45 CFR § 98.50 - Child care services.
(a) Direct child care services shall be provided:
(1) To eligible children, as described in § 98.20;
(3) Using funding methods provided for in § 98.30; and
(4) Based on the priorities in § 98.46.
(1) No less than seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at § 98.53; and
(2) No less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities at § 98.53(a)(4) as such activities relate to the quality of care for infants and toddlers.
(3) Nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b)(1) and (2) of this section.
(c) Funds expended from each fiscal year's allotment on quality activities pursuant to paragraph (b) of this section:
(2) Must include measurable indicators of progress in accordance with § 98.53(f); and
(3) May be provided directly by the Lead Agency or through grants or contracts with local child care resource and referral organizations or other appropriate entities.
(d) Of the aggregate amount of funds expended (i.e., Discretionary, Mandatory, and Federal and State share of Matching Funds), no more than five percent may be used for administrative activities as described at § 98.54.
(2) Are attempting through work activities to transition off such assistance program; and
(3) Are at risk of becoming dependent on such assistance program.
(f) From Discretionary amounts provided for a fiscal year, the Lead Agency shall:
(2) From the remainder, use not less than 70 percent to fund direct services (provided by the Lead Agency).
(g) Of the funds remaining after applying the provisions of paragraphs (a) through (f) of this section, the Lead Agency shall spend a substantial portion of funds to provide direct child care services to low-income families who are working or attending training or education.