2023-03005. Separate Licensing Standards for Relative or Kinship Foster Family Homes

AGENCY:

Children's Bureau (CB); Administration on Children, Youth and Families (ACYF); Administration for Children and Families (ACF); Department of Health and Human Services (HHS).

ACTION:

Notice of proposed rulemaking.

SUMMARY:

ACF is proposing to revise the definition of “foster family home” to allow each title IV-E agency to adopt foster family home licensing or approval standards for foster family homes of individuals related to a child by blood, marriage, or adoption and other individuals who have an emotionally significant relationship with the child, including fictive kin, (referred herein as “relative(s) and kin(ship)”) that differ from non-relative foster family homes agency standards. In this context, a “non-relative” foster family home means a home of an unrelated individual who is not kin or fictive kin. This notice of proposed rulemaking (NPRM) would allow a title IV-E agency to claim title IV-E federal financial participation (FFP) for the cost of foster care maintenance payments (FCMP) on behalf of an otherwise eligible child who is placed in a relative or kinship licensed or approved foster family home when the agency uses different licensing or approval standards for relative or kinship foster family homes and non-relative foster family homes. In addition, the NPRM would amend the requirement that title IV-E agencies review the amount of FCMPs to also assure that the agency provides a licensed or approved relative and kinship foster family home the same amount of FCMP that would have been made if the child was placed in a non-related foster family home.

DATES:

In order to be considered, ACF must receive written comments on this NPRM on or before April 17, 2023.

ADDRESSES:

ACF encourages the public to submit comments electronically to ensure they are received in a timely manner. Please be sure to include identifying information on any correspondence. To download an electronic version of the proposed rule, please go to  http://www.regulations.gov/​. You may submit comments, identified by docket number, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

• Email: [e-mail]. Include [docket number and/or Regulatory Information Number (RIN) number] in subject line of the message.

Instructions: All submissions received must include the agency name and docket number or RIN for this rulemaking. All comments received will be posted without change to www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT:

Kathleen McHugh, Director, Policy Division, Children's Bureau, [phone] [e-mail].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Statutory Authority To Issue NPRM

II. Background

III. Section-by-Section Discussion of Proposed Regulatory Changes

IV. Regulatory Process Matters

V. Tribal Consultation Statement

I. Statutory Authority

This NPRM is published under the authority granted to the Secretary of Health and Human Services (the Secretary) by section 1102 of the Social Security Act (the Act), 42 U.S.C. 1302. Section 1102 of the Act authorizes the Secretary to publish regulations, not inconsistent with the Act, as may be necessary for the efficient administration of the functions with which the Secretary is responsible under the Act.

II. Background

When parents are unable to safely care for their own children, it is often grandparents, other relatives, or kin who step forward to provide a loving home for those children, either temporarily or permanently. All over the nation, there is a preference to prioritize placing children entering foster care with relatives and kin over non-relative foster families when appropriate (“How can we prioritize kin in the home study and licensure process, and make placement with relatives the norm?” Casey Family Programs, 2020.). This preference stems from the knowledge that it is generally best for children to be with family and also from the increasing shortage of qualified foster parents (Miller, Jennifer, “Creating a Kin-First Culture,” American Bar Association, July 1, 2017). The Government Accountability Office found “in 2018, an estimated 2.7 million children lived with kin caregivers—grandparents, other relatives, or close family friends—because their parents were unable to care for them.” (U.S. Government Accountability Office, Child Welfare and Aging Programs: HHS Could Enhance Support for Grandparents and Other Relative Caregivers (GAO-20-434), July 2020).

Title IV-E agencies have discretion to define “relative” and “kin” with regard to licensing standards. The definitions among title IV-E agencies vary, and sometimes “kin” is used more broadly than “relative”. Fictive kin often include people who are not related by blood, marriage or adoption, but who have an emotionally significant relationship with the child, and those who are treated “like family.” (American Bar Association, Legally Recognized Fictive Kin Relationships: A Call for Action, March 1, 2022). For purpose of this NPRM, we use the term “relative(s) and kin(ship)” to allow title IV-E agencies to adopt one set of licensing or approval standards for individuals related to a child by blood, marriage or adoption and other individuals who have an emotionally significant relationship with the child, including fictive kin, that is different from the licensing or approval standards used for non-relative foster family homes. A child is in foster care when a title IV-E agency has placement and care responsibility for a child, removes the child from the parent's home, and places the child in 24-hour substitute care (45 CFR 1355.20). A child is in foster care in accordance with this definition regardless of whether the placement is licensed or approved and payments are made by the state or tribe for the care of the child (45 CFR 1355.20). Placement and care responsibility means that a title IV-E agency is legally accountable for the day-to-day care and protection of the child, decides with whom the child in foster care will be placed, and provides the child with federally mandated protections such as case plans and court reviews (sections 471(a)(16) and 475(5) of the Act; CWPM 8.3A.12 #4). We also use the terms “licensing” and “approval” interchangeably, depending on the state terminology (65 FR 4020 at 4032; CWPM 8.3A.8c #5). Each state and tribe operating a title IV-E program must designate an authority responsible for establishing and maintaining licensing or approval standards for foster family homes.

Encouraging and assisting relative and kin caregivers to become a licensed or approved foster care placement is important, in part, because it allows families to receive financial support through FCMPs (sections 472(b)(1) and (c)(1) of the Act and section I of ACYF-CB-PI-10-11). Licensing or approval is also one component of eligibility for the title IV-E Kinship Guardianship Assistance Program, which can provide longer-term financial support and benefits to a guardian that provides permanency to a child who cannot safely return home (section 473(d)(3)(A)(i)(II) of the Act). The section-by-section discusses other reasons why licensing or approving relative and kinship foster family homes is important for children in foster care.

