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[Federal Register Volume 89, Number 222 (Monday, November 18, 2024)]
[Rules and Regulations]
[Pages 90605-90608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26909]

[[Page 90605]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 98

RIN 0970-AD11

Increase Flexibility for Tribes in Child Care and Development 
Fund (CCDF) Eligibility

AGENCY: Office of Child Care (OCC), Administration for Children and 
Families (ACF), Department of Health and Human Services (HHS).

ACTION: Final rule.

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SUMMARY: This final rule amends the Child Care and Development Fund 
(CCDF) regulations to provide all Indian Tribes and Tribal 
Organizations operating CCDF programs the flexibility, at their 
discretion, to establish and use eligibility criteria regardless of 
family income or assets.

DATES: Effective: November 18, 2024.

FOR FURTHER INFORMATION CONTACT: Megan Campbell, Office of Child Care, 
202-690-6499 or [email protected].

SUPPLEMENTARY INFORMATION:

 
 
 
I. Statutory Authority.........................................        3
II. Background.................................................        3
    Effective Dates............................................        5
    Severability...............................................        5
III. Development of Regulation.................................        5
IV. Discussion of Comments and Regulatory Provisions...........        7
V. Regulatory Process Matters..................................        9
    Regulatory Flexibility Act.................................       11
    Unfunded Mandates Reform Act of 1995.......................       12
    Executive Order 13132......................................       12
    Assessment of Federal Regulations and Policies on Families.       13
    Regulatory Review..........................................       13
VI. Tribal Consultation Statement..............................       14
List of Subjects in 45 CFR Part 98.............................       14
 

I. Statutory Authority

    This final rule is being issued under the authority granted to the 
Secretary of Health and Human Services by the Child Care and 
Development Block Grant (CCDBG) Act of 1990, as amended (42 U.S.C. 9857 
et seq.), and section 418 of the Social Security Act (42 U.S.C. 618).

II. Background

    In response to requests from Tribal Leaders and Tribal Child Care 
and Development Fund (CCDF) Lead Agencies for more flexibility on 
family income eligibility to better meet community needs and to recent 
statutory changes to eligibility in the Tribal Head Start program, this 
final rule amends the CCDF regulations to provide all Tribal CCDF Lead 
Agencies the flexibility to serve Indian children (as defined by the 
Tribal Lead Agency) in their defined service area regardless of family 
income or assets. This final rule is also responsive to Executive Order 
14112, Reforming Federal Funding and Support for Tribal Nations To 
Better Embrace Our Trust Responsibilities and Promote the Next Era of 
Tribal Self-Determination, which directs agencies to ``increase the 
accessibility, equity, flexibility, and utility of Federal funding.'' 
This final rule provides Tribal Nations with more flexibility to better 
meet community needs, responds to calls for greater Tribal sovereignty 
and self-determination, and facilitates better alignment between Tribal 
CCDF and American Indian and Alaska Native (AIAN) Head Start programs.
    The CCDBG Act (42 U.S.C. 9857 et seq.), hereafter referred to as 
the ``Act,'' together with section 418 of the Social Security Act (42 
U.S.C. 618), authorize the CCDF program, which is the primary federal 
funding source to Tribes, States, and Territories devoted to supporting 
families access to child care and to increasing the quality of child 
care for all children. CCDF plays a vital role in supporting child 
development and family well-being; facilitating parent employment, 
training, and education; and improving the economic well-being of 
participating families. In fiscal year (FY) 2024, 264 Tribal Lead 
Agencies representing 546 federally recognized Tribal Nations received 
CCDF grants totaling nearly $600 million.\1\ Annual Tribal CCDF awards 
range from $70,000 to $88 million per year.
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    \1\ https://www.acf.hhs.gov/occ/data/gy-2024-ccdf-tribal-allocations-based-appropriations.
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    The Act does not explicitly apply most of its provisions to the 
Tribal CCDF program, so with some exceptions and within certain 
parameters, the Secretary of Health and Human Services has the 
authority to determine many of the CCDF requirements for Tribal Lead 
Agencies, including the family income and assets eligibility 
requirements for children to receive services from Tribal CCDF 
programs. Previous Tribal CCDF regulations included different family 
income and assets eligibility requirements and flexibilities based on a 
Tribal Lead Agency's award allocation size in FY 2016. Tribal Lead 
Agencies who had allocations under $250,000 in 2016 (155 Tribal Lead 
Agencies) could serve any Indian child (as defined by the Tribal Lead 
Agency) in their defined service area, regardless of family income or 
assets. However, Tribal Lead Agencies with allocations above $250,000 
in 2016 were subject to the same CCDF income and assets eligibility 
standard as States, set forth at Sec.  98.20(a)(2), which meant that 
family income could not be more than 85 percent of Grantee Median 
Income (GMI) and family assets could not exceed $1 million.
    This final rule extends the existing flexibility for Tribal Lead 
Agencies with small allocations to disregard family income and assets 
in determining family eligibility for CCDF to all Tribal Lead Agencies. 
All Tribal CCDF Lead Agencies may continue to use family income and/or 
assets criteria for eligibility at their option, but it will no longer 
be a requirement. Tribal Lead Agencies choosing to use family income or 
assets criteria for eligibility would have the flexibility to determine 
the appropriate threshold for their Nation. This final rule does not 
alter existing flexibilities that permit Tribal Lead Agencies with 
medium and large allocations to apply categorical eligibility criteria 
for families under certain conditions.
    This final rule will benefit Tribal Nations by better aligning 
family income eligibility rules in the Tribal CCDF with Head Start 
programs and providing necessary flexibility to determine how early 
childhood program

