Rule: Child Care and Development Fund State Match Provisions

27972 Federal Register / Vol. 72, No.
96 / Friday, May 18, 2007 / Rules and Regulations
Name of non-regulatory Applicable geographic State submittal date EPA approval date Additional explanation
SIP revision area
VMT Offset SIP Revision .. Washington DC 1-hour 9/2/03, 2/24/04 .................. 5/16/05, 70 FR 25688 .......
ozone nonattainment
area.
Contingency Measure Plan Washington, DC Area ....... 9/2/03, 2/24/04 .................. 5/16/05, 70 FR 25688 .......
1-hour Ozone Modeled Washington DC 1-hour 9/2/03, 2/24/04 .................. 5/16/05, 70 FR 25688.
Demonstration of Attain- ozone nonattainment
ment. area.
Attainment Demonstration Washington County ........... 12/20/04, 2/28/05 .............. 8/17/05, 70 FR 48283.
and Early Action Plan for
the Washington County
Ozone Early Action
Compact Area.
1-hour Ozone Attainment Washington DC 1-hour 9/2/2003, 2/24/2004 .......... 11/16/05, 70 FR 69440.
Plan. ozone nonattainment
area.
8-hour Ozone Maintenance Kent and Queen Anne’s 05/2/06, 05/19/06 .............. 12/22/06, 71 FR 76920.
Plan for the Kent and Counties.
Queen Anne’s Area.
[FR Doc. E7–9518 Filed 5–17–07; 8:45 am] 401–4795, e-mail matching funds and permit States to use
BILLING CODE 6560–50–P awilliams@acf.hhs.gov. public pre-kindergarten expenditures
SUPPLEMENTARY INFORMATION: for up to 30 percent of the expenditures
required to claim their full allotment of
Table of Contents CCDF Federal matching funds. A
DEPARTMENT OF HEALTH AND discussion of comments to the final
HUMAN SERVICES I. Background
A. Child Care and Development Fund rule’s revisions that were received in
Administration for Children and B. Summary of the Statutory Provisions response to the publication of a Notice
Related to the State Match Requirement of Proposed Rulemaking (NPRM) on
Families C. State Match Requirement Regulations November 9, 2004, (69 FR 64881) may
D. Notice of Proposed Rulemaking
45 CFR Part 98 be found below in the preamble. This
II. Statutory Authority
III. Provisions of Final Rule final rule is not substantively different
RIN 0970–AC18 A. Certifying Private Donations as State from the revisions proposed by the
Expenditures NPRM; however, minor technical
Child Care and Development Fund 1. Summary of the Former Regulations changes have been made to address
State Match Provisions Regarding Certifying Private Donations concerns raised by some commenters.
as State Expenditures in the CCDF
AGENCY: Administration for Children Regulations A. Child Care and Development Fund
and Families (ACF), HHS. 2. Consultation With States and Other (CCDF)
ACTION: Final rule.
Organizations
3. Discussion of Comments CCDF assists low-income families,
4. Changes Made in Final Rule including families receiving or
SUMMARY: This final rule revises the
B. Public Pre-Kindergarten Expenditures transitioning from the Temporary
Child Care and Development Fund 1. Summary of the Former Regulations Assistance for Needy Families program
(CCDF) regulations to permit States to Regarding Public Pre-Kindergarten (TANF), in the purchase of child care
designate multiple public and/or private Expenditures in the CCDF Regulations services, thereby allowing parents to
entities as eligible to receive private 2. Consultation With States and Other
work or attend training or education.
donations that may be certified as child Organizations
3. Discussion of Comments States must spend a portion of their
care expenditures for purposes of
4. Changes Made in Final Rule CCDF allotment on expenditures to
receiving CCDF Federal matching funds.
IV. Regulatory Impact Analyses improve the quality and availability of
This final rule also raises from 20 to 30
A. Executive Order 12866 child care.
percent the amount of each State’s B. Regulatory Flexibility Analysis
match requirement that may be met C. Assessment of the Impact on Family B. Summary of the Statutory Provisions
with public pre-kindergarten Well-Being Related to the State Match Requirement
expenditures in order to implement a D. Paperwork Reduction Act
CCDF is comprised of three funding
provision of the President’s Good Start, E. Unfunded Mandates Reform Act of 1995
F. Congressional Review streams—discretionary funds subject to
Grow Smart initiative. These provisions annual appropriation by Congress as
are intended to give States increased G. Executive Order 13132
authorized under Sec. 658B of the
flexibility in making the necessary State I. Background CCDBG Act, 42 U.S.C. 9858, and
expenditures on child care to draw This final rule makes revisions to the mandatory and matching funds
down their full allotment of CCDF matching fund requirements of the appropriated under Sec. 418 of the
Federal matching funds. Child Care and Development Fund Social Security Act (‘‘SSA’’), 42 U.S.C.
DATES: Effective: October 1, 2007.
cprice-sewell on PRODPC61 with RULES
(CCDF) regulations. The new 618. Pursuant to Sec. 418(a)(2) of the

