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1 [1] (November 6, 2018)

handle is hein.crs/crsmthzzbsc0001 and id is 1 raw text is: Child Care Entitlement to States Overview The Child Care Entitlement to States (CCES) was created by the 1996 welfare reform law (P.L. 104-193). This law authorized the CCES in Section 418 of the Social Security Act, which directly appropriates annual mandatory child care funding for states and tribes. The law calls for CCES funds to be integrated, at the state level, with discretionary allotments from the Child Care and Development Block Grant (CCDBG). The law also 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 federal child care funding streams is linked to the system that existed prior to 1996, when the welfare reform law simultaneously repealed, created, and consolidated federal child care programs. Before this, four separate federal programs supported child care for low- income families. Each program had its own eligibility criteria and program rules. Three of these programs were linked to the old welfare system, Aid to Families with Dependent Children (AFDC), while one of these programs (CCDBG) was targeted to low-income working families not connected to the welfare system (see Figure 1). Jurisdiction for these four child care programs was split across multiple congressional committees. Figure I. Legislative Evolution of the CCDF 4 Programs WELFARE-RELATED AFDC Child Care Families receiving welfare Transitional Child Care Families leaving AFDC (12 months) At-Risk Child Care Families at-isk of AFDC el aibility 1 Program Child Care and Development Fund 1 set of program rules 1 target population (85% SMI) 1 state lead agency 2 funding authorizations: NON-WELFARE CCDBG Low-income working families at or holnw 7SQ% SMI Source: Prepared by the Congressional Research Service (CRS). Notes: SSA = Social Security Act. SMI = State Median Income. Updated November 6, 2018 The 1996 law repealed the three welfare-related funding streams, created a new mandatory child care funding stream (CCES), and amended the CCDBG Act. In an effort to streamline and simplify administration of these funding streams, the law generally applied CCDBG Act rules to CCES funds. Since enactment, the Senate Finance and House Ways and Means (W&M) committees have generally exercised jurisdiction over the CCES, while the Senate Health, Education, Labor, and Pensions (HELP) and House Education and the Workforce (E&W) committees have generally exercised jurisdiction over the CCDBG. Authorization Status The 1996 welfare reform law authorized and directly appropriated CCES funding for each of FY1997-FY2002. Temporary extensions provided CCES funding into FY2006, when the Deficit Reduction Act of 2005 (P.L. 109-171) reauthorized the CCES and directly appropriated $2.917 billion annually through FY2010. Since then, the CCES has been funded at the same level ($2.917 billion) by a series of short- or medium-term extensions. The current extension is scheduled to expire on December 7, 2018. The CCDBG Act-which establishes the program rules by which CCES funds are administered at the state level-was reauthorized through FY2020 by P.L. 113-186. Allocation Formula The law requires HHS to reserve between 1% and 2% of CCES funds for tribes and tribal organizations. In addition, FY2019 CCDBG appropriations provisions allow HHS to reserve up to 0.5% for technical assistance and 0.5% for research. Remaining CCES funds are allocated in two parts. * First, each state receives a fixed amount each year, equal to the federal funds the state received for welfare-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 ($1.7 billion annually) are allotted to states based on each state's share of children under age 13. To receive these funds, a state must meet a MOE requirement set at 100% of the amount the state spent on welfare-related child care programs in the mid-1990s. This amount totals $888 million annually. In addition, states must match these federal funds with state dollars (totaling about $1.3 billion annually) at the Medicaid matching rate. Discretionary CCDBG funds are allocated using a separate formula, which is based on each state's share of children under age five, children receiving free- and reduced-price lunches, and state per capita income. www.crs.gov 7-5700

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