4020 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Administration for Children and

Families

45 CFR Parts 1355, 1356 and 1357

RIN 0970–AA97

Title IV–E Foster Care Eligibility

Reviews and Child and Family

Services State Plan Reviews

AGENCY: Administration on Children,

Youth and Families (ACYF),

Administration for Children and

Families (ACF), Department of Health

and Human Services (DHHS).

ACTION: Final Rule.

SUMMARY: This final rule amends

existing regulations concerning Child

and Family Services by adding new

requirements governing the review of a

State’s conformity with its State plan

under titles IV–B and IV–E of the Social

Security Act (the Act), and implements

the provisions of the Social Security Act

Amendments of 1994 (Pub. L. 103–432),

the Multiethnic Placement Act (MEPA)

as amended by Pub. L. 104–188, and

certain provisions of the Adoption and

Safe Families Act (ASFA) of 1997 (Pub.

L. 105–89).

In addition, this final rule sets forth

regulations that clarify certain eligibility

criteria that govern the title IV–E foster

care eligibility reviews which the

Administration on Children, Youth and

Families conducts to ensure a State

agency’s compliance with statutory

requirements under the Act, and makes

other technical changes to the race and

ethnicity data elements in the Adoption

and Foster Care Analysis and Reporting

System (AFCARS).

EFFECTIVE DATE: March 27, 2000.

FOR FURTHER INFORMATION CONTACT:

Kathy McHugh, Director, Policy

Division, Children’s Bureau,

Administration on Children, Youth and

Families at (202) 401–5789.

SUPPLEMENTARY INFORMATION:

I. Background

II. Approach

A. Consultation With the Field

B. Analysis and Decision-Making

C. Regulation in Context

III. Discussion of Major Changes and

Provisions of the Final Rule

A. Definitions

B. Child and Family Service Reviews

C. Enforcement of Section 471(a)(18) of the

Act

D. Reasonable Efforts and Contrary to the

Welfare Determinations and

Documentation

E. Case Plans and Case Review

Requirements

F. Title IV–E Reviews

G. Special Populations

IV. Section-by-Section Discussion of

Comments

V. Impact Analysis

Final Rule

I. Background

Titles IV–B and IV–E of the Social

Security Act (the Act) are the primary

sources of Federal funds for State child

welfare services, foster care and

adoption assistance. The Adoption

Assistance and Child Welfare Act of

1980 (Pub. L. 96–272), amended title

IV–B child welfare services to institute

financial incentives for States to provide

certain protections for children in foster

care under section 427 of the Act. Public

Law 96–272 also established Part E of

title IV of the Act, ‘‘Federal Payments

for Foster Care and Adoption

Assistance.’’ The foster care component

of the Aid to Families with Dependent

Children (AFDC) program, which had

been an integral part of the AFDC

program under title IV–A of the Act,

was transferred to the new title IV–E,

effective on October 1, 1982.

In August 1993, under the Omnibus

Budget Reconciliation Act of 1993,

Public Law 103–66, Congress again

amended title IV–B, creating two

subparts and extending the range of

child and family services funded under

title IV–B to include family preservation

and family support services. The family

preservation and support services were

designed to strengthen and support

families and children in their own

homes, as well as children in out-ofhome care.

Later, through the Social Security

Amendments of 1994, Congress

repealed section 427 and amended

section 422 of the Act to include, as

State plan assurances, the protections

formerly required in section 427 of the

Act. As a result, ACF is no longer

conducting ‘‘427’’ reviews to determine

if a State is eligible to receive additional

title IV–B, subpart 1 funds. Besides

mandating the Secretary to promulgate

regulations for reviews of State child

and family service programs, the

amendments to the Act at section 1123A

required the Department to make

technical assistance available to the

States, and afforded States the

opportunity to develop and implement

corrective action plans designed to

ameliorate areas of nonconformity

before Federal funds are withheld due

to the nonconformity.

In 1994, Congress passed the

Multiethnic Placement Act (MEPA),

Public Law 103–382, to address

excessive lengths of stay in foster care

experienced by children of minority

heritage. One factor believed to be

contributing to these excessive lengths

of stay in foster care was State agencie’

attempts to place children of minority

heritage in foster and adoptive homes

with parents of similar racial or ethnic

backgrounds. The MEPA forbids the

delay or denial of a foster or adoptive

placement based on the race, color, or

national origin of the prospective foster

parent, adoptive parent, or child

involved. At the same time, Congress

added a title IV–B State plan

requirement to section 422(b)(9) of the

Act, to compel States to make diligent

efforts to recruit prospective foster and

adoptive parents who reflect the racial

and ethnic diversity of the children in

the State for whom foster and adoptive

homes are needed.

As originally enacted, section 553 of

MEPA permitted States to consider the

cultural, ethnic, or racial background of

the child and the capacity of the

prospective foster or adoptive parent to

meet the needs of a child of such

background, as one of several factors in

making foster and adoptive placements.

In 1996, through section 1808,

‘‘Removal of Barriers to Interethnic

Adoptions,’’ of the Small Business Job

Protection Act (Pub. L. 104–188),

Congress repealed section 553 of MEPA,

believing that the ‘‘permissible

consideration’’ language therein was

being used to obfuscate the intent of

MEPA. Section 1808 of Public Law 104–

188 amended title IV–E by adding a

State plan requirement, section

471(a)(18) of the Act, which prohibits

the delay or denial of a foster or

adoptive placement based on the race,

color, or national origin of the

prospective foster parent, adoptive

parent, or child involved. Section 1808

of Public Law 104–188 also dictates a

penalty structure and corrective action

planning for any State that violates

section 471(a)(18) of the Act.

On November 19, 1997, President

Clinton signed the first broad-based

child welfare reform legislation since

Public Law 96–272 was enacted in 1980.

The Adoption and Safe Families Act

(ASFA) of 1997, Public Law 105–89,

seeks to provide States with the

necessary tools and incentives to

achieve the original goals of Public Law

96–272: safety; permanency; and child

and family well-being. The impetus for

the ASFA was a general dissatisfaction

with the performance of State’ child

welfare systems in achieving these goals

for children and families. The ASFA

seeks to strengthen the child welfare

system’s response to a child’s need for

safety and permanency at every point

along the continuum of care. In part, the

law places safety as the paramount

concern in the delivery of child welfare

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4021

services and decision-making, clarifies

when efforts to prevent removal or to

reunify a child with his or her family

are not required, and requires criminal

record checks of prospective foster and

adoptive parents. To promote

permanency, ASFA shortens the time

frames for conducting permanency

hearings, creates a new requirement for

States to make reasonable efforts to

finalize a permanent placement, and

establishes time frames for filing

petitions to terminate the parental rights

for certain children in foster care.

II. Approach

A. Consultation With the Field

A Notice of Proposed Rulemaking

(NPRM) was published in the Federal

Register on September 18, 1998 (63 FR

50058–50098) with a 90-day public

comment period. We received 176

letters within that period from State and

local child welfare agencies, national

and local advocacy groups for children,

educational institutions, and individual

social workers. Other commenters on

the NPRM included: Members of

Congress, providers of child welfare

services, State and local courts, national

and State associations representing

groups of practitioners, Indian tribes,

and local community organizations.

Prior to developing the NPRM, we

consulted extensively with the child

welfare field. We conducted a series of

focus groups related to the child and

family services reviews with

representatives of State programs and

national organizations, as well as with

family and child advocates. In addition,

State and Federal teams conducted 12

in-depth on-site pilots of the child and

family services reviews that shaped our

development of the regulation. We also

conducted pilots of the title IV–E

eligibility reviews in 12 States during

the fiscal years 1995 through 1998.

Shortly after the enactment of ASFA, we

held focus groups in Washington, D.C.

and in each of the 10 Federal regions to

obtain input from the field on the

implementation of the new law.

B. Analysis and Decision-Making

We received a wide range of written

comments on the NPRM, representing a

multitude of perspectives on Federal

monitoring of State child welfare

programs and meeting title IV–E

statutory requirements. We received

widespread support for an outcomesfocused approach to the child and

family services reviews and the

inclusion of a program improvement

process subsequent to determinations of

substantial nonconformity, and have

thus retained these features in the final

rule. We also received comments

expressing concerns about other

provisions of the NPRM.

The major concerns from commenters

centered around provisional and twotiered licensing systems for foster care

homes, objectivity and clarity of

substantial conformity determinations

in the child and family services reviews,

the enforcement of the Multiethnic

Placement Act (as amended),

documentation of reasonable efforts and

other judicial determinations, and

exemptions and exceptions from the

termination of parental rights

provisions. We amended and clarified

many aspects of the final rule in

response to these major issues and to

other comments. To guide us in

maintaining an appropriate balance in

our analysis of the comments and

decisionmaking for the final rule we

used several principles. Those

principles are to:

Focus on Achieving the Goals of Safety,

Permanency and Well-being in State

Child Welfare Systems

We believe that the Adoption and

Safe Families Act of 1997 clearly

establishes safety, permanency and

well-being as the key goals for State

child welfare systems. We were

mindful, therefore, to have regulatory

provisions that would support these

statutory goals. For example, in the

NPRM we proposed to prohibit

provisional, or less than full licensure of

foster care providers for title IV–E

purposes. Many commenters opposed

this prohibition for various reasons.

Some were concerned that since relative

caregivers were often granted less than

full licensure, disallowing this practice

for title IV–E purposes would reduce

kinship care and the stability it can

provide in a child’s life. While we

encourage States to consider

permanency in kinship care

arrangements, the ASFA clearly requires

the safety of the child to be the

paramount concern that will guide all

child welfare services. In addition, the

statute on its face requires that a home

is fully licensed or approved as meeting

the State’s licensing standards for the

purpose of title IV–E eligibility.

Therefore, we decided to retain the

proposed prohibition on less than full

licensure, in part because the statute as

amended by ASFA compels us to ensure

that children are in safe placements.

We also chose to strengthen our focus

on safety, permanency and well-being in

the child and family services reviews in

a number of ways. Many commenters

were unclear about how we would

measure these outcomes, so we have

strengthened our process for measuring

and determining substantial conformity

with the safety and permanency

outcomes in particular, through the

statewide assessment. We also heard

concerns that one of the safety outcomes

was in fact two separate outcomes, so

we have divided the first safety outcome

accordingly. We believe that these

modifications will help clarify our

expectations for States to achieve these

outcomes.

Another example of strengthening our

focus on permanency is in the

termination of parental rights

provisions. Many commenters believed

that certain groups of children in foster

care should be exempted from the

application of the provision for States to

file a petition to terminate parental

rights. Consistent with the statutory

framework and desire for timely

permanency for all children in foster

care, we have clarified that no group of

children is to be exempted from the TPR

provision and State or tribal agencies

may make exceptions to the TPR

requirements only on a case-by-case

basis.

Move Child Welfare Systems Toward

Achieving Positive Child and Family

Outcomes While Maintaining

Accountability

As we noted in the NPRM, we have

dramatically changed the focus of State

program reviews by examining the

results that child and family services

programs achieve, rather than the

accuracy and completeness of the case

file documentation. Most commenters

overwhelmingly supported this

approach as one that would improve the

provision of child welfare services for

children and families, and we have thus

retained a focus on outcomes in the

final rule.

Some of the comments, however, also

suggested that the flexibility that is

inherent in an outcomes-based approach

must be properly balanced with

sufficient Federal oversight and State

accountability. We agree that flexibility

and accountability must be balanced,

and have strengthened several

provisions in the final rule in this

respect. For example, for States who

were determined to be out of substantial

compliance on a child and family

services review, we proposed to allow

States two years, with a possible

extension to three years, to complete a

program improvement plan. Some

commenters supported this length of

time as sufficiently flexible to address

needed areas of improvement, while

others believed the program

improvement period to be too long. In

response, we have clarified that we do

not expect States to take the full two

4022 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

years to complete program improvement

in all cases, and note that a State will

only be able to extend a program

improvement plan to three years in rare

circumstances subject to the approval of

the Secretary. Finally, we will apply

penalties for nonconformity as soon as

a State fails to improve on an area of

nonconformity within the interval noted

in the program improvement plan,

rather than at the conclusion of the

entire plan. We believe that these

changes to the final rule properly focus

the State on achieving outcomes while

maintaining flexibility and

accountability.

We also believe it necessary to ensure

State accountability in the areas of

documentation of reasonable efforts and

contrary to the welfare determinations

and requirements related to enforcement

of section 471(a)(18) of the Act. Some

commenters were concerned that the

documentation requirements and

enforcement of section 471(a)(18) of the

Act were too inflexible. However, we

believe that State accountability and

Federal oversight in these critical areas

of child and family protections and antidiscrimination consistent with the

statute, will lead to better outcomes for

children and families.

Use Non-Regulatory Resources to

Support Federal Statutory and

Regulatory Provisions

As we analyzed the comments, we

carefully considered whether Federal

regulations were the appropriate vehicle

to address certain comments. We

believe that we can better respond to

some comments in a venue separate

from the regulatory process, such as

through technical assistance activities or

program guidance.

For instance, some commenters

requested regulations on title IV–E

training or programs under title IV–B of

the Act. We have very limited authority

to expand the scope of the final rule

beyond the issues presented for public

comment in the NPRM, but we are now

aware of certain issues that we may

consider for future clarification. Other

commenters asked for specific guidance

on working to reunify children with

parents who have substance abuse

problems, or guidelines for judges on

reasonable efforts, while others

requested information about ‘‘best

practices’’ in concurrent planning. We

are committed to providing practice

level guidance and will provide

technical assistance in a variety of forms

rather than in regulation. Other

commenters requested Federal funds to

subsidize legal guardianships, or train

courts and their staff. Under current

authority, title IV–E funds cannot be

used for these purposes. However, we

can direct States to our resource centers

who may have information on seeking

non-Federal funding sources for such

initiatives.

C. Regulation in Context

This final rule incorporates many

provisions of recently enacted

legislation, including the Adoption and

Safe Families Act of 1997, the

Multiethnic Placement Act of 1994 as

amended, and the Social Security Act

Amendments of 1994. We received

some comments that criticized us for

not focusing on the requirements of

ASFA and other amending legislation.

We believe that some commenters were

unclear that, to a large extent,

provisions of ASFA, MEPA, etc. amend

the Social Security Act (the Act), and

that we refer to the requirements by

their citation in the Act, rather than

their citations in the amending

legislation. We believe that this final

rule does address the requirements of

the amending legislation in the context

of the existing requirements of titles IV–

B and IV–E of the Act.

In addition to the guidance provided

by this final rule, we encourage

administrators to use the appropriate

statutes as references in implementing

Federal requirements. Also, the final

rule amends existing regulations at 45

CFR part 1355 and 45 CFR part 1356.

Therefore, we encourage the reader to

examine and implement the rules herein

in conjunction with existing regulations

that have not been amended.

III. Discussion of Major Changes and

Provisions of the Final Rule

Discussed below are some of the

major changes and provisions of the

final rule. A more thorough response to

the individual comments can be found

in the section-by-section discussion.

A. Definitions

Overall, we received comments that

requested greater clarity on several

definitions. We frequently encountered

comments that noted that the Federal

definitions did not encompass the

variety of State definitions or practice.

Where a definition was not essential to

the proper implementation of the

program, we chose to be flexible and

leave definitions to the State’s

discretion. In particular, we deleted

definitions of a ‘‘full hearing’’ and a

‘‘temporary custody hearing’’ as the

comments revealed that they were

limiting and not helpful to States. We

also received comments that requested

additional definitions for terminology

used in the statute or in the regulation,

e.g., ‘‘compelling reasons,’’ ‘‘aggravated

circumstances,’’ and ‘‘reasonable

efforts.’’ In most cases we chose not to

regulate additional definitions as we do

not wish to be more prescriptive and

restrict State flexibility.

The proposed definition of the ‘‘date

a child is considered to have entered

foster care’’ elicited many comments

requesting more clarity and State

flexibility. In response, we have revised

the definition to mirror the statutory

language more closely. The ‘‘date a

child is considered to have entered

foster care’’ is no longer different for

children placed in foster care under

voluntary placement agreements, but

more consistently applied. We also have

clarified that a State can use a date

earlier than the outside Federal limit set

in the statute to begin the ‘‘clock’’ for

satisfying the requirements for holding

periodic reviews, permanency hearings,

and for the termination of parental

rights (TPR).

We received many comments on the

definition of a ‘‘foster family home’’ that

urged us to allow provisional licensure

and a two-tiered system of licensing and

approval. Despite these comments, we

are prohibiting these practices,

consistent with the statute, to ensure

that children receiving title IV–E funds

are placed safely in licensed homes. In

recognition that some time may lapse

between the date when a foster family

home satisfies all requirements for

licensure or approval and the actual

date the license is issued, we will allow

States to claim title IV–E reimbursement

during this period, not to exceed 60

days. To accommodate those States

where current State practice is not

consistent with the requirements for

foster family homes, we will allow a sixmonth period for States to bring current

foster family homes to the appropriate

licensing standards.

B. Child and Family Services Reviews

We received many comments in

response to the proposed child and

family services review process that have

helped us strengthen it significantly

from that proposed in the NPRM. In the

NPRM and in the early pilot reviews, we

relied heavily on the findings from the

on-site reviews to make determinations

about substantial conformity. In the

final rule, we believe we have balanced

our use of statewide quantitative

indicators with case-specific qualitative

observations in our decision-making

about substantial conformity. Among

the major changes we have made in the

child and family review process are the

following: We have strengthened the use

of the statewide assessment, selected

particular statewide data indicators to

use in determining substantial

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4023

conformity, more clearly defined the

process for reviewing the systemic

factors, clarified the criteria for

determining substantial conformity,

increased the frequency of full reviews

for States not in substantial conformity,

added a discrepancy resolution process,

and added graduated penalties for

continuous nonconformity.

Most of the comments we received,

particularly from the States, strongly

favored the change to the results-and

outcome-based review process proposed

in the NPRM from the prior emphasis

on compliance with procedural

requirements. Similarly, we received

very strong support for proposing a

review process that provides time for

States to improve programs and enhance

services to children and families rather

than one that imposes immediate

penalties for nonconformity with certain

requirements. A number of comments

also indicated concerns about the

details of the review process and raised

issues about the overall approach that

ACF is taking in reinventing the child

and family services reviews.

Since we did not include all of the

details of the reviews in the proposed

rule, we would like to explain the

procedures in more detail prior to

addressing the major changes we made

to the child and family services review.

We will review State programs in two

areas: (1) Outcomes for children and

families in the areas of safety,

permanency, and child and family wellbeing; and (2) systemic factors that

directly impact the State’s capacity to

deliver services leading to improved

outcomes. The outcomes are as follows:

Safety Outcomes

1. Children are, first and foremost,

protected from abuse and neglect.

2. Children are safely maintained in

their homes whenever possible and

appropriate.

Permanency Outcomes

1. Children have permanency and

stability in their living situations.

2. The continuity of family

relationships and connections is

preserved for children.

Child and Family Well-Being Outcomes

1. Families have enhanced capacity to

provide for their children’s needs.

2. Children receive appropriate

services to meet their educational needs.

3. Children receive adequate services

to meet their physical and mental health

needs. Each outcome is evaluated by

using specific performance indicators

and two outcomes are evaluated using

data indicators as well.

State programs will also be reviewed

to determine the extent to which the

State agency has implemented State

plan requirements that build the

capacity to deliver services leading to

improved outcomes. We describe such

State plan requirements as systemic

factors. These systemic factors include:

(1) Statewide information systems; (2)

case review system; (3) quality

assurance system; (4) staff and provider

training; (5) service array; (6) agency

responsiveness to the community; and

(7) foster and adoptive parent licensing,

recruitment and retention. Each of the

systemic factors subject to review is

based on specific State plan

requirements. Our review and

assessment of the systemic factors will

be based on the extent to which the

State is in conformity with those State

plan requirements.

We also want to clarify how the

various components of the review

process will inform decisions regarding

substantial conformity.

Four sources of information are

included in the child and family

services reviews in order to make

decisions about substantial conformity:

• Statewide AFCARS and NCANDS

data on foster care, adoption and child

protective services, including the State’s

performance on statewide data

indicators with respect to the national

standards for such;

• Narrative information on outcomes

and systemic factors;

• Case-specific qualitative

information and family interviews on

outcomes; and

• Interviews with non-case-specific

State and local community

representatives on outcomes and

systemic factors.

To complete this review effort, several

tools will be used, including:

• A field-tested CFSR procedures

manual that addresses the steps to be

followed in the reviews and

supplements information included in

the rule;

• A statewide assessment instrument

that directs the utilization of statewide

foster care, adoption and child

protection data to complete a narrative

discussion of the outcomes and

systemic factors reviewed, and the

State’s performance in meeting the

standards for the statewide data

indicators;

• An on-site intensive review

instrument;

• Interview protocols for use with

State and local stakeholders; and

• A summary of findings and

recommendations form that enables the

review team to address each outcome

and systemic factor reviewed. This

form, when completed, serves as the

report of the review findings to the

State.

There are five steps in the review

process, from the point of initiating the

review to assessing penalties where

determinations of nonconformity are

made:

• Prior to the State beginning work on

the statewide assessment, ACF prepares

and transmits data profiles of the State’s

foster care and child protective service

populations, using AFCARS and

NCANDS data submitted by the State.

Some examples of the data included in

the profiles include the length of stay in

foster care, foster care re-entries, and

repeat maltreatment rates of children.

The data will indicate whether or not

the State meets the national standards

for those statewide data indicators used

to determine substantial conformity.

• The State then completes the

statewide assessment. This task requires

the State to examine the data relative to

the State programs, goals, and

objectives, and consider them in light of

the outcomes for children and families

subject to review. The State also

addresses in narrative the systemic

issues under review relative to their

influence on the State’s capacity to

deliver effective services. Based on the

quantitative and qualitative findings of

the statewide assessment, the State and

the ACF Regional Office jointly make

decisions about the locations of the onsite review activities and the types of

cases that will be reviewed on-site.

• The on-site review is conducted by

a joint Federal-State team that combines

both the outcomes and the systemic

factors being reviewed. In reviewing for

the outcomes, a sample of cases is

reviewed intensively using information

from the case record and interviews

with family members, the caseworker,

and service providers involved with the

family. The findings from the sample of

cases are combined with the State’s

performance on selected Statewide data

indicators to make determinations about

substantial conformity on the outcomes.

In reviewing for the systemic factors,

interviews are conducted with State and

local representatives, e.g., courts, other

agencies, foster families, and foster care

review boards. The information from

these stakeholder interviews is

combined with information on the

systemic factors in the statewide

assessment to make determinations

about substantial conformity on the

systemic factors.

• The review team recommends a

determination regarding substantial

conformity, for each of the outcomes

and systemic factors reviewed. The

basis for the determinations is a

4024 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

combination of quantitative and

qualitative information from the

statewide assessment and the on-site

review related to each outcome and

systemic factor.

• States are immediately informed of

any penalties associated with outcome

and systemic factors determined not to

be in substantial conformity. Program

improvement plans are developed to

address each area of nonconformity and

the State has a limited period of time to

successfully complete the program

improvement plan before penalties are

actually taken.

A number of the comments we

received reflected a need for more

clarity regarding the overall process. As

noted earlier, we did not include all the

details of the reviews in the proposed

rule, but chose to regulate only the basic

framework of the process, including the

overall approach to the reviews, the

standards for substantial conformity,

and the State plan requirements subject

to review as required in section 1123A

of the Act. We chose to address specifics

about how the reviews will be

conducted, the performance indicators

that will be used to measure outcomes,

and some aspects of the process for

determining substantial conformity in a

procedures manual we developed

separately from the NPRM. This

procedures manual will supplement the

regulation with additional detail that

State and Federal staff will need to

conduct the reviews. The procedures

manual will be in final form for the

initial reviews to be conducted

following publication of this rule.

While we recognize the need to be

clear on the details of the review

process, we also need to maintain the

flexibility to make appropriate changes

that support the results-focused

approach to Federal reviews of State

programs. Although we have field-tested

the proposed review process extensively

in 12 States to date, we believe that not

regulating certain aspects of the review

process affords both the Federal

government and the States an ongoing

opportunity to benefit from lessons

learned in future reviews and make

improvements to the process where

needed.

We have made significant changes to

the review protocol in response to the

concerns raised through public

comment. The most significant concerns

relate to:

• The process and specific criteria for

determining substantial conformity with

State plan requirements;

• The degree of subjectivity involved

in determining substantial conformity;

• The small sample size used in the

on-site portion of the reviews; and,

• The amount of penalties associated

with nonconformity.

The following addresses the major

issues noted above that were the subject

of the majority of the comments and

changes to the regulation:

Determining Substantial Conformity

With State Plan Requirements

Most of the respondents to the NPRM

generally supported a determination of

‘‘substantial conformity,’’ rather than

requiring a determination of conformity

on each specific title IV–B and IV–E

State plan requirement. Of particular

concern to commenters were:

• The standards used to make

determinations of substantial

conformity for outcomes;

• The process for resolving

discrepancies in the aggregate data from

the statewide assessment and the

information obtained from the on-site

review; and,

• The criteria used to determine

substantial conformity for the systemic

factors being reviewed.

Standards used to make

determinations of substantial

conformity for outcomes. The primary

concerns regarding this issue include a

lack of clarity with respect to how

substantial conformity is determined

and the standards that States are

expected to meet in achieving

substantial conformity. Commenters

particularly requested that we set a

more tangible, objective standard for

substantial conformity. In response to

these comments, and concerns raised

about the sample size for the on-site

portion of the review, statewide data

indicators that are measured against

national standards, in combination with

the findings of the on-site review, will

be used to determine substantial

conformity.

Statewide data indicators. The

following statewide data indicators will

be used in combination with findings of

the on-site review to determine

substantial conformity with the

outcomes.

Outcome S1: Children are, first and

foremost, protected from abuse and

neglect. Data indicators: Repeat

maltreatment. Of all children who were

victims of substantiated or indicated

child abuse and/or neglect during the

period under review, what percentage

had another substantiated or indicated

report within a 12-month period?

Maltreatment of children in foster

care. Of all children in foster care in the

State during the period under review,

what percentage was the subject of

substantiated or indicated maltreatment

by a foster parent or facility staff?

Outcome P1: Children will have

permanency and stability in their living

situations. Data indicators: Foster care

re-entries. Of all children who entered

care during the period under review,

what percentage re-entered foster care

within 12 months of a prior foster care

episode?

Length of time to achieve the

permanency plan.

Of all children who were reunified

with their parents or caretakers at the

time of discharge from foster care, what

percentage was reunified in less than 12

months from the time of the latest

removal from home?

Of all children who exited care to a

finalized adoption, what percentage

exited care in less than 24 months from

the time of the latest removal from

home?

Stability of foster care placement. Of

all children served who have been in

foster care less than 12 months from the

time of the latest removal from home,

what percentage have had no more than

two placement settings?

Length of stay in foster care. For a

recent cohort of children entering foster

care for the first time in the State, what

is the median length of stay in care prior

to discharge?

The national standard for each

statewide data indicator identified

above will be based on the 75th

percentile of all State’ performance for

that data indicator, as reported in

AFCARS and NCANDS. We considered

using the 90th percentile and the

median to establish the national

standard and rejected both because

these standards, respectively, were

deemed either too high or too low. This

is illustrated, based on 1998b (April 1–

September 30) AFCARS data, and 1997

NCANDS data (available for repeat

maltreatment only) in the chart below.

Measure Median 75th 90th

% of children with

repeat maltreatment within a 12-

month period ....... 11 7 2

% of children re-entering foster care 20 13 6

% of children reunified in less than

12 months from

latest removal ...... 72 80 88

% of children adopted in less than 24

months from the

latest removal ...... 16 26 43

% of children in care

less than 12

months with no

more than 2

placements .......... 63 77 85

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4025

Measure Median 75th 90th

Median length of

stay in foster care

prior to discharge

(months) .............. 18 12 10

Note: Data for maltreatment of children in

foster care is not available for the purposes of

this illustration, but will be available when we

calculate the standard.

We recognize that we have set a high

standard. However, we think it is

attainable and that our overall approach

for moving States to the standard

through continuous improvement is

sound.

We anticipate that the standard for

each data indicator based on AFCARS

data will be derived from the 1998b,

1999c (complete Federal fiscal year) and

2000a (October 1–March 31) reporting

periods and the standard for each data

indicator based on NCANDS data will

be derived from the 1997 and 1998

reports. However, if we have more

current and complete data available, for

example the 1998 and 1999 NCANDS

reports, we will use these data

submissions to develop the standard. By

using multiple reporting periods we will

increase the number of States that

participate in setting the standard. As we considered how to develop the

national standard, we noticed that

States with smaller caseloads were

clustered in the upper percentiles with

respect to performance on the data

indicators. We did not want States with

larger caseloads to be disadvantaged,

therefore, we explored setting multiple

standards based on caseload size. We

derived the variable ‘‘number of

children in foster care per 10,000

children under 18 years old in the

general population’’ and used it to test

State performance on certain statewide

data indicators. We found no correlation

between the variables. In short, caseload

size was not useful in explaining the

variation in State performance with

respect to the national standards, so it

was not considered in setting the

national standards.

Because this concept of setting a

national standard for data and basing

substantial conformity, in part, on a

State’s ability to meet such a standard

is untested, we purposely limited the

number of outcomes to which we

assigned statewide data indicators. For

example, we did not assign data

indicators to Safety Outcome #2 or

Permanency Outcome #2, although we

will consider adding indicators to those

outcomes at a later time. We will also

consider adding to or revising the data

indicators listed above as needed. For

example, we will consider adding

timeliness of initiating investigations of

child maltreatment to the safety

outcomes later if there is a broad enough

national data base through NCANDS to

support that indicator. In addition, to

date, there are no uniform national data

indicators collected through AFCARS or

NCANDS that can be used to review for

the Well-being outcomes. We expect the statewide data

indicators to change over time and,

therefore, did not regulate them. We

chose to base the first set of statewide

data indicators on the outcome

measures that were developed in

accordance with section 203 of the

ASFA for two reasons: • We received many comments

requesting that the section 203 measures

and the child and family services

reviews be consistent with one another;

and, • The section 203 measures were

developed in conjunction with a

consultation group and were published

in the Federal Register for public

comment.

We would also like to note that many

of the data indicators and performance

measures we selected are consistent

with and support the work of ACF in

meeting the requirements of the

Government Performance and Results

Act of 1993 (GPRA). Under GPRA,

Federal agencies are required to work

with the States to establish performance

goals and monitor performance results

for all Federal programs. We believe that

the outcomes and data indicators used

in the CFSR support one of ACF’s

objectives under GPRA to increase the

safety, permanency, and well-being of

children and youth. We have, however, in regulation,

retained our authority to add new data

indicators, change existing data

indicators, and suspend the use of data

indicators as appropriate. We took a

similar approach to setting the national

standards. The standards will not

change every year. Rather, we have

retained our authority to periodically

review and revise the standards if

experience with the reviews indicates

adjustments are necessary. Findings from the on-site portion of

the review. During the on-site portion of

the review, a set of performance

indicators is used to review the outcome

and determine the extent to which the

outcome has been achieved. Since the

individual circumstances of each child

and family are unique, the performance

indicators serve most effectively as a

guide to help the reviewer gather

appropriate information from a variety

of sources. Experience has taught us that

reviewing only the information that is

recorded in a written case record is

insufficient for assessing outcome

achievement. Therefore, the reviewer

explores the performance indicators

through the case record review and

through interviews with the individuals

relevant to each case. Some components

of the indicators are quantitative, such

as the number of entries into foster care

a child has experienced or the number

of reports of maltreatment that have

been received on a child. However,

there are also indicators that are

qualitative in nature that help explain

the circumstances behind the numbers,

such as reasons for re-entry into foster

care or the nature of the reports of

maltreatment received on a child.

Indicators are rated as an area of

strength or an area in need of

improvement. For outcomes that have

multiple indicators, if all but one of the

indicators are rated as a ‘‘strength,’’ the

outcome is determined ‘‘substantially

achieved’’ in that particular case. We

learned from the pilots that the

information gathered in the on-site

review using instruments structured in

this way most often led reviewers to a

general consensus regarding the degree

of outcome achievement.

Standard for substantial conformity

with the outcomes. For the outcomes to

which statewide data indicators are

assigned, a State must meet both the

national standard for the statewide data

indicators and substantially achieve the

outcome in 90 percent (95 percent in

reviews subsequent to the initial review)

of the cases reviewed on-site to be

considered in substantial conformity.

We will resolve any discrepancies

between the Statewide data and the onsite review findings so that substantial

conformity does not rely totally on one

or the other information source. This

approach permits on-site exploration of

the reasons why performance with

respect to the statewide data indicators

might not be an accurate indicator of

statewide performance. Outcomes for

which there are no assigned statewide

data indicators must be substantially

achieved in 90 percent (95 percent in

reviews subsequent to the initial review)

of the cases reviewed on-site to be

considered in substantial conformity.

Program improvement regarding

statewide data indicators. Any State

found not to be in substantial

conformity with an outcome must enter

into a program improvement plan.

When the national standard is not met

on any of the statewide data indicators

used to determine substantial

conformity, States must engage in

continuous improvement toward the

national standard in the program

improvement plan. This means that

ACF will negotiate with the State to

determine how much progress toward

meeting the standard, in terms of

absolute percentage points, the State

4026 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

will make to successfully complete a

program improvement plan. We retain

final authority to determine how much

improvement the State must make. In

reviews subsequent to the initial child

and family services review, we will

consider prior program improvement

efforts, including continuous

improvement in meeting the national

standard, when negotiating the degree of

improvement required to successfully

complete a program improvement plan.

Resolving discrepancies in the

aggregate data from the statewide

assessment and the information

obtained from the on-site review

pertaining to the outcomes. We received

a number of comments addressing this

issue, particularly concerning how

discrepancies between the two sets of

information will be resolved. New

§ 1355.33(d) provides more detailed

information on the steps we will take to

resolve discrepancies between the

aggregate data and the findings of the

on-site portion of the review. In order to

resolve discrepancies between the

statewide assessment and the findings

of the on-site portion of the review we

will provide the State the option of

either of the following:

• The submission of additional

information by the State that will

explain or resolve the discrepancy, such

as additional data or analysis of the

existing data, or

• ACF and the State will review

additional cases, but only for the

indicators with a discrepancy that must

be resolved. The total number of cases

reviewed may not exceed 150 cases, and

will represent a statistically significant

sample with a 90 percent (or 95 percent

in subsequent reviews) compliance rate,

a tolerable sampling error of 5 percent,

and a confidence coefficient of 95

percent. The conclusions made from

reviewing the additional cases will form

the basis for determining substantial

conformity.

Criteria used to determine substantial

conformity for the systemic factors

being reviewed. The concerns related to

determining substantial conformity for

the systemic factors: (1) Statewide

information systems, (2) case review

system, (3) quality assurance system, (4)

staff and provider training, (5) service

array, (6) agency responsiveness to the

community, and (7) foster and adoptive

parent licensing, recruitment and

retention were similar to those for the

outcome areas: A lack of clarity on how

substantial conformity is determined

and on the standards that States are

expected to meet in achieving

substantial conformity. In response to

these concerns, we have established a

process for rating the State’s conformity

with State plan requirements that is

based on information obtained from the

statewide assessment and the on-site

stakeholder interviews. Information

from the statewide assessment and

interviews with stakeholders on-site

must support a determination of

substantial conformity. The review team

will rate the State’s performance for

each systemic factor using a Likert-type

scale, with criteria attached to each

rating, based on the total information

obtained from a variety of stakeholders

interviewed on-site.

Except for ‘‘information system

capacity,’’ all of the systemic factors

reviewed have more than one State plan

requirement associated with them that

are included in the review process. A

State’s conformity with each systemic

factor will be rated on a scale of 1–4,

based on the extent to which there are

processes in place which meet the State

plan requirements associated with that

systemic factor. For example:

Not in substantial conformity Substantial conformity

1 234

None of the State plan requirements is in place.Some or all of the State plan requirements are in place, but

more than one of the requirements fails to function at the

level described in each requirement *.

All of the State plan requirements

are in place, and no more than

one of the requirements fails to

function as described in each

requirement *.

All of the State plan requirements

are in place and functioning as

described in each requirement.

* For the systemic factor, ‘‘information system capacity,’’ if it is determined that a system is in place but not functioning at the level described in

the one State plan requirement reviewed, that factor is rated a ‘‘2’’, rather than a ‘‘3’’.

The statewide assessment requires the

State to evaluate each of the State plan

requirements. Information from that

source is used in part to determine how

the State is complying with each State

plan requirement. During the on-site

review, selected local and statewide

stakeholders will be interviewed and

asked a series of questions that relate to

the State plan requirements. Not every

stakeholder interviewed will be able to

address each systemic issue thoroughly.

Thus, for each systemic factor, the

review team must use the total

information obtained from all the

interviews to evaluate the extent to

which the requirements are being met.

Both the information from the statewide

assessment and the stakeholder

interviews must indicate that the State

should receive a ‘‘3’’ rating or better for

that systemic factor in order for the

State to be found in substantial

conformity. To ensure objectivity in the

information gathered through

stakeholder interviews, we have

amended the regulation at

§ 1355.33(c)(4)(iv) to set minimum

requirements with respect to the

selection of stakeholders who must be

interviewed.

Subjectivity in Determining Substantial

Conformity

Many respondents to the NPRM

indicated that we needed to strengthen

the rule to assure increased objectivity

in making determinations of substantial

conformity. Given the focus of the

reviews on qualitative measures and

degrees of outcome achievement,

concerns raised included reviewers

making subjective judgments on

outcome achievement, holding States

accountable for these judgments, and a

lack of clarity on the standards used to

make decisions.

We agree that the need to insure

objectivity in the decision-making

process is extremely important. In fact,

we realized early in the design process

of the reviews that proposing a resultsfocused review, as opposed to the

checklist-style reviews of

documentation conducted in the past,

would raise concerns about the level of

objectivity in the reviews. However, to

design a review process that focuses on

results and outcomes we must evaluate

not only what happens to children and

families as a result of the State’

interventions, but the circumstances

and mitigating factors that affect both

the interventions and the results. To

accomplish this, our review process

must utilize both quantitative and

qualitative assessments. We also realize

that determinations regarding outcome

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4027

achievement in the areas of safety,

permanency and well-being require

judgments based on the specific

circumstances of individual children

and families, and that we need to

standardize the criteria for making those

judgments in order to ensure objectivity.

As noted in the NPRM, we included

several criteria and procedures in the

pilot reviews that were designed to

make the reviews as objective as

possible and to result in consistency

among reviewers and across States in

making critical judgments about

outcome achievement. Those measures

include:

• Using statewide aggregate data and

qualitative information from the

statewide assessment to understand and

interpret the status of outcomes and

systemic factors;

• Applying uniform criteria or

performance indicators that guide

reviewers to an accurate conclusion

about the extent to which the outcome

is being achieved in each case;

• Training State and Federal

reviewers in the use of standardized

review instruments and protocols; and,

• Using a quality assurance procedure

during the course of the review by

requiring local team leaders to review

case ratings and debrief daily with

reviewers to ensure that criteria are

applied consistently.

In piloting the reviews, we also

determined that the objectivity and

uniformity of the process could be

strengthened in several areas. For

example, we learned that the Statewide

assessment was prepared differently

among the pilot States and that the

manner of collecting the data for the

safety and permanency profiles was not

uniform, particularly in States where

AFCARS or NCANDS data were

unavailable. These factors made it

difficult to rely upon information in the

statewide assessment.

In regard to case selection, we found

that the manner of selecting cases for

the on-site review varied among States

in ways that made it difficult to assure

randomness. Through the pilots and the

comments we received on the

instruments, we became aware that the

protocols used to review cases could be

improved to reflect, more objectively,

those factors that determine conformity

with State plan requirements.

In response to these lessons and

others, we have strengthened the

provisions for objectivity in the reviews

by adding a number of measures to the

final rule and the CFSR procedures

manual. We are also making substantial

changes to the content of the

instruments used in the reviews that

will assist in making objective

determinations and addressing the

relevant areas of State plan conformity.

Most of the comments regarding

subjectivity were related to the on-site

review. The comments we received

concerning subjectivity in the review

process arise from genuine concerns

that States be held accountable to an

objective set of criteria. We also have

learned from the pilot reviews that we

must be willing to accept the

professional judgment of reviewers in

determining substantial conformity.

Where there are adequate procedures in

place to assure consistency and

accuracy in decision-making, as we

have described above, we believe

professional judgments will be

objective.

We recognize that it is much more

difficult to determine whether or not a

child is safe than it is to determine, for

example, that a date on a court order

meets specified time frames. Reviewing

for outcomes requires gathering both

qualitative and quantitative information,

examining the information within an

appropriate context and, ultimately,

making a judgment about how well the

outcome is or is not being achieved.

Caseworkers in the field must make

these judgments every day, and

children’s lives depend upon the

accuracy of that process. A review

process that only checks for procedural

requirements and does not evaluate the

quality of the decision-making process

and service delivery that we expect of

caseworkers is not likely to yield

findings that will help States improve

those processes where needed.

Sample Size for On-Site Reviews

In the NPRM, we proposed to review

a sample of 30–50 cases. Most of the

comments we received indicated strong

concerns that reviewing only 30–50

cases may not be representative of the

State’ service populations and would

not lead to credible judgments of

substantial conformity. A number of

commenters questioned how such a

small sample could be statistically valid

and expressed concern over imposing

penalties based on a small sample of

cases. Some respondents indicated a

fear that we would be basing decisions

about substantial conformity on

‘‘anecdotal’’ information in the absence

of a much larger sample.

Clearly, to many of the commenters,

sample size is a major issue, and we

wish to explain our rationale for making

only modest changes to this feature of

the review in the final rule, based on the

lessons we learned in the course of

piloting the new review process. We

want to emphasize that two changes

also address these concerns about the

sample size: Adding the statewide data

indicators and a process to resolve

discrepancies that may include

reviewing additional cases.

• We found little discrepancy

between the statewide data and the

findings from the small sample. We

should note that we experienced

minimal disagreement among reviewers

(State and Federal) and between the

statewide data and the findings made on

the basis of the small samples in the

pilot reviews. The findings of the pilots

were similar to those noted in State

quality assurance systems, where those

systems were in place in pilot States. In

most situations, the findings provided

State officials with sufficient details

about the functioning of their programs

to make improvements where needed

and to build on existing strengths in

their programs.

• We learned that we cannot make

accurate decisions in a results-focused

review by only reviewing

documentation in records. We began by

pulling a large sample in the first four

pilot States. We conducted a record

review in all the cases, similar to prior

reviews, except we were attempting to

capture both qualitative outcome and

quantitative information from the

records. In a smaller subsample of the

larger sample, we interviewed the

relevant parties and focused less on

record documentation and more on

what was actually occurring in each

case. Inevitably, the review team found

that the small sample and the strategy

of in-depth analysis through interviews

was a more reliable source of

information on outcomes and

conformity with applicable

requirements. The information obtained

solely from the case records was often

incomplete, not current, and left

information gaps. Basically, we learned

that we cannot apply traditional

checklist-type reviews of documentation

to determine the quality of decisionmaking and service delivery.

• We learned that reviewing cases

intensely, including all the relevant

interviews, requires a large number of

staff resources and is an extremely timeconsuming process. The process of

reviewing case records and conducting

multiple interviews in each case

reviewed, combined with other review

team activities, allows a reviewer time

for only two cases, possibly three, in

one week. Even with a sample size of 50

cases, the process requires a team of

approximately 25 reviewers in order to

complete the on-site review in one

week. Increasing the sample to 150

cases or more would mean that either a

team of 75 reviewers would be needed

to review a State in one week, or 25

4028 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

reviewers would have to remain on-site

for three weeks to complete the review.

Either option creates unreasonable

expectations for States and the Federal

government in terms of staff resources

and cost and, therefore, does not

constitute a cost-effective approach to

the reviews.

As originally proposed in the NPRM,

the sample would be comprised of both

in-home and foster care cases. In-home

cases do not provide insight into the

State’s performance with respect to the

permanency outcomes, meaning that not

every case in the sample would inform

decisions regarding substantial

conformity for the permanency

outcomes. On the other hand, we need

to assure that the sample accurately

captures information on in-home service

cases in order to examine the safety

outcomes based on recent practice and

for children who never entered the

foster care system.

Therefore, in certain circumstances,

the sample size may be increased to

assure that all program areas identified

in the statewide assessment for further

review are adequately represented. In

addition, we are requiring, in regulation,

that the sample of 30–50 cases include

children who entered foster care in the

State during the year under review.

We have also added provisions to the

rule for resolving discrepancies between

the aggregate data and the findings of

the on-site review that address the

sample of cases reviewed. We are

providing States the option of resolving

such discrepancies through the

submission of additional information, or

by ACF and the State reviewing

additional cases that, in combination

with the 30–50 cases reviewed on-site,

will be a sufficient number to comprise

a statistically significant sample. ACF

and the State will determine jointly the

exact number of additional cases to be

reviewed, however, the total number of

cases may not exceed 150. We chose a

maximum of 150 cases because it

exceeds the highest number of cases

necessary to review a sample that will

be statistically significant with a

compliance rate of 90 percent (or 95

percent for subsequent reviews), a

tolerable sampling error of 5 percent

and a confidence coefficient of 95

percent. In order to assure that the

sample of cases reviewed in the on-site

review and the additional cases actually

comprise one random sample, we will

randomly select the oversample of 150

cases for the on-site review, from which

a subsample of 30–50 cases will be

drawn. If the State chooses a review of

additional cases to resolve a

discrepancy, those cases will be selected

from the same oversample. In this

manner, we believe we will address

concerns about the size of the sample,

particularly in cases where

discrepancies in the findings exist and

must be resolved.

We recognize that the sample size

does not represent a faultless approach

to reviewing State programs, and we

fully understand the varying

perspectives on this issue. We must

emphasize, however, that the quality of

information gathered from the overall

process, and not the on-site sample in

isolation, will benefit children and

families by tracking their outcomes and

allowing States to focus on program

improvements where needed.

Penalties Associated With

Nonconformity

We have made an important change in

the final rule regarding withholding of

funds in situations where States remain

in nonconformity continuously on the

same outcomes or systemic factors, and

for States that elect not to engage in a

program improvement plan. The final

rule provides for graduated penalties in

successive reviews if areas of

nonconformity remain uncorrected. We

have also applied the maximum

withholding to those States that do not

implement program improvement plans

to correct the areas of nonconformity.

The comments we received on the

imposition of penalties raised a number

of issues that we considered in making

this change to the rule. Some comments

indicated concerns that the Federal

government is not meeting its

stewardship responsibilities by not

taking a more aggressive approach to

penalizing States found not to be in

substantial conformity. Other comments

indicated that the potential for penalties

is substantial and could have a serious

effect on the capacity of States to

administer their programs. We also were

encouraged to use the process for

imposing penalties to assure that

program improvements are made when

and where they are needed.

We wish to note that we have not

proposed an ‘‘all or nothing’’ approach

to penalizing States. We have been

faithful to the statutory mandate that

applicable penalties be commensurate

with the extent of nonconformity.

Further, we have designed a review

process that is based on substantial

conformity with the requirements,

rather than total compliance without

exception, to be consistent with the

statutory mandate. Penalties are

attached to each outcome and systemic

factor determined to be in

nonconformity. We are providing timelimited opportunities for States to make

needed program improvements prior to

withholding of Federal funds for

nonconformity. Only when States fail to

take advantage of program improvement

opportunities or complete a plan

successfully will they be faced with an

actual loss of Federal funding as a result

of the child and family services reviews.

At the same time, we have taken

seriously the stewardship

responsibilities of the Federal

government in enforcing conformity

with State plan requirements. These

responsibilities are clear and we have

not abandoned them. We intend to

withhold Federal funds where States are

not using those funds to achieve their

designated purpose. To clarify that the

need to make program improvements

will be strongly enforced, we are

strengthening sections of the final rule

to assure that penalties will be taken in

a timely and certain manner.

We do not wish to impose penalties

in a manner that will impair a State’s

ability to provide essential services to

children and families. However, we

have a responsibility to assure that State

plan requirements are met and that

children and families are served in ways

that will provide for their safety,

permanency, and well-being.

C. Enforcement of Section 471(a)(18) of

the Act

We received a large response to the

section of the regulation that enforces

the Multiethnic Placement Act, as

amended. Several commenters sought

practice guidance on how to implement

the law. We believe that we have

addressed these issues in other forums

through policy issuances and HHSfunded technical assistance and guides.

Other commenters were concerned that

we were not maintaining the

partnership approach exemplified in the

child and family services reviews. We

have made no changes to the regulation

in response to these comments, since we

find that the statute is definitive in the

manner in which we are to implement

corrective action and enforce

compliance with section 471(a)(18) of

the Act.

In response to other comments, we

have:

• Clarified that we will consider a

State in violation of section 471(a)(18)

when it maintains a policy, practice,

law or procedure that, on its face,

clearly violates section 471(a)(18) of the

Act;

• Required States to notify ACF upon

a final court finding that the State has

violated section 471(a)(18) of the Act;

• Allowed States up to 30 days to

develop a corrective action plan to

respond to a violation of section

471(a)(18) of the Act resulting from a

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4029

State’s statute, regulation, policy,

procedure or practice, and six months in

which to complete the plan;

• Clarified which title IV–E funds

will be reduced in the event of a

violation of section 471(a)(18) of the

Act; and

• Added a definition of the term

‘‘entity.’’

D. Reasonable Efforts and Contrary to

the Welfare Determinations and

Documentation

Many commenters believed that the

requirements for reasonable efforts and

contrary to the welfare determinations

as proposed were inconsistent with

current State practice. In some instances

we agree that the regulation was

unnecessarily restrictive, and have

made the following changes to preserve

State flexibility while keeping within

the statute and maintaining the integrity

of the program:

• Removed the distinction between

emergency and non-emergency

removals in the sections of the rule on

contrary to the welfare and reasonable

efforts to prevent removal. This change

is in response to concerns that the

distinction was artificial.

• Allowed States up to 60 days to

obtain a judicial determination with

regard to reasonable efforts to prevent

removal of a child from home. This

responds to concerns that our proposed

policy restricted the timing for obtaining

such a determination to a specific date

rather than within a specified time

frame.

• Consolidated the requirements

regarding reasonable efforts to reunify

the child with the family and efforts to

make and finalize alternate permanent

placements into a single requirement to

be more consistent with actual State

practice. Within 12 months of the date

the child is considered to have entered

foster care, the State is to obtain a

judicial determination that the State

agency made reasonable efforts with

respect to the permanency plan that is

in effect.

In other areas, we explained why we

are maintaining our policy position

rather than changing the regulation in

response to commenter’ concerns. We

affirmed that judicial determinations

regarding contrary to the welfare and

reasonable efforts are inextricably

linked to a child’s eligibility for title IV–

E. The statute makes these judicial

determinations eligibility requirements

which we cannot change despite the

many opposing comments. We also

retained the requirement for the State to

make a contrary to the welfare

determination in the first court order

sanctioning the removal of the child

from the home, because it is a

longstanding critical protection for

children and families. Finally, we are

not relaxing the documentation

requirements or allowing nunc pro tunc

orders because we wish to preserve the

certainty that these determinations are

made in accord with the statute.