Although the Act includes provisions requiring each agency to give priority consideration to relatives as foster care placements over a non-related caregiver when determining an out-of-home placement for a child, we understand that title IV-E agencies take varied approaches to licensing and approving relative and kin foster family homes. Research identifies that many agencies have policies that prioritize placements with appropriate relatives and kin and provide them with an option to become a licensed or approved foster parent so that they may receive FCMPs (Beltran, Ana, and Redlich Epstein, Heidi. Improving Foster Care Licensing Standards around the United States: Using Research Findings to Effect Change. Washington, DC: Generations United and American Bar Association, February 2013). Conversely, research also shows that some agencies may not routinely pursue licensing and approving relatives or kin as a possible licensed foster care placement for a child. For example, relatives and kin who provide care for a child in foster care may be denied a foster family home license or approval because they have not met strict licensing standards, including non-safety standards that the state may waive under current federal law. Thus, the relative or kin caregiver is not eligible for FCMPs.

State licensing and approval standards for foster family homes were developed before research demonstrated that relative and kinship care is often the best option for children in foster care. As a result, standards were created to ensure safety for children living with someone they did not know, making many licensing standards irrelevant for children living with a relative or kin (Miller, “Creating a Kin-First Culture,” July 1, 2017). For example:

• The Act requires only that licensing or approval standards established by the state or tribe are reasonably in accordance with recommended standards of national organizations for foster family homes related to admission policies, safety, sanitation, protection of civil rights, and use of the reasonable and prudent parenting standard (section 471(a)(10)(A) of the Act), and that the caregiver fully meet federal requirements under section 471(a)(20) of the Act (concerning criminal background checks for all foster parents). However, in 2000, ACF promulgated regulations that interpreted the Act to require that each state establish and apply its licensing or approval standards to all relative and non-relative foster family homes equally (45 CFR 1355.20). A title IV-E agency may waive non-safety-related licensing or approval standards for relative foster family homes on a case-by-case basis (section 471(a)(10)(D) of the Act). In 2020, ACF reported that 42 states, the District of Columbia, Puerto Rico, the Virgin Islands, and 3 tribes reported using waivers for non-safety licensing standards for relative foster family homes. Examples of non-safety waivers include waiving requirements for the home itself (the physical dimensions of home, room size requirements, the size and location of bedrooms, well water testing, proximity of the relative foster care provider's home to the child's parents), financial standards of the kinship caregiver, pre-service or training standards, and the age and marital status of the caregiver (ACYF-CB-IM-20-08). However, the Act does not allow a title IV-E agency to establish a policy or procedure that provides a blanket waiver of the standards for licensing or approving relative foster family homes (section 471(a)(10)(D) of the Act). Subsequent research found that, partially as a result of the 2000 rule, more than half of states changed their licensing standards. Some states implemented stricter licensing standards for relatives than they had previously. Many states that had standards specific to licensing relatives and kin repealed those standards in their entirety (Beltran and Redlich Epstein, Improving Foster Care Licensing Standards around the United States: Using Research Findings to Effect Change, February 2013).

State licensing or approval standards developed for un-related foster parents also may be unnecessary for relative or kin foster parents. For example, many states require the same time-consuming and intensive foster parent training classes for relatives and kin as they do for non-relatives. However, relative caregivers may require a different level or type of foster parent training to take care of their kin, particularly when they already know the child for whom they are going to provide care. Non-relative foster parents may need training about how to integrate a child into a home with which the child is unfamiliar, or how to determine the child's interests and skills. Similarly, in contrast with non-relative foster parents, who prepare for the arrival of children in foster care over months and years, relatives often receive a request to care for a child in emergency situations. In addition, relatives become licensed to care for a child who is a relative, not because they want to be a foster parent to children in foster care. Therefore, relative licensing standards that allow for training that is condensed and more relevant to relative and kinship families along with the necessary essential agency support for foster parents could pave the way to remove barriers to licensing relatives (Miller, “Creating a Kin-First Culture,” July 1, 2017). Several examples of condensed training may be found on pages 5 and 6 of ACYF-CB-IM-20-08.

Title IV-E of the Act includes provisions requiring each agency to identify relatives of a child placed in foster care and to give priority consideration to relatives as foster care placements. Specifically, a title IV-E agency shall consider giving preference to an adult relative over a non-related caregiver when determining an out-of-home placement for a child, provided that the relative caregiver meets all relevant state or tribal child protection standards (section 471(a)(19) of the Act). Also, the Act requires that within 30 days after the removal of a child from their home, the title IV-E agency must exercise due diligence to identify and provide notice to certain relatives that the child has been or is being removed from the home, explain the options for relatives to participate in the care and placement of the child, describe how to become a foster family home, describe the additional services and supports that are available to the relative, as well as how a relative guardian of the child may participate in the title IV-E Kinship Guardianship Assistance Program if the title IV-E agency elected to operate the optional program (section 471(a)(29) of the Act).

This NPRM would allow a title IV-E agency to adopt one set of licensing or approval standards for all relative or kinship foster family homes that is different from the licensing or approval standards used for non-relative foster family homes. ACF encourages title IV-E agencies to adopt licensing or approval standards for all relative or kinship foster family homes that place as few burdens on such families as possible, consistent with ensuring the safety and wellbeing of children in foster care. Specifically, ACF encourages title IV-E agencies to strongly consider developing standards for relative and kinship foster family homes that meet only the requirements in the Act described earlier ( i.e., section 471(a)(10)(A) and (a)(20)), and not additional standards the agency requires non-relative foster family homes to meet. This eliminates the need for agencies to issue non-safety related waivers to relatives on a case-by-case basis which can delay the licensure process.

Finally, title IV-E of the Act and regulations require title IV-E agencies to provide a periodic review of the standards referred to in the preceding paragraph and amounts paid as foster care maintenance payments and adoption assistance to assure their continuing appropriateness (section 471(a)(11) of the Act; 45 CFR 1356.21(m)). The NPRM would also revise this requirement to assure that the agency provides a licensed or approved relative and kinship foster family home the same amount of foster care maintenance payments that would have been made if the child was placed in a non-related foster family home.

