GM 13-050

Child Care Development Fund Proposed Rule

The Department of Health and Human Services (DHHS) published in the May 20, 2013, FEDERAL REGISTER a proposed rule for the Child Care Development Fund (CCDF) which is designed to improve health and safety protections for children in child care and to place more emphasis on the developmental needs of young children. The proposed rule would generally apply to tribal programs although there would be some exceptions. Currently $100 million is provided annually to 260 tribes and tribal organizations (serving 500 tribes) for child care services (a two percent allocation of funds). The notice is at: Comments are due August 5, 2013.

The DHHS notes that the CCDF, which was last reauthorized in 1996, was designed primarily as a program to help low-income working families via providing child care assistance. Program requirements do not, however, reflect the current research which “demonstrates that the first five years of a child’s cognitive and emotional development establish the foundation for learning and achievement throughout life.” The DHHS points out that state child care policies vary widely, that there are many documented cases of children being injured and dying in child care, some of which were due to a lack of basic requirements for child care providers, and that ten percent of CCDF children are cared for in unregulated facilities.

The proposed new minimum standards would apply to child care providers who accept CCDF funds, although it would allow for exemption of relatives and caregivers in the child’s home. In many instances the Lead Agencies will have the flexibility to determine how they will meet the requirement or to provide an alternative way in which the requirement could be met.

Under the proposed rule CCDF-funded child care providers would be required to have health and safety training in specific areas (i.e., first aid; medication administration; poison prevention; safe sleep practices; recognition and reporting of child abuse; proof of immunizations; emergency preparedness planning and response procedures). Child care providers would be required to comply with applicable state and local fire, health and building codes, receive comprehensive background checks (including fingerprinting) and receive on-site monitoring.
Roughly half the states have websites with child care provider-specific information regarding teaching staff qualifications, learning environment, curricula and activities. The proposed rule would require all states to do this.

The proposed rule would allow parents to keep receiving a child care subsidy while looking for a job. Currently parents lose CCDF eligibility when they become unemployed, and find it difficult to search for jobs without child care. Lead Agencies would be able to set the period of time they allow a subsidy for a family searching for a job.

Tribal-Specific Provisions. As noted earlier, Tribal Lead Agencies would generally be subject to the proposed rule, specifically including child eligibility for services, consumer education, health and safety requirements, and new program integrity provisions, although there is flexibility in how those requirements may be met.

The DHHS, as required by law, worked with tribes and in 2000 issued voluntary minimum child care standards for tribes and tribal organizations receiving CCDF funds. Those standards were updated and reissued in 2005. The DHHS states that the 2005 tribal voluntary standards are generally consistent with the proposed health and safety standards although they will review the standards to ensure that they “adequately address all aspects of the proposed rule.”

Tribes would not be subject to the requirement that direct services be provided utilizing grants, contracts or certificates. The DHHS states that those tribes receiving small CCDF grants may lack the resources necessary to provide services through a grant or contract and also that many tribes directly administer their own tribally-operated child care facilities, rather than purchasing slots through a grant or contract.

The other exemption for tribes is that they would not be required to maintain a website with child care provider-specific information, although they will be required to disseminate “consumer education information on the full range of available providers, including provider-specific information about health and safety, a transparent system of quality indicators, and specific information about the provider selected by a parent receiving a CCDF subsidy.”

Currently large tribes are required to spend at least four percent of their CCDF funds on quality improvement activities. Under the proposal the four percent rule would apply to all tribes. States also must expend at least four percent of funds for quality improvement activities.

Finally, the proposed rule makes a technical change in removing the exemption for tribes from the immunization requirements. Under the 2005 tribal standards an immunization requirement was included which is consistent with the proposed rule.

The DHHS points out that under the proposed rule tribes would continue to have the option to consolidate their CCDF funds under a plan authorized by the Indian Employment, Training and Related Services Demonstration Act of 1992 (PL 102-477). Tribes would continue to be subject to a 15 percent administrative cost limit, rather than the five percent limit that applies to states.

Non-Regulatory Tribal Changes. DHHS includes in the May 20 announcement two changes which are not part of the proposed rule: 1) Currently tribes receiving smaller CCDF grants are not required to operate a certificate program. The change is that beginning in FY 2015, the threshold for what is considered “smaller” will be raised from $500,000 to $700,000; and 2) Beginning in FY 2015 the base amount of funding for each Tribal Lead Agency under the discretionary-funded portion of CCDF will be raised from $20,000 to $30,000.

Reauthorization Legislation. On June 3, 2013, Senator Mikulski (D-MD) introduced S 1086, legislation which would reauthorize the Child Care and Development Block Grant. That bill addresses the issues in the proposed rule, but it would represent a comprehensive reauthorization of that program. Senator Mikulski prefers enactment of a reauthorization bill to the Administration’s proposal to issue regulations.

Please let us know if we may provide additional information or assistance regarding the proposed rule or the reauthorization legislation for the Child Care Block Grant.