[Federal Register Volume 70, Number 19 (Monday, January 31, 2005)]
[Proposed Rules]
[Pages 4803-4808]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1307]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 1356

RIN 0970-AC14


Administrative Costs for Children in Title IV-E Foster Care

AGENCY: Administration for Children and Families (ACF), Department of 
Health and Human Services (DHHS).

ACTION: Proposed rule.

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SUMMARY: The Administration for Children and Families (ACF) is 
proposing to amend the regulations for Child and Family Services with 
respect to title IV-E administrative costs and eligibility 
determinations and re-determinations for title IV-E foster care 
recipients and foster care ``candidates.'' This Notice of Proposed Rule 
Making (NPRM) proposes rules to implement title IV-E foster care 
eligibility and administrative cost provisions in sections 472 and 474 
of the Social Security Act (the Act) and incorporates previously issued 
policy guidance.

DATES: Consideration will be given to written comments received by 
April 1, 2005.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to Kathleen McHugh, Director, Division of Policy, 
Children's Bureau, Administration on Children, Youth and Families, 
Administration for Children and Families, 330 C Street, SW., 
Washington, DC 20447. You may download an electronic version of the 
rule at http://www.regulations.gov. You may also transmit written 
comments electronically via the Internet at: http://www.regulations.acf.hhs.gov. Comments will be available for public 
inspection Monday through Friday 8:30 a.m. to 5 p.m. at the above 
address by contacting Jan Rothstein, in room 2411.

FOR FURTHER INFORMATION CONTACT: Kathleen McHugh, Director, Division of 
Policy, Children's Bureau, Administration on Children, Youth and 
Families, (202) 401-5789 or by e-mail at [email protected]. Do not e-
mail comments on the Notice of Proposed Rule Making to this address.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

    This proposed regulation is issued pursuant to 42 U.S.C. 1302, 
which authorizes the Secretary of Health and Human Services (the 
Secretary) to publish regulations that may be necessary for the 
efficient administration of the functions for which he/she is 
responsible under the Act.

II. Background

    Section 474(a) in title IV-E of the Act entitles a State agency to 
Federal financial participation (FFP) for three separate categories of 
expenditures: title IV-E foster care maintenance payments for eligible 
children in licensed or approved foster family homes or child care 
institutions; adoption assistance payments; and payments for the proper 
and efficient administration of the title IV-E State plan. Furthermore, 
section 474(a)(3)(E) sets the rate of FFP for allowable administrative 
costs at 50 percent. Federal regulations at 45 CFR 1356.60(c) implement 
the title IV-E administrative cost requirements and subparagraph (c)(3) 
lists several examples of allowable administrative costs necessary for 
the administration of the title IV-E foster care program. As a general 
rule, a State agency may claim allowable title IV-E administrative 
costs for a child in title IV-E foster care who is eligible for title 
IV-E foster care

[[Page 4804]]

