Opinion ID: 2195514
Heading Depth: 1
Heading Rank: 6

Heading: Federal Law Providing Funding for Child Care Subsidy Program

Text: In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), Pub. L. No. 104-193, 110 Stat. 2105 (1996). PRWORA made significant changes to federal oversight and funding of public assistance programs, including childcare programs. Before PRWORA, the states received funding for childcare programs primarily from the following four sources: (1) Part of the federal Social Security Act guaranteed childcare assistance to families participating in the aid to families with dependent children program (AFDC); (2) another part of the federal Social Security Act guaranteed childcare assistance to families transitioning off AFDC; (3) a third part of the federal Social Security Act granted funds to the states to create programs to assist working parents not eligible for AFDC, but at risk of becoming dependent upon AFDC; and (4) the Child Care and Development Block Grant Act of 1990 (CCDBGA) provided childcare assistance to low-income families who were working or in education or training programs. See, generally, Jo Ann C. Gong, Child Care in the Wake of the Federal Welfare Act, 30 Clearinghouse Rev. 1044 (1997). The childcare provisions of the PRWORA were meant to streamline what was considered to be a confusing system. See id. States now receive most of their federal funding for childcare assistance out of the childcare and development fund. This fund is created out of three primary funding streams. The first stream is set out at 42 U.S.C. § 618(a)(1) (2000), part of subchapter IV of the Social Security Act. The second stream is found at 42 U.S.C. § 9858 (2000), part of the CCDBGA. The third stream is set out at 42 U.S.C. § 618(a)(2), also part of subchapter IV of the Social Security Act. In addition to these three funding streams, states have the option of diverting 30 percent of the funds they receive under the temporary assistance for needy families program, which supplanted AFDC, to the childcare and development fund. See 42 U.S.C. § 604(d)(1)((B) (2000). See, also, Gong, supra. As noted, these funding streams flow into the childcare and development fund, which is governed by the CCDBGA. So, although the funding streams originate in different places, once they flow into the childcare and development fund, they are subject to the requirements and limitations of [the CCDBGA]. 42 U.S.C. § 618(c). The CCDBGA contains many limitations and requirements, but for the purposes of this case, the pertinent limitation is 42 U.S.C. § 9858n(4) (2000). It defines an eligible child as one: (A) who is less than 13 years of age; (B) whose family income does not exceed 85 percent of the State median income for a family of the same size ; and (C) who (i) resides with a parent or parents who are working or attending a job training or educational program; or (ii) is receiving, or needs to receive, protective services and resides with a parent or parents not described in clause (i). (Emphasis supplied.) This provision, however, does not require that states make aid available to all children who meet the definition of eligible child. This is made clear by 42 U.S.C. § 9858d(a) (2000), which states, Nothing in this subchapter shall be construed . . . (2) to limit the right of any State to impose additional limitations or conditions on contracts or grants funded under this subchapter. Therefore, the definition of eligible child in 42 U.S.C. § 9858n(4) acts as a cap; it prevents the states from providing aid to children whose family income exceeds 85 percent of the state median income for a family of the same size. For example, a state could limit aid to children whose family income does not exceed 40 percent of the state median income, but the state could not provide aid to a child whose family income is 95 percent of the state median income for a family of the same size.