Sec. 112. Allocation of funds; payments

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The Secretary shall allocate the amounts appropriated for carrying out this title for any fiscal year after fiscal year 2021, in the following manner: The amount made available under section 103(a) shall be used for the purpose of providing financial assistance to carry out child care and early learning programs under this title for covered children, other than activities described in paragraph (2). Of the amounts appropriated under section 103(b)— such portion, but not less than 50 percent, shall be used for the purpose of carrying out activities under sections 135 and 136 and such administrative activities as the Secretary determines to be necessary and appropriate to carry out this title; such portion, but not less than 20 percent, shall be used for the purpose of carrying out activities under section 151; and the remainder of such amounts shall be used for the purpose of carrying out activities under sections 137, 138, and 152.

Notwithstanding paragraph (2), the Secretary may, after providing appropriate notice and written justification to Congress, redirect any amounts appropriated under section 103(b) as the Secretary determines to be necessary and appropriate to carry out section 151 for the purpose of carrying out activities under section 151. As soon as practicable after funds are appropriated under section 103(b) for any fiscal year, the Secretary shall publish in the Federal Register the amounts made available for that fiscal year to carry out each of the activities described in subsection (a)(2).

In accordance with this subsection, the Secretary shall pay, from the allocation under subsection (a)(1), the Federal share of the costs of providing child care and early learning programs, in accordance with plans under sections 113 and 114 that have been approved as provided in this title. The Secretary may make such financial assistance as may be necessary to carry out this title. The Secretary may also withhold funds otherwise payable under this title in order to recover any amounts expended in the current or immediately prior fiscal year in violation of any provision of this title or any term or condition of financial assistance under this title.

Except as provided in subparagraphs

(B)through

(E)and section 151, the Federal share of the costs of providing child care and early learning programs for covered children shall be not more than 80 percent. The Federal share shall be 80 percent of the costs of providing child care and early learning programs for low-income covered children. The Federal share shall be 50 percent of the costs of providing child care and early learning programs for covered children who are not low-income children. The Secretary shall pay for 100 percent of the costs of providing child care and early learning programs for covered children of migrant and seasonal farmworkers under this title. The Secretary shall pay each prime sponsor designated under section 113 for 100 percent of the costs of providing child care and early learning programs for covered children in Indian tribes and Native Hawaiian covered children under this title. When making a payment described in paragraph

(1)to any prime sponsor for the Federal share of the costs of providing a child care and early learning program, the Secretary shall also make a payment to the prime sponsor of not more than 100 percent of the costs for staff and other administrative expenses of the prime sponsor, including such costs and expenses related to quality improvement (such as conducting monitoring and training) and operating the Child Care and Early Learning Council, but not to exceed an amount which is reasonable when compared with such costs and expenses for other prime sponsors. The Secretary shall, on the basis of recommendations by an committee of experts outside the Department of Health and Human Services, establish and implement a process for determining the costs described in paragraph (1)(A) and ensuring that the requirement of subparagraph

(B)is met. The Secretary shall ensure that the Federal share determined under paragraph

(2)is sufficient to ensure that a prime sponsor can meet all requirements under this title, including the national program standards under section 121, compensation provisions under section 136(b), and provisions relating to comprehensive services and access to services. The non-Federal share of the costs described in paragraph

(1)may be provided through public or private funds (including labor union or employer contributions) and may be in cash or in kind, fairly evaluated, including facilities, goods, or services. Fees collected for services provided pursuant to section 114(j) may be used toward the non-Federal share. Such fees collected from a family may not exceed 7 percent of the family income, regardless of the number of children served from that family. If, with respect to any fiscal year, a prime sponsor provides a non-Federal share, for any program that exceeds its requirements for such a share, such excess may be applied toward meeting the requirements for such a share for the subsequent fiscal year under this title. No State or locality shall reduce its expenditures for child care and early learning programs (including home-based child care and early learning programs) because of financial assistance provided under this title.