Vol. 78 Monday, 

No. 97 May 20, 2013 

Part II 

Department of Health and Human Services 

45 CFR Part 98 

Child Care and Development Fund (CCDF) Program; Proposed Rule 


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29442 Federal Register / Vol. 78, No. 97 / Monday, May 20, 2013 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Part 98 

RIN 0970–AC53 

Child Care and Development Fund 

(CCDF) Program 

AGENCY: Office of Child Care (OCC), 

Administration for Children and 

Families (ACF), Department of Health 

and Human Services (HHS). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Administration for 

Children and Families (ACF) proposes 

to amend the Child Care and 

Development Fund (CCDF) regulations. 

This proposed rule makes changes to 

CCDF regulatory provisions in order to 

strengthen health and safety 

requirements for child care providers, 

reflect current State and local practices 

to improve the quality of child care, 

infuse new accountability for Federal 

tax dollars, and leverage the latest 

knowledge and research in the field of 

early care and education to better serve 

low-income children and families. 

DATES: In order to be considered, 

comments on this proposed rule must 

be received on or before August 5, 2013. 

ADDRESSES: Interested persons are 

invited to submit comments to the 

Office of Child Care, 370 L’Enfant 

Promenade SW., Washington, DC 20024, 

Attention: Cheryl Vincent, Office of 

Child Care, or electronically via the 

Internet at http://www.regulations.gov. 

If you submit a comment, please include 

your name and address, identify the 

docket number for this rulemaking 

(ACF–2013–0001), indicate the specific 

section of this document to which each 

comment applies, and give the reason 

for each comment. You may submit 

your comments and material by 

electronic means, mail, or delivery to 

the address above, but please submit 

your comments and material by only 

one means. A copy of this Notice of 

Proposed Rulemaking may be 

downloaded from http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Cheryl Vincent, Office of Child Care, 

202–205–0750 (not a toll-free call). Deaf 

and hearing impaired individuals may 

call the Federal Dual Party Relay 

Service at 1–800–877–8339 between 8 

a.m. and 7 p.m. Eastern Time. 

SUPPLEMENTARY INFORMATION: 

Contents 

I. Executive Summary 

II. Background 

A. Child Care and Development Fund 

(CCDF) 

B. Discussion of Changes Made in this 

Proposed Rule 

III. Statutory Authority 

IV. Provisions of Proposed Rule 

Subpart A—Goals, Purposes and 

Definitions 

Subpart B—General Application 

Procedures 

Subpart C—Eligibility for Services 

Subpart D—Program Operations (Child 

Care Services) Parental Rights and 

Responsibilities 

Subpart E—Program Operations (Child 

Care Services) Lead Agency and Provider 

Requirements 

Subpart F—Use of Child Care and 

Development Funds 

Subpart G—Financial Management 

Subpart H—Program Reporting 

Requirements 

Subpart I—Indian Tribes 

Subpart J—Monitoring, Non-Compliance, 

and Complaints 

Subpart K—Error Rate Reporting 

V. Paperwork Reduction Act 

VI. Regulatory Flexibility Act 

VII. Regulatory Impact Analysis 

VIII. Unfunded Mandates Reform Act of 1995 

IX. Congressional Review 

X. Executive Order 13132 

XI. Treasury and General Government 

Appropriations Act of 1999 

I. Executive Summary 

Need for the regulatory action. The 

Child Care and Development Fund 

(CCDF) is the primary Federal funding 

source devoted to providing low-income 

families with access to child care and 

improving the quality of child care. It 

has the twin goals of promoting 

families’ economic self-sufficiency by 

making child care more affordable, and 

fostering healthy child development and 

school success by improving the quality 

of child care. This proposed regulatory 

action is needed to improve 

accountability broadly across many 

areas of the CCDF program, but is 

especially focused on ensuring children 

supported by CCDF funds are in safe, 

healthy, quality child care, and 

empowering parents with transparent 

information about the child care choices 

available to them. 

Last reauthorized in 1996, the CCDF 

program has not undergone any 

significant review in more than 15 

years, yet it has far-reaching 

implications for America’s poorest 

children. It provides child care 

assistance to 1.6 million children from 

nearly 1 million low-income working 

families. Half of the children served are 

living at or below poverty level. In 

addition, children who receive CCDF 

are cared for alongside children who do 

not receive CCDF, by approximately 

500,000 participating child care 

providers, some of whom lack basic 

assurances needed to ensure children 

are safe, healthy and learning. 

National surveys have demonstrated 

that most parents logically assume their 

child care providers have had a 

background check, had training in child 

health and safety, and are regularly 

monitored (National Association of 

Child Care Resource and Referral 

Agencies, National Parent Polling 

Results, 2011). However, State policies 

surrounding the training and oversight 

of child care providers vary widely and 

may not include these requirements. In 

addition, approximately 10 percent of 

CCDF children are cared for in 

unregulated centers and homes, 

meaning there is little to no oversight 

with respect to compliance with basic 

standards designed to safeguard 

children’s well-being, such as first-aid 

and safe sleep practices. This can leave 

children in unsafe conditions, even as 

their care is being funded with public 

dollars. There have been many 

documented instances of children being 

injured or even dying in child care, 

some of which were due to a lack of 

basic requirements for child care 

providers. While it is not possible to 

eliminate all tragic circumstances, this 

proposed rule focuses on preventing 

these situations by increasing 

accountability for protecting the health 

and safety of children in child care. It 

would add requirements for child care 

providers serving children receiving 

CCDF assistance, including background 

checks, pre-service training in specific 

areas of health and safety, and 

strengthened monitoring of providers. 

Yet, compliance with health and 

safety standards is not enough to ensure 

that children are getting the quality 

child care they need to support their 

healthy development and school 

success. A growing body of research 

demonstrates that the first five years of 

a child’s cognitive and emotional 

development establish the foundation 

for learning and achievement 

throughout life. This is especially true 

for low-income children who face a 

school readiness and achievement gap 

and can benefit the most from high 

quality early learning environments. 

Children receiving CCDF subsidies 

come from low-income families and 

typically start school far behind their 

peers in key areas such as language 

development and problem-solving 

skills. Research shows that the quality 

and stability of adult, child 

relationships matter and positive, 

lasting interactions with caregivers can 

help foster the development and 

learning needed to help close those 

gaps. In light of this research, many 

States, Territories, and Tribes, working 

collaboratively with the Federal 


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government, have taken important steps 

to make the CCDF program more childfocused and family-friendly; however, 

implementation of these evidenceinformed practices is uneven across the 

country and critical gaps remain. 

Beyond improving health and safety, 

CCDF can address this in two ways; first 

by investing in the quality of child care 

and providing parents with the 

transparent information they need to 

find that care, and second by improving 

the stability of care through 

implementation of family-friendly 

policies. 

First, parents often lack basic 

information about child care 

providers—including whether they have 

a consistent track record of meeting 

health and safety standards and 

information about the quality and 

qualifications of the caregivers. This 

proposed rule includes a set of 

provisions designed to provide greater 

transparency to parents so they can 

make more informed choices for their 

families and to facilitate quality 

improvement efforts by child care 

providers. It makes available, for both 

CCDF parents and the general public, 

clear, easy-to-understand information 

about the quality of child care providers 

in their communities. In addition, it 

facilitates replication of best practices 

across the country by directing States, 

Territories, and Tribes toward making 

more purposeful investments in child 

care quality improvement and tracking 

the progress and success of those 

investments. 

Secondly, this proposed rule includes 

provisions to make the CCDF program 

more ‘‘family friendly’’ by reducing 

unnecessary administrative burdens on 

families (as well as State, Territory, and 

Tribal agencies administering the 

program), and by improving 

coordination with other programs 

serving low-income families. Currently, 

most families receiving CCDF-assistance 

participate in the program for only 3 to 

7 months, and many are still eligible 

when they leave the program. Parents 

often find it difficult to navigate 

administrative processes and paperwork 

required to maintain their eligibility and 

State policies can be inflexible to 

changes in a family’s circumstances. In 

some States, if a parent loses their job 

they also lose their child care assistance 

right away, making it difficult to look 

for a new job. If a parent finds a new 

job they may have to reapply for CCDF 

and find themselves on a waiting list. 

This disrupts both the parents’ 

economic stability and the relationship 

that a child has with his or her 

caregiver. Research has shown that 

breaks in the relationship that a child 

has with a caregiver is detrimental to 

optimal child development, especially 

for infants and toddlers. Changes in this 

proposed rule support a set of policies 

that will stabilize families’ access to 

child care assistance and in turn, help 

stabilize their employment and 

maintain the stability of the child’s care 

arrangement. 

Legal authority. This proposed 

regulation is being issued under the 

authority granted to the Secretary of 

Health and Human Services by the 

CCDBG Act (42 U.S.C. 9858, et seq.) and 

Section 418 of the Social Security Act 

(42 U.S.C. 618). 

Summary of the major provisions of 

this proposed regulatory action. This 

proposed rule includes regulatory 

changes for CCDF in four priority areas: 

(1) improving health and safety in child 

care; (2) improving the quality of child 

care; (3) establishing family-friendly 

policies; and (4) strengthening program 

integrity. 

The proposed rule would improve 

health and safety protections for 

children receiving CCDF assistance by 

specifying minimum State health and 

safety standards for their child care 

providers, including pre-inspections for 

compliance with State and local fire, 

health, and building codes, criminal 

background checks and pre-service 

training in specific areas, such as first 

aid and CPR. The proposed rule requires 

States to take steps to improve the 

monitoring of child care providers who 

receive CCDF to care for children by 

conducting unannounced, on-site visits 

to CCDF providers. 

In addition to establishing a floor of 

basic health and safety, this proposed 

rule seeks to improve the quality of 

child care and provide parents with 

information about child care providers 

available to them. It requires that States 

post information about health, safety 

and licensing history of child care 

providers on a user-friendly Web site 

and establish a hotline for parents to 

submit complaints about child care 

providers. The proposal builds on 

practices adopted by more than half the 

States by requiring establishment of 

provider-specific quality indicators, 

such as through a Quality Rating and 

Improvement System (QRIS), reflecting 

teaching staff qualifications, learning 

environment, and curricula and 

activities. This makes it easier for 

parents to compare child care providers 

and choose a provider that best meets 

their family’s needs. It also encourages 

States to adopt an organized framework 

for their quality improvement activities 

including helping child care providers 

meet higher standards and helping them 

improve their education and training. 

Finally, the proposed rule addresses the 

lack of supply of high quality care, by 

asking States to identify areas of the 

highest need and use grants or contracts 

directly with child care providers to 

improve the quality in those places. 

To increase stability in the lives of 

low-income families receiving CCDF, 

this proposed rule includes familyfriendly policies to make it easier for 

parents to access and maintain their 

child care assistance. It establishes a 12- 

month period for re-determining 

eligibility and allows parents who lose 

their job to remain eligible for a period 

of time while they look for a new job. 

It allows States more flexibility to 

minimize requirements for families to 

maintain their eligibility and to waive 

co-payments for families. These 

provisions also make it easier for States 

to align CCDF policies with other 

programs that may be serving the 

families, such as the Supplemental 

Nutrition Assistance Program (SNAP), 

Medicaid, the Children’s Health 

Insurance Program, and Early Head Start 

and Head Start. 

Finally, this proposed rule improves 

program integrity by requiring States 

with high rates of improper payments 

for the CCDF program to develop a plan 

for reducing those rates in accordance 

with the Improper Payments 

Elimination and Reduction Act. It also 

adds new provisions requiring States to 

have in place effective internal controls 

for sound fiscal management, processes 

for identifying fraud and other program 

violations, and procedures for 

accurately verifying a family’s 

eligibility. 

This proposed rule recognizes the 

importance of State, Territory, and 

Tribal flexibility in administration of 

the program. In many areas the 

proposed rule establishes a clear 

expectation for States, Territories and 

Tribes, but allows a range of 

implementation options to fit their 

individual circumstances. For example, 

it allows States, Territories, and Tribes 

to exempt relatives and caregivers in the 

child’s home from some or all of the 

CCDF health and safety requirements 

and to set the period of time they allow 

for a family to search for a job. The 

preamble highlights the ways that the 

proposed rule incorporates practices 

common in many States and identifies 

alternative options for implementing 

new requirements. In many cases, the 

examples are illustrative and States can 

identify the best approaches for their 

jurisdictions. Similarly, we expect 

especially wide variation in approaches 

adopted by Tribes. ACF is committed to 

consulting with Tribal leadership on the 

provisions of this proposed rule and we 


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look forward to working with Tribes on 

practices that are a good fit for Tribal 

communities. 

Cost and benefits. Changes in this 

proposed rule directly benefit children 

and parents who use CCDF assistance to 

pay for child care. The 1.6 million 

children who are in child care funded 

by CCDF would have stronger 

protections for their health and safety, 

which addresses every parent’s 

paramount concern. But the effect of 

these changes would go far beyond the 

children who directly participate in 

CCDF. Not only children who receive 

CCDF, but all the children in the care of 

a participating CCDF provider, will be 

safer because that provider has had a 

background check and is more 

knowledgeable about CPR, first aid, safe 

sleep for infants, and the safe 

transportation of children. The 

consumer education and transparency 

provisions in this proposed rule will 

benefit not only CCDF families, but all 

parents selecting child care by requiring 

States to post provider-specific 

information about child care providers 

on a public Web site with information 

about health and safety and licensing 

requirements. Several provisions in this 

proposed rule benefit child care 

providers by encouraging States to 

invest in high quality child care 

providers and professional development 

and to take into account quality when 

they determine child care payment 

rates. It also places a stronger emphasis 

on practices States use to reimburse 

providers, such as ensuring timely 

payments and paying for absence days 

which is a common practice in the child 

care market. 

There are a significant number of 

States, Territories, and Tribes that have 

already implemented many of these 

policies and we have been purposeful 

throughout to note these numbers. The 

cost of implementing the changes in this 

proposed rule will vary depending on a 

State’s specific situation. ACF does not 

believe the costs of this proposed 

regulatory action would be 

economically significant and that the 

tremendous benefits to low-income 

children justify costs associated with 

this proposed rule. 

II. Background 

A. Child Care and Development Fund 

(CCDF) 

The CCDF program is administered by 

the Office of Child Care (OCC), 

Administration for Children and 

Families (ACF) in the Department of 

Health and Human Services (HHS). 

CCDF funds are allocated through 

formula grants to State, Territory, and 

Tribal Lead Agencies. CCDF provides 

financial assistance to low-income 

families to access child care so they can 

work or attend a job training or 

educational program. The program also 

provides funding to improve the quality 

of child care and increase the supply 

and availability of child care for all 

families, including those who receive no 

direct assistance through CCDF. 

Over 12 million young children 

regularly rely on child care to support 

their healthy development and school 

success. Additionally, more than 8 

million children participate in a range 

of school-age programs before- and afterschool and during summers and school 

breaks. CCDF is the primary Federal 

funding source devoted to providing 

low-income families with access to 

child care and before-and after-school 

care and improving the quality of care. 

Each year, States, Territories, and Tribes 

invest $1 billion in CCDF funds to 

support child care quality improvement 

activities that are designed to create 

better learning environments and more 

effective caregivers in child care centers 

and family child care homes across the 

country. 

CCDF was created more than 15 years 

ago, after Congress enacted the Personal 

Responsibility and Work Opportunity 

Reconciliation Act (PRWORA) of 1996 

(Pub. L. 104–193), a comprehensive 

welfare reform plan that included new 

work requirements and provided 

supports to families moving from 

welfare to work, including new 

consolidated funding for child care. 

This funding, provided under section 

418 of the Social Security Act (42 U.S.C. 

618), combined with funding from the 

Child Care and Development Block 

Grant (CCDBG) Act of 1990 (42 U.S.C 

9858 et seq.), was designated by HHS as 

the Child Care and Development Fund. 

CCDF regulations published in 1998 at 

45 CFR parts 98 and 99 implemented 

the child care provisions of PRWORA 

and, excepting the addition of a new 

Subpart K to require Lead Agencies to 

report improper payments, the 

regulations have undergone only minor 

changes since becoming effective. 

At the time current CCDF regulations 

were drafted, policymakers were 

concentrated on re-positioning an 

entitlement-based welfare system into 

one that provided benefits provisionally 

based on work. The resulting focus of 

the CCDF regulations was largely 

dedicated to the goal of enabling lowincome mothers to transition from 

welfare to work. This is evident in a fact 

sheet developed by HHS shortly after 

passage of PRWORA which stated that 

the new welfare law provided an 

increase in child care funding ‘‘to help 

more mothers move into jobs.’’ (http:// 

www.acf.hhs.gov/programs/cse/pubs/

1996/news/prwora.htm) CCDF was 

closely tied to the new Temporary 

Assistance for Needy Families (TANF) 

program which focused on assisting 

needy families through promotion of job 

preparation and work activities. 

In the decade and a half since 

PRWORA, the focus of the CCDF 

program has changed as we have 

learned a remarkable amount about the 

value of high quality early learning 

environments for young children. CCDF 

is a dual purpose Federal program with 

a two-generational impact. Low-income 

parents need access to child care in 

order to work and gain economic 

independence and low-income children 

benefit the most from a high quality 

early learning setting. Traditionally, 

CCDF has been understood as primarily 

providing access to child care to support 

work, with a secondary focus on 

supporting children’s development by 

improving the quality of child care. We 

believe these purposes—access and 

quality—are not competing, but 

synergetic. 

Federal CCDF dollars should provide 

access to high quality care in 

recognition of the impact CCDF has on 

our nation’s most disadvantaged and 

vulnerable children. We do not intend 

to diminish the importance of CCDF as 

a work support. Yet, in order to fully 

leverage the Federal investment, we 

must be accountable for ensuring that 

children supported with CCDF funds 

are placed in safe, healthy, nurturing 

settings that are effective in promoting 

learning, child development and school 

readiness. This dual purpose, twogenerational framework envisions the 

program as an investment supporting 

the child’s long-term development and 

providing the parent with an 

opportunity to work or participate in job 

training or educational activities with 

peace of mind about their children’s 

safety and learning. 

CCDF regulations pre-date much of 

the current science on brain 

development in the early years of 

children’s lives. Ten years ago, HHS (in 

collaboration with other Federal 

agencies and private partners) funded 

the National Academies of Science 

report, Neurons to Neighborhoods. 

(National Research Council and Institute 

of Medicine, From Neurons to 

Neighborhoods: The Science of Early 

Childhood Development, 2000) The 

findings from this report showed that 

brain development is most rapid during 

the first five years of life, and that early 

experiences matter for healthy 

development. Nurturing and stimulating 

care given in the early years of life build 


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optimal brain architecture that allows 

children to maximize their enormous 

potential for learning. On the other 

hand, hardship in the early years of life 

can lead to later problems. Interventions 

in the first years of life are capable of 

helping to shift the odds for those at risk 

of poor outcomes toward more positive 

outcomes. A multi-site study conducted 

by the Frank Porter Graham Child 

Development Institute found that, ‘‘. . . 

children who experienced higher 

quality care are more likely to have 

more advanced language, academic, and 

social skills. Moreover, the study found 

that quality child care matters more for 

at-risk children.’’ (University of North 

Carolina, The Children of the Cost, 

Quality, and Outcomes Study Go to 

School: Executive Summary, 1999) 

Evidence continues to mount 

regarding the influence children’s 

earliest experiences have on their later 

success and the role child care can play 

in shaping those experiences. The most 

recent findings from the National 

Institute of Child Health and Human 

Development (NICHD) found that the 

quality of child care children received 

in their preschool years had small but 

detectable effects on their academic 

success and behavior all the way into 

adolescence. (U.S. Department of Health 

and Human Services, National Institutes 

of Health, Study of Early Child Care and 

Youth Development, 2010) A recent 

follow-up study to the well known 

Abecedarian Project, which began in 

1972 and has followed participants from 

early childhood through adolescence 

and young adulthood, found that adults 

who participated in a high quality early 

childhood education program are still 

benefiting from their early experiences. 

According to the study, Abecedarian 

Project participants had significantly 

more years of education than peers and 

were four times more likely to earn 

college degrees. (Frank Porter Graham 

Child Development Institute, 

Developmental Psychology, 2012) 

In addition, millions of school-age 

children participate in before-and afterschool programs that support their 

learning and development. Participation 

in high quality out-of-school time 

programs is correlated with positive 

outcomes for youth, including improved 

academic performance, work habits and 

study skills. (Vandell, D., et al., The 

Study of Promising After-School 

Programs, Wisconsin Center for 

Education Research, 2005) An analysis 

of over 70 after-school program 

evaluations found that evidence-based 

programs designed to promote personal 

and social skills were successful in 

improving children’s behavior and 

school performance. (Durlak, J. and 

Weissberg, R., The Impact of 

Afterschool Programs that Seek to 

Promote Personal and Social Skills, 

Collaborative for the Advancement of 

Social and Emotional Learning, 2007) 

After-school programs also promote 

youth safety and family stability by 

providing supervised settings during 

hours when children are not in school. 

Parents with school-aged children in 

unsupervised arrangements face greater 

stress that can impact the family’s wellbeing and successful participation in the 

workforce. (Barnett and Gareis, Parental 

After-School Stress and Psychological 

Well-Being, Journal of Marriage and the 

Family, 2006) CCDF plays a critical role 

in providing access to school-age care 

and improving the quality of programs, 

with over a third of children receiving 

CCDF subsidies being aged 6 to 12. 

Because of the strong relationship 

between early experience and later 

success, investments in improving the 

quality of early childhood and beforeand after-school programs can pay large 

dividends. Nurturing and responsive 

relationships with parents and 

caregivers and engaging learning 

environments in early care and 

education settings can provide young 

children with the capacity for 

tremendous growth. Children attending 

high quality school-age programs are 

more likely to succeed in school and 

have stronger social and inter-personal 

skills. In short, high quality early 

education is a linchpin to creating an 

educational system that is 

internationally competitive and vital to 

the country’s workforce development, 

economic security, and global 

competitiveness. 

As a block grant, CCDF offers a great 

deal of flexibility to State, Territory, and 

Tribal Lead Agencies administering the 

program. The first goal listed at section 

658A of the CCDBG Act is ‘‘to allow 

each State maximum flexibility in 

developing child care programs and 

policies that best suit the needs of 

children and parents within such 

State.’’ This structure has allowed many 

States to test and experiment with 

subsidy policies that are child-focused, 

family-friendly and fair to child care 

providers, as well as to implement 

sophisticated quality improvement 

systems that aim to increase the number 

of low-income children in high quality 

child care. Many States also have made 

significant progress in shaping and 

developing coordinated systems of early 

learning and have pioneered 

professional development systems that 

offer child care providers opportunities 

to move towards professional 

advancement in their careers. 

CCDF is a core component of the early 

care and education spectrum and often 

operates in conjunction with other 

programs including Head Start, Early 

Head Start, State pre-kindergarten, and 

before-and after-school programs. States 

have flexibility to use CCDF to provide 

children enrolled in these programs fullday, full-year care, which is essential to 

supporting low-income working 

parents. CCDF also provides the funding 

for quality improvements impacting 

children in all types of settings, not just 

those children receiving subsidies. 

CCDF has helped lay the groundwork 

for development of early learning 

systems, investments that are leveraged 

by the Race to the Top Early Learning 

Challenge (RTT–ELC), a grant 

competition administered jointly by the 

Department of Education and HHS. 

RTT–ELC provides incentives and 

supports to selected States to build a 

coordinated system of early learning 

and development to ensure more 

children from low-income families have 

access to high quality early learning 

programs and are able to start school 

with a strong foundation for future 

learning. RTT–ELC is a vehicle for 

States to demonstrate ways to integrate 

and align resources and policies across 

the spectrum of early care and 

education programs. Much of the 

existing early learning systems and 

quality investments already in place and 

supported by CCDF parallel many of the 

goals and priorities of RTT–ELC, 

resulting in a complementary national 

strategy to improve the quality of early 

learning programs across the country. 

Finally, ACF recently overhauled and 

reorganized the structure and required 

content of the CCDF Plan (ACF–118). 

States, Territories, and Tribes must 

submit their CCDF Plans every two 

years. The Plan serves as the application 

for CCDF funds and provides a 

description of the Lead Agency’s child 

care program and services available to 

eligible families. Changes were made to 

the CCDF Plan to enhance the health 

and safety and quality improvement 

sections with a focus on building 

systems for child care quality 

improvement. 

This proposed rule is driven by the 

same priorities and vision for child care 

reform reflected in the changes made to 

the CCDF Plan and follows many of the 

same principles for improvements in 

early care and education supported by 

Congress through creation of RTT–ELC. 

It is informed by the many documented 

tragedies of child injuries and deaths in 

child care, it recognizes what has been 

learned from early childhood 

development research, supports 

replication of best practices across the 


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29446 Federal Register / Vol. 78, No. 97 / Monday, May 20, 2013 / Proposed Rules 

country, and infuses new accountability 

for Federal dollars to leverage the full 

impact of the CCDF dual investment for 

both parents and children. 

B. Discussion of Changes Made in This 

Proposed Rule 

The changes included in this 

proposed rule cover four priority areas: 

(1) Improving health and safety in child 

care; (2) improving the quality of child 

care; (3) establishing family-friendly 

policies; and (4) strengthening program 

integrity. 

First, we know that health and safety 

is the foundation for building a high 

quality early learning environment. 

Research shows that licensing and 

regulatory requirements for child care 

affect the quality of care and child 

development. (Adams, G., Tout, K., 

Zaslow, M., Early care and education 

for children in low-income families: 

Patterns of use, quality, and potential 

policy implications, Urban Institute, 

2007) All States receiving CCDF funds 

are required to have child care licensing 

systems in place and must ensure child 

care providers serving children 

receiving subsidies meet certain health 

and safety requirements. In this rule, we 

propose changes that strengthen health 

and safety requirements and monitoring 

of compliance with these requirements 

for child care providers serving children 

receiving CCDF assistance. 

Second, improving the quality of 

child care is essential to support lowincome children’s early learning and 

parents need more transparent 

information about the quality of child 

care choices available to them. States 

administering the CCDF program have 

already begun building quality 

improvement systems which make 

strategic investments to provide 

pathways for providers to reach higher 

quality standards. More than half the 

States have implemented Quality Rating 

and Improvement Systems (QRIS) and 

the majority of the remaining States are 

piloting or planning for implementation 

of such systems. Our priority for quality 

improvement would incorporate a 

systemic organizational framework for 

improving the quality of child care into 

CCDF regulations, and provide a 

consumer education mechanism that 

helps parents better understand the 

health, safety and quality standards met 

by child care providers. 

Third, we have prioritized 

establishing family-friendly policies in 

order to improve continuity of services 

for parents and stability of child care 

arrangements for children. Continuity of 

services contributes to improved job 

stability and is important to a family’s 

financial health. One of the goals of the 

CCDF program is to help families 

achieve independence from public 

assistance. This goal can be undermined 

by policies that result in unnecessary 

disruptions to receipt of a subsidy due 

to administrative barriers or other 

processes that make it difficult for 

parents to maintain their eligibility and 

thus fully benefit from the support it 

offers. Continuity also is of vital 

importance to the healthy development 

of young children, particularly the most 

vulnerable. Unnecessary disruptions in 

services can stunt or delay socioemotional and cognitive development 

because safe, stable environments allow 

young children the opportunity to 

develop the relationships and trust 

necessary to comfortably explore and 

learn from their surroundings. Research 

has also demonstrated a relationship 

between child care stability and social 

competence, behavior outcomes, 

cognitive outcomes, language 

development, school adjustment, and 

overall child well-being. (Adams, G., 

Rohacek, M., & Danzinger, A. Child Care 

Instability, The Urban Institute, 2010) 

This priority area includes a number of 

proposed changes including 

requirements for determining a child’s 

eligibility for services and 

administrative processes for interactions 

with families and child care providers. 

Fourth, we have prioritized 

strengthening program integrity by 

proposing changes that address policies 

for internal controls, fiscal management, 

documenting and verifying eligibility, 

and processes for identifying fraud and 

improper payments. In November 2009, 

the President issued Executive Order 

13520, which underscored the 

importance of reducing improper 

payments and eliminating waste in 

Federal programs (74 FR 62201). 

Program integrity efforts can help 

ensure that limited program dollars are 

going to low-income eligible families for 

which assistance is intended. The 

proposed changes seek to strengthen 

accountability while continuing to 

preserve access for eligible children and 

families. 

In large part, the changes in this 

proposed rule articulate a set of 

expectations for how Lead Agencies are 

to satisfy certain requirements in the 

CCDBG Act, which the current 

regulations either only minimally 

address or where they remain altogether 

silent. In some places, such as § 98.41 

regarding health and safety standards 

for providers serving subsidized 

children, the current regulations are 

silent as to specific standards providers 

are expected to meet. The lack of 

specificity in regulation effectively 

undermines the requirement since there 

is no clear guidance on what the 

requirements mean or the manner in 

which Lead Agencies should implement 

them. In other areas of the regulations, 

we have proposed changes to better 

balance the dual purposes of the 

program by adding provisions to ensure 

that healthy, successful child 

development is a consideration when 

Lead Agencies establish policies for the 

child care program. For example, 

authorization of child care services for 

eligible families should take into 

consideration the value of preserving 

continuity in child care arrangements so 

that young children have stability in 

their caregivers. 

Finally, we have proposed other 

changes to the regulations that do not 

impose new requirements on Lead 

Agencies, but rather formalize Federal 

support for certain best practices and 

policies. This can be seen in the 

proposed changes to § 98.51 of the 

regulations which require Lead 

Agencies to spend a minimum of four 

percent on child care quality 

improvement activities. We have added 

regulatory language to this section 

describing a formal framework for 

quality spending that is focused on 

helping Lead Agencies organize, guide, 

and measure progress of quality 

improvement activities, but we are not 

requiring Lead Agencies to adopt that 

framework. 

In developing this proposed rule, we 

were mindful of the Administration’s 

emphasis on flexibility as a guiding 

principle when considering ways to 

better accomplish statutory goals. 

Accordingly, we have sought to retain 

much of the flexibility that is afforded 

to Lead Agencies inherent within the 

CCDF block grant. In many areas where 

we have added new requirements we 

are deferring to Lead Agencies to decide 

how they will implement the provision 

and have provided examples of alternate 

ways in which the requirement could be 

met. In other areas we have added more 

flexibility to allow Lead Agencies to 

align eligibility and other requirements 

across programs and to tailor policies 

that better meet the needs of the lowincome families they serve. For 

example, we are providing more 

flexibility for Lead Agencies to 

determine when it is appropriate to 

waive a family’s co-pay requirement. 

We do not anticipate that these 

proposed changes will place significant 

new burden on States, Territories or 

Tribes because many Lead Agencies 

have already implemented these 

practices through their child care 

licensing systems and by using the 

flexibility in the CCDF program 

provided under current law. We have 


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made it a point throughout this rule to 

include information about the number 

of States and Territories that have 

already adopted the changes we are 

proposing. In addition, a number of 

Tribes have undertaken improvements 

in many of these areas, including health 

and safety requirements. This proposed 

rule at once embraces the progress and 

benefits that have resulted from 

devolving significant program authority 

to States, Territories, and Tribes while 

also identifying specific areas where 

new Federal standards and regulation 

will most benefit the core principles and 

goals of the CCDF program. 

ACF expects provisions included in a 

Final Rule to become effective 30 days 

from the date of publication of the Final 

Rule. Compliance with provisions in the 

Final Rule would be determined 

through ACF review and approval of 

CCDF Plans and through the use of 

Federal monitoring in accordance with 

§ 98.90, including on-site monitoring 

visits as necessary. ACF expects that 

provisions included in a Final Rule 

would be incorporated into the review 

of FY 2016–2017 CCDF Plans that 

would become effective October 1, 2015. 

We recognize that some of the proposed 

changes may require action on the part 

of a State’s legislature or require 

rulemaking in order to implement. It is 

our desire to work with Lead Agencies 

to ensure that adoption of any new 

requirements included a Final Rule is 

done in a thoughtful and comprehensive 

manner. ACF welcomes public 

comment on specific provisions 

included in this proposed rule that may 

warrant a longer phase-in period and 

will take these comments into 

consideration when developing the 

Final Rule. 

In this proposed rule, we have 

generally maintained the structure and 

organization of the current CCDF 

regulations. The preamble in this 

proposed rule discusses the changes to 

current regulations and contains certain 

clarifications based on ACF’s experience 

in implementing the prior final rules. 

Where language of existing regulations 

remains unchanged, the preamble 

explanation and interpretation of that 

language published with all prior final 

rules also is retained unless specifically 

modified in the preamble to this 

proposed rule. (See 57 FR 34352–34413, 

August 4, 1992; 63 FR 39936–39981, 

July 24, 1998; 72 FR 27972–27980, May 

18, 2007; 72 FR 50889–50900. 

September 5, 2007) 

III. Statutory Authority 

This proposed regulation is being 

issued under the authority granted to 

the Secretary of Health and Human 

Services by the CCDBG Act (42 U.S.C. 

9858, et seq.) and Section 418 of the 

Social Security Act (42 U.S.C. 618). 

IV. Provisions of Proposed Rule 

Subpart A—Goals, Purposes and 

Definitions 

Goals and Purposes (Section 98.1) 

We are proposing changes to enhance 

the regulatory language describing 

purposes of the CCDF program to reflect 

the priorities of improving health and 

safety in child care, improving the 

quality of child care, establishing 

family-friendly policies, and 

strengthening program integrity. The 

first part of the regulations at § 98.1(a) 

defines the goals of CCDF and mirrors 

the statutory language describing goals 

of the CCDBG Act. We are proposing no 

changes in this section. The second part 

at § 98.1(b) uses regulatory authority to 

define purposes for the CCDF program 

which are based on purposes included 

in the conference report accompanying 

original passage of the CCDBG Act in 

1990. We propose to revise the purposes 

described at § 98.1(b). 

We have retained all of the language 

in the original purposes with some 

enhancements and added two new 

purposes (proposed changes are 

represented in italics). Specifically, we 

propose to revise paragraph (b) to read: 

(1) Provide low-income families with 

the financial resources to find and 

afford high quality child care for their 

children and serve children in safe, 

healthy, nurturing child care settings 

that are highly effective in promoting 

learning, child development, school 

readiness and success; (2) Enhance the 

quality and increase the supply of child 

care and before-and after-school care 

services for all families, including those 

who receive no direct assistance under 

the CCDF, to support children’s 

learning, development, and success in 

school; (3) Provide parents with a broad 

range of options in addressing their 

child care needs by expanding high 

quality choices available to parents 

across a range of child care settings and 

providing parents with information 

about the quality of child care 

programs; (4) Minimize disruptions to 

children’s development and learning by 

promoting continuity of care; (5) Ensure 

program integrity and accountability in 

the CCDF program; (6) Strengthen the 

role of the family and engage families in 

their children’s development, education, 

and health; (7) Improve the quality of, 

and coordination among Federal, State, 

and local child care programs, beforeand after-school programs, and early 

childhood development programs to 

support early learning, school readiness, 

youth development, and academic 

success; and (8) Increase the availability 

of early childhood development and 

before- and after-school care services. 

We believe these changes bring the 

purposes of CCDF into better alignment 

with the current knowledge in the field, 

result in a more comprehensive vision 

of the program, and provide the 

foundation for a more balanced 

approach to program administration that 

acknowledges the two-generational 

impact of the CCDF program. 

Definitions (Section 98.2) 

We propose to make four technical 

changes at § 98.2 by deleting the 

definition for group home child care 

provider and by making conforming 

changes to the definitions for categories 

of care, eligible child care provider, and 

family child care provider. The current 

regulation defines group home child 

care provider as meaning two or more 

individuals who provide child care 

services for fewer than 24 hours per day 

per child, in a private residence other 

than the child’s residence, unless care 

in excess of 24 hours is due to the 

nature of the parent(s)’ work. When ACF 

revised the FY 2012–2013 CCDF Plan, 

we received public comments indicating 

that many States, Territories and Tribes 

do not consider group homes to be a 

separate category of care when 

administering their CCDF programs or 

related efforts, such as child care 

licensing. Some States use alternative 

terminology (e.g., large family child care 

homes), while others treat all family 

child care homes similarly regardless of 

size. Due to this variation, we propose 

to delete the separate definition for 

group home child care provider which 

requires a number of technical changes 

to the definitions section. 

We propose to revise the definition of 

categories of care at § 98.2 to delete 

group home child care. Under the 

proposed rule, categories of care would 

be defined to include center-based child 

care, family child care, and in-home 

care (i.e., a provider caring for a child 

in the child’s home). Similarly, we 

propose to change the definition for 

eligible child care provider at § 98.2 to 

delete a group home child care provider. 

The revised definition defines an 

eligible child care provider as a centerbased child care provider, a family child 

care provider, an in-home child care 

provider, or other provider of child care 

services for compensation. Group home 

child care would be considered a family 

child care provider for these purposes. 

Accordingly, we propose to amend the 

definition for family child care provider 

at § 98.2 to include larger family homes 

or group homes. The existing definition 


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of family child care provider is limited 

to one individual who provides services 

as the sole caregiver. The revised 

definition defines a family child care 

provider as one or more individuals 

who provide child care services. The 

remainder of the definition remains the 

same, specifying that services are for 

fewer than 24 hours per day per child, 

in a private residence other than the 

child’s residence, unless care in excess 

of 24 hours is due to the nature of the 

parent(s)’ work. 

Many Lead Agencies will continue to 

provide CCDF services for children in 

large family child care homes or group 

homes, and this is allowable and 

recognized by the revised definition of 

family child care provider—which 

would now include care in private 

residences provided by more than one 

individual. This proposed change 

would eliminate group homes as a 

separately-defined category of care for 

purposes of administering the CCDF— 

thereby providing States, Territories, 

and Tribes with greater flexibility. As a 

practical impact, CCDF Lead Agencies 

will no longer be required to report 

separately on group homes in their 

CCDF Plans (for example, regarding 

health and safety requirements), or to 

consider group homes as a separate 

category for purposes of meeting 

parental choice requirements at § 98.30 

and equal access requirements at 

§ 98.43(b)(1). Rather, group homes will 

now be considered as family child care 

homes for these purposes. 

Subpart B—General Application 

Procedures 

Lead Agencies have considerable 

latitude in administering and 

implementing their child care programs. 

Subpart B of the regulations describes 

some of the basic responsibilities of a 

Lead Agency as found in the statute. A 

Lead Agency is designated by the chief 

executive of a State or Territory, or by 

the appropriate Tribal leader or 

applicant, and serves as the single point 

of contact for all child care issues. The 

Lead Agency determines the basic use of 

CCDF funds and the priorities for 

spending CCDF funds and promulgates 

the rules governing overall 

administration. 

Specifically, under existing rules, the 

Lead Agency responsibilities include 

oversight of CCDF funds spent by subgrantees and contractors, monitoring 

programs and services, responding to 

complaints, and developing the CCDF 

Plan in the manner specified by the 

Secretary. In developing the CCDF Plan, 

the Lead Agency must consult with the 

appropriate representatives of local 

government, coordinate the provision of 

services with other Federal, State, and 

local child care and early childhood 

development programs and ‘‘programs, 

including such programs for the benefit 

of Indian children, and hold at least one 

public hearing. Other Lead Agency 

responsibilities include having an 

independent audit conducted after the 

close of each program period, ensuring 

that sub-grantees are audited in 

accordance with appropriate audit 

requirements, and submission of fiscal 

and program reports as prescribed by 

HHS. 

Lead Agency Responsibilities (Section 

98.10) 

We propose to add a provision to 

Lead Agency responsibilities at § 98.10 

to require Lead Agencies to be 

responsible for implementing practices 

and procedures to ensure program 

integrity and accountability as a 

conforming change pursuant to the 

proposed new section at 98.68 Program 

Integrity at Subpart G—Financial 

Management. We include an 

explanation for this new section and 

change later in this proposed rule. 

Administration Under Contracts and 

Agreements (Section 98.11) 

Section 98.11 of the regulations 

currently requires Lead Agencies that 

administer or implement the CCDF 

program indirectly through other local 

agencies or organizations to have 

written agreements with such agencies 

that specify mutual roles and 

responsibilities. However, it does not 

address the content of such agreements. 

We propose amending regulatory 

language at § 98.11(a)(3) to specify that, 

while the content of Lead Agency 

written agreements with other 

governmental or non-governmental 

agencies may vary based on the role the 

entity is asked to assume or the type of 

project undertaken, agreements must, at 

a minimum, include tasks to be 

performed, a schedule for completing 

tasks, a budget that itemizes categorical 

expenditures consistent with proposed 

CCDF requirements at § 98.65(h), and 

indicators or measures to assess 

performance. 

Many Lead Agencies administer the 

CCDF program through the use of subrecipients that have taken on significant 

programmatic responsibilities, 

including providing services on behalf 

of the Lead Agency. For example, some 

States operate primarily through a 

county-based system, while other Lead 

Agencies devolve decision-making and 

administration to local workforce 

boards, school readiness coalitions or 

community-based organizations such as 

child care resource and referral 

agencies. ACF has learned through our 

efforts working with grantees to improve 

program integrity that the quality and 

specificity of written agreements vary 

widely, which hampers accountability 

and efficient administration of the 

program. These proposed changes 

represent minimum, common-sense 

standards for the basic elements of those 

agreements, while allowing latitude in 

determining specific content. The Lead 

Agency is ultimately responsible for 

ensuring that all CCDF-funded activities 

meet the requirements and standards of 

the program, and thus has an important 

role to play to ensure written 

agreements with sub-recipients 

appropriately support program integrity 

and financial accountability. 

Plan Process (Section 98.14) 

Coordination. Currently, § 98.14(a)(1) 

requires Lead Agencies to coordinate 

provision of program services with other 

Federal, State, and local early care and 

development programs as required by 

section 658D(b)(1)(D) of the CCDBG Act. 

Lead Agencies also are required to 

consult and coordinate services with 

agencies responsible for public health, 

public education, employment services/ 

workforce development, and TANF. 

Over time, the CCDF program has 

become an essential support in local 

communities to provide access to early 

care and education and before and 

afterschool settings and to improve the 

quality of care. Partnerships with these 

agencies and local communities have 

been an important factor in improving 

the availability and quality of child care. 

Many Lead Agencies work 

collaboratively to develop a coordinated 

system of planning that includes a 

governance structure composed of 

representatives from the public and 

private sector, parents, schools, 

community-based organizations, child 

care, Head Start and Early Head Start, 

home visitation, as well as health, 

mental health, child welfare, family 

support, and disability services. Local 

coordinating councils or advisory 

boards also often provide input and 

direction on CCDF-funded programs. 

We propose to amend § 98.14(a)(1) to 

add new entities with which Lead 

Agencies are required to coordinate the 

provision of child care services. We 

have added parenthetical language to 

paragraph (C) public education, to 

specify that coordination with public 

education should also include agencies 

responsible for prekindergarten 

programs, if applicable, and educational 

services provided under Part B and C of 

the Individuals with Disabilities 

Education Act (IDEA) (20 U.S.C. § 1400). 

Other proposed new coordinating 


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entities include agencies responsible for 

child care licensing, afterschool 

networks, Head Start collaboration, the 

State Advisory Council on Early 

Childhood Education and Care 

authorized by the Head Start Act (42 

U.S.C. 9831 et seq.) (if applicable); and 

emergency management and response. 

