The Department of Health and Human Services (HHS) has formally finalized the removal of a 2024 rule that required state and tribal child welfare agencies to ensure designated placements for children in foster care who identify as LGBTQI+. This action, effective July 14, 2026, stems directly from a federal court ruling that deemed the original requirements unlawful and unenforceable. The rescission aims to provide clarity to all regulated entities by eliminating provisions from the Code of Federal Regulations (CFR) that lack legal force.
The Original 2024 "Designated Placement" Rule
On April 30, 2024, HHS's Administration for Children and Families (ACF), through its Children's Bureau (CB), published a final rule. This rule, known as the "Designated Placement Requirements Under Titles IV-E and IV-B for LGBTQI+ Children," introduced new regulations under 45 CFR Part 1355. Specifically, it added Section 1355.22, mandating that state and tribal agencies administering titles IV-E (foster care and adoption assistance) and IV-B (child welfare services) of the Social Security Act provide a "Designated Placement" for all children identifying with an alternative sexual orientation or gender identity who requested or would benefit from such a placement. It also established procedural steps for implementing these placements and modified Section 1355.34(c)(2)(i) to include compliance monitoring through Child and Family Services Reviews (CFSR).
Legal Challenge and Judicial Overturn
The implementation of the 2024 final rule was swiftly challenged. On September 24, 2024, the State of Texas filed a lawsuit against HHS, alleging the rule exceeded HHS's statutory authority, violated the Spending Clause, and was arbitrary and capricious under the Administrative Procedure Act (APA). The State of Texas sought to vacate the rule and requested an immediate stay of its effective date.
On March 13, 2025, the U.S. District Court for the Eastern District of Texas granted a nationwide stay, finding that the State of Texas was likely to succeed on the merits. The court concluded that HHS "lacked rulemaking authority to issue the Final Rule" and that the rule "conflicts with the text of Title IV-E." The court stated that the rule imposed requirements on agencies not authorized by the statutory provisions governing the IV-E and IV-B programs. HHS communicated this nationwide stay to agencies via an Information Memorandum (IM) in April 2025.
Ultimately, on June 13, 2025, the same U.S. District Court issued a final judgment, vacating the 2024 final rule in its entirety. This means the rule ceased to have any legal effect or enforceability. Following this judgment, ACF notified agencies of the court's decision in November 2025, confirming that the provisions of the 2024 final rule would not be enforced.
The Rescission Process and Public Commentary
Given the court's decision, ACF initiated a rulemaking process to officially remove the vacated requirements from the CFR. A Notice of Proposed Rulemaking (NPRM) was published on March 6, 2026, proposing the rescission of the 2024 rule's requirements. The public comment period for this NPRM spanned 30 days, concluding on April 6, 2026.
ACF received a total of 1,147 comments. These included a letter from 22 congressional members, comments from 38 advocacy organizations, providers, religious entities, and university institutions, and 1,108 comments from individuals. Notably, no comments were submitted by States, Indian Tribes, or Tribal organizations.
The congressional members opposed the rescission, arguing it would remove protections for a vulnerable population overrepresented in foster care and urged ACF to pursue alternative rulemaking to ensure safe and appropriate placements for all children. Among the organizations, 20 supported the rescission, aligning with ACF's view that removing a vacated rule provides clarity and eliminates uncertainty. These supportive organizations often cited concerns about government overreach, potential harm to children and families, religious liberty, discrimination, and the rights of foster parents. Conversely, 18 organizations opposed the rescission, expressing concern that it would eliminate protections for LGBTQI+ foster youth and encouraging future rulemaking to establish new safeguards.
Individual comments largely mirrored these sentiments. Approximately 1,042 commenters supported the rescission, with many emphasizing the need to remove an unenforceable rule and prevent its potential use as "non-official guidance" in future administrations. Other supportive individual comments cited constitutional concerns, parental rights, and potential discrimination against religious providers. About 105 individuals opposed the rescission, believing it would leave vulnerable children unprotected and advocating for strengthened guidance, expanded training, and improved data collection to address disparities.
ACF analyzed all comments and concluded that the overwhelming support for the rescission, combined with the court's vacatur of the 2024 rule, provided sufficient justification to proceed. The final rule thus removes 45 CFR 1355.22 and the related amendments to Section 1355.34(c)(2)(i), ensuring the regulations accurately reflect current legal standing.
Implications and Future Considerations
The rescission marks a definitive step in addressing the legal challenges that arose from the 2024 "Designated Placement" rule. For state and tribal agencies, this final rule provides regulatory certainty, officially removing requirements that had been legally vacated and were never enforced. This action clarifies that agencies are not federally mandated to create or monitor "Designated Placements" under these specific provisions.
While this rule addresses the legal enforceability of a specific federal mandate, it does not diminish the ongoing broader policy discussions surrounding the well-being and appropriate placement of LGBTQI+ youth in foster care. Advocates for LGBTQI+ youth continue to highlight their disproportionate representation in the foster system and their unique needs. The court's decision focused on the limits of HHS's statutory authority under Titles IV-E and IV-B, rather than on the merits of providing supportive placements for these children. Therefore, debates may continue regarding how federal or state policies can best support all children in foster care while adhering to legal and jurisdictional boundaries. The final rule is classified as a deregulatory action under Executive Order 14192, reflecting its purpose to remove existing regulatory costs and requirements.