E. Case Plans and Case Review

Requirements

To clarify our existing policy with

regard to the timing of the case plan, we

have amended the regulation to allow

States up to 60 days from a child’s

removal from the home to develop the

case plan. We also made a significant

policy shift in the requirements for

subsequent permanency hearings. We

are now requiring subsequent

permanency hearings for all children,

including children placed in a

permanent foster home or a preadoptive

home. We believe that the ASFA

compels us to ensure, through the

protection of a permanency hearing, that

permanency will be achieved for these

children.

We received a significant number of

requests to limit the TPR provision to

only certain groups of the foster care

population. We are unable to make this

change in the regulation, as no statutory

authority exists for doing so, and the

clear intent of ASFA was to speed

critical decision-making for all children

in foster care. We clarify in the final rule

that the exceptions to the requirement to

file a petition for TPR must be done on

a case-by-case basis and added

additional examples of a compelling

reason. We also clarify that States must

begin the process of finding and

approving an adoptive family for a child

when the State files a petition for TPR.

F. Title IV–E Reviews

We made several changes to

strengthen and clarify the title IV–E

reviews. The title IV–E reviews are

designed to review the eligibility of

children in foster care and providers

receiving title IV–E funds. Those

changes to the final rule include:

• Clarifying that when using an

alternate sampling methodology when

AFCARS data are unavailable, we will

review a six-month period that

coincides with the AFCARS reporting

period;

• Allowing all State’ initial primary

reviews to be held at a 15 percent

threshold of ineligible cases regardless

of whether or not the review occurs

within the first three years of the final

rule;

• Providing, on a case-by-case basis,

an extension of a program improvement

plan when a legislative change is

necessary for the State to achieve

substantial compliance; and

• Increasing the initial amount of

time to develop a program improvement

plan from 60 days to 90 days for States

found not to be in substantial

conformity as a result of a title IV–E

foster care eligibility review.

G. Special Populations

Several issues of note recurred as

themes throughout the comments and

the regulation. One was the application

of the rules to certain populations, such

as Indian tribal children, adjudicated

delinquent children, and

unaccompanied refugee minors. We

clarify how in particular the provisions

of the final rule apply to these

populations of children, but also

emphasize that overall the statute must

apply to these children as they would

any other child in foster care. We have

no statutory authority to exempt any

group from provisions such as the safety

requirements or termination of parental

rights requirements. Furthermore, we

strongly believe that, while these

requirements must apply to all children,

the statute affords the State agency the

flexibility to engage in appropriate

individual case planning.

For Indian tribes, numerous other

issues were raised with regard to how

title IV–E requirements and, more

specifically, the recent amendments

made by the Adoption and Safe

Families Act apply to Indian tribes as

sovereign nations. While we are

committed to the government-togovernment relationship between the

Federal government and Indian tribes,

the foster care program under title IV–

E is statutorily targeted to State

agencies, and Indian tribes cannot

receive title IV–E funds directly. Indian

tribes can gain access to title IV–E funds

on behalf of title IV–E eligible children

if they enter into agreements with State

agencies. Accordingly, Indian tribes

must operate within the parameters of a

particular State plan and the specifics of

the agreement. Some commenters also

requested that we explain how the

requirements of the Indian Child

Welfare Act work in the context of the

ASFA. Although we can affirm that

States must comply with ICWA and that

nothing in this regulation supersedes

ICWA requirements, we cannot

expound on ICWA requirements since

they fall outside of our statutory

authority.

4030 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

IV. Section-by-Section Discussion of

Comments

Part 1355—General

Section 1355.20 Definitions

This section amends 45 CFR 1355.20

to revise the definitions of foster care

and foster family home and to define

new terms used throughout the

regulation.

Child care institution. Comment:

Some commenters requested that we

provide more specific guidance or

parameters to determine whether a

facility is a ‘‘child care institution’’ and

offered a variety of suggestions and

recommendations. For example, one

commenter asked that we confirm

whether the definition of ‘‘child care

institution’’ precludes group child care

programs from taking steps to assure

safety for foster children, including

locking facility doors at night and taking

other reasonable measures to prevent

foster children from leaving the facility

without consent.

Response: We understand the desire

for more expansive guidance for

determining whether a facility is

appropriate for title IV–E eligible

children. We strongly believe that any

such guidance should be developed

with input from the field. We have

begun this consultation process by

inviting comments on a notice

published in the Federal Register on

December 7, 1998 (63 FR 67484). That

notice specifically requested comments

on defining appropriate child care

facilities in which children adjudicated

delinquent may be placed. Taking into

account the comments received on the

Federal Register notice, we are

considering our options for setting forth

more expansive guidance for identifying

child care institutions that are

appropriate for title IV–E eligible

children.

Comment: One commenter suggested

that language such as ‘‘or tribal

licensing authorities’’ be inserted after

‘‘State’’ to clarify the definition of

‘‘child care institutions’’ on Indian

reservations.

Response: We concur with the

commenter and have revised the

definition in the final rule to reflect the

tribal licensing authority.

Comment: One commenter noted that

many ‘‘child care institutions’’ care for

more than 25 children.

Response: The limit of 25 children, by

statute, specifically applies to public

child care institutions and not private

facilities. Therefore, no changes to the

final rule are warranted.

Date a child is considered to have

entered foster care. 

Comment: We received a great

number of comments and suggestions

regarding how to define the date a child

is considered to have entered foster care

in accordance with section 475(5)(F) of

the Act (the date the State is to use in

calculating when to hold periodic

reviews in accordance with section

475(5)(B) of the Act, permanency

hearings in accordance with section

475(5)(C) of the Act, and for complying

with the termination of parental rights

(TPR) provision under section 475(5)(E)

of the Act). Some commenters wanted

us to define the term by using the date

on which the child actually enters foster

care and the agency assumes

responsibility for the placement and

care of the child. Others suggested that

we define the term based on a variety of

other points in time, such as: The date

of a judicial determination that it was

contrary to the child’s welfare to remain

at home; the date of the full hearing; the

date of the initial shelter care hearing;

the date of removal; or, the date a

petition for removal is filed. Many

commenters observed that, by linking

the date the child is considered to have

entered foster care to a finding of abuse

or neglect and the agency receiving

responsibility for placement and care of

the child, we incorrectly implied that

the aforementioned decisions occur at

the same hearing when, in fact, these

judicial decisions are often made at

separate hearings.

Response: The time frames for

considering when a child has entered

foster care, i.e., the earlier of a judicial

finding of abuse or neglect or 60 days

from the date the child is removed from

the home, are statutory. However,

nothing precludes a State from using a

point in time that is earlier than that

required by statute or regulation, such

as the date the child is physically

removed from the home. We have

changed the regulation to reflect this

option. Clearly, if a State uses the date

a child is physically removed from the

home, the requirements for holding

periodic reviews, permanency hearings,

and complying with the TPR provision

within the time frames prescribed

would be satisfied.

We also have removed to the

reference to the agency’s responsibility

for the placement and care of the child

so that the definition more closely

follows the statutory language and is

consistent with actual practice.

Comment: One commenter suggested

that the time a child spends in shelter

care not be factored into calculating the

timing for holding periodic reviews,

permanency hearings, and for

complying with the TPR provision.

Response: Under long-standing

Departmental policy, shelter care is

considered a form of foster care (see the

definition of ‘‘foster care’’ at 45 CFR

1355.20). Shelter care is one of many

possible settings in which children in

foster care are placed. Therefore, time

spent in shelter care counts in

determining when to hold periodic

reviews, permanency hearings, and for

complying with the TPR provision. We

have made no changes to the final rule

in response to this comment.

Comment: One commenter requested

that we delete the word ‘‘physically’’

from the regulatory definition of the

date a child is considered to have

entered foster care to adhere strictly to

the statutory language which provides

no qualification of the term ‘‘removal.’’

Response: While we have deleted the

word ‘‘physically’’ from the definition,

we have retained the policy on physical

removals because it is consistent with

the intent of ASFA regarding expedited

permanency. Linking the definition of

the date a child is considered to have

entered foster care to a physical removal

ensures that children do not languish in

care awaiting a judicial order that says

that the child is removed from the

home.

We have, however, created an

exception. Under § 1356.21(k), we

permit constructive removals (i.e., paper

removals) to equalize the situation in

relative and nonrelative foster family

homes. If a child is constructively

removed from the home, the date he or

she is considered to have entered foster

care, absent a finding of abuse or

neglect, is the date that is 60 days from

the date of the constructive removal. We

have amended the regulatory text by

cross-referencing § 1356.21(k), which

sets the parameters for the acceptable

forms of removals.

Comment: One commenter was

concerned about what appeared to be an

inconsistency between the date a child

is considered to have entered foster care

and the timing for developing case

plans. The outside limit for considering

a child to have entered foster care is 60

days from the date of removal, while

§ 1356.21(g)(2) requires case plans to be

developed within 60 days of the State

agency ‘‘ * * * assuming responsibility

for providing services including placing

the child * * *’’

Response: We understand the

confusion and have amended the

regulatory language at § 1356.21(g)(2) to

state clearly that case plans must be

developed within 60 days of the date

the child is removed from the home.

Comment: We received several

comments opposing the manner in

which we applied this definition to

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4031

voluntary placement agreements. In the

NPRM, we set the date a child is

considered to have entered foster care

for a child placed via a voluntary

placement agreement as the date the

voluntary placement agreement is

signed by all relevant parties. Many

commenters wanted to be able to use the

date the child actually is placed in

foster care since the child may not enter

foster care the same day the agreement

is signed. Some commenters believed

we lacked a statutory basis for not

applying section 475(5)(F) of the Act to

all children, irrespective of how they

enter foster care.

Response: We concur that it is more

appropriate to adopt a consistent

application of section 475(5)(F) of the

Act for all children. We have amended

the definition of the date a child is

considered to have entered foster care so

that it makes no distinction for children

who enter foster care via a voluntary

placement agreement. Therefore,

children placed in foster care via a

voluntary placement agreement will be

considered to have entered foster care

no later than 60 days after the child is

removed from the home.

We want to take this opportunity,

however, to note that the purpose of the

60-day limit at section 475(5)(F) of the

Act is to ensure that periodic reviews,

permanency hearings, and application

of the TPR provision are not delayed as

a result of contested involuntary

removals. The danger of such a delay

often does not exist when children are

removed from their homes pursuant to

a voluntary placement agreement. When

children are removed from home via a

voluntary placement agreement, we

encourage States to use the date the

child is placed in foster care (rather than

60 days later) as the date for calculating

when to hold periodic reviews,

permanency hearings, and for

complying with the TPR provision.

Comment: A few commenters

requested guidance on how to apply the

definition to children who are

voluntarily relinquished by their

parents for adoption.

Response: The date a child is

considered to have entered foster care

according to the statute is the earlier of

a judicial finding of abuse or neglect or

60 days from the date the child was

removed from the home. Typically,

there is no finding of abuse or neglect

in a voluntary relinquishment, so the

date of entry into foster care would be

no later than 60 days from the date the

child was removed from the home.

Comment: One commenter requested

that we specifically clarify, in

regulation, that the date the child is

considered to have entered foster care

does not affect the date Federal financial

participation (FFP) may be claimed for

foster care maintenance payments. One

commenter observed that there is a

connection between maintaining

eligibility for title IV–E funding and the

date a child is considered to have

entered foster care.

Response: Both commenters are

correct. Establishing initial eligibility for

title IV–E funding and initial claiming

for FFP have no relationship to the date

the child is considered to have entered

foster care defined at section 475(5)(F)

of the Act. The purpose of that

provision is to set the ‘‘clock’’ for

determining when to satisfy the

requirements for holding periodic

reviews, permanency hearings, and the

TPR provision. A child’s initial

eligibility for title IV–E funding is not

related to this time frame. We have

amended the regulation at § 1355.20

accordingly.

The date a child is considered to have

entered foster care is, however, related

to maintaining a child’s eligibility for

title IV–E funding. Under

§ 1356.21(b)(2), we require the State to

use the date the child is considered to

have entered foster care in determining

when to obtain a judicial determination

that it made reasonable efforts to

finalize a permanency plan. We

intentionally linked the timing for

obtaining this judicial determination to

the date the child is considered to have

entered foster care so that such

determinations could occur at the

permanency hearing, the logical time for

making such determinations.

Comment: Several commenters

requested guidance for applying the

statutory definition of the date a child

is considered to have entered foster care

to children who are adjudicated

delinquent, particularly for those

children who enter foster care

subsequent to placement in a detention

facility.

Response: In general, a date that is no

later than 60 days from the date the

child was physically removed from his

or her home should be used in

calculating when to satisfy the

requirements for holding periodic

reviews, permanency hearings, and for

complying with the TPR provision,

because judicial determinations

regarding abuse or neglect are not

typically made for children who are

adjudicated delinquent. For children

who enter foster care subsequent to

placement in a detention facility, States

should follow existing policy as stated

in ACYF–PA–87–02 in calculating when

to develop case plans, hold periodic

reviews and permanency hearings, and

comply with the TPR provision.

ACYF–PA–87–02 requires States to

satisfy the requirements for developing

case plans, holding periodic reviews

and permanency hearings (the

requirements at section 427 of the Act

at the time ACYF–PA–87–02 was

written) for all children supervised by

or under the responsibility of another

public agency with which the title IV–

B/IV–E agency has an agreement under

title IV–E, and on whose behalf the State

makes title IV–E foster care maintenance

payments. Since the State cannot claim

Federal financial participation under

title IV–E for children in detention

facilities, the ‘‘clock’’ for calculating

when to comply with the requirements

for developing case plans, holding

periodic reviews and permanency

hearings, and the TPR provision begins

when the child is placed in foster care.

Although the ASFA was passed long

after ACYF–PA–87–02 was issued, we

think that the existing policy is an

appropriate interpretation of section

475(5)(F) with respect to adjudicated

delinquents who enter foster care

subsequent to placement in a detention

facility.

Comment: A few commenters

suggested that we adjust the date a child

is considered to have entered foster care

for Indian children to accommodate the

time involved in tribal identification

and notification required by the Indian

Child Welfare Act.

Response: We are sensitive to the fact

that tribal identification and notification

may take time and limit the amount of

time the tribe or State has in making

reasonable efforts to finalize a

permanency plan prior to the

permanency hearing. However, we have

no authority to set a different ‘‘date of

entry into foster care’’ for a particular

group of the foster care population.

Nothing precludes the agency and court

at the permanency hearing from taking

into consideration the amount of time it

took the State to comply with tribal

identification and notification

requirements when determining

appropriate permanency plans for

Indian children.

Comment: Several commenters did

not want the definition of the date a

child is considered to have entered

foster care to apply to the six-month

periodic reviews. The commenters are

concerned that, if the definition were so

applied, children could potentially be in

foster care for eight months before a

review is held.

Response: We chose to apply section

475(5)(F) of the Act to the six-month

periodic reviews, permanency hearings,

and the TPR provision, for two reasons.

First, nothing prohibits the State from

holding six-month periodic reviews

4032 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

based on the date the child is physically

removed from the home. Second, setting

different ‘‘clocks’’ for calculating when

to hold periodic reviews and

permanency hearings, and for

complying with the TPR provision

would add administrative burdens on

States.

For example, we believe that we

would encumber State systems by

requiring a State to hold six-month

periodic reviews based on the date the

child is removed from the home while

holding permanency hearings based on

section 475(5)(F) of the Act. In that

situation, the State would be obliged to

hold two periodic reviews prior to the

permanency hearing, the second of

which would have to be held two

months before the permanency hearing

if the date of entry into foster care were

60 days from the date the child is

removed from the home. Therefore, we

have not made any changes to the final

rule as a result of this comment.

Foster care. No comments were

received on this definition and therefore

no changes are being made to the

language proposed in the NPRM.

Foster care maintenance payments. 

Comment: One commenter questioned

our ability to revise the definition of

foster care maintenance payments to

include travel for visits with workers,

which is currently covered as a title IV–

E administrative expense. Another

commenter recommended that a

revision to the definition be made to

include the travel costs for a parent to

visit his/her child(ren) as an allowable

title IV–E foster care maintenance

payment cost.

Response: The first commenter’s

observation is correct. Including the

phrase ‘‘agency workers * * * ’’ in the

definition goes beyond the statute and

was an error on our part. The statute

clearly allows reasonable travel by the

child for visitation with family. We have

revised the definition in the final rule,

deleting the words ‘‘agency workers,’’ to

conform to the statute. ACYF–PIQ–97–

01 addresses the second commenter’s

request to expand foster care

maintenance payments to include travel

by the parent(s). Such costs are service

related and may be charged to title IV–

B, title XX or the State. No change has

been made to expand foster care

maintenance payments to include other

travel.

Comment: We received several

requests to expand the definition of

foster care maintenance payments to

cover a variety of items. For example,

one commenter recommended that a

State be able to claim child care when

the foster parent is attending a school

meeting or medical and mental health

staffings for another foster child in his/

her care.

Response: The definition of foster care

maintenance payments cited in the

NPRM mirrors the statutory language at

section 475(4) of the Act. We do not

have the authority to extend the

definition beyond the statute.

Furthermore, ACYF–PIQ–97–01

explains that child care provided to a

foster child when a foster parent is

attending activities that go beyond the

scope of ‘‘ordinary parental duties’’ are

reimbursable under title IV–E. The PIQ

provides a thorough discussion on the

child care costs that can be included in

the title IV–E foster care maintenance

payment.

Comment: One commenter asked if

the State could seek foster care

maintenance payments for appropriate

child care costs if the State has a twotiered licensing system, ‘‘licensed’’ for

center-based and ‘‘regulated’’ for homebased child care.

Response: A State’s use of specific

terminology or type of child care

licensing system has no bearing on

whether the costs of child care can be

included in title IV–E foster care

maintenance payments. As long as the

child care facility or individual (in the

case of home-based child care) is

licensed, or otherwise officially

authorized or approved by the State as

meeting the requirements for a child

care facility, the State may claim the

costs of allowable child care as part of

a foster care maintenance payment.

Comment: Two commenters requested

that the language in the preamble to the

NPRM which stated that payments for

child care could be a separate payment

to the child care provider or included in

the basic maintenance payment be

inserted in the regulatory text of the

final rule.

Response: We agree and have

amended the regulation accordingly.

Foster family home. Comment: We

received many comments on the

definition of ‘‘foster family home’’ and

related concerns regarding title IV–E

eligibility and reimbursement. Several

commenters noted that in some States,

the terms ‘‘approved’’ and ‘‘licensed’’

are interchangeable, while in other

States there are separate standards for

each of these categories. States

sometimes establish separate standards,

i.e., approval and provisional licensure,

as opposed to full licensure, for relative

caretakers. Some commenters suggested

that we allow States to claim title IV–

E for eligible children placed with

relative caretakers who meet the State

standards for approval or provisional

licensure, rather than the State’s higher

standards for full licensure. Some

commenters noted that relative

placements encourage continuity in a

child’s life, allowing the child to

maintain a sense of identity and

minimize separation and attachment

issues. One commenter expressed a

belief that the statutory language of

‘‘licensed or approved’’ implies that

different standards are acceptable.

Another commenter suggested that to

require that approval and licensure be

held to the same standard is an

extremely problematic higher standard

than has been required in the past.

Response: We have given

considerable thought to these comments

and have tried to balance the integrity

of the requirement, the safety of the

child and existing State licensing

practices. We did not change the

requirements: (1) That approved foster

family homes must meet the same

standards as licensed foster family

homes; or (2) that relatives must meet

the same licensing/approval standards

as nonrelative foster family homes for

the reasons below.

Section 471(a)(10) of the Act requires

that a State’s title IV–E plan provide for

the establishment or designation of a

State authority that is responsible for

establishing and maintaining standards

for foster family homes and child care

institutions. This section also requires

that the title IV–E State plan provide for

the application of these standards to

‘‘any’’ foster family home or child care

institution receiving either title IV–B or

title IV–E funds. Further, the statutory

definition of ‘‘foster family home’’ in

section 472(c) of the Act states that a

foster family home is a home ‘‘* * *

which is licensed by the State in which

it is situated or has been approved (by

the State licensing authority) as meeting

the standards established for such

licensing.’’ Clearly, the statute did not

intend that there be separate standards

for licensing and approval.

The plain language of the statute

requires that, to be considered a foster

family home for the purpose of title IV–

E eligibility, the home must be either

licensed or approved as meeting State

licensing standards. It also is clear from

the language in section 471(a)(10) of the

Act that the State licensing standards

must be applied to ‘‘any’’ foster family

home that receives funding under titles

IV–E or IV–B. The licensing provisions

of the Act make no exceptions for

different categories of foster care

providers, including relative caretakers.

In past title IV–E foster care eligibility

reviews, we have verified the existence

of a license without differentiating

among the types, and we understand

State concerns in this regard. We also

agree that placements that meet the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4033

child’s need for attachment and

continuity should be encouraged. We

further recognize that, consistent with

section 471(a)(19) of the Act, States

must consider giving preference to a

relative caregiver, provided that the

relative caregiver meets all relevant

State child protection standards.

However, given the emphasis in ASFA

on child safety, and the plain language

of the statute with respect to the

licensing requirements, we believe that

it is incumbent upon us, as part of our

oversight responsibilities, to fully

implement the licensing and safety

requirements specified in the statute by

requiring that foster care homes,

whether relative or nonrelative, be fully

licensed by the State.

Comment: In some States, relative

caretakers must meet the standards for

full licensure, but the State allows for a

waiver of certain provisions for these

specific caretakers. One commenter

asked if the language requiring that

‘‘approved’’ and ‘‘licensed’’ homes meet

the same standard would restrict the use

of these waivers to approve relative

foster family homes. Other commenters

requested that we continue our current

policy of allowing certain requirements

to be waived for relatives.

Response: Waivers are not addressed

in the regulatory text. However, as we

have explained in ACYF–PIQ–85–11,

special situations may arise with

relative caretakers in individual cases

where there are grounds for waiving

certain requirements, such as square

footage of the relative’s home. The

safety standards, however, cannot be

waived in any circumstance. ACYF–

PIQ–85–11 has not been withdrawn

and, therefore, continues to reflect

current policy. To the extent that

waivers are allowed, they must be

granted on a case-by-case basis, based

on the home of the relative and the

needs of the child. The State may not

exclude relative homes, as a group, from

any requirements.

Comment: Several commenters

requested that we reconsider our

position on requiring that a foster family

home be fully licensed before the State

is eligible to claim for title IV–E. We

were advised that in some States, a

provisional license is issued so that a

child may be placed in a foster home

while the State is awaiting criminal

background checks or waiting for the

prospective foster parents to complete

required training. In other States, a

provisional license is issued to all new

foster homes during a probationary

period, even though the home meets the

requirements for a full license or

approval.

Response: We considered the

commenter’ suggestions, but we believe

that the statute requires a foster family

home to meet all of the State

requirements for full licensure or

approval to be eligible for title IV–E

purposes. Accordingly, if a State issues

an interim license (provisional,

emergency, etc.) pending satisfaction of

all licensing standards (e.g., while the

State is awaiting the results of a

criminal records check or the

completion of training), then the State

may not claim title IV–E funds on behalf

of a child in that home.

Since there seems to be some

confusion over the nomenclature used

in the draft regulation, we have revised

the regulatory language in § 1355.20 to

remove the reference to provisional

licensure and to articulate that before a

State may claim title IV–E funds, it must

find that the home meets the State’s

licensing standards.

Comment: Several commenters

offered varying suggestions on the

concept of allowing retroactive

payments. Generally, the commenters

suggested that we allow States to claim

title IV–E reimbursement back to the

date of placement once the home

becomes fully licensed.

Response: The statute predicates

foster family home eligibility on

licensure or approval of the home.

Allowing retroactive payments to the

child’s date of placement would be

inconsistent with this requirement. In

addition, we do not wish to provide

financial incentives for States to place

children in homes before the safety of

the children in those homes can be

assured.

However, we recognize that some

time may elapse between the date that

satisfaction of the requirements is

received and documented and the date

on which the license is actually issued.

We have concluded that 60 days is an

ample period of time to allow between

the time the State receives all the

information on a home and the date on

which the full license is issued.

Therefore, we are permitting States to

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.

Comment: One commenter requested

that we allow States a six-month period

to grandfather in homes that are

currently operating under a provisional

license, so long as the safety of the child

is preserved.

Response: We will allow States a

grace period to bring homes currently

operating with less than a full license or

approval to full licensure/approval

status. Accordingly, if a State is

currently claiming title IV–E foster care

for a foster family home that does not

meet fully the State licensing standards,

the State has no more than six months

from the effective date of this final rule

to grant a full license or approval for

these homes. After that date, a State may

not claim title IV–E funds for any child

in a home that does not meet the State’s

full licensing or approval standards.

Comment: One commenter suggested

that provisional and emergency

licensure be defined, and a distinction

be drawn between these two types of

licenses.

Response: The terms provisional

licensure and emergency licensure are

not used in the regulation. Thus, we see

no reason to impose a definition of these

terms on States.

Comment: One commenter

recommended that the definition of

‘‘foster family home’’ begin with a

statement indicating that this definition

is for purposes of title IV–E foster care

so that it is not wrongly applied to

exclude non-licensed placements from

the section 422 requirements.

Response: We concur with the

commenter and have revised the

regulation to clarify that the definition

relates to title IV–E eligibility only. It

should be noted that section 471(a)(10)

of the Act more broadly requires that a

State’s title IV–E plan provide that a

State’s established licensing standards

apply to ‘‘any’’ foster family home or

child care institution receiving either

title IV–B or IV–E funds. This is a State

plan conformance issue, however, and

not a title IV–E eligibility issue.

Comment: A commenter opposed

inclusion of group homes, agency

operated boarding homes and other

institutional settings in the definition of

‘‘foster family home.’’ The commenter

noted that Congress clearly has

indicated a desire to avoid a child’s

placement in such settings unless it is

necessitated by repeated extreme

disruptions of the preferred family

settings. It was suggested that the

definition include only homes of

individuals or families licensed or

approved by the State licensing or

approval authorities that provide 24-

hour out-of-home care for children.

Response: Group homes, agency

operated boarding homes and other

facilities have been included in the

definition of ‘‘foster family home’’ since

the title IV–E regulations were issued in

1983. The purpose of including these

facilities has been to assure that all

foster care placements meet the

minimum safety requirements by being

licensed or approved under State law or

4034 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

rules. We believe this is a safety issue

for children and not a statement of

placement preference; therefore, we

have retained the language in the final

rule.

Comment: We received some

comments concerning the licensing of

homes by tribal authorities. A few

commenters suggested that tribes should

have the authority to license tribal

homes irrespective of where they are

located, and that the language in the

definition of ‘‘foster family home’’

implies that tribes only have the

authority to license homes that are on or

near reservations. A couple of

commenters suggested that not to allow

tribes this authority would be a

violation of tribal sovereignty and

jurisdiction. One commenter suggested

that this is an overreaching of the

Federal government rather than a safety

issue. It was suggested that HHS strike

‘‘or with respect to foster family homes

on or near Indian reservations’’ from the

definition.

Response: The authority of Indian

tribes to license homes that are ‘‘on or

near Indian reservations’’ has been part

of the title IV–E regulations since May

23, 1983. This provision is consistent

with the Indian Child Welfare Act

(ICWA) of 1978. Section 1931 of ICWA

authorizes Indian tribes and tribal

organizations to establish and operate

child and family services programs ‘‘on

or near reservations,’’ including a

system for licensing or otherwise

regulating Indian foster and adoptive

homes. We are maintaining the language

to remain consistent with the ICWA.

Comment: One commenter asked

whether the definition of ‘‘foster family

home’’ should be interpreted to mean

that homes approved through the tribal

process must meet the same standard as

homes licensed by the State.

Response: The definition of ‘‘foster

family home’’ should not be interpreted

in that manner. The definition of ‘‘foster

family home’’ gives tribal licensing or

approval authorities the jurisdiction to

license or approve homes that are on or

near Indian reservations. This is

consistent with ICWA at section 1931(b)

which states that for purposes of

qualifying for funds under a federally

assisted program, licensing or approval

of foster or adoptive homes or

institutions by an Indian tribe is

equivalent to licensing or approval by a

State. The authority to license or

approve includes the authority to set

standards.

Comment: One commenter was

concerned about the requirement that

approved and licensed homes must

meet the same standard. The commenter

noted that States sometimes use waivers

to approve Indian foster homes which

may not meet certain criteria, such as

square footage requirements, in order to

comply with the ICWA placement

preferences. The commenter

recommended that we include language

to assure that this type of waiver

continues to be permissible.

Response: Our current policy, set

forth in ACYF–PIQ–85–11, recognizes

that there may be exceptional

circumstances that arise with a specific

relative caretaker where there are

grounds for waiving a licensing

requirement, such as square footage, in

order to place a child. The policy set

forth in that issuance applies also to

licensing or approving tribal relative

foster homes, either by a State or tribal

licensing authority. This waiver

authority does not extend to all foster

homes, but only to relative homes in

certain circumstances delineated in

ACYF–PIQ–85–11, as determined by the

licensing authority on a case-by-case

basis. We did not address the issue of

waivers in the NPRM or final rule, but

clarify here that the existing policy

stands.

Full hearing. Comment: Several

commenters objected to a definition for

‘‘full hearing’’ because it did not

coincide with some States’ terminology.

Many commenters requested

clarification, while others recommended

changes in the definition that would

accommodate the specific terms and

proceedings used in their States.

Response: We defined a full hearing

in an attempt to establish a universal

term for the hearing at which the State

agency is assigned responsibility for

placement and care of a child who is

removed from home. Given the multiple

requests for clarification and the

conflicting nature of the

recommendations, it is likely that any

definition for ‘‘full hearing’’ would be

problematic given the variety of Statespecific practices. Therefore, we have

deleted this definition from the final

rule.

Full review. No comments were

received on this definition and therefore

no changes are being made to the

language proposed in the NPRM.

Legal guardianship. Comment: A few

commenters supported the definition of

legal guardianship as written in the

proposed rule. However, some

commenters requested clarification that

the term ‘‘custody,’’ as used in the

definition, refers only to physical

custody of the child rather than legal

custody. The commenters asserted that

some States retain legal custody of the

child in guardianship situations.

Response: The definition in the final

rule is taken directly from the statute

which makes no distinction between

physical and legal custody. We believe

that the definition is intended to

include all legal guardianship

arrangements that are permanent.

Comment: A commenter wanted to

know how the Federal definition for

legal guardianship will be applied to

States that do not have the same

definition in their State statutes.

Response: There is no Federal

requirement for States to have the

statutory definition of legal

guardianship in State law. The statute

requires States to evaluate certain

permanency goals, including legal

guardianship, for children during the

development of the case plan and the

course of a permanency hearing. We

believe that the definition was

developed to clarify that States should

consider legal guardianships that are

permanent and self-sustaining as a

permanency option for children in

foster care.

Comment: There were several

comments on funding legal

guardianships. We received a suggestion

that title IV–E funding be made

available for subsidized legal

guardianship. Another commenter

asked for clarification on financial and

medical assistance available for children

placed in legal guardianship and how to

access funding for legal guardianship. A

third commenter requested that we

clarify that a State is not precluded from

providing financial assistance in legal

guardianships.

Response: While legal guardianship

arrangements may be appropriate

permanency plans, we have no statutory

authority to make title IV–E funding

available for subsidized legal

guardianships. However, some States

are using title IV–E funds to subsidize

legal guardianships under the terms of

a title IV–E demonstration waiver

approved by the Secretary. The statute

does not preclude States from

subsidizing legal guardianships with

State funds.

Comment: A commenter requested

that we make a greater distinction

between legal guardianships and other

living arrangements such as permanent

foster care placements and parent-child

relationships. The commenter believed

that children placed in legal

guardianships often are not subject to

ongoing judicial review, and that in

contrast to parent-child relationships, a

child is not entitled to inherit from a

guardian, and vice versa.

Response: The term legal

guardianship should be used in

reference to the requirements on

reasonable efforts to finalize a

permanency plan, case plans,

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4035

permanency hearings, and TPR. In that

context, States determine whether a

legal guardianship is the most

appropriate permanency option for a

child. We do not believe it is

appropriate for us to regulate the

definition of a legal guardianship

further.

Comment: One commenter requested

guidance on the use of legal

guardianship as a permanency option.

The commenter requested that we share

lessons learned from the title IV–E

demonstration waiver States.

Response: Information on the findings

from the States with demonstration

waivers will be disseminated when

available. This information will be

better provided through our resource

centers and technical assistance

activities rather than through regulation.

National Child Abuse and Neglect

Data System (NCANDS). No comments

were received on this definition and

therefore no changes are being made to

the language proposed in the NPRM.

Partial Review. The Department is

responsible for State compliance with

all aspects of the title IV–B and IV–E

plan requirements and not only the

elements covered by the child and

family service reviews. Accordingly, we

have revised the definition of ‘‘partial

review,’’ to clarify its application to title

IV–E and title IV–B compliance issues

that are outside the scope of the child

and family services review. This partial

review may cover whatever the

Secretary considers necessary to make a

determination regarding State plan

compliance. An example of an area

which is not subject to the full child and

family services review but subject to a

partial review is compliance with

AFCARS. The procedures and standards

for AFCARS compliance are set forth in

45 CFR 1355.40.

Permanency Hearing. Comment: One

commenter disagreed with the

requirement that permanency hearings

be held within 12 months of the date a

child is considered to have entered

foster care. The commenter felt that it

did not give families sufficient time to

make their homes ready for the child to

return.

Response: The requirement to

conduct permanency hearings no later

than 12 months from when a child

enters foster care is statutory. One of the

main purposes of ASFA was to

encourage States and parents to achieve

permanency for children in a more

timely manner.

Comment: One commenter did not

think that permanency hearings should

be conducted by any entity other than

a court.

Response: The option for

administrative bodies, appointed or

approved by the court, to conduct

permanency hearings is expressly

permitted at section 475(5)(C) of the

Act.

Comment: Several commenters were

opposed to the requirement that any

body that conducts permanency

hearings may not be part of or under the

supervision or direction of the State

agency. One commenter asked if this

requirement extended to other public

agencies with which the State agency

has an agreement.

Response: Critical decisions that have

a significant effect on the lives of

children and their families are made at

permanency hearings. The purpose of

requiring courts to oversee permanency

hearings is to ensure that these hearings

are conducted by an impartial body,

which includes any body appointed or

approved by the court to provide this

oversight in its stead. An administrative

body that is part of the State agency or

under its direction or supervision would

not meet the test of impartiality.

The requirement does extend to other

public agencies with which the State

agency has an agreement. In accordance

with ACYF–PIQ–85–2, title IV–E

requirements extend to any other public

agency with which the State agency

enters an agreement for the performance

of title IV–E administrative functions,

including responsibility for placement

and care of the child.

Comment: One commenter requested

that the definition of ‘‘permanency

hearing’’ be revised to indicate

specifically that a tribal agency is

permitted to appear before a tribal court

and that the tribal court has the

authority to make all the necessary

rulings with respect to permanency

hearings.

Response: The statutory and

regulatory language both clearly

indicate that permanency hearings may

be held before a tribal court. The

references to State courts in the

permanency hearing requirements in

section 475(5)(C) of the Act and in the

definition of permanency hearing at

§ 1355.20 should be understood to

include tribal courts.

Comment: A few commenters

requested additional guidance regarding

whether reunification efforts can be

extended beyond the permanency

hearing or if an alternate permanency

plan must be set at the permanency

hearing if the child and family cannot

be reunited at that time.

Response: A major purpose of ASFA

is to promote timely permanency

planning. We recognize, however, that

there are situations when reunification

cannot occur within 12 months but it is

not appropriate to abandon it as the

permanency plan at the permanency

hearing. It is acceptable to extend

reunification efforts past the

permanency hearing if the parent(s) has

been diligently working toward

reunification and the State and court

expect that reunification can occur

within a time frame that is consistent

with the child’s developmental needs.

Comment: One commenter wanted to

know if the permanency hearing was

similar to a dispositional hearing or an

administrative review. This commenter

also wanted to know if the hearing

could still be held within 18 months of

a child entering foster care.

Response: The ASFA changed the

name of the former ‘‘dispositional

hearing’’ to ‘‘permanency hearing’’ and

the timing was changed from 18 months

to 12 months (see p. 50072 of the

NPRM). No statutory flexibility exists

with respect to the time line in the

ASFA for conducting permanency

hearings.

Comment: One commenter asked that

we clarify whether the permanency goal

of placement with a fit and willing

relative was optional because the

commenter’s State had eliminated it as

a permanency goal. A few commenters

asked that we specifically identify

placement in ‘‘another planned

permanent living arrangement’’ as the

appropriate permanency option for all

unaccompanied refugee minors. These

commenters requested that, in

establishing placement in ‘‘another

planned permanent living arrangement’’

as the appropriate permanency option

for unaccompanied refugee minors, this

group of the foster care population be

exempted from the requirement to

provide a compelling reason for not

setting reunification, adoption, legal

guardianship or placement with a fit

and willing relative as the permanency

plan.

Response: We do not believe it is

appropriate for ACF or States to exclude

any permanency options from

consideration or to identify one

permanency goal as the appropriate

permanency goal for an entire group of

the foster care population. Permanency

planning is based on the best interests,

individual needs, and circumstances of

the child. The requirement to document,

to the court, a compelling reason for

setting a permanency plan other than

reunification, adoption, legal

guardianship, or placement with a fit

and willing relative is statutory and

cannot be waived for any group of the

foster care population.

Comment: We had several

commenters request that we include

4036 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

placement in a permanent foster family

home and emancipation in the list of

permanency goals at section 475(5)(C) of

the Act that are exempt from the

compelling reason requirement in that

section. Some commenters also asked us

to include long term foster care and

emancipation as other planned

permanent living arrangements.

Response: Section 475(5)(C) of the Act

specifies that the only permanency

options the State may set without a

compelling reason to do so include

reunification, adoption, legal

guardianship, or placement with a fit

and willing relative. Therefore, ‘‘another

planned permanent living arrangement’’

would be any permanent living

arrangement that is not enumerated in

statute.

Comment: One commenter suggested

that we amend the section of the

definition that describes the decisions to

be made at a permanency hearing. The

commenter suggested that the term

‘‘should’’ be replaced with ‘‘will’’ in the

definition. The commenter thinks the

term ‘‘will’’ is consistent with ASFA’s

intent to ensure permanency while

‘‘should’’ is noncommittal.

Response: We agree and have

amended the language accordingly.

Comment: One commenter was

opposed to the prohibition of paper

reviews, ex parte hearings, and agreed

orders as satisfying the requirements of

a permanency hearing.

Response: Section 475(5)(C) of the Act

requires the State to ensure ‘‘* * *

procedural safeguards shall also be

applied with respect to parental rights

pertaining to the removal of the child

from the home of his parents, to a

change in the child’s placement, and to

any determination affecting visitation

privileges of parents * * *.’’ In our

view, paper reviews, ex parte hearings,

and agreed orders fail to provide these

important safeguards. No change was

made to the regulation based on this

comment.

Comment: One commenter was

opposed to the use of the term

‘‘compelling reason’’ for setting another

planned permanent living arrangement

as the permanency plan. The

commenter feels the term suggests a

legal burden of proof that is not

appropriate for establishing permanency

plans.

Response: The term ‘‘compelling

reason’’ is taken directly from the

statutory language. Moreover, the term

was adopted because far too many

children are given the permanency goal

of long-term foster care, which is not a

permanent living situation for a child.

The requirement is in place to

encourage States to move children from

foster care into the most appropriate

permanent situation available.

Comment: We received several

comments regarding the preamble

language to paragraph 1356.21(g) in the

NPRM which states that States should

exhaust all efforts to place a child in a

permanent home outside the foster care

system before placing the child in a

permanent foster care setting. The

commenters feel this language has

created a standard above the

‘‘compelling reason’’ requirement

prescribed in statute.

Response: We want to clarify that the

language should not be interpreted to

set a standard above what is set in

statute. It was intended to encourage

States to seriously consider placement

options outside of foster care before

settling on a permanent foster care

placement as the permanency plan.

Statewide Assessment (formerly State

self-assessment). No comments were

received on this definition, so we made

no changes to the definition itself. We

did, however, change the name from

‘‘State self-assessment’’ to ‘‘statewide

assessment.’’ The term ‘‘statewide

assessment’’ more accurately reflects the

comprehensive nature of the assessment

conducted during the first phase of a

child and family services review.

Temporary custody proceeding.

Comment: Several commenters objected

to a definition for a temporary custody

proceeding. Some commenters

expressed confusion while others

asserted that the definition, especially

in combination with the definition for a

‘‘full hearing,’’ did not accurately reflect

the variety of State proceedings where

placement and care responsibility is

granted to the State agency.

Response: In the proposed rule we

defined ‘‘temporary custody

proceeding’’ as the first judicial

proceeding held at or shortly after the

emergency removal of a child from the

home. We intended to clarify when the

State court must make certain

reasonable efforts and contrary to the

welfare judicial determinations.

However, we concur that a Federal

definition for a temporary custody

proceeding is not helpful in clarifying

when the court must make certain title

IV–E eligibility determinations, and we

have deleted the definition.

Sections 1355.31–1355.37 The Child

and Family Services Reviews

Section 1355.31 Elements of the Child

and Family Services Review System

This section describes the scope of the

child and family services reviews as

including programs administered by

States under titles IV–B and IV–E of the

Act.

All of the relevant comments on this

section are addressed in the following

sections.

Section 1355.32 Timetable for the

Reviews

This section specifies the review

timetable for the initial and the

subsequent reviews as required by

section 1123A of the Act, and sets forth

rules for reinstatement of reviews based

on information that a State is not in

substantial conformity.

Section 1355.32(a) Initial Reviews

This section sets forth the timetable

for the initial child and family services

reviews.

Comment: We received many

comments concerning the time that it

will take for States to become familiar

with the new review process. Most of

the commenters indicated that it will

take significant time for States to

prepare for the reviews and requested

that ACF add to this section a

requirement that we provide an advance

six-month, or longer, notification to

States prior to initiating the review

process. Similarly, most of these

commenters indicated that the sixmonth period proposed between

publication of the final rule and

initiation of the new review schedule is

necessary and some comments

suggested that a longer time frame to

begin reviews is desirable. A small

number of comments dissented on this

provision.

Response: We acknowledge that

advance notice and preparation are

required for the child and family

services reviews. The exact period of

preparation may vary by State and may

change as the States and ACF become

more familiar with the process. Taking

into consideration that Federal staff will

also require a period of time to prepare

adequately for each review, we do not

anticipate lack of advance notice

becoming an issue. Therefore, we do not

intend to regulate the notification

period. We have, however, extended the

time for completing the initial reviews

to up to 4 years following the effective

date of the final rule.

Comment: We received comments

requesting coordination among the

components of the child and family

services reviews with other Federal

planning and review functions, i.e.,

coordinating the statewide assessment

with the CFSP and coordinating the

reviews with the title IV–E reviews.

Response: We have designed the child

and family services reviews to build on

and coordinate with the process in place

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4037

for title IV–B State planning as set forth

in 45 CFR part 1357. The timing of the

statewide assessments will, in part, be

determined by the timing of the actual

reviews which will vary from State to

State, and coordination with the timing

of the annual progress and services

reports (APSRs) may not be possible.

We considered combining the child

and family services and the title IV–E

reviews but believe that conducting the

two reviews at the same time would

pose a serious burden on States, given

the intensity of the review processes

and the level of State effort required for

each. We will coordinate the actual

timing of the two different reviews such

that States will not be over-burdened.

Section 1355.32(b) Reviews Following

the Initial Review

This section sets forth the timetables

for subsequent child and family services

reviews.

Comment: We received a range of

comments on the proposed frequency of

the reviews. Although a number of

comments supported the proposed

schedule, some commenters suggested

that reviewing at five-year intervals for

States determined to be in substantial

conformity is insufficient to assure the

safety and permanency of children.

Others suggested that the interim

statewide assessments should not be

required at three-year intervals if the

State is in substantial conformity, but

should either be eliminated or occur

less frequently.

Response: We proposed a five-year

review cycle for States found in

substantial conformity and do not think

that it compromises our ability to ensure

children’s safety and permanency for

the following reasons:

sbull; A full or partial child and

family services review can be reinstated

whenever information from any source

indicates that the State is not in

substantial conformity;

• The standard for achieving

substantial conformity is high;

• States in substantial conformity are

required to complete a statewide

assessment at the three-year point

between full reviews;

• The title IV–B five-year Child and

Family Services plan, and the related

annual updates, provide significant

insight into the functioning of the State

child welfare program and a mechanism

for identifying potential conformance

issues with respect to safety and

permanency.

Because we believe that other types of

reviews and information gathering

provide insight into State performance

between on-site reviews, we have not

changed the requirement to review

States every five years if they are

determined to be in substantial

conformity. Likewise, we have not

eliminated or changed the requirement

for the statewide assessment to be

completed every three years because we

believe that the use of information from

that source is an important mechanism

for helping States maintain successful

performance.

In order to address the comments

about assuring the safety and

permanency of children between

reviews, we have changed the

requirement for States determined not to

be in substantial conformity to be

reviewed at two-year intervals, rather

than three-year intervals.

Section 1355.32(c) Reinstatement of

Reviews Based on Information That a

State Is Not in Substantial Conformity

This section sets forth the

requirements for a reinstatement of a

full or partial review and describes the

types of information that may require a

review.

Comment: We received many

comments suggesting that the regulation

should denote that ACF and the State

negotiate a specific time frame for the

receipt of additional information as part

of the detailed inquiry to determine if

more frequent reviews should be

reinstated, and that only after that time

has been exceeded should we be

authorized to proceed with an

additional review.

Response: The time frame and

circumstances of the request for

information will vary depending upon

the nature of the information required to

determine if more frequent reviews

should be reinstated. We have a

responsibility to assure compliance with

State plan requirements and it may be

necessary to require information of a

particular nature within a specific time

frame. Thus, we will not provide for a

negotiated time frame.

Comment: We received many

comments indicating concern about the

sources of information that could trigger

reinstatement of reviews based on

information that a State is not in

substantial conformity. Specifically,

objections were raised regarding

inclusion of information from public

and private organizations and from the

disposition of class action lawsuits. The

main concern was the accuracy of

information from these and other

sources.

Response: Section 1123A(b)(1)(C) of

the Act gives the Secretary the authority

to reinstate more frequent reviews based

on information indicating that the State

may not be in conformity with the State

plan. The statute is silent with respect

to the source of the information that

would trigger an unplanned review.

Therefore, we deleted the list of

potential sources of information that

could trigger an investigation and,

instead, reiterated the statutory

language.

We do recognize that the specific

sources mentioned in the NPRM, and

others not mentioned, may not always

provide accurate information about the

State’ compliance with State plan

requirements. The provision for ACF to

conduct detailed inquiries prior to

initiating more frequent reviews is

designed to address this issue by

ascertaining the validity of the

information. A decision whether or not

to reinstate reviews to determine

substantial conformity will only be

made after the validity of the

information is determined.

Comment: We received questions

concerning the process for reinstating

reviews based on information that a

State may not be in substantial

conformity. Specifically, questions were

raised about the content and format of

the more frequent reviews.

Response: The reinstatement of

reviews could take the form of a full or

partial review, both of which are

defined in § 1355.20. We prefer not to

specify an exact format for each

reinstated review in the rule, since the

nature of the concerns triggering the

review and the intensity of reviews

needed will vary. We have, however,

clarified in the regulation that any

inquiry conducted by ACF does not

replace a full review as scheduled

according to § 1355.32(b).

Section 1355.32(d) Partial Reviews

Based on Noncompliance With State

Plan Requirements That are Outside the

Scope of a Child and Family Services

Review

This new section was added to set

parameters for addressing

noncompliance with title IV–B and IV–

E State plan requirements that are

outside the scope of a child and family

services review.

Comment: A few commenters

questioned our proposal to review for

only certain State plan requirements in

the child and family services reviews,

rather than all State plan requirements.

Response: We have selected those

requirements for the child and family

services review that are most directly

related to the achievement of successful

outcomes in the areas of safety,

permanence and child and family wellbeing. However, the State remains

responsible for complying with all State

plan requirements for titles IV–B and

IV–E, even if each requirement is not

4038 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

subject to review in the child and family

services review. Therefore, we have

added § 1355.32(d) to clarify that we

will use a partial review to determine

conformity with State plan requirements

outside the scope of the child and

family services reviews. Because

defining the variety of State plan

compliance issues in advance is not

possible, we will approach each

circumstance on a case-by-case basis.

Consistent with section 1123A, the

necessary elements of the program

improvement plan and, if necessary, the

amount of the withholding, will be

commensurate with the extent of the

State’s non-conformity.

Section 1355.33 Procedures for the

Review

This section sets forth the review

process and outlines general procedures

for the statewide assessment and the onsite review.

Comment: Overall, we received many

comments from the States favoring the

use of the statewide assessment process

and applauding the partnership between

State and Federal reviewers who

comprise the proposed review teams.

Many comments indicated support for

the joint planning of the on-site review

and the proposal that it be guided by

information in the statewide

assessment. Others wrote in support of

the increased focus on outcomes from

prior reviews and the comprehensive

nature of the reviews in covering the

range of child and family services.

Response: None needed.

Comment: We received comments

regarding the review’ reliance on

existing data sources, specifically

AFCARS. Some comments supported

the use of existing data sources for the

reviews, while some suggested that

these data may not be reliable or capable

of addressing safety and permanency

adequately.

Response: We understand the

concerns regarding the AFCARS data

and acknowledge that the data in the

earliest AFCARS submissions had

weaknesses with respect to quality. The

quality of the data has increased with

every submission and we see this trend

continuing as a result of three factors:

(1) Penalties. Since October 1994,

States have been required to participate

in AFCARS and, beginning in Federal

fiscal year 1998, penalties were imposed

on States not in compliance with

AFCARS submission requirements. The

number of States submitting penaltyfree data has increased significantly

since penalties have been imposed.

(2) State self-analysis prior to

submission. Two types of software are

available to afford States the

opportunity to ensure the quality of

their data prior to submitting it to ACF.

The first performs more than 800 checks

on various relationships among

AFCARS data elements to ensure the

accuracy of the data. The second is the

same software ACF uses to assess data

quality and is the basis for imposing

penalties.

(3) Incentives. Two sources provide

incentives for improving AFCARS data.

First, the ASFA established the

Adoption Incentive Program, section

473A of the Act, under which States

receive a bonus for increasing the

numbers of children adopted out of the

public child welfare system. While the

statute provides flexibility with respect

to data sources used for establishing

initial baselines, AFCARS data must be

used in calculating bonuses for the

number of adoptions over the baseline.

Second, under section 479A of the Act,

the Department is required to develop a

set of outcome measures based, to the

maximum extent possible, on AFCARS

data. State performance will be rated

based on these outcome measures.

AFCARS is the statutorily-mandated

information collection system for the

Federal child welfare programs. Thus, it

is the appropriate data source for use in

Federal reviews.

Section 1355.33(a) The Full Child and

Family Services Reviews

This section states that the review

will be a two-phase process and

describes the composition of the review

team.