First, we propose to add a 

specification to the existing regulatory 

requirement to coordinate with agencies 

responsible for public education at 

§ 98.14(a)(1)(C) to include 

prekindergarten, if applicable, and 

educational services provided through 

Part B and C of IDEA. Part B of the IDEA 

provides funding for Special Education 

Preschool grants. According to the 

National Institute for Early Education 

Research (NIEER), 40 States funded 

preschool programs during the 2009– 

2010 school year. (The State of 

Preschool 2010, NIEER, Rutgers 

graduate School of Education) 

Prekindergarten programs generally 

serve 3 and 4-year olds and aim to better 

prepare children to succeed in 

kindergarten. Similar to Head Start, 

many CCDF Lead Agencies coordinate 

services with children enrolled in 

prekindergarten programs to provide 

full-day, full-year care. Given the 

prevalence of State-funded 

prekindergarten programs and 

overlapping populations and purposes 

with the CCDF program we believe it is 

important to include these entities as a 

required coordinating partner. 

State education agencies use IDEA 

funds to provide special education and 

related services for preschool-aged 

children with disabilities. Part C of the 

IDEA provides funding to provide early 

intervention services for infants and 

toddlers with disabilities and their 

families. Since the establishment of the 

Part C early intervention program under 

IDEA, all States have established State 

Interagency Coordinating Councils 

(SICCs) to advise and assist in the 

implementation of Part C for infants and 

toddlers with disabilities and their 

families. We believe this specification is 

important to ensure that Lead Agencies 

take into account children with special 

needs in child care and coordinate with 

other services available to children with 

disabilities and their families. Linkages 

between child care providers caring for 

children who have physical, 

developmental, behavioral, or emotional 

conditions and medical and therapeutic 

services can help make inclusion a 

reality by integrating additional 

resources and expertise needed to help 

care for children in a continuous and 

comprehensive manner. In the FY 2012– 

2013 CCDF Plans, nearly all States and 

Territories reported coordinating with 

agencies responsible for children with 

special needs, including IDEA 

implementation. [Note: The analysis of 

CCDF Plans throughout this proposed 

rule includes a total of 56 State and 

Territorial CCDF Plans, including 

American Samoa, Guam, Northern 

Marianas Islands, Puerto Rico, and the 

Virgin Islands.] Through these 

partnerships, many Lead Agencies 

provide joint training and collaborative 

technical assistance on child 

development and on the inclusion of 

children with disabilities in child care 

programs. 

We propose to add child care 

licensing agencies as a required 

coordinating entity at new paragraph (E) 

to formalize a partnership that already 

exists in many States. Section 658A of 

the CCDBG Act provides that one of the 

goals of the program is ‘‘to assist States 

in implementing the health, safety, 

licensing, and registration standards 

established in State regulations.’’ 

According to the FY 2012–2013 CCDF 

Plans, 34 States and Territories indicate 

coordinating provision of CCDF services 

with agencies responsible for child care 

licensing. Child care licensing 

regulations and monitoring and 

enforcement policies help provide a 

baseline of protection for the health and 

safety of children in out-of-home care. 

According to the 2011 Child Care 

Licensing Study (prepared by the 

National Child Care Information and 

Technical Assistance Center and the 

National Association for Regulatory 

Administration), there are a total of 

312,000 licensed facilities in the U.S. 

with more than 10 million licensed 

child care slots. In addition, the study 

found that most State licensing agencies 

use CCDF funds to hire and support 

child care licensing staff. 

We believe it is important that CCDF 

Lead Agencies collaborate with agencies 

responsible for child care licensing to 

ensure that information is shared about 

the licensing or regulatory status of 

providers serving children receiving 

subsidies, especially any history of 

licensing violations. To the extent that 

child care licensing agencies are 

responsible for monitoring compliance 

with State regulatory requirements, 

strong partnerships can help improve 

program integrity within CCDF by 

ensuring that providers serving children 

receiving subsidies are accountable for 

meeting health and safety and other 

regulatory requirements. We encourage 

CCDF Lead Agencies also to coordinate 

with licensing agencies when 

developing quality improvement 

systems to incorporate basic licensing 

requirements as part of the framework 

for determining program standards and 

a foundation for improving the quality 

of care. 

We propose to add the Head Start 

collaboration office as a required 

coordinating entity at new paragraph (F) 

because CCDF services can be linked 

with the Head Start program to help 

support provision of full-day, full year 

care for children enrolled in Head Start 

and eligible for the CCDF program. The 

Head Start Act (42 U.S.C. 9801, et seq.) 

provides funding for each State to 

establish a Head Start collaboration 

office to promote linkages between Head 

Start, Early Head Start, and other child 

and family services. This proposed 

change has reciprocity with the 

requirement in the Head Start Act and 

would formalize a partnership that 

already exists in 46 States and 

Territories according to the FY 2012– 

2013 CCDF Plans. In both Head Start 

and CCDF, collaboration efforts extend 

to linking with other key services for 

young children and their families, such 

as medical, dental and mental health 

care, nutrition, services to children with 

disabilities, child support, refugee 

resettlement, adult and family literacy, 

and employment training. These 

comprehensive services are crucial in 

helping families progress towards selfsufficiency and in helping parents 

provide a better future for their young 

children. 

We propose to add the agency 

responsible for the State Advisory 

Council on Early Childhood Education 

and Care, if applicable, at new 

paragraph (G) in recognition of 

provisions included in the Head Start 

Reauthorization Act of 2007 (Pub. L. 

110–134) which require States to create 

State Advisory Councils on Early 

Childhood Education and Care to 

improve coordination and collaboration 

among Head Start and Early Head Start 

agencies, pre-k programs, and other 

early childhood education providers. In 

FY 2009, the American Recovery and 

Reinvestment Act (ARRA) (Pub. L. 111– 

5) provided funding to States to convene 

these councils. Fifty States and 

Territories indicated in the FY 2012– 

2013 CCDF Plans that they coordinate 

with the State Advisory Council. State 

Advisory Councils are often responsible 

for conducting a statewide needs 

assessment for early childhood 

education, developing 

recommendations for a statewide 

professional development and career 

plan for the early childhood education 

and care workforce, and developing 

recommendations for establishing a 

unified data collection system for 

publicly funded programs offering early 

childhood education services. Advisory 

councils may also play a role in making 


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linkages with Early Childhood 

Comprehensive Systems (ECCS) 

grantees within the State. Adding the 

State Advisory Council on Early 

Childhood Education and Care to the 

list of coordinating entities will ensure 

CCDF Lead Agencies continue to 

consult with and maintain effective 

collaboration with this important 

stakeholder. 

We propose to add agencies 

responsible for administering Statewide 

afterschool networks or other 

coordinating entities for out-of-school 

time care (if applicable) at new 

paragraph (H). Approximately, 39 States 

have established statewide afterschool 

networks. (National Network of 

Statewide Afterschool Networks, 

www.statewideafterschoolnetworks.net) 

These networks bring together different 

stakeholders to consider ways to 

improve the quality, quantity, and 

sustainability of school-age programs in 

their State. The CCDF program provides 

assistance to children up to age 13, 

therefore we believe it is critical that 

child care administrators partner with 

statewide afterschool networks or other 

entities, such as State associations of 

school-age programs, in order to better 

understand and respond to the unique 

issues related to improving access to 

and the quality of before-and-after 

school programs. 

Finally, we propose to add 

coordination with State and local 

government agencies responsible for 

emergency management and response at 

new paragraph (I) because maintaining 

the safety of children in early care and 

school-age programs in the event of a 

disaster or emergency necessitates 

advance planning by Lead Agencies and 

child care providers. In many disasters, 

including Hurricane Katrina in 2005, 

the tornado disaster in Joplin, Missouri 

in 2011, and Hurricane Sandy in 2012, 

the provision of emergency child care 

services and rebuilding of child care 

facilities emerged as a critical need. At 

the Federal level, ACF has worked with 

the National Commission on Children 

and Disasters (NCCD) and the Federal 

Emergency Management Agency 

(FEMA) to raise awareness of child care 

as a key component in disaster 

preparedness and response. For 

example, ACF published an Information 

Memorandum (CCDF–ACF–IM–2011– 

01) that provided guidance to assist 

Lead Agencies in the development of 

comprehensive statewide emergency 

preparedness and response plans for 

child care and the CCDF program. 

State, Territorial, and Tribal Lead 

Agencies can play an important role in 

helping to better prepare child care 

providers and support programs after a 

disaster to help them quickly recover 

and provide care for children in a safe 

and effective manner. Child care 

providers need to be prepared to 

maintain the safety of children in the 

event of a disaster or emergency and 

facilitate safe return of children to 

families in the immediate aftermath of 

an event. Additionally, it is important 

that providers receive the support and 

help they need to repair damaged 

property and rebuild so they can reopen and provide child care services for 

families recovering from the disaster. 

Lead Agencies must be concerned with 

ensuring continuity of care and services 

for families receiving assistance through 

the CCDF program and providers caring 

for children who receive subsidies when 

a disaster strikes. Lead Agencies also 

may be called upon to assist emergency 

management officials and voluntary 

organizations with the provision of 

emergency child care services after a 

disaster. We believe adding emergency 

management agencies as a coordinating 

partner in the regulation will enable 

Lead Agencies to better handle these 

wide-ranging and important roles. 

Paragraphs (b) and (c) of this section 

would remain unchanged. As a 

technical matter, upon publication of 

the Final Rule we propose to correct the 

paragraph designations in § 98.14 by 

changing (a)(1)(A) through (I) to (a)(1)(i) 

through (ix). 

Public availability of Plans. We 

propose to add a new paragraph 

§ 98.14(d) to require Lead Agencies to 

make their CCDF Plan and any Plan 

amendments publicly available. Ideally, 

Plans and Plan amendments would be 

available on the Lead Agency Web site 

or other appropriate State Web site to 

ensure that there is transparency for the 

public, and particularly for parents 

seeking assistance, about how the child 

care program operates. We believe this 

is especially important for Plan 

amendments, given that Lead Agencies 

often make substantive changes to 

program rules or administration during 

the two-year Plan period through 

submission of Plan amendments 

(subject to ACF approval), but are not 

currently required to make those 

amendments available to the public. 

Plan Provisions (Section 98.16) 

Submission and approval of the CCDF 

Plan is the primary mechanism by 

which ACF works with Lead Agencies 

to ensure program implementation 

meets Federal regulatory requirements. 

All provisions that are currently 

required to be included in the CCDF 

Plan are outlined at § 98.16. 

Accordingly, this section of the 

regulation is the point at which our four 

priorities converge. Nearly all of our 

proposed regulatory changes are 

reflected in this section. The revisions 

and proposed additions to this section 

correspond to proposed changes 

throughout the regulations, many of 

which we provide explanation for later 

in this proposed rule. In addition, these 

proposed changes are consistent with 

changes included in the overhaul of the 

CCDF Plan. The Plan has been 

reorganized to better reflect State and 

Territorial practice in CCDF, to focus on 

a number of areas that are of high 

interest to both the Federal government 

and CCDF grantees, and to better 

capture the hallmarks of CCDF programs 

throughout the country, which have 

evolved significantly since its inception 

in 1996. Paragraph (a) of section 98.16 

would continue to require that the Plan 

specify the Lead Agency. 

Written agreements. A new paragraph 

§ 98.16(b) is proposed to correspond 

with changes at § 98.11(a)(3) discussed 

earlier, related to administration of the 

program through agreements with other 

entities. In the CCDF Plan, the proposed 

change would require the Lead Agency 

to include a description of processes it 

will use to monitor administrative and 

implementation responsibilities 

undertaken by agencies other than the 

Lead Agency including descriptions of 

written agreements, monitoring, and 

auditing procedures, and indicators or 

measures to assess performance. This is 

consistent with the desire to strengthen 

program integrity within the context of 

current State practices that devolve 

significant authority for administering 

the program to sub-recipients. Current 

paragraphs (b) through (e) would be redesignated as paragraphs (c) through (f) 

and otherwise would remain 

unchanged. 

Job search. We propose to require 

Lead Agencies to allow for some period 

of job search for families receiving 

CCDF assistance that experience job 

loss. The goal of this change is to 

minimize temporary disruption to 

subsidy receipt to promote children’s 

development and learning by helping to 

sustain their early learning or school-age 

care placement through temporary 

periods of parental unemployment. We 

know that parents are better able to find 

new jobs quickly if they are allowed to 

retain their subsidy eligibility, 

providing the stability and flexibility to 

search for new employment. This is also 

consistent with changes we are 

proposing at § 98.20 describing a child’s 

eligibility for services to promote 

continuity of subsidy receipt and care 

arrangements discussed later in this 

proposed rule. 


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Families can experience rapid and 

multiple changes within a short period 

of time and unemployment and job loss 

are very disruptive to families. 

Instability in a family’s child care 

arrangement can make it difficult for 

parents to seek new employment, and 

retention of eligibility during a job 

search or temporary period of 

unemployment can alleviate some of the 

stress on families and facilitate a 

smoother transition back into the 

workforce. According to analysis of the 

FY 2012–2013 CCDF Plans, many States 

and Territories provide CCDF assistance 

during periods of job search. However, 

some States only offer job search for 

certain subsets of families receiving 

CCDF assistance, such as those also 

receiving assistance through TANF. 

Under this proposed change Lead 

Agencies must allow some period of job 

search for all families receiving CCDF. 

In order to implement this change we 

propose to add parenthetical language at 

paragraph § 98.16(g)(6), as redesignated, to require the Lead Agency 

to include some period of job search in 

its definition of ‘‘working’’ in the CCDF 

Plan. Currently, paragraph (f) requires 

Lead Agencies to provide definitions for 

the following terms in the CCDF Plan: 

(1) Special needs child; (2) physical or 

mental incapacity (if applicable); (3) 

attending (a job training or educational 

program); (4) job training or educational 

program; (5) residing with; (6) working; 

(7) protective services (if applicable); (8) 

very low-income; and (9) in loco 

parentis. 

We propose to require job search in 

the definition of ‘‘working’’ in the 

regulation because we view job search 

as closely linked to work and most Lead 

Agencies that allow job search already 

include job search in that definition in 

the Plan. However, some Lead Agencies 

currently elect to define job search 

under their definition of ‘‘attending (a 

job training or education program)’’ 

rather than ‘‘working’’ in the Plan, since 

job search also can be associated with 

activities such as attending interviews, 

job fairs, and re ́sume ́ building classes; 

completing applications; and/or 

participating in job shadowing or 

unpaid internship opportunities. 

Therefore, as a technical matter, and in 

deference to State flexibility, when 

determining compliance with this 

provision through review of the CCDF 

Plan, ACF will continue to allow Lead 

Agencies to decide whether to include 

job search in their definition of 

‘‘working’’ or ‘‘attending (a job training 

or educational program).’’ 

It should be noted that this proposed 

change continues to allow Lead 

Agencies discretion to determine the 

length of time that ‘‘job search 

activities’’ are counted as a qualifying 

activity and whether to allow job search 

as an eligible activity for families 

applying for subsidy in addition to 

those currently receiving a subsidy who 

subsequently become unemployed. This 

proposal is consistent with the practices 

that already exist in many programs as 

well as provisions in the revised CCDF 

Plan that requires that Lead Agencies 

describe their policies promoting 

continuity of care for children and 

stability for families. 

Continuity of care. We propose to add 

a provision at paragraph § 98.16(h), as 

re-designated, requiring Lead Agencies 

to include a description of policies to 

promote continuity of care for children 

and stability for families receiving CCDF 

services, including policies which take 

into account developmental needs of 

children when authorizing child care 

services; timely eligibility determination 

and processing of applications; and 

policies that promote employment and 

income advancement for parents. This 

change complements proposed changes 

at § 98.20 describing a child’s eligibility 

for services, which are discussed later in 

this proposed rule. 

The Lead Agency would be required 

to specify in the Plan the time limit it 

has established for making eligibility 

determinations and processing 

applications. Lead Agencies have 

flexibility in determining the policies 

and practices related to parent 

applications and eligibility 

determination processes for CCDF 

subsidies. It is critical for Lead Agencies 

to design processes that promote timely 

eligibility determinations for CCDF 

subsidy applicants, particularly in cases 

where families need immediate 

assistance. For example, a parent may 

be unable to start employment or may 

risk losing their job if they cannot 

secure a child care arrangement while 

waiting for the CCDF subsidy 

application to be approved. Many Lead 

Agencies already have implemented 

policies to improve the timeframe 

between the receipt of an application 

and the approval of child care services 

using web-based application 

submissions and other systems 

enhancements to reduce processing time 

allowing for families and providers to 

receive authorization more quickly. 

A study of mid-western States found 

that the time for processing applications 

ranged from 7 to 45 days. (Adams, G., 

Synder, K., and Banghardt, P., Designing 

Subsidy Systems to Meet the Needs of 

Families, 2008) This research also 

identified a number of customerfriendly State practices that promoted 

timely eligibility determinations, 

including certain administrative 

structures (such as consolidated 

eligibility units) and caseworker targets 

and timeframes for processing. Many 

Lead Agencies have established policies 

that set a time limit for eligibility 

determinations and electronically track 

and monitor the eligibility process. 

Grants or contracts. We propose to 

add language at paragraph § 98.16(i)(1), 

as re-designated, requiring a Lead 

Agency to include a description of how 

it will use grants or contracts to address 

shortages in the supply of high quality 

child care. Grants and contracts can 

play an important role in building the 

supply and availability of high quality 

child care in underserved areas and for 

underserved populations, and provide 

greater financial stability for child care 

providers. This regulatory change 

complements proposed changes at 

§ 98.30(a)(1) describing parental choice 

requirements and § 98.50(b)(3) 

describing funding methods for child 

care services, discussed later in this 

proposed rule. The new provision 

regarding grants and contracts maintains 

the principle of parental choice and the 

requirement that parents be offered a 

certificate. 

Under this proposed change, the Lead 

Agency would be required to provide a 

description that identifies any shortages 

in the supply of high quality child care 

providers for specific localities and 

populations, includes the data sources 

used to identify shortages, and explains 

how grants or contracts for direct 

services will be used to address such 

shortages. To identify supply shortages, 

the Lead Agency may analyze available 

data from market price studies, resource 

and referral agencies, and other sources. 

ACF recommends that the Lead Agency 

examine all localities in its jurisdiction, 

recognizing that each local child care 

market has unique characteristics—for 

example, many rural areas face supply 

shortages. The Lead Agency also should 

consider the supply of child care for 

underserved populations such as infants 

and toddlers and children with special 

needs. Further, we recommend that the 

Lead Agency’s analysis consider all 

categories of care, recognizing that a 

community with an adequate supply of 

one category of care (e.g., centers) may 

face shortages for another category (e.g., 

family child care). 

Eligibility policies. We also propose to 

add language at § 98.16(i)(5) in this 

section. Currently the provision requires 

Lead Agencies to describe any eligibility 

criteria, priority rules and definitions 

established pursuant to § 98.20(b). We 

propose to expand the required 

information to include other eligibility 

policies, particularly any requirements 


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for families to report changes in 

circumstances that may impact 

eligibility between redetermination 

periods. The revised provision also adds 

a reference to § 98.20(c), in addition to 

the existing reference to § 98.20(b). This 

change complements proposed changes 

at § 98.20, which are discussed later in 

this proposed rule. 

Consumer education and quality 

indicators. We also propose to add 

language at paragraph § 98.16(j), as redesignated, requiring Lead Agencies to 

include a description of a transparent 

system of quality indicators that 

provides parents with provider-specific 

information about the quality of child 

care providers in their communities as 

part of the description of consumer 

education activities. This change 

complements proposed changes at 

§ 98.33 describing consumer education 

activities, which are discussed later in 

this proposed rule. 

Co-payments. We propose to revise 

language at paragraph § 98.16(k), as redesignated, requiring Lead Agencies to 

include a description of how payments 

are affordable for families as part of the 

requirement to implement a sliding fee 

scale that provides for cost sharing for 

families receiving CCDF subsidies. This 

proposed change is consistent with the 

existing regulatory requirement at 

§ 98.43(b)(3), which requires Lead 

Agencies to provide a summary of facts 

relied upon to determine that its 

payment rates ensure equal access 

including how copayments based on a 

sliding fee scale are affordable. In 

addition, we propose to add language 

requiring the Lead Agency to include 

the criteria established for waiving 

contributions for families, pursuant to 

proposed changes at § 98.42(c), 

discussed later in this proposed rule. 

Monitoring of health and safety 

requirements. We propose to add a 

provision at paragraph § 98.16(l), as redesignated, requiring Lead Agencies to 

provide a description of unannounced, 

on-site monitoring and other 

enforcement procedures in effect to 

ensure that child care providers serving 

children receiving subsidies comply 

with applicable health and safety 

requirements. The change complements 

proposed changes at § 98.41 describing 

health and safety requirements, which 

are discussed later in this proposed rule. 

Paragraph (k), requiring a description of 

the child care certificate payment 

system would be re-designated as 

paragraph (m), but otherwise would 

remain unchanged. 

Payment rates. We propose to revise 

language at paragraph § 98.16(n), as redesignated, requiring a description of a 

biennial local valid market price study, 

or other alternate approved 

methodology, and a description of how 

the quality of child care providers 

serving children receiving subsidies is 

taken into account when determining 

payment rates. This change 

complements proposed changes at 

§ 98.43 describing equal access 

provisions, which are discussed later in 

this proposed rule. 

Hotline for parental complaints. We 

propose to add language at paragraph 

§ 98.16(o), as re-designated, to require 

States to establish or designate a hotline 

for parental complaints. This change 

complements the proposed change at 

§ 98.32 describing requirements for 

maintaining a record of parental 

complaints, which is discussed later in 

this proposed rule. Current paragraph 

(n) would be re-designated as paragraph 

(p), but otherwise would remain 

unchanged. 

Licensing exemptions. We propose to 

add language at paragraph § 98.16(q), as 

re-designated, requiring a description of 

any exemptions to licensing 

requirements and a rationale for such 

exemptions. This change complements 

the proposed change at § 98.40 which 

asks Lead Agencies to certify they have 

in place licensing requirements for child 

care services, discussed later in this 

proposed rule. Paragraph (p), requiring 

a description of the definitions or 

criteria used to implement the exception 

to individual penalties in the TANF 

program would be re-designated as 

paragraph (r), but otherwise would 

remain unchanged. 

Provider payment practices and 

timely reimbursement. We propose to 

add a new paragraph § 98.16(t) requiring 

CCDF Lead Agencies to describe 

payment practices for child care 

providers of services for which 

assistance is provided under this part, 

including timely reimbursement for 

services, how payment practices 

support providers’ provision of high 

quality services, and to promote the 

participation of child care providers in 

the subsidy system. 

Lead Agencies have flexibility to 

determine payment processes for 

subsidies, and should use that flexibility 

to ensure payment practices are fair to 

child care providers and support the 

provision of high quality services. As 

noted in the preamble to the 1998 Final 

Rule, a system of child care payments 

that does not reflect the realities of the 

market makes it economically infeasible 

for many providers to serve low-income 

children—undermining the statutory 

and regulatory requirements of equal 

access and parental choice. In addition, 

failure to compensate in a timely 

manner may cause providers to refuse to 

care for children with subsidies (63 FR 

39958). Surveys and focus groups with 

child care providers have found that 

some providers experience problems 

with late payments, including issues 

with receiving the full payment on time 

and difficulties resolving payment 

disputes. (Adams, G., Rohacek, M., and 

Snyder, K., Child Care Voucher 

Programs: Provider Experiences in Five 

Counties, 2008) This research also 

found that delayed payments creates 

significant financial hardships for the 

impacted providers, and forces some 

providers to stop serving or limit the 

number of children receiving child care 

subsidies. 

A number of Lead Agencies have 

developed streamlined, providerfriendly payment policies and 

administrative processes, such as paying 

providers based on enrollment and 

paying for a limited number of absence 

days. Administrative improvements 

such as direct deposit, on-line training 

for providers for electronic voucher 

reimbursement, provider self-service 

components in an automated system for 

children authorized into their care, and 

web-based electronic attendance and 

billing systems also can help facilitate 

the participation of providers in the 

subsidy system. Lead Agencies can 

allow providers to be paid for days 

when a child is absent due to an illness 

and/or allow families a limited number 

of vacation days where providers would 

continue to receive payment. These 

policies would promote continuity of 

care by allowing the provider to retain 

the slot for the child without a financial 

penalty. Private-paying parents 

generally pay for an entire period (e.g., 

a week, a month) even if the child is out 

sick within that period. This policy 

would align subsidy policies with the 

general child care market and positively 

affect subsidy providers while also 

enabling families to retain child care 

services. 

Program integrity. We propose to add 

a new paragraph § 98.16(u) requiring a 

description of processes a Lead Agency 

has in place to investigate and recover 

fraudulent payments and to impose 

sanctions on providers or clients in 

response to fraud. This change 

complements proposed changes at 

section 98.68 describing program 

integrity requirements, which are 

discussed later in this proposed rule. 

Quality performance report. We also 

propose to add a new paragraph 

§ 98.16(v) requiring States and 

Territories to establish performance 

goals and targets in the Plan for 

expenditures on activities to improve 

the quality of care, and report annually 

a description of progress towards 


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meeting those goals. This change is 

consistent with proposed changes at 

§ 98.51(f) regarding quality 

improvement activities, which are 

discussed later in this preamble. 

The Quality Performance Report 

(QPR) was recently added as an 

appendix to the CCDF Plan to improve 

accountability for quality expenditures 

and encourage more strategic, 

intentional planning between the 

subsidy system and quality initiatives. 

The report is organized to align with the 

CCDF Plan and asks Lead Agencies to 

report on the goals and performance 

measures that they set for themselves in 

the Plan. In addition, it asks for key data 

on the quality of child care. Over time, 

this data will be used to report to 

Congress, stakeholders, and the general 

public on the quality of child care and 

CCDF’s critical role in improving 

quality. This proposed change would 

mandate submission of the Quality 

Performance Report appendix as part of 

the CCDF Plan process. 

Assessment of serious injuries and 

deaths in child care. In this paragraph 

we also propose to add § 98.16(v)(2) 

asking Lead Agencies to describe, as 

part of the Quality Performance Report, 

any changes to State regulations, 

enforcement mechanisms, or other State 

policies addressing health and safety 

based on an annual review and 

assessment of serious injuries or deaths 

of children occurring in child care. 

Currently, the Quality Performance 

Report gives Lead Agencies the option 

to list and describe the annual number 

of child injuries and fatalities in child 

care. We are proposing to require Lead 

Agencies to answer these questions and 

to describe the results of an annual 

review of all serious child injuries and 

deaths occurring in child care 

(including both regulated and 

unregulated child care centers and 

family child care homes). The review 

would be publicly available and would 

include an assessment of whether any 

State or local regulatory requirements, 

enforcement mechanism, or other State 

or local policies addressing health and 

safety were changed in response to the 

review. ACF strongly encourages Lead 

Agencies to work with the State entity 

responsible for child care licensing in 

conducting their review. 

The primary purpose of this proposed 

change is prevention of future tragedies. 

Often, incidents of child injury or death 

in child care are avoidable. For 

example, one State recently reviewed 

the circumstances surrounding a 

widely-publicized, tragic death in child 

care and identified several opportunities 

to improve State monitoring and 

enforcement that might otherwise have 

identified the very unsafe circumstances 

surrounding the child’s death and 

prevented the tragedy. The State moved 

quickly to make several changes to its 

monitoring procedures. It is important 

to learn from these tragedies to better 

protect children in the future. Lead 

Agencies should review all serious child 

injuries and deaths in child care, 

including lapses in health and safety 

(e.g., unsafe sleep practices for infants, 

transportation safety, issues with 

physical safety of facilities, etc. * * *) 

to help identify training needs of 

providers. 

The utility of this assessment is 

reliant upon the State obtaining 

accurate, detailed information about any 

child injuries and deaths that occur in 

child care. Therefore, as discussed later 

in this preamble, we are requiring at 

98.41(d)(4) that Lead Agencies establish 

policies and procedures for child care 

providers serving children receiving 

CCDF support to report any incidents of 

serious child injuries or deaths to a 

designated State, territorial or tribal 

agency, such as the licensing agency. 

We recommend that States, Territories 

and Tribes require all child care 

providers, regardless of subsidy receipt, 

to report incidents of serious child 

injuries or death to a designated agency. 

Lead Agencies are strongly 

encouraged to work with their 

established Child Death Review systems 

and with the National Center for the 

Review and Prevention of Child Death 

(www.childdeathreveiw.org) to conduct 

their annual reviews. The National 

Center for the Review and Prevention of 

Child Death, which is funded by the 

Maternal and Child Health Bureau in 

the Health Resources and Services 

Administration (HRSA), reports that all 

50 States and the District of Columbia 

already review child deaths through 

1,200 State and local Child Death 

Review panels (National Center for 

Child Death Review, Keeping Kids 

Alive: A Report on the Status of Child 

Death Review in the Unities States, 

2011). The Child Death Review system 

is a process in which multidisciplinary 

teams of people meet to share and 

discuss case information on deaths in 

order to understand how and why 

children die so that they can take action 

to prevent other deaths. These review 

systems vary in scope and in the types 

of death reviewed, but every review 

panel is charged with making both 

policy and practice recommendations 

which are usually submitted to the State 

governor and are publicly available. The 

National Center for the Review and 

Prevention of Child Death provides 

support to local and State teams 

throughout the child death review 

process through training and technical 

assistance designed to strengthen the 

review and the prevention of future 

deaths. 

Lead Agencies may also work in 

conjunction with the recentlyestablished National Commission to 

Eliminate Child Abuse and Neglect 

Fatalities, established by the Protect Our 

Kids Act, H.R. 6655. The Commission, 

consisting of 12 members appointed by 

the President and Congress, will work to 

develop recommendations to reduce the 

number of children who die from abuse 

and neglect. The Commission will hold 

hearings and gather information about 

current Federal programs and 

prevention efforts in order to 

recommend a comprehensive strategy to 

reduce and prevent child abuse and 

neglect fatalities nationwide. Their 

report will be issued to both Congress 

and the President no later than two 

years after the date on which the 

majority of members of the Commission 

have been appointed. Although this 

Commission will only be studying a 

subsection of child injuries and death, 

it is important that the commissioners 

examine the issue of child abuse and 

neglect in child care settings. 

Finally, we note that the requirement 

to submit a Quality Performance Report 

is not applicable to Tribal Lead 

Agencies, as we are mindful of the 

reporting burden on Tribes. In the 

future, ACF may consider asking Tribes 

to report performance outcomes 

associated with spending on quality 

improvement activities through the 

existing Tribal ACF–700 or ACF–696T 

reports using the information collection 

process, which would provide 

opportunity for public comment. We 

have re-designated paragraph (r) as 

paragraph (w) with no other changes. 

Approval and Disapproval of Plans and 

Plan Amendments (Section 98.18) 

This section of the regulations 

describes processes and timelines for 

CCDF Plan approvals and disapprovals, 

as well as submission of Plan 

amendments. CCDF Plans are submitted 

biennially and prospectively describe 

how the Lead Agency will implement 

the program. To make a substantive 

change to a CCDF program after the Plan 

has been approved, a Lead Agency must 

submit a Plan amendment to ACF for 

approval. The purpose of Plan 

amendments is to ensure that grantee 

expenditures continue to be made in 

accordance with the statutory and 

regulatory requirements of CCDF, if the 

grantee makes changes to the program 

during the two-year Plan period. 

Advance written notice. In 

conjunction with the change discussed 


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at § 98.14(d) to make the Plan and any 

Plan amendments publicly available, we 

propose to add a provision at 

§ 98.18(b)(2) to require Lead Agencies to 

provide advance written notice to 

affected parties, specifically parents and 

child care providers, of changes in the 

program made through an amendment 

that adversely affect income eligibility, 

payment rates, or sliding fee scales. The 

Lead Agency must provide written 

notice to affected recipients and child 

care providers prior to a policy change 

that will reduce or terminate benefits. 

The notice should describe the action to 

be taken (including the amount of any 

benefit reduction), the reason for the 

reduction or termination, and the 

effective date of the action. We are 

providing Lead Agencies with flexibility 

to determine an appropriate, specific 

time period for advance notice, since 

this may vary depending on the type of 

policy change being implemented and/ 

or the effective date of that policy 

change. Advance notice will add 

transparency to the Plan amendment 

process and provide a mechanism to 

ensure that affected parties remain 

informed of any substantial changes to 

the Lead Agency’s CCDF Plan that may 

affect their ability to participate in the 

child care program. For example, if a 

Lead Agency submits a Plan amendment 

to revise its sliding fee scale and raise 

family co-pay amounts, it is important 

to give advance notice to those families 

and child care providers because this 

change may have implications for their 

ability to continue with their child care 

arrangement. 

We note that section 98.14(c)(1) of the 

current regulations requires Lead 

Agencies to conduct at least one 

statewide public hearing before the 

CCDF Plan is submitted to ACF. The 

public hearing serves as a mechanism to 

provide broad notice and comment for 

families, child care providers, and other 

stakeholders regarding key elements of 

the CCDF program. Lead Agencies 

routinely submit amendments to their 

CCDF Plans throughout the two-year 

period during which the Plan is in 

effect; yet there is no similar 

transparency requirement with regards 

to Plan amendments. We are not 

requiring the Lead Agency to hold a 

formal public hearing and solicit 

comments on each Plan amendment; 

however, we encourage solicitation of 

public input whenever possible. We are 

only requiring notification of substantial 

changes in the program that adversely 

affect income eligibility, payment rates, 

or sliding fee scales. This regulatory 

change is consistent with the spirit and 

intent of the public hearing provision. 

The Lead Agency may choose to issue 

the notification in a variety of ways, 

including a mailed letter or email sent 

to all participating child care providers 

and families. Paragraph (c) of this 

section describing appeal and 

disapproval of a Plan or Plan 

amendment would remain unchanged. 

Subpart C—Eligibility for Services 

This subpart establishes parameters 

for a child’s eligibility for child care 

services under the CCDF program and 

how Lead Agencies determine and 

verify eligibility. The current regulatory 

language defining an eligible child 

mirrors statutory language in the 

CCDBG Act. In order to be eligible for 

child care services, a child must be 

under the age of 13 (or at the option of 

the Lead Agency, be under age 19 and 

physically or mentally incapable of 

caring for himself or herself, or under 

court supervision); reside with a family 

whose income does not exceed 85 

percent of State median income for a 

family of the same size; reside with a 

parent or parents who are working or 

attending a job training or educational 

program; or receive or need to receive 

protective services, at grantee option 

this may include children in foster care. 

The section also describes provisions 

related to establishment of additional 

eligibility conditions and priority rules 

by the Lead Agency. We propose to 

revise and update this section to 

promote continuity of care, make a 

technical change regarding the State 

Median Income (SMI), expand the scope 

of the protective services category to 

provide more flexibility, and refine the 

regulations concerning eligibility 

determinations. 

A Child’s Eligibility for Child Care 

Services (Section 98.20) 

We propose to make several revisions 

to eligibility requirements under this 

section that will promote continuity of 

child care services. As envisioned in 

this proposed rule, the purpose of CCDF 

is to develop high-quality child care 

programs that best suit the needs of 

children and families as they pursue the 

dual goals of financial self-sufficiency 

and healthy development and school 

success for their children. With those 

two goals in mind, it is important to 

emphasize continuity of subsidy receipt 

when developing eligibility policies. 

Continuity of subsidy receipt supports 

financial self-sufficiency by offering 

working families stability to establish a 

strong financial foundation while also 

preparing children for school by 

creating stable conditions necessary for 

healthy child development and early 

learning. 

Many families receive CCDF 

assistance for only short periods of time 

and have frequent spells of cycling on 

and off the program. For example, a 

five-State study has shown that the 

median length of child care subsidy 

receipt is often very short, ranging from 

3 to 7 months. (Meyers, M.K., et al., The 

Dynamics of Child Care Subsidy Use: A 

Collaborative Study of Five States, 

National Center for Children in Poverty, 

2002) Preliminary findings from other 

studies using CCDF administrative data 

also indicate short subsidy spells. Short 

periods of subsidy receipt can be the 

result of a variety of factors, but 

developing eligibility policies that 

provide increased continuity for 

families that continue to need child care 

assistance would offer valuable support 

and relief to families working toward 

long-term stability. 

In addition, research has shown that 

children have better educational and 

developmental outcomes when they 

have continuity in their child care 

arrangements. (Raikes, H., Secure Base 

for Babies: Applying Attachment Theory 

Concepts to the Infant Care Setting, 

Young Children 51, no. 5, 1996) For 

young children, safe, stable 

environments provide the opportunity 

to develop the relationships and trust 

necessary to comfortably explore and 

learn from their surroundings. 

Concurrently, research has shown that 

frequent changes in care arrangements 

are associated with higher levels of 

distress and negative behavior in infants 

and toddlers. (Dicker, S., & Gordon, E., 

Ensuring the Healthy Development of 

Infants in Foster Care; A Guide for 

Judges, Advocates, and Child Welfare 

Professionals, Zero to Three, 2004) 

Continuity of care also is important 

for school-age children because the 

amount of exposure to programming, or 

dosage, has been shown to determine 

the impact such services have on a 

child. One study revealed that children 

who actively attended after-school 

programming showed marked 

improvement in test scores and school 

attendance when compared to their 

peers who were less active or did not 

participate in the program at all. (Welsh, 

M., Russell, C., Willimans, I., Reisner, 

E., and Whites, R., Promoting Learning 

and School Attendance through Afterschool Programs, Policy Studies 

Associates, 2002) The effect on 

attendance is of particular importance 

because school attendance has been 

found to be significantly related to 

sociological and academic outcomes for 

school-age children. (Gottfried, M., 

Evaluating the Relationship Between 

Student Attendance and Achievement 

in Urban Elementary and Middle 


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Schools: An Instrumental Variables 

Approach, American Education 

Research Journal, 2009) 

State eligibility policies should take 

into consideration the importance of 

continuity in arrangements for children 

receiving subsidies and what policies 

make the most sense for supporting the 

child’s developmental outcomes and 

school readiness, especially if a child is 

enrolled with a high quality child care 

provider. Many of the proposed changes 

in this section seek to improve 

continuity through implementation of 

more family-friendly eligibility policies, 

while recognizing that Lead Agencies 

need flexibility to make decisions to 

ensure that funds are appropriately 

targeted to families in need. The Lead 

Agency, however, must ensure that its 

eligibility policies (e.g., related to 

frequency of eligibility redetermination) are not only included in 

policy, but also consistently 

implemented in practice—for example 

by the localities, sub-recipients, and 

eligibility workers that implement the 

program on the Lead Agency’s behalf. 

As mentioned earlier, the revisions to 

§ 98.20, discussed below, complement 

new § 98.16(h), which requires Lead 

Agencies to include in their CCDF Plans 

a description of policies to promote 

continuity of care for children and 

stability for families receiving CCDF 

services, including policies that take 

into account developmental needs of 

children when authorizing child care 

services, timely eligibility determination 

and processing of applications, and 

policies that promote employment and 

income advancement for parents. 

Income eligibility. Lead Agencies are 

required to report their income 

eligibility threshold in the CCDF Plan. 

However, neither the statute nor 

regulations specify a source or basis for 

SMI. Therefore, each Lead Agency 

currently has the ability to determine 

the data source for the SMI. From a 

national perspective, this means the 

SMI levels are not comparable—making 

it more difficult to get a true 

understanding of where Lead Agencies 

are setting their thresholds. We propose 

to revise § 98.20(a)(2) by adding new 

paragraph (i) to clarify that eligibility 

threshold levels should be based on the 

most recent SMI data that is published 

by the Bureau of the Census. The 

proposed clarification would ensure 

that eligibility criteria are based on the 

most current and valid available data 

and provide consistency that allows for 

cross-State comparisons. SMI data may 

not be available from the Census Bureau 

for some Territories, in which case the 

Territory may use an alternative source. 

Income eligibility policies can also 

play an important role in promoting 

continuity of services. Lead Agencies 

have flexibility to establish income 

eligibility thresholds up to 85 percent of 

SMI, however many Lead Agencies set 

eligibility levels at a lower threshold 

due to resource constraints and 

competing budgetary priorities. When 

setting an eligibility threshold that is 

below 85 percent of SMI, some Lead 

Agencies have instituted a two-tiered 

eligibility threshold which provides for 

initial and continuing income eligibility 

limits. A preliminary analysis of the FY 

2012–2013 CCDF plans shows that 16 

States and Territories have implemented 

policies which provide an entry level 

eligibility threshold and a higher exit 

income eligibility threshold. 

As an example, a Lead Agency may 

have a policy that families must have an 

income at or below 50 percent of SMI 

in order to access the subsidized child 

care system. The parent(s) may be 

determined eligible at an income level 

just below 50 percent of SMI. Over the 

course of the next 3 to 6 months the 

parent may receive a small hourly wage 

increase which results in exceeding the 

income eligibility level and losing the 

family’s child care subsidy. This 

scenario not only could disrupt the 

child care arrangement, it undermines 

the goal of helping low-income parents 

to work and gain economic 

independence because the increase in 

child care costs experienced by the 

family may exceed the amount of the 

wage increase. The wage increase 

becomes detrimental to the family’s 

financial success by jeopardizing receipt 

of a child care subsidy. As an 

alternative, the Lead Agency could have 

a policy which requires that parents 

applying for subsidies have income 

below 50 percent of SMI, but once 

determined eligible, allows those 

parents to have incomes up to 60 

percent of SMI before becoming 

ineligible for the subsidy. This twotiered approach supports financial 

success by allowing for a modest 

amount of wage growth and a gradual 

transition out of the program by 

minimizing abrupt disruptions in 

services. 

In recognition of the fact that many 

States set eligibility thresholds below 85 

percent of SMI, we are not proposing a 

regulatory change to require a two-tiered 

eligibility policy. Yet, ACF recommends 

that Lead Agencies consider this policy 

as a strategy that allows families to 

retain child care assistance while 

experiencing modest success in the job 

market. This approach is consistent 

with the goal of improving continuity of 

child care services and can help prevent 

unnecessary churning on and off of the 

program by allowing for some amount of 

wage growth as families work towards 

greater self-sufficiency. 

Protective services. Section 658P(3) of 

the CCDBG Act indicates that, for CCDF 

purposes, an eligible child includes a 

child who is receiving or needs to 

receive protective services. Under 

current regulations at § 98.20(a)(3)(ii)(B), 

at the option of the Lead Agency, this 

category may include children in foster 

care. The regulations allow that children 

deemed eligible based on protective 

services may reside with a guardian or 

other person standing ‘‘in loco parentis’’ 

and that person is not required to be 

working or attending job training or 

education activities in order for the 

child to be eligible. In addition, the 

regulations allow grantees to waive 

income eligibility and co-payment 

requirements as determined necessary 

on a case-by-case basis, by, or in 

consultation with, an appropriate 

protective services worker for children 

in this eligibility category. According to 

a preliminary analysis of the FY 2012– 

2013 CCDF Plans, at least 44 States and 

Territories provide child care subsidies 

to children receiving or in need of 

protective services. Additionally, at 

least 35 States and Territories elect to 

waive, on a case-by-case basis, the fee 

and income eligibility requirements for 

cases in which children receive, or need 

to receive, protective services. For 

children in foster care, 11 States and 

Territories have elected to provide child 

care subsidies regardless of the foster 

parents’ work status or participation in 

education or training activities. 

