This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

980 

Vol. 84, No. 22 

Friday, February 1, 2019 

DEPARTMENT OF AGRICULTURE 

Food and Nutrition Service 

7 CFR Part 273 

[FNS–2018–0004] 

RIN 0584–AE57 

Supplemental Nutrition Assistance 

Program: Requirements for AbleBodied Adults Without Dependents 

AGENCY: Food and Nutrition Service 

(FNS), USDA. 

ACTION: Proposed rule. 

SUMMARY: Federal law generally limits 

the amount of time an able-bodied adult 

without dependents (ABAWD) can 

receive Supplemental Nutrition 

Assistance Program (SNAP) benefits to 3 

months in a 36-month period, unless the 

individual meets certain work 

requirements. On the request of a State 

SNAP agency, the law also gives the 

Department of Agriculture (the 

Department) the authority to 

temporarily waive the time limit in 

areas that have an unemployment rate of 

over 10 percent or a lack of sufficient 

jobs. The law also provides State 

agencies with a limited number of 

percentage exemptions that can be used 

by States to extend SNAP eligibility for 

ABAWDs subject to the time limit. The 

Department proposes to amend the 

regulatory standards by which the 

Department evaluates State SNAP 

agency requests to waive the time limit 

and to end the unlimited carryover of 

ABAWD percentage exemptions. The 

proposed rule would encourage broader 

application of the statutory ABAWD 

work requirement, consistent with the 

Administration’s focus on fostering selfsufficiency. The Department seeks 

comments from the public on the 

proposed regulations. 

DATES: Written comments must be 

received on or before April 2, 2019 to 

be assured of consideration. 

ADDRESSES: The Food and Nutrition 

Service, USDA, invites interested 

persons to submit written comments on 

this proposed rule. Comments may be 

submitted in writing by one of the 

following methods: 

• Preferred Method: Federal 

eRulemaking Portal: Go to http://

www.regulations.gov. Follow the online 

instructions for submitting comments. 

• Mail: Send comments to 

Certification Policy Branch, Program 

Development Division, FNS, 3101 Park 

Center Drive, Alexandria, Virginia 

22302. 

• All written comments submitted in 

response to this proposed rule will be 

included in the record and will be made 

available to the public. Please be 

advised that the substance of the 

comments and the identity of the 

individuals or entities submitting the 

comments will be subject to public 

disclosure. FNS will make the written 

comments publicly available on the 

internet via http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Certification Policy Branch, Program 

Development Division, FNS, 3101 Park 

Center Drive, Alexandria, Virginia 

22302. SNAPCPBRules@fns.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Acronyms or Abbreviations 

[Phrase, Acronym or Abbreviation] 

Able-Bodied Adult without 

Dependent(s), ABAWD(s) 

Advanced Notice of Public Rulemaking, 

ANPRM 

Bureau of Labor Statistics, BLS 

Census Bureau’s American Community 

Survey, ACS 

Code of Federal Regulations, CFR 

Department of Labor, DOL 

Employment and Training 

Administration, ETA 

Employment and Training, E&T 

Food and Nutrition Act of 2008, Act 

Food and Nutrition Service, FNS 

Labor Market Area(s), LMA(s) 

Labor Surplus Area(s), LSA(s) 

Supplemental Nutrition Assistance 

Program, SNAP 

The Personal Responsibility and Work 

Opportunity Reconciliation Act of 

1996, PRWORA 

U.S. Department of Agriculture, the 

Department or USDA 

References 

The following references may be 

useful to help inform those wishing to 

provide comments. 

(1) Section 6(d) and section 6(o) of the Food 

and Nutrition Act of 2008, as amended 

(2) Title 7 of the Code of Federal Regulations, 

parts 273.7 and 273.24 

(3) Food Stamp Program: Personal 

Responsibility Provisions of the Personal 

Responsibility and Work Opportunity 

Reconciliation Act of 1996, Proposed 

Rule, 64 FR 70920 (December 17, 1999). 

Available at: https://

www.federalregister.gov/documents/ 

1999/12/17/99-32527/food-stampprogram-personalresponsibilityprovisions-of-the-personalresponsibilityand-work 

(4) Food Stamp Program: Personal 

Responsibility Provisions of the Personal 

Responsibility and Work Opportunity 

Reconciliation Act of 1996, Final Rule, 

66 FR 4437 (January 17, 2001). Available 

at: https://www.federalregister.gov/ 

documents/2001/01/17/01-1025/ 

foodstamp-program-personalresponsibilityprovisions-of-the-personalresponsibilityand-work 

(5) Guide to Serving ABAWDs Subject to 

Time-limited Participation, 2015. 

Available at: https://fnsprod.azureedge.net/sites/default/files/ 

Guide_to_Serving_ABAWDs_Subject_to_

Time_Limit.pdf 

(6) Guide to Supporting Requests to Waive 

the Time Limit for Able-Bodied Adults 

without Dependents, 2016. Available at: 

https://fns-prod.azureedge.net/sites/ 

default/files/snap/SNAP-Guide-toSupporting-Requests-to-Waive-the-TimeLimit-for-ABAWDs.pdf 

(7) Expiration of Statewide ABAWD Time 

Limit Waivers, 2015. Available at: 

https://fns-prod.azureedge.net/sites/ 

default/files/snap/SNAP-Expiration-ofStatewide-ABAWD-Time-LimitWaivers.pdf 

(8) ABAWD Time Limit Policy and Program 

Access, 2015. Available at: https://fnsprod.azureedge.net/sites/default/files/ 

snap/ABAWD-Time-Limit-Policy-andProgram-Access-Memo-Nov2015.pdf 

(9) ABAWD Questions and Answers, 2015. 

Available at: https://fnsprod.azureedge.net/sites/default/files/ 

snap/ABAWD-Questions-and-AnswersJune%202015.pdf 

(10) ABAWD Questions and Answers, 2013. 

Available at: https://fnsprod.azureedge.net/sites/default/files/ 

snap/ABAWD-Questions-and-AnswersDecember-2013.pdf 

(11) BLS Local Area Unemployment 

Statistics. Available at: https://

www.bls.gov/lau/ 

(12) BLS Labor Surplus Area. Available at: 

https://www.doleta.gov/programs/ 

lsa.cfm 

The Rationale for Modifying Waiver 

Standards 

The President’s Executive Order on 

Reducing Poverty in America by 

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 981 

Promoting Opportunity and Economic 

Mobility (April 10, 2018) provided 

guiding principles for public assistance 

programs, one of which was to improve 

employment outcomes and economic 

independence by strengthening existing 

work requirements for work-capable 

individuals. The Executive Order 

directed Federal agencies to review 

regulations and guidance documents to 

determine whether such documents are 

consistent with the principles of 

increasing self-sufficiency, well-being, 

and economic mobility. Consistent with 

the Executive Order and the 

Administration’s focus on fostering selfsufficiency, as well as the Department’s 

extensive operational experience with 

ABAWD waivers, the Department has 

determined that the standards for 

waivers must be strengthened so that 

the ABAWD work requirement is 

applied to ABAWDs more broadly. The 

Department is confident that these 

changes would encourage more 

ABAWDs to engage in work or work 

activities if they wish to continue to 

receive SNAP benefits. 

The Department believes that the 

proposed changes reinforce the Act’s 

intent to require these individuals to 

work or participate in work activities in 

order to receive SNAP benefits for more 

than 3 months in a 36 month period. 

Section 6(o) of the Act, entitled, ‘‘Work 

Requirements,’’ allows these individuals 

to meet the ABAWD work requirement 

by working and/or participating in a 

qualifying work program at least 20 

hours per week (averaged monthly to 80 

hours per month) or by participating in 

and complying with workfare. For the 

purposes of meeting the ABAWD work 

requirement, working includes unpaid 

or volunteer work that is verified by the 

State agency. The Act specifically 

exempts individuals from the ABAWD 

time limit and corresponding work 

requirement for several reasons, 

including, but not limited to, age, 

unfitness for work, having a dependent 

child, or being pregnant. 

The Act authorizes waivers of the 

ABAWD time limit and work 

requirement in areas in which the 

unemployment rate is above 10 percent, 

or where there is a lack of sufficient 

jobs. The Department believes waivers 

of the ABAWD time limit are meant to 

be used in a limited manner in 

situations in which jobs are truly 

unavailable to ensure enforcement of 

the ABAWD work requirements as 

much as possible to promote greater 

engagement in work or work activities. 

Immediately following the Great 

Recession, the vast majority of the 

States, including the District of 

Columbia, Guam, and the Virgin 

Islands, qualified for and implemented 

statewide ABAWD time limit waivers in 

response to a depressed labor market. In 

the years since the Great Recession, the 

national unemployment rate has 

dramatically declined. Despite the 

national unemployment rate’s decline 

from 9.9 percent in April 2010 to 3.9 

percent in April 2018, a significant 

number of States continue to qualify for 

and use ABAWD waivers under the 

current waiver standards. Right now, 

nearly half of ABAWDs live in areas that 

are covered by waivers despite a strong 

economy. The Department believes 

waiver criteria need to be strengthened 

to better align with economic reality. 

These changes would ensure that such 

a large percentage of the country can no 

longer be waived when the economy is 

booming and unemployment is low. 

The Department is committed to 

enforcing the work requirements 

established by Congress and is 

concerned about the current level of 

waiver use in light of the current 

economy. The regulations afforded 

States broad flexibility to develop 

approvable waiver requests. The 

Department’s operational experience 

has shown that some States have used 

this flexibility to waive areas in such a 

way that was likely not foreseen by the 

Department. 

Some of the key concerns have 

stemmed from the combining of data 

from multiple individual areas to waive 

a larger geographic area (e.g., a group of 

contiguous counties) and the 

application of waivers in individual 

areas with low unemployment rates that 

do not demonstrate a lack of sufficient 

jobs. For example, some States have 

maximized the number of areas or 

people covered by waivers by 

combining data from areas with high 

unemployment with areas with low 

unemployment. This grouping has 

resulted in the combined area qualifying 

for a waiver when not all individual 

sub-areas would have qualified on their 

own. States have combined counties 

with unemployment rates under 5 

percent with counties with significantly 

higher unemployment rates in order to 

waive larger areas. For example, current 

regulations required the Department to 

approve a State request to combine 

unemployment data for a populous 

county with a high unemployment rate 

of over 10 percent with the 

unemployment data of several other less 

populous counties with very low 

unemployment rates that ranged 

between 3 and 4 percent. Other States 

have combined data from multiple areas 

that may only tenuously be considered 

an economic region. In some cases, 

States have grouped areas that are 

contiguous but left out certain lowunemployment areas that would 

otherwise logically be considered part of 

the region. In this manner, States have 

created questionable self-defined 

economic areas with gaping holes to 

leverage the flexibility of the 

regulations. 