III. Section-by-Section Discussion of Proposed Regulatory Changes

Section § 1355.20

ACF proposes to revise the definition of “foster family home” by removing “Foster family homes that are approved must be held to the same standards as foster family homes that are licensed[.]” and replacing it with “Agencies may establish foster family home licensing or approval standards for all relative or kinship foster family homes that are different from standards for non-relative foster family homes.” This would allow a title IV-E agency to establish a set of foster family home licensing or approval standards that apply to all relative or kinship foster family homes, and that are different from non-relative foster family homes. An agency may also designate different names for the different type of standards. For example, an agency may designate the term “approval” to relative foster family home standards for relatives, and “licensing” to non-relative foster family homes. However, all standards and foster family homes must meet the requirements under title IV-E of the Act.

As a result of this NPRM, a title IV-E agency would be able to remove a possible barrier to claiming title IV-E FCMP on behalf of an otherwise eligible child who is placed in a licensed or approved relative or kinship foster family home. For example, the agency could require that relative and kinship families only meet the licensing requirements in the Act stated earlier, and not additional standards the agency requires non-relative foster family homes to meet. Or, the agency could implement state or tribal licensing standards for all relative or kinship foster family homes to extend age limits for relative or kinship foster care providers; allow relative children to share sleeping spaces; disregard certain income, transportation, literacy, language, and education requirements; and remove disqualifications for non-child-related past crimes such as issuing bad checks (Beltran and Redlich Epstein, Improving Foster Care Licensing Standards around the United States: Using Research Findings to Effect Change, February 2013; ; “How can we prioritize kin in the home study and licensure process, and make placement with relatives the norm?” Casey Family Programs, 2020.). A title IV-E agency has the discretion to define who is a relative or kinship provider in reference to this regulatory change.

This NPRM proposes to allow title IV-E agencies to establish a set of foster family home licensing or approval standards that apply to all relative or kinship foster family homes, for several reasons. First, this proposed change is consistent with long-standing recommendations of stakeholders and experts in child welfare to license or approve more relative and kinship foster family homes to significantly increase the services and financial resources available to relative and kinship caregivers., ACF has heard from stakeholders and discussed their recommendations. Second, placing children in licensed or approved relative foster family homes has multiple benefits to relatives and children. Third, the proposed change allows title IV-E agencies more flexibility without compromising child safety and well-being.

The current regulation requires the same licensing or approval standards for all foster family homes. This can lead to placing children with unlicensed relative foster family caregivers because some relatives are not able to meet the agency's licensing or approval standards. (Children's Defense Fund. Recommendations to Ensure Children's Well-being through Support of Kinship Caregivers). Stakeholders in the child welfare community have long advocated for a change to federal regulations that would remove common licensing barriers for relatives and kin, and allow foster family home licensing or approval standards that reflect the unique needs and circumstances of relative and kinship caregivers (“How can we prioritize kin in the home study and licensure process, and make placement with relatives the norm?” Casey Family Programs, 2020). Allowing more relatives and kin to become licensed or approved as foster parents would significantly increase the services and financial resources available to kin caregivers. (Foster Family-based Treatment Association. The Kinship Treatment Foster Care Initiative Toolkit. Hackensack, NJ: Foster Family-Based Treatment Association, 2015, Page 14). Most children in nonparental care lived with grandparents (63%), others lived with foster parents (15%), some of whom were related, or with other relatives and nonrelatives such as aunts, godparents, or friends (22%) (Radel, Bramlett, Chow, Waters, 2016). Many relatives who care for their kin are older, more likely to be single, more likely to be African American, more likely to live in poverty, and more likely to be less well educated (Bramlett, Radel, Chow, 2017) (U.S. Government Accountability Office, Child Welfare and Aging Programs: HHS Could Enhance Support for Grandparents and Other Relative Caregivers (GAO-20-434), July 2020);). When children are placed with relative caregivers, it is most often in emergency situations which may result in unanticipated expenses. Many relatives, especially those on a fixed income cannot financially afford to care for their kin in the child welfare system unless they receive support. Relatives who do not meet licensing standards are not eligible for title IV-E FCMP and instead rely on financial assistance from Temporary Assistance for Needy Families (TANF). TANF typically provides less than half of the monthly FCMP. Lower foster care payments for kinship care providers negatively affects the number of relatives that can care for children (“How can we prioritize kin in the home study and licensure process, and make placement with relatives the norm?” Casey Family Programs, 2020). Thus, relatives are often in greater need of financial support; providing care for a child who has been removed from home places financial strains on the relatives providing that care. This NPRM can help low-income families who are adversely affected by poverty and struggling to raise their kin by providing financial assistance to maintain the child in the relative's home until the child can be reunified.

Second, allowing a title IV-E agency to establish different foster family home licensing or approval standards for all relative or kinship foster family homes so that more children can be placed with relatives and kin has multiple benefits to relatives and to children. Research confirms that children in foster care often do best when placed with relatives and kin and that family connections are critical to healthy child development and a sense of belonging (Miller, “Creating a Kin-First Culture,” July 1, 2017). Relative and kinship care also helps to preserve children's cultural identity and relationship to their community. This regulation would allow children placed with a relative or kin to remain connected to their families, communities, and schools. For youth in foster care, having a strong cultural identity can lead to greater self-esteem, higher education levels, improved coping abilities, and decreased levels of loneliness and depression (Child Welfare Information Gateway. (2022). Kinship care and the child welfare system. U.S. Department of Health and Human Services, Administration for Children and Families, Children's Bureau. https://www.childwelfare.gov/​pubs/​f-kinshi/​). For example, in American Indian and Alaskan Native communities, the cultural knowledge children acquire from grandparents, other adult family members or close family friends who are caring for them can be critical to developing the survival skills and resilience needed in the face of multiple challenges and overcoming barriers to positive outcomes. Culture and kinship relationships are strong resources that support their children in their care (Generations United and National Indian Child Welfare Association. (2020). TOOLKIT—American Indian and Alaska Native Grandfamilies: Helping Children Thrive Through Connection to Family and Cultural Identity. www.gu.org and www.nicwa.org). Further, research indicates that children living with relatives experience fewer behavioral problems and higher placement stability rates compared to children living with non-relatives in foster care (Child Welfare Information Gateway. (2022). Kinship care and the child welfare system. U.S. Department of Health and Human Services, Administration for Children and Families, Children's Bureau. https://www.childwelfare.gov/​pubs/​f-kinshi/​; Foster Family-based Treatment Association, The Kinship Treatment Foster Care Initiative Toolkit, 2015). However, restrictive licensing standards and inadequate information about standards places relatives at a disadvantage and reduce the positive effects associated with kinship care (“How can we prioritize kin in the home study and licensure process, and make placement with relatives the norm?” Casey Family Programs, 2020).

