sec. 256.3(b) require that a sliding
fee be established that provides for some level of contribution by all
recipients.
As is the case with At-Risk families, families eligible for TCC are
only one step away from actual receipt of AFDC. We believe it is
appropriate to give States the option to treat TCC families the same as
other similarly-situated families in the State. Therefore, we propose
to revise Sec. 256.3(b) to give States the option to waive the
contribution from a family whose income is at or below the poverty
level for a family of the same size.
Gaps in Employment During TCC
As discussed in the preamble to part 255 we propose to amend
Sec. 256.1(a) and add Sec. 256.2(f) to allow States the option to
continue child care that would otherwise be lost, for a limited period
of time for families waiting to enter employment or who have a gap in
employment. Section 256.2(f) codifies into part 256 the existing and
proposed title IV-A child care gaps policy.
PART 257--AT-RISK CHILD CARE PROGRAM
Child Care That Is ``Reasonably Related'' to Parent's Employment
As discussed in the preamble at parts 255 and 256, we propose to
amend Sec. 257.21(a)(6) to have the State include in its At-Risk Child
Care plan a description of its policy on what constitutes child care
that is reasonably related to the parent's hours of employment.
Gaps in Employment During At-Risk Child Care
As discussed in the preamble at parts 255 and 256, we propose to
amend Sec. 257.30(c) to allow States the additional option to continue
child care for a limited period of time for families that lose a job
but are searching for another and whose child care arrangements would
otherwise be lost. We also propose to conform the At-Risk regulations
regarding the provision of child care during the two weeks prior to
start of employment with the corresponding regulations in part 255 and
the proposed amendment to part 256. With these proposed amendments,
States will have the flexibility to create a consistent gaps policy
across the three title IV-A child care programs.
Other Proposed At-Risk Child Care Amendments
We propose amending the At-Risk regulations concerning in-home care
and the effects test, as discussed earlier in the preamble.
List of Subjects
45 CFR Part 98
Child care, Grant program--social programs, Parental choice,
Reporting and recordkeeping requirements.
45 CFR Part 255
Aid to families with dependent children, Grant programs--social
programs, Employment, Education and training, Day care.
45 CFR Part 256
Aid to families with dependent children, Grant programs--social
programs, Employment, Education and training, Day care.
45 CFR Part 257
Day care, Grant programs--social programs, Reporting and
recordkeeping requirements.
(Catalog of Federal Domestic Assistance Programs: 93.037, Child Care
and Development Block Grant; 93.560, Aid to Families with Dependent
Children; 93.561, Job Opportunities and Basic Skills Training (JOBS)
Program; 93.574, At-Risk Child Care)
Dated: March 31, 1994.
Mary Jo Bane,
Assistant Secretary for Children and Families.
Approved: April 20, 1994.
Donna E. Shalala,
Secretary, Department of Health and Human Services.
For the reasons set forth in the preamble, parts 98, 255, 256, and
257 of title 45 of the Code of Federal Regulations are revised to read
as follows:
45 CFR Subtitle A
PART 98--CHILD CARE AND DEVELOPMENT BLOCK GRANT
1. The authority citation for part 98 continues to read as follows:
Authority: 42 U.S.C. 9858.
Subpart A--Purposes and Definitions
2. Section 98.2 is amended by removing and reserving paragraph (z);
and revising paragraphs (y) and (cc) to read as follows:
Sec. 98.2 Definitions.
* * * * *
(y) Expenditure period is the time period during which one fiscal
year's grant funds must be expended which includes the relevant fiscal
year in which the funds were awarded and the succeeding three fiscal
years. This provision pertains to all grantees, including State,
Territorial and Tribal grantees;
* * * * *
(cc) Program period is the time period during which one fiscal
year's grant funds may be used to support program activities. The time
frame for the program period is the same as that for the expenditure
period;
* * * * *
Subpart B--General Application Procedures
Sec. 98.13 [Amended]
3. Section 98.13 is amended by removing and reserving paragraph
(a)(6)(ii).
4. Section 98.16 is amended by revising paragraphs (a)(7)(ii) and
(a)(12)(ii); and adding paragraph (a)(12)(iii) to read as follows:
Sec. 98.16 Plan provisions.
