[Federal Register: January 17, 2001 (Volume 66, Number 11)]
[Rules and Regulations]
[Page 4437-4471]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ja01-18]
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Part VII
Department of Agriculture
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Food and Nutrition Service
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7 CFR Parts 272 and 273
Food Stamp Program; Personal Responsibility Provisions of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996; Final
Rule
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 272 and 273
RIN 0584-AC39
Food Stamp Program: Personal Responsibility Provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996
AGENCY: Food and Nutrition Service, USDA.
ACTION: Final Rule.
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SUMMARY: This rule finalizes the proposed rule of the same name which
was published December 17, 1999. It implements 13 provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA). Upon implementation, this rule will: Prohibit an increase in
food stamp benefits when a household's income is reduced because of
either a penalty imposed under a Federal, State, or local means-tested
public assistance program for failure to perform a required action or
for an act of fraud; allow State agencies to disqualify an individual
from participation in the Food Stamp Program (Program) if the
individual is disqualified from another means-tested program for
failure to perform an action required by that program; specify that
State agencies may not apply a food stamp sanction to Program
households for failure to ensure their minor children attend school, or
if the adults do not have (or are not working toward attaining) a
secondary school diploma or its equivalent; make individuals convicted
of drug-related felonies ineligible for food stamps; make fleeing
felons and probation and parole violators ineligible for food stamps;
require States to provide households' addresses, Social Security
Numbers, or photographs to law enforcement officers to assist them in
locating fugitive felons or probation or parole violators; allow States
to require food stamp recipients to cooperate with child support
agencies as a condition of food stamp eligibility; allow states to
disqualify individuals who are in arrears in court-ordered child
support payments; double the penalties for violating Program
requirements; permanently disqualify individuals convicted of
trafficking in food stamp benefits of $500 or more; make individuals
ineligible for 10 years if they misrepresent their identity or
residence in order to receive multiple Program benefits; and limit the
Program participation of most able-bodied adults without dependents to
three months in a three-year period during times the individual is not
working or participating in a work program.
DATES: Effective Dates: This rule is effective no later than April 2,
2001, except for the amendment to 7 CFR 272.2(d)(1)(xiii) which is
effective August 1, 2001.
Implementation Date: State agencies must implement the provision in
this final rule no later than August 1, 2001.
FOR FURTHER INFORMATION CONTACT: Margaret Werts Batko, Assistant Branch
Chief, Certification Policy Branch, Program Development Division, Food
and Nutrition Service (FNS), USDA, 3101 Park Center Drive, Alexandria,
Virginia, 22302, (703) 305-2516. Her Internet address is:
Margaret.Batko@FNS.USDA.GOV.
Executive Order 12866
This final rule has been determined to be economically significant
and was reviewed by the Office of Management and Budget in conformance
with Executive Order 12866.
SUPPLEMENTARY INFORMATION:
Executive Order 13132
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments. FNS
has considered the impact on State agencies. For the most part, this
rule deals with changes required by law, and implemented by law in
1996. However, the Department has made discretionary changes to ensure
client protections and access to the Program and to simply the
administration of the requirements by the State agencies. These changes
primarily affect food stamp recipients. The effects on State agencies
are moderate. In some instances, the changes result in modest increases
in administrative burdens. However, these changes are legislatively
mandated and we have no discretion to minimize them. This rule is
intended to have preemptive effect on any State law that conflicts with
its provisions or that would otherwise impede its full implementation.
Generally, PRWORA and other federal statutes required many of the
changes made in this rule, and made most of them effective on enactment
and all of them effective prior to the publication of this rule. FNS is
not aware of any case where the discretionary provisions of the rule
would preempt State law.
Prior Consultation With State Officials
Before drafting this rule, we received input from State agencies at
various times. Because the Program is a State-administered, federally
funded program, our regional offices have formal and informal
discussions with State and local officials on an ongoing basis. These
discussions involve implementation and policy issues. This arrangement
allows State agencies to provide feedback that forms the basis for many
discretionary decisions in this and other Program rules. In addition,
FNS officials attend regional, national, and professional conferences
to discuss issues and receive feedback from State officials at all
levels. Lastly, the comments on the proposed rule from State officials
were carefully considered in drafting this final rule. The nature of
the concerns of the State and local officials who commented on the
proposed rule, our position supporting the need to issue this final
rule, and the extent to which the concerns expressed by the State and
local officials have been met are discussed in detail in this preamble.
Executive Order 12372
The Food Stamp Program is listed in the Catalog of Federal Domestic
Assistance under No. 10.551. For the reasons set forth in the final
rule in 7 CFR part 3015, Subpart V and related Notice (48 FR 29115),
this Program is excluded from the scope of Executive Order 12372 which
requires intergovernmental consultation with State and local officials.
Executive Order 12778
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This rule is intended to have preemptive effect
with respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the Dates paragraph of this preamble. Prior to
any judicial challenge to the provisions of this rule or the
application of its provisions, all applicable administrative procedures
must be exhausted.
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Shirley R.
Watkins, Under Secretary, Food, Nutrition, and Consumer Services, has
certified that this rule will not have a significant economic impact on
a substantial number of small entities. State and local welfare
agencies will be the most affected to the extent that they administer
the Program.
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Paperwork Reduction Act
The information collection burden associated with the provisions in
this rule concerning eligibility, certification, and continued
eligibility of food stamp recipients is approved under OMB 0584-0064.
The information collection burden associated with the request for a
waiver under the food stamp time limit in 7 CFR 273.24 is approved
under OMB No. 0584-0479. The information collection burden associated
with provisions in this rule which affect the regulations at 7 CFR
273.16, the Demand Letter for Over Issuance, is approved under OMB
0584-0492. The information collection burden that is associated with
the provisions in this rule which affect the regulations at 7 CFR
272.2, the State Plan of Operations, is approved under OMB 0584-0083.
Unfunded Mandate Reform Act of 1995 (UMRA) Title II of UMRA
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. Under Section 202 of the UMRA, FNS generally must
prepare a written statement, including a cost-benefit analysis, for
proposed and final rules with ``Federal mandates'' that may result in
expenditures to State, local, or tribal governments in the aggregate,
or to the private sector, of $100 million or more in any one year. When
such a statement is needed for a rule, section 205 of the UMRA
generally requires FNS to identify and consider a reasonable number of
regulatory alternatives and adopt the least costly, more cost-effective
or least burdensome alternative that achieves the objectives of the
rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector of $100 million or more in any one
year. This rule is, therefore, not subject to the requirements of
sections 202 and 205 of the UMRA.
Civil Rights Impact Analysis
FNS has reviewed this final rule in accordance with the Department
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and
address any major civil rights impacts the proposed rule might have on
minorities, women, and persons with disabilities. After a careful
review of the rule's intent and provisions, and the characteristics of
food stamp households and individual participants, FNS has determined
that there is no way to soften their effect on any of the protected
classes. FNS has no discretion in implementing many of these changes.
The changes required to be implemented by law have been implemented.
All data available to FNS indicate that protected individuals have
the same opportunity to participate in the Food Stamp Program as non-
protected individuals. FNS specifically prohibits the State and local
government agencies that administer the Program from engaging in
actions that discriminate based on race, color, national origin,
gender, age, disability, marital or family status. Regulations at 7 CFR
272.6 specifically state that ``State agencies shall not discriminate
against any applicant or participant in any aspect of program
administration, including, but not limited to, the certification of
households, the issuance of coupons, the conduct of fair hearings, or
the conduct of any other program service for reasons of age, race,
color, sex, handicap, religious creed, national origin, or political
beliefs. Discrimination in any aspect of program administration is
prohibited by these regulations, the Food Stamp Act of 1977 (the Act),
the Age Discrimination Act of 1975 (Pub. L. 94-135), the Rehabilitation
Act of 1973 (Pub. L. 93-112, section 504), and title VI of the Civil
Rights Act of 1964 (42 U.S.C. 2000d). Enforcement action may be brought
under any applicable Federal law. Title VI complaints shall be
processed in accord with 7 CFR part 15.'' Where State agencies have
options, and they choose to implement a certain provision, they must
implement it in such a way that it complies with the regulations at 7
CFR 272.6.
Regulatory Impact Analysis
Need for Action: On August 22, 1996 the President signed the
PRWORA. This rule implements 13 provisions of the PRWORA. This rule (1)
prohibits an increase in food stamp benefits when households' income is
reduced because of a penalty imposed under a Federal, State, or local
means-tested public assistance program for failure to perform a
required action, (2) prohibits an increase in food stamp benefits when
households' income is reduced because of an act of fraud under a
Federal, State, or local means-tested public assistance program; (3)
allows States to disqualify an individual from the Program if the
individual is disqualified from another means-tested program for
failure to perform an action required by that program; (4) clarifies
that households who are receiving grants under a State's Temporary
Assistance for Needy Families (TANF) Program and who are sanctioned
because their minor children are not attending school, or if the adults
do not have (or are not working toward attaining) a secondary school
diploma or its equivalent, may not be sanctioned under the Program
beyond those sanctions provided for in 7 CFR 273.11(k) and (l); (5)
makes individuals convicted of drug-related felonies ineligible for
food stamps; (6) makes fleeing felons and probation and parole
violators ineligible for food stamps; (7) requires States to provide
households' addresses, Social Security numbers, or photographs to law
enforcement officers to assist them in locating fugitive felons or
probation or parole violators; (8) allows states to require food stamp
recipients to cooperate with child support agencies as a condition of
food stamp eligibility; (9) allows states to disqualify individuals who
are in arrears in court-ordered child support payments; (10) doubles
the penalties for violating Program requirements; (11) permanently
disqualifies individuals convicted of trafficking in food stamp
benefits of $500 or more; (12) makes individuals ineligible for 10
years if they misrepresent their identity or residence in order to
receive multiple food stamp benefits; and (13) limits the food stamp
participation of most able-bodied adults without dependents (ABAWDs) to
three months in a three-year period during times the individual is not
working at least half-time or participating in a work program.
The changes in food stamp requirements made by the provisions in
PRWORA addressed in this rule would reduce Program costs for fiscal
year (FY) 1999-2003 by approximately $1.810 billion. For FY 1999-2003,
the estimated yearly savings are (in millions) $525, $431, $348, $263,
and $243, respectively. The majority of the savings are realized from
Section 824 of PRWORA, time limited benefits for able-bodied adults
without dependents. Smaller savings are realized from the following
provisions: Section 819, comparable disqualifications; Section 822,
cooperation with child support agencies; Section 823, disqualifications
for child support arrears; and Section 829 and 911, no increase in
benefits. The savings from the remaining provisions in the rule are
negligible and, therefore, will not be discussed in this analysis.
Comparable Disqualifications--Section 819--This provision gives
States the option to impose the same disqualification for food stamps
as imposed on a household member for failure to take a required action
under a Federal, State, or local law relating to a means-tested public
assistance program. The rule provides that: (1) The
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program has to be authorized by Federal, State, or local law; (2) that
a Federal means-tested program includes public and general assistance
as defined in 7 CFR 271.2; (3) the provision may be applied selectively
to programs since it is an optional provision; (4) the provision only
applies if the person is disqualified while receiving the other
assistance and food stamps; (5) the provision does not apply to time-
limited benefits, exceeding the family cap, failing to complete the
application process on time or failing to reapply; or to purely
procedural requirements such as submitting a form; (6) only a household
member may be disqualified; (7) the penalty must run concurrently with
the penalty in the other program, and for the duration of the penalty
in the other program, but not to exceed one year without review; (8) A
State must shorten the disqualification period when it becomes aware
that the person is ineligible for means-tested public assistance for
another reason during that time frame; (9) all of the resources and all
but pro rata share of the income of the ineligible member must be
counted in accordance with 7 CFR 273.11(c)(2); (10) the household
rather than the State agency will have to initiate the action of adding
a person back to the household; (11) a disqualification may be imposed
in addition to allotment reductions under section 829 of PRWORA; and
(12) States that elect to implement this provision must include it in
the Plan of Operation.
This provision affects participants to the extent States choose to
implement this provision and to the extent individuals are disqualified
or sanctioned under another Federal means-tested program. We estimate
that 3,000 participants will be disqualified from food stamp benefits
due to this provision in FY 1999. We estimate that the FY 1999 cost
savings from this provision will be $5 million and the five-year cost
savings for FY 1999 through FY 2003 will be $25 million.
As a proxy for the number of individuals disqualified from other
means-tested programs, we used Department of Health and Human Services'
Administration for Children and Families data regarding the average
number of people sanctioned monthly from the JOBS program in May 1994.
More recent data were not available. There were almost 13,000 monthly
first sanctions, 1,876 monthly second sanctions and 375 monthly third
sanctions. First sanctions were assumed to result in instant compliance
and therefore last zero months in duration. Second sanctions were
assumed to have an average duration of three months and third sanctions
were assumed to have an average duration of six months.
The savings estimate was calculated as the sum of the products of
the number of individuals sanctioned, an estimated average food stamp
benefit per person ($73.74) and the duration of the sanction [e.g.
(12,999 cases of first sanctions) times ($73.74 times 12 months for
yearly benefits) times 0 months of sanction; (1,876 cases of second
sanctions) times ($73.74 times 12 months for yearly benefits) times 3
months of sanction; (375 cases of third sanctions) times ($73.74 times
12 months for yearly benefits) times 6 months of sanction)].
Because Section 819 is optional, the estimate was adjusted to
account for the proportion of food stamp households in States choosing
to exercise this provision. State option data were based on the May
1998 FNS report, State Food Stamp Policy Choices Under Welfare Reform:
Findings of 1997 50-State Survey, indicating which States have adopted
the optional provisions of PRWORA as of the end of calendar year 1997.
Thirteen States reported having adopted this optional provision:
Arizona, California, Idaho, Illinois, Kansas, Maine, Michigan,
Mississippi, North Dakota, Ohio, South Dakota, Tennessee and Wyoming.
According to 1998 food stamp quality control data, these thirteen
States account for approximately 30 percent of all food stamp public
assistance households. The savings estimate was, therefore, adjusted to
reflect 30 percent uptake by States. The estimate of the number of
individuals disqualified because of the section 819 provision equals
the total unrounded savings divided by an estimated average food stamp
benefit.
Cooperation with Child Support Agencies--Section 822 of PRWORA--
This provision allows States to require cooperation with child support
agencies as a condition of food stamp eligibility. The provision is
optional and can be waived for the custodial parent for good cause but
not for the non-custodial parent. The rule requires: (1) States to
refer appropriate individuals to the agency funded under IV-D for a
determination of cooperation; (2) State agencies to adopt the IV-A or
IV-D agency's standards for good cause, (3) the disqualification is for
the individual and not the entire household; (4) States that elect to
implement this provision to include it in the Plan of Operation; and
(5) States to count all of the resources and all but pro-rata share of
the income of the disqualified individual.
This provision affects participants to the extent States choose to
implement this provision and to the extent they are a custodial or non-
custodial parent with child support responsibilities and do not
cooperate with child support agencies.
Custodial Parents
Using the fiscal year 2001 budget baseline, we estimate that in FY
1999 approximately 4,000 custodial parents will be disqualified due to
sanctions for noncompliance and 68,000 custodial parents will have
their benefits slightly reduced due to compliance and increased child
support income as a result of this provision. We estimate the FY 1999
cost savings for the custodial parents to be $15 million and the five-
year cost savings for FY 1999 through FY 2003 to be $85 million.
Because food stamp households receiving public assistance are
already mandated to cooperate with child support agencies, the impact
of this provision is expected to be realized among food stamp-only
custodial-parent households. Based on the February 1995 FNS report,
Participation in the Child Support Enforcement Program Among Non-AFDC
Food Stamp Households, food stamp-only custodial households with child
support needs that are not cooperating with the child support agencies
account for roughly 2.8 percent of all participating food stamp
households. According to the report, the response of these custodial
parents to this provision was assumed to fall into three categories:
(1) Those that comply and receive higher child support payments; (2)
those that do not comply and face sanctions, and; (3) those that opt to
leave the Program rather than comply.
First, in the 1995 report, custodial parents choosing to comply
with the provision were found to account for approximately 8.5 percent
of food stamp benefits and were expected to experience a decline in
food stamp benefits of 2.0 percent as a result of higher child support
payments. Savings from this group was calculated as the proportion of
total food stamp benefits contributed to this group (8.5 percent) times
the expected decline of 2.0 percent (0.085 times 0.02 = .00170 or 0.17
percent).
Second, to estimate the cost for households which are sanctioned
for noncompliance, the report indicated that food stamp-only custodial
households accounted for 7.0 percent of all food stamp households, and
that approximately 2.1 percent of such households would choose to be
sanctioned rather than comply with the provision. The total number of
participating households was calculated by dividing a participation
projection
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from the fiscal year 2001 budget baseline by the average household size
from 1998 food stamp quality control data (2.4 persons). The monthly
benefit reduction for those sanctioned and leaving food stamps rather
than comply was estimated to be the difference between the maximum
allotment for a family of four and the maximum allotment for a family
of three (difference =$90). The savings for this group was calculated
as the product of total households, the proportion which are food
stamp-only custodial households (7.0 percent), the proportion choosing
to be sanctioned rather than comply with the provision (2.1 percent),
and the annual value of the sanction (e.g., in FY 1999, 7,276
households times 7 percent times 2.1 percent times $90 times 12
months).
Third, the 1995 report indicated that of food stamp-only custodial
households, 3.8 percent were expected to leave the Program rather than
comply with the provision. The estimate of savings from the group of
custodial parents choosing to leave food stamps rather than comply was
calculated as the product of the number of total food stamp households,
the proportion which are food stamp-only custodial households (7.0
percent), the proportion choosing to leave food stamps rather than
comply (3.8 percent), and the annual value of the household benefit
lost (e.g., in FY 1999, 7,276 households times 7 percent times 3.8
percent times $221 benefit per month times 12 months).
The three group impacts were summed and the estimate was adjusted
pursuant to assumptions regarding the proportion of food stamp
recipients in States choosing to adopt this optional provision--10
percent in FY 1997 and growing to 20 percent by FY 2003. State option
data were based on the May 1998 FNS report, State Food Stamp Policy
Choices Under Welfare Reform: Findings of 1997 50-State Survey. Seven
States reported having adopted this optional provision as of the end of
calendar year 1997: Idaho, Kansas, Maine, Michigan, Mississippi, Ohio
and Wisconsin. According to 1998 food stamp quality control data, these
seven States account for approximately 10 percent of applicable food
stamp households.
The estimate of the number of custodial parents disqualified for
food stamp benefits from this provision (4,000 people) was calculated
as the total unrounded savings ($10.6 million) attributable to the
second and third groups of custodial parents--those continuing to not
cooperate with child support agencies--divided by the annual value of
their sanction ($221 times 12 months).
The estimate of the number of custodial parents receiving reduced
benefits as a result of complying with this provision and receiving
increased child support income (68,000 persons) was calculated as the
difference between the total number of custodial parents affected by
the provision (71,000 persons) and those being disqualified for
noncompliance (4,000 people) rounded to the nearest thousand. The total
number of custodial parents affected was estimated as the total target
population of the provision--2.8 percent of all households according to
the 1995 report--times the projected number of participants from the FY
2001 budget baseline, times the State option phase-in assumptions.
Non-Custodial Parents
Using the fiscal year 2001 budget baseline, we estimate that
approximately 4,000 non-custodial parents will be disqualified by this
provision in FY 1999. We estimate the FY 1999 cost savings for non-
custodial parents to be $5 million and the five-year cost savings for
FY 1999 through FY 2003 to be $25 million.
Estimates of the savings attributable to the non-custodial parents
in this provision are based on information from a 1995 report, Non-
custodial Fathers: Can They Afford to Pay More Child Support, by Elaine
Sorenson at the Urban Institute. Data on non-custodial parents is
extremely limited and this was the best available information. The
number of non-custodial parents not cooperating with child support was
estimated to be more than 78,000 in 1990. This estimate was based on
the reported 5.9 million fathers in 1990 who were not paying support,
adjusted by 75 percent to account for those at low-income levels, times
the proportion estimated to represent non-custodial fathers receiving
food stamps who had no child support order--a proxy for non-cooperation
(1.77 percent which is derived from the 1995 Urban Institute report)
(5.9 million times 0.75 times 0.0177 = 78,323). The estimate of the
number of non-custodial parents not cooperating with their child
support agency was inflated by 1.5 percent annually to account for
growth in the child support system. This inflation factor is consistent
with information from the Department of Health and Human Services on
the child support system. The savings were estimated as the product of
the number of non-custodial parents not cooperating and an estimated
average food stamp benefit per person ($72.29 per month times 88,891
persons times 12 months).
The savings estimate for non-custodial parents was adjusted for the
proportion of households in States choosing to adopt this optional
provision and assumptions regarding the percent of non-cooperating non-
custodial parents States are able to identify and sanction. The State
option assumptions were based on the May 1998 FNS report, State Food
Stamp Policy Choices Under Welfare Reform: Findings of 1997 50-State
Survey. Three States reported having adopted this provision at the end
of calendar year 1997: Maine, Mississippi, and Wisconsin. According to
1998 quality control data, these three States account for roughly 5
percent of all applicable households. Therefore, the savings estimate
in FY 1997 assumes only these States implement this child support
provision, thereby affecting 5 percent of all households that could be
subject to this provision, and further assumes a gradual expansion of
the States selecting this option so that 10 percent of all households
are subject to this provision by FY 2003. The estimate was adjusted
further based on the assumption that, operating at maximum
effectiveness, States would only be able to correctly identify and
sanction 75 percent of applicable offenders.
The estimate of the number of non-custodial parents disqualified
for food stamp benefits from this provision was calculated as the total
unrounded savings from non-custodial parents ($3 million) divided by an
estimated average annual food stamp benefit ($867.48 = $72.29 times 12
months).
Summing together the estimates for both custodial and non-custodial
parents, we estimate that 8,000 people will be disqualified as a result
of these provisions in FY 1999. 68,000 custodial parents will have
benefits reduced due to higher amounts of child support income as a
result of this provision. We estimate the FY 1999 cost savings to be
$20 million and the five-year cost savings for FY 1999 through FY 2003
to be $110 million.
Disqualification for Child Support Arrears--Section 823--This
provision allows States to disqualify individuals for any month during
which they are delinquent in any court-ordered child support payment.
This provision is optional. The rule requires that: (1) The
disqualification apply to the individual and not the entire household;
(2) if the State later discovers that an individual was delinquent in
paying child support, the State shall determine disqualification and
establish a claim for the month's benefits; (3) States that
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elect to implement this provision must include it in the Plan of
Operation; and, (4) the States must count all of the resources and all
but a pro rata share of the income of disqualified individuals.
This provision affects participants to the extent States choose to
implement this provision and to the extent they have court-ordered
child support responsibilities and they are delinquent in their
payments. We estimate that approximately 3,000 persons will be
disqualified as a result of this provision in FY 1999. We estimate the
FY 1999 cost savings to be $5 million and the five-year cost savings
for FY 1999 through FY 2003 to be $25 million.
The estimate of savings for this provision was based on the 1995
report, Non-Custodial Fathers: Can They Afford to Pay More Child
Support, by Elaine Sorenson at the Urban Institute. There were an
estimated 825,000 custodial mothers participating in the child support
system (in IV-D programs) with child support orders not receiving
support in 1990. It was assumed that for every custodial mother with an
order and without support, there was a non-custodial father in arrears.
Estimating that almost 7 percent (the national average of 1 in 14
Americans receiving food stamps) of them were receiving food stamp
benefits, it was calculated that in 1990 there were more than 56,000
non-custodial fathers receiving food stamps who were in arrears for
court-ordered child support. This number was inflated by 1.5 percent
per year to reflect growth in the child support system, consistent with
information from the Department of Health and Human Services. The
estimate of savings for this provision was based on an estimated
average monthly benefit per person ($72.29). The total savings was
calculated as the product of the number of non-custodial fathers in
arrears for child support times the annual benefits they would lose due
to disqualification (64,883 people times $72.29 per month times 12
months).
