[Federal Register Volume 89, Number 136 (Tuesday, July 16, 2024)]
[Proposed Rules]
[Pages 57835-57838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15244]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 98

RIN 0970-AD11


Increase Flexibility for Tribes in Child Care and Development 
Fund (CCDF) Eligibility

AGENCY: Office of Child Care (OCC), Administration for Children and 
Families (ACF), Department of Health and Human Services (HHS).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Health and Human Services, Administration 
for Children and Families proposes to amend the Child Care and 
Development Fund (CCDF) regulations through this notice of proposed 
rulemaking (NPRM) to allow all Indian Tribes and Tribal Organizations 
operating CCDF programs, at their discretion, to establish and use 
eligibility criteria regardless of family income.

DATES: In order to be considered, written comments on this proposed 
rule must be received on or before September 16, 2024.

ADDRESSES: You may submit comments, identified by docket number ACF-
2024-0010 and/or RIN number 0970-AD11, to the Federal eRulemaking 
Portal: https://www.regulations.gov. Follow the instructions for 
submitting comments.
    Instructions: All submissions received must include the agency name 
and docket number or RIN number for this rulemaking. All comments 
received are a part of the public record and will be posted for public 
viewing on www.regulations.gov, without change. That means all personal 
identifying information (such as name or address) will be publicly 
accessible. Please do not submit confidential information, or otherwise 
sensitive or protected information. We accept anonymous comments. If 
you wish to remain anonymous, enter ``N/A'' in the required fields.
    Docket: Go to the Federal eRulemaking Portal at https://www.regulations.gov for access to the rulemaking docket, including any 
background documents and the plain-language summary of the proposed 
rule of not more than 100 words in length required by the Providing 
Accountability Through Transparency Act of 2023, 5 U.S.C. 553(b)(4).

FOR FURTHER INFORMATION CONTACT: Megan Campbell, Office of Child Care, 
202-690-6499 or [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    Effective Dates
    Severability
II. Statutory Authority
III. Discussion of Proposed Changes
IV. Regulatory Process Matters
    Paperwork Reduction Act
    Regulatory Flexibility Act
    Unfunded Mandates Reform Act of 1995
    Executive Order 13132
    Assessment of Federal Regulations and Policies on Families
    Regulatory Review
VI. Tribal Consultation Statement
List of Subjects in 45 CFR Part 98

 I. Background

    In response to requests from Tribal Child Care and Development Fund 
(CCDF) Lead Agencies for more flexibility on family income eligibility 
to better meet community needs and to recent statutory changes to 
eligibility in the Tribal Head Start program, this NPRM proposes a 
regulatory change to allow all Tribal CCDF Lead Agencies to serve 
Indian children (as defined by the Tribal Lead Agency) in their service 
area regardless of family income or assets. This NPRM is also 
responsive to Executive Order 14112, Reforming Federal Funding and 
Support for Tribal Nations To Better Embrace Our Trust Responsibilities 
and Promote the Next Era of Tribal Self-Determination, which directs 
agencies to ``increase the accessibility, equity, flexibility, and 
utility of Federal funding.'' This proposal will provide Tribal Nations 
with more flexibility to better meet community needs, address calls for 
greater Tribal sovereignty, and facilitate better alignment between 
Tribal CCDF and Tribal Head Start programs.
    The Child Care and Development Block Grant Act (42 U.S.C. 9857 et 
seq.), hereafter referred to as the ``Act,'' together with section 418 
of the Social Security Act (42 U.S.C. 618) authorize CCDF, which is the 
primary Federal funding source to Tribes, States, and Territories 
devoted to supporting families with low incomes access to child care 
and to increasing the quality of child care for all children. CCDF 
plays a vital role in supporting child development and family well-
being, facilitating parent employment, training, and education, and 
improving the economic well-being of participating families. In FY 
2024, 264 Tribal Lead Agencies representing 546 federally recognized 
Tribal Nations received CCDF grants totaling $600 million.\1\ Annual 
Tribal CCDF awards range from $70,000 to $88 million per year.
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    \1\ https://www.acf.hhs.gov/occ/data/gy-2024-ccdf-tribal-allocations-based-appropriations.
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    The Act does not explicitly apply most of its provisions to the 
Tribal CCDF program, so with some exceptions and within certain 
parameters, the Secretary of Health and Human Services has the 
authority to determine many of the CCDF requirements for Tribal Lead 
Agencies, including the family income eligibility requirements for 
children to receive services from Tribal CCDF programs. Current Tribal 
CCDF regulations at 45 CFR 98.81(b)(1) include different family income 
eligibility requirements and flexibilities based on a Tribe's award 
allocation size in FY 2016. Tribes who had allocations under $250,000 
in 2016 (155 Tribal Lead Agencies) may serve any Indian child (as 
defined by the Tribal Lead Agency) in the defined service area, 
regardless of family income or assets. However, Tribal Lead Agencies 
who had allocations above $250,000 in 2016 are subject to the same CCDF 
income eligibility standard as States, set forth at 45 CFR 
98.20(a)(2)--family income cannot be more than 85 percent of Grantee 
Median Income and the family must pass an asset test.
    This proposed rule would provide the 109 Tribal Lead Agencies with 
medium and large allocations the flexibility to disregard family income 
and assets in determining family eligibility for CCDF. This would 
extend the flexibility Tribes with smaller allocations have to 
disregard family income to all Tribal CCDF Lead Agencies. Tribes, at 
their discretion, could continue to choose to use family income 
criteria for eligibility, but this would no longer be a requirement. 
This proposal does not alter existing flexibilities that permit Tribal 
Lead Agencies to apply categorical eligibility criteria for families 
under certain conditions.
    Tribal Nations have requested greater flexibility for CCDF family 
income eligibility. Tribes report the rules do not provide the 
flexibility necessary for Tribal Nations to implement CCDF programs in 
ways that best meet the needs of the children and families in their 
communities. The significant variation between Tribal Nation child care 
needs, infrastructure, and location as well as the individuality of the 
546 federally-recognized Tribal Nations receiving CCDF make the 85 
percent grantee median income eligibility threshold poorly suited to 
Tribal Nations, hindering their ability to effectively and efficiently 
using CCDF to serve children and families. OCC recently sought feedback 
from Tribal Nations and other interested parties on areas where more 
flexibility and/or