(a) * * *
(7) * * *
(ii) Specification of the grantee's policy for the availability of
in-home care and the rationale for that policy;
* * * * *
(12) * * *
(ii) Based on a methodologically sound system for determining
payment rates, a justification of the grantee's decision not to provide
for differences in payment based on the setting (categories of care),
or the age of the child; and
(iii) A description of how differential rates within categories of
care, if any, are determined and identification of within-category
distinctions;
* * * * *
Subpart D--Program Operations (Child Care Services)--Parental
Rights and Responsibilities
Sec. 98.30 [Amended]
5. In Sec. 98.30, paragraphs (e) and (g) are removed and reserved.
Subpart E--Program Operations (Child Care Services)--State and
Provider Requirements
Sec. 98.40 [Amended]
6. In Sec. 98.40, paragraph (b)(2) is removed and reserved.
7. Section 98.41 is amended by removing and reserving paragraph
(b); and revising paragraph (a)(1) to read as follows:
Sec. 98.41 Health and safety requirements.
(a) * * *
(1) The prevention and control of infectious diseases (including
immunizations):
(i) Grantees must establish immunization requirements as part of
their health and safety plans which assure that children receiving
services under the Block Grant are immunized. Immunization requirements
must be established in accordance with the following guidelines:
(A) State and Territorial health and safety plans must incorporate
(by reference or otherwise) the latest recommendation for childhood
immunizations of the respective State or Territorial Department of
Public Health;
(B) Tribes have the option to determine the immunization standards
to be incorporated in their health and safety plans, but must identify
the source of standards. Tribes may choose from:
(1) State Department of Public Health immunization standards; or
(2) Indian Health Service immunization standards.
(ii) Notwithstanding paragraph (a)(1)(i) of this section, States
may exempt:
(A) Children who are cared for by relatives (defined as
grandparents, aunts and uncles);
(B) Children who receive care in their own homes;
(C) Children whose parents object for religious reasons; and
(D) Children whose medical condition contraindicates immunization;
* * * * *
8. Section 98.43 is amended by removing and reserving paragraph
(c); and revising paragraphs (b)(1) introductory text, (b)(2) and (e)
to read as follows:
Sec. 98.43 Payment rates.
* * * * *
(b) * * *
(1) Variations in the amount charged for providing child care:
* * * * *
(2) The additional amount charged for providing child care for a
child with special needs for services which are not required as an
accommodation under the Americans with Disabilities Act.
* * * * *
(e) If a grantee sets a payment rate schedule which includes
variation in the payment rate within a category, pursuant to
Sec. 98.16(a)(12)(iii), the grantee must describe how the payment
differential was determined and what the distinctions within categories
are.
* * * * *
Sec. 98.45 [Amended]
9. In Sec. 98.45, paragraph (d) is removed and reserved.
Subpart F--Use of Block Grant Funds
10. Section 98.50 is amended by removing and reserving paragraph
(d)(3); and revising paragraph (d)(2) to read as follows:
Sec. 98.50 Child care services.
* * * * *
(d) * * *
(2) To meet the requirements of paragraph (d)(1) of this section:
(i) At least 85 percent of the funds reserved for assistance under
this section must be expended for services pursuant to paragraph (a)(1)
of this section; and
(ii) Not more than 15 percent of the funds may be expended for
activities as described in paragraphs (a)(2) and (a)(3) of this
section.
11. Section 98.52 is amended by revising paragraph (c) to read as
follows:
Sec. 98.52 Administrative activities.
* * * * *
(c) Expenditures on any administrative activities related to the
services under Sec. 98.50 are subject to the requirements and
limitation under Sec. 98.50(d), and together with expenditures for
quality and availability, must not exceed the limitation under
Sec. 98.50(d)(2).
Subpart G--Financial Management
12. Section 98.60 is amended by removing and reserving paragraphs
(d)(2), (d)(3), (e), (h)(2); revising the word ``obligation'' in
paragraph (h)(1) to read ``expenditure'' and revising the word
``obligated'' in paragraph (h)(1) to read ``expended''; and revising
paragraphs (d)(1), (d)(4), and (h)(3) to read as follows:
Sec. 98.60 Availability of funds.
* * * * *
(d)(1) State, Territorial, and Tribal Grantees must expend their
allotment in the fiscal year in which funds are awarded or in the
succeeding three fiscal years.