The regulatory provision concerning 

protective services was put in place in 

recognition of the unique and distinct 

aspects of children in protective 

services wherein child care serves the 

child’s needs as much or more than the 

parents’ needs. Additionally, because 

the statute references children who 

‘‘need to receive protective services,’’ 

we believe the intent of this language 

was to provide services to at-risk 

children, not to limit this definition to 

serve children already in the child 

protective services system. We are 

proposing to formally clarify this in 

regulation by adding language as 

§ 98.20(a)(3)(ii) specifying that the 

protective services category may include 

specific sub-populations of vulnerable 

children as identified by the Lead 

Agency. Thus, children need not be 

formally involved with child protective 

services or the child welfare system in 

order to be considered eligible for CCDF 

assistance under this category. 

Similarly, we also propose to delete the 

language indicating that the case-byVerDate Mar<15>2010 19:44 May 17, 2013 Jkt 229001 PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 E:\FR\FM\20MYP2.SGM 20MYP2

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case determination of income and copayment requirements for this category 

must be made by, or in consultation 

with, a protective services worker. 

These changes will provide Lead 

Agencies with additional flexibility to 

offer services to those who have the 

greatest need, including high-risk 

populations. 

As an example, a family living in a 

homeless shelter may not meet certain 

eligibility requirements (e.g. work or 

income requirements), but the child is 

in a vulnerable situation and could 

benefit greatly from access to highquality child care services. This would 

have a dual benefit of offering the child 

access to care that supports child 

development, education, and health 

while also offering support to the family 

as they work towards finding a home 

and stabilizing their lives. Another 

vulnerable population that could benefit 

from access to child care services is the 

migrant worker community. Since the 

employment or income status of a 

migrant family may fluctuate 

throughout the year, stable access to 

child care services would prevent the 

child’s development from being 

negatively impacted by variable working 

and living conditions. 

Eligibility re-determination periods. 

Neither the CCDBG Act nor the CCDF 

regulations currently address the 

frequency of eligibility redeterminations or whether the Lead 

Agency must ensure the child is eligible 

on a continuous basis. We propose to 

add a new paragraph § 98.20(b) 

establishing that Lead Agencies may redetermine a child’s eligibility for child 

care services no sooner than 12 months 

following the initial eligibility 

determination or most recent redetermination. In conjunction with this 

change, the proposed new paragraph 

provides that during the period of time 

between re-determinations, a Lead 

Agency, at its option, may consider a 

child to be eligible pursuant to some or 

all of the eligibility requirements 

specified in paragraph (a), if the child 

met all of the requirements in paragraph 

(a) on the date of the most recent 

eligibility determination or redetermination. Finally, this proposed 

change would require Lead Agencies to 

specify in the CCDF Plan any 

requirements for families to report 

changes in circumstances that may 

impact eligibility between redeterminations. These provisions would 

also apply to any localities or subrecipients that implement the CCDF 

program on the Lead Agency’s behalf. 

Over time, many Lead Agencies have 

changed their policies to allow for 

longer eligibility re-determination 

periods. One State found that 86 percent 

of its families were still eligible for 

subsidies at the time of their required 6 

month re-determination. As a result, in 

order to reduce administrative burden 

on families, the State switched to a 12 

month re-determination period for most 

families. Studies also suggest that a 

significant number of families are still 

income-eligible for child care services, 

by both Federal and State eligibility 

criteria, when they leave the CCDF 

program. (Grobe, D., Weber, R.B., & 

Davis, E.E., Why Do They Leave? Child 

Care Subsidy Use in Oregon. Oregon 

State University, 2006) According to the 

FY 2012–2013 CCDF Plans, slightly 

more than half of the States and 

Territories require eligibility redetermination at 6 months, one State 

has an 8 month re-determination 

requirement, and the remainder have 12 

month eligibility re-determination 

periods. 

ACF believes a 12 month redetermination period is the most 

consistent with the programmatic goals 

of promoting continuity of care and 

financial self-sufficiency for CCDF 

families. Lead Agencies would be 

allowed to adopt re-determination 

periods longer than 12 months. For 

example, a Lead Agency could establish 

a child’s eligibility to continue until 

kindergarten entry to align with Head 

Start or extend eligibility to facilitate 

partnerships between child care and 

Early Head Start programs serving 

infants and toddlers. We recognize that 

this proposed change would require 

some Lead Agencies to change policy in 

this area by moving from a 6 month to 

a 12 month re-determination period. 

Therefore we are requesting comment 

regarding the impact of this change, 

particularly any benefits or burdens it 

may have for CCDF families and to 

better understand implications for Lead 

Agencies. 

In conjunction with this change we 

propose to add language that would 

allow Lead Agencies the option to 

consider a child eligible (pursuant to 

some or all of the eligibility 

requirements) during the period of time 

between re-determinations, as long as 

the child met CCDF eligibility 

requirements on the date of eligibility 

determination or re-determination. We 

believe this proposed change would 

allow Lead Agencies to adopt more 

family-friendly eligibility policies, to 

align eligibility requirements with other 

assistance programs, and promote 

continuity in child care subsidy receipt. 

In the past, ACF has received questions 

from Lead Agencies seeking guidance 

regarding instances in which a family’s 

circumstances may change after initial 

eligibility determination or between redetermination periods, and whether the 

Lead Agency would be subject to a 

disallowance if it was determined that, 

during those interim periods, the family 

no longer met CCDF eligibility 

requirements. 

This proposed change acknowledges 

that there are costs and other challenges 

associated with monitoring and 

verifying eligibility on a continuous 

basis to ensure that at any given point 

in time a family is eligible for services. 

These include costs to families that are 

trying to balance work and family 

obligations as well as costs to Lead 

Agencies administering the program. 

This proposed change clarifies that the 

Lead Agency is responsible for correctly 

determining and verifying eligibility at 

the time of initial eligibility 

determination and periodic redeterminations conducted thereafter, as 

the most reasonable and practical 

application of the statutory intent 

establishing eligibility criteria for CCDF. 

Lead Agencies are not required to 

implement policies that ‘‘look back’’ at 

a family’s eligibility in the months prior 

to a re-determination and, if the family 

is found to be ineligible upon redetermination, seek to recoup funds 

from the family for benefits received in 

prior months. 

We note the proposed change 

indicates that a Lead Agency, at its 

option, may consider a child to be 

eligible pursuant to some or all of the 

eligibility requirements between 

eligibility re-determinations. This gives 

States latitude to decide which elements 

of CCDF eligibility, if any, to track 

between eligibility re-determinations. A 

Lead Agency may establish a family’s 

eligibility for 12 months (or longer) and 

only identify changes to a family’s 

circumstances at the time of the next redetermination and make necessary 

adjustments to the CCDF benefit then as 

appropriate. Alternately, a Lead Agency 

could set criteria for limited, significant 

changes that it will track between 

eligibility re-determinations, examining 

all other eligibility criteria at the time of 

the next re-determination. For example, 

the Lead Agency may establish criteria 

that require families to report changes in 

circumstances (if the State does not 

have other mechanisms for learning 

about the change) related to any changes 

in income above a certain threshold— 

but evaluate other eligibility criteria at 

the time of re-determination. ACF 

recommends that States require parents 

receiving subsidies to report a job loss 

between eligibility determinations to 

initiate the allowable period of job 

search. However, State policies that 

track all eligibility criteria on a 


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continuous basis and require more 

frequent reporting of changes in 

circumstances remain allowable, but are 

not recommended. Under the proposed 

change, Lead Agencies would be 

required to specify in the Plan any 

requirements for families to report 

changes in circumstances that may 

impact eligibility between redeterminations. 

For school-age children, the proposed 

change would allow Lead Agencies to 

avoid terminating access to valuable 

high quality before-and after-school care 

in a manner that may be detrimental to 

positive youth development and 

academic success or put the child at-risk 

if a parent is working and cannot be 

with the child after school. As an 

example, in order to promote continuity 

of care for a 12-year old child enrolled 

in a before-or after-school program and 

supported by CCDF, the Lead Agency 

could schedule the family’s redetermination date at the beginning of 

the school year and schedule the next 

re-determination to occur after the 

school year has ended. Therefore, if the 

child turned 13 during the school year, 

the child would continue to be able to 

participate in their before-or after-school 

program, as opposed to being abruptly 

removed immediately after the child’s 

birthday. In addition, this type of policy 

can ease administration of school-age 

programs by making the eligibility of 

children receiving subsidies more 

commensurate with the school year. 

We strongly encourage Lead Agencies 

to adopt reasonable policies for tracking 

eligibility that minimize compliance 

burdens on families and promote selfsufficiency. Many low-income families 

have frequent fluctuations in work 

schedules and hours of work. Strict 

requirements that families report all 

changes in circumstances in a short time 

frame, even those that do not directly 

impact eligibility, can make it more 

difficult for working families to 

maintain their eligibility, increase 

administrative burden, and could result 

in children having to leave child care 

providers with whom they have bonded. 

According to the FY 2012–2013 CCDF 

Plans, 20 States and Territories report 

implementing policies to minimize 

reporting requirements for changes in 

family circumstances that have no effect 

on a family’s eligibility in order to 

promote continuity of care. 

We also encourage Lead Agencies to 

consider how they can align CCDF 

eligibility policies with other programs 

serving low-income families. This 

proposed change is consistent with 

practices in other Federal programs 

serving low-income families which 

allow States the option to certify 

families as eligible for a specified period 

of time. For example, the Head Start 

program requires that families be 

eligible at an initial eligibility 

determination and allows the child to 

remain eligible until they enter school. 

A Lead Agency could establish 

eligibility periods longer than 12 

months for children enrolled in Head 

Start and receiving CCDF, since 

children enrolled in Head Start remain 

eligible until they enter school— 

creating a better alignment between 

programs. Similarly, a Lead Agency 

could establish longer eligibility periods 

during an infant and toddler’s 

enrollment in Early Head Start. The 

Supplemental Nutrition Assistance 

Program’s (SNAP) simplified reporting 

requirements provide States the option 

of requiring households to report 

changes in income between certification 

and scheduled reporting periods only 

when total countable income rises above 

130 percent of the poverty level. In 

SNAP, a Lead Agency may require a 

household that has been certified as 

eligible for a 12 or 6-month period to 

submit a periodic report (as opposed to 

a face-to-face visit), generally about 

halfway through the certification period, 

for which certain changes that have 

occurred since certification must be 

reported. Similarly, provisions in the 

Medicaid and Children’s Health 

Insurance Program (CHIP) allow States 

the option to provide children with 

continuous 12 month eligibility. The 

changes proposed in this rule promote 

conformity across Federal programs by 

providing options to Lead Agency’s to 

simplify CCDF reporting and eligibility 

requirements for families receiving 

assistance from multiple programs. 

In proposing this change, ACF is 

cognizant of the importance of ensuring 

CCDF funds are effectively and 

efficiently targeted towards eligible lowincome families. Policies to promote 

continuity, such as lengthening 

eligibility periods and allowing a child 

to remain eligible between redetermination periods, necessarily must 

be founded on a strong commitment to 

program integrity. ACF expects Lead 

Agencies to have rigorous processes in 

place to detect fraud and improper 

payments, but these should be 

reasonably balanced with familyfriendly practices. In order to ensure 

that only eligible families receive CCDF 

assistance, Lead Agencies should focus 

administrative dollars on making sure 

that a family’s eligibility is determined 

accurately at the initial determination 

and at times designated for redetermination. For this reason, the 

proposed rule includes the addition of 

a new section at § 98.68 titled Program 

Integrity that requires Lead Agencies to 

have procedures in place for 

documenting and verifying that children 

meet eligibility criteria at the time of 

eligibility determination and redetermination. 

Lead Agencies receive a fixed amount 

of CCDF funds and often face challenges 

determining how to appropriately 

allocate resources. When implementing 

their CCDF programs, Lead Agencies 

must balance ensuring compliance with 

eligibility requirements with other 

considerations, including administrative 

feasibility, program integrity, promoting 

continuity of care for children, and 

aligning child care with Head Start, 

Early Head Start, and other early 

childhood programs to promote 

partnerships. This proposed change 

removes any uncertainty regarding 

applicability of Federal eligibility 

requirements for CCDF and the threat of 

potential penalties or disallowances that 

otherwise may inhibit a Lead Agencies’ 

ability to balance these priorities in a 

way that best meets the needs of 

children in families within their 

jurisdiction. 

Developmental needs of the child. We 

propose to amend § 98.20 to add 

paragraph (d) requiring Lead Agencies 

to take into account the developmental 

needs of the child when authorizing 

child care services. Under this proposed 

change, Lead Agencies would not be 

restricted to limiting authorized child 

care services based on the work, 

training, or educational schedule of the 

parent(s). This is consistent with the 

current regulations at § 98.20(a)(3)(i) 

requiring that the child ‘‘reside with’’ a 

parent or parents who are working or 

attending a job training or educational 

program. One of the goals of this 

proposed rule is to enhance recognition 

of the role of CCDF as a child 

development program by emphasizing 

access to early learning and afterschool 

settings that support children’s success, 

as well as enabling parents to work. In 

service of this goal, this proposed 

change clarifies that Lead Agencies 

should take into account the 

developmental and academic needs of 

children—not just their parents’ work or 

training needs—as part of eligibility, 

intake, authorization, and other CCDF 

policies and practices. 

As an example, in serving a preschool 

aged child (e.g., age 3 or 4), the Lead 

Agency should consider whether or not 

the child has access to a high quality 

preschool setting and how CCDF can 

make attendance at a high quality 

preschool more likely. Many Lead 

Agencies tie access to child care 

subsidies closely with parental work 


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hours, which may limit access to high 

quality settings. If most local high 

quality early learning programs offer 

only full-time slots, but the child care 

authorization reflects only the parent’s 

part-time work schedule, the child may 

be unable to attend a high quality early 

learning program, which is especially 

critical for low-income children in the 

year preceding kindergarten. Lead 

Agencies are encouraged to authorize 

adequate hours to allow the child to 

participate in a high quality program. 

Alternatively, Lead Agencies can 

partner with Early Head Start, Head 

Start, prekindergarten, or other high 

quality programs to build an intentional 

package of arrangements for the child— 

that allows for both attendance at 

preschool and perhaps a second 

arrangement that accommodates the 

parents’ work schedule. 

Specifically, it is important for infants 

and toddlers to build secure 

attachments and maintain relationships 

with caregivers over time to promote 

healthy child development. For 

example, a Lead Agency may wish to 

authorize part-day CCDF services that 

accommodate a child’s participation in 

Early Head Start, while also maintaining 

a secondary child care arrangement to 

preserve the relationship with a familiar 

caregiver. A Lead Agency could also 

offer parents the choice to select highquality infant slots that are funded 

through contracts or grants with infant 

and toddler programs. For children of 

all ages, a Lead Agency could provide 

more intensive case management for 

children with multiple risk factors to 

increase the likelihood that the family 

will find a stable, quality child care 

arrangement that will work with other 

services providers in assisting the child 

and family. 

This proposed provision 

acknowledges that both the child’s 

development and the parent’s need to 

work are factors in the service needs of 

each family. We recognize that given 

constraints on funding, limited human 

resource capacity, and the inadequate 

supply of high quality care, a perfect 

arrangement will not be found in all 

cases. Rather, we expect Lead Agencies 

to consider how they can infuse the 

needs of children into their policies and 

practices and encourage partnerships 

with high quality providers, child care 

resource and referral agencies, and case 

management partners to look for ways to 

strengthen CCDF’s capacity to fulfill its 

child development mission for families. 

Lead Agencies retain flexibility on how 

to carry out this provision and ACF 

expects to provide technical assistance 

to support innovation in this area. 

Subpart D—Program Operations (Child 

Care Services) Parental Rights and 

Responsibilities 

In the description of goals for the 

child care program, section 658A(b)(2) 

of the CCDBG Act includes, ‘‘to promote 

parental choice to empower working 

parents to make their own decisions on 

the child care that best suits their 

family’s needs.’’ Subpart D of the 

regulations describes parental rights and 

responsibilities and provisions related 

to parental choice, including unlimited 

parental access to their children, 

requirements that Lead Agencies 

maintain a record of parental 

complaints, and consumer education 

activities conducted by Lead Agencies 

to increase parental awareness of the 

range of child care options available to 

them. We have proposed a number of 

changes to this subpart including 

provisions directed towards increasing 

the supply of high quality child care, 

establishment of a hotline for parental 

complaints, consumer education 

activities to increase awareness of the 

quality of child care choices available to 

parents receiving subsidies, and 

ensuring parents receive specific 

information about the child care 

provider they select. 

Parental Choice (Section 98.30) 

Use of grants or contracts. Section 

658E(c)(2)(A)(i) of the CCDBG Act 

requires that Lead Agencies provide 

assurances that parents are given the 

option to enroll their child with a child 

care provider that has a grant or contract 

to provide child care services or to 

receive a child care certificate. Current 

regulations at § 98.30(a) require that 

Lead Agencies offer eligible parents a 

child care certificate, or to enroll the 

child with a provider that has a grant or 

contract ‘‘if such services are available.’’ 

The statutory language does not include 

this clause; instead it was added 

through regulation. The proposed 

change would delete the phrase ‘‘if such 

services are available’’ at § 98.30(a)(1) 

and add ‘‘in accordance with § 98.50.’’ 

As discussed later in this preamble, we 

propose to modify § 98.50(b)(3) to read 

that child care services shall be 

provided using methods provided for in 

§ 98.30, which must include the use of 

grants or contracts for the provision of 

direct services, with the extent of such 

services determined by the Lead Agency 

after consideration of supply shortages 

described in the Lead Agency’s Plan 

pursuant to § 98.16(i)(1), and other 

factors as determined by the Lead 

Agency. We believe the current 

regulatory language undermines the 

strength of the parental choice statutory 

requirement by sending the message 

that contracts are of secondary 

importance to vouchers and need not be 

used as a mechanism for providing 

direct services. The proposed change 

would retain the requirement for Lead 

Agencies to offer parents a child care 

certificate or voucher. 

In 2011, CCDF administrative data 

showed that approximately 90 percent 

of children receiving child care 

assistance were served through 

certificates (also referred to as 

vouchers). According to a preliminary 

analysis of the FY 2012–2013 CCDF 

Plans, only 21 States and Territories 

indicated that they provide child care 

services through grants or contracts 

through child care slots. We do not 

believe the intent of the CCDBG statute 

was to create a system solely operated 

through certificates. In fact, the statute 

does not give priority or preference to 

the use of certificates or vouchers, but 

reflects a balance between using both 

certificates and grants or contracts to 

provide child care assistance. Grants 

and contracts play a vital role in 

meeting the needs of underserved 

populations, and increase the choices 

available to parents. 

While the majority of States and 

Territories rely on certificates to provide 

child care assistance to eligible families, 

some States and Territories have 

reported in their CCDF Plans using 

grants and contracts to increase the 

supply of specific types of child care. 

These include contracts to fund 

programs to serve children with special 

needs, targeted geographic areas, infants 

and toddlers, and school-age children. 

Grants and contracts are also used to 

provide wrap-around services to 

children enrolled in Head Start and 

prekindergarten to provide full-day, 

full-year care and to fund programs that 

provide comprehensive services. 

Additionally, Lead Agencies report 

using grants and contracts to fund child 

care programs that provide higher 

quality child care services. 

The proposed revision retains the 

requirement that the Lead Agency 

operate a certificate program and that 

eligible families be offered a certificate, 

however the change requires Lead 

Agencies to find ways to also 

incorporate grants or contracts into their 

administration of the CCDF program, 

with specific consideration for how 

grants or contracts can be used to 

address shortage in the supply of high 

quality child care. Child care certificates 

can be an effective means of ensuring 

parental choice when providing child 

care assistance. However, demand-side 

mechanisms like certificates are only 

fully effective when there is an adequate 


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supply of child care. Multiple research 

studies have shown a lack of supply of 

certain types of child care and for 

certain localities. Child care supply in 

many low-income and rural 

communities is often low, particularly 

for infant and toddler care, school-age 

children, children with disabilities, and 

families with non-traditional work 

schedules. Parents in low-income 

communities also report that the 

regulated infant and toddler care or care 

for special needs children that is 

available is often unaffordable or of low 

quality. (Paulsell, D., Nogales, R., and 

Cohen, Quality Child Care for Infants 

and Toddlers, 2003) We provide further 

discussion of this proposed change 

regarding grants and contracts at 

Subpart F—Use of Child Care and 

Development Funds. Current paragraphs 

(b), (c), and (d) would remain 

unchanged. 

We also propose a technical change at 

§ 98.30(e) to delete group home child 

care from the variety of child care 

categories from which parents receiving 

a certificate for child care service must 

be able to choose. This is consistent 

with the changes made at § 98.2 

removing group home child care from 

the definition of categories of care and 

eligible child care provider. As 

discussed earlier, instead we have 

modified the definition of family child 

care provider to include one or more 

individuals to be inclusive of group 

home care within this category. Current 

paragraph (f) at this section would 

remain unchanged. 

Parental choice and child care 

quality. In order to be meaningful, we 

believe the parental choice requirements 

included in this section should give 

parents access to high quality child care 

arrangements across different types of 

providers that foster healthy 

development and learning for children. 

Many Lead Agencies have invested a 

significant amount of CCDF funds to 

implement quality rating and 

improvement systems (QRIS) to promote 

high quality early care and education 

programs, and some have expressed 

concerns that the current language of 

the parental choice regulatory 

provisions inhibits their ability to link 

the child care subsidy program to these 

systems. In order to fully leverage their 

investments, Lead Agencies are seeking 

to increase the number of children 

receiving CCDF subsidies that are 

enrolled with providers participating in 

the quality improvement system. ACF 

published a Policy Interpretation 

Question (CCDF–ACF–PIQ–2011–01) 

clarifying that parental choice 

provisions within regulations do not 

automatically preclude a Lead Agency 

from implementing policies that require 

child care providers serving subsidized 

children to meet certain quality 

requirements, including those specified 

within a quality improvement system. 

As long as certain conditions are met to 

protect a parent’s ability to choose from 

a variety of categories of care, a Lead 

Agency could require that in order to 

provide care to children receiving 

subsidies, the provider chosen by the 

parent must meet requirements 

associated with a specified level in a 

quality improvement system. 

We propose to incorporate this policy 

interpretation into regulation by adding 

paragraph (g) at § 98.30 to clarify that, 

as long as parental choice provisions at 

paragraph (f) of this section are met, 

parental choice provisions should not 

be construed as prohibiting a Lead 

Agency from establishing policies that 

require child care providers that serve 

children receiving subsidies to meet 

higher standards of quality as defined in 

a quality improvement system or other 

transparent system of quality indicators 

(discussed later in this proposed rule). 

Section 98.30(f) prohibits Lead Agencies 

from implementing health and safety or 

regulatory requirements that 

significantly restrict parental choice by 

expressly or effectively excluding any 

category or type of provider, as defined 

at § 98.2, or any type of provider within 

a category of care. Section 98.2 currently 

defines categories of care as centerbased child care, group home child care, 

family child care, and in-home care (i.e., 

a provider caring for a child in the 

child’s own home). (Note: We are 

proposing to delete group homes as a 

category of care at § 98.30(e)(1)). Types 

of providers are defined as non-profit, 

for-profit, sectarian, and relative 

providers. 

When establishing such policies, we 

encourage Lead Agencies to assess the 

availability of care across categories and 

types, and availability of care for 

specific subgroups (e.g. infants, schoolage children, families who need 

weekend or evening care) and within 

rural and underserved areas, to ensure 

that eligible parents have access to the 

full range of categories of care and types 

of providers before requiring them to 

choose providers that meet certain 

quality levels. Should a Lead Agency 

choose to implement a quality 

improvement system that does not 

include the full range of providers, the 

Lead Agency would need to have 

reasonable exceptions to the policy to 

allow parents to choose a provider that 

is not eligible to participate in the 

quality improvement system (e.g. 

relative care). As an example, a Lead 

Agency may implement a system that 

incorporates only center-based and 

family child care providers. In cases 

where a parent selects a center-based or 

family child care provider, the Lead 

Agency may require that the provider 

meet a specified level or rating. 

However, the policy also must allow 

parents to choose other categories and 

types of child care providers that may 

not be eligible to participate in the 

quality improvement system or when a 

parent decides that the rated providers 

are not suited to their family’s needs or 

preferences. This is particularly 

important for geographic areas where an 

adequate supply of child care is lacking 

or when a parent has scheduling, 

transportation, or other issues that 

prevent the use of a preferred provider 

within the system. 

In a similar manner, we propose 

adding paragraph (h) at § 98.30 to clarify 

that Lead Agencies may provide parents 

with information and incentives that 

encourage the selection of high quality 

child care without violating parental 

choice provisions. As discussed below, 

this proposed rule would require Lead 

Agencies to establish a system of quality 

indicators and to provide information 

about the quality of child care providers 

to parents receiving subsidies. 

Accordingly, this provision would allow 

Lead Agencies to adopt policies that 

incentivize parents to choose high 

quality providers as determined in a 

system of quality indicators. Lead 

Agencies may provide brochures or 

other products that encourage parents to 

select a high quality provider without 

violating parental choice provisions. 

Parental Complaints (Section 98.32) 

Hotline for parental complaints. 

Section 658E(c)(2)(C) of the CCDBG Act 

requires that a Lead Agency ‘‘maintain 

a record of substantiated parental 

complaints and makes information 

regarding such parental complaints 

available to the public on request and 

provide a detailed description of how 

such record is maintained and is made 

available.’’ Current language at § 98.32 

mirrors the statutory requirement. We 

propose to add § 98.32(a) to require the 

Lead Agency to establish or designate a 

hotline for parents to submit complaints 

about child care providers. Paragraphs 

(a), (b), and (c) in the current regulations 

have been re-designated as paragraphs 

(b), (c), and (d) but otherwise remain 

unchanged. 

States vary in how they meet the 

current requirement to keep a record of 

and make public substantiated parental 

complaints. In the FY 2012–2013 CCDF 

plans, 10 States reported having a tollfree hotline for parents to submit child 

care-related complaints, including 9 


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States with dedicated child care 

hotlines and one State that utilizes the 

child abuse and neglect hotline. An 

additional 16 States list public toll-free 

numbers on their Web sites for parents 

to contact the child care office. Not all 

are listed as hotlines, but may still 

provide parents with a means for 

submitting complaints and seeking 

additional information. 

The Department of Defense (DoD) 

military child care program also runs a 

national parental complaint hotline. The 

Military Child Care Act of 1989 (P.L. 

101–189) required the creation of a 

national 24 hour toll-free hotline that 

allows parents to submit complaints 

about military child care centers 

anonymously. DoD has found the 

hotline to be important tool in engaging 

parents in child care. In addition, 

complaints received through the hotline 

have helped DoD identify problematic 

child care programs. For example, 

information that was submitted through 

the hotline led to an investigation and 

the closure of some child care facilities 

in the early 1990s. (Campbell, N., 

Appelbaum, J., Martinson, K., Martin, 

E., Be All That We Can Be: Lessons from 

the Military for Improving Our Nation’s 

Child Care System, 2000) 

Lead Agencies have flexibility to 

design the hotline to fit the needs of the 

families they serve. Lead Agencies may 

also choose to work with other agencies 

to adapt existing hotlines, such as 

modifying hotlines used to report child 

abuse and neglect to include an option 

for reporting child care complaints. 

We strongly encourage the Lead 

Agency to widely publicize the child 

care hotline number, and to consider 

requiring child care providers to 

publicly post the hotline number in 

their center or family child care home 

to increase parental awareness. Other 

areas for posting may be the Web site 

proposed at § 98.33(a), the child care 

resource and referral network and Web 

site, and consumer education materials, 

including the proposed consumer 

statement for parents receiving subsidy 

at § 98.33(c). 

Lead Agencies are encouraged to 

establish a toll-free hotline that includes 

multilingual options and has a TTY/ 

TDD option to ensure it is accessible to 

those with hearing impairments. It is 

important that all parents have access to 

the hotline, regardless of ability to pay 

for the call, English proficiency, or 

hearing ability. As with the military 

child care hotline, we recommend that 

the hotline be available for 24 hours a 

day. Allowing parents to submit 

complaints any time of the day gives 

them the flexibility to call when their 

work schedule allows. Parents should 

also have the option to report 

complaints anonymously. For some 

parents, reporting these issues may be 

difficult, and the option of anonymity 

may make them more comfortable with 

coming forward with a complaint. 

Finally, Lead Agencies should have a 

complaint response plan in place that 

includes time frames for following up 

on a complaint depending on the 

urgency or severity of the parent’s 

concern. This plan relates to the 

proposed regulatory change at 

§ 98.41(d)(3) that Lead Agencies must 

do an unannounced, on-site monitoring 

visit in response to receipt of a 

complaint pertaining to the health and 

safety of children in the care of a 

provider serving children receiving 

CCDF subsidies. 

Consumer Education (Section 98.33) 

Section 658E(c)(2)(D) of the CCDBG 

Act requires that Lead Agencies ‘‘collect 

and disseminate to parents of eligible 

children and the general public, 

consumer education information that 

will promote informed child care 

services.’’ Current language at § 98.33(a) 

requires that, at a minimum, consumer 

education information should be 

provided about: (1) Full range of 

providers available; and (2) health and 

safety requirements. 

Consumer education activities carried 

out across the country vary by who 

provides the information, how the 

information is presented, and what 

information is included. In some States 

and Territories, consumer education 

materials and referrals to providers are 

offered by the Lead Agency or by State 

or local TANF offices. In others, 

resource and referral agencies provide 

information about child care choices 

and referrals to all types of child care 

providers. The way information is 

presented to parents includes checklists, 

brochures, telephone hotlines, and inperson meetings. In addition to 

providing materials and referrals to 

parents receiving child care assistance, 

Lead Agencies engage in a variety of 

consumer education activities, 

including public awareness campaigns, 

planning or implementing quality rating 

systems, and translating outreach and 

education materials into other 

languages. 

Current regulations do not specify 

mechanisms for how Lead Agencies 

should collect and disseminate 

consumer education information to the 

public or to parents determined eligible 

for CCDF assistance. In many States, the 

process for applying for and receiving a 

subsidy is disconnected from consumer 

education services offered by the Lead 

Agency, leaving the parent to find out 

what child care options are available to 

them with little to no information about 

the quality of that care. Additionally, it 

is unclear what information, if any, is 

provided to parents regarding the child 

care provider they choose, such as 

licensing or other regulatory 

requirements met by the provider. 

We are proposing several changes to 

§ 98.33 describing consumer education 

activities. Since the proposed regulatory 

changes at this section are extensive, the 

first part of this section briefly 

summarizes all of the proposed 

regulatory changes, and then each 

change is explained in more detail in 

the discussion that follows. 

• Consumer education Web site. We 

propose to add language to § 98.33(a) 

requiring Lead Agencies to collect and 

disseminate, through a user-friendly, 

easy-to-understand Web site and other 

means identified by the Lead Agency, 

consumer education information that 

will promote informed child care 

choices. At § 98.33(a)(1) current 

regulations require that consumer 

education information, at a minimum, 

include information about the full range 

of available providers. We propose to 

add new provisions to require that the 

Lead Agency make available on a Web 

site: (i) Provider-specific information 

about any health and safety, licensing or 

regulatory requirements met by the 

provider, including the date the 

provider was last inspected; (ii) any 

history of violations of these 

requirements; and (iii) any compliance 

actions taken. We also propose to revise 

§ 98.33(a)(2) to require that Lead 

Agencies include on the Web site a 

description of health and safety and 

licensing or regulatory requirements for 

child care providers and processes for 

ensuring that child care providers meet 

those requirements. The description 

must include information about the 

background check process for providers, 

as well as any other individuals in the 

child care setting (as applicable), and 

what offenses preclude a provider from 

serving children. 

• Transparent system of quality 

indicators. We propose to add new 

paragraph § 98.33(b) to require Lead 

Agencies to collect and disseminate 

consumer education through a 

transparent system of quality indicators, 

such as a quality rating and 

improvement system or other system 

established by the Lead Agency, to 

provide parents with a way to 

differentiate between the quality of 

different child care providers in their 

communities using a rating or other 

descriptive method. The system must: 

(1) Include provider-specific 

information about the quality of child 


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care; (2) Describe the standards used to 

assess the quality of child care; (3) Take 

into account teaching staff qualifications 

and/or competencies, learning 

environment, and curricula and 

activities; and (4) Disseminate providerspecific quality information, if available, 

through the Web site described in 

§ 98.33(a), or through an alternate 

mechanism which the Lead Agency 

shall describe in the CCDF Plan, 

including a description of how the 

mechanism makes the system of quality 

indicators transparent. 

• Providing consumer education to 

families receiving subsidies. Finally, we 

propose to add a new paragraph 

§ 98.33(c) requiring that Lead Agencies 

provide information to parents receiving 

subsidies about the child care providers 

available to them, as described in 

paragraphs (a) and (b), and specific 

information about the child care 

provider they choose, including health 

and safety requirements met by the 

provider described at § 98.41(a), 

licensing and regulatory requirements 

met by the provider, any voluntary 

quality standards met by the provider, 

and any history of violations of 

licensing or health and safety 

requirements. 

Paragraphs (b) and (c) in the current 

regulations have been re-designated as 

paragraphs (d) and (e) but otherwise 

remain unchanged. 

Consumer education Web site. We 

propose amending paragraph (a) of 

§ 98.33 to require Lead Agencies to post 

provider-specific information to a userfriendly, easy-to-understand Web site as 

part of its consumer education 

activities. Making available a Web site 

with accessible, easy-to-understand 

basic information about how child care 

is regulated and monitored, as well as 

regulatory requirements met by 

individual child care providers can 

improve transparency and greatly 

reduce burden on families. Parents often 

lack information regarding specific 

requirements that individual child care 

providers may or may not meet. Some 

States and Territories currently post 

lists of licensed providers online, but 

not all licensing information is 

available, such as history of licensing 

violations or when the provider was last 

inspected or monitored. Limiting access 

to this information creates a burden for 

parents, makes it difficult for them to 

make informed decisions about their 

child’s care, and denies parents 

information about providers’ ability to 

protect their children’s health and 

safety. 

We believe parents choosing a 

provider should be able to do so with 

access to any information that the State 

may have about that provider, including 

information about, the date the provider 

was last inspected, licensing violations 

or compliance actions taken by the State 

against a provider. Similarly, if a 

provider is exempt from State licensing 

or regulatory requirements then the 

parent should be given that information 

and provided an explanation about why 

the provider is not required to be 

licensed. 

The Web site also should make it easy 

for parents to know how the State 

regulates child care providers and what 

requirements they must meet. This must 

include a description of health and 

safety and licensing or regulatory 

requirements and processes for 

monitoring providers. We strongly 

recommend that the State tell parents 

how frequently providers are monitored 

or maximum amount of time between 

inspections. The Web site also must 

include a plain language description of 

the provider background check process 

including what the State looks at as part 

of a comprehensive background check 

(i.e., use of fingerprints for checks of 

Federal and State criminal history, as 

well as check of child abuse and neglect 

and sex offender registries). There must 

be information about what types of 

offenses that could preclude a provider 

from serving children, as well as 

offenses that would not disqualify a 

provider. We recommend using 

accessible terms when referring to 

criminal offenses, such as child abuse 

and violent crime, since terms like 

felony and misdemeanors might not 

have meaning for parents. 

In order for a Web site to be a useful 

tool for parents, it should be easy to 

navigate, searchable, and in plain 

language. We recommend that Web sites 

be comprehensive, including a detailed 

profile for each licensed provider, 

which may include the provider’s 

contact information, enrollment 

capacity, years in operation, languages 

spoken, etc . . . In addition, parents 

should be able to use many search terms 

when deciding on a provider, including 

name, type of care, county, zip code, or 

school district. All relevant licensing 

information should also be available on 

one Web site. Lead Agencies have 

flexibility to determine how to present 

information regarding child care 

provider licensing violations and 

compliance actions taken. This includes 

determining the length of the history to 

be included for providers, 

distinguishing between the severities of 

different violations, or posting 

information about compliance action or 

fines only after the provider has 

exhausted their due process rights or 

waives their rights. 

This proposed change is consistent 

with current practices in many States to 

increase availability of information 

about licensing process, standards and 

violations to parents and the general 

public. According to a preliminary 

analysis of the FY 2012–2013 CCDF 

Plans, at least 30 States and Territories 

make all licensing information available 

to parents and the public online. Ten 

States and Territories reported making 

at least some licensing information 

available on a public Web site or other 

online tool, such as a provider training 

registry. 

Research suggests that online 

publishing of licensing violations and 

complaints impact both inspector and 

provider behavior. One study found that 

after inspection reports are posted 

online, there was an improvement in the 

quality of care, specifically the 

classroom environment and improved 

management at child care centers 

serving low-income children. (Witte, A. 

& Queralt, M., What Happens When 

Child Care Inspections and Complaints 

Are Made Available on the Internet? 

NBER Working Paper No. 10227, 2004) 

Making provider compliance 

information widely available on a 

dedicated Web site allows all parents to 

make informed choices, and for 

purposes of the CCDF subsidy program, 

is key to ensuring that parental choice 

is meaningful for families receiving 

subsidies. 

A transparent system of child care 

quality indicators. We propose to add 

new paragraph (b) at § 98.33 to require 

use of a transparent system of quality 

indicators, such as a quality rating and 

improvement system or other system 

established by the Lead Agency, to 

collect and disseminate consumer 

education information. As part of this 

proposed change, Lead Agencies would 

be required to implement a system that 

includes: Provider-specific information 

about the quality of child care; describes 

standards used to assess the quality of 

child care providers; takes into account 

teaching staff qualifications and/or 

competencies, learning environment, 

and curricula and activities; and 

disseminates provider-specific quality 

information through the Web site 

described above, or alternate 

mechanism established by the Lead 

Agency. This system would act as a 

basic tool that can be used not only to 

assess and collect quality information 

about specific child care providers, but 

also a straightforward way to provide 

parents with quality information and 

promote more informed child care 

choices. A system of quality indicators 

should include indicators which are 

appropriate to different types of 


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provider settings, including child care 

centers and family child care homes. 

Additionally, quality indicators should 

be appropriate for providers serving 

different age groups of children, 

including infants and toddlers, 

preschool, and school-age children. 

In order for a transparent system of 

quality indicators to be useful, Lead 

Agencies must provide parents 

information that describes the standards 

used to assess the quality of child care 

providers, what the quality indicators 

mean, and if any providers are not 

covered in the system. In addition, the 

transparent system of quality indicators 

must take into account teaching staff 

qualifications and/or competencies, 

learning environments, and curricula 

and learning activities in child care 

settings. Teaching staff qualifications 

refer to specific education or training 

requirements attained by the teaching 

staff, program director, or family child 

care provider. Staff competencies reflect 

actual provider performance, typically 

measured with observational tools. 

Some research suggests that higher 

levels of education and credentials are 

related to better interactions between 

providers and the children in their care, 

leading to higher quality child care 

settings, when these training programs 

are informed by evidence and wellimplemented. (Whitebook, M., Early 

Education Quality: Higher Teacher 

Qualifications for Better Learning 

Environments—A Review of the 

Literature, 2003; U.S. Department of 

Health and Human Services, National 

Institutes of Health, The NICHD Study 

of Early Child Care and Youth 

Development, 2006) Learning 

environments are the activities, 

practices, materials and provisions in 

the environment to promote children’s 

optimal learning and development. The 

elements of a learning environment play 

an important role in determining the 

safety of a child’s environment and the 

quality of a child’s learning experience. 

Curricula and learning activities are the 

plan and activities used to help meet a 

child’s developmental goals. ACF 

recommends curriculum indicators be 

linked with State early learning 

guidelines. 

Finally, under proposed § 98.33(b)(3), 

Lead Agencies must disseminate the 

provider-specific quality information to 

the public, either through the Web site 

described at § 98.33(a), or, alternately, a 

Lead Agency may use another 

mechanism, such as dissemination 

through local resource and referral 

agencies or another approach, that the 

Lead Agency will describe in its CCDF 

Plan; the Plan will include a description 

of how the mechanism makes the 

system of quality indicators transparent. 

We strongly encourage Lead Agencies 

to meet the requirement proposed in 

paragraph § 98.33(b) through the 

implementation of a Quality Rating and 

Improvement System (QRIS). QRIS 

provides a framework for organizing, 

guiding, and gauging the progress of 

early care and education quality 

initiatives at the State, Territorial, or 

Tribal level. In many cases, QRIS is the 

foundation of a cross-sector ECE system. 

States’ leadership in creating and 

implementing QRIS has produced a 

more systemic approach to quality 

efforts and accountability. This move to 

a more systemic approach to improving 

child care quality also was reflected in 

the inclusion of a QRIS in the 

application for the Race to the TopEarly Learning Challenge (RTT–ELC) 

grant program. 

As discussed earlier, more than half of 

the States have implemented QRIS as a 

framework for organizing and guiding 

the progress of early care and education 

quality initiatives and communicating 

the level of quality to parents. The 

rating structure of the QRIS typically 

uses a building block design, points, or 

some combination of the two to 

determine the rating earned by a 

provider. In a building block design, all 

of the standards in one level must be 

met in order to move to the next higher 

level. In a points system, points are 

earned for each standard and then are 

added together to determine the level. 

Each rating level includes a range of 

possible scores. These levels are then 

usually represented through symbols, 

such as one star, two stars, or three 

stars, providing an easy to understand 

means for parents to determine the 

quality of care available at a certain 

provider. Later in this rule we discuss 

proposed changes to § 98.51(a)(2) which 

describe activities to improve the 

quality of child care. We propose to add 

a description of a framework for 

organizing, guiding, and measuring 

progress of quality investments. A QRIS, 

or other system of quality improvement, 

is one key component of this larger 

framework and can help improve the 

ability to evaluate and communicate the 

quality of child care programs. 

While ACF encourages all States to 

implement a systemic framework for 

evaluating, improving and 

communicating the level of quality in 

child care programs, we are not 

requiring Lead Agencies to implement a 

QRIS in order to meet the requirement 

to implement a transparent system of 

quality indicators. Lead Agencies have 

the flexibility to meet the requirement 

proposed at paragraph § 98.33(b)(3) by 

implementing, more limited, alternative 

systems of quality indicators. However, 

we recommend that these be an interim 

step for Lead Agencies on the path to 

developing a full QRIS. Over time, Lead 

Agencies are encouraged to work on 

linking their quality improvement 

initiatives and strategies, culminating in 

a comprehensive QRIS with adequate 

support for providers to attain higher 

levels of quality and transparency for 

parents and the community regarding 

the quality of child care. 

Lead Agencies also could meet the 

new requirement for a transparent 

system of quality indicators by 

providing a profile or report card of 

information about the child care 

provider to parents that could include 

compliance with State licensing or 

health and safety requirements, 

information about ratios and group size, 

average teacher training or credentials, 

type of curriculum used, any private 

accreditations held, and presence of 

staff to work with young dual language 

learners or children with special needs. 

We encourage Lead Agencies to 

incorporate mandatory licensing 

requirements into a system of quality 

indicators, as a baseline of information 

for parents to use. For example, one 

State currently has a Licensed Plus 

option that designates providers who 

have met certain quality levels beyond 

that of the State’s regular licensing 

program. By building on existing 

licensing structures, Lead Agencies may 

have an easier transition into a more 

sophisticated system that differentiates 

between indicators of quality. Lead 

Agencies should explain the licensing 

system to parents, as well as what a 

provider must do in order to receive a 

higher level license, and how violations 

of licensing standards are handled. 