FOR FURTHER INFORMATION CONTACT: requirements permit States to designate SSA, the Federal CCDF matching funds
Andrew Williams, Child Care Program multiple public and/or private entities are the funds remaining after the
Specialist, Child Care Bureau, 1250 as eligible to receive donated funds that mandatory funds have been distributed
Maryland Ave, SW., 8th Floor, States certify as child care expenditures to the States. Matching funds are
Washington, DC 20024, telephone (202) for purposes of receiving Federal CCDF allocated to the States on the basis of the
VerDate Aug<31>2005 15:21 May 17, 2007 Jkt 211001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:\FR\FM\18MYR1.SGM 18MYR1
Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Rules and Regulations 27973
number of children under age 13 in the FY1999, nine States have failed to draw to or under State control as
State compared with the number of down their full allotment of Federal expenditures for the purpose of
children under age 13 in the Nation. CCDF matching funds in at least one receiving Federal CCDF matching funds,
These funds must be matched by States year. Five of these States have failed to former CCDF regulations provided that
at the State’s Federal medical assistance draw down their full allotment of States must designate a single entity to
percentage (FMAP) rate. Federal CCDF matching funds in receive such privately donated funds
C. State Match Requirement Regulations multiple years. Three States failed to and all such privately donated funds
draw down their full allotment of must be transferred to this single
CCDF regulations are codified at 45 Federal CCDF matching funds in each of designated entity. The specific
CFR part 98. Previously, the relevant fiscal years 2003 and 2004. State provisions setting forth this requirement
matching fund requirements of the expenditure and allotment data can be appeared at § 98.53(f) of the CCDF
CCDF regulations provided that donated found at http://www.acf.dhhs.gov/ regulations and provided that funds
funds from private sources could be programs/ccb/data/index.htm. In recent donated from private sources ‘‘may be
qualified as State expenditures for months, ACF Regions and the Child given to the entity designated by the
purposes of receiving Federal CCDF Care Bureau have received requests State to receive donated funds’’ in the
matching funds, provided that such from States for increased flexibility in State Plan.
funds were transferred to or under the the use of donated funds and public pre-
control of the State CCDF Lead Agency 2. Consultation With States and Other
kindergarten expenditures to meet
or given to the single entity designated Organizations
CCDF matching requirements.
by the State to receive donated funds. 45 Furthermore, Good Start, Grow Smart: Requests have been made by State
CFR 98.53(f). In order to qualify as State The Bush Administration’s Early officials for increased flexibility in
CCDF matching funds, the former CCDF Childhood Initiative, the document that meeting the States’ CCDF matching
regulations also stipulated that private describes the President’s Good Start, requirements. The Child Care Bureau
donations, whether they were Grow Smart initiative, specifically has also learned that States found the
transferred directly to the State or to a provides that the amount of State pre- CCDF regulations too restrictive when
designated entity, (i) must have been kindergarten expenditures that may be States sought to encourage coordination
donated without any restriction that used for Federal match should be among early childhood education
would require their use for a specific increased to give States more flexibility programs or to implement the
individual, organization, facility or in funding quality activities in support President’s Good Start, Grow Smart
institution; (ii) could not revert to the of early learning. This final rule initiative. For example, the requirement
donor’s facility or use; (iii) were not implements that recommendation. Good for a single designated entity to receive
used to match other Federal funds; (iv) Start, Grow Smart: The Bush privately donated funds has impeded
shall have been certified both by the Administration’s Early Childhood the ability of some States to partner with
donor and by the Lead Agency as Initiative may be downloaded from the multiple organizations that are
available and representing expenditures President’s Web site at http:// interested in contributing towards the
eligible for Federal match; and (v) shall www.whitehouse.gov/infocus/ State’s match requirement.
have been subject to the audit earlychildhood/toc.html.
requirements in Sec. 98.65. 45 CFR Finally, this final rule makes 3. Discussion of Comments
98.53(e)(2). technical corrections and clarifies some Greater Flexibility and Coordination
The former relevant matching fund
ambiguities in the CCDF regulations. Comment: Two commenters noted
requirements also provided that States
could use public pre-kindergarten D. Notice of Proposed Rulemaking that the proposed rule would allow
expenditures for up to 20 percent of the A Notice of Proposed Rulemaking greater flexibility in making the
expenditures serving as maintenance-of- (NPRM) was published in the Federal necessary State expenditures on child
effort and up to 20 percent of the Register on November 9, 2004 (69 FR care to draw down the full allotment of
expenditures meeting CCDF matching 64881) with a 60-day public comment Federal CCDF matching funds and
requirements. 45 CFR 98.53(h). States period. As discussed later in this would promote the ability of States to
seeking to use pre-kindergarten preamble, we received comments from 9 coordinate the use of private funds in a
expenditures for between 10 and 20 commenters: three State child care more cohesive system of early care and
percent of the expenditures serving as administrators and six national education. However, several
maintenance-of-effort or meeting CCDF advocacy groups for child care. commenters noted concerns regarding
matching requirements had to provide a the tracking and reporting that would be
description of the efforts they would II. Statutory Authority needed to comply with Federal
undertake to ensure that pre- This final rule is being issued under requirements.
kindergarten programs meet the needs the authority granted to the Secretary of Response: It is the intent of the Child
of working families. They also were Health and Human Services (HHS) by Care Bureau that the flexibility created
required to demonstrate how they will Sec. 658E of the CCDBG Act, 42 U.S.C. by this rule will ease the burden on
coordinate their pre-kindergarten and § 9858c. States in meeting their CCDF matching
child care services to expand the requirement and free more State funds
availability of child care. 45 CFR III. Provisions of Final Rule for use in coordinated efforts that
98.53(h)(4). A. Certifying Private Donations as State emphasize quality child care and early
While retaining most of the provisions Expenditures education.
governing CCDF State matching With respect to the concerns raised by
1. Summary of the Former Regulations
requirements, this rule finalizes the the commenters regarding the tracking
provisions of the NPRM to give States Regarding Certifying Private Donations and reporting of privately donated
more flexibility in making the necessary as State Expenditures in the CCDF funds, we note that States are
State expenditures for child care to Regulations responsible for ensuring that private
draw down their full allotment of In order to certify funds donated from donations counted towards a State’s
Federal CCDF matching funds. Since private sources that are not transferred CCDF match requirements meet all the
27974 Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Rules and Regulations
rules and restrictions set forth for such of unrestricted funds donated to a suggested: (1) Making funds subject to
funds in CCDF regulations. As provided designated entity would be unduly audit requirements that would
in the Child Care Bureau’s October 30, burdensome on donors, designated specifically focus on determining
1996 Program Instruction on Matching entities, and Lead Agencies. Requiring compliance with safeguards applicable
Funds, Maintenance of Effort, and designated entities to make or collect to donated funds; (2) collecting and
Administrative Costs (ACYF–PI–CC–96– numerous certifications from donors publishing information on the amount
17), ‘‘Federal matching funds are only who contributed some portion of of donated funds used to help States
available to match State expenditures unrestricted funds, often in small draw down Federal matching funds and
for those child care service [sic] and amounts, that were used to pay for an ensuring that program reviews include
related activities, including quality expenditure meeting CCDF State match components designed to monitor
activities, that are allowable and are also requirements, would have a chilling compliance with Federal requirements
included by the State as part of its effect on the donation process. Further, applicable to donated funds; and (3)
program under the Act and noted in the we see little value in certifications from requiring the State agency, rather than
approved State Plan.’’ Sec. 98.53(e)(2) of donors who have neither control over the agency receiving the donated funds,
the CCDF regulations (as amended by funds that have already been donated, to make determinations on whether
this final rule) provides for special rules nor the expertise to determine whether donated funds count as a State match.
concerning privately donated funds: (1) such funds represent expenditures Response: It is important to recognize
Such funds must be donated without eligible for CCDF State match. We that under existing CCDF regulations,
