[Federal Register Volume 60, Number 106 (Friday, June 2, 1995)]
[Rules and Regulations]
[Pages 28735-28737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13507]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 1357

RIN AB44


Child Welfare Services Program

AGENCY: Administration on Children, Youth and Families; Administration 
for Children and Families, HHS.

ACTION: Final rule.

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SUMMARY: The Department of Health and Human Services is issuing this 
final rule to amend the regulations governing direct payments to Indian 
Tribal Organizations (ITOs) for child welfare services. It eliminates 
the requirement that to be eligible ITOs must provide services under 
contract (or grant) with the Secretary of the Interior under section 
102 of the Indian Self-Determination Act, and adds a description of the 
formula used to calculate the amount of Federal funds available to 
eligible ITOs under title IV-B, Subpart 1 of the Social Security Act. 
We believe that complex and limiting eligibility requirements and low 
grant amounts have resulted in low ITO participation rates. The 
amendment will improve the quality of Indian child welfare services 
nationally by broadening eligibility and by allowing for an increase in 
grant amounts.

EFFECTIVE DATE: October 1, 1995.

FOR FURTHER INFORMATION CONTACT: Olivia A. Golden, Administration on 
Children, Youth and Families, P.O. Box 1182, Washington, DC 20013, 
(202) 205-8474.

SUPPLEMENTARY INFORMATION:

I. Program Description and Background

    Title IV-B, Subpart 1, of the Social Security Act (the Act), the 
Child Welfare Services program, is a formula grant program. Each State 
receives a grant representing its share of the current authorized 
amount. The grants provide States with Federal support for a wide 
variety of State child welfare services including: preplacement 
preventive services to strengthen families and avoid placement of 
children; services to prevent abuse and neglect; services for the 
provision of foster care and adoption; and certain protections for 
children in foster care.
    The grant funds can be used to provide services regardless of the 
income of the families and children who are in need of such services.
    The Child Welfare Services program has been a part of the Social 
Security Act (the Act) since the Act's inception in 1935. In 1968, 
Congress transferred this program to title IV, Part B of the Act 
(sections 420-425 of the Act). Historically, title IV-B has provided 
Federal grants to States to establish, extend and strengthen child 
welfare services. Under this program, services are available to all 
children, including the homeless, neglected, dependent and those with 
disabilities.
    The Adoption Assistance and Child Welfare Act of 1980 (Pub. L. 96-
272) was enacted on June 17, 1980. In addition to amending title IV-B, 
Public Law 96-272 established a new program, the title IV-E program, 
which replaced on October 1, 1982, the title IV-A foster care program 
in the States. The law created links between the two programs with 
numerous program and fiscal incentives. The impetus behind the passage 
of Public Law 96-272 was the belief of Congress and most State child 
welfare administrators, supported by extensive research, that the 
public child welfare system responsible for serving dependent and 
neglected children, youth and families had become a receiving or 
holding system for children living away from their parents. Congress 
envisioned in the new legislation a system that would help families 
remain together by assisting parents in carrying out their roles and 
responsibilities and providing alternative permanent placement for 
those children who cannot return to their own homes.
    Public Law 96-272 created section 428 of the Act which provides for 
direct payments to certain Indian Tribal Organizations, of funds 
authorized under title IV-B for child welfare services to certain ITOs. 
Effective June 22, 1983, regulations published at 45 CFR 1357.40 
implemented section 428 of the Act, and specified which ITOs are 
eligible to receive funds directly and under what circumstances direct 
payments should be made available. In determining which ITOs would be 
eligible for direct funding, the Department decided to make the option 
of applying for direct funding available to those ITOs which had 
contracted with, or received a grant from, the Bureau of Indian Affairs 
under Public Law 93-638 (Indian Self-Determination Act) for child 
welfare services. This requirement was intended to limit direct funding 
to ITOs that had established the need for child welfare services and 
had taken advantage of the opportunity for direct management and 
operation of a tribal child welfare services program. Under this 
approach, direct grants would be added to existing ongoing Indian child 
welfare programs operated by the tribal organizations. The title IV-B 
funds were intended to be linked to the other major Federal Indian 
social services program to support Indian self-determination, and 
complement the provisions of the Indian Child Welfare Act of 1978 (Pub. 
L. 95-608). This was considered important by the Department because 
title IV-B funds alone are [[Page 28736]] insufficient for an ITO to 
establish and operate a basic child welfare services program.
    We believe that the requirement that ITOs must contract, or receive 
a grant, for child welfare services under Public Law 93-638 in order to 
be eligible for direct funding under title IV-B is no longer necessary. 
In recent years, Federal social service funding under the Indian Child 
Welfare Act (ICWA) has increased significantly. In fiscal year 1994, 
530 tribes are expected to receive $22,905,000 under ICWA. We are aware 
that there are ITOs which do not receive Indian Self-Determination Act 
funding although they are operating child welfare services programs 
utilizing ICWA funding, and others which could choose to begin to 
provide child welfare services.

