[Federal Register Volume 59, Number 90 (Wednesday, May 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11087]


[[Page Unknown]]

[Federal Register: May 11, 1994]


_______________________________________________________________________

Part II





Department of Health and Human Services





_______________________________________________________________________



Administration for Children and Families



_______________________________________________________________________



45 CFR Part 98, et al.



Child Care and Development Block Grants and Aid to Families With 
Dependent Children and Child Care Programs; Proposed Rule
DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 98

Administration for Children and Families

45 CFR Parts 255, 256 and 257

RIN 0970-AB33

 

Aid to Families With Dependent Children Child Care Program, 
Transitional Child Care and At-Risk Child Care; Child Care and 
Development Block Grant

AGENCY: Administration for Children and Families (ACF), HHS.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Administration for Children and Families (ACF) proposes to 
amend the regulations for the Child Care and Development Block Grant 
(CCDBG), child care serving Aid to Families with Dependent Children 
(AFDC) families, the Transitional Child Care program (TCC), and At-Risk 
Child Care program.
    The purpose of this proposal is to support States, Territories and 
Tribes in their efforts to increase the availability and quality of 
federally-subsidized child care, develop more coordinated delivery 
systems, and improve child care opportunities for families, providers 
and communities.
    The proposed rule is presented in a single package because of our 
intent to remove regulatory barriers to program coordination, to 
increase flexibility across the four programs, and to promote common 
goals. The proposed rule addresses certain key areas of mutual concern 
for operation of these programs: Accessibility to higher quality care 
through amended payment rates; adaptation of payment policies for 
children with special needs as a result of the Americans with 
Disabilities Act; impact of the Fair Labor Standards Act and other 
Federal and State statutes on in-home care; and deletion of provisions, 
known as the effects test, which may be construed as minimizing 
regulatory protection for children in care concerning State 
implementation of health and safety standards.
    The proposed amendments to the CCDBG regulations additionally 
include technical amendments required by the Juvenile Justice and 
Delinquency Prevention Amendments of 1992 and the Older Americans Act 
Technical Amendments. Other proposals respond to general concerns about 
payment differentials for quality care, children's immunizations, 
eligibility of children in foster care, availability of certificates as 
a payment mechanism, and cost limitations for administration and 
certain other activities.
    The proposed amendments to the regulations for child care for AFDC 
families, TCC, and At-Risk Child Care promote coordination among these 
programs and also with CCDBG to: provide State flexibility in 
determining a child's physical or mental incapacity; modify and codify 
policy regarding child care during gaps in employment; require States 
to define how child care is reasonably related to the parent's work or 
other activity; and allow States flexibility to conform family fee 
requirements. Additionally, proposed amendments to TCC would give 
States the option to provide TCC to families who voluntarily terminate 
their AFDC benefit, and address the process of requesting TCC.

DATES: Interested persons and agencies are invited to submit written 
comments concerning these proposed regulations no later than July 11, 
1994.

ADDRESSES: Comments should be mailed (facsimile transmissions will not 
be accepted) to the Assistant Secretary for Children and Families, 
Attention: Child Care Comments, OFA/DJP, Fifth Floor, 370 L'Enfant 
Promenade, SW., Washington, DC 20447, or delivered to the 
Administration for Children and Families, Office of Family Assistance, 
Aerospace Building, Fifth Floor East, 901 D Street, SW., Washington, DC 
between 8 a.m. and 4:30 p.m. on regular business days. Comments 
received may be inspected during the same hours by making arrangements 
with the contact persons shown below.

FOR FURTHER INFORMATION CONTACT: For questions concerning the title IV-
A child care programs, please contact Mary Ann Higgins, Director, 
Division of JOBS Program, Fifth Floor, 370 L'Enfant Promenade SW., 
Washington, DC 20447, telephone (202) 401-9294. For questions 
concerning the Child Care and Development Block Grant, please contact 
Helen Morgan Smith, Acting Director, Division of Child Care, Hubert 
Humphrey Building, room 352G, 200 Independence Avenue, SW., Washington, 
DC 20201, telephone (202) 690-6241. 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:

Background

    The Administration for Children and Families (ACF) administers a 
number of programs that address the child care needs of low-income 
families. In recent years, the scope of ACF-administered child care 
programs was broadened to address the child care needs of increasingly 
larger segments of the population. ACF's child care programs reflect a 
growing awareness of the needs of the family for safe child care that 
also attends to the developmental needs of children. They offer the 
Nation's low income families an important support in their efforts to 
achieve and maintain economic independence.
    Child care needs for working families who receive Aid to Families 
with Dependent Children (AFDC) benefits were first addressed through 
the dependent care disregard. The family's child care expense (up to 
$200 a month for a child under age 2 and up to $175 for a child who is 
at least age 2) is deducted from the family's earnings when determining 
the amount of the family's countable income for the purpose of the 
family's eligibility for and amount of AFDC assistance. The dependent 
care disregard is used by most States as one method for providing child 
care to working AFDC families.
    The Social Services Block Grant (title XX of the Social Security 
Act) enables States to provide social services which are best suited to 
the needs of its residents. These services can include child care, and 
most States have used title XX funds to provide child care through 
contracts with providers.
    The regulatory changes proposed in this rule concern four child 
care programs created through two statutes: the Family Support Act of 
1988 (Pub. L. 100-485) and the Omnibus Budget Reconciliation Act of 
1990 (OBRA 90). A brief description of each program and of the overall 
goals of this proposed rule follows.
    The Family Support Act of 1988 amended title IV-A of the Social 
Security Act at section 402(g), providing a very significant extension 
of ACF's ability to fund child care services. The amendment created two 
new child care programs. First, it guaranteed necessary child care for 
working AFDC recipients, and for AFDC recipients in approved education 
or training activities (including the Job Opportunities and Basic 
Skills Training (JOBS) Program). This program is often called AFDC 
child care. The regulations for AFDC child care are located at 45 CFR 
part 255. An amendment concerning applicable child care standards under 
45 CFR 255.4 (Allowable Costs and Matching Rates) became effective on 
August 4, 1992.
    Second, the Family Support Act addressed the need for Transitional 
Child Care (TCC) during the 12 months after a family becomes ineligible 
for AFDC due to work. The regulations specific to TCC are located at 45 
CFR part 256. However, many of the regulations for AFDC child care 
(part 255) also apply to TCC.
    With OBRA 90, Congress established two additional child care 
programs that further extended child care services to the Nation's low-
income families: an optional At-Risk Child Care program (child care for 
low-income working families in need of such care and otherwise at risk 
of becoming eligible for AFDC) and the Child Care and Development Block 
Grant (CCDBG).
    Currently, 49 States and the District of Columbia have approval to 
operate the At-Risk program. That program, like the other title IV-A 
child care programs, requires the State to match Federal funds, but, 
unlike the other programs, it is capped and the funds are distributed 
according to a formula. The At-Risk Child Care program is located at 
section 402(i) of title IV-A of the Social Security Act. The At-Risk 
regulations are located at 45 CFR part 257.
    In this preamble, we refer to AFDC child care, TCC, and At-Risk 
Child Care as the title IV-A programs.
    The CCDBG is intended to provide child care services for low-income 
families and to increase the availability, affordability, and quality 
of child care and development services. That program does not require a 
State match. Regulations for the CCDBG program are located at 45 CFR 
parts 98 and 99.
    The Juvenile Justice and Delinquency Prevention Amendments of 1992, 
Public Law 102-586, made various technical changes to the CCDBG. For 
example, section 8(a)(1) and (2) of the amendments made changes to 
section 658J(c) of the Block Grant Act by replacing ``obligation 
period'' with ``expenditure period.'' Other minor technical corrections 
to the Block Grant Act are included in the Older Americans Act 
Technical Amendments, Public Law 103-171.

Purpose of Proposed Rule

    This proposed rule incorporates lessons ACF has learned from our 
initial experience with the title IV-A and CCDBG programs. Our purpose 
is to remove barriers, promote coordination, foster higher quality 
care, and champion the health of our neediest children. We have 
evaluated State and Tribal child care program plans, conducted many 
child care program field reviews, sponsored two national child care 
conferences, held symposia for States and Tribes, and participated in 
many other conferences and meetings. We have listened as State 
representatives and others voiced desire for remedies of regulatory 
barriers to the operation of seamless child care delivery systems and 
for the ability to deliver higher quality care. This section of the 
preamble gives an overview of our findings and considerations. These 
ideas for change are developed in greater detail later in the preamble.
    There are four main purposes of this proposed rule. First, it is a 
vehicle for responding to changes needed to existing regulations to 
achieve consistency with recently enacted law. We thus propose changes 
to the CCDBG regulations required by the Juvenile Justice and 
Delinquency Prevention Amendments of 1992 and the Older Americans Act 
Technical Amendments. We also propose amendments and provide guidance 
in the preamble on how payments for special needs children can be made 
under both title IV-A child care and CCDBG in light of the Americans 
with Disabilities Act (ADA), Public Law 101-336, enacted on July 26, 
1990.
    Second, these proposals reflect ACF's desire to help States 
facilitate operation of the title IV-A and CCDBG programs based on the 
experiences of both States and families with existing program policy. 
The changes will give States some immediate relief to certain 
regulatory barriers. Many of these proposals will permit States to 
coordinate the four programs better, making services more seamless for 
child care providers and families. Allowing for greater conformity 
among the sliding fee scales for title IV-A child care and CCDBG is an 
example of this kind of effort. Allowing States to determine physical 
or mental incapacity of children to be served under title IV-A 
consistent with CCDBG rules is another example.
    Third, our objective in proposing these changes is to strengthen 
States' capacity to ensure the quality of federally-subsidized child 
care services by removing regulatory barriers. We believe the quality 
of federally-subsidized child care is important and want to promote 
safe and healthy environments for children that foster their 
development and overall well-being. We wish to further foster quality 
in partnership with the States. Our proposals to foster quality include 
eliminating the regulation in the CCDBG that limits payment 
differentials within categories of care to no more than 10 percent. We 
also propose to allow States to pay the actual charge for higher 
quality child care for children in title IV-A programs, without regard 
to the 75th percentile of the local cost of care, for child care that 
meets State-designated objective standards of quality that exceed the 
normal licensing or certification requirements.
    Finally, the health of children plays an overwhelmingly important 
role in their well-being and their ability to grow and develop into 
productive citizens. We therefore propose to amend the CCDBG health and 
safety standards to require that children receiving CCDBG services 
receive immunizations.
    In sum, this proposed rule goes beyond adoption of technical 
refinements to ACF-administered child care programs. It represents 
ACF's efforts to think more broadly about helping States better serve 
low-income families through subsidized child care.

Statutory Authority

    Regulations for the title IV-A child care programs are published 
under the general authority of 1102 of the Social Security Act which 
requires the Secretary to publish regulations that may be necessary for 
the efficient administration of the functions for which she is 
responsible under the Act. Section 658E of the Child Care and 
Development Block Grant Act requires that the Secretary shall by rule 
establish the information needed in the Block Grant plan.