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different program rules would better serve children, families, and 
Tribal Nations through a formal Request for Information (RFI), 
published in the Federal Register at 88 FR 48409 (July 27, 2023). 
Throughout the RFI feedback process and other feedback processes, 
Tribal Lead Agencies expressed appreciation for many CCDF flexibilities 
but explained current categorical eligibility rules were complicated, 
burdensome, and too limited and that standard family income eligibility 
rules were too narrow to meet community needs. Many Tribal Lead 
Agencies expressed support for changing eligibility requirements so 
they can serve Indian children (as defined by the Tribal Lead Agency), 
regardless of family income.
    This proposal will also benefit Tribal Nations by better aligning 
family income eligibility rules in the Tribal CCDF and Head Start 
programs. At the request of Tribal Nations and the Biden-Harris 
Administration, the Further Consolidated Appropriations Act, 2024 (Pub. 
L. 118-47) included a legislative change to section 645 of the Head 
Start Act, 42 U.S.C. 6840, to allow Tribal Head Start programs to serve 
children in their service area regardless of family income. The Head 
Start Act, unlike the CCDBG Act, required legislative action to make 
this change. This important new Head Start flexibility better supports 
Tribal sovereignty and allows Tribal Head Start programs to better meet 
the needs of children and families in their communities. However, it 
inadvertently makes CCDF more restrictive than Head Start, creating 
unintended implementation challenges for Tribes and barriers to 
effectively and efficiently using multiple types of early childhood 
Federal funding to support comprehensive early learning services, child 
development, and family well-being. This challenge is especially 
salient since almost all Tribal Head Start grantees administer a Tribal 
CCDF program. This proposal would better align Head Start and CCDF and 
allow Tribal Nations the necessary flexibility to determine how early 
childhood program family income eligibility determinations can best 
support their communities.

Effective Dates

    ACF proposes that the final rule become effective 60 days from the 
date of publication of the final rule.

Severability

    The provisions of this NPRM, once it becomes final, are intended to 
be severable, such that, in the event a court were to invalidate any 
particular provision or deem it to be unenforceable, the remaining 
provisions would continue to be valid.

II. Statutory Authority

    This proposed regulation is being issued under the authority 
granted to the Secretary of Health and Human Services by the CCDBG Act 
of 1990, as amended (42 U.S.C. 9857, et seq.), and section 418 of the 
Social Security Act (42 U.S.C. 618).