maintenance payments pursuant to sections 472(a), (b) and (c) of the 
Act or for a child who is a ``candidate'' for title IV-E foster care.
    On July 3, 2001, ACF issued policy announcement ACYF-CB-PA-01-02 to 
clarify our policy regarding title IV-E administrative costs for title 
IV-E foster care ``candidates'' and other related issues. The policy 
announcement, in part, made clear that a State agency could not claim 
FFP for administrative costs for children in unlicensed foster care, 
with the exception of children in relative foster family homes while 
the State agency is in the process of licensing the home. Prior to 
ACYF-CB-PA-01-02, many States agencies were operating under an 
expansive interpretation of an August 17, 1993 memorandum from the 
Acting Commissioner of the Administration for Children, Youth and 
Families (ACYF) to the ACF Regional Administrators. That guidance 
allowed State agencies to claim FFP for title IV-E administrative costs 
associated with a child who otherwise would be eligible for title IV-E 
foster care maintenance payments but for his/her placement in an 
unlicensed foster family home, if the child could be considered a 
``candidate'' for title IV-E foster care. A determination of title IV-E 
candidacy permits a State agency to claim the full Federal share (50 
percent) of child-specific title IV-E administrative costs. ACYF-CB-PA-
01-02 clarified that a child who has been removed from home and placed 
in title IV-E foster care cannot be considered a ``candidate'' since 
the term ``candidate'' refers to a child prior to such placement.
    Pending the issuance of a Final Rule, a State agency may continue 
to claim FFP for the administrative costs associated with an otherwise 
title IV-E eligible child placed in an unlicensed foster family home. 
All other policies expressed in ACYF-CB-PA-01-02 (as incorporated into 
the Children's Bureau's Child Welfare Policy Manual (CWPM), found at 
http://www.acf.dhhs.gov/programs/cb/laws/cwpm) remain in effect.
    However, as noted above, ACYF-CB-PA-01-02 also addressed other 
policy issues, some but not all of which are included as subjects of 
this NPRM. We have included these issues in response to the numerous 
letters we received from States and other interested parties who 
objected to our making some of the changes contained in ACYF-CB-PA-01-
02 without providing an opportunity for public comment. Specifically, 
we propose to codify the following policies contained in ACYF-CB-PA-01-
02: administrative cost claims for children in facilities not eligible 
for title IV-E foster care reimbursement; the requirement that the 
State agency itself must make the determinations of title IV-E foster 
care candidacy; and, the requirement that the State agency document 
(re-determine) a child's candidacy for title IV-E foster care every six 
months.

III. Discussion of the Proposed Regulatory Changes

Section 1356.60(c)(3) Administrative Cost Claims for a Child Placed in 
an Ineligible Facility

    In new paragraph 1356.60(c)(3), we propose to state explicitly that 
title IV-E administrative costs do not include costs claimed on behalf 
of a child placed in an ineligible facility such as a detention center, 
a hospital (medical or psychiatric), a public institution that 
accommodates more than 25 children, or a facility operated primarily 
for the detention of children who are determined to be delinquent. This 
is consistent with policy guidance clarified in ACYF-CB-PA-01-02 and 
contained in the CWPM at section 8.1D, question 7, which prohibits a 
State agency's administrative cost claims on behalf of a child who is 
placed in an ineligible facility and CWPM section 8.1B, question 12, 
which prohibits administrative cost claims on behalf of a child placed 
in a public institution that accommodates more than 25 children.
    A State agency may claim title IV-E administrative costs for the 
administration of the Federal title IV-E foster care program on behalf 
of an eligible child during the time the child is in a licensed or 
approved title IV-E foster care facility. The statute, at section 
472(c)(2), expressly excludes from eligible title IV-E placement 
settings detention facilities, forestry camps, training schools, public 
institutions that accommodate more than 25 children and facilities that 
are primarily for the detention of children who are determined to be 
delinquent. Except as proposed in 1356.60(c)(5), a child who is placed 
in such a facility is not eligible under title IV-E and the State 
agency, therefore, may not claim FFP for foster care maintenance or 
administrative payments for such a child. Similarly, a child who is 
placed in a psychiatric hospital is not eligible for title IV-E. The 
State agency, therefore, may not claim FFP for foster care maintenance 
or administrative payments for such a child, except as proposed in 
1356.60(c)(5), because psychiatric hospitals are not foster family 
homes or child-care institutions.
    A child who is placed in the aforementioned facilities cannot be 
considered a ``candidate'' for title IV-E foster care because the child 
has been removed from his/her home and placed into some alternative 
care setting. The statute does not set forth separate eligibility 
criteria for title IV-E administrative cost claims nor does it allow 
ACF to disregard one or more of the eligibility criteria in section 472 
of the Act in order to permit State agencies to claim title IV-E 
administrative costs. The requirements of section 472(c) of the Act 
apply to both administrative costs and foster care maintenance 
payments. A child must, therefore, satisfy all statutorily prescribed 
eligibility criteria to be eligible for either title IV-E foster care 
maintenance payments or title IV-E administrative funds.
    We propose to re-designate Sec.  1356.60(c)(3) as (c)(4).