The Department has also noted that, 

despite the improving economy, the 

lack of a minimum unemployment rate 

has allowed local areas to qualify for 

waivers based solely on having 

relatively high unemployment rates as 

compared to national average, regardless 

of how low local areas unemployment 

rates fall. Since the current waiver 

criteria have no floor, a certain 

percentage of States will continue to 

qualify for waivers even if 

unemployment continues to drop. 

It is the Department’s understanding 

that the intent of Congress in passing 

the Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996 

was to provide SNAP to unemployed 

ABAWDs on a temporary basis (3 

months in any 3-year period) with the 

expectation that they work and/or 

engage in a work program at least 20 

hours per week, or participate in 

workfare, to receive SNAP on an 

ongoing basis. The Department is 

committed to implementing SNAP as 

Congress intended and believes that 

those who can work should work. The 

widespread use of waivers has allowed 

some ABAWDs to continue to receive 

SNAP benefits while not meeting the 

ABAWD work requirement for longer 

than 3 months. The proposed rule 

addresses these areas of concern and 

places safeguards to avoid approving 

waivers that were not foreseen by 

Congress and the Department, and to 

restrict States from receiving waivers in 

areas that do not clearly demonstrate a 

lack of sufficient jobs. 

As stated above, given the widespread 

use of ABAWD waivers during a period 

of historically low unemployment, the 

Department believes that the current 

regulatory standards should be 

reevaluated. Based on the Department’s 

approximately two decades’ experience 

with reviewing ABAWD waivers, the 

Department is proposing that the 

standards for approving these waivers 

be updated to ensure the waivers are 

applied on a more limited basis. The 

application of waivers on a more limited 

basis would encourage more ABAWDs 

to take steps towards self-sufficiency. 

The Department proposes stricter 

criteria for ABAWD waiver approvals 

that would establish stronger, updated 

standards for determining when and 

where a lack of sufficient jobs justifies 

temporarily waiving the ABAWD time 

982 Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 

1The term ‘‘State’’ refers to any of the 50 States, 

the District of Columbia, and the U.S. territories 

limit. The proposed rule would also 

ensure the Department only issues 

waivers based on representative, 

accurate, and consistent economic data, 

where it is available. Limiting waivers 

would make more ABAWDs subject to 

the time limit and thereby encourage 

more ABAWDs to engage in meaningful 

work activities if they wish to continue 

to receive SNAP benefits. The 

Department recognizes that long-term, 

stable employment provides the best 

path to self-sufficiency for those who 

are able to work. The Department 

believes it is appropriate and necessary 

to encourage greater ABAWD 

engagement with respect to job training 

and employment opportunities that 

would not only benefit ABAWDs, but 

would also save taxpayers’ money. The 

Department and the States share a 

responsibility to help SNAP 

participants—especially ABAWDs—find 

a path to self-sufficiency. Through the 

stricter criteria for waiver approvals, the 

Department would encourage greater 

engagement in meaningful work 

activities and movement toward selfsufficiency among ABAWDs, thus 

reducing the need for nutrition 

assistance. 

Waiver Standards Framework 

Current regulations at 7 CFR 273.24(f) 

set standards and requirements for the 

data and evidence that States must 

provide to FNS to support a waiver 

request. States enjoy considerable 

flexibility to make these waiver requests 

pursuant to the current regulations. For 

example, these regulatory standards give 

States broad flexibility to define the 

waiver’s geographic scope. The 

discretion for States to define areas 

allows waivers based on data for 

combined areas that are not necessarily 

economically tied. An economically tied 

area is an area within which individuals 

can reside and find employment within 

a reasonable distance or can readily 

change employment without changing 

their place of residence. In addition, 

while the current regulations establish 

criteria for unemployment data that rely 

on standard Bureau of Labor Statistics 

(BLS) data or methods, the regulations 

also allow States to rely on alternative, 

less robust economic indicators, which 

include data other than unemployment 

data from BLS, to demonstrate a lack of 

sufficient jobs. Moreover, the waiver 

standards allow areas within States to 

qualify for waivers as a result of 

unemployment rates relative to the 

national average, without consideration 

for whether the national or local area 

unemployment rate is high or low. Put 

differently, under the current 

regulations, which do not include a 

local unemployment rate floor, even if 

the national unemployment rate falls, a 

particular area’s unemployment rate 

may support a waiver if that area’s 

unemployment rate is low but 

sufficiently higher than the national 

average. As a result of these and other 

shortcomings, the current regulations 

give States an opportunity to qualify for 

waivers and avoid the ABAWD time 

limit when economic conditions do not 

justify such relief. For these reasons, the 

Department believes that the waiver 

standards under this proposed rule will 

better identify areas that do not have a 

sufficient number of jobs to provide 

employment for ABAWDs. 

As of September 2018, the national 

unemployment rate is the lowest 

unemployment rate since 1969; 

however, States continue to request and 

qualify for ABAWD waivers based on 

the current waiver criteria, which define 

the lack of sufficient jobs in an area too 

broadly. In April 2010, the national 

unemployment rate stood at 9.9 percent. 

From 2010 through 2013, the vast 

majority of States qualified for and 

continued to implement statewide 

ABAWD time limit waivers. SNAP 

participation peaked at an average of 

47.6 million recipients per month in FY 

2013 and has gradually declined since 

then. In July 2013, the national 

unemployment rate was 7.3 percent; 45 

ABAWD time limit waivers covered the 

entire State,1 and 6 waivers covered 

specific areas within the State. In April 

2018, SNAP participation totaled 39.6 

million participants, and the national 

unemployment rate stood at 3.9 percent. 

In April 2018, 8 waivers applied to an 

entire State, and 28 covered specific 

areas within a State. Although the 

national unemployment rate has 

dropped from 9.9 percent in April 2010 

to 3.9 percent in April 2018, many 

States continue to qualify for and use 

ABAWD time limit waivers under the 

current waiver standards, and nearly 

half of all ABAWDs live in areas that are 

covered by waivers. 

The Department is concerned that 

ABAWD time limit waivers continue to 

cover significant portions of the country 

and are out of step with a national 

unemployment rate hovering at less 

than 4 percent. Since the current waiver 

criteria have no floor, a certain 

percentage of States will continue to 

qualify for waivers even if 

unemployment continues to drop. In 

other words, regardless of how strong 

the economy is, the criteria are written 

in such a way that areas will continue 

to qualify even with objectively low 

unemployment rates. Many currentlywaived areas qualified based on 24- 

month local unemployment rates below 

6 percent. 

The current criteria for waiver 

approval permit States to qualify for 

waivers without a sufficiently robust 

standard for a lack of sufficient jobs. 

The waiver criteria should be updated 

to ensure States submit data that is more 

representative of the economic 

conditions in the requested areas. Such 

reforms would make sure the 

Department issues waivers based on 

representative, accurate, and consistent 

economic data. 

This proposed rule would set clear, 

robust, and quantitative standards for 

waivers of the ABAWD time limit. The 

proposal would also: Eliminate waivers 

for areas that are not economically tied 

together; eliminate the ability of an area 

to qualify for a waiver based on its 

designation as a Labor Surplus Area 

(LSA) by the Department of Labor; limit 

the use of alternative economic 

indicators to areas for which standard 

data is limited or unavailable, such as 

Indian Reservations and U.S. 

Territories; and provide additional 

clarity for States regarding the waiver 

request process. The proposed changes 

would ensure the Department issues 

waivers only to provide targeted relief to 

areas that demonstrate a lack of 

sufficient jobs or have an 

unemployment rate above 10 percent 

and that the ABAWD time limit 

encourages SNAP participants to find 

and keep work if they live in areas that 

do not lack sufficient jobs. 

Background 

Previous Action 

On February 23, 2018, the Department 

published an Advanced Notice of Public 

Rulemaking (ANPRM) entitled 

‘‘Supplemental Nutrition Assistance 

Program: Requirements and Services for 

Able-Bodied Adults Without 

Dependents’’ (83 FR 8013) to seek 

public input to inform potential policy, 

program, and regulatory changes that 

could consistently encourage ABAWDs 

to obtain and maintain employment and 

thereby decrease food insecurity. The 

Department specifically asked whether 

changes should be made to: (1) The 

existing process by which State agencies 

request waivers of the ABAWD time 

limit; (2) the information and data States 

must provide to support the waiver 

request; (3) the Department’s 

implementation of the waiver approval; 

and (4) the waiver’s duration. The 

ANPRM generated nearly 39,000 

comments from a range of stakeholders 

including private citizens, government 

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 983 

agencies and officials, food banks, 

advocacy organizations, and 

professional associations. 

The comments addressed the broad 

scope of topics covered by the ANPRM. 

Comments about the ABAWD waiver 

included diverse perspectives, ranging 

from those who supported stricter 

waiver approval requirements to those 

who favored maintaining or expanding 

the criteria for waiver approval. Many 

commenters favored no change or 

expressed support for greater flexibility. 

Other commenters identified a number 

of areas of concern with current 

practices, including the use of waivers 

by States to waive the ABAWD work 

requirement and avoid promoting work, 

waiving areas with relatively low 

unemployment rates, and allowing the 

use of certain metrics for waiver 

approvals. 

The Department received more than 

3,500 comments regarding potential 

reforms to the ABAWD time limit and 

waivers of the time limit through the 

Department’s request for information 

(RFI) entitled, ‘‘Identifying Regulatory 

Reform Initiatives’’ published July 17, 

2017 (82 FR 32649). This RFI requested 

ideas on how the Department can 

provide better customer service and 

remove unintended barriers to 

participation in the Department’s 

programs in ways that least interfere 

with the Department’s customers and 

allow the Department to accomplish its 

mission. The Department specifically 

requested ideas on regulations, guidance 

documents, or any other policy 

documents that require reform. While 

commenters disagreed with certain 

SNAP provisions outlined previously, 

specific changes to regulations and 

policies were not provided. The 

Department received a range of 

comments to the RFI in addition to the 

comments listed above that are not 

relevant to this proposed rule. 