Comment: We received a number of

comments about the composition of the

review team, including requests for

specific representatives on the team,

such as representatives of citizen review

panels. Some commenters raised

concerns that the training and

backgrounds of review team members

reflect strength in child welfare practice.

One respondent suggested that

representatives of the Department’s

Office for Civil Rights (OCR) in

particular receive training in the

processes and issues covered by the

child and family services reviews.

Response: We recognize the necessity

of having reviewers who are

knowledgeable about child and family

services and this is an important matter

for internal ACF consideration.

However, the existing regulations that

implement title IV–B of the Act specify

the types of representatives with whom

the State should consult in its planning

processes, and we anticipate that States

will utilize many of these same

individuals or types of representatives

in staffing the child and family services

review teams. We will also provide

guidance to States for the selection of

team members and train both Federal

and State members of the review teams

on the review procedures as the reviews

are conducted. For those reasons, we

did not regulate the specific State or

Federal representatives who will

participate on the review team.

Section 1355.33(b) Statewide

Assessment

This section describes the first phase

of the full review, the statewide

assessment.

Comment: There were a wide variety

of concerns about objectivity in the

review process, most of which were

directed toward the sample of cases to

be reviewed on-site and the role of the

statewide assessment.

Response: We are making revisions to

the following sections of the rule to

increase the objectivity of the reviews

and support accurate determinations of

substantial conformity:

• In § 1355.33(b)(1), we require that

the statewide assessment address each

systemic factor under review, including

the statewide information system, case

review system, quality assurance

system, staff training, service array,

agency responsiveness to the

community, and foster and adoptive

parent licensing, recruitment and

retention.

• In § 1355.33(b)(2), we require that

the State, using data from AFCARS,

NCANDS, or, for the initial review,

another source approved by ACF, assess

the outcome areas of safety,

permanency, and well-being of children

and families served by the State agency,

including a discussion of the State’s

performance in meeting the national

standard established for the statewide

data indicators.

• In § 1355.33(b)(5), we require that

the completed statewide assessment

include a list of all the persons external

to the State agency who had input into

the preparation of the statewide

assessment in order to assure that the

required participation and consultation

in § 1355.33(a)(2)(ii) and (iv) actually

occurred.

• In § 1355.33(b)(6), we require that

the State submit the statewide

assessment to ACF within 4 months of

our transmission of the information for

the statewide assessment to the State.

We anticipate that we will need 60 days

to review the statewide assessment and

notify the State of any potential areas

that might be an issue during the on-site

review. It will also afford the State an

opportunity to gather additional

information in advance of the review to

clarify any concerns raised; and,

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4039

• In § 1355.33(c)(5), we regulate the

size of the on-site sample of cases to be

reviewed and require that the cases be

selected randomly from AFCARS and

NCANDS, or, for the initial review,

another approved source. This will

promote consistency and help to

eliminate bias in the sample.

Comment: We received a few

comments that expressed concern about

the use of the statewide assessment in

county-administered States.

Commenters noted that particular items

in the statewide assessment have the

potential for variance among counties.

Response: We recognize the issues

raised by reviewing programs in countyadministered versus State-administered

systems. Following the pilot reviews,

however, we concluded that we could

not design a separate review process to

measure State compliance for countyadministered system. States, not

counties, are ultimately responsible and

held accountable for compliance with

State plan requirements. The statewide

assessment is designed to be completed

by the State, not by individual counties,

and responses should reflect official

State policies and the most typical State

practice, while noting where

outstanding exceptions exist.

Section 1355.33(c) On-site Review

This section describes the second

phase of the full review, the on-site

review.

Comment: We received some

comments about the geographic areas to

be covered by the on-site review as

stated in paragraph (c)(1) through (3). In

particular, some concern was expressed

that including the State’s largest

metropolitan area would lessen the

representativeness of the sample and

would target the area of the State with

the most resources. Another comment

requested that the review also include

rural areas of the State.

Response: Urban areas often provide a

disproportionate number of families

who have contact with the child welfare

system. In order to serve its stated

purpose of improving outcomes for

children and families, the proposed

review process must include this

population of children and families. For

example, the reviews could not

accurately claim to represent statewide

issues in Illinois without reviewing

Chicago, in New York without

reviewing New York City, or in

California without reviewing Los

Angeles. It is also important to represent

the range of other environments in the

State including rural and suburban areas

with their unique family and resource

issues. However, since the reviews will

only permit on-site activities in a

limited number of locations, we prefer

not to regulate geographic sites other

than the largest metropolitan area.

Beyond that, we have provided for the

statewide assessment to guide the State

and Regional ACF Offices in

determining the most appropriate

review sites given each State’s unique

characteristics, issues and population.

Comment: We received comments

requesting that specific representatives

be interviewed as part of the on-site

review process as described in

paragraph (c)(4). Most often, the

commenters suggested a requirement

that parents and adoptive parents be

included, as well as the courts or

administrative body that conducts

administrative reviews in the States.

One respondent also noted that special

consideration should be given to the

circumstances under which children

and families should or should not be

interviewed and the weight that should

be given their responses.

Response: Parents and adoptive

parents will be routinely interviewed on

cases selected for the on-site review.

While the rule does not specify the

community stakeholders who will be

interviewed in addition to the casespecific representatives, a number of

representatives with both statewide and

local perspectives on the systemic

functioning of the child and family

services delivery system will be

interviewed. Representatives from the

courts or other administrative review

bodies will be included, as well as

children’s guardians ad litem and other

individuals representing the child’s best

interests. We are producing, separate

from the rule, a procedures manual for

use in conducting the reviews that lists

the community representatives to be

interviewed. The procedures manual

and the training provided by ACF to the

reviewers will also address the

circumstances under which children

and families should or should not be

interviewed.

Comment: Some commenters

requested that we require case

information obtained by reviewers to be

kept confidential.

Response: All case-specific

information disclosed during a child

and family services review is

confidential. Both titles IV–B and IV–E

have restrictive disclosure provisions

(found at section 471(a)(8) of the Act

and 45 CFR 205.50). One of the

purposes for which a State is authorized

to disclose such information, however,

is for an audit or similar activity

conducted by the Department in

connection with the State plan. Further,

Federal regulations at 45 CFR 205.50

require that recipients of information

concerning children and families

receiving assistance and/or services

from the title IV–B/IV–E agency be held

to the same standards of confidentiality

as the agency. The confidentiality

standards for case-specific information

are addressed in the procedures manual

for use in conducting the child and

family services review. In addition, the

confidentiality of case records routinely

will be reinforced during reviewer

training prior to each review.

States have complete flexibility in

establishing procedures to ensure that

confidentiality requirements are met.

During the pilot reviews, some States

chose to require the reviewers who were

not State or Federal employees to sign

confidentiality agreements prior to

reviewing confidential information.

Comment: We received a number of

comments requesting that we not use

the term ‘‘social worker’’ unless it is a

specific reference to professionally

trained social workers, i.e., persons with

B.S.W. or M.S.W. degrees.

Response: Recognizing that not all

caseworkers in public agencies have

academic degrees in social work, we are

changing the term ‘‘social worker’’ in

the rule to ‘‘caseworker.’’

Section 1355.33(d) Resolution of

Discrepancies Between the Statewide

Assessment and the On-site Review

This new section was added to

describe the steps we will take in

resolving discrepancies between the

aggregate data and the findings of the

on-site review.

ACF will provide States with the

option of submitting additional

information to resolve the discrepancy,

or for ACF and the State to review

additional cases, using only those

indicators in which the discrepancy

occurred. ACF and the State will

determine an additional number of

cases to be reviewed, not to exceed a

total of 150 cases. As described in

section 1355.33(c)(6), the additional

cases, in combination with the 30–50

cases reviewed on-site, will comprise a

statistically significant sample with a 90

percent (or 95 percent for subsequent

reviews) compliance rate, a tolerable

error rate of 5 percent, and a confidence

coefficient of 95 percent. We will pull

the additional cases from an oversample

of cases for the on-site review, so that

both sets of cases will comprise one

sample. Only those indicators in which

the discrepancy occurred will be subject

to review.

Section 1355.33(e) Partial Review

(1355.33(d) in the NPRM)

This section describes the partial

review process.

4040 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

We redesignated § 1355.33(d) as

§ 1355.33(e) and made a technical edit

to clarify that the partial review

requirements in this section relate to the

partial child and family services

reviews. We have also clarified that a

partial review does not substitute for the

regularly scheduled full reviews.

Section 1355.33(f) Notification

(1355.33(e) in the NPRM)

This section describes the manner in

which ACF will notify States of whether

the State is operating in substantial

conformity.

Comment: Some comments requested

that the regulation require more detail to

be included in the ACF notification

letter to States, informing them if they

are operating, or not operating, in

substantial conformity.

Response: In the interest of providing

the States with timely feedback on the

child and family services reviews, we

have designed a review process that is

less dependent upon lengthy reports

than in the past. The review team will

provide the State with verbal

information on the findings of the

review throughout the on-site review

and subsequent exit conference. The

written description of the findings will

begin with the evaluation of the

statewide assessment and will be

updated as a result of the on-site review.

The notification to the State following

the on-site review is a confirmation of

those findings and will provide specific

information to allow a State to know

where it is operating in or out of

conformity.

Section 1355.34 Criteria for

Determining Substantial Conformity

This section pertains to the criteria

that must be satisfied to find a State in

substantial conformity, including a

discussion of outcomes, level of

achievement of outcomes, and criteria

related to a State agency’s capacity to

deliver services leading to improved

outcomes for children and families.

Section 1355.34(a) Criteria To Be

Satisfied

This section describes the elements

on which a State’s substantial

conformance with title IV–B and title

IV–E State plan requirements will be

based.

Comment: Some respondents

requested that decisions regarding

substantial conformity not be reliant on

the resolution of discrepancies between

aggregate data from the statewide

assessment and the findings of the onsite review.

Response: It was always our intention

to resolve discrepancies between

aggregate data from the statewide

assessment and the findings of the onsite review. Now that substantial

conformity is based on statewide data

indicators, as well as the findings of the

on-site review, we believe that if

significant discrepancies occur among

the sources of information used to

determine substantial conformity, they

must be reconciled so an accurate

determination can be made. To clarify

our procedures to resolve these

discrepancies, we are adding a new

§ 1355.33(d) that gives States the option

of either submitting additional

information to resolve discrepancies

between the statewide data indicators,

or the State and ACF reviewing

additional cases for the indicators where

the discrepancy exists.

Section 1355.34(b) Criteria Related to

Outcomes

This section sets forth the criteria

related to outcomes that will be

evaluated to determine a State’s

substantial conformance.

Comment: We received many

comments supporting the proposed

approach of limiting the reviews to

those State plan requirements that relate

specifically to outcomes and the

delivery of improved services. Some

comments questioned the authority of

HHS to select only certain State plan

requirements for review in the child and

family services reviews.

Response: The child and family

service reviews focus on the most

prominent aspects of the programs

under review, specifically child safety,

permanency for children in foster care,

and well-being of all the children served

by the programs. This focus in no way

alters the requirements imposed on

States to operate their programs in

conformity with all applicable State

plan requirements.

Therefore, in response to this

comment, a new paragraph (d) under

§ 1355.32, ‘‘Partial reviews based on

noncompliance with State plan

requirements that are outside the scope

of a child and family services review’’

has been added to clarify parameters for

addressing issues regarding compliance

with title IV–B and title IV–E State plan

requirements that are outside the scope

of these reviews. If needed, we will

conduct partial reviews to resolve such

issues regarding compliance. Partial

reviews of this nature will not

necessarily follow the prescribed format

of the child and family services review.

Rather, such partial reviews will

address whatever the Secretary deems

necessary in order to make a

determination concerning State plan

compliance.

If a State is determined to be out of

compliance with a State plan

requirement under either title IV–E or

title IV–B, there will be an opportunity

for program improvement, consistent

with section 1123A of the Act, before

funds are withheld.

Comment: A significant number of

comments noted that Safety Outcome #1

is actually two separate outcomes.

Response: We agree and have revised

§ 1355.34(b)(1)(i)(A) and (B). We

separated Safety Outcome #1 into its

two component parts and will use them

as the two safety outcomes, replacing

the current Safety Outcome #2 (The risk

of harm to children will be minimized.).

The two safety outcomes now read as

follows:

Outcome S1: Children are, first and

foremost, protected from abuse and

neglect.

Outcome S2: Children are safely

maintained in their homes whenever

possible and appropriate.

In this manner, we will address safety

as a State’s primary concern while

measuring compliance with the

statutory requirement to maintain

children safely in their own homes

when possible.

Comment: One commenter questioned

whether safely maintaining children in

their own homes is, in fact, a safety

outcome. The commenter suggested that

it would be more appropriately assessed

as a permanency outcome.

Response: Although this outcome

addresses decisions about whether to

remove children and place them in

foster care or maintain them in their

own homes, it is, in fact, a safety

outcome. ASFA is clear that the child’s

health and safety must be the primary

concern in decisions to remove or to

reunify. In reviewing the circumstances

of those children who remain in their

own homes, we intend to review for

their safety and well-being, and not for

the foster care provisions under the

permanency outcomes that are not

applicable to them. We will evaluate the

permanency outcomes only for those

children who have been removed from

their homes and placed in foster care,

since foster care is intended to be a

temporary setting.

Comment: We received numerous

comments questioning the applicability

of certain performance indicators to

their related outcomes. One example

cited was Well-Being Outcome #1,

Families have enhanced capacity to

provide for their children’s needs.

Commenters raised concerns that the

performance indicators associated with

it are measures of process and do not

equate with enhanced capacity for

parents.

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4041

Response: For each outcome to be

reviewed, we selected indicators that, if

met, are both within the scope of the

State agency’s range of responsibilities

and are likely to promote outcome

achievement. Each of the on-site

indicators includes a subset of questions

and issues that permits reviewers to

explore the indicator below the surface

level. We believe that this type of

exploration during the on-site review is

necessary to evaluate the quality of

work and the successful achievement of

outcomes for children and families. It is

unlikely that individual performance

indicators, in isolation, can be used to

evaluate the outcomes accurately. In

combination, however, the set of

performance indicators associated with

each outcome will provide a balanced

perspective on the outcome.

Comment: A number of comments

were received indicating concern that

Well-Being Outcome #2, Children

receive appropriate services to meet

their educational needs, is not an

outcome that can necessarily be

achieved by the child welfare system.

Other comments were received

questioning if this outcome, as it is

stated, meets the definition of an

outcome.

Response: The outcome delineated in

§ 1355.34(b)(1)(iii)(B), addresses the

responsibilities of public child welfare

agencies in regard to the educational

needs of children in their care and

custody. Certain aspects of the

educational status of children are not

within the control of the public child

welfare agency. We are reluctant to

describe the outcome in more definitive

terms and hold the State accountable for

educational outcomes that must be

addressed primarily through the State’s

educational agencies. Rather, we have

proposed to review those

responsibilities that the State child

welfare agency legitimately has in this

area: Considering and addressing

educational needs for children in case

planning; obtaining and considering

educational records for children in its

care; and, where appropriate,

advocating for children’s educational

needs with the education authorities in

the State.

Comment: A few commenters raised

concerns that length of stay in foster

care and number of adoptions from the

public child welfare system were not

included as outcomes for the child and

family services reviews.

Response: We agree that it is critical

to track the length of a child’s stay in

foster care and the number of adoptions

from the public child welfare system.

We have included length of stay as a

statewide data indicator and we are

addressing numbers of adoptions by

looking at the length of time between a

child’s entry into foster care and a

finalized adoption. In this manner, we

capture not only the number of

adoptions but also assess State

performance in expediting this

permanency goal.

Comment: Commenters noted that

some of the outcomes and indicators

may not be appropriate for all types of

cases in the system, particularly the

well-being outcomes as they relate to

families who are receiving child

protective services.

Response: We recognize that not all of

the outcomes and indicators will be

applicable to every type of case

reviewed. In most areas, we have

allowed for nonapplicability to be noted

on the review instrument. However, we

also believe that the well-being

outcomes very often do apply to

children and families who are served in

their own homes, in addition to

children placed in out-of-home care. For

example, the well-being outcomes

address issues such as: A family’s

ability to meet a child’s needs;

educational achievements of children;

and children’s physical and mental

health needs. We believe that these are

concerns that should be addressed by

child welfare systems regardless of

whether the child is in out-of-home-care

or not.

Comment: We received many

comments urging consistency between

the outcomes used in the child and

family services reviews, and those

outcomes that will be included in the

annual report to Congress on State

performance.

Response: We agree with the

commenters that it is critical that we

coordinate the annual report on State

performance in child welfare, required

by Section 203 of the ASFA, with the

child and family services reviews and

have taken the necessary steps to do so.

Specific statewide data indicators,

drawn from the outcome measures

included in the annual report, in

addition to the findings of the on-site

review, will be used as the basis for

determinations of substantial

conformity on one outcome measure of

safety and one of permanency. As we

gain experience in using statewide data

indicators for making determinations of

substantial conformity, such data

indicators may change. However, we

have committed in regulation, to the

extent practical and feasible, to keeping

the data indicators used in the child and

family services review consistent with

the measures developed pursuant to

section 203 of the ASFA.

Section 1355.34(c) Criteria Related to

State Agency Capacity to Deliver

Services Leading to Improved Outcomes

for Children and Families

This section describes criteria for

seven core systemic factors that will be

evaluated to determine the State

agency’s capacity to deliver services that

improve outcomes for children and

families.

Comment: A number of comments

suggested a need for greater detail in the

regulation on how determinations of

substantial conformity will be made for

the systemic factors being reviewed.

Response: A detailed description of

the changes to the process for making

determinations of substantial

conformity can be found under the

‘‘Discussion of Major Changes and

Provisions of the Final Rule’’ section.

We amended § 1355.34(c) so that

determining substantial conformity with

the systemic factors includes a process

by which the review team rates the

State’s conformity with State plan

requirements, based on information

obtained from the statewide assessment

and the on-site review. Information from

BOTH the statewide assessment and the

on-site portion of the review must

support a determination of substantial

conformity. State performance will now

be rated for each systemic factor, using

a Likert-type scale, e.g., 1–4 with criteria

attached to each rating, based on the

total information obtained from a

variety of stakeholders interviewed onsite.

Comment: We received several

comments suggesting that States found

to be in substantial conformity on the

outcomes should not be reviewed for

conformity with the systemic factors,

stating that these are process measures.

Other comments requested deleting

some of the systemic requirements.

Response: The purpose of the child

and family services reviews is to

determine compliance with State plan

requirements as well as the outcomes

for children. Some requirements are

related directly to outcomes in the areas

of safety, permanency, and well-being,

while others are related to systemic

factors that States are accountable for

implementing in return for receipt of

Federal funds. We do not believe that a

process limited to procedural

requirements can assure improved

outcomes for children and families. We

do believe, however, that the presence

of specific systemic factors is essential

to assuring that States have the capacity

to deliver services in a manner that is

most likely to help children and

families achieve desirable outcomes. We

cannot forego the responsibility to

4042 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

review systemic factors, and abandoning

that responsibility would weaken the

potential of the child and family service

review process to help States identify

areas where needed improvements can

lead to better outcomes.

Comment: We received a number of

comments requesting that the child and

family services reviews include the full

range of training activities permitted

under title IV–E, including preemployment training of State staff and

long-term training that permits staff to

obtain social work degrees.

Response: We have proposed to

review staff and provider training

according to State plan requirements in

those areas, as stated in the NPRM.

Although pre-employment and longterm staff training are allowable title IV–

E training costs, there are no State plan

requirements for these activities that

would be subject to the child and family

services review.

Comment: Several commenters

expressed concern that the child and

family services review does not include

the ASFA requirements.

Response: The child and family

services review does examine a State’s

compliance with several requirements

of the ASFA. However, the rule does not

specifically cite the ASFA in identifying

those State plan requirements under

review. The ASFA is not cited because

it primarily amends the Social Security

Act, which is the authorizing legislation

for the Federal child welfare programs.

Comment: We received a comment

that the NPRM fails to recognize two

distinct case review systems in Public

Law 96–272 and ASFA and does not

acknowledge the value of the periodic

case review system in place since 1980.

The comment noted that periodic

review should be recognized as

necessary to insure safety and

permanency.

Response: This comment seems to

confuse the State’s periodic

administrative or judicial review of

individual cases with the Federal

review of State plan requirements. The

purpose of the child and family service

review, in part, is to test whether a State

has appropriately implemented the case

review system required by Public Law

96–272 and strengthened by ASFA. We

concur with the commenter that

periodic reviews and other requirements

of the case review system are critical

protections for children and help to

promote timely permanency.

Comment: We received some

comments questioning the applicability

of the review of State plan requirements

to the tribes and the Indian Child

Welfare Act (ICWA), and whether a

State’s compliance with ICWA will be

part of the review. Some commenters

raised questions about how particular

State plan requirements will be

considered for tribes that receive their

title IV–B allocations directly.

Response: In both the statewide

assessment and the on-site review

instruments, we have included items

that address how States are meeting

ICWA requirements. Further, in the

pilot reviews, we found that the review

process helped us successfully assess

whether or not the interaction between

the State and tribes satisfied title IV–B

and title IV–E requirements for tribal

children. However, the child and family

services reviews are not intended to

review for ICWA compliance, per se, but

to review for the effectiveness of the

broad child and family service system

relative to State plan requirements.

Further, the reviews are based on the

entire child and family service system

as indicated by the use of AFCARS and

NCANDS data as an integral part of the

process, and assessing penalties for

nonconformity on a pool of funds that

includes both titles IV–B and IV–E. For

these reasons, we did not tailor the

CFSR specifically to examine ICWA

requirements.

Similarly, because the child and

family service reviews are designed to

review the entire system of child and

family services, which includes both

titles IV–B and IV–E, this review

process is not designed for tribes that

receive title IV–B funding only.

Furthermore, section 1123A of the Act

directed the Department to develop a

review system for State compliance with

the State plans under titles IV–B and

IV–E of the Act. Therefore, tribes that

receive title IV–B allocations will not be

reviewed under the child and family

services review process.

Section 1355.34(d) Availability of

Review Instruments

This section states that copies of the

review instruments will be made

available to the State.

Comment: We received several

comments in response to our request for

suggestions on the most effective

method for keeping States updated on

the content of the review instruments.

One of the recommendations was to

provide States with a copy of the

instrument that will be used for the

review at least six months before the

review is conducted.

Response: We appreciate the State’

need to have as much advance exposure

as possible to the most current review

instruments. We anticipate revising the

instruments as appropriate, based on

lessons learned from ongoing reviews

and from State’ feedback to us. Given

that we expect the statewide assessment

process to take approximately six

months, we easily anticipate having

review instruments available to the

State well before the on-site portion of

the review is conducted. In addition, we

plan to post the instruments on the ACF

website (http://www.acf.dhhs.gov/

programs/cb/) in order to make the most

current version of the instruments

available at all times.

Section 1355.35 Program Improvement

Plans

This section pertains to the

development of program improvement

plans for States determined not to be in

substantial conformity with State plan

requirements, including the time frames

for submission and implementation of

the plans.

Section 1355.35(a) Mandatory

Program Improvement Plan

This section describes elements of a

program improvement plan for those

States found not to be operating in

substantial conformity.

Comment: We received comments

concerning Federal technical assistance

to States upon a finding of

nonconformity, ranging from a need to

develop the capacity for technical

assistance prior to initiating reviews to

suggesting that the need for technical

assistance is not a valid reason for

delaying penalties or the frequency of

reviews.

Response: Section 1123A of the Act

requires that States be afforded

opportunities to correct areas of

nonconformity with the use of technical

assistance prior to having penalties

withheld. While we have not regulated

this aspect of the review process, we are

committed to developing effective

sources and means for providing

technical assistance to States.

Comment: We received many

comments concerning possible conflicts

between program improvement plans

and requirements for State consent

decrees. Concerns were raised that

program improvement plans not be

required to include any action steps or

goals that are inconsistent with a State’s

consent decree. Some respondents also

requested that the provisions of a State’s

consent decree not automatically be

required to be included in a program

improvement plan.

Response: ACF is responsible for

reviewing compliance with State plan

requirements, and we must assure that

the program improvement plan

addresses applicable requirements. We

did not include any provisions in the

NPRM that would require States to

include the provisions of consent

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4043

decrees into program improvement

plans. We cannot assure that the

provisions of a State’s consent decree do

not conflict with Federal requirements.

It is the State’ responsibility to ensure

that no such conflict exists. We are

willing to work with States to minimize

such conflict within our statutory and

regulatory mandates.

Comment: We received a small

number of comments suggesting that

States determined not to be in

substantial conformity should be

penalized for ASFA violations

immediately, rather than suspending the

penalties pending implementation of a

program improvement plan. The same

comments suggested that the term

‘‘program improvement plan’’ deviates

from the ‘‘corrective action’’ language of

the statute and undermines the

enforcement role of HHS.

Response: Section 1123A(b) of the Act

requires that States be afforded the

opportunity to correct areas of

noncompliance prior to withholding

Federal funds. ASFA primarily amends

sections of the Social Security Act to

which section 1123A applies. Moreover,

ASFA did not supercede section 1123A,

nor did it amend section 1123A to

require immediate penalties for failure

to comply with the ASFA requirements.

The use of the term ‘‘program

improvement plan’’ in no way deviates

from statutory requirements since the

result is still that the State must correct

any identified areas of nonconformity

with State plan requirements. The term

‘‘program improvement plan’’

underscores the intent of the reviews to

serve as a means of assisting States to

help families and children experience

improved outcomes as a result of the

services provided by the State and

funded by the State and Federal

governments. Failure to successfully

complete a program improvement plan

will result in penalties.

Section 1355.35(b) Voluntary Program

Improvement Plan

This section sets forth the condition,

under which States found to be

operating in substantial conformity may

voluntarily develop and implement a

program improvement plan.

There were no comments on this

section and no changes have been made

to this section.

Section 1355.35(c) Approval of

Program Improvement Plans

This section sets forth the approval

process for the program improvement

plan.

Comment: With a few exceptions,

most of the comments we received on

the time frames for submitting and resubmitting program improvement plans

following reviews encouraged us to

lengthen the time frames.

Response: We recognize that the

development and revision of program

improvement plans requires

considerable effort. Given the

complexity of the issues that will be

addressed in many program

improvement plans, we are extending

the length of time for the initial

submission of the program improvement

plan by the State to ACF from 60 days

to 90 days. We are retaining the 30-day

time frame for re-submitting plans that

are not initially approved by ACF.

Given the potential consequences for

children and families of delaying efforts

to correct areas of need, we do not

believe we can further lengthen the time

frames to develop the plans.

Section 1355.35(d) Duration of

Program Improvement Plans

This section sets forth the time frame

for successful completion of provisions

in a State’s program improvement plan.

Comment: We received a number of

comments in favor of the two-year

maximum time frame for implementing

program improvement plans, with the

opportunity for a one-year extension in

certain circumstances. Some comments,

however, indicated the time period was

too long and should be shortened.

Response: We have retained this

feature in the final rule. However, not

all program improvement plans will

require two years to implement and the

specific time frame for each State’s plan

will be negotiated and agreed upon

between the State and ACF. We are

aware though, from the complex issues

being litigated or settled by a number of

States on behalf of their child welfare

systems, that some improvements will

require extensive periods of time to

implement. Systemic changes that lead

to identifiable improvements in the

outcomes for children and families

cannot always be achieved by simply

modifying a policy, creating new

tracking procedures or implementing

new standards. However, in

consideration of the comments on this

issue and those pertaining to § 1355.36

that we strengthen the certainty of a

penalty when a State fails to make

program improvements, we are making

the following changes in the rule for the

time allotted to implement program

improvement plans:

• ACF will require time frames for a

program improvement plan to be

consistent with the seriousness and

complexity of the remedies required for

any areas determined not in substantial

conformity.

• We are requiring in paragraph (d)(2)

that particularly egregious areas of

nonconformity impacting the safety of

children in the State’s responsibility

receive priority in both the content and

time frames of the program

improvement plans and must be

satisfactorily addressed in less than two

years.

• We are adding a requirement to

paragraph (d)(3) that the Secretary

approve any extensions of deadlines in

the program improvement plans and

any requests to extend the program

improvement plan by a third year. The

circumstances under which requests for

extensions would be approved are

expected to be very rare and will require

compelling documentation. Requests for

extensions must be received by ACF at

least 60 days prior to the affected

completion date.

• Finally, in paragraph (d)(4) we are

requiring that monitoring of the

implementation of the State’ program

improvement plans include quarterly

status reports by the States to ACF,

unless the State and ACF agree to less

frequent reports. These reports will

inform ACF of the State’s progress in

implementing the plan.

Section 1355.35(e) Evaluating Program

Improvement Plans.

This section describes the joint

process the State agency and ACF will

use to evaluate the program

improvement plan. This section also

describes the frequency of evaluating

progress and the terms for renegotiating

a program improvement plan.

No comments were received on this

section. Changes were made to this

section only to the extent necessary to

keep it consistent with the changes

made to the other sections of § 1355.35.

Section 1355.35(f) Integration of

Program Improvement Plans With CFSP

Planning.

This section requires that elements of

the program improvement plan be

incorporated into the goals and

objectives of the State’s CFSP and

annual reviews and progress reports

related to the CFSP.

No comments were received on this

section and no changes have been made

to the final rule.

Section 1355.36 Withholding Federal

Funds Due to Failure To Achieve

Substantial Conformity or Failure to

Successfully Complete a Program

Improvement Plan

This section sets forth the penalties

associated with a State’s failure to

operate a program in substantial

conformity; implements the statutory

4044 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

requirement to specify the methods for

withholding Federal funds for

substantial nonconformity; and

describes the amount of Federal funds

that are subject to a penalty. The

suspension of withholding during the

course of a State’s program

improvement plan, and termination of

the penalty upon successful completion

of the plan are also discussed.

Section 1355.36(a) For the Purposes of

This Section

This section defines ‘‘title IV–B

funds’’ and ‘‘title IV–E funds’’ for the

purpose of this section.

Comment: We received comments

that the regulation, rather than the

preamble, should state that the title IV–

E administrative costs to which

withholding applies does not include

funds allocated for training.

Response: In the proposed rule, we

specified that the administrative costs of

the foster care maintenance payments

program are included in the pool of

funds from which penalties will be

assessed. In the final rule, rather than

listing those title IV–E components that

are excluded from the penalty pool, we

have amended the regulatory language

to more specifically identify the

administrative costs of the foster care

maintenance payments program as the

source of title IV–E funds for the penalty

pool.

Section 1355.36(b) Determination of

the Amount of Federal Funds To Be

Withheld

This section describes the manner in

which ACF will determine the amount

of the State title IV–B and IV–E funds

to be withheld if the State is not

operating in substantial conformity.

Comment: We received many

comments in favor of the proposal that

funds not be withheld from a State if the

determination of nonconformity was

caused by the State’s correct use of

formal written statements of Federal law

or policy provided by HHS, but a few

comments objected to this provision.

Response: This is a statutory

requirement under section 1123A of the

Act. Therefore, we have not made

changes to the final rule.

Comment: We received comments

regarding the proposed requirement

that, upon finding that a State is not in

substantial conformity, funds be

withheld for the year under review and

for each succeeding year until the

State’s failure to comply is ended either

through the successful completion of a

program improvement plan or until a

subsequent full review determines the

State is operating in substantial

conformity. The commenter requested

assurance that withholding is not

unnecessarily extended because of

HHS’’ lack of capacity to assess the

completion of the plan or to conduct

another review.

Response: The rule specifies the time

frames for conducting reviews and for

the duration of program improvement

plans. Adherence to those time frames

should limit delays in determining the

status of the State’ substantial

conformity. We do not believe any

change to the regulation is necessary.

Comment: We received many

comments pertaining to the amount of

the penalties. The comments ranged

from the suggestion that the proposed

penalties are too low to the idea that

they are too high. Some respondents

expressed concern about the cumulative

effects of penalties for a variety of

Federal reviews of child welfare

programs and systems, and urged us to

consider a consolidated penalty

proposal based on a performance-based

incentive system for child welfare or a

reinvestment policy for nonconformity.

Comments on the pool of funds from

which penalties will be taken ranged

from requests to specifically limit the

pool to increasing it to include

additional funds.

Response: We have given serious

consideration to the comments on the

amount of the penalties and the pool

from which they are to be taken and

believe that a change is warranted. We

wish to promote practice improvements

through the review process, and do not

wish to use the penalty process to

prevent States from making the needed

improvements. However, we must make

clear that the failure to correct areas of

nonconformity identified in the reviews

will result in substantial financial

penalties. Therefore, we have added

sections 1355.36(b)(7) and (b)(8) to

provide a graduated penalty for

continuous nonconformity.

To strengthen our commitment to

program improvement through the

review process, we have added these

sections to the final rule that will

increase the penalty for outcomes and

systemic factors that remain in

continuous nonconformity on

successive reviews. States that continue

to remain out of substantial conformity

on successive reviews can now be

penalized up to two percent per

outcome or systemic factor at the second

full review in which the nonconformity

continues, and up to three percent per

outcome or systemic factor at the third

and subsequent full reviews in which

the nonconformity continues. We

believe the possibility of increased

withholding of funds will encourage

States to engage in active program

improvement planning and make efforts

to resolve areas of nonconformity as

early as possible.

We believe that this revised penalty

structure is in accordance with the

Social Security Act Amendments of

1994 (Pub. L. 103–342), since we are

making the amount of the penalty

commensurate with the level of

nonconformity and providing States an

opportunity to engage in corrective

action prior to withholding funds. We

tried to establish penalties in amounts

that create significant motivators for

States to improve programs while not

denying services to needy children that

are critical to their safety, permanency,

and well-being. We believe the

approach contained in these final rules

balances the issues in a manner that

promotes the overall goal of program

improvement in States.

The State’s entire title IV–B allocation

is included in the pool from which

penalties will be taken because we are

reviewing for all the programs funded

by title IV–B in the State. A portion of

the title IV–E administrative funds is

included in the pool from which

penalties will be taken, since a smaller

percentage of title IV–E requirements

are reviewed in the child and family

services reviews.

In addressing the comments that

advocated for funding reinvestment, the

statute specifically mandates

withholding Federal funds as penalties

for nonconformity, rather than

reinvesting. Also, the statutes for

various programs carry penalty

provisions that HHS cannot waive in

favor of a consolidated, performancebased incentive system in child welfare.

We recognize the commenter’

concerns that States found to be the

most egregious in their non-conformity,

based on the child and family services

reviews, may also be determined out of

conformity in other reviews, e.g., title

IV–E eligibility reviews and other

reviews that cover related issues and

requirements. Such States could be

exposed to multiple penalties in a fiscal

year. We strongly encourage States in

those situations to take full advantage of

the opportunities for technical

assistance and program improvement

planning in order to increase the

effectiveness of their programs and

improve the outcomes of children and

families served by the programs.

Section 1355.36(c) Suspension of

Withholding

This section describes the

circumstances under which ACF will

suspend the withholding of funds for

those States found not to be operating in

substantial conformance.

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4045

We did not receive comments on this

particular section and have made no

changes to the regulation.

Section 1355.36(d) Terminating the

Withholding of Funds

This section describes the

circumstances under which ACF will

terminate the withholding of State funds

related to nonconformity.

We did not receive comments on this

particular section and have made no

changes to the regulation.

Section 1355.36(e) Withholding of

Funds

This section describes the

circumstances under which ACF will

withhold funds for those States

determined not to be in substantial

conformity.

Comment: A number of commenters

suggested that we emphasize that

penalties will be enforced.

Response: As we consider the amount

of the penalty and the provisions for

withholding funds due to

nonconformity, we think that this is an

area where stronger provisions are

needed. We want to convey in the rule

our sense of urgency about the need to

implement needed improvements in

child and family services and to make

the application of penalties consistent

with that sense of urgency. As a result,

we have amended the regulatory

language at § 1355.36(e)(2) so that

proposed penalties associated with a

particular outcome or systemic area will

be imposed when the State fails to come

into substantial conformity or fails to

make the necessary progress with

respect to the statewide data indicators

by the date specified in the PIP, rather

than waiting for the completion of the

entire PIP. Some problems may only

require six months to fix, for example,

while others may require the full two

years. In this manner, if the State is

required to complete an action step in

six months, fails to do so, and the

Secretary does not approve an

extension, an immediate penalty will be

assessed for that area of nonconformity.

We also added a provision at

§ 1355.36(e)(4) that applies the

maximum withholding of funds of 42

percent of the pool to States that elect

not to engage in program improvement

planning or to otherwise correct areas

determined not to be in substantial

conformity.

Comment: There were several

alternatives suggested regarding the

basis for computing interest on penalties

and the time frame during which

interest will accrue.

Response: The Department has

established regulations with respect to

interest on withheld funds to which we

are bound.

Section 1355.37 Opportunity for

Public Inspection of Review Reports and

Materials

This section provides that States must

make certain sources of information

related to the child and family services

reviews available for public inspection.

Comment: We received several

comments requesting that States be

given flexibility in the methods of

making the review reports and materials

available for public inspection. Some

commenters suggested we take a more

prescriptive approach with respect to

this issue.

Response: Given the variance across

State systems, we think it is important

to permit States flexibility in satisfying

this requirement. While the suggestions

we received regarding ways States

should publicize information related to

the child and family services review

were excellent, they would be more

appropriately deployed through

technical assistance efforts with States

rather than requiring them through

regulation.

Comment: We received comments

requesting that ACF provide official

public notice of reviews in advance of

the reviews.

Response: We are considering options

for implementing this suggestion.

However, we do not believe it is an

appropriate issue for regulation.

Section 1355.38 Enforcement of

Section 471(a)(18) of the Act Regarding

the Removal of Barriers to Interethnic

Adoption

This section implements the

enforcement of section 471(a)(18) of the

Act which specifically prohibits the

denial of the opportunity to any person

to become an adoptive or a foster parent,

or the delay or denial of the placement

of a child in an adoptive or foster family

home on the basis of the race, color, or

national origin of the child or of the

adoptive or foster parent. In addition to

the specific comments on § 1355.38, we

received a number of general comments

and requests related to the statutory

language itself at section 471(a)(18) of

the Act.

Many commenters requested that the

final rule include a section on what

constitutes a delay or denial of a child’s

adoptive or foster care placement and

when race, color, or national origin can

be used in child placement decisions.

Several commenters also requested that

the final rule include a discussion of

good social work practice and define

‘‘best interest of the child’’ as it relates

to section 471(a)(18) of the Act. A large

number of commenters also requested

that the final rule include language that

stated that compliance with section

471(a)(19) (which allows the State to

give preference to a relative over a nonrelated caregiver) and section 422(b)(9)

(which requires the State to make

diligent efforts to recruit potential foster

and adoptive families that reflect the

ethnic and racial diversity of children

needing an adoptive or foster home)

would not be considered a violation of

section 471(a)(18) of the Act.

Also, many commenters believed the

tone of the section to be adversarial and

requested that the section be revised to

mirror the partnership approach used in

the child and family services review. A

few commenters believed the

enforcement of section 471(a)(18) of the

Act is too heavily focused on the rights

of adults rather than the needs of the

child. Additionally, a few commenters

were concerned that vigorous

enforcement of section 471(a)(18) of the

Act may have a negative effect on the

quality of services available to children.

In contrast to these comments, one

commenter voiced concern that

§ 1355.38 did not adequately enforce

section 471(a)(18) of the Act. The

commenter believed that additional

enforcement mechanisms and

administrative authority should be

included in the final rule.

The regulatory language in § 1355.38

closely follows the statutory language

and represents our commitment to

diligently enforce these provisions of

law. We have made only limited

revisions to this portion of the

regulation in response to comments, as

we believe that enforcement of section

471(a)(18) of the Act is clearly defined

by the statute. We would like to note

that the statutory language guiding this

section is very different from that

underpinning the child and family

services reviews, and it is this

distinction that accounts for the

difference in the approaches taken.

The request for guidance on what

constitutes a delay or denial of a child’s

adoptive or foster care placement and

when race, color, or national origin can

be used in child placement decisions; a

discussion section on good social work

practice; and the inclusion of a

definition of ‘‘best interest of the child’’

as it relates to section 471(a)(18) of the

Act all represent practice level issues.

Practice level issues are more

appropriately addressed through

technical assistance rather than

regulation. Also, the determination of

delay or denial in foster care or

adoption is based on the facts of the

specific case. Thus, we did not include

4046 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

any additional guidance in the final

rule.

We also did not include qualifying

statements regarding relative preference

and/or diligent recruitment in the final

rule. The activities regulated in this

final rule are procedural directives for

implementation of financial sanctions.

Thus, we do not intend to cite all the

activities which may or may not violate

section 471(a)(18) of the Act. Given the

number of comments received, we are

providing the following discussion on

relative preference and diligent

recruitment as they relate to section

471(a)(18) of the Act:

• Section 471(a)(19) of the Act allows

the State to give preference to an adult

relative over a nonrelated caregiver,

when placing a child for adoption or in

foster care provided that the relative

caregiver meets all relevant child

protection standards. Relative

preference recognizes the importance of

maintaining biological relationships.

Prioritizing biological ties is not a form

of race preference; rather it is an

acknowledgment of the significance of

these ties. Relatives come under the

same scrutiny as nonrelatives and must

meet the same Federal title IV–E

requirements to become foster and/or

adoptive parents. In all circumstances,

the best interests of the child must

determine a placement decision. A

State’s appropriate use of the relative

placement preference does not

constitute a violation of section

471(a)(18) of the Act.

• Section 422(b)(9) of the Act requires

the State to make diligent efforts to

recruit potential foster and adoptive

families that reflect the ethnic and racial

diversity of children in the State

needing an adoptive or foster home.

Diligent recruitment activities are

necessary to ensure that all qualified

members of a community, who may be

excluded from or reluctant to request

services, have the opportunity to

become a foster or adoptive parent.

Diligent recruitment can provide a

broad pool of placement resources for

those children waiting for foster or

adoptive homes. A State’s general

diligent recruitment activities do not

constitute a violation of section

471(a)(18) of the Act. General diligent

recruitment activities should not

discriminate on the basis of race, color

or national origin by excluding families

who are not targeted for services and

denying them the opportunity to be a

part of the pool of available families for

children of different backgrounds.

• The purpose of the Multiethnic

Placement Act of 1994 (MEPA) was

threefold: (1) To decrease the length of

time a child waits to be adopted; (2) to

prevent discrimination in foster care

and adoption; and (3) to promote the

recruitment of ethnic and minority

families that reflect the children in the

public child welfare system. We do not

interpret any of these purposes to be

mutually exclusive. In the Removal of

Barriers to Interethnic Adoption (IEP)

provisions, which amended MEPA,

Congress further clarified that race,

color, or national origin should not be

routinely considered in foster care and

adoption placements. The IEP also

contained enforcement provisions. The

IEP did not change the recruitment

provision contained at section 422(b)(9)

of the Act.

We recommend that the State or

entity review Federal policy guidance

already issued on the MEPA, as

amended by IEP (found at http://

www.acf.dhhs.gov/programs/cb/).

Additionally, both the Office of Civil

Rights (OCR) and ACF Regional Offices

stand ready to provide guidance to any

State with a specific policy question.

Rather than attempting to identify the

multiple situations which may lead to a

violation of section 471(a)(18) of the

Act, we have found that providing

technical assistance to specific State

questions is most useful. Technical

assistance is available through the ACF

and OCR regional offices, as well as

through the federally funded national

resource centers. Periodically the

Department will review the issues

raised to determine the need for

additional guidance.

Specific questions and comments are

addressed in the following paragraphs.

Section 1355.38(a) Determination

That a Violation Has Occurred in the

Absence of a Court Finding

This section sets forth the

requirements for determining a violation

of section 471(a)(18) of the Act during

the course of a child and family services

review, the filing of a complaint, or

some other mechanism.

Comment: One commenter requested

clarification of the term ‘‘entity in the

State’’ as used in section 471(a)(18) of

the Act, specifically if it includes

private agencies. Another commenter

inquired about the application of

section 471(a)(18) of the Act to court

findings and if ACF has the authority to

sanction the court as an ‘‘entity.’’

Response: We have added a definition

for ‘‘entity’’ in § 1355.20 in response to

this comment. According to the statute

any entity in a State that receives title

IV–E funds must comply with section

471(a)(18) of the Act. We define the

term ‘‘entity’’ to include private

agencies. A State court is not an

‘‘entity,’’ for purposes of this provision,

to the extent that it issues decisions or

opinions, or performs other judicial

functions. If, on the other hand, an

administrative arm of a State court

carries out title IV–E administrative

functions pursuant to a contract with

the State agency, then it is an ‘‘entity’’

for these narrow purposes. If the private

agency, an administrative arm of the

court, or any other entity is found not

to be in compliance with section

471(a)(18) of the Act, ACF has the

authority to collect all of the title IV–E

funds received by the entity for the

quarter the violation occurred.

Comment: Several commenters

requested that the final rule contain the

‘‘HHS criteria’’ that ACF will use to

determine if a violation of section

471(a)(18) of the Act has occurred.

Response: HHS has not developed any

specific ‘‘criteria’’ for determining if a

violation of section 471(a)(18) of the Act

has occurred. HHS will determine on a

case-by-case basis whether the State has

delayed or denied a child’s adoptive or

foster care placement or denied a person

the opportunity to become an adoptive

or foster parent based on race, color, or

national origin. It is impossible to define

every situation and circumstance that

would result in a civil rights violation.

Thus, the regional office will review the

specific facts of each case to determine

if a State or entity is in violation of

section 471(a)(18) or if a policy or

practice is consistent with previously

issued guidance. No change has been

made to the final rule as a result of this

comment.

Comment: One commenter requested

that the final rule provide guidance on

how a complaint from a prospective

foster or adoptive parent who is not

selected for a specific placement and is

of a different race, color, or national

origin of the child to be placed, will be

handled (i.e., the roles of all parties

involved, if the State will have an

opportunity to respond to the allegation,

etc.).

Response: We have not defined

specific procedures for the

determination of a violation, or the

procedures for handling allegations of a

violation in regulation, as we expect

that these determinations will be made

on a case-by-case basis and rely on the

specific facts of each situation.

Comment: Many commenters

requested that the final rule detail the

contents of the notification letter that

ACF will provide to the State found to

be in violation of section of 471(a)(18)

of the Act and suggested that the letter

include specific information on the

roles and responsibilities of HHS and

the State.

Response: We intend to draw on this

suggestion, and others like it, in

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4047

preparing the internal agency

procedures that will be used to

investigate and respond to a violation of

section 471(a)(18) of the Act. However,

we believe this level of specificity is

inappropriate for regulation. No change

has been made to the final rule.

Comment: Several commenters

objected to the phrase ‘‘ * * * if

applied, would likely result in a

violation against a person * * * ’’ in

paragraph (a)(2)(iii). The commenters

stated that this ambiguous phrase may

result in a violation being based on a

hypothetical situation.

Response: We concur with the

commenters that the phrase ‘‘ * * *

would likely result * * * ’’ may appear

ambiguous. We have reworded

paragraph (a)(2)(iii) to clarify that a

violation will be based on policies,

procedures, practices, regulations, and

laws that on their face violate the law.

Section 1355.38(b) Corrective Action

and Penalties for Violations With

Respect to a Person or Based on a Court

Finding

This section sets forth the

requirements for corrective action and

penalties for a violation of section

471(a)(18) of the Act with respect to a

person or based on a court finding.

Comment: One commenter requested

that we define the term ‘‘court finding,’’

to clarify what court is being referred to

in this section as it relates to the

assessment of penalties for a violation of

section 471(a)(18) of the Act.

Response: While we do not intend to

define the term ‘‘court finding,’’ we

would like to clarify that any Federal or

State court’s finding of a violation of

section 471(a)(18) of the Act may result

in the assessment of a penalty by ACF.

Under the statute, an individual who

believes that he or she has been

aggrieved by a section 471(a)(18)

violation, may bring action in the

United States District Court. The final

rule will not be this specific because the

District Court finding can be appealed to

a higher court; thus a court other than

the United States District Court may

ultimately determine that a 471(a)(18)

violation has taken place.

Comment: Several commenters

opposed the immediate assessment of

the penalty for a violation with respect

to a person, suggesting that there should

be an opportunity for corrective action

beforehand.

Response: We believe that the statute

is clear at 474(d)(1) that there is to be

an immediate penalty, without

corrective action beforehand, where

there is a violation with respect to a

person. This is consistent with the

Department’s commitment to aggressive

enforcement of section 471(a)(18) of the

Act. Thus, no change has been made to

the final rule as a result of these

comments.

Comment: Several commenters

opposed the immediate assessment of a

penalty for a violation based on a court

finding, suggesting that ACF/OCR

investigations be the sole basis for

assessing a penalty.

Response: Section 474(d)(3) of the Act

affords an individual who is aggrieved

by a violation of section 471(a)(18) of

the Act the right to file a lawsuit against

the State or entity. In accordance with

the statute, a violation with respect to

an individual requires an immediate

penalty if the court finds that the State

has violated section 471(a)(18) of the

Act. Thus, we do not intend to

investigate a case where the court has

already rendered a finding. If a State, an

entity, or an individual is dissatisfied

with the court’s finding, the appropriate

action of recourse is to appeal through

the judicial system. No change has been

made to the final rule as a result of these

comments.

Comment: Several commenters

expressed concern about dual penalties

(from both the Court and ACF) that

States may incur based on a court

finding of a violation of section

471(a)(18) of the Act.

Response: We do not believe that dual

penalties will result from the situation

as described. The statute allows for an

individual aggrieved by a violation of

section 471(a)(18) of the Act the right to

bring action and seek relief from the

State. If the court finds that the

individual has been aggrieved by the

State, it is possible that monetary

compensation may be awarded to the

individual as relief for the State’s action.

This monetary award is not a penalty.

Penalties by ACF are required by the

statute when the State violates the law.

No change has been made to the final

rule as a result of these comments.

Comment: A few commenters

recommended that the final rule require

the State to notify ACF of a court’s

finding that the State is in violation of

section 471(a)(18) of the Act, since ACF

will not be a party to the proceedings.

Response: We agree with the

commenter’ recommendation and have

revised the final rule to require a State

found by a court to be in violation of

section 471(a)(18) to notify ACF. A new

paragraph, § 1355.38(b)(4), requires the

State to notify the appropriate ACF

regional office of the violation within 30

days from date of entry of the final

judgement once all appeals have been

exhausted, declined, or the appeal

period has expired.

Section 1355.38(c) Corrective Action

for Violations Resulting From a State’s

Statute, Regulation, Policy, Procedure,

or Practice

This section sets forth the

requirements for corrective action when

a State’s statute, regulation, policy,

procedure, or practice is found to be in

violation of section 471(a)(18) of the

Act.

Comment: We received several

comments relating to the time period

provided for corrective action. One

commenter stated that six months for

corrective action is too short, while

another commenter stated that six

months is excessively long.

Response: The statute specifies at

474(d)(1) of the Act, that the time period

to implement a corrective action plan

for section 471(a)(18) of the Act must

not exceed six months. We have made

a change to the regulation to require a

State to complete a corrective action

plan within six months. All corrective

action plans will not require six months

to complete. ACF has the authority to

establish a shorter time frame for the

completion of the corrective action plan

consistent with the seriousness,

complexity, and the remedy required by

the violation.