Section 1356.60(c)(5) Administrative Cost Claims for a Child in an 
Ineligible Facility: An Exception

    In new paragraph 1356.60(c)(5), we propose an exception to the 
general provision at proposed new paragraph 1356.60(c)(3). Proposed new 
paragraph (c)(5) permits a State agency to claim title IV-E 
administrative costs for up to one calendar month on behalf of a child 
in an ineligible facility such as a detention center, a hospital 
(medical or psychiatric), a public institution that accommodates more 
than 25 children, or a facility operated primarily for the detention of 
children who are determined to be delinquent. The one month exception 
is designed to ensure the child's continuity of care as the child 
transitions into a licensed foster family home or child care 
institution.
    Following the release of ACYF-CB-PA-01-02, we learned that many 
State agencies considered an otherwise eligible child placed in an 
ineligible facility for whom the plan was placement into or return to 
title IV-E foster care as a title IV-E foster care ``candidate'' and 
were claiming title IV-E administrative costs accordingly. A child who 
is placed in an ineligible facility cannot be considered a 
``candidate'' for title IV-E foster care. We agree that title IV-E 
administrative funds should be available for such a child for a limited 
period of time to ensure continuity of care as the child transitions 
into a licensed foster family home or child care institution. However, 
one month is a sufficient period of time for the State agency to 
develop or update the child's case plan, identify the appropriate 
placement, and make referrals to any necessary supportive

[[Page 4805]]

services. This continuity of care payment may be applied at any time a 
child experiences a brief disruption in title IV-E foster care, such as 
a short-term hospitalization. A State agency must apply this exception 
retroactively, after the child has been placed in or returned to an 
eligible facility.
    Allowing State agencies to claim administrative costs for up to one 
calendar month prior to the child's placement into or return to title 
IV-E foster care is good child welfare practice because it allows the 
child welfare worker to adequately prepare for the child's transition 
from the ineligible placement into a foster care setting. Furthermore, 
it is consistent with the effective and efficient administration of the 
program pursuant to section 474(a)(3) of the Act because it encourages 
State agencies to ensure that a child is placed in the most 
appropriate, least restrictive placement available consistent with his/
her needs. Moreover, it is consistent with the Federal Adoption and 
Foster Care Analysis and Reporting System (AFCARS) policy at section 
1.2B.7, question 21 of the CWPM that instructs State agencies not to 
count brief disruptions in a title IV-E foster care placement of the 
type described above as a change in placement.

Section 1356.60(c)(6) Administrative Cost Claims for a Child in an 
Unlicensed Foster Family Home

    In new paragraph (c)(6), we propose that a State agency may not 
claim title IV-E administrative costs on behalf of a child placed in an 
unlicensed foster family home. However, we make an exception to allow 
State agencies to claim administrative costs on behalf of a child 
placed in the unlicensed home of a relative while the State agency is 
in the process of licensing that home in accordance with its standard 
procedures. If the State agency does not license the relative's home 
within its standard time frame, the State agency must discontinue all 
claims for administrative costs incurred on behalf of the child until 
such time as it licenses the home.
    Making this exception for a relative foster family home is in 
keeping with section 471(a)(19) of the Act that requires State agencies 
to consider giving relatives preference when making placement 
decisions. The statutory requirements for State agencies to consider 
giving relatives preference in making placement decisions on the one 
hand, and to place children in licensed foster family homes on the 
other hand, create competing priorities for State agencies. We have 
attempted to harmonize these two provisions by permitting State 
agencies to claim title IV-E administrative costs, but not title IV-E 
foster care maintenance payments, on behalf of a child placed in an 
unlicensed related foster family home while the home is in the process 
of being licensed.
    This is a reasonable exception because a State agency may have 
access to several licensed, unrelated foster family homes in which to 
immediately place a child who enters foster care, but no similar 
readily available pool of licensed relative homes. For this reason, 
this exception does not apply to children placed in the unlicensed 
homes of non-relatives.
    We considered proposing a specific time limit for how long a State 
agency may claim administrative costs on behalf of a child in the 
unlicensed home of a relative. Specifically, we considered requiring 
State agencies to license the relative within 6 months of the child's 
placement or ceasing administrative cost claims for the child. We 
struggled, however, with the following challenges to doing so: (1) It 
is inconsistent with section 471(a)(10) of the Act, in which State 
agencies are vested with the authority to establish licensing standards 
for foster family homes; (2) The length of time it customarily takes to 
license a foster home varies from State to State and often within a 
State. For example, in rural areas, the necessary foster parent 
training may not be offered as frequently as in urban areas; (3) Some 
State agencies have procedures in place to expedite licensing of 
relative foster family homes. We do not want to create a disincentive 
for State agencies to follow the procedures they have in place by 
establishing a Federal timeframe that is longer than a State agency's 
licensing process; and (4) Conversely, we do not want to set a time 
limit that encourages a State agency to accelerate the licensing 
process and inadvertently creates safety concerns for children.
    Our ultimate goal is to ensure that children are placed and 
sustained in appropriate and safe settings. We are, therefore, 
proposing to continue our policy as stated in ACYF-CB-PA-01-02 that 
allows a State agency to claim the administrative costs for children in 
the unlicensed home of relatives during the standard time frame for 
licensing foster family homes in that State. We are particularly 
interested in public comments on this section of the proposed rule.