Summary of Proposed Changes 

The Department believes current 

regulations at 7 CFR 273.24(c) and 7 

CFR 273.24(f) should be updated and 

strengthened. The proposed rule focuses 

on updating the standards for ABAWD 

waivers. Current regulations at 7 CFR 

273.24(f) set standards and requirements 

for the data and evidence that States 

must provide to FNS to support an 

ABAWD waiver request. States enjoy 

considerable flexibility to make these 

waiver requests pursuant to the current 

regulations. This flexibility has resulted 

in the widespread use of waivers during 

a period of low unemployment, which 

reduces the application of the work 

requirement. 

The Department proposes several 

changes. First, the proposed rule would 

limit the ability of areas to qualify for 

waivers as local economies and the 

overall national economy improve. 

Second, the proposed rule would no 

longer allow State agencies to combine 

unemployment data from areas with 

high unemployment with areas with 

lower unemployment and more 

plentiful employment opportunities in 

order to maximize the area waived. 

Instead, the proposed rule would ensure 

the Department issues waivers only to 

economically tied areas that meet the 

new criteria defining what is meant by 

a lack of sufficient jobs. The proposed 

rule would also limit the duration of 

waivers to one year, and curtail the use 

of less robust data to approve waivers. 

The subsequent sections provide details 

about the changes proposed in this rule. 

Discussion of Proposed Changes 

General 

The Department proposes that the 

rule, once finalized, would go into effect 

on October 1, 2019, which is the 

beginning of federal fiscal year 2020. All 

waivers in effect on October 1, 2019, or 

thereafter, would need to be approvable 

according to the new rule at that time. 

Any approved waiver that does not meet 

the criteria established in the new rule 

would be terminated on October 1, 

2019. States would be able to request 

new waivers if the State’s waiver is 

expected to be terminated. The 

Department requests feedback from 

States regarding the implementation 

date. In addition, the Department 

proposes clarifying that any State 

agency’s waiver request must have the 

Governor’s endorsement to ensure that 

such a critical request is supported at 

the highest levels of State government. 

Establishing Core Standards for 

Approval 

The Department proposes updating 

criteria for ABAWD time limit waivers 

to improve consistency across States 

and only allow approvals in areas where 

waivers are truly necessary. These 

revisions would include the 

establishment of core standards that 

would allow a State to reasonably 

anticipate whether it would receive 

approval from the Department. These 

core standards would serve as the basis 

for approval for the vast majority of 

waiver requests, save for areas with 

exceptional circumstances or areas with 

limited data or evidence, such as Indian 

Reservations and U.S. Territories. The 

proposed rule would continue to allow 

approvals for waivers based on data 

from BLS or a BLS-cooperating agency 

that show an area has a recent, 12- 

month average unemployment rate over 

10 percent. 

The proposed rule emphasizes that 

the basis for approval of waivers would 

be sound data and evidence that 

primarily relies on data from BLS or 

BLS-cooperating agencies. Any 

supporting unemployment data 

provided by the State would need to 

rely on standard BLS data or methods. 

BLS unemployment data is generally 

considered to be reliable and robust 

evidence for evaluating labor market 

conditions. BLS is an independent 

Federal statistical agency that is 

required to provide accurate and 

objective statistical information and is 

the principal fact-finding agency for the 

Federal government in the broad field of 

labor economics and statistics. It 

collects, processes, analyzes, and 

disseminates essential statistical data for 

the public and Federal agencies. 

The proposed core standards for 

waiver approval would be codified in 7 

CFR 273.24(f)(2). 

Core Standards: Retaining Waivers 

Based on an Unemployment Rate Over 

10 Percent 

The Department does not propose 

changes to the regulations for waivers 

when an area has an unemployment rate 

over 10 percent. The proposed rule 

would continue to allow approvals for 

waivers based on data from BLS or a 

BLS-cooperating agency that show an 

area has a recent, 12-month average 

unemployment rate over 10 percent. 

Core Standards: Establishing a Floor for 

Waivers Based on the 20 Percent 

Standard 

Current regulations at 7 CFR 

273.24(f)(2) and (3) provide for waiver 

approvals for requested areas with an 

average unemployment rate at least 20 

percent above the national average for a 

recent 24-month period, beginning no 

earlier than the same 24-month period 

that DOL uses to determine LSAs for the 

current fiscal year (otherwise known as 

the ‘‘20 percent standard’’). Under the 

current regulations, the Department 

adopted the 20 percent standard, in 

addition to LSA designation, to provide 

States with the flexibility to support 

waivers for areas in the country that are 

not considered by DOL for LSA 

designation and to allow States to use a 

more flexible 24-month reference 

period. 

There are key differences between the 

two standards. DOL’s criteria for LSAs 

require an average unemployment rate 

that is at least 20 percent above the 

national average and at least 6 percent 

for the preceding two calendar years (a 

984 Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 

24-month period). DOL’s local 

unemployment rate floor of 6 percent 

prevents areas with unemployment rates 

below that threshold from qualifying as 

LSAs. The 20 percent standard is the 

same, except that it allows for a flexible 

24-month data reference period (no 

earlier than that which is used for LSAs) 

and it does not include any 

unemployment rate floor. 

Based upon operational experience, 

the Department has observed that, 

without an unemployment rate floor, 

local areas will continue to qualify for 

waivers under the Department’s 20 

percent standard based on high 

unemployment relative to the national 

average even as local unemployment 

rates fall to levels as low as 5 to 6 

percent (depending upon the national 

rate). The Department believes that 

amending the waiver regulations to 

include an unemployment floor is a 

critical step in achieving more targeted 

criteria. While the 20 percent standard 

is similar to the calculation of an LSA, 

the Department believes it is 

appropriate to request public comment 

to explore a floor that is designed 

specifically for ABAWD waivers. 

The Department believes a floor 

should be set for the 20 percent 

standard so that areas do not qualify for 

waivers when their unemployment rates 

are generally considered to be normal or 

low. The ‘‘natural rate of 

unemployment’’ is the rate of 

unemployment expected given normal 

churn in the labor market, with 

unemployment rates lower than the 

natural rate tending to result in 

inflationary pressure on prices. Thus, 

unemployment rates near or below the 

‘‘natural rate of unemployment’’ are 

more indicative of the normal delay in 

unemployed workers filling the best 

existing job opening for them than a 

‘‘lack of sufficient jobs’’ in an area. 

Generally, the ‘‘natural rate of 

unemployment’’ hovers around 5 

percent. The Department believes that 

only areas with unemployment rates 

above the ‘‘natural rate of 

unemployment’’ should be considered 

for waivers. The Department seeks to 

establish a floor that is in line with the 

Administration’s effort to encourage 

greater engagement in work and work 

activities. The Department believes that 

the 7 percent floor for the 20 percent 

standard would strengthen the 

standards for waivers so that the 

ABAWD work requirement would be 

applied more broadly and fully consider 

the ‘‘lack of sufficient jobs’’ criteria in 

the statute. Furthermore, this aligns 

with the proposal in the Agriculture and 

Nutrition Act of 2018, H.R. 2, 115th 

Cong. § 4015 (as passed by House, June 

21, 2018). As stated previously, the 

Department seeks to make the work 

requirements the norm rather than the 

exception to the rule because of 

excessive use of ABAWD time limit 

waivers to date. Using the proposed 

rule’s 7 percent floor for this criterion 

and eliminating waiver approvals based 

on an LSA designation (as well as 

utilizing the proposed limit on 

combining areas discussed below), an 

estimated 11 percent of ABAWDs would 

live in areas subject to a waiver. 

Currently, approximately 44 percent of 

ABAWDs live in a waived area. The 

Department views the proposal as more 

suitable for achieving a more 

comprehensive application of work 

requirements so that ABAWDs in areas 

that have sufficient number of jobs have 

a greater level of engagement in work 

and work activities, including job 

training. In sum, the proposed rule 

modifies the current waiver criterion so 

that an area must have an average 

unemployment rate at least 20 percent 

above the national average and at least 

7 percent for a recent 24-month period, 

beginning no earlier than the same 24- 

month period that DOL uses to 

determine LSAs for the current fiscal 

year, to qualify for a waiver. The 7 

percent floor prevents a requested area 

with an unemployment rate 20 percent 

above the national average, but below 7 

percent, from qualifying for a waiver. 

Although the Department believes the 

local unemployment floor should be set 

at 7 percent to best meet its goals of 

promoting self-sufficiency and ensuring 

areas with unemployment rates 

generally considered normal are not 

waived, it is requesting evidence-based 

and data-driven feedback on the 

appropriate threshold for the floor. 

Specifically, the Department requests 

feedback on which unemployment rate 

floor—6 percent, 7 percent, or 10 

percent—would be most effective at 

limiting waivers consistent with the 

Act’s requirement that waivers be 

determined based on a lack of sufficient 

jobs. 

The Department is interested in 

public comments on establishing an 

unemployment floor of 6 percent, which 

would be consistent with DOL 

standards for LSAs. A 6 percent floor 

would require that an area demonstrate 

an unemployment rate of at least 20 

percent above the national average for a 

recent 24-month period and at least a 6 

percent unemployment rate for that 

same time period in order to receive 

waiver approval. The 6-percent floor 

also bears a relationship to the ‘‘natural 

rate of unemployment.’’ in that it is 

approximately 20 percent higher. As 

previously noted, the ‘‘natural rate of 

unemployment’’ generally hovers 

around 5 percent, meaning that 20 

percent above that rate is 6.0 percent. In 

combination with other changes in the 

proposed rule, the Department estimates 

that a 6-percent floor would reduce 

waivers to the extent that approximately 

24 percent of ABAWDs would live in 

waived areas. The Department is 

concerned that too many areas would 

qualify for a waiver of the ABAWD time 

limit with a 6 percent floor and that too 

few individuals would be subject to the 

ABAWD work requirements, which can 

be met through working or participating 

in a work program or workfare program, 

thereby moving fewer individuals 

towards self-sufficiency. 

The Department would also like to 

receive comments on establishing a 

floor of 10 percent for the 20 percent 

standard. A 10-percent floor would 

allow for even fewer waivers than the 

other options and would result in the 

work requirements being applied in 

almost all areas of the country. In 

combination with other changes in the 

proposed rule, the Department estimates 

that a 10-percent floor would reduce 

waivers to the extent that approximately 

2 percent of ABAWDs would live in 

waived areas. 

It is important to note that a 10- 

percent floor would be distinct from the 

criteria for approval of an area with an 

unemployment rate of over 10 percent. 

