[Federal Register Volume 68, Number 56 (Monday, March 24, 2003)]
[Rules and Regulations]
[Pages 14127-14131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6887]



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  Federal Register / Vol. 68, No. 56 / Monday, March 24, 2003 / Rules 
and Regulations  

[[Page 14127]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 792

RIN 3206-AJ77


Agency Use of Appropriated Funds for Child Care Costs for Lower 
Income Employees

AGENCY: Office of Personnel Management.

ACTION: Interim rule, with request for comments.

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

SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to revise the final regulations issued March 14, 2000, 
implementing the child care subsidy program legislation. We are issuing 
interim regulations because Congress made permanent the law authorizing 
agencies in the executive branch of the Federal Government to assist 
lower income employees with their child care costs, thus making child 
care more affordable for those employees. OPM also is issuing these 
revisions as part of a broader review of OPM's regulations to make the 
regulations more readable.

DATES: The regulations will become effective March 24, 2003, and 
comments must be received on or before May 23, 2003.

ADDRESSES: Send or deliver comments to: U.S. Office of Personnel 
Management, 1900 E St., NW., Room 7315, Washington, DC 20415, Attn. 
Bonnie Storm. Comments may also be submitted by email to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Bonnie Storm by telephone at (202) 
606-1313; by fax (202) 606-2091; or by email at [email protected].

SUPPLEMENTARY INFORMATION: OPM is issuing interim regulations to revise 
the rules included in 5 CFR part 792. Congress enacted Public Law 106-
58, section 643, on September 29, 1999, which allowed executive 
agencies to use appropriated funds to assist their lower income Federal 
employees with the costs of child care. The authority was first 
established as a pilot program effective from March 14, 2000, until 
September 30, 2001.
    OPM issued regulations to implement the authority, and they were 
published in the Federal Register on March 14, 2000. The authority for 
the child care subsidy program was made permanent on November 12, 2001, 
by Sec.  630, Public Law 107-67, the 2001 Treasury and General 
Government Appropriations Act. These interim regulations address the 
permanency of this legislation by deleting irrelevant dates, changing 
the Public Law number, and deleting references to the law as new (Sec.  
792.201; Sec.  792.202; Sec.  792.204; Sec.  792.209; Sec.  792.214). 
Additionally, the law now authorizes advance payments to child care 
providers under certain circumstances as described in Sec.  792.231. 
Revisions make the regulations easier to understand by substituting the 
words ``child care subsidy'' for ``tuition assistance'' to avoid any 
confusion associated with educational programs versus custodial care 
programs.
    The regulations clarify that agencies must use child care providers 
that meet State and local licensing standards, and that employees are 
free to choose among both accredited and non-accredited providers in 
order to qualify. OPM wants to ensure that Federal employees have the 
widest possible choice in child care providers by making clear that all 
State and locally licensed or regulated child care providers, meaning 
those subject to the State and local standards of safety and care for 
children, qualify under the program.