ACF believes that title IV-E agencies can develop different foster family home licensing or approval standards for relatives in a manner that does not compromise child safety and well-being. The Act requires that all foster family home licensing standards be reasonably in accord with recommended standards of national organizations concerned with these standards for foster family homes related to admission policies, safety, sanitation, protection of civil rights and use of the reasonable and prudent parenting standard (section 471(a)(10) of the Act). Further, the Act specifies that a child is only eligible to receive a title IV-E FCMP if placed in a licensed or approved placement, which includes federal requirements that the foster parent fully meet the requirements concerning criminal background checks (section 471(a)(20) of the Act). A child is not eligible for FCMP if the criminal records check reveals that the prospective foster or adoptive parent has been convicted of a felony related to child abuse or neglect, spousal abuse, a crime against a child or children (including child pornography), or a crime involving violence, including rape, sexual assault, or homicide. In addition, a child is not eligible for FCMP if the criminal record checks reveal that within the last 5 years, the prospective foster or adoptive parent has been convicted of a felony involving physical assault, battery, or a drug-related offense (Section 471(a)(20)(A) of the Act; 45 CFR 1356.30). This NPRM does not propose to change those important safety requirements for relative or kinship caregivers. Therefore, a title IV-E agency may choose to develop standards for relative and kinship foster family homes that meet only the federal requirements outlined in the Act. As previously discussed, research shows that children placed in foster care with relatives are just as safe, or safer, when compared with children placed with unrelated foster families (Beltran and Redlich Epstein, Improving Foster Care Licensing Standards around the United States: Using Research Findings to Effect Change, February 2013).

Finally, we propose to revise the definition of “foster family home” by removing “[T]he term may include group homes, agency-operated boarding homes or other facilities licensed or approved for the purpose of providing foster care by the State or Tribal agency responsible for approval or licensing of such facilities.” Public Law 115-123, the Family First Prevention Services Act, amended section 472(c)(1)(A)(ii) of the Act to limit the definition of a foster family home to the “home of an individual or family,” and to require that the foster parent resides in the home with the child. Title IV-E agencies are required to comply with these statutory amendments regardless of the regulatory language, so this change is merely a technical amendment that aligns the definition with the law and clarifies that these entities are not homes of individuals and therefore, not considered foster family homes.

With these proposed revisions, the definition would read, “ `Foster family home' means, for the purpose of title IV-E eligibility, the home of an individual or family licensed or approved as meeting the standards established by the licensing or approval authority(ies), that provides 24-hour out-of-home care for children. The licensing authority must be a state authority in the state in which the foster family home is located, a tribal authority with respect to a foster family home on or near an Indian Reservation, or a tribal authority of a tribal title IV-E agency with respect to a foster family home in the tribal title IV-E agency's service area. Agencies may establish foster family home licensing or approval standards for all relative or kinship foster family homes that are different from standards for non-relative foster family homes. Anything less than full licensure or approval is insufficient for meeting title IV-E eligibility requirements. Title IV-E agencies may, however, claim title IV-E reimbursement during the period of time between the date a prospective foster family home satisfies all requirements for licensure or approval and the date the actual license is issued, not to exceed 60 days.”

Section § 1356.21

The NPRM would also revise section § 1356.21(m) to require that title IV-E agencies review the amount of foster care maintenance payments to assure that the agency provides a licensed or approved relative and kinship foster family home the same amount of foster care maintenance payments that would have been made if the child was placed in a non-related foster family home. This proposed revision codifies the holding in Miller v. Youakim, 440 U.S. 125 (1979). In Miller, the Supreme Court established that children placed with relative foster homes that met approval or licensing standards were full participants in the IV-E program. The Court stated that “neither the legislative history nor the structure of the [Social Security] Act indicates that Congress intended to differentiate among neglected children based on their relationship to their foster parents.” (Id. at 138-139). Further, the definition of “foster care maintenance payments” for IV-E purposes is based on the costs of the services and supplies provided to the foster child, not the relationship of the child to the foster parent (42 U.S.C. 675(4)(A)). This proposed revision means that a title IV-E agency must use the same payment schedule(s) for relative and non-relative licensed or approved foster family homes. The agency may not establish a separate payment schedule for licensed or approved relative and kinship foster family homes. For example, a title IV-E agency has a foster care maintenance payment schedule of monthly payments based on age and including basic maintenance and difficulty-of-care Levels 1, 2 & 3. The agency determines that, if placed with a non-relative, the child of a certain age in title IV-E foster care requires level 3 care at $31.00 per day. However, the child is placed in a relative foster family home that is licensed or approved using separate licensing standards, established consistent with this proposal. The amount of the level 3 foster care maintenance payment based on the child's age must also be $31.00 per day.

With this proposed revision, the regulation would read, “(m) Review of payments and licensing standards. In meeting the requirements of section 471(a)(11) of the Act, the title IV-E agency must review at reasonable, specific, time-limited periods to be established by the agency: (1) The amount of the payments made for foster care maintenance to assure their continued appropriateness, and that the amount made to a licensed or approved relative or kinship foster family home is the same as the amount that would have been made if the child was placed in a licensed or approved non- relative foster family home; (2) The amount of the payments made for adoption assistance to assure their continued appropriateness; and (3) The licensing or approval standards for child care institutions and foster family homes.”