This product was adjusted for assumptions regarding the proportion
of food stamp households in States choosing to implement this provision
and the State's ability to identify and sanction the appropriate
individuals. The State option assumptions were based on the May 1998
FNS report, State Food Stamp Choices Under Welfare Reform: Findings of
1997 50-State Survey, indicating that three States reported operating
this provision at the end of 1997: Ohio, Oklahoma and Wisconsin.
According to 1998 food stamp quality control data, these three States
account for approximately 5 percent of all applicable households. The
savings estimate was adjusted to reflect that 5 percent of the States
would implement this provision in FY 1997, growing to 10 percent by FY
2003. The estimate was adjusted further based on the assumption that,
operating at maximum effectiveness, States would only be able to
correctly identify and sanction 75 percent of applicable offenders. In
FY 1999, for example, the savings was calculated by taking the product
of the 6 percent State phase-in and the assumption of 75 percent
cooperation and multiplying it by the total savings. The estimate of
the number of individuals disqualified for food stamp benefits from
this provision was calculated as the total unrounded savings ($2.5
million) divided by an estimated average annual food stamp benefit
($867.48).
Able-Bodied Adults without Dependents--Section 824 of PRWORA--This
provision limits the receipt of food stamps for certain able-bodied
adults without dependents (ABAWDs) to 3-months in a 36 month period
unless the individual is either working at least half-time or
participating in an approved work or work training program for at least
20 hours per week. Individuals are exempt from the time limit if they
are under 18 or 50 years or older, medically certified as physically or
mentally unfit for employment, a parent or other household member with
responsibility for a dependent child, or exempt from work registration
under 6(d)(2) of the Act, or pregnant. Individuals can regain
eligibility if they work 80 hours in a 30 day period, and they maintain
eligibility as long as they are satisfying the work requirement. If
individuals later lose their job, they can receive an additional 3
months of food stamps while not working. The additional 3 months must
be consecutive, and begins on the date the individual notifies the
State that he/she is no longer working. The Act allows waivers of the
time limit for groups of individuals living in areas with an
unemployment rate of more than 10 percent or where there are not a
``sufficient number of jobs to provide employment for the
individuals.''
The rule: (1) Allows unpaid and work for in-kind services to count
as ``work;'' (2) allows the State agency to determine good cause for
missing work; (3) does not count partial months toward the 3 month
limit; (4) makes verification of work hours mandatory; (5) makes
participants report changes in work hours that bring the person below
20 hours a week; (6) counts all of the resources and all but a pro rata
share of the income of the ineligible ABAWD as available to the
household; (7) exempts individuals starting on their 50th birthday; (8)
exempts all adults in a household where there is a child under 18; (9)
prorates benefits back to the date the ``cure'' is complete for
regaining eligibility (except in instances where individuals regain
eligibility by doing workfare, at which point the benefits will be
prorated back to the date of application); (10) requires States to
submit unemployment data based on approved Bureau of Labor Statistics
methodologies when applying for a waiver under the 10 percent criteria;
(11) approves a waiver for a time period that bears some relationship
to the documentation provided, but for no more than a year.
This provision affects participants to the extent they are able-
bodied adults without dependents and to the extent they are not
fulfilling the work requirement, exempt or covered by a waiver. The
methodology used in this provision relies on current projections of
participation in the Program and information on food stamp participants
prior to PRWORA who match the ABAWD definition. We estimate that
345,000 individuals are subject to the time limit in FY 1999 due to
this provision. We estimate that the FY 1999 cost savings from this
provision will be $490 million. We estimate that the five-year cost
savings for FY 1999 through FY 2003 will be $1.6 billion.
The caseload estimates were generated by identifying program
participants in the 1996 food stamp quality control data who are likely
to lose eligibility due to ABAWD work requirement provisions (those
between the ages of 18 and 50 who have no dependents, are not disabled,
who do not already have more earnings than that of a 20 hour-per week
job, etc.). The size of this group of participants was then adjusted to
reflect the decline in overall caseload between 1996 and 1999,
resulting in a pool of just under 730,000 program participants who
could have been considered to be subject to the ABAWD provisions in FY
1999. An adjustment was then made to account for the estimated number
of ABAWDS who lived in waived areas and were exempt from the work
requirement, which narrowed this pool down to approximately 523,000. An
additional adjustment of just under 180,000 participants was then taken
to account for persons who were able to retain eligibility through the
Food Stamp Employment and Training (E&T) program. The estimated 345,000
participants who remain represent the final pool of ABAWDS in FY 99 who
are expected to lose their eligibility due to the new work requirement.
The cost
[[Page 4443]]
estimates for 1999 was then derived by first multiplying the 345,000
participants by the average monthly benefit for a single able-bodied
Food Stamp recipient ($118), and then multiplying that amount by 12 to
get the annual cost. Cost estimates for FY 2000-2003 also incorporated
the expected decline in food stamp participation as well as the
increased use of E&T funds to provide qualifying work opportunities.
Subsequent to the enactment of PRWORA, the Balanced Budget Act of
1997 and the Agricultural Research, Extension, and Education Reform Act
of 1998 (AREERA) modified the ABAWD provisions of PRWORA. The Balanced
Budget Act of 1997 increased funding to the Food Stamp Employment and
Training Program to allow states to create qualifying work
opportunities to help ABAWDs retain their Food Stamp eligibility, and
permitted states to exempt up to 15 percent of their unwaived able-
bodied caseload from the time limits. AREERA further modified the level
of funding for Employment and Training Programs for ABAWDs. Taken
together both of these laws will likely mitigate the effects of the
ABAWD provisions of PRWORA. The effects of these more recent laws will
be addressed in future rulemaking.
No increase for Penalties in other Programs--Section 829 and 911--
Section 829 provides that if a household's benefits are reduced under a
Federal, State, or local means-tested public assistance program for
failure to perform a required action, the household may not receive an
increased food stamp allotment as a result of the decrease in income
due to the reduced public assistance payment. This applies to both
intentional and unintentional failures to take a required action. In
addition to not increasing allotments, States may reduce the Food Stamp
allotment by up to 25 percent. The rule requires that: (1) Federal
means-tested public assistance programs include public and general
assistance as defined in 7 CFR 271.2; (2) ``reduced'' means denied,
decreased, suspended, or terminated; (3) the penalty must be applied
while the person is receiving other assistance; (4) it only applies if
the other agency cooperates and it applies to overlapping provisions
but runs concurrently; (5) States can prohibit an increase by several
different means and reduce the allotment by up to 25 percent; (6) the
whole household cannot be denied and the reduction cannot be more than
25 percent even if Title IV-A has a larger reduction; (7) States that
elect to implement this 25 percent reduction must include it in the
Plan of Operation; (8) the penalty will be for the same duration as the
assistance penalty (but the State agency must review for
appropriateness if the penalty is in effect after one year) and States
must end the prohibition when it becomes aware that the person is
ineligible for assistance in the other program for some other reason;
and that the sanction goes with the person when they move within the
State.
Section 911 prohibits an increase in food stamp benefits as the
result of a decrease in Federal, State, or local means-tested
assistance benefits because of fraud. The rule provides that this
provision be treated the same as 829.
Participants will be affected by these provisions to the extent
their benefits are reduced for failure to perform a required action or
for fraud. The effect of the provisions also depends on the cooperation
of other programs in notifying the food stamp agency. We estimate
approximately 6,000 participants will be affected by these provisions.
We estimate the FY 1999 cost saving to be $5 million and the five-year
cost savings for FY 1999 through FY 2003 to be $40 million.
Food stamp savings from these provisions results from two sources:
(1) A mandatory prohibition on increasing food stamp benefits when
individuals receive lower benefits in other means-tested programs for
failure to comply with a required action; and (2) an optional provision
to decrease food stamp benefits by no more than 25 percent.
The estimate for savings from the mandatory prohibition on
increasing benefits was based on the Department of Health and Human
Services' Administration for Children and Families data regarding the
average number of people sanctioned monthly from the JOBS program in
May 1994. This serves as a proxy for the number of individuals that
receive reduced benefits from a means-tested programs for failure to
perform a required action or for fraud, and is the best available data.
(Data on fraud in other programs is unavailable.) There were almost
13,000 monthly first sanctions, 1,876 monthly second sanctions and 375
monthly third sanctions. First sanctions were assumed to result in
instant compliance and therefore last zero months in duration. This
assumption is based on 1994 information from the Department of Health
and Human Service, Administration on Children and Families (ACF). ACF
does not have any more recent information. Second sanctions were
assumed to have an average duration of three months and third sanctions
were assumed to have an average duration of six months. The savings
from the mandatory prohibition on increasing food stamp benefits was
calculated as the sum of the products of the number of individuals
sanctioned, the average AFDC benefit lost times the FSP benefit
reduction rate of 30 percent, and the duration of the sanction. The
average AFDC benefit reduction was taken from the average AFDC benefit
per person reported in the 1996 Green Book and inflated over time.
((1,876 monthly second sanctions times 12 months times the 1999
estimated average AFDC benefit lost which equals $143 times 30 percent
FSP benefit reduction times 3 months) plus (375 monthly third sanctions
times 12 months times the average AFDC benefit lost which equals $143
times 30 percent FSP benefit reduction times 6 months))
The estimate for savings from the State option to decrease food
stamp benefits by no more than 25 percent was based on an estimated
average monthly food stamp benefit per person and the JOBS sanction
data. The savings was calculated as the product of the number of
individuals sanctioned, 25 percent of the average food stamp benefit
per person and the duration of the sanction. This estimate was adjusted
to account for the proportion of food stamp households in States
expected to exercise this optional provision--10 percent in 1997 and
growing to 20 percent by 2003. This was based on information provided
in the May 1998 FNS report, State Food Stamp Policy Choices Under
Welfare Reform: Findings of 1997 50-State Survey. Seven States reported
having adopted this optional provision at the end of 1997: Connecticut,
Iowa, Kentucky, Michigan, Mississippi, Montana and Tennessee. According
to 1998 food stamp quality control data, these seven States account for
approximately 10 percent of all food stamp cash assistance households.
The savings estimates for the mandatory and optional portions of
the provisions were summed. The estimate of the number of individuals
receiving a reduction in food stamp benefits due to these provisions
was calculated as the total unrounded savings divided by an estimated
average annual food stamp benefit. ((1,876 monthly second sanctions
times 12 months times the average AFDC benefit lost which equals $143
times 30 percent Program benefit reduction times 3 months) plus (375
monthly third sanctions times 12 months times the average AFDC benefit
lost which equals $143 times 30 percent Program benefit reduction times
6 months) plus the sum of (1,876 times 12 months times the average FSP
benefit per AFDC household which equals
[[Page 4444]]
$259.96 times .25 reduction times 3 months) and (375 times the average
Program benefit per AFDC household which equals $259.96 times .25
reduction times 6 months))
Background
On August 22, 1996, the President signed the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L.
104-193 (PRWORA). The PRWORA amended the Act by adding new Program
eligibility requirements, increasing existing penalties for failure to
comply with Program rules, and establishing a time limit for Program
participation of three months in three years for able-bodied adults
without children who are not working at least half time.
On December 17, 1999, we published a rule proposing to codify the
personal responsibility provisions of PRWORA. The period for comment on
the proposed rule ended February 17, 2000. We received comments from 28
State agencies, 37 advocate groups, 7 government entities, and 4
individuals. In this final rule, we will not address comments on
provisions that are required by law and on which we have no discretion.
We will not discuss comments that supported our proposals. We will not
discuss comments that concerned merely technical corrections for
inadvertent omissions, we have simply made the corrections. We will not
discuss provisions on which we received no comments, and we will adopt
these provisions as written. For a full understanding of the background
of the provisions in this rule, see the proposed rulemaking, which was
published in the Federal Register at 64 FR, 70920. With the exceptions
noted above, in response to the comments made and for ease of reading
we will discuss each provision and the comments made.
7 CFR 273.11--Action on Households with Special Circumstances
Ban on Increased Benefits for Failure To Take Required Action or
Fraud--7 CFR 273.11(j)
Section 829 of PRWORA amended Section 8(d) of the Act, 7 U.S.C.
2017(d), to provide that, if the benefits of a household are reduced
under a Federal, State, or local law relating to a means-tested public
assistance program for the failure of a person to perform an action
required under the law or program, then the household may not receive
an increased food stamp allotment as the result of that decrease for
the duration of the reduction. In addition, the State agency may reduce
the household's food stamp allotment by not more than 25 percent. This
provision applies when the act leading to the decrease in benefits was
intentional or unintentional. If the reduction is the result of a
failure to perform an action required under part A of title IV of the
Social Security Act, 42 U.S.C. 601, et seq. (TANF), the State agency
may use the rules and procedures that apply under part A of title IV to
reduce the food stamp allotment.
Section 911 of PRWORA provides that if an individual's benefits
under a Federal, State, or local law relating to a means-tested welfare
or public assistance program are reduced because of an act of fraud by
the individual under the law or program, the individual may not, for
the duration of the reduction, receive increased food stamp benefits as
a result of a decrease in income attributable to such reduction. Since
cases of fraud generally involve a failure to take a required action in
another program, we proposed to treat sections 829 and 911 similarly.
We received no comments on this proposal. Therefore, in this rule we
continue to treat sections 829 and 911 similarly in 7 CFR 273.11(j).
We proposed to modify 7 CFR 273.11(k) to provide that a ``means-
tested public assistance program'' for purposes of the restriction
imposed by Section 829 of PRWORA would include any public or assisted
housing under Title I of the United States Housing Act of 1937, 42
U.S.C. 1437 et seq., any State program funded under part A of Title IV
of the Social Security Act, and any program for the aged, blind, or
disabled under Titles I, X, XIV, or XVI of the Social Security Act, and
State and local general assistance as defined in 7 CFR 271.2. Title XIX
of the Social Security Act was not included because Medicaid benefits
are not counted as income for food stamp purposes. A final rule
published November 21, 2000, redesignated paragraph (k) as paragraph
(j). Therefore in this final, the paragraph concerning no increase in
benefits will be referred to as paragraph (j). All subsequent
paragraphs in 273.11 will be redesignated accordingly.
All but one of the comments we received opposed the definition of
means-tested public assistance program. Most of the commenters opposed
the inclusion of any public or assisted housing under Title I of the
United States Housing Act of 1937. Commenters pointed out that
including housing in this definition is administratively burdensome and
error prone. In addition, as with Medicaid, we have never counted
housing as income, and therefore, we should not include it in this
definition. Finally, State agencies would not be aware if a reduction
in housing was caused by a failure to comply with that program.
Several commenters opposed the inclusion of Supplemental Security
Income (SSI) in the definition of ``means-tested public assistance
program.'' One commenter pointed out that historically it has been
difficult to verify with the Social Security Agency (SSA) whether or
not a person's SSI overpayment was the direct result of non-
cooperation. Another commenter said that the SSA is not able to provide
State agencies with this information because SSA considers all
overpayments non-cooperation even if agency caused. For example, if the
client reports a change, but the SSA does not act on the change timely
or makes a computational error, the SSA would consider this non-
cooperation.
Many commenters suggested that we restrict the definition of
``means-tested public assistance program'' to the current definitions
of public assistance and general assistance found in 7 CFR 271.2. Some
commenters suggested that we define ``means-tested public assistance
programs'' as TANF only. One commenter suggested that we restrict the
definition of ``means-tested public assistance program'' to TANF only,
but allow State agencies the option of including general assistance in
the definition.
Based on these comments, we have decided to modify the regulations
at 7 CFR 273.11(j) to restrict the definition of ``means-tested public
assistance programs'' to that of ``public assistance'' and ``general
assistance'' as defined in 7 CFR 271.2. We decided not to adopt the one
commenter's suggestion to modify the regulations further to give State
agencies the option of including ``general assistance'' in the
definition. General assistance is a means-tested State or local
assistance program. We believe that not including it in the definition
of ``means-tested assistance program'' would circumvent the law which
specifically provides that this provision applies to `` * * * State or
local means-tested programs.''
One commenter suggested we clarify that by ``assistance'' we mean
``cash assistance'' and not merely other benefits or services funded by
TANF. While we agree, such non-cash benefits are not counted as income
for food stamp purposes, and a reduction in these services due to
failure to comply would not trigger an increase in food stamp benefits.
Therefore, we do not believe that the regulations at 7 CFR 273.11(j)
need to be clarified in this manner.
[[Page 4445]]
We proposed that the restriction imposed by section 829 of PRWORA
only apply if assistance benefits are reduced for failure of a member
of a household to perform a required action if the person was receiving
assistance at the time the reduction was imposed. In other words, this
provision would only apply to reductions imposed during the period
benefits were originally authorized by the other program and to
reductions imposed at the time of application for continued benefits if
there is no break in participation, but not to reductions imposed at
initial application. The majority of the commenters supported this
proposal. Only three commenters opposed it. They suggested that the ban
on increases apply to applicants of assistance programs as well as
recipients. One commenter suggested that this be a State agency option.
We are maintaining this provision as proposed at 7 CFR 273.11(j).
We proposed that if a reduction in the assistance benefits was in
force at the time the individual applied for food stamps, the State
agency would compute the benefits in a manner that would prevent a
higher food stamp allotment as a result of the failure to take the
required action. The majority of the commenters suggested that the ban
on increases should only apply if the individual was receiving food
stamps at the time he failed to take a required action in the other
program. Several commenters said that the State agency cannot prevent
an increase in food stamps if an individual is not receiving food
stamps at the time he fails to perform a required action in the
assistance program. In addition, several commenters stated that the
State agency should advise individuals of the consequences of non-
compliance in the assistance program before imposing a penalty in the
Program. We agree with these comments. Therefore, we are modifying 7
CFR 273.11(j) to provide that the ban on increasing food stamps will
only apply to individuals who are receiving food stamps at the time of
the failure to perform a required action in a means-tested assistance
program.
We proposed that this provision not apply to situations where
individuals reach a time limit for benefits, have a child that is not
eligible because of a family cap, or fail to comply with purely
procedural requirements such as failure to submit a monthly report or
failure to reapply for assistance. The majority of the commenters
supported these proposals. One commenter opposed the exclusion of
procedural requirements from those that would trigger a sanction
because in many cases procedural requirements are in fact substantive.
Several commenters suggested we clarify in the regulation what we
consider ``procedural'' (which would not trigger a sanction) versus
``substantive'' (which would trigger a sanction). One commenter
suggested we include an explicit definition of what is required for a
public assistance sanction to trigger a disqualification under this
provision. s
Since TANF policies vary substantially from State-to-State, and
sometimes even within States, we are not confident that we could
conclusively resolve this issue with a foolproof definition. However,
based on these comments, we are clarifying the regulations at 7 CFR
273.11(j) to say that this provision does not apply to reaching a time
limit for time-limited benefits, having a child that is not eligible
because of a family cap, failing to reapply or complete the
reapplication process for continued assistance under the other program,
or failure to perform a purely procedural requirement. Further, in this
section, we are providing the State agency with the flexibility to
determine procedural versus substantive requirements within the
following parameters: A procedural requirement, which would not trigger
a food stamp sanction, is a step that an individual must take to
continue receiving benefits in the program such as submitting a monthly
report form or providing verification of circumstances. A substantive
requirement, which would trigger a food stamp sanction, is a behavioral
requirement designed to improve the well being of the recipient family,
such as participating in job search activities or ensuring that
children receive the proper vaccinations.
Several commenters suggested we clarify that the substantive action
must be within the power of the individual in order to trigger a food
stamp sanction. For example, an individual is required to attend
parenting classes in order to continue receiving assistance. The
individual is willing to take the class but the individual is unable to
because the classes are full. We agree with this comment. Therefore, we
are modifying 7 CFR 273.11(j) to provide that failing to perform an
action because the individual is unable to perform, as opposed to
refusing, shall not be considered failure to perform a required action.
One commenter suggested that the person not taking the required
action must be a member of a certified food stamp household in order
for the sanction to be imposed. In some instances, the TANF family unit
and the food stamp household are not one and the same. If an individual
who is not a member of the food stamp household (such as a roomer)
fails to take a required action which precipitates a decrease in the
TANF grant, the commenter believes the food stamp allotment should be
allowed to rise. We agree with the commenter. Therefore, we are
clarifying that in order for this provision to be effective, the
individual must be a member of a food stamp household as defined in
Sec. 273.1, including ineligible household members such as students. If
the individual is a non-household member, such as a roomer, a live-in
attendant, or another individual who shares living quarters with the
household but who does not purchase food and prepare meals together,
this provision would not be effective.
Section 8(d)(1)(A) of the Act, as amended by section 829 of PRWORA,
provides that the household may not receive an increase in food stamp
benefits and section (8)(d)(1)(B) provides that State agencies may
reduce the food stamp allotments by not more than 25 percent. Several
commenters suggested we modify the regulations to provide that any
percentage reduction in benefits should be calculated from the amount
that the household would have received under the regular food stamp
benefit formula, taking into account its actual (reduced) income. This
would insure that the combination of preventing an increase and further
reducing the food stamp allotments would not result in a household
receiving an amount of food stamps that is more than 25 percent less
than the amount the household would receive if the usual food stamp
calculation formula were applied to the family's actual income. We
agree with these commenters. Therefore, we are modifying the proposed
regulations at 7 CFR 273.11(j) accordingly.
Section 829 of the PRWORA also amended section 8(d)(2) of the Act
to provide that if benefits are reduced for a failure of an individual
to perform an action required under a program under Title IV-A of the
Social Security Act (TANF), the State agency may use the TANF rules and
procedures to reduce the food stamp allotments. We interpreted the
reference to use of TANF rules and procedures to apply only to
procedural aspects such as budgeting and combined notices and hearings.
A few commenters pointed out that budgeting procedures, such as use of
prospective or retrospective budgeting, are substantive policies that
could significantly change the scope and severity of the penalties.
Since
[[Page 4446]]
budgeting rules can routinely determine whether someone is eligible in
a month, and what benefits an individual receives, budgeting procedures
should be considered substantive and should not be imported from TANF.
State agencies are currently mandated to use TANF budgeting procedures
when determining eligibility for food stamp households/TANF households.
Current regulations at 7 CFR 273.21(a)(2) provide that State agencies
must ``determine eligibility, either prospectively or retrospectively,
on the same basis that it uses for its (TANF) program, unless it has
been granted a waiver by FNS.'' Based on this, we are retaining the
provision as written.
We proposed that the prohibition on increasing the food stamp
allotment be for the duration of the reduction in the assistance
program. At the same time we proposed that the maximum length of the
food stamp sanction not exceed one year. Several commenters pointed out
that there is a discrepancy between these two provisions. We believe
that the prohibition on increasing benefits must be for the same months
as the decrease in assistance to the extent possible, even if there is
a break in participation. If the penalty in the other program is six
months, then the food stamp sanction must be for the same six months,
to the extent possible. We also believe that the prohibition on
increasing food stamp benefits not be longer than a sanction for an
Intentional Program Violation (IPV), and, therefore, we proposed that
the prohibition not be longer than a year. The majority of the
commenters supported the idea of a time limit on the penalty. Several
suggested a shorter time frame, such as six months. Several suggested
State agencies be allowed to set the time frame as long as it was less
than one year. One commenter suggested the time frame for the sanction
be the same as the food stamp certification period. A few commenters
opposed the one-year limit because it was too short. These commenters
suggested State agencies should be allowed to keep the food stamp
sanction in place as long as the penalty in the other program is in
effect and the assistance program remains open. The majority of the
commenters supported the concept of a time limit. However, there was no
consensus on how long that time limit should be. Our further legal
review of the statutory authority resulted in a modification of the
proposed rule. Therefore, we have provided that the sanction shall not
exceed the sanction period in the other program. If at any time the
State agency can no longer ascertain the amount of the reduction, then
the State agency may terminate the food stamp sanction. If the sanction
is still in effect at the end of one year, the State agency shall
review the case to determine if the sanction continues to be
appropriate. If, for example, the household is not receiving
assistance, it would not be appropriate to continue the sanction.