Comment: Another commenter

recommended that the time limit for

ACF to approve or disapprove a State’s

corrective action plan be defined in the

final rule to avoid a State’s being

penalized due to delayed action by ACF.

Response: ACF recognizes the need

for approving corrective action plans in

a timely manner but did not include the

commenter’s recommendation in the

final rule. To respond to the

commenter’s concern we have revised

§ 1355.38(c)(1). The State will have 30

days after receipt of written notification

of noncompliance with section

471(a)(18) of the Act, to develop a

corrective action plan and submit it to

ACF for approval. Once the corrective

action plan is approved by ACF, the

State will have six months to complete

the corrective action and come into

compliance before a penalty is applied.

The calculation for the six months will

begin after ACF has approved the plan.

A State’s completion of a corrective

action plan within the specified time

will not, in itself, prevent the

assessment of a penalty. The completed

corrective action plan must result in the

State coming into compliance with

section 471(a)(18) of the Act to avoid

incurring a penalty. We have revised the

final rule to clarify this point at

§ 1355.38(c)(1) and also at (g)(1)–(4).

Additionally, we have revised

§ 1355.38(c)(3) to provide the State with

4048 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

an additional 30 days to revise and

resubmit the corrective action plan in

the event the State’s corrective action

plan is not approved by ACF. If the

State fails to resubmit the corrective

action plan within the 30 days, a

penalty will be assessed.

Comment: One commenter was

concerned that §§ 1355.38(c)(1) and

(g)(3) were inconsistent. The commenter

believed paragraph (c)(1) provides a

State with six months before assessing

a penalty while paragraph (g)(3)

imposes a reduction beginning with the

quarter that the State received

notification.

Response: Paragraphs (c)(1) and (g)(3)

are not inconsistent. Paragraph (c)(1)

provides the State with six months to

complete corrective action before a

penalty is assessed. Paragraph (g)(3)

defines the starting point for assessing

the penalty in the event a State declines

to participate in corrective action or

fails to successfully complete the

corrective action plan within six

months.

Comment: One commenter disagreed

with the use of the word ‘‘implement,’’

in original paragraph (c)(4), to mean

‘‘begin’’ and stated that ‘‘implement’’

means to ‘‘complete.’’

Response: In light of the addition of

up to a 60-day period for the State to

develop the corrective action plan, we

have revised the definition of

‘‘implement’’ in the final rule to mean

‘‘complete.’’ Paragraphs (c)(4) and (5)

were deleted and paragraph (c)(1) now

reads that a State in violation of section

471(a)(18) of the Act will have six

months to complete corrective action

and come into compliance once its plan

has been approved before a penalty is

assessed.

Comment: One commenter requested

that the State be allowed to make

changes to the corrective action plan

without incurring additional penalties.

Response: As written, the regulation

does not preclude the State from making

changes to the corrective action plan.

The changes made to the corrective

action plan must be approved by ACF

and completed within the original sixmonth time frame.

Section 1355.38(d) Contents of a

Corrective Action Plan

This section describes the contents of

a corrective action plan.

We did not receive comments related

to this section but have revised this

section to coincide with changes made

in § 1355.38(c). Paragraph (d)(4) defines

the completion date for the corrective

action and deletes the option to extend

the corrective action completion date.

Section 1355.38(e) Evaluation of

Corrective Action Plans

This section describes the evaluative

steps that ACF will take to review the

implementation of corrective action

plans submitted by States who have

been found to be in violation of section

471(a)(18) of the Act.

We received no comments related to

this section but revised this section to

coincide with changes made to

§ 1355.38(c) and (d). This section now

states that ACF will evaluate the

corrective action plan within 30 days of

the six-month completion date.

Section 1355.38(f) Funds To Be

Withheld

This section defines the term ‘‘title

IV–E funds’’ in the context of this

section.

Comment: One commenter requested

clarification on the use of the word

‘‘claims.’’

Response: In describing the penalty

for a violation of section 471(a)(18) of

the Act, the statute at 474(d)(1) uses the

phrase, ‘‘otherwise payable to the State

under this part’’ in reference to the

amount of title IV–E funds to be

reduced. We interpret this to mean the

Federal share of allowable title IV–E

costs paid or advanced to the State and

have revised § 1355.38(f) in the final

rule to reflect this interpretation. The

reader should note that it does not

matter whether the costs are reported as

a current expenditure or as an

adjustment; all title IV–E funds

expended during the quarter(s) the State

is determined to be in violation of

section 471(a)(18) of the Act will be

subject to a penalty.

Section 1355.38(g) Reduction of Title

IV–E Funds

This section describes the

circumstances under which a State’s

title IV–E funds will be reduced by ACF

due to a violation of section 471(a)(18)

of the Act.

Comment: Several commenters

expressed concern about ACF’s

authority to continue a penalty into the

next fiscal year.

Response: The regulation does not

provide for a continuation of a penalty

into the subsequent fiscal year if a State

fails to come into compliance. ACF may

and has the authority to initiate a full or

partial review in a subsequent fiscal

year for those States that are in violation

of section 471(a)(18) of the Act and have

failed to complete corrective action to

come into compliance. Thus, any

statute, regulation, policy, procedure or

practice that remains uncorrected from

a previous fiscal year may result in a

new finding of a violation of

noncompliance with section 471(a)(18)

of the Act. We will not disregard an

uncorrected violation simply because a

fiscal year has ended. It is part of the

Department’s oversight responsibility to

ensure that all States are in compliance

with section 471(a)(18) of the Act at any

given time and any uncorrected

violation may be subject to a review at

the beginning of a new fiscal year.

Comment: One commenter is

concerned that the use of fiscal

sanctions for every quarter that the State

has not completed a corrective action

plan is overly harsh.

Response: We are unable to modify

the penalty structure as it is defined in

law. The statute clearly states that

penalties are to be applied quarterly

when a State is in violation of section

471(a)(18) or has not successfully

implemented a corrective action plan;

and that the penalty will be applied

until the State achieves compliance or

until the end of the fiscal year.

Comment: Several commenters

requested that the final rule permit the

suspension of the penalty while the

State appeals a court finding of a

violation of section 471(a)(18) of the

Act.

Response: We concur and have

included such language in the final rule

at paragraph (g)(6). This clarifies that

penalties will not be imposed until a

final determination regarding a violation

is made through the judicial appeal

process.

Section 1355.38(h) Determination of

the Amount of Reduction of Federal

Funds

This section describes the specific

amount a State’s title IV–E funds will be

reduced by ACF in the event of a section

471(a)(18) violation and provides

instructions related to interest liability.

Comment: One commenter requested

that the final rule clarify that the

calculation of the penalty is quarterly.

Response: We have revised paragraph

(h) to clarify that the penalty is

calculated and assessed quarterly.

Comment: One commenter believed

that five percent is the penalty and not

a cap.

Response: Five percent is both a

penalty and a cap. The statute at section

474(d)(1) of the Act requires that the

third or subsequent violation(s) in a

fiscal year will result in a five percent

reduction of title IV–E funds payable to

the State in that quarter. The statute also

sets an annual cap whereby no State’s

fiscal year payment will be reduced by

more than 5 percent.

Comment: One commenter requested

clarification on the State agency’s

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4049

responsibility for interest if an entity

such as a private agency violates section

471(a)(18) of the Act.

Response: The State agency or entity

that has been found to be in violation is

responsible for the interest. No change

has been made to the final rule.

Section 1355.39 Administrative and

Judicial Review

This section provides States found not

to be in substantial conformity with

titles IV–B and IV–E State plan

requirements, or in violation of section

471(a)(18) of the Act, with an

opportunity to appeal.

Comment: One commenter

recommended that the final rule provide

the State with the right to immediately

appeal a determination of substantial

nonconformity or require ACF to

provide the State with a detailed report

of the reasons underlying the finding

prior to the development and

implementation of a program

improvement plan.

Response: A final determination

regarding State nonconformity is not

made until the State has had an

opportunity for corrective action.

Therefore, it would be premature to

provide for an appeal to the DAB prior

to that time. However, we will provide

written notification, within 30 days

following the child and family services

review, that the State is, or is not,

operating in substantial conformity.

While we understand the commenter’s

desire to have a detailed report of the

review findings, specifying the details of

the notification letter is not appropriate

for regulation. Additionally, we have

designed the review process to be less

dependent upon a lengthy report. The

team will provide the State with verbal

information on the findings of the

review throughout the on-site review

and subsequent exit conference. The

notification letter will confirm findings

of the onsite review, which builds on

information initially reported in the

State prepared statewide assessment,

and will include sufficient information

for a State to know where it is operating

in or out of conformity. No change has

been made to the final rule.

Comment: One commenter

recommended that the final rule require

ACF to assume the responsibility for

any costs related to the development

and implementation of the program

improvement plan in the event ACF

determines that the State is not

operating in substantial conformity but

a subsequent DAB decision finds that

the State is operating in substantial

conformity.

Response: We do not concur with the

commenter’s proposal that ACF should

assume full costs for the program

improvement plans in the event the

DAB overturns an ACF finding of

substantial nonconformity. The State

may claim FFP for appropriate program

improvement plan activities under title

IV–E.

Comment: One commenter stated that

if private agencies are to be sanctioned

for a violation as ‘‘entities in the State,’’

they should have an opportunity for

appeal.

Response: We concur with the

commenter and have revised the final

rule to allow such entities the

opportunity to appeal to the DAB.

Section 1355.40 Foster Care and

Adoption Data Collection

We have made a technical

amendment to conform with new

Federal requirements related to the

collection of race and ethnicity data. On

October 30, 1997, the Office of

Management and Budget (OMB)

published a notice in the Federal

Register (62 FR 58781–58790)

announcing its decision to revise

Statistical Policy Directive No. 15, The

Race and Ethnic Standards for Federal

Statistics and Administrative Reporting.

OMB’s Statistical Policy standards

provide a common language to promote

uniformity and comparability of data on

race and ethnicity for the population

groups specified in the directive. The

Department is required to collect

information in accordance with the

directive’s standards.

The revised standards have five

categories for data on race: American

Indian or Alaska Native, Asian, Black or

African American, Native Hawaiian or

Other Pacific Islander, and White. The

new standards allow individuals of

mixed race to identify with more than

one race. Also, OMB revised the two

categories for data on ethnicity to:

‘‘Hispanic or Latino’’ and ‘‘Not Hispanic

or Latino.’’ The AFCARS currently

collects information on the race and

ethnicity of children in foster care and

those who have been adopted, foster

parents, and adoptive parents. However,

we must change the definitions of the

racial classifications, revise ethnicity

classifications, and allow multiple-race

identification in AFCARS race data

elements to comply with the OMB

Directive. In ACYF–CB–PI–99–01

(issued January 27, 1999) we informed

States of the required changes to the

AFCARS collection of race data as a

result of a change in OMB policy. States

were directed to change race and

ethnicity collections for the report

period beginning October 1, 1999. Since

these changes are already underway in

the States and a matter of HHS policy,

we are codifying these changes as

technical amendments in this final rule.

Section 1355.40(a) Scope of the Data

Collection System

We removed a reference to the former

protections in section 427 of the Act in

paragraph (a)(2) and replaced it with the

correct citation. Congress repealed

section 427 of the Act with Public Law

103–432, effective October 1, 1997. The

protections previously included in

section 427 of the Act are now included

as assurances in section 422(b)(10) of

the Act.

Appendix A to Part 1355

In Appendix A to part 1355, Section

I, we included the new race and

ethnicity classifications consistent with

OMB’s Statistical Policy Directive

Number 15. All of the foster care race

elements (elements II.C.1, IX.C.1 and

IX.C.3) are listed in the element chart

alphabetically as they are in the

directive.

In section II to appendix A, we

removed the obsolete reference to the

section 427 protections and replaced it

with the correct statutory reference. In

Section II, II.C.1, we added new race

definitions and made an editorial

change regarding how a person’s race

and ethnicity is determined. Consistent

with the OMB Directive, we make this

change to emphasize that selfidentification or self-reporting is the

preferred method of gathering

information on race or ethnicity except

where this is not practical. Obviously,

in the case of young children, racial or

ethnic self-identification is not practical

and is therefore primarily determined

by the parent. We recommend that

caseworkers ask children (if age

appropriate) and adults to identify all

the racial categories that apply.

In ACYF–CB–PI–99–01 we provided

policy guidance on the use of the

category ‘‘unable to determine’’ as it

applies to situations where a parent or

other adult caretaker is unwilling to

identify their race or that of the child.

We have included that clarification in

this regulation. If a parent or caretaker

is unwilling to identify a race, then the

State should classify the information as

‘‘unable to determine,’’ indicating that

the State attempted to gather the

information but was unable to do so.

This will provide for better data as the

State will not overstate the amount of

missing data for this element and

jeopardize conformity with the missing

data standards. Finally, we amend the

way that a State must code the data for

the race categories to properly identify

a single race, multiple race or ‘‘unable

to determine’’ response.

4050 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

We have made changes similar to

those above in Section II, II.C.2, which

define the Hispanic and Latino ethnicity

classifications. In addition, we have

deleted the last sentence of the

paragraph that required the State to

indicate that the child is not of Hispanic

ethnicity only when the origin of the

child is clear. We believe that this

distinction is unnecessary and

inconsistent with our approach to other

regulatory definitions on race and

ethnicity.

In Section II, IX.C, we now crossreference only the definitions of race

and ethnicity classifications used in the

section on child demographics (II.C).

The existing regulations also crossreference the definition of ‘‘unable to

determine,’’ however, this definition as

stated is not applicable to adults. For

adults, the code ‘‘f. unable to

determine,’’ must be used only in

circumstances where the parent is

unwilling to identify his or her race or

ethnicity. During AFCARS pilot

reviews, we found that States were

inappropriately coding missing

information as ‘‘unable to determine.’’

When data is missing or not known

because the State has not asked an

individual for information on race or

ethnicity, the response must be left

blank.

Finally, in Section II, we have deleted

paragraph IX.D on coding ethnicity data.

This paragraph incorrectly crossreferenced the section on disabilities.

We have incorporated the relevant

portions of the instruction in paragraph

IX.C.

Appendix B to Part 1355

In appendix B to part 1355, we have

made the same amendments to the race

and ethnicity adoption data elements as

those listed above for the foster care

elements.

Appendix D to Part 1355

In appendix D to part 1355, we

amended the race and ethnicity

elements in the foster care and adoption

record layouts consistent with the OMB

directive. We amended the coding notes

that precede each record layout table to

clarify that the race classifications are

now elements where more than one

response is allowed.

We also made a technical change to

the foster care and adoption record

layouts to accommodate the year 2000

century date change. Prior to October

1996, States were required by regulation

to report date information in decade

format. In response to the year 2000 and

the data issues associated with the

processing of date information, we

issued an information memorandum,

ACYF–IM–CB–96–08 (April 17, 1996),

requiring States to report in century date

format. We are now making the requisite

technical change to the regulation.

Appendix E to Part 1355

In appendix E to part 1355, we made

several technical edits to replace all

references to ‘‘Hispanic origin’’ with

‘‘Hispanic or Latino ethnicity’’ in order

to be consistent with the OMB directive

(see element charts and Section

B.2.a.(8)). In section A.2.a.(18) for foster

care and section B.2.a.(9) for adoption,

we have added an internal consistency

validation for race elements. Internal

consistency validations evaluate the

logical relationship between data

elements in a record. We also revised

cross-references to the internal

consistency checks throughout the

Appendix to accommodate the addition.

Part 1356—Requirements Applicable to

Title IV–E

Section 1356.20 State Plan Document

and Submission Requirements

Section 1356.20(e)(4) State Plan

Document and Submission

Requirements

This section implements the authority

of ACF Regional HUB Directors and

Administrators and the Commissioner

of ACYF to approve State plans and

amendments that govern State programs

under section 471 of the Act.

No comments were received on this

section and no changes were made in

the final rule.

Section 1356.21 Foster Care

Maintenance Payments Program

Implementation Requirements

In this section, we clarified existing

policies and set forth additional foster

care maintenance requirements which

have a direct impact on determining the

eligibility of children in the title IV–E

foster care program.

Comment: A few commenters were

concerned that § 1356.21 of the

regulation was not sensitive to and

appeared inconsistent with the Indian

Child Welfare Act (ICWA).

Response: The purpose of the

regulation is to implement the title IV–

E foster care program, not the

requirements of the ICWA. We want to

be clear that nothing in these

regulations supersedes the requirements

of the Indian Child Welfare Act. States

must continue to comply fully with

ICWA.

Comment: We received a large

number of general comments expressing

disappointment that following the

outcome orientation of the child and

family services review that § 1356.21 of

the regulation reverts to a process

orientation.

Response: We agree, this section of

the regulation is process-oriented. The

purpose of this section is to regulate

title IV–E eligibility criteria and

procedural requirements, which are

inherently process-oriented.

Comment: One commenter suggested

we provide language throughout this

section that distinguishes title IV–E

eligibility criteria from State plan

requirements.

Response: Title IV–E eligibility

criteria are distinguished from State

plan requirements in § 1356.21. We

have amended § 1356.71(f) and (g) to

clearly enumerate the title IV–E

eligibility criteria. However, we agree

that we may have caused some

confusion by addressing a particular

State plan requirement in the reasonable

efforts section relating to permanency

hearings that must be held within 30

days of a judicial determination that

reasonable efforts to reunify a child and

family are not required. Also, the

leading sentences to § 1356.21(h)

suggest that the permanency hearing is

an eligibility criterion. We have deleted

language that could cause any confusion

between title IV–E eligibility criteria

and State plan requirements.

Comment: Some commenters

recommended that the regulations

include a new section that describes

tribal authority and responsibilities in

satisfying title IV–E requirements when

tribes and States enter into title IV–E

agreements. One commenter also

requested that the suggested section

include a provision that permits the

Secretary to waive title IV–E provisions

with respect to any title IV–E agreement

between an Indian tribe and a State. The

commenter believed such a provision

would make it easier for State-tribal

agreements to be established.

Response: The regulations are written

from the perspective of the State agency

because the statute makes the State

child welfare agency ultimately

responsible for the proper

administration of the title IV–E program.

Section 472(a)(2) of the Act permits

other public agencies to have

responsibility for placement and care of

children in foster care under an

agreement with the State child welfare

agency. The State and the public entity

with which it is entering into an

agreement, whether it is a tribe, juvenile

justice agency, etc., must determine

between themselves how roles and

responsibilities for meeting title IV–E

requirements will be shared. The

requirements of the title IV–E program

do not, and cannot, change merely

because a public entity other than the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4051

State child welfare agency has

responsibility for placement and care of

certain children in foster care. Tribes

and other public entities with which the

State agency has entered into

agreements do, however, have the

latitude to develop their own

procedures for satisfying title IV–E

requirements as long as the State child

welfare agency’s ultimate responsibility

for compliance is assured. We have not

made any changes to the regulation

based on these comments.

Section 1356.21(a) Statutory and

Regulatory Requirements of the Federal

Foster Care Program

This section introduces the title IV–E

implementation requirements for

eligibility of Federal financial

participation (FFP) under the title IV–E

foster care program.

Comment: One commenter observed

that §§ 1356.22 and 1356.30 should be

included in the references in this

paragraph.

Response: We concur and have

amended the paragraph accordingly.

Section 1356.21(b) Reasonable Efforts

This section sets forth the ASFA

requirement that the State hold the

child’s health and safety as its

paramount concern when making

reasonable efforts.

Comment: We received several

suggestions to include, in the regulation,

the preamble language at page 50073 of

the NPRM which describes the threefold

purpose of the reasonable efforts

requirements. The basis for this

suggestion was a concern that the focus

of the regulation was on the steps the

State agency must take in order to

access Federal funds rather than the

intent of the statute. The commenters

believe the inclusion of this language in

the regulation will provide an outcome

oriented balance to the process

orientation of this section of the

regulation.

Response: We concur and have

amended § 1356.21(b) accordingly.

Comment: Many commenters

requested that we delete the preamble

language at page 50073 of the NPRM

that provides examples of questions the

courts should consider in determining

whether the agency satisfied the

reasonable efforts requirements. These

commenters are concerned that

examples provided in regulation or

policy guidance become de facto policy.

Conversely, we received many

comments not only supporting the list

in question, but encouraging us to

include it in the text of the regulation

and expand it to include more guidance

on reasonable efforts to make and

finalize permanent placements.

Response: We intend for examples to

set parameters for the appropriate use of

the flexibility that is inherent in some

title IV–E provisions. We believe the

examples will be helpful to State child

welfare agencies in preparing for

hearings at which reasonable efforts

determinations are to be made. We do,

however, think the list is more

appropriate as policy guidance rather

than regulatory text and therefore, did

not change the regulation to include the

examples.

Comment: One commenter suggested

that we include regulatory language

which places the burden of proof in

satisfying the reasonable efforts

requirements on the State agency.

Response: We believe that the very

nature of the reasonable efforts

determination indicates the burden of

proof is on the State agency. Section

472(a)(1) of the Act requires that the

court determine whether the State

agency made reasonable efforts in

accordance with section 471(a)(15) of

the Act. We believe that the suggested

change is unnecessary, therefore, and

have made no changes to the regulation.

Comment: We received a few

comments suggesting that we have no

statutory basis for requiring a judicial

determination that the State made

reasonable efforts to prevent the child’s

removal from his/her home, to reunify

the child and family, and to make and

finalize an alternate permanent

placement when the child and family

cannot be reunited. We also received

several comments supporting the

requirement for three separate

reasonable efforts determinations but

questioning our authority to link title

IV–E funding to such determinations.

Response: The judicial determinations

are based in the statute. Section

472(a)(1) of the Act contains two

eligibility criteria. The first pertains to

the child’s removal from home. Such

removal must be based on a voluntary

placement agreement or a judicial

determination that it was contrary to the

child’s welfare to remain at home. The

second eligibility criterion requires a

judicial determination that the State

made reasonable efforts of the type

described in section 471(a)(15) of the

Act. Section 471(a)(15) of the Act

requires the State agency to make

reasonable efforts to prevent the child’s

removal from his/her home, to reunify

the child and family, and to make and

finalize an alternate permanent

placement when the child and family

cannot be reunited. The requirements

for judicial determinations regarding

reasonable efforts are title IV–E

eligibility criteria. If the eligibility

criteria are not satisfied, the child is not

eligible for title IV–E funding.

Comment: One commenter suggested

we permit a 60-day extension to the

time frames prescribed in the regulation

for obtaining judicial determinations

regarding reasonable efforts to address

the problem of continuances.

Response: We are sympathetic to the

issue of continuances. However, we

believe that the need for timely judicial

determinations is more appropriately

addressed by building capacity through

training judges and attorneys rather than

extending the time frames for satisfying

title IV–E eligibility criteria. Therefore,

we have not modified the regulation in

response to this comment.

Comment: We received a few

comments observing that a sentence in

the preamble for this section mistakenly

read, ‘‘Congress provided a list of

circumstances in which reasonable

efforts are required.’’

Response: Yes, this was a misprint.

The sentence should have read,

‘‘Congress provided a list of

circumstances in which reasonable

efforts are not required (emphasis

added).’’

Section 1356.21(b)(1) Judicial

Determination of Reasonable Efforts To

Prevent a Child’s Removal From the

Home

This section sets forth the statutory

requirement of a judicial determination

that reasonable efforts were made to

prevent removal of a child from his or

her home.

Comment: Numerous commenters

informed us that the distinction we

made between emergency and nonemergency removals was not reflective

of State practice.

Response: We concur that the

distinction was not useful. We have

removed the distinction and

consolidated the requirements for

reasonable efforts to prevent removals

into a single paragraph, (b)(1). States

will now have up to 60 days from the

time a child is removed from the home

to obtain a judicial determination

regarding reasonable efforts to prevent

removal.

Comment: We received an

overwhelming number of comments on

the timing prescribed for obtaining

judicial determinations that the State

made reasonable efforts to prevent

removals. The proposed language

required such determinations to be

made ‘‘* * * at the first full hearing

pertaining to the removal of the child or

no later than 60 days after a child has

been removed from home, whichever is

first.’’ Commenters interpreted this

4052 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

language to preclude such

determinations from being made at an

earlier time, thus delaying title IV–E

eligibility.

Response: We did not intend to

prohibit these determinations from

being made at an earlier time and we

have amended the regulation language

in paragraph (b)(1)(i) accordingly. The

rule now requires the State agency to

obtain a judicial determination that it

either made or was not required to make

reasonable efforts to prevent a child’s

removal from home no later than 60

days from the date the child was

removed from the home.

Comment: Many commenters believed

that we were overly harsh in prohibiting

title IV–E eligibility for an entire foster

care episode if the reasonable efforts to

prevent removal requirements were not

satisfied. Some suggested that the State

be permitted to establish the child’s

eligibility when and if this requirement

is met at a later date.

Response: The requirement for the

State to make reasonable efforts to

prevent removals is a fundamental

protection under the Act and one of

several title IV–E eligibility criteria used

in establishing eligibility. From both a

practice and an eligibility perspective, it

is impossible for the State to provide

efforts to prevent the removal of a child

from home after the fact.

In terms of practice, there is a

profound effect on the child and family

once a child is removed from home,

even for a short time, that cannot be

undone. If the child is returned after

services have been delivered, or even

immediately, the State has reunified the

family, not prevented a removal.

The statute requires that title IV–E

eligibility be established at the time of

a removal. If the State does not make

reasonable efforts to prevent a removal

or fails to obtain a judicial

determination with respect to such

efforts, the child can never become

eligible for title IV–E funding for that

entire foster care episode because there

is no opportunity to establish eligibility

at a later date. Once title IV–E eligibility

is initially established, the judicial

determination regarding the reasonable

efforts the State made to finalize a

permanency plan is required to

maintain title IV–E eligibility.

Comment: A couple of commenters

stated that it was impossible to satisfy

the proposed requirements for making

reasonable efforts to prevent removals

for unaccompanied refugee minors.

Response: We have no authority to

waive title IV–E eligibility requirements

for any child or group of children. If the

State wishes to claim title IV–E funds

for unaccompanied refugee minors, then

all title IV–E eligibility criteria must be

satisfied.

Section 1356.21(b)(2) Judicial

Determination of Reasonable Efforts to

Finalize a Permanency Plan

This section (formerly § 1356.21(b)(3)

and (b)(4) of the NPRM) describes the

requirements for obtaining a judicial

determination to finalize a permanency

plan.

Comment: Most commenters

expressed confusion regarding when the

‘‘clock’’ starts for obtaining judicial

determinations that the State made

reasonable efforts to reunify the child

and family or to make and finalize an

alternate permanency plan. A few

commenters observed that often the

permanency plan may change from

reunification to an alternate

permanency plan prior to the State

obtaining a judicial determination

regarding its efforts to reunify the child

and family. These commenters

requested clarification about which

permanency plan the court must rely on

to make its determination in such

situations. A couple of commenters

suggested that we not permit States to

change the permanency plan outside a

permanency hearing or without a court

order so that the court has an

opportunity to determine if the State

agency did make reasonable efforts to

reunify the child and family before

sanctioning the change in the

permanency plan.

Response: After reviewing the

comments and the proposed

requirements, we determined that our

proposal in the NPRM with respect to

reasonable efforts to reunify a child and

family and to make and finalize

alternate permanency plans was

confusing and not responsive to actual

practice. To simplify the requirements,

we have consolidated the reasonable

efforts requirements regarding efforts to

reunify the child and family and to

make and finalize alternate permanent

placements into a single requirement

related to making reasonable efforts to

finalize a permanency plan. In new

paragraph (b)(2), we require the State to

obtain a judicial determination that it

made reasonable efforts to finalize the

permanency plan that is in effect,

regardless of what it is, within 12

months of the date the child is

considered to have entered foster care in

accordance with the definition of such

at § 1355.20. The State must obtain such

a determination every 12 months

thereafter while the child is in foster

care. Our purpose in imposing this

policy, as stated in the NPRM, is to tie

the timing for obtaining reasonable

efforts determinations regarding

permanency to the timing of the

permanency hearing because it is a

logical determination to make at such

hearings and it would ease

administrative burden.

In determining whether the State

made reasonable efforts to finalize a

permanency plan, the court’s

determination should be based on the

permanency plan that is in effect at the

time at which the agency is seeking

such a determination. We are not

requiring the State to obtain judicial

determinations on its efforts regarding

permanency plans that it has

abandoned.

We realize that obtaining reasonable

efforts determinations regarding

finalizing permanency plans every 12

months while a child is in foster care is

a significant departure from current

practice and that States will need

transition time to implement this

requirement for children who have been

in foster care for more than 12 months.

Therefore, we will not take adverse

action against States who cannot

comply with this requirement for a

period of 12 months from the effective

date of this final rule.

Finally, we think it appropriate to

permit the State agency to alter the

permanency plan outside a permanency

hearing and will not require the court to

approve such a plan before the State

agency can act on it. When a State

agency has placement and care

responsibility for a child, it is

responsible for setting and acting on the

appropriate permanency plan. We

understand that, in some States, courts

provide such active oversight during the

course of a permanency hearing that the

court actually sets the permanency plan.

That is the State’s prerogative. Federal

law does not require the courts to play

such a prescriptive role in the

permanency planning process. Section

475(5)(C) of the Act requires the court

to review the permanency plan

presented to it by the State agency.

Comment: We received several

comments objecting to the proposal that

children, for whom judicial

determinations are not made regarding

reasonable efforts to reunify and to

make and finalize alternate permanency

plans, become ineligible for title IV–E

funding until such a determination is

made.

Response: We did not amend the

regulation based on these comments

because the requirements for judicial

determinations are statutory. To be

eligible for title IV–E funding, section

472(a)(1) of the Act requires the State to

obtain a judicial determination

regarding its reasonable efforts of the

type described in section 471(a)(15) of

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4053

the Act. Section 471(a)(15) of the Act,

among other things, requires the State to

make reasonable efforts to finalize

permanency plans. If these criteria are

not satisfied, the child is ineligible for

title IV–E funding.

Comment: We received a number of

comments opposing the requirement

that judicial determinations regarding

reasonable efforts to finalize

permanency plans be made at least

every 12 months. These commenters

suggested that such determinations

should be required every six months to

be consistent with the ASFA’s focus on

expedited permanency.

Response: We agree that six-month

intervals for making determinations

regarding reasonable efforts to effect a

permanency plan may provide an

incentive for expediting permanency.

However, requiring such judicial

determinations to be made at the

interval suggested would limit the

flexibility provided at section 475(5)(B)

of the Act for holding the periodic

reviews required therein before an

administrative body rather than a court.

We cannot justify a requirement that

would limit flexibility provided by the

statute, particularly since we know it

would place a significant burden on the

courts and State agencies. Therefore, we

have made no changes to the regulation.

We believe that the six-month

periodic reviews will encourage a

timely permanency planning process.

These reviews must determine, in part:

‘‘the continuing necessity for and

appropriateness of the placement, the

extent of compliance with the case plan

* * * and to project a likely date by

which the child may be returned to and

safely maintained in the home or placed

for adoption or legal guardianship.’’

Thus, the statute already compels States

to review reasonable efforts to achieve

permanency every six months.

Comment: One commenter requested

that we amend the regulatory language

to ensure that courts oversee

reunification efforts between

unaccompanied refugee children and

the party designated as the child’s

permanent placement.

Response: The courts oversee the

State agency’s efforts to finalize

permanency plans, regardless of what

the permanency plan is or with whom

the child is to be placed. Therefore, we

do not believe we must regulate such an

assurance for a particular group of

children in foster care.

Section 1356.21(b)(3) Circumstances

in Which Reasonable Efforts Are Not

Required to Prevent a Child’s Removal

From Home or to Reunify the Child and

Family

This section (formerly § 1356.21(b)(5)

in the NPRM) describes the

circumstances in which reasonable

efforts to prevent a removal or to reunify

a child with his or her family are not

required.

Comment: Many commenters

requested additional guidance in

defining aggravated circumstances in

which reasonable efforts are not

required. The majority of commenters

supported State autonomy in identifying

those aggravated circumstances but

wanted further guidance or clarification.

Response: Congress provided specific

examples of aggravated circumstances

in the statute which we have included

in the regulation. Section

471(a)(15)(D)(i) of the Act requires the

State to define, in law, those aggravated

circumstances in which reasonable

efforts are not required. We believe that

the State legislative process will

produce decisions that are based on

public debate, consideration, and broad

input from all interested and relevant

parties. We strongly believe that

providing Federal guidance beyond

what is included in the statute is

inconsistent with the intent of the

statute to provide States with maximum

flexibility in this area.

Comment: Several commenters urged

us to permit the court to determine that

reasonable efforts are not required in

circumstances other than those

enumerated at section 471(a)(15)(D) of

the Act when the State agency provides

evidence to that effect. These

commenters believe that the

interpretation that they are requesting is

consistent with the Rule of Construction

at section 478 of the Act. Many

commenters made this suggestion

because they were uncomfortable with

the preamble discussion which submits

that an assessment of the family that

indicates that the child is not safe in the

home would satisfy the reasonable

efforts requirements.

Response: We understand the

commenter’ concern; however, the

statute specifically enumerates those

circumstances in which reasonable

efforts are not required. Section 478 of

the Act clarifies that the State court

continues to have discretion when

making judgements about the health and

safety of the child. However, it does not

grant ACF the authority to add or

change the list at section 471(a)(15)(D)

of the Act. As written, the statute

requires the State to make reasonable

efforts in all cases unless one of the

circumstances at section 471(a)(15)(D) of

the Act exists.

The aforementioned interpretation of

the statute should not be construed to

support unwarranted attempts to

preserve families. Rather, when

reasonable efforts are required, the State

agency and the courts must determine

the level of effort that is reasonable,

based on safety considerations and the

circumstances of the family. Sometimes,

based on its assessment of a family, the

State agency determines that it is

reasonable to make no effort to maintain

the child in the home or to reunify the

child and family. In such circumstances,

if the court determines that the agency’s

assessment of the family is accurate and

its actions were appropriate, the court

should find that the agency’s efforts in

such cases were reasonable, not that

reasonable efforts were not required.

Comment: One commenter

recommended that we permit Indian

tribes to identify in tribal code those

aggravated circumstances in which

reasonable efforts are not required in

accordance with section 471(a)(15)(D)(i)

of the Act.

Response: When entering into a title

IV–E agreement with a State, the tribe

must adhere to the list of aggravated

circumstances defined in State law. The

statute at section 471(a)(15)(D)(i)

specifically requires that the aggravated

circumstances in which reasonable

efforts are not required be defined in

State law. Moreover, other public

agencies and tribes that enter into

agreements with the State agency are

not operating or developing their own

title IV–E program separate and apart

from that operated under the State plan.

Rather, the agency or tribe is agreeing to

operate the title IV–E program

established under the State plan for a

specific population of children in foster

care. Therefore, the other public agency

or tribe is bound by any State statute

related to the operation of the title IV–

E program. We expect the State child

welfare agency to engage the tribes, and

any other agency with which it has title

IV–E agreements, in developing its list

of aggravated circumstances.

Comment: In the preamble to

proposed § 1356.21(b)(5), we explained

that a court determination that

reasonable efforts to prevent a child’s

removal were not required did not

remove the State’s obligation to make

reasonable efforts to reunify the child

and family. Only a judicial

determination that reasonable efforts to

reunify the child and family are not

required removes that obligation.

Several commenters requested that we

4054 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

eliminate this requirement because they

believe it to be unduly burdensome.

Response: We believe that States will

frequently encounter circumstances in

which they are exempt from making

efforts to prevent a child’s removal from

the home but it is appropriate to make

reasonable efforts to reunify the child

and family. We think the policy

described in the comment above ensures

that decision making is based on the

individual circumstances of the child

and family rather than blanket

exceptions. Moreover, the statute

supports such an interpretation. Section

471(a)(15)(D) of the Act enumerates

circumstances in which reasonable

efforts of the type described at section

471(a)(15)(B) of the Act are not required.

Two distinct types of reasonable efforts

are described at section 471(a)(15)(B) of

the Act: to prevent removals; and to

reunify children and their families.

Therefore, a judicial determination

exempting the State from providing

each type of reasonable effort must be

made. We have retained this

requirement.

Comment: A couple of commenters

requested that we clarify that we are not

prescribing the timing for judicial

determinations that reasonable efforts

are not required to reunify the family.

Response: The commenters are correct

that we are not prescribing the time

frame for judicial determinations that

reasonable efforts to reunify the child

and family are not required. We do not

think it is appropriate to prescribe a

time frame for obtaining such a

determination and have made this

clarification in paragraph (b)(3).

However, all judicial determinations

with respect to reasonable efforts to

prevent removals, even determinations

that such efforts are not required, must

be obtained within the time frame

prescribed in paragraph (b)(1), within 60

days of the date the child is removed

from the home.

Comment: We received a number of

comments regarding the list of felonies

at § 1356.21(b)(5) used to identify when

reasonable efforts are not required. The

comments included requests for

clarification regarding whether a

criminal conviction is required, support

for requiring a criminal conviction, and

opposition to requiring a criminal

conviction.

Response: We have amended

§ 1356.21(b)(3)(ii) to clarify that a parent

must be convicted of one of the felonies

enumerated before the court can

determine that reasonable efforts are not

required. (We have similarly amended

language in § 1356.21(i)(1)(iii) which

requires TPR when a parent is convicted

of one of the enumerated felonies). The

statutory language specifically calls for

a court of competent jurisdiction to find

that one of the felonies was committed.

In our opinion, this language requires a

criminal conviction. As we stated in the

NPRM, however, in circumstances in

which the criminal proceedings have

not been completed or are under appeal,

the court that hears child welfare

dependency cases determines whether it

is reasonable to attempt to reunify the

child with his/her parent. It is important

for this decision to be based on the

developmental needs of the child and

the length of time associated with

completion of the criminal proceedings

or the appeals process.

Section 1356.21(b)(4) Concurrent

Planning

This section (formerly § 1356.21(b)(6)

in the NPRM) implements the statutory

provision which provides States the

option of using concurrent planning.

Comment: One commenter suggested

that we require an assessment of every

family to determine the appropriateness

of concurrent planning before the State

implements it for that family.

Response: We agree that the

commenter’s suggestion is consistent

with good practice. However, it would

be overly prescriptive to include such a

requirement in regulation since

concurrent planning is an option for the

State, and not a mandate.

Comment: One commenter

encouraged us to prohibit States from

using concurrent planning for

unaccompanied refugee minors.

Response: The choice to engage in

concurrent planning is optional and

should be made on a case-by-case basis.

We see no reason to prohibit the use of

this technique for a particular group of

children in foster care.

Comment: One commenter asked if

the State must present the concurrent

plan to the court and if the court must

make a reasonable efforts determination

with respect to the concurrent plan.

Response: The answer to both

questions is no. The State is not

required to present the plan for the

purposes of obtaining a reasonable

efforts determination by the court. The

concurrent planning option is addressed

in the reasonable efforts section

because, among other things, that

section of the regulation addresses

permanency planning activities, of

which concurrent planning is one.

Comment: One commenter suggested

we broaden the concurrent planning

language in the regulation to include all

types of permanency plans. As

presented in the NPRM, we only

address concurrent planning with

respect to reunification and adoption.

The commenter thinks the regulation

should clarify that concurrent planning

may be used regardless of what the

alternate permanency plan is.

Response: We agree and have

amended the language in paragraph

(b)(4) accordingly.

Section 1356.21(b)(5) Use of the

Federal Parent Locator Service

This section (formerly § 1356.21(b)(7)

in the NPRM) provides for the use of the

Federal Parent Locator Service (FPLS) to

search for absent parents in order to

expedite permanency for children.

Comment: A number of commenters

suggested we provide guidance

regarding the timing for use of the

Federal Parent Locator Service.

Comments ranged from suggesting that

we encourage States to locate absent

parents and/or putative fathers as soon

as possible to requiring that such

searches take place within 30 days of

the child entering foster care.

Response: While we agree with the

idea that searches for absent parents

should be conducted as soon as possible

after a child enters care, we do not think

it is appropriate to include such practice

level guidance in regulation. We have,

however, made an editorial change in

paragraph (b)(5) to note that we are not

restricting when a State can seek the

services of the FPLS.

Section 1356.21(c) Contrary to the

Welfare Determination

This section sets forth the

requirements that there be a judicial

determination stating that remaining in

the home would be contrary to the

child’s welfare.

Comment: We received numerous

comments regarding the distinction in

the NPRM between emergency and nonemergency removals. The comments

were similar to those we received

regarding reasonable efforts to prevent

removals; that the distinction is not

consistent with actual practice in many

States.

Response: We concur and have

removed the distinction between

emergency and non-emergency

removals in the final rule. Now a State

will need to obtain a contrary to the

welfare determination in the first court

order removing the child from the

home, regardless of whether there is an

emergency or non-emergency situation.

Comment: Commenters

overwhelmingly opposed our proposed

requirement that contrary to the welfare

determinations be made at the first

hearing pertaining to the child’s

removal from home. The commenters

said we were inappropriately

overturning policy established by the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4055

Departmental Appeals Board (DAB)

decision #1508, which permitted States

up to six months to obtain a contrary to

the welfare determination.

Response: We recognize that some

States may have made changes to their

contrary to the welfare policies based on

this DAB decision. However, at the time

that the DAB made that ruling, the

Department did not have regulations

addressing the timing of contrary to the

welfare determinations. Therefore, we

are now taking this opportunity to

clarify in regulation our policy on this

issue. Our reasons for establishing this

policy are set forth below:

The contrary to the welfare

determination was the first of the

existing protections afforded to children

and their families by the Federal foster

care program and has been in effect

since the inception of the program in

1961 when it was operated under title

IV–A. The statute then, and now,

recognizes the severity of removing a

child, even temporarily, from home.

This protection is in place because

Congress believed that judicial oversight

would prevent unnecessary removals

and act as a safeguard against potential

inappropriate agency action. This policy

is consistent with Congressional intent

and stands as proposed in the NPRM.

The contrary to the welfare

determination must be made in the first

court order sanctioning the removal of

the child from home, as is explicitly

required at section 472(a)(1) of the Act.

Comment: Several commenters

requested that we clarify that we did not

intend to consider an emergency order

(sometimes referred to as a ‘‘pick-up

order’’ or ‘‘ex-parte order’’) as the first

court ruling for the purpose of meeting

the contrary to the welfare

requirements.

Response: We did not make any

distinction about the type of order in

which the contrary to the welfare

determination is required. We mean the

very first court order pertaining to the

child’s removal from home. If the

emergency order is the first order

pertaining to a child’s removal from

home, then the contrary to the welfare

determination must be made in that

order to establish title IV–E eligibility.

We understand that some States must

change their practices and even State

statutes to meet this requirement. The

critical nature of this protection requires

us to maintain this policy.

Comment: One commenter suggested

we eliminate the contrary to the welfare

requirement because it provides an

incentive for workers not to remove

children from their homes.

Response: The contrary to the welfare

determination is a statutory requirement

and a critical protection that must be

afforded to all children and their

families to assure that unnecessary

removals are minimized. We have,

therefore, made no change to the

regulation.

Comment: A few commenters

opposed the policy to make children for

whom the contrary to the welfare

requirements are not satisfied ineligible

for title IV–E funding. Commenters

thought we were particularly harsh in

making the child ineligible for that

entire foster care episode.

Response: Consistent with the

reasonable efforts to prevent removals

requirements, the contrary to the

welfare determination is a critical

statutory protection and a criterion for

establishing title IV–E eligibility. Once a

child is removed from home, the State

cannot go back and fix an inappropriate

removal. If a child’s removal from home

is not based on a judicial determination

that it was contrary to the child’s

welfare to remain in the home, the child

is ineligible for title IV–E funding for

the entire foster care episode subsequent

to that removal because there is no

opportunity to satisfy this eligibility

criterion at a later date. The same does

not hold true for all other eligibility

criteria. For example, judicial

determinations regarding reasonable

efforts to finalize a permanency plan,

placement in a licensed foster family

home or child care institution, and State

agency responsibility for placement and

care are all title IV–E eligibility criteria

that can be reestablished if lost or

established at a later time if missing at

the beginning of a foster care episode.

This is not the case with the contrary to

the welfare determination.

Comment: A number of commenters

pointed out a technical discrepancy

between the contrary to the welfare and

reasonable efforts to prevent removals

requirements regarding the consequence

for not meeting these requirements. In

the NPRM, we stated that, if the

reasonable efforts to prevent removals

requirements are not met, the child is

ineligible for title IV–E funding for the

remainder of ‘‘that stay’’ in foster care.

The language for the contrary to the

welfare determination states that the

child is not eligible for the duration of

‘‘his/her’’ stay in foster care. The

commenters are concerned that the

language for the contrary to the welfare

requirements could be construed to

mean the child is never eligible for title

IV–E funding again.

Response: We have amended the

language at § 1356.21(c) so that it is

consistent with that at § 1356.21(b)(1). If

the contrary to the welfare requirements

are not satisfied, the child is not eligible

for title IV–E funding for the remainder

of that stay in foster care.

Comment: One commenter suggested

that unaccompanied refugee minors be

exempt from the contrary to the welfare

requirements.

Response: We have no authority to

waive or exempt any group of children

in foster care from this provision. It is

a title IV–E eligibility criterion that must

be satisfied if a State claims title IV–E

funding for a child.

Comment: A few commenters

requested that we accept a judicial

determination that the removal of the

child from the home was in the best

interests of society in satisfying the

contrary to the welfare requirements.

Response: This suggestion would not

comport with the law or the intent of

the title IV–E foster care program. The

statute is clear that for title IV–E

purposes a removal from the home must

be based on a determination that

remaining in the home would be

contrary to the child’s welfare. We have

clarified this requirement previously in

ACYF–PIQ–91–03 which states that,

‘‘* * * if the court order indicates only

that the child is a threat to the

community, such language would not

satisfy the requirement for a

determination that continuation in the

home would be contrary to the child’s

welfare * * *’’. We find no basis to

overturn this policy as it is intended to

ensure that children are not

unnecessarily removed from their

homes and is based on the child’s best

interests.

Section 1356.21(d) Documentation of

Judicial Determinations

This section establishes the

documentation requirements for the

reasonable efforts and contrary to the

welfare determinations.

Comment: Many commenters wrote in

support of our proposed policy of

requiring judicial determinations to be

explicit, made on a case-by-case basis,

and so stated in the court order. Others

felt that we were being overly

prescriptive in this section. Those

commenters expressed concern that this

requirement prohibits the use of

preprinted forms that include checklists

for making the necessary judicial

determinations. A few suggested that we

permit the court order to reference the

facts in a court report, related

psychiatric or psycho-social report, or

sustained petition to demonstrate that

the determination was based on the

individual circumstances of that case. A

few commenters even suggested that we

delete the paragraph in its entirety.

Response: In keeping with the

supportive comments we received on

4056 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

the need for individualized judicial

determinations, we have not made

changes in this section, but would like

to clarify our reasons for the policy. Our

purpose for proposing this policy can be

found in the legislative history of the

Federal foster care program. The Senate

report on the bill characterized the

required judicial determinations as

‘‘* * * important safeguard(s) against

inappropriate agency action * * *’’ and

made clear that such requirements were

not to become ‘‘* * * a mere pro forma

exercise in paper shuffling to obtain

Federal funding * * *’’ (S. Rept. No.

336, 96th Cong., 2d Sess. 16 (1980)). We

concluded, based on our review of State’

documentation of judicial

determinations over the past years, that,

in many instances, these important

safeguards had become precisely what

Congress was concerned that they not

become.

Our primary concern is that judicial

determinations be made on a case-bycase basis and it was not our intent to

create a policy that was overly

prescriptive and burdensome. States

have a great deal of flexibility in

satisfying this requirement. The

suggestion that the court order reference

the facts of a court report, related

psychiatric or psycho-social report, or

sustained petition as a mechanism for

demonstrating that judicial

determinations are made on a case-bycase basis is an excellent one and would

satisfy this requirement. If the State can

demonstrate that such determinations

are made on a case-by-case basis

through a checklist then that is

acceptable also.

Comment: A few commenters asked

for clarification regarding the language

that must be contained in judicial

determinations that satisfy title IV–E

eligibility criteria. The commenters

wanted to know if these determinations

needed to use the exact terms

‘‘reasonable efforts’’ and ‘‘contrary to

the welfare.’’

Response: Existing policy does not

require the judicial determinations to

use the exact terminology of the statute.

We have no intention of overturning

this policy. In fact, in the preamble to

this section in the NPRM, we

specifically stated that,

* * * (t)he judicial determinations

themselves need not necessarily include the

exact terms ‘‘contrary to the welfare’’ and

‘‘reasonable efforts,’’ but must convey that

the court has determined that reasonable

efforts have been made or are/were not

required (as described in section 471(a)(15) of

the Act), and that it would be contrary to the

welfare of a child to remain at home.

Comment: One commenter was

opposed to our requiring specific

judicial determinations. The commenter

felt we should be able to cull out the

fact that the court made the appropriate

determinations by reading the hearing

record.

Response: While we can allow some

flexibility in this area, it is a statutory

requirement that the specific judicial

determinations regarding reasonable

efforts and contrary to the welfare be

explicit in court orders. Section

1356.21(d)(1) of the regulation states

that we will accept transcripts of the

court proceedings if the necessary

judicial determinations are not explicit

in the court orders.

Comment: Overwhelmingly,

commenters were opposed to the

prohibition on nunc pro tunc orders.

Commenters generally felt that the

States would be punished for the failure

of the court to fulfill its responsibility.

Some commenters suggested we permit

nunc pro tunc orders only to clarify or

correct technical errors.

Response: We placed the ban on nunc

pro tunc orders because we discovered

that they were being used months,

sometimes years, later to meet

reasonable efforts and contrary to the

welfare requirements that had not been

met at the time the original hearing took

place. We are sensitive to the issue of

technical errors. However, it is

permissible for States to use transcripts

of court proceedings to verify that

judicial determinations were made in

the absence of the necessary orders. We

have, therefore, made no changes to the

regulation to modify the ban on nunc

pro tunc orders.

Comment: Some commenters opposed

our decision not to accept judicial

determinations regarding reasonable

efforts and contrary to the welfare

determinations which merely reference

State statute.

Response: We believe that judicial

determinations should be as meaningful

as possible and child-specific in order to

ensure that the circumstances of each

child are reviewed individually. We

believe that explicit documentation is a

way to ensure that such determinations

actually occur and could find no

compelling argument to change our

position. We will not accept judicial

determinations that merely reference

State statute to satisfy the reasonable

efforts and contrary to the welfare

determinations.

Section 1356.21(e) Trial Home Visits

This section defines trial home visits

for the purposes of establishing title

IV–E eligibility.

Comment: Most commenters

supported allowing title IV–E eligibility

to continue for six months while a child

is on a trial home visit.

Response: No response is necessary to

these comments, but we changed the

term ‘‘foster care setting,’’ to ‘‘foster

care,’’ to have consistent terminology

throughout the rule.

Comment: A commenter sought

clarification of whether there is a

regulatory definition of a trial home

visit.