Regulatory Impact Analysis

    This proposed rule has been reviewed by the Office of Management 
and Budget (OMB) pursuant to Executive Order 12866. Executive Order 
12866 requires that regulations be reviewed to ensure that they are 
consistent with the priorities and principles set forth in the 
Executive Order. The Department has determined that this rule is 
consistent with these priorities and principles. An assessment of the 
costs and benefits of available regulatory alternatives (including not 
regulating) demonstrated that the approach taken in the regulation is 
the most cost-effective and least burdensome while still achieving the 
regulatory objectives.
    It was difficult for us to determine the actual cost implications 
of the regulation because most of the changes are optional with States. 
We did not know how many States would adopt these options, or whether 
States would make other programmatic changes which would counteract any 
potential increases in costs. Therefore, we are explicitly seeking 
comments on the cost implications of the proposed changes.
    We are proposing a new requirement that children be immunized in 
order to receive services under the Child Care and Development Block 
Grant. The CCDBG health and safety regulations currently require States 
and Tribes to include provisions about immunizations in their CCDBG 
plans and to provide assurances that requirements with respect to 
immunizations are in place. In addition, most States already include 
immunizations in their child care standards. We do not anticipate that 
our proposal will have a significant negative impact on either grantees 
or families, since grantees will not be required to provide 
immunizations directly and families who receive subsidized child care 
are by law eligible for free immunizations under such federally 
supported programs as Medicaid, the Early Periodic Screening Diagnosis 
and Treatment (EPSDT) Program, and the new Vaccines for Children 
program. The immunization provision was considered the most cost-
effective and least burdensome approach because: (1) It helps ensure 
that vulnerable young children are immunized; (2) immunization of such 
children is highly cost-effective; and (3) it provides flexibility to 
grantees in determining how to implement the provision.
    Furthermore, it directly supports the President's national 
immunization initiative, Vaccines for Children, which calls for greater 
mobilization and expansion of immunization resources to protect the 
health of our youngest and most vulnerable children.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (Pub. L. 96-354) requires the 
Federal government to anticipate and reduce the impact of rules and 
paperwork requirements on small businesses and other small entities. 
The primary impact of these final rules is on State, Tribal and 
Territorial governments. To a lesser extent the regulation could affect 
individuals and small businesses. However, the number of small 
businesses affected should be limited, and the expected economic impact 
on these businesses would not be so significant that a full regulatory 
flexibility analysis is indicated.
     First, the regulations retain many provisions designed to 
ensure broad participation by small businesses in the program. For 
example, the IV-A entitlement programs provide that individuals must be 
able to choose among available providers, including family day care 
providers. The At-Risk program regulations still require that any 
registration requirements States impose on unlicensed and unregulated 
providers be simple and timely, and facilitate prompt payment. In the 
CCDBG program, the regulations still require that parents have a choice 
among a variety of providers including family day care providers. These 
and other provisions in the current rules will help ensure that States 
exercise restraint in imposing any additional requirements on small 
entities providing child care.
     The proposed rule contains a number of provisions which 
could result in some decreases in the regulatory and economic burdens 
on providers who are small businesses. Most importantly, because States 
will be able to operate their programs under a more consistent set of 
program rules, participating providers should face a simpler and more 
streamlined set of regulatory requirements.
     Many of the providers who would potentially be affected 
are in-home providers. These providers are generally not operating as 
small businesses, but as domestic employees; thus, any impact on them 
need not be specifically addressed under this Act.
     The regulation could ultimately result in some additional 
regulatory requirements or health and safety standards for other 
providers, such as family day care providers, who are small businesses. 
However, the impacts on small businesses, if any, would not be directly 
attributable to this regulation. With the possible exception of the 
immunization provision, the regulation does not directly propose any 
expansion of regulatory requirements or health and safety standards on 
providers; thus, any impacts on providers should only arise as the 
result of independent State and/or local decisions to impose additional 
requirements.
    The effects tests may have discouraged States from imposing 
additional requirements--beyond those which were generally applicable--
on providers who specifically wanted to participate in these federally 
supported child care programs. However, we do not believe States have 
much interest in imposing additional requirements on these providers. 
First, States and localities know that parents often have difficulty 
locating child care providers which meet their needs, and that low-
income parents frequently have more serious access problems. They do 
not want to make it appreciably more difficult for providers to 
participate in the programs which serve low-income families. Secondly, 
States have limited resources for enforcing and monitoring child care 
regulations; thus, they are motivated to be selective about imposing 
requirements. Thirdly, States have an interest in establishing a 
consistent set of requirements for providers, regardless of their 
payment sources; differential rules make it more difficult to ensure 
regulatory compliance and provide a seamless system of services which 
help families make the transition from welfare to self-sufficiency. 
Finally, under current rules, State and local governments have full 
flexibility to set general regulatory requirements and health and 
safety standards for child care providers. If States (or other 
grantees) have felt that there was a substantial need for additional 
requirements (presumably to protect the well-being of children in 
care), we would have expected them to act under this general authority.
    While States generally have immunization requirements for children 
in child care, the proposed immunization provision might result in some 
additional children being subject to immunization requirements or 
stronger requirements for some children. However, States have 
flexibility in deciding how immunization requirements are to be 
implemented. Requirements would not necessarily be imposed on 
providers; rather, States can choose to impose them on eligible 
families. Thus, the immunization provision in this proposed rule does 
not directly affect small businesses. Further, where States do choose 
to impose additional requirements on providers related to the 
immunization provision, such requirements would be basically 
administrative in nature (e.g., documentation); we expect the costs of 
immunization to be covered through other funding sources. Thus, this 
provision would not have a significant economic impact on affected 
providers.
    Thus, the number of entities affected, and the net economic impact 
on them, should not be significant.

Paperwork Reduction Act

    Certain sections of these proposed regulations contain information 
collection requirements which are subject to review and approval by OMB 
under the Paperwork Reduction Act of 1980 (44 U.S.C. chapter 35). The 
proposed revisions for the title IV-A child care programs will produce 
only minor changes and additions to the State Supportive Services Plan 
(ACF-106).
    Specifically, State plans would be required to include: (1) 
Policies on ``reasonably related'' (see Sec. 255.1(e)(4) and 
Sec. 257.21(a)(6)); (2) definitions of ``mentally or physically 
incapable'' (see Secs. 255.1(m) and 256.1(a)(5)); and (3) decisions on 
whether States have opted to provide TCC without formal requests, 
during gaps, and in voluntary closure situations (Sec. 256.1(a)(6)). If 
States take advantage of the other new options available to them, they 
would also have to report on their criteria for determining ``higher 
quality'' care (Sec. 255.1(i)(2)) and conditions and limitations for 
in-home care (Sec. 255.1(n) and Sec. 257.21(o)). The proposed rule 
would reduce reporting burden at Sec. 255.1(i) through its elimination 
of the requirement for surveys of special needs rates.
    These amendments to the IV-A State plans are being submitted to 
OMB.
    Similarly, the proposed revisions for the CCDBG program will 
produce minor changes and additions in the CCDBG plan. Grantee plans 
will have to include additional information about immunization policies 
pursuant to the amendments at Sec. 98.41(a)(1) (see Sec. 98.16(a)(10)). 
Depending on their response to the proposed amendments and 
clarifications, Grantees may also be revising plan sections on in-home 
policies (Sec. 98.16(a)(7)(ii)), the definition of protective services 
(Sec. 98.16(a)(6)(vii)), and payment rate differentials 
(Secs. 98.16(a)(12) and 98.43(e)).
    Amendments to the CCDBG plans will also be submitted to OMB.
    ACF has submitted a copy of this proposed rule to OMB for its 
review of these information collection requirements. Other 
organizations and individuals desiring to submit comments regarding the 
information collection requirements should direct them to the 
Administration for Children and Families (address above) and to the 
Office of Information and Regulatory Affairs, OMB, room 3208, New 
Executive Office Building, Washington, DC 20503, Attn: Laura Oliven, 
Desk Officer for ACF.

Order of Preamble and Regulations

    The preamble begins with a discussion of four areas where the 
proposed regulations for the title IV-A child care programs and CCDBG 
address similar issues--payments for higher quality child care, 
payments for children with special needs, providing in-home care, and 
the effects test. We first discuss these four issues from a common 
perspective. But, where needed because the respective statutes for the 
programs differ, the general discussion on these topics is followed by 
a discussion of the proposed regulatory change in the context of the 
specific program, either the Block Grant or the applicable title IV-A 
program(s). It is our intent that where these proposals address a 
common issue, the proposed changes result in policies that better 
enable States to coordinate these programs into a more cohesive child 
care system. Comments which identify the potential for conflicting 
policy between programs as a result of these proposals are especially 
encouraged.
    Following the discussion of these four issues, we discuss 
additional changes specific to the CCDBG (part 98) followed by proposed 
changes specific to the title IV-A child care programs (parts 255, 256, 
and 257). The proposed regulations follow the order of the Code of 
Federal Regulations (CFR) and are presented after the preamble, 
beginning with the CCDBG followed by the title IV-A child care 
programs.

Proposed Child Care Rule Amendments, 45 CFR Parts 98, 255, 256, and 257 
------------------------------------------------------------------------
               Topic                            45 CFR section          
------------------------------------------------------------------------
            Joint Issues                                                
                                                                        
Payment Rates for Higher Quality                                        
 Care:                                                                  
  CCDBG............................  98.16, 98.43                       
  Title IV-A.......................  255.1, 255.3, 255.4                
Payment Rates for Special Needs                                         
 Care:                                                                  
  CCDBG............................  98.16, 98.43                       
  Title IV-A.......................  255.4                              
In-Home Care:                                                           
  CCDBG............................  98.16                              
  Title IV-A.......................  255.1, 255.3, 255.4, 257.21, 257.40
Effects Test:                                                           
  CCDBG............................  98.30, 98.40, 98.41, 98.43, 98.45  
  Title IV-A.......................  255.4, 257.41                      
                                                                        
  Child Care and Development Block                                      
               Grant                                                    
                                                                        
Immunizations......................  98.41                              
Foster Care........................  Preamble clarification             
Certificate Availability...........  98.30                              
Other Authorized Activities........  98.13, 98.50, 98.52                
Availability of Funds and Reporting  98.2, 98.60, 98.63, 98.70          
                                                                        
       Title IV-A Child Care                                            
                                                                        
Reasonably Related.................  255.1, 257.21                      
Determining Incapacity.............  255.1, 255.2, 256.1, 256.2         
Gaps in Employment and Continuity    255.2, 256.1, 256.2, 257.30        
 of Title IV-A Child Care.                                              
Transitional Child Care............  256.1, 256.2, 256.3, 256.4         
------------------------------------------------------------------------

Payments for Higher Quality Child Care

    Both the Federal government and the States have an interest in 
assuring that the increasing number of the Nation's children who 
receive child care services benefit from high quality care. This 
interest applies to all children, whether or not in subsidized care. 
High quality care provides parents a necessary support service to 
enable them to participate in work, education, or training. High 
quality care also provides sound developmental support for the children 
who comprise our future work force.
    Balancing the Federal government's interest in an adequate supply 
of child care to meet the needs of family self-sufficiency programs 
with the States' responsibility for regulating the quality of that care 
is a delicate exercise. We have learned from administering the title 
IV-A and CCDBG programs that States wish to have more opportunities to 
recognize higher quality care by compensating providers appropriately. 
As a result, ACF proposes to amend the payment regulations for both 
title IV-A and CCDBG child care programs. Along with other amendments 
described in this proposed rule, these payment amendments will enable 
States to provide recipients of child care under these programs greater 
access to higher quality care.
    As described more fully below, we propose to eliminate the 
regulation for the CCDBG that limits payment differentials within 
categories of care to no more than 10 percent. We also propose to amend 
the title IV-A child care regulations to allow States to pay the actual 
cost of care, subject only to the statewide limit, for care that meets 
the State's definition of higher quality care.

Payments Under CCDBG

    We propose to revise Secs. 98.16(a)(12)(ii) and 98.43(e) to remove 
the 10 percent cap on payment differentials within a category of care. 
In addition, we propose to revise Sec. 98.43(b) (1) and (2) to clarify 
that the cost of subsidized child care services must be no more than 
the actual amount billed or charged for non-subsidized care.
    The Block Grant Act requires that payment rates take into account 
the variations in cost of providing child care in different categories, 
as defined in Sec. 98.2(h), and to children of different age groups, as 
well as the additional costs of providing child care for children with 
special needs. Grantees have been required to differentiate among 
center-based, group home, family, and in-home child care providers. The 
existing regulations permit grantees to differentiate payment rates 
within categories of care, if certain conditions are met.
    As noted in the preamble to the existing regulations, the limit on 
payment rate differentials within a category of care was one of the 
more controversial issues of the regulation. That controversy continues 
today. In writing the existing regulations, we were persuaded by 
grantees and child care advocates that grantees should be permitted to 
differentiate within categories of care to account for licensing status 
and considerations of quality, as well as coordination with other child 
care programs. As a consequence, grantees were permitted to set 
differential payment rates, with a 10 percent cap, within categories of 
care. However, in the preamble, we indicated that we would consider 
amending the regulation if it became apparent that the 10 percent limit 
was inappropriate or served no useful purpose.
    Since publication of the existing regulations, we have conducted 
program reviews in States and non-exempt Tribes, held a number of 
meetings attended by States, Territories and Tribes, consulted with 
many child care advocacy groups and received numerous letters from the 
Congress and other interested parties. In these contacts, we were told 
that child care providers meet varying licensing requirements and 
provide care at varying levels of quality. Grantees have asked for the 
additional flexibility to set payment rates which provide incentives 
for becoming licensed and which reflect differences in program quality. 
A number of grantees have stated that, in setting payment differentials 
within categories of care, they want to recognize and compensate those 
child care facilities which have obtained nationally recognized 
accreditation along with those child care providers who have earned 
Child Development Associates (CDA) credentials. Additionally, grantees 
want to take into consideration the differing costs of providing care 
in licensed, unlicensed, and license-exempt (e.g., relative) settings, 
and of providing care during non-traditional hours (e.g., evenings and 
nights).
    It has also been pointed out that other child care subsidy programs 
allow grantees to differentiate within categories of care without 
imposing any limitation on the amount of the payment differential. As a 
consequence, some grantees have experienced difficulty in creating a 
seamless child care system.
    Eliminating the 10 percent limitation will give grantees the 
flexibility to address these areas of concern. As a consequence, we 
propose to remove the reference to limits on payment differentials in 
Secs. 98.16(a)(12) and 98.43(e). We propose to revise Sec. 98.43(e) and 
add Sec. 98.16(a)(12)(iii) to require grantees that provide for 
variations in the payment rate within a category to include a 
description of how the differential rates within categories of care are 
determined and to identify the distinctions within categories. Grantees 
would still be required to ensure that payment rates are sufficient to 
provide access to child care services comparable to those in the non-
subsidized sector.
    We are clarifying the regulations at Sec. 98.43(b) (1) and (2) to 
read ``amount charged'' instead of costs. We believe this terminology 
more clearly reflects Federal policy which prohibit the use of Federal 
dollars to pay more for a service than the provider would charge a non-
subsidized family. Oftentimes, the provider may not bill the actual 
costs, believing that the parent(s) could not afford them. However, 
providers may well provide those ``costs'' when responding to market 
surveys or other ``payment rate'' questions concerning costs, resulting 
in receipt of payments which exceed those actually charged. We believe 
that this revision will eliminate such occurrences. This clarification 
does not represent a change in policy.