Sanctions extended beyond one year must be reviewed at least annually
but may be ended by the State agency at any time. In the final rule at
7 CFR 273.11(j) we clarify that the ban on increasing food stamps is
for the duration of the reduction in the assistance program. The State
agencies may determine the length of the food stamp sanction providing
it does not exceed the sanction in the other program, and does not
exceed one year, without review.
We proposed that the State agency be allowed to shorten the
prohibition on increasing benefits to less than one year if the
individual becomes ineligible during the sanction period for some other
reason. A few commenters suggested that State agencies be allowed to
lift the sanction when the individual's case is closed in the other
assistance program. Several commenters suggested that we require the
State agencies to do this. Several commenters said that this would be
administratively burdensome: how would the State agency know that the
household was ineligible for some other reason since this isn't a
reportable change? We agree that the individual should not be
sanctioned when he is no longer eligible for the assistance program or
when his case is closed. We believe the requirement to report a change
in the amount of income will generally capture the instances when an
individual whose assistance grant is reduced then becomes ineligible
for another reason. However, we recognize that there are instances
where food stamp reporting requirements won't capture this information.
Therefore, we are modifying the regulations at 7 CFR 273.11(j) to
provide that the State agency must lift the ban on increasing food
stamp benefits when it becomes aware that the individual is ineligible
during the sanction period for some other reason, or when his case is
closed.
We proposed that if an individual fails to perform a required
action in a State or local assistance program, and the individual moves
within the State, the prohibition on increasing benefits goes with that
person. We proposed that it be terminated if the person is ineligible
for the assistance program for some other reason or if the individual
moves out of State. We proposed that if an individual fails to perform
a required action in a Federal program, and the individual moves,
either interstate or intrastate, the State verify the status and
continue the disqualification if appropriate. The majority of the
commenters opposed tracking penalties, particularly from State-to-State
because it is administratively burdensome and error prone. We agree
with these comments. Therefore, we are removing the provision at 7 CFR
273.11(j) which requires tracking penalties from State-to-State.
However, we believe if an individual moves intrastate, the State agency
should be aware of penalties levied by Federal, State or local public
assistance programs. Therefore, we are retaining the provision which
provides if an individual moves within the State, the prohibition on
increasing benefits shall be applied to the gaining household unless
that person is ineligible for the assistance program for some other
reason.
We proposed to remove the exception from 7 CFR 273.11(j) that the
prohibition on increasing food stamp benefits did not apply in the case
of individuals or households subject to the food stamp work sanction
imposed pursuant to 7 CFR 273.7(g)(2). We believe the law allows the
State agency to disqualify the individual for food stamp purposes and
prohibit an increase in food stamps as the result of the reduction of
assistance. We failed to mention in the preamble of the proposed rule
that the law also permits the State agency to further reduce the food
stamp allotment by up to 25 percent even if there is some overlap.
Several commenters opposed the proposal that the same conduct could
be subject to multiple punishments. They pointed out that the
subsequent penalty could be more severe than an IPV. One commenter
suggested that the law did not authorize State agencies to ``pile on''
penalties, but gave them a choice among penalty systems. This commenter
suggested that where both section 8(d) (no increase in benefits and or
reduction by 25 percent) and section 6(i) (comparable
disqualification), or section 6(d) (disqualification for failure to
comply with TANF work requirements) of the Act apply to the same
conduct, the household should receive the most severe of the penalties
that apply in any given month, not the combined effect for them all,
and the food stamp penalty should take precedence.
We consulted our legal authority and have determined that we do not
have the discretion to limit the penalties the State agency may apply
under sections 8(d) and sections 6(i) of the Act. The law clearly
prohibits State agencies from increasing food stamp allotments and
[[Page 4447]]
gives them the option to further decrease the food stamp allotment by
25 percent. Separate and apart from these provisions, it gives them the
option to disqualify individuals who are disqualified from a means-
tested assistance program. There is no connection between the two
penalties which can be construed as giving us the discretion to limit
them. Therefore, we are not adopting the commenters' suggestions to
limit the penalties by making only the most severe penalty apply.
However, we urge the State agencies to carefully balance desires to
support TANF policies with family food needs when choosing which
optional provisions to apply.
We are retaining our proposal to remove the exception from 7 CFR
273.11(j) that the prohibition on increasing food stamp benefits did
not apply in the case of individuals or households subject to the food
stamp work sanction imposed pursuant to 7 CFR 273.7(g)(2). If an
individual who is exempt from food stamp work registration is
sanctioned under TANF for failing to comply with TANF work
requirements, the individual must be disqualified from the Program. If
we keep the exception in place, individual's food stamp benefits would
rise in response to the decrease in income caused by the TANF sanction.
One of the main thrusts of PRWORA was to help individuals become self
sufficient by encouraging them to work if they are able. One of the
main reasons behind these provisions (section 829 and 819 of PRWORA)
was to support other programs' penalties. Individuals who fail to
comply with a means-tested assistance program for any other reason and
are subsequently disqualified from that program can be disqualified
from the Program and have their food stamp benefits held constant. To
make an exception for individuals who fail to comply with TANF work
requirements is inconsistent with the spirit of the law. Therefore, we
are removing the exception as proposed.
We emphasized in the preamble of the proposed rule that during the
sanction the State agency must act on changes that would affect the
household's benefits which are not related to the assistance violation.
Several commenters pointed out that we left this out of the regulation
language. This was an inadvertent error and we have corrected it in the
final rule.
One commenter suggested that the rule should explicitly state that
if the public assistance program determines that the reduction was not
appropriate, any food stamps that the household was denied under this
provision be restored. We agree that a household should not suffer if
the public assistance program or the State agency administering the
Program later determines that the reduction in the public assistance
grant was not appropriate. At the same time, we cannot support the
household's unduly benefiting. For example, if the public assistance
program restores benefits, then the household would not be entitled to
restored food stamp benefits. However, if the State agency chooses the
option to further reduce the food stamp benefits by up to 25 percent
and it is later determined that the reduction in the public assistance
grant was inappropriate, then the household would be entitled to
restored benefits. Currently, the regulations at 7 CFR 273.17 require
the State agency to restore lost benefits if the loss was caused by an
error by the State agency, an IPV which was reversed or if there is a
statement elsewhere in the regulations specifically stating that the
household is entitled to restoration of lost benefits. Instead of
detailing all of these circumstances in the regulations, we have
decided to modify 7 CFR 237.11(j) to provide that the State agency must
restore lost benefits when necessary if it is later determined that the
reduction in the public assistance program was not appropriate.
We proposed to revise 7 CFR 273.9(b)(5)(i) so that the total amount
of welfare or public assistance, rather than the total amount minus the
repayment amount, is counted as income for food stamps purposes when
the overissuance in the PA program was caused by the household. The
majority of the commenters opposed this proposal. Several commenters
argued that this proposal is administratively complex and error prone.
The State agency would have to contact the other program to determine
if the overpayment was administrative or client caused. Several
commenters argued that we should not assume all overpayments are the
result of a failure to take a required action or even fraud, as many
overpayments are either inadvertent household errors or errors caused
by the program. Several commenters stated that this would result in a
form of double jeopardy--we would count benefits as income in the usual
manner, and again when they are recouped after the overpayment is
found. A few commenters suggested we only count the amount of the
repayment in the case of fraud. In light of these comments, we have
decided not to make the proposed change at 7 CFR 273.9(b)(5)(i).
One commenter pointed out that we require State agencies to
indicate in their State Plan of Operations if they are implementing
optional provisions of this rule. However, we failed to require State
agencies to indicate in their plans if they have chosen to implement
the optional provision to reduce the food stamp allotments by up to 25
percent. This was an inadvertent error. We have modified 7 CFR 272.2
and 273.11(j) accordingly.
Comparable Disqualifications--7 CFR 273.11(k)
Section 819(a) of the PRWORA amended Section 6 of the Act, 7 U.S.C.
2015, to provide that if a disqualification is imposed on a member of a
food stamp household for a failure of the member to perform an action
required under a Federal, State, or local law relating to a means-
tested public assistance program, the State agency may impose the same
disqualification on the member of the household under the Food Stamp
Program. In addition, the State agency may use the rules and procedures
that apply under TANF to impose the same disqualification under the
Food Stamp Program. Finally, after the disqualification period has
expired, the member may apply for food stamp benefits and shall be
treated as a new applicant.
We proposed to add a new section, 7 CFR 273.11(l) to codify this
provision (now Sec. 273.11(k)). Several of our proposals under this
provision paralleled our proposals to implement section 829 and 911 of
PRWORA at 7 CFR 273.11(j). For example, we proposed that neither of
these provisions would apply to individuals who are initially applying
for benefits from a means-tested assistance program. In general, the
comments we received spoke to the parallel provisions. Where the
provisions are similar we have discussed the comments and our rationale
for our decisions in the previous discussion of section 829 and 911 of
PRWORA, or 7 CFR 273.11(j). Therefore, we will not repeat the
discussion here. However, we lay out our proposals and our decisions as
they relate to this particular section. Where the provisions and our
proposals differ, we provide a complete discussion of the provision,
our proposal, the comments we received and our decision.
Parallel Provisions
(1) We proposed at 7 CFR 273.11(l) that the penalty applied only if
an individual was receiving assistance at the time the disqualification
was imposed by the other program and at the time of application for
continued benefits if there was no break in participation. We proposed
that this
[[Page 4448]]
provision would not apply if the person was disqualified upon initially
applying for an assistance program. We are maintaining this provision
as written at 7 CFR 273.11(k).
(2) We proposed at Sec. 273.11(l) that if an individual was
disqualified from an assistance program and the disqualification was
still in effect when he initially applies for food stamps, then the
State agency may disqualify him from food stamps at the initial
application. We have revised this provision at 7 CFR 271.11(k) to
provide that the individual must be receiving food stamps at the time
of the disqualification in the other program in order to be
disqualified from food stamps.
(3) We proposed at 7 CFR 273.11(l) that this provision not apply to
reaching a time limit for time-limited benefits or having a child that
is not eligible because of a family cap. In addition, we proposed that
this provision not apply to purely procedural requirements such as a
failure to submit a monthly report or failure to reapply for
assistance. We are clarifying the regulations at 7 CFR 273.11(k) to
provide that this provision does not apply to: (1) Reaching a time
limit for time-limited benefits, (2) having a child that is not
eligible because of a family cap, (3) failing to reapply or complete
the reapplication process for continued assistance under the other
program, (4) failing to perform an action that the individual is unable
to perform as opposed to refusing to perform, or, (5) failing to
perform a purely procedural requirement. We are providing that the
State agency has the flexibility to determine procedural versus
substantive requirements within the following parameters: (1) A
procedural requirement, which would not trigger a sanction, is a step
that an individual must take to continue receiving benefits in the
program such as submitting a monthly report form or providing
verification of circumstances; and (2) a substantive requirement, which
would trigger a sanction, is a behavioral requirement designed to
improve the well-being of the recipient family, such as participating
in job search activities or ensuring that children receive the proper
vaccinations.
(4) We proposed that the food stamp disqualification period be
limited to the same period of time as the disqualification in the
assistance program, to the extent possible. We also proposed that the
maximum length of the food stamp disqualification in these
circumstances be no more than one year. We are retaining the provision
that the disqualification be concurrent to the extent possible with the
disqualification in the other program. We are also providing that the
State agency may determine the length of the disqualification as long
as it does not exceed the disqualification in the other program. If the
sanction is still in effect at the end of one year, the State agency
shall review the case to determine if the sanction continues to be
appropriate. If, for example, the household is not receiving
assistance, it would not be appropriate to continue the sanction.
Sanctions extended beyond one year must be reviewed at least annually
but may be ended by the State agency at any time.
(5) We proposed at 7 CFR 273.11(l) that the State agency be allowed
to shorten the food stamp disqualification period if the person becomes
ineligible to participate in the other program for some other reason
during that one-year time period. We are modifying the regulations at 7
CFR 273.11(k) to provide that a State agency must lift the food stamp
disqualification when it becomes aware that the individual is
ineligible for assistance for some other reason.
(6) We are modifying 7 CFR 237.11(k) to provide that the State
agency must restore lost benefits when necessary if it is later
determined that the reduction in the public assistance grant was not
appropriate.
Provisions Unique to 7 CFR 273.11(k)
We proposed at 7 CFR 273.11(l) that the assistance program under
which the disqualification was imposed, has to be authorized by
Federal, State or local law, but that the specific disqualification
penalty does not have to be specified in the law. Several commenters
argued that in order for a State to sanction an individual under this
provision, the action, not just the program, should be explicitly
required by law. One commenter argued that the action should be
required under law or formal written policy. We believe that the law
provides that the program not the action must be specified in the law.
Therefore, in the final rule at Sec. 273.11(k) we are retaining the
provision as proposed.
We interpreted the term, ``means-tested public assistance program''
to include any public or assisted housing under Title I of the United
States Housing Act of 1937; any State temporary assistance for needy
families funded under part A of Title IV of the Social Security Act;
and any program for the aged, blind, or disabled under Titles I, X,
XIV, or XVI of the Social Security Act; Medicaid under Title XX of the
Social Security Act; and State and local general assistance as defined
in 7 CFR 271.2. The majority of the commenters opposed this provision
for the same reasons they opposed this definition for Section 829 of
PRWORA. In addition, they opposed the inclusion of Medicaid in this
definition. They suggested that the definition be restricted to the
definition of ``public assistance'' and ``general assistance'' as
defined in the food stamp regulations. Based on these comments, and in
the interest of consistency with section 7 CFR 273.11(j), we have
decided to modify the regulations at 7 CFR 273.11(k) to restrict the
definition of ``means-tested public assistance programs'' to that of
``public assistance'' and ``general assistance'' as defined in 7 CFR
271.2
Since the law makes the comparable disqualification provision a
State option, we proposed to allow State agencies the discretion to
apply this provision to some, but not all, means-tested public
assistance programs. Further, we proposed to allow State agencies to
choose which disqualifications within a specific program it wants to
impose for food stamp purposes. The majority of the comments we
received supported this provision. Only one commenter opposed the
provision that allows the State agency to apply it selectively. Because
the majority of the commenters supported these provisions, and we
believe that allowing State choice would further Program goals, we are
retaining them as written at 7 CFR 273.11(k).
We proposed that for food stamp purposes only the individual can be
disqualified, rather than the whole household. The majority of the
commenters supported this provision. Therefore, we are retaining it as
written.
We proposed that when a household member is disqualified from food
stamp eligibility under section 6(a)(2) of the Act, the State agency
count all of the member's resources and either all or a pro rata share
of the income and deductible expenses as available to the household.
The majority of the comments opposed allowing the State agencies the
option of counting all of the individual's income as available to the
household. They argue that this is too punitive. They contend that if a
State agency chose to count all of the income as available to the
household, it would be imposing the same penalty as for an IPV and that
penalties comparable to IPVs should come at the direction of Congress
as it did in the cases of drug felons and immigrants ineligible under
section 6(f) of the Act. We agree with these comments and, accordingly,
we have decided to modify
[[Page 4449]]
the regulations at 7 CFR 273.11(k) to provide that the State agency
must count all of the resources and all but a pro-rata share of the
income of the disqualified member as available to the household in
accordance with 7 CFR 273.11(c)(2).
School Attendance--7 CFR 273.11(l)
Section 103 of PRWORA amended Part A of Title IV of the Social
Security Act, 42 U.S.C. 601, et seq., to provide for block grants to
States for TANF. The title of Section 404 of the amended Part A of
Title IV is ``Use of Grants.'' Section 404(i) provides that a State to
which a grant is made under section 403 shall not be prohibited from
sanctioning a family that includes an adult who has received assistance
under the Food Stamp Program, if such adult fails to ensure that the
minor dependent children of such adult attend school as required by the
law of the State in which the minor children reside. Section 404(j)
provides that a State to which a grant is made under section 403 shall
not be prohibited from sanctioning a family that includes an adult who
is older than age 20 and younger than age 51 and who has received
assistance under the Program, if such adult does not have, or is not
working toward attaining, a secondary school diploma or its recognized
equivalent unless such adult has been determined in the judgment of
medical, psychiatric, or other appropriate professionals to lack the
requisite capacity to successfully complete a course of study that
would lead to a secondary school diploma or its recognized equivalent.
We interpreted these provisions to pertain to TANF sanctions only.
We proposed that States may not apply a separate food stamp sanction to
households based on sections 404(i) and (j). We included a reference to
these provisions in 7 CFR 273.11, Action on Households with Special
Circumstances. In addition, we proposed that if an individual was
sanctioned under TANF, then the State agency must apply 7 CFR
273.11(j), prohibiting an increase in food stamp benefits as a result
of a reduction in public assistance benefits, and it may apply 7 CFR
273.11(k), regarding comparable disqualifications. We also proposed
that if a State agency elected the optional reduction, then it should
include it in its State Plan of Operation. All of the comments we
received supported our interpretation that these provisions applied to
TANF sanctions only. One commenter stated that our regulations were
unnecessarily long, and that a simple statement that these provisions
do not provide independent authority for food stamp sanctions beyond
any that may apply though sections 6(i) or 8(d) of the Act would be
sufficient. One commenter questioned the necessity to include these
provisions in the State Plan of Operation since they are already
included under 7 CFR 273.11(j) and (k). We agree with both of these
commenters. Therefore, we are combining these two provisions into a
single provision at 7 CFR 273.11(l). We are providing that these
provisions do not provide for a separate food stamp sanction beyond
those that are provided for in 7 CFR 273.11(j) and (k). In addition, we
are removing the requirement at 7 CFR 272.2 that State agencies include
this in their State Plan of Operations. Finally, we are not including
these individuals in the list of non-household members at 7 CFR
273.1(b).
Cooperation with Law-Enforcement Authorities--7 CFR 272.1(c)(1)(vii)
We proposed amending 7 CFR 272.1(c)(1) to implement section 837 of
PRWORA which requires State agencies to disclose certain information
regarding food stamp participants to law enforcement officers. Under
proposed paragraph 7 CFR 272.1(c)(1)(vii), which essentially tracks the
statutory language, a State agency, upon the written request (including
the name of the household member) of a Federal, State, or local law
enforcement officer, would be required to disclose the address, social
security number and, if available, a photograph of any household member
where the member is: (1) Fleeing to avoid prosecution, or custody or
confinement after conviction, for a crime (or attempt to commit a
crime) that, under the law of the place the member is fleeing, is a
felony (or, in the case of New Jersey, a high misdemeanor); or (2) is
violating a condition of probation or parole imposed under Federal or
State law; or (3) has information that is necessary for the officer to
conduct an official duty related to a member of the household who is
fleeing to avoid prosecution or custody for a felony.
One commenter generally opposed the proposed provision based on the
belief that it is unnecessary since State agencies are already free to
cooperate with law enforcement agencies. Another commenter wanted to
know if the State agency should withhold an eligibility determination
if a law enforcement officer is seeking information regarding an
applicant who may be fleeing from prosecution or custody for a felony
or may have violated a condition of probation or parole. Other
commenters requested clarification of some of the provisions in the
proposed rule, specifically regarding information about a household
member who is not a violator him or herself but who may have
information regarding a violator. In response to these comments we are
making the language of the final rule more specific. We are clarifying
that a request from a law enforcement officer for information regarding
a household member who may be fleeing to avoid prosecution or custody
would not be sufficient to withhold an eligibility determination or to
terminate the participation of such an individual. However, as provided
by the amendment made by sections 115 and 821 of PRWORA (discussed
below), documentation that the household member is, in fact, a fleeing
felon, or is violating a condition of probation or parole, would be
sufficient to terminate the eligibility or deny the application of the
member. We are also clarifying that this provision authorizes law
enforcement officers to obtain information regarding household members
who, although not fleeing to avoid prosecution or custody themselves,
have information regarding other members who are, in fact, fleeing
felons. We are taking this opportunity to remind State agencies that
this provision in no way requires them to collect photo IDs as a
condition of eligibility. Though the regulations at 7 CFR 273.2(f)
require State agencies to verify identity, they are very clear that any
document which reasonably establishes the applicant's identity must be
accepted. The State agency may not impose a requirement for a specific
type of document such as a photo ID.
Finally, the rule notes that the State agency shall only disclose
the information as is necessary to comply with a specific written
request, which is authorized by the rule, of the law enforcement
agency.
Verification of Criteria Related to the Commission of Crimes (Drug-
related Felonies, Flight to Avoid Prosecution or Incarceration, and
Violations of Parole or Probation)--7 CFR 273.2(f)(1)(ix)
Under section 115 of PROWRA, an individual convicted (under Federal
or State law) of any offense which is classified as a felony by the law
of the jurisdiction involved and which has as an element the
possession, use, or distribution of a controlled substance (as defined
in section 102(6) of the Controlled Substances Act, 21 U.S.C. 802(6))
is not eligible to participate in the Food Stamp Program unless the
State agency through legislation elects to opt out of the
disqualification provisions of the statute. Under section 6(k) of the
Act, 7 U.S.C. 2015(k) as
[[Page 4450]]
amended by section 821 of PRWORA, individuals who are fleeing to avoid
prosecution, or custody or confinement after conviction, for a crime
classified as a felony under the law of the place from which the
individual is fleeing, or violating a condition of probation or parole
imposed under a Federal or State law are ineligible to participate in
the Program. We proposed amending 7 CFR 273.2(f)(1) to require that
each State agency establish a system or systems to verify the status of
food stamp applicants/recipients to determine if they would be subject
to disqualification under section 115 or section 821 of PRWORA. One
commenter expressed general support of the rule as written. A number of
commenters expressed strong opposition to this proposal indicating that
establishment of a system of verification would result in a significant
burden on affected State agencies. Several State agencies indicated
that since access to existing databases containing criminal records is
generally limited to law enforcement agencies, State agencies would not
be able to utilize such databases to determine whether an applicant
would be subject to disqualification under section 115 or 821, making
verification extremely difficult since there is no current nationwide
database which is accessible to State welfare agencies.
Based on their experience, a number of State agencies expressed the
opinion that a statement on the application form requiring individuals
subject to disqualification based on convictions for drug related
felonies to identify themselves as such would be sufficient to identify
those individuals for the purposes of the Program. In response to these
comments, we are eliminating the requirement that State agencies
establish systems to verify whether an applicant has been convicted of
a drug-related felony. With respect to verification of other criminal
activity such as flight to avoid prosecution or custody, or violation
of a condition of probation or parole, we feel that, based on the
comments, it would be impracticable to mandate the establishment of
State systems to verify such activity. We also believe that in the
overwhelming majority of cases as soon as a household member is
identified by a law enforcement agency as an individual who is fleeing
to avoid prosecution or custody for a felony, or has violated a
condition of parole or probation, that individual would be taken into
custody, and as such, would no longer be a member of a household
eligible to participate in the program. Based on these factors the
final rule will not include a provision mandating the establishment of
systems to verify whether applicants are fleeing to avoid prosecution
or custody, or have violated a condition of probation or parole.