Section 1356.60(c)(7) State Agency Authority and Responsibility To Make 
Title IV-E Foster Care Eligibility and Candidacy Determinations and Re-
Determinations

    In new paragraph (c)(7), we propose adding language that 
establishes the State agency's authority and responsibility for 
conducting determinations and re-determinations of title IV-E foster 
care eligibility and foster care candidacy.
    The regulations at 45 CFR 1355.30(p)(4) which cross reference to 45 
CFR 205.100, require that officials of the State agency perform 
administrative functions that require the exercise of discretion and do 
not permit the State agency to delegate such functions. Under long-
standing Departmental policy that originates with the 1939 amendments 
to the Act, the determination of an individual's eligibility for a 
Federal entitlement is considered an inherently governmental function 
that requires the exercise of discretion. The determination of 
eligibility is fundamental to the administration of an entitlement 
program because it is the basis for the flow of funds. A determination 
of title IV-E foster care candidacy is a type of eligibility 
determination because title IV-E funds are expended as the result of 
this determination.
    We propose in paragraph (c)(7)(i) that the title IV-E agency or 
other public agency that has entered into an agreement with the title 
IV-E agency pursuant to section 472(a)(2) of the Act re-determine title 
IV-E foster care eligibility every 12 months, consistent with policy 
guidance at section 8.3A.10, question 1 of the CWPM. The State agency 
should review and document factors subject to change, such as continued 
deprivation of parental support and care of the child and the child's 
financial need. We propose to regulate the 12-month timeframe for re-
determinations of foster care eligibility to take the opportunity to 
propose a more comprehensive approach to eligibility determinations in 
general.
    Similarly, we propose in paragraph (c)(7)(ii) that the title IV-E 
agency or other public agency that has entered into an agreement with 
the title IV-E agency pursuant to section 472(a)(2) of the Act re-
determine eligibility for title IV-E foster care candidacy every six 
months. This is consistent with section 8.1D, question 5 of the CWPM, 
which requires a State to document its justification for retaining a 
child in ``candidate'' status for longer than six months. We propose to 
regulate the timeframe for candidacy re-

[[Page 4806]]