any restriction that would require their therefore revise Sec. 98.53(e)(2)(iv) to States have the flexibility to designate a
use for a specific individual, provide that privately donated funds single entity to receive privately
organization, facility or institution; (2) must ‘‘be certified both by the Lead donated funds. To date, we are not
such funds may not revert to the donor’s Agency and by the donor as available aware of any documented instances of
facility or use; (3) such funds may not and representing funds eligible for fraud or misexpenditure by these
be used to match other Federal funds; Federal match if funds are donated designated entities despite regular
(4) such funds must be certified both by directly to the Lead Agency. If private audits. We see no reason why simply
the Lead Agency and by the donor (if funds are donated directly to the allowing States to designate more than
funds are donated directly to the Lead designated entity, those funds must be one entity to receive privately donated
Agency) or the entity designated by the certified both by the Lead Agency and funds would lead to greater fraud or
State to receive donated funds pursuant the entity designated by the State to misexpenditure.
to Sec. 98.53(f) (if funds are donated receive donated funds as available and At the same time, we recognize the
directly to the designated entity) as representing funds eligible for Federal importance of maintaining
available and representing funds eligible match, pursuant to Sec. 98.53(e).’’ The accountability and integrity in the
for Federal match; and (5) such funds preamble to the CCDF regulations program, and we reiterate that Sec.
shall be subject to the audit supports this interpretation, noting, 98.53(e)(2)(v) of the CCDF regulations
requirements in Sec. 98.65 of the CCDF ‘‘Both the Lead Agency and the entity explicitly requires that State match
regulations. States must take designated by the State to receive funds derived from privately donated
responsibility to ensure compliance donated funds must * * * certify that funds are subject to the audit
with CCDF rules and restrictions the donated funds are available and requirements in Sec. 98.65 of the CCDF
regarding private donations when eligible for Federal match.’’ 63 FR regulations.
considering which and how many 39965. Therefore, we believe that the Therefore, pursuant to Sec. 98.65(d),
private or public entities will be intent of the CCDF regulations has any Federal match funds drawn down
designated as eligible to receive private always been that the Lead Agency and with privately donated funds that are
donations for CCDF match. the entity designated by the State to determined through the audit process
We take this opportunity to make a receive donated funds should certify to not to have been expended in
technical change to the CCDF the availability and eligibility of accordance with CCDF statutory or
regulations in response to the concern privately donated funds donated to the regulatory provisions, or with the State
raised regarding the tracking of private designated entity, and thus consider this Plan, are subject to disallowance and
donations. Sec. 98.53(e)(2)(iv) of the revision to be a technical change. In being returned to the Federal
former CCDF regulations required both cases where private donations are made government. States using privately
the donor and the Lead Agency to directly to the Lead Agency, donors are donated funds to meet their CCDF State
certify that privately donated funds still required to make the required match requirement, whether such funds
were ‘‘available and representing certifications. are received by the State or a designated
expenditures eligible for Federal third party, should be cognizant of this
match.’’ Read literally in the case of a Reduced Accountability/Increased requirement and implement all
State using private donations to an Fraud and Misexpenditure necessary systems and procedures to
entity designated by the State to receive Comment: Several commenters ensure that all funds used to meet CCDF
such funds for the purpose of meeting opined that allowing States to designate State match requirements comply with
CCDF matching requirements, this multiple entities to receive private CCDF’s statutory and regulatory
would require the State and/or the donations would lead to reduced requirements.
designated entity to obtain numerous accountability and increased fraud and We also note that States are required
certifications from individual donors misexpenditure. According to these to report their use of privately donated
who neither had control over funds they commenters, it would be difficult under funds to meet their CCDF State match
had already donated to the designated the proposed rule for States to requirement in two places. First, in Sec.
entity, nor had the expertise to independently determine whether funds 1.8 of the Child Care and Development
determine whether such funds reported as collected were actually Fund Plan for FFY 2006–2007, States
represented expenditures eligible for collected in a manner consistent with must answer whether they will use
Federal match. the CCDF regulations and harder to privately donated funds to meet a part
We believe that requiring donors to determine whether the safeguards were of their CCDF State match requirement
certify to the availability and eligibility being followed. The commenters and identify and describe the entity or
entities designated to receive privately Allowing the entity receiving donated including quality activities, provided
donated funds. Second, States must funds to impose special conditions or that such services and activities meet
report on a quarterly basis the amount spend donated funds on their own eligibility and other program
of privately donated funds used to meet programs increases the risk that overall requirements, are consistent with the
their CCDF State match requirement on program priorities would be distorted. goals and purposes of the CCDBG Act,
the ACF–696 Financial Report. We The commenters suggested: (1) and are noted in the approved State
recommend that States take appropriate Specifying that the entity receiving Plan. Again, States have the
measures with respect to their own data- funds may not impose a requirement responsibility of ensuring that the
collection requirements to ensure that that the funds be used for a specific activities funded through private
donors and entities designated to individual or group of individuals, donations meet all the requirements to
receive private donations comply with organization, facility or institution; (2) qualify as CCDF State match. If a State
CCDF statutory and regulatory specifying that funds may not revert to determines that an entity designated to
requirements. such entity’s facility or use; and (3) receive private donations is acting
Further, we note that the State as well specifying that decisions about the improperly, it must remove that entity’s
as the donor or the entity receiving appropriate expenditures of donated designation and find another source to
privately donated funds are required by funds counting as State match must be meet the State’s CCDF State match
CCDF regulations to certify that the made by the State agency rather than the requirement.
privately donated funds are both entity receiving donated funds.
available and represent expenditures Response: Sec. 98.53(e)(2) prohibits Competition/Inequitable Distribution of
eligible for Federal match. Through the donors from placing special conditions Funds
certification process, States are held on private donations that would require Comment: Several commenters
accountable for all privately donated their use for a specific individual, believed that allowing States to
funds used as CCDF State match organization, facility or institution or designate multiple entities to receive
whether such funds are donated to the that would result in their reversion to private donations creates the risk that
State directly or donated to a designated the donor’s facility or use. However, the that such entities would compete in the
entity. Further, we reiterate that preamble to the CCDF regulations makes collection of private funds. These
designations of privately donated funds clear that limiting the use of privately commenters opined that competition
as eligible for CCDF Federal matching donated funds to a specific geographic could lead to inequitable distribution of
funds are subject to verification through area, such as within the limits of a funds because wealthy communities
audit. specific city or even a single could generate more private donations
Finally, in an effort to reduce the neighborhood, is permissible, as this than poor communities. They also
chances of fraud or misexpenditure and was one of the intentions of allowing argued that the proposed rule could
to further clarify our regulations, we separate entities to receive privately result in competition among child care
take this opportunity to make another donated funds for use as CCDF State providers that might be put in a position
technical change by removing the word match. 63 FR 39965. of having to raise funds to contribute to
‘‘and’’ after Sec. 98.53(e)(2)(ii). One CCDF regulations provide that match. The commenters suggested: (1)
Lead Agency interpreted the inclusion restrictions on placing special Specifying that any State electing to use
of the word ‘‘and’’ between clauses (ii) conditions on privately donated funds donated funds as CCDF State match
and (iii) of Sec. 98.53(e)(2) to mean that apply only to donors and not to the must provide assurances that CCDF
privately donated funds were only entities receiving them. However, CCDF matching funds will be allocated in an
required to meet the requirements of regulations also provide that the entities equitable manner that does not result in