The 10-percent unemployment floor 

would be attached to the 20 percent 

standard, which would mean an area 

would require an average 

unemployment rate 20 percent above 

the national average for a recent 24- 

month period and at least 10 percent for 

the same period; the other similar, but 

separate standard requires an area to 

have an average unemployment rate of 

over 10 percent for a 12-month period. 

Based on the Department’s analysis, 

nearly 90 percent of ABAWDs would 

live in areas without waivers and would 

be encouraged to take steps towards 

self-sufficiency if a floor of 7 percent 

was established. In comparison, a 6 

percent floor would mean that 76 

percent of ABAWDs would live in areas 

without waivers and a 10 percent floor 

would mean that 98 percent of 

ABAWDs would live in areas without 

waivers. A higher floor allows for the 

broader application of the time limit to 

encourage self-sufficiency. 

The Department is thus requesting 

comments on the various proposed 

options for setting a floor for the 20 

percent standard. This will ensure that 

the Department fully considers the 

range of evidence available to establish 

a floor that meets the need of evaluating 

waivers. 

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 985 

Core Standards: Retaining the Extended 

Unemployment Benefits Qualification 

Standard 

Under the proposed rule, the 

Department would continue to approve 

a State’s waiver request that is based 

upon the requesting State’s qualification 

for extended unemployment benefits, as 

determined by DOL’s Unemployment 

Insurance Service. Extended 

unemployment benefits are available to 

workers who have exhausted regular 

unemployment insurance benefits 

during periods when certain economic 

conditions exist within the State. The 

extended benefit program is triggered 

when the State’s unemployment rate 

reaches certain levels. Qualifying for 

extended benefits is an indicator, based 

on DOL data, that a state lacks sufficient 

jobs. Current regulations include this 

criterion as evidence of lack of sufficient 

jobs. The Department has consistently 

approved waivers based on qualification 

for extended unemployment benefits 

because it has been a clear indicator of 

lack of sufficient jobs and an especially 

responsive indicator of sudden 

economic downturns, such as the Great 

Recession. Therefore, the Department 

proposes to continue to include this 

criterion, reframed as a core standard for 

approval in this proposed regulation. 

The three provisions described above 

(the unemployment rate over 10 percent 

standard, the 20 percent standard, and 

the qualification for extended 

unemployment benefits standard), 

would be considered the core standards 

for approval and, thus, the basis for 

most conventional waiver requests and 

approvals. The core standards would be 

codified in 7 CFR 273.24(f)(2). 

Criteria Excluded From Core Standards 

The proposed core standards would 

not include some of the current ABAWD 

time limit waiver criteria that are rarely 

used, sometimes subjective, and not 

appropriate when other more specific 

and robust data is available, such as 

unemployment rates from BLS. These 

excluded criteria include a low and 

declining employment-to-population 

ratio, a lack of jobs in declining 

occupations or industries, or an 

academic study or other publication(s) 

that describes an area’s lack of jobs. 

These standards would no longer suffice 

for a waiver’s approval if BLS data is 

available. These proposed changes 

would ensure that ABAWD time limit 

waiver requests are only approved in 

areas where waivers are truly necessary. 

The proposed rule would emphasize 

sound data and evidence that primarily 

relies on BLS and other DOL data for 

waiver approvals. Any supporting 

unemployment data that a State 

provides must, under the core 

standards, rely on standard data from 

BLS or a BLS-cooperating agency. 

Other Data and Evidence in Exceptional 

Circumstances 

The proposed core standards would 

form the primary basis for determining 

waiver approval. However, the rule also 

proposes that the Department can 

approve waiver requests in exceptional 

circumstances based on other data and 

evidence. The Department proposes that 

other data and evidence still primarily 

rely on BLS unemployment data. Such 

alternative data would only be 

considered in exceptional 

circumstances or if BLS data is limited, 

unavailable, or if BLS develops a new 

method or data that may be applicable 

to the waiver review process. Given that 

economic conditions can change 

quickly, the Department believes it is 

appropriate to maintain a level of 

flexibility to approve waivers as needed 

in extreme, dynamic circumstances. 

Such waiver requests must demonstrate 

that an area faces an exceptional 

circumstance and provide data or 

evidence that the exceptional 

circumstance gives rise to an area not 

having a sufficient number of jobs to 

provide employment for the individuals 

in the area. For example, an exceptional 

circumstance may arise from the rapid 

disintegration of an economically and 

regionally important industry or the 

prolonged impact of a natural disaster. 

A short-term aberration, such as a 

temporary closure of a plant, would not 

fall within the scope of exceptional 

circumstances. For waiver requests in 

exceptional circumstances, the State 

agency may use additional data or 

evidence other than those listed in the 

core standards to support its need for a 

waiver under exceptional 

circumstances. In these instances, the 

State may provide data from the BLS or 

a BLS-cooperating agency showing an 

area has a most recent three-month 

average unemployment rate over 10 

percent. This provision to strengthen 

the standards for waivers would be 

codified in 7 CFR 273.24(f)(3). 

Restricting Statewide Waivers 

Current regulations at 7 CFR 

273.24(f)(6) and the Department’s policy 

guidance provide States with the 

discretion to define the areas to be 

covered by waivers. A State may request 

that a waiver apply to the entire State 

(statewide) or only to certain areas 

within the State (e.g., individual 

counties, cities, or towns), as long as the 

State provides data that corresponds to 

each requested area showing that the 

area meets one of the qualifying 

standards for approval. 

The proposed rule would eliminate 

statewide waiver approvals when 

substate data is available through BLS, 

except for those waivers based upon a 

State’s qualification for extended 

unemployment benefits as determined 

by DOL’s Unemployment Insurance 

Service. The Department proposes this 

change so that waivers of the ABAWD 

time limit are more appropriately 

targeted to those particular areas in 

which unemployment rates are high. 

Since statewide unemployment figures 

may include areas in which 

unemployment rates are relatively low, 

the Department believes that a more 

targeted approach would ensure that 

waivers exist only in areas that do not 

have a sufficient number of jobs to 

provide employment for the individuals 

living in that specific area. This 

proposed change further supports the 

Department’s goal that more individuals 

are subject to the ABAWD time limit 

and work requirement, which can be 

met through working or participating in 

a work program or workfare program, 

consistent with the intent of the Act. 

The Department requests public 

comment specific to the proposed 

restriction on statewide waivers, 

especially with consideration to how 

the change may affect different States in 

different ways based upon geographic 

size, population, and other factors. 

These changes would be codified in 7 

CFR 273.24(f)(4). 

Restricting the Combining of Data to 

Group Substate Areas 

Current regulations at 7 CFR 

273.24(f)(6) and the Department’s policy 

guidance provide States considerable 

flexibility to define areas covered by 

ABAWD waivers. This flexibility allows 

States to combine data to group two or 

more substate areas, such as counties, 

together (otherwise referred to as 

‘‘grouped’’ areas or ‘‘grouping’’). In 

order to meet the requirement for 

qualifying data or evidence that 

corresponds to the requested area, States 

use the unemployment and labor force 

data from the individual areas in the 

group to calculate an unemployment 

rate representative of the whole group. 

States can only group areas and support 

approval based on qualifying 

unemployment data. Under current 

regulations, States must demonstrate 

that the areas within any such group are 

contiguous and/or share the same 

Federal- or State-recognized economic 

region. For example, two or more 

contiguous counties could be grouped 

together, and the group’s average 

unemployment rate could be calculated, 

986 Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 

2An LMA is an economically integrated 

geographic area within which individuals can 

reside and find employment within a reasonable 

distance or can readily change employment without 

changing their place of residence. LMAs include 

Federally-designated statistical areas such as 

metropolitan statistical areas, micropolitan 

statistical areas, and other combined statistical 

areas. A nationwide list of every LMA is maintained 

by BLS. 

by combining the unemployment and 

labor force data from each individual 

county. 

The Department’s existing general 

conditions for the grouping of areas— 

that the areas must be either contiguous 

and/or share the same economic 

region—were intended to ensure that 

the areas grouped together are 

economically tied. However, in practice, 

the Department has learned that its 

standards for combining areas provide 

too much flexibility for State agencies 

and are often ineffective at ensuring that 

States are only grouping areas that are 

economically tied. For example, some 

States have grouped nearly all 

contiguous counties in the State 

together while omitting a few counties 

with relatively low unemployment in 

order to maximize the waived areas in 

the State. In other cases, States have 

grouped certain towns together that 

share the same economic region while 

omitting others with relatively low 

unemployment from the group, thereby 

maximizing the waived areas in the 

State. 

The proposed rule would prohibit 

States from grouping areas, except for 

areas that are designated a Labor Market 

Area (LMA) by the Federal 

government.2 This change would ensure 

that only areas that are economically 

tied are grouped together. Moreover, the 

proposed rule would require States to 

include the unemployment data 

representative of all areas in the LMA in 

the State. As a result, States would be 

unable to omit certain areas within the 

LMA in the State for the purposes of 

achieving a qualifying unemployment 

rate for part of an LMA. These changes 

would be codified in 7 CFR 273.24(f)(5). 

The Department requests public 

comments on whether it should include 

Labor Market Areas (LMAs) defined by 

the Federal government as the basis for 

grouping areas or whether it should 

prohibit grouping entirely. If grouping 

were prohibited entirely, waived areas 

would be limited to individually 

qualifying jurisdictions with 

corresponding data (for example, 

counties and their equivalents, cities, 

and towns). The Department requests 

comments on the potential impacts of 

either policy. The Department believes 

that only allowing the use of Federally 

designated LMAs will limit the 

combination of areas that are not 

contiguous and economically integrated. 

The Department is interested in 

feedback on whether the LMA 

definition will target waivers to 

jurisdictions with a demonstrable lack 

of sufficient jobs without including 

jurisdictions that do not lack sufficient 

jobs. 

Duration of Waiver Approvals and 

Timeliness of Data 

The proposed approach would limit 

the duration of waiver approvals. Under 

the current regulations, the Department 

typically approves waivers for one year. 

However, the current regulations allow 

the Department to approve shorter or 

longer waivers in certain circumstances. 

The Department proposes limiting a 

waiver’s duration to one year, but 

continuing to allow a waiver for a 

shorter period at a State’s request. The 

Department believes that a one year 

waiver term allows sufficient 

predictability for States to plan and 

implement the waiver; at the same time, 

a one-year waiver term ensures that the 

waiver request reflects current economic 

conditions. 

