Proposed Rule2026-04515
Designated Placement Requirements Under Titles IV-E and IV-B for LGBTQI+ Children; Rescission
Primary source
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Published
March 6, 2026
Issuing agencies
Health and Human Services Department
Abstract
The Administration for Children and Families (ACF) proposes to remove the requirements issued in the final rule Designated Placement Requirements Under Titles IV-E and IV-B for LGBTQI+ Children (89 FR 34818) that was published on April 30, 2024. The final rule required title IV-E/IV-B agencies to ensure that a Designated Placement is available for all children who self-identify with an alternative sexual orientation or self-identify as something other than their sex in foster care who request or would benefit from such a placement. On June 13, 2025, the U.S. District Court for the Eastern District of Texas vacated the final rule in its entirety, State of Texas v. United States Department of Health & Human Services, 770 F. Supp. 3d 940 (E.D. Tex. 2025), concluding that the final rule exceeded the Department of Health and Human Services' statutory authority and conflicted with the text of title IV-E. As a result of the court's decision, the final rule is no longer in effect or enforceable, and to ensure clarity for the public and regulated entities, ACF proposes to remove the provisions from the Code of Federal Regulations.
Full Text
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<title>Federal Register, Volume 91 Issue 44 (Friday, March 6, 2026)</title>
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[Federal Register Volume 91, Number 44 (Friday, March 6, 2026)]
[Proposed Rules]
[Pages 11017-11019]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04515]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 1355
RIN 0970-AD19
Designated Placement Requirements Under Titles IV-E and IV-B for
LGBTQI+ Children; Rescission
AGENCY: Children's Bureau (CB), Administration on Children, Youth and
Families (ACYF), Administration for Children and Families (ACF),
Department of Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Administration for Children and Families (ACF) proposes to
remove the requirements issued in the final rule Designated Placement
Requirements Under Titles IV-E and IV-B for LGBTQI+ Children (89 FR
34818) that was published on April 30, 2024. The final rule required
title IV-E/IV-B agencies to ensure that a Designated Placement is
available for all children who self-identify with an alternative sexual
orientation or self-identify as something other than their sex in
foster care who request or would benefit from such a placement. On June
13, 2025, the U.S. District Court for the Eastern District of Texas
vacated the final rule in its entirety, State of Texas v. United States
Department of Health & Human Services, 770 F. Supp. 3d 940 (E.D. Tex.
2025), concluding that the final rule exceeded the Department of Health
and Human Services' statutory authority and conflicted with the text of
title IV-E. As a result of the court's decision, the final rule is no
longer in effect or enforceable, and to ensure clarity for the public
and regulated entities, ACF proposes to remove the provisions from the
Code of Federal Regulations.
DATES: Comments on this proposed rule must be received by April 6,
2026.
ADDRESSES: You may submit written comments, identified by docket number
ACF-XXXX-XXXX and/or Regulatory Information Number (RIN) 0970-AD19,
through the Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a> on
or before the due date. Follow the instructions for submitting
comments. All comments received will be posted without change to
<a href="http://www.regulations.gov">www.regulations.gov</a>, including any personal information provided.
FOR FURTHER INFORMATION CONTACT: Jennifer Haight, Children's Bureau,
202-329-6464, Administration for Children and Families, Department of
Health and Human Services, <a href="/cdn-cgi/l/email-protection#fe9d9c9d9193939b908a8dbe9f9d98d096968dd0999188"><span class="__cf_email__" data-cfemail="4b2829282426262e253f380b2a282d65232338652c243d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Statutory Authority
II. Background
III. Purpose of Proposed Rule
IV. Regulatory Impact Analysis
V. Tribal Consultation Statement
I. Statutory Authority
This Notice of Proposed Rulemaking (NPRM) is published under the
authority granted to the Secretary of HHS (the Secretary) by Section
1102 of the Social Security Act (the Act), 42 U.S.C. 1302, which
authorizes the Secretary to publish regulations, not inconsistent with
the Act, as may be necessary for the efficient administration of the
functions entrusted to the Secretary under the Act.
II. Background
Designated Placements Final Rule
The Administration for Children and Families (ACF) proposes to
remove the requirements issued in the final rule Designated Placement
Requirements Under Titles IV-E and IV-B for LGBTQI+ Children that was
published on April 30, 2024 (89 FR 34818) (final rule). The final rule
added Sec. 1355.22 to 45 CFR part 1355, requiring State and Tribal
agencies administering or supervising the administration of title IV-E
and IV-B of the Social Security Act (``agencies'') to ensure that a
Designated Placement is available for all children who self-identify
with an alternative sexual orientation or self-identify as something
other than their sex in foster care who request or would benefit from
such a placement. It established procedural steps for title IV-E/IV-B
agencies to implement Designated Placements and added requirements for
foster care providers of these placements. The final rule also amended
Sec. 1355.34(c)(2)(i) requiring agencies to monitor compliance with
Designated Placement requirements through the Child and Family Services
Reviews (CFSR).