clauses (i) and (ii) or clauses (iii)–(v), receiving privately donated funds as disproportionate allocation of resources
but not all five clauses. We believe that well as the State must certify that such to communities or entities based on the
the word ‘‘and’’ was inadvertently left donated funds are both available and collection of donated funds; and (2)
in the regulations when they were eligible for Federal match. Therefore, requiring States to describe in their
revised in 1998. We further believe that both the entities receiving privately State Plans how the allocation of funds
removing the word ‘‘and’’ does not donated funds as well as the State must for services and quality activities
change the meaning or our take appropriate steps to ensure that between areas of the State is reasonable
interpretation of Sec. 98.53(e)(2). such funds are spent on allowable and appropriate in light of the identified
However, we want to avoid any activities, as described in the approved needs of the respective areas of the
misinterpretation of Sec. 98.53(e)(2) that State Plan, that meet the goals and State.
might lead to privately donated funds purposes of the CCDBG Act. States must Response: As noted above, the
being claimed as CCDF State match be vigilant in monitoring the entities preamble to the CCDF regulations makes
without meeting all five requirements of that they designate as eligible to receive clear that limiting the use of privately
Sec. 98.53(e)(2). We consider this privately donated funds, and should act donated funds to a specific geographic
revision to be a technical change. quickly and decisively to remove their area, such as within the limits of a
designation if any impropriety has specific city or even a single
Distorted Program Priorities occurred. neighborhood, was one of the intentions
Comment: Several commenters argued Entities that receive privately donated of allowing separate entities to receive
that CCDF rules that prohibit special funds may expend such funds on their privately donated funds for use as CCDF
conditions on private donations and the own activities, provided that such State match. To date, we have found no
reversion of donations back to the donor activities qualify as eligible child care evidence that this has led to inequity in
may be interpreted to apply only to activities under the CCDBG Act and child care spending among communities
donors and not the entities designated CCDF regulations, and provided further of varying economic status. We see no
to receive donations. According to these that such activities are permissible reason why simply allowing States to
commenters, if private donations are under State or local law and regulations designate more than one entity to
generated with special conditions, governing conflict of interest. Qualifying receive privately donated funds would
entities could raise funds that would be child care activities may include child lead to greater inequities among various
limited to the benefit of their members. care direct services or related activities, regions of a State.
We take this opportunity to remind spending for subsidies, quality to 2010–2011 State Plan submission
States of CCDF’s parental choice improvement, and infants and toddlers. process.
requirements. Sec. 98.30(f) of the CCDF Response: Allowing more than one Lack of Rationale
regulations prohibits States or local public or private entity to receive
governments from establishing rules, private donations in no way changes Comment: Several commenters noted
procedures or other requirements States’ CCDF matching and MOE that the NPRM does not adequately
promulgated for purposes of the CCDF requirements. Whether the source of the explain why the existing requirement
that significantly restrict parental choice CCDF matching or MOE funds is from restricting States to the designation of a
by: (i) Expressly or effectively excluding the State or from a private donation to single entity for receipt of private
any category of care or type of provider, a designated entity, the amount required donations has been a problem and offers
or any type of provider within a to draw down a State’s full allotment of no examples of any instance in which
category of care; (ii) having the effect of CCDF matching funds is not altered by it has impeded coordination or
limiting parental access to or choice this regulatory change. Further, these discouraged the use of private
from among such categories of care or rules are intended to increase State contributions. They argue that States
types of providers; or (iii) excluding a flexibility and should have a positive should be required to demonstrate in
significant number of providers in any impact on funding child care. States their State plan how they are using any
category of care or of any type of care. ultimately have responsibility to increase in available funds to both
If a State enacted a rule, procedure or determine how best to address child improve coordination and to increase
other requirement to take advantage of care and this regulation will give States the availability of services for low-
the additional flexibility provided by additional flexibility to meet the needs income working families.
this final rule that had the effect of Response: As noted above, since
of children and families.
FY1999, nine States have failed to draw
limiting parental choice in violation of With respect to child care funding for down their full allotment of Federal
CCDF regulations, then that State would certain ages of eligible children, such as CCDF matching funds in at least one
be subject to losing all or a portion of infants and toddlers, we note that States year, and five of these States have failed
its CCDF grant. We urge States to already have the flexibility to allocate to draw down their full allotment of
consider CCDF’s parental choice funds between direct services and Federal CCDF matching funds in
requirements carefully in crafting new quality activities and among the various multiple years. It is our belief that
rules, procedures, or other requirements ages of eligible children according to the greater flexibility in meeting their State
designed to take advantage of this final particular circumstances within the match could have helped these States
rule. State. However, there are several draw down their full allotment of CCDF
We further urge States to monitor how requirements of States that ensure that Federal match funds. We also reiterate
State and Federal child care funds are CCDF funds are spread across all that the Child Care Bureau has received
distributed across a State and use the eligible children and types of child care requests from State officials for
flexibility provided by CCDF statute and activities. States are required to spend at increased flexibility in meeting the
regulations to ensure that child care least four percent of their CCDF States’ CCDF matching requirements,
resources are distributed equitably and allotment on quality activities and at particularly for States seeking to
optimally. Further, we will take under least 70 percent of their allotment of encourage coordination among early
advisement prior to the 2010–2011 State CCDF mandatory and matching funds childhood education programs or to
Plan submission process the on direct services for families receiving implement the President’s Good Start,
recommendation to require States to TANF assistance, transitioning off of Grow Smart initiative. It is our belief
describe in their State Plans how they TANF assistance, or at risk of becoming that this rule change will enable States
make use of privately donated funds dependent on TANF assistance. to raise more funds for child care and
and whether such use leads to disparate Additionally, set-asides in annual encourage more public-private
services across varying regions of a appropriation of CCDF discretionary partnerships in increasing the quality
State. We will, at that time, publish a funds require States to spend CCDF and availability of affordable child care.
Federal Register notice (OMB Control funds on specified activities, such as We do see merit in the suggestion that
Number 0970–0114) to solicit public ‘‘activities that improve the quality of States should be required to
comment as to the availability of child infant and toddler care.’’ demonstrate in their State Plan how
care services that meet the needs of This rule is not intended to reward they are using privately donated funds
working parents. one group of children at the expense of to both improve coordination and to
the other. Rather, this rule hopes to increase the availability of services for
Reduced Funding for Child Care
facilitate greater funding opportunities low-income working families. While no
Comment: Several commenters for all eligible children through private regulatory changes are needed, we will
opined that child care is not adequately donations and to encourage greater take that suggestion under advisement
funded and that the proposed changes cooperation and coordination between prior to the 2010–2011 State Plan
to CCDF regulations may actually result the child care and early education submission process. We will, at that
in fewer child care services, particularly communities. We feel this is in the best time, publish a Federal Register notice
for infants and toddlers. They argue that interests of all children. However, we (OMB Control Number 0970–0114) to
increased use of private donations to will continue to monitor States’ solicit public comment as to the
meet CCDF State match requirements implementation of the CCDF program availability and coordination of child
could result in shrinkage of public through State Plans, annual State care services that meet the needs of
commitment because legislatures might expenditure data and other reporting working parents.
reduce appropriations in the requirements. We also will publish a