The proposed rule would also 

prioritize recent data by preventing 

States from requesting to implement 

waivers late in the Federal fiscal year, 

which broadens the available data 

reference period. Through operational 

experience, the Department has 

observed that several States that have 

historically requested 12-month waivers 

on a fiscal year basis (i.e., October 1 of 

one year through September 30 of the 

following year), have shifted their 

waiver request and implementation 

dates to later in the fiscal year (e.g., 

September 1 through August 31). The 

States that have made this shift have 

supported their waivers based on the 20 

percent standard. In the current 

regulations, the 24-month data reference 

period for this waiver is tied to the fiscal 

year and only updates each year on 

October 1. The Department has noticed 

that as the unemployment rates have 

improved, States that shift the waiver 

operational period to later in the fiscal 

year have been able to capitalize on 

older data and qualify for waivers of the 

ABAWD time limit for additional time. 

States are able to take advantage of this 

loophole if their unemployment rates 

for the requested areas have been 

improving relative to the national 

average. As a result, these States are able 

to obtain a waiver and maximize the 

areas waived into the next fiscal year, 

using data that is no longer appropriate 

as of the October 1 update. 

To curtail this practice, the 

Department proposes that waivers based 

on the 20 percent standard would not be 

approved beyond the fiscal year in 

which the waiver is implemented. In 

addition, these waivers must utilize data 

from a 24-month period no less recent 

than that DOL used in its current fiscal 

year LSA designation. Such an approach 

ensures waivers rely on sufficiently 

recent data for the current fiscal year 

and prevents States from using older 

data, which may not accurately reflect 

current economic conditions. 

This provision would streamline the 

implementation of the program and 

would be codified in 7 CFR 273.24(f)(6). 

Areas With Limited Data or Evidence 

Current practices provide flexibility to 

State agencies to rely on alternative data 

sources regardless of whether the area 

has corresponding BLS unemployment 

data available. Currently, the 

Department may approve requests 

supported by an estimated 

unemployment rate of an area based on 

available data from BLS and Census 

Bureau’s American Community Survey 

(ACS), a low and declining 

employment-to-population ratio, a lack 

of jobs as a consequence of declining 

occupations or industries, or an 

academic study or other publication 

describing the area’s lack of a sufficient 

number of jobs. At times, State agencies 

will use these alternative data sources to 

justify a waiver request even when the 

corresponding BLS data shows that the 

unemployment rate in the area is 

relatively low. As stated previously, the 

Department believes that waivers of the 

ABAWD time limit should be limited to 

only circumstances in which the area 

clearly does not have a sufficient 

number of jobs to provide employment 

for the individuals. By not restricting 

the use of these alternative to areas with 

limited data or evidence, the 

Department has permitted States to take 

advantage of these alternative data 

sources, when BLS employment data is 

readily available. 

Under the proposed rule, all of these 

criteria would only be applicable to 

areas for which BLS or a BLScooperating agency data is limited or 

unavailable, such as a reservation area 

or U.S. Territory. In these areas, the 

Department could approve requests 

supported by an estimated 

unemployment rate of an area based on 

available data from BLS and ACS, a low 

and declining employment-topopulation ratio, a lack of jobs as a 

consequence of declining occupations 

or industries, or an academic study or 

other publication describing the area’s 

lack of a sufficient number of jobs. 

Waiver requests for an area for which 

standard data from BLS or a BLSVerDate Sep<11>2014 16:27 Jan 31, 2019 Jkt 247001 PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 E:\FR\FM\01FEP1.SGM 01FEP1
Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 987 

3Under current regulations, the State must certify 

that data from the BLS or the BLS-cooperating 

agency show a most recent 12-month average 

unemployment rate over 10 percent or that ETA 

designated the area as an LSA for the current fiscal 

year. 

cooperating agency is limited or 

unavailable would not be required to 

conform to the criteria for approval 

proposed under paragraphs (f)(2), (f)(3), 

(f)(4), (f)(5), and (f)(6). Additionally, the 

Department would consider other data 

in line with BLS methods or considered 

reliable. This allows for flexibility if 

new methods or data are developed for 

Indian Reservation or U.S. Territory 

regions currently with limited or no 

data. 

Using an estimated unemployment 

rate based on available data from BLS 

and ACS is part of current practice. The 

Department proposes codifying this 

criteria in the regulations only for areas 

with limited data or evidence, such as 

a reservation area or U.S. Territory. 

Currently, States often estimate 

unemployment rates for reservation 

areas by applying data from ACS to 

available BLS data. In addition, some 

tribal governments generate their own 

labor force and/or unemployment data, 

which would remain acceptable to 

support a waiver. 

These changes would be codified in 7 

CFR 273.24(f)(7). 

Other Changes to Waivers 

The proposed rule would eliminate 

three provisions in current regulations: 

The designation as an LSA as a criterion 

for approval; the implementation of 

waivers before approval; and the 

historical seasonal unemployment as a 

criterion for approval. These provisions 

are eliminated to ensure that the 

ABAWD work requirement is applied in 

accordance with the Department’s goal 

to strengthen work requirements. 

The proposed rule would no longer 

allow an area to qualify for a waiver 

based on DOL’s Employment and 

Training Administration (ETA) 

designation of the area as an LSA for the 

current fiscal year. This change is 

central to the Department’s efforts to 

raise the standards by which it 

determines whether an area is lacking a 

sufficient number of jobs to provide 

employment for ABAWDs in order to 

require more ABAWDs to engage in 

work, work training, or workfare if they 

wish to receive SNAP. As explained in 

a previous section, DOL’s criteria for 

LSAs require an average unemployment 

rate that is at least 20 percent above the 

national average and at least 6 percent 

for the preceding two calendar years (a 

24-month period). The Department is 

eliminating LSA designation as a basis 

for waiver approval because LSAs are 

determined using a minimum 

unemployment rate floor of 6 percent, 

whereas the Department proposes using 

a minimum unemployment rate of 7 

percent for its similar, but more flexible, 

20 percent standard. Continuing to 

allow LSA designation as a basis for 

waiver approval would be inconsistent. 

Moreover, LSAs are not designated for 

all different types of areas across the 

country, and having an LSA criteria 

separate from the 20 percent criteria 

could be seen as unnecessary moving 

forward. 

The proposed rule would bar States 

from implementing a waiver prior to its 

approval. Though rarely used, current 

regulations allow a State to implement 

an ABAWD waiver as soon as the State 

submits the waiver request based on 

certain criteria.3 By removing the 

current pertinent text in 273.24(f)(4), the 

proposed rule would require States to 

request and receive approval before 

implementing a waiver. This would 

allow the Department to have a more 

accurate understanding of the status of 

existing waivers and would provide 

better oversight in the waiver process. It 

would also prevent waivers from being 

implemented until the Department 

explicitly reviewed and approved the 

waiver. 

The proposed rule would also remove 

the criterion of a historical seasonal 

unemployment rate over 10 percent as 

a basis for approval. Historical seasonal 

unemployment does not demonstrate a 

prolonged lack of sufficient number of 

jobs to provide employment for the 

individuals. Historical seasonal 

unemployment rates, by definition, are 

limited to a relatively short period of 

time each year. Nor does a historical 

seasonal unemployment rate indicate 

early signs of a declining labor market. 

Historical seasonal unemployment rates 

are cyclical rather than indicative of 

declining conditions. Based on 

operational experience, the Department 

has not typically seen the use of this 

criterion by States. The Department has 

not approved a waiver under this 

criterion in more than two decades. For 

these reasons, the Department proposes 

removing a historical seasonal average 

unemployment rate as a way to qualify 

for a waiver. 

In addition, as stated previously, the 

proposed rule would no longer provide 

for statewide waivers except for those 

waivers approved based upon a state’s 

qualification for extended 

unemployment benefits. 

Ending the ‘‘Carryover’’ of ABAWD 

Exemptions 

The proposed rule would end the 

unlimited carryover and accumulation 

of ABAWD percentage exemptions, 

previously referred to as 15 percent 

exemptions before the enactment of the 

Agriculture Improvement Act of 2018. 

Upon enactment, Section 6(o)(6) of the 

Act provides that each State agency be 

allotted exemptions equal to an 

estimated 12 percent of ‘‘covered 

individuals,’’ which are the ABAWDs 

who are subject to the ABAWD time 

limit in the State in Fiscal Year 2020 

and each subsequent Fiscal Year. States 

can use these exemptions available to 

them to extend SNAP eligibility for a 

limited number of ABAWDs subject to 

the time limit. When one of these 

exemptions is provided to an ABAWD, 

that one ABAWD is able to receive one 

additional month of SNAP benefits. The 

Act and current regulations give States 

discretion whether to use these 

exemptions, and, as a result, some 

States use the exemptions that are 

available to them and others do not. 

Each fiscal year, the Act requires the 

Department to estimate the number of 

exemptions that each State be allotted 

and to adjust the number of exemptions 

available to each State. Based on the 

Act’s instructions, the regulations 

provide the specific formulas that the 

Department must use to estimate the 

number of exemptions, which are 

referred to as ‘‘earned’’ exemptions, and 

to adjust the exemptions available to the 

State each year. The proposed rule 

would not change any part of the 

calculation that the Department follows 

to estimate earned exemptions, or any 

other part of 273.24(g). The proposed 

rule would only change the calculation 

that the Department uses to adjust the 

number of exemptions available for each 

fiscal year at 7 CFR 273.24(h). 

The regulation’s current interpretation 

of Section 6(o)(6)(G) of the Act, which 

requires the adjustment of exemptions, 

causes unused exemptions to carry over 

and accumulate from one year to the 

next, unless the State uses all of its 

available exemptions in a given year. 

For FY 2018, States earned 

approximately 1.2 million exemptions, 

but had about an additional 7.4 million 

exemptions available for use due to the 

carryover of unused exemptions from 

previous fiscal years. The Department 

views the carryover of significant 

amounts of unused exemptions to be an 

unintended outcome of the current 

regulations. The Department is 

concerned that such an outcome is 

inconsistent with Congressional intent 

to limit the number of exemptions 

988 Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 

available to States each year. Concerns 

about the carryover of exemptions were 

also expressed by the September 2016, 

USDA Office of the Inspector General 

(OIG) audit report ‘‘FNS Controls Over 

SNAP Benefits for Able-Bodied Adults 

Without Dependents.’’ Therefore, the 

Department proposes revising 7 CFR 

273.24(h) to end the unlimited carryover 

of unused percentage exemptions. The 

Department proposes this change to 

implement the Act more effectively and 

to advance further the Department’s goal 

to promote self-sufficiency. 