Waiver of Notice of Proposed Rulemaking and Delayed Effective Date

    Pursuant to section 553(b)(3)(B) of title 5, United States Code, I 
find that good cause exists for waiving the general notice of proposed 
rulemaking. The noticed is being waived because it is necessary for 
agencies to budget for and implement a child care subsidy program in 
FY2003.
    The interim regulations are amended as follows:
    Section 792.201--(interim Sec.  792.200) Overseas locations: During 
the pilot program from March 14, 2000, to September 30, 2001, agencies 
asked OPM to address implementation of this legislation in overseas 
locations and the revisions clarify that the legislation applies to 
overseas locations.
     Section 792.201 and Sec. 792.218--(interim Sec.  792.200 and Sec.  
792.216) Eligible programs: The revisions include a change in policy 
that the legislation applies to daytime summer programs and continues 
to apply to full-time and part-time care, including before and after 
school programs.
    Section 792.203--(interim Sec.  792.202) Notification to Congress: 
The revisions clarify that notification to Congress is an annual 
obligation.
    Section 792.205--(interim Sec.  792.204) Data collection: The 
revisions state that OPM will collect data annually for a report the 
agencies can use.
    Section 792.206--(no interim section) Benefits to the agency: This 
section has been removed from the regulations and is included in OPM's 
child care subsidy program guidance.
    Section 792.207--(interim Sec.  792.205) Use of funds: The 
revisions clarify that the agencies may use appropriated funds 
ordinarily used for salaries as well as funds for expenses.
    Section 792.212--(interim Sec.  792.210) Definition of civilian 
employee: The revisions clarify that private contractors are not 
eligible for the child care subsidy program.
    Section 792.214--(interim Sec.  792.212) Definition of contractor: 
The revisions make the definition more readable by removing 
redundancies.
    Section 792.217--(interim Sec.  792.215) Definition of a child with 
a disability: The revisions make the definition more readable.
    Section 792.221--(no interim section) The process for helping lower 
income employees with child care subsidy: We removed this section from 
the regulations and included it in OPM's child care subsidy program 
guidance.
    Section 792.223--(interim Sec.  792.220) Are there any conditions 
which the child care provider must meet in order to participate in this 
program: Has been revised to rename the section for clarity purposes to 
``What are the requirements that child care providers must meet in 
order to participate in this program?'' Revisions also clarify that 
overseas agencies do not have to be state licensed and/or regulated and 
that agencies must not restrict the use of funds to apply to accredited 
child care providers only.
    Section 792.225--(interim Sec.  792.222) Definition of lower income 
Federal

[[Page 14128]]

employee: The revisions make the definition more readable by deleting 
information that appears instead in the ``Guide for Implementing Child 
Care Legislation.''
    Section 792.227--(interim Sec.  792.224) Payments to employees: 
Agencies requested that OPM address the option of paying the child care 
subsidy directly to employees rather than the child care providers in 
special situations, and the revisions address that issue.
    Section 792.230--(interim Sec.  792.227) Duration: The revisions 
clarify that the child care subsidy program will be in effect as long 
as the agency has a program in addition to the conditions previously 
listed.
    Section 792.232--(interim Sec.  792.229) List of restrictions: The 
revisions include a sample list of restrictions agencies may place on 
the program that are in line with restrictions the agencies actually 
applied during the pilot phase. They also clarify that agencies must 
not restrict the use of funds to apply to accredited child care 
providers only.
    Section 792.234--(interim Sec.  792.231) Advance payments: The 
permanent legislation includes a provision for advance payments. The 
revisions address the conditions under which agencies may make advance 
payments.
    Section 792.235--(no interim section) Disbursement and use of funds 
oversight responsibility: We removed this section from the regulations 
because the information is already stated in interim Sec.  792.204.
    These revisions make the regulations easier to understand by 
substituting the words ``agency'' and ``agencies'' for pronouns 
denoting ``agency'.
    Section 792.203--Notifications: The revisions substitute 
``agencies'' and ``agency'' for ``we.''
    Section 792.228--Disbursements: The revisions substitute ``agency'' 
for ``we.''
    Section 792.232--Restrictions: The revisions substitute ``agency'' 
for ``we.''
    Section 792.233--Physical space: The revisions substitute 
``agency'' for ``we.''
    The interim changes will result in the following number order 
revisions:

------------------------------------------------------------------------
                                                               Former
                Revised/Interim section no.                  section no.
------------------------------------------------------------------------
792.200...................................................       792.201
792.201...................................................       792.202
792.202...................................................       792.203
792.203...................................................       792.204
792.204...................................................       792.205
792.205...................................................       792.207
792.206...................................................       792.208
792.207...................................................       792.209
792.208...................................................       792.210
792.209...................................................       792.211
792.210...................................................       792.212
792.211...................................................       792.213
792.212...................................................       792.214
792.213...................................................       792.215
792.214...................................................       792.216
792.215...................................................       792.217
792.216...................................................       792.218
792.217...................................................       792.219
792.218...................................................       792.220
792.219...................................................       792.222
792.220...................................................       792.223
792.221...................................................       792.224
792.222...................................................       792.225
792.223...................................................       792.226
792.224...................................................       792.227
792.225...................................................       792.228
792.226...................................................       792.229
792.227...................................................       792.230
792.228...................................................       792.231
792.229...................................................       792.232
792.230...................................................       792.233
792.231...................................................       792.234
------------------------------------------------------------------------