* * * * *
(4) Any funds not expended during the expenditure period specified
in paragraph (d)(1) of this section will revert to the Federal
government.
* * * * *
(h) * * *
(3) If received by the grantee or subgrantee after the expenditure
period specified in paragraph (d)(1) of this section, be returned to
the Federal government.
* * * * *
13. Section 98.63 is amended by revising paragraphs (a)(1) and (b)
to read as follows:
Sec. 98.63 Reallotment.
(a) * * *
(1) In the fourth (and last) fiscal year of each expenditure
period, the State shall report to the Secretary the dollar amount of
funds available for reallotment from the award given in the first
fiscal year of that expenditure period. Such report must be postmarked
by April 1st.
* * * * *
(b) States receiving reallotted funds must expend these funds in
accordance with Sec. 98.60. The reallotment of funds does not extend
the program period for expenditure of such funds.
Subpart H--Program Reporting Requirements
14. Section 98.70 is amended by removing and reserving paragraph
(b); and revising paragraph (a) to read as follows:
Sec. 98.70 Annual report requirement.
(a) Grantees that receive assistance under the Block Grant shall
prepare and submit to the Secretary an annual report. The report will
be submitted in the manner specified by the Secretary by December 31
and will cover expenditures made by September 30 of that year. Unless
otherwise specified by the Secretary, each fiscal year's grant shall be
accounted for separately.
* * * * *
45 CFR Chapter II
PART 255--CHILD CARE AND OTHER WORK-RELATED SUPPORTIVE SERVICES
DURING PARTICIPATION IN EMPLOYMENT, EDUCATION, AND TRAINING
1. The authority citation for part 255 is revised to read as
follows:
Authority: 42 U.S.C. 602, 603 and 1302.
2. Section 255.1 is amended by revising paragraphs (e)(4) and (i)
and adding paragraphs (m) and (n) to read as follows:
Sec. 255.1 State plan requirements.
* * * * *
(e) * * *
(4) Child care provided or claimed for reimbursement is reasonably
related to the hours of participation or employment as described in the
State Supportive Services plan.
* * * * *
(i)(1) A description of the methodology used for setting local
market rates pursuant to Sec. 255.4(a)(2). Such methodology must
address rates established for each category of care (i.e., center,
group family day care, and family day care) provided. The description
must address variations in the costs of care for infants, toddlers,
pre-school and school-age children, whether care is full- or part-time,
and reduction in the cost of care for additional children in the same
family if such variations exist. If the State chooses to survey in-home
care, the methodology used must be included in the description. The
rates determined by using the methodologies described must be submitted
as part of the State's Supportive Services plan and must be updated
periodically, but no less than biennially.
(2) A description of the State's criteria for higher quality care,
if any, in accordance with Sec. 255.4(a).
* * * * *
(m) The State's definition of physically or mentally incapable of
caring for himself or herself, pursuant to Sec. 255.2(a).
(n) Any conditions and limitations the State IV-A agency has
established for providing in-home care, pursuant to Sec. 255.3(c)(2).
3. Section 255.2 is amended by revising paragraphs (a) introductory
text and (d)(2) to read as follows:
Sec. 255.2 Eligibility.
(a) The State IV-A agency must guarantee child care for a dependent
child who is: under age 13; physically or mentally incapable of caring
for himself or herself, as determined by the State and defined in the
State's Supportive Services plan; or under court supervision (and for a
child who would be a dependent child except for the receipt of benefits
under Supplemental Security Income under title XVI or foster care under
title IV-E), to the extent that such child care is necessary to permit
an AFDC eligible family member to--
* * * * *
(d) * * *
(2) For a period not to exceed one month where child care (or other
services) arrangements would otherwise be lost, and:
(i) The subsequent activity is scheduled to begin within that
period; or
(ii) The eligible family member is searching for another job.
* * * * *
4. Section 255.3 is amended by revising paragraph (c) to read as
follows:
Sec. 255.3 Methods of providing child care and other supportive
services.
* * * * *
(c)(1) If more than one category of child care is available, e.g.,
center, group family care, family day care, or in-home care, the
caretaker relative must be provided an opportunity to choose the
arrangement. The State IV-A agency may select the method of payment
under paragraph (a) of this section.