expectation that agencies or Federal Register notice (OMB Control 4. Changes Made in Final Rule
communities should generate private Number 0970–0114) to solicit public In order to grant States greater
match instead. Those commenters comment as to the availability and flexibility in meeting the matching
suggest that States be prohibited from coordination of child care services that requirements for Federal CCDF
reducing their current child care meet the needs of working parents prior matching funds, this final rule provides
that States shall be allowed to designate 2. Consultation With States and Other services and demonstrate that the
multiple public and/or private entities Organizations increase in funds has not resulted in a
to receive privately donated funds that Requests have been made by State decline in State child care expenditures.
may be certified as State expenditures officials for increased flexibility in Response: Increasing the allowable
for purposes of receiving Federal CCDF meeting the States’ CCDF matching pre-K funds for State match from 20%
matching funds. We revised Sec. requirements. The Child Care Bureau to 30% is intended to provide an
98.53(f) to provide that privately has also been informed that States were incentive for States to more closely link
donated funds ‘‘may be given to the finding the former CCDF regulations to their pre-K and child care systems and
establish a coordinated system that
public or private entities designated by be too restrictive when States sought to
better meets the needs of working
the State to implement the child care encourage coordination among early
families for full-day/full-year services
program in accordance with Sec. 98.11 childhood education programs or to
that prepare children to enter school
provided that such entities are implement the President’s Good Start,
ready to learn. The intent is not to create
identified and designated in the State Grow Smart initiative. This rule will
an incentive for States to divert State
Plan to receive donated funds pursuant provide greater leverage to ensure
funds away from other child care
to Sec. 98.16(c)(2).’’ Additionally, coordination between pre-kindergarten
programs to meet their Matching
conforming changes to Secs. 98.16(c)(2) and child care.
requirements solely through pre-K
and 98.53(e)(2)(iv) reflect the fact that 3. Discussion of Comments expenditures. Additionally, we note that
privately donated funds may be given to to address potential concerns about the
More Funds for Quality Enhancements
‘‘public or private entities.’’ use of pre-K expenditures in meeting
Comment: Two commenters noted CCDF requirements, expenditures for
Also, as discussed above, two that CCDF funds freed by the proposed
technical changes are made to address pre-K programs may constitute no more
change could be directed toward quality than 30 percent of State match
concerns noted in comments. First, Sec. enhancements supporting early expenditures.
98.53(e)(2)(iv) is revised to provide that learning, and that increased To reiterate what we stated in the
privately donated funds must ‘‘be coordination could lead to increased 1998 final rule, a chief concern to
certified both by the Lead Agency and efficiencies, improved service working parents is that many pre-K
by the donor (if funds are donated effectiveness, and the potential to services are only part-day and or part-
directly to the Lead Agency) or the leverage additional private donations. year and such programs may not serve
entity designated by the State to receive Response: We agree. It is the intent of the family’s real needs. CCDF
donated funds pursuant to Sec. 98.53(f) the Child Care Bureau that the regulations require a State using pre-k
(if funds are donated directly to the flexibility created by this rule will ease expenditures to meet its CCDF State
designated entity) as available and the burden on States in meeting their match requirement to describe in its
representing funds eligible for Federal CCDF matching requirement, free more State Plan the efforts it will undertake
match.’’ Second, the word ‘‘and’’ after State funds for use in funding quality to ensure that pre-K programs meet the
Sec. 98.53(e)(2)(ii) is removed. activities in support of early learning, needs of working parents.
and encourage coordination among We further note that CCDF regulations
B. Public Pre-Kindergarten Expenditures those working to improve and expand require that State Plans shall reflect a
1. Summary of the Former Regulations early education and child care. State’s intent to use public pre-K funds
Regarding Public Pre-Kindergarten Reduced Funding for Child Care in excess of 10% of its or State matching
Expenditures in the CCDF Regulations funds in a fiscal year and how the State
Comment: Several commenters will coordinate its pre-K and child care
Former CCDF regulations provided reiterated their argument that child care services to expand the availability of
that, once States had met their is not adequately funded and the child care. Thus, the CCDF regulations
maintenance-of-effort requirement, they proposed changes to the CCDF do require States to take steps to ensure
could use public pre-kindergarten regulations may actually result in fewer that their pre-k programs meet the needs
expenditures for up to 20 percent of child care services, particularly for of working parents and, in some
their child care expenditures designated infants and toddlers. One commenter instances, to coordinate their pre-k and
toward meeting CCDF matching argued that if preschool children move child care services to expand the
away from community-based child care availability of child care to all.
requirements. States seeking to use the
to State pre-K programs, child care
full 20 percent of pre-kindergarten Rationale for Rule Change
providers would be left with a
expenditures to meet the matching
disproportionate share of infants and A number of commenters argued that
requirements were required to provide a toddlers who are more expensive to it is unclear how increasing the amount
description of the efforts they would serve. Commenters noted that increased of State pre-k dollars that can be used
undertake to ensure that pre- use of pre-k expenditures for CCDF to meet the match requirement will in
kindergarten programs met the needs of State match could lead to the any way improve coordination. These
working families. They were also supplanting of current State investments commenters suggested requiring States
required to demonstrate how they in child care subsidy programs and an to demonstrate in their State plan how
would coordinate their pre-kindergarten overall reduction of funding for child they are using any increase in available
and child care services to expand the care. The commenters suggested: (1) funds to both improve coordination and
availability of child care. The specific Prohibiting States from reducing their to increase the availability of services
provisions setting forth this requirement current child care spending for for low-income working families.
appeared at Sec. 98.53(h)(3) of the CCDF
subsidies, quality improvement, and Response: As discussed above, since