Executive Order 12866 Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

Regulatory Flexibility Act

    I certify that these changes will not have a significant economic 
impact on a substantial number of small entities because the 
regulations pertain only to Federal employees and agencies.

Lists of Subjects in 5 CFR Part 792

    Alcohol abuse, Alcoholism, Day care, Drug abuse, Government 
employees.

Office of Personnel Management.
Kay Coles James,
Director.


    Accordingly, OPM is amending 5 CFR part 792 as follows:

PART 792--AGENCY USE OF APPROPRIATED FUNDS FOR CHILD CARE COSTS FOR 
LOWER INCOME EMPLOYEES

    1. The authority citation for part 792 continues to read as 
follows:

    Authority: Sec. 201 of Pub. L. 91-616; 84 Stat. 1849, as amended 
and transferred to sec. 520 of the Public Health Services Act by 
sec. 2(b)(13) of Pub. L. 98-24 (42 U.S.C. 290dd-1) and sec. 413 of 
Pub. L. 92-255, 86 Stat. 84, as amended and transferred to sec. 525 
of the Public Health Services Act by sec. 2(b)(16)(A) of Pub. L. 98-
24 (42 U.S.C. 290 ee-1); sec. 643, Pub. L. 106-58, 113 Stat. 477; 
sec. 630, Pub. L. 107-67.


    2. Subpart B is revised to read as follows:
Subpart B--Agency Use of Appropriated Funds for Child Care Costs for 
Lower Income Employees--What is the Child Care Subsidy Program 
Legislation and to Whom Does It Apply?
Sec.
792.200 What are the benefits of the child care subsidy program law?
792.201 What is the purpose of the child care subsidy program law?
792.202 Do agencies have any notification responsibilities before 
initiating a child care subsidy program and when may agencies 
obligate funds for the program?
792.203 What materials are available to assist agencies with the 
process of establishing a child care subsidy program?
792.204 Are there any special reporting and oversight requirements 
related to the child care subsidy program law?
792.205 Which agency funds may be used for the purpose of child care 
the subsidy program?
792.206 Are agencies required to participate in this program?
792.207 When does the child care subsidy program law become 
effective and how may agencies take advantage of this law?
792.208 What is the definition of executive agency?
792.209 What is the definition of child care subsidy program?
792.210 What is the definition of civilian employee?
792.211 What is the definition of a Federally sponsored child care 
center?
792.212 What is the definition of a child care contractor?
792.213 What is the definition of a child for this purpose of this 
subpart?
792.214 Which children are eligible for this subsidy?
792.215 What is the definition of a child with disabilities?
792.216 Are Federal employees with children who are enrolled in 
summer programs and part-time programs eligible for the child care 
subsidy program?
792.217 Are part-time Federal employees eligible for the child care 
subsidy program?
792.218 Does the law apply only to on-site Federal child care 
centers that are utilized by Federal families?
792.219 Are agencies required to negotiate with their Federal labor 
organizations concerning the implementation of this law?
792.220 What are the requirements that child care providers must 
meet in order to participate in this program?
792.221 Is there a statutory cap on the amount or the percentage of 
child care costs that will be subsidized?
792.222 What is the definition of a lower income Federal employee 
and how is the amount of the child care subsidy determined?
792.223 Who determines if a Federal employee qualifies as a lower 
income employee and how is the program administered?
792.224 Are child care subsidies paid to the Federal employee using 
the child care?
792.225 May an agency disburse funds to an organization that 
administers the child care subsidy program prior to the time the 
employee receives the child care services?
792.226 How may an agency disburse funds to a Federally sponsored 
child care center in a multi-tenant building?