(2) The State IV-A agency may establish conditions and limitations
under which it will provide in-home care in the State Supportive
Services plan.
* * * * *
5. Section 255.4 is amended by removing paragraph (c)(2)(iii);
revising paragraphs (a)(2) introductory text, (a)(2) (ii) and (iii);
adding new paragraphs (a)(2) (iv) and (v); revising paragraphs (a)(3)
(i), (ii), (iii), and (iv); and adding a new paragraph (a)(3)(v) to
read as follows:
Sec. 255.4 Allowable costs and matching rates.
(a) * * *
(2) Except as specified in paragraphs (a)(2) (iv) and (v) of this
section, the applicable local market rate must be established:
* * * * *
(ii) For all political subdivisions or for alternative areas which
represent reasonable local child care markets based upon their
geographic proximity or common characteristics;
(iii) Based on the 75th percentile cost of such categories of care
in the local areas (however, where there are only one or two providers
of a category of care in a local market area, the rate may be set at
the 100th percentile.);
(iv) At State option, at the provider's actual charge for that care
which meets the State's objective criteria for higher quality care. For
purposes of this paragraph, the States's criteria for higher quality
care must be in addition to State licensing or regulatory requirements;
and
(v) At the provider's actual charge for care for children with
special needs if that actual charge exceeds the local market rate for a
child of the same age and in the same category of care who does not
have special needs, and provided the additional charge is for services
which are not required as an accommodation under the Americans with
Disabilities Act.
(3) * * *
(i) Be established for center care, group family care, and family
day care;
(ii) Differentiate among care for infants, toddlers, pre-school and
school-age children, where applicable;
(iii) Differentiate between full-time and part-time care, if
applicable;
(iv) Consider reductions in the cost of care for additional
children in the same family; and
(v) Be established for in-home care:
(A) At the level required by Federal and State provisions that
govern domestic service employees, without reference to the
requirements in paragraph (a)(2) of this section; or
(B) In accordance with paragraph (a)(2) of this section only when
such a local market rate would exceed the level required by Federal and
State provisions that govern domestic services employees.
* * * * *
PART 256--TRANSITIONAL CHILD CARE
1. The authority citation for part 256 is revised to read as
follows:
Authority: 42 U.S.C. 602, 603 and 1302.
2. Section 256.1 is amended by revising paragraphs (a)(3) and
(a)(4) and by adding paragraphs (a)(5) and (a)(6) to read as follows:
Sec. 256.1 State plan requirements.
(a) * * *
(3) The methods and procedures the State IV-A agency shall use to
ensure tha fees are collected;
(4) The application requirements established by the State for
families requesting TCC;
(5) The State's definition of physically or mentally incapable of
caring for himself or herself, pursuant to Sec. 256.2(a); and
(6) Whether the State has elected to provide care under this part:
(i) To families without a request from the family pursuant to
Sec. 256.2(b)(3);
(ii) Before employment begins or during breaks in employment
pursuant to Sec. 256.2(f); and
(iii) To families who voluntarily cease to receive AFDC pursuant to
Sec. 256.2(b)(1)(ii).
* * * * *
3. Section 256.2 is amended by revising paragraphs (a), (b)(1),
(b)(3) and (c) and by adding paragraphs (f) and (g) to read as follows:
Sec. 256.2 Eligibility.
(a) The State IV-A agency must guarantee child care for a child who
is: Under age 13; physically or mentally incapable of caring for
himself or herself, as determined by the State and defined in the
State's Supportive Services plan; or under court supervision, and who
would be a dependent child, if needy (and for a child who would be a
dependent child except for the receipt of benefits under Supplemental
Security Income under title XVI or foster care under title IV-E), to
the extent that such care is necessary to permit a member of an AFDC
family to accept or retain employment.
(b) * * *
(1)(i) The family must have ceased to be eligible for AFDC as a
result of increased hours of, or increased income from, employment or
the loss of income disregards due to the time limitations at
Sec. 233.20(a)(11); or
(ii) At State option, the family voluntarily ceases to receive an
AFDC benefit as a result of increased hours of, or increased income
from, employment or the loss of income disregards due to the time
limitations at Sec. 233.20(a)(11);
* * * * *
(3) The family requests transitional child care benefits, if
required by the State, provides the information necessary for
determining eligibility and fees, and meets appropriate application
requirements established by the State; and
* * * * *
(c)(1) Eligibility for transitional child care begins with the
first month for which the family is ineligible for AFDC, for the
reasons included in paragraph (b)(1) of this section, and continues for
a period of 12 consecutive months.