In order to address the carryover 

issue, the proposed rule would change 

the adjustment calculation that the 

Department uses to increase or decrease 

the number of exemptions available to 

each State for the fiscal year based on 

usage during the preceding fiscal year. 

The proposed rule would no longer 

allow for unlimited carryover from all 

preceding years. Instead, each State 

agency’s adjustment would be based on 

the number of exemptions earned in the 

preceding fiscal year minus the number 

of exemptions used in the preceding 

fiscal year. The resulting difference 

would be used to adjust (by increasing 

or decreasing) the earned exemption 

amount. In addition, the adjustment will 

apply only to the fiscal year in which 

the adjustment is made. 

The three examples below show how 

the proposed rule’s adjustment 

calculation would work in practice 

based on no exemption use, varied 

exemption use, and exemption overuse. 

These examples assume that a State 

earns five new exemptions every year 

over a 4-year period. 

Example 1, No Exemption Use 

Example 1 shows how the proposed 

adjustment calculation would work for 

a State that uses zero exemptions, and 

how it would end the carryover and 

accumulation of unused exemptions. 

The State earned five exemptions for the 

current fiscal year (FY) of 2021 in this 

example (row A). The State’s adjustment 

for FY 2021 is based on the number of 

exemptions earned in the previous year 

(FY 2020) minus the number of 

exemptions used for the previous year 

(FY 2020). In this example, we assume 

the State earned five exemptions in FY 

2020 and used no exemptions in FY 

2020, so the adjustment for FY 2021 is 

five (row B). The adjustment of five (row 

B) is then added to the five earned for 

FY 2021 (row A) to obtain the State’s 

total of 10 exemptions after adjustment 

for FY 2021 (row C). In FY 2021, the 

State uses zero exemptions (row D), so 

it does not have any overuse liability for 

that year because row E results in a 

positive number. In FY 2022, FY 2023, 

and FY 2024, the calculation is the same 

and results are the same each year. The 

number of exemptions available to the 

State is increased based on the number 

earned for and used in the preceding 

fiscal year, but the State does not 

carryover accumulated exemptions 

indefinitely. Whereas the State would 

have 25 total exemptions after 

adjustment for FY 2024 under the 

current regulations, the State would 

have 10 total exemptions after 

adjustment for FY 2024 under the 

proposed regulation. 

EXAMPLE 1 

Fiscal year (FY) 2021 2022 2023 2024 

A ................................... Earned for current FY ........................................... 5 5 5 5 

B ................................... (+) Adjustment for current FY (earned minus 

used for previous FY).

5 5 5 5 

C .................................. (=) Total after adjustment for current FY .............. 10 10 10 10 

D .................................. (¥) Used in current FY ......................................... 0 0 0 0 

E ................................... (=) Liability for overuse? (Yes or No) ................... 10 (No) 10 (No) 10 (No) 10 (No) 

Example 2, Varied Exemption Use 

Example 2 shows how the proposed 

adjustment calculation would work for 

a State that uses different amounts of 

exemptions each fiscal year and 

therefore receives an increase or 

decrease in the exemptions available to 

it each subsequent fiscal year. In other 

words, the number of exemptions 

available to the State is adjusted for an 

increased total exemptions one year, 

then a decreased total exemptions the 

next. The State earned five exemptions 

for the current FY of 2021 (row A). The 

State’s adjustment for FY 2021 is based 

on the number of exemptions earned in 

the previous year (FY 2020) minus the 

number of exemptions used for the 

previous year (FY 2020). We assume the 

State earned five exemptions in FY 2020 

but used zero exemptions in FY 2020, 

so the State’s total after adjustment for 

FY 2021 is 10 (row C). In FY 2021, the 

State uses eight exemptions (row D), so 

it does not have any over-usage liability 

for that year (row E). That is, though the 

State only earned 5 exemptions for FY 

2021, the adjustment allowed the State 

to avoid any over usage liability for FY 

2021. However, for the purposes of 

adjustment in FY 2022, the 8 used 

exemptions are subtracted from the 5 

earned exemptions for FY 2021, not 

from the 10 adjusted exemption amount 

available in FY 2021. Therefore, the 

adjustment amount for FY 2022 is 

negative three. In FY 2022, the State 

again earns five exemptions but the 

adjustment is negative three (the result 

of subtracting row D, FY 2021 from row 

A, FY 2022). The State then has a total 

of two exemptions for FY 2022. The 

State chooses to use two exemptions for 

FY 2022, therefore it has no overuse in 

FY 2022. This example shows how the 

proposed regulation increases or 

decreases the number of exemptions 

available to States while also limiting 

the average number of exemptions in 

effect to 12 percent over time. As shown 

in row D, the State can use no more than 

10 exemptions over the course of any 2- 

year period, which is equal to the 10 

exemptions earned over every 2-year 

period. 

EXAMPLE 2 

Fiscal year (FY) 2021 2022 2023 2024 

A ................................... Earned for current FY ........................................... 5 5 5 5 

B ................................... (+) Adjustment for current FY (earned minus 

used for previous FY).

5 ¥3 3 ¥3 

C .................................. (=) Total after adjustment for current FY .............. 10 2 8 2 

D .................................. (¥) Used in current FY ......................................... 8 2 8 2 

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 989 

EXAMPLE 2—Continued 

Fiscal year (FY) 2021 2022 2023 2024 

E ................................... (=) Liability for overuse? (Yes or No) ................... 2 (No) 0 (No) 0 (No) 0 (No) 

Example 3, Exemption Overuse 

Example 3 shows how the proposed 

adjustment calculation would work for 

a State that overuses exemptions. In this 

example, we again assume the State 

earned five exemptions in FY 2020 but 

used zero exemptions in FY 2020, so the 

State’s total after adjustment for FY 

2021 is 10 (row C). In FY 2021, the State 

uses six exemptions (row D); once again, 

it does not have any over-usage liability 

for that year (row E), but the adjustment 

for FY 2022 will be negative one (the 

result of subtracting row D, FY 2021 

from row A, FY 2022). Put differently, 

the five exemptions earned for FY 2022 

offset the adjustment of negative one. 

The State then has a total of four 

exemptions for FY 2022 (row C). 

However, the State uses six exemptions 

in FY 2022. Because the State used more 

exemptions in FY 2022 than its total 

after adjustment for FY 2022, it has an 

overuse liability of two for FY 2022. The 

Department would consider the 

exemption overuse an overissuance and 

would hold the State liable for the total 

dollar value of the exemptions, as 

estimated by the Department. 

EXAMPLE 3 

Fiscal year (FY) 2021 2022 2023 2024 

A ................................... Earned for current FY ........................................... 5 5 5 5 

B ................................... (+) Adjustment for current FY (earned minus 

used for previous FY).

5 ¥1 ¥1 1 

C .................................. (=) Total after adjustment for current FY .............. 10 4 4 6 

D .................................. (¥) Used for current FY ....................................... 6 6 4 4 

E ................................... (=) Liability for overuse? (Yes or No) ................... 4 (No) ¥2 (Yes) 0 (No) 2 (No) 

Under the proposed rule, the 

Department would continue to provide 

States with its estimated number of 

exemptions earned for each upcoming 

fiscal year as data becomes available, 

typically in September. The Department 

would also continue to provide States 

with the exemption adjustments as soon 

as updated caseload data is available 

and states have provided final data on 

the number of exemptions used in the 

preceding fiscal year, typically in 

January. 

The Department also seeks comments 

from States on how to treat State 

agencies’ existing total number of 

percentage exemptions, which in some 

cases have carried over and 

accumulated over many years, and on 

when the proposed change should be 

implemented. Under the proposed rule, 

these accumulated percentage 

exemptions would not be available to 

States once the change is implemented. 

Additionally, because the adjusted 

number of exemptions is based on the 

preceding fiscal year, the change in 

regulatory text will impact State’s 

ability to use exemptions in the fiscal 

year preceding the fiscal year that the 

provision goes into effect. Therefore, the 

Department seeks comment on how to 

best handle these issues. 

The proposed rule would not change 

or affect the ‘‘caseload adjustments’’ at 

273.24(h)(1), which apply to any State 

that has a change of over 10 percent in 

its caseload amount. However, the 

Department is taking this opportunity to 

correct the cross-reference that this 

paragraph makes to 273.24(g)(2) for 

accuracy. The proposed regulation 

cross-references 273.24(g)(3), instead of 

(g)(2). The Department is making this 

change because it is more accurate and 

precise to cross-reference to 

273.24(g)(3), given that the caseload 

adjustments apply to the number of 

exemptions estimated as earned for each 

State for each fiscal year. 

Procedural Matters 

Executive Order 12866 and 13563 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This 

proposed rule has been determined to 

be economically significant and was 

reviewed by the Office of Management 

and Budget (OMB) in conformance with 

Executive Order 12866. 

Regulatory Impact Analysis 

As required for rules that have been 

designated as economically significant 

by the Office of Management and 

Budget, a Regulatory Impact Analysis 

(RIA) was developed for this proposed 

rule. It follows this rule as an Appendix. 

The following summarizes the 

conclusions of the regulatory impact 

analysis: 

The Department has estimated the net 

reduction in federal spending associated 

with the proposed transfer rule to be 

approximately $1.1 billion in fiscal year 

(FY) 2020 and $7.9 billion over the five 

years 2020–2024. This is a reduction in 

federal transfers (SNAP benefit 

payments); the reduction in transfers 

represents a 2.5 percent decrease in 

projected SNAP benefit spending over 

this time period. 

Under current authority, the 

Department estimates that about 60 

percent of ABAWDs live in areas that 

are not subject to a waiver and thus face 

the ABAWD time limit. Under the 

revised waiver criteria the Department 

estimates that nearly 90 percent of 

ABAWDs would live in such an area. Of 

those newly subject to the time limit, 

the Department estimates that 

approximately two-thirds (755,000 

individuals in FY 2020) would not meet 

the requirements for failure to engage 

meaningfully in work or work training. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601–612) requires Agencies to 

analyze the impact of rulemaking on 

small entities and consider alternatives 

that would minimize any significant 

impacts on a substantial number of 

small entities. Pursuant to that review, 

990 Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 

it has been certified that this rule would 

not have a significant impact on a 

substantial number of small entities. 