Another option for designing a 

transparent system of quality indicators 

to meet the new requirement at 

§ 98.33(b), is to rely on accreditation 

programs to differentiate between 

quality of child care providers. The 

accreditation system may have different 

levels or steps in the process to indicate 

a progressive change in quality that 

would give a more useful picture of 

quality available to parents than if the 

system simply differentiates between 

accredited and not accredited. Lead 

Agencies that choose this type of system 

should provide information to parents 

about which type of accreditation 

options are available, what the 

accreditations mean, and what type of 

providers are eligible to participate. One 

limitation of this approach is that only 

a small proportion of child care 

providers are nationally accredited. To 

address this situation, many States 


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embed accreditation into a more widelyapplicable set of quality indicators. 

In designing a transparent system of 

quality indicators, we suggest 

considering the following key 

principles: Provide outreach to targeted 

audiences; ensure indicators are 

research-based and incorporate the use 

of validated observational tools when 

feasible and that assessments of quality 

include program standards that are 

developmentally appropriate for 

different age groups; incorporate 

feedback from child care providers and 

from parents and families; make 

linkages between consumer education 

and other family-specific issues such as 

care for children with special needs; 

engage community partners; and 

establish partnerships that build upon 

the strengths of resource and referral 

programs and public agencies that serve 

low-income parents. 

Under the proposed change, each 

Lead Agency has the flexibility to 

develop a system of quality indicators, 

such as a QRIS, based on its specific 

needs. Lead Agencies may develop a 

system that is voluntary for child care 

providers to participate in or could 

choose to exempt certain providers, 

such as faith-based providers, from its 

system of quality indicators. A Lead 

Agency also could choose to incorporate 

licensing as part of the base level of 

indicators (e.g., some States 

automatically incorporate all licensed 

providers into their QRIS). We 

encourage Lead Agencies to establish a 

system of quality indicators that is 

inclusive of all types of providers, 

including family child care providers 

and providers serving school-age 

children. 

We recognize that it takes time to 

build a comprehensive system that is 

inclusive of a large number of providers 

across a wide geographic area. However, 

in order for a system of quality 

indicators to be meaningful it should 

include as many providers as possible 

so that parents can benefit from having 

information about the quality of a wide 

range and variety of child care 

providers. While we are not mandating 

a specific approach or participation rate, 

the public needs contextual information 

regarding the extent of participation by 

providers in a system of quality 

indicators. For example, the Quality 

Performance Report, which has been 

implemented as an attachment to the 

CCDF Plan, asks States to track and 

report on the participation of providers 

in State QRIS. 

Providing consumer education to 

families receiving subsidies. This 

discussion has focused on Lead Agency 

responsibilities for providing consumer 

education to the general public and all 

parents; however, we believe those 

families receiving subsidies deserve 

particular attention. We propose adding 

a new paragraph (c) to § 98.33 to require 

Lead Agencies to provide parents 

determined eligible for CCDF assistance 

with information about the child care 

provider options available to them, as 

described at paragraphs (a) and (b), and 

specific information on the child care 

provider they choose, including CCDF 

health and safety requirements met by 

the provider, any licensing and 

regulatory requirements met by the 

provider, any voluntary or State or 

locally mandated quality standards met 

by the provider, and any history of 

violations of health and safety, licensing 

or regulatory requirements. 

Lead Agencies should also provide 

information necessary for parents to 

understand the components of a 

comprehensive criminal background 

check, as well as the types of findings 

that may preclude a provider from 

serving children receiving subsidies. In 

addition, if the parent chooses a 

provider that is legally-exempt from 

State regulatory requirements or exempt 

from CCDF health and safety 

requirements (e.g., relatives or in-home 

providers at Lead Agency option, as 

described later in this proposed rule), 

the Lead Agency or its designee should 

explain the exemption to the parent and 

the rationale for the exemption. 

When providing this information, 

which is essentially a consumer 

statement for subsidy parents, a Lead 

Agency may provide that information 

using the Web site required by § 98.33(a) 

or through the alternative mechanism 

allowed by § 98.33(b). In such cases, the 

Lead Agency should ensure that parents 

have access to the internet or provide 

access on-site in the subsidy office. 

However, once a parent receiving a 

subsidy selects a particular provider, the 

Lead Agency must provide the health 

and safety and quality information 

about that specific provider, such as by 

providing a hard copy report or email 

(for parents with internet access and an 

email address) with a link to the specific 

information online. 

We strongly encourage Lead Agencies 

to incorporate child care consumer 

education services directly into the 

intake and eligibility process for 

families applying for CCDF assistance to 

explain the full range of child care 

options and meaning of licensing 

violations and quality standards. 

Parents seeking subsidies should have 

access to information that the Lead 

Agency collects regarding the child care 

providers in their community, 

especially information about the quality 

of those child care providers. Parents of 

eligible children often lack the 

information necessary to make informed 

decisions about their child care 

arrangement. The child care market 

often faces the issue of information 

asymmetry, where parents may have 

difficulty accessing complete 

information about a particular provider 

without assistance. Low-income 

working families may face additional 

barriers when trying to find information 

about child care providers, such as 

limited access to the Internet, limited 

literacy skills, or limited English 

proficiency. Lead Agencies can play an 

important role in bridging the gap 

created by these barriers by providing 

information for families receiving CCDF 

subsidies to ensure the parent fully 

understands their child care options and 

feels comfortable in assessing the 

quality of providers. 

Finally, ACF encourages Lead 

Agencies to provide parents receiving 

CCDF assistance with any updated 

information on the child care provider 

they select (or information about any 

new provider they may select if the 

child care provider changes), including 

notifying the parent of any violations 

incurred by the provider. These updates 

should be provided on a periodic basis, 

such as providing an update at the time 

of the family’s next eligibility redetermination. We also encourage 

strong ties between the CCDF Lead 

Agency and the licensing agency to 

ensure that families are not referred to 

providers seriously out-of-compliance 

with health and safety requirements, 

and that placement and payment of 

subsidy does not continue where 

children’s health and safety are at-risk. 

The goal of all the proposed revisions 

at § 98.33 is to make the child care 

system as transparent as possible for 

parents and the public. In order to 

ensure a robust consumer education 

system, we are specifically seeking 

comment on the new proposals at 

§ 98.33 and ask for feedback about areas 

that should be included in the system. 

We also ask for State, Tribal, and 

Territorial experiences with collecting 

and sharing child care provider 

information, including greater detail on 

what types of information from provider 

background checks are shared with 

parents seeking child care. 

Subpart E—Program Operations (Child 

Care Services) Lead Agency and 

Provider Requirements 

Subpart E of the regulations describes 

Lead Agency and provider requirements 

for compliance with applicable State 

and local regulatory and health and 

safety requirements. It also includes 


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provisions requiring the Lead Agency to 

establish a sliding fee scale that 

provides for cost sharing for families 

receiving assistance, to ensure that 

payment rates to providers serving 

children receiving subsidies ensure 

equal access to the child care market, 

and to establish priorities for child care 

services. We propose to make several 

changes to this subpart specifically 

regarding health and safety 

requirements, procedures for monitoring 

providers, sliding fee scales, and equal 

access provisions. 

Compliance With Applicable State and 

Local Regulatory Requirements (Section 

98.40) 

Section 658E(c)(2)(E) of the CCDBG 

Act requires every Lead Agency to 

certify that it has in effect licensing 

requirements applicable to child care 

services within its jurisdiction. 

Correspondingly, § 98.40 of the 

regulations implements section 

658E(c)(2)(E), and asks Lead Agencies to 

provide a description of licensing 

requirements for child care services and 

how they are effectively enforced. We 

propose to make one change in this 

section to add language at paragraph 

§ 98.40(a)(2) requiring the Lead Agency 

to provide a description of any 

exemptions to licensing requirements 

and a rationale for such exemptions in 

the CCDF Plan. 

According to the 2011 Child Care 

Licensing Study (prepared by the 

National Child Care Information and 

Technical Assistance Center and the 

National Association for Regulatory 

Administration), half of the States have 

exemptions from licensing for child care 

centers. The most common licensing 

exemptions include: Facilities with the 

parents are on the premises (e.g. child 

care services in shopping malls or 

health clubs); facilities with a small 

number of children in care; facilities 

consisting of recreation programs, 

instructional classes, and/or club 

programs; and facilities with a small 

number of hours per day or week. Lead 

Agencies will now be asked in their 

CCDF Plan, as reflected in the proposed 

change at § 98.16(q), to describe their 

licensing exemptions and to explain the 

necessity of those exemptions. Asking 

States to provide a rationale can help 

ensure that exemptions are issued in a 

thoughtful, purposeful manner that 

keeps children safe. Information about 

licensing and regulatory exemptions 

should be made publicly available on 

the Lead Agency’s Web site, pursuant to 

§ 98.33(a). 

Health and Safety Requirements 

(Section 98.41) 

The CCDBG Act also includes a 

provision at 658E(c)(2)(F) to require that 

Lead Agencies establish health and 

safety requirements applicable to child 

care providers serving children 

supported by CCDF subsidies. Congress 

included this additional section, 

separate from the certification of State 

licensing requirements discussed above, 

to apply specifically to providers 

serving subsidized children and 

identified three categories required to be 

addressed as part of health and safety 

requirements: (1) Prevention and control 

of infectious diseases (including 

immunization); (2) building and 

physical premises safety; and (3) 

minimum health and safety training 

appropriate to the provider setting. 

Existing CCDF regulations at § 98.41, 

implementing section 658E(c)(2)(F), 

elaborate on only one of these three 

categories describing requirements 

related to immunizations as part of 

prevention and control of infectious 

diseases. The regulations are silent as to 

what the language ‘‘building and 

physical premises safety’’ and 

‘‘minimum health and safety training’’ 

actually means for providers serving 

subsidized children. We believe this has 

resulted in a lack of accountability in 

the use of Federal funds for child care 

subsidies despite the fact that the statute 

clearly intended to establish minimum 

standards. The changes described in this 

section of the proposed rule would 

provide further specificity regarding 

expectations for how Lead Agencies are 

to meet these requirements. 

State child care licensing regulations 

and monitoring and enforcement 

policies help provide a baseline of 

protection for the health and safety of 

children in out-of-home care. However, 

States vary greatly in the extent to 

which they require different types of 

child care providers to meet licensing 

and regulatory requirements. According 

to the 2011 Child Care Licensing Study 

(prepared by the National Child Care 

Information and Technical Assistance 

Center and the National Association for 

Regulatory Administration), every State 

licenses child care centers; however, 3 

States do not license small family child 

care homes (defined in the study as one 

adult caring for a group of children in 

the provider’s residence). Fifteen States 

require family child care homes to be 

licensed when they care for two or more 

children; 8 States require homes to be 

licensed when they care for three or 

more children; 11 States require homes 

to be licensed when they care for four 

or more children; and 14 States don’t 

require homes to be licensed until they 

care for 5 children or more. 

Recognizing that these exemptions 

may leave children unprotected, the 

RTT–ELC, administered by the 

Department of Education, established a 

competitive priority for State applicants 

that implemented a licensing and 

inspection system covering all programs 

that regularly care for two or more 

unrelated children for a fee in a 

provider setting. 

There also is considerable variation 

among States in what they include in 

their child care licensing requirements. 

Some State licensing standards do not 

require providers to have pre-service 

training, such as in first-aid or CPR, or 

they do not require providers to undergo 

background checks before caring for 

children. 

We believe revisions to this part are 

especially important because many 

child care providers serving children 

receiving CCDF subsidies either are not 

required to be licensed or have been 

exempted from licensing requirements 

by States, meaning that CCDF health 

and safety requirements are the primary, 

and in most cases, the only safeguard in 

place to protect those children—along 

with any other children the provider 

may be caring for. Approximately 10 

percent of CCDF children are cared for 

by non-relatives in unregulated centers 

and homes. 

When States exempt certain types of 

child care from licensing, the safety of 

children is left unmonitored and there 

can be a lack of accountability for 

children receiving CCDF subsidies. All 

too frequently, there are reports of child 

injury or death in child care homes or 

facilities not licensed or monitored by 

the State. A national study of child 

fatality rates in child care showed 

variation in fatality rates based on the 

strength of licensing requirements and 

suggested that licensing not only raises 

standards of quality, but serves as an 

important mechanism for identifying 

high-risk facilities that pose the greatest 

threat to child safety. (Dreby, J., Wrigley, 

J., Fatalities and the Organization of 

Child Care in the United States, 1985– 

2003, American Sociological Review, 

2005) Additionally, child deaths at 

unlicensed child care homes or facilities 

have prompted some State legislatures 

to take action by passing laws to 

strengthen licensing requirements. 

Because many child care providers 

may not fall under the purview of the 

State’s licensing program, or licensing 

requirements themselves may not be 

rigorous, we believe it is important to 

provide additional detail in this section 

to ensure that all providers serving 

CCDF-subsidized children meet 


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minimum health and safety standards, 

whether or not they are licensed by the 

State (excepting relative providers and 

in-home providers that care for children 

in the child’s home at the option of the 

Lead Agency, as discussed later in this 

proposed rule). Health and safety is the 

foundation of quality in child care and 

health promotion in child care settings 

can improve children’s development. 

We believe the proposed changes will 

make significant strides in strengthening 

standards to ensure the basic safety, 

health, and well-being of children 

receiving a child care subsidy. 

Our first proposed change to this 

section would amend the regulatory 

language at 98.41(a)(1)(i) to replace 

‘‘States and Territories’’ with ‘‘Lead 

Agencies’’ to be inclusive of Tribes. 

When the 1998 Final Rule was issued, 

Tribes were exempt from this 

requirement because minimum tribal 

health and safety standards had not yet 

been developed and released by HHS at 

that time. However, minimum tribal 

standards have subsequently been 

developed and released, and the 

standards address immunization in a 

manner that is consistent with the 

requirements of this section. As a result, 

there is no longer a compelling reason 

to continue to exempt Tribes from this 

regulatory requirement. 

Building and physical premises 

safety. Section 658E(c)(2)(F) of the 

CCDBG Act requires that Lead Agencies 

have in effect requirements designed to 

protect the health and safety of children 

that are applicable to providers serving 

children receiving subsidies which must 

include ‘‘building and physical 

premises safety.’’ However, the CCDBG 

Act and current regulations do not 

specify expectations for this 

requirement. We propose to amend 

§ 98.41(a)(2) to describe minimum 

requirements for ‘‘building and physical 

premises safety.’’ The proposed change 

would specify that this requirement 

shall include: 

i. Comprehensive background checks 

on child care providers that include use 

of fingerprints for State checks of 

criminal history records, use of 

fingerprints for checks of Federal 

Bureau of Investigation (FBI) criminal 

history records, clearance through the 

child abuse and neglect registry, if 

available, and clearance through sex 

offender registries, if available; 

ii. Compliance with State and local 

fire, health, and building codes for child 

care, which must include ability to 

evacuate children in the case of an 

emergency. Compliance must be 

determined prior to child care providers 

serving children receiving assistance 

under this part; and 

iii. Emergency preparedness and 

response planning, including provisions 

for evacuation and relocation, shelterin-place, and family reunification. 

Comprehensive criminal background 

checks. First, we believe the proposed 

change at § 98.41(a)(2)(i), to require 

comprehensive background checks, is a 

basic safeguard essential to minimize 

children’s risk of abuse and neglect. 

This proposed change is consistent with 

a discussion in the preamble to the 1998 

regulations which stated that, ‘‘ACF 

considers [criminal background checks] 

to fall under the building and physical 

premises safety standard in the statute.’’ 

(63 FR 39956) Chief among health and 

safety standards is that children are safe 

in the care of child care providers. 

Parents have the right to know that their 

child care providers and others who 

come into contact with children do not 

have a record of violent offenses, sex 

offenses, child abuse or neglect, and 

have not engaged in other behaviors that 

would disqualify them from caring for 

children. A GAO report issued in 

September 2011 found several cases in 

which individuals convicted of serious 

sex offenses had access to children in 

child care facilities as employees, 

because they were not subject to a 

criminal history check prior to 

employment. (GAO–11–757) This 

change also is consistent with other 

program policies such as Head Start, 

which requires all prospective Head 

Start and Early Head Start employees to 

receive a criminal background check. 

According to a preliminary analysis of 

the FY 2012–2013 CCDF Plans, all 

States and Territories require that child 

care center staff undergo at least one 

type of criminal background check and 

approximately 40 require a fingerprint 

check. Fifty States and Territories 

require family child providers to have a 

criminal background check and 

approximately 36 require a fingerprint 

check. For some States and Territories, 

these requirements are currently limited 

to licensed providers rather than all 

providers that serve children receiving 

CCDF subsidies. Under this proposed 

rule, we would require that all providers 

serving CCDF-subsidized children (with 

the exception, at Lead Agency option, of 

relatives and providers in the child’s 

own home) must undergo a 

comprehensive criminal background 

check that includes: (1) Use of 

fingerprints for State checks of criminal 

history records; (2) use of fingerprints 

for checks of Federal Bureau of 

Investigation (FBI) criminal history 

records; (3) clearance through the child 

abuse and neglect registry, if available; 

and (4) clearance through sex offender 

registries, if available. ACF recently 

published an Information Memorandum 

(CCDF–ACF–IM–2011–05) that provides 

further guidance and information 

regarding these four components of a 

comprehensive background check. 

We are specifically seeking comments 

on whether requirements for a 

comprehensive criminal background 

check should also be applicable to other 

individuals in a child care center, such 

as food service and office personnel. In 

addition, we request comment on 

whether other individuals in a family 

child care home that provides services 

to children receiving CCDF subsidies 

should be required to undergo a 

background check, and at what age. 

Forty-three States require some type of 

background check of family members 18 

years of age or older that reside in the 

family child care home. (Leaving Child 

Care to Chance: NACCRRA’s Ranking of 

State Standards and Oversight for Small 

Family Child Care Homes, National 

Association of Child Care Resource and 

Referral Agencies, 2012) 

Pre-inspections and ability to 

evacuate children. Secondly, we 

propose to add § 98.41(a)(2)(ii) requiring 

compliance with State and local 

applicable fire, health, and building 

codes, as part of the building and 

physical premises safety standard, 

including demonstration of the ability to 

evacuate children in the case of an 

emergency. Compliance must be 

determined before a provider serves a 

child care receiving a CCDF subsidy and 

phased in within an appropriate 

timeframe for providers currently caring 

for children. Building codes are 

designed to ensure that a building is 

safe for occupants and regular fire safety 

checks by trained officials can ensure 

that a child care facility or family child 

care home meets all applicable 

requirements as established by the State 

or locality. 

According to the 2011 Child Care 

Licensing Study (prepared by the 

National Center on Child Care Quality 

Improvement and the National 

Association of Regulatory 

Administrators), 39 States require fire, 

health, and building code inspections, 

also referred to as environmental 

inspections, for child care centers. In 

addition, many States conduct separate 

licensing inspections prior to issuing a 

license to a child care center. The study 

reports that 12 States require fire, 

health, and building code inspections 

for family child care providers. In 

addition, of the 42 States that license 

small family child care homes, 37 

conduct an inspection before issuing a 

license to a family child care home. 

Child care centers and family child 

care homes may be governed by 


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different fire, health, and building codes 

depending on the State or locality. Child 

care centers are a non-residential setting 

and serve more children and there may 

be more extensive fire, health and 

building codes in place for centers as 

opposed to family child care homes. 

The proposed requirement at 

§ 98.41(a)(2)(ii) does not prescribe the 

fire, health, or building codes that 

should be applied to child care centers 

or family child care homes. Rather, Lead 

Agencies have the flexibility to 

determine the appropriate codes to 

apply to different providers. 

We propose that Lead Agencies must 

take into account if the child care 

provider can evacuate children in the 

case of an emergency when determining 

whether a child care center or family 

child care home meets the building and 

physical premises safety standards. To 

ensure that children are in safe settings, 

Lead Agencies need to establish 

appropriate group sizes for child care 

providers that meet the health and 

safety needs of young children. Childstaff ratios should also be set such that 

providers can demonstrate the capacity 

to evacuate all of the children in their 

care in a timely manner. Currently, all 

States that license child care centers 

have requirements for child-staff ratios, 

and all States that license family child 

care homes have requirements about the 

maximum number of children 

(including infants, toddlers, preschool, 

and school-age children) that can be 

cared for by one adult provider. (2011 

Child Care Licensing Study, National 

Center on Child Care Quality 

Improvement and National Association 

for Regulatory Administration, 2011) 

One resource for determining the 

appropriate child-staff ratios and group 

sizes is NFPA 101: Life Safety Code 

from The National Fire Protection 

Association (NFPA) which recommends 

that small family child care homes with 

one provider serve no more than two 

children incapable of self-preservation. 

For large family child care homes, the 

NFPA recommends that no more than 

three children younger than two years of 

age be cared for where two staff 

members are caring for up to twelve 

children. (National Fire Protection 

Association. NFPA 101: Life Safety 

Code. 2009) 

We are specifically seeking comments 

on the provision at 98.41(a)(2)(ii) 

requiring that health and safety 

inspections be completed prior to 

serving children receiving child care 

assistance. While we feel that requiring 

child care programs to meet State and 

local fire, health, and building codes 

prior to serving children is a crucial step 

in ensuring that the 1.6 million children 

served by CCDF are cared for in safe 

environments from day one, we 

recognize that this could create a burden 

for Lead Agencies, providers, and 

families. Additionally, we do not want 

to create additional barriers to parents 

finding care for their children because 

of delays in the availability of child care 

slots. We are also seeking comment 

about the process for inspecting 

programs that may already be serving 

children when this Final Rule is 

published. 

Emergency preparedness and 

response planning. Third, consistent 

with the proposed changes at § 98.14, 

requiring Lead Agencies to coordinate 

with agencies responsible for emergency 

management and response when 

preparing the CCDF Plan, we propose 

adding § 98.41(a)(2)(iii) requiring Lead 

Agencies to include emergency 

preparedness and response planning 

requirements for child care providers 

serving children receiving CCDF 

subsidies. The importance of the need to 

improve emergency preparedness and 

response in child care was highlighted 

in an October 2010 report released by 

the National Commission on Children 

and Disasters (NCCD). The Commission 

was appointed by the President and 

Congress to conduct a comprehensive 

review of Federal disaster-related laws, 

regulations, programs, and policies to 

assess their responsiveness to the needs 

of children and make recommendations 

to close critical gaps. The Commission’s 

report included two primary 

recommendations for child care: (1) To 

improve disaster preparedness 

capabilities for child care; and (2) to 

improve capacity to provide child care 

services in the immediate aftermath and 

recovery from a disaster. (2010 Report to 

the President and Congress, National 

Commission on Children and Disasters, 

p. 81, October 2010) Child care also has 

been recognized by the Federal 

Emergency Management Agency 

(FEMA) as an important part of disaster 

response (see FEMA Disaster Assistance 

Fact Sheet 9580.107, Public Assistance 

for Child Care Services, 2013). 

This proposed change requires child 

care providers serving children 

supported by CCDF funds to 

appropriately plan for disasters and 

emergencies. Lead Agencies have 

flexibility to determine specific 

guidelines for what child care providers 

should include in emergency 

preparedness and response planning; 

however, planning must include 

provisions for evacuation and 

relocation, shelter-in-place, and family 

reunification. The National Resource 

Center for Health and Safety in Child 

Care and Early Education, funded by the 

Maternal and Child Health Bureau in 

HHS, publishes Caring for Our Children: 

National Health and Safety Performance 

Standards: Guidelines for Out-of-Home 

Child Care, 2nd Edition. This guidance 

includes recommended standards for 

written evacuation plans and drills, 

planning for care for children with 

special needs, and emergency 

procedures related to transportation and 

emergency contact information for 

parents. In addition, the National 

Association of Child Care Resource and 

Referral Agencies (NACCRRA) and Save 

the Children recently released a 

publication titled, Protecting Children 

in Child Care During Emergencies: 

Recommended State and National 

Standards for Family Child Care Homes 

and Child Care Centers, that includes 

recommended State regulatory and 

accreditation standards related to 

emergency preparedness for family 

child care homes and child care centers. 

Finally, ACF has published guidance for 

Lead Agencies to use for developing 

State-level emergency response plans 

for child care and resources for child 

care providers. These resources are 

available on our Web site at: http:// 

www.acf.hhs.gov/programs/occ/ 

resource/child-care-resources-fordisasters-and-emergencies. 

Since all three of these building and 

physical premises safety requirements 

would apply to providers serving 

children receiving CCDF assistance, 

upon publication of a Final Rule, we are 

seeking comment as to what an 

appropriate phase-in or timeframe 

would be for ensuring that providers not 

meeting these requirements at that time 

are brought into compliance. We do not 

intend that these requirements cause 

disruption in the child care 

arrangements of children receiving 

subsidies, but expect that we would 

need to establish some reasonable 

period of time to ensure child care 

providers meet the conditions outlined 

at this section. 

Minimum health and safety training. 

Adequate training in basic health and 

safety is essential to ensuring that the 

child care workforce is properly 

equipped to care for children receiving 

subsidies. The current regulations 

require minimum health and safety 

training, but do not define the 

requirement. Child care providers 

should have a firm grasp on essential 

health and safety areas prior to working 

with children so that they are fully 

prepared to meet the needs of all 

subsidy children from the very first 

professional interaction. Research has 

shown that caregivers who receive 

specialized training are better able to 

facilitate a positive learning 


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environment and tend to have children 

who exhibit fewer negative behaviors. 

(Fiene, R., 13 Indicators of Quality Child 

Care: Research Update, Pennsylvania 

State University, National Resource 

Center for Health and Safety in Child 

Care, 2002) Given the breadth of health 

and safety issues related to young 

children, we believe it is important to 

establish a minimum baseline for preservice and orientation training that 

applies uniformly across all providers 

serving children receiving CCDF 

subsidies. This proposed change will 

ensure that all child care providers 

responsible for the health and safety of 

children have received specific and 

basic training commensurate with their 

professional responsibilities. 

We propose adding a list of minimum 

health and safety pre-service and 

orientation training, appropriate to the 

provider setting and ages of children 

served, at § 98.41(a)(3) to include the 

following: (i) First-aid and 

Cardiopulmonary Resuscitation (CPR); 

(ii) medication administration policies 

and practices; (iii) poison prevention 

and safety; (iv) safe sleep practices 

including Sudden Infant Death 

Syndrome (SIDS) prevention; (v) shaken 

baby syndrome and abusive head 

trauma prevention; (vi) age-appropriate 

nutrition, feeding, including support for 

breastfeeding, and physical activity; 

(vii) procedures for preventing the 

spread of infectious disease, including 

sanitary methods and safe handling of 

foods; (viii) recognition and reporting of 

suspected child abuse and neglect; (ix) 

emergency preparedness planning and 

response procedures; (x) management of 

common childhood illnesses, including 

food intolerances and allergies; (xi) 

transportation and child passenger 

safety (if applicable); (xii) caring for 

children with special health care needs, 

mental health needs, and developmental 

disabilities in compliance with the 

Americans with Disabilities Act (ADA); 

and (xiii) child development, including 

knowledge of developmental stages and 

milestones of all developmental 

domains appropriate for the ages of 

children receiving services. 

The proposed minimum requirements 

are based on health and safety training 

recommendations from Caring for Our 

Children: National Health and Safety 

Performance Standards; Guidelines for 

Early Care and Education Programs, 3rd 

Edition. The proposed list is focused on 

those items that we believe represent 

the most immediate needs related to 

basic health and safety for children 

receiving subsidies. However, Lead 

Agencies are encouraged to develop a 

comprehensive and robust training 

program that also covers additional 

areas related to program design, worker 

safety, and child developmental needs, 

using the Caring for our Children 

guidelines as best practices in the field. 

In addition, training requirements 

should be appropriate to the provider 

setting and ages of children served. For 

example, training on SIDS is only 

necessary if a program cares for infants. 

If providers are caring for children of 

different ages, training in first-aid and 

CPR should include elements which 

take into account that practices differ for 

infants versus school-age children. 

We propose to include § 98.41(a)(3)(i), 

first-aid and CPR, in the list of health 

and safety training requirements 

because studies show that training in 

these areas is associated with higher 

quality of care. A study of providers in 

four mid-western States, who had 

completed CPR or first-aid training 

within the past two years, showed that 

the training was associated with higher 

quality scores from the Family Day Care 

Rating Scale (FDCRS) and Early 

Childhood Environment Rating Scale 

Revised (ECERS–R) in family child care 

homes and centers. (Raikes, H. et al., 

Child Care Quality and Workforce 

Characteristics in Four Midwestern 

States, Omaha, NE, Gallup 

Organization, 2003) 

It is important that someone who is 

qualified to respond to common injuries 

and life-threatening emergencies be in 

attendance in a child care setting at all 

times. A staff member trained in 

pediatric first-aid, including pediatric 

CPR can reduce the potential for serious 

injury. It also important to be trained 

specifically in first-aid and CPR for 

young children because first aid in the 

child care setting requires a more childspecific approach and technique than 

adult-oriented first-aid generally offers. 

Training in basic first-aid and CPR for 

children also has been shown to reduce 

the number of accidental injuries in 

child care. (Ulione, M.S., Health 

Promotion and Injury Prevention in a 

Child Development Center, Journal of 

Pediatric Nursing, 1997) 

According to the FY 2012–2013 CCDF 

Plans, approximately 42 State and 

Territories have CPR pre-service 

training requirements for child care 

centers and 43 State and Territories 

have first-aid pre-service training 

requirements. For family child care 

providers, 44 have CPR pre-service 

training requirements and 43 have firstaid pre-service training requirements. 

(Note, throughout this section we have 

cited information from the most recent 

CCDF Plans which indicate the number 

of States and Territories that have preservice training requirements in the 

areas discussed, consistent with the 

proposed change at § 98.41(a)(3) 

discussed later in this proposed rule. 

However, the CCDF Plan also asks Lead 

Agencies to indicate whether they have 

ongoing training requirements in certain 

areas, and in nearly all of the areas cited 

a higher number of Lead Agencies 

indicated they require ongoing training. 

Ongoing training requires the provider 

to receive specific training on some 

regular established basis, rather than, 

prior to provision of services.) 

We propose to include 

§ 98.41(a)(3)(ii), medication 

administration policies and practices, in 

the list of health and safety training 

requirements. We believe it is important 

that any child care provider who 

administers medication receive 

standardized training that educates the 

provider about the necessary skills and 

competencies needed to do so safely. 

Increasing numbers of children entering 

child care take medications (Caring for 

Our Children, Section 3.6.3). Medication 

will only be effective if appropriately 

administered and can be extremely 

dangerous if administered 

inappropriately. According to the FY 

2012–2013 CCDF Plans, approximately 

23 States and Territories have a 

medication administration pre-service 

training requirement for child care 

centers. For family child care homes, 15 

States and Territories require preservice training in medication 

administration. 

We propose to include 

§ 98.41(a)(3)(iii), poison prevention and 

safety, in the list of health and safety 

training requirements, so that staff can 

respond appropriately and in a timely 

manner to exposure to poisonous or 

toxic elements. There are over two 

million human poison exposures 

reported to poison centers every year, 

and children less than six years of age 

account for over half of those potential 

poisonings. (Caring for Our Children, 

Section 5.2.9.1) The substances most 

commonly involved in poison 

exposures of children are cosmetics and 

personal care products, cleaning 

substances, and medications. Toxic 

substances, when ingested, inhaled, or 

in contact with skin, may react 

immediately or slowly, with serious 

symptoms occurring much later. It is 

important for the caregiver to have the 

appropriate training to recognize 

symptoms, alert the poison center, and 

undertake the appropriate response. 

This precaution is essential to the health 

and well-being of staff and children 

alike. 

We currently do not have data in the 

CCDF Plans regarding the number of 

Lead Agencies requiring poison 

prevention and safety training. 


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However, according to the 2011 Child 

Care Licensing Study (prepared by the 

National Child Care Information and 

Technical Assistance Center and the 

National Association for Regulatory 

Administration), 46 States require an 

inaccessibility of toxic substances 

policy as part of their licensing system 

for child care centers, and 45 have the 

same requirement for family child care 

providers. 

We propose to include 

§ 98.41(a)(3)(iv), safe sleep practices 

including Sudden Infant Death 

Syndrome (SIDS) prevention in the list 

of health and safety training 

requirements. Despite the decrease in 

deaths attributed to SIDS and the 

decreased frequency of prone or side 

infant sleep position over the past two 

decades, many child care providers 

continue to place infants to sleep in 

positions or environments that are not 

safe and potentially fatal. According to 

the American Association of Pediatrics 

Task Force on Infant Sleep Position and 

Sudden Infant Death Syndrome, nearly 

20 percent of SIDS deaths occur while 

the infant is in the care of a nonparental caregiver, with 60 percent of 

these occurring in family child care, 20 

percent in child care centers, and 20 

percent in relative care. (American 

Academy of Pediatrics, Reducing the 

Risk of SIDS in Child Care training, 

2008) 

Infants who are cared for by adults 

other than their parent/guardian or 

primary caregiver/teacher are at 

increased risk for dying from SIDS. 

According to Caring for Our Children, 

recent research and demonstration 

projects have revealed that caregivers/ 

teachers are often unaware of the 

dangers or risks associated with prone 

infant sleep positioning, and many 

believe that they are using the safest 

practices possible, even when they are 

not. (Caring for Our Children, Section 

3.1.4) Training has been shown to lead 

to an increase in healthy sleep practices 

which can help decrease the instance of 

injury or death in child care. According 

to the FY 2012–2013 CCDF Plans, 

approximately 25 States and Territories 

have safe sleep and SIDS prevention 

pre-service training requirements for 

child care centers, and 25 States and 

Territories have SIDS prevention preservice training requirements for family 

child care homes. 

We propose to include 

§ 98.41(a)(3)(v), shaken baby syndrome 

and abusive head trauma prevention, in 

the list of health and safety training 

requirements. Over the past several 

years there has been increasing 

recognition of shaken baby syndrome 

which is the occurrence of brain injury 

in young children under three years of 

age due to shaking. Even mild shaking 

can result in serious, permanent brain 

damage or death. It is important for 

child care providers to be educated 

about the risks of shaking and supports 

should be in place to provide child care 

providers with healthy coping 

mechanisms to deal with frustrations 

that may arise when working with a 

challenging child. Research has 

suggested that approximately 1,300 U.S. 

children experience severe or fatal head 

trauma from child abuse every year and 

that approximately 30 per 100,000 

children under age 1 suffered inflicted 

brain injuries (www.dontshake.org). It is 

important that child care providers are 

properly trained in healthy practices 

and how to prevent trauma from unsafe 

treatment of children. 

We propose to add § 98.41(a)(3)(vi), 

age-appropriate nutrition, feeding, 

including support for breastfeeding, and 

physical activity, in the list of health 

and safety training requirements. Over 

the past three decades, childhood 

obesity rates in America have tripled, 

and today, nearly one in three children 

in America are overweight or obese. The 

persistence of childhood obesity can 

lead to significant health problems 

including diabetes, heart disease, high 

blood pressure, cancer, and asthma. 

(Let’s Move! Child Care, Learn the 

Facts, 2010) Educating caregivers on 

appropriate nutrition and physical 

activity is essential to provide young 

children with a healthy environment to 

prevent long-term negative health 

implications. According to the FY 2012– 

2013 CCDF Plans, 19 States and 

Territories have a nutrition pre-service 

training requirement for child care 

centers, and 15 States and Territories 

require pre-service training in this area 

for family child care homes. 

In May 2010, the White House Task 

Force on Childhood Obesity reported 

that physical activity assists children in 

obtaining and improving fine and gross 

motor skill development, coordination, 

balance and control, hand-eye 

coordination, strength, dexterity, and 

flexibility—all of which are necessary 

for children to reach developmental 

milestones. In addition, daily physical 

activity provides numerous health 

benefits including improved fitness and 

cardiovascular health, healthy bone 

development, improved sleep, and 

improved mood and sense of well-being. 

Daily physical activity is an important 

part of preventing excessive weight gain 

and childhood obesity. Early childhood 

years, in particular, are crucial for 

obesity prevention due to the timing of 

the development of fat tissue, which 

typically occurs from ages 3 to 7. During 

these preschool years, children’s body 

mass index (BMI) typically reaches its 

lowest point and then increases 

gradually through adolescence and most 

of adulthood. However, if this BMI 

increase begins before ages 4 to 6, 

research has suggested that children 

face a greater risk of obesity in 

adulthood. (White House Task Force on 

Obesity, Report to the President, 2010) 

Nutrition and age-appropriate feeding 

is important to ensure that children 

receive the proper nutritional content to 

provide for healthy development. This 

is of particular importance when 

working with families who may be 

facing nutritional challenges in the 

home as well. Eating well is equally 

important for the healthy development 

of young children, and research has 

shown that public programs can 

improve the nutritional quality of the 

food, as children who receive food 

through government-regulated programs 

(e.g., the U.S. Department of Agriculture 

Child and Adult Care Food Program) eat 

healthier than those bringing food from 

home. (White House Task Force, 2010) 

Age-appropriate feeding in particular is 

important to avoid potential health 

hazard (e.g. choking and allergies), 

particularly when introducing solid 

foods to young children. Ageappropriate feeding also means 

encouraging, providing arrangement for, 

and supporting breastfeeding in the 

child care environment. 

We propose to include 

§ 98.41(a)(3)(vii), procedures for 

preventing the spread of infectious 

disease, including sanitary methods and 

safe handling of foods, in the list of 

health and safety training requirements. 

Attendance at a child care facility may 

expose a child to the risk of acquiring 

infectious diseases. Staff members face 

challenges in terms of enforcing 

recommended hygiene measures 

including hand hygiene, maintenance of 

proper environmental sanitation, food 

safety, and the proper inclusion or 

exclusion due to illness for both 

children and staff. Training in such 

procedures for preventing and managing 

the spread of infectious disease will 

help mitigate the effects of an illness in 

the child care setting and protect 

children, staff, and families from 

unnecessary exposure. According to the 

FY 2012–2013 CCDF Plans, 

approximately 22 States and Territories 

have a pre-service training requirement 

on preventing the spread of infectious 

disease for its child care centers, and 20 

States and Territories pre-service 

training in this area for family child care 

providers. 

We propose to include 

§ 98.41(a)(3)(viii), recognition and 


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reporting of suspected child abuse and 

neglect, in the list of health and safety 

training requirements. It is important for 

child care providers to be trained in 

child abuse and neglect prevention in 

order to be able to recognize the 

manifestations of child maltreatment. 

While child care providers are not 

expected to diagnose or investigate 

child abuse and neglect, it is important 

that they be aware of common physical 

and emotional signs and symptoms of 

child maltreatment. All States have laws 

mandating the reporting of child abuse 

and neglect to child protection agencies 

and/or the police. While the laws about 

when and to whom to report may vary 

by State, child care providers are often 

considered mandatory reporters of child 

abuse and neglect and therefore 

responsible for notifying the proper 

authorities in accordance with their 

State’s child abuse reporting laws. Child 

care providers should use child abuse 

and neglect training to educate and 

establish child abuse and neglect 

prevention and recognition measures for 

children, providers, and parents. 

According to the FY 2012–2013 CCDF 

Plans, approximately 31 States and 

Territories have a pre-service training 

requirement on mandatory reporting of 

suspected abuse or neglect for child care 

centers, and 25 States and Territories 

require pre-service training in this area 

for family child care providers. 

We propose to include 

§ 98.41(a)(3)(ix), emergency 

preparedness planning and response 

procedures, in the list of health and 

safety training requirements. This is 

consistent with the earlier discussion in 

this proposed rule highlighting the 

importance of emergency preparedness 

and response planning for child care 

providers. These new requirements 

would ensure providers are trained on 

procedures and practices included in 

emergency preparedness and response 

plans. Given the extreme vulnerability 

of young children, it is important that 

providers be prepared to follow the 

necessary evacuation, shelter-in-place or 

re-location procedures, including 

emergency response practices for 

children with special needs, family 

reunification, and procedures related to 

transportation and accessing emergency 

contact information for parents. 

According to the FY 2012–2013 CCDF 

Plans, approximately 29 States and 

Territories have emergency 

preparedness and response training 

requirements for child care centers, and 

22 States and Territories require training 

in this area for family child care 

providers. We note that Lead Agencies 

have flexibility to determine if health 

and safety training proposed in this 

section should occur pre-service or as 

part of orientation. In the case of 

emergency preparedness and response, 

it may be more appropriate for the 

provider to receive this training as part 

of orientation since emergency 

procedures are often site-specific. 

We propose to include 

§ 98.41(a)(3)(x), management of common 

childhood illnesses, including food 

intolerances and allergies, in the list of 

health and safety training requirements. 

Management of common childhood 

illnesses is essential to safeguarding the 

spread of illness throughout child care 

settings. Caregivers/teachers should be 

knowledgeable about infectious disease 

in order to recognize and properly 

contain the spread of illness among 

children, staff, and the greater 

community. Since young children are 

particularly susceptible to illness, the 

proper management of the child care 

environment through hygiene and 

sanitation trainings can drastically 

reduce the spread of common childhood 

illnesses. Similarly, proper feeding 

practices can prevent health problems 

for children with food intolerances and 

allergies. 

We propose to include 

§ 98.41(a)(3)(xi), transportation and 

child passenger safety, in the list of 

health and safety training requirements. 

We recognize that not all child care 

providers provide transportation 

services, so we have added ‘‘if 

applicable.’’ For child care providers 

that do provide transportation, we 

believe it is important that the provider 

is properly trained in age and sizeappropriate child restraint practices for 

car safety seats and seatbelts. 

Additionally, child passenger safety 

training should include awareness of 

the incidence of death and injury 

associated with forgetting or leaving 

children unattended in a vehicle. 

We propose to include 

§ 98.41(a)(3)(xii), caring for children 

with special health care needs, mental 

health needs, and developmental 

disabilities, in the list of health and 

safety training requirements. In order to 

provide appropriate services, providers 

should be trained on caring for children 

with special health care needs, mental 

health needs, and developmental 

disabilities in compliance with the 

American with Disabilities Act (ADA) 

(42 U.S.C. 12101, et seq.) and other 

relevant Federal laws. (Caring for Our 

Children, Section 8.2.0.2) This is 

important to ensure that all children are 

included in all activities possible unless 

a specific medical contraindication 

exists. The goal is to provide fully 

integrated care to the extent feasible 

given each child’s limitations. Federal 

and State laws do not permit 

discrimination on the basis of disability 

per the ADA. 

Training to support a 

developmentally appropriate and 

inclusive environment is crucial 

because studies have found the 

following benefits of inclusive child 

care: Children with special needs 

develop increased social skills and selfesteem; families of children with special 

needs gain social support and develop 

more positive attitudes about their 

child; children and families without 

special needs become more 

understanding and accepting of 

differences and disabilities; caregivers/ 

teachers learn from working with 

children, families, and service providers 

and develop skills in individualizing 

care for all children. A basic 

understanding of developmental 

disabilities and special care 

requirements of any child in care is a 

fundamental part of any orientation for 

new employees. Staff should obtain 

appropriate training in order to include 

children with special needs, such as 

children with severe disabilities and 

children with special health care needs 

such as chronic illnesses, into child care 

settings. These may include technologydependent children and children with 

serious and severe chronic medical 

problems. 