Payments for Higher Quality Care Under Title IV-A Child Care 
Programs

    Currently, Federal Financial Participation (FFP) for title IV-A 
child care is available for the lowest of the actual charge for care, 
the local market rate for that category of care or the applicable 
statewide limit. The local market rate is based on the 75th percentile 
cost of care in the local area. We continue to believe that the 75th 
percentile is a reasonable definition of local market rate. This level 
represents a balance between concerns about fiscal accountability and 
accessibility to most services. In addition, we believe that requiring 
local market rates to be set at the 75th percentile has raised the 
general level of reimbursement to providers. We recognize, however, 
that the 75th percentile may not be sufficient to purchase some higher 
quality care. Therefore, to permit States to recognize and reward 
higher quality care, we propose amending Sec. 255.4(a) to define the 
actual charge for care that meets the State's objective criteria for 
higher quality care as the local market rate for such care. We will 
provide FFP for the actual charge for such care, subject to the 
statewide limit.
    While we recognize that State licensing or regulatory certification 
contributes to high quality care, we do not believe that licensing or 
regulation is the sole criterion or indicator of a higher quality of 
care. The proposed amendment to Sec. 255.4(a) requires that the State-
defined higher quality criteria will be in addition to existing State 
licensing or regulatory requirements. For example, the State's 
objective criteria for higher quality care might be that providers have 
a Child Development Associate (CDA) credential coupled with lower than 
regulatory staff/child ratios, or the State could choose the Head Start 
Program Performance Standards or other nationally or State-recognized 
criteria as its criteria for higher quality. We do not propose a 
national standard or definition for higher quality care.
    Similarly, it is not the intention that this regulation be used to 
circumvent the regulation at Sec. 255.4(a)(2)(iii) which establishes 
local market rates at the 75th percentile based on a survey of 
providers in an area. We expect that, because the State's criteria for 
higher quality care will be above the licensing and regulatory 
standards generally in effect, the State will make payments at the 
actual cost (subject only to the statewide limit) under this provision 
less frequently than payments are made at the 75th percentile. Payments 
for higher quality care would apply, then, to only a few providers in 
an area, not the majority of providers. These providers still would be 
included in local market rate surveys. We are also proposing to amend 
Sec. 255.1(i) to require States to specify in the Supportive Services 
Plan their objective criteria for higher quality care.
    To be consistent in our terminology, we propose to amend 
Sec. 255.4(a)(2)(iii) to replace ``type'' with ``category'' when 
referring to various kinds of providers. We propose the same revision 
for Secs. 255.1(i) and 255.3(c).

Payments for Child Care for Children With Special Needs

    For the purposes of this section only, in discussing payments for 
child care, we use the term ``special needs'' to mean children with 
mental or physical impairments that substantially limit one or more of 
the major life activities, i.e., ``disabilities'' as the term is used 
in the Americans with Disabilities Act (ADA). Special needs in this 
preamble discussion does not mean foster care, protective services, 
bilingual/cultural needs or other broader considerations sometimes 
attached to the term, for example, for the purpose of targeting as 
required by the CCDBG regulations at Sec. 98.44(b).

Americans With Disabilities Act

    The Americans with Disabilities Act, enacted on July 26, 1990, 
provides comprehensive civil rights protections to individuals with 
disabilities in the areas of employment, public accommodations, State 
and local government services, and telecommunications. The ADA is 
administered by the U.S. Department of Justice (DOJ). However, most 
States have established a central contact, usually in the office of the 
Governor or Attorney General, and questions about the ADA should be 
referred to that contact first. In addition, DOJ has established a 
technical assistance Information Line for public inquiries. The 
Information Line is available 24 hours daily at (202) 514-0301 (voice) 
or (202) 514-0381 (TDD). (This number will be replaced with a toll free 
800 number in the future.) Lastly, written inquiries about the ADA may 
be directed to: U.S. Department of Justice, Civil Rights Division, 
Public Access Section, P.O. Box 66738, Washington, DC 20035-6738.
    Of particular consequence in the context of paying for child care 
is title III of the ADA which prohibits discrimination on the basis of 
disability by private entities in places of public accommodation. The 
ADA defined public accommodations as facilities whose operations affect 
commerce and fall within twelve specified categories, including social 
service center establishments. The implementing regulations for the 
ADA, issued on July 26, 1991, specifically include ``day care centers'' 
as public accommodations and clarified that places of public 
accommodation located in a private residence are covered by the ADA.
    The ADA uses the term ``day care center'' as a generic term for all 
categories of out-of-home child care providers. In contrast to many 
other Federal non-discrimination laws, a public accommodation does not 
have to receive Federal funding to be covered by the requirements of 
the ADA. Thus, with a few very limited exceptions specified in the ADA, 
all child care providers who provide services to the public are covered 
by the ADA. While most provisions of the ADA have been well understood, 
there has been considerable confusion about its impact on payments for 
child care, particularly when such payment is subsidized. In light of 
the ADA, we believe it is important to discuss the payments for child 
care for children with special needs under ACF-administered child care 
programs. We are therefore proposing clarifications to the regulations 
which address payments for child care for children with special needs.
    The ADA regulation at 28 CFR 36.301(c) states: ``A public 
accommodation may not impose a surcharge on a particular individual 
with a disability * * * to cover the costs of measures, such as the 
provision of auxiliary aids, barrier removal, alternatives to barrier 
removal, and reasonable modification in policies, practices or 
procedures, that are required to provide that individual * * * with the 
non-discriminatory treatment required by the Act * * *.''
    In response to ``whether day care centers may charge for extra 
services provided to individuals with disabilities,'' the preamble 
noted that Sec. 36.301(c) ``is intended only to prohibit charges for 
measures necessary to achieve compliance with the ADA.'' (56 FR 35564, 
July 26, 1991.) Thus, the ADA and its implementing regulations do allow 
caregivers to charge higher rates for special needs, provided those 
higher charges are for services beyond those required by the ADA and 
are not for the purpose of recouping the cost of measures required by 
the ADA.
    States need the flexibility to determine on an individual basis how 
best to meet the needs of children with special needs. It is our intent 
that such children receive quality child care in developmentally 
appropriate settings so that they may reach their maximum potential and 
grow into responsive and responsible adults. Providers should be 
compensated, within the ADA regulations, for those developmentally 
appropriate child care services provided to children with special needs 
in order to ensure that these children do not go unserved and the 
quality of care is not affected. (At the same time, such compensation 
must be consistent with the cost principles applicable to expenditures 
under the program.)

Payments for Child Care for Children With Special Needs Under CCDBG

    The CCDBG program uses the term ``special needs'' in two different 
contexts. But as stated earlier for the purpose of payment rate 
discussion, the term ``children with special needs'' will be used to 
refer to children with mental or physical impairments that 
substantially limit one or more of the major life activities.
    Because the ADA stresses the need for making decisions on 
accommodations on an individual basis, it is inconsistent to require 
grantees to set a single or overall payment rate for children with 
special needs. We believe that grantees must have the flexibility to 
set payment amounts on a case-by-case basis. As a consequence, we 
propose to revise Sec. 98.16(a)(12)(ii) by removing the requirement 
that grantees justify a decision not to have different rates based on 
the additional amount charged for child care services provided to a 
child with special needs. We also propose revising Sec. 98.43(b)(2) to 
reflect that additional charges for providing child care for a child 
with special needs must be for services not required as an 
accommodation under the ADA.

Payments for Child Care for Children With Special Needs Under Title 
IV-A

    The existing regulations governing payments for title IV-A child 
care require States to conduct local market surveys to establish rates 
for such care, including care for children with special needs, where 
applicable. Further, although the regulations for the CCDBG do not 
require that grantees conduct such market surveys, many grantees have 
adopted the title IV-A local market rates established by these surveys. 
The ADA does not explicitly prevent States and grantees from continuing 
to conduct and use such surveys as a method of establishing rates for 
payment of special needs child care. However, given the emphasis of the 
ADA on accommodating persons with disabilities on an individualized 
basis, ACF strongly believes that local market surveys, for the purpose 
of establishing rates for special needs care, are no longer useful or 
accurate.
    Because the ADA stresses that decisions on accommodations for a 
person's disability must be made on an individual, case-by-case basis, 
we propose at Sec. 255.4(a)(2) that in lieu of a local market survey to 
establish rates for special needs care, States must use the following 
method for determining payments to providers of care to special needs 
children: when a provider charges a special needs child, on an 
individual basis, a rate that exceeds the local market rate for a child 
of the same age and category of care, that charge would be the local 
market rate for that special needs child. The State would pay that 
charge, subject to the statewide limit and applicable cost principles, 
if it is for services which are not required as an accommodation under 
the ADA.
    Other than the statewide limit, our regulations do not provide for 
or authorize additional limitations on charges for children whose needs 
go beyond those accommodated under ADA. We had concerns that such 
limitations could violate the ADA principle of individual 
accommodation, and we did not want to entangle welfare agencies in 
decisions about what are appropriate accommodations under ADA. Further, 
it is our belief that the general cost principles applicable in these 
programs protect both Federal and State governments against provider 
charges that are unreasonable. Nevertheless, we are interested in 
comments in this area.
    It should be noted that States may continue to establish higher 
statewide limits for children with special needs.
    As discussed above, we believe that States cannot establish valid 
local market rates for children with special needs because, under the 
ADA, any higher charges must be based on the individual child's and 
provider's circumstances; these would not be known or taken into 
account by a survey. Accordingly, we also propose to remove the 
reference to differentiating local market rates for children with 
special needs from Sec. 255.4(a)(3)(ii).

