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1 1 (February 12, 2024)

handle is hein.crs/goveoiw0001 and id is 1 raw text is: Child Care Entitlement to States: An Overview Overview The Child Care Entitlement to States (CCES) was created by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193). PRWORA authorized the CCES in Section 418 of the Social Security Act. Section 418 appropriates mandatory child care funding for states, territories, and tribes. The law calls for states to integrate CCES funds with discretionary allotments from the Child Care and Development Block Grant (CCDBG) and generally requires CCES funds to be spent under CCDBG Act rules. In combination, the CCES and CCDBG are commonly called the Child Care and Development Fund (CCDF). The CCDF is administered by the U.S. Department of Health and Human Services (HHS). Legislative Evolution The current structure of child care funding streams is linked to programs that existed prior to 1996, when PRWORA simultaneously repealed, created, and consolidated federal child care programs (Figure 1). Before this, four separate federal programs supported child care for low-income families. Each program had its own eligibility criteria and program rules. Three programs were linked to a need-based cash assistance program, Aid to Families with Dependent Children (AFDC), while one (CCDBG) targeted low- income working families not connected to AFDC. Jurisdiction was split across multiple committees. The 1996 law repealed the three AFDC-related child care funding streams, created a new mandatory funding stream (CCES), and amended the CCDBG Act. To streamline and simplify administration, the law generally applied CCDBG Act rules to CCES funds. The Senate Finance Committee and House Ways and Means (W&M) Committee typically exercise CCES jurisdiction. The Senate Health, Education, Labor, and Pensions (HELP) Committee and House Education and the Workforce (E&W) Committee typically exercise CCDBG jurisdiction. Authorization and Appropriations The 1996 law authorized and appropriated CCES funding for each of FY1997-FY2002. Temporary extensions provided funding into FY2006, when the Deficit Reduction Act of 2005 (P.L. 109-171) reauthorized the CCES and appropriated $2.917 billion annually through FY2010. A series of extensions maintained funding at the same level over the next decade. In 2021, the American Rescue Plan Act (ARPA, P.L. 117-2) amended Section 418 to provide permanent annual appropriations of $3.550 billion for FY2021 and beyond. ARPA also made other changes to the CCES (e.g., made territories eligible for the first time). The CCDBG Act-which establishes most of the program rules by which CCES funds are administered at the state level-was reauthorized through FY2020 by P.L. 113-186. Updated February 12, 2024 While this authorization has expired, annual appropriations acts have continued to provide funding for the CCDBG. Figure I. CCDF Legislative Evolution BEFORE P.L. 104-193 4 Programs AFTER PL. 104-193 1 Program i I I Source: Prepared by the Congressional Research Service (CRS). Allocation of Funds As amended by ARPA, Section 418 specifies that, from the total amounts appropriated to the CCES, $75 million is to go to the territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands) and $100 million is to go to Indian tribes and tribal organizations. In addition, since FY2016, annual CCDBG appropriations effectively apply two CCDBG set-asides to CCES appropriations: up to 0.5% for technical assistance and 0.5% for research. Remaining CCES funds are allocated to the 50 states and the District of Columbia in two parts. First, each state receives a fixed amount each year, equal to the federal funds the state received for AFDC-related child care programs in the mid-1990s. This amount totals $1.2 billion annually and is sometimes called guaranteed mandatory funding, as there are no state maintenance-of-effort (MOE) or matching requirements. Second, remaining CCES funds are allotted to states based on their share of children under age 13. To receive these funds, each state must meet a MOE requirement set at 100% of the amount the state spent on AFDC- related child care programs in the mid-1990s. This totals $888 million annually. States must also match these funds with state dollars at the Medicaid matching rate (the Federal Medical Assistance Percentage, or FMAP). SSA = Social Security Act; SMI = State Median Income.

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