Finally, we propose to add 

§ 98.41(a)(3)(xiii) child development, 

including knowledge of the stages and 

milestones of all developmental 

domains for the ages of children 

enrolled in the facility, in the list of 

health and safety training requirements. 

In addition to being integral to 

professional development, child 

development is an essential component 

for the health and safety of children, 

both in and outside the child care 

setting. From a protection standpoint, 

research has shown that improving 

parental understanding of child 

development reduces the incidence of 

child abuse and neglect cases. (Daro, D. 

and McCurdy, K., ‘‘Preventing Child 

Abuse and neglect: Programmatic 

Interventions,’’ Child Welfare, 1994); 

(Reppucci, N., Britner, P., and Woodard, 

J., Preventing Child Abuse and Neglect 

Through Parent Education, 1997) Child 

care providers should be knowledgeable 

of the important developmental 

milestones to support the healthy 

development of children in their care, 

but also so they can be a resource for 

parents and provide valuable parent 

education. Child abuse is often a result 

of frustration, which can be exacerbated 

by an improper understanding of a 

child’s capabilities. Knowledge of 


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developmental stages and milestones 

minimizes this frustration and reduces 

the odds of child abuse and neglect by 

establishing more reasonable and 

appropriate expectations for children. 

Child development training is also an 

important component of health and 

safety because it equips child care 

providers with the information 

necessary to recognize any significant 

developmental delays such as autism 

spectrum disorders, motor delays, or 

other conditions. Early detection and 

intervention, access to the appropriate 

developmental screenings, and referrals 

to the appropriate services provides a 

safeguard against avoidable 

developmental delays. According to 

Caring for Our Children, 70 percent of 

children with developmental 

disabilities and mental health problems 

are not identified until school entry. 

The report identifies child care 

professionals as playing an important 

role in early detection due to their daily 

interaction with children and families 

and their knowledge in child 

development principles and milestones. 

(Caring for Our Children, Section 

2.1.1.4) Child development training 

must address all developmental 

domains, including social and 

emotional, physical, and cognitive 

domains. This comprehensive training 

will ensure that providers are able to 

recognize and provide appropriate 

services or referrals in all 

developmental areas, such as mental 

health services for children who are 

experiencing trauma or stress. 

Pre-service or orientation training. In 

this proposed rule at § 98.41(a)(3) we 

also have added language to specify that 

the health and safety training 

requirements described above, proposed 

in paragraphs (a)(3)(i)–(xii,) should be 

met during pre-service or orientation 

training. We believe it is important that 

child care providers be well-prepared 

and have a firm grasp on basic health 

and safety issues prior to serving 

children receiving subsidies. Many Lead 

Agencies have already established preservice training requirements for child 

care providers serving children 

receiving subsidies, which generally 

differ for child care center staff and 

family child care homes, as shown in 

the discussion above using data from 

the most recent CCDF Plans. These 

requirements may include a minimum 

number of training hours prior to 

employment through participation in 

workshops, meetings, or one-to-one 

consultation, and a minimum number of 

ongoing hours of training. Lead 

Agencies often allow requirements to be 

satisfied through completion of a 

certification course or vocational or 

occupational education program. In 

addition, while the proposed regulatory 

requirements focus on pre-service or 

orientation training, we strongly 

encourage Lead Agencies to establish 

requirements for ongoing training as 

well. Requiring periodic training on an 

ongoing basis will ensure that providers 

retain their knowledge and skills over 

time and are updated on the most 

current practices and information to 

ensure children’s health and safety. 

We are specifically seeking comment 

on whether regulatory changes should 

include a minimum number of preservice training hours and ongoing 

hours of training in these areas. Caring 

for our Children guidelines recommend 

at least 30 hours of initial pre-service 

training for child care staff, at least 30 

hours during the first year, and at least 

24 hours per year of continuing 

education and professional 

development thereafter. (Caring for our 

Children, Section 1.4.1.1 and 1.4.4.1) 

We also request comment on whether 

the Final Rule should specify a format 

for the training and whether the training 

requirements should be linked to 

measures of accountability, such as 

continuing education credits, to ensure 

that ongoing training requirements lead 

to a progression or advancement in a 

provider’s knowledge base. 

We recognize that it may not be 

possible for child care providers serving 

subsidized children to meet all the 

listed minimum health and safety 

training requirements prior to the first 

day of service. Therefore, we are 

allowing Lead Agencies to require the 

training prior to the provider’s start of 

service (i.e., pre-service) or during the 

initial service period (i.e., orientation). 

We are leaving it to the Lead Agency’s 

discretion to specifically define ‘‘preservice’’ and ‘‘orientation’’, which may 

include stipulations that the training be 

completed within the first weeks or 

month of providing child care services 

to children receiving CCDF assistance. 

Lead Agencies should also offer a grace 

period to providers who are already 

serving children receiving CCDF 

assistance to minimize disruptions to 

child care arrangements for children 

currently enrolled with a provider and 

receiving subsidies. A significant 

number of the proposed training 

requirements in this section are already 

being met by many child care providers 

that are subject to Lead Agency 

licensing or regulatory requirements. 

Additionally, many of the areas 

included in the proposed new 

requirements are readily available 

through on-line trainings, which should 

minimize burden on Lead Agencies. 

Monitoring. The CCDBG Act at 

658E(c)(2)(G) requires Lead Agencies to 

certify that procedures are in effect to 

ensure that child care providers serving 

children receiving CCDF subsidies 

comply with all applicable State and 

local health and safety requirements, 

including those described at § 98.41(a). 

Currently, § 98.41(d) of the regulations 

incorporates this language but does not 

provide further clarification of this 

requirement. The regulation as written 

states that ‘‘Each Lead Agency shall 

certify that procedures are in effect to 

ensure that child care providers of 

services for which assistance is 

provided under this part, within the 

area served by the Lead Agency, comply 

with all applicable State, local, or Tribal 

health and safety requirements. . . .’’ 

There is no further definition as to what 

procedures are appropriate for the Lead 

Agency to employ to meet this 

certification requirement or specific 

mention of monitoring as a key 

component to ensure child care 

providers comply with health and safety 

requirements. 

We propose to amend § 98.41(d) to 

require that Lead Agencies procedures 

must include unannounced on-site 

monitoring and to add § 98.41(d)(1) to 

require that all providers serving 

children receiving CCDF subsidies must 

be subject to on-site monitoring, 

including unannounced visits. We 

propose to add § 98.41(d)(2) stating that 

the Lead Agency may not solely rely on 

child care provider self-certification of 

compliance with health and safety 

requirements included in paragraph (a) 

without documentation or other 

verification that requirements have been 

met. Finally, we propose to add 

§ 98.41(d)(3) to require that Lead 

Agency monitoring procedures must 

require an unannounced visit in 

response to receipt of a complaint 

pertaining to the health and safety of 

children in the care of a provider 

serving children receiving CCDF 

subsidies. 

These changes would add much 

needed clarity to the current 

regulations, which is especially 

important given the new proposed 

health and safety requirements at 

§ 98.41(a), discussed above. CCDF 

requires Lead Agencies to provide 

assurances that providers caring for 

subsidized children, including 

providers that are not otherwise 

regulated or licensed, meet minimum 

health and safety requirements. We 

believe it makes sense also to articulate 

expectations for how compliance with 

those requirements should be 

monitored. 


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There is currently significant 

variation across States regarding the 

nature and intensity of on-site 

monitoring and unannounced visits, 

with a variation in the frequency of 

monitoring. According to a preliminary 

analysis of the 2012–2013 CCDF Plans, 

all 56 Lead Agencies currently have 

some unannounced visit component in 

place for licensed centers and 47 of the 

Lead Agencies currently have 

unannounced visits for licensed family 

child care providers. However, only 13 

Lead Agencies indicate use of 

unannounced visits for license-exempt 

CCDF child care providers. ACF 

believes the use of unannounced visits 

more effectively influences provider 

behavior because the possibility of an 

unannounced visit may compel 

providers to maintain compliance with 

basic requirements. 

The proposed change requires that all 

providers serving children receiving 

subsidies be subject to on-site 

unannounced monitoring. The Lead 

Agency may choose to inform providers 

before monitoring staff depart for 

unannounced visits that involve 

significant travel time, such as those in 

rural areas, to avoid staff visits when the 

provider or children are not present. A 

Lead Agency’s on-site monitoring 

practices must require both regulated 

and unregulated family child care 

homes and centers that provide care to 

children receiving CCDF subsidies to be 

inspected. Further, Lead Agencies may 

not limit on-site monitoring solely to 

licensed or regulated providers if 

unregulated providers also are 

providing services to children receiving 

CCDF assistance, and Lead Agencies 

must conduct unannounced visits. Note 

that, pursuant to 98.41(e) and discussed 

later in this proposed rule, the Lead 

Agency may choose to exempt relative 

and in-home child care providers from 

monitoring requirements. 

In recognition of resource constraints, 

we recommend, that Lead Agencies 

ensure child care providers caring for 

children receiving a subsidy receive an 

initial on-site monitoring visit and at 

least one annual unannounced on-site 

monitoring visit. We recognize that onsite monitoring requires adequate 

licensing and monitoring staff and other 

resources. Therefore, we are specifically 

requesting public comment on this 

recommendation and whether it should 

become a requirement and welcome 

input as to alternative monitoring 

frequencies. 

ACF encourages Lead Agencies to 

consider the use of differential 

monitoring as a method for determining 

the use or frequency of on-site, 

unannounced monitoring based on an 

assessment of the child care provider’s 

past level of compliance with health 

and safety requirements or with 

information received that could indicate 

violations. This allows Lead Agencies to 

prioritize monitoring of providers that 

have previously been found out of 

compliance or that receive parental 

complaints. Lead Agencies should make 

data-driven decisions, and make any 

necessary adjustments to these policies 

regarding the frequency of on-site 

monitoring visits over time based on the 

latest available data. For example, if the 

Lead Agency finds widespread or 

significant compliance issues under its 

existing monitoring protocol, it should 

consider increasing the number and 

frequency of inspections for those 

providers. 

According to the 2011 Child Care 

Licensing Study (prepared by the 

National Child Care Information and 

Technical Assistance Center and the 

National Association for Regulatory 

Administration), 26 States use 

differential or risk-based monitoring for 

child care centers and 21 States use this 

method for family child care homes. If 

a risk-based methodology is not feasible, 

Lead Agencies might consider random 

sampling. 

Lead Agencies are also encouraged to 

coordinate with other entities that 

already have inspection and on-site 

monitoring mechanisms in place such 

as licensing, QRIS, and Head Start. 

Another key partner in ensuring health, 

safety and quality in child care is the 

U.S. Department of Agriculture’s Child 

and Adult Care Food Program (CACFP), 

which provides funding to State 

agencies to reimburse child care 

providers for meals and snacks served to 

participants. The program requires 

CACFP agencies to conduct periodic 

unannounced site visits to prevent and 

identify management deficiencies, fraud 

and abuse under the program as well as 

to improve program operations. As an 

example of interagency coordination, 

one State holds monthly meetings with 

representation from its licensing 

division, the CCDF Lead Agency, 

CACFP, and other public agencies with 

child care monitoring responsibilities. 

These divisions and agencies identify 

areas of overlap in monitoring and 

coordinate accordingly to leverage 

combined resources and minimize 

duplication of efforts. 

Coordinating with other monitoring 

agencies can be beneficial to both 

agencies as they prevent unnecessary 

duplication of services. To the extent 

that other agencies provide an on-site 

monitoring component that may satisfy 

or partially satisfy the new monitoring 

requirement under this proposed rule, 

the Lead Agency is encouraged to 

pursue this type of collaboration. It is 

important that any such collaboration 

does not impose additional burden or 

inappropriate authority on any one 

partner or its participating agencies and 

that any shared costs are properly 

allocated between the partnering 

organizations benefiting. 

The regulatory revision at 98.41(d)(2) 

is being proposed because we feel that 

self-certification without documentation 

or other verification is an insufficient 

certification of compliance with health 

and safety requirements and represents 

a significant risk for unsafe conditions 

that endanger children, as well as for 

fraudulent or improper payments. In 

some States, child care providers caring 

for subsidized children can self-certify 

that they have met minimum health and 

safety standards without additional 

verification, monitoring or enforcement 

of those provisions. According to the FY 

2012–2013 CCDF Plans, 21 States and 

Territories allow license-exempt family 

child care providers to self-certify that 

they have met the CCDF health and 

safety requirements and 6 Lead 

Agencies allow license-exempt child 

care centers to self-certify. Under the 

proposed rule, Lead Agencies must, at a 

minimum, verify any self-certification 

claims with supporting documentation. 

Some examples of documentation 

include inspection by a Fire Marshall, a 

current CPR certificate, certificates 

demonstrating completion of training 

hours, or confirmation of completion of 

on-line training. 

Finally, the proposed regulation at 

98.41(d)(3) provides that Lead Agency 

monitoring procedures must require an 

unannounced visit in response to 

receipt of a complaint pertaining to the 

health and safety of children in the care 

of a provider serving children receiving 

CCDF subsidies. We believe that it is 

incumbent upon a Lead Agency to 

investigate complaints related to 

possible health and safety violations for 

child care providers serving CCDF 

children and that it is reasonable to 

require that a complaint should 

automatically trigger an unannounced 

visit to the provider. 

Finally, we propose at 98.41(d)(4) that 

Lead Agencies establish procedures that 

require child care providers that care for 

children receiving CCDF subsidies to 

report to a designated State, territorial, 

or tribal entity any serious injuries or 

deaths of children occurring in child 

care. We strongly recommend that 

States, Territories, and Tribes extend 

this requirement to all child care 

providers, including those not serving 

CCDF children. According to the 2011 

Child Care Licensing Study, 34 States 


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require child care centers to report all 

serious injuries that occur to children in 

programs, and 33 States require deaths 

that occur to children in programs to be 

reported. For family child care, 31 

States require reporting of all serious 

injuries and 25 States require reporting 

of child deaths. Therefore, this 

requirement is in line with current State 

practice, and provides an important tool 

for States in monitoring the health and 

safety of child care providers. The 

information collected from these 

providers should be used to inform the 

proposed assessment of child injuries 

and deaths in child care as required at 

§ 98.16(v)(2). 

In-home and relative providers. 

Regulations at § 98.41(e) currently allow 

Lead Agencies to exempt relative 

caregivers, including grandparents, great 

grandparents, siblings (if such providers 

live in a separate residence), and aunts 

or uncles from health and safety and 

monitoring requirements described in 

this section. We propose to add 

language at § 98.41(e) to expand the 

Lead Agency’s flexibility to also exempt 

in-home child care providers (i.e., an 

individual who provides child care 

services in the child’s own home). 

Accordingly, at the Lead Agency’s 

option, they may choose to exempt 

relative-caregivers and in-home 

caregivers from some or all of their 

health and safety training requirements 

and monitoring procedures. If the Lead 

Agency chooses to exempt either of 

these categories of providers, the Lead 

Agency must provide a description and 

justification in the CCDF Plan of 

requirements, if any, that apply to these 

providers. We believe this additional 

flexibility is important because we 

recognize that some of the proposed 

requirements, such as compliance with 

building, health, and fire codes, 

emergency preparedness and response 

planning, and unannounced on-site 

monitoring may not be appropriate for 

that type of care setting. However, we 

do not intend for in-home providers 

serving children receiving subsidies to 

meet no minimum standards. Lead 

Agencies should think carefully about 

what types of health and safety 

requirements should apply to in-home 

providers such as criminal background 

checks and minimum health and safety 

training, in a similar manner that is 

done when considering which of the 

requirements should apply to relative 

caregivers. 

Sliding Fee Scales (Section 98.42) 

CCDF regulations at § 98.42(c) 

currently state that ‘‘Lead Agencies may 

waive contributions from families 

whose incomes are at or below the 

poverty level for a family of the same 

size.’’ We propose amending this 

section so that Lead Agencies can waive 

contributions from families ‘‘meeting 

criteria established by the Lead 

Agency.’’ Lead Agencies have often 

requested more flexibility to waive copayments beyond just those families at 

or below the poverty level. This change 

would increase flexibility to determine 

waiver criteria that the Lead Agency 

believes will best serve subsidy families. 

For example, a Lead Agency could use 

this flexibility to target particularly 

vulnerable populations, such as 

homeless families or migrant workers, 

or to better align services for children 

dually funded through both CCDF and 

Head Start. While we are allowing Lead 

Agencies to define criteria for waiving 

co-payments, the criteria must be 

described and approved in the CCDF 

Plan pursuant to the proposed change at 

§ 98.16(k). Lead Agencies may not use 

this revision as an authority to eliminate 

the co-payment requirement for all 

families receiving CCDF assistance. We 

continue to expect that Lead Agencies 

will have co-payment requirements for 

a substantial number of families 

receiving CCDF subsidies. 

Finally, we are also proposing to add 

paragraph § 98.42(d) to provide that 

Lead Agencies may not use cost or price 

of care or subsidy payment rate as a 

factor in setting co-payment amounts, 

but may use quality of care. This 

corrects a contradiction between the 

1992 and 1998 preamble discussions. 

The 1992 preamble stated that 

‘‘Grantees may take into account the 

cost of care in establishing a fee scale,’’ 

(57 FR 34380), while the 1998 preamble 

states that ‘‘As was stated in the 

preamble to the regulations published 

on August 4, 1992, basing fees on the 

cost or category of care is not allowed.’’ 

(63 FR 39960) This proposed change 

will correct this discrepancy by clearly 

stating that Lead Agencies may not use 

cost or price of care when setting their 

co-pay amounts, which could violate 

the statutory requirements to preserve 

equal access and parental choice. 

Equal Access (Section 98.43) 

Section 658E(c)(4) of the CCDBG Act 

requires the CCDF Plan to provide 

assurances that payment rates for CCDF 

subsidies are sufficient to ensure equal 

access for eligible children to 

comparable child care services that are 

provided to children whose parents are 

not eligible to receive child care 

assistance. The statute also requires the 

CCDF Plan to provide a summary of the 

facts on which the Lead Agency relied 

to determine that payment rates are 

sufficient to ensure equal access. The 

existing regulation at § 98.43(b) requires 

a Lead Agency to show that it 

considered the following three key 

elements in determining that its child 

care program provides equal access for 

eligible families to child care services: 

(1) Choice of the full range of categories 

and types of providers; (2) adequate 

payment rates, based on a local market 

rate survey conducted no earlier than 

two years prior to the effective date of 

the current Plan; and (3) affordable 

copayments. The proposed rule largely 

maintains these three key elements at 

§ 98.43(b)(2), but proposes some 

revisions regarding payment rates and 

the market rate survey. 

First, for purposes of clarity, we 

propose to replace the term market rate 

survey with the term valid local market 

price study in paragraph § 98.43(b)(2). 

This is not a substantive change, but 

rather a change in terminology that 

more accurately reflects the scope and 

nature of the requirement. As in the 

past, the purpose of the market price 

study is to ensure that payment rates are 

established within the context of market 

conditions so that the rates are sufficient 

to provide equal access to child care 

services in the open market. We propose 

to use the term price rather than rate 

since § 98.43(b)(2) requires the Lead 

Agency to systematically collect 

information about the prices (not rates) 

charged in the market by child care 

providers. Once a Lead Agency gathers 

and analyzes this price information, it is 

used to help determine the rates paid by 

the Lead Agency to providers that serve 

children who receive CCDF. The change 

in terminology in the regulatory 

language more clearly distinguishes 

between the initial collection of price 

data, and the subsequent analysis and 

setting of payment rates. We also 

propose to use the term study rather 

than survey since Lead Agencies have 

the flexibility to use data collection 

methodologies other than a survey. For 

example, Lead Agencies may use 

administrative data from resource and 

referral agencies or other sources. 

We also propose to require that the 

market price study must be valid— 

meaning that it accurately reflects the 

prices charged for child care in the local 

community. If a market price study is 

not valid, it will provide misleading 

results that cannot serve as a sound 

basis for establishing payment rates to 

providers or for measuring the adequacy 

of the rates. A recent report funded by 

ACF using CCDF research dollars 

identified components of a valid market 

price study (Grobe, D., Weber, R., Davis, 

E., Kreader, L., and Pratt, C., Study of 

Market Prices: Validating Child Care 

Market Rate Surveys, 2008). Based 


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largely on this research, a market price 

study will be considered valid if it 

meets the following benchmarks: 

• Includes the priced child care 

market. The study includes child care 

providers within the priced market (i.e., 

providers that charge parents a price 

established through an arm’s length 

transaction). In an arm’s length 

transaction, the parent and the provider 

do not have a prior relationship that is 

likely to affect the price charged. For 

this reason, some unregulated, licenseexempt providers, particularly providers 

who are relatives or friends of the 

child’s family, are generally not 

considered part of the priced child care 

market and therefore are not included in 

a market price study. These providers 

typically do not have an established 

price that they charge the public for 

services, and the amount that the 

provider charges is often affected by the 

relationship between the family and the 

provider. In addition, from a practical 

standpoint, many Lead Agencies are 

unable to identify a comprehensive 

universe of family, friend, and neighbor 

caregivers since these providers 

frequently are not included on lists 

maintained by licensing agencies, 

resource and referral agencies, or other 

sources. In the absence of findings from 

a market price study, Lead Agencies 

often use other facts to establish 

payment rates for providers outside of 

the priced market (e.g., family, friend, 

and neighbor providers); for example, 

many Lead Agencies set these payment 

rates as a percentage of the rates for 

providers in the priced market. 

• Provides complete and current data. 

The study uses data sources (or 

combinations of sources) that fully 

capture the universe of providers in the 

priced child care market. The study 

should use lists or databases from 

multiple sources, including licensing, 

resource and referral, and the subsidy 

program, if necessary for completeness. 

In addition, the study should reflect upto-date information for a specific time 

period (e.g., all of the prices in the study 

are collected within a three month time 

period). The existing regulation at 

§ 98.43(b)(2) requires that the market 

price study be completed no earlier than 

two years prior to the effective date of 

the Plan, thereby ensuring that the study 

reflects recent prices. ACF expects a 

Lead Agency to use its current market 

study completed within the past two 

years, rather than an older study, when 

setting its payment rates, though the 

Lead Agency retains discretion on 

where to set payment levels as 

compared to the market study findings, 

provided that it meets the requirements 

for providing equal access at § 98.43. 

• Represents geographic variation. 

The study includes providers from all 

geographic parts of the State, Territory, 

or Tribal Service Area. It should also 

collect and analyze data in a manner 

that links prices to local geographic 

areas. The existing regulation at 

§ 98.43(b)(2) requires the market price 

study to be ‘‘local’’, meaning that it 

should measure differences in local 

child care markets. 

• Uses rigorous data collection 

procedures. The study uses good data 

collection procedures, regardless of the 

method (mail, telephone, or web-based 

survey; administrative data). This 

includes a response from a high 

percentage of providers (65 percent or 

higher is desirable; below 50 percent is 

highly suspect). 

• Analyzes data in a manner that 

captures market differences. The study 

should examine the price per child care 

slot, recognizing that all child care 

facilities should not be weighted equally 

because some serve more children than 

others. This approach best reflects the 

experience of families who are 

searching for child care. When 

analyzing data from a sample of 

providers, as opposed to the complete 

universe, the sample should be 

appropriately weighted so that the 

sample slots are treated proportionally 

to the overall sample frame. The study 

should collect and analyze price data 

separately for each age group and 

category of care to reflect market 

differences. 

In addition, we propose regulatory 

revisions designed to promote 

alternative or additional methodologies 

to market price studies as a basis for 

setting rates. Specifically, under new 

§ 98.43(b)(2)(ii) a Lead Agency may 

propose an alternative methodology, 

such as a model that estimates the cost 

of providing various levels of quality 

child care, in lieu of a market price 

study. The Lead Agency must receive 

advance ACF approval prior to 

substituting the methodology for a 

market price study. We also propose to 

add new § 98.43(b)(4) which requires 

the Lead Agency to provide any 

additional facts the Lead Agency 

considered in determining that its 

payment rates ensure equal access, such 

as information on the cost of providing 

quality child care. We encourage Lead 

Agencies to use the flexibility afforded 

them under the CCDF rules to adopt 

innovative approaches to setting 

subsidy payment rates in a way that also 

is linked to child care quality. 

We are concerned that many Lead 

Agencies currently are setting payment 

rate ceilings that are inadequate to 

ensure equal access. The preamble to 

the 1998 Final Rule indicated that 

payments established at least at the 75th 

percentile of the market would be 

regarded as providing equal access (63 

FR 39959). In order to provide access to 

the highest quality care, even higher 

payment rates may be necessary. 

However, the vast majority of States set 

rate ceilings that are below the 75th 

percentile, and in some cases 

significantly below that benchmark. 

This means that families are unable to 

access a significant portion of the child 

care market. 

We recognize that Lead Agencies face 

resource constraints that limit their 

ability to increase payment rates, and 

we are not requiring an increase in 

payment rates through this proposed 

rule; however, we continue to be 

concerned about families’ ability to 

access high quality care when rates are 

low. Many child care providers report 

that they are unable to set published 

prices that reflect the full cost of 

providing quality services because 

parents would be unable to pay these 

prices. (Report of the Build Subsidized 

Child Care Rate Policy Task Force, 

Pennsylvania Build Initiative, 2004) As 

a result, the published prices that are 

reflected in market price studies (and 

which are used as the basis for setting 

CCDF subsidy payment rates) are not 

always adequate to cover the providers’ 

full costs, particularly for high quality 

care. 

To address this situation, Lead 

Agencies could adopt new 

methodologies and approaches for 

setting payment rates. One approach is 

to conduct cost studies (in contrast to 

price studies) that document the full 

cost to providers of quality child care. 

Another method is to develop models 

that estimate the cost to providers at 

various levels of quality. We considered 

mandating new rate-setting approaches 

for all Lead Agencies through this 

proposed rule; however, we do not yet 

have sufficient State experience using 

alternative methods to mandate them at 

this time. 

There is an urgent need for States to 

explore and document new rate-setting 

practices, and our intent is to spur 

innovation in this area. Therefore, we 

would like to solicit public comments 

on innovative rate setting approaches 

and possible new Federal requirements 

that would better ensure that subsidy 

rates provide equal access, as required 

by statute. In addition to providing a 

basis for setting subsidy payment rates, 

new methodologies may also help the 

State determine what level of financial 

supports and incentives, such as grants 

and bonuses, are necessary to support 

quality enhancements for providers (for 


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example, the level of support necessary 

to sustain providers at the top level of 

a QRIS or other system of quality 

indicators). 

Because the market price study is a 

long-standing practice that can provide 

important contextual information for 

setting rates, we propose to require 

advance ACF approval before a Lead 

Agency replaces its market price study 

with an alternative methodology. After 

enactment of a Final Rule, ACF will 

provide additional guidance to Lead 

Agencies regarding the process for 

proposing an alternative methodology to 

be used in place of a market price study, 

and the specific criteria for ACF 

approval. To obtain approval, we 

anticipate that the Lead Agency will 

need to demonstrate how the alternative 

methodology provides a sound basis for 

setting payment rates. ACF approval 

will only be necessary if the Lead 

Agency plans to replace the market 

price study with an alternative 

methodology. Approval will not be 

required if the Lead Agency plans to 

implement both a market price survey 

and an additional methodology to 

inform rate-setting. 

We also note that ACF has previously 

issued guidance (Program Instruction 

CCDF–ACF–PI–2009–02) that describes 

conditions under which Tribal and 

Territorial Lead Agencies may provide 

alternative documentation in lieu of 

conducting or using a market price 

study. Specifically, this includes 

circumstances where the Lead Agency 

funds direct services solely in settings 

outside the scope of a market price 

study. This guidance remains effective, 

and is not altered by this proposed rule. 

We propose adding a new paragraph 

§ 98.43(c) to clarify that a Lead Agency 

shall take into account the quality of 

child care when determining payment 

rates for child care providers. Higher 

quality care is often more expensive to 

provide, whether that is reflected in the 

price or not. Therefore, it is important 

for payment rates to consider quality in 

order to ensure that parents receiving 

CCDF subsidies have equal access to 

quality child care. Taken together, 

revised paragraph (b) and new 

paragraph (c) identify the key elements 

required for equal access—the full range 

of providers, affordable copayments, 

and adequate payment rates which take 

into account the quality of child care. 

We recommend that Lead Agencies 

pay higher subsidy rates for higher 

quality care. The taxpaying public 

rightly expects the government to pay 

for results, and research shows that 

quality is a prerequisite for supporting 

children’s learning and development 

through child care. By paying more for 

quality, Lead Agencies provide a 

financial incentive for providers to 

increase the quality of care. The higher 

rates also help give providers the 

necessary resources to pay for higher 

levels of compensation for child care 

professionals, as well as other 

components of quality care. 

When determining the differential 

rate for higher quality, we encourage 

Lead Agencies to make certain that rates 

are sufficient to ensure access at the 

higher levels of quality. At the same 

time, a Lead Agency’s base rates (i.e., 

before any quality incentives are 

included) must be sufficient for all 

children to access care that meets a 

baseline of quality and health and 

safety. In addition, higher subsidy rates 

alone may not be sufficient to promote 

quality, particularly for child care 

providers that serve only a limited 

number of children receiving CCDF 

assistance. We encourage Lead Agencies 

to use grants, contracts, training and 

scholarship opportunities and other 

forms of support to help providers 

increase their quality. Linking enhanced 

subsidy rates to higher quality is an 

important component of promoting 

quality when implemented in 

conjunction with other ongoing 

financial supports, assistance, and 

incentives. In the FY2012–2013 CCDF 

Plans, 32 States and Territories 

indicated that they provide tiered or 

differential rates for higher quality. 

With regard to paying higher rates for 

quality, we note that, in the preamble to 

the 1998 Final Rule, we reminded Lead 

Agencies of the general principle that 

Federal subsidy funds cannot pay more 

for services than is charged to the 

general public for the same service (63 

FR 39959). We would like to clarify, 

however, that Lead Agencies may pay 

amounts above the provider’s private 

pay rate, as a quality bonus or incentive. 

Recognizing that private pay rates are 

often not sufficient to support high 

quality, many Lead Agencies have 

already implemented tiered 

reimbursement systems that support 

quality and produce the school 

readiness and success outcomes that 

children deserve. Lead Agencies may 

use CCDF quality dollars to recognize 

higher quality care, or to provide 

incentives to increase the availability of 

child care otherwise in short supply in 

the market. This can be achieved 

through provider bonuses or incentives 

that may be implemented through tiered 

or quality reimbursement systems or 

other mechanisms. These payments may 

exceed private pay rates if they are 

designed to reimburse providers for 

additional costs associated with offering 

higher quality care or types of care that 

are not produced in sufficient amounts 

by the market (e.g., non-standard hour 

care, care for children with special 

health care needs, etc. . . . ). These 

bonuses or incentives may be provided 

in the form of an hourly, monthly or 

other augment to provider 

reimbursement for the care of an eligible 

child. 

We also propose to make a technical 

correction at § 98.43(b)(3) to clarify the 

reference to how copayments are 

affordable as described at § 98.42. The 

previous language read in such a way as 

to suggest that § 98.42 described 

affordable copayments in reference to 

the sliding fee scale, when in fact it does 

not. Current paragraphs (c) through (e) 

would be re-designated as (d) through (f) 

but otherwise would be unchanged. 

Subpart F—Use of Child Care and 

Development Funds 

Subpart F of CCDF regulations 

establishes allowable uses of CCDF 

funds related to the provision of child 

care services, activities to improve the 

quality of child care, administrative 

costs, Matching fund requirements, 

restrictions on the use of funds, and cost 

allocation. 

Child Care Services (Section 98.50) 

We propose a technical change to 

§ 98.50(a) which states that the Lead 

Agency shall spend a substantial 

portion of the funds remaining after 

applying provisions at (c), (d), and (e) of 

this section to provide child care 

services to low-income working 

families. Paragraphs (c), (d), and (e), 

respectively, require the Lead Agency to 

spend a minimum of 4 percent on 

activities to improve the quality of care, 

not more than 5 percent for 

administrative activities, and not less 

than 70 percent of the Mandatory and 

Matching funds to meet the needs of 

families receiving Temporary Assistance 

for Needy Families (TANF), families 

transitioning from TANF, and families 

at-risk of becoming dependent on 

TANF. We propose to specify that 

§ 98.50(b) is describing use of funds for 

direct child care services. In the past, we 

have been asked to interpret whether 

this section would allow States to use a 

substantial portion of funds for 

activities other than direct services. 

In accordance with the proposed 

change at § 98.30(a)(1) discussed earlier, 

we propose to add language to 

§ 98.50(b)(3) of the regulations to clarify 

that child care services shall be 

provided using funding methods 

described at § 98.30 (i.e., using grants or 

contracts or certificates), which must 

include some use of grants or contracts 

for the provision of direct services, with 


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the extent of such services determined 

by the Lead Agency after consideration 

of the supply shortages described and 

other factors as determined by the Lead 

Agency. As discussed earlier, existing 

language at § 98.30 provides that parents 

must be offered a choice of a grant or 

contract ‘‘if such services are available,’’ 

or a certificate. This proposed change, 

in conjunction with the proposed 

change at § 98.30, is intended to 

promote the use of grants or contracts, 

along with certificates, as funding 

mechanisms for child care services. As 

noted earlier, the majority of children 

(approximately 90 percent) currently 

receiving child care subsidies are served 

through certificates. We recognize that 

there may be geographic areas or other 

circumstances where grants or contracts 

may not be a viable option to offer every 

parent applying for subsidies; therefore, 

we allow Lead Agencies to determine 

the extent to which grants or contracts 

are used based on supply shortages and 

other relevant factors. However, this 

proposed change would require Lead 

Agencies to employ some use of grants 

or contracts to provide child care 

services. 

Grants or contracts should play a role 

in building the supply and availability 

of child care, particularly high quality 

care, in underserved areas and for 

underserved populations. For example, 

contracts can be used to fund programs 

to serve children with special needs, 

specific geographic areas, infants and 

toddlers, and school-age children. 

Grants or contracts may also be used to 

provide wrap-around services in Head 

Start and pre-kindergarten and to fund 

programs that provide comprehensive 

services. Another factor a Lead Agency 

may wish to consider in the use of 

grants or contracts might be the ability 

of the child care market to sustain high 

quality child care providers in certain 

localities or for specific populations. 

Grants or contracts provide greater 

financial stability for child care 

providers by funding a specified 

number of slots even if individual 

children leave the program, whereas 

certificates are portable allowing parents 

to leave a given provider at any time. 

Child care providers that receive 

funding through certificates face a 

constant threat of losing funding and 

children. Without stable funding, it is 

difficult for providers to pay for the 

higher costs associated with providing 

high quality child care, most child care 

providers, especially those in lowincome or rural areas, cannot afford the 

qualified staff, equipment, and facilities 

that are necessary to meet high quality 

program standards. With greater 

financial stability, providers may be 

more willing to provide higher cost care, 

such as for infants and toddlers, or to 

locate in low-income or rural 

communities. Finally, grants or 

contracts also can improve 

accountability and fiscal integrity by 

giving the Lead Agency more access to 

monitor child care provider’s 

compliance with health and safety 

requirements and appropriate billing 

practices. 

Activities To Improve the Quality of 

Child Care (98.51) 

We propose making a technical 

change at § 98.51(a) by substituting 

‘‘from each fiscal year’s allotment’’ for 

‘‘for a fiscal year.’’ The purpose for this 

change is to make clearer that the four 

percent minimum quality expenditure is 

calculated based on each fiscal year’s 

allotment (rather than a fiscal year’s 

expenditure) as Lead Agencies have 

multiple years to spend an entire CCDF 

allotment in accordance with the 

liquidation timeframes at § 98.60(d) and 

(e). The revision also is consistent with 

existing language at § 98.52(a) 

describing the five percent limitation on 

administrative costs. 

Framework for quality improvement 

activities. Under Section 658G of the 

CCDBG Act and existing regulations at 

§ 98.51(a)(1), Lead Agencies must use 

not less than 4 percent of the CCDF 

funds for activities that are designed to 

provide comprehensive consumer 

education to parents and the public, 

activities that increase parental choice, 

and activities designed to improve the 

quality and availability of child care, 

including resource and referral services. 

Lead Agencies have broad flexibility to 

determine what may constitute quality 

activities as long as those definitions fit 

within the broad statutory requirement. 

Current regulations at § 98.51(a)(2) 

describe a list of potential activities 

which may be considered allowable in 

order to meet this minimum quality 

expenditure requirement. The current 

list of suggested activities includes: (i) 

Operating directly or providing 

financial assistance to organizations 

(including private non-profit 

organizations, public organizations, and 

units of general purpose local 

government) for the development, 

establishment, expansion, operation, 

and coordination of resource and 

referral programs specifically related to 

child care; (ii) Making grants or 

providing loans to child care providers 

to assist such providers in meeting 

applicable State, local, and tribal child 

care standards, including applicable 

health and safety requirements, 

pursuant to §§ 98.40 and 98.41; (iii) 

Improving the monitoring of compliance 

with, and enforcement of, applicable 

State, local, and tribal requirements 

pursuant to §§ 98.40 and 98.41; (iv) 

Providing training and technical 

assistance in areas appropriate to the 

provision of child care services, such as 

training in health and safety, nutrition, 

first-aid, the recognition of 

communicable diseases, child abuse 

detection and prevention, and care of 

children with special needs; (v) 

Improving salaries and other 

compensation (such as fringe benefits) 

for full-and part-time staff who provide 

child care services for which assistance 

is provided under this part; and (vi) and 

other activities that are consistent with 

the intent of this section. 

This list of activities is based on 

specific activities formerly contained in 

the CCDBG Act of 1990 prior to its 

reauthorization in 1996, which were 

retained in the 1998 Final Rule. We 

believe this list includes worthwhile 

quality activities, but does not reflect 

the great progress that has been made in 

the last decade toward organizing 

quality activities into an intentional, 

systematic approach to helping child 

care programs meet higher standards 

and child care professionals advance in 

their skills and knowledge. Therefore, 

we propose to delete the current list of 

suggested quality improvement 

activities at § 98.51(a)(2) and insert the 

activities that follow: (We note that all 

of the previously listed activities are 

incorporated into this new framework, 

and the proposed revision should not be 

interpreted as an indication that the 

previously delineated activities are no 

longer allowable activities toward 

meeting the minimum quality 

expenditure requirement.) 

As proposed, activities to improve the 

quality of child care services may 

include, but are not limited to, 

implementation of a systemic 

framework for organizing, guiding, and 

measuring progress of quality 

improvement activities that includes the 

following key components: (i) Activities 

to ensure the health and safety of 

children through licensing and health 

and safety standards pursuant to 

§§ 98.40 and 98.41; (ii) Establishment 

and implementation of age-appropriate 

learning and development guidelines for 

children of all ages, including infants, 

toddlers, and school-age children; (iii) 

Establishment and implementation of 

systems of quality improvement to 

evaluate, improve and communicate the 

level of quality of child care programs 

that may contain the following 

elements: 

(A) Establishment of program 

standards to define expectations for 

quality and indicators of different levels 


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of quality appropriate to the provider 

setting; 

(B) Provision of supports, training and 

technical assistance to assist child care 

programs in meeting child care quality 

improvement standards; 

(C) Provision of financial incentives 

and monetary supports to assist child 

care programs in meeting child care 

quality improvement standards; 

(D) Provision of quality assurance and 

monitoring to measure child care 

program quality over time; and 

(E) Implementation of strategies for 

outreach and consumer education 

efforts to promote knowledge of child 

care quality improvement standards to 

child care programs and to provide 

parents, including parents receiving 

assistance under this part, with 

provider-specific information about the 

quality of child care provider options 

available to them and the child care 

provider they select consistent with 

§ 98.33; 

(iv) Implementation of professional 

development systems to ensure a wellqualified child care workforce that may 

contain the following elements: 

(A) Establishment of core knowledge 

and competencies to define what the 

workforce should know (content) and be 

able to do (skills) in their role working 

with children and their families; 

(B) Establishment of career pathways 

to define options and a sequence of 

qualifications and ongoing professional 

development opportunities; 

(C) Conducting professional 

development assessments to build 

capacity of higher education systems 

and other training institutions to meet 

the diverse needs of the child care 

workforce and address the full range of 

development and needs of children; 

(D) Provision of access to professional 

development to ensure practitioners are 

made aware of, and receive supports 

and assistance to utilize professional 

development opportunities; 

(E) Provision of rewards or financial 

supports to practitioners for 

participating in and completing 

education or training and for increased 

compensation; 

(v) Implementation of an 

infrastructure of support to build child 

care provider capacity to promote health 

through wellness, physical activity and 

nutrition programs, to serve children 

with special needs, dual language 

learners and other vulnerable children 

(e.g., children in the child welfare 

system and homeless children), to 

implement family engagement 

strategies; 

(vi) Assessment and evaluation of the 

effectiveness of quality improvement 

activities; and 

(vii) Any other activities consistent 

with the intent of this section. 

This proposed change envisions a 

more comprehensive approach aimed at 

systems-level change by providing a 

framework Lead Agencies can use to 

determine whether CCDF-funded 

quality initiatives have actually made a 

measurable difference to improve the 

quality of care. The proposed change 

provides a list of suggested quality 

improvement activities that Lead 

Agencies may consider for purposes of 

meeting the minimum quality spending 

requirement. We are not proposing to 

limit Lead Agencies to only these 

activities or requiring that Lead 

Agencies use quality dollars for these 

purposes. However, we believe this 

framework will help promote strategic 

investments that are coordinated and 

planned to achieve goals more 

efficiently. 

Nationally, there is an increased call 

for improvement in child care quality. 

The quality of child care across the 

country is uneven, and too often the 

quality is insufficient to promote 

children’s growth and development. 

Research has shown that it is possible 

to improve the quality of child care, for 

example by increasing the caregiver to 

child ratios and supporting more 

qualified caregivers by helping them 

attain educational credentials and 

training. (NICHD Early Child Care 

Research Network, Child Outcomes 

When Child Care Center Classes Meet 

Recommended Standards for Quality, 

American Journal of Public Health, 

1999) States, Territories, and Tribes 

have pioneered new pathways to 

excellence to help center and homebased providers move toward 

continuous quality improvement. Many 

Lead Agencies have used CCDF quality 

funds to build a strong child care 

infrastructure that is focused on 

ensuring child care providers are 

supporting children’s learning and 

development to help them succeed in 

school and life. In FY 2011, States and 

Territories reported spending 

approximately $1 billion or 12 percent 

of CCDF expenditures on quality 

improvement activities. This exceeds 

the statutory quality spending 

requirement, demonstrating the 

commitment Lead Agencies have shown 

to improving child care quality. These 

quality investments reach millions of 

children not receiving CCDF subsidies 

across a wide array of settings in the 

child care market. 

Health and safety and licensing 

standards. We propose to add new 

paragraph at § 98.51(a)(2)(i) to include 

compliance with health and safety 

standards pursuant to §§ 98.40 and 

98.41 in the list of quality improvement 

activities. This consolidates some of the 

separate activities already currently 

listed at § 98.51(a)(2). This activity is of 

particular importance given the 

proposed changes we have discussed 

regarding minimum health and safety 

requirements for child care providers 

serving children receiving subsidies. 

Assisting providers in meeting these 

requirements and appropriately 

monitoring compliance is a fundamental 

quality improvement activity, as health 

and safety is the foundation of quality. 