Applicability of SSI Categorical Eligibility to Individuals Subject to
Disqualification Under Section 115 of PRWORA--7 CFR 273.2(j)(2)(vii)
Since publication of the proposed rule, it has come to our
attention that it will be necessary to address the issue of whether
section 115 of PRWORA (disqualification based on a conviction of a
drug-related felony) applies to individuals who are categorically
eligible to participate in the Program based on their eligibility to
participate in the Supplemental Security Income (SSI) Program. Under 7
CFR 273.2(j)(2), households in which all persons receive or are
authorized to receive SSI are considered categorically eligible to
participate in the Program. Under 7 CFR 273.2(j)(2)(vii)), certain
individuals who are statutorily ineligible based on nonfinancial
eligibility criteria shall not be considered as part of an otherwise
categorically eligible household. We believe that individuals who are
ineligible to participate in the Program as the result of the operation
of section 115 of PRWORA are similarly situated since their
ineligibility is the result of a statutory provision unrelated to
financial eligibility. Accordingly, we are amending 7 CFR
273.2(j)(2)(vii) by adding a new subparagraph (D) which specifically
provides that an individual who is ineligible under 7 CFR 273.11(m) by
virtue of a conviction for a drug-related felony shall not be included
in a categorically eligible household. Although 7 CFR 273.2(j) also
confers food stamp categorical eligibility on persons who are
authorized to receive assistance under the TANF Program, it is not
necessary to address the applicability of disqualification under
section 115 of PRWORA to potentially categorically eligible TANF
recipients convicted of drug-related felonies since section 115 of
PRWORA also prohibits individuals convicted of drug-related felonies
from participating in the TANF Program.
Disqualification Based on the Conviction of a Drug-Related Felony--7
CFR 273.11(m) and 273.11(c)(1)
Under Section 115 of PRWORA, an individual convicted (under Federal
or State law) of any offense which is classified as a felony by the law
of the jurisdiction involved and which has as an element the
possession, use, or distribution of a controlled substance (as defined
in section 102(6) of the Controlled Substances Act) is not eligible to
participate in the Program unless the State agency through legislation
elects to opt out of the disqualification provisions of the statute.
Three commenters requested that we clarify the effective date of this
provision. Although we addressed this issue in the implementation
section of the preamble of the proposed rule, we have revised the
language of 7 CFR 273.11(m) in the final rule to expressly provide that
the disqualification provision only applies to convictions for crimes
occurring subsequent to August 22, 1996. Some commenters also expressed
the opinion that counting the resources and income of a person
disqualified based on a drug-related felony conviction was unduly
punitive. We are retaining the provision in the proposed rule since it
is based directly on the statute (section 115(b)(2) of PRWORA) with no
agency discretion. One commenter wanted to know if a conviction for a
drug-related felony occurring during the certification period should be
considered a reportable change. We are not mandating that the
conviction be a reportable change although we anticipate that State
agencies would act to disqualify a household member who is convicted of
a drug-related felony during the certification period if the household
voluntary reports such a change or if it becomes otherwise known to the
State agency. We also believe that in most cases a conviction for a
drug-related felony (as opposed to a misdemeanor) would result in the
incarceration of the household member resulting in a reportable change
based on household composition since the individual convicted and
subsequently incarcerated would no longer be a household member. One
commenter suggested that the regulation provide more detail regarding
the treatment of the disqualified member's income and resources.
Although we feel that the current regulations (including the proposed
changes adding convicted drug felons) at 7 CFR 273.11(c) provide
sufficient detail regarding the treatment of the income and resources
of certain disqualified household members and that an expanded
description of the applicable procedures is unnecessary, we have added
a cross-reference to 7 CFR 273.11(c)(1) at 273.11(m).
For general information, the following 19 States have either opted
out or limited the disqualification time period: Louisiana, Oklahoma,
Illinois, Michigan, Minnesota, Ohio, Wisconsin, New Hampshire, New
York, Vermont,
[[Page 4451]]
New Jersey, North Carolina, Colorado, Iowa, Utah, Hawaii, Nevada,
Oregon and Washington.
7 CFR 273.11(n)--Disqualification of Fleeing Felons and Probation/
Parole Violators
Under section 821 of PRWORA, individuals who are fleeing to avoid
prosecution, or custody or confinement after conviction, for a crime
classified as a felony under the law of the place from which the
individual is fleeing, or violating a condition of probation or parole
imposed under a Federal or State law are ineligible to participate in
the Program. One commenter expressed concern regarding the vagueness of
the term, ``violating a condition of probation or parole''. Although we
agree that the term is somewhat vague we do not believe that it would
be possible to provide a definition with any specificity since
conditions of probation or parole vary greatly among individuals. We
also wish to note that, in most cases once a determination is made that
an individual is violating a condition of probation or parole, the
individual will be taken into custody and would be ineligible to
participate in the Program on the basis that the individual is a
resident of an institution rather than a member of the household. One
commenter suggested that we clarify that once an individual is released
from supervision he or she would no longer be considered in violation
of a condition of probation or parole. We have considered the comment
and have elected not to specifically address the issue in the
regulatory language since we feel that the determination of whether an
individual is considered to be violating a condition of parole or
probation would be a determination of (State or Federal) courts and/or
law enforcement authorities.
One commenter suggested we include a cross reference to 7 CFR
273.11(c)(1) regarding the treatment of income and resources of the
ineligible member. We agree with the commenter and are making the
change at Sec. 273.11(n) to include the cross reference.
Cooperation With Child Support--7 CFR 273.11(o) and (p)
Section 822 of PRWORA amended section 6(l) of the Act (7 U.S.C.
2015(l)) to allow State agencies to disqualify a natural or adoptive
parent or other individual (collectively referred to as ``the
individual'') who is living with and exercising parental control over a
child under the age of 18 if the custodial parent does not cooperate
with the State agency administering the program established under Part
D of Title IV of the Social Security Act (42 U.S.C. 651 et seq.,) (the
State Child Support Agency) in establishing paternity and collecting
support for the child and or the individual without good cause. The
provision requires the Department, in consultation with the Department
of Health and Human Services (DHHS), to develop standards for what will
constitute ``good cause'' for refusal of a custodial parent to
cooperate. Section 822 of PRWORA also amended Section 6 of the Act by
adding subsection (m) to give State agencies the option to disqualify
the non-custodial parent who refuses to cooperate with the State Child
Support Agency in establishing the paternity of a child and providing
support for the child.
One commenter suggested we define ``custodial parent'' versus
``non-custodial parent'' for purposes of these provisions. We agree
that a definition is warranted. Therefore, for purposes of this
provision, a custodial parent is one who lives with his or her child
under the age of 18. A ``non-custodial parent'' is one who does not
live with his or her child who is under the age of 18.
Several commenters suggested that we require the State agencies to
notify applicants of the requirement to cooperate with the State Child
Support Agency as a condition of eligibility. Without knowledge that a
cooperation requirement exists and what will be required to comply, an
individual cannot be expected to comply. We agree with these comments.
Therefore, we are modifying both 7 CFR 273.11 (o) and (p) to require
the State agency provide notification of this requirement in writing to
applicants for initial benefits and for continued benefits.
Custodial Parent--7 CFR 273.11(o)
We proposed that the State agency make the cooperation and the good
cause determination. Several commenters argued that we do not have the
authority to determine if an individual is cooperating with the State
Child Support Agency. A couple of commenters pointed out that the
Social Security Act, as amended by section 5548 of Pub. L. 105-33,
gives the State Child Support Agency the authority to make this
determination. Section 454(29)(A) of the Social Security Act provides
that the State Child Support Agency ``shall make the determination (and
redetermination at appropriate intervals) as to whether an individual
who has applied for or is receiving assistance under * * * the Food
Stamp Program * * * is cooperating in good faith with the State in
establishing the paternity of, or in establishing, modifying or
enforcing a support order for, any child of the individual by providing
the State Child Support agency with the name of, and such other
information as the State Child Support agency may require with respect
to, the non-custodial parent of the child, subject to good cause and
other exceptions * * *.'' Furthermore, section 454(4)(A)(IV) of the
Social Security Act provides that the State Child Support Agency ``* *
* provide services relating to the establishment of paternity or the
establishment, modification, or enforcement of child support
obligations * * * with respect to each child for whom cooperation is
required pursuant to section 2015(l)(1) of title 7 (the Food Stamp
Program) * * *.'' One commenter suggested that our regulations simply
clarify the process by which the State agency would be notified by the
State Child Support Agency that the individual has failed to cooperate.
Section 454(29)(E) provides that the IV-D agency must ``promptly notify
the individuals and the State agency administering * * * the Food Stamp
Program * * * of each determination, and if non-cooperation is
determined, and the basis thereof * * *.''
When PRWORA was enacted in August of 1996, it did not include
changes to the Social Security Act which addressed cooperation with the
State Child Support Agency for food stamp recipients. However, the
Balanced Budget Act of 1997 (Pub. L. 105-33) amended the Social
Security Act to include references to the Food Stamp Program as
detailed above. Subsequently, TANF has published final regulations
implementing section 454 of the Social Security Act which also requires
TANF applicants and recipients to cooperate with the State Child
Support Agency as an eligibility requirement. Based on these
developments, and on comments, we have decided to modify the proposed
regulations at 7 CFR 273.11(o) to provide that if the State Agency
chooses to implement this provision, it must refer the appropriate
individuals to the State Child Support Agency.
The proposed definition of cooperation was based on wording used at
the time by DHHS. We proposed that the individual must cooperate with
the State agency in obtaining support by: (1) Establishing the
paternity of a child born out of wedlock; (2) obtaining support
payments for the child or the individual and the child; and (3)
obtaining any other payments or property due the child or the
individual and the child. We also proposed that the following actions
be included in the definition: (1) Appearing at an office of
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the State or local agency or the child support agency to provide verbal
or written information; (2) appearing as a witness at judicial or other
hearings or proceedings; (3) supplying information in establishing
paternity; and (4) paying to the child support agency any support
payments received from the absent father. We received a number of
comments on our proposed definition. Several commenters suggested that
we refer to the final TANF regulations as an example. Several other
commenters suggested changes to the proposed language defining
cooperation. However, because it is the State Child Support Agency that
makes the cooperation determination, and the definition of cooperation
is embedded in section 454(29) of the Social Security Act, we have
decided that it is not necessary to detail in our regulations the
definition of cooperation beyond what is provided for in section 822 of
PRWORA. Therefore, in this final rule at 7 CFR 273.11(o), we are
deleting our proposed definition of cooperation and replacing it with
an abbreviated version which is based on section 822 of PRWORA and
section 454(29) of the Social Security Act. We provide that the
individual must cooperate with the State Child Support Agency in
establishing paternity, and in establishing, modifying, or enforcing a
support order with respect to the child in accordance with section
454(29) of the Social Security Act.
A few commenters suggested that, if an individual is already
participating in TANF, Medicaid or the State Child Support program, the
individual would already be deemed as cooperating for food stamp
purposes. We believe this would simplify the administration of this
provision. Therefore, we are modifying 7 CFR 273.11(o) to provide
accordingly.
Several commenters suggested that since this is an optional
provision we allow the State agencies to apply this provision
selectively, e.g. to parents but not other individuals. One commenter
suggested we give State agencies the option to limit this provision to
those groups of people who the State agency decides that child support
cooperation requirements are appropriate. One commenter suggested that
we define ``other individual'' as a ``legally responsible adult.'' We
believe that the State agency at a minimum should apply this provision
to natural and adoptive parents. However, we agree that the State
agency should have some latitude to apply this provision to those other
individuals that it deems appropriate, whether or not those individuals
are the ``legally responsible adults.'' Therefore, we are modifying the
regulations at 7 CFR 273.11(o) to provide that if the State agency
chooses to implement this provision it must apply it to all natural and
adoptive parents and, at State option, it may apply it to other
individuals. This information must be included in the State Plan of
Operation as required at 7 CFR 272.2
We proposed to adopt DHHS' provisions concerning good cause
exceptions. We listed the circumstances under which cooperation may be
against the best interests of the child and would not be required.
Again, we received a multitude of comments on this subject. The
commenters either suggested we be less prescriptive and let the State
agencies define good cause, or more prescriptive, but adjust the
wording to encompass more situations which would be considered good
cause. One commenter said we should allow the State agencies to
recognize additional situations in which cooperation would be contrary
to the best interests of the child. A few commenters suggested we have
a less onerous burden of good cause. For example, the emotional or
physical harm should not have to be to the extent that it ``reduces
[the individual's] ability to care for the child adequately'' or that
the ``emotional impairment * * * substantially affects the individual's
functioning.'' Several commenters suggested that we go beyond that
which is in the best interests of the child and take into consideration
the best interests of the parent or other individual. Several
commenters suggested that our good cause exemptions related to domestic
violence are too narrowly drawn and would require the food stamp
agencies to make impossible and dangerous judgments. Several commenters
suggested we allow a good cause exemption based on the TANF exemption
for victims of domestic violence. Finally, several commenters suggested
that the inability to cooperate be considered good cause.
We have been advised by the DHHS that the definition and
determination of good cause is left up to either the State Child
Support Agency or the State TANF program. Based on the comments and our
consultation with DHHS and in the interest of conforming to current
TANF and Medicaid regulations, simplifying the administration of this
provision, and reducing the potential for errors, we have decided to
modify our regulations. Therefore, at 7 CFR 273.11(o) in this final
rule, we provide that if a State agency chooses to implement this
provision, it must, adopt the good cause criteria that its State TANF
program or its State Child Support Agency uses, whichever agency
defines good cause for non-cooperation. In addition, if those good
cause provisions do not take into consideration the threat of domestic
violence, State agencies must consider if cooperating with the State
Child Support Agency would make it more difficult for individuals to
escape domestic violence or unfairly penalize such individuals who are
or have been victimized by such violence, or individuals who are at
risk of further domestic violence. For purposes of this provision, the
term ``domestic violence'' means the individual or child would be
subject to physical acts that result in, or are threatened to result
in, physical injury to the individual; sexual abuse; sexual activity
involving a dependent child; being forced as the caretaker relative of
a dependent child to engage in nonconsensual sexual acts or activities;
threats of, or attempts at physical or sexual abuse; mental abuse; or
neglect or deprivation of medical care.
Finally, we provide that the State agency may define additional
good cause criteria in consultation with the State Child Support
Enforcement Agency or the State TANF Program, whichever agency is
appropriate, and identify the additional criteria in the State plan.
One commenter noted that good cause should address situations where
a parent or caretaker may be willing but unable to pursue child support
enforcement. For example, the parent or caretaker may lack information
about the absent parent. Some custodial parents and other caretakers
may simply not know the identity of a child's father. We agree with
this commenter that there are instances where the individual cannot
provide any information on the father. However, we believe this
situation will be covered by the State Child Support or TANF agency's
definition of good cause. As indicated above, the State agency must
adopt the same criteria as the State Child Support or TANF agency uses
for good cause. In the event that this situation is not covered by the
State Child Support or TANF agency's definition of good cause, we urge
State agencies to adopt the criteria that the inability to provide
information about the father is considered good cause.
One commenter suggested that if the State TANF and Medicaid
programs have already granted good cause then we should also do so for
food stamp purposes. We agree with the commenter, especially since we
are adopting the good cause provisions from
[[Page 4453]]
the State TANF program or the State Child Support Agency. Therefore, we
are modifying the regulations at 7 CFR 273.11(p), to provide that if
the State TANF program or State Child Support Agency has already
established that the individual has good cause for non-cooperation,
then the State agency must accept that for food stamp purposes. If the
State TANF program or the State Child Support Agency determines that
the individual does not have good cause for refusing to cooperate, then
the State agency must determine if the individual meets the good cause
criteria for domestic violence or for any additional criteria the State
agency has identified.
We proposed that the individual provide evidence to corroborate the
claim of good cause. We received several comments regarding our
proposal. All of the comments opposed our requirements as being too
burdensome. A few commenters suggested that individuals be permitted to
substantiate claims with a sworn statement. One commenter suggested we
broaden our definition of good cause so those individuals should not
have to offer additional proof that these circumstances would make the
pursuit of child support against the best interests of the child.
Again we consulted with our counterparts at DHHS. Based on the
comments and our discussions with DHHS, we have decided that the State
agency must adopt the corroboration standards mandated by either the
State Child Support Agency or the State TANF program, whichever agency
in the State defines and determines good cause. We believe this will
simplify administration of this provision and provide consistency with
TANF, Medicaid and the State Child Support Agency. Therefore, we
provide accordingly in this final rule at 7 CFR 273.11(o).
We proposed that if the State agency determines that the custodial
parent has not cooperated without good cause, then that individual (and
not the entire household) would be ineligible to participate in the
Program. We received no comments on this provision and are adopting it
as final at 7 CFR 273.11(o).
We proposed that the disqualification period be over as soon as it
is determined that the individual is cooperating with the State Child
Support Agency. An integral aspect of this requirement is that the
State agency must have procedures in place to re-qualify an individual
once cooperation has been established. We solicited comments on systems
already in use. We received none. Therefore, we are adopting these
provisions as final.
We proposed that the State agency count all of the disqualified
individual's resources, but to give State agencies the option to count
all or all but a pro rata share of the individual's income as available
to the household. The majority of the comments we received on these
provisions opposed allowing the State agencies the option to count all
of the income as available to the household. They believe this is too
punitive and is not in the best interest of the children. We agree.
Therefore, in this final rulemaking we are amending 7 CFR 273.11(c) and
7 CFR 273.11(o) to provide that all but a pro rata share of the
ineligible member's income is counted as available to the household.
Section 6(l) of the Act prohibits the payment of a fee or other
cost for services provided under a Part D of Title IV, the Child
Support Enforcement Program. Subsequently, section 454(6) of the Social
Security Act (42 U.S.C. 654(6)) has been amended to prohibit the State
Child Support Agency from charging application fees for furnishing such
services if cooperation is required from the Food Stamp Program. All
the comments we received on this provision were supportive. We are
adopting this provision as final.
We proposed that if a State agency exercises its option to permit
the disqualification of an individual who refuses to cooperate without
good cause, the option must be included in its State Plan of Operation.
We received no comments on this provision. We are adopting this
provision as final at 7 CFR 272.2.
We proposed that prior to making a final determination of good
cause for refusing to cooperate, the State agency would afford the
State Child Support Agency the opportunity to review and comment on the
findings and the basis of the proposed determination and consider any
recommendation from the State Child Support Agency. We received no
comments on this proposal. However, we have since been advised that it
may not be the State Child Support Agency that defines and determines
good cause. It could be the TANF agency. Accordingly, we are modifying
the language at 7 CFR 273.11(o) to specify that the State agency will
afford the State Child Support Agency or the agency which administers
the program funded under Part A of the Social Security Act the
opportunity to review and comment on the findings.
We proposed that the State agency will not deny, delay or
discontinue assistance pending a determination of good cause for
refusal to cooperate if the applicant or recipient has complied with
the requirements to furnish corroborative evidence and information. We
received several comments suggesting that we clarify that the 30-day
processing standards still apply pending this determination. We agree
with these comments and are, therefore, modifying this provision
accordingly at 7 CFR 273.11(p).
Noncustodial Parent--7 CFR 273.11(p)
Section 822 of PRWORA also amended section 6 of the Act by adding
subsection (m) to give State agencies the option to disqualify the non-
custodial parent who refuses to cooperate with the State Child Support
Agency in establishing the paternity of a child and providing support
for the child.
We proposed to adopt DHHS' definition of cooperation. We also
proposed that the State agency make the determination as to whether or
not the individual is refusing to cooperate with the State Child
Support Agency. We proposed that refusal to cooperate occurs if: (1)
The non-custodial parent refuses to appear for an interview; (2)
refuses to furnish requested documentation; (3) refuses DNA testing; or
(4) fails to make payments to the State Child Support Agency.
One commenter argued that pursuant to section 454(29)(A) of the
Social Security Act (42 U.S.C. 654(29)(A)), as amended by section 5548
of Pub. L. 105-33, the State Child Support Agency ``shall make the
determination (and redetermination at appropriate intervals) as to
whether an individual who has applied or is receiving assistance under
* * * the Food Stamp Program is cooperating in good faith * * *.'' This
same commenter pointed out that this provision conflicts with section
6(l)(2) of the Food Stamp Act, 7 U.S.C. 2015(l)(2), which was added to
the Act by section 822 of PRWORA which provides that the Secretary of
Agriculture must, in consultation with the Secretary of Health and
Human Services, `` * * * develop guidelines on what constitutes a
refusal to cooperate * * * and that the `` * * * State agency shall
develop procedures, using guidelines developed under (the preceding
provision), for determining whether an individual is refusing to
cooperate.'' Based on these two statutory provisions, this same
commenter suggested that the State Child Support Agency make the
determination of non-cooperation and that the food stamp State agency
make the determination as to whether or not the non-cooperation
constitutes a refusal to cooperate. We agree that this clear
delineation of responsibilities better serves the program. Therefore,
we
[[Page 4454]]
are modifying the regulations at 7 CFR 273.11(p) to provide that if the
State agency implements this option, it must refer non-custodial
parents of a child under the age of 18 to the State Child Support
Agency. If the State Child Support Agency determines that the
individual is not cooperating in good faith, it must notify the State
agency of this determination and the basis of its determination. The
State agency must then determine whether this non-cooperation
constitutes a refusal to cooperate.
Based on this modification, we have determined that there is no
need to define in the regulations what constitutes cooperation, only
what constitutes refusal. We received several comments suggesting we
clarify that the non-custodial parent can only be disqualified for
refusing to cooperate, as opposed to failing or being unable to
cooperate. Therefore, we have decided to modify the regulations at 7
CFR 273.11(p) by deleting the definition of cooperation, and replacing
it with a definition of refusal. The State agency must determine that
an individual's non-cooperation with the State Child Support Agency is
a refusal to cooperate if the individual demonstrates an unwillingness
to cooperate as opposed to an inability to cooperate.
We proposed that the individual and not the entire household would
be ineligible to participate in the Program. The comments we received
were supportive. We adopting it as final at 7 CFR 273.11(p).
We proposed that the State agency count all of the disqualified
individual's resources as available to the household, but that it may
choose to count all or all but a pro rata share of the ineligible
member's income as available to the household. The majority of the
comments we received opposed this proposal as being potentially too
punitive to the non-custodial parent's household. They suggested that
we require the State agency to count all but a pro rata share of the
income as available to the household. We agree with these comments. We
are modifying the regulations at 7 CFR 273.11(p) and 7 CFR 273.11(c)(2)
accordingly.
We proposed that the disqualification period be over as soon as it
is determined that the individual is cooperating with the State Child
Support Agency. The State agency must have procedures in place to re-
qualify an individual once cooperation has been established. We
solicited comments on those systems already in use. We received none.
We are adopting this provision as final at 7 CFR 273.11(p).
Section 6(l) of the Act prohibits the payment of a fee or other
cost for services provided under a Part D, Title IV, Child Support
Enforcement Program. In addition, section 654(6) of the Social Security
Act prohibits the State Child Support Agency from charging application
fees for furnishing such services if cooperation is required from the
Food Stamp Program. We proposed to prohibit the charging of such fees
or costs. The comments we received on this provision were supportive.
We are adopting this provision as final at 7 CFR 273.11(p)
Section 6 of the Act, as amended by section 822 of PRWORA also
requires the State agency to provide safeguards to restrict the use of
information collected by the State agency to purposes for which the
information is collected. We proposed the State agency should have
flexibility to establish the specific safeguards. We received no
comments on this provision. Accordingly, we are adopting it as final at
7 CFR 273.11(p).
We proposed that if a State agency opts to disqualify the non-
custodial parent who refuses to cooperate, it include this policy in
its State Plan of Operation. In addition, we proposed to add a new
section 7 CFR 272.2(d)(1)(xiv) to require that the States that elect to
implement this provision include these safeguards in their Plan of
Operation. We received no comments on these proposals. We are adopting
them as final at 273.2(d)(xiii).