This proposed rule would not have an 

impact on small entities because the 

proposed rule primarily impacts State 

agencies. As part of the requirements, 

State agencies would have to update 

their procedures to incorporate the new 

criteria for approval associated with 

requesting waivers of ABAWD time 

limit. Small entities, such as smaller 

retailers, would not be subject to any 

new requirements. However, all retailers 

would likely see a drop in the amount 

of SNAP benefits redeemed at stores if 

these provisions were finalized, but 

impacts on small retailers are not 

expected to be disproportionate to 

impact on large entities. As of FY 2017, 

approximately 76 percent of authorized 

SNAP retailers (nearly 200,000 retailers) 

were small groceries, convenience 

stores, combination grocery stores, and 

specialty stores, store types that are 

likely to fall under the Small Business 

Administration gross sales threshold to 

qualify as a small business for Federal 

Government programs. While these 

stores make up the majority of 

authorized retailers, collectively they 

redeem less than 15 percent of all SNAP 

benefits. The proposed rule is expected 

to reduce SNAP benefit payments by 

about $1.7 billion per year. This would 

equate to about a $100 loss of revenue 

per small store on average per month 

($1.7 billion × 15%/200,000 stores/12 

months). In 2017, the average small 

store redeemed more than $3,800 in 

SNAP each month; the potential loss of 

benefits represents less than 3 percent of 

their SNAP redemptions and only a 

small portion of their gross sales. Based 

on 2017 redemption data, a 2.7 percent 

reduction in SNAP redemptions 

represented between 0.01 and 0.5 

percent of these stores gross sales. 

Executive Order 13771 

Executive Order 13771 directs 

agencies to reduce regulation and 

control regulatory costs and provides 

that the cost of planned regulations be 

prudently managed and controlled 

through a budgeting process. 

This proposed rule is expected to be 

an Executive Order 13771 deregulatory 

action. The rule does not include any 

new costs. FNS is proposing a reduction 

in burden hours since State agencies are 

no longer able to group areas together 

for waiver approval. The reduction 

would result in an estimated collective 

savings of $12,092 for State Agencies. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, 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, 

the Department generally must prepare 

a written statement, including a cost 

benefit analysis, for proposed and final 

rules with ‘‘Federal mandates’’ that may 

result in expenditures by State, local or 

tribal governments, in the aggregate, or 

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 the 

Department to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the most cost 

effective or least burdensome alternative 

that achieves the objectives of the rule. 

This proposed rule does not contain 

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. Thus, the rule is 

not subject to the requirements of 

sections 202 and 205 of the UMRA. 

Executive Order 12372 

SNAP is listed in the Catalog of 

Federal Domestic Assistance under No. 

10.551. For the reasons set forth in the 

Final Rule codified 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. 

Federalism Summary Impact Statement 

Executive Order 13132 requires 

Federal agencies to consider the impact 

of their regulatory actions on State and 

local governments. Where such actions 

have Federalism implications, agencies 

are directed to provide a statement for 

inclusion in the preamble to the 

regulations describing the agency’s 

considerations in terms of the three 

categories called for under Section 

6(b)(2)(B) of Executive Order 13132. 

The Department has determined that 

this rule does not have Federalism 

implications. Therefore, under Section 

6(b) of the Executive Order, a 

Federalism summary impact statement 

is not required. 

Executive Order 12988, Civil Justice 

Reform 

This proposed rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. This rule is not 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 and timely 

implementation. This rule is not 

intended to have retroactive effect 

unless so specified in the Effective Dates 

section of the final rule. Prior to any 

judicial challenge to the provisions of 

the final rule, all applicable 

administrative procedures must be 

exhausted. 

Civil Rights Impact Analysis 

FNS has reviewed the proposed 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. While we 

believe that a reduction in the number 

of ABAWD waivers granted to State 

agencies will adversely affect potential 

program participants in all groups who 

are unable to meet the employment 

requirements, and have the potential for 

disparately impacting certain protected 

groups due to factors affecting rates of 

employment of members of these 

groups, we find that the implementation 

of mitigation strategies and monitoring 

by the Civil Rights Division of FNS will 

lessen these impacts. 

Executive Order 13175 

This rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-government basis on policies that 

have tribal implications, including 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

The USDA’s Office of Tribal Relations 

(OTR) has assessed the impact of this 

rule on Indian tribes and determined 

that this rule has tribal implications that 

require tribal consultation under E.O. 

13175. FNS invited Tribal leaders to a 

consultation held on March 14, 2018. 

Tribal leaders did not provide any 

statement or feedback to the Department 

on the rule. FNS and OTR will 

determine if a future consultation is 

needed. If a Tribe requests consultation, 

FNS will work with the Office of Tribal 

Relations to ensure meaningful 

consultation is provided where changes, 

additions, and modifications identified 

herein are not expressly mandated by 

Congress. 

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 991 

Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. Chap. 35; 5 CFR 1320) 

requires the Office of Management and 

Budget (OMB) approve all collections of 

information by a Federal agency before 

they can be implemented. Respondents 

are not required to respond to any 

collection of information unless it 

displays a current valid OMB control 

number. In accordance with the 

Paperwork Reduction Act of 1995, this 

proposed rule will contain information 

collections that are subject to review 

and approval by the Office of 

Management and Budget; therefore, FNS 

is submitting for public comment the 

changes in the information collection 

burden that would result from adoption 

of the proposals in the rule. 

Comments on this proposed rule must 

be received by April 2, 2019. Comments 

are invited on: (a) Whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; (c) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on those who are to respond, including 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology. 

All responses to this notice will be 

summarized and included in the request 

for OMB approval. All comments will 

also become a matter of public record. 

Title: Supplemental Nutrition 

Assistance Program Waivers of Section 

6(o) of the Food and Nutrition Act. 

OMB Number: 0584–0479. 

Expiration Date: [July 31, 2021]. 

Type of Request: Revision of a 

currently approved collection. 

Abstract: Section 6(o) of the Food and 

Nutrition Act of 2008, (the Act, as 

amended through Pub. L. 113–xxx), 

limits the amount of time an ablebodied adult without dependents 

(ABAWD) can receive Supplemental 

Nutrition Assistance Program (SNAP) 

benefits to 3 months in a 36-month 

period, unless the individual is working 

and/or participating in a work program 

half-time or more, or participating in 

workfare. The Act exempts individuals 

from the time limit for several reasons, 

including age, unfitness for work, or 

having a dependent child. The ABAWD 

time limit and work requirement 

currently apply to people ages 18 

through 49, unless they are already 

exempt from the general work 

requirements, medically certified as 

physically or mentally unfit for 

employment, responsible for a child 

under 18, or pregnant. ABAWDs are also 

work registrants and must meet the 

general work requirements. In addition, 

ABAWDs subject to the time limit must 

work and/or participate in a work 

program 80 hours per month or more, or 

participate in and comply with workfare 

to receive SNAP for more than 3 months 

in a 36-month period. Participation in 

SNAP E&T, which is a type of work 

program, is one way a person can meet 

the 80 hour per month ABAWD work 

requirement, but other work programs 

are acceptable as well. 

The Act also provides State agencies 

with flexibility to request a waiver of 

this time limit if unemployment is high 

or the area does not have a sufficient 

number of jobs to provide employment. 

State agencies can request to waive the 

ABAWD time limit if an area has an 

unemployment rate of over 10 percent 

or the State can meet one of the 

regulatory options to show it does not 

have a sufficient number of jobs to 

provide employment. If the time limit is 

waived, individuals are not required to 

meet the ABAWD work requirement to 

receive SNAP for more than 3 months 

in a 36-month period. This collection of 

information is necessary for FNS to 

perform its statutory obligation to 

review waivers of the SNAP ABAWD 

time limit. 

This is a revision of a currently 

approved information collection request 

associated with this rulemaking. In the 

previous submission, the Food and 

Nutrition Service (FNS) estimated 35 

hours for each waiver request for a total 

of 1,198 hours. Based on the experience 

of FNS during calendar year 2018, FNS 

projects that 36 out of 53 State agencies 

would submit requests for a waiver of 

the time limit for ABAWD recipients 

based on a high unemployment rate or 

lack of sufficient number of jobs. FNS 

estimates a response time of 28 hours 

for each waiver request based on labor 

market data, which require detailed 

analysis of labor markets within the 

State. FNS projects a total of 1,008 

hours, which would be a reduction of 

190 hours compared to the 1,198 hours 

estimated provided in the pending 

approval. 

FNS is proposing a reduction in 

burden hours since State agencies are no 

longer able to group areas together for 

waiver approval. The reduction will 

burden hours would result in an 

estimated collective savings of $12,092 

for State Agencies. This rule does not 

require any recordkeeping burden. 

Reporting detail burden details are 

provided below. 

Respondents: State agencies. 

Estimated Number of Respondents: 

36. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 1,008. 

OMB No. 

0584–0479 

Requirement 

(7 CFR 273.24(f) 

Estimated 

number 

of respondents 

Response 

annually per 

respondent 

Total 

annual 

responses 

Hours per 

response 

Annual 

burden 

hours 

Previous 

submission 

total hours 

Differences 

due to 

program 

changes 

Differences 

due to 

adjustment 

Affected Public: State Agencies 

Reporting burden Submissions of 

waiver request 

based on labor 

market data.

36 1 36 28 1,008 1,190 ¥182 0 

7 CFR 

273.24(f)— 

Submission of 

waiver request 

based on 

Labor Surplus 

Area designation.

0 0 0 0 0 8 ¥8 0 

Reporting totals ........................... 36 ........................ .................... .................... 1,008 .................... ¥190 ........................

992 Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 

OMB No. 

0584–0479 

Requirement 

(7 CFR 273.24(f) 

Estimated 

number 

of respondents 

Response 

annually per 

respondent 

Total 

annual 

responses 

Hours per 

response 

Annual 

burden 

hours 

Previous 

submission 

total hours 

Differences 

due to 

program 

changes 

Differences 

due to 

adjustment 

Total Reporting 

Burden due to 

Rulemaking.

........................... ........................ ........................ .................... .................... 1,008 .................... ........................ ........................

E-Government Act Compliance 

The Department is committed to 

complying with the E-Government Act 

of 2002, to promote the use of the 

internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for other purposes. 

List of Subjects in 7 CFR Part 273 

Able-bodied adults without 

dependents, Administrative practice 

and procedures, Employment, Indian 

reservations, Time limit, U.S. territories, 

Waivers, Work requirements. 