Legal Challenge and Current Status
State of Texas v. United States Department of Health & Human Services,
770 F. Supp. 3d 940 (E.D. Tex. 2025)
On September 24, 2024, the State of Texas Attorney General's Office
filed a lawsuit against HHS alleging the final rule:
<bullet> Exceeds HHS's statutory authority,
<bullet> Violates the Spending Clause, and
<bullet> Is arbitrary and capricious.
[[Page 11018]]
The plaintiff asked the court to vacate the final rule and
requested an immediate stay of the final rule's effective date under 5
U.S.C. 705. On March 13, 2025, the court concluded that the State of
Texas is likely to succeed on the merits of the case because the final
rule ``violates the APA in two independent ways.'' 770 F. Supp. 3d at
948. First, HHS ``lacked rulemaking authority to issue the Final
Rule,'' and second, the final rule ``conflicts with the text of Title
IV-E.'' Id. The court stayed the final rule in its entirety nationwide,
pending the conclusion of proceedings in that case, finding that the
final rule imposed requirements on agencies not authorized by the
statutory provisions governing the title IV-E and IV-B programs. Id. at
948-50. HHS notified title IV-E/IV-B agencies of the nationwide stay
through emails and an Information Memorandum (IM) ACF-ACYF-CB-IM-25-03
issued April 15, 2025.
On June 13, 2025, the U.S. District Court for the Eastern District
of Texas issued a final judgment, vacating the final rule in its
entirety. See Texas v. U.S. Dep't of Health & Hum. Servs., Case No.
6:24-cv-348-JDK (E.D. Tex.), Doc. 37 (filed June 13, 2025) (Order and
Final Judgment). For the reasons stated in the initial stay of the
final rule, the court concluded that the rule exceeded HHS's statutory
authority and conflicted with the text of title IV-E. The court's
decision vacated the final rule in its entirety, meaning that the rule
is no longer in effect and has no legal force. Due to the court's final
judgment, ACF will not enforce the provisions of the final rule and has
notified title IV-E/IV-B agencies of the court's decision through ACF-
ACYF-CB-IM-25-03.
III. Purpose of Proposed Rule
We propose to remove 45 CFR 1355.22 and rescind the amendment to
Sec. 1355.34(c)(2)(i) made in the final rule, i.e., to remove the
cross references to the Designated Placements requirements of Sec.
1355.22(b) and (d). The purpose of this proposal is to ensure clarity
for the public and regulated entities by formally removing the final
rule's requirements from the regulations because the court's decision
vacating the final rule rendered it ineffective and unenforceable.
Removing the requirements from the Code of Federal Regulations will
eliminate any uncertainty, provide clarity for regulated entities on
the requirements applicable to them, and ensure that the regulations
are accurate. This NPRM does not propose new requirements or change
existing obligations under the title IV-E or IV-B programs. ACF invites
public comments on this proposal.
IV. Regulatory Impact Analysis
Regulatory Planning and Review of Executive Orders 12866, 13563, and
14192
Executive Orders 12866 and 13563 direct agencies to assess all
benefits and costs of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits. The Office of Management and Budget (OMB) has determined
that this NPRM is a significant regulatory action under section 3(f) of
Executive Order 12866. Executive Order 14192 requires that any new
incremental costs associated with significant new regulations ``shall,
to the extent permitted by law, be offset by the elimination of
existing costs associated with at least ten prior regulations.'' This
NPRM if finalized is expected to be a deregulatory action as defined by
Section 3 of Executive Order 14192.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act (RFA; 5 U.S.C. 601 et seq.), as
amended by the Small Business Regulatory Enforcement Fairness Act of
1996requires Federal agencies to determine, to the extent feasible, a
rule's impact on small entities, explore regulatory options for
reducing any significant impact on a substantial number of such
entities, and explain their regulatory approach. The term ``small
entities,'' as defined in the RFA, comprises small businesses, not-for-
profit organizations that are independently owned and operated and are
not dominant in their fields, and governmental jurisdictions with
populations of less than 50,000. HHS considers a rule to have a
significant impact on a substantial number of small entities if it has
at least a three percent impact on revenue on at least 5 percent of
small entities. The Secretary certifies, under 5 U.S.C. 605(b), as
enacted by the RFA (Pub. L. 96-354), that this rulemaking will not
result in a significant impact on a substantial number of small
entities. This rule does not affect small entities because it is
applicable only to state and tribal title IV-E/IV-B agencies and those
entities are not considered to be small entities for purposes of the
Regulatory Flexibility Act. Therefore, an initial regulatory
flexibility analysis is not required for this rulemaking.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4) was
enacted to avoid imposing unfunded Federal mandates on state, local,
and Tribal governments, or on the private sector. Section 202 of UMRA
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any one year of
$100 million in 1995 dollars, updated annually for inflation. In 2025,
that threshold is approximately $187 million. This rulemaking does not
contain mandates that will impose spending costs on state, local, or
Tribal governments in the aggregate, or on the private sector, in
excess of the threshold.