III. Discussion of Proposed Changes

    We propose to revise 45 CFR 98.81(b)(1) to allow all CCDF Tribal 
Lead Agencies the flexibility to determine family eligibility for CCDF 
without regard to family income and assets. The proposal amends Sec.  
98.81(b)(1)(ii) to allow Tribal Lead Agencies to disregard family 
income requirements described in Sec.  98.20(a)(2), while retaining the 
ability for Tribal Lead Agencies with a Tribal median income below a 
level determined by the Secretary to deem any child in their service 
area categorically eligible, regardless of family income, work, or 
training status. Currently, the 40 percent of Tribal Lead Agencies with 
medium and large allocations, as defined in CCDF regulations, are 
subject to the requirements at Sec.  98.20(a)(2) that children must be 
in families with incomes below 85 percent Grantee Median Income and 
with assets under $1 million in order to be eligible for CCDF. Tribes 
with small allocations are not subject to the requirements at Sec.  
98.20(a)(2) and are therefore already have the flexibility to serve 
Indian children (as defined by the Tribal Lead Agency) regardless of 
family income. Extending the flexibility to serve any Indian Child in 
the service area regardless of family income to all Tribal Lead 
Agencies better supports Tribal sovereignty and self-determination, and 
it gives Tribes the ability to prioritize services in the way that best 
meets the needs of Tribal Nations and communities. It will create 
better opportunities for Tribes to align CCDF programs with other 
Tribal early childhood programs, including Tribal home visiting, Early 
Head Start, Head Start, and tribally funded preschool.
    This proposal does not make any other changes to current Tribal 
CCDF family eligibility rules, including existing Tribal categorical 
eligibility flexibilities, which remain unchanged.

IV. Regulatory Process Matters

Paperwork Reduction Act

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq., as 
amended) (PRA), all Departments are required to submit to the Office of 
Management and Budget (OMB) for review and approval any reporting or 
recordkeeping requirements inherent in a proposed or final rule. As 
required by this Act, we will submit any proposed revised data 
collection requirements to OMB for review and approval.
    The proposed rule modifies the previously approved ACF-118-A CCDF 
Tribal Plan information collection, but ACF has not yet initiated the 
OMB approval process to implement these changes. ACF will publish a 
Federal Register notice soliciting public comment on specific revisions 
to this information collection and the associated burden estimate and 
will make available the proposed form and instructions for review.

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                                        Relevant
          CCDF title/code            section in the    OMB control    Expiration            Description
                                     proposed rule         No.           date
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ACF-118-A (CCDF Tribal Plan) Part      Sec.   98.81       0970-0198    4/30/2025  The proposed rule would
 I and Part II.                                                                    provide new flexibilities
                                                                                   which Tribal lead agencies
                                                                                   with medium and large
                                                                                   allocations will be required
                                                                                   to report on in the CCDF
                                                                                   plans.
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    The table below provides current approved annual burden hours and 
estimated annual burden hours for these existing information 
collections that are modified by this proposed rule.

                                                                 Annual Burden Estimates
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                                                                                              Current                        Proposed
                                                          Total number  Total number  of     approved                        estimated       Proposed
                       Instrument                              of         responses per       average     Current annual  average burden     estimated
                                                           respondents     respondent      burden hours    burden hours     hours  per     annual burden
                                                                                           per response                      response          hours
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ACF-118A Part I (for all tribes)........................           265                 1             120          10,600             120          10,600
ACF-118-A Part II (for medium and large Tribes only)....           106                 1              24             848              24             848
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Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (see 5 U.S.C. 605(b) as 
amended by the Small Business Regulatory Enforcement Fairness Act) 
requires Federal agencies to determine, to the extent feasible, a 
rule's impact on small entities, explore regulatory options for 
reducing any significant impact on a substantial number of such 
entities, and explain their regulatory approach. The term ``small 
entities,'' as defined in the RFA, comprises small businesses, not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000. HHS considers a rule to have a 
significant impact on a substantial number of small entities if it has 
at least a 3 percent impact on revenue on at least 5 percent of small 
entities. The Secretary proposes to certify, under 5 U.S.C. 605(b), as 
enacted by the RFA (Pub. L. 96-354), that this rulemaking would not 
result in a significant impact on a substantial number of small 
entities, as this rulemaking primarily impacts tribes receiving Federal 
CCDF grants. Therefore, an initial regulatory flexibility analysis is 
not required for this document.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of regulatory actions on State, local, and Tribal governments, 
and the private sector. Under section 202 of the UMRA, the Department 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures by State, local or Tribal governments, in 
the aggregate, or the private sector, of $100 million in 1995 dollars, 
updated annually for inflation. In 2024 the threshold is approximately 
$183 million. This proposed rule does not impose an unfunded mandate on 
State, local, or Tribal governments or the private sector of more than 
$183 million per year. Therefore, ACF is not required to provide a 
statement, including a cost-benefit analysis, of the impacts of the 
proposed changes.