[[Page 14129]]

792.227 How long will the child care subsidy program be in effect 
for a Federal employee?
792.228 May these funds be used for children of Federal employees 
who are already enrolled in child care?
792.229 May an agency place restrictions or requirements on the use 
of these funds, and may the agency restrict the disbursement of such 
funds to only one type of care or to one location?
792.230 May an agency use appropriated funds to improve the physical 
space of the family child care homes or child care centers?
792.231 Is an agency permitted to make advance child care subsidy 
payments for an individual Federal employee?

Subpart B--Agency Use of Appropriated Funds for Child Care Costs 
for Lower Income Employees--What Is the Child Care Subsidy Program 
Legislation and to Whom Does It Apply?


Sec.  792.200  What are the benefits of the child care subsidy program 
law?

    Sec. 630 of Public Law 107-67 permits executive agencies to use 
appropriated funds to improve the affordability of child care for lower 
income Federal employees. The law applies to child care in the United 
States and in overseas locations. Employees can benefit from reduced 
child care rates at Federal child care centers, non-Federal child care 
centers, and in family child care homes for both full-time and part-
time programs such as before and after school programs and daytime 
summer programs.


Sec.  792.201  What is the purpose of the child care subsidy program 
law?

    The law is intended to make child care more affordable for lower 
income Federal employees through the use of agency appropriated funds.


Sec.  792.202  Do agencies have any notification responsibilities 
before initiating a child care subsidy program and when may agencies 
obligate funds for the program?

    An agency intending to initiate a child care subsidy program must 
provide notice to the House Subcommittee on Treasury, Postal Service 
and General Government Appropriations; to the Senate Subcommittee on 
Treasury and General Government Appropriations; and to its 
appropriations subcommittees prior to the obligation of funds. The 
agency must also notify OPM of its intention. The agency must give 
notice to these Congressional committees and OPM annually, and funds 
may be obligated immediately after the agency has made these 
notifications.


Sec.  792.203  What materials are available to assist agencies with the 
process of establishing a child care subsidy program?

    OPM has developed guidance that contains samples of memoranda of 
understanding, marketing tools, child care subsidy program 
applications, and models for determining subsidy program eligibility. 
These materials are found in the ``Guide for Implementing Child Care 
Legislation--Public Law 107-67, Sec. 630.'' The Guide is available on 
OPM's Web site, http://www.opm.gov/wrkfam. Agencies may also obtain a 
copy by writing to OPM at U.S. Office of Personnel Management, Office 
of Work/Life Programs, 1900 E St., NW., Washington, DC 20415.


Sec.  792.204  Are there any special reporting and oversight 
requirements related to the child care subsidy program law?

    Agencies are responsible for tracking the utilization of their 
funds and reporting the results to OPM. OPM will provide agencies the 
mandatory reporting form for this purpose. OPM also will produce an 
annual report for use by the agencies.


Sec.  792.205  Which agency funds may be used for the purpose of the 
child care subsidy program?

    Agencies are permitted to use appropriated funds, including 
revolving funds, that are otherwise available to them for salaries and 
expenses.


Sec.  792.206  Are agencies required to participate in this program?

    Agencies are not required to participate in this program. The 
decision to participate is left to the discretion of the agency. If an 
agency chooses to participate, it may not use funds other than those 
specified in Sec.  792.205.


Sec.  792.207  When does the child care subsidy program law become 
effective and how may agencies take advantage of this law?

    This authority was made permanent on November 12, 2001. Agencies 
may now offer child care subsidy programs to their lower income Federal 
employees to help them reduce their child care costs.


Sec.  792.208  What is the definition of executive agency?

    The term executive agency is defined by section 105 of title 5, 
United States Code, but does not include the General Accounting Office.


Sec.  792.209  What is the definition of child care subsidy program?