regulations and provided that ‘‘[i]n any infants and toddlers; and (2) specifying FY1999, nine States have failed to draw
fiscal year, a State may use other public that any State using pre-k expenditures down their full allotment of Federal
pre-K funds for up to 20% of the for more than 20 percent of their CCDF matching funds in at least one
expenditures serving as the State’s matching funds provide assurances that year, and five of these States have failed
matching funds under this subsection.’’ the State will not supplant existing to draw down their full allotment of
Federal CCDF matching funds in State’s full allotment of Federal under Sec. 654 of the Treasury and
multiple years. It is our belief that matching funds available under this General Appropriations Act of 1999.
greater flexibility in meeting their State subsection.’’ Additionally, conforming This final rule will make it easier for
match could have helped these States changes would be made to Sec. States to receive their full allotment of
draw down their full allotment of CCDF 98.53(h)(4) to provide that the CCDF Federal matching funds through CCDF.
Federal match funds. We also reiterate Plan ‘‘shall reflect the State’s intent to These funds are to be used by States to
that the Child Care Bureau has received use public pre-K funds in excess of assist low-income families in
requests from State officials for 10%, but not for more than 20% of its purchasing child care services, to
increased flexibility in meeting the maintenance-of-effort or 30% of its State provide comprehensive consumer
States’ CCDF matching requirements, matching funds in a fiscal year.’’ education to parents and the public, and
particularly for States seeking to to improve the quality and availability
III. Regulatory Impact Analyses
encourage coordination among early of child care.
childhood education programs or to A. Executive Order 12866
implement the President’s Good Start, D. Paperwork Reduction Act
Executive Order 12866 requires that
Grow Smart initiative. It is our belief regulations be drafted to ensure that In order for States to use the increased
that this rule change will enable States they are consistent with the priorities flexibility provided by the final rule,
to raise more funds for child care and and principles set forth in Executive Lead Agencies must amend their Lead
encourage more public-private Order 12866. The Department has Agency Plans, the information
partnerships in increasing the quality determined that this final rule is
and availability of affordable child care. requirements of which are set forth in
consistent with these priorities and Sec. 98.16 of the CCDF regulations. As
We do see merit in the suggestion that principles. Moreover, we have
States should be required to required by the Paperwork Reduction
consulted with the Office of Act of 1995 (44 U.S.C. 3507 (d)), the
demonstrate in their State Plan how Management and Budget (OMB) and
they are using any increase in available Administration for Children and
determined that these final rules meet Families has submitted a copy of this
funds to both improve coordination and the criteria for a significant regulatory
to increase the availability of services section, together with a copy of this
action under Executive Order 12866. final rule to the Office of Management
for low-income working families. While Thus, they were subject to OMB review.
no regulatory changes are needed, we and Budget (OMB) for its review.
Executive Order 12866 encourages
will take that suggestion under agencies, as appropriate, to provide the Title: Amendment to State/Territorial
advisement prior to the 2010–2011 State public with meaningful participation in Plan Pre-Print (ACF–118) for the Child
Plan submission process.. We will, at the regulatory process. As described Care and Development Fund (Child Care
that time, publish a Federal Register earlier, the Child Care Bureau and ACF and Development Block Grant).
notice (OMB Control Number 0970– regional offices have been contacted by Description: The legislatively-
0114) to solicit public comment as to numerous States expressing their desire mandated plans serve as the agreement
the availability and coordination of for greater flexibility in meeting their between the Lead Agency and the
child care services that meet the needs matching requirement for Federal CCDF Federal Government as to how CCDF
of working parents. matching funds. This rule addresses programs will be administered in
4. Changes Made in This Final Rule these concerns. In addition, we have conformance with legislative
provided a 60-day public comment requirements, pertinent Federal
In order to grant States greater
period and have responded to or regulations, and other applicable
flexibility in meeting the matching
addressed all comments in this final instructions and guidelines issued by
requirements for Federal CCDF
rule. ACF. This information is used for
matching funds, this final rule provides
that once a State has met its B. Regulatory Flexibility Analysis Federal oversight of the Child Care and
maintenance-of-effort requirement, it Development Fund. Because the State
The Regulatory Flexibility Act (5 Plans must accurately reflect the
may designate a portion of its public U.S.C. Ch. 6) (RFA) requires the Federal
pre-kindergarten expenditures as manner in which a State meets the
government to anticipate and reduce the matching requirements for Federal
expenditures toward Federal CCDF impact of rules and paperwork
matching funds; provided that the CCDF matching funds, in order for a
requirements on small businesses and State to use the increased flexibility
portion of public pre-kindergarten other small entities. Small entities are
expenditures designated as State provided by this final rule, it must
defined in the RFA to include small submit an amendment to its plan
matching funds may not exceed 30 businesses, small non-profit
percent of the amount of expenditures reflecting the change in the manner in
organizations, and small governmental which it meets the matching
required by the State to draw down its entities. This rule will affect only the 50
full allotment of Federal CCDF matching requirement for Federal CCDF matching
States and the District of Columbia.
funds. We propose to revise Sec. funds. Because the information required
Therefore, the Secretary certifies that
98.53(h)(3) to provide that, ‘‘[i]n any to take advantage of the provisions of
this rule will not have a significant
fiscal year, a State may use other public this final regulation are already
impact on small entities.
pre-K funds as expenditures serving as collected in the ACF–118 (OMB Control
State matching funds under this C. Assessment of the Impact on Family Number 0970–0114), a new information
subsection; such public pre-K funds Well-Being collection document will not be
used as State expenditures may not We certify that we have made an necessary.
exceed 30% of the amount of a State’s assessment of this final rule’s impact on Respondents: State and territorial
expenditures required to draw down the the well-being of families, as required governments.
ANNUAL BURDEN ESTIMATES