Executive Order 13132

    Executive Order 13132 requires Federal agencies to consult with 
State and local government officials if they develop regulatory 
policies with federalism implications. Federalism is rooted in the 
belief that issues that are not national in scope or significance are 
most appropriately addressed by the level of government close to the 
people. This rulemaking would not have substantial direct impact on the 
States, on the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, this action does not have sufficient 
federalism implications to warrant the preparation of a federalism 
summary impact statement.

Assessment of Federal Regulations and Policies on Families

    Assessment of Federal Regulations and Policies on Families section 
654 of the Treasury and General Government Appropriations Act of 2000 
requires Federal agencies to determine whether a policy or regulation 
may negatively affect family well-being. If the agency determines a 
policy or regulation negatively affects family well-being, then the 
agency must prepare an impact assessment addressing seven criteria 
specified in the law. HHS believes it is not necessary to prepare a 
family policymaking assessment (see Pub. L. 105-277) because the action 
it takes in this NPRM would not have any impact on the autonomy or 
integrity of the family as an institution.

Regulatory Review

    We have examined the impacts of the rule under Executive Order 
12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 
601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). 
Executive Orders 12866 and 13563 direct us to assess all benefits, 
costs, and transfers of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity). A regulatory impact analysis must be prepared for rules deemed 
significant under section 3(f)(1) of E.O. 12866, as amended by E.O. 
14094.
    The Office of Information and Regulatory Affairs has determined 
that this proposed rule is not a significant regulatory action under 
section 3(f)(1) of E.O. 12866, as amended by E.O. 14094, and does not 
require a full regulatory impact analysis. This proposed rule has, 
however, been designated ``a significant regulatory action'' under 
section 3(f) of Executive Order 12866, as amended by Executive Order 
14094. In FY 2024, OCC estimates that up to $173 million is allocated 
to Tribal Lead Agencies that could be impacted by the proposed change. 
Further, these Tribal Lead Agencies have discretion on whether to adopt 
this flexibility based on their unique needs. This proposed rule does 
not stipulate any new requirements.

VI. Tribal Consultation Statement

    Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments, requires agencies to consult with Indian tribes 
when regulations have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes. The proposed changes included 
in this NPRM are in response to requests from Tribal Nations for 
greater flexibility for CCDF family income eligibility that OCC has 
received through formal consultation with Tribal Leaders and through 
the Request for Information

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(RFI) OCC published in July 2023. Additional discussion of proposed 
changes in section 3 of the preamble serves as the Tribal impact 
statement. We intend to notify Tribal lead agencies about the 
opportunity to provide comment on the NPRM no later than the day of 
publication. Further, shortly after publication of the NPRM, we will 
host consultation with Tribal Leaders and hold briefing sessions with 
Tribal lead agencies and any other interested tribe on the contents of 
the NPRM.
    Jeff Hild, Principal Deputy Assistant Secretary for the 
Administration for Children and Families, performing the delegable 
duties of the Assistant Secretary, approved this document on May 22, 
2024.

(Catalog of Federal Domestic Assistance Program Number 93.575, Child 
Care and Development Block Grant; 93.596, Child Care Mandatory and 
Matching Funds)

List of Subjects in 45 CFR Part 98

    Child care, Grant programs--social programs.

    Dated: July 8, 2024.
Xavier Becerra,
Secretary, Department of Health and Human Services.
    For the reasons set forth in the preamble, we propose to amend 45 
CFR part 98 as follows:

PART 98--CHILD CARE AND DEVELOPMENT FUND

0
1. The authority for part 98 continues to read as follows:

    Authority:  42 U.S.C. 618, 9858.

0
2. Amend Sec.  98.81 by revising paragraph (b)(1)(ii) to read as 
follows.


Sec.  98.81  Application and Plan procedures.

* * * * *
    (b) * * *
    (1) * * *
    (ii) The basis for determining family eligibility may be determined 
by the Tribe notwithstanding family income as described in Sec.  
98.20(a)(2).
* * * * *
[FR Doc. 2024-15244 Filed 7-12-24; 8:45 am]
BILLING CODE 4184-87-P