Response: There is no regulatory

definition of the term ‘‘trial home visit,’’

as it is within the State’s discretion to

define. We do not believe that it would

be appropriate for us to develop a

regulatory definition. We also do not

believe that we could develop a

definition that would be inclusive of the

variety of State policies on trial home

visits or that a definition would be

helpful. In practice, a trial home visit is

intended to be a short term option in

preparation for returning the child home

permanently.

Comment: A commenter asserted that

the law does not recognize or define a

trial home visit, and therefore, we have

no authority to require a determination

of title IV–E eligibility for children who

reenter foster care after a trial home visit

that lasts more than six months.

Response: While it is true that the

statute does not explicitly address trial

home visits and determinations of title

IV–E eligibility, we believe our policy is

consistent with the statute. Further, we

are allowing maximum flexibility to

States regarding establishing title IV–E

eligibility if the child reenters foster

care. If a trial home visit continues for

an extended period, the circumstances

of the original removal are likely to have

changed. For that reason, a State must

determine title IV–E eligibility upon a

child’s reentry into foster care. When a

trial home visit extends beyond six

months and the child returns to foster

care, the child is then considered to be

entering a new placement.

Comment: A commenter sought

clarification on whether a continuance

of a hearing scheduled to address the

trial home visit satisfied the

requirement that for title IV–E funding

to continue, a court must order a longer

visit.

Response: The provision establishes a

six-month outer limit for a trial home

visit, except when a court orders a

longer visit. A court continuance of a

hearing regarding the trial home visit

does not satisfy this requirement.

Section 1356.21(f)—Case Review System

This section establishes the case

review system requirements for the title

IV–E foster care program.

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4057

Comment: A few commenters

requested that the regulations contain

more guidance on how the case review

system could determine the safety of the

child and ensure that the child was

maintained safely in the home.

Response: We believe that we can

better respond to these comments

through the provision of technical

assistance as this is more of a practice

issue. Nor do we think that prescribing

how a State must maintain a child’s

safety would be useful, since safety

considerations will vary on a case-bycase basis.

Comment: Another commenter

suggested that the time frames for all

case review requirements (permanency

hearings, TPR and periodic reviews)

were arbitrary, and should not be

prescribed in regulations. The

commenter recommended that the time

frames should be flexible to

accommodate court calendars.

Response: We do not have the

authority to waive time frames for case

review requirements because the law

requires that States hold court hearings

and periodic reviews within very

specific time frames. We believe that

States must be held accountable to these

statutory time frames, and therefore,

offer no changes to the case review

system. A major goal of ASFA was to

tighten case review time frames to

prevent children from experiencing

extended stays in foster care.

Section 1356.21(g) Case Plan

Requirements

This section establishes the

development and documentation

requirements for case plans.

Comment: The majority of

commenters on this section supported

the requirement in § 1356.21(g)(1) that

States develop the case plan with the

child’s parent or guardian.

Response: None needed.

Comment: Several commenters

suggested that we amend § 1356.21(g)(1)

to instruct the State to document a

parent’s inability or refusal to

participate in the development of the

case plan. Another commenter

suggested that we require a State to

document in the case plan the efforts

caseworkers employed to engage the

parent in the development of the plan.

Response: We expect that States will

document efforts made to engage

parents in developing the case plan, but

we do not believe that it is necessary to

prescribe this documentation. We

believe it is especially critical that

caseworkers engage parents early on

because of the new time frames for

permanency established by the ASFA.

Comment: A couple of commenters

suggested that case plans be developed

within 30 days of a State agency

assuming responsibility for placement

and providing services. One commenter

believed that according to our proposed

rule, case plans might not be developed

until 120 days after a child has been

actually removed from the home.

Response: The proposed rule at

§ 1356.21(g)(2) mirrored the language in

existing regulations which required the

case plan to be developed within 60

days of a State assuming responsibility

for providing services, including placing

the child. We are not convinced that

shortening the time frame for

developing case plans to 30 days will

have any measurable effect on the

quality and function of a case plan, and

therefore, are not changing the

regulation in this manner. We believe

that one of the commenters may have

misinterpreted the proposed rule to

mean that States have up to 60 days

from the date the child is considered to

have entered care according to 475(5)(F)

of the Act to develop the case plan. We

would like to clarify that the date the

child is considered to have entered

foster care is irrelevant for purposes of

developing the case plan. Rather, the

case plan must be developed within 60

days of the child’s removal from the

home.

Comment: Some commenters

suggested that we require specific steps

in § 1356.21(g)(5) that a State should

take to make and finalize alternate

permanency placements.

Response: We believe that the specific

steps a State agency makes to finalize

alternate permanency placements are

practice issues that need to be

determined on a case-by-case basis.

Therefore, we are not including these

specific steps in regulation. A State

agency can best formulate the steps

necessary to achieve permanency based

on the best interests of the child and the

child’s permanency plan. Court review

and oversight of the permanency plan

should provide an adequate check on

State efforts in this area.

Comment: A few commenters

suggested that we include in the final

rule the language from section 475(1)(E)

of the Act, which requires States, at a

minimum, to document the steps and

child-specific recruitment efforts if the

child’s permanency goal is adoption or

placement in another permanent home.

A couple of commenters also requested

that we include in the final rule the

statutory examples of child-specific

recruitment efforts, i.e., the use of State,

regional and national adoption

exchanges.

Response: We agree that a clearer

statement of the requirement to

document the steps to permanently

place the child is warranted. We have,

therefore, made changes to the language

and included it in a new paragraph,

1356.21(g)(5). We have amended the

language in the regulation so that the

documentation of ‘‘child specific

recruitment efforts’’ is only applicable

to children with case plan goals of

adoption and not to other permanency

goals. We believe that the illustrative

list which mentions adoption exchanges

and the reference to recruitment limits

the requirement to children with case

plan goals of adoption. States still need

to document the steps taken to secure a

permanent placement for children with

alternate permanency goals.

Comment: A commenter requested

clarification on the differences between

a case plan and a permanency plan.

Response: We use the term ‘‘case

plan’’ to refer to a plan developed to

meet the statutory requirements of

sections 422(b)(10)(B)(ii), 471(a)(16),

475(1) and 475(5)(A) of the Act. The

case plan is a written document which

includes, in part: a description of the

child’s placement; a discussion of the

safety and appropriateness of the

placement; a plan for ensuring that the

child and family receive services

designed to facilitate the return of the

child to a safe home or to another

permanent placement; the health and

educational records of the child; when

appropriate, a description of the

programs and services which will

facilitate the child’s transition from

foster care to independent living; and,

documentation of the steps to place the

child in a permanent living

arrangement.

The ‘‘permanency plan,’’ while it may

be described in the case plan or may be

a portion of the case plan, is what the

planned permanency living arrangement

will be for the child, e.g., reunification

with the family, or adoption. We

understand that some States use the

term ‘‘permanency plan’’ synonymously

with ‘‘case plan,’’ because it conveys

what the case plan is designed to

accomplish. We do not believe that it is

necessary to require States to use

distinct terminology, as long as States

meet the requirements of the statute and

regulations.

Comment: A commenter suggested

that we require courts to approve case

plans.

Response: There is no statutory basis

for requiring judicial approval of the

State agency’s case plan document. The

court’s role is to: exercise oversight of

the permanency plan; review the State

agency’s reasonable efforts to prevent

4058 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

removal from the home, reunify the

child with the family and finalize

permanent placements; and to conduct

permanency hearings. The State agency

is responsible for developing and

implementing the case plan. We see no

additional benefit in requiring court

approval of the case plan.

In addition, we are clarifying in the

regulation at § 1356.21(g)(3) that it is not

permissible for courts to extend their

responsibilities to include ordering a

child’s placement with a specific foster

care provider. To be eligible for title IV–

E foster care maintenance payments the

child’s placement and care

responsibility must either lie with the

State agency, or another public agency

with whom the State has an agreement

according to section 472(a)(2) of the Act.

Once a court has ordered a placement

with a specific provider, it has assumed

the State agency’s placement

responsibility. Consequently, the State

cannot claim FFP for that placement.

Comment: A couple of commenters

requested that we specify that long term

foster care is an appropriate

permanency goal for unaccompanied

refugee minors.

Response: The determination of the

appropriateness of a permanency goal

must be made by the State on a case-bycase basis and take into consideration

the best interests of the child. The State

agency is the responsible party for

making this determination, with the

oversight of the court. We, therefore,

will not regulate appropriate

permanency goals for any group of

children.

Comment: A commenter suggested

that we require case plans to address the

child’s developmental needs and

acquisition of life skills.

Response: We believe that the statute

at section 475(1) of the Act already

requires States to document how the

services provided will meet the needs of

the child, and in the case of a child

whose goal is independent living, the

programs and services that will enable

the child to transition into independent

living. We do not believe that any

additional regulation in this area is

required.

Section 1356.21(h) Application of

Permanency Hearing Requirements

This section implements the new

ASFA requirements related to

permanency hearings and modifies and

clarifies existing policy. It also sets forth

requirements for an administrative body

appointed or approved by the court to

conduct permanency hearings.

Comment: One commenter was

concerned that children would become

ineligible for title IV–E funding if the

permanency hearing requirements were

not satisfied as prescribed.

Response: We agree that the language

at paragraph (h)(1) presented the

permanency hearing as an eligibility

criterion. That is not the case and we

have amended the paragraph to clarify

that, in meeting the requirements of the

permanency hearing, the State must

comply with section 475(5)(C) of the Act

and this paragraph. The permanency

hearing is a State plan requirement. It is

not a title IV–E eligibility criterion. If

the State fails to meet the permanency

hearing requirements, it is out of

compliance with the State plan. The

child does not become ineligible for title

IV–E funding.

Comment: We received a number of

comments regarding paragraph (h)(2)

which provides guidance related to

determining for whom the State must

hold permanency hearings. Commenters

thought the paragraph was confusing

and unclear about whether we were

referring to initial or subsequent

permanency hearings. We also received

a request not to refer to these permanent

placements as ‘‘court sanctioned’’

because the commenter felt the

terminology meant the court chooses the

placement, which would make the

placement ineligible for title IV–E

funding.

Response: In the NPRM, we proposed

to retain the provision in the current

regulation for permitting the State to

waive subsequent permanency hearings

for children placed in permanent foster

family homes. The number of comments

received prompted us to review this

section of the proposed rule against the

statutory language as amended by

ASFA. Based on that review, we have

decided to delete the paragraph in its

entirety. When ASFA was passed the

language from the definition of

permanency hearing in section 475(5)(C)

of the Act that addressed children

remaining in foster care on a

‘‘permanent or long term basis’’ was

removed. Instead, the ASFA requires the

State to document a compelling reason

for establishing a permanency plan that

does not call for the child to exit foster

care through reunification, adoption,

legal guardianship, or placement with a

fit and willing relative. Therefore, all

children in foster care must be afforded

the benefit of permanency hearings

while they are in foster care.

Although the paragraph in question

has been deleted from the regulation, we

wanted to take this opportunity to

respond to the observation that the State

may not claim FFP when the court

orders a specific placement for a child.

The commenter is correct. Section

472(a)(2) of the Act requires

responsibility for the child’s placement

and care to be with the State agency.

When the court orders a specific

placement, it in essence takes on the

State’s responsibility for the child’s

placement and the child becomes

ineligible for title IV–E funding. To

make this clear, we have amended

§ 1356.21(g) to note this restriction. The

court may sanction a permanent foster

family home through its oversight of the

permanency plan, however, this does

not give the court the authority to

determine a specific placement for the

child.

Finally, we recognize that States will

need transition time to begin holding

subsequent permanency hearings for

children who formerly were exempt

from this requirement. We will not take

adverse action against a State that

cannot comply with this requirement for

a period of 12 months from the effective

date of this final rule.

Comment: One commenter suggested

that the requirement in paragraph (h)(2)

for holding a permanency hearing

within 30 days of a judicial

determination that reasonable efforts are

not required, be extended to

circumstances beyond those identified

at section 471(a)(15)(D) of the Act.

Another wanted us to exempt

unaccompanied refugee minors from

this provision altogether.

Response: The statute is very specific

to those circumstances enumerated at

section 471(a)(15)(D) of the Act. We

have no authority to expand that list.

However, the State may hold a

permanency hearing any time it deems

it to be appropriate to do so. We also

have no authority to exempt

unaccompanied refugee minors from

this requirement.

Comment: Some commenters noted

that the language in § 1356.21(h)(3)

(proposed § 1356.21(h)(4)) is

inconsistent with the definition of

‘‘permanency hearing’’ at § 1355.20. The

language at § 1356.21(h)(3) limited the

alternate planned permanent living

arrangement options to a foster family

home.

Response: We concur with the

commenter and have amended

paragraph (h)(3) to use the exact

statutory language, ‘‘ * * * another

planned permanent living arrangement

* * *.’’

Comment: Some commenters objected

to the inclusion of an example of a

compelling reason for the State to

choose another planned permanent

living arrangement over reunification,

guardianship, or adoption in the text of

the regulation. These commenters

believe that examples included in

regulation become de facto policy.

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4059

Response: We do not believe that

examples in regulation become de facto

policy, nor were they intended to do so.

However, we do not believe the example

provided in the NPRM fully illustrates

how to comply with this provision and

have included additional examples in

paragraph (h)(3) to more accurately

reflect its intent.

Section 1356.21(i) Requirements for

Filing a Petition to Terminate Parental

Rights Per Section 475(5)(E) of the

Social Security Act

This section implements the new

ASFA provisions regarding termination

of parental rights.

Comment: Many commenters sought

exemptions for specific populations

from the requirement for States to file or

join TPR petitions for certain children

who have been in foster care for 15 out

of the most recent 22 months,

abandoned infants, or children of

parents who have committed certain

felonies. Several commenters noted that

many tribal cultures and traditions do

not recognize the concepts of

terminating parental rights and

adoption, and requested a specific

exemption from the application of the

provision to tribes. Several commenters

also wanted an exemption for

unaccompanied refugee minors in foster

care. The commenters noted that

according to Federal regulations for

child welfare services to

unaccompanied refugee minors (see 45

CFR part 400, subpart H) such children

‘‘are not generally eligible for adoption

since family reunification is the

objective of the [unaccompanied refugee

minor child welfare] program.’’

Similarly, some advocates and providers

who work to preserve or reunify foreignborn children with their families, noted

that the TPR requirement may hinder

international reunification efforts by

switching the focus from reunification

to adoption after fifteen months. A few

commenters also wanted exemptions for

juveniles adjudicated delinquent,

children voluntarily placed in foster

care, and children deemed ‘‘persons in

need of services’’ who are not

considered abused or neglected.

Response: We have no statutory

authority to provide an exemption for

particular populations from the

requirement to file a TPR for certain

children. Thus, we did not make any

exemptions to the requirement in the

regulation. The TPR requirement is

designed to encourage State agencies to

make timely decisions about

permanency for children in foster care.

Congress developed the TPR provision

to be applied to all children in foster

care, whatever their entry point into the

system. Exempting groups of children

from the requirements would be

contrary to ASFA’s goal to shorten

children’s time in foster care. However,

we are changing § 1356.21(i)(2)(ii) in

two ways. First, to clarify that the State

agency must apply the exceptions to the

requirement to file a petition for TPR by

considering the best interests of the

individual child on a case-by-case basis.

Second, we added two more examples

of compelling reasons regarding

unaccompanied refugee minors and

situations involving international legal

or foreign policy issues.

Comment: A commenter requested an

explanation of how the TPR

requirement applies to Indian tribes and

the relationship to Indian Child Welfare

Act requirements. A commenter

suggested that the regulation clarify that

tribal agencies can elect not to file a

petition for TPR in certain

circumstances.

Response: The Indian Child Welfare

Act of 1978 (ICWA), Public Law 95–608,

was passed in response to concerns

about the large number of Indian

children who were being removed from

their families and tribes and the failure

of States to recognize the culture and

tribal relations of Indian people. ICWA,

in part, creates procedural protections

and imposes substantive standards on

the removal, placement, termination of

parental rights and consent to adoption

of children who are members of or are

eligible for membership in an Indian

tribe. The addition of the requirement in

section 475(5)(E) of the Act to file a

petition for TPR for certain children in

no way diminishes the requirements of

ICWA for the State to protect the best

interests of Indian children.

Furthermore, States are required to

comply with the ICWA requirements

and develop plans that specify how they

will comply with ICWA in section

422(b)(11) of the Act.

The requirement in section 475(5)(E)

of the Act applies to Indian tribal

children as it applies to any other child

under the placement and care

responsibility of a State or tribal agency

receiving title IV–B or IV–E funds.

While we recognize that termination of

parental rights and adoption may not be

a part of an Indian tribe’s traditional

belief system or legal code, we have no

statutory authority to provide a general

exemption for Indian tribal children

from the requirement to file a petition

for TPR. If an Indian tribe that receives

title IV–B or IV–E funds has placement

and care responsibility for an Indian

child, the Indian tribe must file a

petition for TPR or, if appropriate,

document the reason for an exception to

the requirement in the case plan, on a

case-by-case basis.

Comment: We received many

comments on the time frame in which

a State must file a petition for TPR

according to § 1356.21(i)(1)(i). Many

commenters objected to our requiring a

State to file a petition for TPR at the end

of the child’s fifteenth month in foster

care, and suggested that we allow a

grace period of up to 60 days. These

commenters believed that to meet this

time frame, a State agency would need

to make decisions on permanency

before the end of the fifteenth month,

which they felt was unreasonable. A few

commenters supported the provision as

written. A commenter suggested that the

State file before the end of the fifteenth

month, and another suggested that we

establish no time frames for filing the

petition.

Response: We believe that States will

have adequate time to prepare petitions

for TPR, when appropriate, by the end

of the child’s fifteenth month in foster

care. Furthermore, we can find no

statutory basis for allowing a grace

period for States to file a petition for

TPR for children who have been in

foster care for 15 out of the most recent

22 months. To meet the permanency

hearing requirements, the State agency

must prepare a permanency plan for the

child to present to the court within 12

months. This will require the State

agency to begin working with the family

early on, so that the State agency can

make appropriate decisions about

permanency goals for the child,

including whether to file a petition for

TPR and pursue adoption.

Comment: A commenter suggested

that once a State agency has determined

that a child is an abandoned infant or

a parent has committed certain felonies

as described in section 475(5)(E) of the

Act, the State file a petition within one

week of that determination. The NPRM

required that a State file such petitions

within 60 days of the determination of

abandonment or a parent’s felony

conviction.

Response: We do not concur with the

commenter’s suggestion to require a

State to file a TPR petition within one

week of a determination that the child

is abandoned or that a parent has

committed certain felonies. We continue

to believe that 60 days is a reasonable

period of time for the State agency to

complete the necessary administrative

and legal work required to file a petition

for TPR.

Comment: A few commenters

expressed uncertainty about whether a

State must file a petition for TPR after

a child has been in foster care for 15

months or 22 months.

4060 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

Response: The State agency is

required either to file a petition for TPR

or document an exception to the

requirement when a child has been in

foster care for 15 cumulative months out

of 22 months. If the child has been in

care for 15 cumulative months, the State

should not wait for 22 months of a

child’s stay in foster care to elapse

before filing a petition for TPR. We do

not believe that any change to the

regulation is necessary.

Comment: A commenter expressed

concern that the TPR requirement

would be misinterpreted as prohibiting

a State from filing a petition for TPR

before a child has been in foster care for

15 months out of the most recent 22

months.

Response: We would like to clarify

that a State continues to have the

discretion to file a petition for TPR

whenever it is in the best interests of the

child to do so. In addition, Congress

passed a Rule of Construction at section

103(d) of Public Law 105–89 reaffirming

a State’s ability to file a petition for TPR

before it is mandated by Federal statute

or for reasons other than those indicated

in Federal law. Therefore, States should

view the Federal statutory time frames

of 15 out of 22 months of a child’s stay

in foster care as the maximum length of

time that can elapse before a State

agency must file a petition or document

an exception for TPR.

Comment: We received a range of

suggestions and comments on our

proposal to exclude runaway episodes

and trial home visits from the

calculation of the 15-month time frame

a child spends in foster care for TPR

purposes. A few commenters opposed

our exclusion of runaway episodes and

trial home visits for various reasons.

One commenter suggested that

including trial visits and runaway

episodes in the calculation was a way to

ensure that no child languished in foster

care. Another commenter suggested that

we allow States to determine whether

such time should be included. A third

commenter was concerned that

excluding runaway episodes and trial

home visits increased the record

keeping burden on States. A couple of

commenters supported the provision as

written. These commenters believed

that our proposed policy is consistent

with efforts to reunify the family when

that is the goal.

Response: We considered all of these

viewpoints and do not believe a change

in the regulation is warranted. We

believe that it is inappropriate to count

time a child is on a runaway episode

because during that time the agency is

unable to provide services to the child

or the family. Similarly, counting time

when a child is at home with the family

toward the time for calculating when to

file a petition for TPR is inappropriate.

While the child may be in the legal

custody and under the supervision of

the State agency, both the child and the

parent consider him or her to be at

home. However, as we discussed above,

the State has the discretion to file a

petition for TPR whenever it is in the

best interests of the child to do so.

Comment: A commenter suggested

that we define the number of calendar

or business days that constitute a month

for the purposes of calculating 15 out of

the 22 most recent months for the TPR

requirement. The commenter suggested

we define a month as 30 days,

presumably so that time less than a

month spent in foster care would not be

counted toward the requirement.

Response: We have decided not to

define a ‘‘month’’ and leave it to the

State’s discretion.

Comment: We received a range of

comments to our proposal that States

need only apply the provision to file a

TPR petition when a child has been in

care 15 out of the most recent 22 months

once, when the State determines that an

exception applies. Several commenters

voiced support for the proposed rule as

written. Another commenter supported

the proposed provision overall, but

suggested that we include language in

the regulation that explicitly requires

States periodically, to reevaluate the

need to file a petition for termination of

parental rights. Many commenters

opposed the provision believing that

children may stay indefinitely in foster

care once a State makes an exception to

the TPR requirement.

Response: We understand the concern

that children may continue to languish

in foster care once a State applies an

exception if this decision is never

reevaluated. Nevertheless, we did not

change the one-time application of the

TPR provision for two reasons. First, the

statutory construction of the provision

makes it applicable only once. Second,

we believe that there are at least two

existing opportunities for the State to

reevaluate an exception to the TPR

requirement: the six-month periodic

review and the permanency hearing.

We encourage States to use the sixmonth periodic review to review the

continuing appropriateness of an

exception to the requirement to file a

petition for TPR within the context of

the requirements in section 475(5)(B) of

the Act. States also have another

opportunity to reevaluate the decision

not to pursue a TPR petition at the

permanency hearing, which must be

held at least every 12 months. The

permanency hearing must address

whether the child’s permanency plan is

to reunify the child with the family, file

a petition for TPR and move toward

adoption, or place the child with a fit

and willing relative, legal guardian, or

in another planned permanent living

arrangement. The State is required to

reevaluate the permanency plan during

the course of the permanency hearing,

regardless of whether the State agency

has previously applied an exception to

the requirement to file a petition for

TPR. As such, we believe there are

multiple safeguards to ensure that

children do not languish in foster care.

Comment: A few commenters

expressed doubt that States would use

the exceptions in paragraph (i)(2) in

appropriate cases and suggested that we

discourage States from using the

exceptions in the regulations. The

commenters expressed concern that the

exceptions could be used as a loophole

to cover a State agency’s deficiency in

proper case planning or service

delivery.

Response: We understand these

concerns, however, the exceptions to

the requirement to file a petition for

TPR are statutory. We expect that States

will apply the exceptions to filing a

petition for TPR judiciously and on a

case-by-case basis. We believe the intent

of the requirement to file a petition for

TPR for certain children was to

encourage State agencies to make timely

decisions about permanency for

children in foster care. The exceptions

were developed to allow State agencies

to exercise individual case planning and

seek an alternative permanent

placement when adoption may not be

appropriate or available for a child.

Comment: A couple of commenters

raised concerns about the exception to

filing a petition for TPR in situations

where the child is placed with a

relative. The commenters sought more

guidance on how and when States

should use this exception.

Response: The statute provides the

State with the option not to file a

petition for TPR when a child is placed

with a relative. We encourage the use of

relative placements as an option for

ensuring that the child achieves

permanency, and not only as a

temporary placement. A State must

continue to develop and reevaluate a

child’s case plan goal and conduct

permanency hearings if the State

decides not to file a petition for TPR

because the child is placed with a

relative. Relative placements should not

preclude consideration of legalizing the

permanency of the placement through

adoption or legal guardianship.

Comment: The majority of comments

supported our decision not to define the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4061

term ‘‘compelling reason,’’ as it is used

in section 475(5)(E) of the Act, to allow

exceptions to the requirement to file a

petition for TPR. A couple of

commenters wanted us to define the

term.

Response: We concur with the

majority of commenters who did not

want us to define the term ‘‘compelling

reason’’ as used in the statute and have

made no changes to the regulation. We

believe that the determination of what

constitutes a ‘‘compelling reason’’ must

be based on the individual

circumstances of the child and the

family, and that a Federal definition

would not be helpful in that process.

We believe that the examples provided

on possible compelling reasons provide

adequate guidance about the practical

application of this term without limiting

a State’s flexibility.

Comment: We received both criticism

and support for listing two examples of

a compelling reason not to file a petition

for TPR. Many commenters did not

want the two examples of compelling

reasons included in the regulation for a

variety of reasons. Some commenters

believed that the examples would

become ‘‘de facto policy,’’ and would

therefore exempt groups of children

from the requirement. Similarly, other

commenters thought that specifying

examples of compelling reasons was

inconsistent with our decision not to

define the term. Some commenters

believed that the examples were too

broad, and if used, would mitigate the

effectiveness of the requirement.

On the other hand, many commenters

supported the inclusion of the examples

of compelling reasons. Some

commenters expressed that the

examples provided critical guidance to

the field and would temper concerns

about increases in the number of ‘‘junk’’

petitions and legal orphans. Other

commenters wanted us to include the

language from the preamble discussion

on the examples in the regulation text,

and some wanted us to expand the list

of examples of compelling reasons.

Commenters suggested that the

expanded list of compelling reasons

could include: A child belongs to a

particular population ( i.e., adjudicated

delinquents, Indian tribal children, and

unaccompanied refugee minors); a child

has not completed treatment in a

residential facility; a child’s parent had

not been notified by the State agency

that TPR was a possible outcome; a

parent has made significant measurable

progress to meet the requirements of the

case plan; or, a child had a permanency

goal other than adoption.

Response: In developing the two

broad examples, we wished to provide

some basic guidance to States short of

the definition that most commenters

opposed. We have, therefore, decided to

retain the two examples of compelling

reasons in the proposed regulation and

added two additional examples.

Unaccompanied refugee minors are

those children who enter the country

unaccompanied and are not destined to

a parent, relative, or custodial adult. We

received a number of comments noting

that the Office of Refugee Resettlement

(ORR) within the Department maintains

a policy that reunification, in general, is

the appropriate goal for these children

while they are classified as

unaccompanied refugee minors. ORR’s

regulation at 45 CFR part 400, Subpart

H, defines an unaccompanied refugee

minor and the rare circumstances in

which adoption may be appropriate. In

order to clarify that we do not intend to

contradict HHS policy in this regard, we

are listing this as another example of a

compelling reason for not filing or

joining a petition for TPR. We have also

added a fourth example to address

situations in which international legal

or foreign policy considerations may

affect a child’s status. We are not

including other populations as part of

the examples of compelling reasons

because we believe that the broad

examples provide a framework that

allows a State sufficient room to make

decisions regarding filing a petition for

TPR on a case-by-case basis that is in

the best interests of an individual child.

Comment: One commenter suggested

that the regulations clarify that

compelling reasons for not filing for

TPR may be defined in tribal policy.

Another commenter suggested clarifying

that the tribe rather than the State could

document the compelling reason.

Response: The regulations are written

from the State perspective because the

State agency is ultimately responsible

for the administration of the title IV–E

program. If the tribe has responsibility

for the placement and care of a child

pursuant to a title IV–E agreement with

a State, not only would it be permissible

for the tribal agency to identify the

compelling reason for not filing a

petition for TPR, it would be the tribal

agency’s responsibility. Tribes and

States may not develop a standard list

of compelling reasons for not filing for

TPR that exempts groups of children.

Such a practice is contrary to the

requirement that determinations

regarding compelling reasons be made

on a case-by-case basis.

Comment: A commenter suggested

that we clarify the terminology for the

second compelling reason example in

§ 1356.21(i)(2)(ii)(B) from ‘‘insufficient

grounds for filing a petition to terminate

parental rights exist,’’ to ‘‘no grounds to

file a petition to terminate parental

rights exist.’’

Response: We concur that the

suggested language more accurately

conveys our point that a compelling

reason for not filing a petition for TPR

may be that there are no grounds in

State law on which to pursue a legal

action to terminate parental rights.

Therefore, we have made the suggested

change in the regulation text. States,

however, are not permitted to have State

laws that carve out groups of the foster

care population to be exempted from the

requirement to file a petition for TPR.

Comment: A commenter wanted us to

elaborate on the exception to TPR where

the State has not provided the services

identified in the case plan. The

commenter may be concerned that we

were not encouraging States to provide

services in a more timely way. Another

commenter questioned whether this

exception also applied in situations

where the specified services were not

available, how the determination is

made, and by whom.

Response: This exception to the

requirement to file a petition for TPR is

taken directly from the statute, as are all

of the exceptions. We do not believe it

is necessary to elaborate in the

regulation on how the State agency

should make the determination that the

necessary services have not been

provided. The exception affirms that the

provision of services, early in a child’s

placement in foster care, is often crucial

to either enabling the child to return to

a safe and stable home or making a

determination to move forward with a

petition for TPR. By using the

exception, a State agency can avoid

penalizing the parent if the necessary

services are not available or accessible

to a parent or child. We encourage

States to strengthen service delivery

systems and to use this exception

judiciously. We will be monitoring

State’ use of all of the exceptions in the

child and family services review.

Comment: Many commenters sought

clarification about the requirement at

§ 1356.21(i)(3) for a State concurrently

to recruit and approve an adoptive

family for a child while a State petitions

for TPR. Most commenters wanted

language added to the regulation text

that interpreted the statutory provision

to mean that a State agency should

begin the process of finding an adoptive

family at the time a petition for TPR is

filed. Some commenters were concerned

that the proposed rule and statutory

language imply or encourage a State

agency to wait until it has an adoptive

family available for the child before the

State agency proceeds with filing a

4062 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

petition for TPR. Another commenter

wanted to know if this requirement

could be waived for children who did

not have a goal of adoption.

Response: We understand the

commenter’ concern regarding the

wording of this requirement and have

made some changes to the regulatory

language in § 1356.21(i)(3). The final

rule now clarifies that the State must

begin the process to find an adoptive

family for the child concurrently with

filing a petition for TPR. We believe that

this provision was developed to ensure

that a child does not wait unnecessarily

between the time a TPR is granted and

the child’s permanent placement in a

home. The requirement should not be

interpreted to suggest that a State wait

until an adoptive family is found for a

specific child before a TPR petition is

filed. We cannot waive the requirement

to find an adoptive family for a child

concurrently with the filing of a petition

for TPR as there is no statutory authority

to do so.

Comment: Several commenters sought

clarification on whether the fact that a

child had been in foster care for 15 out

of the most recent 22 months was legal

grounds for a State to file a TPR

petition. Some commenters believed

that we should specifically exclude the

time frame as grounds for a TPR, while

others thought that we should require or

permit the time frame to be grounds for

TPR.

Response: States are neither required

nor prohibited by Federal statute from

making a child’s length of stay in foster

care legal grounds to file or grant a

petition for TPR. We have made no

changes to the regulation in response to

these comments.

Comment: A couple of commenters

asked for greater specificity on the roles

of the court and the agency with respect

to the exceptions to filing a petition for

TPR for certain children in foster care.

In the preamble to the NPRM we noted

that there was no requirement for the

court to make a judicial determination

if a State made a compelling reason

exception to filing a petition for TPR. A

commenter disagreed and suggested that

Congressional intent was for the State

agency to make an evidentiary case to

the court regarding whether an

exception was appropriate for the child.

Another commenter suggested that we

specify that court decisions prevail in

situations where the court and State

agency disagree on pursuing TPR.

Response: The requirement to file a

petition for TPR or to document an

exception to the requirement is the State

agency’s responsibility. The statutory

language is clear that for a compelling

reason, or any other exception to the

requirement to file a petition for TPR,

there is no requirement for a judicial

determination. However, the State

agency is to document in the case plan,

which is available for court review, the

compelling reason for why filing a

petition for TPR is not in the best

interests of the child. Clearly, courts

play an important oversight role for

children in foster care. The court

exercises authority in making decisions

at permanency hearings regarding the

child’s permanency plan. It is at these

times that the court should review State

agency decisions with regard to the

requirement to file a petition for TPR.

Finally, we have no authority to suggest

that courts prevail in situations where

there is a disagreement between the

court and the State agency on filing a

petition for TPR. We have made no

change to the regulation in response to

these comments.

Comment: Several commenters sought

regulations on the responsibilities of

courts and State agencies to finalize

proceedings to terminate parental rights

once the State agency has filed a

petition for TPR. A couple of

commenters proposed that we suggest a

particular time frame for the court to

finalize a TPR, and one suggested a time

frame of six months. A third commenter

suggested that we require the State

agency to continue to file petitions for

TPR if a court denies the original

petition.

Response: We understand the concern

that court and State agency delays occur

once a petition for TPR is filed such that

it could be several years before a child

is finally adopted. However, our

authority does not extend into the

finalization of proceedings for

termination of parental rights as this is

a matter of State law. Therefore, we did

not make any changes to the regulation

in response to these comments.

Comment: A few commenters

suggested that we note the importance

of making reunification efforts with both

parents and when necessary, filing TPR

petitions on both parents.

Response: We believe that we have

addressed this issue in a separate

section of the regulation. We indicate in

§ 1356.21(b)(5) that State title IV–B/IV–

E agencies can use the Federal Parent

Locator Service (FPLS) in expediting

permanency. In that paragraph we

encourage States to use the FPLS to

locate absent parents in order to explore

permanent placements or pursue TPR.

To avoid duplication, we chose to make

such a statement in the reasonable

efforts section to encourage States to

find noncustodial parents early in a

child’s stay in foster care.

Comment: We received several

comments that requested funding or

program guidance on staff training,

assessments, case planning, and

concurrent planning around

permanency.

Response: We believe that we can

better provide practice-level guidance

through technical assistance rather than

through regulation.

Section 1356.21(j) Child of a Minor

Parent in Foster Care

This section implements the statutory

provision related to the title IV–E

eligibility of the child of a minor parent

who is in foster care.

Comment: A commenter suggested

replacing ‘‘must include amounts

* * * ’’ to ‘‘may include amounts

* * * ’’ as some States give minor

parents financial responsibility for the

child.

Response: To revise this provision to

be permissive would be in conflict with

the statutory requirement. Section

475(4)(B) of the Act specifically requires

that the foster care maintenance

payment made on behalf of the minor

parent ‘‘shall’’ include amounts that

may be necessary to cover the foster care

maintenance costs of a child of a minor

parent when the parent and child are in

the same foster family home or child

care institution. We, therefore, did not

change this paragraph of the regulation

to reflect the commenter’s suggestion.

Section 1356.21(k) Removal From the

Home of a Specified Relative and

§ 1356.21(l) Living With a Specified

Relative

Section 1356.21(k) describes, for the

purposes of meeting the requirements of

section 471(a)(1) of the Act, a

‘‘removal.’’ Section 1356.21(l) sets forth

the required conditions for living with

a specified relative prior to removal

from the home.

Because of the complexity of this

issue, we thought it best to explain

again how the policy has changed before

discussing the comments on this section

of the regulation. To be eligible for title

IV–E funding, a child must, among other

things, be removed from the home of a

relative as the result of a voluntary

placement agreement or a judicial

determination that continuation in the

home would be contrary to the child’s

welfare. Under prior policy, we

interpreted the term ‘‘removal’’ to mean

a physical removal. As a result, if a

child was residing with an interim

caretaker who was a relative between

the time the child lived with the

custodial parent and when he or she

entered foster care, and the State

intended to remove custody from the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4063

parent but let the child remain with that

interim caretaker relative, the child

could not be eligible for title IV–E

funding because the child was not

physically removed from the home of a

relative. This policy created a

disincentive for relative placements. To

remove this inequity between relative

and nonrelative caregivers, we now

permit the removal of the child from the

home, in such circumstances, to be a

‘‘constructive’’ (i.e., a nonphysical)

removal.

As a result of the comments we

received on this proposed policy, we

closely examined the examples

provided in the preamble to the NPRM

and the proposed regulatory text against

the statute. As a result of this further

review, we do not believe that example

(3) on page 50078 of the preamble

should have been included. In example

(3), the living with and removal from

requirements were satisfied by a

physical removal from the interim

relative caretaker with whom the child

lived for seven months. A physical

removal from the home of an interim

relative caretaker cannot satisfy title IV–

E eligibility because it is not the result

of a voluntary placement or a judicial

determination, as required by section

472(a)(1) of the Act.

We offer a summary of examples to

clarify when a child would be eligible

for title IV–E foster care under the rule.

These examples presume that the child

is eligible for AFDC (according to the

State plan in effect on July 16, 1996) in

the home of the parent or other

specified relative:

• The child lived with either a related

or nonrelated interim caretaker for less

than six months prior to the State’s

petition to the court for removal of the

child. The State licenses the home as a

foster family home and the child

continues to reside in that home in

foster care. The child is eligible for title

IV–E foster care if he or she lived with

the parent within six months of the

State’s petition to the court, and was

constructively removed from the parent

( i.e., there was a paper removal of

custody).

• The child lived with either a related

or nonrelated interim caretaker for more

than six months prior to the State’s

petition to the court. The State licenses

the home as a foster family home and

the child remains in that home in foster

care. The child is ineligible for title IV–

E foster care since he or she had not

lived with the specified relative within

six months of the State’s petition to the

court, and was not removed from the

home of a relative. (The constructive

removal does not apply to this situation

because it had been more than six

months since the child lived with the

parent.)

• The child lives with a related

interim caretaker for seven months

before the caretaker contacts the State to

remove the child from his/her home.

The agency petitions the court and the

court removes custody from the parents

and the agency physically removes the

child from the home of the interim

related caretaker. The child would not

be eligible for title IV–E foster care since

he or she had not lived with the parent

or other specified relative from whom

there was a constructive removal within

six months of the initiation of court

proceedings. (Although the child was

physically removed from the home of

the related interim caretaker, that

removal cannot be used to determine

title IV–E eligibility since the removal

was not the result of a voluntary

placement agreement or judicial

determination, as required in section

472(a)(1) of the Act. Nor does

constructive removal apply to this

situation because it had been more than

six months since the child lived with

the parent from whom custody was

removed.)

• The child lived with a nonrelated

interim caretaker for seven months

before the caretaker asks the State to

remove the child from his/her home and

place the child in foster care. The child

is ineligible for title IV–E foster care

because he or she had not lived with a

parent or other specified relative within

six months of the petition.

• The child is in a three-generation

household in which the mother leaves

the home. The grandmother contacts the

State agency four months later and the

agency petitions the court within six

months of the date the child lived with

the mother in the home. The State

licenses the grandmother’s home as a

foster family home and the child

continues to reside in the home in foster

care. The child is eligible for title IV–E

foster care since he or she lived with the

parent within six months of the State’s

petition to the court, and was

constructively removed from the

parent’s custody.

The regulatory text has been amended

to reflect this change in policy and to

more clearly delineate the requirements

of living with and removal from the

home of a specified relative.

Comment: Several commenters

supported the policy on living with and

removal from the home of a specified

relative. One commenter noted that the

new policy enhances a child’s ability to

remain with a relative and preserve the

child’s culture, as well as minimizes the

number of out-of-home placements a

child otherwise might experience.

Response: No changes were necessary

in response to these comments.

Comment: Three commenters

opposed the policy. Some of the

commenters shared beliefs that: (1) The

proposed policy creates a six-month

statute of limitations period within

which an abused and abandoned child

must apply for foster care or be forever

barred from receiving such benefits; (2)

the policy impermissibly narrows title

IV–E eligibility for children living with

a relative; and (3) the policy

discriminates against relative homes,

and is in violation of the language and

intent of ASFA.

Response: We have retained the

proposed policy for the reasons that

follow. In order to be eligible for title

IV–E foster care, a child must be eligible

for AFDC in his or her own home in the

month of the voluntary placement

agreement or initiation of court

proceedings (i.e., petition). However, if

a child is not living with the custodial

relative in the month of the voluntary

placement agreement or petition, then

the statute allows a six-month period

during which the child may reside with

an interim caretaker and still be eligible

for title IV–E. In these circumstances, if

a child is not living with the specified

relative from whom he or she is being

removed in the month of the voluntary

placement agreement or petition, the

child can be deemed eligible for that

month if: (1) The child had been living

with that specified relative at some time

within the six-month period prior to

that month; and (2) would have been

eligible in the home of that specified

relative in the month of the voluntary

placement agreement or petition if the

child had continued to reside with the

relative. This is a longstanding

Departmental policy based upon the

statutory language in section

472(a)(4)(ii) of the Act, and consistent

with the purpose of the program which

is to provide continuing support for an

AFDC-eligible child when he or she

cannot live safely at home.

It is a misinterpretation to suggest that

the proposed policy narrows title IV–E

eligibility for children living with

relative caretakers and is discriminatory

against relatives as foster caretakers.

Rather than limiting a child’s eligibility

or discriminating against relative

homes, the policy supports children

remaining with related caretakers when

the State determines that they cannot

live safely in their own homes, and

applies the living with and removal

from requirements equitably to both

relative and nonrelative caretakers.

Under the previous policy, if a parent

left a child with a nonrelated caretaker

and the agency petitioned the court for

4064 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

removal of custody from the parent in

less than six months from the date the

child lived with the parent, the

otherwise eligible child would have

been eligible to receive title IV–E if the

interim caretaker was subsequently

licensed or approved as a foster family

home by the State and the child

remained in that home. Conversely, if

the parent left the child with a related

caretaker and the same circumstances

existed, the otherwise eligible child

would not have been eligible for title

IV–E foster care because: (1) In the

absence of the parents, the home and

customary family setting was

considered to have shifted to the home

of the other relatives; and (2) the child

was living with another relative at the

time of petition and not physically

removed from that home. The revised

policy provides equitable treatment in

either circumstance and encourages a

child’s continued placement with a

relative caretaker when he or she cannot

remain safely at home. The policy does

not discriminate against relatives, and is

consistent with the intent of ASFA.

Comment: Two commenters

referenced the Land v. Anderson case

and related litigation that are currently

in the Ninth Circuit Court of Appeals.

One commenter recommended that we

follow the analysis in the Land v.

Anderson case and the other commenter

urged us to withdraw the proposed

policy and await the outcome of the

Ninth Circuit case.

Response: The final rule with respect

to the issue before the above referenced

court reflects longstanding

Departmental policy that is in keeping

with the statutory requirements. That

policy continues to be in effect. Should

the Ninth Circuit Court of Appeals rule

against the Department, that decision

would be subject to further review by

the Supreme Court, and it would not, in

any event, necessarily require a

nationwide change in Federal law or

policy. No changes were made to the

regulation as a result of this comment.

Comment: One commenter suggested

that the six-month time limit should be

waived for relative care to support the

child remaining with a family member.

Response: We are unable to waive the

six-month time limit because it is

statutory. The statute at section

472(a)(4) of the Act requires, among

other things, that a child be living with

and removed from the home of a

specified relative at the time of the

voluntary placement agreement or

initiation of court proceedings. Section

472(a)(4)(B)(ii) of the Act provides an

exception to that requirement by

allowing a six-month period that the

child can live with an interim caretaker

and still be eligible for title IV–E foster

care. We do not have the authority to

waive a statutory provision and,

therefore, did not revise the regulations.

The flexibility we have afforded States,

however, is to allow constructive

removals (i.e., paper or nonphysical

removals) in order to provide equal

treatment for related and nonrelated

caregivers.

Comment: One commenter supported

allowing ‘‘legal’’ removals, but did not

believe that the revised interpretation of

the removal requirement was clearly

expressed. The commenter suggested

language be included that more clearly

states that ‘‘legal’’ removals are allowed.

Response: We concur with the

comment and have revised the

regulatory language to clarify that either

physical or constructive removals are

allowed.

Comment: A commenter suggested

that ‘‘interim caretaker’’ be defined.

Response: We have revised the

regulatory language to clearly provide

for the use of constructive removals. In

doing so, we have removed all

references to interim caretakers.

Therefore, there is no need to define this

term in the regulation.

Comment: A commenter expressed

concern that the restriction of ‘‘within

six months’’ appears to contradict other

areas of title IV–E eligibility where

removal from the home of a specified

relative is a determining factor.

Response: Removal from the home of

a specified relative is one of several

criteria for title IV–E eligibility, as is the

six-month living with requirement. The

commenter did not cite references for

the sections of the Act about which the

concern was raised and we do not find

any specific citation that conflicts with

the six-month limitation. No changes

were made to the regulation based upon

this comment.

Comment: One commenter asked if a

child must be AFDC eligible as if he or

she had been living in his or her home

in the removal month even in

circumstances where the child is not

physically removed from that home.

Response: In determining title IV–E

foster care eligibility, a child must be

eligible for AFDC in the month in which

either a voluntary placement agreement

is entered into or a petition to the court

is initiated to remove the child from his

or her home. If the child is not living

with a specified relative at that time,

then section 472(a)(4)(B)(ii) of the Act

allows a six-month period of time

during which the child could have been

living with an interim caretaker. Under

these circumstances, a child can be

considered AFDC eligible in the month

of the voluntary placement agreement or

petition if: (1) The child had been living

with the specified relative at some time

within the six-month period prior to

that month; and (2) would have been

eligible in the home of the specified

relative in that month if he or she had

continued to reside with the relative.

Comment: One commenter asked if

there must be a physical removal for a

child who lives with the same relative

after legal custody is transferred to the

State.

Response: Two possible scenarios can

be derived from this question. In the

first, a child is living with his or her

parent, custody is transferred to the

State but the child remains in the home

of the parent. In this situation, the child

is not in foster care and ineligible for

title IV–E foster care. However, in a

second scenario, the child is living with

a related interim caretaker for less than

six months prior to the State’s petition

to the court for removal of the child, and

custody is removed from the parent. The

related caretaker is licensed as a foster

family home and the child continues to

live in that home. In this situation, the

child remains with the related caretaker,

who is now a licensed foster parent, and

the child is eligible for title IV–E foster

care.

Comment: One commenter asked

whether the child must have been living

with the specified relative from whom

custody is removed. The commenter

pointed out that, at times, a child could

be absent from such a home for six

months or longer.

Response: Yes. The child must have

been living with the specified relative

from whom custody is removed at some

time within the six-month period prior

to the month of the voluntary placement

agreement or initiation of court

proceedings.

Comment: One commenter questioned

the State agency’s ability to make after

the fact assessments of the need for

foster care placement when families

make such placements initially without

the agency’s involvement or

determination that such placement/

family disruption was necessary. The

commenter expressed concern that this

could create an incentive to get higher

foster care rates in lieu of lower TANF

rates.

Response: The purpose of title IV–E

foster care is to provide assistance for

the maintenance of AFDC-eligible

children who cannot remain safely in

their own homes. It is not for the

purpose of maintaining children in the

homes of noncustodial relatives when

protection in their own home is not an

issue. The revised policy assures

equitable treatment for relative and

nonrelative interim caretakers when the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4065

child can no longer remain safely with

the parent or other custodial relative.

There are, however, certain

requirements that must be met for

AFDC-eligible children in every case: (1)

There must be either a voluntary

placement agreement between the

custodial relative and the State agency,

or court findings that it is contrary to

the child’s welfare to remain at home

and that reasonable efforts have been

made to prevent placement; (2) the

foster care provider’s home (whether

related or not) must be fully licensed or

approved in accordance with the State

licensing standards; and (3) the

protective and permanency

requirements in the Act must be met.

We want to emphasize that title IV–E

foster care funds are available only

when the child is at-risk in his or her

own home and all other eligibility

criteria are met.

Section 1356.21(m) Review of

Payments and Licensing Standards

This section sets forth the State plan

requirement regarding review of the

appropriateness of payments under title

IV–E, as well as State licensing/approval

standards for foster homes. No

comments were received on this

paragraph and therefore we made no

changes to the regulation.

Section 1356.21(n) Foster Care Goals

This section provides the

requirements related to foster care goals

that must be established by States.

Comment: One commenter requested

an explanation of the criteria for these

goals, and who will identify the goals.

Response: The criteria for establishing

these goals, and who will identify the

goals, is left to the individual States to

determine. One example would be to set

goals to reduce the number of children,

in a given year, who have remained in

foster care for at least 24 months by a

certain percentage for each succeeding

year and provide the steps that the State

will take to achieve these incremental

reductions. States also may want to

align their foster care goals with those

used for the annual report on State

performance under section 479A of the

Act.

Section 1356.21(o) Notice and

Opportunity To Be Heard

This section implements the new

requirement of the case review system

that mandates giving notice of hearings

and an opportunity to be heard to foster

parents, preadoptive parents and

relative caregivers.

Comment: We received several

comments concerning the notification

process for this requirement. Some

commenters suggested that the

regulation not be prescriptive

concerning who must provide the

notice, while others recommended that

we clarify the manner in which the

notice is given and who is responsible

for providing the notice. One

commenter cautioned that we not

presume that foster parents will receive

notice in the same manner as other

parties. Another commenter suggested

that the State agency be responsible for

providing notice. One commenter raised

a concern that more court hearings

could occur as a result of improper

notice. Another commenter

recommended that we state the intent of

this provision is for notice to be given

in a timely manner and that the hearings

be conducted in a location accessible to

the child’s family.

Response: We concur with the

commenters who suggested that the

regulation not be prescriptive with

respect to who must provide the notice

of the opportunity to be heard. Since the

State title IV–B/IV–E agency has the

ultimate responsibility for

implementing the case review system

requirements in section 475(5)of the Act

and we do not regulate the courts, we

believe that such decisions are best left

to the State. Although we expect that a

State will choose to use the same

procedure for giving notice to foster

parents, relative caretakers, and

preadoptive parents as it does for the

parents and others who are parties to

the case, this is a State decision.

We also agree with the comment that

suggested we clarify that the notification

of the opportunity to be heard be given

in a timely manner and have revised

paragraph (o) accordingly. The right to

notification of an opportunity to be

heard is meaningless unless the

individuals are notified of the

opportunity to be heard at the review or

hearing in a timely manner.

In addition, we understood the

suggestion that we require that the

location of the reviews and hearings be

accessible to parents to mean the

parents from whom the child was

removed and not the foster parents,

preadoptive parents or relative

caretakers. We did not revise the

regulation as a result of this comment

since such a requirement is not covered

by the statutory provision, the purpose

of which is to afford the primary

caregivers for a child who is in an outof-home placement the opportunity to

provide relevant information about the

child at the review and hearing.

Comment: One commenter suggested

that the regulatory language for this

section be the same as that in the Act.