determinations in response to numerous comments from States and other 
interested parties who objected to our issuing policy clarifications in 
ACYF-CB-PA-01-02 without providing an opportunity for public comment.
    Given the many contingencies that may arise in a particular case, 
we have not set a maximum time for which a child may be a 
``candidate''; however, if a child continues in such status for more 
than six months, the State agency must confirm that the child is still 
at serious risk of removal but safe enough to remain in the home. A 
child who is a ``candidate'' must be at serious risk of removal from 
the home, so that the status of ``candidate'' is necessarily a 
temporary one; either the risk to the child will be alleviated or the 
necessity for removal will become clear and the child will be removed.
    Good child welfare practice suggests, in light of the goals of both 
safety and permanency, that a child should not remain a ``candidate'' 
indefinitely. This proposed policy is also consistent with several 
Departmental Appeals Board (DAB) Decisions, which make clear that the 
basic purpose of the title IV-E program is to fund foster care 
maintenance payments for children who are eligible for the former Aid 
to Families with Dependent Children program and who must be placed in 
foster care. For example, in DAB Decision 1783, issued August 29, 2001, 
the DAB stated that we must be ``mindful of the purpose of the IV-E 
program and the limited authorization in the statute and regulations 
for title IV-E funding for administrative activities on behalf of 
children prior to their actual placement in foster care.'' The DAB in 
that decision further clarified that ``[t]he Act and the regulations 
contemplate only very limited funding under the IV-E program for 
administrative activities on behalf of children who have not yet been 
placed in foster care.''
    We propose in paragraph (c)(7)(iii) to specify the limits of the 
role of contract personnel in completing the steps necessary for an 
eligibility determination. Specifically, the State agency may permit 
contract personnel to gather the necessary documentation, prepare the 
case plan, complete the steps necessary for an eligibility 
determination, and make a recommendation to the State agency about a 
child's eligibility for title IV-E foster care or foster care 
candidacy.
    The State agency, however, must actually make and document the 
final determination of eligibility for title IV-E foster care or 
eligibility for foster care candidacy. We felt it was necessary to 
clarify these roles in regulation to ensure that State agencies and 
contractors are clear on their roles in the foster care eligibility 
determination process and the foster care candidacy determination 
process.

IV. Impact Analysis

Executive Order 12866

    Executive Order 12866 requires 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 this 
proposed rule is consistent with these priorities and principles. This 
rule is considered a ``significant regulatory action'' under 3(f) of 
the Executive Order and therefore has been reviewed by the Office of 
Management and Budget.
    We believe the majority of States have implemented the policy on 
children in unlicensed relative foster family homes correctly. In fact, 
when policy announcement ACYF-CB-PA-01-02 was issued in 2001, we were 
surprised by the reaction of some State agencies to the policy 
clarification. We were unaware of the extent to which State agencies 
were operating under an expansive interpretation of the policy. 
Therefore, our cost estimates reflect our best assessment of the number 
of States that are currently employing this more expansive policy 
interpretation. Based on available data we estimate that this policy 
clarification will result in a reduction of Federal reimbursement to 
those States that are claiming inappropriate administrative expenses 
ranging from approximately $65-$78 million in FY 2006 and increasing to 
approximately $75-$88 million by FY 2009.
    We developed these costs estimates using data gathered through 
informal surveys conducted by the American Public Human Services 
Association (APHSA) and ACF regional offices. Specifically, in an 
informal survey conducted by ACF, 24 States indicated that this policy 
would have a financial impact ranging from $200,000 per year at the low 
end to $79 million at the high end. In addition, 15 States indicated 
that there would be little or no financial impact and two States were 
uncertain whether there would be any impact. In a second survey 
conducted by APHSA 16 States responded, with five reporting no 
anticipated impact, one reporting uncertain impact, and the remaining 
10 States reporting very wide ranging impacts. Eight of these States 
estimated financial impact in the range of $80,000 to $20 million in 
reduced Federal funding and the remaining two States estimated that the 
impact could be as high as $21 million to $100 million.
    Based on the response to these surveys we assumed that 
approximately 20-25 States would be impacted to some extent by the 
policy clarification contained in this proposed rule. It was more 
challenging to determine the total financial impact on States given the 
wide ranges reported by some States and the lack of clarity regarding 
how the States developed their estimates.
    Given this uncertainty we were extremely cautious in developing 
these costs estimates. In addition to these data concerns, there are 
other mitigating circumstances that could result in increased Federal 
administrative and maintenance payment reimbursements which would 
offset the potential financial impact on States. The primary mitigating 
factor turns on a State's ultimate decision regarding the licensing of 
relative homes when final regulations are published in the Federal 
Register. We would expect that States will move in the direction of 
licensing relative foster care homes, the most beneficial outcome for 
foster care children resulting from this regulatory change. States 
choosing this option will then be able to claim both Federal 
reimbursement for administrative costs as well as maintenance payments 
for children in these newly licensed homes. In addition to the positive 
programmatic outcome of this policy shift, we have observed an 
increasing propensity on the part of States to move in the direction of 
licensing relative foster care homes. This trend is supported by 
Federal policy that eases licensing requirements for relative foster 
care homes while ensuring that children are in safe and stable 
environments.
    In addition, this regulatory document contains two provisions that 
may impact States ability to claim Federal reimbursement for 
administrative costs, thereby reducing the impact cited in our cost 
estimates and those estimates originally submitted by the States. 
First, we have proposed that States be allowed to claim Federal 
financial participation during the period of time in which it takes to 
license a relative foster family home. Licensing authority is vested 
with the States so the time frame in which licensing occurs varies from 
State to State. Second, we have proposed that States be allowed to 
claim one month of administrative costs for children who are 
transitioning between allowable and unallowable facilities, such as 
placement in a hospital to address medical issues. This added 
flexibility should provide much needed relief to States and offers a 
reasonable approach