For example, many QRIS tie eligibility 

to participate directly to licensing. 

Many Lead Agencies also report using 

CCDF quality funds to support 

monitoring of compliance with 

licensing and regulatory requirements, 

to support training for licensing staff, 

and funding data system automation. 

Learning guidelines. We propose to 

add new paragraph 98.51(a)(2)(ii) to 

include establishment and 

implementation of age-appropriate 

learning guidelines or standards for 

children of all ages, including infants, 

toddlers, and school-age children in the 

list of quality improvement activities. 

Early learning guidelines (sometimes 

called early learning standards) describe 

what children need to know and be able 

to do and their disposition toward 

learning and can help Lead Agencies 

measure and promote the physical, 

cognitive, and social and emotional 

development of children. In the FY 

2012–2013 CCDF Plans, 47 States and 

Territories indicated that they have 

developed early learning guidelines for 

infants and toddlers, 55 for three-to-five 

year olds, and 21 States and Territories 

have developed them for children five 

and older. Almost all States and 

Territories report aligning early learning 

guidelines with K–12 content standards 

or other content standards, such as the 

Head Start Child Development and 

Early Learning Framework or State or 

Territory pre-kindergarten expenditures. 

For school-aged children, Lead Agencies 

may use existing standards for K–12 

education, or build on them to include 

other domains of development, such as 

social and emotional competencies. 

This proposed regulatory change 

formally encourages Lead Agencies to 

use CCDF quality funds to continue 

their efforts to implement early learning 

guidelines across the domains of early 

learning and development. 

Systems of quality improvement. We 

propose to add new paragraph 

98.51(a)(2)(iii) to include 

implementation of systems of quality 

improvement to evaluate, improve and 

communicate the level of quality of 

child care programs in the list of 


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suggested quality improvement 

activities. ACF encourages that the 

system contain the following five 

elements: (1) Program standards to 

define expectations for quality and 

quality indicators indicating different 

levels of quality; (2) supports, training 

and technical assistance to assist child 

care programs in meeting child care 

quality improvement standards; (3) 

financial incentives and monetary 

supports to assist child care programs in 

meeting child care quality improvement 

standards; (4) quality assurance and 

monitoring to measure child care 

program quality over time; and (5) 

strategies for outreach and consumer 

education efforts to promote knowledge 

of child care quality improvement 

standards to child care programs and to 

provide parents, including parents 

receiving assistance under this part, 

with information about the quality of 

child care provider options available to 

them, pursuant to § 98.33. 

As discussed earlier, QRIS is one 

approach that has been gaining 

momentum as a key strategy for 

promoting child care quality and more 

informed child care choices throughout 

the country. Many States have found 

QRIS a useful mechanism for providing 

parents with tools and information to 

select high-quality care for their 

children, to provide incentives, 

resources and technical assistance to 

help programs attain higher levels of 

quality, and to improve cross-sector 

coordination within the early care and 

education system. The five content areas 

proposed in this section were included 

in the revisions to the FY 2012–2013 

CCDF Plan and also align with the 

definition of a ‘‘Tiered Quality Rating 

and Improvement System’’ included in 

the Race to the Top Early Learning 

Challenge (RTT–ELC). ACF encourages 

Lead Agencies to implement QRIS that 

are applicable to all child care sectors 

and address the needs of all children, 

including children of all ages, families 

of all cultural-socio-economic 

backgrounds, and practitioners. We also 

encourage Lead Agencies to incorporate 

strategies for family engagement into 

their QRIS to enhance the capacity of 

families to support their children’s 

education and development. 

ACF’s Child Care Technical 

Assistance Network has provided key 

resources to States and Territories 

regarding QRIS, including a QRIS 

Resource Guide and a QRIS CostEstimation Tool. In 2011–2012, ACF’s 

National Center on Child Care Quality 

Improvement provided technical 

assistance related to QRIS to 32 States, 

responded to information requests from 

CCDF Administrators on QRIS, 

conducted regional roundtables to assist 

and inform State QRIS development, 

and participated and partnered in efforts 

to coordinate and connect QRIS 

technical assistance and research at the 

national level. Additionally, ACF’s 

Office of Planning, Research and 

Evaluation (OPRE), released a 

Compendium of Quality Rating Systems 

and Evaluations providing information, 

analysis, and resources about quality 

rating systems for States and other key 

stakeholders. 

A system of quality improvement, 

such as a QRIS, should include program 

standards that link to the other 

components of the quality framework. 

For example, the program standards 

should require child care providers to 

use curricula and learning activities that 

are based on the State’s early learning 

guidelines, and should address the use 

of information about children’s growth 

and development to improve services. 

The program standards should also 

address teacher qualifications and skills 

consistent with the State’s professional 

development system. 

Professional development systems. 

We propose to add new paragraph 

98.51(a)(2)(iv) to include 

implementation of professional 

development systems in the list of 

quality improvement activities. We 

believe these activities are important to 

ensure a well-qualified child care 

workforce and propose that professional 

development systems contain the 

following five elements: (1) Core 

knowledge and competencies to define 

what the workforce should know 

(content) and be able to do (skills) in 

their role working with children and 

their families; (2) career pathways to 

define options and a sequence of 

qualifications and ongoing professional 

development opportunities; (3) 

professional development assessments 

to build capacity of higher education 

systems and other training institutions 

to meet the diverse needs of the child 

care workforce and address the full 

range of development and needs of 

children; (4) access to professional 

development to ensure practitioners are 

made aware of, and receive supports 

and assistance to utilize professional 

development opportunities; and (5) 

rewards or financial supports to 

practitioners for participating in and 

completing education or training and for 

increased compensation. The five 

components of a professional 

development system proposed in this 

section were included in the FY 2012– 

2013 CCDF Plan and also are reflected 

in the RTT–ELC focus on creating a 

strong early childhood workforce. 

Responsive, well-qualified caregivers 

are the most important factor in 

children’s development and learning in 

child care settings. In the FY 2012–2013 

CCDF Plans, the majority of States and 

Territories indicated that they have 

implemented components of a 

professional development system, 

including core knowledge and 

competencies for practitioners and 

career pathways that define a sequence 

of qualifications related to professional 

development and experience. There are 

other areas where more progress is 

needed, such as providing sustained 

financial support on a periodic, 

predictable basis for high levels of 

training and education. 

Professional development and 

workforce supports are needed to 

increase the stability of a child care 

workforce that experiences turnover 

rates of approximately 30 percent per 

year, a national average wage of $10.15 

an hour and a decline in the number of 

teachers with college degrees. (National 

Association of Child Care Resource and 

Referral Agencies, Child Care 

Workforce, 2012) In May 2012, the 

Bureau of Labor Statistics data 

estimated there were 624,520 child care 

workers in the US. These numbers, 

however, only include professionals in 

licensed facilities. According to a study 

by the Center for the Child Care 

Workforce and Human Services Policy 

Center, there are an estimated 2.3 

million paid child care providers 

working in varied settings including 

public and private, for-profit and 

nonprofit, faith-based, communitybased, school-based, home-based, and 

employer-sponsored providers. 

Approximately 35 percent of child care 

workers are self-employed, with the 

majority of these workers serving as 

family child care providers. Of these 2.3 

million paid child care providers, nearly 

half care for toddlers aged 19 through 36 

months. (Estimating the Size and 

Components of the U.S. Child Care 

Workforce and Caregiving Population, 

Center for the Child Care Workforce and 

Human Services Policy Center, May 

2002) There is little data available about 

the informal sector of child care, 

although it makes up a large number of 

child care providers in the U.S. 

Because the professional development 

needs of child care providers can vary 

based on the ages of the children in a 

provider’s care, Lead Agencies should 

ensure their professional development 

systems are applicable to all providers, 

including school-age practitioners, 

infant-toddler care providers, and 

family child care. For example, core 

knowledge and competencies and 

available trainings should be specific to 


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the needs of child care providers 

whether they work with infants and 

toddlers, preschool-age, or school-age 

children. Additionally, States may want 

to create credentials tailored to specific 

categories of practitioners, such as a 

school-age professional or youth 

development credential, or an infant 

and toddler credential. 

All sectors of the early care and 

education field require a well-qualified 

workforce with opportunities for growth 

from entry level through master teacher, 

including the many additional roles in 

the child care system (e.g., consultants, 

technical assistance providers, trainers, 

and higher education faculty). Lack of 

access to professional development that 

leads to progressively higher levels of 

competency is a barrier to providing 

access to high-quality early childhood 

education for all children. 

Infrastructure of support to build 

child care provider capacity. We 

propose to add new paragraph 

98.51(a)(2)(v), to include 

implementation of an infrastructure of 

support to build child care provider 

capacity to deliver comprehensive 

services that meet the needs of children 

and families, including: promoting 

health and wellness; serving children 

with special needs, dual language 

learners and other vulnerable children 

(e.g., children in the child welfare 

system and homeless children); and 

implementing family engagement 

strategies. We believe it is important to 

dedicate resources towards building 

community-wide infrastructure for early 

care and afterschool programs to 

increase quality and provide 

comprehensive services. This 

infrastructure could include: 

coordinating referrals to health and 

social services; providing relevant 

training and professional development; 

supplying curricula, materials and 

resources; collecting and disseminating 

relevant data on the well-being of 

children and families to guide services; 

and including families and a broad 

range of community representatives in 

planning and leadership efforts. 

Many States and localities have 

invested in infrastructure for early care 

and afterschool programs to increase 

their quality and provide 

comprehensive services. For example, 

one State contracts with programs that 

provide high quality early education 

and care services for homeless children. 

In addition to providing children a 

stable, nurturing and stimulating 

environment that meets the individual 

developmental, behavioral, and 

emotional needs, these programs offer 

services to parents like on-site GED 

classes, job skills training, and 

counseling and advocacy services. 

Another example is a communitybased organization that built a 

comprehensive system aimed at 

ensuring children are ready to succeed 

in school and helping families achieve 

economic success. The program 

collaborates with the local school 

district to provide education to threeand four-year olds with special needs. It 

also partners with family and children’s 

services to provide family support, 

parent education, case management 

crisis intervention, and family 

counseling services. Lastly, it works 

with the local university to provide 

healthcare to enrolled children, their 

parents, and their siblings. 

Family engagement is also an example 

of an approach for involving families in 

decisions about their children, services, 

and communities. It includes a wide 

array of activities, such as direct 

relationships with child care and other 

service providers, mutual support 

shared among parents, advocacy by 

parents on behalf of their families, 

decision-making and advisory roles in 

agencies, and leadership in the 

community. Lead Agencies should 

consider use of CCDF quality funds to 

encourage partnerships between child 

care providers and public, private, and 

grassroots organizations to implement 

parent and family engagement 

strategies. Local and community 

networks and infrastructure are 

strongest when built with input from 

engaged parents and other residents. 

The Strengthening Families 

framework, developed by the Center for 

the Study of Social Policy, is a widelyused approach that gives child care and 

early education programs commonsense strategies to support vulnerable 

families. Many States and communities 

have employed the framework to anchor 

efforts to build comprehensive early 

childhood systems at State and local 

levels. The approach focuses on sciencebased parenting skills, children’s life 

skills, and family life skills specifically 

designed to build protective factors that 

prevent abuse and neglect and promote 

family strength. Many States have 

incorporated the core concepts of 

Strengthening Families into child care 

staff training and professional 

development, as well as into quality 

standards for QRIS. 

Assessment and evaluation of quality 

improvement activities. We propose to 

add new paragraph 98.51(a)(2)(vi) to 

include assessment and evaluation of 

the effectiveness of quality 

improvement activities in the list of 

suggested quality improvement 

activities. Lead Agencies are encouraged 

to evaluate and assess the success of 

their quality investments. A good 

evaluation design can provide 

information critical to improving a 

quality initiative at many points in the 

process, and increase the odds of its 

ultimate success. The importance of 

these activities is highlighted in a 

September 2002 GAO report that looks 

at evaluations of State quality 

initiatives. This report notes that the 

descriptive information collected from 

State-sponsored studies can provide 

reliable information required to address 

program design issues, as well as to 

assess program implementation, which 

can then be useful in planning more 

rigorous evaluations of program 

impacts. (GAO–02–897) 

Lead Agencies with a QRIS or that 

plan to implement a QRIS are 

encouraged to use a QRIS validation 

study to assess whether rating 

components and summary ratings can 

be relied on as accurate indicators of 

quality. Validation is important because 

it promotes increased credibility and 

support for QRIS, as well as efficient use 

of limited quality improvement 

resources. Factors that Lead Agencies 

should consider when designing a QRIS 

validation study include the strength of 

evidence required to address research 

questions and program improvement 

inputs needed to inform program 

management, stage of QRIS 

development, available funding; and 

timeframe in which research questions 

must be answered. Similar to 

implementation of QRIS, States should 

also consider using CCDF quality funds 

to test the effectiveness or validate the 

different elements of their professional 

development system. 

Paragraph § 98.51(a)(2)(vii), as redesignated, would continue to allow 

any activites consistent with the intent 

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

this section would remain unchanged. 

We propose to add a new paragraph 

at § 98.51(d) to clarify that activities to 

improve the quality of child care are not 

restricted to children meeting eligibility 

requirements under § 98.20 or to the 

child care providers serving children 

receiving subsidies. Children or 

providers benefiting from Lead Agency 

quality improvement activities and 

investments are not required to meet 

applicable CCDF eligibility 

requirements at § 98.20. Thus, CCDF 

quality funds may be used to enhance 

the quality and increase the supply of 

child care for all families, including 

those who receive no direct assistance. 

We propose to add a new paragraph 

at § 98.51(e) to codify longstanding ACF 

policy that targeted funds for quality 

improvement and other activities that 


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may be included in appropriations law 

may not count towards meeting the 4 

percent minimum quality requirement, 

unless so specified by Congress. Since 

FY 2000, Congress has included 

language in annual appropriations 

legislation for CCDF discretionary funds 

requiring States and Territories to spend 

portions of their CCDF Discretionary 

Funds on specified activities, including: 

child care resource and referral and 

school-aged child care activities (this 

requirement also applies to Tribes); 

improving the quality of infant and 

toddler child care; and additional 

quality expansion activities intended to 

be in addition to the 4 percent 

requirement. 

We propose to add a new paragraph 

at § 98.51(f) to require that Lead 

Agencies must include in the Plan a 

description of performance goals 

associated with expenditure of funds on 

activities to improve the quality of care 

and report annually on whether goals 

have been met, pursuant to quality 

performance report described at 

§ 98.16(v). The CCDF Plan is a 

prospective document, but in many 

cases, Lead Agencies are primarily 

describing the child care system that is 

currently operating in the State or 

Territory. In keeping with our 

commitment to CCDF Lead Agency 

flexibility, we asked Lead Agencies to 

set goals for themselves for each 

upcoming biennium in the FY 2012– 

2013 Plans. We also asked Lead 

Agencies to tell us what performance 

measures they use to track progress on 

child care quality. This information will 

be a resource as we update national 

performance measures on child care 

quality. These self-reported goals and 

measures will guide ACF technical 

assistance and serve as the basis for 

reporting under the new CCDF Quality 

Performance Report. 

Administrative Costs (Section 98.52) 

Section 658E(c)(3) of the CCDF Act 

and regulations at § 98.52 prohibit Lead 

Agencies from spending more than 5 

percent of CCDF funds for 

administrative activities, such as 

salaries and related costs of 

administrative staff and travel costs. 

Section 98.52 (b) specifically provides 

that this limitation applies only to 

States and Territories (Note that a 15 

percent limitation applies to Tribes 

under § 98.83(g)). We propose to add a 

provision at § 98.52(d) to formally add 

a list of activities which should not be 

counted towards the 5 percent 

limitation on administrative activities. 

These include: (1) Establishment and 

maintenance of computerized child care 

information systems; (2) Establishing 

and operating a certificate program; (3) 

Eligibility determination; (4) 

Preparation/participation in judicial 

hearings; (5) Child care placement; (6) 

Recruitment, licensing, inspection of 

child care providers; (7) Training for 

Lead Agency or sub-recipient staff on 

billing and claims processes associated 

with the subsidy program; (8) Reviews 

and supervision of child care 

placements; (9) Activities associated 

with payment rate setting; (10) Resource 

and referral services; and (11) Training 

for child care staff. These activities were 

included in the preamble to the 1998 

Final Rule, which stated that the 

Conference Agreement (H.R. Rep. 104– 

175 at 411) of PRWORA specified that 

these activities should not be 

considered administrative costs. (63 FR 

39962) We propose to incorporate this 

list into the regulation itself for clarity 

and easy reference. 

Administrative costs and subrecipients. Current CCDF regulations at 

§ 98.52(a) provides a listing of activities 

that may constitute administrative costs 

and defines administrative costs to 

include administrative services 

performed by grantees or sub-grantees or 

under agreements with third-parties. 

However, we have received questions 

from CCDF Lead Agencies to clarify 

whether activities performed through 

sub-recipients or contractors are subject 

to the 5 percent administrative cost 

limitation. Our interpretation is that 

sub-recipients (contractors or subgrantees) that receive funds from the 

Lead Agency are not individually bound 

by this requirement. However, the Lead 

Agency continues to be responsible for 

ensuring that the program complies 

with all Federal requirements and is 

required to oversee the expenditures of 

funds by sub-recipients. As such, while 

we do not as a technical matter 

separately apply the administrative cap 

to funds provided to each sub-recipient, 

the Lead Agency continues to be 

responsible for ensuring that the total 

amount of CCDF funds expended on 

administrative activities—regardless of 

whether it is expended by the Lead 

Agency directly or via sub-grant, 

contract, or other mechanism does not 

exceed the administrative cost 

limitation. Therefore, we propose to add 

§ 98.52(e) to clarify that if a Lead 

Agency enters into agreements with subrecipients for operation of the CCDF 

program, the amount of the contract or 

grant attributable to administrative 

activities as described at § 98.52(a) shall 

be counted towards the administrative 

cost limit. 

Determining whether a particular 

service or activity provided by a subrecipient under a contract, sub-grant, or 

other mechanisms would count as an 

administrative activity towards the 5 

percent administrative cost limitation 

depends on the function or nature of the 

contract/sub-grant/mechanism. If a Lead 

Agency provides a contract or sub-grant 

for direct services, the entire cost of the 

contract could potentially be counted as 

direct services if there is no countable 

administrative component. On the other 

hand, if the entire sub-grant or contract 

was administrative in nature (e.g., for 

payroll services for employees), then the 

entire cost of the contract would count 

towards the administrative cost cap. If a 

sub-grant/contract includes a mix of 

administrative and programmatic 

activities, the Lead Agency would need 

to develop a method for attributing an 

appropriate share of the sub-grant/ 

contract costs to administrative costs. 

Restrictions on Use of Funds (Section 

98.54) 

Current CCDF regulations at 

§ 98.54(b)(1) stipulate that for States and 

local agencies, no funds shall be 

expanded for the purchase or 

improvement of land or for the 

purchase, construction, or permanent 

improvement of any building or facility. 

However, funds may be expended for 

minor remodeling, and for upgrading 

child care facilities to assure that 

providers meet State and local child 

care standards, including applicable 

health and safety requirements. This 

rule does not apply to Tribal Lead 

Agencies, which may request approval 

to use CCDF funds for construction and 

major renovation of child care facilities 

(§ 98.84). 

Under current regulations at § 98.2 

major renovation is defined as (1) 

structural changes to the foundation, 

roof, floor, exterior, or load-bearing 

walls of a facility, or the extension of a 

facility to increase its floor area; or (2) 

extensive alternation of a facility such 

as to significantly change its function 

and purpose, even if such renovation 

does not include any structural change. 

We propose to modify § 98.54(b) to 

include the following language: 

Improvements or upgrades to a facility 

that are not specified under the 

definitions of construction or major 

renovation at § 98.2 may be considered 

minor remodeling and are, therefore, 

allowable. The preamble to the 1998 

Final Rule included a discussion 

regarding minor remodeling and stated 

that, ‘‘. . . rather than create a separate 

definition for minor remodeling State 

Lead Agencies may assume that an 

improvement or upgrade to a facility 

which is not specified under the 

definition of major renovation adopted 

by this rule may, by default, be 


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considered a minor renovation and, 

therefore is allowable under the Act.’’ 

(63 FR 39940) This proposed change 

formally incorporates this policy into 

regulatory language. 

Subpart G—Financial Management 

The focus of Subpart G is to ensure 

proper financial management of the 

CCDF program, both at the Federal level 

by HHS and the Lead Agency level. The 

proposed changes to this section 

include increasing the amount of CCDF 

funds the Secretary may set-aside for 

technical assistance, incorporating 

targeted funds that have been included 

in appropriations language, but are not 

in the current regulations, and inclusion 

of the details of required financial 

reporting by Lead Agencies. Lastly, we 

propose clarifications regarding 

obligations and reallotment of matching 

funds. 

Availability of Funds (Section 98.60) 

Technical assistance. Sections 

658(a)(3) and (b)(1) of the CCDBG Act 

authorize the Secretary to provide 

technical assistance to help States carry 

out the requirements of these rules, as 

well as requiring the Secretary to 

‘‘review and monitor State compliance’’ 

with the statute and the Plan approved 

by HHS. Under current regulation at 

§ 98.60(b)(1), the Secretary may 

withhold one quarter of one percent of 

a fiscal year’s appropriation for 

technical assistance. We propose 

amending paragraph (b) to allow the 

Secretary to withhold up to c of 1 

percent of CCDF funds for technical 

assistance. 

The increased set-aside for technical 

assistance and monitoring will allow 

ACF to invest in efforts to improve 

program integrity by providing 

increased technical assistance to States 

on reducing waste, fraud, and abuse and 

improving the quality of care. This 

training and technical assistance 

involves assessing Lead Agency needs, 

identifying innovations in child care 

administration, and promoting the 

dissemination and replication of 

solutions to the challenges that Lead 

Agencies and local child care programs 

face. The support provided by ACF and 

our technical assistance providers helps 

States, Territories, Tribes and local 

communities build integrated child care 

systems that enable parents to work and 

promote the health and development of 

children. We believe increasing the setaside for technical assistance is 

necessary for ACF to meet its 

responsibility to support Lead Agencies 

as they begin to improve health and 

safety standards, implement a 

transparent system of quality indicators, 

and invest in improving access to high 

quality child care. 

Currently, ACF funds the Child Care 

Technical Assistance Network (CCTAN) 

to provide training and technical 

assistance to CCDF Lead Agencies. The 

CCTAN includes the National Center on 

Child Care Quality Improvement, the 

National Center on Child Care 

Professional Development Systems and 

Workforce Initiatives, and the National 

Center on Child Care Subsidy 

Innovation and Accountability. In 

addition to these Centers, a National 

Center on Tribal Child Care 

Implementation and Innovation, a 

National Center on Child Care Data and 

Technology, and a Network of State 

Child Care Systems Specialists provide 

TA that meets the individual needs of 

States, Territories, and Tribes. The 

CCTAN supports CCDF grantees in their 

efforts to improve the quality of early 

care and education and school-age care 

and helps the States, Territories, and 

Tribes reach their CCDF Plan goals. The 

new resources made available under 

this proposed rule would build on these 

efforts and allow increased assistance to 

Lead Agencies administering CCDF. 

Over the past several years there has 

been a heightened focus on program 

integrity in child care, Head Start and 

other ACF programs. Recent 

investigations into CCDF programs have 

brought the program integrity of several 

States into question. For example, a 

GAO investigation found that five test 

States included in the GAO 

investigation ‘‘lacked controls over 

child care assistance application and 

billing processes for unregulated child 

care providers, leaving the program 

vulnerable to fraud and abuse.’’ (GAO– 

10–1062) We believe it is necessary to 

increase the resources available for 

technical assistance in order to 

strengthen program integrity by 

ensuring that CCDF dollars are used to 

provide child care to eligible families 

and to make investments in improving 

the quality of child care programs, and 

are not lost to fraud or improper 

payments. See the discussion in Subpart 

J for more information on monitoring 

and oversight. 

Obligations. We propose to add a 

paragraph at § 98.60(d)(7) to clarify that 

the transfer of funds from a Lead 

Agency to a non-governmental third 

party or sub-recipient counts as an 

obligation, even when these funds will 

be used for issuing child care 

certificates. Some Lead Agencies 

contract with local units of government 

or non-governmental third parties, such 

as Child Care Resource and Referral 

Agencies (CCR&Rs), to administer their 

CCDF programs. The functions included 

in these contracts could include 

eligibility determination, subsidy 

authorization, and provider payments. 

The contracting of some of these duties 

to a third party has led to many policy 

questions as to whether CCDF funds 

that are used by non-governmental third 

parties to administer certificate 

programs are considered obligated at the 

time the sub-grant or contract is 

executed between the Lead Agency and 

the third party pursuant to current 

regulation at § 98.60(d)(5), or rather at 

the time the voucher or certificate is 

issued to a family pursuant to current 

regulation at § 98.60(d)(6). 

The preamble to the August 4, 1992 

CCDBG Regulations (57 FR 34395) helps 

clarify the intent of § 98.60(d). It states, 

‘‘The requirement that State and 

Territorial grantees obligate their funds 

[within obligation timeframes] applies 

only to the State or Territorial grantee. 

The requirement does not extend to the 

Grantee’s sub-grantees or contractors 

unless State or local laws or procedures 

require obligation in the same fiscal 

year.’’ It follows that, in the absence of 

State or local laws or procedure to the 

contrary, § 98.60(d)(6) would not apply 

when the issuance of a voucher or 

certificate is administered by a nongovernmental third party because the 

funds used to issue the vouchers or 

certificates would have already been 

obligated by the Lead Agency. Based on 

this language, we have interpreted the 

obligation to take place at the time of 

contract execution between the Lead 

Agency and the third party. The 

addition of proposed paragraph (d)(7) 

simply codifies current ACF policy, and 

does not change existing obligation and 

liquidation requirements. Note that a 

local office of the Lead Agency, and 

certain other entities specified in 

regulation at § 98.60(d)(5) are not 

considered third parties. 

Finally, we propose to make a 

technical change at § 98.60(h) to 

eliminate a reference to [§ 98.51(a)(2)(ii)] 

of the regulation which would 

otherwise becomes obsolete since this 

proposed rule proposes to delete it. This 

technical change does not change the 

meaning or the substance of paragraph 

(h), which specifies that repayment of 

loans made to child care providers as 

part of a quality improvement activity 

may be made in cash or in services 

provided in-kind. 

Allotments From Discretionary Funds 

(Section 98.61) 

Targeted funds. We propose to add 

paragraph § 98.61(f) to reference funds 

targeted through annual appropriations 

law. Since FY 2000, annual 

appropriations law has required the use 


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of specified amounts of CCDF funds for 

targeted purposes (i.e., quality, infant 

and toddler quality, school-age care and 

resource and referral). This proposed 

addition is for clarification so that the 

regulations will provide a complete 

picture of CCDF funding parameters. 

New paragraph (f) provides that Lead 

Agencies shall expend any funds setaside for targeted activities as directed 

in appropriations law. 

Audits and Financial Reporting (Section 

98.65) 

We propose revising § 98.65(g), which 

currently provides that the Secretary 

shall require financial reports as 

necessary, to specify that States must 

submit quarterly expenditure reports for 

each fiscal year. Currently, States and 

Territories file quarterly expenditure 

reports (ACF–696); however, the current 

regulations do not describe this 

reporting in detail. Under proposed 

paragraph (h), States and Territories will 

be required to include the following 

information on expenditures of CCDF 

grant funds, including Discretionary 

(which includes any reallotted funds 

and funds transferred from the TANF 

block grant), Mandatory, and Matching 

funds; and State Matching and 

Maintenance-of-Effort (MOE) funds: (1) 

Child care administration; (2) Quality 

activities excluding targeted funds; (3) 

Targeted funds identified in 

appropriations law; (4) Direct services; 

(5) Non-direct services including: a. 

Systems, b. Certificate program cost/ 

eligibility determination, c. All other 

non-direct services; and (6) Such other 

information as specified by the 

Secretary. 

We propose adding greater specificity 

to the regulation in light of the 

important role expenditure data play in 

ensuring compliance with the four 

percent quality expenditure requirement 

at § 98.51(a), administrative cost cap at 

§ 98.52(a), and obligation and 

liquidation deadlines at § 98.60(d). 

Additionally, expenditure data provide 

us with important details about how 

Lead Agencies are spending both their 

Federal and State CCDF funds, 

including what proportion of funds are 

being spent on direct services to 

families or how much has been invested 

in quality activities. These reporting 

requirements do not create an additional 

burden on Lead Agencies because we 

are simply updating the regulations to 

reflect current expenditure reporting 

processes. 

Tribal financial reporting. We propose 

to add paragraph (i) at § 98.65 requiring 

Tribal Lead Agencies to submit annual 

expenditure reports to the Secretary 

(ACF–696T). As with State and 

Territorial grantees, these expenditure 

reports help us to ensure that tribal 

grantees comply with obligation and 

liquidation deadlines at § 98.60(e), the 

fifteen percent administrative cap at 

§ 98.83(g), and the four percent quality 

expenditure requirement at § 98.51(a). 

This reporting requirement is current 

practice and does not create an 

additional reporting burden on tribal 

grantees. 

Program Integrity. We propose to add 

a new section § 98.68 Program 

Integrity—to include requirements that 

Lead Agencies have effective procedures 

and practices that ensure integrity and 

accountability in the CCDF program. 

These proposed changes formalize 

changes made to the CCDF Plan which 

require Lead Agencies to report in these 

areas. The Plan now includes questions 

on internal controls, monitoring subrecipients, identifying fraud and errors, 

methods of investigation and collection 

of identified fraud, and sanctions for 

clients and providers who engage in 

fraud. ACF has been working with State, 

Territorial and Tribal CCDF Lead 

Agencies to strengthen program 

integrity to ensure that funds are 

maximized to benefit eligible children 

and families. For example, ACF issued 

a Program Instruction (CCDF–ACF–PI– 

2010–06) that provides stronger policy 

guidance on preventing waste, fraud, 

and abuse and has worked with States 

to conduct case record reviews to 

reduce administrative errors. The 

requirements proposed in this section 

build on these efforts and are designed 

to reduce errors in payment and 

minimize waste, fraud and abuse to 

ensure that funds are being used for 

allowable program purposes and for 

eligible beneficiaries. 

At § 98.68(a) we propose to require 

Lead Agency internal controls to 

include processes to ensure sound fiscal 

management, processes to identify areas 

of risk, and regular evaluation of 

internal control activities. Examples of 

internal controls include practices that 

identify and prevent errors associated 

with recipient eligibility and provider 

payment such as: checks and balances 

that ensure accuracy and adherence to 

procedures; automated checks for red 

flags or warning signs; and established 

protocols and procedures to ensure 

consistency and accountability. The 

Grantee Internal Control Self 

Assessment Instrument is available as a 

resource for assisting Lead Agencies in 

assessing how well their policies and 

procedures meet the CCDF regulatory 

requirements for supporting program 

integrity and financial accountability. 

At § 98.68(b) we propose to require 

Lead Agencies to have processes in 

place to identify fraud and other 

program violations associated with 

recipient eligibility and provider 

payment. These processes may include, 

but are not limited to, record matching 

and database linkages, review of 

attendance and billing records, quality 

control or quality assurance reviews, 

and staff training on monitoring and 

audit processes. Lead Agencies may 

wish to use unique identifiers to 

crosscheck information provided by 

parents and providers across State and 

national data systems. For example, 

income reported on the application for 

child care assistance may be checked 

with State quarterly wage databases or 

other benefit programs (i.e., SNAP, 

TANF, or Medicaid). Many such data 

systems can be structured to 

automatically flag potential improper 

payments. States should also provide 

training to caseworkers responsible for 

eligibility determination and 

redetermination and make efforts to 

simplify forms. 

At § 98.68(c) we propose to require 

Lead Agencies to have procedures in 

place for documenting and verifying 

that children meet eligibility criteria at 

the time of eligibility determination. 

Lead Agencies are responsible for 

ensuring that all children served in 

CCDF are eligible at the time of 

eligibility determination or redetermination and receiving care from 

eligible child care providers. Lead 

Agencies should, at a minimum, verify 

and maintain documentation of the 

child’s age, family income, and require 

proof that parents are engaged in 

eligible activities. Income 

documentation may include pay stubs, 

tax records, child support enforcement 

documentation, alimony court records, 

government benefit letters, and receipts 

for self-employed applicants. 

Documentation of participation in 

eligible activities may include school 

registration records, class schedules, or 

job training forms. Lead Agencies are 

encouraged to use automated 

verification systems and electronic 

recordkeeping practices to reduce 

paperwork. In addition, Lead Agencies 

may use client information collected 

and verified by other State programs 

(e.g., through the use of consolidated 

application forms) to streamline the 

eligibility determination process for 

CCDF. This new amendment would 

require Lead Agencies to institute 

procedures that ensure eligibility is 

appropriately verified and to monitor 

State, local, and non-governmental 

agencies directly engaged in eligibility 

determination and would provide 

additional safeguards to ensure that 


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children receiving child care subsidies 

are eligible pursuant to requirements 

found at § 98.20. 

At § 98.68(d) we propose to require 

Lead Agencies to have processes in 

place to investigate and recover 

fraudulent payments and to impose 

sanctions on clients or providers in 

response to fraud. This new provision 

complements the existing requirement 

at § 98.60(h)(1) that requires Lead 

Agencies to recover child care payments 

that are made as the result of fraud; 

these payments must be recovered from 

the party responsible for committing the 

fraud. The proposed new provisions 

ensure that Lead Agencies have the 

necessary processes in place to identify 

fraud and program violations so that 

recovery can be pursued and so that the 

Lead Agency can better design practices 

and procedures that prevent fraud from 

occurring in the first place. Lead 

Agencies are encouraged to use 

automated payment systems for child 

care providers, such as direct deposit, in 

order to minimize the risk of fraud. We 

also recommend that each Lead Agency 

include staff dedicated to program 

integrity efforts and that these staff 

should partner with law enforcement as 

appropriate to address fraud. 

Program integrity efforts can help 

ensure that limited program dollars are 

going to low-income eligible families for 

which assistance is intended; however, 

it is important to ensure that these 

efforts do not inadvertently impair 

access for eligible families. The 

Administration has emphasized that 

efforts to reduce improper payments 

and fraud must be undertaken with 

consideration for impacts on eligible 

families seeking benefits. In November 

2009, the President issued Executive 

Order 13520, which underscored the 

importance of reducing improper 

payments in Federal programs while 

protecting access to programs by their 

intended beneficiaries (74 FR 62201). It 

states, ‘‘The purpose of this order is to 

reduce improper payments by 

intensifying efforts to eliminate 

payment error, waste, fraud, and abuse 

in the major programs administered by 

the Federal Government, while 

continuing to ensure that Federal 

programs serve and provide access to 

their intended beneficiaries.’’ 

It is important to have a strategic and 

intentional planning process to 

formalize mechanisms to promote 

program integrity and financial 

accountability while balancing quality 

and access for eligible families. Efforts 

to promote program integrity and 

financial accountability should not 

compromise child care access for 

eligible children and families. A 

foundation for accountability should be 

policies and procedures that help lowincome parents’ access child care 

assistance to support their work and 

training and promote children’s success 

in school. Once a Lead Agency has 

established policies and procedures, 

steps should be taken to implement the 

program with fidelity and to include a 

variety of checks to detect areas both 

where there may be vulnerability to 

error or fraud and areas in which the 

system is failing to serve families well. 

Lead Agencies also can promote 

program integrity by clearly 

communicating specific policies to staff, 

parents, and providers. When policies 

are easily understood by the public and 

clearly communicated, parents and 

providers can better understand 

reporting requirements and deadlines. 

Subpart H—Program Reporting 

Requirements 

Content of Reports (Section 98.71) 

Section 98.71 describes 

administrative data elements that Lead 

Agencies are required to report to ACF, 

including basic demographic data on 

the children served, the reason they are 

in care, and the general type of care 

(center-based, family child care home, 

regulated vs. unregulated provider). 

While this data provides useful 

contextual information on the 

population of children and families 

receiving CCDF subsidies, it does not 

include information on the quality of 

care for subsidized children, which is a 

gap in our ability to track our goals to 

serve more low-income children in high 

quality care. 

We propose to add new § 98.71(a)(15) 

to require State and Territorial Lead 

Agencies to submit an indicator of the 

quality of the child care provider as part 

of the quarterly family case-level 

administrative data report. This data 

will allow ACF and Lead Agencies to 

describe the quality of child care for 

each child receiving a child care 

subsidy and is consistent with revisions 

proposed at § 98.33 related to consumer 

education that would require Lead 

Agencies to implement a system of 

transparent quality indicators to provide 

parents with a way to differentiate the 

quality of child care providers. Many 

States pay higher subsidy rates for 

quality care, and therefore already track 

some information on the quality of care 

for at least a portion of child care 

providers in the subsidy system. This 

information may include the provider’s 

level under a QRIS, accreditation status, 

compliance with State pre-kindergarten 

standards, compliance with Head Start 

performance standards, or compliance 

with other State-defined measures of 

child care quality. 

However, States vary greatly in the 

extent to which they use this quality 

data to improve management of their 

CCDF program, track quality 

improvement initiatives, and target 

financial incentives and technical 

assistance. In addition, none of this data 

is available at the national level. The 

limited and dated information that we 

have from research studies in selected 

States suggests that the quality of care 

in too many instances is mediocre or 

poor. Greater attention needs to be paid 

to quality of care that children receive, 

particularly low-income children in the 

subsidy system, to ensure that their care 

is promoting their learning and 

development to support success in 

school and life. 

To address this situation, ACF has 

separately revised the CCDF quarterly 

family case-level administrative data 

report (ACF–801) in order to add data 

elements related to the quality of care 

for children receiving CCDF subsidies 

(76 FR 44934). The revisions at § 98.71 

reflect this change to the ACF–801 form. 

In our revisions to the form, we have 

allowed for a range of potential 

responses in recognition of State 

flexibility and variation in 

implementing CCDF, and a phased-in 

implementation period to allow States 

the necessary time to modify systems 

and implement the reporting. Current 

paragraph (a)(15) would be redesignated as paragraph (a)(16) but 

otherwise is unchanged. 

Subpart I—Indian Tribes 

This subpart addresses requirements 

and procedures for Indian Tribes and 

Tribal organizations applying for or 

receiving CCDF funds. CCDF currently 

provides funding to approximately 260 

Tribes and Tribal organizations that, 

either directly or through consortia 

arrangements, administer child care 

programs for over 500 federallyrecognized Indian Tribes. Tribes and 

Tribal organizations receive 2 percent of 

CCDF funds, equaling over $100 

million. With few exceptions, Tribal 

CCDF grantees are located in rural and 

economically challenged areas. In these 

communities, the CCDF program plays a 

crucial role in offering child care 

options to parents as they move toward 

economic self-sufficiency, and in 

promoting learning and development for 

children. In many cases, Tribal child 

care programs also emphasize 

traditional culture and language. 

Tribal Consultation. ACF is 

committed to consulting with Tribal 

leadership on the provisions of this 

proposed rule. The requirements in this 


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rule were informed by past 

consultations and meetings with Tribal 

representatives on related topics, such 

as the recent revisions to the CCDF 

Tribal Plan, which addressed many of 

the same issues as this proposed rule— 

including health and safety, quality 

improvement, and program integrity. 

ACF has not yet formally consulted with 

Tribal leaders on the specific provisions 

of this proposed rule, but will consult 

with Tribes through appropriate venues 

during the public comment period. The 

consultations will be conducted in 

accordance with ACF’s newly-revised 

Tribal Consultation Policy (76 FR 

55678). Advance notice regarding these 

consultations will be disseminated to 

Tribes. Furthermore, we encourage 

Tribes to submit written comments 

during the public comment period. 

In light of unique tribal 

circumstances, this proposed rule 

continues to balance flexibility for 

Tribes with the need to ensure 

accountability and quality child care for 

children. In Subpart I, the proposed rule 

maintains all existing provisions at 

§ 98.80 (General Procedures and 

Requirements), § 98.81 (Application and 

Plan Procedures) and § 98.82 

(Coordination). It proposes three 

changes to § 98.83 (Requirements for 

Tribal Programs). Below we discuss 

broader contextual issues, including 

how provisions located outside of 

Subpart I apply to Tribes, before moving 

to a discussion of the proposed changes 

to § 98.83. 

First, we would note that Tribes 

continue to have the option to 

consolidate their CCDF funds under a 

plan authorized by the Indian 

Employment, Training and Related 

Services Demonstration Act of 1992 

(Pub. L. 102–477). This law permits 

tribal governments to integrate a number 

of their Federally-funded employment, 

training, and related services programs 

into a single, coordinated 

comprehensive program. ACF does 

publish annual program instructions 

providing directions for Tribes wishing 

to consolidate CCDF funds under an 

Indian Employment, Training and 

Related Services plan. The Department 

of the Interior has lead responsibility for 

administration of Public Law 102–477 

programs. 

Subpart I continues to specify the 

extent to which general regulatory 

requirements apply to Tribes. In 

accordance with § 98.80(a), a Tribe shall 

be subject to all regulatory requirements 

in Parts 98 and 99, unless specifically 

exempted. We propose to add a new 

exemption for Tribes, from the 

requirements at § 98.50(b)(3) regarding 

funding mechanisms (which is 

discussed further below). However, 

Tribal Lead Agencies are generally 

subject to the new and revised 

provisions in this proposed rule— 

including, but not limited to, changes 

regarding: a child’s eligibility for 

services at § 98.20, consumer education 

at § 98.33; health and safety 

requirements at § 98.41; and new 

program integrity provisions at § 98.68. 

We have included further discussion 

below regarding how a number of these 

specific provisions would apply to 

Tribes and Tribal organizations. 

Health and safety standards. Tribes 

would be required to meet proposed 

revisions to § 98.41 which provide 

greater specificity regarding CCDF 

health and safety requirements. (In 

addition, as discussed below, we are 

proposing that Tribes be subject to 

immunization requirements that 

currently apply only to States and 

Territories; see discussion below). 

The CCDBG Act, as amended by 

PRWORA, required HHS to develop 

minimum child care standards for 

Indian Tribes and Tribal Organizations 

receiving funds under the CCDF. These 

health and safety standards were first 

published in 2000 after three years of 

consultation with Tribes, Tribal 

organizations, and Tribal child care 

programs, and the standards were 

updated and reissued in 2005. The HHS 

minimum standards are voluntary 

guidelines that represent the baseline 

from which all programs should operate 

to ensure that children are cared for in 

healthy and safe environments and that 

their basic needs are being met. 

Tribes may comply with the proposed 

new requirements at § 98.41 by adopting 

and implementing components of the 

minimum tribal standards issued by 

HHS, or by developing and 

implementing their own tribal child 

care standards. Many Tribes already 

exceed the minimum tribal standards 

issued by HHS, and some Tribes have 

used the minimum standards as the 

starting point for developing their own 

more specific tribal standards. The 

minimum Tribal standards issued by 

HHS are generally consistent with the 

proposed revisions at § 98.41, but we 

will be reviewing the standards to 

ensure that they adequately address all 

aspects of the proposed rule. We 

welcome comments that provide 

recommendations on any necessary 

updates to the minimum standards. 

Consumer education. Tribes would 

also be subject to proposed new 

requirements at § 98.33 related to 

consumer education, with the exception 

of the requirement for a Web site at 

§ 98.33(a), see further discussion below. 

