[Federal Register Volume 64, Number 240 (Wednesday, December 15, 1999)]
[Rules and Regulations]
[Pages 69924-69926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32420]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 1302

RIN 0970-AB98


Head Start Program

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

ACTION: Final rule.

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SUMMARY: The Administration on Children, Youth and Families is amending 
the Head Start regulations governing policies and procedures on 
selection and funding of grantees. The amendment removes the section on 
priority for previously selected Head Start agencies in open 
competitions for Head Start grants. We are removing this section 
because of increased confusion among existing Head Start grantees about 
the meaning of ``priority'' as ACYF acts to replace grantees who have 
been terminated or relinquish their grant. This change clarifies that 
the ``priority'' provided under the Head Start Act (``Act'') applies to 
annual refunding of existing grantees and not to competition to select 
a grantee to serve an unserved area or an area previously served by a 
grantee no longer with the program. Removal of this section does not 
affect the ongoing funding or operation of Head Start grantees.

DATES: This rule is effective January 14, 2000.

FOR FURTHER INFORMATION CONTACT: James Kolb (202) 205-8580.

SUPPLEMENTARY INFORMATION:

I. Program Purpose

    Head Start is authorized under the Head Start Act (42 U.S.C. 9801 
et seq.). It is a national program providing comprehensive 
developmental services primarily to low-income preschool children, 
primarily age three to the age of compulsory school attendance, and 
their families. To help enrolled children achieve their full potential, 
Head Start programs provide comprehensive health, nutritional, 
educational, social and other services. Also, section 645A of the Head 
Start Act provides authority (authorized in 1994) to fund programs for 
families with infants and toddlers. Programs receiving funds under the 
authority of this section are referred to as Early Head Start programs.
    Additionally, Head Start programs are required to provide for the 
direct participation of the parents of enrolled children in the 
development, conduct, and direction of local programs. Parents also 
receive training and education to foster their understanding of and 
involvement in the development of their children. In fiscal year 1998, 
Head Start served 823,000 children through a network of over 2,000 
grantees and delegate agencies.
    While Head Start is intended to serve primarily children whose 
families have incomes at or below the poverty line or who receive 
public assistance, Head Start policy permits up to 10 percent of the 
children in local programs to be from families who do not meet these 
low-income criteria. The Act also requires that a minimum of 10 percent 
of the enrollment opportunities in each program be made available to 
children with disabilities. Such children are expected to participate 
in the full range of Head Start services and activities with their non-
disabled peers and to receive needed special education and related 
services.

II. Discussion of the Final Rule

    The Administration for Children and Families (ACF) published on 
March 24, 1999, a Notice of Proposed Rulemaking (NPRM) proposing to 
remove Sec. 1302.12, entitled ``Priority for previously selected Head 
Start agencies'' from the regulations governing the selection of Head 
Start grantees. This change was necessary to make it clear that the 
application of the priority provided by section 641(c) of the Head 
Start Act does not apply to competitions to select a grantee to serve 
an unserved area or an area previously served by a grantee no longer 
with the program. (The 1998 Head Start reauthorization, however, 
provides priority to a delegate agency that functioned in the community 
when the Secretary is designating a Head Start agency but this change 
would not affect this rule.) We made no changes to the final rule.
    Eliminating Sec. 1302.12 clarifies that priority applies to the 
annual refunding of existing grantees providing services within their 
communities, not to other circumstances such as selection of a 
replacement grantee. The threshold requirement under Section 641(d) of 
the Head Start Act for holding a competition for award of Head Start 
funding is that there be no entity in the ``community'' which is 
eligible for a priority. ``Community'' is defined in Section 641(b) as 
``a city, county, multicity or multicounty unit within a State, an 
Indian reservation (including Indians in any off-reservation area 
designated by an appropriate tribal government in consultation with the 
Secretary), or a neighborhood or other area (irrespective of boundaries 
or political subdivisions) which provides a suitable organizational 
base and possesses the commonality of interest needed to operate a Head 
Start program.'' Under 45 CFR 1305.3(a), each grantee must specify in 
its annual application for refunding the ``service area'' to be served. 
The grantee must define its service area by ``county or sub-county 
area, such as a municipality, town or census tract or a federally-
recognized Indian reservation,'' and it must not overlap with the 
service areas where other grantees have been designated to provide 
services, except where the service area of a Tribe includes a non-
reservation area in which it serves children native to the reservation. 
A Head Start agency's approved service area defines the community it is 
serving. A community which has not previously been served, or was 
served by a grantee no longer participating in the program, by 
definition is one in which no grantee is currently providing Head Start 
services within the community, and therefore one for which the grantee 
must be