Equity Impact

This NPRM supports the Administration's priority of advancing equity for those historically underserved and adversely affected by persistent poverty and inequality (U.S. President. Executive Order. “Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, Executive Order 13985 of January 20, 2021.”). The current regulation prohibits a title IV-E agency from uniformly adopting separate foster family home licensing or approval standards for relative or kinship caregivers. This disadvantages lower income prospective relative caregivers, some of whom are disqualified from providing care as a result of not meeting income and other standards established for licensing or approving foster family homes.

This NPRM would especially provide a support to low-income prospective relative caregivers, many of whom are families of color, are from underserved rural areas, or are members of other communities in which long-term systemic factors such as poverty hamper families from making intergenerational progress. Ethnically and culturally diverse populations are disproportionately represented in relative and kinship families. “While Black or African American individuals represent just 13% of the U.S. population, they make up nearly a quarter of all children in households where a grandparent is responsible for the needs of the child” (Advisory Council to Support Grandparents Raising Grandchildren with Assistance from the HHS Administration for Community Living. Supporting Grandparents Raising Grandchildren (SGRG) Act, Initial Report to Congress. Washington, DC: Author, p. 4, November 16, 2021.). “Similarly, American Indian and Alaska Natives make up only 1.3% of the U.S. population, but their representation in grandparent-led households where the grandparent is providing for most of their needs, is more than double that rate (U.S. Census Bureau, 2019). The available data on grandparents responsible for grandchildren suggests that underserved racial and ethnic populations are disproportionately taking responsibility for grandchildren.” (Advisory Council to Support Grandparents Raising Grandchildren with assistance from the HHS Administration for Community Living. [November 16, 2021]. Supporting Grandparents Raising Grandchildren (SGRG) Act, Initial Report to Congress. Washington, DC: Author, p. 12). Moreover, many individuals in these communities face simultaneous, multiple barriers when attempting to provide care to a relative who has been removed from their home.

Policies that expand access to FCMPs can have an especially strong impact on underserved groups. Encouraging and removing barriers to kinship placement also is consistent with cultural norms of some underserved groups that traditionally rely more heavily on kin and family in times of need. For example:

• Children age 3 to 5 who are the subject of a child maltreatment report in rural areas and those in households with incomes less than 50 percent of federal poverty level were more likely to be placed in informal kinship settings than similarly situated children in urban areas ( Walsh, W.A. Informal Kinship Care Most Common Out-of-Home Placement After an Investigation of Child Maltreatment [Fact Sheet no. 24]. Durham, NH: University of New Hampshire, Carsey Institute, 2013.).

• African American families rely on extended family and other informal systems of care not only because these informal systems are cultural strengths, but because African American children historically were excluded from public and private sector child welfare programs and supports (U.S. Government Accountability Office, Child Welfare and Aging Programs: HHS Could Enhance Support for Grandparents and Other Relative Caregivers (GAO-20-434), July 2020).

• Traditionally, grandparents and other family members assume integral roles in raising children within American Indian/Alaska Native communities. This type of extensive familial support system helps parents to pass on to their children the knowledge of customs, culture, and language essential to community survival and well-being (Capacity Building Center for Tribes. Engaging and Supporting Native Grandfamilies. 2022. https://tribalinformationexchange.org/​files/​products/​GrandfamiliesResourceList2022.pdf; Lewis, Jordan & Boyd, Keri & Allen, James & Rasmus, Stacy & Henderson, Tammy. (2018). “We Raise our Grandchildren as our Own:” Alaska Native Grandparents Raising Grandchildren in Southwest Alaska. Journal of Cross-Cultural Gerontology. 33.10.1007/s10823-018-9350-z.).

IV. Regulatory Process Matters

Regulatory Planning and Review Executive Order 12866 and Executive Order 13563

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 is supplemental to, and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866, emphasizing the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Section 3(f) of Executive Order 12866 defines “a significant regulatory action” as an action that is likely to result in a rule that may (1) have an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, and tribal governments or communities (also referred to as “economically significant”); (2) create a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. A regulatory impact analysis must be prepared for rules determined to be significant regulatory actions within the scope of section 3(f)(1) of Executive Order 12866, and all significant regulatory actions are subject to review by the Office of Management and Budget (OMB).

ACF consulted OMB and determined that this proposed rule meets the criteria for a significant regulatory action under Executive Order 12866 and subject to OMB review. Based on ACF's estimates of the likely costs associated with this proposal, OMB designated this proposed rule as a significant regulatory action within the scope of section 3(f)(1) of Executive Order 12866.

The estimated cost and transfer impacts of this regulatory proposal are provided below (see the sections titled “Federal cost estimate with implementation of this proposal in a final rule” and “Estimated costs of this proposal to title IV-E agencies”). As described in the Section-by-Section above, children in foster care do best when placed with relatives and kin and family connections are critical to healthy child development and a sense of belonging. Relative and kinship care also helps to preserve children's cultural identity and relationship to their family, community and school, which can help buffer depressive symptoms. Children living with relatives experience fewer behavioral problems and higher placement stability rates then children living with un-related foster parents. Situating relatives and kin to become a licensed or approved foster care placement is important, in part, because it allows families to receive financial support through FCMPs (sections 472(b)(1) and (c)(1) of the Act and section I.C. of ACYF-CB-PI-10-11), and it meets one component of eligibility for the title IV-E Kinship Guardianship Assistance Program, which can provide longer-term financial support and benefits to a family that provides permanency to a child who cannot safely return home (section 473(d)(3)(A)(i)(II) of the Act). Relative and kinship placements also support cultural norms of some underserved groups that traditionally rely more heavily on kin and family in times of need. In addition, there is an increasing shortage of qualified foster parents, and research demonstrates that when a parent(s) is not able to safely care for their child, it is best for child to be cared for by family who step forward to provide the child(ren) with a loving home.