Executive Order 13132 on Federalism
Executive Order 13132 on Federalism requires that Federal agencies
consult with state and local government officials in the development of
regulatory policies with Federalism implications. In accordance with
section 6 of Executive Order 13132, it is determined that this NPRM
does not have sufficient federalism implications to warrant the
preparation of a federalism summary impact statement.
Alternatives Considered
There are no alternatives to issuing this NPRM because the final
rule was vacated by the court and is no longer in effect.
Assessment of Federal Regulations and Policies on Families
The Treasury and General Government Appropriations Act of 1999
(Pub. L. 105-277) requires Federal agencies to determine whether a
policy or regulation may negatively affect family well-being (sec. 654,
Pub. L. 105-277, 112 Stat. 2681). If the agency determines a policy or
regulation negatively affects family well-being, then the agency must
prepare an impact assessment addressing seven criteria specified in the
law. ACF concluded it is not necessary to prepare a family policymaking
assessment because this rulemaking would not have any impact on the
autonomy or integrity of the family as an institution.
Paperwork Reduction Act
This NPRM does not affect any information collection requirements
subject to review by OMB under the Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501-3520.
Costs and Benefits
In the final rule, ACF estimated that the costs to the Federal
Government would be $10,827,381 over a three fiscal year period (FYs
2027-2029) for title IV-E/IV-B agencies to meet the requirements in the
final rule (89 FR
[[Page 11019]]
34855-34859). Projected agency costs used to calculate the total are
outlined in the final rule and include increased recruitment costs and
additional training of caseworkers and supervisors. ACF estimated that
the combined total Federal and agency costs over three fiscal years
would be $45,743,070. For the purposes of quantifying the economic
impacts of the removal of section 1355.22 and amendment to section
1355.34(c)(2)(i), we adopt these estimates as costs that would be
incurred under an analytic baseline scenario of no further regulatory
action. Compared to this baseline, the impact of this NPRM is to avert
these costs, resulting in cost savings of a similar magnitude. To
quantify the cost savings of the NPRM under Executive Order 14192, we
adjust the estimates to 2024 dollars using the GDP deflator and
calculate present value and annualized cost savings using a 7 percent
discount rate, using 2024 as the base year for discounting. Our
analysis indicates this deregulatory action if finalized would result
in a present value of cost savings of about $35.5 million or annualized
cost savings of about $2.5 million.
V. Tribal Consultation Statement
Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments, requires agencies to consult with Indian tribes
when regulations have substantial direct effects on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes and either impose substantial
direct compliance costs on tribes or preempt state law. Similarly,
ACF's Tribal Consultation Policy provides that consultation is
triggered for a new rule adoption that significantly affects tribes,
meaning the new rule adoption has substantial direct effects on one on
more Indian tribes, on the amount or duration of ACF program funding,
on the delivery of ACF programs or services to one or more Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes. The final rule did not meet
either standard for consultation, as indicated in the preamble at 89 FR
34818, and consequently this NPRM does not either.
List of Subjects in 45 CFR part 1355Adoption and foster care, Child
Welfare, Grant Programs-Social Programs
(Catalogue of Federal Domestic Assistance Program Number 93.658,
Foster Care Maintenance; 93.659, Adoption Assistance; 93.645, Child
Welfare Services-State Grants).
For the reasons set forth in the preamble, ACF proposes to amend 45
CFR part 1355 as follows:
PART 1355--GENERAL
0
1. The authority citation for part 1355 continues to read as follows:
Authority :42 U.S.C. 620 et seq., 42 U.S.C. 670 et seq., 42
U.S.C. 1302.
0
2. Remove and reserve Sec. 1355.22.
Authority :3. Amend Sec. 1355.34 by revising paragraph
(c)(2)(i) to read as follows:
Sec. 1355.34 Criteria for determining substantial conformity.
* * * * *
(c) * * *
(2) * * *
(i) Provide, for each child, a written case plan to be developed
jointly with the child's parent(s) that includes provisions: for
placing the child in the least restrictive, most family-like placement
appropriate to his/her needs, and in close proximity to the parents'
home where such placement is in the child's best interests; for visits
with a child placed out of State/Tribal service area at least every 12
months by a caseworker of the agency or of the agency in the State/
Tribal service area where the child is placed; and for documentation of
the steps taken to make and finalize an adoptive or other permanent
placement when the child cannot return home (sections 422(b)(8)(A)(ii),
471(a)(16) and 475(5)(A) of the Act);
* * * * *
Robert F. Kennedy, Jr.,
Secretary, Department of Health and Human Services.
Department of Health and Human Services.
[FR Doc. 2026-04515 Filed 3-4-26; 4:25 pm]
BILLING CODE 4184-25-P
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