In-Home Care

    The CCDBG and title IV-A child care regulations currently mandate 
that States and other grantees offer in-home care as an option to 
parents whose child care is subsidized by these programs. However, the 
provisions for in-home care in the two sets of regulations lack 
compatibility and impede seamless program administration. CCDBG 
grantees are allowed to limit the availability of in-home care to those 
situations in which the payment is reasonably similar to payments for 
other categories of care. The title IV-A regulations contain no such 
provision for limiting the availability of in-home care and, unlike the 
CCDBG, require that States establish local market rates for this 
category.
    To increase the compatibility between CCDBG and IV-A regulations we 
are proposing to: (1) Allow States and other grantees the same degree 
of flexibility under both programs; (2) give both programs greater 
latitude in setting the terms and conditions under which in-home care 
will be offered; and (3) allow States to establish the minimum wage as 
the in-home payment rate for care subsidized under title IV-A without 
conducting a market survey. We believe that these proposals will give 
States and other grantees greater control and flexibility over the use 
of in-home care while protecting parental choice and ensuring that 
specific family needs can be met.
    Because this category of care occurs in the child's own home, it 
has unique characteristics. First, it is affected by the interaction 
with other laws and regulations. For example, in-home providers are 
classified as domestic service workers under the Fair Labor Standards 
Act (FLSA) (29 U.S.C. 206(a)) and are therefore covered under minimum 
wage and tax requirements. Second, child care administrators have faced 
greater challenges in monitoring the quality of care and the 
appropriateness of payments to in-home providers. These unique 
characteristics and the experience of States, Territories and Tribes 
over the past several years indicate a need for greater flexibility as 
well as consistent policies across funding streams.
    The mandatory inclusion of in-home care in current CCDBG and IV-A 
regulations is intended to ensure a full range of options to meet 
families' needs and to accurately reflect the child care market. 
However, because in-home care is not required by statute and because 
States and other grantees have requested greater flexibility and 
consistency across policies, we considered proposing that in-home care 
be made optional in both programs. However, we were concerned that, 
because in-home care presents a number of administrative challenges, 
some States would unduly restrict the availability of care for families 
who particularly need this type of setting or who lack other options. 
We therefore decided not to make in-home care optional but to give 
States and other grantees greater flexibility.
    We are mindful that in-home care plays a valid and important role 
in the child care market place and that many participants in subsidized 
care programs rely on care in their own homes to meet their family 
needs. Access to care which meets the needs of individual families is 
critically important to parents and children, to schools and the 
workplace, and to other community institutions which interface with the 
family. While in-home care represents only a small proportion of all 
available care in most communities, it may be the best or only option 
for some families and may prove valuable, necessary and cost-effective 
when compared to other options. Despite the challenges cited above, in-
home care is being successfully offered and has proven to be an 
important resource. For these reasons, we expect States and Tribes to 
consider family and community circumstances carefully in establishing 
any conditions which will limit the availability of in-home care. We 
are thus proposing that grantees include in their CCDBG plans a 
discussion of their policies for in-home care and a rationale for their 
policy decisions.
    There are a number of conditions under which in-home care may be 
the most practical solution to a family's child care needs. For 
example, the child's own home may be the only practical setting in 
rural areas or in areas where transportation is particularly difficult. 
Employees who work nights, swing shifts, rotating shifts, weekends or 
other non-standard hours may experience considerable difficulty in 
locating and maintaining satisfactory center-based or family day care 
arrangements. Part-time employees often find it more difficult to make 
child care arrangements than do those who work full-time. Similarly, 
families with more than one child or children of very different ages 
might be faced with multiple child care arrangements if in-home care 
were unavailable. Many families also believe that very young children 
are often best served in their own homes. Given the general paucity of 
school-age child care in many communities, in-home supervision may 
enable some families to avoid latchkey situations before school, after 
school, and when school is not in session. For many families, in-home 
care by relatives also represents an important cultural value and may 
promote stability, cohesion and self-sufficiency in nuclear and 
extended families.
    We also urge child care administrators to consider the capacity of 
local child care markets to meet existing demand and the role that in-
home care may play in the ability of parents to manage work and family 
life. Although in-home care does not represent a large share of the 
national supply, it plays an important role in the structure and 
functioning of local child care markets by extending the ability of 
parents to care for children within their own families, closing gaps in 
the supply of community facilities, and creating a bridge between adult 
care and self- or sibling-care as children near adolescence.
    Some States may choose to limit in-home care because of cost 
factors governed by minimum wage provisions of the FLSA and other 
Federal and State requirements. For example, a State might determine 
that minimum wage requirements result in payments for in-home care 
serving only one or two children that are much higher than the local 
market rate for other categories. Therefore, the State could elect to 
limit in-home care to families in which three or more children require 
care. The payment to the in-home provider would then be similar to the 
payment for care of the three children in other settings. This ability 
to limit in-home care allows States to recognize the same cost 
restraints that families whose care is unsubsidized must face.
    ACF recognizes that giving the States greater latitude to impose 
conditions and restrictions on in-home care may affect parents' ability 
to make satisfactory arrangements and thus their ability to participate 
in work, education or training. We also recognize the challenges of 
implementing health and safety requirements in the child's own home, of 
monitoring in-home providers, and of complying with federal wage and 
tax laws governing domestic workers. Therefore, we are seeking focused 
comments on our regulatory proposals for in-home care and would 
especially appreciate suggestions on how to balance parental choice, 
cost effectiveness, and adherence to other Federal and State 
provisions, such as the FLSA, that are unique to in-home settings.

In-Home Care and the CCDBG

    We propose to revise Sec. 98.16(a)(7)(ii) to require that grantees 
include in their CCDBG plans a specification of their policies for in-
home care and the rationale for those policies.

In-Home Care and Title IV-A Child Care

    We propose to amend Secs. 255.3(c) and 257.40(b) to give States the 
flexibility to specify the conditions and limitations under which the 
State will make in-home care available. Therefore, we propose to add 
State plan requirements at Secs. 255.1(n) and 257.21(o) to ascertain 
any conditions and limitations the State has placed on in-home care.

Establishing the Local Market Rate for In-Home Providers

    ACF proposes to amend Sec. 255.4(a)(3) (i) and (v) to give States 
the flexibility to eliminate the local market survey, required by 
Sec. 255.4(a)(2), as the basis for establishing local market rates for 
in-home care providers. The proposed amendment provides that the local 
market rate for in-home providers must be at a level no lower than the 
level required by Federal and State provisions which govern domestic 
service workers. The State may choose to establish the local market 
rate at such a level without conducting the survey specified under 
Sec. 255.4(a)(2). As an alternative, the State has the option to 
conduct a local market rate survey for in-home care if the State 
believes that the local market rate for such care is higher than that 
required by the FLSA and other Federal and State statutes.

The Effects Test and CCDBG

    Section 658E(c)(2)(A) of the Block Grant Act requires States to 
provide assurances that parents are given the option of (1) enrolling 
their children with a provider who has a grant or contract to provide 
services, or (2) receiving a child care certificate with which to pay 
the provider of their choice. The Act also requires that children who 
are to be enrolled in contracted slots must be placed with the provider 
of their parents' choice whenever possible. For the CCDBG program, 
Congress clearly expected that parents would be able to choose from a 
wide variety of child care arrangements, including care in private 
homes by relatives or family providers; in churches, synagogues or 
temples; in community centers and schools; and in employer-provided 
facilities.
    In addition to the expectation that parents would be offered child 
care options, Congress clearly intended that CCDBG grantees ensure the 
safety of children in care. Therefore, grantees are also required by 
statute to promulgate health and safety regulations which adequately 
protect children.
    We believe that Congress intended grantees to balance these 
provisions. In issuing the CCDBG regulations, ACF attempted to regulate 
how grantees would implement this balance. In order to protect 
children, grantees were mandated to ensure that health and safety 
requirements were in effect for all providers receiving funds under the 
CCDBG. Simultaneously, ACF promulgated additional provisions, known as 
the ``effects test,'' which withheld CCDBG funds if the grantees 
adopted requirements or procedures which had the effect of 
significantly limiting parental access to a category of care or type of 
provider.
    Many grantees and advocates in the field of child care have pointed 
out the potential tension between these regulatory provisions. In 
addition, many questions have been raised regarding the practical 
implementation of the effects test and the criteria by which to judge 
that health and safety standards have actually limited parental choice. 
Most compelling among such arguments has been the noted absence of 
statutory references to the effects test.
    We are now proposing to eliminate the effects test. We do not 
intend and do not believe this proposal will weaken parental choice. In 
subpart D of the CCDBG regulations, Secs. 98.30-98.34 delineate 
parental rights and responsibilities. We are not proposing to change 
anything in these sections that would in any way minimize the 
importance of parental choice. Parental choice remains a requirement 
for CCDBG at Sec. 98.30.
    Based on two years of experience in the implementation of these 
programs, we do not believe that the effects test is necessary to 
protect parental choice. We have substantial evidence that grantees are 
indeed offering parents a choice of eligible providers through the 
design and operation of their certificate programs. In addition to 
information gathered from administrative staff during 33 on-site 
program reviews, we heard from parents and providers in focus group 
settings. Parents as well as providers spoke favorably about the 
choices that parents exercise in making arrangements for their 
children. The findings of these program reviews, along with our ongoing 
review of child care plans, reveal that grantees are operating 
certificate programs which fulfill the statutory parental choice 
directives. However, based on the experience of grantees attempting to 
balance these provisions, we are seeking focused comments on the 
potential impact of this proposal.
    We propose that the CCDBG rule be amended by removing Sec. 98.30(g) 
which sets forth the effects test and by removing related references at 
Secs. 98.40(b)(2) (State and local regulatory requirements), 98.41(b) 
(health and safety requirements), 98.43(c) (payment rates), and 
98.45(d) (registration).

The Effects Test and Title IV-A

    There is no specific statutory commitment to the principle of 
parental choice of providers in the title IV-A child care programs as 
there is for the CCDBG program. Parental choice, however, is addressed 
in the current title IV-A regulations. If more than one category of 
care is available, the regulations require the State to provide the 
parent or caretaker relative with an opportunity to choose the 
arrangement. Also, the State IV-A agency is required to establish at 
least one method by which self-arranged care may be paid.
    To be compatible with the current CCDBG regulations, the existing 
title IV-A child care regulations include an effects test concerning 
the regulatory provisions that allow States to adopt the health and 
safety requirements of other Federal or State child care programs. 
Additionally, they contain an effects test concerning the At-Risk 
provider registration provisions which States must adopt. The title IV-
A child care effects test is the same as the effects test contained in 
the CCDBG regulations, i.e., that a State's requirements and procedures 
in those areas may not have the effect of excluding any categories of 
child care providers. For the same reasons given for removing the CCDBG 
effects test provisions, however, ACF proposes to remove the title IV-A 
effects tests requirements at Secs. 255.4(c)(2)(iii), 257.41(a)(3), and 
257.41(b)(2)(v). We do not propose to, and do not believe this action 
will, delete or weaken the current title IV-A parental choice 
provisions.