    The term child care subsidy program, for the purposes of this 
subpart, means the program that results from the expenditure of agency 
funds to assist lower income Federal employees with child care costs, 
including such activities as: Determining which employees receive a 
subsidy and the size of the subsidy each employee receives; 
distributing agency funds to participating providers; and tracking and 
reporting to OPM information such as total cost and employee use of the 
program.


Sec.  792.210  What is the definition of civilian employee?

    The term civilian employee, for the purposes of this subpart, means 
all appointive positions in an executive agency (5 U.S.C. 105). It does 
not refer to private contractors hired by the agencies.


Sec.  792.211  What is the definition of a Federally sponsored child 
care center?

    The term Federally sponsored child care center, for the purposes of 
this subpart, is a child care center that is located in a building or 
space that is owned or leased by the Federal Government.


Sec.  792.212  What is the definition of a child care contractor?

    Section 630 of Public Law 107-67 provides that child care services 
provided by contract are encompassed by this new legislation. The term 
child care contractor applies to an organization or individual 
providing child care services for which Federal families are eligible. 
These entities are commonly referred to as ``child care providers'' in 
the child care industry and they provide services under contract in 
center-based child care and family child care homes.


Sec.  792.213  What is the definition of a child for the purposes of 
this subpart?

    For the purposes of this subpart, a child is considered to be:
    (a) A biological child who lives with the Federal employee;
    (b) An adopted child;
    (c) A stepchild;
    (d) A foster child;
    (e) A child for whom a judicial determination of support has been 
obtained; or
    (f) A child to whose support the Federal employee, who is a parent 
or legal guardian, makes regular and substantial contributions.


Sec.  792.214  Which children are eligible for this subsidy?

    The law covers the children of Federal employees, excluding 
contract employees, from birth through age 13 and disabled children 
through age 18.

[[Page 14130]]

Sec.  792.215  What is the definition of a child with disabilities?

    For the purpose of this subpart, a child with disabilities is 
defined as one who is unable to care for himself or herself based on a 
physical or mental incapacity as determined by a physician or licensed 
or certified psychologist.


Sec.  792.216  Are Federal employees with children who are enrolled in 
summer programs and part-time programs eligible for the child care 
subsidy program?

    Federal employees with children (birth through age 13) and children 
with disabilities (children through age 18) who are enrolled in daytime 
summer programs and part-time programs such as before and after school 
programs are eligible for the child care subsidy program. The summer 
and part-time programs must be licensed and/or regulated.


Sec.  792.217  Are part-time Federal employees eligible for the child 
care subsidy program?

    Federal employees who work part-time are eligible for the child 
care subsidy program.


Sec.  792.218  Does the law apply only to on-site Federal child care 
centers that are utilized by Federal families?

    The bill includes non-Federal center-based child care as well as 
care in family child care homes, as long as the providers are licensed 
and/or regulated by the State and/or local regulating authorities.


Sec.  792.219  Are agencies required to negotiate with their Federal 
labor organizations concerning the implementation of this law?

    Agencies are reminded of their obligation under 5 U.S.C. 7117 to 
negotiate or consult, as appropriate, with the exclusive 
representatives of their employees on the implementation of the 
regulations in this subpart.


Sec.  792.220  What are the requirements that child care providers must 
meet in order to participate in this program?

    The provider, whether center-based or family child care, must be 
licensed and/or regulated by the State and, where applicable, by local 
authorities where the child care service is delivered. Outside of the 
United States, agencies may adopt or create criteria to ensure a child 
care center or family child care home is safe. Agencies must not 
restrict the use of funds to apply to accredited child care providers 
only.


Sec.  792.221  Is there a statutory cap on the amount or the percentage 
of child care costs that will be subsidized?

    The law does not specify a cap on the amount or percentage of child 
care subsidy that may be subsidized.


Sec.  792.222  What is the definition of a lower income Federal 
employee and how is the amount of the child care subsidy determined?

    Each agency decides who qualifies as a lower income Federal 
employee within that agency. OPM has provided guidance for determining 
eligibility in the ``Guide for Implementing Child Care Legislation--
Public Law 107-67, Sec. 630.'' This publication is available on OPM's 
Web site, http://www.opm.gov/wrkfam.