II. Discussion of the Comments and Final Rule

    On October 20, 1994, the Department published a Notice of Proposed 
Rulemaking (NPRM) in the Federal Register [59 FR 52951] that proposed a 
revision of 45 CFR Part 1357, the regulation governing direct payments 
to Indian Tribal Organizations (ITOs). Interested persons were given 60 
days in which to comment on the proposed rule. The following is a 
summary of the comments from the respondents and the Department's 
response.
    The Department received comments from twenty-one respondents, 
including Tribal governments, Tribal human services agencies, national 
Indian organizations, a Federal agency, and a State agency. Nineteen 
comments supported changing the multiplication factor from 1.4 to 3.0. 
Eighteen responses supported elimination of the Indian Self-
Determination Act eligibility requirement. One respondent opposed 
elimination of the Indian Self-Determination Act eligibility 
requirement. Two respondents recommended changes to the proposed rule.

Comment

    One respondent opposed elimination of the Indian Self-Determination 
Act eligibility requirement, and requested that an impact study be 
conducted first to determine the effect of expanding the population of 
Indians served on the population of Indians currently served under 
title IV-B, Part 1. The respondent recommended that the results of the 
study be published in the Federal Register along with the proposed 
definition changes and proposed funding allocation, and that there be 
an opportunity for comments.

Response

    This comment appears to reflect two concerns: that the change 
allows for native American consortiums to receive direct title IV-B 
funding, and that the resulting increase of population which could 
participate in title IV-B funding could adversely impact the program if 
not funded appropriately. In response, it should be noted that the 
current regulation allows Indian consortiums to receive title IV-B 
direct funding. The proposed rule did not change this. However, the 
proposed rule, by eliminating the Indian Self-Determination Act 
requirement would likely expand the population of Indian children and 
families served under title IV-B direct funding. If such a change in 
the population served did occur, the corresponding increase of funding 
to tribes would result in a corresponding equivalent decrease in 
funding available to the State title IV-B agencies. There would be no 
decrease in title IV-B funding available to those Indian Self-
Determination Act tribes currently receiving direct title IV-B funding 
as a result of increasing the Indian population under this program. We 
do not believe that an impact study is therefore necessary or 
appropriate.

Comment

    One respondent recommended delay of implementation of the 
multiplication factor change to FY 1996 and implementation in two 
stages: citing as examples, 2.25 in FY 1996, and 3.0 in FY 1997. The 
respondent expressed concern about the impact on a State Agency due to 
the significant percentage of the budget reduction anticipated and the 
lack of adequate advance time for a State Agency to plan for the change 
if implemented in FY 1995, as proposed.
Response

    The Department agrees that a large increase in direct funding of 
Tribes, coming late in a State's budget cycle would impose serious 
problems. In order to allow those States that are likely to be 
significantly impacted by the final regulation to adequately plan for 
the change, the Department will delay the effective date of the final 
regulation to October 1, 1995. However, we do not agree with the 
proposal to raise the multiplication factor in stages because we do not 
believe that a lower multiplication factor than 3.0 would be sufficient 
to achieve the purpose of the policy, which is to substantially 
increase the participation of the tribes and raise the quality of 
Indian child welfare services. Although we understand the State's 
concern about the need to maintain adequate State funding to continue 
to serve the Indian population of enrolled tribal members living off 
reservation, the title IV-B appropriations are not intended to 
adequately meet all of a State's child welfare services needs. It is 
expected that States will fund a significant portion of State child 
welfare services from other sources.

Comment

    One respondent recommended replacing the proposed funding formula 
with a $20,000 base level of funding per Tribe, plus a percentage for 
each child. This comment opposes the proposed formula because small 
Tribes cannot sustain a viable program if this proposed funding formula 
to tribes is approved and because small tribes have the same base cost 
of providing services.

Response

    Although we understand the concern that the funding formula does 
not adequately meet the needs of the smaller tribes, the Department 
believes that title IV-B is not sufficient to sustain base level plus 
percentage funding for every Tribe and also fund those States with 
either a large number of Tribes and/or a large population of Tribal 
children. Title IV-B is intended to supplement other State and Tribal 
child welfare resources. Under the Department's plan for increasing the 
multiplication factor from 1.4 to 3.0, the Tribes will receive twice 
the dollars per child in comparison with the States. The base level 
plus percentage proposal would result in differentials far greater in 
certain States. The proposed change as stated in the NPRM maintains 
more of a balance between the Department's decision to more adequately 
fund tribes, and the Federal responsibility to the States to assist 
them to meet the needs of the children served in their child welfare 
systems.

