(a) Of the funds remaining after applying the provisions of paragraphs (c), (d) and (e) of this section the Lead Agency shall spend a substantial portion to provide child care services to low-income working families.
(b) Child care services shall be provided:
(1) To eligible children, as described in Sec. 98.20;
(2) Using a sliding fee scale, as described in Sec. 98.42;
(3) Using funding methods provided for in Sec. 98.30; and
(4) Based on the priorities in Sec. 98.44.
(c) Of the aggregate amount of funds expended (i.e., Discretionary, Mandatory, and Federal and State share of Matching Funds), no less than four percent shall be used for activities to improve the quality of child care as described at Sec. 98.51.
(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 Sec. 98.52.
(e) Not less than 70 percent of the Mandatory and Matching Funds shall be used to meet the child care needs of families who:
(1) Are receiving assistance under a State program under Part A of title IV of the Social Security Act,
(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) Pursuant to Sec. 98.16(g)(4), the Plan shall specify how the State will meet the child care needs of families described in paragraph (e) of this section.