Disqualification for Child Support Arrears--7 CFR 273.11(q)
Section 823 of PRWORA amended section 6 of the Act by adding
subsection (n) (7 U.S.C. 2015(n)) to give State agencies the option to
disqualify a member of any household during any month that the
individual is delinquent in any payment due under a court order for the
support of the individual's child. The provision also specifies that if
a court is allowing the individual to delay payment or the individual
is complying with a payment plan approved by a court or the State Child
Support Agency, the individual will not be disqualified. We proposed
that the disqualification apply to the offending individual and not the
entire household.
We proposed that for any month for which it later discovers that
the individual was delinquent and should have been disqualified, the
State agency must establish a claim against the household. We received
several comments on this provision, both for and against this
procedure. Several commenters opposed the provision in general because
it was too punitive and further hampered individuals' ability to become
self-sufficient and productive. Several commenters opposed it because
it was too administratively burdensome. Several commenters suggest that
the State agency be allowed to disqualify the individual the month
after the month it learns that the individual has been delinquent in
child support payments. Others suggested that State agencies be allowed
to establish a grace period of several months. For example, if an
individual has not paid child support after four months, the individual
should be disqualified until the individual starts to comply. One
commenter said that since this is not a reportable change, we have no
authority to set up a claim. Several commenters supported our proposal
as the only way to remain faithful to the statute. The statute provides
that a State agency may disqualify an individual ``* * * during any
month the individual is delinquent in any payment * * * '' and,
therefore, we have no option but to set up a claim. Our analysis has
determined that we have no discretion to permit the State agencies to
implement the provision any other way than the way we proposed. The law
is very clear that the individual is to be disqualified the month that
he is delinquent. Therefore, we are adopting the provision as proposed
at 7 CFR 273.11(q).
A few commenters suggested that we provide a good cause exception
for this provision. One commenter suggested that this provision should
only apply when an individual refuses to pay as opposed to being unable
to pay. The Statute does provide exceptions to this provision: (1) If
the court is allowing the individual to delay payment, or (2) the
individual is complying with a payment plan approved by a court or the
State Child Support Agency. However, since this is a State agency
option, we have decided to give State agencies the option to identify
additional good cause exemptions. We are adopting the provision at 7
CFR 273.11(q) accordingly.
One commenter suggested that this provision only apply to non-
custodial parents. We believe that there are situations in which a
custodial parent is still obligated to pay child support. For example,
the parents are separated, and the non-custodial parent is required to
pay child support. During the separation, the non-custodial parent does
not comply with the support order for one reason or another. Even if
the parents reunite, the former non-custodial parent is still obligated
to pay for the period of time the parents were separated. However, we
also recognize that some State agencies might view this
[[Page 4455]]
as too punitive. Therefore, since this is a State agency option, we
have decided to give State agencies the option to apply this provision
to custodial or non-custodial parents.
We proposed that the State agency consider all of the disqualified
individuals' resources, and at State agency option, either all or all
but a pro rata share of the income as available to the household. All
of the comments we received opposed this proposal as being too punitive
to the household. Many of the commenters argued that if the State
agency chose to count all of the income, the children in the household
would suffer. We agree with these comments. Therefore, in this final
rule at 7 CFR 237.11(q) and 7 CFR 273.11(c)(2) we are providing that if
a State chooses this option, it must count all of the individuals'
resources and all but a pro rata share of the income as available to
the household.
We proposed that the State agency must disqualify the individual
and not the whole household. All the comments we received on this
provision were supportive. We are adopting the provision as proposed at
7 CFR 273.11(q).
7 CFR 273.16--Disqualification for Intentional Program Violation
The current regulations at 7 CFR 273.16 outline the procedures
involved with Intentional Program Violations (IPVs) and IPV-related
disqualifications. The proposed rule contained extensive revisions to
this section of the regulations. These changes included the increased
and additional IPV-related disqualification penalties brought about by
sections 813, 814 and 820 of PRWORA. In addition, the proposed rule
contained a change necessitated by a judicial decision on the
imposition of disqualification periods. Clarification was also being
provided in the proposed rule for a number of issues, including the
definition of an IPV. Lastly, as part of an effort to streamline the
regulatory requirements and to increase State agency flexibility in the
area, the Department proposed to remove prescriptive language and some
requirements in many discretionary areas concerning IPVs and the IPV
disqualification process.
IPV Procedures and Rights of Individuals
With respect to this streamlining effort, the Department received
numerous comments expressing concern about removing much of this
prescriptive language. By doing so, according to the commenters, we are
also omitting a number of protections necessary for ensuring fairness
and due process for individuals facing the possibility of
disqualification or criminal prosecution. The Department has found many
of these arguments compelling. Although the Department believes the
original goals of streamlining and increased State flexibility were
worthy of the effort and may be revisited at some later date, we do not
think such changes should come at the possible expense of the
elimination of individuals' rights. Therefore, unless specifically
addressed below, we are restoring in this final rule the language of
the existing regulations as it pertained to discretionary areas
concerning IPVs and the IPV disqualification process. Included in the
restored language are such provisions as the Administrative
Disqualification Hearing (ADH) and court referral process, notice
requirements, waiver and consent forms, ADH decision format, and local
level hearings. Finally, one commenter expressed concern that a
significant number of innocent people, lacking adequate representation,
are intimidated into signing ADH waivers. The commenter suggests that
individuals may be threatened with criminal prosecution though the
evidence against the individual is far from convincing. The Department
in this preamble would like to clarify its position with respect to the
use of false and/or misleading statements to obtain ADH waivers. While
the Department believes strongly that those found guilty of IPVs should
be removed from participation in the FSP, we would emphasize that the
purpose of the FSP is to provide assistance to those in need. The use
of investigative techniques that may lead to the disqualification of
innocent participants is inconsistent with the intended purpose of the
FSP. To this purpose, the current regulations provide for certain
safeguards against intimidation, including a two-party review to ensure
that evidence against an individual is sufficiently clear to merit an
ADH before an ADH waiver is offered. The ADH waiver should not be used
as a shortcut to the investigative process, but should only be offered
after the investigation has yielded evidence adequate to bring before
an ADH hearing official. Though the Department believes that no
modification of the current regulations is necessary, we would
emphasize our desire that these safeguards be observed.
Administrative Versus Criminal Pursuit--7 CFR 273.16(a)(1) and
(e)(3)(iii)(H)
The Department received two comments in support of and four in
opposition to our clarification that both an administrative
disqualification hearing (ADH) and a criminal prosecution may be
initiated simultaneously for the same offense. One of the opposing
comments suggested that permitting simultaneous proceedings placed an
enormous burden on individuals or their legal representatives to
provide adequate representation in two separate proceedings. As a
matter of fairness and to ensure that each individual has an
appropriate opportunity to provide an adequate defense, the Department
agrees with this argument and is clarifying in this final rule that
both an ADH and a civil or criminal proceeding may be initiated by the
State but not simultaneously. Further, the initiation of a civil or
criminal proceeding is permitted regardless of the outcome of the ADH.
This is not a change from our current policy as reflected in
Sec. 273.16(a) of this final rule.
Definition of an IPV--7 CFR 273.16(c)
The Department proposed updating this definition to provide a
clarification on trafficking as well as to account for the improper
acquisition and use of electronic benefit transfer (EBT) cards. One
commenter suggested that we make the definition more consistent with
section 6(b)(1) of the Act (7 U.S.C. 2035(b)(1)) by replacing
``relating to the use, presentation'' as it appears in the current
regulations with ``for the purpose of using, presenting'' as it appears
in the Act. We agree that this wording better reflects the appropriate
intent and is reflected in Section 273.16(c) in this final rule.
PRWORA Section 813--Doubled Penalties for Violating FSP Rules
The proposed rule contained the provision in section 813 of PRWORA
that increases the penalties twofold for the non-permanent offenses.
Specifically, unless the offense falls under a specific category
requiring a more stringent penalty, section 6(b)(1) of the Act (7
U.S.C. 2015(b)(1)) now requires that an individual be disqualified for
one year for a first finding of IPV, and for two years for a second
finding of IPV. The penalty for a third finding of IPV, permanent
disqualification, remains the same. For convictions involving the
trading of controlled substances for coupons, section 813 of PRWORA
requires that an individual be disqualified for two years for the first
offense.
The comments received by the Department concerning the doubling of
the current disqualification penalties expressed general support. Since
the
[[Page 4456]]
Department is retaining the structure of the current rule, these
changes will be reflected in Sec. 273.16(b) of the final rule.
PRWORA Section 814--Disqualification of Individuals Convicted of
Trafficking $500 or More
The proposed rule included the provision in section 814 of PRWORA
that permanently disqualifies individuals from FSP participation if
they are convicted of a trafficking offense of $500 or more.
The statutory language provides for this penalty to take effect
where there is an actual conviction. The proposed rule extended the
applicability of this penalty to include signed disqualification
consent agreements in connection with deferred adjudications. The
Department received two comments objecting to this extension of
penalties. Specifically, the commenters believed that since there is no
actual determination of guilt, there is no actual conviction as
required by section 6(b) of the amended Act. This is a valid point.
Therefore, the final rule adds language to permanently disqualify
individuals from FSP participation if they are convicted of a
trafficking offense of $500 or more. The proposed language specifying
that this penalty also applies to deferred adjudications does not
appear in the final rule.
This change does not affect our current long-standing policy in 7
CFR 273.16(b)(9) that allows the penalties associated with trading
coupons for firearms, ammunition, explosives or controlled substances
to be imposed using agreements obtained in deferred adjudications. The
basis for the difference between this policy and the new trafficking
penalty is the different respective requirements in the Act. As
discussed above, Section 6(b)(1)(iii)(IV) of the Act (7 U.S.C. 2025
(b)(1)(iii)(IV)) requires a conviction for the new PRWORA trafficking
penalty. Conversely, the existing firearms, ammunition, explosives and
controlled substances penalties requires only a court finding (rather
than a conviction) (7 U.S.C. 2025 (b)(1)). Therefore, the current
policy regarding these long-standing penalties remain unchanged.
A number of comments were received regarding the $500 trafficking
benchmark associated with this penalty. The preamble to the proposed
rule (64 FR 70933) specified that, if the cumulative amount of the
related infractions making up the IPV is greater than $500, then the
individual would be subject to the increased trafficking penalty. Three
of the comments were from State agencies expressing that it would be
difficult to track dollar amounts of individual convictions. This is
not our intention. Aggregating involves the accumulation of dollar
amounts for separate but related trafficking offenses leading up to the
prosecution of a single IPV. All evidence necessary for the prosecution
of a case, regardless of the number of offenses, should include the
dollar amounts for each. It should then be relatively simple to
aggregate these amounts to determine whether the total reaches the $500
benchmark for permanent disqualification. Comparing or aggregating
individual conviction amounts are not necessary (or even appropriate)
in these instances.
The Department also received one comment indicating that the
aggregating of the dollar amounts of individual trafficking offenses to
reach the threshold of $500 is unfair to affected individuals and
households. The commenter suggested that Congress intended to severely
punish the more serious offenders while allowing the lesser offenders
to learn from their mistakes. Therefore, according to the commenter,
individual trafficking incidents should not be combined. While the
Department does not disagree with the suggested intent, we believe that
the trafficking of $500 or more, whether in an single transaction or in
aggregate, is a serious offense and is deserving of the more serious
penalty. Further, permanent disqualification is applicable, as
clarified above, in such cases only when referred to the court and a
conviction is obtained. The final determination will thus belong to the
court. The Department would also like to point out that those
individuals that receive less than $500 per month in food stamp
benefits would have to participate in multiple intentional violations
to reach the $500 benchmark for permanent disqualification. Without
aggregating, these same individuals, though they be chronic serious
offenders, would never be subject to the penalty intended by Congress.
Conversely, without aggregating, the Department would be in the
position of unfairly holding only those that receive $500 or more per
month in food stamp benefits potentially liable for the more severe
penalty. However, even this latter group could avoid ever receiving a
permanent disqualification by intentionally limiting trafficking
transactions to $499 or less. The Department does not believe that this
is what Congress intended and the requirement concerning aggregating
will be retained in the final rule.
PRWORA Section 820--Ten Year Disqualification for Multiple
Participation
The proposed rule included the provision in section 820 of PRWORA
which amended section 6 of the Act by adding paragraph (j), 7 U.S.C.
2015 (j), to provided for a ten year disqualification for making a
fraudulent statement or misrepresentation in order to receive multiple
benefits simultaneously duplicate participation.
Two of the commenters expressed general support for this provision
and for the criteria used in determining duplicate participation. Two
additional commenters suggested that there must be a dollar loss before
duplicate participation is considered to have occurred. The Department
disagrees. The amendment made by section 120 applies by its terms to
fraudulent statements or representations with respect to identity or
place of residence in order to receive multiple benefits
simultaneously. It is not specified that such statements or
representations must be successful in order for the 10-year
disqualification to apply. As long as there is sufficient evidence that
the individual made such statements or representations, it is not
necessary to establish a dollar loss. Unsuccessful attempts to commit
fraud through duplicate participation should be dealt with in the same
manner as successful attempts. To do otherwise would undermine the
integrity of the Program. The final rule at Sec. 273.16(b)(5) remains
unchanged.
Finally, one respondent asked for clarification on whether
continuing to receive benefits in one State after moving to a second
constitutes duplicate participation. If so, which State should pursue
the IPV and establish the claim: the State the individual moved from or
the State the individual moved to. In such cases, the State where the
individual resides should initiate the IPV investigation and establish
the claim.
Applicability of PRWORA Disqualification Penalties
The proposed rule discussed whether these new PRWORA IPV
disqualification penalties should be applied to all ADHs, court
hearings, and similar proceedings held subsequent to enactment of the
law (regardless of when the actual offense occurred) or only to those
cases in which the actual offense occurred subsequent to State agency
implementation of the new legislation. PRWORA set the date of
enactment, August 22, 1996, as the effective date for these provisions
of the
[[Page 4457]]
law. As a result, State agencies were permitted discretion as to
whether the new or increased penalties should apply to offenses that
occurred prior to State agency implementation of the new legislation.
It was, therefore, impractical in the proposed rule for the Department
to introduce standards on an issue for which action has already been
taken.
The Department received two comments stating that offenses
occurring prior to the date of enactment (August 22, 1996) should not
trigger the new penalties. While we understand the commenters'
position, the Department still believes that retroactively imposing new
standards for an action that has already been taken would be an
inappropriate burden to place on States. The final rule remains
unchanged.
Another respondent asked the Department to specify which penalties
apply when the offense occurs prior to August 22, 1996. Again, since
State agencies have already used their discretion in implementing this
provision, this will remain a State option and will not be regulated by
the Department. We would add, however, that we expect that the
penalties a State has decided to use in this circumstance, will be
applied in all such cases.
Two respondents suggested that a second offense for the trafficking
of a controlled substance that occurs after August 22, 1996 (the date
of enactment of PRWORA) when the first offense occurred prior to that
date should not trigger a permanent disqualification. While PRWORA
required the doubling of the first offense for the trafficking of a
controlled substance, the permanent disqualification for a second such
offense existed prior to PRWORA. This provision was part of Section
13942 of the Mickey Leland Childhood Hunger Relief Act (Pub. L. 103-
66). The Department already implemented this non-discretionary
provision in regulations published on August 22, 1995 (60 FR 43513) and
this provision is not changed in this final rule.
Imposition of Disqualification Penalties--7 CFR 273.16(a), (e), (f),
(g) and (h)
In response to a lawsuit (Garcia v. Concannon and Espy, 67 F. 3d
256 (1995)), the Department proposed to require State agencies to
impose a disqualification period for all IPV-related disqualifications
as soon as administratively possible, regardless of eligibility. We
received four comments supporting this change of policy. One commenter,
however, believed that this change was too burdensome to implement
since those that are no longer on the Program now need to have their
disqualification periods tracked. We disagree. This policy adds no new
requirements for State agencies, it actually eliminates one. State
agencies have always been required to impose disqualifications
immediately when the individual being disqualified remained otherwise
eligible to participate in the Program. That will not change with this
policy except that State agencies will no longer need to track pending
disqualifications until the individual reapplies and is found eligible
for benefits. The final rule retains the proposed provision. (See
Sec. 273.16(b)(13).)
ADH Timeframes
The current regulations at 7 CFR 273.16(e)(2) require that the
State agency reach a decision and inform the individual within 90 days
of the date the hearing is scheduled. The proposed rule required that
the individual be notified within 180 days after the date of discovery
of the suspected violation or within 60 days of the date of the
hearing, whichever is sooner.
The Department received 12 comments opposing at least one aspect of
this change. Most commenters thought 180 days was too short a period to
properly develop evidence, build a case, hold the hearing and arrive at
a decision. The commenters suggested retaining the current requirement
of 90 days from the date of the initial notification to the individual.
Given the general disagreement with the Department's proposal and
support for retention of the current standard, we have decided to
retain the existing 90-day standard as required in the current rule.
Local-Level ADHs
The proposed rule made clear our long-standing policy that either
the affected individual or local agency must be given the opportunity
to seek some form of an appellate review of a local-level decision. The
Department received one comment disagreeing with this position. The
commenter believed that State agencies should not be allowed to hold a
second hearing on the same charge when the individual has already been
``cleared.'' We disagree. The Department believes that there are
instances in which a State appeal would be appropriate. We also believe
that State agencies will not abuse this authority and only reserve
these appeals for those instances in which policy is clearly
misapplied. The current language in the existing regulations is
retained without change.
Reporting Requirements--7 CFR 273.16(i)
The Department received one comment seeking clarification whether
the Department's reporting system for disqualifications, DRS, would
accept the new IPV disqualification penalties. DRS will currently
accept a disqualification penalty of any length. The system does
contain edits that alert the user when a non-standard penalty has been
submitted, but this in no way prevents the system from accepting the
disqualification record. The penalty for duplicate participation and
the more severe penalties for trafficking will also trigger an alert.
FNS is currently exploring ways to avoid this latter circumstance.
State agencies should contact their FNS regional DRS Coordinator if
they need further assistance.
7 CFR 273.24--Time Limit for Able-Bodied Adults Without Dependents
(ABAWDs)
Section 824 of PRWORA amended section 6 of the Act by adding a new
subsection (o) 7 U.S.C. 2015(o) that limits the receipt of food stamps
for certain able-bodied adults to three months in a three-year period
unless the individual is working 20 hours per week or participating in
a work program 20 hours per week, or is participating in a workfare
program. Individuals can regain eligibility, and may receive an
additional three months of food stamps while not working in certain
circumstances. Amended section 6(o) includes some exceptions, and
receiving food stamps while exempt does not count towards an
individual's time limit. In recognition that it may be difficult for
individuals to find work in depressed labor markets, the statute
authorizes waivers for individuals in areas in which the unemployment
rate is above ten percent, or where there is a lack of sufficient jobs.
We proposed to codify the time limit for ABAWDs at 7 CFR 273.25.
However, on Friday, September 3, 1999, we published an interim final
rule called The Food Stamp Provisions of the Balanced Budget Act of
1997. This rule implemented the changes to the Food Stamp Act brought
about by the Balanced Budget Act of 1997, which included a provision
allowing the State agencies to exempt from the time limit up to 15
percent of ``covered individuals.'' This provision was codified at 7
CFR 273.24. Because these two provisions are related, we have decided
to merge the two. Therefore in this final rule, we have modified 7 CFR
[[Page 4458]]
273.24 to include the time limit for ABAWDs.
We proposed that for purposes of this provision, 20 hours a week
equals 80 hours a month. The majority of the commenters supported this
proposal. A few commenters suggested that weekly earnings which equal
the minimum wage times 20 should be the equivalent of working 20 hours
a week. The statute refers specifically to ``working 20 hours a week.''
In addition, it provides for an exception if an individual is exempt
under section 6(d)(2) of the Act. One of the exemptions under section
6(d)(2) of the Act is if an individual's weekly earnings equal 30 times
the minimum wage. We believe if Congress intended for 20 times the
minimum wage to count as meeting the work requirement it would have
specified so in the Act and not have referenced the section 6(d)(2)
exemption. Therefore, we are not adopting the commenters' suggestion.
We proposed that for purposes of this provision unpaid work under
standards established by the State agency, and work for in-kind
services count as work. The majority of the commenters supported this
proposal. Only one commenter opposed the provision as not consistent
with the goal of self-sufficiency. Several commenters suggested that
unpaid work be classified as comparable workfare so it would include
worker protections and hour limitations. One commenter elaborated
further saying this suggestion is consistent with congressional intent
that persons working for no compensation other than the opportunity to
receive food stamps should not be required to work more hours than the
minimum wage divided into those benefits. Also, limiting the hours any
individual recipient must volunteer would allow non-profits to create
slots for more recipients. While we agree that individuals working for
no compensation should not have to work more than their food stamp
allotment divided by the minimum wage, we do not have the discretion to
require State agencies to create a comparable workfare program in
accordance with Sec. 273.7(m)(10). We do encourage all State agencies
to create comparable workfare programs in order to restrict the number
of hours an individual has to work in a volunteer position in order not
to be subject to the time limit. However, in those situations where
State agencies do not have enough workfare slots or have not created a
comparable workfare program, we believe individuals should have the
opportunity to fulfill the work requirement by volunteering 20 hours a
week averaged monthly. We also received several comments supporting
this proposal. Therefore, we are adopting the provision as written at 7
CFR 273.24.
We proposed that work include unpaid work under standards
established by the State agency. Several commenters suggested that we
clarify in the regulations that the State agency may only set standards
for verification of work, but they may not set standards for the work
itself. One commenter pointed out that we allow in-kind work to count
without referencing state-set standards and that we should allow the
same for unpaid work. This same commenter stressed that any individual
who can demonstrate that the individual is doing 20 hours of unpaid
work a week, averaged monthly, should be able to receive food stamps.
While we agree, we also believe that the State agency should have some
control over unpaid work. We believe it should be able to require
whatever verification it wants to in order to verify unpaid work.
Therefore, we are modifying the regulation to provide that work means
unpaid work, verified under standards set by the State agency.
Several commenters queried how the State agencies would determine
the hourly value of in-kind work. One commenter suggested the State
agencies be responsible for determining the value of in-kind work. We
would like to reiterate that the State agency has to verify with the
employer the number of hours an individual works, no matter what
currency that individual is being paid in--money, commodities, or
housing. If an individual is receiving housing in exchange for being
the superintendent of the apartment complex, but the individual only
works at that position 10 hours a week, then that individual is not
fulfilling the work requirement, unless the total of all types of work
and participation in work programs meet the 20 hours per week
requirement. We believe we do not have to clarify the regulations any
further.
A few commenters suggested counting all work experience programs as
workfare programs. We do not have the discretion to do this. Workfare
and work experience programs are two distinct programs governed by
different provisions in the Act. Workfare is governed by section 20 of
the Act, 7 U.S.C. 2029. Work experience programs are components of the
Employment and Training Program (E&T Program) governed by section
6(d)(4) of the Act, 7 U.S.C. 2015(d)(4). Section 824 of PRWORA
references both separately. Section 824 added paragraph (o) to section
6 of the Act to provide that the individual must participate and comply
with a work program (which encompasses an E&T Program) 20 hours a week,
or a workfare program under Section 20 of the Act. It does not
reference an hourly requirement in the workfare program since
everyone's workfare obligation is different. Therefore, we are not
adopting the commenters' suggestion.
We proposed that someone who has missed work for good cause as
determined by the State agency will be considered to be satisfying the
work requirement if the absence from work is temporary and the
individual retains the job. The majority of the commenters supported
this provision. A few opposed it as administratively time consuming and
error prone and feared that it would not be uniformly applied. A few
commenters suggested we include in the regulations a non-exhaustive
list of what constitutes good cause. We believe the State agencies are
in a better position to define good cause for purposes of this
provision. However, we also believe that the good cause provision for
ABAWDS fulfilling the work requirements should parallel the good cause
provisions for work registration and E&T Program requirements.