These new provisions require Lead 

Agencies to collect and disseminate 

information on the quality of child care 

providers, using information from a 

transparent system of child care 

provider quality standards, such as a 

QRIS. We recognize that many Tribes 

lack the resources necessary to 

implement their own comprehensive 

quality standards or QRIS. However, 

Tribal Lead Agencies may encourage 

child care providers in their service 

areas to participate in State quality 

initiatives, such as QRIS, to the extent 

that such systems are available and 

culturally relevant to Tribes. Tribes may 

also satisfy the requirements at revised 

§ 98.33 by tracking and disseminating 

other information related to quality of 

providers, such as: compliance with 

health and safety requirements; training 

that the provider has completed; the 

group size and adult-child ratio for the 

provider; whether the provider is 

accredited; or whether the provider 

meets certain quality standards. We also 

encourage Tribes to explore innovative 

new models for tracking and 

disseminating quality information as a 

consumer education strategy, and we 

look forward to providing technical 

assistance to support these efforts. 

Please see further discussion below 

regarding the applicability of new 

quality provisions at § 98.51 to Tribes. 

Increased Lead Agency flexibility. 

Provisions in this proposed rule that are 

designed to increase Lead Agency 

flexibility (e.g., waiving family 

copayments at § 98.43; allowing higher 

standards of CCDF providers at 

§ 98.30(g)) all apply to Tribes and will 

increase the ability of Tribal Lead 

Agencies to design programs that meet 

the unique needs of tribal communities. 

In addition, with two exceptions 

(related to immunization requirements 

and quality expenditures, which are 

discussed further below), the proposed 

rule would maintain all existing tribal 

exemptions from CCDF requirements. 

These existing provisions exempt Tribes 

from a number of CCDF requirements 

that apply to State Lead Agencies, in 

recognition of the unique social and 

economic circumstances of many tribal 

communities. For example, as is the 

case with the existing rule, Tribes 

continue to be subject to a 15 percent 

administrative cost limit, rather than the 

five percent limit that applies to States. 

Similarly, Tribes may use either State 

median income or Tribal median 

income when determining a child’s 

eligibility. 

Requirements for Tribal Programs 

(Section 98.83) 

We propose four changes to section 

98.83. First, we propose to exempt 


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Tribes from the requirement for a Web 

site at § 98.33(a). Under the proposed 

rule, this provision would require Lead 

Agencies to establish a user-friendly, 

easy-to-understand Web site to 

disseminate consumer education 

information about the full range of 

available providers and providerspecific information about health and 

safety requirements; including history of 

violation of requirements and any 

compliance actions taken. Where 

appropriate, we encourage Tribes to 

implement Web sites for consumer 

education, but we are exempting Tribes 

from the mandate in recognition of the 

unique circumstances of tribal 

programs. For example, in cases where 

tribal child care providers are licensed 

by the State, information about 

compliance with health and safety 

requirements should already be 

available on the State’s Web site. 

Furthermore, in some instances, the 

small number of child care providers in 

the Tribe’s service area may not warrant 

the development and maintenance of a 

Web site. Although we are exempting 

Tribes from the Web site requirement, 

Tribes will still be required to meet 

other provisions of § 98.33(a), (b) and 

(c)—specifically to disseminate 

consumer education information on the 

full range of available providers, 

including provider-specific information 

about health and safety, a transparent 

system of quality indicators, and 

specific information about the provider 

selected by a parent receiving a CCDF 

subsidy. Tribes will have flexibility for 

determining the most effective 

approaches for providing this 

information. 

Second, we propose to exempt Tribes 

from the requirement at § 98.50(b)(3). As 

revised by this proposed rule, that 

provision would require direct services 

to be provided using funding methods 

provided for in § 98.30 (i.e., grant or 

contract, certificate), which must 

include some use of grants or contracts, 

with the extent of such services 

determined by the Lead Agency after 

consideration of the supply of high 

quality care, the needs of underserved 

populations, and the circumstances of 

local communities. This would require 

Lead Agencies to employ some use of 

grants or contracts to provide child care 

services. We are exempting Tribes from 

this requirement because we recognize 

that some Tribes, particularly those 

receiving smaller CCDF grant awards, 

may lack the resources necessary to 

provide services through a grant or 

contract. In addition, we recognize that 

many Tribes directly administer their 

own tribally-operated child care 

facilities, rather than purchasing slots 

through a grant or contract. These 

tribally-operated centers can accomplish 

many of the same goals as the use of 

grants and contracts (i.e., building 

supply, strengthening quality). For 

home-based care, grants or contracts 

with family child care providers or 

networks of family child care providers 

can be an effective approach to increase 

quality and supply in rural areas, 

including tribal service areas. The 

provision of services by Tribal Lead 

Agencies through certificates is already 

separately addressed at § 98.83(f), and is 

discussed in this preamble further 

below. 

In addition, consistent with this 

proposed rule’s overall focus on 

promoting high quality care that 

supports children’s learning and 

development, we propose two changes 

in § 98.83 in order to strengthen health 

and safety requirements and quality 

initiatives for Indian children. First, we 

propose to revise § 98.83(d) to remove 

reference to § 98.41(a)(1)(i) and thereby 

extend coverage of CCDF health and 

safety requirements related to 

immunization so that the requirements 

would apply to Tribes, whereas 

previously Tribes were exempt. Second, 

we propose to revise § 98.83(f) so that 

all Tribes would be required to spend a 

minimum of 4 percent of CCDF 

expenditures on quality improvement 

activities; previously this requirement 

only applied to larger Tribes. 

Immunization requirement. Under 

§ 98.83(d) of the existing regulation, 

Tribes are currently exempt from the 

requirement at § 98.41(a)(1)(i) to assure 

that children receiving services under 

CCDF are age-appropriately immunized. 

The preamble to the 1998 Final Rule (63 

FR 39953) indicated that Tribes were 

not subject to this regulatory 

requirement due to the anticipated 

development of tribal health and safety 

standards. The minimum tribal health 

and safety standards, required by 

section 658E(c)(2)(E)(ii) of the CCDBG 

Act, had not yet been developed and 

released by HHS at the time that the 

1998 final rule was issued. Since HHS 

planned to consider immunization 

requirements as part of the consultation 

and development of the minimum tribal 

standards, it was premature at that time 

to address immunization requirements 

for Tribes through regulation. 

However, the minimum tribal 

standards have subsequently been 

developed and released, and the 

standards address immunization in a 

manner that is consistent with the 

requirements at § 98.41(a)(1)(i). As a 

result, there is no longer a compelling 

reason to continue to exempt Tribes 

from this regulatory requirement. We 

believe that many Tribes have already 

moved forward with implementing 

immunization requirements for children 

receiving CCDF assistance. By extending 

the requirement to Tribes, we will 

ensure that Indian children receiving 

CCDF assistance are age-appropriately 

immunized as part of efforts to prevent 

and control infectious diseases. 

As with States and Territories, Tribal 

Lead Agencies will have flexibility to 

determine the method to implement the 

immunization requirement. For 

example, they may require parents to 

provide proof of immunization as part 

of CCDF eligibility determinations, or 

they may require child care providers to 

maintain proof of immunization for 

children enrolled in their care. As 

indicated in the regulation, Lead 

Agencies have the option to exempt the 

following groups: (1) Children who are 

cared for by relatives; (2) children who 

receive care in their own homes; (3) 

children whose parents object on 

religious grounds; and (4) children 

whose medical condition requires that 

immunizations not be given. In 

determining which immunizations will 

be required, Tribal Lead Agencies have 

the flexibility to apply its own 

immunization recommendations or 

standards. Many Tribes may choose to 

adopt recommendations from the Indian 

Health Service or the State’s public 

health agency. 

Quality improvement activities. The 

existing rule at § 98.83(f) currently 

exempts smaller Tribes and tribal 

organizations (with total CCDF 

allocations less than an amount 

established by the Secretary) from the 4 

percent quality requirement at § 98.51(a) 

and the requirement to operate a 

certificate program at §§ 98.15(a)(2) and 

98.30(a) and (d). We propose to amend 

§ 98.83(f) by deleting paragraph (3) so 

that smaller Tribes would continue to be 

exempt from operating a certificate 

program, but all Tribes regardless of size 

would now be required to spend at least 

4 percent on quality improvement 

activities. 

As discussed elsewhere in this 

preamble, a primary goal of this 

proposed rule is to promote high quality 

child care to support children’s learning 

and development. Since comprehensive 

CCDF regulations were last issued in 

1998, policymakers and administrators 

have increasingly focused on promoting 

school-readiness and positive child 

outcomes through systemic efforts to 

improve the quality of child care. We 

want to ensure that Indian children and 

Tribes benefit from these quality 

improvement efforts. Therefore, we plan 

to require that all Tribes meet the 4 


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percent quality requirement, which 

already applies to larger Tribes, States, 

and Territories under the existing 

statute and regulation. Approximately 

50 Tribal Lead Agencies currently 

receive over $500,000 and are therefore 

already subject to the 4 percent quality 

requirement. This rule proposes to 

require that the remaining Tribes (over 

200 Tribal Lead Agencies) meet the 4 

percent quality requirement as well. 

Since the quality requirement is 

applied as a percentage of the Tribe’s 

CCDF expenditures, the amount 

required will be relatively small, and 

therefore not burdensome, for Tribes 

receiving smaller CCDF grant awards. 

There are a wide range of quality 

improvement activities that Tribes have 

the flexibility to implement, and the 

scope of these efforts can be adjusted 

based on the resources available so that 

even smaller Tribal Lead Agencies can 

effectively promote the quality of child 

care. We will provide technical 

assistance to help Tribes identify 

current activities that may count 

towards meeting the 4 percent quality 

requirement, as well as appropriate new 

opportunities to spend at least 4 percent 

on quality. 

The proposed revisions to § 98.51 

(Activities to Improve the Quality of 

Child Care), discussed earlier in this 

preamble, provide a systemic framework 

for organizing, guiding, and measuring 

progress of quality improvement 

activities. We recognize that this 

systemic framework may be more 

relevant for States, than for many 

Tribes, since the framework is based on 

the innovative work occurring in States 

related to quality improvement, such as 

the development of a QRIS. Such largescale, comprehensive systemic 

initiatives may not always be 

appropriate for Tribes, given the unique 

circumstances of tribal communities. 

However, Tribes may implement 

selected components of the quality 

framework at § 98.51—such as training 

for child care providers or grants to 

improve health and safety. 

While proposed revisions to § 98.51 

lay out a new quality vision and 

framework, the revisions in no way 

restrict Tribes’ ability to spend CCDF 

quality dollars on a wide range of 

quality improvement activities. Under 

existing § 98.51(a)(1), Tribes continue to 

have the flexibility to use quality dollars 

for activities that include, but are not 

limited to: activities designed to provide 

comprehensive consumer education to 

parents and the public; activities that 

increase parental choice; and activities 

designed to improve the quality and 

availability of child care. As is currently 

the case, these activities could include: 

resource and referral activities, 

consumer education, grants or loans to 

assist providers, training and technical 

assistance for providers, improving 

salaries and compensation of 

practitioners, monitoring or 

enforcement of health and safety 

standards, and other activities to 

improve the quality of child care. While 

Tribes have broad flexibility, to the 

degree possible Tribes should plan 

strategically and systemically when 

implementing their quality initiatives in 

order to maximize the effectiveness of 

those efforts. 

In addition, we encourage strong 

Tribal-State partnerships that promote 

Tribal participation in States’ systemic 

initiatives, as well as State support for 

Tribal initiatives. For example, Tribes 

and States can work together to ensure 

that quality initiatives in the State are 

culturally relevant and appropriate for 

Tribes, and to encourage Tribal child 

care providers to participate in State 

initiatives such as QRIS and 

professional development systems. 

Under existing § 98.82(a), Tribes must 

coordinate to the maximum extent 

feasible with the State CCDF Lead 

Agencies. At the same time, § 98.12(c) 

requires State CCDF Lead Agencies to 

coordinate, to the maximum extent 

feasible, with any Indian Tribes in the 

State receiving CCDF funds. 

Certificate program. Under revised 

§ 98.83(f) in the proposed rule, Tribes 

receiving smaller CCDF grants would 

continue to be exempt from operating a 

certificate program. We recognize that 

small Tribal grantees may not have 

sufficient resources or infrastructure to 

effectively operate a certificate program. 

In addition, many smaller Tribes are 

located in less-populated, rural 

communities that frequently lack the 

well-developed child care market and 

supply of providers that is necessary for 

a robust certificate program. 

The dollar threshold for determining 

which Tribes are exempt from operating 

a certificate program is established by 

the Secretary. The threshold is not 

included in regulation, and therefore 

revising the threshold does not require 

a regulatory change. However, we 

would like to inform Tribes of our intent 

to update the threshold—which has 

been set at $500,000 since 1998. We are 

planning to increase the threshold to 

$700,000 starting with grants awarded 

in FY 2015. This change will recalibrate 

the threshold to a level that is 

comparable to the original threshold, 

after adjusting for inflation. It will 

expand the number of Tribes that are 

exempt from operating a certificate 

program, thereby ensuring that only 

Tribes of sufficient size are required to 

meet the certificate requirement. With 

this change, Tribal Lead Agencies with 

total CCDF allocations less than 

$700,000 in a fiscal year will be exempt 

from the requirement to operate a 

certificate program. Tribal Lead 

Agencies with allocations equal to or 

greater than $700,000 will be required to 

operate a certificate program. 

Base amount. Similarly, although a 

regulatory change is not required, we 

are planning to update the base amount 

of funding that each Tribal Lead Agency 

receives as part of its Discretionary 

Fund award per the current 

§ 98.61(c)(1)(i). For grants awarded 

starting in FY 2015, we are planning to 

increase the base amount from $20,000 

to $30,000 in order to account for 

inflation that has eroded the value of the 

base amount since it was originally 

established in 1998. As referenced at the 

existing § 98.83(e), the base amount of 

any tribal grant is not subject to the 

administrative costs limitation at 

§ 98.83(g) or the quality expenditure 

requirement at § 98.51(a). The base 

amount for each Tribal grant may be 

used for any activity consistent with the 

purposes of CCDF, including the 

administrative costs of implementing a 

child care program. 

Subpart J—Monitoring, NonCompliance, and Complaints 

We propose no changes at Subpart J. 

Subpart K—Error Rate Reporting 

On September 5, 2007, ACF published 

a final rule that added subpart K to the 

CCDF regulations. This subpart, which 

was effective October 1, 2007, 

established requirements for the 

reporting of error rates in the 

expenditure of CCDF grant funds by the 

50 States, the District of Columbia and 

Puerto Rico. The error reports were 

designed to implement provisions of the 

Improper Payments Information Act of 

2002 (IPIA; Pub. L. 107–300). In July 

2010, the President signed into law the 

Improper Payments Elimination and 

Recovery Act (IPERA) (Pub. L. 111–204) 

which amended the IPIA of 2002 and 

provided a renewed focus on 

government-wide efforts to control 

improper payments. In recent years, 

ACF has provided technical assistance 

and guidance to CCDF Lead Agencies to 

assist their efforts in preventing and 

controlling improper payments. These 

program integrity efforts help ensure 

that limited program dollars are going to 

low-income eligible families for which 

assistance is intended. 

This proposed rule retains the error 

reporting requirements at subpart K, but 

proposes two changes which are 

discussed below. In addition to the 


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regulatory requirements at subpart K, 

details regarding the error rate reporting 

requirements are contained in forms and 

instructions that are established through 

the Office of Management and Budget’s 

(OMB) information collection process. 

As part of the renewal process for these 

forms and instructions, ACF recently 

revised the methodology in the forms 

and instructions to measure improper 

payments rather than improper 

authorizations for payment recognizing 

that an improper authorization does not 

always lead to an improper payment. 

Error Rate Reports and Content of Error 

Rate Reports (Sections 98.100 and 

98.102) 

Estimated annual amount of improper 

payments. As provided below, in this 

proposed rule, we propose to delete 

existing § 98.102(a)(5), thereby 

eliminating one of the data elements 

currently required as part of the error 

rate report submitted by Lead Agencies. 

With this change, Lead Agencies would 

no longer be required to submit the 

estimated annual amount of improper 

payments. We propose a corresponding 

deletion at § 98.100(b), which also 

describes the content of the error 

reports. 

It is no longer necessary to require 

Lead Agencies to report the estimated 

annual amount of improper payments. 

ACF can use other existing sources of 

data (i.e., CCDF outlay data) along with 

the percentage of improper payments 

reported by Lead Agencies for the 

representative samples, in order to 

estimate the annual amount of improper 

payments for the program as a whole. 

The resulting standard methodology 

will eliminate inconsistencies resulting 

from separate Lead Agency estimates. 

This proposed change will also reduce 

the reporting burden currently imposed 

on the 50 States, DC, and Puerto Rico. 

A number of Lead Agencies have 

experienced challenges in reporting this 

information in the past. ACF plans to 

revise the error rate forms and 

instructions, through the information 

collection approval process, to eliminate 

this data element once the final rule is 

published. 

Corrective action plan. We propose to 

add paragraph § 98.102(c) to require that 

any Lead Agency with an improper 

payment rate that exceeds a threshold 

established by the Secretary must 

submit a comprehensive corrective 

action plan, as well as subsequent 

reports describing progress in 

implementing the plan. This is a 

conforming change to match new 

requirements for corrective action plans 

that were contained in the recent 

revisions to the forms and instructions. 

The corrective action plan must be 

submitted within 60-days of the 

deadline for submission of the Lead 

Agency’s standard error rate report 

required by § 98.102(c). The corrective 

action plan must include: identification 

of a senior accountable official, 

milestones that clearly identify actions 

to be taken to reduce improper 

payments and the individual 

responsible for completing each action, 

a timeline for completing each action 

within one year of ACF approval of the 

plan and for reducing improper 

payments below the threshold 

established by the Secretary, and targets 

for future improper payment rates. 

Subsequent progress reports must be 

submitted as requested by the Assistant 

Secretary. Failure to carry out actions 

described in the approved corrective 

action plan will be grounds for a penalty 

or sanction under § 98.92. 

This proposed new requirement will 

strengthen CCDF program integrity and 

accountability. Existing CCDF 

regulations at § 98.102(a)(6) and (8) 

currently require all 50 States, DC and 

Puerto Rico to report error rate targets 

for the next reporting cycle and to 

describe actions that will be taken to 

correct causes of improper payments. 

However, the information reported by 

Lead Agencies sometimes lacks detail or 

specificity, is only reported on a threeyear cycle, and does not include status 

updates about the Lead Agency’s 

progress in implementing corrective 

action. More specific and timely 

requirements are necessary for Lead 

Agencies with high improper payment 

rates. Therefore, we propose that any 

Lead Agency exceeding a threshold of 

improper payments be required to 

submit a formal, comprehensive 

corrective action plan with a detailed 

description and timeline of action steps 

of how it will meet targets for 

improvement. The corrective action 

plan should also address any relevant 

findings from annual audits required by 

existing regulation at § 98.65(a), OMB 

Circular A–133, and the Single Audit 

Act. The Lead Agency would also be 

required to submit subsequent reports, 

on at least an annual basis, describing 

progress in implementing corrective 

action. These new requirements will 

ensure that Lead Agencies engage in a 

strategic and thoughtful planning 

process for reducing improper 

payments, take action in a timely 

fashion, and provide information on 

action steps that is transparent and 

available to the public. 

The proposed rule indicates that the 

improper payment threshold, which 

triggers the requirement for a corrective 

action plan, will be established by the 

Secretary. Although the proposed rule 

provides flexibility to adjust the 

threshold in the future, the initial 

threshold will be an improper payment 

rate of 10 percent or higher. In other 

words, if a Lead Agency indicates that 

its improper payment rate reported in 

accordance with § 98.102(a)(3) equals or 

exceeds 10 percent, the Lead Agency 

will be subject to corrective action 

under proposed § 98.102(b). This 10 

percent threshold is consistent with the 

IPERA which indicates that an improper 

payment rate of less than 10 percent for 

a Federal program is necessary for 

compliance. Under IPERA, ACF must 

submit a corrective action plan if the 

national improper payment rate for 

CCDF exceeds 10 percent. Since CCDF 

is administered by State and Territory 

Lead Agencies and the error rate review 

process is executed by States, the only 

effective way for ACF to achieve and 

maintain an improper payment rate 

below the 10 percent threshold is to 

hold Lead Agencies accountable. 

V. Paperwork Reduction Act 

A number of sections in this proposed 

rule refer to collections of information. 

These collections of information are 

subject to review by the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act of 1995 

(the PRA) (44 U.S.C. 3501–3520). In 

several instances, the collections of 

information for the relevant sections of 

this proposed rule have been approved 

previously under a series of OMB 

control numbers as indicated in the 

following table. The proposed rule does 

not modify these currently-approved 

collections. 

CCDF title/code Relevant section in the proposed 

rule 

OMB control 

number Expiration date 

ACF–700 (CCDF Annual Report for Tribal Lead 

Agencies).

§ 98.71 ............................................ 0980–0241 12/31/2013 

ACF–800 (Annual Aggregate Data Reporting) ........... § 98.71 ............................................ 0970–0150 06/30/2015 

ACF–801 (Monthly Case-Level Data Reporting) ........ § 98.71 ............................................ 0970–0167 04/30/2015 


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CCDF title/code Relevant section in the proposed 

rule 

OMB control 

number Expiration date 

ACF–696 (Financial Reporting-States) ....................... § 98.65 ............................................ 0970–0163 05/31/2016 (renewal is under review at OMB) 

ACF–696–T (Financial Reporting-Tribal Organizations).§ 98.65 ............................................ 0970–0195 05/31/2016 (renewal is under review at OMB) 

ACF–403, ACF–404, ACF–405 (CCDF Error Rate 

Reporting).

§§ 98.100 and 98.102 .................... 0970–0323 09/30/2015 

CCDF–ACF –PI–2013–01 (Tribal Application for 

Construction Funds).

§ 98.84 ............................................ 0970–0160 03/31/2016 

In other instances, the proposed rule 

seeks to modify several currentlyapproved information collections. HHS 

will publish Federal Register notices 

soliciting public comment on specific 

revisions to those information 

collections and will make available the 

proposed forms and instructions for 

review. To assist the public in reviewing 

the relevant provisions of the proposed 

rule, below is a summary of the status 

of these collections. 

ACF–118 CCDF State Plan. The rule, 

at 45 CFR §§ 98.14, 98.16, 98.18, and 

98.43, proposes to modify this existing 

information collection approved under 

OMB control number 0970–0114. The 

proposed rule adds several new 

requirements which States and 

Territories will be required to report in 

the biennial CCDF Plans, including 

provisions related to health and safety 

requirements, consumer education, and 

eligibility policies. As described earlier 

in the preamble, provisions included in 

a Final Rule will be incorporated into 

the review of FY 2016–2017 CCDF Plans 

that become effective October 1, 2015. 

HHS plans to publish separate Federal 

Register notices seeking public 

comment on this proposed information 

collection and the annual burden 

estimate. 

ACF–118–A CCDF Tribal Plan. The 

rule, at 45 CFR 98.14, 98.16, 98.18, 

98.43, 98.81, and 98.83, proposes to 

modify this existing information 

collection approved under OMB control 

number 0970–0198. The proposed rule 

adds several new requirements that 

Tribes and Tribal organizations will be 

required to report in the biennial CCDF 

Plans, including provisions related to 

health and safety requirements, 

consumer education, and eligibility 

policies. Provisions included in a Final 

Rule will be incorporated into the 

review of FY 2016–2017 CCDF Plans 

that become effective October 1, 2015. 

HHS plans to publish separate Federal 

Register notices seeking public 

comment on this proposed information 

collection and the annual burden 

estimate. 

The table below provides annual 

burden estimates for existing 

information collections that are 

modified by this proposed rule. These 

estimates reflect the total burden of each 

information collection, including the 

changes made by this proposed rule. 

ANNUAL BURDEN ESTIMATES

Instrument Number of 

respondents 

Number of 

responses per 

respondent 

Average 

burden hours 

per response 

Total 

burden hours 

ACF–118 CCDF State Plan ............................................................................. 56 0.5 163.5 4,578 

ACF–118–A CCDF Tribal Plan ........................................................................ 257 0.5 121 15,549 

Finally, the proposed rule contains 

two new information collection 

requirements, and the table below 

provides an annual burden hour 

estimate for these collections. First, 

§ 98.33 requires Lead Agencies to post 

provider-specific information to a userfriendly, easy to understand Web site as 

part of its consumer education activities 

(described earlier in this preamble). 

This Web site will provide information 

to parents about the degree to which 

specific child care providers meet State 

health and safety requirements and 

quality indicators. This requirement 

applies to the 50 States, District of 

Columbia, and five Territories that 

receive CCDF grants. States will have 

significant flexibility regarding how to 

implement this provision and each State 

will determine its own tailored 

approach based on existing practices, 

available resources, and other 

circumstances. 

In estimating the burden estimate, we 

considered the fact that many States 

already have existing Web sites. Even in 

States without an existing Web site, 

much of the information will be readily 

available from licensing agencies, 

quality rating and improvement 

systems, and other sources. The burden 

hour estimate below reflects an average 

estimate, recognizing that there will be 

significant State variation. The estimate 

is annualized to encompass initial data 

entry as well as updates to the Web site 

over time. The total estimated dollar 

cost for all Lead Agencies is $2,000,000. 

Second, § 98.41 requires Lead 

Agencies to establish procedures that 

require child care providers that care for 

children receiving CCDF subsidies to 

report to a designated State, territorial, 

or tribal entity any serious injuries or 

deaths of children occurring in child 

care. This is necessary for States to be 

able to examine the circumstances 

leading to serious injury or death of 

children in child care, and, if necessary, 

make adjustments to health and safety 

requirements and enforcement of those 

requirements in order to prevent any 

future tragedies 

The requirement would potentially 

apply to the approximately 500,000 

child care providers who serve children 

receiving CCDF subsidies, but only a 

portion of these providers would need 

to report, since our burden estimate 

assumes that no report is required in the 

absence of serious injury or death. Using 

currently available aggregate data on 

child deaths and injuries, we estimated 

the average number of provider 

respondents would be approximately 

10,000 annually. 

In estimating the burden, we 

considered that more than half the 

States already have reporting 

requirements in place as part of their 

licensing procedures for child care 

providers. States, Territories and Tribes 

have flexibility in specifying the 


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particular reporting requirements, such 

as timeframes and which serious 

injuries must be reported. While the 

reporting procedures will vary by 

jurisdiction, we anticipate that most 

providers will need to complete a form 

or otherwise provide written 

information. 

ANNUAL BURDEN ESTIMATES

Instrument Number of respondents 

Number of 

responses per 

Respondent 

Average 

burden 

hours per 

response 

Total burden 

hours 

Consumer Education Web site ....................... 56 States/Territories ....................................... 1 260 14,560 

Reporting of Serious Injuries and Death ........ 10,000 child care providers ............................ 1 1 10,000 

We will consider public comments 

regarding information collection in the 

following areas: (1) Evaluating whether 

the proposed collection is necessary for 

the proper performance of the CCDF 

program, including whether the 

information will have practical utility; 

(2) evaluating the accuracy of the 

estimated burden of the proposed 

collection; (3) enhancing the quality, 

usefulness, and clarity of the 

information to be collected; and (4) 

minimizing the burden of the collection 

of information, including the use of 

appropriate technology. 

Written comments regarding 

information collection should be sent to 

ACF, and to the Office of Management 

and Budget, Office of Information and 

Regulatory Affairs (Attention: Desk 

Officer for the Administration for 

Children and Families) by email to: 

oira_submission@omb.eop.gov, or by fax 

to (202) 395–7285. 

VI. Regulatory Flexibility Act 

The Secretary certifies that, under 5 

U.S.C. 605(b), as enacted by the 

Regulatory Flexibility Act (Pub. L. 96– 

354), this proposed rule will not result 

in a significant economic impact on a 

substantial number of small entities. 

This proposed rule is intended to ensure 

accountability for Federal funds 

consistent with the purposes of the 

CCDBG Act and regulations and is not 

duplicative of other requirements. The 

primary impact of this proposed rule is 

on State, Tribe, and Territorial grantees 

since the proposed changes articulate a 

set of expectations for how grantees are 

to satisfy certain requirements in the 

CCDBG Act. To a lesser extent the 

proposed rule could affect individuals 

and small businesses, particularly 

family child care providers, however the 

number of entities affected should be 

limited and the economic impact has 

not been determined to be significant. 

We have proposed changes to better 

balance the dual purposes of the 

program by adding provisions which 

would ensure that healthy, successful 

child development is a consideration 

when establishing policies for the CCDF 

program (e.g., preserving continuity in 

child care arrangements), and to ensure 

that child care providers caring for 

children receiving subsidies meet basic 

standards for ensuring the safety of 

children and have minimum training in 

health and safety. These include 

requirements for comprehensive 

criminal background checks and health 

and safety training in areas such as firstaid and CPR that may impact child care 

providers caring for children receiving 

CCDF subsidies. Some child care 

providers, particularly family child care 

providers that do not already meet these 

requirements, may incur some burden. 

However, we do not believe these new 

requirements will have a significant 

economic impact on a substantial 

number of small entities since we 

expect Lead Agencies to use CCDF 

funds to assist child care providers in 

meeting the requirements. For example, 

as indicated at proposed § 98.51(a)(2)(i), 

Lead Agencies may use quality funds to 

support activities that ensure the health 

and safety of children. 

VII. Regulatory Impact Analysis 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This proposed rule meets the 

criteria for a significant regulatory 

action under E.O. 12866 and thus has 

been reviewed by OMB. For the reasons 

set forth below, ACF does not believe 

the impact of this proposed regulatory 

action would be economically 

significant and that the total cost would 

fall well below the $100 million 

threshold. 

Need for the proposed rule. The 

impetus for this proposed rule is based 

on the need to reform and update the 

CCDF program, which has not 

undergone a significant regulatory 

review or revision in more than 15 

years. Since then, there has been a 

growing body of research on early 

childhood development underscoring 

the importance of children’s earliest 

experiences and impacts on their later 

success. Given that CCDF is a program 

that provides Federal financial 

assistance to pay for child care for lowincome children, it is absolutely 

essential that policy and program 

priorities be informed by this research. 

It is no longer sufficient to consider the 

quality of care arrangements for 

children receiving CCDF assistance as 

an afterthought to the function of the 

program as a work support for lowincome parents. The CCDF program 

must necessarily be concerned with 

ensuring that child care providers caring 

for children meet minimum 

requirements for maintaining healthy 

and safe environments and work to 

improve the quality of those 

environments to the greatest extent 

possible. Many States, Territories, and 

Tribes administering CCDF have long 

since recognized this dual-purpose 

framework and have used their 

flexibility within the block grant 

program to adopt practices and policies 

that reflect these goals. However, 

implementation of the CCDF program 

across the country varies greatly. Lack of 

substantive Federal regulatory guidance 

in areas such as health and safety, 

quality, and eligibility policy 

jeopardizes accountability in the sense 

that all families receiving CCDF 

assistance, regardless of what State, 

Territory or Tribe they may reside in, 

should have basic assurances about the 

quality of services they receive. This 

proposed rule seeks to establish 

concrete expectations in these areas to 

better balance the dual purposes of the 

CCDF program and fully leverage its 

two-generational impact. 


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Benefits of the proposed rule. CCDF 

provides financial assistance to make 

child care more affordable so that 

parents can work or attend job training 

or educational programs. As stated 

throughout this proposed rule, we 

envision the program as also providing 

children in those families access to high 

quality care to ensure their healthy, safe 

development. In FY 2011, the CCDF 

program provided assistance to nearly 

1.6 million children in nearly 1 million 

families. In addition, approximately 

500,000 child care providers provided 

services to children receiving CCDF 

subsidies. The changes in this proposed 

rule are almost wholly directed towards 

improving the lives of the children and 

families we serve and improving health 

and safety and quality of child care 

providers caring for those children. In 

short, the changes in this proposed rule 

have three primary beneficiaries—lowincome working parents, low-income 

children, and child care providers 

serving these families. 

We have included several changes in 

this proposed rule that we believe will 

improve the continuity of services and 

stability of child care arrangements for 

families receiving CCDF. The benefits of 

these changes are not easily quantified, 

but can have a profound effect on the 

lives of the low-income parents and 

children we serve. For example, we 

anticipate that changes in the proposed 

rule will mean that a parent can retain 

their subsidy after experiencing job loss 

in order to search for new employment. 

In some States, parents enter into 

downward spirals when they lose their 

jobs and potentially lose their child 

care, jeopardizing the stability of care 

arrangements and stifling any positive 

impacts the arrangements may have had 

on their children’s development. In 

other States, when parents lose their 

jobs, they maintain their subsidies and 

child care while they search for new 

jobs, leading to less stress on their 

families and preserving their children’s 

relationships with their caregivers. We 

know that about half of the States 

already allow for a certain period of job 

search for parents that lose employment. 

Therefore, the benefits of this particular 

policy change will primarily be directed 

towards the CCDF families and children 

in the remaining States that have yet to 

adopt this practice. 

Several of the changes in this 

proposed rule benefit child care 

providers and the children they serve. 

To the extent that the proposed rule 

causes a child care provider to receive 

training in basic areas of health and 

safety where they might not otherwise 

have been compelled to, this proposed 

rule will have spillover effects that 

reach not only the CCDF child in that 

providers’ care, but all the children 

cared for by that provider. We believe 

the new health and safety requirements 

are a benefit to public health and safety 

because they are aimed at practices that 

ultimately are intended to reduce the 

incidence of injury and death for 

children in child care. For example, if 

a child care provider receives 

certification in CPR or is knowledgeable 

in poison prevention and safety then 

they are in a better position to respond 

to or prevent an emergency if a child is 

in danger. If a child care provider is 

trained in SIDS prevention then 

children in their care are less likely to 

be at risk. We believe that improving 

accountability for Federal dollars means 

paying for safe, healthy child care and 

ensuring children are cared for by 

providers with a minimum of health 

and safety training. The requirement for 

child care providers to have a core body 

of knowledge will also place more 

providers on a career pathway, 

increasing their opportunities to 

develop professional knowledge 

necessary for advancement. 

Finally, changes in this proposed rule 

related to quality improvement and 

consumer education activities also will 

benefit not only CCDF families, but also 

the general public. For example, if a 

child care provider receives a grant 

funded by CCDF to implement a new 

curriculum as part of a quality 

improvement activity, then that 

investment will benefit all the children 

in that provider’s care. In addition, one 

of the changes in this proposed rule 

would require States to post providerspecific information on a Web site with 

information about health and safety and 

licensing or regulatory requirements met 

by the provider, including the history of 

licensing violations and date of last 

inspection. We believe making this 

information readily available and 

transparent to parents will promote 

more informed child care choices. In all 

of these ways we believe that changes in 

this proposed rule will not only directly 

benefit CCDF parents, children and 

providers, but also have a valuable 

public benefit with the possibility of 

impacting many families far beyond the 

immediate reach of the CCDF program. 

Costs of the proposed rule. At the 

beginning of this proposed rule, we 

explain that one of the reasons for 

revising the CCDF regulations is to 

better reflect State and local practices to 

improve the quality of child care and 

the tremendous strides that have been 

made in implementation of evidencebased policies. As such, in many of the 

areas where changes are proposed there 

are a significant number of States and 

Territories that have already 

implemented these policies, and we 

have been purposeful throughout to 

note these numbers. The cost of 

implementing the changes in this 

proposed rule will vary depending on a 

State’s specific situation. We conducted 

an analysis of State and Territory 

responses in the FY 2012–2013 CCDF 

Plans covering five of the key policy 

areas where we anticipate there could 

be cost implications. [Note: The analysis 

of CCDF Plans throughout this proposed 

rule includes a total of 56 State and 

Territorial CCDF Plans, including 

American Samoa, Guam, Northern 

Marianas Islands, Puerto Rico, and the 

Virgin Islands.] 

Parental complaint hotline. The 

proposed rule includes a new 

requirement at § 98.32(a) that Lead 

Agencies must establish or designate a 

hotline for parents to submit complaints 

about child care providers. In the FY 

2012–2013 CCDF plans, 10 States 

reported having a toll-free hotline for 

parents to submit child care-related 

complaints. An additional 16 States list 

public toll-free numbers on their Web 

sites for parents to contact the child care 

office. Establishing or designating a 

hotline may lead to additional costs for 

States, such as those associated with 

establishing a new hotline system or 

staff time used to answer the hotline. 

However, Lead Agencies have flexibility 

in implementing the proposed hotline 

and may work with other agencies in 

the State to adapt existing hotlines, such 

as those used to report child abuse and 

neglect. 

Consumer Education. The proposed 

rule includes two new requirements that 

may increase costs as part of the 

statutory requirement that Lead 

Agencies collect and disseminate 

consumer education information about 

child care. The first of these 

requirements is that Lead Agencies must 

post provider-specific information on a 

Web site. The second is that Lead 

Agencies must implement a transparent 

system of quality indicators. 

We propose amending paragraph (a) 

of § 98.33 to require Lead Agencies to 

post provider-specific information to a 

user-friendly, easy to understand Web 

site as part of its consumer education 

activities. The proposed change would 

require Lead Agencies to list available 

child care providers on a Web site with 

provider-specific information about any 

health and safety, licensing or 

regulatory requirements met by the 

provider, any history of violations of 

these requirements, and any compliance 

actions taken, as well as information 

about the quality of the provider, if 

available, as identified through a 


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transparent system of quality indicators. 

The Web site must also include a 

description of health and safety, 

licensing or regulatory requirements for 

child care providers within the Lead 

Agency’s jurisdiction and processes for 

ensuring providers meet those 

requirements, including the background 

check process for providers and any 

other individuals in the child care 

setting, and offenses that may preclude 

a provider from serving children. Lead 

Agencies have flexibility to determine 

how to improve transparency to the 

public regarding child care provider 

licensing violations and compliance 

actions taken. Making provider 

compliance information widely 

available on a dedicated Web site allows 

parents to make informed choices, and 

for purposes of the CCDF subsidy 

program, is key to ensuring that parental 

choice is meaningful. 

Creating and maintaining a Web site 

with provider-specific information may 

come with new costs for Lead Agencies. 

However, as the majority of States 

already have these Web sites in place, 

we do not expect this requirement to 

create a significant financial burden. 

According to a preliminary analysis of 

the FY 2012–2013 CCDF Plans, at least 

30 States and Territories make all 

licensing information available to 

parents and the public online. Ten 

States and Territories reported making 

at least some licensing information 

available on a public Web site or other 

online tool. Therefore, this proposed 

change is consistent with current 

practices in many States and will not 

create new costs for them. 

At new paragraph § 98.33(b) we 

propose to require Lead Agencies to 

collect and disseminate consumer 

education through a transparent system 

of quality indicators. The system must 

include provider-specific information 

about the quality of child care 

providers; (2) describe the standards 

used to assess the quality of child care; 

(3) take into account teaching staff 

qualifications, learning environment, 

curricula and activities; and (4) 

disseminate provider-specific quality 

information through a Web site or other 

alternate mechanism. Each Lead Agency 

has the flexibility to develop a system 

of quality indicators based on its 

specific needs. The costs associated 

with implementing a transparent system 

of quality indicators will depend on 

what consumer education activities the 

Lead Agency currently has in place. 

According to the FY 2012–2013 CCDF 

Plans, more than half the States have 

implemented quality rating and 

improvement systems (QRIS) and 

additional States have a QRIS in one or 

more localities that has not been 

implemented statewide. Therefore, 

additional costs would be associated 

with expanding the QRIS or creating a 

means of disseminating quality 

information to parents and the public in 

an easy-to-understand manner. 

Background Checks. We propose to 

amend § 98.41(a)(2)(i) of the regulations 

to include comprehensive background 

checks on child care providers serving 

children receiving CCDF subsidies 

(excepting relative and in-home 

providers at the State’s discretion), 

including use of fingerprints for State 

checks of criminal history records, use 

of fingerprints for checks of FBI 

criminal history records, clearance 

through the child abuse and neglect 

registry, if available, and clearance 

through the sex offender registry. 

According to the FY 2012–2013 CCDF 

Plans, all States and Territories have 

some infrastructure in place to conduct 

criminal background checks on child 

care providers. However, States vary in 

the extent to which they require 

different types of providers to receive 

background checks and many do not 

require the use of fingerprints for 

background checks. 

For example, 53 States and Territories 

already require that child care center 

staff undergo at least one type of 

criminal background check, however 

only 40 States and Territories conduct 

FBI checks that include fingerprints. 

Similarly, 50 States and Territories 

require family child care providers to 

have a criminal background check and 

36 require an FBI background check that 

includes fingerprints. The majority of 

States and Territories already have 

requirements in place for checks of 

child abuse and neglect registries and 

over half have a sex offender registry 

requirement in place. While some States 

may have to revise their background 

check policies or expand the 

requirement to be inclusive of 

additional providers, all States are 

already in partial compliance with the 

proposed provision. 

Additionally, the Lead Agency can 

work with other State or local 

organizations that may already have the 

necessary equipment and resources to 

carry out the comprehensive 

background checks as a way of reducing 

administrative burden and associated 

costs. Many State agencies have already 

purchased Livescan technology that 

significantly decreases delays and 

administrative burdens associated with 

fingerprint-based checks. The cost of 

conducting criminal background checks 

will vary from State to State, but an FBI 

background check should only cost 

between $18 and $24. States currently 

have several methods for allocating the 

expense of background checks. Lead 

Agencies may use CCDF funds to pay 

for comprehensive background checks, 

and can potentially obtain funds from 

other Federal sources such as the 

National Criminal History Improvement 

Program (NCHIP) and the Adam Walsh 

Implementation Grants. Lead Agencies 

may also require that providers assume 

responsibility for background check fees 

as a cost of doing business. In some 

States, the child care facility pays for 

staff members’ background checks. 

Almost half of the States currently 

require individuals to pay for their own 

background checks. Since the cost of the 

background check requirement is not 

borne solely by the State, the cost of 

implementing this provision will be 

diffused throughout the field. While this 

may represent an additional burden for 

some child care providers, current 

practice indicates that background 

check expenses are already considered a 

reasonable cost of doing business within 

the field of child care. In addition, 

States can implement systems to 

facilitate making background check 

verifications portable, reducing the cost 

to providers in an industry with 

traditionally high turnover. 

Pre-inspections for compliance with 

fire, health and building codes. The 

proposed rule adds a new requirement 

at § 98.41(a)(2)(ii) requiring States to 

ensure providers are in compliance with 

State and local applicable fire, health, 

and building codes, prior to serving 

children receiving CCDF subsidies. 

According to the 2011 Child Care 

Licensing Study (prepared by the 

National Center on Child Care Quality 

Improvement and the National 

Association of Regulatory 

Administrators), 39 States require fire, 

health, and building code (also called 

environmental) inspections for child 

care centers. Many States also conduct 

separate licensing inspections prior to 

issuing a license to a child care center. 

For family child care providers, 12 

states require fire, health, and building 

code inspections. Further, of the 42 

states that license family child care 

homes, 37 conduct an inspection before 

issuing a license to a family child care 

home. Since fire, health, and building 

codes vary across States, the financial 

impact of this new requirement will also 

vary. States already have systems in 

place to conduct these inspections, and 

enforcement of the applicable codes 

may already be happening at the local 

level. Further, we are seeking public 

comment on an appropriate phase-in 

and timeframe for this provision, as well 


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as the requirement for comprehensive 

criminal background checks. 