The Final Rule

    This final rule revises paragraph (a) to eliminate the Indian Self-
Determination Act eligibility requirement. Paragraph (a), as revised, 
states that ``any ITO that meets the definitions in section 428(c) of 
the Act, or any consortium or other group of eligible tribal 
organizations authorized by the membership of the tribes to act for 
them is eligible to apply for direct funding if the Indian tribe, 
consortium or group has a plan for child welfare services provided by 
the ITO that is jointly developed by the ITO and the Department''.
    In determining the amount of direct funding available to an ITO 
eligible under the existing regulation, the [[Page 28737]] Secretary 
currently applies a formula similar to the one used to calculate the 
title IV-B allotments of the territories. This formula takes into 
consideration the Indian tribe's resident population under 21 and its 
per capita income.
    The current formula for calculating an ITO's allotment results in 
an amount which bears the same ratio to the total State's title IV-B 
allotment as the product of 1.4 times the proportion of the Indian 
tribe's resident population under age 21 to the State's total 
population under age 21. The 1.4 multiplication factor has not resulted 
in grant amounts large enough to make it worthwhile for many tribes to 
apply for title IV-B. By June 1993, only 24 tribes were receiving 
direct title IV-B grants totaling $549,340. The average grant available 
to specified ITOs was $22,889, and grants ranged from a high of 
$166,468 to a low of $648.
    The Department plans to change the multiplication factor to 3.0 for 
fiscal year 1996 in order to improve the quality of Indian child 
welfare nationally. For comparison purposes, using the fiscal year 1993 
figures given above, this would have raised the average amount 
available to the specified ITO's to $45,778, and grants would have 
ranged from a high of $332,936 to a low of $1,296.
    Paragraph (g)(6) contains the Department's formula for the 
calculation of ITO allotments. The multiplication factor will be 
adjusted in future years based on the Department's experience, if 
necessary, in order to achieve the purposes of the Act. Any decision to 
change the multiplication factor will be promulgated through the 
issuance of an Information Memorandum under the ACYF policy issuance 
system.
    Except for delaying the effective date to October 1, 1995, we have 
made no changes in the final rule as proposed in the Notice.

III. Impact Analysis

Executive Order 12866

    Executive Order 12866 requires that regulations be written to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that the 
regulations are consistent with these priorities and principles. This 
final rule will not result in more costs because the increased funding 
to Indian tribes and ITOs will come from the change in the allotment 
formula.

Regulatory Flexibility Act of 1980

    Consistent with the Regulatory Flexibility Act of 1980 (5 U.S.C. 
Ch. 5), the Department tries to anticipate and reduce the impact of 
rules and paperwork requirements on small businesses. For each rule 
with a ``significant economic impact on a substantial number of small 
entities'' an analysis is prepared describing the rule's impact on 
small entities. Small entities are defined in the Act to include small 
businesses and small non-profit organizations. This regulation would 
affect States and Indian tribes, which are not ``small entities'' 
within the meaning of the Act. For these reasons, the Secretary 
certifies that this rule will not have a significant impact on a 
substantial number of small entities.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1980, Public Law 96-511, all 
Departments are required to submit to the Office of Management and 
Budget (OMB) for review and approval any reporting or recordkeeping 
requirements in a proposed or final rule. This final rule contains no 
reporting or recordkeeping requirements. Therefore no submission to OMB 
is required.

List of Subjects in 45 CFR Part 1357

    Adoption and foster care, Child welfare, Child welfare services, 
State plan, Indians, Reporting and recordkeeping requirements.

(Catalog of Federal Domestic Assistance Program Number 93.645, Child 
Welfare Services--State Grants)

    Dated: May 12, 1995.
Mary Jo Bane,
Assistant Secretary for Children and Families.

    For the reasons set forth in the preamble, 45 CFR 1357.40 is 
amended as follows:

PART 1357--REQUIREMENTS APPLICABLE TO TITLE IV-B

    1. The authority statement for Part 1357 continues to read as 
follows:

    Authority: 42 U.S.C. 620; 42 U.S.C. 670 et seq.; 42 U.S.C. 1302.

    2. Section 1357.40 is amended by revising the heading and paragraph 
(a) and by adding paragraph (g)(6) to read as follows:


Sec. 1357.40  Direct payments to Indian Tribal Organizations (title IV-
B, subpart 1, child welfare services).

    (a) Who may apply for direct funding? Any Indian Tribal 
Organization (ITO) that meets the definitions in section 428(c) of the 
Act, or any consortium or other group of eligible tribal organizations 
authorized by the membership of the tribes to act for them, is eligible 
to apply for direct funding if the ITO, consortium or group has a plan 
for child welfare services that is jointly developed by the ITO and the 
Department.
* * * * *
    (g) Grants: General.
* * * * *
    (6) In order to determine the amount of Federal funds available for 
a direct grant to an eligible ITO, the Department shall first divide 
the State's title IV-B allotment by the number of children in the 
State, then multiply the resulting amount by a multiplication factor 
determined by the Secretary, and then multiply that amount by the 
number of Indian children in the ITO population. The multiplication 
factor will be set at a level designed to achieve the purposes of the 
Act and revised as appropriate.

[FR Doc. 95-13507 Filed 6-1-95; 8:45 am]
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