Therefore, we are modifying the regulations at 7 CFR 273.24 to provide
that good cause shall include circumstances beyond the member's
control, such as, but not limited to, illness, illness of another
household member requiring the presence of the member, a household
emergency, or the unavailability of transportation.
A few commenters suggested that we extend this provision to
workfare and employment and training (E&T). As mentioned above, the
regulations at 7 CFR 273.7(i) already provide a good cause clause for
work registration and E&T. We believe that putting it in the
regulations at 7 CFR 273.24 would be redundant. Therefore, we are not
adopting the commenter's suggestion.
We discussed in the preamble to the proposed regulation the merits
of our proposal that a qualifying work program need not be an FNS E&T
Program under 7 CFR 273.7(f). Section 6(o) only requires that a
qualifying work program not be a job search or job search training
program and that it meet standards approved by the Governor of the
State. We proposed that we would not review plans for these programs,
but cautioned State agencies to scrutinize these programs carefully so
that they are not later determined through the quality control process
to not meet the requirements of the statute. We received several
comments voicing concern that this implied our quality control
[[Page 4459]]
reviewers would be reviewing the programs themselves to ensure that
they meet standards set by the Governor. We want to clarify that as
part of our oversight duties we may evaluate, through our management
evaluation process, and not our quality control process, these programs
to ensure that they meet the requirements of the statute.
We proposed that a qualifying work program may contain job search
as a subsidiary component but that the job search activity must be less
than half of the requirement. The majority of the commenters supported
this proposal. One commenter opposed the proposal as being too
restrictive because many E&T programs are made up of job search and job
search training activities. One commenter suggested we modify the
wording so the job search component be ``not more than half,'' that way
the program could be 50 percent work and 50 percent job search. Section
824 of PRWORA specifically provides that participation in an E&T
Program, OTHER THAN a job search or job search training program, would
satisfy the work requirement. We acknowledge that prior to PRWORA the
bulk of food stamp E&T Programs consisted of job search. We also
acknowledge that job search and job search training are valuable
aspects of the these programs. However, in amending Section 6 of the
Act, Congress specifically prohibited E&T job search activities as
fulfilling the work requirement. We decided to allow job search as a
subsidiary component, but do not believe we have the discretion to
allow it as an equal or dominant component. Therefore, we are not
adopting the commenters' suggestions.
We proposed that an individual could combine work and participation
in a work program to meet the 20 hours per week requirement. The
majority of the commenters supported this proposal. One commenter
suggested that we clarify in the regulations that time spent off-site
preparing for E & T activities count towards meeting the requirements.
This is up to the State agency. If the State Agency recognizes such
activities for E & T purposes then the individual is fulfilling the
work requirement.
We proposed that the State agencies have the option of how to
measure and track the 36-month period. They may use a ``fixed'' or
``rolling'' 36-month ``clock.'' The majority of the commenters
supported this proposal. A few commenters suggested that we allow State
agencies to switch back and forth from fixed to rolling at any time.
Several State agencies switched from a rolling period to a fixed period
in December 1999, the end of the first 36-months. Several other State
agencies switched once they had solved their potential ``Y2K'' computer
problems. We believe that switching back and forth frequently could
negatively affect recipients. However, we also believe State agencies
are in the best position to determine how to measure and track this
period of time and should have the flexibility to change tracking
systems if they determine it is necessary. We urge State agencies to
choose which method they are going to use by the implementation date of
this rule. After such time, we provide in this final rule at 7 CFR
273.24 that once the implementation date of this rule has passed, State
agencies must inform us if they switch tracking methods for this time
period.
We proposed that partial months not count towards the 3-month time
limit. The majority of the commenters supported this proposal. One
commenter suggested that we clarify that prorated months will not count
as opposed to not counting the month of application. Another commenter
suggested we clarify the regulations by saying ``. . . after the first
of the month.'' According to the regulations at 7 CFR 237.10, initial
months' benefits are prorated from the date of application. This
implies that, unless an individual applies on the first day of the
issuance cycle, his benefits are prorated and are in effect for only
part of the month, not the full month. While we believe our proposal
that a countable month is one in which an individual receives a full
month's benefit is clear, we will modify it to say that a countable
month is one in which an individual receives a full month's benefit,
and not benefits that are prorated in accordance to 7 CFR
273.10(a)(1)(ii).
We proposed that State agencies may opt to consider benefits
erroneously received as having been received until they are repaid in
full. Several of the commenters opposed the option of tracking benefits
erroneously received as too complex. One commenter suggested that when
determining the amount a client has to pay back on an overissuance,
State agencies can exclude a month that was paid in error if that month
was treated as a countable month for ABAWD purposes. A few commenters
argued that benefits should count no matter what if they have been
posted to an EBT account since the quality control system considers a
case active and benefits received under this situation. One commenter
suggested that State agencies be allowed to consider benefits to have
been received unless or until it files a claim to recover the
overissuance. The intent of this proposal was to give State agencies
different options on how to treat benefits that are received in error.
We believe that if an ABAWD receives benefits erroneously and then pays
them back, that month should not be considered a countable month.
Therefore, we are modifying the regulation to provide that State
agencies must count benefits erroneously received as having been
received for purposes of this provision, until the individual repays
them in full.
We proposed that unreported work would ``erase'' a countable month.
Only one commenter supported this proposal. The majority of the
comments we received opposed it. They said it was complex,
administratively burdensome and not consistent with income reporting
requirements and regulations governing IPVs. One commenter said that it
rewards a recipient who did not comply with the program requirement to
report income. Another commenter argued that current rules state a
household's benefit cannot be restored if the household fails to report
the information and he questions why we should have different standards
for ABAWDs. Another commenter said that as reinforcement to the
reporting requirements the countable months should not be adjusted in
this situation.
In light of these comments, we believe State agencies are in the
best position to determine whether or not they should count an
unreported job as ``work'' for purposes of this provision. We believe
that if a State agency erases a countable month if it later determines
the individual was in fact working in an unreported job, it will have
acted within the law. However, we also realize from the comments that
some State agencies would choose not to do this. Therefore, we are
modifying the provision and giving State agencies the option to count
unreported work as ``work'' for this provision.
We proposed at 7 CFR 273.2(f)(1)(xiv)(A) that State agencies must
verify work hours for individuals subject to the time limit. Several
commenters opposed mandating verification of work hours as overly
prescriptive. One commenter suggested that the State agency only be
required to verify that information if it is questionable. We
understand that State agencies may see this requirement as burdensome.
However, we believe it is necessary in order to ensure the proper
implementation of a basic eligibility factor. Therefore, we are
retaining this proposal as written.
[[Page 4460]]
We proposed at 7 CFR 273.12 that individuals be required to report
if their work hours fell below 20 hours a week, averaged monthly. The
majority of the commenters opposed this provision. They said it was
complicated, burdensome, not family friendly, and in contrast to
reporting simplification measures of the President's July 1999
Initiative. One commenter suggested that individuals be required to
report if their work hours fell below 80 hours a month. We believe that
in order to be faithful to the law, we must require individuals subject
to the time limit to report if their hours fall below 20 hours a week
averaged monthly, or as defined earlier, 80 hours a month. However, we
also recognize that State agencies have different kinds of reporting
systems for different types of households. We do not want to prescribe
the type of reporting system a State agency must assign a potential
ABAWD. However, we want to emphasize that State agencies are required
to adhere to the statutory requirement of time-limited benefits for
individuals who are not fulfilling the work requirement. Therefore, we
are modifying the regulations to provide that individuals are required
to report when their number of hours worked fall below 20 hours a week,
averaged monthly (80 hours a month). Regardless of the type of
reporting system the State agency assigns to potential ABAWDs, the
State agency must adhere to the statutory requirements of time-limited
benefits for individuals who are not fulfilling the work requirement.
We proposed at 7 CFR 273.2(f)(8) that the State agency must verify
the countable months an individual has used in another State if there
is an indication that the individual participated in another State. We
also proposed that the State agency may accept the other State's
assertion as to the number of countable months the individual has used
in the other State. The majority of the comments we received opposed
this provision. Commenters argued that this proposal is complex,
especially since State agencies have different tracking systems for the
36-month clock. A few commenters argued that this would delay
application processing. Several commenters said that until a national
database exists, they should not be required to verify this
information. Some commenters suggested State agencies only verify this
information if questionable. Other commenters indicated that they
should not rely on other States' assertions as to the number of
countable months since in fair hearings and IPV challenges, State
agencies must obtain copies of all relevant supportive materials. To be
faithful to the statute, we believe we must require State agencies to
verify the number of countable months an individual has participated in
another State where there is an indication that the individual has
participated in another State. Because commenters have expressed
concern that this may delay the application, we are reminding State
agencies at 7 CFR 273.2(f) that the normal processing standards of 7
CFR 273.2(g) apply. In addition, and in an attempt to simplify and
hasten this verification process, we have decided to retain in the
regulations the provision that the State may accept another State's
assertion as to the number of countable months an individual has used
in another State. The other State's assertion will be acceptable for
quality control review purposes.
We proposed that all of the resources and all but a pro rata share
of the income of the ineligible ABAWD would be counted as available to
the household. We received wide variety of comments. Several commenters
argued that this proposal was too harsh, especially in light of the
fact the ineligible ABAWD would not have much money or resources
anyway. They suggested that none of the income and none of the
resources be considered as available to the household. Other commenters
said this was too lenient, and that the State agency should count all
of the income and resources as available to the household. Other
commenters suggested that this should be a State agency option. Since
this is a mandatory provision, we do not believe we may give the State
agency an option as to how to treat the income and resources of the
ineligible ABAWD, especially since we are now mandating how the State
agency treat it for individuals ineligible under optional provisions,
such as comparable disqualification, cooperation with child support
agencies, and disqualification for child support arrears. In addition,
we do not believe we should be punitive and require the State agencies
to count all of the income and resources of the individual since he has
failed to meet his responsibilities. Finally, we do not believe we
should require the State agency to ignore the income and resources of
these individuals, given that they have not ``complied'' with a food
stamp eligibility requirement. Therefore, we have decided to retain the
language as written at 7 CFR 273.24 and 7 CFR 273.(11)(c)(2) and
provide that the State agency must count all of the resources and all
but a pro rata share of the income as available to the household. We
believe this is the most equitable treatment.
Exemptions
We proposed in accordance with the section 6(o)(3)(A) of the Act,
that an individual is exempt from this requirement if he is under 18 or
older than 50 years of age. A few commenters suggested we clarify that
an individual becomes exempt on his or her 50th birthday, in accordance
with current policy. We agree with this comment. Therefore we are
clarifying in the regulations that an individual is exempt if he is
under 18 or 50 years or older.
We proposed that an individual is medically certified as physically
or mentally unfit for employment if he provides a statement from a
physician or a licensed or certified psychologist that he is physically
or mentally unfit for employment. Several commenters supported our
proposal of not requiring individuals to meet a more stringent
definition of ``disability.'' However, the majority of the commenters
suggested that we let the eligibility worker certify the individual as
physically or mentally unfit if the unfitness is obvious. A few
commenters argued that it is too difficult and expensive for
individuals to get a statement from a physician or a licensed or
certified psychologist and that we allow a statement from a nurse, a
nurse practitioner, or a designated staff member of the doctor's office
to suffice. Several commenters suggested that we do away with this
provision and rely solely on the regulations at 7 CFR 273.7(b). As
explained in the preamble, we incorporated the ``unfit for employment''
exemption from 7 CFR 273.7(b) into the ABAWD provision except, in
accordance with the statute, we required that for purposes of this
provision, the medical certification be mandatory in all cases.
However, our comment analysis has led us to believe that that this
level of verification is not necessary. Therefore, we have decided to
require a medical certification only in cases where the unfitness is
not evident to the eligibility worker. In addition, we have decided
that a statement from a nurse, nurse practitioner, designated
representative at a doctor's office, social worker, or other medical
personnel the State agency deems appropriate would suffice as a medical
certification. We are modifying the regulations at 7 CFR 273.24
accordingly.
We proposed that an individual is exempt if the individual is a
parent (natural, adoptive, or step) of a household member under the age
of 18, or is living in a household where a member is under the age of
18. The majority of the commenters supported
[[Page 4461]]
this proposal. A few commenters opposed the proposal as defeating the
purpose of welfare reform. A couple of commenters suggested that only
one parent should be exempt, not both, and that all the other adults in
the house should work. A few commenters suggested that we clarify that
even if the individual who is under 18 is not eligible for food stamps,
the individual's presence in the house exempts those adults who are
living in the household. As discussed in the preamble to the proposed
rule, we believe it is administratively burdensome, and in this day and
age virtually impossible, for the State agency to determine who is
``responsible'' for a dependent child. We believe that in many cases,
more than one adult has responsibility for a dependent child.
Therefore, we are retaining the provision as written. However, we are
clarifying in the regulations that even if the household member who is
under 18 is not eligible for food stamps, the other individuals in the
household are still exempt from the time limit.
All the other comments concerning the proposals on the exemptions
were supportive. Therefore, we are retaining them as written.
Regaining Eligibility
We proposed that an individual can regain eligibility if the
individual works 80 hours in a 30-day period. For purposes of this
provision, we proposed that a 30-day period be any 30 consecutive days.
We received only a few comments on this proposal. One commenter opposed
this provision and suggested that the 30-day period immediately precede
application. One commenter suggested we clarify in the regulations that
the 30-day period need not immediately precede application. One
commenter suggested that we modify the language so that an individual
can regain eligibility if the individual works 80 hours in a calendar
month. Our proposal basically mirrored the language of the law which
provides that individuals can regain eligibility if they work 80 hours
during a 30-day period. As discussed in the proposed rule, the statute
does not require that the 30-day period be a calendar month, nor does
it require that the 30-day period immediately precede the date of
application. Therefore, in order to afford flexibility and be faithful
to the statute, we are retaining the proposal as written.
We proposed that the State agency have the option to prorate
benefits from the date the ``cure'' is complete or back to the date of
application for individuals that complete the cure by working or
participating in a work program. One commenter said that it is
burdensome to keep the application open and pending until an applicant
completes the cure. Two commenters suggested that we allow State
agencies to determine eligibility prospectively. For example, if an
individual applies and has a job lined up to start the next week, which
guarantees him the number of hours necessary to regain eligibility, the
State agency should be allowed to determine that he has completed the
cure. We agree with these comments. Therefore, we are modifying the
regulations to provide that the State agency also has the option to
determine eligibility for ABAWD purposes prospectively.
We proposed in the preamble that there be no limit to the number of
times an individual could regain eligibility by working 80 hours in a
30-day period. Two commenters supported this proposal as written. One
of these commenters suggested we codify this in the regulations. One
commenter said that this proposal is too burdensome to track. This same
commenter suggested that once an individual has regained eligibility,
the individual should be eligible at any time he is meeting the work
requirement. The individual should not have to work another 80 hours to
regain eligibility. We recognize the complexity of this provision.
However, we believe that the proper reading of the law requires that an
individual who has lost eligibility must regain it by working 80 hours
in a 30-day period. We agree that this needs to be codified in the
regulations. Therefore, we are modifying the regulations at 7 CFR
273.24 to provide that there is no limit on the number of times an
individual may regain and then maintain eligibility by fulfilling the
work requirement.
We proposed that the window of eligibility for the second three-
month period start on the day the State agency learns that an
individual has lost his job. Several commenters argued that this is
very difficult to administer, especially if someone notifies the State
agency in the middle of the month. These commenters suggested that the
window of eligibility start the month after the month in which the
individual notifies the State agency that he has lost his job. The
regulations already provide for this. According to the regulations at 7
CFR 273.10, benefits are prorated back to the date of application. In
addition, according to the regulations at the newly designated
Sec. 273.24, partial months are not countable months for ABAWD
purposes. The individual would be entitled to benefits back to the date
of application, but the first or partial month would not count for
ABAWD purposes. The individual would still be entitled to three full
consecutive countable months. We believe the regulations at 7 CFR
273.24(e) are clear when they state, ``An individual * * * is eligible
for three consecutive countable months (as defined in paragraph (b) of
this section). * * *), emphasis added. Therefore, we are retaining the
provision as written.
One commenter asked us to clarify if the ``window of opportunity''
opens whether or not an individual applies for benefits and if the
State agency must take action if an individual does not apply for
benefits. We believe in most cases, the State agency will be dealing
with either current recipients or initial applicants. If an individual
is a current food stamp recipient, the individual will notify the State
agency in accordance with reporting requirements that the individual
has lost his job and the window of eligibility starts then. Or, if the
individual is a workfare participant, the State agency will become
aware that the individual is no longer participating. However, if an
individual is not a recipient, the individual probably will not notify
the State agency that he has lost his job until he applies for
benefits. At such time, the State agency must take action on the case.
We believe it is very rare that a State agency is notified by a former
recipient, or becomes aware that a former recipient is no longer
employed, except at the time the former recipient is reapplying for
benefits.
Several commenters disagreed with our proposal that when an
individual ``forfeits'' the opportunity to use the three consecutive
countable months (for example, due to a voluntary quit sanction), the
individual may work another 80 hours in a 30-day period and regain
eligibility again for the three consecutive countable months. These
commenters argued that this is confusing and difficult to administer
since the State agency does not track individuals' ``window of
eligibility.'' One commenter suggested that if an individual is not
eligible for the three consecutive countable months because of a
sanction, the individual may not regain eligibility for another three
month period. One commenter suggested we include language that limits
eligibility for the additional three months to those who lose a job or
placement through no fault of their own, thus eliminating the confusion
that would result from trying to reconcile the relationship between the
voluntary quit sanction period and the additional three months of
eligibility. Another commenter suggested that if the individuals were
ineligible to receive
[[Page 4462]]
benefits during those three months, they may ``bank'' the three months
and then reapply for them once their sanction is over and not have to
work 80 hours in a 30-day period again. We understand the tracking
difficulties this provision implies. At the same time, we cannot ignore
the fact that if an individual is under a sanction during the period
the individual is eligible for benefits the three consecutive months,
the individual does not ``receive'' food stamps. The language of the
law states clearly that an ``individual shall not receive benefits
pursuant to clause (i) for more than a single 3-month period in any 36-
month period.'' In addition, the law provides that if an individual
loses eligibility the individual must regain it by working 80 hours in
a 30-day period. If an individual does not ``receive'' the benefits for
which the individual is eligible due to a sanction, the individual may
regain eligibility and ``receive'' them in the future. We do not
believe we have the discretion to limit this provision as suggested by
the commenters. Therefore, we are retaining the provision as written.
One commenter suggested that we clarify that anyone who has lost
eligibility can requalify, not just individuals who are denied
benefits. We agree with this comment and are modifying the regulations
to provide that an individual denied eligibility under paragraph (b) of
this section, or who does not reapply for benefits because the
individual is not meeting the work requirements of 7 CFR 273.7, can
regain eligibility.
This same commenter suggested we clarify in the regulations that an
individual can re-qualify by becoming exempt. We believe the
regulations are clear that if a person meets one of the exemption
criteria the person is exempt, and does not have to fulfill the work
requirement, including regaining eligibility. However, we have modified
the regulations at 7 CFR 273.24 to provide that an individual can
requalify by becoming exempt.
Waivers
Section 824 of PRWORA amended section 6(o)(4) of the Act to allow
the Secretary, at the request of a State agency, to waive the time
limit for any group of individuals if the Secretary determines that the
area in which the individuals reside has an unemployment rate of over
ten percent, or ``does not have a sufficient number of jobs to provide
employment for the individuals.''
On December 3, 1996, we published guidance which contained basic
procedures for applying for a waiver, identified data sources which
could be used to substantiate requests, and described some approaches
that could support a request based on ``lack of sufficient jobs.''
Because the guidance was extensive and detailed we proposed not to
include it in the regulations. Instead, we proposed a general framework
for waiver requests with the understanding that State agencies could
submit requests with no limit on the supporting documentation, and
every request would be weighed on its own individual merits. We
received several comments suggesting we include all or some of the
guidance in the regulations. Commenters argued that unless the guidance
is incorporated into the regulations, a subsequent administration could
abolish it without public comment. Based on these comments, we have
decided to incorporate some of the more pertinent aspects of the
guidance into the regulation. More specifically, we have modified the
regulations at 7 CFR 273.24(f) to include a non-exhaustive list of the
kinds of information a State agency may submit to support a claim of 10
percent unemployment or ``lack of sufficient jobs.'' For example, a
State agency could provide evidence that an area has 10 percent
unemployment if it has: (1) A recent 12 month average unemployment rate
over 10 percent which indicates a period of sustained high unemployment
rates; (2) a recent three month average unemployment rate over 10
percent which indicates an early signal of a labor market with high
unemployment; or (3) an historical seasonal unemployment rate of over
10 percent. States may submit evidence of a lack of sufficient jobs by
submitting data that the area: (1) Was designated as a Labor Surplus
Area by the Department of Labor's Employment and Training
Administration (ETA); (2) was determined by the Department of Labor's
Unemployment Insurance Service as qualifying for extended unemployment
benefits; (3) has a low and declining employment-to-population ratio;
(4) has a lack of jobs in declining occupations or industries; or (5)
has a 24 month average unemployment rate 20 percent above the national
average for the same period.
To facilitate the waiver process, we have decided to incorporate
into the regulations a paragraph describing three types of waiver
requests we currently approve and will continue to approve based on
clear quantitative standards. Specifically, we provide that we will
approve a waiver if a State agency submits and we confirm (1) data from
the BLS or the BLS cooperating agency that shows an area has a most
recent 12 month average unemployment rate over 10 percent; (2) data
from the BLS or the BLS cooperating agency that an area has a 24 month
average unemployment rate that exceeds the national average by 20
percent for any 24-month period no earlier than the same period the ETA
uses to designate LSAs for the current fiscal year; or (3) evidence
that the area has been designated a Labor Surplus Area by the ETA for
the current fiscal year.
We proposed that States seeking waivers for areas with unemployment
rates higher than 10 percent be required to submit data that relies on
standard Bureau of Labor Statistics (BLS) data or methods. We also
proposed that, to the extent that a ``lack of sufficient jobs'' waiver
is based on labor force and unemployment data, States be required to
submit data that relies on standard BLS data or methods. Several
commenters opposed the mandate that State agencies be restricted to
this data. One commenter pointed out that some states have already
obtained waivers based on adverse employment-to-population ratios using
BLS employment data and Census Bureau population estimates, or academic
studies showing particularly severe employment barriers. We should
weigh these requests on their own merits and not dismiss them out of
hand. Other commenters suggested we consider data from the Bureau of
Indian Affairs.
As discussed in the preamble, established Federal policy requires
Federal executive branch agencies to use the most recent National,
State or local labor force and unemployment data from the BLS for all
program purposes. This policy is contained in Statistical Policy
Directive No. 11, issued by the Office of Federal Statistical Policy
Standards, Office of Management and Budget. This policy ensures the
standardization of collection methods and the accuracy of data used to
administer Federal programs. Therefore, we have no choice but to
require State agencies that are submitting requests based on
unemployment rates to submit the most recent data acquired from BLS or
its cooperating agency in the State. This includes requests under the
``lack of sufficient jobs'' criteria which are using unemployment data
as supporting evidence (e.g. low or declining employment-to-population
ratios, or unemployment 20 percent above the national average for more
than two years). As discussed above, this does not preclude any State
agency from submitting other data to prove ``lack of sufficient jobs''
such as an academic
[[Page 4463]]
study, designation of Labor Surplus Areas status, or data from the
Bureau of Indian Affairs. Therefore, we are retaining the requirement
as written.