Average burden hour per sub-
Number of respondents* Number of submittals Total burden hours
mittal
22 1 2 44
* Estimate based upon the total number of States using private donations and/or their public pre-kindergarten expenditures as their expendi-
tures toward Federal CCDF matching funds in FY2002, plus an additional number of States that are expected to take advantage of the increased
flexibility in using private donations and/or public pre-kindergarten expenditures to meet their State CCDF matching requirement.
The Administration for Children and private sector, of $100 million or more Dated: April 13, 2007.
Families will consider comments by the in any one year. Expenditures made to Daniel C. Schneider,
public on this proposed collection of meet the requirements for Federal CCDF Acting Assistant Secretary for Children and
information in the following areas: matching funds are made entirely at the Families.
(1) Evaluating whether the proposed option of the State or Tribal government Approved: May 9, 2007.
collection is necessary for the proper seeking the Federal CCDF matching Michael O. Leavitt,
performance of the functions of ACF, funds. Secretary, Department of Health and Human
including whether the information will Services.
have practical utility; F. Congressional Review
■ For the reasons set forth in the
(2) Evaluating the accuracy of the
This final rule is not a major rule as preamble, Part 98 of Subtitle A of Title
ACF’s estimate of the burden of the
defined in 5 U.S.C. 804. 45 of the Code of Federal Regulations
proposed collection of information,
are amended as follows:
including the validity of the G. Executive Order 13132
methodology and assumptions used; PART 98—CHILD CARE AND
(3) Enhancing the quality, usefulness, Executive Order 13132 guarantees DEVELOPMENT FUND
and clarity of the information to be ‘‘the division of governmental
collected; and responsibilities between the national ■ 1. The authority for part 98 continues
(4) Minimizing the burden of the government and the States that was to read:
collection of information on those who intended by the Framers of the Authority: 42 U.S.C. 618, 9858.
are to respond, including through the Constitution, to ensure that the
use of appropriate automated, principles of federalism established by ■ 2. Amend 45 CFR 98.16 to revise
electronic, mechanical, or other the Framers guide the executive paragraph (c)(2) as follows:
technology, e.g., permitting electronic departments and agencies in the § 98.16 Plan provisions.
submission of responses. formulation and implementation of
OMB is required to make a decision * * * * *
policies, and to further the policies of (c) * * *
concerning the collection of information the Unfunded Mandates Reform Act.’’
contained in this final rule between 30 (2) Identification of the public or
and 60 days after publication of this The Secretary certifies that this final private entities designated to receive
document in the Federal Register. rule does not have a substantial direct private donated funds and the purposes
Therefore, a comment is best assured of effect on States, on the relationship for which such funds will be expended,
having its full effect if OMB receives it between the Federal government and pursuant to Sec. 98.53(f);
within 30 days of publication. This does the States, or on the distribution of * * * * *
not affect the deadline for the public to power and responsibilities among the ■ 3. Amend 45 CFR 98.53 to revise
comment to the Department on the final various levels of government. This final paragraphs (e)(2), (f), (h)(3), and (h)(4) to
rule. Written comments to OMB for the rule does not preempt State law and read as follows:
proposed information collection should does not impose unfunded mandates.
§ 98.53 Matching fund requirements.
be sent directly to the following: Office This final rule does not contain
of Management and Budget, either by * * * * *
regulatory policies with federalism (e) An expenditure in the State for
fax to 202–395–6974 or by e-mail to implications that would require specific
OIRA_submission@omb.eop.gov. Please purposes of this subpart may be:
consultations with State or local elected
mark faxes and e-mails to the attention * * * * *
officials.
of the desk officer for ACF. (2) Donated from private sources
List of Subjects when the donated funds:
E. Unfunded Mandates Reform Act of (i) Are donated without any
1995 Charitable donation, Child care, Day restriction that would require their use
Sec. 202 of the Unfunded Mandates care, Early education, Grant programs— for a specific individual, organization,
Reform Act of 1995 (UMRA) requires social programs, Pre-kindergarten, State facility or institution;
that a covered agency prepare a match. (ii) Do not revert to the donor’s
budgetary impact statement before (Catalogue of Federal Domestic Assistance facility or use;
promulgating a rule that includes any Programs: 93.575, Child Care and (iii) Are not used to match other
Federal mandate that may result in the Development Block Grant; 93.596, Child Care Federal funds;
expenditure by State, local, and Tribal Mandatory and Matching Funds) (iv) Shall be certified both by the Lead
governments, in the aggregate, or by the Agency and by the donor (if funds are
private sector, of $100 million or more donated directly to the Lead Agency) or
in any one year. the Lead Agency and the entity
This final rule will not result in the designated by the State to receive
expenditure by State, local, and Tribal donated funds pursuant to § 98.53(f) (if
governments, in the aggregate, or by the funds are donated directly to the
designated entity) as available and DEPARTMENT OF COMMERCE vessels less than 60 feet (18.3 m) LOA
representing funds eligible for Federal using pot or hook-and-line gear in the
match; and National Oceanic and Atmospheric BSAI.