[[Page 69925]]

selected through a competition under Section 641(d) rather than through 
application of the priority provided under Section 641(c). (In the 
Notice of Proposed Rulemaking we referred to Section 641(a) as 
prohibiting selection of a Head Start grantee to provide services 
outside its current ``service area.'' Upon further reflection, we have 
determined that this interpretation of the requirements of Section 
641(a) is neither the best interpretation nor is it necessary to 
support the decision to withdraw 45 CFR 1302.12 from the Head Start 
regulations. In addition, we have determined that there are 
circumstances where a current Head Start grantee would be considered 
eligible under Section 641(a) to receive a replacement grant through a 
competitive process. This would be the case where the Head Start 
grantee can demonstrate that it meets all of the requirements for 
designation under Section 641(a), including that the area it is 
applying to serve would be part of a single ``community'' as that term 
is defined under Section 641(b) with the area it is now serving if the 
grantee receives the replacement grant.)
    One comment from a private, non-profit agency was received. The 
commenter suggested that instead of removing it, the priority should be 
expanded to include any agency already operating a Head Start or Early 
Head Start program. At a minimum, the commenter suggests leaving the 
regulation as it is.
    We do not accept this recommendation. The comment ignores the 
statutory provision in Section 641(d) of the Head Start Act which 
requires that where no organization in the community is eligible for a 
priority that a competition must be held. In addition, it ignores the 
requirement in 45 CFR 1305.3(a) that each grantee must specify in its 
annual application for refunding the ``service area'' to be served. 
Thus, the mere fact that an agency is operating a Head Start program in 
the vicinity is not sufficient to establish priority for that agency. 
Finally, while the Head Start Act provides for long-term stability for 
grantees who are performing well by not requiring repeated re-
competition, opening up an unserved area to healthy competition among 
agencies in the community to be served will help assure that a high-
quality Head Start program will be operating in the community.

    [Note: The references to Section 641 of the Head Start Act in 
this Preamble reflect, where appropriate, the recent reauthorization 
changes made to the Head Start Act in the Coats Human Services 
Reauthorization Act of 1998, Public Law 105-285, enacted October 27, 
1998. The Head Start statutory changes in the Reauthorization Act do 
not affect the removal of 45 CFR 1302.12.]

    We want to emphasize again that this rule does not affect in any 
way the annual refunding of existing grantees to continue to provide 
Head Start services in their approved service area. Grantees will 
continue to receive this priority for funding without interruption. 
Only when a grantee is terminated or relinquishes its grant, or in the 
case of an unserved area, and the area thus has no provider, does this 
rule have an effect.

III. Impact Analyses

Executive Order 12866

    Executive Order 12866 require that regulations be drafted to ensure 
that they are consistent with the priorities and principles set forth 
in the Executive Order. The Department has determined that the removal 
of 45 CFR 1302.12 is consistent with these priorities and principles. 
This regulation has been reviewed by OMB under E.O. 12866.

Regulatory Flexibility Act of 1980

    The Regulatory Flexibility Act (5 U.S.C. Ch. 6) requires the 
Federal government 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 must be prepared describing the rule's impact on 
small entities. Small entities are defined by the Act to include small 
businesses, small non-profit organizations and small governmental 
entities. Removal of section 1302.12 does not affect any Head Start 
grantees, including those that are small entities. The change brings 
the regulations into conformity with requirements of the regulations 
and the statute.

Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA) of 1995, Public Law 104-13, 
all Departments are required to submit to the Office of Management and 
Budget (OMB) for review and approval any reporting or record-keeping 
requirement inherent in a proposed or final rule. This final rule does 
not contain any reporting or recordkeeping requirements and therefore 
is not subject to the PRA.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1532) requires that a covered agency prepare a budgetary impact 
statement before promulgating a rule that includes any Federal mandate 
that may result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year.
    If a covered agency must prepare a budgetary impact statement, 
section 205 further requires that it select the least costly, most 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule and is consistent with the statutory 
requirements. In addition, section 205 requires a plan for informing 
and advising any small government that may be significantly or uniquely 
impacted by the proposed rule.
    We have determined that this final rule will not impose a mandate 
that will result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million in any one year. Accordingly, we have not prepared a 
budgetary impact statement, specifically addressed the regulatory 
alternatives considered, or prepared a plan for informing and advising 
any significantly or uniquely impacted small government.

Congressional Review of Rulemaking

    This rule is not a ``major'' rule as defined in Chapter 8 of 5 
U.S.C.

The Family Impact Requirement

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires a family impact assessment affecting family well-
being.
    We have determined that this action will not affect the family. 
Therefore, no analysis or certification of the impact of this action 
was developed.

List of Subjects in 45 CFR Part 1302

    Education of disadvantaged, Grant programs-social programs.

(Catalog of Federal Domestic Assistance Program Number 93.600, 
Project Head Start)

    Dated: September 29, 1999.
Olivia A. Golden,
Assistant Secretary for Children and Families.
    Approved: October 27, 1999.
Donna E. Shalala,
Secretary.
    For the reasons set forth in the Preamble, 45 CFR part 1302 is 
amended to read as follows:

PART 1302--POLICIES AND PROCEDURES FOR SELECTION, INITIAL FUNDING, 
AND REFUNDING OF HEAD START GRANTEES, AND FOR SELECTION OF 
REPLACEMENT GRANTEES

    1. The authority citation for Part 1302 is revised to read as 
follows:

    Authority: 42 U.S.C. 9801 et seq.

[[Page 69926]]

Sec. 1302.12  [Removed]

    2. Section 1302.12 is removed.

[FR Doc. 99-32420 Filed 12-14-99; 8:45 am]
BILLING CODE 4184-01-P