(2) Families may begin to receive child care in any month during
the 12-month eligibility period.
* * * * *
(f) The State IV-A agency may provide child care under this part
for an eligible family member who is waiting to enter employment:
(1) For a period not to exceed two weeks; or
(2) For a period not to exceed one month where child care
arrangements would otherwise be lost, and:
(i) Employment is scheduled to begin within that period; or
(ii) The eligible family member is searching for another job.
(g) The State IV-A agency may establish a reasonable time limit for
accepting TCC requests following the close of the TCC eligibility
period.
4. Section 256.3 is amended by revising paragraph (b) to read as
follows:
Sec. 256.3 Fee requirement.
* * * * *
(b)(1) Each State IV-A agency shall establish a sliding fee formula
based on the family's ability to pay that provides for contributions
from each family toward the cost of care provided under this part.
(2) The State IV-A agency may waive the contribution from a family
whose income level is at or below the poverty level for a family of the
same size.
* * * * *
5. Section 256.4 is amended by revising paragraph (c) to read as
follows:
Sec. 256.4 Other provisions.
* * * * *
(c) The State IV-A agency must notify all families of:
(1) Their potential eligibility for transitional child care
services under this part in writing, and orally as appropriate, at the
time they become ineligible for AFDC;
(2) The time limit the State has established for requesting TCC
following the close of the TCC eligibility period; and
(3) Their rights and responsibilities under the program.
* * * * *
PART 257--AT-RISK CHILD CARE PROGRAM
1. The authority citation for part 257 continues to read as
follows:
Authority: 42 U.S.C. 602, 603, and 1302.
2. Section 257.21 is amended by revising paragraphs (a)(6), (m) and
(n) and adding paragraph (o) to read as follows:
Sec. 257.21 State plan content.
(a) * * *
(6) Child care provided or claimed for reimbursement is reasonably
related to the hours of employment as described in the State's At-Risk
Child Care plan;
* * * * *
(m) A description of the coordination of the At-Risk Child Care
program with existing IV-A child care programs, with other Federally-
funded child care programs, and with other child care provided through
other State, public, and private agencies;
(n) A description of the health and safety requirements, if any,
for the prevention and control of infectious diseases (including
immunization), building and physical premises safety, and minimum
health and safety training appropriate to the provider setting, in
accordance with Sec. 255.4(c)(2)(ii) of this chapter and
Sec. 257.41(a)(2); and
(o) Any conditions and limitations the State IV-A agency has
established for providing in-home care, pursuant to Sec. 257.40(b)(2).
3. Section 257.30 is amended by revising paragraph (c) to read as
follows:
Sec. 257.30 Eligibility.
* * * * *
(c) The State IV-A agency may provide child care under this Part
for an eligible family member who is waiting to enter employment:
(1) For a period not to exceed two weeks; or
(2) For a period not to exceed one month where child care
arrangements would otherwise be lost, and:
(i) Employment is scheduled to begin within that period; or
(ii) The eligible family member is searching for another job.
4. Section 257.40 is amended by revising paragraph (b) to read as
follows:
Sec. 257.40 Methods of providing child care.
* * * * *
(b)(1) If more than one category of child care is available, e.g.,
center, group family care, family day care, and in-home care, the
family must be provided an opportunity to choose the arrangement. The
State IV-A agency may select the method of payment under paragraph (a)
of this section.
(2) The State IV-A agency may establish the conditions and
limitations under which it will offer in-home care in the State
Supportive Services plan.
* * * * *
5. In Sec. 257.41, paragraphs (a)(3) and (b)(2)(v) are removed and
paragraphs (b)(2)(iii) and (iv) are revised to read as follows:
Sec. 257.41 Child care standards.
* * * * *
(b) * * *
(2) * * *
(iii) Allow providers to register with the State or locality after
selection by the parent(s); and
(iv) Be simple and timely.
* * * * *
[FR Doc. 94-11087 Filed 5-10-94; 8:45 am]
BILLING CODE 4184-01-P