Response: These regulations

implement the Act and clarify for States

the requirements related to the statutory

provisions. We believe that this section

needs additional language to clarify the

statutory provisions and therefore have

not revised the regulation in the

suggested manner.

Comment: One commenter suggested

that we require States to provide

extended family members with written

notice of a child’s entrance into foster

care, timelines and permanency goals.

Response: States are not prohibited

from providing extended family

members with written notification of a

child’s entrance into foster care, if doing

so is appropriate for the situation, in the

best interests of the child, and

consistent with the administration of

the State’s title IV–E State plan.

However, we believe that the suggestion

goes beyond the statutory authority;

therefore we have not made this a

requirement in the regulation.

Comment: One commenter requested

more guidance on what documentation

the State has to give caregivers, e.g.,

court reports, in preparation for their

appearance in court. This commenter

also requested that we require States to

provide notice to caregivers who have

had the child for at least three months

during the two years preceding the

hearing.

Response: The requirement that States

give foster parents, preadoptive parents

and relative caretakers notice of and an

opportunity to be heard affords these

individuals with a right to provide input

to these reviews and hearings. However,

it does not confer a right to appear in

person at the review or hearing. The

requirement can be met as the State sees

fit, such as by notification to the

individuals that they have an

opportunity to attend the review or

hearing and provide input, or

notification that they can provide

written input for consideration at the

review or hearing. Since this provision

does not make these individuals a legal

party to the case and does not give them

a right to appear at the review or

hearing, it is up to the State to

determine what documentation, if any,

to provide, consistent with Federal and

State confidentiality laws.

In addition, requiring that a State

provide notice of an opportunity to be

heard to previous caregivers goes

beyond the statutory language. The

statute requires only that notice be given

to caregivers ‘‘providing care’’ for the

child. This does not, however, prohibit

a State from offering previous caregivers

the opportunity to be heard, if the State

determines it is appropriate for a

particular child’s situation.

4066 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

Comment: We received several

comments requesting clarification

around the types of hearings these

individuals should be attending, and the

extent of their participation in the

hearings. One commenter recommended

that the regulation clearly lay out the

types of hearings at which foster

parents, preadoptive parents and

relative caretakers have notice/

opportunity to be heard. Some

commenters pointed out that section

475(5)(G) of the Act gives foster parents,

preadoptive parents, and relative

caregivers the right to notice and the

opportunity to be heard at ‘‘any review

or hearing,’’ and is not limited to ‘‘any

review or permanency hearing.’’

However, one commenter did not feel it

would make sense to give them the

opportunity to participate in purely

procedural hearings, such as discovery

hearings or hearings addressing purely

legal issues. One commenter requested

that HHS delete the requirement that

these individuals be provided an

opportunity to be heard at the six-month

case reviews, and that the decision to

invite individuals other than the

biological parents should be made on a

case-by-case basis.

Response: The proposed regulation

provides the types of hearings and

reviews that require notice and an

opportunity to be heard for foster

parents, preadoptive parents and

relative caretakers. We made a minor

revision to the regulatory language,

however, to clarify that the review is the

six-month periodic review as described

in section 475(5)(B) of the Act. We did

not make any further revisions as a

result of these comments as we do not

believe that they can be supported by

the statute. The statute specifically

requires that these caretakers be

provided notice and an opportunity to

be heard at ‘‘any review or hearing’’

held with respect to the child. We,

therefore, do not have the statutory

authority to waive that requirement by

allowing a State to determine on a caseby-case basis whether these caretakers

should be provided an opportunity to be

heard at the reviews. Also, as stated

above, the notice and opportunity to be

heard does not mean that these

individuals have to be invited to the

reviews and hearings. This requirement

can be met by providing the caretakers

with an opportunity to present either

written or oral input that can then be

considered at the review or hearing.

Comment: Some commenters

suggested that these individuals should

not have the right to be present during

entire hearings or access to confidential

information regarding biological parents

that is likely to be disclosed in a full

hearing.

Response: We believe that the

regulation is consistent with the statute

with respect to the rights of the foster

parents, preadoptive parents and

relative caretakers regarding this

provision and, therefore, did not make

any changes. The provision only offers

an opportunity to be heard and does not

afford these individuals standing as a

party in the case. As discussed in the

preamble of the NPRM, the court,

however, is not precluded from making

appropriate rulings with respect to any

of these individuals. Rather than

prescribing in regulation that these

individuals cannot be present during

the entire hearing or be provided with

confidential information, we believe

those decisions are best left to the State

and the court to determine, consistent

with Federal and State confidentiality

laws and the best interests of the child.

Comment: We received several

comments concerning legal standing

and party status for foster and

preadoptive parents and relative

caregivers. One commenter suggested

adding language to the effect that the

court can give standing to these

individuals, and further recommended

that the States set criteria for receiving

standing, such as when the child has

been in a particular foster home for a

year. One commenter believes that these

individuals need not be given the right

to legal counsel because they do not

have standing.

Response: State courts have the

authority to make appropriate rulings

with respect to these individuals. We

believe that to impose requirements on

States related to standing goes beyond

the intent of the provision. In addition,

the right to provide input on a case at

a hearing does not convey the right to

legal counsel to these individuals. We

have not made any changes to the

regulation in response to these

comments.

Section 1356.22 Implementation

Requirements for Children Voluntarily

Placed in Foster Care

This section sets forth requirements

States must meet to receive Federal

financial participation (FFP) for

children removed from home under a

voluntary placement agreement.

Comment: We received several

comments expressing concern around

the application of the TPR requirement

to children voluntarily placed in foster

care. Some commenters believe that

application of the TPR provision to this

population goes beyond the statute. One

commenter requested that

unaccompanied refugee minors placed

voluntarily be exempt from the TPR

provision.

Response: We do not have the

statutory authority to provide an

exemption from the requirement to file

a TPR for particular populations of

children. Thus, we did not change the

regulation to provide an exemption for

children, including unaccompanied

refugee minors, placed in foster care by

a voluntary placement agreement. The

TPR requirement is designed to

encourage State agencies to make timely

decisions about permanency for

children in foster care. Congress

developed the TPR provision to be

applied to all children in foster care,

whatever their entry point into the

system. Exempting groups of children

from the requirements would be

contrary to ASFA’s goal to shorten a

child’s time in foster care. Exceptions to

the requirement to file a petition for

TPR must be applied on a case-by-case

basis considering the best interests of

the child, consistent with

§ 1356.21(i)(2).

Comment: Many commenters

expressed concern that there are

insufficient protections for parents who

voluntarily place their children in foster

care, and that States have an affirmative

obligation to notify parents of the ASFA

requirements. Some commenters

suggested that States be required to

provide written notification to the

parents or guardian at the time they

voluntarily place their children in foster

care of the requirements for periodic

reviews, case plans, permanency

hearings, and the TPR provisions.

Response: The statute and the

regulation provide sufficient protections

to parents who voluntarily place their

children in foster care. Section 472(f)(2)

of the Act requires that the voluntary

placement agreement specify, at a

minimum, the legal status of the child

and the rights and obligations of the

parents or guardian, the child, and the

agency while the child is in an out-ofhome placement. Further, the statute at

section 472(g) of the Act suggests that a

voluntary placement agreement is a

temporary status, such that the parents

or guardian have the capacity and right

to revoke such agreement unless a court

determines that return to the home

would be contrary to the best interests

of the child. The regulation at

§ 1356.22(c) emphasizes the rights of the

parents in this regard as it requires the

State to have uniform procedures,

consistent with State law, for revocation

by the parents of a voluntary placement

agreement. In addition, the regulation at

§ 1356.21(g) requires that the case plan

be developed jointly with the parent or

guardian. Furthermore, it is incumbent

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4067

upon the State to work toward a timely

reunification when the case plan goal is

to return the child to his or her parents

or guardian. We, therefore, do not

believe that it is necessary to further

prescribe what the State must present to

the parents or guardian when they

voluntarily place a child in foster care.

Comment: One commenter was

opposed to the requirement that States

establish a procedure for revocation of

a voluntary placement agreement by the

parents. The commenter believed that

this is an unnecessary requirement

unless the Department has evidence

suggesting that parents have difficulty

revoking these agreements and having

their children returned.

Response: The requirement that States

establish a procedure for revocation of

a voluntary placement agreement is not

new. This has been included in the

voluntary placement agreement

requirements since the regulations were

issued in 1983. In fact, at that time, the

Department determined that since the

practice among States in returning

children voluntarily placed is

sufficiently responsive, we did not need

to impose further requirements on

States to specify the timing and

procedures for the return home of a

voluntarily placed child, as public

comment had suggested at that time. We

believe the requirement that the State

have uniform procedures, consistent

with State law, for revocation of such

agreements provides a safeguard for

parents who voluntarily place their

children into foster care and, therefore,

did not revoke this requirement.

Comment: One commenter suggested

that § 1356.22(a)(3) be revised to read,

‘‘45 CFR 1356.21 (f), (g), (h), and (i).’’

Response: We concur with these

comments and have amended the

regulation accordingly. We agree that

paragraph (f) should be included since

it sets forth the sections of the statute to

which a State must adhere in order to

meet the case review system

requirements. The case review system

applies to all children in foster care,

including children placed through a

voluntary placement agreement. In

addition, we concur with the inclusion

of § 1356.21(g) in this provision since

the State is required to develop a case

plan for each child in foster care,

including those voluntarily placed. We

also agree with the exclusion of

paragraph (j) since that sets forth the

requirements for an infant born to, and

placed with, a minor parent who is in

foster care.

Section 1356.30 Safety Requirements

for Foster Care and Adoptive Home

Providers

This section pertains to safety

requirements for foster care and

adoptive home providers, and sets forth

conditions under which States cannot

license or approve foster and adoptive

homes if the State finds that prospective

foster or adoptive parents have been

convicted of certain crimes.

Comment: We received several

comments and questions regarding the

application of the criminal records

check requirement to the individuals

and groups contained within the

definition of foster care in § 1355.20 of

the regulation. Some commenters

recommended that the criminal records

check provision not be applied to child

care facilities or to unlicensed relatives.

One commenter suggested that child

care facilities not be included in the

requirement, but that upon discovery of

a criminal record, the facility be

required to undertake corrective action.

Response: To address these

comments, we would like to clarify the

requirements for States that institute the

criminal records check provision and

the requirements for States that do not.

The criminal records check provision

does not extend to child care facilities;

the statute specifically limits this

requirement to prospective foster and

adoptive parents. However, in order to

be an eligible provider for title IV–E

funding purposes, in all cases where no

criminal records check is conducted, the

licensing file must include

documentation that safety

considerations with respect to the

caretakers have been addressed. This

safety documentation requirement

applies to child care institutions in

every situation and to prospective foster

and adoptive parents in States that opt

out of the criminal records check

provision. Since this provision is a title

IV–E funding requirement, it does not

extend to relative homes that are not

licensed or approved in accordance

with State licensing standards because

children placed in such homes are not

eligible for title IV–E funding.

Comment: Two commenters asked if

this section applies to currently licensed

foster parents and approved adoptive

parents whose licensure or approval

predates the passage of ASFA.

Response: The provision applies to

‘‘prospective’’ foster and adoptive

parents. Therefore, the provision applies

to foster and adoptive parents who are

licensed or approved after the date of

enactment of the law (November 19,

1997), or the approved delayed effective

date if the State required legislation to

implement the provision.

Comment: A commenter requested

that we extend the requirements for a

criminal records check by encouraging

States to complete checks for any

member of the household over the age

of 18.

Response: To require that a State

conduct criminal records checks for

anyone other than prospective foster

and adoptive parents goes beyond the

statute.

Comment: One commenter requested

clarification that this provision not be

interpreted to require prospective foster/

adoptive parents to be U.S. residents for

the last five years. The commenter

expressed belief that such an

interpretation would be unfair to

prospective caretakers of refugee

minors.

Response: This provision does not

impose a time-specified U.S. residency

requirement on prospective foster and

adoptive parents. However, for the State

to claim title IV–E funds on behalf of a

foster or an adoptive child, the

prospective parent and the child must

meet the requirements in the Personal

Responsibility and Work Opportunity

Reconciliation Act (PRWORA) of 1996

related to qualified aliens. ACYF–CB–

PIQ–99–01 provides guidance with

respect to when alien foster and

adoptive parents and children can be

eligible for title IV–E.

Comment: Several comments were

received requesting flexibility in

awarding adoptive/foster home licenses

to individuals who have been convicted

of certain crimes within the last five

years. There is a concern regarding the

requirement to automatically deny

eligibility to prospective adoptive and

foster parents who have had drug

convictions within five years. It was

recommended that States be allowed to

make individual assessments of the

prospective parent’s ability to care for a

child. Also, it was recommended that

States have flexibility in decisions

concerning rehabilitated relatives.

Response: The statute is very explicit

in specifying that in such situations

‘‘final approval shall not be granted.’’

We, therefore, did not make the

suggested changes because the statute

does not support such an interpretation.

Comment: One commenter

recommended that the phrase in

§ 1356.30(b)(4), ‘‘violent crime,

including rape, sexual assault * * *,’’

be revised to reflect the ASFA language

of ‘‘crime involving violence.’’ The

commenter was concerned that certain

nonviolent crimes, such as robbery, may

involve violent actions that should be

considered when determining the

4068 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

suitability of prospective foster and

adoptive parents.

Response: We concur with this

comment and have revised the

regulation to reflect the statutory

language.

Comment: A commenter expressed

concern with the inconsistency of

allowing States to reunite children with

biological parents who have committed

certain crimes, but denying child

placements with foster or adoptive

parents who have committed these same

crimes.

Response: We do not believe the

statute is inconsistent in this regard.

Although the safety of children is the

paramount concern in both in-home and

out-of-home situations, biological

parents, who have certain rights with

respect to their children, cannot be

compared to a foster parent, who is a

substitute caretaker when the child

cannot be maintained safely in his or

her own home. It is up to a State’s

discretion to determine, in individual

cases, whether a child and biological

parent should be reunited in cases

where the parent has been convicted of

certain crimes. It also is incumbent

upon the State in its custodial role of a

child to provide scrutiny of its foster

parents to assure they meet certain

established safety (and other) standards

before a child is placed in the home.

Comment: A question was raised

about whether ‘‘a drug-related offense’’

includes an alcohol-related felony

conviction.

Response: The criminal records check

provision at section 471(a)(20)(A) of the

Act would apply in such situations.

Alcohol is considered a drug and a

felony conviction for an alcohol-related

offense is a serious crime. Therefore,

unless the State opts out of the

provision, an alcohol-related felony

conviction within the last five years

would prohibit the State from placing

children with the individual for the

purpose of foster care or adoption under

title IV–E.

Comment: One commenter supported

the criminal records check provision,

but raised a concern that prospective

foster and adoptive parents not be

subjected to duplicate or multiple

requirements when several

jurisdictions, with differing licensing

and background checks, are involved.

The commenter noted that involvement

of multiple jurisdictions in an adoption

may sometimes become a stumbling

block to achieving permanency and

finalizing adoptions.

Response: This issue is a matter of

State discretion. The criminal records

check provision is intended to assure

the safety of children in foster care and

adoptive placements. The State agency

is responsible for determining the type

of background checks necessary to meet

the safety standards established by the

State.

Comment: A commenter requested

clarification concerning which criminal

records check provisions apply to title

IV–B and which apply to title IV–E. The

commenter believes that § 1356.30(b),

(c), and (d) are requirements only for

title IV–E, and that (e) should be for

children in licensed homes receiving

title IV–E in States that opt out of the

criminal records check requirement.

The commenter suggests that an

additional item (f) be added to address

safety as a title IV–B requirement for all

non-title IV–E out-of-home placements.

Response: The criminal records check

requirement is both a title IV–E State

plan provision and an eligibility

requirement for title IV–E funding. The

specific statutory language of the

provision limits its authority to

eligibility for the title IV–E foster care

maintenance payment and adoption

assistance programs under a State’s title

IV–E State plan. We, therefore, do not

have the statutory authority to apply the

requirement for criminal records checks

to all non-title IV–E out-of-home

placements of children and did not

make this change in the regulation.

The regulation at § 1356.30(e), as

proposed in the NPRM, would apply

more broadly than only to those States

that opt out of the criminal records

check requirement. Since we may not

have made this clear, we have separated

the requirements of this paragraph into

two sections for the final rule to clarify

the criteria for title IV–E eligibility. We

revised § 1356.30(e) to apply only in

States that opt out of the criminal

records check. We also added a

paragraph (f) to set forth the safety

requirements that must be addressed for

child care institutions, which are not

covered under the criminal records

check provision. This revision only

clarifies the requirements; it does not

change the substance of the

requirements in any way.

Comment: We received several

comments concerning the inability to

claim title IV–E until the criminal

records check is completed.

Commenters noted that the length of

time required to complete background

checks, particularly Federal Bureau of

Investigations (FBI) checks, unfairly

penalizes States. Several commenters

recommended that States be allowed to

claim FFP retroactively to the date of

placement once the criminal records

check has been completed, while others

suggested that HHS allow provisional

licensure for up to six months as long

as application for the criminal records

check is made within 30 days of

placement. Another commenter

suggested that States be allowed to

claim FFP if the safety of the placement

is documented, including checking the

names of prospective parents against the

State’s child abuse registry, while

awaiting completion of the background

check.

Response: Federal matching funds for

payments to foster family homes under

title IV–E cannot be permitted until all

State requirements for licensure are

satisfied. Further, the criminal records

check provision restricts eligibility for

title IV–E funding until after the home

has been finally approved for the

placement of a title IV–E eligible child.

In fact, the plain language of the

criminal records check provision

requires such checks on prospective

foster and adoptive parents ‘‘before’’ the

parent can be approved for ‘‘placement

of a child’’ for whom foster care

maintenance payments or adoption

assistance payments ‘‘are to be made.’’

Accordingly, to allow a State to claim

retroactively back to the date of

placement would be in conflict with the

statute which bases foster family home

eligibility on licensure or approval of

the home, including completion of a

criminal records check.

However, we recognize that some

time may elapse between the date the

requirements are satisfied and the date

on which the license or approval

actually is issued to the foster home. We

have concluded that 60 days is an ample

period of time to allow between the time

the State receives all the information on

a home that is required to fully license

or approve it and the date on which

such license or approval is issued.

Therefore, we have revised the

definition of ‘‘foster family home’’ in the

regulation to allow a State to claim title

IV–E reimbursement for a period, not to

exceed 60 days, between satisfaction of

the approval or licensing requirements

and the actual issuance of a full license

or approval. This accommodation does

not conflict with the statutory

requirement that all licensure

requirements must be satisfied before a

foster home is eligible for title IV–E

funding. Rather, it is recognition that a

period of time may elapse between

when the eligibility criteria are met and

the time it takes a State to issue a license

or approval.

Comment: One commenter opposed

linking criminal records checks to title

IV–E eligibility.

Response: Since the requirement for

criminal records checks is statutorily

linked to title IV–E eligibility, we did

not change the regulation.

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4069

Comment: One commenter requested

that we specify that the costs of

conducting criminal records checks are

allowable administrative costs under

title IV–E.

Response: The regulations at

§ 1356.60(c)(2) allow States to claim

costs associated with the recruitment

and licensing of foster homes as

administrative costs under title IV–E.

ACYF–PA–83–01 identifies additional

allowable administrative costs specific

to the title IV–E adoption assistance

program. Since the criminal records

check provision is a condition of

licensure or approval in States that do

not opt out of the provision, costs

associated with criminal records checks

for prospective foster and adoptive

parents are allowable under title IV–E

when claimed pursuant to an approved

cost allocation plan. No revisions were

made to this section of the regulation

since this is already covered in

§ 1356.60 which addresses fiscal

requirements for title IV–E.

Comment: We received many

comments concerning the levels of

background checks required, e.g., local,

State, and Federal. Comments ranged

from those that approve of State

discretion in deciding what level of

checks to conduct, to those that believe

HHS should require both State and

Federal background checks. One

commenter suggested that we require all

States to conduct Federal criminal

records checks on prospective parents

who have been living in a State for less

than two years, while another suggested

we require States to conduct

background checks in States where the

prospective parent previously resided.

Response: We have carefully

considered the comments in this area.

We concur with the commenters who

approved of State discretion with

respect to the level of background

checks to conduct and, therefore, did

not make any changes to the regulation.

Although the comments with respect to

expanding the criminal records check

requirement were good suggestions, we

believe that, in the absence of any

statutory direction in this area, such

decisions are best left to the State. We

do, however, encourage States to be

thorough in their safety assessments of

foster homes and to utilize the

information sources available to them to

the fullest extent possible to assure the

safety of children in out-of-home

placements.

Comment: We received some

comments suggesting that HHS require

more extensive background checks,

including child abuse registries,

domestic violence registries, and adult

protective services records.

Response: These are good suggestions

and we encourage States to routinely

include checks of State registries to

assist in determining whether a

potential foster family home is safe.

However, we believe that to require a

State to include such checks under this

provision goes beyond the statutory

authority.

Comment: One commenter expressed

concern that past suspicions of child

abuse and neglect will be discarded, and

suggested that a National central registry

be established for child abuse and

neglect records.

Response: The establishment of a

National central registry, and a

requirement that States participate in

such a registry, goes beyond the

statutory authority. We did not make

any changes to the regulations based on

this comment since it does not relate

directly to criminal records checks.

Comment: Two commenters

expressed concern that States may opt

out of the criminal records check

requirement.

Response: The statute specifically

makes the criminal records check

requirement a State option. However,

§ 1356.30(e) and (f) of the regulation

require States that opt out of the

requirement to address and document

safety in foster and adoptive homes, as

well as child care institutions.

Comment: One commenter requested

that the regulations be revised to specify

that an Indian tribe may elect not to

conduct or require criminal records

checks on foster or adoptive parents if

it obtains an approved resolution from

the governing body of the Indian tribe.

Response: While we understand that

Tribes often license or approve foster

homes, we are unable to modify the

regulation based on this comment.

Tribes may only receive title IV–E funds

pursuant to a title IV–E agreement with

a State. A tribe that enters into such an

agreement must comport with section

471(a)(20) of the Act and § 1356.30 in

accordance with the State plan in order

to receive title IV–E funding on behalf

of children placed in the homes it

licenses. The statute expressly gives the

State the authority to opt out of section

471(a)(20) of the Act through State

legislation or a letter from the Governor

to the Secretary. Agreements between

the State child welfare agency and other

public agencies or tribes permit those

entities to have placement and care

responsibility for a particular group of

the foster care population under the

approved State plan. Such agreements

do not permit other public agencies or

tribes to develop a distinct title IV–E

program separate from that operated

under the approved State plan.

Comment: We received several

comments asking for clarification

concerning § 1356.30(e) and the

procedures and documentation required

to show that safety considerations have

been made in States that have elected

not to conduct or require criminal

records checks. One commenter asked

for guidance on what processes and

procedures should be in place in lieu of

a criminal records check. Another

commenter suggested that the

regulations require minimum

documentation, such as: Written results

of an on-site inspection of the home,

group care facility, or institution; a

statement that the home meets the

minimal standards for health and safety;

and an assurance that the caregivers

have plans or procedures for protecting

the safety of children.

Response: Although these were good

suggestions, we do not believe that we

have the statutory authority to specify

the mechanism or documentation

required to verify that safety

considerations have been made.

Although we leave that decision to the

State, we continue to require that the

licensing file for the foster family,

adoptive family, child care institution

and relative placement contain

documentation that shows safety

considerations have been addressed. In

addition, we made a minor revision to

the regulation to clarify that the

documentation must verify that the

safety considerations have been

addressed. We strongly encourage States

to conduct thorough safety checks and

utilize all available information sources

to the fullest to assure the safety of

children in out-of-home placements.

Comment: One commenter asked for

clarification that for States that have

elected not to conduct or require

criminal records checks, title IV–E may

be claimed as long as the licensing file

contains documentation that safety

considerations have been addressed.

Response: We do not believe that a

change is required in the regulation to

confirm that title IV–E can be claimed

in such circumstances. However, we

have separated the requirements of this

paragraph into two sections for the final

rule to clarify the criteria for title IV–E

eligibility. We revised § 1356.30(e) to

apply only in States that opt out of the

criminal records check. We also added

a paragraph (f) to set forth the safety

requirements that must be addressed for

child care institutions, which are not

covered under the criminal records

check provision.

4070 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

Section1356.50 Withholding of Funds

for Noncompliance With the Approved

Title IV–E State Plan.

Although we did not propose

amendments to § 1356.50 of the

regulations in the NPRM, we are

amending it in this final rule to bring

the cross-references contained therein

into conformity with the new

regulations.

Section 1356.60 Fiscal Requirements

(Title IV–E)

This section sets for the fiscal

requirements and available federal

financial participation for title IV–E

costs

In § 1356.60(b) we have made a

technical amendment to the existing

regulation with regard to matching for

title IV–E training, in order to make it

consistent with the statute. The existing

regulation at § 1356.60(c)(4) authorizes

States to use administrative funds at a

matching rate of 50% for the training of

foster and adoptive parents and staff of

licensed or approved child care

institutions that provide care for

children receiving assistance under title

IV–E. The existing regulation also limits

associated costs to per diem and travel

expenses. Since the promulgation of

that regulation, the statute has been

amended by section 13715 of the

Omnibus Budget Reconciliation Act of

1993, to authorize State’ use of training

funds at a 75% match rate for the shortterm training of current or prospective

foster or adoptive parents as well as staff

of licensed child care institutions.

Under the statute, a State’s claims may

include but are not limited to per diem

and travel.

The Department has followed the

overriding statutory language since it

was enacted (see ACYF–PI–94–15 and

ACYF–PA–90–01). However, we would

like to take this opportunity to make the

regulatory language consistent with the

statute. Because this change is technical

in nature, and does not affect policy, we

have included this change in this final

rule. We are rescinding existing

paragraph § 1356.60(c)(4) and amending

§ 1356.60(b)(1) to make this technical

change.

Section 1356.71 Federal Review of the

Eligibility of Children in Foster Care and

the Eligibility of Foster Care Providers in

Title IV–E Programs

This section sets forth the

requirements governing Federal reviews

of State compliance with the title IV–E

eligibility provisions as they apply to

children and foster care providers under

paragraphs (a) and (b) of section 472 of

the Act.

Section 1356.71(a) Purpose, Scope and

Overview of the Process

Comment: Three commenters were of

the opinion that the title IV–E review,

because its major focus is on

documentation, is inconsistent with the

new outcomes-based review for child

and family services. Two commenters

said that this review relies solely on

individual case eligibility for payments

absent any consideration of good

casework practice and procedures.

Response: The title IV–E foster care

eligibility review and the child and

family services review are different in

purpose and scope. The purpose of the

title IV–E eligibility review is to validate

the accuracy of a State’s claims to assure

that appropriate payments are made on

behalf of eligible children, to eligible

homes and institutions, at allowable

rates. These determinations are made

most effectively by an examination of

the case record and payment

documentation. The title IV–E review

has been revised, within existing

statutory constraints, to strengthen the

State and Federal partnership through

the provision of corrective action and

technical assistance. While we

acknowledge the importance of positive

outcomes for the children and families

the title IV–E foster care program serves,

we also acknowledge our attendant

stewardship responsibility in the

administration of this program.

Comment: We received five comments

indicating that the title IV–E eligibility

review penalizes child welfare agencies

when certain eligibility requirements

beyond the State’s control, specifically

those related to the documentation of

judicial determinations, are not met.

Response: We recognize that child

welfare agencies ultimately may be held

accountable and lose title IV–E funding

when documentation of the required

title IV–E judicial determinations is not

secured. Because the statute specifically

requires judicial determinations

regarding contrary to the welfare and

reasonable efforts, however, we have no

authority or flexibility to modify these

requirements. Where the statute

permits, we have afforded State child

welfare agencies additional time to

obtain the required judicial

determinations.

Section 1356.71(b) Composition of

Review Team and Preliminary Activities

Preceding an On-Site Review

This section describes the

composition of the on-site review team

and the preliminary activities which the

State must undertake prior to the on-site

review.

Comment: We received four

comments regarding the composition of

the review team, including requests for

specific representatives on the team,

such as State foster care review board

members, child advocates, and

individuals with expertise on

unaccompanied refugee minors. One

commenter requested that we require

States to include local agency staff on

the review team.

Response: The purpose of the title IV–

E financial review is to assess payment

accuracy through an examination of

case record documentation. Those

individuals recommended above to

participate on the title IV–E review team

possess expertise that would be utilized

more effectively on a review of service

delivery issues, such as the child and

family services review. During the title

IV–E pilot reviews, we learned that the

Federal/State team combination assisted

States in identifying strategies for

training, technical assistance and

corrective action, and augmented the

knowledge of State staff about title IV–

E eligibility requirements. For these

reasons, we see no benefit in expanding

the review team composition to include

external representatives. The State may,

however, exercise its discretion in

deciding the range of State and/or local

staff to include on the team.

Comment: One commenter noted that

the requirement that the State submit

the complete payment history records

for each sample case does not comport

with the regulation governing records

retention at 45 CFR part 74. The

commenter inquired if ACF could

require States to retain the payment

history for a child in out-of-home care

for more than three years. We received

an additional comment about the

difficulty of obtaining the payment

history for a child in care for 10 years.

A third commenter requested

clarification regarding whether

complete payment history encompassed

only the six-month period under review

or the complete life of the case. Another

commenter said that complete payment

history should be required only when

the case is determined to be ineligible.

Response: There is no inconsistency

between the requirement that a State

provide the complete payment history

and the regulation at 45 CFR 74.53(b)

which, in pertinent part, states that

‘‘Financial records * * * shall be

retained for a period of three years from

the date of submission of the final

expenditure report * * .*’’ (emphasis

added). For a child in out-of-home care,

the final expenditure report would not

be submitted to ACF until such child is

discharged from foster care. Since the

title IV–E review is designed to look at

a sample of more recent cases and

because ASFA reinforces moving

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4071

children to permanency more

expediently, we hope not to encounter

any case where a child has been in

foster care for 10 years. In those rare

instances where we do review such a

case, however, the payment history

must reflect the title IV–E foster care

payments for the duration of that child’s

placement, irrespective of the initial

date of placement, if the case is still

open and title IV–E payments continue

to be made on that child’s behalf. For

these reasons, we do not agree that this

requirement conflicts with 45 CFR part

74 and have made no modifications to

this section.

We have concerns with the

recommendation that the complete

payment history be required only after

a case is determined to be ineligible.

The purpose of the title IV–E foster care

eligibility review is to assure that

appropriate payments are made on

behalf of eligible children at allowable

rates to eligible homes and institutions.

Our experience has demonstrated that

assuring that ‘‘appropriate payments are

made * * * at allowable rates’’ is

determined as the result of identifying

duplicate payments, overpayments,

underpayments, erroneous payments

and related fiscal issues for each case

under review at the time the case is

being reviewed. Therefore, we have

made no modification to this section.

Comment: We received one comment

that ACF should allow sufficient time

for States to prepare for the review.

Response: We acknowledge our

responsibility to assure that States

receive ample notice in order to prepare

for a title IV–E review. We recognize

that the specific preparation time may

vary by State and may change as States

become more familiar with the process.

Taking into consideration the fact that

Federal staff also will require time to

prepare adequately for each review, we

do not anticipate the lack of advance

notice becoming an issue and, therefore,

prefer not to regulate the notification

period. We fully expect that States and

Regional Offices will negotiate this

aspect of the review in a mutually

agreeable manner.

Section 1356.71(c) Sampling Guidance

and Conduct of Review

This section describes the process to

be used to select the title IV–E foster

care sample of children to be reviewed.

Comment: Two commenters

recommended that the description of

the alternative sampling frame to be

utilized when AFCARS data are

unavailable or deficient should specify

that the period under review is six

months.

Response: We concur and have

revised paragraph (c)(1) to clarify that

the period under review is to be

consistent with one AFCARS six-month

reporting period when an alternative

sampling methodology is utilized.

Comment: We received numerous

comments about the sample that

included a range of concerns regarding

its statistical validity, its applicability to

States of differing sizes with varying

populations of children in foster care,

its accuracy and its reliability. Three

commenters questioned the rationale for

random sampling as the preferred

methodology. Several commenters

objected to the error rate thresholds as

abstract and unreasonably high. One

commenter supported the thresholds as

fair and reasonable. Several commenters

urged us not to regulate the sampling

methodology at all.

Response: The proposed sampling

methodology is designed to provide

national consistency in sample

selection, reduce the burden on States

associated with drawing their own

samples, utilize the AFCARS database,

and assure statistical validity. In our

attempt to achieve a balance between

partnership and stewardship, we

considered and evaluated several

sampling methodologies. The

methodology chosen was the result of

internal deliberations with ACF

statisticians and is similar to the

sampling methodology deployed

throughout the history of the title IV–E

reviews, with a significant modification

that affords States an opportunity for

program improvement prior to an

extrapolated disallowance. We chose

simple random sampling as the

preferred methodology as we believe it

will result in the most representative

sample. However, we expect that States

will work closely with ACF statisticians

in pulling a sample that is

representative and fair. We further

expect that regulating the sample will

afford States and ACF maximum

accuracy, uniformity, consistency, and

reliability.

Comment: One commenter found the

terms ‘‘first’’ and ‘‘second’’ confusing,

particularly when applied to the

subsequent three-year reviews.

Response: We concur and have

modified this and related sections to use

the terms ‘‘primary’’ and ‘‘secondary,’’

respectively, to describe the reviews.

The review of 80 cases is the primary

review. In those instances where the 15

percent threshold is exceeded and the

State enters into a PIP, followed by a

review of 150 additional cases, this

subsequent review will be referred to as

the secondary review.

Comment: One commenter

recommended that all States have an

opportunity to have their primary

review at the 15 percent threshold, since

all primary reviews may not be

completed within three years of the

final rule. Another commenter noted

that the title IV–E monitoring

regulations do not indicate when ACF

will begin conducting these reviews. A

third commenter indicated that States

should be afforded ample time to

implement the various requirements.

Response: We agree in principle and

have modified this section accordingly

to reflect that each State’s primary

review will be subject to the 15 percent

threshold. We fully anticipate that ACF

and States will work together to assure

that the primary reviews are held within

a reasonable period of time after

publication of the final rule. In any

event, we do not expect that States will

procrastinate in scheduling their

primary reviews once they have been

approached by ACF.

Comment: One commenter

recommended that we delete the words

‘‘determined to be’’ from the discussion

of disallowances in this section, noting

that the disallowance will be applicable

for the period of time that the case was

ineligible and not from the date the

reviewer discovered the ineligibility.

Response: We concur and have

modified this section accordingly. Any

disallowance will be applicable to the

period of time during which the case is

ineligible and not from the date the

reviewer makes the determination of

ineligibility.

Comment: Several commenters

recommended that the secondary review

should be limited to cases where

children entered foster care after the PIP

was implemented. Four commenters

said that the final rules should not

apply to children who entered foster

care before the rule was finalized.

Response: We do not concur that the

secondary review should include only

cases of children who entered foster

care after the program improvement

plan was implemented or that the final

rule apply only to children who entered

foster care after its promulgation. We

will apply the final rule prospectively

so that States are only responsible for

meeting the new requirements following

the effective date of the final rule.

Compliance with the requirements will

be evaluated against the standards in

effect at the time the action was taken.

Therefore, the checklist will be

modified so that we review for the ACF

policy in effect at the time of the action

and it reflects the transition time

indicated in the pertinent sections of

§§ 1355.20 and 1356.21(b)(2) related to

4072 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

licensing of foster family homes and the

reasonable efforts determination

regarding finalizing permanency plans.

Comment: One commenter requested

the discussion of the 10 percent and 15

percent error thresholds be clarified to

make it apparent that the error threshold

for the primary review is eight cases or

fewer and four cases or fewer—not

simply ‘‘8’’ and ‘‘4.’’

Response: We agree and have

modified the regulations such that they

consistently express that the error

threshold for the primary review is eight

or fewer and four or fewer cases—not

simply eight or four. We further have

revised this section to clarify that the

error rate applicable to the secondary

review of 150 cases is 10%.

Comment: One commenter requested

that unaccompanied refugee minors be

excluded from the sample of title IV–E

cases reviewed.

Response: Any child on whose behalf

title IV–E payments were made is

subject to review. No statutory basis

exists to exclude any specific

population from review and,

consequently, no modifications were

made to this section.

Section 1356.71(d) Requirements

Subject to Review

This section describes the

requirements subject to the title IV–E

eligibility reviews.

Comment: One commenter noted that

section 475(1) of the Act was

inappropriately cross-referenced in

paragraph (2).

Response: We concur and have

changed this cross-reference to

§ 1356.30 which addresses the safety

requirements for foster care and

adoptive home providers.

Comment: One commenter suggested

that all title IV–E requirements be

reviewed, including sections 471(a)(16),

475(1) and 475(5)(B) of the Act which

are the requirements for case plans and

six-month periodic reviews.

Response: The focus of the title IV–E

foster care eligibility review is those

child eligibility criteria set forth at

section 472(a)(1)–(4) of the Act and the

criminal records checks required at

section 471(a)(20) of the Act. The

sections noted by the commenter are

addressed in the child and family

services review of State plan

requirements, and we made no changes

to this section.

Section 1356.71(e) Review Instrument

This section informs States that a

checklist will be used to substantiate

child and provider eligibility during the

on-site title IV–E foster care eligibility

review.

Comment: Three commenters

requested that the review instrument be

made available immediately rather than

upon publication of the final rule.

Response: It would be premature for

us to publish the review instrument

until the rule becomes final. Once that

occurs, we will modify the instrument

to reflect the final rule and make it

publicly available.

Section 1356.71(f) Eligibility

Determination—Child

This section sets forth the case record

requirement of documentation to verify

a child’s eligibility.

Comment: Two commenters requested

that the specific child eligibility

requirements be included in this

section.

Response: We concur that this would

be helpful to States and have modified

this section accordingly.

Section 1356.71(g) Eligibility

Determination—Provider

This section sets forth the

requirement for the licensing file for

each case under review.

Comment: One commenter supports

obtaining the licensing file and

indicates that we should look ‘‘beyond’’

the actual license. Another commenter

requested that the specific provider

eligibility requirements be included in

this section. A third commenter wanted

to know the specific licensing standards

to which States will be held accountable

for the title IV–E foster care eligibility

reviews. A fourth commenter requested

clarification regarding the scope and

extent of the provider review.

Response: The State plan requirement

at section 471(a)(10) of the Act vests the

State with the responsibility for

establishing minimum licensing

standards regarding safety, admissions

policies, sanitation, and civil rights for

foster family homes and child care

institutions. The State is required to

apply its licensing standards to any

foster family home or child care

institution receiving funds under titles

IV–B and IV–E, and for the purposes of

title IV–E, only place children in

facilities that meet the Federal

definition of a foster family home or

child care institution. However, it is not

within the scope of the title IV–E foster

care eligibility review to examine the

State licensing standards. For the title

IV–E eligibility review, we will

determine that the foster family home or

facility has a valid license that

encompasses the period of the child’s

stay under review and that the safety

requirements at § 1356.30 have been

addressed. We made no changes to the

regulation as a result of this comment.

During a title IV–E eligibility review,

we will examine a provider’s license to

determine that; it is an appropriate type

of facility (i.e., meets the definition of a

foster family home or child care

institution), the license is valid for the

duration of the child’s placement, and

the safety requirements at § 1356.30

have been addressed. We made no

changes to the regulation as a result of

this comment.

Section 1356.71(h) Standards of

Compliance

This section defines the terms

‘‘substantial compliance’’ and

‘‘noncompliance,’’ and describes the

disallowances and program

improvement plan process.

Comment: One commenter indicated

that reviews should be conducted

annually, as opposed to at three-year

intervals. Another commenter

recommended that we conduct monthly

audits. A third commenter suggested

reviews at five-year instead of three-year

intervals after a State completes its

primary review.

Response: The frequency of the title

IV–E reviews is not statutorily

mandated. We decided that three years

was a reasonable time frame,

considering that some States may be

required to develop a PIP after their

primary review. For some States, the PIP

will be effective for as long as one year.

Furthermore, the title IV–E review is not

the sole mechanism in place to assure

the propriety and accuracy of State’

claiming procedures, since the ACF

Regional Offices review the quarterly

claims submitted by the States. For

these reasons, and because States will

be undergoing an intensive child and

family services review following the

publication of the final rule, we have

made no modification to this section.

Comment: One commenter was of the

opinion that more meaningful sanctions

should be imposed. Another commenter

supported ACF’s proposal for the

disallowance of funds, indicating that it

provides an incentive for States to come

into compliance.

Response: We carefully considered

various options in developing the

penalty structure for ineligible cases and

believe that our proposal achieves the

appropriate balance between

partnership and stewardship. We have

developed a more collaborative

approach with the goal of bringing about

the desired results utilizing a process

that includes technical assistance and

corrective action.

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4073

Section 1356.71(i) Program

Improvement Plans

This section sets forth the

requirement for States, determined not

to be in substantial compliance, to

develop a program improvement plan.

Comment: One commenter requested

that we consider a provision for a State

to negotiate the extension of a PIP in

those instances when a legislative

amendment is necessary for the State to

achieve substantial compliance.

Response: We concur and have

modified paragraph (i)(1)(i) to reflect

that the duration of the program

improvement plan will be determined

jointly by the State and the ACF

Regional Office, but shall not exceed

one year, unless legislative action is

required. In such cases, the State and

ACF will negotiate the terms and length

of the extension not to exceed the last

day of the first legislative session after

the date of the program improvement

plan. We believe that this time frame is

sufficient for a State to make necessary

statutory changes to achieve substantial

compliance.

Comment: Several commenters said

that 60 days is insufficient time for a

State to produce a comprehensive

program improvement plan, since such

a plan will require collaboration with

multiple external entities. Proposed

time frames ranged from 120 days to

two years. Some commenters indicated

that, under exceptional circumstances, a

30-day extension should be an option.

Response: An extensive period of time

should not elapse from the completion

of the on-site review to the development

of the PIP. We do recognize, however,

that occasionally circumstances may

warrant the need for additional time for

the State to collaborate with entities

outside the child welfare agency, e.g.,

the court system. We have, therefore,

amended paragraph (i)(2) to reflect a

modification from 60 days to 90 days for

the development of the PIP.

Section 1356.71(j) Disallowance of

Funds

This section sets describes how funds

to be disallowed will be determined.

Comment: Two commenters noted

that we reference a nonexistent

paragraph ‘‘(k)’’ in the NPRM.

Response: We recognize this oversight

and have removed the reference to

paragraph (k) and clarified that, in the

event that a State fails to submit a PIP,

we will immediately proceed to the

secondary review process.

Comment: One commenter noted that

the sample period for a review after the

completion of a PIP should be the first

full AFCARS period subsequent to

completion of the PIP.

Response: It is our intent to select a

sample of cases from AFCARS for the

secondary review after the PIP has been

completed. In most instances, the most

recent State AFCARS submission

subsequent to the completion of the PIP

will constitute the period under review.

Comment: One commenter

recommends that the first review under

the new protocol should be a joint pilot

review with no disallowances taken in

order to demonstrate ACF’s assertion

that the primary objectives of the

reviews include promoting federal/state

partnerships, focusing on program

improvements and generating useful

information.

Response: We conducted 12 title IV–

E foster care eligibility pilot reviews

over the past three years to inform the

development of the new protocol. States

were afforded many opportunities to

volunteer for these pilots. We do not

concur with the recommendation that

we defer sanctions until after the

primary review, since in the

development of the process we already

have suspended disallowances for more

than three years.

Comment: One commenter requested

clarification regarding the term

‘‘universe of claims paid.’’ Another

commenter requested clarification

regarding the scope of the title IV–E

foster care disallowance and what was

included in it.

Response: The term ‘‘universe of

claims paid’’ means the Federal share of

allowable title IV–E foster care

maintenance payments and

administrative costs for the period of

time the case is ineligible. All title IV–

E funds expended during the quarter(s)

the case is ineligible will be subject to

disallowance, including funds for

administrative costs. We have revised

this paragraph in the final rule to

specify which funds will be reduced.

Part 1357—Requirements Applicable to

Title IV–B

Section 1357.40 Direct Payments to

Indian Tribal Organizations (Title IV–B,

Subpart 1, Child Welfare Services)

This section provides the

requirements for Indian Tribal

Organizations to apply for and receive

direct funds under title IV–B, subpart 1.

We made a technical change to

§ 1357.40 in the final rule to incorporate

a 1995 change to the regulation that was

mistakenly eliminated by a subsequent

final rule. On June 2, 1995, we

published a final rule (60 FR 28735–

28737) amending the regulations

governing direct payments to Indian

Tribal Organizations (ITOs) for child

welfare services. The revised regulations

added a description of the formula used

to calculate the amount of Federal funds

available to eligible ITOs under title IV–

B. A new paragraph, § 1357.40(g)(6),

was added to implement the new

formula. On November 18, 1996, we

published a comprehensive final rule

for title IV–B, Child and Family Services

(61 FR 58632–58663), which amended

§ 1357.40 and inadvertently omitted the

paragraph including the grant formula

for ITOs.

We are taking this opportunity to

restore the grant formula for ITOs to the

regulation as we have been using this

formula since it was effective in FFY

1996 (see ACYF–IM–CB–95–28). We

have, therefore, made a technical

amendment to add the grant formula in

a new paragraph, § 1357.40(d)(6).

Impact Analysis

Executive Order 12866

Executive Order 12866 requires that

regulations be drafted to ensure that

they are consistent with the priorities

and principles set forth in the Executive

Order. The Department has determined

that this rule is consistent with these

priorities and principles. This final rule

amends existing regulations concerning

Child and Family Services by adding

new requirements governing the review

of a State’s conformity with its State

plan under titles IV–B and IV–E of the

Social Security Act (the Act), and

implements the provisions of the Social

Security Act Amendments of 1994 (Pub.

L. 103–432), the Multiethnic Placement

Act (MEPA) as amended by Public Law

104–188, and certain provisions of the

Adoption and Safe Families Act (ASFA)

of 1997 (Pub. L. 105–89).

In addition, this final rule sets forth

regulations that clarify certain eligibility

criteria that govern the title IV–E foster

care eligibility reviews that the

Administration on Children, Youth and

Families (ACYF) conducts to ensure a

State agency’s compliance with

statutory requirements under the Act.

We received no comments on this

section.

Executive Order 13132

Executive Order 13132 on Federalism

applies to policies that have federalism

implications, defined as ‘‘regulations,

legislative comments or proposed

legislation, and other policy statements

or actions that have substantial direct

effects on the States, on the relationship

between the national government and

the States, or on the distribution of

power and responsibilities among the

various levels of government.’’ This rule

does not have federalism implications

as defined in the Executive Order.

4074 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

Family Well-Being Impact

As required by Section 654 of the

Treasury and General Government

Appropriations Act of 1999, we have

assessed the impact of this final rule on

family well-being. The final rule

implements requirements of titles IV–B

and IV–E of the Social Security Act

relating to Federal monitoring and

oversight of State child welfare

programs. The rule will promote child

safety, child and family well-being and

permanence for those children who

must be removed from their families

temporarily to assure their safety. The

final rule will help to ensure that States

are taking appropriate steps to protect

children and to strengthen, support and

stabilize both biological and adoptive

families.

Regulatory Flexibility Act of 1980

The Regulatory Flexibility Act (5

U.S.C. Ch. 6) requires the Federal

government to anticipate and reduce the

impact of rules and paperwork

requirements on small businesses. For

each rule with a ‘‘significant number of

small entities’’ an analysis must be

prepared describing the rule’s impact on

small entities. ‘‘Small entities’’ are

defined by the Act to include small

businesses, small nonprofit

organizations and small governmental

entities. These regulations do not affect

small entities because they are

applicable to State agencies that

administer the child and family services

programs and the foster care

maintenance payments program.

We received no comments on this

section.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act

(Pub. L. 104–4) requires agencies to

prepare an assessment of anticipated

costs and benefits before proposing any

rule that may result in an annual

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100,000,000 or more

(adjusted annually for inflation).

Comment: One commenter argued

that the regulation was not in

compliance with the Unfunded

Mandates Reform Act (UMRA) because

the ASFA requirements significantly

increase the administrative burden and

cost for State courts and agencies, which

are not offset by an increase in Federal

funding.

Response: Section 201 of the UMRA

states that, ‘‘[e]ach agency shall, unless

otherwise prohibited by law, assess the

effects of Federal regulatory actions on

State, local, and tribal governments, and

the private sector (other than to the

extent that such regulations incorporate

requirements specifically set forth in

law).’’ The UMRA is not applicable to

the codification of the ASFA

requirements because they are

specifically set forth in law. Rather, it is

the requirements and procedures of the

child and family services review and the

title IV–E eligibility review processes

which come under the auspices of the

UMRA.

This final rule does not impose any

mandates on State, local, or tribal

governments, or the private sector that

will result in an annual expenditure of

$100,000,000 or more. We anticipate

that one-third (17) of the States will be

reviewed under both review procedures

each year and that, each year,

approximately five States will be

required to complete a corrective action

plan in response to section 471(a)(18)

compliance issues, for an annual cost of

$352,420. This estimate is based on the

burden hours associated with each

information collection identified in the

‘‘Paperwork Reduction Act’’ section.

Congressional Review

This rule is not a major rule as

defined in 5 U.S.C., Chapter 8.

Paperwork Reduction Act

Under the Paperwork Reduction Act

of 1995, Public Law 104–13, all

Departments are required to submit to

the Office of Management and Budget

(OMB) for review and approval any

reporting or record-keeping

requirements inherent in a proposed or

final rule. This final rule contains

information collection requirements in

certain sections that the Department has

submitted to OMB for its review.

The sections that contain information

collection requirements are: 1355.33(b)

on statewide assessments, and (c) onsite review; 1355.35(a) on program

improvement plan; 1355.38(b) and (c)

on corrective action plans; and

1356.71(i) on program improvement

plan. Section 1356 on State plan

document and submission requirements

(OMB Number 0980–0141) and case

plan requirements (OMB Number 0980–

0140) contains information collections.

However, these are approved collections

and no changes are being made at this

time.

The respondents to the information

collection requirements in this rule are

State agencies. The Department requires

this collection of information: (1) In

order to review State’ compliance with

the provisions of the statute and

implementing regulations of titles IV–B

and IV–E of the Act; and (2) effectively

implement the statutory requirement at

section 1123A of the Act which requires

that regulations be promulgated for the

review of child and family services

programs, and foster care and adoption

assistance programs for conformity with

State plan requirements.

Comment: A few commenters noted

that the estimate for the burden hours

associated with § 1355.33(c), the on-site

portion of the child and family services

review, was too low. The commenters

observed that extensive training is

required to prepare reviewers.

Response: We agree and have

amended the estimate accordingly. In

addition, we have significantly

increased the estimated burden for the

on-site portion of the child and family

services review to account for the

logistics associated with scheduling

interviews.

Collection Number of respondents Number of

responses

Average

burden

hours per

response

Total

burden

hours

1355.33(b)—Statewide assessment ...................... 17—State agencies administering the title IV–B

& E Programs.

17 240 4,080

1355.33(c)—On-site review ................................... 17—State agencies administering the title IV–B

& E programs.

595 18 10,710

1355.35(a)—Program improvement plan .............. 17—State agencies administering the titles IV–B

& IV–E programs.