Alternatives Considered: We considered providing a federal definition of relative and kinship, which would allow title IV-E agencies to apply relative standards to only those who would meet the federal definition, rather than a potentially broader state/tribal definition of these terms. For example, one federal definition could allow only a subset of relatives to whom the standards would apply, such as those who meet the former Aid to Families with Dependent Children income standards. However, we determined that the title IV-E agency should continue to define relative and kin because providing a federal definition could interfere with the goal of the proposal to provide FCMPs on behalf of a child in foster care in need. In addition, providing a federal definition of relative and kinship would be a burden on title IV-E agencies because it would likely require many states and Tribes to change their definitions in policy regulations or statutes. Without this NPRM, title IV-E agencies must maintain the same licensing or approval standards for relative and non-related foster family homes and may continue issuing non-safety related waivers on a case-by-case basis for relatives that do not meet the agency's foster family home standards.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (RFA) (see 5 U.S.C. 605(b) as amended by the Small Business Regulatory Enforcement Fairness Act) requires federal agencies to determine, to the extent feasible, a rule's impact on small entities, explore regulatory options for reducing any significant impact on a substantial number of such entities, and explain their regulatory approach. The term “small entities,” as defined in the RFA, comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. HHS considers a rule to have a significant impact on a substantial number of small entities if it has at least a 3 percent impact on revenue on at least 5 percent of small entities. However, the Secretary certifies, under 5 U.S.C. 605(b), as enacted by the RFA (Pub. L. 96-354), that this rule would not result in a significant impact on a substantial number of small entities. This proposed rule does not affect small entities because it is applicable only to state and tribal title IV-E agencies. Therefore, an initial regulatory flexibility analysis is not required for this notice.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4) was enacted to avoid imposing unfunded federal mandates on state, local, and tribal governments, or on the private sector. Section 202 of UMRA requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2022, that threshold is approximately $165 million. This rule does not contain mandates that would impose spending costs on state, local, or tribal governments in the aggregate, or on the private sector, in excess of the threshold.

Assessment of Federal Regulations and Policies on Families

Section 654 of the Treasury and General Government Appropriations Act of 2000 requires federal agencies to determine whether a policy or regulation may negatively affect family well-being. If the agency determines a policy or regulation negatively affects family well-being, then the agency must prepare an impact assessment addressing seven criteria specified in the law. ACF believes it is not necessary to prepare a family policymaking assessment (see Pub. L. 105-277) because the action it takes in this NPRM would not have any impact on the autonomy or integrity of the family as an institution.

Executive Order 13132

Executive Order 13132 requires federal agencies to consult with state and local government officials if they develop regulatory policies with federalism implications. Federalism is rooted in the belief that issues that are not national in scope or significance are most appropriately addressed by the level of government close to the people. This rule would not have substantial direct impact on the states, on the relationship between the federal government and the states, or on the distribution of power and responsibilities among the various levels of government because allowing each title IV-E agency to adopt foster family home licensing or approval standards for relative foster family homes is optional and not mandatory. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this action does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (Pub. L. 104-13) seeks to minimize government-imposed burden from information collections on the public. In keeping with the notion that government information is a valuable asset, it also is intended to improve the practical utility, quality, and clarity of information collected, maintained, and disclosed.

The Paperwork Reduction Act defines “information” as any statement or estimate of fact or opinion, regardless of form or format, whether numerical, graphic, or narrative form, and whether oral or maintained on paper, electronic, or other media (5 CFR 1320.3(h)). This includes requests for information to be sent to the government, such as forms, written reports and surveys, recordkeeping requirements, and third-party or public disclosures (5 CFR 1320.3(c)). There is no burden to the Federal government or to title IV-E agencies as a result of this proposed regulation. First, it is optional for a title IV-E agency to develop separate licensing standards for relative and kinship foster family homes. If the agency elects to do so, there are no new reporting requirements. Second, title IV-E agencies are already required by section 471(a)(11) of the Act to conduct periodic reviews of the rates and standards related to foster care maintenance payments. Therefore, the regulatory proposal that during these reviews, agencies ensure that the rate of FCMP to relative and non-related foster family homes is equal, does not impose any new reporting requirements. Finally, title IV-E agencies were required to make changes consistent with Public Law 115-123, the Family First Prevention Services Act. Therefore, the proposed technical change to bring federal regulations up to date with title IV-E of the Act does not impose any new reporting requirements.

Annualized Cost to the Federal Government

Total Projections to Implement Final Rule. The estimate for this NPRM was derived using fiscal year (FY) 2019 data from the Adoption and Foster Care Analysis and Reporting System (AFCARS) on title IV-E relative foster family home placements and FY 2019 claiming data from the Form CB-496 “Title IV-E Programs Quarterly Financial Report (Foster Care, Adoption Assistance, Guardianship Assistance, Prevention Services and Kinship Navigator Programs).” We did not use FY 2020 or 2021 data from AFCARS because such data would likely reflect anomalies due to the COVID19 public health emergency period.

If this proposed regulatory action becomes final, ACF estimates that there would be annual increases in the number of title IV-E relative foster family home placements and annual increases in federal costs for foster care maintenance payments (FCMPs) and administration. ACF estimates that the proposed regulatory change would cost the federal government $28,753,988 in title IV-E FFP i.e., FCMPs and administration, the first year after the rule becomes final and $3.085 billion over a total of 10 years.

Assumptions: ACF made several assumptions when calculating the cost of FCMPs and administrative costs.

• First, we anticipate that without any changes to the regulation, the annual caseload growth rate ( i.e., the increase in title IV-E relative and non-relative foster family home placements) would be 1 percent, and the annual title IV-E claiming growth factor would be two percent. We retain this same annual two percent claiming growth factor in estimating the FFP to implement the final rule because relative and non-relative foster family homes receive the same amount of title IV-E foster care maintenance payments.

• Second, if the NPRM becomes final, we assume a varied implementation rate of title IV-E relative and kinship foster family home placements. The estimate assumes a slow rate of change because agencies may not immediately decide to implement new or revised relative foster family home licensing or approval standards. In addition, states and tribes vary on whether policy, regulation or statutory change must precede such changes.