Administration In accordance with § 679.20(d)(1)(iii),
(v) Shall be subject to the audit
requirements in § 98.65 of these the Regional Administrator finds that
50 CFR Part 679 the 2007 Pacific cod directed fishing
regulations.
[Docket No. 070213033–7033–01] allowance allocated to catcher vessels
(f) Donated funds need not be less than 60 feet (18.3 m) LOA using pot
transferred to or under the RIN 0648–XA25 or hook-and-line gear in the BSAI has
administrative control of the Lead been reached. Consequently, NMFS is
Agency in order to qualify as an Fisheries of the Exclusive Economic
prohibiting directed fishing for Pacific
Zone Off Alaska; Pacific Cod by
expenditure eligible to receive Federal cod by catcher vessels less than 60 feet
Catcher Vessels Less than 60 Feet
match under this subsection. They may (18.3 m) LOA using pot or hook-and-
(18.3 m) LOA Using Pot or Hook-and-
be given to the public or private entities line gear in the BSAI.
Line Gear in the Bering Sea and
designated by the State to implement Aleutian Islands Management Area After the effective date of this closure
the child care program in accordance the maximum retainable amounts at
with § 98.11 provided that such entities AGENCY: National Marine Fisheries § 679.20(e) and (f) apply at any time
are identified and designated in the Service (NMFS), National Oceanic and during a trip.
State Plan to receive donated funds in Atmospheric Administration (NOAA),
Commerce. Classification
accordance with § 98.16(c)(2).
ACTION: Temporary rule; closure. This action responds to the best
* * * * *
available information recently obtained
(h) * * * SUMMARY: NMFS is prohibiting directed from the fishery. The Assistant
(3) In any fiscal year, a State may use fishing for Pacific cod by catcher vessels Administrator for Fisheries, NOAA
less than 60 feet (18.3 meters (m)) length (AA), finds good cause to waive the
public pre-K funds for up to 20% of the
overall (LOA) using pot or hook-and- requirement to provide prior notice and
funds serving as maintenance-of-effort
line gear in the Bering Sea and Aleutian opportunity for public comment
under this subsection. In addition, in
Islands management area (BSAI). This pursuant to the authority set forth at 5
any fiscal year, a State may use other action is necessary to prevent exceeding
public pre-K funds as expenditures U.S.C. 553(b)(B) as such requirement is
the 2007 Pacific cod total allowable impracticable and contrary to the public
serving as State matching funds under catch (TAC) allocated to catcher vessels
this subsection; such public pre-K funds interest. This requirement is
less than 60 feet (18.3 m) LOA using pot impracticable and contrary to the public
used as State expenditures may not or hook-and-line gear in the BSAI. interest as it would prevent NMFS from
exceed 30% of the amount of a State’s DATES: Effective 1200 hrs, Alaska local responding to the most recent fisheries
expenditures required to draw down the time (A.l.t.), May 15, 2007, through 2400 data in a timely fashion and would
State’s full allotment of Federal hrs, A.l.t., December 31, 2007. delay the closure of Pacific cod by
matching funds available under this FOR FURTHER INFORMATION CONTACT: catcher vessels less than 60 feet (18.3 m)
subsection. Jennifer Hogan, 907–586–7228. LOA using pot or hook-and-line gear in
(4) If applicable, the CCDF Plan shall SUPPLEMENTARY INFORMATION: NMFS the BSAI. NMFS was unable to publish
reflect the State’s intent to use public manages the groundfish fishery in the a notice providing time for public
pre-K funds in excess of 10%, but not BSAI according to the Fishery comment because the most recent,
for more than 20% of its maintenance- Management Plan for Groundfish of the relevant data only became available as
of-effort or 30% of its State matching Bering Sea and Aleutian Islands of May 14, 2007.
funds in a fiscal year. Also, the Plan Management Area (FMP) prepared by The AA also finds good cause to
shall describe how the State will the North Pacific Fishery Management waive the 30–day delay in the effective
coordinate its pre-K and child care Council under authority of the date of this action under 5 U.S.C.
services to expand the availability of Magnuson-Stevens Fishery 553(d)(3). This finding is based upon
child care. Conservation and Management Act. the reasons provided above for waiver of
Regulations governing fishing by U.S. prior notice and opportunity for public
* * * * * comment.
vessels in accordance with the FMP
[FR Doc. E7–9626 Filed 5–17–07; 8:45 am] appear at subpart H of 50 CFR part 600 This action is required by section
BILLING CODE 4184–01–P and 50 CFR part 679. 679.20 and is exempt from review under
The 2007 and 2008 final harvest Executive Order 12866.
specifications for groundfish in the Authority: 16 U.S.C. 1801 et seq.
BSAI (72 FR 9451, March 2, 2007), the
reallocation on March 5, 2007 (72 FR Dated: May 15, 2007.
10428, March 8, 2007), and the James P. Burgess,
reallocation on April 31, 2007 (72 FR Acting Director, Office of Sustainable
18595, April 30, 2007) allocated a Fisheries, National Marine Fisheries Service.
directed fishing allowance for Pacific [FR Doc. 07–2473 Filed 5–15–07; 1:42 pm]
cod of 2,853 metric tons to catcher BILLING CODE 3510–22–S

Rule: Child Care and Development Fund State Match Provisions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Rule: Child Care and Development Fund State Match Provisions

Uploaded by

Copyright:

Available Formats

27972 Federal Register / Vol. 72, No.

96 / Friday, May 18, 2007 / Rules and Regulations

(CCDF) regulations. The new 618. Pursuant to Sec. 418(a)(2) of the

reduce appropriations in the requirements. We also will publish a

subsidies, quality improvement, and Response: As discussed above, since

ANNUAL BURDEN ESTIMATES

You might also like