17 80 1,360

1355.38(b) and (c)—Corrective action plan .......... 5—State agencies administering titles IV–B and

IV–E.

5 80 400

1356.71(i)—Program improvement plan ............... 17—State agencies administering the title IV–E

program.

17 63 1,071

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4075

We received and considered 38 letters

in response to the preclearance Notice

(63 FR 52703 (October 1, 1998))

published in order to obtain approval of

this information collection under the

Paperwork Reduction Act. Several

commenters submitted comments on the

October 1, 1998 Notice in conjunction

with their comments on the NPRM. The

comment period for the October 1, 1998

Notice closed on December 1, 1998

while the comment period for the

NPRM closed on December 17, 1998. In

our opinion, to consider late comments

constitutes an arbitrary extension of the

comment period for certain groups or

individuals. Those comments pertaining

to the October 1, 1998 Notice that were

submitted in conjunction with the

comments on the NPRM were late and

were not considered.

In the October 1, 1998 Notice, we

published, in their entirety, the

statewide assessment, on-site review

instrument, and stakeholder interview

guide used in conducting the child and

family service review. Overwhelmingly,

the comments we received were very

technical in nature. Commenters offered

specific suggestions for rephrasing or

adding questions, for quantifying

responses, for changes in terminology,

and for increasing the objectivity of the

instruments. In response to the

comments received, each instrument

has undergone significant revision. We

streamlined the statewide assessment so

that it targets State performance in

satisfying the relevant State plan

requirements and reports on the

statewide data indicators used for

determining substantial conformity. The

on-site review instrument and

stakeholder interview guide have been

revised to increase objectivity in

drawing conclusions regarding the

State’s performance in achieving the

outcomes and in implementing the

systemic factors. Copies of the

instruments will be distributed to all

State agencies and posted on the ACF

web site immediately following the

effective date of this regulation.

List of Subjects

45 CFR Part 1355

Adoption and foster care, Child

welfare, Grant programs-Social

programs.

45 CFR Part 1356

Adoption and foster care, Grant

programs-social programs

45 CFR Part 1357

Child and family services, Child

welfare, Grant programs-Social

programs

(Catalog of Federal Domestic Assistance

Program Numbers 93.658, Foster Care

Maintenance; 93.659, Adoption

Assistance; and 93.645, Child Welfare

Services—State Grants)

Approved: September 23, 1999.

Donna E. Shalala,

Secretary.

Dated: August 25, 1999.

Olivia A. Golden,

Assistant Secretary for Children and Families.

For the reasons set forth in the

preamble we are amending 45 CFR parts

1355, 1356, and 1357 to read 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. Section 1355.20 is amended by

revising the definition of Foster care and

by adding the following definitions in

alphabetical order to read as follows:

§ 1355.20 Definitions.

(a) * * *

Child care institution means a private

child care institution, or a public child

care institution which accommodates no

more than twenty-five children, and is

licensed by the State in which it is

situated or has been approved by the

agency of such State or tribal licensing

authority (with respect to child care

institutions on or near Indian

Reservations) responsible for licensing

or approval of institutions of this type

as meeting the standards established for

such licensing. This definition must not

include detention facilities, forestry

camps, training schools, or any other

facility operated primarily for the

detention of children who are

determined to be delinquent.

* * * * *

Date a child is considered to have

entered foster care means the earlier of:

The date of the first judicial finding that

the child has been subjected to child

abuse or neglect; or, the date that is 60

calendar days after the date on which

the child is removed from the home

pursuant to § 1356.21(k). A State may

use a date earlier than that required in

this paragraph, such as the date the

child is physically removed from the

home. This definition determines the

date used in calculating all time period

requirements for the periodic reviews,

permanency hearings, and termination

of parental rights provision in section

475(5) of the Act and for providing timelimited reunification services described

at section 431(a)(7) of the Act. The

definition has no relationship to

establishing initial title IV–E eligibility.

* * * * *

Entity, as used in § 1355.38, means

any organization or agency (e.g., a

private child placing agency) that is

separate and independent of the State

agency; performs title IV–E functions

pursuant to a contract or subcontract

with the State agency; and, receives title

IV–E funds. A State court is not an

‘‘entity’’ for the purposes of § 1355.38

except if an administrative arm of the

State court carries out title IV–E

administrative functions pursuant to a

contract with the State agency.

Foster care means 24-hour substitute

care for children placed away from their

parents or guardians and for whom the

State agency has placement and care

responsibility. This includes, but is not

limited to, placements in foster family

homes, foster homes of relatives, group

homes, emergency shelters, residential

facilities, child care institutions, and

preadoptive homes. A child is in foster

care in accordance with this definition

regardless of whether the foster care

facility is licensed and payments are

made by the State or local agency for the

care of the child, whether adoption

subsidy payments are being made prior

to the finalization of an adoption, or

whether there is Federal matching of

any payments that are made.

Foster care maintenance payments

are payments made on behalf of a child

eligible for title IV–E foster care to cover

the cost of (and the cost of providing)

food, clothing, shelter, daily

supervision, school supplies, a child’s

personal incidentals, liability insurance

with respect to a child, and reasonable

travel for a child’s visitation with

family, or other caretakers. Local travel

associated with providing the items

listed above is also an allowable

expense. In the case of child care

institutions, such term must include the

reasonable costs of administration and

operation of such institutions as are

necessarily required to provide the

items described in the preceding

sentences. ‘‘Daily supervision’’ for

which foster care maintenance

payments may be made includes:

(1) Foster family care—licensed child

care, when work responsibilities

preclude foster parents from being at

home when the child for whom they

have care and responsibility in foster

care is not in school, licensed child care

when the foster parent is required to

participate, without the child, in

activities associated with parenting a

child in foster care that are beyond the

scope of ordinary parental duties, such

as attendance at administrative or

4076 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

judicial reviews, case conferences, or

foster parent training. Payments to cover

these costs may be: included in the

basic foster care maintenance payment;

a separate payment to the foster parent,

or a separate payment to the child care

provider; and

(2) Child care institutions—routine

day-to-day direction and arrangements

to ensure the well-being and safety of

the child.

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 State

licensing or approval authority(ies) (or

with respect to foster family homes on

or near Indian reservations, by the tribal

licensing or approval authority(ies)),

that provides 24-hour out-of-home care

for children. The 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 agency

responsible for approval or licensing of

such facilities. Foster family homes that

are approved must be held to the same

standards as foster family homes that

are licensed. Anything less than full

licensure or approval is insufficient for

meeting title IV-E eligibility

requirements. States 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.

Full review means the joint Federal

and State review of all federally-assisted

child and family services programs in

the States, including family preservation

and support services, child protective

services, foster care, adoption, and

independent living services, for the

purpose of determining the State’s

substantial conformity with the State

plan requirements of titles IV-B and IVE as listed in § 1355.34 of this part. A

full review consists of two phases, the

statewide assessment and a subsequent

on-site review, as described in § 1355.33

of this part.

* * * * *

Legal guardianship means a

judicially-created relationship between

child and caretaker which is intended to

be permanent and self-sustaining as

evidenced by the transfer to the

caretaker of the following parental rights

with respect to the child: protection,

education, care and control of the

person, custody of the person, and

decision-making. The term legal

guardian means the caretaker in such a

relationship.

National Child Abuse and Neglect

Data System (NCANDS) means the

voluntary national data collection and

analysis system established by the

Administration for Children and

Families in response to a requirement in

the Child Abuse Prevention and

Treatment Act (Pub. L. 93–247), as

amended.

Partial review means:

(1) For the purpose of the child and

family services review, the joint Federal

and State review of one or more

federally-assisted child and family

services program(s) in the States,

including family preservation and

support services, child protective

services, foster care, adoption, and

independent living services. A partial

review may consist of any of the

components of the full review, as

mutually agreed upon by the State and

the Administration for Children and

Families as being sufficient to determine

substantial conformity of the reviewed

components with the State plan

requirements of titles IV-B and IV-E as

listed in § 1355.34 of this part; and

(2) For the purpose of title IV-B and

title IV-E State plan compliance issues

that are outside the prescribed child and

family services review format, e.g.,

compliance with AFCARS

requirements, a review of State laws,

policies, regulations, or other

information appropriate to the nature of

the concern, to determine State plan

compliance.

Permanency hearing means:

(1) The hearing required by section

475(5)(C) of the Act to determine the

permanency plan for a child in foster

care. Within this context, the court

(including a Tribal court) or

administrative body determines whether

and, if applicable, when the child will

be:

(i) Returned to the parent;

(ii) Placed for adoption, with the State

filing a petition for termination of

parental rights;

(iii) Referred for legal guardianship;

(iv) Placed permanently with a fit and

willing relative; or

(v) Placed in another planned

permanent living arrangement, but only

in cases where the State agency has

documented to the State court a

compelling reason for determining that

it would not be in the best interests of

the child to follow one of the four

specified options above.

(2) The permanency hearing must be

held no later than 12 months after the

date the child is considered to have

entered foster care in accordance with

the definition at § 1355.20 of this part or

within 30 days of a judicial

determination that reasonable efforts to

reunify the child and family are not

required. After the initial permanency

hearing, subsequent permanency

hearings must be held not less

frequently than every 12 months during

the continuation of foster care. The

permanency hearing must be conducted

by a family or juvenile court or another

court of competent jurisdiction or by an

administrative body appointed or

approved by the court which is not a

part of or under the supervision or

direction of the State agency. Paper

reviews, ex parte hearings, agreed

orders, or other actions or hearings

which are not open to the participation

of the parents of the child, the child (if

of appropriate age), and foster parents or

preadoptive parents (if any) are not

permanency hearings.

* * * * *

Statewide assessment means the

initial phase of a full review of all

federally-assisted child and family

services programs in the States,

including family preservation and

support services, child protective

services, foster care, adoption, and

independent living services, for the

purpose of determining, in part, the

State’s substantial conformity with the

State plan requirements of titles IV–B

and IV–E as listed in § 1355.34 of this

part. The statewide assessment refers to

the completion of the federallyprescribed assessment instrument by

members of a review team that meet the

requirements of § 1355.33(a)(2) of this

part.

3. New §§ 1355.31 through 1355.39

are added to read as follows:

§ 1355.31 Elements of the child and family

services review system.

Scope. Sections 1355.32 through

1355.37 of this part apply to reviews of

child and family services programs

administered by States under subparts 1

and 2 of title IV–B of the Act, and

reviews of foster care and adoption

assistance programs administered by

States under title IV–E of the Act.

§ 1355.32 Timetable for the reviews.

(a) Initial reviews. Each State must

complete an initial full review as

described in § 1355.33 of this part

during the four-year period after the

final rule becomes effective.

(b) Reviews following the initial

review. 

(1) A State found to be operating in

substantial conformity during an initial

or subsequent review, as defined in

§ 1355.34 of this part, must:

(i) Complete a full review every five

years; and

(ii) Submit a completed statewide

assessment to ACF three years after the

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4077

on-site review. The statewide

assessment will be reviewed jointly by

the State and the Administration for

Children and Families to determine the

State’s continuing substantial

conformity with the State plan

requirements subject to review. No

formal approval of this interim

statewide assessment by ACF is

required.

(2) A State program found not to be

operating in substantial conformity

during an initial or subsequent review

will:

(i) Be required to develop and

implement a program improvement

plan, as defined in § 1355.35 of this

part; and

(ii) Begin a full review two years after

approval of the program improvement

plan.

(c) Reinstatement of reviews based on

information that a State is not in

substantial conformity.

(1) ACF may require a full or a partial

review at any time, based on any

information, regardless of the source,

that indicates the State may no longer be

operating in substantial conformity.

(2) Prior to reinstating a full or partial

review, ACF will conduct an inquiry

and require the State to submit

additional data whenever ACF receives

information that the State may not be in

substantial conformity.

(3) If the additional information and

inquiry indicates to ACF’s satisfaction

that the State is operating in substantial

conformity, ACF will not proceed with

any further review of the issue

addressed by the inquiry. This inquiry

will not substitute for the full reviews

conducted by ACF under § 1355.32(b).

(4) ACF may proceed with a full or

partial review if the State does not

provide the additional information as

requested, or the additional information

confirms that the State may not be

operating in substantial conformity.

(d) Partial reviews based on

noncompliance with State plan

requirements that are outside the scope

of a child and family services review.

When ACF becomes aware of a title IV–

B or title IV–E compliance issue that is

outside the scope of the child and

family services review process, we will:

(1) Conduct an inquiry and require

the State to submit additional data.

(2) If the additional information and

inquiry indicates to ACF’s satisfaction

that the State is in compliance, we will

not proceed with any further review of

the issue addressed by the inquiry.

(3) ACF will institute a partial review,

appropriate to the nature of the concern,

if the State does not provide the

additional information as requested, or

the additional information confirms that

the State may not be in compliance.

(4) If the partial review determines

that the State is not in compliance with

the applicable State plan requirement,

the State must enter into a program

improvement plan designed to bring the

State into compliance. The terms, action

steps and time-frames of the program

improvement plan will be developed on

a case-by-case basis by ACF and the

State. The program improvement plan

must take into consideration the extent

of noncompliance and the impact of the

noncompliance on the safety,

permanency or well-being of children

and families served through the State’s

title IV–B or IV–E allocation. If the State

remains out of compliance, the State

will be subject to a penalty related to the

extent of the noncompliance.

(5) Review of AFCARS compliance

will take place in accordance with 45

CFR 1355.40.

§ 1355.33 Procedures for the review.

(a) The full child and family services

reviews will:

(1) Consist of a two-phase process that

includes a statewide assessment and an

on-site review; and

(2) Be conducted by a team of Federal

and State reviewers that includes:

(i) Staff of the State child and family

services agency, including the State and

local offices that represent the service

areas that are the focus of any particular

review;

(ii) Representatives selected by the

State, in collaboration with the ACF

Regional Office, from those with whom

the State was required to consult in

developing its CFSP, as described and

required in 45 CFR part 1357.15(l);

(iii) Federal staff of HHS; and

(iv) Other individuals, as deemed

appropriate and agreed upon by the

State and ACF.

(b) Statewide assessment. The first

phase of the full review will be a

statewide assessment conducted by the

internal and external State members of

the review team. The statewide

assessment must:

(1) Address each systemic factor

under review, including the statewide

information system; case review system;

quality assurance system; staff training;

service array; agency responsiveness to

the community; and foster and adoptive

parent licensing, recruitment and

retention;

(2) Assess the outcome areas of safety,

permanency, and well-being of children

and families served by the State agency

using data from AFCARS, NCANDS, or,

for the initial review, another source

approved by ACF. The State must also

analyze and explain its performance in

meeting the national standards for the

statewide data indicators;

(3) Assess the characteristics of the

State agency that have the most

significant impact on the agency’s

capacity to deliver services to children

and families that will lead to improved

outcomes;

(4) Assess the strengths and areas of

the State’s child and family services

programs that require further

examination through an on-site review;

(1) Include a listing of all the persons

external to the State agency who

participated in the preparation of the

statewide assessment pursuant to

§§ 1355.33(a)(2)(ii) and (iv); and

(2) Be completed and submitted to

ACF within 4 months of the date that

ACF transmits the information for the

statewide assessment to the State.

(c) On-site review. The second phase

of the full review will be an on-site

review.

(1) The on-site review will cover the

State’s programs under titles IV–B and

IV–E of the Act, including in-home

services and foster care. It will be jointly

planned by the State and ACF, and

guided by information in the completed

statewide assessment that identifies

areas in need of improvement or further

review.

(2) The on-site review may be

concentrated in several specific political

subdivisions of the State, as agreed

upon by the ACF and the State;

however, the State’s largest

metropolitan subdivision must be one of

the locations selected.

(3) ACF has final approval of the

selection of specific areas of the State’s

child and family services continuum

described in paragraph (c)(1) of this

section and selection of the political

subdivisions referenced in paragraph

(c)(2) of this section.

(4) Sources of information collected

during the on-site review to determine

substantial conformity must include,

but are not limited to:

(i) Case records on children and

families served by the agency;

(ii) Interviews with children and

families whose case records have been

reviewed and who are, or have been,

recipients of services of the agency;

(iii) Interviews with caseworkers,

foster parents, and service providers for

the cases selected for the on-site review;

and

(iv) Interviews with key stakeholders,

both internal and external to the agency,

which, at a minimum, must include

those individuals who participated in

the development of the State’s CFSP

required at 45 CFR 1357.15(1), courts,

administrative review bodies, children’s

guardians ad litem and other

4078 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

individuals or bodies assigned

responsibility for representing the best

interests of the child.

(5) The sample will range from 30–50

cases. Foster care cases must be drawn

randomly from AFCARS, or, for the

initial review, from another source

approved by ACF and include children

who entered foster care during the year

under review. In-home cases must be

drawn randomly from NCANDS or from

another source approved by ACF. To

ensure that all program areas are

adequately represented, the sample size

may be increased.

(6) The sample of 30–50 cases

reviewed on-site will be selected from a

randomly drawn oversample of no more

than 150 cases. The oversample must be

statistically significant at a 90 percent

compliance rate (95 percent in

subsequent reviews), with a tolerable

sampling error of 5 percent and a

confidence coefficient of 95 percent.

The additional cases in the oversample

not selected for the on-site review will

form the sample of cases to be reviewed,

if needed, in order to resolve

discrepancies between the data

indicators and the on-site reviews in

accordance with paragraph (d)(2) of this

section.

(d) Resolution of discrepancies

between the statewide assessment and

the findings of the on-site portion of the

review. Discrepancies between the

statewide assessment and the findings

of the on-site portion of the review will

be resolved by either of the following

means, at the State’s option:

(1) The submission of additional

information by the State; or

(2) ACF and the State will review

additional cases using only those

indicators in which the discrepancy

occurred. ACF and the State will

determine jointly the number of

additional cases to be reviewed, not to

exceed a total of 150 cases to be selected

as specified in paragraph (c)(6) of this

section.

(e) Partial review. A partial child and

family services review, when required,

will be planned and conducted jointly

by ACF and the State agency based on

the nature of the concern. A partial

review does not substitute for the full

reviews as required under § 1355.32(b).

(f) Notification. Within 30 calendar

days following either a partial child and

family services review, full child and

family services review, or the resolution

of a discrepancy between the statewide

assessment and the findings of the onsite portion of the review, ACF will

notify the State agency in writing of

whether the State is, or is not, operating

in substantial conformity.

§ 1355.34 Criteria for determining

substantial conformity.

(a) Criteria to be satisfied. ACF will

determine a State’s substantial

conformity with title IV–B and title IV–

E State plan requirements based on the

following:

(1) Its ability to meet national

standards, set by the Secretary, for

statewide data indicators associated

with specific outcomes for children and

families;

(2) Its ability to meet criteria related

to outcomes for children and families;

and

(3) Its ability to meet criteria related

to the State agency’s capacity to deliver

services leading to improved outcomes.

(b) Criteria related to outcomes.

(1) A State’s substantial conformity

will be determined by its ability to

substantially achieve the following

child and family service outcomes:

(i) In the area of child safety:

(A) Children are, first and foremost,

protected from abuse and neglect; and,

(B) Children are safely maintained in

their own homes whenever possible and

appropriate;

(ii) In the area of permanency for

children:

(A) Children have permanency and

stability in their living situations; and

(B) The continuity of family

relationships and connections is

preserved for children; and

(iii) In the area of child and family

well-being:

(A) Families have enhanced capacity

to provide for their children’s needs;

(B) Children receive appropriate

services to meet their educational needs;

and

(C) Children receive adequate services

to meet their physical and mental health

needs.

(2) A State’s level of achievement

with regard to each outcome reflects the

extent to which a State has:

(i) Met the national standard(s) for the

statewide data indicator(s) associated

with that outcome, if applicable; and,

(ii) Implemented the following CFSP

requirements or assurances:

(A) The requirements in 45 CFR

1357.15(p) regarding services designed

to assure the safety and protection of

children and the preservation and

support of families;

(B) The requirements in 45 CFR

1357.15(q) regarding the permanency

provisions for children and families in

sections 422 and 471 of the Act;

(C) The requirements in section

422(b)(9) of the Act regarding

recruitment of potential foster and

adoptive families;

(D) The assurances by the State as

required by section 422(b)(10)(C)(i) and

(ii) of the Act regarding policies and

procedures for abandoned children;

(E) The requirements in section

422(b)(11) of the Act regarding the

State’s compliance with the Indian

Child Welfare Act;

(F) The requirements in section

422(b)(12) of the Act regarding a State’s

plan for effective use of crossjurisdictional resources to facilitate

timely adoptive or permanent

placements; and,

(G) The requirements in section

471(a)(15) of the Act regarding

reasonable efforts to prevent removals of

children from their homes, to make it

possible for children in foster care to

safely return to their homes, or, when

the child is not able to return home, to

place the child in accordance with the

permanency plan and complete the

steps necessary to finalize the

permanent placement.

(3) A State will be determined to be

in substantial conformity if its

performance on:

(i) Each statewide data indicator

developed pursuant to paragraph (b)(4)

of this section meets the national

standard described in paragraph (b)(5)

of this section; and,

(ii) Each outcome listed in paragraph

(b)(1) of this section is rated as

‘‘substantially achieved’’ in 95 percent

of the cases examined during the on-site

review (90 percent of the cases for a

State’s initial review). Information from

various sources (case records,

interviews) will be examined for each

outcome and a determination made as to

the degree to which each outcome has

been achieved for each case reviewed.

(4) The Secretary will, using AFCARS

and NCANDS, develop statewide data

indicators for each of the specific

outcomes described in paragraph (b)(1)

of this section for use in determining

substantial conformity. The Secretary

will add, amend, or suspend any such

statewide data indicator(s) when

appropriate. To the extent practical and

feasible, the statewide data indicators

will be consistent with those developed

in accordance with section 203 of the

Adoption and Safe Families Act of 1997

(Pub. L. 105–89).

(5) The initial national standards for

the statewide data indicators described

in paragraph (b)(4) of this section will

be based on the 75th percentile of all

State performance for that indicator, as

reported in AFCARS or NCANDS. The

Secretary may adjust these national

standards if appropriate. The initial

national standard will be set using the

following data sources:

(i) The 1997 and 1998 submissions to

NCANDS (or the most recent and

complete 2 years available), for those

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4079

statewide data indicators associated

with the safety outcomes; and,

(ii) The 1998b, 1999c, and 2000a

submissions to AFCARS (or the most

recent and complete report periods

available), for those statewide data

indicators associated with the

permanency outcomes.

(c) Criteria related to State agency

capacity to deliver services leading to

improved outcomes for children and

families. In addition to the criteria

related to outcomes contained in

paragraph (b) of this section, the State

agency must also satisfy criteria related

to the delivery of services. Based on

information from the statewide

assessment and onsite review, the State

must meet the following criteria for each

systemic factor in paragraphs (c)(2)

through (c)(7) of this section to be

considered in substantial conformity:

All of the State plan requirements

associated with the systemic factor must

be in place, and no more than one of the

state plan requirements fails to function

as described in paragraphs (c)(2)

through (c)(7) of this section. The

systemic factor in paragraph (c)(1) of

this section, is rated on the basis of only

one State plan requirement. To be

considered in substantial conformity,

the State plan requirement associated

with statewide information system

capacity must be both in place and

functioning as described in the

requirement. ACF will use a rating scale

to make the determinations of

substantial conformity. The systemic

factors under review are:

(1) Statewide information system: The

State is operating a statewide

information system that, at a minimum,

can readily identify the status,

demographic characteristics, location,

and goals for the placement of every

child who is (or within the immediately

preceding 12 months, has been) in foster

care (section 422(b)(10)(B)(i) of the Act);

(2) Case review system: The State has

procedures in place that:

(i) Provide, for each child, a written

case plan to be developed jointly with

the child’s parent(s) that includes

provisions: for placing the child in the

least restrictive, most family-like

placement appropriate to his/her needs,

and in close proximity to the parent’

home where such placement is in the

child’s best interests; for visits with a

child placed out of State at least every

12 months by a caseworker of the

agency or of the agency in the State

where the child is placed; and for

documentation of the steps taken to

make and finalize an adoptive or other

permanent placement when the child

cannot return home (sections

422(b)(10)(B)(ii), 471(a)(16) and

475(5)(A) of the Act);

(ii) Provide for periodic review of the

status of each child no less frequently

than once every six months by either a

court or by administrative review

(sections 422(b)(10)(B)(ii), 471(a)(16)

and 475(5)(B) of the Act);

(iii) Assure that each child in foster

care under the supervision of the State

has a permanency hearing in a family or

juvenile court or another court of

competent jurisdiction (including a

Tribal court), or by an administrative

body appointed or approved by the

court, which is not a part of or under the

supervision or direction of the State

agency, no later than 12 months from

the date the child entered foster care

(and not less frequently than every 12

months thereafter during the

continuation of foster care) (sections

422(b)(10)(B)(ii), 471(a)(16) and

475(5)(C) of the Act);

(iv) Provide a process for termination

of parental rights proceedings in

accordance with sections

422(b)(10(B)(ii), 475(5)(E) and (F) of the

Act; and,

(v) Provide foster parents, preadoptive

parents, and relative caregivers of

children in foster care with notice of

and an opportunity to be heard in any

review or hearing held with respect to

the child (sections 422(b)(10)(B)(ii) and

475(5)(G) of the Act).

(3) Quality assurance system: The

State has developed and implemented

standards to ensure that children in

foster care placements are provided

quality services that protect the safety

and health of the children (section

471(a)(22)) and is operating an

identifiable quality assurance system

(45 CFR 1357.15(u)) as described in the

CFSP that:

(i) Is in place in the jurisdictions

within the State where services

included in the CFSP are provided;

(ii) Is able to evaluate the adequacy

and quality of services provided under

the CFSP;

(iii) Is able to identify the strengths

and needs of the service delivery system

it evaluates;

(iv) Provides reports to agency

administrators on the quality of services

evaluated and needs for improvement;

and

(v) Evaluates measures implemented

to address identified problems.

(4) Staff training: The State is

operating a staff development and

training program (45 CFR 1357.15(t))

that:

(i) Supports the goals and objectives

in the State’s CFSP;

(ii) Addresses services provided

under both subparts of title IV–B and

the training plan under title IV–E of the

Act;

(iii) Provides training for all staff who

provide family preservation and support

services, child protective services, foster

care services, adoption services and

independent living services soon after

they are employed and that includes the

basic skills and knowledge required for

their positions;

(iv) Provides ongoing training for staff

that addresses the skills and knowledge

base needed to carry out their duties

with regard to the services included in

the State’s CFSP; and,

(v) Provides short-term training for

current or prospective foster parents,

adoptive parents, and the staff of Statelicensed or State-approved child care

institutions providing care to foster and

adopted children receiving assistance

under title IV–E that addresses the skills

and knowledge base needed to carry out

their duties with regard to caring for

foster and adopted children.

(5) Service array: Information from the

Statewide assessment and on-site

review determines that the State has in

place an array of services (45 CFR

1357.15(n) and section 422(b)(10)(B)(iii)

and (iv) of the Act) that includes, at a

minimum:

(i) Services that assess the strengths

and needs of children and families

assisted by the agency and are used to

determine other service needs;

(ii) Services that address the needs of

the family, as well as the individual

child, in order to create a safe home

environment;

(iii) Services designed to enable

children at risk of foster care placement

to remain with their families when their

safety and well-being can be reasonably

assured;

(iv) Services designed to help

children achieve permanency by

returning to families from which they

have been removed, where appropriate,

be placed for adoption or with a legal

guardian or in some other planned,

permanent living arrangement, and

through post-legal adoption services;

(v) Services that are accessible to

families and children in all political

subdivisions covered in the State’s

CFSP; and,

(vi) Services that can be

individualized to meet the unique needs

of children and families served by the

agency.

(6) Agency responsiveness to the

community:

(i) The State, in implementing the

provisions of the CFSP, engages in

ongoing consultation with a broad array

of individuals and organizations

representing the State and county

agencies responsible for implementing

4080 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

the CFSP and other major stakeholders

in the services delivery system

including, at a minimum, tribal

representatives, consumers, service

providers, foster care providers, the

juvenile court, and other public and

private child and family serving

agencies (45 CFR 1357.15(l)(4));

(ii) The agency develops, in

consultation with these or similar

representatives, annual reports of

progress and services delivered

pursuant to the CFSP (45 CFR

1357.16(a));

(iii) There is evidence that the

agency’s goals and objectives included

in the CFSP reflect consideration of the

major concerns of stakeholders

consulted in developing the plan and on

an ongoing basis (45 CFR 1357.15(m));

and

(iv) There is evidence that the State’s

services under the plan are coordinated

with services or benefits under other

Federal or federally-assisted programs

serving the same populations to achieve

the goals and objectives in the plan (45

CFR 1357.15(m)).

(7) Foster and adoptive parent

licensing, recruitment and retention:

(i) The State has established and

maintains standards for foster family

homes and child care institutions which

are reasonably in accord with

recommended standards of national

organizations concerned with standards

for such institutions or homes (section

471(a)(10) of the Act);

(ii) The standards so established are

applied by the State to every licensed or

approved foster family home or child

care institution receiving funds under

title IV–E or IV–B of the Act (section

471(a)(10) of the Act);

(iii) The State complies with the

safety requirements for foster care and

adoptive placements in accordance with

sections 471(a)(16), 471(a)(20) and

475(1) of the Act and 45 CFR 1356.30;

(iv) The State has in place an

identifiable process for assuring the

diligent recruitment of potential foster

and adoptive families that reflect the

ethnic and racial diversity of children in

the State for whom foster and adoptive

homes are needed (section 422(b)(9) of

the Act); and,

(v) The State has developed and

implemented plans for the effective use

of cross-jurisdictional resources to

facilitate timely adoptive or permanent

placements for waiting children (section

422(b)(12) of the Act).

(d) Availability of review instruments.

ACF will make available to the States

copies of the review instruments, which

will contain the specific standards to be

used to determine substantial

conformity, on an ongoing basis,

whenever significant revisions to the

instruments are made.

§ 1355.35 Program improvement plans.

(a) Mandatory program improvement

plan.

(1) States found not to be operating in

substantial conformity shall develop a

program improvement plan. The

program improvement plan must:

(i) Be developed jointly by State and

Federal staff in consultation with the

review team;

(ii) Identify the areas in which the

State’s program is not in substantial

conformity;

(iii)Set forth the goals, the action steps

required to correct each identified

weakness or deficiency, and dates by

which each action step is to be

completed in order to improve the

specific areas;

(iv) Set forth the amount of progress

the statewide data will make toward

meeting the national standards;

(v) Establish benchmarks that will be

used to measure the State’s progress in

implementing the program

improvement plan and describe the

methods that will be used to evaluate

progress;

(vi) Identify how the action steps in

the plan build on and make progress

over prior program improvement plans;

(vii) Identify the technical assistance

needs and sources of technical

assistance, both Federal and nonFederal, which will be used to make the

necessary improvements identified in

the program improvement plan.

(2) In the event that ACF and the State

cannot reach consensus regarding the

content of a program improvement plan

or the degree of program or data

improvement to be achieved, ACF

retains the final authority to assign the

contents of the plan and/or the degree

of improvement required for successful

completion of the plan. Under such

circumstances, ACF will render a

written rationale for assigning such

content or degree of improvement.

(b) Voluntary program improvement

plan. States found to be operating in

substantial conformity may voluntarily

develop and implement a program

improvement plan in collaboration with

the ACF Regional Office, under the

following circumstances:

(1) The State and Regional Office

agree that there are areas of the State’s

child and family services programs in

need of improvement which can be

addressed through the development and

implementation of a voluntary program

improvement plan;

(2) ACF approval of the voluntary

program improvement plan will not be

required; and

(3) No penalty will be assessed for the

State’s failure to achieve the goals

described in the voluntary program

improvement plan.

(c) Approval of program improvement

plans.

(1) A State determined not to be in

substantial conformity must submit a

program improvement plan to ACF for

approval within 90 calendar days from

the date the State receives the written

notification from ACF that it is not

operating in substantial conformity.

(2) Any program improvement plan

will be approved by ACF if it meets the

provisions of paragraph (a) of this

section.

(3) If the program improvement plan

does not meet the provisions of

paragraph (a) of this section, the State

will have 30 calendar days from the date

it receives notice from ACF that the plan

has not been approved to revise and

resubmit the plan for approval.

(4) If the State does not submit a

revised program improvement plan

according to the provisions of paragraph

(c)(3) of this section or if the plan does

not meet the provisions of paragraph (a)

of this section, withholding of funds

pursuant to the provisions of § 1355.36

of this part will begin.

(d) Duration of program improvement

plans.

(1) ACF retains the authority to

establish time frames for the program

improvement plan consistent with the

seriousness and complexity of the

remedies required for any areas

determined not in substantial

conformity, not to exceed two years.

(2) Particularly egregious areas of

nonconformity impacting child safety

must receive priority in both the content

and time frames of the program

improvement plans and must be

addressed in less than two years.

(3) The Secretary may approve

extensions of deadlines in a program

improvement plan not to exceed one

year. The circumstances under which

requests for extensions will be approved

are expected to be rare. The State must

provide compelling documentation of

the need for such an extension. Requests

for extensions must be received by ACF

at least 60 days prior to the affected

completion date.

(4) States must provide quarterly

status reports (unless ACF and the State

agree upon less frequent reports) to

ACF. Such reports must inform ACF of

progress in implementing the measures

of the plan.

(e) Evaluating program improvement

plans. Program improvement plans will

be evaluated jointly by the State agency

and ACF, in collaboration with other

members of the review team, as

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4081

described in the State’s program

improvement plan and in accordance

with the following criteria:

(1) The methods and information used

to measure progress must be sufficient

to determine when and whether the

State is operating in subsequent

substantial conformity or has reached

the negotiated standard with respect to

statewide data indicators that fail to

meet the national standard for that

indicator;

(2) The frequency of evaluating

progress will be determined jointly by

the State and Federal team members,

but no less than annually. Evaluation of

progress will be performed in

conjunction with the annual updates of

the State’s CFSP, as described in

paragraph (f) of this section;

(3) Action steps may be jointly

determined by the State and ACF to be

achieved prior to projected completion

dates, and will not require any further

evaluation at a later date; and

(4) The State and ACF may jointly

renegotiate the terms and conditions of

the program improvement plan as

needed, provided that:

(i) The renegotiated plan is designed

to correct the areas of the State’s

program determined not to be in

substantial conformity and/or achieve a

standard for the statewide data

indicators that is acceptable to ACF;

(ii) The amount of time needed to

implement the provisions of the plan

does not extend beyond three years from

the date the original program

improvement plan was approved;

(iii) The terms of the renegotiated

plan are approved by ACF; and

(iv) The Secretary approves any

extensions beyond the two-year limit.

(f) Integration of program

improvement plans with CFSP planning.

The elements of the program

improvement plan must be incorporated

into the goals and objectives of the

State’s CFSP. Progress in implementing

the program improvement plan must be

included in the annual reviews and

progress reports related to the CFSP

required in 45 CFR 1357.16.

§ 1355.36 Withholding Federal funds due

to failure to achieve substantial conformity

or failure to successfully complete a

program improvement plan.

(a) For the purposes of this section:

(1) The term ‘‘title IV–B funds’’ refers

to the State’s combined allocation of

title IV–B subpart 1 and subpart 2 funds;

and

(2) The term ‘‘title IV–E funds’’ refers

to the State’s reimbursement for

administrative costs for the foster care

program under title IV–E.

(b) Determination of the amount of

Federal funds to be withheld. ACF will

determine the amount of the State title

IV–B and IV–E funds to be withheld due

to a finding that the State is not

operating in substantial conformity, as

follows:

(1) A State will have the opportunity

to develop and complete a program

improvement plan prior to any

withholding of funds.

(2) Title IV–B and IV–E funds will not

be withheld from a State if the

determination of nonconformity was

caused by the State’s correct use of

formal written statements of Federal law

or policy provided the State by DHHS.

(3) A portion of the State’s title IV–B

and IV–E funds will be withheld by

ACF for the year under review and for

each succeeding year until the State

either successfully completes a program

improvement plan or is found to be

operating in substantial conformity.

(4) The amount of title IV–B and title

IV–E funds subject to withholding due

to a determination that a State is not

operating in substantial conformity is

based on a pool of funds defined as

follows:

(i) The State’s allotment of title IV–B

funds for each of the years to which the

withholding applies; and

(ii) An amount equivalent to 10

percent of the State’s Federal claims for

title IV–E foster care administrative

costs for each of the years to which

withholding applies;

(5) The amount of funds to be

withheld from the pool in paragraph

(b)(4) of this section will be computed

as follows:

(i) Except as provided for in

paragraphs (b)(7) and (b)(8) of this

section, an amount equivalent to one

percent of the funds described in

paragraph (b)(4) of this section for each

of the years to which withholding

applies will be withheld for each of the

seven outcomes listed in § 1355.34(b)(1)

of this part that is determined not to be

substantially achieved; and

(ii) Except as provided for in

paragraphs (b)(7) and (b)(8) of this

section, an amount equivalent to one

percent of the funds described in

paragraph (b)(4) of this section for each

of the years to which withholding

applies will be withheld for each of the

seven systemic factors listed in

§ 1355.34(c) of this part that is

determined not to be in substantial

conformity.

(6) Except as provided for in

paragraphs (b)(7), (b)(8), and (e)(4) of

this section, in the event the State is

determined to be in nonconformity on

each of the seven outcomes and each of

the seven systemic factors subject to

review, the maximum amount of title

IV–B and title IV–E funds to be

withheld due to the State’s failure to

comply is 14 percent per year of the

funds described in paragraph (b)(4) of

this section for each year.

(7) States determined not to be in

substantial conformity that fail to

correct the areas of nonconformity

through the successful completion of a

program improvement plan, and are

determined to be in nonconformity on

the second full review following the

first full review in which a

determination of nonconformity was

made will be subject to increased

withholding as follows:

(i) The amount of funds described in

paragraph (b)(5) of this section will

increase to two percent for each of the

seven outcomes and each of the seven

systemic factors that continues in

nonconformity since the immediately

preceding child and family services

review;

(ii) The increased withholding of

funds for areas of continuous

nonconformity is subject to the

provisions of paragraphs (c), (d), and (e)

of this section;

(iii) The maximum amount of title IV–

B and title IV–E funds to be withheld

due to the State’s failure to comply on

the second full review following the

first full review in which the

determination of nonconformity was

made is 28 percent of the funds

described in paragraph (b)(4) of this

section for each year to which the

withholding of funds applies.

(8) States determined not to be in

substantial conformity that fail to

correct the areas of nonconformity

through the successful completion of a

program improvement plan, and are

determined to be in nonconformity on

the third and any subsequent full

reviews following the first full review in

which a determination of

nonconformity was made will be subject

to increased withholding as follows:

(i) The amount of funds described in

paragraph (b)(5) of this section will

increase to three percent for each of the

seven outcomes and each of the seven

systemic factors that continues in

nonconformity since the immediately

preceding child and family services

review;

(ii) The increased withholding of

funds for areas of continuous

nonconformity is subject to the

provisions of paragraphs (c), (d), and (e)

of this section;

(iii) The maximum amount of title IV–

B and title IV–E funds to be withheld

due to the State’s failure to comply on

the third and any subsequent full

reviews following the first full review in

which the determination of

nonconformity was made is 42 percent

4082 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

of the funds described in paragraph

(b)(4) of this section for each year to

which the withholding of funds applies.

(c) Suspension of withholding.

(1) For States determined not to be

operating in substantial conformity,

ACF will suspend the withholding of

the State title IV–B and title IV–E funds

during the time that a program

improvement plan is in effect, provided

that:

(i) The program improvement plan

conforms to the provisions of § 1355.35

of this part; and

(ii) The State is actively implementing

the provisions of the program

improvement plan.

(2) Suspension of the withholding of

funds is limited to three years following

each review, or the amount of time

approved for implementation of the

program improvement plan, whichever

is less.

(d) Terminating the withholding of

funds. For States determined not to be

in substantial conformity, ACF will

terminate the withholding of the State’s

title IV–B and title IV–E funds related to

the nonconformity upon determination

by the State and ACF that the State has

achieved substantial conformity or has

successfully completed a program

improvement plan. ACF will rescind the

withholding of the portion of title IV–

B and title IV–E funds related to specific

goals or action steps as of the date at the

end of the quarter in which they were

determined to have been achieved.

(e) Withholding of funds.

(1) States determined not to be in

substantial conformity that fail to

successfully complete a program

improvement plan will be notified by

ACF of this final determination of

nonconformity in writing within 10

business days after the relevant

completion date specified in the plan,

and advised of the amount of title IV–

B and title IV–E funds which are to be

withheld.

(2) Title IV–B and title IV–E funds

will be withheld based on the following:

(i) If the State fails to submit status

reports in accordance with

§ 1355.35(d)(4), or if such reports

indicate that the State is not making

satisfactory progress toward achieving

goals or actions steps, funds will be

withheld at that time for a period

beginning October 1 of the fiscal year for

which the determination of

nonconformity was made and ending on

the specified completion date for the

affected goal or action step.

(ii) Funds related to goals and action

steps that have not been achieved by the

specified completion date will be

withheld at that time for a period

beginning October 1 of the fiscal year for

which the determination of

nonconformity was made and ending on

the completion date of the affected goal

or action step; and

(iii) The withholding of funds

commensurate with the level of

nonconformity at the end of the program

improvement plan will begin at the

latest completion date specified in the

program improvement plan and will

continue until a subsequent full review

determines the State to be in substantial

conformity or the State successfully

completes a program improvement plan

developed as a result of that subsequent

full review.

(3) When the date the State is

determined to be in substantial

conformity or to have successfully

completed a program improvement plan

falls within a specific quarter, the

amount of funds to be withheld will be

computed to the end of that quarter.

(4) A State agency that refuses to

participate in the development or

implementation of a program

improvement plan, as required by ACF,

will be subject to the maximum

increased withholding of 42 percent of

its title IV–B and title IV–E funds, as

described in paragraph (b)(8) of this

section, for each year or portion thereof

to which the withholding of funds

applies.

(5) The State agency will be liable for

interest on the amount of funds

withheld by the Department, in

accordance with the provisions of 45

CFR 30.13.

§ 1355.37 Opportunity for Public

Inspection of Review Reports and Materials.

The State agency must make available

for public review and inspection all

statewide assessments (§ 1355.33(b)),

report of findings (§ 1355.33(e)), and

program improvement plans

(§ 1355.35(a)) developed as a result of a

full or partial child and family services

review.

§ 1355.38 Enforcement of section

471(a)(18) of the Act regarding the removal

of barriers to interethnic adoption.

(a) Determination that a violation has

occurred in the absence of a court

finding.

(1) If ACF becomes aware of a

possible section 471(a)(18) violation,

whether in the course of a child and

family services review, the filing of a

complaint, or through some other

mechanism, it will refer such a case to

the Department’s Office for Civil Rights

(OCR) for investigation.

(2) Based on the findings of the OCR

investigation, ACF will determine if a

violation of section 471(a)(18) has

occurred. A section 471(a)(18) violation

occurs if a State or an entity in the State:

(i) Has denied to any person the

opportunity to become an adoptive or

foster parent on the basis of the race,

color, or national origin of the person,

or of the child, involved;

(ii) Has delayed or denied the

placement of a child for adoption or into

foster care on the basis of the race, color,

or national origin of the adoptive or

foster parent, or the child involved; or,

(iii) With respect to a State, maintains

any statute, regulation, policy,

procedure, or practice that on its face,

is a violation as defined in paragraphs

(a)(2)(i) and (2)(ii) of this section.

(3) ACF will provide the State or

entity with written notification of its

determination.

(4) If there has been no violation,

there will be no further action. If ACF

determines that there has been a

violation of section 471(a)(18), it will

take enforcement action as described in

this section.

(5) Compliance with the Indian Child

Welfare Act of 1978 (Pub. L. 95–608)

does not constitute a violation of section

471(a)(18).

(b) Corrective action and penalties for

violations with respect to a person or

based on a court finding.

(1) A State found to be in violation of

section 471(a)(18) with respect to a

person, as described in paragraphs

(a)(2)(i) and (a)(2)(ii) of this section, will

be penalized in accordance with

paragraph (g)(2) of this section. A State

determined to be in violation of section

471(a)(18) of the Act as a result of a

court finding will be penalized in

accordance with paragraph (g)(4) of this

section. The State may develop, obtain

approval of, and implement a plan of

corrective action any time after it

receives written notification from ACF

that it is in violation of section

471(a)(18) of the Act.

(2) Corrective action plans are subject

to ACF approval.

(3) If the corrective action plan does

not meet the provisions of paragraph (d)

of this section, the State must revise and

resubmit the plan for approval until it

has an approved plan.

(4) A State found to be in violation of

section 471(a)(18) by a court must notify

ACF within 30 days from the date of

entry of the final judgement once all

appeals have been exhausted, declined,

or the appeal period has expired.

(c) Corrective action for violations

resulting from a State’s statute,

regulation, policy, procedure, or

practice.

(1) A State found to have committed

a violation of the type described in

paragraph (a)(2)(iii) of this section must

develop and submit a corrective action

plan within 30 days of receiving written

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4083

notification from ACF that it is in

violation of section 471(a)(18). Once the

plan is approved the State will have to

complete the corrective action and come

into compliance. If the State fails to

complete the corrective action plan

within six months and come into

compliance, a penalty will be imposed

in accordance with paragraph (g)(3) of

this section.

(2) Corrective action plans are subject

to ACF approval.

(3) If the corrective action plan does

not meet the provisions of paragraph (d)

of this section, the State must revise and

resubmit the plan within 30 days from

the date it receives a written notice from

ACF that the plan has not been

approved. If the State does not submit

a revised corrective action plan

according to the provisions of paragraph

(d) of this section, withholding of funds

pursuant to the provisions of paragraph

(g) of this section will apply.

(d) Contents of a corrective action

plan. A corrective action plan must:

(1) Identify the issues to be addressed;

(2) Set forth the steps for taking

corrective action;

(3) Identify any technical assistance

needs and Federal and non-Federal

sources of technical assistance which

will be used to complete the action

steps; and,

(4) Specify the completion date. This

date will be no later than 6 months from

the date ACF approves the corrective

action plan.

(e) Evaluation of corrective action

plans. ACF will evaluate corrective

action plans and notify the State (in

writing) of its success or failure to

complete the plan within 30 calendar

days. If the State has failed to complete

the corrective action plan, ACF will

calculate the amount of reduction in the

State’s title IV–E payment and include

this information in the written

notification of failure to complete the

plan.

(f) Funds to be withheld. The term

‘‘title IV–E funds’’ refers to the amount

of Federal funds advanced or paid to the

State for allowable costs incurred by a

State for foster care maintenance

payments, adoption assistance

payments, administrative, and training

costs under title IV–E and the State’s

allotment for the Independent Living

program.

(g) Reduction of title IV–E funds.

(1) Title IV–E funds shall be reduced

in specified amounts in accordance with

paragraph (h) of this section under the

following circumstances:

(i) A determination that a State is in

violation of section 471(a)(18) of the Act

with respect to a person as described in

paragraphs (a)(2)(i) and (a)(2)(ii) of this

section, or;

(ii) After a State’s failure to

implement and complete a corrective

action plan and come into compliance

as described in paragraph (c) of this

section.

(2) Once ACF notifies a State, in

writing, that it has committed a section

471(a)(18) violation with respect to a

person, the State’s title IV–E funds will

be reduced for the fiscal quarter in

which the State received such written

notification and for each succeeding

quarter within that fiscal year or until

the State completes a corrective action

plan and comes into compliance,

whichever is earlier.

(3) For States that fail to complete a

corrective action plan within 6 months,

title IV–E funds will be reduced by ACF

for the fiscal quarter in which the State

received notification of its violation.

The reduction will continue for each

succeeding quarter within that fiscal

year or until the State completes the

corrective action plan and comes into

compliance, whichever is earlier.

(4) If, as a result of a court finding, a

State is determined to be in violation of

section 471(a)(18) of the Act, ACF will

assess a penalty without further

investigation. Once the State is notified

(in writing) of the violation, its title IV–

E funds will be reduced for the fiscal

quarter in which the court finding was

made and for each succeeding quarter

within that fiscal year or until the State

completes a corrective action plan and

comes into compliance, whichever is

sooner.

(5) The maximum number of quarters

that a State will have its title IV–E funds

reduced due to a finding of a State’s

failure to conform to section 471(a)(18)

of the Act is limited to the number of

quarters within the fiscal year in which

a determination of nonconformity was

made. However, an uncorrected

violation may result in a subsequent

review, another finding, and additional

penalties.

(6) No penalty will be imposed for a

court finding of a violation of section

471(a)(18) until the judgement is final

and all appeals have been exhausted,

declined, or the appeal period has

expired.

(h) Determination of the amount of

reduction of Federal funds. ACF will

determine the reduction in title IV–E

funds due to a section 471(a)(18)

violation in accordance with section

474(d)(1) of the Act.

(1) State agencies that violate section

471(a)(18) with respect to a person or

fail to implement or complete a

corrective action plan as described in

paragraph (c) of this section will be

subject to a penalty. The penalty

structure will follow section 474(d)(1) of

the Act. Penalties will be levied for the

quarter of the fiscal year in which the

State is notified of its section 471(a)(18)

violation, and for each succeeding

quarter within that fiscal year until the

State comes into compliance with

section 471(a)(18). The reduction in title

IV–E funds will be computed as follows:

(i) 2 percent of the State’s title IV–E

funds for the fiscal year quarter, as

defined in paragraph (f) of this section,

for the first finding of noncompliance in

that fiscal year;

(ii) 3 percent of the State’s title IV–E

funds for the fiscal year quarter, as

defined in paragraph (f) of this section,

for the second finding of noncompliance

in that fiscal year;

(iii) 5 percent of the State’s title IV–

E funds for the fiscal year quarter, as

defined in paragraph (f) of this section,

for the third or subsequent finding of

noncompliance in that fiscal year.

(2) Any entity (other than the State

agency) which violates section

471(a)(18) of the Act during a fiscal

quarter with respect to any person must

remit to the Secretary all title IV–E

funds paid to it by the State during the

quarter in which the entity is notified of

its violation.

(3) No fiscal year payment to a State

will be reduced by more than 5 percent

of its title IV–E funds, as defined in

paragraph (f) of this section, where the

State has been determined to be out of

compliance with section 471(a)(18) of

the Act.

(4) The State agency or entity, as

applicable, will be liable for interest on

the amount of funds reduced by the

Department, in accordance with the

provisions of 45 CFR 30.13.

§ 1355.39 Administrative and judicial

review.

States determined not to be in

substantial conformity with titles IV–B

and IV–E State plan requirements, or a

State or entity in violation of section

471(a)(18) of the Act:

(a) May appeal, pursuant to 45 CFR

part 16, the final determination and any

subsequent withholding of, or reduction

in, funds to the HHS Departmental

Appeals Board within 60 days after

receipt of a notice of nonconformity

described in § 1355.36(e)(1) of this part,

or receipt of a notice of noncompliance

by ACF as described in § 1355.38(a)(3)

of this part; and

(b) Will have the opportunity to

obtain judicial review of an adverse

decision of the Departmental Appeals

Board within 60 days after the State or

entity receives notice of the decision by

the Board. Appeals of adverse

4084 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

Department Appeals Board decisions

must be made to the district court of the

United States for the judicial district in

which the principal or headquarters

office of the agency responsible for

administering the program is located.