[[Page 4807]]

to address short term shifts in placements for foster care children.
    We especially welcome comments on our cost estimates and the other 
mitigating circumstances that could impact Federal reimbursement to 
States. We urge States to consider the interaction of these factors as 
they review the proposed regulatory changes. We will carefully consider 
these comments as we finalize the regulations.

Regulatory Flexibility Analysis

    The Secretary certifies under 5 U.S.C. 605(b), as enacted by the 
Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not 
result in a significant impact on a substantial number of small 
entities. This proposed rule does not affect small entities because it 
is applicable only to State agencies that administer child and family 
services programs and the title IV-E foster care program.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act (Pub. L. 104-4) requires agencies 
to prepare an assessment of anticipated costs and benefits before 
proposing any rule that may result in an annual expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100,000,000 or more (adjusted annually for inflation). We 
have determined that this rule will not have an impact of $100,000,000 
or more in any one year.

Paperwork Reduction Act

    Under the Paperwork Reduction Act (Pub. L. 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 requirements 
inherent in a proposed or final rule. This NPRM contains information 
collection requirements in sections 1356.60(c)(7)(i) and (ii) which the 
Department has submitted to OMB for its review. The respondents to the 
information collection in this proposed rule are State agencies. The 
Department must require this collection of information to ensure State 
agencies are properly claiming title IV-E maintenance payments and 
administrative costs for the appropriate children. Re-determinations of 
title IV-E foster care eligibility must be conducted every 12 months 
for children in title IV-E foster care and every six months for 
``candidates'' for title IV-E foster care.
    The following are estimates:

----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                                                     Number of     responses per   burden hours    Total  annual
                   Instrument                       respondents     respondent     per response       burden
                                                                     annually         (hours)         (hours)
----------------------------------------------------------------------------------------------------------------
Title IV-E foster care eligibility re-                   264,670               1             0.5         132,335
 determination..................................
Title IV-E foster care candidacy re-                     144,600               2             0.5         144,600
 determination..................................
----------------------------------------------------------------------------------------------------------------

    Title IV-E Foster Care Eligibility Re-Determination--There were 
264,670 children in title IV-E foster care in FY 2002. We estimate each 
title IV-E foster care eligibility re-determination will take 
approximately one-half hour and that there will be one per year. 
Therefore, we estimate the total number of respondents to be 264,670 
for title IV-E eligibility re-determinations. The total annual burden 
in hours will be 132,335 (264,670 multiplied by 0.5 hours).
    Title IV-E Foster Care Candidacy Re-Determination--Using State 
administrative cost claiming data for title IV-E foster care for FY 
2002, we estimate the number of foster care ``candidates'' to be 
144,600. We estimate each title IV-E foster care candidacy re-
determination will take approximately one-half hour and there will be 
two per year. Therefore, we estimate the total annual burden hours for 
title IV-E foster care candidacy re-determinations to be 144,600 hours 
per year (144,600 multiplied by 1.0).
    OMB is required to make a decision concerning the collection of 
information contained in this proposed regulation between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment to the Department on the proposed 
regulations. Written comments to OMB on the proposed information 
collection should be sent directly to the following: Office of 
Management and Budget, Paperwork Reduction Project, 725 17th Street, 
NW., Washington DC 20503, Attention: Desk Officer for the 
Administration for Children and Families.