Part 98--Child Care and Development Block Grant

Immunizations

    We are proposing to amend the CCDBG health and safety regulations 
to require that grantees establish rules requiring children receiving 
CCDBG services to be immunized. While this change affects only the 
CCDBG regulations, grantees may apply the immunization requirement to 
title IV-A child care programs for a more seamless child care system.
    The CCDBG statute currently includes references to immunizations. 
Section 658E(c)(2)(F) requires grantees to provide assurances that 
provider requirements are in effect to protect the health and safety of 
children receiving services under Secs. 98.50 and 98.51, including 
``the prevention and control of infectious diseases (including 
immunizations).''
    Section 658E(c)(2)(G) of the Block Grant Act also requires grantees 
to assure that procedures are in effect which ensure that child care 
providers comply with all applicable health and safety requirements 
described in paragraph (F) of section 658E. However, section 658P(5)(B) 
allows grantees to exclude grandparents, aunts or uncles from provider 
health and safety requirements. The current CCDBG regulations reiterate 
these statutory requirements.
    Surveys of licensed child care facilities indicate that the 
majority of States require some proof of immunizations for children 
enrolled in licensed or regulated child care centers and family day 
care homes. However, individual States differ in their specific 
requirements and regulatory approaches. In addition, requirements for 
the immunization of children in legally unlicensed care vary widely. 
Consequently, there is concern that current immunization policies and 
practices may be inadequate to protect large numbers of young children.
    Preventable diseases that were practically eliminated years ago are 
again infecting our youngest and most vulnerable children. More than 
55,000 measles cases were reported to the Centers for Disease Control 
and Prevention (CDC) between 1989 and 1991. In 1990, 64 deaths from 
measles were reported, the highest number in two decades. A survey 
conducted by the CDC in 1991 found that only 37-56% of two-year-old 
children were fully vaccinated. (``Childhood Immunizations Fact 
Sheet,'' Department of Health and Human Services, Washington, DC, 
February 12, 1993.) Since a large percentage of children receiving 
assistance under the Block Grant program are under 5 years of age, we 
believe that the proposed requirements will assist in reducing the 
incidence of infectious diseases among preschool age children.
    For these reasons, we propose amending Sec. 98.41(a)(1) to require 
that grantees' health and safety plans include specific provisions 
requiring children to be immunized in order to receive services under 
the CCDBG. State and Territorial health and safety plans must 
incorporate (by reference or otherwise) the latest recommendations for 
childhood immunizations of the respective State or Territorial 
Department of Public Health. Since there may not be a similar public 
health authority for Tribes to follow regarding immunization standards, 
we are proposing to allow Tribes the option to determine the 
immunization standards to be followed for children to receive CCDBG 
services. Tribes may choose standards set forth by the State Public 
Health Department or the Indian Health Service. Tribes will be required 
to identify the source of these standards in their CCDBG plans. In 
addition, we propose that all grantees consider requirements which 
include provisions for documenting regular updates of the child's 
immunizations.
    Grantees have flexibility in the method of implementing this 
requirement. For example, grantees may require parents to provide proof 
of immunization as part of the initial eligibility determination and 
again at redetermination, or grantees may require child care providers 
to maintain proof of immunization for children enrolled in their care. 
However, the requirements established by the grantee must apply to all 
children receiving CCDBG assistance and in all child care settings, 
unless the child is in one of the exempt groups cited below.
    While we propose to require children to be immunized in order to 
receive services, grantees may continue to exempt:
    (1) Children who are cared for by relatives (defined as 
grandparents, aunts and uncles);
    (2) Children who receive care in their own homes;
    (3) Children whose parents object for religious reasons; and
    (4) Children whose medical condition contraindicates immunization.
    In proposing that children be immunized, we considered that parents 
may not always have had access to immunizations. However, we believe 
that the increasing national focus on immunization will ease this 
difficulty. The President has made vaccine delivery a national priority 
and has signed into law the Vaccine for Children program which provides 
free vaccines to States for the inoculation of uninsured children, 
children eligible for Medicaid, and Native American children. 
Underinsured children whose health insurance does not cover 
immunizations are also eligible to be served by Federally Qualified 
Health Centers and Rural Health Clinics. The new program will also 
allow federally purchased vaccine to be distributed to private 
physicians to vaccinate eligible children.
    Where grantees impose burdens on providers to check on the 
immunization status of children in their care and to ensure that 
necessary immunizations are received, we would expect grantees to 
assist providers in meeting these requirements. At a minimum, the 
assistance should include: (1) Provision of updated immunization 
schedules; (2) information on the availability of free vaccines; and 
(3) information on locations where parents of eligible children can be 
referred for immunizations. These expectations are consistent with 
section 658E(c)(2)(G) of the CCDBG statute which requires that 
procedures be in place to ensure that providers comply with applicable 
health and safety requirements.
    We also expect that some children may not have all of the required 
immunizations at the time eligibility is determined. In order to ensure 
that children eligible to receive services under the Block Grant are 
not denied services, we recommend that grantees establish a grace 
period in which children can receive services while taking the 
necessary actions to comply with the requirements. Grantees will be 
required to describe the grace period allowed to these families in 
their CCDBG plan.
    The health of all children is important, and we therefore strongly 
encourage immunizations for children receiving title IV-A child care. 
However, we believe that there is no authority under the Social 
Security Act to require immunizations for children receiving title IV-A 
child care and therefore we cannot propose a parallel regulation for 
title IV-A child care. Unlike the CCDBG statutory mandate for State 
requirements for the prevention and control of infectious diseases, 
including immunization, for all providers, the Social Security Act is 
silent. Nevertheless, we wish to emphasize that States already have the 
necessary flexibility to choose to require immunizations for children 
receiving title IV-A care under the existing title IV-A applicable 
standards regulations. The application to title IV-A child care of the 
proposed immunization requirement would facilitate the seamless 
delivery of child care services across programs.
    The applicable standards regulations at Secs. 255.4 and 257.41 
require title IV-A child care providers to meet any generally 
applicable standard of State, local or Tribal law. Additionally, the 
applicable standards regulations allow States to deny payment for care 
that does not meet the additional standards used in other Federal 
(e.g., CCDBG) or State child care programs in the area of prevention 
and control of infectious diseases, including immunizations. Thus 
additional Federal regulations are not necessary for title IV-A child 
care for States to have the ability to require consistent health and 
safety standards, including the proposed immunization requirement.

Foster Care

    We are clarifying that CCDBG grantees have the flexibility to 
include foster care in their definition of protective services. The 
preamble to the existing regulations distinguishes between protective 
services cases and children placed in foster care by allowing child 
care subsidies for foster care cases only if the foster parent is 
working, in education or in training. The distinction made in the 
preamble was an interpretation of the regulatory language. The 
regulation discusses child protective services only; it is silent on 
foster care. This change in interpretation does not require a 
regulatory change.
    In many States, foster care is an integral part of the protective 
services system. It is one of the many services provided to children 
and families who, for a variety of reasons, may need protective 
intervention. A child is placed in foster care when remaining in the 
home places him or her at risk. States, acting in loco parentis, may 
provide on-going supportive services to meet the developmental needs 
and redress developmental delays which may exist as a result of neglect 
or abuse. These services are available both for a child who remains in 
his or her own home and for a child in a foster placement. For purposes 
of protective services benefits, some grantees do not differentiate 
between the protective services for families who remain intact and for 
those children who are in a foster placement.
    In the preamble to the existing regulations, a child in a family 
that is receiving, or needs to receive, some type of protective, 
interventive services can be eligible for child care subsidies under 
CCDBG if he or she remains in his or her own home even if the parent is 
not working, in education or in training. However, such therapeutic 
child care outside of the home may be a necessary part of the 
individual child's supportive services plan regardless of the child's 
living situation. In these cases, child care is needed to carry out the 
social services plan for the child and the family--not necessarily 
because the parent is working, in education or in training. Therefore 
we are changing our interpretation of the regulation to allow States 
the option of including children in foster care in the State's 
definition of protective services cases.
    Allowing CCDBG grantees to include foster care in their definition 
of protective services not only gives grantees the flexibility to work 
within existing child protective services systems, it is also 
consistent with the goals of the recently enacted Family Support and 
Preservation Act. This Act promotes integrated and comprehensive 
services for families already receiving supportive and/or interventive 
assistance from social services agencies.
    Grantees electing to include foster care in their definition of 
protective services will be required to state this in their Block Grant 
Plan. Those grantees choosing to exclude foster care from their 
definition of protective services must define eligibility for 
participation in CCDBG child care subsidies in terms of the foster 
parent working, in education or in training.

Certificate Availability

    Section 658E(c)(2)(A) of the CCDBG Act requires States to provide 
assurances that parents are given the option of (1) Enrolling their 
children with a provider who has a grant or contract to provide 
services, or (2) receiving a child care certificate with which to pay 
the provider of their choice. The Act also requires that children who 
are to be enrolled in contracted slots must be placed with the provider 
of their parents' choice whenever possible.
    The CCDBG regulation elaborates on the choice between grant/
contract child care and a child care certificate by requiring that a 
certificate must be offered when child care services under Sec. 98.50 
are made available to a parent. We do not propose any changes to this 
requirement which is stated both at Sec. 98.30(a) and Sec. 98.30(e). 
However, we do propose removing Sec. 98.30(e) because it is redundant 
to a clearer and more expanded presentation of parental choice set 
forth in Sec. 98.30(a) (1) and (2).
    We are also using the opportunity provided by this proposed rule to 
clarify the certificate requirement and to offer examples of grantee 
systems which have successfully met this requirement.
    Our restatement of the regulatory position that certificates must 
be available whenever services under Sec. 98.50 are offered does not 
preclude grantees from entering into grants or contracts for child care 
services. Depending upon the child care needs of the eligible 
population in discrete geographic areas of service, grants and 
contracts may be necessary to provide stable child care for 
participating populations or specific communities. In essence, the 
provision requires a good faith effort by the grantee to balance the 
allocation of funds between grants/contracts and certificates to ensure 
that parents have optimum choice among quality child care options as 
stipulated in the legislation and reinforced in the existing 
regulation.
    In conducting on-site program reviews over the past two years, we 
have found that grantees are operating certificate programs which offer 
parental choice. Some grantees are offering only certificates. Others 
are committing funds on a proportional basis between certificates and 
contracts based on the particular needs of individual areas or 
populations. Some grantees, however, have experienced that stable child 
care is more difficult to find in rural or inner-city areas, for 
infants, or for children with special needs and have therefore 
contracted with competent providers to specifically address these 
shortages.
    In planning the distribution of funds for grants/contracts and 
certificates, grantees should establish sufficient fiscal flexibility 
to ensure that parents who choose certificates are not placed on a 
waiting list while substantial numbers of contracted slots in the same 
area remain un-utilized.
    However, most grantees are reporting that the need for subsidized 
low-income child care far exceeds the available funding. Thus, if 
certificate funds are fully reserved for children who are already 
enrolled, and no subsidized slots are available (either filled or not 
part of the grantee's program), it may be necessary to begin a waiting 
list for certificates. Similarly, because many grantees are allocating 
funds on a locality by locality basis, waiting lists may result in some 
parts of the State while services are still available in other areas.
    We want to clarify that although certificates must be an option for 
parents whenever Sec. 98.50 services are offered, it is not necessary 
to offer certificates whenever Sec. 98.50 services are being used. For 
example, if all CCDBG funds available in a community are ``reserved'' 
for specific children in contracted and certificate-funded slots, the 
grantee is not actually offering services and need not offer additional 
certificates. Thus, a local program might not offer new child care 
services during some portion of the program year because all available 
funds have been assigned to specific children and are being used or 
``reserved'' for those specific children.

Other Authorized Activities

    Currently, CCDBG grantees may spend up to 10 percent of CCDBG funds 
authorized under Sec. 98.50 (the 75 percent monies) for program 
administration and activities to improve the availability and quality 
of child care services. If expenditures for operating the certificate 
program and related consumer education equal or exceed 10 percent, 
grantees may petition for an additional five percent for other 
authorized activities, for a total of 15 percent.
    Based on information provided by grantees in their annual reports 
and during on-site program reviews, we now propose to allow grantees to 
use up to 15 percent of funds authorized under Sec. 98.50 for ongoing 
activities related to program administration, quality and availability 
without further justification.
    In proposing this change, we acknowledge the cost implications of 
complex interrelationships among program administration, quality 
services and availability of child care options in the context of 
rapidly increasing family and community needs. Many States and 
localities want to develop more cohesive, integrated and sophisticated 
child care management, delivery and payment systems. Activities 
undertaken under Sec. 98.50(d) can contribute to the development of 
child care systems which more effectively support informed consumer 
choice and the delivery of quality care through community-based 
providers. This change will provide grantees with the flexibility to 
balance priorities and develop more responsive child care programs.
    Accordingly, we propose that the CCDBG rules be amended to specify 
that the amount generally allowed for activities related to 
administration, quality and availability is 15 percent at 
Sec. 98.50(d)(2)(ii). Therefore, the amount specified for direct 
services is at least 85 percent at Sec. 98.50(d)(2)(i). The change will 
also remove Sec. 98.50(d)(3) which requires grantees to petition for 
the additional five percent and remove a reference to Sec. 98.50(d)(3) 
which occurs in Sec. 98.52(c). It will also remove a related reference 
at Sec. 98.13(a)(6)(ii).

Availability of Funds

    In the Juvenile Justice and Delinquency Prevention Amendments of 
1992, section 658J(c) of the CCDBG Act was amended to eliminate the 
time restrictions on obligation and to extend the length of time 
grantees have to expend funds received each fiscal year.
    Block Grant funds awarded to States and Territories had previously 
been available for obligation by the grantee in the fiscal year in 
which the grant funds were awarded and in the succeeding fiscal year 
(year 2). Unliquidated obligations at the end of year 2 were to be 
liquidated during the next fiscal year (year 3).
    The statutory amendments eliminate the restrictions on obligation 
of funds by States and Territories by providing that CCDBG funds are 
expendable in the fiscal year in which they are awarded and in the 
three (3) succeeding fiscal years. For Tribal grantees, the amendments 
also extend the expenditure period from three (3) fiscal years to four 
(4) fiscal years. Thus, the expenditure period for all grantees 
(States, Territories, exempt Tribes and non-exempt Tribes) now extends 
to four (4) fiscal years.
    The amendments were not effective in time to remove the September 
30, 1992, obligation restriction on FY 1991 grant funds awarded to 
States and Territories. However, the amendments do provide an 
additional year to expend funds for obligations made with FY 1991 
funds, so that States and Territories now have until September 30, 1994 
(rather than September 30, 1993), to expend FY 1991 funds which were 
obligated by September 30, 1992.
    Tribal grantees who received FY 1991 funds were required to expend 
their funds by September 30, 1993. Because the amendments provide an 
additional year during which FY 1991 funds may be expended, Tribal 
grantees have until September 30, 1994, to expend their FY 1991 grants.
    In summary, for all grantees (States, Territories and Tribes), FY 
1992 and subsequent fiscal years' funds must be expended by the end of 
the expenditure period (the fiscal year in which the funds are awarded 
plus the three succeeding fiscal years). To reflect these changes, we 
propose amending Sec. 98.2 by removing and reserving paragraph (z) and 
revising paragraphs (y) and (cc) and Sec. 98.60 by revising paragraphs 
(d)(1), (d)(4), (h)(1), and (h)(3) and removing paragraphs (d)(2), 
(d)(3), (e), and (h)(2).