Sec.  792.223  Who determines if a Federal employee qualifies as a 
lower income employee and how is the program administered?

    The agency or another appropriately identified organization 
determines eligibility using certain income and/or subsidy program 
criteria chosen by the agency. If the agency itself does not administer 
the program, it must select another organization to do so, using 
procedures that are in accordance with the Federal Acquisition 
Regulations. Regardless of what organization administers the program, 
the model for determining both the subsidy program eligibility and the 
amount of the subsidy is always determined by the Federal agency.


Sec.  792.224  Are child care subsidies paid to the Federal employee 
using the child care?

    Agencies must pay the child care provider directly, unless one of 
the following exceptions applies:
    (a) If an agency chooses to have an organization administer its 
program (see Sec.  792.223), the organization pays the child care 
provider;
    (b) For overseas locations, the agency may choose to pay the 
employee if the provider deals only in foreign currency; or
    (c) In unique circumstances, an agency may obtain written 
permission from OPM to do so.


Sec.  792.225  May an agency disburse funds to an organization that 
administers the child care subsidy program prior to the time the 
employee receives the child care services?

    The agency may disburse funds to an organization that administers 
the child care subsidy program in one lump sum. The organization will 
be responsible for tracking the funds and providing the agency with 
regular reports. An agency contract should specify that any unexpended 
funds shall be returned to the agency after the contract is completed.


Sec.  792.226  How may an agency disburse funds to a Federally 
sponsored child care center in a multi-tenant building?

    In a multi-tenant building, funds from the agencies may be pooled 
together for the benefit of the employees qualified for the child care 
subsidy program.


Sec.  792.227  How long will the child care subsidy program be in 
effect for a Federal employee?

    The child care subsidy program, in the form of a reduced child care 
cost rate, shall be in effect from the time the agency makes a decision 
for a particular Federal employee and the child is enrolled in the 
program until one of the following occurs:
    (a) The child is no longer enrolled in the program;
    (b) The employee no longer qualifies as a ``lower income employee'; 
or
    (c) The agency no longer has a child care subsidy program.


Sec.  792.228  May these funds be used for children of Federal 
employees who are already enrolled in child care?

    The funds may be used for children currently enrolled in child care 
as long as their families meet the child care subsidy program 
eligibility requirements established by the agency.


Sec.  792.229  May an agency place restrictions or requirements on the 
use of these funds, and may the agency restrict the disbursement of 
such funds to only one type of child care or to one location?

    (a) Depending on the agency's staffing needs and the employees' own 
needs, including the local availability of child care, the agency may 
choose to place restrictions on the use of its funds for the child care 
subsidy program. For example, an agency may decide to restrict use to 
the following:
    (1) Federal employees who are full-time permanent employees;
    (2) Federal employees using an agency on-site child care center;
    (3) Federal employees using full-time child care; or
    (4) Federal employees using child care in specific locations.
    (a) With the exception of Sec.  792.229(c) an agency may determine 
whether and what restrictions to impose on the use of appropriated 
funds for the child care subsidy program.
    (b) Agencies must not restrict the use of funds to apply to 
accredited child care providers only.

[[Page 14131]]

Sec.  792.230  May an agency use appropriated funds to improve the 
physical space of the family child care homes or child care centers?

    An agency may not use appropriated funds under this program to 
improve the physical space of child care centers and family child care 
homes.


Sec.  792.231  Is an agency permitted to make advance child care 
subsidy program payments for an individual Federal employee?

    An agency may choose to make advance payments to a child care 
provider in certain situations. Advance payments may be paid to the 
child care provider when the provider requires payment up to one month 
in advance of rendering services. Except in accordance with Sec.  
792.225, an agency may not make advance payments for more than one 
month before the employee receives child care services.

[FR Doc. 03-6887 Filed 3-21-03; 8:45 am]
BILLING CODE 6325-41-P