Accordingly, FNS proposes to amend 

7 CFR part 273 to read as follows: 

PART 273—CERTIFICATION OF 

ELIGIBLE HOUSEHOLDS 

■ 1. The authority citation for part 273 

continues to read as follows: 

Authority: 7 U.S.C 2011–2036. 

■ 2. In § 273.24, revise paragraph (f) to 

read as follows: 

§ 273.24 Time Limit for able-bodied adults. 

* * * * * 

(f) Waivers—(1) General. The State 

agency may request FNS approval to 

temporarily waive the time limit for a 

group of individuals in the State in the 

area in which the individuals reside. To 

be considered for approval, the request 

must be endorsed by the State’s 

governor and supported with 

corresponding data or evidence 

demonstrating that the requested area: 

(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) Core standards. FNS will approve 

waiver requests under (1)(i) and (ii) that 

are supported by any one of the 

following: 

(i) Data from the Bureau of Labor 

Statistics (BLS) or a BLS-cooperating 

agency that shows an area has a recent 

12-month average unemployment rate 

over 10 percent; 

(ii) Data from the BLS or a BLScooperating agency that shows an area 

has a 24-month average unemployment 

rate 20 percent or more above the 

national rate for a recent 24-month 

period, but in no case may the 24-month 

average unemployment rate of the 

requested area be less than 7 percent. 

The 24-month period must be no earlier 

than the same 24-month period used by 

the Department of Labor’s Employment 

and Training Administration to 

designate Labor Surplus Areas for the 

current fiscal year; or 

(iii) Evidence that an area qualifies for 

extended unemployment benefits as 

determined by the Department of Labor 

(DOL). 

(3) Other data and evidence. FNS may 

approve waiver requests that are 

supported by data or evidence other 

than that listed under paragraph (f)(2) of 

this section if the request demonstrates 

an exceptional circumstance in an area. 

In addition, the request must 

demonstrate that the exceptional 

circumstance has caused a lack of 

sufficient number of jobs, such as data 

from the BLS or a BLS-cooperating 

agency that shows an area has a most 

recent three-month average 

unemployment rate over 10 percent. 

Supporting unemployment data 

provided by the State must rely on 

standard BLS data or methods. 

(4) Restriction on statewide waivers. 

FNS will not approve statewide waiver 

requests if data for the requesting State 

at the substate level is available from 

BLS, except for waivers under 

paragraph (f)(2)(iii) of this section. 

(5) Restricting the combining of data 

to group substate areas. The State 

agency may only combine data from 

individual areas that are collectively 

considered to be a Labor Market Area by 

DOL. 

(6) Duration of waiver approvals. In 

general, FNS will approve waivers for 

one year. FNS may approve waivers for 

a shorter period at the State agency’s 

request and waivers under paragraph 

(f)(2)(ii) of this section will not be 

approved for a period beyond the fiscal 

year in which the waiver is 

implemented. 

(7) Areas with limited data or 

evidence. Waiver requests for an area for 

which standard BLS data or a BLScooperating agency data is limited or 

unavailable, such as a reservation area 

or U.S. Territory, are not required to 

conform to the criteria for approval 

under paragraphs (f)(2), (f)(3), (f)(4), 

(f)(5) and (f)(6) of this section. The 

supporting data or evidence provided by 

the State must correspond to the 

requested area. 

(i) FNS may approve waivers for these 

areas if the requests are supported by 

sufficient data or evidence, such as: 

(A) Estimated unemployment rate 

based on available data from BLS and 

Census Bureau’s American Community 

Survey; 

(B) A low and declining employmentto-population ratio; 

(C) A lack of jobs in declining 

occupations or industries; or 

(D) An academic study or other 

publication describing the area as 

lacking a sufficient number of jobs to 

provide employment for its residents. 

(ii) In areas with limited data or 

evidence, such as reservation areas or 

U.S. Territories, FNS may allow the 

State agency to combine data from 

individual areas to waive a group of 

areas if the State agency demonstrates 

that the areas are economically 

integrated. 

* * * * * 

■ 3. In § 273.24, revise paragraph (h) to 

read as follows: 

* * * * * 

(h) Adjustments. FNS will make 

adjustments as follows: 

(1) Caseload adjustments. FNS will 

adjust the number of exemptions 

estimated for a State agency under 

paragraph (g)(3) of this section during a 

fiscal year if the number of SNAP 

recipients in the State varies from the 

State’s caseload by more than 10 

percent, as estimated by FNS. 

(2) Exemption adjustments. During 

each fiscal year, FNS will increase or 

decrease the number of exemptions 

allocated to a State agency based on the 

difference between the number of 

exemptions used by the State for the 

preceding fiscal year and the number of 

exemptions estimated for the State for 

the preceding fiscal year under 

paragraphs (g)(3) and (h)(1) of this 

section. The increase or decrease will 

only apply for the fiscal year in which 

the adjustment is made. For example: 

(i) If the State agency uses fewer 

exemptions in the preceding fiscal year 

than were estimated for the State agency 

by FNS for the preceding fiscal year 

under paragraphs (g)(3) and (h)(1) of this 

section, FNS will increase the number 

of exemptions allocated to the State 

agency for the current fiscal year by the 

Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 / Proposed Rules 993 

1For purposes of this NOPR, references to RTO/ 

ISO markets include any submarkets therein. 

difference to determine the adjusted 

exemption amount. 

(ii) If the State agency uses more 

exemptions in the preceding fiscal year 

than were estimated for the State agency 

by FNS for the preceding fiscal year 

under paragraphs (g)(3) and (h)(1) of this 

section, FNS will decrease the number 

of exemptions allocated to the State 

agency for the current fiscal year by the 

difference to determine the adjusted 

exemption amount. 

* * * * * 

Dated: December 20, 2018. 

Brandon Lipps, 

Acting Deputy Under Secretary, Food, 

Nutrition, and Consumer Services. 

[FR Doc. 2018–28059 Filed 1–31–19; 8:45 am] 

BILLING CODE 3410–30–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 35 

[Docket No. RM19–2–000] 

Refinements to Horizontal Market 

Power Analysis for Sellers in Certain 

Regional Transmission Organization 

and Independent System Operator 

Markets 

AGENCY: Federal Energy Regulatory 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Federal Energy 

Regulatory Commission (Commission) is 

proposing to revise its regulations 

regarding the horizontal market power 

analysis required for market-based rate 

sellers that study certain Regional 

Transmission Organization (RTO) or 

Independent System Operator (ISO) 

markets and submarkets therein. This 

proposed modification of the 

Commission’s horizontal market power 

analysis would relieve such sellers of 

the obligation to submit indicative 

screens when seeking to obtain or retain 

market-based rate authority. The 

Commission’s regulations would 

continue to require market-based rate 

sellers that study an RTO, ISO, or 

submarket therein, to submit indicative 

screens for authorization to make 

capacity sales at market-based rates in 

any RTO/ISO market that lacks an RTO/ 

ISO-administered capacity market 

subject to Commission-approved RTO/ 

ISO monitoring and mitigation. For 

those RTOs and ISOs lacking an RTO/ 

ISO-administered capacity market, we 

propose that Commission-approved 

RTO/ISO monitoring and mitigation no 

longer be presumed sufficient to address 

any horizontal market power concerns 

for capacity sales where there are 

indicative screen failures. 

DATES: Comments are due March 18, 

2019. 

ADDRESSES: Comments, identified by 

docket number, may be filed 

electronically at http://www.ferc.gov in 

acceptable native applications and 

print-to-PDF, but not in scanned or 

picture format. For those unable to file 

electronically, comments may be filed 

by mail or hand-delivery to: Federal 

Energy Regulatory Commission, 

Secretary of the Commission, 888 First 

Street NE, Washington, DC 20426. The 

Comment Procedures Section of this 

document contains more detailed filing 

procedures. 

FOR FURTHER INFORMATION CONTACT: 

Gregory Basheda, Office of Energy 

Market Regulation, Federal Energy 

Regulatory Commission, 888 First 

Street NE, Washington, DC 20426, 

(202) 502–6479, Gregory.basheda@

ferc.gov. 

Laura Chipkin, Office of the General 

Counsel, Federal Energy Regulatory 

Commission, 888 First Street NE, 

Washington, DC 20426, (202) 502– 

8615, Laura.chipkin@ferc.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

Paragraph Nos. 

I. Introduction ............................................................................................................................................................................... 1 

II. Background ............................................................................................................................................................................... 3 

A. The Market-Based Rate Program ..................................................................................................................................... 3 

B. Order No. 816 Proposal .................................................................................................................................................... 7 

C. Comments on Order No. 816 Proposal ............................................................................................................................ 10 

III. Discussion ............................................................................................................................................................................... 23 

A. Overview of Existing RTO/ISO Market Power Monitoring and Mitigation .................................................................. 26 

B. Proposal Implementation ................................................................................................................................................. 42 

C. Bilateral Transactions ....................................................................................................................................................... 56 

D. The Commission Will Continue To Ensure That Market-Based Rates Are Just and Reasonable ................................ 61 

IV. Information Collection Statement .......................................................................................................................................... 71 

V. Environmental Analysis .......................................................................................................................................................... 77 

VI. Regulatory Flexibility Act ...................................................................................................................................................... 78 

VII. Comment Procedures ............................................................................................................................................................ 84 

VIII. Document Availability ......................................................................................................................................................... 88 

I. Introduction 

1. In this Notice of Proposed 

Rulemaking (NOPR), the Federal Energy 

Regulatory Commission (Commission) 

seeks comment on a proposal to modify 

the horizontal market power analysis for 

certain Regional Transmission 

Organization (RTO) and Independent 

System Operator (ISO) markets. 

Specifically, the Commission proposes 

to relieve market-based rate sellers, i.e., 

sellers seeking to obtain or retain 

authorization to make market-based rate 

sales, of the requirement to submit 

indicative screens for certain RTO/ISO 

markets and submarkets.1 This 

proposed modification of the 

Commission’s horizontal market power 

analysis would apply in any RTO/ISO 

market with RTO/ISO-administered 

energy, ancillary services, and capacity 

markets subject to Commissionapproved RTO/ISO monitoring and 

mitigation. In addition, for RTOs and 

ISOs that lack an RTO/ISO-administered 

capacity market, market-based rate 

sellers would be relieved of the 

requirement to submit indicative 

screens if their market-based rate 

authority is limited to sales of energy 

and/or ancillary services. We believe 

that this proposal would reduce the 

filing burden on market-based rate 

sellers in RTO/ISO markets without 

compromising the Commission’s ability