45 C.F.R. § 98.3 Effect on State law.
Title 45 - Public Welfare
(a) Nothing in the Act or this part shall be construed to supersede or modify any provision of a State constitution or State law that prohibits the expenditure of public funds in or by sectarian organizations, except that no provision of a State constitution or State law shall be construed to prohibit the expenditure in or by sectarian institutions of any Federal funds provided under this part. (b) If a State law or constitution would prevent CCDF funds from being expended for the purposes provided in the Act, without limitation, then States shall segregate State and Federal funds.
Title 45: Public Welfare
PART 98—CHILD CARE AND DEVELOPMENT FUND
Subpart A—Goals, Purposes and Definitions
§ 98.3 Effect on State law.