[[Page 90606]]

family income or assets determinations can best support their 
communities. This alignment is particularly salient because many 
American Indian and Alaskan Native (AIAN) Head Start grant recipients 
administer a Tribal CCDF program. At the request of Tribal Nations and 
the Biden-Harris Administration, the Further Consolidated 
Appropriations Act, 2024 (Public Law (Pub. L.) 118-47, Div. D, Tit. II, 
Sec. 238) included changes to AIAN Head Start eligibility criteria, to 
make eligible for Head Start services all age-eligible children in an 
AIAN program's service area regardless of income. The Head Start Act, 
unlike the CCDBG Act, required legislative action to make this change.

Effective Dates

    This final rule will become effective on the date of publication to 
expedite Tribal Lead Agencies' ability to implement the flexibilities 
included in this final rule.

Severability

    The provisions of this final rule are intended to be severable, 
such that, in the event a court were to invalidate any particular 
provision or deem it to be unenforceable, the remaining provisions 
would continue to be valid.

III. Development of Regulation

    ACF published a notice of proposed rulemaking (NPRM) in the Federal 
Register on July 16, 2024, (89 FR 57835) proposing revisions to CCDF 
regulations. We provided a 60-day comment period during which 
interested parties could submit comments in writing electronically.
    ACF received 18 comments on the proposed rule (public comments on 
the proposed rule are available for review on www.regulations.gov), 
including Tribal Nations and Tribal organizations, a state CCDF Lead 
Agency, non-profit and research organizations, parents, and individual 
members of the public. Public comments informed the development of 
content for this final rule.
    Tribal consultation and comments. ACF is committed to consulting 
with Tribal Nations prior to promulgating any regulation that has 
Tribal implications. ACF held a formal consultation session virtually 
in August 2024 with Tribal leaders and authorized representatives to 
discuss the impact of the proposed regulations on Tribes. Tribes and 
Tribal organizations were informed of these events through formal 
letters to Tribal leaders and announcements to Tribal CCDF 
administrators. ACF also distributed materials specifically addressing 
the impact of the proposed rule on Tribes. ACF will publish a 
consultation report, which will be posted as a supplemental document in 
the Federal Register and will include information on consultation 
attendees as well as their specific comments. During consultation, ACF 
received testimony from one authorized representative who expressed 
strong support for the proposed change. This final rule was informed by 
this testimony.
    In addition, prior to the development of the NPRM, OCC sought 
feedback from Tribal Nations and other interested parties on areas 
where more flexibility and/or different program rules would better 
serve children, families, and Tribal Nations through a formal Request 
for Information (RFI), published in the Federal Register at 88 FR 48409 
(July 27, 2023). Through the RFI process, many Tribal Lead Agencies 
expressed support for changing eligibility requirements so they can 
serve Indian children (as defined by the Tribal Lead Agency), 
regardless of family income. OCC also received feedback on the need for 
flexibility in eligibility determination at the ACF Tribal Early 
Childhood Consultation held in July 2024. This final rule was informed 
by this feedback.
    This final rule maintains the structure and organization of the 
current CCDF regulations. Where language of previous 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 rule. (See 57 FR 34352, 
Aug. 4, 1992; 63 FR 39936, Jul. 24, 1998; 72 FR 27972, May 18, 2007; 72 
FR 50889, Sep. 5, 2007; 81 FR 67438, Sept. 30, 2016; 89 FR 15366, Mar. 
1, 2024).