(c) The procedure described in

paragraphs (a) and (b) of this section

will not apply to a finding that a State

or entity has been determined to be in

violation of section 471(a)(18) which is

based on a judicial decision.

4. Amend § 1355.40 by revising the

second sentence in paragraph (a)(2) to

read as follows:

§ 1355.40 Foster care and adoption data

collection.

(a) Scope of the data collection

system.

(1) * * *

(2) * * * This includes American

Indian children covered under the

assurances in section 422(b)(10) of the

Act on the same basis as any other

child. * * *

* * * * *

Appendix A to Part 1355—Foster Care Data

Elements

5. Appendix A to part 1355 is

amended as follows:

a. Amend Section I by revising data

elements II.C.1. and heading of 2.,

IX.C.1., headings of 2. and 4., and

IX.C.3.

b. Amend Section II by revising the

first paragraph on ‘‘Reporting

population’’ and the instruction

paragraphs II.C. and IX.C., and

c. Remove paragraph IX.D. to read as

follows:

Section I—Foster Care Data Elements

* * * * *

II. Child’s Demographic Information

* * * * *

C. Race/Ethnicity

1. Race

a. American Indian or Alaska Native

b. Asian

c. Black or African American

d. Native Hawaiian or Other Pacific

Islander

e. White

f. Unable to Determine

2. Hispanic or Latino Ethnicitylll

* * * * *

IX. Foster Family Home-Parent(s) Data (To be

answered only if Section V., Part A.

CURRENT PLACEMENT SETTING is 1, 2

or 3)

* * * * *

C. Race/Ethnicity

1. Race of 1st Foster Caretaker

a. American Indian or Alaska Native

b. Asian

c. Black or African American

d. Native Hawaiian or Other Pacific

Islander

e. White

f. Unable to Determine

2. Hispanic or Latino Ethnicity of 1st

Foster Caretakerlll

* * * * *

3. Race of 2nd Foster Caretaker (If

Applicable)

a. American Indian or Alaska Native

b. Asian

c. Black or African American

d. Native Hawaiian or Other Pacific

Islander

e. White

f. Unable to Determine

4. Hispanic or Latino Ethnicity of 2nd

Foster Caretaker (If applicable)lll

* * * * *

Section II—Definitions of and Instructions for

Foster Care Data Elements

Reporting population. The population to be

included in this reporting system includes all

children in foster care under the

responsibility of the State agency

administering or supervising the

administration of the title IV-B Child and

Family Services State plan and the title IVE State plan; that is, all children who are

required to be provided the assurances of

section 422(b)(10) of the Social Security Act.

* * * * *

II. Child’s Demographic Information

* * * * *

C. Race/Ethnicity**

1. Race—In general, a person’s race is

determined by how they define themselves or

by how others define them. In the case of

young children, parents determine the race of

the child. Indicate all races (a through e) that

apply with a ‘‘1.’’ For those that do not apply,

indicate a ‘‘0.’’ Indicate ‘‘f. Unable to

Determine’’ with a ‘‘1’’ if it applies and a ‘‘0’’

if it does not.

American Indian or Alaska Native—A

person having origins in any of the original

peoples of North or South America

(including Central America), and who

maintains tribal affiliation or community

attachment.

Asian—A person having origins in any of

the original peoples of the Far East, Southeast

Asia, or the Indian subcontinent including,

for example, Cambodia, China, India, Japan,

Korea, Malaysia, Pakistan, the Philippine

Islands, Thailand, and Vietnam.

Black or African American—A person

having origins in any of the black racial

groups of Africa.

Native Hawaiian or Other Pacific

Islander—A person having origins in any of

the original peoples of Hawaii, Guam, Samoa,

or other Pacific Islands.

White—A person having origins in any of

the original peoples of Europe, the Middle

East, or North Africa.

Unable to Determine—The specific race

category is ‘‘unable to determine’’ because

the child is very young or is severely

disabled and no person is available to

identify the child’s race. ‘‘Unable to

determine’’ is also used if the parent, relative

or guardian is unwilling to identify the

child’s race.

2. Hispanic or Latino Ethnicity—Answer

‘‘yes’’ if the child is of Mexican, Puerto

Rican, Cuban, Central or South American

origin, or a person of other Spanish cultural

origin regardless of race. Whether or not a

person is Hispanic or Latino is determined by

how they define themselves or by how others

define them. In the case of young children,

parents determine the ethnicity of the child.

‘‘Unable to Determine’’ is used because the

child is very young or is severely disabled

and no person is available to determine

whether or not the child is Hispanic or

Latino. ‘‘Unable to determine’’ is also used if

the parent, relative or guardian is unwilling

to identify the child’s ethnicity.

* * * * *

IX. Family Foster Home-Parent(s) Data

* * * * *

C. Race—Indicate the race for each of the

foster parent(s). See instructions and

definitions for the race categories under data

element II.C.1. Use ‘‘f. Unable to Determine’’

only when a parent is unwilling to identify

his or her race. Hispanic or Latino

Ethnicity—Indicate the ethnicity for each of

the foster parent(s). See instructions and

definitions under data element II.C.2. Use ‘‘f.

Unable to Determine’’ only when a parent is

unwilling to identify his or her ethnicity.

* * * * *

Appendix B to Part 1355—Adoption Data

Elements

6. Appendix B to part 1355 is

amended as follows:

a. Amend Section I by revising data

elements II.C.1., headings of 2. and 4.,

II.C.3., II.C. and VI.C. b. Amend Section

II by revising the instruction paragraphs

II.C. and VI.C. to read as follows:

Section I—Adoption Data Elements

* * * * *

II. Child’s Demographic Information

* * * * *

C. Race/Ethnicity

1. Race

a. American Indian or Alaska Native

b. Asian

c. Black or African American

d. Native Hawaiian or Other Pacific

Islander

e. White

f. Unable to Determine

2. Hispanic or Latino Ethnicitylll

* * * * *

VI. Adoptive Parents

* * * * *

C. Race/Ethnicity

1. Adoptive Mother’s Race (If Applicable)

a. American Indian or Alaska Native

b. Asian

c. Black or African American

d. Native Hawaiian or Other Pacific

Islander

e. White

f. Unable to Determine

2. Hispanic or Latino Ethnicity of Mother

(If Applicable)lll

* * * * *

3. Adoptive Father’s Race (If Applicable)

a. American Indian or Alaska Native

b. Asian

c. Black or African American

d. Native Hawaiian or Other Pacific

Islander

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4085

e. White

f. Unable to Determine

4. Hispanic or Latino Ethnicity of Father (If

Applicable)lll

* * * * *

Section II—Definitions of Instructions

for Adoption Data Elements

* * * * *

II. Child’s Demographic Information

* * * * *

C. Race/Ethnicity

1. Race—In general, a person’s race is

determined by how they define

themselves or by how others define

them. In the case of young children,

parents determine the race of the child.

Indicate all races (a–e) that apply with

a ‘‘1.’’ For those that do not apply,

indicate a ‘‘0.’’ Indicate ‘‘f. Unable to

Determine’’ with a 1’’ if it applies and

a ‘‘0’’ if it does not.

American Indian or Alaska Native—A

person having origins in any of the

original peoples of North or South

America (including Central America),

and who maintains tribal affiliation or

community attachment.

Asian—A person having origins in

any of the original peoples of the Far

East, Southeast Asia, or the Indian

subcontinent including, for example,

Cambodia, China, India, Japan, Korea,

Malaysia, Pakistan, the Philippine

Islands, Thailand, and Vietnam.

Black or African American—A person

having origins in any of the black racial

groups of Africa.

Native Hawaiian or Other Pacific

Islander—A person having origins in

any of the original peoples of Hawaii,

Guam, Samoa, or other Pacific Islands.

White—A person having origins in

any of the original peoples of Europe,

the Middle East, or North Africa.

Unable to Determine—The specific

race category is ‘‘unable to determine’’

because the child is very young or is

severely disabled and no person is

available to identify the child’s race.

‘‘Unable to determine’’ is also used if

the parent, relative or guardian is

unwilling to identify the child’s race.

2. Hispanic or Latino Ethnicity—

Answer ‘‘yes’’ if the child is of Mexican,

Puerto Rican, Cuban, Central or South

American origin, or a person of other

Spanish cultural origin regardless of

race. Whether or not a person is

Hispanic or Latino is determined by

how they define themselves or by how

others define them. In the case of young

children, parents determine the

ethnicity of the child. ‘‘Unable to

Determine’’ is used because the child is

very young or is severely disabled and

no other person is available to

determine whether or not the child is

Hispanic or Latino. ‘‘Unable to

determine’’ is also used if the parent,

relative or guardian is unwilling to

identify the child’s ethnicity.

* * * * *

VI. Adoptive Parents

* * * * *

C. Race/Ethnicity—Indicate the race/

ethnicity for each of the adoptive

parent(s). See instructions and

definitions for the race/ethnicity

categories under data element II.C. Use

‘‘f. Unable to Determine’’ only when a

parent is unwilling to identify his or her

race or ethnicity.

* * * * *

Appendix D to Part 1355—Foster Care and

Adoption Record Layouts

7. Appendix D to part 1355 is

amended as follows:

a. Amend Section A by revising

1.b.(2) and (3), revising the Element No.,

Data element description, and No. of

numeric characters columns of the table

under c. for certain elements, and

revising the number of ‘‘Total

characters’’;

b. Amend Section A by revising

2.b.(3) and the table under c. including

the No. of characters for Element No. 02

and the number for ‘‘Record Length’’;

c. Amend Section B by revising 1.b.(2)

and (3), revising the Element No., Data

element description, and No. of numeric

characters columns of the table under c.

for certain elements, and revising the

number of ‘‘Total characters’’; and

d. Amend Section B by revising

2.b.(3) and the table under c. including

the No. of characters for Element No. 02

and the number for ‘‘Record Length’’, to

read as follows:

A. Foster Care

1. Foster Care Semi-Annual Detailed

Data Elements Record

a. * * *

b. * * *

(2) Enter date values in year, month

and day order (YYYYMMDD), e.g.,

19991030 for October 30, 1999, or year

and month order (YYYYMM), e.g.,

199910 for October 1999. Leave the

element value blank if dates are not

applicable.

(3) For elements 8, 11–15, 26–40, 52,

54 and 59–65, which are ‘‘select all that

apply’’ elements, enter a ‘‘1’’ for each

element that applies, enter a zero for

non-applicable elements.

* * * * *

c. foster care Semi-Annual Detailed

Data elements Record layout follows:

Element No. Appendix A data

element Data element description No. of numericcharacters

*******

02 I.B. Report period ending date .................................................................................................. 6

*******

05 I.E. Date of most recent periodic review ................................................................................... 8

06 II.A. Child’s date of birth ............................................................................................................. 8

*******

08 II.C.1. Race ....................................................................................................................................

08a American Indian or Alaska native ....................................................................................... 1

08b Asian ................................................................................................................................... 1

08c Black or African American .................................................................................................. 1

08d Native Hawaiian or Other Pacific Islander .......................................................................... 1

08e White ................................................................................................................................... 1

08f Unable to Determine ........................................................................................................... 1

09 II.C.2. Hispanic or Latino Ethnicity ................................................................................................ 1

*******

18 III.A.1. Date of first removal from home ......................................................................................... 8

4086 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

Element No. Appendix A data

element Data element description No. of numericcharacters

*******

20 III.A.3. Date child was discharged from last foster care episode ................................................... 8

21 III.A.4. Date of latest removal from home ...................................................................................... 8

22 III.A.5. Removal transaction date ................................................................................................... 8

23 III.B.1. Date of placement in current foster care setting ................................................................ 8

*******

45 VII.B.1. Year of birth (1st principal caretaker) ................................................................................. 4

46 VII.B.2. Year of birth (2nd principal caretaker) ................................................................................ 4

47 VIII.A. Date of mother’s parental rights termination ....................................................................... 8

48 VIII.B. Date of legal or putative father’s parental rights ................................................................. 8

*******

50 IX.B.1. Year of birth (1st foster caretaker) ...................................................................................... 4

51 IX.B.2. Year of birth (2nd foster caretaker) .................................................................................... 4

52 IX.C.1. Race of 1st foster caretaker ...............................................................................................

52a American Indian or Alaska Native ...................................................................................... 1

52b Asian ................................................................................................................................... 1

52c Black or African American .................................................................................................. 1

52d Native Hawaiian or Other Pacific Islander .......................................................................... 1

52e White ................................................................................................................................... 1

52f Unable to Determine ........................................................................................................... 1

53 IX.C.2. Hispanic or Latino ethnicity of 1st foster caretaker ............................................................ 1

54 IX.C.3. Race of 2nd foster caretaker ..............................................................................................

54a American Indian or Alaska Native ...................................................................................... 1

54b Asian ................................................................................................................................... 1

54c Black or African American .................................................................................................. 1

54d Native Hawaiian or Other pacific Islander .......................................................................... 1

54e White ................................................................................................................................... 1

54f Unable to Determine ........................................................................................................... 1

55 IX.C.4. Hispanic or Latino ethnicity of 2nd foster caretaker ........................................................... 1

56 X.A.1. Date of discharge from foster care ..................................................................................... 8

57 X.A.2. Foster care discharge transaction date .............................................................................. 8

*******

Total Characters ....................................................................................................... 197

2. Foster Care Semi-Annual Summary

Data Elements Record

a. * * *

b. * * *

(3) Enter date values in year, month

order (YYYYMM), e.g.,199912 for

December 1999.

c. Foster Care Semi-Annual Summary

Data Elements Record Layout follows:

Element No. Summary data

file

No. of

characters

*****

02 Report period

ending date

(YYYYMM).

6

*****

Record Length 174

B. Adoption

1. Adoption Semi-Annual Detailed Data

Elements Record

a. * * *

b. * * *

(2) Enter date values in year, month

and day order (YYYYMMDD), e.g.,

19991030 for October 30, 1999, or year

and month order (YYYYMM), e.g.,

199910 for October 1999. Leave the

element value blank if dates are not

applicable.

(3) For elements 7, 11–15, 25, 27 and

29–32 which are ‘‘select all that apply’’

elements, enter a ‘‘1’’ for each element

that applies; enter a zero for nonapplicable elements.

c. Adoption Semi-Annual Detailed

Data Elements Record Layout follows:

Element No. Appendix B data

element Data element description No. of numericcharacters

*******

02 I.B. Report period ending date .................................................................................................. 6

*******

05 II.A. Date of birth ........................................................................................................................ 6

*******

07 II.C.1 Race.

07a American Indian or Alaska Native ...................................................................................... 1

07b Asian ................................................................................................................................... 1

07c Black or African American .................................................................................................. 1

07d Native Hawaiian or Other Pacific Islander .......................................................................... 1

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4087

Element No. Appendix B data

element Data element description No. of numericcharacters

07e White ................................................................................................................................... 1

07f Unable to Determine ........................................................................................................... 1

08 II.C.2. Hispanic or Latino ethnicity ................................................................................................. 1

*******

16 IV.A.1 Mother’s year of birth .......................................................................................................... 4

17 IV.A.2. Father’s (Putative or legal) year of birth ............................................................................. 4

*******

19 V.A.1. Date of mother’s termination of parental rights .................................................................. 8

20 V.A.2. Date of father’s termination of parental rights .................................................................... 8

21 V.B. Date adoption legalized ...................................................................................................... 8

*******

23 VI.B.1. Mother’s year of birth (if applicable) ................................................................................... 4

24 VI.B.2. Father’s year of birth (if applicable) .................................................................................... 4

25 VI.C.1. Adoptive mother’s race .......................................................................................................

25a American Indian or Alaska Native ...................................................................................... 1

25b Asian ................................................................................................................................... 1

25c Black or African American .................................................................................................. 1

25d Native Hawaiian or Other Pacific Islander .......................................................................... 1

25e White ................................................................................................................................... 1

25f Unable to Determine ........................................................................................................... 1

26 VI.C.2. Hispanic or Latino Ethnicity ................................................................................................ 1

27 VI.C.3. Adoptive father’s race .........................................................................................................

27a American Indian or Alaska Native ...................................................................................... 1

27b Asian ................................................................................................................................... 1

27c Black or African American .................................................................................................. 1

27d Native Hawaiian or Other Pacific Islander .......................................................................... 1

27e White ................................................................................................................................... 1

27f Unable to Determine ........................................................................................................... 1

28 VI.C.4. Hispanic or Latino Ethnicity ................................................................................................ 1

Total Characters ....................................................................................................... 111

2. Adoption Semi-Annual Summary

Data Elements Record

a. * * *

b. * * *

(3) Enter data values in year, month

order (YYYYMM), e.g., 199912 for

December 1999.

c. Adoption Semi-Annual Summary

Data Element Record Layout follows:

Element No. Summary data

file

No. of characters

*****

02 Report period

ending date

(YYYYMM).

6

*****

Record Length 174

Appendix E to Part 1355—Data Standards

8. Appendix E to part 1355 is

amended as follows:

a. Amend Section A.2. by adding

paragraph a.(18);

b. Revise Section A.3. paragraph a.(1),

and the element description for Element

No. 09, 53, and 55 of the chart under

b.(2);

c. Amend Section B.2. by revising

paragraph a.(8) and adding paragraph

a.(9); and

d. In Section B.3. revise paragraph

a.(1), the element description for

Element No. 08, 26 and 28 of the chart

under b.(2), to read as follows:

A. Foster Care

* * * * *

2. Detailed Data File Submission Standards

a. * * *

(18) In Elements 8, 52, and 54, race

categories (‘‘a’’ through ‘‘e’’) and ‘‘f. Unable

to Determine’’ cannot be coded ‘‘0,’’ for it

does not apply. If any of the race categories

apply and are coded as ‘‘1’’ then ‘‘f. Unable

to Determine’’ cannot also apply.

* * * * *

3. Missing Data Standards

* * * * *

a. * * *

(1) Data elements whose values fail

internal consistency validations as outlined

in A.2.a.(1)–(18) above, and

* * * * *

Element No. Element description

*****

09 Child’s Hispanic or Latino Ethnicity

*****

53 Hispanic or Latino Ethnicity of

1st foster caretaker

Element No. Element description

*****

55 Hispanic or Latino Ethnicity of

2nd foster caretaker

* * * * *

B. Adoption

* * * * *

2. Detailed Data Elements File Submission

Standards

a. * * *

(8) If the ‘‘Family Structure’’ (Element 22)

is option 3, Single Female, then the Mother’s

Year of Birth (Element 23), the ‘‘Adoptive

Mother’s Race’’ (Element 25) and ‘‘Hispanic

or Latino Ethnicity’’ (Element 26) must be

completed. Similarly, if the ‘‘Family

Structure’’ (Element 22) is option 4, Single

Male, then the Father’s Year of Birth

(Element 24), the Adoptive Father’s Race’’

(Element 27) and ‘‘Hispanic or Latino

Ethnicity’’ (Element 28) must be completed.

If the ‘‘Family Structure’’ (Element 22) is

option 1 or 2, then both Mother’s and

Father’s ‘‘Year of Birth,’’ ‘‘Race’’ and

‘‘Hispanic or Latino Ethnicity’’ must be

completed.

(9) In Elements 7, 25, and 27, race

categories (‘‘a’’ through ‘‘e’’) and ‘‘f. Unable

to Determine’’ cannot be coded ‘‘0,’’ for it

does not apply. If any of the race categories

apply and are coded as ‘‘1’’ then ‘‘f. Unable

to Determine’’ cannot also apply.

* * * * *

4088 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

3. Missing Data Standards

* * * * *

a. * * *

(1) Data elements whose values fail

internal consistency validations as outlined

in 2.a.(1)–(9) above, and

* * * * *

Element No. Element description

*****

08 Is the child of Hispanic or

Latino ethnicity?

*****

26 Hispanic or Latino ethnicity of

mother

*****

28 Hispanic or Latino ethnicity of

father

* * * * *

PART 1356—REQUIREMENTS

APPLICABLE TO TITLE IV–E

9. 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., and 42 U.S.C. 1302.

10. Section 1356.20 is amended by

revising the first two sentences of

paragraph (e)(4) to read as follows:

§ 1356.20 State plan document and

submission requirements.

* * * * *

(e) * * *

(4) Action. Each Regional

Administrator, ACF, has the authority to

approve State plans and amendments

thereto which provide for the

administration of foster care

maintenance payments and adoption

assistance programs under section 471

of the Act. The Commissioner, ACYF,

retains the authority to determine that

proposed plan material is not

approvable, or that a previously

approved plan no longer meets the

requirements for approval. * * *

* * * * *

11. Section 1356.21 is revised to read

as follows:

§ 1356.21 Foster care maintenance

payments program implementation

requirements.

(a) Statutory and regulatory

requirements of the Federal foster care

program. To implement the foster care

maintenance payments program

provisions of the title IV–E State plan

and to be eligible to receive Federal

financial participation (FFP) for foster

care maintenance payments under this

part, a State must meet the requirements

of this section, 45 CFR 1356.22, 45 CFR

1356.30, and sections 472, 475(1),

475(4), 475(5) and 475(6) of the Act.

(b) Reasonable efforts. The State must

make reasonable efforts to maintain the

family unit and prevent the unnecessary

removal of a child from his/her home,

as long as the child’s safety is assured;

to effect the safe reunification of the

child and family (if temporary out-ofhome placement is necessary to ensure

the immediate safety of the child); and

to make and finalize alternate

permanency plans in a timely manner

when reunification is not appropriate or

possible. In order to satisfy the

‘‘reasonable efforts’’ requirements of

section 471(a)(15) (as implemented

through section 472(a)(1) of the Act), the

State must meet the requirements of

paragraphs (b) and (d) of this section. In

determining reasonable efforts to be

made with respect to a child and in

making such reasonable efforts, the

child’s health and safety must be the

State’s paramount concern.

(1) Judicial determination of

reasonable efforts to prevent a child’s

removal from the home.

(i) When a child is removed from his/

her home, the judicial determination as

to whether reasonable efforts were

made, or were not required to prevent

the removal in accordance with

paragraph (b)(3) of this section, must be

made no later than 60 days from the

date the child is removed from the home

pursuant to paragraph (k) of this section.

(ii) If the determination concerning

reasonable efforts to prevent the

removal is not made as specified in

paragraph (b)(1)(i) of this section, the

child is not eligible under the title IV–

E foster care maintenance payments

program for the duration of that stay in

foster care.

(2) Judicial determination of

reasonable efforts to finalize a

permanency plan.

(i) The State agency must obtain a

judicial determination that it has made

reasonable efforts to finalize the

permanency plan that is in effect

(whether the plan is reunification,

adoption, legal guardianship, placement

with a fit and willing relative, or

placement in another planned

permanent living arrangement) within

twelve months of the date the child is

considered to have entered foster care in

accordance with the definition at

§ 1355.20 of this part, and at least once

every twelve months thereafter while

the child is in foster care.

(ii) If such a judicial determination

regarding reasonable efforts to finalize a

permanency plan is not made, the child

becomes ineligible under title IV–E from

the end of the twelfth month following

the date the child is considered to have

entered foster care in accordance with

the definition at § 1355.20 of this part,

or the end of the month in which the

most recent judicial determination of

reasonable efforts to finalize a

permanency plan was made, and

remains ineligible until such a judicial

determination is made.

(3) Circumstances in which

reasonable efforts are not required to

prevent a child’s removal from home or

to reunify the child and family.

Reasonable efforts to prevent a child’s

removal from home or to reunify the

child and family are not required if the

State agency obtains a judicial

determination that such efforts are not

required because:

(i) A court of competent jurisdiction

has determined that the parent has

subjected the child to aggravated

circumstances (as defined in State law,

which definition may include but need

not be limited to abandonment, torture,

chronic abuse, and sexual abuse);

(ii) A court of competent jurisdiction

has determined that the parent has been

convicted of:

(A) Murder (which would have been

an offense under section 1111(a) of title

18, United States Code, if the offense

had occurred in the special maritime or

territorial jurisdiction of the United

States) of another child of the parent;

(B) Voluntary manslaughter (which

would have been an offense under

section 1112(a) of title 18, United States

Code, if the offense had occurred in the

special maritime or territorial

jurisdiction of the United States) of

another child of the parent;

(C) Aiding or abetting, attempting,

conspiring, or soliciting to commit such

a murder or such a voluntary

manslaughter; or

(D) A felony assault that results in

serious bodily injury to the child or

another child of the parent; or,

(iii) The parental rights of the parent

with respect to a sibling have been

terminated involuntarily.

(4) Concurrent planning. Reasonable

efforts to finalize an alternate

permanency plan may be made

concurrently with reasonable efforts to

reunify the child and family.

(5) Use of the Federal Parent Locator

Service. The State agency may seek the

services of the Federal Parent Locator

Service to search for absent parents at

any point in order to facilitate a

permanency plan.

(c) Contrary to the welfare

determination. Under section 472(a)(1)

of the Act, a child’s removal from the

home must have been the result of a

judicial determination (unless the child

was removed pursuant to a voluntary

placement agreement) to the effect that

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4089

continuation of residence in the home

would be contrary to the welfare, or that

placement would be in the best interest,

of the child. The contrary to the welfare

determination must be made in the first

court ruling that sanctions (even

temporarily) the removal of a child from

home. If the determination regarding

contrary to the welfare is not made in

the first court ruling pertaining to

removal from the home, the child is not

eligible for title IV–E foster care

maintenance payments for the duration

of that stay in foster care.

(d) Documentation of judicial

determinations. The judicial

determinations regarding contrary to the

welfare, reasonable efforts to prevent

removal, and reasonable efforts to

finalize the permanency plan in effect,

including judicial determinations that

reasonable efforts are not required, must

be explicitly documented and must be

made on a case-by-case basis and so

stated in the court order.

(1) If the reasonable efforts and

contrary to the welfare judicial

determinations are not included as

required in the court orders identified in

paragraphs (b) and (c) of this section, a

transcript of the court proceedings is the

only other documentation that will be

accepted to verify that these required

determinations have been made.

(2) Neither affidavits nor nunc pro

tunc orders will be accepted as

verification documentation in support

of reasonable efforts and contrary to the

welfare judicial determinations.

(3) Court orders that reference State

law to substantiate judicial

determinations are not acceptable, even

if State law provides that a removal

must be based on a judicial

determination that remaining in the

home would be contrary to the child’s

welfare or that removal can only be

ordered after reasonable efforts have

been made.

(e) Trial home visits. A trial home

visit may not exceed six months in

duration, unless a court orders a longer

trial home visit. If a trial home visit

extends beyond six months and has not

been authorized by the court, or exceeds

the time period the court has deemed

appropriate, and the child is

subsequently returned to foster care,

that placement must then be considered

a new placement and title IV–E

eligibility must be newly established.

Under these circumstances the judicial

determinations regarding contrary to the

welfare and reasonable efforts to prevent

removal are required.

(f) Case review system. In order to

satisfy the provisions of section

471(a)(16) of the Act regarding a case

review system, each State’s case review

system must meet the requirements of

sections 475(5) and 475(6) of the Act.

(g) Case plan requirements. In order to

satisfy the case plan requirements of

sections 471(a)(16), 475(1) and 475(5)

(A) and (D) of the Act, the State agency

must promulgate policy materials and

instructions for use by State and local

staff to determine the appropriateness of

and necessity for the foster care

placement of the child. The case plan

for each child must:

(1) Be a written document, which is

a discrete part of the case record, in a

format determined by the State, which

is developed jointly with the parent(s)

or guardian of the child in foster care;

and

(2) Be developed within a reasonable

period, to be established by the State,

but in no event later than 60 days from

the child’s removal from the home

pursuant to paragraph (k) of this section;

(3) Include a discussion of how the

case plan is designed to achieve a safe

placement for the child in the least

restrictive (most family-like) setting

available and in close proximity to the

home of the parent(s) when the case

plan goal is reunification and a

discussion of how the placement is

consistent with the best interests and

special needs of the child. (FFP is not

available when a court orders a

placement with a specific foster care

provider);

(4) Include a description of the

services offered and provided to prevent

removal of the child from the home and

to reunify the family; and

(5) Document the steps to finalize a

placement when the case plan goal is or

becomes adoption or placement in

another permanent home in accordance

with sections 475(1)(E) and (5)(E) of the

Act. When the case plan goal is

adoption, at a minimum, such

documentation shall include childspecific recruitment efforts such as the

use of State, regional, and national

adoption exchanges including electronic

exchange systems.

(This requirement has been approved by the

Office of Management and Budget (OMB)

under OMB control number 0980–0140)

(h) Application of the permanency

hearing requirements. 

(1) To meet the requirements of the

permanency hearing, the State must,

among other requirements, comply with

section 475(5)(C) of the Act.

(2) In accordance with paragraph

(b)(3) of this section, when a court

determines that reasonable efforts to

return the child home are not required,

a permanency hearing must be held

within 30 days of that determination,

unless the requirements of the

permanency hearing are fulfilled at the

hearing in which the court determines

that reasonable efforts to reunify the

child and family are not required.

(3) If the State concludes, after

considering reunification, adoption,

legal guardianship, or permanent

placement with a fit and willing

relative, that the most appropriate

permanency plan for a child is

placement in another planned

permanent living arrangement, the State

must document to the court the

compelling reason for the alternate plan.

Examples of a compelling reason for

establishing such a permanency plan

may include:

(i) The case of an older teen who

specifically requests that emancipation

be established as his/her permanency

plan;

(ii) The case of a parent and child

who have a significant bond but the

parent is unable to care for the child

because of an emotional or physical

disability and the child’s foster parents

have committed to raising him/her to

the age of majority and to facilitate

visitation with the disabled parent; or,

(iii) the Tribe has identified another

planned permanent living arrangement

for the child.

(4) When an administrative body,

appointed or approved by the court,

conducts the permanency hearing, the

procedural safeguards set forth in the

definition of permanency hearing must

be so extended by the administrative

body.

(i) Application of the requirements for

filing a petition to terminate parental

rights at section 475(5)(E) of the Social

Security Act. (1) Subject to the

exceptions in paragraph (i)(2) of this

section, the State must file a petition (or,

if such a petition has been filed by

another party, seek to be joined as a

party to the petition) to terminate the

parental rights of a parent(s):

(i) Whose child has been in foster care

under the responsibility of the State for

15 of the most recent 22 months. The

petition must be filed by the end of the

child’s fifteenth month in foster care. In

calculating when to file a petition for

termination of parental rights, the State:

(A) Must calculate the 15 out of the

most recent 22 month period from the

date the child entered foster care as

defined at section 475(5)(F) of the Act;

(B) Must use a cumulative method of

calculation when a child experiences

multiple exits from and entries into

foster care during the 22 month period;

(C) Must not include trial home visits

or runaway episodes in calculating 15

months in foster care; and,

(D) Need only apply section 475(5)(E)

of the Act to a child once if the State

4090 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

does not file a petition because one of

the exceptions at paragraph (i)(2) of this

section applies;

(ii) Whose child has been determined

by a court of competent jurisdiction to

be an abandoned infant (as defined

under State law). The petition to

terminate parental rights must be filed

within 60 days of the judicial

determination that the child is an

abandoned infant; or,

(iii) Who has been convicted of one of

the felonies listed at paragraph (b)(3)(ii)

of this section. Under such

circumstances, the petition to terminate

parental rights must be filed within 60

days of a judicial determination that

reasonable efforts to reunify the child

and parent are not required.

(2) The State may elect not to file or

join a petition to terminate the parental

rights of a parent per paragraph (i)(1) of

this section if:

(i) At the option of the State, the child

is being cared for by a relative;

(ii) The State agency has documented

in the case plan (which must be

available for court review) a compelling

reason for determining that filing such

a petition would not be in the best

interests of the individual child.

Compelling reasons for not filing a

petition to terminate parental rights

include, but are not limited to:

(A) Adoption is not the appropriate

permanency goal for the child; or,

(B) No grounds to file a petition to

terminate parental rights exist; or,

(C) The child is an unaccompanied

refugee minor as defined in 45 CFR

400.111; or

(D) There are international legal

obligations or compelling foreign policy

reasons that would preclude terminating

parental rights; or

(iii) The State agency has not

provided to the family, consistent with

the time period in the case plan,

services that the State deems necessary

for the safe return of the child to the

home, when reasonable efforts to

reunify the family are required.

(3) When the State files or joins a

petition to terminate parental rights in

accordance with paragraph (i)(1) of this

section, it must concurrently begin to

identify, recruit, process, and approve a

qualified adoptive family for the child.

(j) Child of a minor parent in foster

care. Foster care maintenance payments

made on behalf of a child placed in a

foster family home or child care

institution, who is the parent of a son

or daughter in the same home or

institution, must include amounts

which are necessary to cover costs

incurred on behalf of the child’s son or

daughter. Said costs must be limited to

funds expended on those items

described in the definition of foster care

maintenance payments.

(k) Removal from the home of a

specified relative.

(1) For the purposes of meeting the

requirements of section 472(a)(1) of the

Act, a removal from the home must

occur pursuant to:

(i) A voluntary placement agreement

entered into by a parent or relative

which leads to a physical or

constructive removal (i.e., a nonphysical or paper removal of custody) of

the child from the home; or

(ii) A judicial order for a physical or

constructive removal of the child from

a parent or specified relative.

(2) A removal has not occurred in

situations where legal custody is

removed from the parent or relative and

the child remains with the same relative

in that home under supervision by the

State agency.

(3) A child is considered

constructively removed on the date of

the first judicial order removing

custody, even temporarily, from the

appropriate specified relative or the date

that the voluntary placement agreement

is signed by all relevant parties.

(l) Living with a specified relative.For

purposes of meeting the requirements

for living with a specified relative prior

to removal from the home under section

472(a)(1) of the Act and all of the

conditions under section 472(a)(4), one

of the two following situations must

apply:

(1) The child was living with the

parent or specified relative, and was

AFDC eligible in that home in the

month of the voluntary placement

agreement or initiation of court

proceedings; or

(2) The child had been living with the

parent or specified relative within six

months of the month of the voluntary

placement agreement or the initiation of

court proceedings, and the child would

have been AFDC eligible in that month

if s/he had still been living in that

home.

(m) Review of payments and licensing

standards. In meeting the requirements

of section 471(a)(11) of the Act, the State

must review at reasonable, specific,

time-limited periods to be established

by the State:

(1) The amount of the payments made

for foster care maintenance and

adoption assistance to assure their

continued appropriateness; and

(2) The licensing or approval

standards for child care institutions and

foster family homes.

(n) Foster care goals. The specific

foster care goals required under section

471(a)(14) of the Act must be

incorporated into State law by statute or

administrative regulation with the force

of law.

(o) Notice and opportunity to be

heard. The State must provide the foster

parent(s) of a child and any preadoptive

parent or relative providing care for the

child with timely notice of and an

opportunity to be heard in permanency

hearings and six-month periodic

reviews held with respect to the child

during the time the child is in the care

of such foster parent, preadoptive

parent, or relative caregiver. Notice of

and an opportunity to be heard does not

include the right to standing as a party

to the case.

12. Section 1356.30 is redesignated as

§ 1356.22 and revised to read as follows:

§ 1356.22 Implementation requirements for

children voluntarily placed in foster care.

(a) As a condition of receipt of Federal

financial participation (FFP) in foster

care maintenance payments for a

dependent child removed from his

home under a voluntary placement

agreement, the State must meet the

requirements of:

(1) Section 472 of the Act, as

amended;

(2) Sections 422(b)(10) and 475(5) of

the Act;

(3) 45 CFR 1356.21 (f), (g), (h), and (i);

and

(4) The requirements of this section.

(b) Federal financial participation is

available only for voluntary foster care

maintenance expenditures made within

the first 180 days of the child’s

placement in foster care unless there has

been a judicial determination by a court

of competent jurisdiction, within the

first 180 days of such placement, to the

effect that the continued voluntary

placement is in the best interests of the

child.

(c) The State agency must establish

and maintain a uniform procedure or

system, consistent with State law, for

revocation by the parent(s) of a

voluntary placement agreement and

return of the child.

13. New § 1356.30 is added to read as

follows:

§ 1356.30 Safety requirements for foster

care and adoptive home providers.

(a) Unless an election provided for in

paragraph (d) of this section is made,

the State must provide documentation

that criminal records checks have been

conducted with respect to prospective

foster and adoptive parents.

(b) The State may not approve or

license any prospective foster or

adoptive parent, nor may the State claim

FFP for any foster care maintenance or

adoption assistance payment made on

behalf of a child placed in a foster home

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4091

operated under the auspices of a child

placing agency or on behalf of a child

placed in an adoptive home through a

private adoption agency, if the State

finds that, based on a criminal records

check conducted in accordance with

paragraph (a) of this section, a court of

competent jurisdiction has determined

that the prospective foster or adoptive

parent has been convicted of a felony

involving:

(1) Child abuse or neglect;

(2) Spousal abuse;

(3) A crime against a child or children

(including child pornography); or,

(4) A crime involving violence,

including rape, sexual assault, or

homicide, but not including other

physical assault or battery.

(c) The State may not approve or

license any prospective foster or

adoptive parent, nor may the State claim

FFP for any foster care maintenance or

adoption assistance payment made on

behalf of a child placed in a foster home

operated under the auspices of a child

placing agency or on behalf of a child

placed in an adoptive home through a

private adoption agency, if the State

finds, based on a criminal records check

conducted in accordance with

paragraph (a) of this section, that a court

of competent jurisdiction has

determined that the prospective foster

or adoptive parent has, within the last

five years, been convicted of a felony

involving:

(1) Physical assault;

(2) Battery; or,

(3) A drug-related offense.

(d)(1) The State may elect not to

conduct or require criminal records

checks on prospective foster or adoptive

parents by:

(i) Notifying the Secretary in a letter

from the Governor; or

(ii) Enacting State legislation.

(2) Such an election also removes the

State’s obligation to comport with

paragraphs (b) and (c) of this section.

(e) In all cases where the State opts

out of the criminal records check

requirement, the licensing file for that

foster or adoptive family must contain

documentation which verifies that

safety considerations with respect to the

caretaker(s) have been addressed.

(f) In order for a child care institution

to be eligible for title IV–E funding, the

licensing file for the institution must

contain documentation which verifies

that safety considerations with respect

to the staff of the institution have been

addressed.

14. Section 1356.50 is amended by

revising paragraphs (a) and (b) to read

as follows:

§ 1356.50 Withholding of funds for

noncompliance with the approved title IV–

E State plan.

(a) To be in compliance with the title

IV–E State plan requirements, a State

must meet the requirements of the Act

and 45 CFR 1356.20, 1356.21, 1356.30,

and 1356.40 of this part.

(b) To be in compliance with the title

IV–E State plan requirements, a State

that chooses to claim FFP for voluntary

placements must meet the requirements

of the Act, 45 CFR 1356.22 and

paragraph (a) of this section; and

* * * * *

15. Section 1356.60 is amended by

revising paragraph (b)(1) and removing

paragraph (c)(4) to read as follows:

§ 1356.60 Fiscal requirements (title IV–E).

* * * * *

(b) Federal matching funds for State

and local training for foster care and

adoption assistance under title IV–E.

(1) Federal financial participation is

available at the rate of seventy-five

percent (75%) in the costs of:

(i) Training personnel employed or

preparing for employment by the State

or local agency administering the plan,

and;

(ii) Providing short-term training

(including travel and per diem

expenses) to current or prospective

foster or adoptive parents and the

members of the state licensed or

approved child care institutions

providing care to foster and adopted

children receiving title IV–E assistance.

* * * * *

§§ 1356.65 and 1356.70 [Removed]

16. Sections 1356.65 and 1356.70 are

removed.

17. New § 1356.71 is added to read as

follows:

§ 1356.71 Federal review of the eligibility

of children in foster care and the eligibility

of foster care providers in title IV–E

programs.

(a) Purpose, scope and overview of the

process.

(1) This section sets forth

requirements governing Federal reviews

of State compliance with the title IV–E

eligibility provisions as they apply to

children and foster care providers under

paragraphs (a) and (b) of section 472 of

the Act.

(2) The requirements of this section

apply to State agencies that receive

Federal payments for foster care under

title IV–E of the Act.

(3) The review process begins with a

primary review of foster care cases for

the title IV–E eligibility requirements.

States determined to be in substantial

compliance based on the primary

review will not be subject to another

review for three years. States that are

determined not to be in compliance will

develop and implement a program

improvement plan designed to correct

the areas of non-compliance, and a

secondary review will be conducted

after completion of the program

improvement plan.

(b) Composition of review team and

preliminary activities preceding an onsite review.

(1) The review team must be

composed of representatives of the State

agency, and ACF’s Regional and Central

Offices.

(2) The State must provide ACF with

the complete payment history for each

of the sample and oversample cases

prior to the on-site review.

(c) Sampling guidance and conduct of

review.

(1) The list of sampling units in the

target population (i.e., the sampling

frame) will be drawn by ACF statistical

staff from the Adoption and Foster Care

Analysis and Reporting System

(AFCARS) data which are transmitted

by the State agency to ACF. The

sampling frame will consist of cases of

children who were eligible for foster

care maintenance payments during the

reporting period reflected in a State’s

most recent AFCARS data submission.

For the initial primary review, if these

data are not available or are deficient, an

alternative sampling frame, consistent

with one AFCARS six-month reporting

period, will be selected by ACF in

conjunction with the State agency.

(2) A sample of 80 cases (plus a 10

percent oversample of eight cases) from

the title IV–E foster care program will be

selected for the primary review utilizing

probability sampling methodologies.

Usually, the chosen methodology will

be simple random sampling, but other

probability samples may be utilized,

when necessary and appropriate.

(3) Cases from the oversample will be

substituted and reviewed for each of the

original sample of 80 cases which is

found to be in error.

(4) At the completion of the primary

review, the review team will determine

the number of ineligible cases. When

the total number of ineligible cases does

not exceed eight, ACF can conclude

with a probability of 88 percent that in

a population of 1000 or more cases the

population ineligibility case error rate is

less than 15 percent and the State will

be considered in substantial

compliance. For primary reviews held

subsequent to the initial primary

reviews, the acceptable population

ineligibility case error rate threshold

will be reduced from less than 15

percent (eight or fewer ineligible cases)

4092 Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations

to less than 10 percent (four or fewer

ineligible cases)). A State agency which

meets this standard is considered to be

in ‘‘substantial compliance’’ (see

paragraph (h) of this section). A

disallowance will be assessed for the

ineligible cases for the period of time

the cases are ineligible.

(5) A State which has been

determined to be in ‘‘noncompliance’’

(i.e., not in substantial compliance) will

be required to develop a program

improvement plan according to the

specifications discussed in paragraph (i)

of this section, as well as undergo a

secondary review. For the secondary

review, a sample of 150 cases (plus a 10

percent oversample of 15 cases) will be

drawn from the most recent AFCARS

submission. Usually, the chosen

methodology will be simple random

sampling, but other probability samples

may be utilized, when necessary and

appropriate. Cases from the oversample

will be substituted and reviewed for

each of the original sample of 150 cases

which is found to be in error.

(6) At the completion of the secondary

review, the review team will calculate

both the sample case ineligibility and

dollar error rates for the cases

determined ineligible during the review.

An extrapolated disallowance equal to

the lower limit of a 90 percent

confidence interval for the population

total dollars in error for the amount of

time corresponding to the AFCARS

reporting period will be assessed if both

the child/provider (case) ineligibility

and dollar error rates exceed 10 percent.

If neither, or only one, of the error rates

exceeds 10 percent, a disallowance will

be assessed for the ineligible cases for

the period of time the cases are

ineligible.

(d) Requirements subject to review.

States will be reviewed against the

requirements of title IV–E of the Act

regarding:

(1) The eligibility of the children on

whose behalf the foster care

maintenance payments are made

(section 472(a)(1)–(4) of the Act) to

include:

(i) Judicial determinations regarding

‘‘reasonable efforts’’ and ‘‘contrary to

the welfare’’ in accordance with

§ 1356.21(b) and (c), respectively;

(ii) Voluntary placement agreements

in accordance with § 1356.22;

(iii) Responsibility for placement and

care vested with the State agency;

(iv) Placement in a licensed foster

family home or child care institution;

and,

(v) eligibility for AFDC under such

State plan as it was in effect on July 16,

1996.

(2) Allowable payments made to

foster care providers who comport with

sections 471(a)(10), 471(a)(20), 472(b)

and (c) of the Act and § 1356.30.

(e) Review instrument. A title IV–E

foster care eligibility review checklist

will be used when conducting the

eligibility review.

(f) Eligibility determination—child.

The case record of the child must

contain sufficient documentation to

verify a child’s eligibility in accordance

with paragraph (d)(1) of this section, in

order to substantiate payments made on

the child’s behalf.

(g) Eligibility determination—

provider. 

(1) For each case being reviewed, the

State agency must make available a

licensing file which contains the

licensing history, including a copy of

the certificate of licensure/approval or

letter of approval, for each of the

providers in the following categories:

(i) Public child care institutions with

25 children or less in residence;

(ii) Private child care institutions;

(iii) Group homes; and

(iv) Foster family homes, including

relative homes.

(2) The licensing file must contain

documentation that the State has

complied with the safety requirements

for foster and adoptive placements in

accordance with § 1356.30.

(3) If the licensing file does not

contain sufficient information to

support a child’s placement in a

licensed facility, the State agency may

provide supplemental information from

other sources (e.g., a computerized

database).

(h) Standards of compliance. 

(1) Disallowances will be taken, and

plans for program improvement

required, based on the extent to which

a State is not in substantial compliance

with recipient or provider eligibility

provisions of title IV–E, or applicable

regulations in 45 CFR parts 1355 and

1356.

(2) Substantial compliance and

noncompliance are defined as follows:

(i) Substantial compliance—For the

primary review (of the sample of 80

cases), no more than eight of the title

IV–E cases reviewed may be determined

to be ineligible. (This critical number of

allowable ‘‘errors,’’ i.e., ineligible cases,

is reduced to four errors or less in

primary reviews held subsequent to the

initial primary review). For the

secondary review (if required),

substantial compliance means either the

case ineligibility or dollar error rate

does not exceed 10 percent.

(ii) Noncompliance—means not in

substantial compliance. For the primary

review (of the sample of 80 cases), nine

or more of the title IV–E cases reviewed

must be determined to be ineligible.

(This critical number of allowable

‘‘errors,’’ i.e., ineligible cases, is reduced

to five or more in primary reviews

subsequent to the initial primary

review). For the secondary review (if

required), noncompliance means both

the case ineligibility and dollar error

rates exceed 10 percent.

(3) ACF will notify the State in

writing within 30 calendar days after

the completion of the review of whether

the State is, or is not, operating in

substantial compliance.

(4) States which are determined to be

in substantial compliance must undergo

a subsequent review after a minimum of

three years.

(i) Program improvement plans.

(1) States which are determined to be

in noncompliance with recipient or

provider eligibility provisions of title

IV–E, or applicable regulations in 45

CFR Parts 1355 and 1356, will develop

a program improvement plan designed

to correct the areas determined not to be

in substantial compliance. The program

improvement plan will:

(i) Be developed jointly by State and

Federal staff;

(ii) Identify the areas in which the

State’s program is not in substantial

compliance;

(iii) Not extend beyond one year. A

State will have a maximum of one year

in which to implement and complete

the provisions of the program

improvement plan unless State

legislative action is required. In such

instances, an extension may be granted

with the State and ACF negotiating the

terms and length of such extension that

shall not exceed the last day of the first

legislative session after the date of the

program improvement plan; and

(iv) Include:

(A) Specific goals;

(B) The action steps required to

correct each identified weakness or

deficiency; and,

(C) a date by which each of the action

steps is to be completed.

(2) States determined not to be in

substantial compliance as a result of a

primary review must submit the

program improvement plan to ACF for

approval within 90 calendar days from

the date the State receives written

notification that it is not in substantial

compliance. This deadline may be

extended an additional 30 calendar days

when a State agency submits additional

documentation to ACF in support of

cases determined to be ineligible as a

result of the on-site eligibility review.

(3) The ACF Regional Office will

intermittently review, in conjunction

with the State agency, the State’s

Federal Register / Vol. 65, No. 16 / Tuesday, January 25, 2000 / Rules and Regulations 4093

progress in completing the prescribed

action steps in the program

improvement plan.

(4) If a State agency does not submit

an approvable program improvement

plan in accordance with the provisions

of paragraphs (i)(1) and (2) of this

section, ACF will move to a secondary

review in accordance with paragraph (c)

of this section.

(j) Disallowance of funds. The amount

of funds to be disallowed will be

determined by the extent to which a

State is not in substantial compliance

with recipient or provider eligibility

provisions of title IV–E, or applicable

regulations in 45 CFR parts 1355 and

1356.

(1) States which are in found to be in

substantial compliance during the

primary or secondary review will have

disallowances (if any) determined on

the basis of individual cases reviewed

and found to be in error. The amount of

disallowance will be computed on the

basis of payments associated with

ineligible cases for the entire period of

time that each case has been ineligible.

(2) States which are found to be in

noncompliance during the primary

review will have disallowances

determined on the basis of individual

cases reviewed and found to be in error,

and must implement a program

improvement plan in accordance with

the provisions contained within it. A

secondary review will be conducted no

later than during the AFCARS reporting

period which immediately follows the

program improvement plan completion

date on a sample of 150 cases drawn

from the State’s most recent AFCARS

data. If both the case ineligibility and

dollar error rates exceed 10 percent the

State is in noncompliance and an

additional disallowance will be

determined based on extrapolation from

the sample to the universe of claims

paid for the duration of the AFCARS

reporting period (i.e., all title IV-E funds

expended for a case during the

quarter(s) that case is ineligible). If

either the case ineligibility or dollar rate

does not exceed 10 percent, the amount

of disallowance will be computed on

the basis of payments associated with

ineligible cases for the entire period of

time the case has been determined to be

ineligible.

(3) The State agency will be liable for

interest on the amount of funds

disallowed by the Department, in

accordance with the provisions of 45

CFR 30.13.

(4) States may appeal any

disallowance actions taken by ACF to

the HHS Departmental Appeals Board in

accordance with regulations at 45 CFR

Part 16.

PART 1357—REQUIREMENTS

APPLICABLE TO TITLE IV–B

18. The authority citation for part

1357 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.

19. Section 1357.40 is amended by

revising paragraph (d)(6) to read as

follows:

§ 1357.40 Direct payments to Indian Tribal

Organizations (title IV–B, subpart 1, child

welfare services).

* * * * *

(d)* * *

(6) In order to determine the amount

of Federal funds available for a direct

grant to an eligible ITO, the Department

shall first divide the State’s title IV–B

allotment by the number of children in

the State, then multiply the resulting

amount by a multiplication factor

determined by the Secretary, and then

multiply that amount by the number of

Indian children in the ITO population.

The multiplication factor will be set at

a level designed to achieve the purposes

of the act and revised as appropriate.

[FR Doc.00–1122 Filed 1–24–00; 8:45 am]

BILLING CODE 4184–01–P