• Finally, the title IV-E participation rate for relative foster family home placements was 27.6 percent in FY 2019. Conversely, the title IV-E participation rate for other foster care placements was 47.7 percent in FY 2019. We assume that this percentage would increase for relative foster family home placements over time as a result of the proposed regulation because it allows different licensing or approval standards for relative and non-relative foster family home placements. We also assume that the difference in the title IV-E participation rate of relatives and non-relatives is almost entirely due to the use of the same licensing or approval standard for both relative and non-relative foster family home placements. We anticipate incremental changes in the IV-E participation rate for relative and kinship foster family home placements over a total of 10 years, and that by year ten, this rate would increase to 41.7 percent.

Average title IV-E FCMP and Administrative costs per child. To determine the FY 2019 average FFP cost per child, we divided the total number of children in foster care in FY 2019 receiving title IV-E maintenance payments (170,446) by the total FFP claimed on the Form CB-496 for this time period. This resulted in an average title IV-E FCMP cost of $9,240 per child; and an average title IV-E administrative cost of $12,907 (This is the baseline FFP). We used the annual average per child costs to calculate the FFP that would be claimed over a total of 10 years with and without implementation of the proposed rule. We made an assumption that 15 percent of the increased relative placement title IV-E caseload in each year would have already been subject to title IV-E claiming for administrative cost purposes (without the NPRM) based on current law that allows these costs for the period specified in the law, up to 12 months, that an application for licensure is pending (see section 472(i)(1)(A) of the Act).

Federal Cost Estimates Without Implementation of the Proposed Rule

Line 1. Estimates of the number of title IV-E relative foster family home placements. As of September 30, 2019, there were 36,953 title IV-E relative foster family home placements. Applying our assumptions, on line 1 on the table below, we display the annual increases in title IV-E relative placements without implementation of the proposed rule for 5 different years, beginning with FY 2023 and ending with 2032. For example, in FY 2023, there would be 37,322 title IV-E relative foster family home placements if the regulation is not implemented: 36,953 + (36,953 × .01) = 37,322.

Lines 2 through 5. Estimates of FFP for title IV-E relative foster family home placements. To determine increases in the annual FCMP and administrative costs of title IV-E relative foster family home placements, we multiplied the average annual federal cost per child (lines 2 and 3) by the annual number of title IV-E relative foster home placements on line 1. On the table below, line 4 displays the increased FCMP costs and line 5 displays increased administrative costs for 5 different years beginning with 2023 and ending with 2032. The baseline FCMP costs for 2019 is $9,240 × 36,953 = $341,462,572. The baseline administrative costs for 2019 is $12,907 × 36,953 = $476,934,437.

Federal Cost Estimate With Implementation of This Proposal in a Final Rule

Lines 6 and 7. Number of title IV-E relative foster family home placements. On line 6 of the table below, we estimate the annual increases in title IV-E relative foster family home placements if the proposed rule becomes final. We used a caseload growth rate of 5 percent in year 1, 15 percent in year 2, 25 percent in year 3, 45 percent in year 5. By year 10, this implementation rate is expected to reach 70 percent based on our assumptions described earlier. On line 7 of the table below, we determined the annual number of new title IV-E relative foster family home placements as a result of the regulation. To calculate the annual number of new title IV-E relative foster family home placements due to implementation of the final rule, we subtracted the projected caseload without application of the final rule on line 1 from the projected caseload of the proposed rule on line 6. For example, in 2023 there would be 1,392 new title IV-E relative foster family home placements: 38,714−37,323 = 1,392.

Lines 8 through 10. Annual federal costs of title IV-E relative foster family home placements. Lines 8 and 9 display the annual increases in FCMPs and administrative costs for the new title IV-E relative foster family home placements (on line 6) if the final rule is implemented. To determine the annual federal cost of the NPRM on lines 8 and 9, we multiplied the annual number of new title IV-E relative foster family home placements on line 6 by the average child costs for FCMPs and administration on lines 2 and 3. This information is displayed for 5 different years beginning with 2023 and ending with 2032. For example, on line 8, the cost in 2023 for FCMPs is approximately $13,117,787 (1,392 children × $9,425 average FCMP). Line 10 displays the annual incremental federal costs of the NPRM if it becomes a final rule.

	Estimates without regulatory changes
	2019 Baseline	2023 (Year 1)	2024 (Year 2)	2025 (Year 3)	2027 (Year 5)	2032 (Year 10)	Ten year total cost
1. Number of title IV-E relative placements @1% growth	36,953	37,323	37,696	38,073	38,838	40,819
2. Avg. title IV-E FCMP FFP claim per child@2% claiming growth factor	$9,240	$9,425	$9,614	$9,806	$10,202	$11,264
3. Avg. title IV-E Administrative cost FFP claim per child@2% claiming growth factor	$12,907	$13,165	$13,428	$13,696	$14,250	$15,733
4. FCMP cost	$341,462,572	$351,774,691	$362,398,575	$373,343,289	$396,233,652	$459,790,346	$4,036,424,435
5. Administrative cost	$476,934,437	$491,337,785	$506,176,589	$521,463,509	$553,435,395	$642,207,572	$5,637,835,507
Estimated FFP with proposed regulatory changes
	2019	2023 (Year 1)	2024 (Year 2)	2025 (Year 3)	2027 (Year 5)	2032 (Year 10)	Ten year total cost
6. Number of title IV-E relative placement @varied caseload growth rates	36,953	38,714	41,849	45,042	51,609	61,680
7. Total annual increase in title IV-E relative placements		1,392	4,153	6,970	12,771	20,861
8. Annual increase in FCMP costs		$13,117,787	$39,926,838	$68,344,565	$130,295,804	$234,976,401	$1,304,789,018
9. Increase in administrative costs		$15,636,201	$50,233,323	$89,758,368	$175,938,591	$324,690,283	$1,780,051,762
10. Total incremental increase in FFP		$28,753,988	$90,160,161	$158,102,933	$306,234,395	$559,666,684	$3,084,840,780
Title IV-E agency estimates with proposed regulatory changes
	2019	2023	2024	2025	2027 (Year 5)	2032 (Year 10)	Ten year total cost
11. Maintenance Portion—Incremental Non-Federal Share (Using FY 2019 Avg. FMAP rate of 56.61%)		$10,054,421	$30,602,817	$52,384,220	$99,868,132	$180,102,915	$1,000,084,711
12. Administration Portion—Incremental Non-Federal Share (50% FFP)		$15,636,201	$50,233,323	$89,758,368	$175,938,591	$324,960,283	$1,780,051,762
13. Total Incremental Increase in Non-Federal Share		$25,690,622	$80,836,140	$142,142,587	$275,806,723	$504,793,199	$2,780,136,473