Financial Reporting

    We propose revising Sec. 98.63(a)(1) and (b) to change the dates by 
which States must report funds for reallotment to other State grantees. 
Reallotment rules do not affect Territories or Tribal grantees since 
those grantees may not receive reallotted funds.
    Each fiscal year, States must specify the amount of any CCDBG funds 
which will be available for reallocation or else report that all funds 
will be expended. The deadline for submission of this information was 
previously April 1 of the second fiscal year of the obligation period. 
As a result of the extension of the expenditure deadline by section 8 
of the Juvenile Justice and Delinquency Prevention Amendments of 1992, 
the date by which States must report CCDBG funds for reallotment has 
been extended to April 1 of the fourth (and last) fiscal year of the 
expenditure period.
    Since the amendments did not remove the September 30, 1992 
obligation deadline for FY 1991 grant funds, this change in reporting 
did not affect FY 1991 awards. For FY 1992 funds, States must report on 
the availability of funds for reallotment by April 1, 1995. Funds 
reallotted from one fiscal year's grant are subject to the same period 
of availability as the grant year from which the funds were awarded. 
Thus, FY 1992 funds, if any, reallotted in May of 1995 must be expended 
by September 30, 1995.

Annual Report Requirement

    In Sec. 98.70, the CCDBG rule requires grantees to submit annual 
reports to the Secretary by December 31. This provision is not affected 
by the extension of the expenditure period by section 8 of the Juvenile 
Justice and Delinquency Prevention Amendments of 1992. Each report must 
specify expenditures made by September 30 of the year in which the 
report is submitted to the Secretary, with each fiscal year's funds 
accounted for separately. However, we are proposing to revise 
Sec. 98.70 to more clearly state the requirement and to delete those 
requirements no longer applicable.

PART 255--CHILD CARE AND OTHER WORK RELATED SUPPORTIVE SERVICES 
DURING PARTICIPATION IN EMPLOYMENT, EDUCATION AND TRAINING

Child Care That Is ``Reasonably Related'' To Parent's Activities

    Under the regulations for title IV-A child care, a State must 
assure in the State Supportive Services Plan that child care provided 
or claimed for reimbursement is reasonably related to the hours of 
participation in JOBS or in other State-approved education and training 
(for care under part 255) or employment (for care under parts 255, 256 
and 257). ACF recognized that many individuals would participate in 
education, training and employment on less than a full-time basis, but 
decided not to regulate a definition of what constitutes child care 
that is reasonably related to the parent's hours of participation or 
employment. Rather, we gave States the flexibility and, we believed, 
the authority to develop their own policies.
    During our discussions with States, however, we learned that there 
is some misunderstanding or disagreement about who has the 
responsibility for establishing policies on what constitutes an amount 
of child care that is reasonably related to the parent's training or 
employment. For example, internal or external reviews or audits have 
questioned how a State determined that the child care under review was 
reasonably related to the parent's activity.
    ACF continues to maintain that State IV-A agencies should establish 
their own policies for what constitutes a ``reasonably related'' amount 
of child care. Therefore, we propose to have the State include in its 
Supportive Services Plan a description of its policy on what 
constitutes child care that is reasonably related to the parent's hours 
of participation in education, training or employment by revising 
Secs. 255.1(e)(4) and 257.21(a)(6).
    Including the State's ``reasonably related'' child care policy in 
the federally approved Supportive Services Plan will clarify the IV-A 
agency's role in developing and articulating the State's policy in this 
area. By having written policy on ``reasonably related,'' States should 
avoid such disputes with potential reviewers.
    In proposing this regulation, we wish to clarify the difference 
between a policy which addresses paying for child care when a child is 
absent from regularly scheduled care (e.g. due to illness) and a policy 
which describes what is reasonably related child care.
    A ``reasonably related'' child care policy correlates the parent's 
activities with the amount of child care that the IV-A agency views as 
necessary based on the parent's activities and in consideration of 
other factors that the agency regards as significant. For example, 
States may wish to include such factors as the individual needs of the 
recipient family, the availability or lack of care alternatives in a 
local market area, need for continuity of care by a specific caregiver, 
or the needs of a Head Start Agency to meet operating expenses for 
wrap-around child care.
    In contrast to the ``reasonably related'' policy which relates the 
parent's activity to an amount of child care, an absence policy 
addresses the fact that children will occasionally miss child care 
especially due to illness. A State's absence policy would establish 
when a State would pay for child care even when the child is absent. 
FFP is available for payments made in accordance with a State's absence 
policy.
    The ``reasonably related'' policy the State describes in its 
approved Supportive Services Plan will become the standard against 
which actual payments will be judged, for example, for audit purposes. 
We therefore advise the State to articulate its policy clearly to all 
individuals responsible for approving the payment or reimbursement of 
child care services.

Determination of Physical or Mental Incapacity

    Under the regulations for AFDC child care at part 255 and 
Transitional Child Care (TCC) at part 256, the determination of mental 
or physical incapacity for a child over age 13 can only be made by a 
``physician or a licensed or certified psychologist.''
    The existing policy was adopted to be consistent with the 
regulations concerning exemption from participation in the Job 
Opportunities and Basic Skills Training (JOBS) program found in part 
250. Exemptions from participation in JOBS are available for a number 
of reasons, including physical or mental incapacity. Since incapacity 
would provide a long and perhaps permanent period of exemption from 
activities that would prepare an individual for entry into the work 
force, a high standard of professional verification by a physician or 
licensed or certified psychologist was adopted. After experience with 
the child care programs, we do not believe that receiving child care 
services under parts 255 and 256 requires such rigorous verification.
    In addition, when the CCDBG program and the At-Risk Child Care 
program were implemented after JOBS, both programs, by regulation, 
provided for care of a child over age 13 who is physically or mentally 
incapable of caring for himself or herself. The regulations for those 
programs at parts 98 and 257, respectively, permit the State to make 
the determination of physical or mental incapacity. Those regulations 
also require States to include a definition of the term ``physically or 
mentally incapable of caring for himself or herself'' in the applicable 
State Plan.
    We propose to amend the child care regulations at parts 255 and 256 
to be compatible with the regulations of the other child care programs. 
These proposed changes will ease State administration of child care 
programs while continuing to ensure that eligibility is properly 
documented. We therefore propose to amend Secs. 255.2(a) and 256.2(a) 
to provide State flexibility in determining physical or mental 
incapacity. We also propose to add Secs. 255.1(m) and 256.1(a)(5) to 
require the State to provide its definitions of physical or mental 
incapacity in the applicable State Plan.

Gaps in Employment and Child Care Under Title IV-A

    We propose to modify the regulatory language at Sec. 255.2(d)(2) to 
allow States the additional option to continue child care for families 
that lose a job but are searching for another job. Under the proposed 
regulation at Sec. 255.2(d)(2)(ii) care can be continued for up to one 
month of job search if the care arrangements would otherwise be lost. 
This is an expansion of the existing regulation which provides for a 
continuation of care for up to one month only if an activity is 
scheduled to begin within that month and the arrangements would 
otherwise be lost.
    We believe that giving States this additional option to continue 
child care for a limited period of job search is supportive of families 
who may have to change employment and recognizes that it is not always 
possible to secure another job immediately following a job loss. Under 
the existing regulations, States have had the option to extend child 
care services that would otherwise be lost for a limited period both 
when another activity is already scheduled to begin within that period 
and when there is a short period of absence from an on-going job. The 
proposed regulation broadens the State's ability to serve families for 
whom continuity of care would assist their movement towards self-
sufficiency.
    We also propose to amend the At-Risk regulations at Sec. 257.30(c) 
to be consistent with the proposed change at Sec. 255.2(d)(2)(ii) to 
allow States the option to continue child care for up to one month for 
families that lose a job but are searching for another job. 
Additionally, we propose to amend Sec. 257.30(c) to delete the 
requirement that child care for the two-week period prior to the start 
of a job may be provided only if ``the child care arrangements would 
otherwise be lost.'' We believe that the two-week period may be needed 
to provide child care in order to prepare for employment. We propose 
that at State option child care may be available for up to two weeks 
before employment without restriction.
    In making these changes to the regulations at Secs. 255.2(d) and 
257.30(c), we recognized that the existing regulations for care under 
part 256 (TCC) are silent on the provision of child care during gaps 
between jobs. In JOBS-FSA-AT-90-8, dated June 29, 1990, we clarified 
that families are eligible for TCC during gaps in employment. This 
proposed rule at Sec. 256.2(f) thus codifies existing policy and 
mirrors the amended policy concerning gaps in employment in parts 255 
and 257. Care provided during a break in employment, that is, when the 
family is not working, does not extend the family's 12-month 
eligibility period.
    We propose to make a corresponding amendment to the regulations at 
Sec. 256.1(a) for the State Supportive Services Plan which addresses 
Transitional Child Care. We propose that the plan reflect whether the 
State has elected to allow child care during gaps in employment under 
TCC pursuant to the proposed Sec. 256.2(f).

PART 256--TRANSITIONAL CHILD CARE

Determination of Physical or Mental Incapacity

    We propose to amend the regulations of the TCC program at 
Sec. 256.2(a) to allow the State to determine ``physical or mental 
incapacity'' and at Sec. 256.1(a) to allow the State to define the term 
in the State's Supportive Services Plan. Our reasons are further 
explained in the preamble to the proposed changes for part 255.

Voluntary Cessation of AFDC and Eligibility for TCC

    We propose to amend Sec. 256.2(b)(1) by adding a new subparagraph 
(ii) to allow States the option of making families who voluntarily 
terminate receipt of an AFDC benefit eligible for TCC. Under this 
option, working families that receive AFDC could request that their 
AFDC be terminated and still become eligible for TCC, provided that 
they meet all other TCC eligibility requirements.
    The existing regulation, which we propose to redesignate as 
Sec. 256.2(b)(1)(i), requires that a family's eligibility for TCC is 
based on a loss of eligibility for AFDC due to the increased hours of 
employment, increased income from employment or loss of the income 
disregards due to time limits. In our consultations we have heard 
concerns that some working families find themselves ineligible for TCC 
because they voluntarily leave AFDC when they are still entitled to a 
grant. Therefore, we propose to allow the State the option to provide 
TCC to those working families who voluntarily request that their AFDC 
be terminated because their hours or income from employment have 
increased or they have lost the income disregards due to time limits, 
but are still eligible for AFDC. This policy, coupled with our proposal 
to give States the option to eliminate the need for a request for TCC, 
should allow States to provide TCC to more families, while easing the 
administrative burden on them to provide that service.
    We are not proposing to require States to provide TCC in voluntary 
closure cases because we are unsure of the administrative and fiscal 
impacts on States. At the same time, we want our regulations to support 
families who take the initiative to get jobs and move off AFDC. 
Therefore, we are interested in receiving comments as to whether it 
would be more appropriate to allow or to require States to provide TCC 
in voluntary closure cases.
    We propose to revise the regulations concerning the State 
Supportive Services Plan at Sec. 256.1(a)(6) to include information on 
whether the State elects to provide TCC to working families who 
voluntarily cease to receive AFDC.

