(a) Funds available to the Commission for child care services will be allocated to the workforce areas using need-based formulas, as set forth in this section.     
      (b) Child Care and Development Fund (CCDF) Mandatory Funds authorized under the Social Security Act §418(a)(1), as amended, together with state general revenue Maintenance of Effort (MOE) Funds, Social Services Block Grant funds, TANF funds, and other funds designated by the Commission for child care (excluding any amounts withheld for state-level responsibilities) will be allocated on the following basis:      
        (1) 50 percent will be based on the relative proportion of the total number of children under the age of five years old residing within the workforce area to the statewide total number of children under the age of five years old, and       
        (2) 50 percent will be based on the relative proportion of the total number of people residing within the workforce area whose income does not exceed 100 percent of the poverty level to the statewide total number of people whose income does not exceed 100 percent of the poverty level.       
      (c) CCDF Matching Funds authorized under the Social Security Act §418(a)(2), as amended, together with state general revenue matching funds and estimated appropriated receipts of donated funds, will be allocated according to the relative proportion of children under the age of 13 years old residing within the workforce area to the statewide total number of children under the age of 13 years old.     
      (d) CCDF Discretionary Funds authorized under the Child Care and Development Block Grant Act of 1990 §658B, as amended, will be allocated according to the relative proportion of the total number of children under the age of 13 years old in families whose income does not exceed 150 percent of the poverty level residing within the workforce area to the statewide total number of children under the age of 13 years old in families whose income does not exceed 150 percent of the poverty level.     
      (e) The following provisions apply to the funds allocated in subsections (b) - (d) of this section:      
        (1) Sufficient funds must be used for direct child care services to ensure Commission-approved performance targets are met.       
        (2) Children eligible for Transitional and Choices child care shall be served on a priority basis to enable parents to participate in work, education, or training activities.       
        (3) No more than 5 percent of the total expenditure of funds may be used for administrative expenditures as defined in federal regulations contained in 45 C.F.R. §98.52, as may be amended unless the total expenditures for a workforce area are less than $5,000,000. If a workforce area has total expenditures of less than $5,000,000, then no more than $250,000 may be used for administrative expenditures.       
        (4) Each Board shall set the amount of the total expenditure of funds to be used for quality activities consistent with federal and state statutes and regulations.       
        (5) The Board shall comply with any additional requirements adopted by the Commission or contained in the Board contract.       
        (6) Allocations of child care funds will include applications of hold harmless/stop gain procedures.       
     Source Note:        The provisions of this §800.58 adopted to be effective September 3, 2001, 26 TexReg 6719; amended to be effective August 23, 2004, 29 TexReg 8148; amended to be effective September 14, 2009, 34 TexReg 6341; amended to be effective February 7, 2011, 36 TexReg 592