We proposed that in areas for which the State certifies that data
from BLS show an unemployment rate above 10 percent, the State may
begin to operate the waiver at the time the waiver request is
submitted, and that we would contact the State if the waiver needed to
be modified. One commenter suggested that, in addition, we allow
immediate implementation of waivers for areas where the Employment and
Training Administration, U.S. Department of Labor (ETA), has designated
such areas as Labor Surplus Areas (LSA), since our current policy
defers to these designations in granting waivers. We agree with this
comment. We are modifying the regulations at 7 CFR 273.24 accordingly.
We proposed that waivers would not be approved for more than one
year. One commenter suggested we clarify that yearlong waivers are
routinely available in order to reassure States that they will not be
subject to more burdensome requirements. We agree with this comment.
Therefore, we are modifying the regulations at 7 CFR 273.24 to provide
that generally, we will approve waivers for one year. However, we
reserve the right to approve waivers for a shorter period if the data
is insufficient, or to approve waivers for longer periods if the
reasons are compelling.
One commenter suggested we allow waivers to be granted
retroactively at the request of a State agency where the data supports
a waiver during the months in question. This commenter pointed out that
it sometimes takes longer than anticipated for a State agency to get
the necessary paperwork together and to get a waiver request cleared
through the proper channels. States that know they have solid data in
support of a waiver should be able to implement or continue
implementing a waiver they are confident will be granted during these
delays and while they await USDA's approval. We recognize that it may
take time for the State agency to draft and clear its request, whether
it be for an initial or extension requests. However, as already
discussed above, States may begin operating a waiver immediately upon
requesting one if it has data that indicates the area has a 12 month
average unemployment rate above 10 percent or has been designated a LSA
by the ETA. For all other requests, in the event a State agency submits
a request to us in an untimely fashion due to circumstances beyond its
control, we reserve the right to make a retroactive approval. However,
we believe these decisions should be made on a case-by-case basis and
not codified in regulations. We encourage State agencies to begin
working on waiver requests (both initial and extensions) and submit
them to us in a timely fashion, taking into consideration the amount of
time it will take to get such a request cleared through the proper
State channels, so that retroactive approval does not become an issue.
We will continue to expedite the approval of these requests, and in
those circumstances which warrant it, we will grant retroactive
approval.
We proposed that State agencies have complete discretion to define
the geographic areas covered by waivers so long as they provide data
for the corresponding area. Most of the comments we received supported
this proposal. We received one comment suggesting that State agencies
may want to define areas that do not correspond with census tracts or
the catchment areas of unemployment compensation offices, making a
mismatch between data and areas. This commenter suggested we clarify in
the regulations that this is permissible. For simplicity sake, we
encourage States to define areas for which corresponding data exists.
We believe this is very easily done, especially since unemployment data
goes down to the census tract level. However, we also realize that
there are situations where data does not correspond to already defined
areas, such as Indian Reservations. In these situations, we suggest
State agencies submit data that corresponds as closely to the area as
possible. We will consider it and decide on a case-by-case basis
whether or not to approve the request. In this final rule we are
modifying the regulation at 7 CFR 273.24 to provide that if
corresponding data does not exist, State agencies should submit data
that corresponds as closely to the area as possible.
Implementation
This rule is effective no later than April 2, 2001, except for the
amendment to 7 CFR 272.2(d)(1)(xiii) which is effective August 1, 2001.
State agencies must implement the provisions in this final rule no
later than August 1, 2001.
List of Subjects
7 CFR Part 272
Alaska, Civil rights, Food stamps, Grant programs-social programs,
Reporting and recordkeeping requirements.
7 CFR Part 273
Administrative practice and procedures, Claims Food stamps, Grant
programs-social programs, Penalties, Reporting and recordkeeping,
Social security, Students.
Accordingly, 7 CFR parts 272 and 273 are amended as follows:
1. The authority citation for parts 272 and 273 continues to read
as follows:
Authority: 7 U.S.C. 2011-2036.
PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES
2. In Sec. 272.1, add paragraph (c)(1)(vii) and paragraph (g)(165)
to read as follows.
Sec. 272.1 General terms and conditions.
* * * * *
(c) * * *
(1) * * *
(vii) Local, State or Federal law enforcement officers, upon
written request, for the purpose of obtaining the address, social
security number, and, if available, photograph of any household member,
if the member is fleeing to avoid prosecution or custody for a crime,
or an attempt to commit a crime, that would be classified as a felony
(or in the State of New Jersey, a high misdemeanor), or is violating a
condition of probation or parole imposed under a Federal or State law.
The State agency shall not require a household to present photographic
identification as a condition of eligibility and must accept any
document that reasonably establishes the applicant's identity. The
State agency shall also provide information regarding a household
member, upon the written request of a law enforcement officer acting in
his or her official capacity, where such member has information
necessary for the apprehension or investigation of another member who
is fleeing to avoid prosecution or custody for a felony, or has
violated a condition of probation or parole. If a law enforcement
officer provides documentation indicating that a household member is
fleeing to avoid prosecution or custody for a felony, or has violated a
condition of probation or parole, the State agency shall terminate the
participation of the member. A request for information absent
documentation would not be sufficient to terminate the member's
participation. The State agency shall disclose only such information as
is necessary to comply with a specific written request of a law
enforcement agency authorized by this paragraph.
* * * * *
(g) * * *
[[Page 4464]]
(165) Amendment No. 387--This rule is effective no later than
{insert the first day of the month 60 days after publication of the
final rule, except for the amendment to 7 CFR 272.2(d)(1)(xiii) which
is effective August 1, 2001. State agencies must implement the
provisions in this final rule no later than August 1, 2001.
3. In Sec. 272.2, new paragraph (d)(1)(xiii) is added to read as
follows:
Sec. 272.2 Plan of operation.
* * * * *
(d) * * *
(1) * * *
(xiii) If the State agency chooses to implement the optional
provisions specified in (273.11(k), (l), (o), (p), and (q) of this
chapter, it must include in the Plan's attachment the options it
selected, the guidelines it will use, and any good cause criteria under
paragraph (o). For Sec. 273.11(k) of this chapter, the State agency
must identify which sanctions in the other programs this provision
applies to. The State agency must also include in the plan a
description of the safeguards it will use to restrict the use of
information it collects in implementing the optional provision
contained in Sec. 273.11(p) of this chapter.
* * * * *
PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
4. In Sec. 273.1, new paragraphs (b)(7)(viii), (b)(7)(ix),
(b)(7)(x), (b)(7)(xi), and (b)(7)(xii) are added to read as follows:
Sec. 273.1 Household concept.
* * * * *
(b) * * *
(7) * * *
(viii) Individuals who are ineligible under Sec. 273.11(m) because
of a drug-related felony conviction.
(ix) At State agency option, individuals who are disqualified in
another assistance program in accordance with Sec. 273.11(k).
(x) Individuals who are fleeing to avoid prosecution or custody for
a crime, or an attempt to commit a crime, or who are violating a
condition of probation or parole who are ineligible under
Sec. 273.11(n).
(xi) Individuals disqualified for failure to cooperate with child
support enforcement agencies in accordance with Sec. 273.11(o) or (p),
or for being delinquent in any court-ordered child support obligation
in accordance with Sec. 273.11(q).
(xii) Persons ineligible under Sec. 273.24, the time limit for
able-bodied adults.
* * * * *
5. In Sec. 273.2:
a. A new paragraph (f)(1)(xiv)is added.
b. Paragraph (f)(8)(i)(C) is redesignated as paragraph
(f)(8)(i)(D), and a new paragraph (f)(8)(i)(C) is added.
c. Paragraph (j)(2)(vii)(D) is added.
The additions read as follows:
Sec. 273.2 Application processing.
* * * * *
(f) * * *
(1) * * *
(xiv) Additional verification for able-bodied adults subject to the
time limit.
(A) Hours worked. For individuals subject to the food stamp time
limit of Sec. 273.24 who are satisfying the work requirement by
working, by combining work and participation in a work program, or by
participating in a work or workfare program that is not operated or
supervised by the State agency, the individuals' work hours shall be
verified.
(B) Countable months in another state. For individuals subject to
the food stamp time limit of Sec. 273.24, the State agency must verify
the number of countable months (as defined in Sec. 273.24(b)(1)) an
individual has used in another State if there is an indication that the
individual participated in that State. The normal processing standards
of 7 CFR 273.2(g) apply. The State agency may accept another State
agency's assertion as to the number of countable months an individual
has used in another State.
* * * * *
(8) * * *
(i) * * *
(C) For individuals subject to the food stamp time limit of
Sec. 273.24 who are satisfying the work requirement by working, by
combining work and participation in a work program, or by participating
in a work program that is not operated or supervised by the State
agency, the individuals' work hours shall be verified.
* * * * *
(j)* * *
(2) * * *
(vii)* * *
(D) Any member of that household is ineligible under Sec. 273.11(m)
by virtue of a conviction for a drug-related felony.
* * * * *
6. In Sec. 273.11:
a. The introductory text of paragraph (c) is revised, and the
heading and introductory text of paragraphs (c)(1) and (c)(2) are
revised.
b. Paragraph (c)(4)(ii) is revised.
c. Paragraph (j) is revised.
d. Paragraphs (k), (l), (m), (n), (o), (p), and (q) are added.
The additions and revisions read as follows:
Sec. 273.11 Action on households with special circumstances.
* * * * *
(c) * * *
During the period of time that a household member cannot
participate for the reasons addressed in this section, the eligibility
and benefit level of any remaining household members shall be
determined in accordance with the procedures outlined in this section.
(1) Intentional Program violation, felony drug conviction, or
fleeing felon disqualifications, and workfare or work requirement
sanctions. The eligibility and benefit level of any remaining household
members of a household containing individuals determined ineligible
because of a disqualification for an intentional Program violation, a
felony drug conviction, their fleeing felon status, noncompliance with
a work requirement of Sec. 273.7, or imposition of a sanction while
they were participating in a household disqualified because of failure
to comply with workfare requirements shall be determined as follows:
* * * * *
(2) SSN disqualifications, comparable disqualifications, child
support disqualifications, and ineligible ABAWDs. The eligibility and
benefit level of any remaining household members of a household
containing individuals determined to be ineligible for refusal to
obtain or provide an SSN, for meeting the time limit for able-bodied
adults without dependents or for being disqualified under paragraphs
(k), (o), (p), or (q) of this section shall be determined as follows:
* * * * *
(4) * * *
(ii) Disqualified or determined ineligible for reasons other than
intentional Program violation. If a household's benefits are reduced or
terminated within the certification period for reasons other than an
Intentional Program Violation disqualification, the State agency shall
issue a notice of adverse action in accordance with Sec. 273.13(a)(2)
which informs the household of the ineligibility, the reason for the
ineligibility, the eligibility and benefit level of the remaining
members, and the action the household must take to end the
ineligibility.
* * * * *
(j) Reduction of public assistance benefits. If the benefits of a
household that is receiving public assistance are reduced under a
Federal, State, or local
[[Page 4465]]
means-tested public assistance program because of the failure of a food
stamp household member to perform an action required under the
assistance program or for fraud, the State agency shall not increase
the household's food stamp allotment as the result of the decrease in
income. In addition to prohibiting an increase in food stamp benefits,
the State agency may impose a penalty on the household that represents
a percentage of the food stamp allotment that does not exceed 25
percent. The 25 percent reduction in food stamp benefits must be based
on the amount of food stamp benefits the household should have received
under the regular food stamp benefit formula, taking into account its
actual (reduced) income. However, under no circumstances can the food
stamp benefits be allowed to rise. Reaching a time limit for time-
limited benefits, having a child that is not eligible because of a
family cap, failing to reapply or complete the application process for
continued assistance under the other program, failing to perform an
action that the individual is unable to perform as opposed to refusing
to perform, or failing to comply with a purely procedural requirement,
shall not be considered a failure to perform an action required by an
assistance program for purposes of this provision. A procedural
requirement, which would not trigger a food stamp sanction, is a step
that an individual must take to continue receiving benefits in the
assistance program such as submitting a monthly report form or
providing verification of circumstances. A substantive requirement,
which would trigger a food stamp sanction, is a behavioral requirement
in the assistance program designed to improve the well being of the
recipient family, such as participating in job search activities. The
State agency shall not apply this provision to individuals who fail to
perform a required action at the time the individual initially applies
for assistance. The State agency shall not increase food stamp
benefits, and may reduce food stamp benefits only if the person is
receiving such assistance at the time the reduction in assistance is
imposed or the reduction in assistance is imposed at the time of
application for continued assistance benefits if there is no break in
participation. The individual must be certified for food stamps at the
time of the failure to perform a required action for this provision to
apply. Assistance benefits shall be considered reduced if they are
decreased, suspended, or terminated.
(1) For purposes of this provision a Federal, State or local
``means-tested public assistance program'' shall mean public or general
assistance as defined in Sec. 271.2 of this chapter, and is referred to
as ``assistance''. This provision must be applied to all applicable
cases. If a State agency is not successful in obtaining the necessary
cooperation from another Federal, State or local means-tested welfare
or public assistance program to enable it to comply with the
requirements of this provision, the State agency shall not be held
responsible for noncompliance as long as the State agency has made a
good faith effort to obtain the information. The State agency, rather
than the household, shall be responsible for obtaining information
about sanctions from other programs and changes in those sanctions.
(2) The prohibition on increasing food stamp benefits applies for
the duration of the reduction in the assistance program. If at any time
the State agency can no longer ascertain the amount of the reduction,
then the State agency may terminate the food stamp sanction. However,
the sanction may not exceed the sanction in the other program. If the
sanction is still in effect at the end of one year, the State agency
shall review the case to determine if the sanction continues to be
appropriate. If, for example, the household is not receiving
assistance, it would not be appropriate to continue the sanction.
Sanctions extended beyond one year must be reviewed at least annually
but may be ended by the State agency at any time. It shall be
concurrent with the reduction in the other assistance program to the
extent allowed by normal food stamp change processing and notice
procedures.
(3) The State agency shall determine how to prevent an increase in
food stamp benefits. Among other options, the State agency may increase
the assistance grant by a flat percent, not to exceed 25 percent, for
all households that fail to perform a required action in lieu of
computing an individual amount or percentage for each affected
household.
(4) If the allotment of a household is reduced under Title IV-A of
the Social Security Act, the State agency may use the same procedures
that apply under Title IV-A to prevent an increase in food stamp
benefits as the result of the decrease in Title IV-A benefits. For
example, the same budgeting procedures and combined notices and
hearings may be used, but the food stamp allotment may not be reduced
by more than 25 percent.
(5) The State agency must lift the ban on increasing food stamp
benefits if it becomes aware that the person has become ineligible for
the assistance program during the disqualification period for some
other reason, or the person's assistance case is closed.
(6) If an individual moves within the State, the prohibition on
increasing food stamp benefits shall be applied to the gaining
household unless that person is ineligible for the assistance program
for some other reason. If such individual moves to a new State the
prohibition on increasing benefits shall not be applied.
(7) The State agency must restore lost benefits when necessary in
accordance with Sec. 273.17 if it is later determined that the
reduction in the public assistance grant was not appropriate.
(8) The State agency must act on changes which are not related to
the assistance violation and that would affect the household's
benefits.
(9) The State agency must include in its State Plan of Operations
any options it has selected in this paragraph (j).
(k) Comparable disqualifications. If a disqualification is imposed
on a member of a household for failure to perform an action required
under a Federal, State or local means-tested public assistance program,
the State agency may impose the same disqualification on the member of
the household under the Food Stamp Program. The program must be
authorized by a Federal, State, or local law, but the provision itself
does not have to be specified in the law. A State agency may choose to
apply this provision to one or more of these programs, and it may
select the types of disqualifications within a program that it wants to
impose on food stamp recipients. The State agency shall be responsible
for obtaining information about sanctions from other programs and
changes in those sanctions.
(1) For purposes of this section Federal, State or local ``means-
tested public assistance program'' shall mean public and general
assistance as defined in Sec. 271.2 of this chapter.
(2) The State agency shall not apply this provision to individuals
who are disqualified at the time the individual initially applies for
assistance benefits. It may apply the provision if the person was
receiving such assistance at the time the disqualification in the
assistance program was imposed and to disqualifications imposed at the
time of application for continued assistance benefits if there is no
break in participation with the following exceptions: Reaching a time
limit for time-limited benefits, having a child that is not eligible
because of a family
[[Page 4466]]
cap, failing to reapply or complete the application process for
continued assistance, failing to perform an action that the individual
is unable to perform as opposed to refusing to perform, and failing to
perform purely procedural requirements, shall not be considered
failures to perform an action required by an assistance program. A
procedural requirement, which would not trigger a food stamp sanction,
is a step that an individual must take to continue receiving benefits
in the assistance program such as submitting a monthly report form or
providing verification of circumstances. A substantive requirement,
which would trigger a food stamp sanction, is a behavioral requirement
in the assistance program designed to improve the well being of the
recipient family, such as participating in job search activities. The
individual must be receiving food stamps at the time of the
disqualification in the assistance program to be disqualified from the
Food Stamp Program under this provision.
(3) The State agency must stop the food stamp disqualification when
it becomes aware that the person has become ineligible for assistance
for some other reason, or the assistance case is closed.
(4) If a disqualification is imposed for a failure of an individual
to perform an action required under a program under Title IV-A of the
Social Security Act, the State may use the rules and procedures that
apply under the Title IV-A program to impose the same disqualification
under the Food Stamp Program.
(5) Only the individual who committed the violation in the
assistance program may be disqualified for food stamp purposes even if
the entire assistance unit is disqualified for Title IV-A purposes.
(6) A comparable disqualification for food stamp purposes shall be
imposed concurrently with the disqualification in the assistance
program to the extent allowed by normal food stamp processing times and
notice requirements. The State agency may determine the length of the
disqualification, providing that the disqualification does not exceed
the disqualification in the other program. If the sanction is still in
effect at the end of one year, the State agency shall review the case
to determine if the sanction continues to be appropriate. If, for
example, the household is not receiving assistance, if would not be
appropriate to continue the sanction. Sanctions extended beyond one
year must be reviewed at least annually but may be ended by the State
agency at any time.
(7) If there is a pending disqualification for a food stamp
violation and a pending comparable disqualification, they shall be
imposed concurrently to the extent appropriate. For example, if the
household is disqualified for June for a food stamp violation and an
individual is disqualified for June and July for an assistance program
violation, the whole household shall be disqualified for June and the
individual shall be disqualified for July for food stamp purposes.
(8) The State agency must treat the income and resources of the
disqualified individual in accordance with Sec. 273.11(c)(2).
(9) After a disqualification period has expired, the person may
apply for food stamp benefits and shall be treated as a new applicant
or a new household member, except that a current disqualification based
on a food stamp work requirement shall be considered in determining
eligibility.
(10) A comparable food stamp disqualification may be imposed in
addition to any coupon allotment reductions made in accordance with
paragraph (j) of this section.
(11) State agencies shall state in their Plan of Operation if they
have elected to apply comparable disqualifications, identify which
sanctions in the other programs this provision applies to, and indicate
the options and procedures allowed in paragraphs (k)(1), (k)(2),
(k)(3), (k)(4), and (k)(10) of this section which they have selected.
(12) The State agency must act on changes which are not related to
the assistance violation and that would affect the household's
benefits.
(13) The State agency must restore lost benefits when necessary in
accordance with 7 CFR 273.17 if it is later determined that the
reduction in the public assistance grant was not appropriate.
(l) School Attendance. Section 404(i) of Part A of the Social
Security Act, 42 U.S.C. 601, et seq., provides that any state receiving
a TANF block grant cannot be prohibited from sanctioning a family that
includes an adult who has received assistance financed with federal
TANF dollars or provided from the food stamp program if such adult
fails to ensure that the minor dependent children of such adult attend
school as required by the law of the State in which the minor children
reside. Section 404(j) of Part A of the Social Security Act, 42 U.S.C.
601, et seq., provides that States shall not be prohibited from
sanctioning a family that includes an adult who is older than 20 and
younger than 51 and who has received assistance that is either financed
with federal TANF funds or provided through the food stamp program if
such adult does not have, or is not working toward attaining, a
secondary school diploma or recognized equivalent. These provisions do
not provide independent authority for food stamp sanctions beyond any
that may apply through paragraphs (j) and (k) of this section.
(m) Individuals convicted of drug-related felonies. An individual
convicted (under Federal or State law) of any offense which is
classified as a felony by the law of the jurisdiction involved and
which has as an element the possession, use, or distribution of a
controlled substance (as defined in section 102(6) of the Controlled
Substance Act, 21 U.S.C. 802(6)) shall not be considered an eligible
household member unless the State legislature of the State where the
individual is domiciled has enacted legislation exempting individuals
domiciled in the State from the above exclusion. If the State
legislature has enacted legislation limiting the period of
disqualification, the period of ineligibility shall be equal to the
length of the period provided under such legislation. Ineligibility
under this provision is only limited to convictions based on behavior
which occurred after August 22, 1996. The income and resources of
individuals subject to disqualification under this paragraph (m) shall
be treated in accordance with the procedures at paragraph (c)(1) of
this section.
(n) Fleeing felons and probation or parole violators. Individuals
who are fleeing to avoid prosecution or custody for a crime, or an
attempt to commit a crime, that would be classified as a felony (or in
the State of New Jersey, a high misdemeanor) or who are violating a
condition of probation or parole under a Federal or State law shall not
be considered eligible household members. The income and resources of
the ineligible member shall be handled in accordance with (c)(1) of
this section.
(o) Custodial parent's cooperation with the State Child Support
Agency. For purposes of this provision, a custodial parent is a natural
or adoptive parent who lives with his or her child, or other individual
who is living with and exercises parental control over a child under
the age of 18.
(1) Option to disqualify custodial parent for failure to cooperate.
At the option of a State agency, subject to paragraphs (o)(2) and
(o)(4) of this section, no natural or adoptive parent or, at State
agency option, other individual (collectively referred to in
[[Page 4467]]
this paragraph (o) as ``the individual'') who is living with and
exercising parental control over a child under the age of 18 who has an
absent parent shall be eligible to participate in the Food Stamp
Program unless the individual cooperates with the agency administering
a State Child Support Enforcement Program established under Part D of
Title IV of the Social Security Act (42 U.S.C. 651, et seq.), hereafter
referred to as the State Child Support Agency.
(i) If the State agency chooses to implement paragraph (o)(1) of
this section, it must notify all individuals of this requirement in
writing at the time of application and reapplication for continued
benefits.
(ii) If the State agency chooses to implement paragraph (o)(1) of
this section, it must refer all appropriate individuals to the State
Child Support Agency.
(iii) If the individual is receiving TANF or Medicaid, or
assistance from the State Child Support Agency, and has already been
determined to be cooperating, or has been determined to have good cause
for not cooperating, then the State agency shall consider the
individual to be cooperating for food stamp purposes.
(iv) The individual must cooperate with the State Child Support
Agency in establishing paternity of the child, and in establishing,
modifying, or enforcing a support order with respect to the child and
the individual in accordance with section 454(29) of the Social
Security Act (42 U.S.C. 654(29)).
(v) Pursuant to Section 454(29)(E) of the Social Security Act (42
U.S.C. 654(29)(E) the State Child Support Agency will notify the
individual and the State agency whether or not it has determined that
the individual is cooperating in good faith.