Requesting TCC

    The existing regulations require States to provide information to 
families about their potential eligibility for TCC, the steps they need 
to take to request TCC services, and their rights and responsibilities 
under the program. States must provide this information during initial 
application for AFDC, during orientation to the JOBS program, at 
redetermination of eligibility for AFDC benefits and at termination of 
AFDC benefits. ACF issued an Action Transmittal (CC-ACF-AT-92-3), dated 
June 16, 1992, that reiterated the necessity for all families to be 
informed about TCC ``in writing, and orally as appropriate, at the time 
they become ineligible for AFDC.''
    The existing regulations also require that all families request TCC 
before services are provided. ACF did not regulate the nature of the 
request or application process. Rather we encouraged States to make the 
process simple, citing the example of a current recipient for whom the 
State might approve TCC through a recertification process if the 
necessary information was on file.
    We have, however, heard concerns that the requirement for the 
family to request services may have discouraged some families from 
seeking TCC or caused disruption in child care arrangements. This 
requirement is especially frustrating for families when necessary 
information is already on file with the State agency.
    Therefore, we propose at Sec. 256.2(b)(3) to give States the option 
to provide TCC, without requiring a request, to eligible families. We 
believe that such a policy would be most applicable to families who 
were approved for child care services under part 255. For example, an 
AFDC recipient reports her newly-begun job to her AFDC case manager. At 
that time, the case manager determines that the family will remain 
eligible for AFDC until the time limitations on the income disregard at 
Sec. 233.20(a)(11) cause the family to lose AFDC eligibility. Because 
the case manager recognizes that the family will be eligible for TCC in 
four months, if circumstances remain the same, she obtains the 
necessary information with which to determine eligibility and establish 
the level of the family's fee for TCC, if any. Continuing child care 
services in this instance would be possible because all the appropriate 
information is available to determine TCC eligibility, including fees, 
when the family loses eligibility for AFDC and transitions to TCC. 
Adopting this option can make the delivery of title IV-A child care 
services more seamless for the family. Additionally, the transition 
from child care services provided under part 255 to TCC services may 
well be ``transparent'' to the family if the State also adopts the 
proposed option to waive TCC fees for those families who are at or 
below the poverty level.
    However, in adopting the option to continue child care services 
without a request for TCC, the State must still provide all of the 
required notifications, including appeals rights, regarding the 
termination of AFDC benefits and child care services pursuant to 
Secs. 205.10 or 250.36 as appropriate. The family must also be notified 
of the requirements for their continued eligibility for TCC, including 
the payment of fees if applicable, pursuant to the requirements at 
Secs. 256.2, 256.3 and 256.4.
    We propose amending Sec. 256.1(a)(6)(i) to have States specify in 
their Supportive Services Plan whether they have adopted this option.
    In proposing this option we recognize that, in some cases (e.g., 
where a State does not have current or complete information on a 
family), a State may find it difficult to provide TCC in the absence of 
a request. Therefore, the State will still need a mechanism in place to 
collect the information necessary to determine eligibility and 
payments. For many families, the need for child care will not arise 
until they get a job which terminates their AFDC eligibility. Other 
families who leave AFDC due to employment may not need child care at 
that time (e.g., because their child is enrolled in Head Start), but 
may need care subsequently. Whenever the need for child care arises, 
the State must make a prompt determination of eligibility for TCC in 
order to assist the family. ACF remains concerned that States have not 
established such timely, efficient procedures. The request or 
application process should be simple so as not to hinder the 
applicant's ability to accept work or continue working.
    Because we continue to hear concerns that the requirement for a 
request for TCC is problematic and that TCC utilization is low, we are 
requesting comments on whether: (1) This provision to make requests 
optional is a sufficient response; (2) the request requirement 
constitutes a serious barrier to the receipt of TCC; and (3) other 
changes should be made to make TCC more accessible to eligible 
families.

Retroactive Requests for TCC

    The existing rule at Sec. 256.2(c) specifically provides for 
families to receive TCC ``notwithstanding when the family requests 
assistance under this Part * * *.'' States have asked whether they may 
establish a cut-off date for TCC requests as they have received 
requests after the family's 12-month period of TCC eligibility has 
expired. There is no existing Federal policy which addresses a cut-off 
date for TCC requests following the 12-month eligibility period. We 
believe a cut-off date should be a State decision. We propose to revise 
Sec. 256.2(c) and add a new paragraph Sec. 256.2(g) to provide States 
the authority to establish a reasonable time limit for accepting TCC 
requests following the close of the eligibility period.
    We also propose to amend Sec. 256.4(c) to require States which have 
elected to establish a time limit for accepting requests for TCC, 
pursuant to Sec. 256.2(g), to notify families of the time limit.

Fee Requirement

    In order to be compatible with the At-Risk Child Care Program at 
Sec. 257.31(c) and CCDBG at Sec. 98.42(c), we propose to amend the TCC 
regulation that requires some level of contribution to the cost of TCC 
by all recipients. Section 402(g)(1)(A)(vii) of the Act requires a 
family to contribute to the cost of TCC according to its ability to 
pay. The existing regulations at Sec. 256.3(b) require that a sliding 
fee be established that provides for some level of contribution by all 
recipients.
    As is the case with At-Risk families, families eligible for TCC are 
only one step away from actual receipt of AFDC. We believe it is 
appropriate to give States the option to treat TCC families the same as 
other similarly-situated families in the State. Therefore, we propose 
to revise Sec. 256.3(b) to give States the option to waive the 
contribution from a family whose income is at or below the poverty 
level for a family of the same size.

Gaps in Employment During TCC

    As discussed in the preamble to part 255 we propose to amend 
Sec. 256.1(a) and add Sec. 256.2(f) to allow States the option to 
continue child care that would otherwise be lost, for a limited period 
of time for families waiting to enter employment or who have a gap in 
employment. Section 256.2(f) codifies into part 256 the existing and 
proposed title IV-A child care gaps policy.

PART 257--AT-RISK CHILD CARE PROGRAM

Child Care That Is ``Reasonably Related'' to Parent's Employment

    As discussed in the preamble at parts 255 and 256, we propose to 
amend Sec. 257.21(a)(6) to have the State include in its At-Risk Child 
Care plan a description of its policy on what constitutes child care 
that is reasonably related to the parent's hours of employment.

Gaps in Employment During At-Risk Child Care

    As discussed in the preamble at parts 255 and 256, we propose to 
amend Sec. 257.30(c) to allow States the additional option to continue 
child care for a limited period of time for families that lose a job 
but are searching for another and whose child care arrangements would 
otherwise be lost. We also propose to conform the At-Risk regulations 
regarding the provision of child care during the two weeks prior to 
start of employment with the corresponding regulations in part 255 and 
the proposed amendment to part 256. With these proposed amendments, 
States will have the flexibility to create a consistent gaps policy 
across the three title IV-A child care programs.

Other Proposed At-Risk Child Care Amendments

    We propose amending the At-Risk regulations concerning in-home care 
and the effects test, as discussed earlier in the preamble.

List of Subjects

45 CFR Part 98

    Child care, Grant program--social programs, Parental choice, 
Reporting and recordkeeping requirements.

45 CFR Part 255

    Aid to families with dependent children, Grant programs--social 
programs, Employment, Education and training, Day care.

45 CFR Part 256

    Aid to families with dependent children, Grant programs--social 
programs, Employment, Education and training, Day care.

45 CFR Part 257

    Day care, Grant programs--social programs, Reporting and 
recordkeeping requirements.

(Catalog of Federal Domestic Assistance Programs: 93.037, Child Care 
and Development Block Grant; 93.560, Aid to Families with Dependent 
Children; 93.561, Job Opportunities and Basic Skills Training (JOBS) 
Program; 93.574, At-Risk Child Care)

    Dated: March 31, 1994.
Mary Jo Bane,
Assistant Secretary for Children and Families.
    Approved: April 20, 1994.
Donna E. Shalala,
Secretary, Department of Health and Human Services.
    For the reasons set forth in the preamble, parts 98, 255, 256, and 
257 of title 45 of the Code of Federal Regulations are revised to read 
as follows:

45 CFR Subtitle A

PART 98--CHILD CARE AND DEVELOPMENT BLOCK GRANT

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

    Authority: 42 U.S.C. 9858.

Subpart A--Purposes and Definitions

    2. Section 98.2 is amended by removing and reserving paragraph (z); 
and revising paragraphs (y) and (cc) to read as follows:


Sec. 98.2  Definitions.

* * * * *
    (y) Expenditure period is the time period during which one fiscal 
year's grant funds must be expended which includes the relevant fiscal 
year in which the funds were awarded and the succeeding three fiscal 
years. This provision pertains to all grantees, including State, 
Territorial and Tribal grantees;
* * * * *
    (cc) Program period is the time period during which one fiscal 
year's grant funds may be used to support program activities. The time 
frame for the program period is the same as that for the expenditure 
period;
* * * * *

Subpart B--General Application Procedures


Sec. 98.13  [Amended]

    3. Section 98.13 is amended by removing and reserving paragraph 
(a)(6)(ii).
    4. Section 98.16 is amended by revising paragraphs (a)(7)(ii) and 
(a)(12)(ii); and adding paragraph (a)(12)(iii) to read as follows:


Sec. 98.16  Plan provisions.

    (a) * * *
    (7) * * *
    (ii) Specification of the grantee's policy for the availability of 
in-home care and the rationale for that policy;
* * * * *
    (12) * * *
    (ii) Based on a methodologically sound system for determining 
payment rates, a justification of the grantee's decision not to provide 
for differences in payment based on the setting (categories of care), 
or the age of the child; and
    (iii) A description of how differential rates within categories of 
care, if any, are determined and identification of within-category 
distinctions;
* * * * *

Subpart D--Program Operations (Child Care Services)--Parental 
Rights and Responsibilities


Sec. 98.30  [Amended]

    5. In Sec. 98.30, paragraphs (e) and (g) are removed and reserved.

Subpart E--Program Operations (Child Care Services)--State and 
Provider Requirements


Sec. 98.40  [Amended]

    6. In Sec. 98.40, paragraph (b)(2) is removed and reserved.
    7. Section 98.41 is amended by removing and reserving paragraph 
(b); and revising paragraph (a)(1) to read as follows:


Sec. 98.41  Health and safety requirements.

    (a) * * *
    (1) The prevention and control of infectious diseases (including 
immunizations):
    (i) Grantees must establish immunization requirements as part of 
their health and safety plans which assure that children receiving 
services under the Block Grant are immunized. Immunization requirements 
must be established in accordance with the following guidelines:
    (A) State and Territorial health and safety plans must incorporate 
(by reference or otherwise) the latest recommendation for childhood 
immunizations of the respective State or Territorial Department of 
Public Health;
    (B) Tribes have the option to determine the immunization standards 
to be incorporated in their health and safety plans, but must identify 
the source of standards. Tribes may choose from:
    (1) State Department of Public Health immunization standards; or
    (2) Indian Health Service immunization standards.
    (ii) Notwithstanding paragraph (a)(1)(i) of this section, States 
may exempt:
    (A) Children who are cared for by relatives (defined as 
grandparents, aunts and uncles);
    (B) Children who receive care in their own homes;
    (C) Children whose parents object for religious reasons; and
    (D) Children whose medical condition contraindicates immunization;
* * * * *
    8. Section 98.43 is amended by removing and reserving paragraph 
(c); and revising paragraphs (b)(1) introductory text, (b)(2) and (e) 
to read as follows:


Sec. 98.43  Payment rates.

* * * * *
    (b) * * *
    (1) Variations in the amount charged for providing child care:
* * * * *
    (2) The additional amount charged for providing child care for a 
child with special needs for services which are not required as an 
accommodation under the Americans with Disabilities Act.
* * * * *
    (e) If a grantee sets a payment rate schedule which includes 
variation in the payment rate within a category, pursuant to 
Sec. 98.16(a)(12)(iii), the grantee must describe how the payment 
differential was determined and what the distinctions within categories 
are.
* * * * *


Sec. 98.45  [Amended]

    9. In Sec. 98.45, paragraph (d) is removed and reserved.

Subpart F--Use of Block Grant Funds

    10. Section 98.50 is amended by removing and reserving paragraph 
(d)(3); and revising paragraph (d)(2) to read as follows:


Sec. 98.50  Child care services.

* * * * *
    (d) * * *
    (2) To meet the requirements of paragraph (d)(1) of this section:
    (i) At least 85 percent of the funds reserved for assistance under 
this section must be expended for services pursuant to paragraph (a)(1) 
of this section; and
    (ii) Not more than 15 percent of the funds may be expended for 
activities as described in paragraphs (a)(2) and (a)(3) of this 
section.
    11. Section 98.52 is amended by revising paragraph (c) to read as 
follows:


Sec. 98.52  Administrative activities.

* * * * *
    (c) Expenditures on any administrative activities related to the 
services under Sec. 98.50 are subject to the requirements and 
limitation under Sec. 98.50(d), and together with expenditures for 
quality and availability, must not exceed the limitation under 
Sec. 98.50(d)(2).

Subpart G--Financial Management

    12. Section 98.60 is amended by removing and reserving paragraphs 
(d)(2), (d)(3), (e), (h)(2); revising the word ``obligation'' in 
paragraph (h)(1) to read ``expenditure'' and revising the word 
``obligated'' in paragraph (h)(1) to read ``expended''; and revising 
paragraphs (d)(1), (d)(4), and (h)(3) to read as follows:


Sec. 98.60  Availability of funds.

* * * * *
    (d)(1) State, Territorial, and Tribal Grantees must expend their 
allotment in the fiscal year in which funds are awarded or in the 
succeeding three fiscal years.
* * * * *
    (4) Any funds not expended during the expenditure period specified 
in paragraph (d)(1) of this section will revert to the Federal 
government.
* * * * *
    (h) * * *
    (3) If received by the grantee or subgrantee after the expenditure 
period specified in paragraph (d)(1) of this section, be returned to 
the Federal government.
* * * * *
    13. Section 98.63 is amended by revising paragraphs (a)(1) and (b) 
to read as follows:


Sec. 98.63  Reallotment.