Congressional Review

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

Assessment of Federal Regulations on Policies and Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a proposed 
policy or regulation may affect family wellbeing. If the agency's 
determination is affirmative, then the agency must prepare an impact 
assessment addressing criteria specified in the law. These regulations 
will not have an impact on family wellbeing as defined in the 
legislation.

Executive Order 13132

    Executive Order 13132 on Federalism requires that Federal agencies 
consult with State and local government officials in the development of 
regulatory policies with Federal implications. Consistent with 
Executive Order 13132, we specifically solicit comment from State and 
local government officials on this proposed rule.

List of Subjects in 45 CFR Part 1356

    Adoption and Foster Care.

(Catalog of Federal Domestic Assistance Program Number 93, 658, 
Foster Care Maintenance)


Wade F. Horn,
Assistant Secretary for Children and Families.

    Approved: July 21, 2004.
Tommy G. Thompson,
Secretary.

    Editorial Note: This document was received at the Office of the 
Federal Register January 19, 2005.

    For the reasons set forth in the preamble, we propose to amend 45 
CFR 1356.60 as follows:

PART 1356--REQUIREMENTS APPLICABLE TO TITLE IV-E

    1. The authority citation for part 1356 continues to read as 
follows:

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

    2. We propose to amend Sec.  1356.60 to re-designate paragraph 
(c)(3) as paragraph (c)(4), and add new paragraphs (c)(3), (5), (6) and 
(7) as follows:


Sec.  1356.60  Fiscal requirements (title IV-E).

* * * * *

[[Page 4808]]

    (c) * * *
    (3) Subject to the exception in paragraph (c)(5) of this section, a 
State agency may not claim FFP as an allowable administrative cost on 
behalf of a child placed in an ineligible facility, including but not 
limited to the following facilities: a detention center, a hospital 
(medical or psychiatric), a public institution that accommodates more 
than 25 children, or a facility operated primarily for the detention of 
children who are determined to be delinquent.
    (4) * * *
    (5) Notwithstanding paragraph (c)(3) of this section, a State 
agency may claim administrative costs for up to one calendar month on 
behalf of a child in an ineligible facility, including but not limited 
to the following facilities: a detention center, a hospital (medical or 
psychiatric), a public institution that accommodates more than 25 
children, or a facility operated primarily for the detention of 
children who are determined to be delinquent as the child transitions 
into a licensed foster family home or child care institution. The 
claims must be submitted after the child is in an eligible placement.
    (6) Allowable administrative costs do not include costs claimed on 
behalf of a child placed in an unlicensed foster family home. 
Exception: A State agency may claim such costs on behalf of a child 
placed in an unlicensed relative foster family home while it is in the 
process of licensing that home in accordance with its standard 
procedures for licensing foster family homes. If the State agency does 
not license the foster family home within its standard time frame, the 
State agency must discontinue administrative cost claims on behalf of 
the child.
    (7) Determinations of title IV-E foster care eligibility and foster 
care candidacy must be performed by an employee of the title IV-E State 
agency or an employee of another public agency that has entered into an 
agreement with the title IV-E State agency pursuant to section 
472(a)(2) of the Act.
    (i) The State agency must re-determine title IV-E foster care 
eligibility every 12 months.
    (ii) The State agency must re-determine title IV-E foster care 
candidacy every 6 months.
    (iii) Contract personnel may gather the necessary documentation, 
prepare the case plan, complete the steps necessary for an eligibility 
determination, and make a recommendation to the State agency about a 
child's eligibility for title IV-E foster care or foster care 
candidacy.
* * * * *
[FR Doc. 05-1307 Filed 1-28-05; 8:45 am]
BILLING CODE 4184-01-P