(2) Claiming good cause for non-cooperation. Prior to requiring
cooperation under paragraph (o)(1) of this section, the State agency
will notify the household in writing at initial application and at
application for continued benefits of the right to good cause as an
exception to the cooperation requirement and of all the requirements
applicable to a good cause determination. Paragraph (o)(1) of this
section shall not apply to the individual if good cause is found for
refusing to cooperate, as determined by the State agency:
(i) Circumstances under which cooperation may be ``against the best
interests of the child.'' The individual's failure to cooperate is
deemed to be for ``good cause'' if:
(A) The individual meets the good cause criteria established under
the State program funded under Part A of Title IV or Part D of Title IV
of the Social Security Act (42 U.S.C. 601, et seq, or 42 U.S.C. 651, et
seq.) (whichever agency is authorized to define and determine good
cause) for failing to cooperate with the State Child Support Agency; or
(B) Cooperating with the State Child Support Agency would make it
more difficult for the individual to escape domestic violence or
unfairly penalize the individual who is or has been victimized by such
violence, or the individual who is at risk of further domestic
violence. For purposes of this provision, the term ``domestic
violence'' means the individual or child would be subject to physical
acts that result in, or are threatened to result in, physical injury to
the individual; sexual abuse; sexual activity involving a dependent
child; being forced as the caretaker relative of a dependent child to
engage in nonconsensual sexual acts or activities; threats of, or
attempts at physical or sexual abuse; mental abuse; or neglect or
deprivation of medical care.
(C) The individual meets any other good cause criteria identified
by the State agency. These criteria will be defined in consultation
with the Child Support Agency or TANF program, whichever is
appropriate, and identified in the State plan according to
Sec. 272.2(d) (xiii).
(ii) Proof of good cause claim. (A) The State agency will accept as
corroborative evidence the same evidence required by Part A of Title IV
or Part D of Title IV of the Social Security Act (42 U.S.C. 601, et
seq. or 42 U.S.C. 651, et seq.) to corroborate a claim of good cause.
(B) The State agency will make a good cause determination based on
the corroborative evidence supplied by the individual only after it has
examined the evidence and found that it actually verifies the good
cause claim.
(iii) Review by the State Child Support or TANF Agency. Prior to
making a final determination of good cause for refusing to cooperate,
the State agency will afford the State Child Support Agency or the
agency which administers the program funded under Part A of the Social
Security Act the opportunity to review and comment on the findings and
the basis for the proposed determination and consider any
recommendation from the State Child Support or TANF Agency.
(iv) Delayed finding of good cause. The State agency will not deny,
delay, or discontinue assistance pending a determination of good cause
for refusal to cooperate if the applicant or recipient has complied
with the requirements to furnish corroborative evidence and
information. In such cases, the State agency must abide by the normal
processing standards according to Sec. 273.2(g).
(3) Individual disqualification. If the State agency has elected to
implement this provision and determines that the individual has not
cooperated without good cause, then that individual shall be ineligible
to participate in the Food Stamp Program. The disqualification shall
not apply to the entire household. The income and resources of the
disqualified individual shall be handled in accordance with
paragraph(c)(2) of this section.
(4) Fees. A State electing to implement this provision shall not
require the payment of a fee or other cost for services provided under
Part D of Title IV of the Social Security Act (42 U.S.C. 651, et seq.)
(5) Terminating the Disqualification. The period of
disqualification ends once it has been determined that the individual
is cooperating with the State Child Support Agency. The State agency
must have procedures in place for re-qualifying such an individual.
(p) Non-custodial parent's cooperation with child support agencies.
For purposes of this provision, a ``non-custodial parent'' is a
putative or identified parent who does not live with his or her child
who is under the age of 18.
(1) Option to disqualify non-custodial parent for refusal to
cooperate. At the option of a State agency, subject to paragraphs
(p)(2) and (p)(4) of this section, a putative or identified non-
custodial parent of a child under the age of 18 (referred to in this
subsection as ``the individual'') shall not be eligible to participate
in the Food Stamp Program if the individual refuses to cooperate with
the State agency administering the program established under Part D of
Title IV of the Social Security Act (42 U.S.C. 651, et seq.), hereafter
referred to as the State Child Support Agency, in establishing the
paternity of the child (if the child is born out of wedlock); and in
providing support for the child.
(i) If the State agency chooses to implement paragraph (p)(1) of
this section, it must notify all individuals in writing of this
requirement at the time of application and reapplication for continued
benefits.
(ii) If the individual is receiving TANF, Medicaid, or assistance
from the State Child Support Agency, and has already been determined to
be cooperating, or has been determined to have good cause for not
cooperating,
[[Page 4468]]
then the State agency shall consider the individual is cooperating for
food stamp purposes.
(iii) If the State agency chooses to implement paragraph (p)(1) of
this section, it must refer all appropriate individuals to the State
Child Support Agency established under Part D of Title IV of the Social
Security Act (42 U.S.C. 651, et seq.).
(iv) The individual must cooperate with the State Child Support
Agency in establishing the paternity of the child (if the child is born
out of wedlock), and in providing support for the child.
(v) Pursuant to Section 454(29)(E) of the Social Security Act (42
U.S.C. 654(29)(E)), the State Child Support Agency will notify the
individual and the State agency whether or not it has determined that
the individual is cooperating in good faith.
(2) Determining refusal to cooperate. If the State Child Support
Agency determines that the individual is not cooperating in good faith,
then the State agency will determine whether the non-cooperation
constitutes a refusal to cooperate. Refusal to cooperate is when an
individual has demonstrated an unwillingness to cooperate as opposed to
an inability to cooperate.
(3) Individual disqualification. If the State agency determines
that the non-custodial parent has refused to cooperate, then that
individual shall be ineligible to participate in the Food Stamp
Program. The disqualification shall not apply to the entire household.
The income and resources of the disqualified individual shall be
handled according to paragraph (c)(2) of this section.
(4) Fees. A State electing to implement this provision shall not
require the payment of a fee or other cost for services provided under
Part D of Title IV of the Social Security Act (42 U.S.C. 651, et seq.)
(5) Privacy. The State agency shall provide safeguards to restrict
the use of information collected by a State agency administering the
program established under Part D of Title IV of the Social Security Act
(42 U.S.C. 651, et seq.) to purposes for which the information is
collected.
(6) Termination of disqualification. The period of disqualification
ends once it has been determined that the individual is cooperating
with the child support agency. The State agency must have procedures in
place for re-qualifying such an individual.
(q) Disqualification for child support arrears.
(1) Option to disqualify. At the option of a State agency, no
individual shall be eligible to participate in the Food Stamp Program
as a member of any household during any month that the individual is
delinquent in any payment due under a court order for the support of a
child of the individual. The State agency may opt to apply this
provision to only non-custodial parents.
(2) Exceptions. A disqualification under paragraph (q)(1) of this
section shall not apply if:
(i) A court is allowing the individual to delay payment;
(ii) The individual is complying with a payment plan approved by a
court or the State agency designated under Part D of Title IV of the
Social Security Act (42 U.S.C., 651 et seq.) to provide support of a
child of the individual; or
(iii) The State agency determines the individual has good cause for
non-support.
(3) Individual disqualification. If the State agency has elected to
implement this provision and determines that the individual should be
disqualified for child support arrears, then that individual shall be
ineligible to participate in the Food Stamp Program. The
disqualification shall not apply to the entire household. The income
and resources of the disqualified individual shall be handled according
to paragraph (c)(2) of this section.
(4) Collecting claims. State agencies shall initiate collection
action as provided for in Sec. 273.18 for any month a household member
is disqualified for child support arrears by sending the household a
written demand letter which informs the household of the amount owed,
the reason for the claim and how the household may pay the claim. The
household should also be informed as to the adjusted amount of income,
resources, and deductible expenses of the remaining members of the
household for the month(s) a member is disqualified for child support
arrears.
7. In Sec. 273.12, a new paragraph (a)(1)(viii) is added to read as
follows:
Sec. 273.12 Reporting changes.
(a) * * *
(1) * * *
(viii) For able-bodied adults subject to the time limit of
Sec. 273.24, any changes in work hours that bring an individual below
20 hours per week, averaged monthly, as defined in
Sec. 273.24(a)(1)(i). An individual shall report this information in
accordance with the reporting system for income to which he is subject.
* * * * *
8. In Sec. 273.16
a. Remove the last sentence in paragraph (a)(1).
b. Revise paragraphs (b) and (c).
c. Revise paragraph (e)(8)(i).
d. Remove paragraph (e)(8)(iii) and redesignate paragraph
(e)(8)(iv) as paragraph (e)(8)(iii).
e. Remove paragraph (f)(2)(iii) and redesignate paragraph
(f)(2)(iv) as paragraph (f)(2)(iii).
f. Remove paragraph (g)(2)(ii) and redesignate paragraph
(g)(2)(iii) as paragraph (g)(2)(ii).
g. Remove paragraph (h)(2)(ii) and redesignate paragraph
(h)(2)(iii) as paragraph (h)(2)(ii).
The revisions read as follows:
Sec. 273.16 Disqualification for intentional Program violation.
* * * * *
(b) Disqualification penalties.
(1) Individuals found to have committed an intentional Program
violation either through an administrative disqualification hearing or
by a Federal, State or local court, or who have signed either a waiver
of right to an administrative disqualification hearing or a
disqualification consent agreement in cases referred for prosecution,
shall be ineligible to participate in the Program:
(i) For a period of twelve months for the first intentional Program
violation, except as provided under paragraphs (b)(2), (b)(3), (b)(4),
and (b)(5) of this section;
(ii) For a period of twenty-four months upon the second occasion of
any intentional Program violation, except as provided in paragraphs
(b)(2), (b)(3), (b)(4), and (b)(5) of this section; and
(iii) Permanently for the third occasion of any intentional Program
violation.
(2) Individuals found by a Federal, State or local court to have
used or received benefits in a transaction involving the sale of a
controlled substance (as defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802)) shall be ineligible to participate in
the Program:
(i) For a period of twenty four months upon the first occasion of
such violation; and
(ii) Permanently upon the second occasion of such violation.
(3) Individuals found by a Federal, State or local court to have
used or received benefits in a transaction involving the sale of
firearms, ammunition or explosives shall be permanently ineligible to
participate in the Program upon the first occasion of such violation.
(4) An individual convicted by a Federal, State or local court of
having trafficked benefits for an aggregate amount of $500 or more
shall be
[[Page 4469]]
permanently ineligible to participate in the Program upon the first
occasion of such violation.
(5) Except as provided under paragraph (b)(1)(iii) of this section,
an individual found to have made a fraudulent statement or
representation with respect to the identity or place of residence of
the individual in order to receive multiple food stamp benefits
simultaneously shall be ineligible to participate in the Program for a
period of 10 years.
(6) The penalties in paragraphs (b)(2) and (b)(3) of this section
shall also apply in cases of deferred adjudication as described in
paragraph (h) of this section, where the court makes a finding that the
individual engaged in the conduct described in paragraph (b)(2) and
(b)(3) of this section.
(7) If a court fails to impose a disqualification or a
disqualification period for any intentional Program violation, the
State agency shall impose the appropriate disqualification penalty
specified in paragraphs (b)(1), (b)(2), (b)(3), (b)(4), and (b)(5) of
this section unless it is contrary to the court order.
(8) One or more intentional Program violations which occurred prior
to April 1, 1983 shall be considered as only one previous
disqualification when determining the appropriate penalty to impose in
a case under consideration.
(9) Regardless of when an action taken by an individual which
caused an intentional Program violation occurred, the disqualification
periods specified in paragraphs (b)(2) and (b)(3) of this section shall
apply to any case in which the court makes the requisite finding on or
after September 1, 1994.
(10) For the disqualification periods in paragraphs (b)(1), (b)(5)
or (b)(6) of this section, if the offense occurred prior to the
implementation of these penalties, the State agency may establish a
policy of disqualifying these individuals in accordance with the
disqualification periods in effect at the time of the offense. This
policy must be consistently applied for all affected individuals.
(11) State agencies shall disqualify only the individual found to
have committed the intentional Program violation, or who signed the
waiver of the right to an administrative disqualification hearing or
disqualification consent agreement in cases referred for prosecution,
and not the entire household.
(12) Even though only the individual is disqualified, the
household, as defined in Sec. 273.1, is responsible for making
restitution for the amount of any overpayment. All intentional Program
violation claims must be established and collected in accordance with
the procedures set forth in Sec. 273.18.
(13) The individual must be notified in writing once it is
determined that he/she is to be disqualified. The disqualification
period shall begin no later than the second month which follows the
date the individual receives written notice of the disqualification.
The disqualification period must continue uninterrupted until completed
regardless of the eligibility of the disqualified individual's
household.
(c) Definition of intentional Program violation. Intentional
Program violations shall consist of having intentionally:
(1) made a false or misleading statement, or misrepresented,
concealed or withheld facts; or
(2) committed any act that constitutes a violation of the Food
Stamp Act, the Food Stamp Program Regulations, or any State statute for
the purpose of using, presenting, transferring, acquiring, receiving,
possessing or trafficking of coupons, authorization cards or reusable
documents used as part of an automated benefit delivery system (access
device).
* * * * *
(e) * * *
(8) * * *
(i) If the hearing authority rules that the individual has
committed an intentional Program violation, the household member must
be disqualified in accordance with the disqualification periods and
procedures in paragraph (b) of this section. The same act of
intentional Program violation repeated over a period of time must not
be separated so that separate penalties can be imposed.
* * * * *
10. In Sec. 273.24:
a. the section heading is revised.
b. paragraph (a) introductory text is revised.
c. paragraphs (a)(1) and (a)(2) are redesignated as paragraphs
(a)(5) and (a)(6).
d. paragraphs (b), (c), (d), and (e) are redesignated as paragraphs
(g), (h), (i) and (j).
e. the heading of the newly designated paragraph (g) is revised to
read ``15 percent exemptions.''
f. paragraphs (a)(1) through (a)(4) and paragraphs (b) through (f)
are added as follows.
Sec. 273.24 Time limit for able-bodied adults.
(a) Definitions. For purposes of the food stamp time limit, the
terms below have the following meanings:
(1) Fulfilling the work requirement means:
(i) Working 20 hours per week, averaged monthly; for purposes of
this provision, 20 hours a week averaged monthly means 80 hours a
month;
(ii) Participating in and complying with the requirements of a work
program 20 hours per week, as determined by the State agency;
(iii) Any combination of working and participating in a work
program for a total of 20 hours per week, as determined by the State
agency; or
(iv) Participating in and complying with a workfare program;
(2) Working means:
(i) Work in exchange for money;
(ii) Work in exchange for goods or services (``in kind'' work); or
(iii) Unpaid work, verified under standards established by the
State agency.
(iv) Any combination of paragraphs (a)(2)(i), (a)(2)(ii) and
(a)(2)(iii) of this section.
(3) Work Program means:
(i) A program under the Workforce Investment Act (Pub. L. 105-220);
(ii) A program under section 236 of the Trade Act of 1974 (19
U.S.C. 2296); or
(iii) An employment and training program, other than a job search
or job search training program, operated or supervised by a State or
political subdivision of a State that meets standards approved by the
Governor of the State, including a program under Sec. 273.7(f). Such a
program may contain job search or job search training as a subsidiary
component as long as such component is less than half the requirement.
(4) Workfare program means:
(i) A program under Sec. 273.22; or
(ii) A comparable program established by a State or political
subdivision of a State.
* * * * *
(b) General Rule. Individuals are not eligible to participate in
the Food Stamp Program as a member of any household if the individual
received food stamps for more than three countable months during any
three-year period, except that individuals may be eligible for up to
three additional countable months in accordance with paragraph (e) of
this section.
(1) Countable months. Countable months are months during which an
individual receives food stamps for the full benefit month while not:
(i) Exempt under paragraph (c) of this section;
(ii) Covered by a waiver under paragraph (f) of this section;
(iii) Fulfilling the work requirement as defined in paragraph
(a)(1) of this section; or
(iv) Receiving benefits that are prorated in accordance with
Sec. 273.10.
[[Page 4470]]
(2) Good cause. As determined by the State agency, if an individual
would have worked an average of 20 hours per week but missed some work
for good cause, the individual shall be considered to have met the work
requirement if the absence from work is temporary and the individual
retains his or her job. Good cause shall include circumstances beyond
the individual's control, such as, but not limited to, illness, illness
of another household member requiring the presence of the member, a
household emergency, or the unavailability of transportation.
(3) Measuring the three-year period. The State agency may measure
and track the three-year period as it deems appropriate. The State
agency may use either a ``fixed'' or ``rolling'' clock. If the State
agency chooses to switch tracking methods it must inform FNS in
writing. With respect to a State, the three-year period:
(i) Shall be measured and tracked consistently so that individuals
who are similarly situated are treated the same; and
(ii) Shall not include any period before the earlier of November
22, 1996, or the date the State notified food stamp recipients of the
application of Section 824 of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (Pub. L. 104-193).
(4) Treatment of income and resources. The income and resources of
an individual made ineligible under this paragraph (b) shall be handled
in accordance with Sec. 273.11(c)(2).
(5) Benefits received erroneously. If an individual subject to this
section receives food stamp benefits erroneously, the State agency
shall consider the benefits to have been received for purposes of this
provision unless or until the individual pays it back in full.
(6) Verification. Verification shall be in accordance with
Sec. 273.2(f)(1) and (f)(8).
(7) Reporting. A change in work hours below 20 hours per week,
averaged monthly, is a reportable change in accordance with
Sec. 273.12(a)(1)(viii). Regardless of the type of reporting system the
State agency assigns to potential ABAWDs, the State agency must adhere
to the statutory requirements of time-limited benefits for individuals
who are subject to the work requirement. The State agency may opt to
consider work performed in a job that was not reported according to the
requirements of Sec. 273.12 ``work.''
(8) Applicability of Food Stamp Act. Nothing in this paragraph (b)
shall make an individual eligible for food stamp benefits if the
individual is not otherwise eligible for benefits under the other
provisions of these regulations and the Food Stamp Act of 1977, as
amended.
(c) Exemptions. An individual is exempt from the time limit if he
or she is;
(1) Under 18 or 50 years of age or older;
(2) Determined by the State agency to be medically certified as
physically or mentally unfit for employment. An individual is medically
certified as physically or mentally unfit for employment if he or she:
(i) Is receiving temporary or permanent disability benefits issued
by governmental or private sources;
(ii) Is obviously mentally or physically unfit for employment as
determined by the State agency; or
(iii) If the unfitness is not obvious, provides a statement from a
physician, physician's assistant, nurse, nurse practitioner, designated
representative of the physician's office, a licensed or certified
psychologist, a social worker, or any other medical personnel the State
agency determines appropriate, that he or she is physically or mentally
unfit for employment.
(3) Is a parent (natural, adoptive, or step) of a household member
under age 18, even if the household member who is under 18 is not
himself eligible for food stamps;
(4) Is residing in a household where a household member is under
age 18, even if the household member who is under 18 is not himself
eligible for food stamps;
(5) Is otherwise exempt from work requirements under section
6(d)(2) of the Food Stamp Act, as implemented in regulations at
Sec. 273.7(b); or
(6) Is pregnant.
(d) Regaining eligibility. (1) An individual denied eligibility
under paragraph (b) of this section, or who did not reapply for
benefits because he was not meeting the work requirements under
paragraph (b) of this section, shall regain eligibility to participate
in the Food Stamp Program if, as determined by the State agency, during
any 30 consecutive days, he or she:
(i) Worked 80 or more hours;
(ii) Participated in and complied with the requirements of a work
program for 80 or more hours;
(iii) Any combination of work and participation in a work program
for a total of 80 hours; or participated in and complied with a
workfare program; or
(iv) At State agency option, verifies that the he or she will meet
one of the requirements in paragraphs (d)(1)(i), (d)(1)(ii),
(d)(1)(iii), or (d)(1)(v) of this section, within the 30 days
subsequent to application; or
(v) Becomes exempt.
(2) An individual regaining eligibility under paragraph (d)(1) of
this section shall have benefits calculated as follows:
(i) For individuals regaining eligibility by working, participating
in a work program, or combining hours worked and hours participating in
a work program, the State agency may either prorate benefits from the
day the 80 hours are completed or from the date of application, or
(ii) For individuals regaining eligibility by participating in a
workfare program, and the workfare obligation is based on an estimated
monthly allotment prorated back to the date of application, then the
allotment issued must be prorated back to this date.
(3) There is no limit on how many times an individual may regain
eligibility and subsequently maintain eligibility by meeting the work
requirement.
(e) Additional three-month eligibility. An individual who regained
eligibility under paragraph (d) of this section and who is no longer
fulfilling the work requirement as defined in paragraph (a) of this
section is eligible for a period of three consecutive countable months
(as defined in paragraph (b) of this section), starting on the date the
individual first notifies the State agency that he or she is no longer
fulfilling the work requirement, unless the individual has been
satisfying the work requirement by participating in a work or workfare
program, in which case the period starts on the date the State agency
notifies the individual that he or she is no longer meeting the work
requirement. An individual shall not receive benefits under this
paragraph (e) more than once in any three-year period.
(f) Waivers.
(1) General. On the request of a State agency, FNS may waive the
time limit for a group of individuals in the State if we determine that
the area in which the individuals reside:
(i) Has an unemployment rate of over 10 percent; or
(ii) Does not have a sufficient number of jobs to provide
employment for the individuals.
(2) Required data. The State agency may submit whatever data it
deems appropriate to support its request. However, to support waiver
requests based on unemployment rates or labor force data, States must
submit data that relies on standard Bureau of Labor Statistics (BLS)
data or methods. A non-exhaustive list of the kinds of data a State
agency may submit follows:
[[Page 4471]]
(i) To support a claim of unemployment over 10 percent, a State
agency may submit evidence that an area has a recent 12 month average
unemployment rate over 10 percent; a recent three month average
unemployment rate over 10 percent; or an historical seasonal
unemployment rate over 10 percent; or
(ii) To support a claim of lack of sufficient jobs, a State may
submit evidence that an area: is designated as a Labor Surplus Area
(LSA) by the Department of Labor's Employment and Training
Administration (ETA); is determined by the Department of Labor's
Unemployment Insurance Service as qualifying for extended unemployment
benefits; has a low and declining employment-to-population ratio; has a
lack of jobs in declining occupations or industries; is described in an
academic study or other publications as an area where there are lack of
jobs; has a 24-month average unemployment rate 20 percent above the
national average for the same 24-month period. This 24-month period may
not be any earlier than the same 24-month period the ETA uses to
designate LSAs for the current fiscal year.
(3) Waivers that are readily approvable. FNS will approve State
agency waivers where FNS confirms:
(i) Data from the BLS or the BLS cooperating agency that shows an
area has a most recent 12 month average unemployment rate over 10
percent;
(ii) Evidence that the area has been designated a Labor Surplus
Area by the ETA for the current fiscal year; or
(iii) Data from the BLS or the BLS cooperating agency that an area
has a 24 month average unemployment rate that exceeds the national
average by 20 percent for any 24-month period no earlier than the same
period the ETA uses to designate LSAs for the current fiscal year.
(4) Effective date of certain waivers. In areas for which the State
certifies that data from the BLS or the BLS cooperating agency show a
most recent 12 month average unemployment rate over 10 percent; or the
area has been designated as a Labor Surplus Area by the Department of
Labor's Employment and Training Administration for the current fiscal
year, the State may begin to operate the waiver at the time the waiver
request is submitted. FNS will contact the State if the waiver must be
modified.
(5) Duration of waiver. In general, waivers will be approved for
one year. The duration of a waiver should bear some relationship to the
documentation provided in support of the waiver request. FNS will
consider approving waivers for up to one year based on documentation
covering a shorter period, but the State agency must show that the
basis for the waiver is not a seasonal or short term aberration. We
reserve the right to approve waivers for a shorter period at the State
agency's request or if the data is insufficient. We reserve the right
to approve a waiver for a longer period if the reasons are compelling.
(6) Areas covered by waivers. States may define areas to be covered
by waivers. We encourage State agencies to submit data and analyses
that correspond to the defined area. If corresponding data does not
exist, State agencies should submit data that corresponds as closely to
the area as possible.
Dated: January 9, 2001.
Shirley R. Watkins,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 01-1025 Filed 1-16-01; 8:45 am]
BILLING CODE 3410-30-U
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