IV. Discussion of Comments and Regulatory Provisions

    This final rule amends Sec.  98.81(b)(1) to provide all CCDF Tribal 
Lead Agencies the flexibility to determine family eligibility for CCDF 
without regard to family income and assets. Specifically, the rule 
revises Sec.  98.81(b)(1)(ii) so that all Tribal Lead Agencies may 
disregard family income and assets requirements described in Sec.  
98.20(a)(2), while retaining the ability for Tribal Lead Agencies with 
a Tribal median income below a level determined by the Secretary to 
deem any child in their service area categorically eligible, regardless 
of work, or training status. Previously, the 40 percent of Tribal Lead 
Agencies with medium and large allocations were subject to the 
requirements at Sec.  98.20(a)(2) that children must be in families 
with incomes below 85 percent Grantee Median Income (GMI) and with 
assets under $1 million to be eligible for CCDF. Tribes with small 
allocations were already exempt from the requirements at Sec.  
98.20(a)(2). Extending the flexibility to serve any Indian child in the 
service area regardless of family income or assets to all Tribal Lead 
Agencies gives the Lead Agencies the authority to better meet the needs 
of Tribal Nations and their communities and supports Tribal sovereignty 
and self-determination. It also creates better opportunities for Tribes 
to align CCDF programs with other Tribal early childhood programs, 
including Tribal home visiting, Early Head Start, Head Start preschool, 
and tribally or state funded preschool.
    The new flexibility included in this final rule is at the option of 
the Tribal Lead Agency. Therefore, Tribal Lead Agencies with medium and 
large allocations may choose to continue using income and/or assets 
when determining if a child is eligible for CCDF. Tribal Lead Agencies 
who choose to keep income and/or assets as eligibility criteria are not 
limited to setting the income threshold at or below 85 percent GMI, or 
an asset limit at $1 million and may set these thresholds higher.
    This final rule does not make any other changes to Tribal CCDF 
regulations. No other changes were made to family eligibility rules, 
including existing Tribal categorical eligibility flexibilities, which 
remain unchanged.
    Comment: Commenters unanimously expressed support for the proposed 
change to provide all Tribal Lead Agencies the flexibility to serve all 
Indian children (as defined by the Lead Agency) in their service area 
regardless of family income or assets. Commenters noted that the change 
is a step toward promoting Tribal sovereignty and enabling Tribal 
Nations to implement the CCDF program in a way that meets the unique 
needs of each community. They also noted that the change better aligns 
with eligibility rules of other early childhood programs, including 
Head Start, which may lead to more inclusive and equitable services for 
Native families.
    Response: We acknowledge that commenters supported the proposed 
change and agree that this change supports Tribal sovereignty and have 
retained the provision as proposed with one minor addition to clarify 
that Tribal Lead Agencies may disregard eligibility requirements for 
assets, in addition to

[[Page 90607]]

those required for income, which has always been the intent of the 
rule.
    Comment: While all commenters supported the change, some noted that 
all Tribal Lead Agencies may not have the funding to serve all Indian 
children in their service areas.
    Response: This regulatory change provides a new flexibility for all 
Tribal Lead Agencies. The rule does not impact Congressionally 
appropriated funds or Tribal CCDF allocations. Disregarding income and 
assets as eligibility criteria is an option for Tribal Lead Agencies, 
not a requirement. Tribal Lead Agencies have flexibility to establish 
income and asset requirements that balance the needs of the community 
and resources available.

V. Regulatory Process Matters

Paperwork Reduction Act

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq., as 
amended), all Departments are required to submit to the Office of 
Management and Budget (OMB) for review and approval any reporting or 
recordkeeping requirements inherent in a proposed or final rule. As 
required by this Act, we will submit all revised data collection 
requirements to OMB for review and approval.
    The final rule modifies the previously approved ACF-118-A CCDF 
Tribal Plan information collection (OMB #0970-0198). ACF initiated the 
process to receive OMB approval to revise and extend approval of the 
ACF-118-A CCDF Tribal Plan. This began with the initial 60-day comment 
period, which started on July 2, 2024, (89 FR 54827) and the first 
comment period ended on September 3, 2024. ACF will include the changes 
that result from this final rule in the revision request that is 
submitted to OMB for review and approval. This includes updates to the 
information collection and the associated burden estimates. This 
process will include publication of a second Federal Register notice 
soliciting public comments over a 30-day period on the revisions to the 
ACF-118-A CCDF Tribal Plan.

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                                           Relevant
            CCDF title/code             section in the  OMB control   Expiration            Description
                                         proposed rule      No.          date
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ACF-118-A (CCDF Tribal Plan) Part I       Sec.   98.81    0970-0198    4/30/2025  This final rule provides new
 and Part II.                                                                      flexibilities which Tribal
                                                                                   lead agencies with medium and
                                                                                   large allocations will be
                                                                                   required to report on in the
                                                                                   CCDF plans.
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    The table below provides current approved annual burden hours and 
estimated annual burden hours for these existing information 
collections that are modified by this final rule.