    (a) * * *
    (1) In the fourth (and last) fiscal year of each expenditure 
period, the State shall report to the Secretary the dollar amount of 
funds available for reallotment from the award given in the first 
fiscal year of that expenditure period. Such report must be postmarked 
by April 1st.
* * * * *
    (b) States receiving reallotted funds must expend these funds in 
accordance with Sec. 98.60. The reallotment of funds does not extend 
the program period for expenditure of such funds.

Subpart H--Program Reporting Requirements

    14. Section 98.70 is amended by removing and reserving paragraph 
(b); and revising paragraph (a) to read as follows:


Sec. 98.70  Annual report requirement.

    (a) Grantees that receive assistance under the Block Grant shall 
prepare and submit to the Secretary an annual report. The report will 
be submitted in the manner specified by the Secretary by December 31 
and will cover expenditures made by September 30 of that year. Unless 
otherwise specified by the Secretary, each fiscal year's grant shall be 
accounted for separately.
* * * * *

45 CFR Chapter II

PART 255--CHILD CARE AND OTHER WORK-RELATED SUPPORTIVE SERVICES 
DURING PARTICIPATION IN EMPLOYMENT, EDUCATION, AND TRAINING

    1. The authority citation for part 255 is revised to read as 
follows:

    Authority: 42 U.S.C. 602, 603 and 1302.

    2. Section 255.1 is amended by revising paragraphs (e)(4) and (i) 
and adding paragraphs (m) and (n) to read as follows:


Sec. 255.1  State plan requirements.

* * * * *
    (e) * * *
    (4) Child care provided or claimed for reimbursement is reasonably 
related to the hours of participation or employment as described in the 
State Supportive Services plan.
* * * * *
    (i)(1) A description of the methodology used for setting local 
market rates pursuant to Sec. 255.4(a)(2). Such methodology must 
address rates established for each category of care (i.e., center, 
group family day care, and family day care) provided. The description 
must address variations in the costs of care for infants, toddlers, 
pre-school and school-age children, whether care is full- or part-time, 
and reduction in the cost of care for additional children in the same 
family if such variations exist. If the State chooses to survey in-home 
care, the methodology used must be included in the description. The 
rates determined by using the methodologies described must be submitted 
as part of the State's Supportive Services plan and must be updated 
periodically, but no less than biennially.
    (2) A description of the State's criteria for higher quality care, 
if any, in accordance with Sec. 255.4(a).
* * * * *
    (m) The State's definition of physically or mentally incapable of 
caring for himself or herself, pursuant to Sec. 255.2(a).
    (n) Any conditions and limitations the State IV-A agency has 
established for providing in-home care, pursuant to Sec. 255.3(c)(2).
    3. Section 255.2 is amended by revising paragraphs (a) introductory 
text and (d)(2) to read as follows:


Sec. 255.2  Eligibility.

    (a) The State IV-A agency must guarantee child care for a dependent 
child who is: under age 13; physically or mentally incapable of caring 
for himself or herself, as determined by the State and defined in the 
State's Supportive Services plan; or under court supervision (and for a 
child who would be a dependent child except for the receipt of benefits 
under Supplemental Security Income under title XVI or foster care under 
title IV-E), to the extent that such child care is necessary to permit 
an AFDC eligible family member to--
* * * * *
    (d) * * *
    (2) For a period not to exceed one month where child care (or other 
services) arrangements would otherwise be lost, and:
    (i) The subsequent activity is scheduled to begin within that 
period; or
    (ii) The eligible family member is searching for another job.
* * * * *
    4. Section 255.3 is amended by revising paragraph (c) to read as 
follows:


Sec. 255.3  Methods of providing child care and other supportive 
services.

* * * * *
    (c)(1) If more than one category of child care is available, e.g., 
center, group family care, family day care, or in-home care, the 
caretaker relative must be provided an opportunity to choose the 
arrangement. The State IV-A agency may select the method of payment 
under paragraph (a) of this section.
    (2) The State IV-A agency may establish conditions and limitations 
under which it will provide in-home care in the State Supportive 
Services plan.
* * * * *
    5. Section 255.4 is amended by removing paragraph (c)(2)(iii); 
revising paragraphs (a)(2) introductory text, (a)(2) (ii) and (iii); 
adding new paragraphs (a)(2) (iv) and (v); revising paragraphs (a)(3) 
(i), (ii), (iii), and (iv); and adding a new paragraph (a)(3)(v) to 
read as follows:


Sec. 255.4  Allowable costs and matching rates.

    (a) * * *
    (2) Except as specified in paragraphs (a)(2) (iv) and (v) of this 
section, the applicable local market rate must be established:
* * * * *
    (ii) For all political subdivisions or for alternative areas which 
represent reasonable local child care markets based upon their 
geographic proximity or common characteristics;
    (iii) Based on the 75th percentile cost of such categories of care 
in the local areas (however, where there are only one or two providers 
of a category of care in a local market area, the rate may be set at 
the 100th percentile.);
    (iv) At State option, at the provider's actual charge for that care 
which meets the State's objective criteria for higher quality care. For 
purposes of this paragraph, the States's criteria for higher quality 
care must be in addition to State licensing or regulatory requirements; 
and
    (v) At the provider's actual charge for care for children with 
special needs if that actual charge exceeds the local market rate for a 
child of the same age and in the same category of care who does not 
have special needs, and provided the additional charge is for services 
which are not required as an accommodation under the Americans with 
Disabilities Act.
    (3) * * *
    (i) Be established for center care, group family care, and family 
day care;
    (ii) Differentiate among care for infants, toddlers, pre-school and 
school-age children, where applicable;
    (iii) Differentiate between full-time and part-time care, if 
applicable;
    (iv) Consider reductions in the cost of care for additional 
children in the same family; and
    (v) Be established for in-home care:
    (A) At the level required by Federal and State provisions that 
govern domestic service employees, without reference to the 
requirements in paragraph (a)(2) of this section; or
    (B) In accordance with paragraph (a)(2) of this section only when 
such a local market rate would exceed the level required by Federal and 
State provisions that govern domestic services employees.
* * * * *

PART 256--TRANSITIONAL CHILD CARE

    1. The authority citation for part 256 is revised to read as 
follows:

    Authority: 42 U.S.C. 602, 603 and 1302.

    2. Section 256.1 is amended by revising paragraphs (a)(3) and 
(a)(4) and by adding paragraphs (a)(5) and (a)(6) to read as follows:


Sec. 256.1  State plan requirements.

    (a) * * *
    (3) The methods and procedures the State IV-A agency shall use to 
ensure tha fees are collected;
    (4) The application requirements established by the State for 
families requesting TCC;
    (5) The State's definition of physically or mentally incapable of 
caring for himself or herself, pursuant to Sec. 256.2(a); and
    (6) Whether the State has elected to provide care under this part:
    (i) To families without a request from the family pursuant to 
Sec. 256.2(b)(3);
    (ii) Before employment begins or during breaks in employment 
pursuant to Sec. 256.2(f); and
    (iii) To families who voluntarily cease to receive AFDC pursuant to 
Sec. 256.2(b)(1)(ii).
* * * * *
    3. Section 256.2 is amended by revising paragraphs (a), (b)(1), 
(b)(3) and (c) and by adding paragraphs (f) and (g) to read as follows:


Sec. 256.2  Eligibility.

    (a) The State IV-A agency must guarantee child care for a child who 
is: Under age 13; physically or mentally incapable of caring for 
himself or herself, as determined by the State and defined in the 
State's Supportive Services plan; or under court supervision, and who 
would be a dependent child, if needy (and for a child who would be a 
dependent child except for the receipt of benefits under Supplemental 
Security Income under title XVI or foster care under title IV-E), to 
the extent that such care is necessary to permit a member of an AFDC 
family to accept or retain employment.
    (b) * * *
    (1)(i) The family must have ceased to be eligible for AFDC as a 
result of increased hours of, or increased income from, employment or 
the loss of income disregards due to the time limitations at 
Sec. 233.20(a)(11); or
    (ii) At State option, the family voluntarily ceases to receive an 
AFDC benefit as a result of increased hours of, or increased income 
from, employment or the loss of income disregards due to the time 
limitations at Sec. 233.20(a)(11);
* * * * *
    (3) The family requests transitional child care benefits, if 
required by the State, provides the information necessary for 
determining eligibility and fees, and meets appropriate application 
requirements established by the State; and
* * * * *
    (c)(1) Eligibility for transitional child care begins with the 
first month for which the family is ineligible for AFDC, for the 
reasons included in paragraph (b)(1) of this section, and continues for 
a period of 12 consecutive months.
    (2) Families may begin to receive child care in any month during 
the 12-month eligibility period.
* * * * *
    (f) The State IV-A agency may provide child care under this part 
for an eligible family member who is waiting to enter employment:
    (1) For a period not to exceed two weeks; or
    (2) For a period not to exceed one month where child care 
arrangements would otherwise be lost, and:
    (i) Employment is scheduled to begin within that period; or
    (ii) The eligible family member is searching for another job.
    (g) The State IV-A agency may establish a reasonable time limit for 
accepting TCC requests following the close of the TCC eligibility 
period.
    4. Section 256.3 is amended by revising paragraph (b) to read as 
follows:


Sec. 256.3  Fee requirement.

* * * * *
    (b)(1) Each State IV-A agency shall establish a sliding fee formula 
based on the family's ability to pay that provides for contributions 
from each family toward the cost of care provided under this part.
    (2) The State IV-A agency may waive the contribution from a family 
whose income level is at or below the poverty level for a family of the 
same size.
* * * * *
    5. Section 256.4 is amended by revising paragraph (c) to read as 
follows:


Sec. 256.4  Other provisions.

* * * * *
    (c) The State IV-A agency must notify all families of:
    (1) Their potential eligibility for transitional child care 
services under this part in writing, and orally as appropriate, at the 
time they become ineligible for AFDC;
    (2) The time limit the State has established for requesting TCC 
following the close of the TCC eligibility period; and
    (3) Their rights and responsibilities under the program.
* * * * *

PART 257--AT-RISK CHILD CARE PROGRAM

    1. The authority citation for part 257 continues to read as 
follows:

    Authority: 42 U.S.C. 602, 603, and 1302.

    2. Section 257.21 is amended by revising paragraphs (a)(6), (m) and 
(n) and adding paragraph (o) to read as follows:


Sec. 257.21  State plan content.

    (a) * * *
    (6) Child care provided or claimed for reimbursement is reasonably 
related to the hours of employment as described in the State's At-Risk 
Child Care plan;
* * * * *
    (m) A description of the coordination of the At-Risk Child Care 
program with existing IV-A child care programs, with other Federally-
funded child care programs, and with other child care provided through 
other State, public, and private agencies;
    (n) A description of the health and safety requirements, if any, 
for the prevention and control of infectious diseases (including 
immunization), building and physical premises safety, and minimum 
health and safety training appropriate to the provider setting, in 
accordance with Sec. 255.4(c)(2)(ii) of this chapter and 
Sec. 257.41(a)(2); and
    (o) Any conditions and limitations the State IV-A agency has 
established for providing in-home care, pursuant to Sec. 257.40(b)(2).
    3. Section 257.30 is amended by revising paragraph (c) to read as 
follows:


Sec. 257.30  Eligibility.

* * * * *
    (c) The State IV-A agency may provide child care under this Part 
for an eligible family member who is waiting to enter employment:
    (1) For a period not to exceed two weeks; or
    (2) For a period not to exceed one month where child care 
arrangements would otherwise be lost, and:
    (i) Employment is scheduled to begin within that period; or
    (ii) The eligible family member is searching for another job.
    4. Section 257.40 is amended by revising paragraph (b) to read as 
follows:


Sec. 257.40  Methods of providing child care.

* * * * *
    (b)(1) If more than one category of child care is available, e.g., 
center, group family care, family day care, and in-home care, the 
family must be provided an opportunity to choose the arrangement. The 
State IV-A agency may select the method of payment under paragraph (a) 
of this section.
    (2) The State IV-A agency may establish the conditions and 
limitations under which it will offer in-home care in the State 
Supportive Services plan.
* * * * *
    5. In Sec. 257.41, paragraphs (a)(3) and (b)(2)(v) are removed and 
paragraphs (b)(2)(iii) and (iv) are revised to read as follows:


Sec. 257.41  Child care standards.

* * * * *
    (b) * * *
    (2) * * *
    (iii) Allow providers to register with the State or locality after 
selection by the parent(s); and
    (iv) Be simple and timely.
* * * * *
[FR Doc. 94-11087 Filed 5-10-94; 8:45 am]
BILLING CODE 4184-01-P