Health and safety training. We 

propose adding a list of minimum 

health and safety pre-service or 

orientation training for providers 

serving children receiving CCDF 

assistance. A preliminary analysis of the 

2012–23 CCDF Plans shows that many 

States have a number of these trainings 

already in place for their licensed 

providers. Thirty-eight States already 

require pre-service CPR training for 

child care centers and 43 require it for 

family child care providers. Forty States 

already require pre-service first-aid 

training for centers and 43 require it for 

family child care providers. Most of the 

other trainings are offered to licensed 

center and family child care providers 

in approximately half of the States. 

However, since this only captures the 

current training data for licensed 

providers, the new requirements will 

most likely require an expansion of the 

trainings offered to license-exempt 

CCDF providers. This is important 

because many child care providers 

serving children receiving CCDF 

subsidies either are not required to be 

licensed or have been exempted from 

licensing requirements by States. 

Approximately 10 percent of CCDF 

children are cared for by non-relatives 

in unregulated centers and homes. In 

these cases, CCDF health and safety 

requirements are the primary, and in 

most cases, the only safeguard in place 

to protect children in this type of care. 

We recognize that it may not be 

possible for child care providers serving 

subsidized children to meet all the 

listed minimum health and safety 

training requirements prior to the first 

day of service. Therefore, we are 

allowing Lead Agencies to require the 

training prior to the provider’s start of 

service (i.e., pre-service) or during the 

initial service period (i.e., orientation). 

We are leaving it to the Lead Agency’s 

discretion to specifically define ‘‘preservice’’ and ‘‘orientation,’’ which may 

include stipulations that the training be 

completed within the first weeks or 

month of providing child care services 

to children receiving CCDF assistance. 

Lead Agencies should also offer a grace 

period to providers who are already 

serving children receiving CCDF 

assistance to minimize disruptions to 

child care arrangements for children 

currently enrolled with a provider and 

receiving subsidies. Additionally, many 

of the areas included in the proposed 

new requirements are readily available 

through on-line trainings, which should 

minimize burden on Lead Agencies. 

Monitoring. We propose to amend 

98.41(d) to require that Lead Agencies 

include unannounced on-site 

monitoring as part of their procedures to 

ensure providers serving children 

receiving CCDF assistance meet health 

and safety requirements. All providers 

serving children receiving CCDF 

subsidies must be subject to 

unannounced on-site monitoring. 

Further, Lead Agencies may not solely 

rely on self-certification of compliance 

with health and safety requirements and 

must include unannounced visits. The 

proposed change would allow Lead 

Agencies to retain the flexibility to 

determine the frequency and 

components of unannounced on-site 

monitoring visits. However, we are 

seeking comment on the 

recommendation that States conduct an 

initial on-site monitoring visit and at 

least one annual unannounced visit. 

There is currently significant 

variation across States regarding the 

nature and intensity of on-site 

monitoring. According to the FY 2012– 

2013 CCDF Plans, States and Territories 

report using both announced and 

unannounced routine visits as a way to 

enforce licensing requirements with 

different policies applicable to child 

care centers versus family child care 

homes. Almost all Lead Agencies have 

an on-site monitoring component in 

place for licensed center and family 

child care providers, but 28 do not 

monitor unlicensed providers. 

Therefore, about half of the Lead 

Agencies will need to expand their onsite monitoring practices to include 

unlicensed providers caring for children 

receiving CCDF subsidies. 

The new requirement may create 

additional costs for Lead Agencies 

because it could potentially expand the 

number of child care providers subject 

to unannounced on-site monitoring. 

These costs may include the need for 

additional monitoring staff or funding of 

contracts to carry out monitoring visits, 

new training for staff to ensure 

knowledge of new health and safety 

requirements, or additional tools and 

supplies necessary to carry out effective 

monitoring visits. However, because all 

States have an infrastructure for on-site 

monitoring visits through their licensing 

systems, we do not believe this 

requirement will create a significant 

financial burden for the majority of 

States. In FY 2011, there were 

approximately 500,000 providers caring 

for children receiving CCDF subsidies. 

Of these, approximately 180,000 were 

relative providers and approximately 

39,000 in-home providers providing 

care in the child’s home. The proposed 

rule allows Lead Agencies the option to 

exempt both relative and in-home 

providers from the health and safety and 

monitoring requirements. The 

remaining 205,000 child care providers 

must be subject to health and safety and 

monitoring requirements and about twothirds of these providers are reported as 

licensed or regulated by the State and 

thus would potentially already be 

subject to monitoring. Therefore, we 

estimate approximately 90,000 

providers (that are not relatives or inhome providers) caring for children 

receiving CCDF subsidies are currently 

unlicensed and would now be subject to 

monitoring. This number is potentially 

larger to the extent that States choose to 

apply monitoring and health and safety 

requirements to relative and in-home 

providers. This total is a national total 

and the distribution varies by State. 

VIII. Unfunded Mandates Reform Act 

of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that a covered agency prepare a written 

statement before promulgating a rule 

that includes any Federal mandate that 

may result in the expenditure by State, 

local, and Tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more in any one year. 

If an agency must prepare a budgetary 

impact statement, section 205 requires 

that it select the most cost-effective and 

least burdensome alternative that 

achieves the objectives of the rule 

consistent with the statutory 

requirements. Section 203 requires a 

plan for informing and advising any 

small government that may be 

significantly or uniquely impacted. The 

Department has determined that this 

proposed rule would not impose a 

mandate that will result in the 

expenditure by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector, of more than $100 

million in any one year. 

IX. Congressional Review 

This regulation is not a major rule as 

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

X. Executive Order 13132 

Executive Order 13132, Federalism, 

requires that Federal agencies consult 

with State and local government 

officials in the development of 

regulatory policies with federalism 

implications. This proposed rule will 

not have substantial direct effect on the 

States, on the relationship between the 

Federal Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. This proposed 

rule does not preempt State law. In large 

part, the changes included in the 

proposed rule are based upon practices 


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already implemented by many States. 

Therefore, in accordance with section 6 

of Executive Order 13132, it is 

determined that this proposed rule does 

not have sufficient federalism 

implications to warrant the preparation 

of a federalism summary impact 

statement. 

XI. Treasury and General Government 

Appropriations Act of 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act of 1999 (Pub. L.105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any rule 

that may affect family well-being. This 

proposed rule would not have any 

impact on the autonomy or integrity of 

the family as an institution. 

Accordingly, HHS has concluded that it 

is not necessary to prepare a Family 

Policymaking Assessment. 

List of Subjects in 45 CFR Part 98 

Child Care, Grant programs-social 

programs. 

For the reasons set forth in the 

preamble, we propose to amend part 98 

of 45 CFR as follows: 

PART 98—CHILD CARE AND 

DEVELOPMENT FUND 

■ 1. The authority citation for part 98 

continues to read: 

Authority: 42 U.S.C. 618, 9858, et seq. 

■ 2. Amend § 98.1 by revising paragraph 

(b) to read as follows: 

§ 98.1 Goals and purposes. 

* * * * * 

(b) The purpose of the CCDF is to 

increase the availability, affordability, 

and quality of child care services. The 

program offers Federal funding to 

States, Territories, Indian Tribes, and 

tribal organizations in order to: 

(1) Provide low-income families with 

the financial resources to find and 

afford high quality child care for their 

children and serve children in safe, 

healthy, nurturing child care settings 

that are highly effective in promoting 

learning, child development, school 

readiness and success; 

(2) Enhance the quality and increase 

the supply of child care and before- and 

after-school care services for all 

families, including those who receive no 

direct assistance under the CCDF, to 

support children’s learning, 

development, and success in school; 

(3) Provide parents with a broad range 

of options in addressing their child care 

needs by expanding high quality 

choices available to parents across a 

range of child care settings and 

providing parents with information 

about the quality of child care programs; 

(4) Minimize disruptions to children’s 

development and learning by promoting 

continuity of care; 

(5) Ensure program integrity and 

accountability in the CCDF program; 

(6) Strengthen the role of the family 

and engage families in their children’s 

development, education, and health; 

(7) Improve the quality of, and 

coordination among Federal, State, and 

local child care programs, before- and 

after-school programs, and early 

childhood development programs to 

support early learning, school readiness, 

youth development and academic 

success; and 

(8) Increase the availability of early 

childhood development and before- and 

after-school care services. 

* * * * * 

■ 3. Amend § 98.2 by revising the 

definition for Categories of care, the 

introductory text of paragraph (1) in the 

definition of Eligible child care 

provider, and the definition of Family 

child care provider and removing the 

definition of Group home child care 

provider. 

The revisions read as follows: 

§ 98.2 Definitions. 

* * * * * 

Categories of care means center-based 

child care, family child care and inhome care; 

* * * * * 

Eligible child care provider means: 

(1) A center-based child care provider, 

a family child care provider, an in-home 

child care provider, or other provider of 

child care services for compensation 

that— 

* * * * * 

Family child care provider means one 

or more individual(s) who provide child 

care services for fewer than 24 hours per 

day per child, as the sole caregiver(s), in 

a private residence other than the 

child’s residence, unless care in excess 

of 24 hours is due to the nature of the 

parent(s)’ work; 

* * * * * 

■ 4. Amend § 98.10 by revising 

paragraphs (d) and (e) and adding 

paragraph (f) to read as follows: 

§ 98.10 Lead Agency responsibilities. 

* * * * * 

(d) Hold at least one public hearing in 

accordance with § 98.14(c); 

(e) Coordinate CCDF services 

pursuant to § 98.12; and 

(f) Implement practices and 

procedures to ensure program integrity 

and accountability pursuant to § 98.68. 

■ 5. Amend § 98.11 by adding a 

sentence to the end of paragraph (a)(3) 

to read as follows: 

§ 98.11 Administration under contracts 

and agreements. 

(a) * * * 

(3) * * * The contents of the written 

agreement may vary based on the role 

the entity is asked to assume or the type 

of project undertaken, but must include, 

at a minimum, tasks to be performed, a 

schedule for completing tasks, a budget 

which itemizes categorical expenditures 

consistent with CCDF requirements at 

§ 98.65(h), and indicators or measures to 

assess performance. 

* * * * * 

■ 6. Amend § 98.14 by revising 

paragraphs (a)(1)(C) and adding 

paragraphs (a)(1)(E), (F), (G), (H), and (I), 

and (d) to read as follows: 

§ 98.14 Plan process. 

* * * * * 

(a)(1) * * * 

(C) Public education (including 

agencies responsible for prekindergarten services, if applicable, and 

educational services provided under 

Part B and C of the Individuals with 

Disabilities Education Act (20 U.S.C. 

1400)); 

* * * * * 

(E) Child care licensing; 

(F) Head Start collaboration; 

(G) State Advisory Council on Early 

Childhood Education and Care 

authorized by the Head Start Act (42 

U.S.C. 9831 et seq.) (if applicable); 

(H) Statewide afterschool network or 

other coordinating entity for out-ofschool time care (if applicable); and 

(I) Emergency management and 

response. 

* * * * * 

(d) Make the Plan and any Plan 

amendments publicly available. 

■ 7. Amend § 98.16 by 

■ a. Redesignating paragraph (r) as 

paragraph (w), paragraphs (g) through 

(q) as (i) through (s), and paragraphs (b) 

through (f) as (c) through (g); 

■ b. Adding new paragraphs (b) and (h); 

■ c. Revising newly redesignated 

paragraphs (g)(6), (i)(1), (i)(5), (j), (k), 

(l),(n), (o), and (q); and 

■ d. Adding new paragraphs (t), (u), and 

(v). 

The additions and revisions read as 

follows: 

§ 98.16 Plan provisions. 

* * * * * 

(b) A description of processes the 

Lead Agency will use to monitor 

administrative and implementation 

responsibilities undertaken by agencies 

other than the Lead Agency including 


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descriptions of written agreements, 

monitoring and auditing procedures, 

and indicators or measures to assess 

performance pursuant to § 98.11(a)(3); 

* * * * * 

(g) * * * 

(6) Working (which must include 

some period of job search); 

* * * * * 

(h) A description of policies to 

promote continuity of care for children 

and stability for families receiving 

services for which assistance is 

provided under this part, including: 

(1) Policies that take into account 

developmental needs of children when 

authorizing child care services pursuant 

to § 98.20(d); 

(2) Timely eligibility determination 

and processing of applications; and 

(3) Policies that promote employment 

and income advancement for parents. 

(i) * * * 

(1) A description of such services and 

activities, including how the Lead 

Agency will address supply shortages 

through the use of grants or contracts. 

The description should identify any 

shortages in the supply of high quality 

child care providers, including for 

specific localities and populations, list 

the data sources used to identify 

shortages, and explain how grants or 

contracts for direct services will be used 

to address such shortages; 

* * * * * 

(5) Any additional eligibility criteria, 

priority rules, definitions, and policies, 

including any requirements for families 

to report changes in circumstances that 

may impact eligibility, established 

pursuant to § 98.20(b) and (c); 

(j) A description of the activities to 

provide comprehensive consumer 

education, which must include a 

transparent system of quality indicators, 

pursuant to § 98.33(b), that provides 

parents with provider-specific 

information about the quality of child 

care providers in their communities; to 

increase parental choice; and to improve 

the quality and availability of child care, 

pursuant to § 98.51; 

(k) A description of the sliding fee 

scale(s) (including any factors other 

than income and family size used in 

establishing the fee scale(s)) that 

provide(s) for cost sharing by the 

families that receive child care services 

for which assistance is provided under 

the CCDF and how co-payments are 

affordable for families, pursuant to 

§ 98.42. This shall also include a 

description of the criteria established by 

the Lead Agency, if any, for waiving 

contributions for families; 

(l) A description of the health and 

safety requirements, applicable to all 

providers of child care services for 

which assistance is provided under the 

CCDF, in effect pursuant to § 98.41, 

which must include a description of 

unannounced, on-site monitoring and 

other enforcement procedures in effect 

to ensure that providers of child care 

services for which assistance is 

provided under the CCDF comply with 

all applicable health and safety 

requirements pursuant to § 98.41(d); 

* * * * * 

(n) Payment rates and a summary of 

the facts, including a biennial valid 

local market price study or alternate 

approved methodology, relied upon to 

determine that the rates provided are 

sufficient to ensure equal access 

pursuant to § 98.43, which must include 

a description of how the quality of 

providers of child care services for 

which assistance is provided under this 

part is taken into account when 

determining payment rates; 

(o) A detailed description of the 

hotline established or designated by the 

State for receiving parental complaints, 

of how the State maintains a record of 

substantiated parental complaints and 

how it makes information regarding 

those complaints available to the public 

on request, pursuant to § 98.32; 

* * * * * 

(q) A detailed description of licensing 

requirements applicable to child care 

services provided, any exemptions to 

those requirements and a rationale for 

such exemptions, and a description of 

how such licensing requirements are 

effectively enforced, pursuant to § 98.40; 

* * * * * 

(t) A description of payment practices 

for child care services for which 

assistance is provided under this part, 

including timely reimbursement for 

services, how payment practices 

support providers’ provision of high 

quality child care services, and practices 

to promote the participation of child 

care providers in the subsidy system; 

(u) A description of processes in place 

to investigate and recover fraudulent 

payments and to impose sanctions on 

clients or providers in response to fraud 

pursuant to § 98.68(d); 

(v) An annual quality performance 

report by the States and Territories to 

the Secretary, which must be made 

publicly available, and include: 

(1) A description of progress related to 

meeting performance goals through 

activities to improve the quality of child 

care pursuant to § 98.51(f); and 

(2) A report describing any changes to 

State regulations, enforcement 

mechanisms, or other State policies 

addressing health and safety based on 

an annual review and assessment of 

serious injuries or deaths of children 

occurring in child care (including both 

regulated and unregulated child care 

centers and family child care homes). 

* * * * * 

■ 8. Amend § 98.18 by designating 

paragraph (b) and paragraph (b)(1) and 

adding paragraph (b)(2) to read as 

follows: 

§ 98.18 Approval and disapproval of Plans 

and Plan amendments. 

* * * * * 

(b) * * * 

(2) Lead Agencies must provide 

advance, written notice to affected 

parties (i.e., parents and child care 

providers) of substantial changes in the 

program that adversely affect income 

eligibility, payment rates, and/or sliding 

fee scales. 

* * * * * 

■ 9. Amend § 98.20 by: 

■ a. Revising paragraphs (a)(2), (a)(3)(ii) 

introductory text and (a)(3)(ii)(A); 

■ b. Redesignating paragraph (b) as 

paragraph (c); 

■ c. Adding a new paragraph (b); and 

■ d. Adding paragraph (d) 

The revisions and additions read as 

follows: 

§ 98.20 A child’s eligibility for child care 

services. 

(a) * * * 

(2) Reside with a family whose 

income does not exceed 85 percent of 

the State’s median income (SMI) for a 

family of the same size. The SMI used 

to determine the eligibility threshold 

level must be based on the most recent 

SMI data that is published by the 

Bureau of the Census; and 

(3) * * * 

(ii) Receive, or need to receive, 

protective services, which may include 

specific populations of vulnerable 

children as identified by the Lead 

Agency, and reside with a parent or 

parents (as defined in § 98.2) other than 

the parent(s) described in paragraph 

(a)(3)(i) of this section. 

(A) At grantee option, the 

requirements in paragraph (a)(2) of this 

section and in § 98.42 may be waived 

for families eligible for child care 

pursuant to this paragraph, if 

determined to be necessary on a caseby-case basis. 

* * * * * 

(b) A Lead Agency shall re-determine 

a child’s eligibility for child care 

services no sooner than 12 months 

following the initial determination or 

most recent re-determination, subject to 

the following: 

(1) During the period of time between 

re-determinations a Lead Agency, at its 

option, may consider a child to be 


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eligible pursuant to some or all of the 

eligibility requirements specified in 

paragraph (a) of this section, if the child 

met all of the requirements in paragraph 

(a) on the date of the most recent 

eligibility determination or redetermination. 

(2) The Lead Agency shall specify in 

the Plan any requirements for families 

to report changes in circumstances that 

may impact eligibility between redeterminations. 

* * * * * 

(d) Lead Agencies must take into 

consideration developmental needs of 

children when authorizing child care 

services and are not restricted to 

limiting authorized child care services 

based on the work, training, or 

educational schedule of the parent(s). 

■ 10. Amend § 98.30 by: 

■ a. Revising paragraph (a)(1); 

■ b. Removing paragraph (e)(1)(ii) and 

redesignating paragraphs (e)(1)(iii) and 

(iv) as paragraphs (e)(1)(ii) and (iii); 

■ c. Adding paragraphs (g) and (h). 

The revisions and additions read as 

follows: 

§ 98.30 Parental choice. 

(a) * * * 

(1) To enroll such child with an 

eligible child care provider that has a 

grant or contract for the provision of 

such services, in accordance with 

§ 98.50; or 

* * * * * 

(g) As long as provisions at paragraph 

(f) of this section are met, parental 

choice provisions shall not be construed 

as prohibiting a Lead Agency from 

establishing policies that require 

providers of child care services for 

which assistance is provided under this 

part to meet higher standards of quality 

as identified in a quality improvement 

system or other transparent system of 

quality indicators pursuant to § 98.33. 

(h) Parental choice provisions shall 

not be construed as prohibiting a Lead 

Agency from providing parents with 

information and incentives that 

encourage the selection of high quality 

child care. 

■ 11. Amend § 98.32 by redesignating 

paragraphs (a) through (c) as paragraphs 

(b) through (d) and adding a new 

paragraph (a) to read as follows: 

§ 98.32 Parental complaints. 

* * * * * 

(a) Establish or designate a hotline for 

parents to submit complaints about 

child care providers; 

* * * * * 

■ 12. Amend § 98.33 by: 

■ a. Revising paragraph (a); 

■ b. Redesignating paragraphs (b) and 

(c) as paragraphs (d) and (e); 

■ c. Adding new paragraphs (b) and (c); 

and 

■ d. In newly redesignated paragraph (e) 

removing ‘‘paragraph (b)’’ and adding in 

its place ‘‘paragraph (d)’’. 

The revision and additions read as 

follows: 

§ 98.33 Consumer education. 

* * * * * 

(a) Certify that it will collect and 

disseminate to parents and the general 

public, through a user-friendly, easy-tounderstand Web site and other means 

identified by the Lead Agency, 

consumer education information that 

will promote informed child care 

choices including, at a minimum, 

information about: 

(1) The full range of available 

providers, including: 

(i) Provider-specific information about 

any health and safety, licensing or 

regulatory requirements met by the 

provider, including the date the 

provider was last inspected; 

(ii) Any history of violations of these 

requirements; and 

(iii) Any compliance actions taken. 

(2) A description of health and safety 

requirements and licensing or regulatory 

requirements for child care providers 

and processes for ensuring that child 

care providers meet those requirements. 

The description must include 

information about the background check 

process for providers, and any other 

individuals in the child care setting (if 

applicable), and what offenses may 

preclude a provider from serving 

children. 

(b) As part of its consumer education 

activities, implement a transparent 

system of quality indicators appropriate 

to the provider setting, such as those 

reflected in a quality rating and 

improvement system or other system 

established by the Lead Agency, to 

provide parents with a way to 

differentiate the quality of child care 

providers available to them in their 

communities through a rating or other 

descriptive method. The system must: 

(1) Include provider-specific 

information about the quality of child 

care; 

(2) Describe the standards used to 

assess the quality of child care 

providers; 

(3) Take into account teaching staff 

qualifications and/or competencies, 

learning environment, curricula and 

activities; and 

(4) Disseminate provider-specific 

quality information, if available, 

through the Web site described in 

paragraph (a) of this section, or through 

an alternate mechanism which the Lead 

Agency shall describe in the CCDF Plan, 

which shall include a description of 

how the mechanism makes the system 

of quality indicators transparent. 

(c) For families that receive assistance 

under this part, provide information 

about the child care options available to 

them as described in paragraphs (a) and 

(b) of this section, and specific 

information about the child care 

provider selected by the parent, 

including health and safety 

requirements met by the provider 

described at 98.41(a), any licensing or 

regulatory requirements met by the 

provider, any voluntary quality 

standards met by the provider pursuant 

to paragraph (b) of this section, and any 

history of violations of health and 

safety, licensing or regulatory 

requirements. 

* * * * * 

■ 13. Amend 98.40 by redesignating 

paragraph (a)(2) as (a)(3) and adding 

new paragraph (a)(2) to read as follows: 

§ 98.40 Compliance with applicable State 

and local regulatory requirements. 

(a) * * * 

(2) Any exemptions to licensing 

requirements and a rationale for such 

exemptions; 

* * * * * 

■ 14. Amend § 98.41 by revising 

paragraphs (a)(1)(i), (a)(2), (a)(3), (d), 

and (e) to read as follows: 

§ 98.41 Health and safety requirements. 

(a) * * * 

(1) * * * 

(i) As part of their health and safety 

provisions in this area, Lead Agencies 

shall assure that children receiving 

services under the CCDF are ageappropriately immunized. Those health 

and safety provisions shall incorporate 

(by reference or otherwise) the latest 

recommendation for childhood 

immunizations of the respective State or 

territorial public health agency. 

* * * * * 

(2) Building and physical premises 

safety, which shall at a minimum 

include the following: 

(i) Comprehensive background checks 

on child care providers that include use 

of fingerprints for State checks of 

criminal history records, use of 

fingerprints for checks of Federal 

Bureau of Investigation (FBI) criminal 

history records, clearance through the 

child abuse and neglect registry (if 

available) and clearance through sex 

offender registries (if available); 

(ii) Compliance with applicable State 

and local fire, health and building 

codes, which must include ability to 

evacuate children in the case of an 

emergency. Compliance must be 

determined prior to child care providers 


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serving children receiving assistance 

under this part; and 

(iii) Emergency preparedness and 

response planning including provisions 

for evacuation and relocation, shelterin-place, and family reunification; and 

(3) Minimum health and safety 

training appropriate to the provider 

setting and age of children served, 

which shall, at a minimum, include preservice or orientation training in the 

following areas: 

(i) First-aid and Cardiopulmonary 

Resuscitation (CPR); 

(ii) Medication administration 

policies and practices; 

(iii) Poison prevention and safety; 

(iv) Safe sleep practices including 

Sudden Infant Death Syndrome (SIDS) 

prevention; 

(v) Shaken baby syndrome and 

abusive head trauma prevention; 

(vi) Age-appropriate nutrition, 

feeding, including support for 

breastfeeding, and physical activity; 

(vii) Procedures for preventing the 

spread of infectious disease, including 

sanitary methods and safe handling of 

foods; 

(viii) Recognition and reporting of 

suspected child abuse and neglect; 

(ix) Emergency preparedness planning 

and response procedures; 

(x) Management of common 

childhood illnesses, including food 

intolerances and allergies; 

(xi) Transportation and child 

passenger safety (if applicable); 

(xii) Caring for children with special 

health care needs, mental health needs, 

and developmental disabilities in 

compliance with the Americans with 

Disabilities (ADA) Act; and 

(xiii) Child development, including 

knowledge of stages and milestones of 

all developmental domains appropriate 

for the ages of children receiving 

services. 

* * * * * 

(d) Each Lead Agency shall certify 

that procedures are in effect to ensure 

that child care providers of services for 

which assistance is provided under this 

part, within the area served by the Lead 

Agency, comply with all applicable 

State, local, or tribal health and safety 

requirements, including those described 

in paragraph (a) of this section. The 

Lead Agency’s procedures: 

(1) Must include unannounced on-site 

monitoring. All child care providers of 

services for which assistance is 

provided under this part must be subject 

to on-site monitoring, including 

unannounced visits; 

(2) May not solely rely on child care 

provider self certification of compliance 

with health and safety requirements 

included in paragraph (a) of this section 

without documentation or other 

verification that requirements have been 

met; 

(3) Must require an unannounced visit 

in response to the receipt of a complaint 

pertaining to the health and safety of 

children in the care of a provider of 

services for which assistance is 

provided under this part; and 

(4) Must require child care providers 

of services for which assistance is 

provided under this part to report to a 

designated State, territorial, or tribal 

entity any serious injuries or deaths of 

children occurring in child care. 

(e) For the purposes of this section 

only, the term ‘‘child care providers,’’ at 

the option of the Lead Agency, may not 

include in-home child care providers, 

pursuant to § 98.2, and grandparents, 

great grandparents, siblings (if such 

providers live in a separate residence), 

aunts or uncles, pursuant to § 98.2. If 

the Lead Agency chooses not to include 

these providers, the Lead Agency shall 

provide a description and justification 

in the CCDF Plan, pursuant to § 98.16(l), 

of requirements, if any, that apply to 

these providers. 

■ 15. Amend § 98.42 by revising 

paragraph (c) and adding paragraph (d) 

to read as follows: 

§ 98.42 Sliding fee scales. 

* * * * * 

(c) Lead Agencies may waive 

contributions from families meeting 

criteria established by the Lead Agency. 

(d) Lead Agencies may not use cost of 

care or subsidy payment rate as a factor 

in setting co-payment amounts. 

■ 16. Amend § 98.43 by: 

■ a. Revising paragraphs (b)(1) through 

(3); 

■ b. Redesignating paragraphs (c), (d), 

and (e) as paragraphs (d), (e) and (f); 

and; 

■ c. Adding new paragraphs (b)(4) and 

(c), 

The revisions and additions read as 

follows: 

§ 98.43 Equal access. 

* * * * * 

(b) * * * 

(1) How a choice of the full range 

providers, e.g. center, family, and inhome care, is made available; 

(2) How payment rates are adequate 

based on either: 

(i) a valid, local market price study 

conducted no earlier than two years 

prior to the effective date of the 

currently approved plan; or 

(ii) an alternative methodology, such 

as a cost estimation model, that has 

been proposed by the Lead Agency and 

approved in advance by the Assistant 

Secretary; 

(3) How copayments based on a 

sliding fee scale, as stipulated at § 98.42, 

are affordable; and 

(4) Any additional facts the Lead 

Agency considered in determining that 

its payment rates ensure equal access, 

such as information on the cost of 

providing quality child care. 

(c) The Lead Agency shall take into 

account the quality of child care when 

determining payment rates. 

* * * * * 

■ 17. Amend § 98.50 by revising 

paragraphs (a) and (b)(3) to read as 

follows: 

§ 98.50 Child care services. 

(a) Of the funds remaining after 

applying the provisions of paragraphs 

(c), (d), and (e) of this section the Lead 

Agency shall spend a substantial 

portion to provide direct child care 

services to low-income working 

families. 

(b) * * * 

(3) Using funding methods provided 

for in § 98.30, which must include some 

use of grants or contracts for the 

provision of direct services, with the 

extent of such services determined by 

the Lead Agency after consideration of 

supply shortages described in the Plan 

pursuant to § 98.16(i)(1) and other 

factors as determined by the Lead 

Agency; and 

* * * * * 

■ 18. Amend § 98.51 by revising 

paragraphs (a) introductory text and 

(a)(2) and adding paragraphs (d), (e), 

and (f) to read as follows: 

§ 98.51 Activities to improve the quality of 

child care. 

(a) No less than four percent of the 

aggregate funds expended by the Lead 

Agency from each fiscal year’s 

allotment, and including the amounts 

expended in the State pursuant to 

§ 98.53(b), shall be expended for quality 

activities. 

* * * * * 

(2) Activities to improve the quality of 

child care services may include, but are 

not limited to, implementation of a 

systemic framework for organizing, 

guiding, and measuring progress of 

quality improvement activities which 

includes the following key components: 

(i) Activities to ensure the health and 

safety of children through licensing and 

health and safety standards pursuant to 

§§ 98.40 and 98.41; 

(ii) Establishment and 

implementation of age-appropriate 

learning and development guidelines for 

children of all ages, including infants, 

toddlers, and school-age children; 

(iii) Implementation of systems of 

quality improvement to evaluate, 


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improve and communicate the level of 

quality of child care programs that may 

contain the following elements: 

(A) Establishment of program 

standards that define expectations for 

quality and indicators of different levels 

of quality appropriate to the provider 

setting; 

(B) Provision of supports, training and 

technical assistance to assist child care 

programs in meeting child care quality 

improvement standards; 

(C) Provision of financial incentives 

and monetary supports to assist child 

care programs in meeting child care 

quality improvement standards; 

(D) Provision of quality assurance and 

monitoring to measure child care 

program quality over time; and 

(E) Implementation of strategies for 

outreach and consumer education 

efforts to promote knowledge of child 

care quality improvement standards to 

child care programs and to provide 

parents, including parents receiving 

assistance under this part, with 

provider-specific information about the 

quality of child care provider options 

available to them, pursuant to 

§ 98.33(b). 

(iv) Implementation of professional 

development systems to ensure a wellqualified child care workforce that may 

contain the following elements: 

(A) Establishment of core knowledge 

and competencies to define what the 

workforce should know (content) and be 

able to do (skills) in their role working 

with children and their families. 

(B) Establishment of career pathways 

to define options and a sequence of 

qualifications and ongoing professional 

development opportunities; 

(C) Conducting professional 

development assessments to build 

capacity of higher education systems 

and other training institutions to meet 

the diverse needs of the child care 

workforce and address the full range of 

development and needs of children; 

(D) Provision of access to professional 

development to ensure practitioners are 

made aware of, and receive supports 

and assistance to utilize professional 

development opportunities; and 

(E) Provision of rewards or financial 

supports to practitioners for 

participating in and completing 

education or training and for increased 

compensation; 

(v) Implementation of an 

infrastructure of support to build child 

care provider capacity to promote health 

through wellness, physical activity and 

nutrition programs, to serve children 

with special needs, dual language 

learners, and other vulnerable children 

(e.g., children in the child welfare 

system and homeless children), to 

implement family engagement 

strategies; 

(vi) Assessment and evaluation of the 

effectiveness of quality improvement 

activities; and 

(vii) Any other activities consistent 

with the intent of this section. 

* * * * * 

(d) Activities to improve the quality of 

child care services are not restricted to 

activities affecting children meeting 

eligibility requirements under § 98.20 or 

to child care providers of services for 

which assistance is provided under this 

part. 

(e) Unless expressly authorized by 

law, targeted funds for quality 

improvement and other activities that 

may be included in appropriations law 

may not count towards meeting the four 

percent minimum requirement in 

paragraph (a) of this section. 

(f) The Lead Agency must include in 

the Plan a description of performance 

goals associated with expenditure of 

funds on activities to improve the 

quality of child care pursuant to the 

quality performance report described at 

§ 98.16(v). 

■ 19. Amend § 98.52 by adding 

paragraphs (d) and (e) to read as follows: 

§ 98.52 Administrative costs. 

* * * * * 

(d) The following activities do not 

count towards the five percent 

limitation on administrative 

expenditures in paragraph (a) of this 

section: 

(1) Establishment and maintenance of 

computerized child care information 

systems; 

(2) Establishing and operating a 

certificate program; 

(3) Eligibility determination; 

(4) Preparation/participation in 

judicial hearings; 

(5) Child care placement; 

(6) Recruitment, licensing, inspection 

of child care providers; 

(7) Training for Lead Agency or subrecipient staff on billing and claims 

processes associated with the subsidy 

program; 

(8) Reviews and supervision of child 

care placements; 

(9) Activities associated with payment 

rate setting; 

(10) Resource and referral services; 

and 

(11) Training for child care staff. 

(e) If a Lead Agency enters into 

agreements with sub-recipients for 

operation of the CCDF program, the 

amount of the contract or grant 

attributable to administrative activities 

as described at § 98.52(a) shall be 

counted towards the five percent limit. 

■ 20. Revise § 98.54(b)(1) to read as 

follows: 

§ 98.54 Restrictions on the use of funds. 

* * * * * 

(b) Construction. (1) For State and 

local agencies and nonsectarian 

agencies or organizations, no funds shall 

be expended for the purchase or 

improvement of land, or for the 

purchase, construction, or permanent 

improvement of any building or facility. 

However, funds may be expended for 

minor remodeling, and for upgrading 

child care facilities to assure that 

providers meet State and local child 

care standards, including applicable 

health and safety requirements. 

Improvements or upgrades to a facility 

which are not specified under the 

definitions of construction or major 

renovation at § 98.2 may be considered 

minor remodeling and are, therefore, 

allowable. 

* * * * * 

■ 21. Amend § 98.60 by revising 

paragraph (b)(1), redesignating (d)(7) as 

paragraph (d)(8), and adding a new 

paragraph (d)(7), and revising paragraph 

(h) to read as follows: 

§ 98.60 Availability of funds. 

* * * * * 

(b) * * * 

(1) May withhold up to one half of 

one percent of the CCDF funds made 

available for a fiscal year for the 

provision of technical assistance; and 

* * * * * 

(d) * * * 

(7) In instances where third party 

agencies issue child care certificates, the 

obligation of funds occurs upon entering 

into agreement through a subgrant or 

contract with such agency, rather than 

when the third party issues certificates 

to a family. 

* * * * * 

(h) Repayment of loans made to child 

care providers as part of quality 

improvement activities pursuant to 

§ 98.51, may be made in cash or in 

services provided in-kind. Payment 

provided in-kind shall be based on fair 

market value. All loans shall be fully 

repaid. 

* * * * * 

■ 22. In § 98.61, add paragraph (f) to 

read as follows: 

§ 98.61 Allotments from the Discretionary 

Fund. 

* * * * * 

(f) Lead Agencies shall expend any 

funds that may be set-aside for targeted 

activities pursuant to annual 

appropriations law as directed by the 

Secretary. 

■ 23. Amend § 98.65 by revising 

paragraph (g) and adding paragraphs (h) 

and (i) to read as follows: 


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§ 98.65 Audits and financial reporting. 

* * * * * 

(g) The Secretary shall require 

financial reports as necessary. Lead 

Agencies shall submit financial reports 

to the Department in a manner specified 

by the Secretary quarterly for each fiscal 

year until funds are expended. 

(h) At a minimum, a State or 

territorial Lead Agency’s quarterly 

report shall include the following 

information on expenditures under 

CCDF grant funds, including 

Discretionary (which includes realloted 

funding and any funds transferred from 

the TANF block grant), Mandatory, and 

Matching funds (which includes 

redistributed funding); and State 

Matching and Maintenance-of-Effort 

(MOE) funds: 

(1) Child care administration; 

(2) Quality activities excluding 

targeted funds; 

(3) Targeted funds identified in 

appropriations law; 

(4) Direct services; 

(5) Non-direct services, including: 

(i) Systems, 

(ii) Certificate program cost/eligibility 

determination; 

(iii) All other non-direct services; and 

(6) Such other information as 

specified by the Secretary; 

(i) Tribal Lead Agencies shall submit 

financial reports annually. 

■ 24. Add § 98.68 to subpart G to read 

as follows: 

§ 98.68 Program integrity. 

(a) Lead Agencies are required to have 

effective internal controls in place to 

ensure integrity and accountability in 

the CCDF program. These shall include: 

(1) Processes to ensure sound fiscal 

management; 

(2) Processes to identify areas of risk; 

and 

(3) Regular evaluation of internal 

control activities. 

(b) Lead Agencies are required to have 

processes in place to identify fraud or 

other program violations which may 

include, but are not limited to the 

following: 

(1) Record matching and database 

linkages; 

(2) Review of attendance and billing 

records; 

(3) Quality control or quality 

assurance reviews; and 

(4) Staff training on monitoring and 

audit processes. 

(c) Lead Agencies must have 

procedures in place for documenting 

and verifying that children receiving 

assistance under this part meet 

eligibility criteria at the time of 

eligibility determination. 

(d) Lead Agencies are required to have 

processes in place to investigate and 

recover fraudulent payments and to 

impose sanctions on clients or providers 

in response to fraud. 

■ 25. Amend § 98.71 by redesignating 

paragraph (a)(15) as paragraph (a)(16) 

and adding a new paragraph (a)(15) to 

read as follows: 

§ 98.71 Content of reports. 

(a) * * * 

(15) Indicator of the quality of the 

child care provider pursuant to 

§ 98.33(b); and 

* * * * * 

■ 26. Amend § 98.81 by revising 

paragraph (b)(6) to read as follows: 

§ 98.81 Application and Plan procedures. 

* * * * * 

(b) * * * 

(6) The Plan is not subject to 

requirements in § 98.16(g)(8), (i)(1), or 

(i)(4). 

■ 27. Amend § 98.83 by revising 

paragraphs (d), (f)(1), and (f)(2) and 

removing paragraph (f)(3) to read as 

follows: 

§ 98.83 Requirements for tribal programs. 

* * * * * 

(d) Tribal Lead Agencies shall not be 

subject to the requirements at 

§§ 98.33(a), limited to the Web site 

requirement, 98.44(a), 98.50(b)(3), 

98.50(e), 98.52(a), 98.53, and 98.63. 

* * * * * 

(f) * * * 

(1) The assurance at § 98.15(a)(2); and 

(2) The requirement for certificates at 

§ 98.30(a) and (d). 

* * * * * 

■ 28. Amend § 98.100 by revising the 

second sentence in paragraph (b) to read 

as follows: 

§ 98.100 Error Rate Report. 

* * * * * 

(b) * * * States, the District of 

Columbia and Puerto Rico must use this 

report to calculate their error rates, 

which is defined as the percentage of 

cases with an error (expressed as the 

total number of cases with an error 

compared to the total number of cases); 

the percentage of cases with an 

improper payment (expressed as the 

total number of cases with an improper 

payment compared to the total number 

of cases); the percentage of improper 

payments (expressed as the total amount 

of improper payments in the sample 

compared to the total dollar amount of 

payments made in the sample); and the 

average amount of improper payment. 

* * * 

* * * * * 

■ 29. Amend § 98.102 by: 

■ a. Removing paragraph (a)(5); 

■ b. Redesignating paragraphs (a)(6) 

through (10) as (a)(5) through (9); and 

■ c. Adding paragraph (c). 

The addition reads as follows: 

§ 98.102 Content of Error Rate Reports 

* * * * * 

(c) Any Lead Agency with an 

improper payment rate that exceeds a 

threshold established by the Secretary 

must submit to the Assistant Secretary 

for approval a comprehensive corrective 

action plan, as well as subsequent 

reports describing progress in 

implementing the plan. 

(1) The corrective action plan must be 

submitted within 60 days of the 

deadline for submitting the Lead 

Agency’s standard error rate report 

required by § 98.102(b). 

(2) The corrective action plan must 

include the following: 

(i) Identification of a senior 

accountable official; 

(ii) Milestones that clearly identify 

actions to be taken to reduce improper 

payments and the individual 

responsible for completing each action; 

(iii) A timeline for completing each 

action within 1 year of the Assistant 

Secretary’s approval of the plan, and for 

reducing the improper payment rate 

below the threshold established by the 

Secretary; and 

(iv) Targets for future improper 

payment rates. 

(3) Subsequent progress reports must 

be submitted as requested by the 

Assistant Secretary. 

(4) Failure to carry out actions 

described in the approved corrective 

action plan will be grounds for a penalty 

or sanction under § 98.92. 

* * * * * 

§§ 98.16, 98.20, 98.30, 98.50, 98.51, 98.53, 

98.81, and 98.102 [Amended] 

■ 30. In the table below, for each section 

indicated in the left column, remove the 

cross-reference indicated in the middle 

column from wherever it appears in the 

section, and add the cross-reference 

indicated in the right column: 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
29498 Federal Register / Vol. 78, No. 97 / Monday, May 20, 2013 / Proposed Rules 

REDESIGNATION TABLE

Amended sections Remove cross-reference citations Add, in its place, new cross-reference 

citations 

§ 98.16(r), as redesignated ................................ § 98.33(b) ......................................................... § 98.33(d). 

§ 98.20(a)(3)((ii)(B) ............................................. § 98.16(f)(7) ...................................................... § 98.16(g)(7). 

§ 98.20(c), as redesignated ................................ § 98.16(g)(5) ..................................................... § 98.16(i)(5). 

§ 98.30(e)(1)(iii), as redesignated ...................... § 98.16(g)(2) ..................................................... § 98.16(i)(2). 

§ 98.50(f) ............................................................. § 98.16(g)(4) ..................................................... § 98.16(i)(4). 

§ 98.51(b) ............................................................ § 98.16(h) ......................................................... § 98.16(j). 

§ 98.53(f) ............................................................. § 98.16(c)(2) ..................................................... § 98.16(d)(2). 

§ 98.53(h)(2) ....................................................... § 98.16(q) ......................................................... § 98.16(s). 

§ 98.81(b)(5) ....................................................... § 98.16(g)(2) ..................................................... § 98.16(i)(2). 

§ 98.81(b)(5) ....................................................... § 98.16(k) ......................................................... § 98.16(m). 

§ 98.102(b)(2) ..................................................... § 98.102(a)(1) through (5) ................................ § 98.102(a)(1) through 4. 

(Catalog of Federal Domestic Assistance 

Program Number 93.575, Child Care and 

Development Block Grant; 93.596, Child Care 

Mandatory and Matching Funds) 

Dated: January 12, 2012. 

George H. Sheldon, 

Acting Assistant Secretary for Children and 

Families. 

Approved: January 19, 2012. 

Kathleen Sebelius, 

Secretary. 

Note: This document was received by the 

Office of the Federal Register on May 13, 

2013. 

[FR Doc. 2013–11673 Filed 5–16–13; 11:15 am] 

BILLING CODE 4184–01–P 


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