                                                                 Annual Burden Estimates
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                                                                                              Current                        Estimated
                                                                Total      Total number      approved                     average burden     Estimated
                         Instrument                           number of    of responses   average burden  Current annual     hours per     annual burden
                                                             respondents  per respondent     hours per     burden hours   response based  hours based on
                                                                                             response                      on final rule    final rule
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ACF-118A Part I (for all tribes)...........................          265               1             120          10,600             120          10,600
ACF-118-A Part II (for medium and large Tribes only).......          106               1              24             848              24             848
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    We did not receive any public comments on these burden estimates, 
which were included in the NPRM.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (see 5 U.S.C. 605(b), as 
amended by the Small Business Regulatory Enforcement Fairness Act) 
requires federal agencies to determine, to the extent feasible, a 
rule's impact on small entities, explore regulatory options for 
reducing any significant impact on a substantial number of such 
entities, and explain their regulatory approach. The term ``small 
entities,'' as defined in the RFA, comprises small businesses, not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000. HHS considers a rule to have a 
significant impact on a substantial number of small entities if it has 
at least a 3 percent impact on revenue on at least 5 percent of small 
entities. The Secretary certifies, under 5 U.S.C. 605(b), as enacted by 
the RFA (Pub. L. 96-354), that this rulemaking will not result in a 
significant impact on a substantial number of small entities, as this 
rulemaking primarily impacts tribes receiving federal CCDF grants. 
Therefore, a regulatory flexibility analysis is not required for this 
document.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of regulatory actions on state, local, and tribal governments, 
and the private sector. Under section 202 of the UMRA, the Department 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``federal mandates'' that 
may result in expenditures by State, local or Tribal governments, in 
the aggregate, or the private sector, of $100 million in 1995 dollars, 
updated annually for inflation. In 2024 the threshold is approximately 
$183 million. This final rule does not impose an unfunded mandate on 
State, local, or Tribal governments or the private sector of more than 
$183 million per year. Therefore, ACF is not required to provide a 
statement, including a cost-benefit analysis, of the impacts of the 
changes.

Executive Order 13132

    Executive Order 13132 requires federal agencies to consult with 
State and local government officials if they develop regulatory 
policies with federalism implications. Federalism is rooted in the 
belief that issues that are

[[Page 90608]]

not national in scope or significance are most appropriately addressed 
by the level of government close to the people. This rulemaking does 
not have substantial direct impact on the States, on the relationship 
between the federal government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
Therefore, in accordance with section 6 of Executive Order 13132, this 
action does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement.

Assessment of Federal Regulations and Policies on Families

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

Regulatory Review

    We have examined the impacts of the rule under Executive Order 
12866, Executive Order 13563, the RFA (5 U.S.C. 601-612), and the UMRA 
of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to 
assess all benefits, costs, and transfers of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety, and other advantages; 
distributive impacts; and equity).
    The Office of Information and Regulatory Affairs has determined 
that this final rule is not a significant regulatory action under 
section 3(f)(1) of Executive Order 12866, as amended by Executive Order 
14094. This final rule has, however, been designated ``a significant 
regulatory action'' under section 3(f) of Executive Order 12866, as 
amended by Executive Order 14094. Of the nearly $600 million 
appropriated for 264 Tribal Lead Agencies in FY 2024, approximately 
$422 million was allocated to grantees that already have discretion to 
take-up the flexibilities included in this rule. The remaining $173 
million is allocated to Tribal Lead Agencies that could be impacted by 
the change included in this rule. Further, these Tribal Lead Agencies 
have discretion on whether to adopt this flexibility based on their 
unique needs. This final rule does not stipulate any new requirements.

VI. Tribal Consultation Statement

    Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments, requires agencies to consult with Indian tribes 
when regulations have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes. The discussion in sections 
III and IV of the preamble serves as the Tribal impact statement and 
contains a detailed description of the consultation and outreach in 
this final rule.

(Catalog of Federal Domestic Assistance Program Number 93.575, Child 
Care and Development Block Grant; 93.596, Child Care Mandatory and 
Matching Funds)

    Dated: November 14, 2024.
Xavier Becerra,
Secretary, Department of Health and Human Services.

List of Subjects in 45 CFR Part 98

    Child care, Grant programs-social programs.

    For the reasons set forth in the preamble, we amend 45 CFR part 98 
as follows:

PART 98--CHILD CARE AND DEVELOPMENT FUND

0
1. The authority citation for part 98 continues to read as follows:

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

0
2. Amend Sec.  98.81 by revising paragraph (b)(1)(ii) to read as 
follows.

Sec.  98.81  Application and Plan procedures.

* * * * *
    (b) * * *
    (1) * * *
    (ii) The basis for determining family eligibility may be determined 
by the Tribe notwithstanding family income or assets as described in 
Sec.  98.20(a)(2).
* * * * *
[FR Doc. 2024-26909 Filed 11-15-24; 8:45 am]
BILLING CODE 4184-87-P
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