Estimated costs of this proposal to title IV-E agencies. Title IV-E agencies may claim reimbursement for the federal cost of FCMPs and administrative costs, and the title IV-E agency pays its share with state or tribal funds. Line 11 displays the agency's estimated FCMP costs and line 12 displays the estimated agency costs for administration. Line 13 displays the total incremental increase in cost for the state/tribal share. This information is displayed for 5 different years beginning with 2023 and ending with 2032. The estimates provided are calculated using the national average federal medical assistance percentage (FMAP) rate of 56.61 percent for FY 2019 and an administrative cost FFP rate of 50 percent. This proposal is optional; therefore, agencies are not required to incur any costs.

Accounting Statement

From a society-wide perspective, many of the effects estimated above are transfers. We seek comment on estimation of the portion that represents new resource use attributable to the proposed rule. Preliminary, as shown in the table below, the full amounts are categorized as transfers—from either the federal government or Title IV-E agencies to Title IV-E participants.

Category	Primary estimate (millions)	Units
		Year dollars	Discount rate (%)	Period covered (years)
Federal Budget Transfers (annualized)	$439	2019	7	10
	362	2019	3	10
From/To	From: Federal government	To: Title IV-E participants
Other Transfers (annualized)	395	2019	7	10
	326	2023	3	10
From/To	From: Title IV-E agencies	To: Title IV-E participants

V. Tribal Consultation Statement

Executive Order 13175, Consultation and Coordination With Indian Tribal Governments, requires agencies to consult with Indian tribes when regulations have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. This NPRM does not propose any mandatory action on Tribal governments or impose any tribal burden or cost, and therefore does not have substantial direct effects on Indian tribes. Rather it proposes to provide tribal title IV-E agencies an option for implementing the foster family home licensing requirements for the title IV-E foster care program. Accordingly, a tribal title IV-E agency can adopt separate licensing or approval standards for relative or kinship foster family homes, but is not required to do so. We intend to notify tribal title IV-E agency leadership about the opportunity to provide comment on the NPRM no later than the day of publication. Further, shortly after publication of the NPRM, we plan to hold briefing sessions with tribal title IV-E agencies and any other interested tribe on the contents of the NPRM.

January Contreras, Assistant Secretary of the Administration for Children and Families, approved this document on January 20, 2023.

List of Subjects

45 CFR Part 1355

• Administrative costs
• Adoption Assistance
• Child welfare
• Fiscal requirements (title IV-E)
• Grant programs—social programs
• Statewide information systems
• Adoption and foster care
• Child welfare
• Grant programs—social programs

45 CFR Part 1356

• Adoption and foster care
• Child welfare
• Grant programs—social programs

(Catalog of Federal Domestic Assistance Program Number 93.658, Foster Care Maintenance; 93.659, Adoption Assistance; 93.645, Child Welfare Services—State Grants).

Dated: February 8, 2023.

Xavier Becerra,

Secretary, Department of Health and Human Services.

For the reasons set forth in the preamble, ACF proposes to amend 45 CFR parts 1355 and 1356 as follows:

PART 1355—GENERAL

1. The authority citation for part 1355 continues to read as follows:

Authority: 42 U.S.C. 620 et seq.,42 U.S.C. 670 et seq.;42 U.S.C. 1302.

2. In § 1355.20, amend paragraph (a) by revising the definition of “Foster family home” to read as follows:

§ 1355.20

Definitions.

(a) * * *

Foster family home means, for the purpose of title IV-E eligibility, the home of an individual or family licensed or approved as meeting the standards established by the licensing or approval authority(ies), that provides 24-hour out-of-home care for children. The licensing authority must be a state authority in the state in which the foster family home is located, a tribal authority with respect to a foster family home on or near an Indian Reservation, or a tribal authority of a tribal title IV-E agency with respect to a foster family home in the tribal title IV-E agency's service area. Agencies may establish one set of foster family home licensing or approval standards for all relative or kinship foster family homes that are different from the set of standards used to license or approve all non-relative foster family homes. Anything less than full licensure or approval is insufficient for meeting title IV-E eligibility requirements. Title IV-E agencies may, however, claim title IV-E reimbursement during the period of time between the date a prospective foster family home satisfies all requirements for licensure or approval and the date the actual license is issued, not to exceed 60 days.

* * * * *

PART 1356—REQUIREMENTS APPLICABLE TO TITLE IV-E

3. The authority citation for part 1356 continues to read as follows:

Authority: 42 U.S.C. 620 et seq.,42 U.S.C. 670 et seq.;42 U.S.C. 1302.

4. Amend § 1356.21 by revising paragraphs (m)(1) and (2), and adding paragraph (m)(3) to read as follows:

§ 1356.21

Foster care maintenance payments program implementation requirements.

* * * * *

(m) * * *

(1) The amount of the payments made for foster care maintenance to assure their continued appropriateness, and that the amount made to a licensed or approved relative or kinship foster family home is the same as the amount that would have been made if the child was placed in a licensed or approved non-relative foster family home;

(2) The amount of the payments made for adoption assistance to assure their continued appropriateness; and

(3) The licensing or approval standards for child care institutions and foster family homes.

* * * * *