4438 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

RIN 0584–AC39

Food Stamp Program: Personal

Responsibility Provisions of the

Personal Responsibility and Work

Opportunity Reconciliation Act of 1996

AGENCY: Food and Nutrition Service,

USDA.

ACTION: Final Rule.

SUMMARY: This rule finalizes the

proposed rule of the same name which

was published December 17, 1999. It

implements 13 provisions of the

Personal Responsibility and Work

Opportunity Reconciliation Act of 1996

(PRWORA). Upon implementation, this

rule will: Prohibit an increase in food

stamp benefits when a household’s

income is reduced because of either a

penalty imposed under a Federal, State,

or local means-tested public assistance

program for failure to perform a

required action or for an act of fraud;

allow State agencies to disqualify an

individual from participation in the

Food Stamp Program (Program) if the

individual is disqualified from another

means-tested program for failure to

perform an action required by that

program; specify that State agencies may

not apply a food stamp sanction to

Program households for failure to

ensure their minor children attend

school, or if the adults do not have (or

are not working toward attaining) a

secondary school diploma or its

equivalent; make individuals convicted

of drug-related felonies ineligible for

food stamps; make fleeing felons and

probation and parole violators ineligible

for food stamps; require States to

provide households’ addresses, Social

Security Numbers, or photographs to

law enforcement officers to assist them

in locating fugitive felons or probation

or parole violators; allow States to

require food stamp recipients to

cooperate with child support agencies

as a condition of food stamp eligibility;

allow states to disqualify individuals

who are in arrears in court-ordered

child support payments; double the

penalties for violating Program

requirements; permanently disqualify

individuals convicted of trafficking in

food stamp benefits of $500 or more;

make individuals ineligible for 10 years

if they misrepresent their identity or

residence in order to receive multiple

Program benefits; and limit the Program

participation of most able-bodied adults

without dependents to three months in

a three-year period during times the

individual is not working or

participating in a work program.

DATES: Effective Dates: This rule is

effective no later than April 2, 2001,

except for the amendment to 7 CFR

272.2(d)(1)(xiii) which is effective

August 1, 2001.

Implementation Date: State agencies

must implement the provision in this

final rule no later than August 1, 2001.

FOR FURTHER INFORMATION CONTACT:

Margaret Werts Batko, Assistant Branch

Chief, Certification Policy Branch,

Program Development Division, Food

and Nutrition Service (FNS), USDA,

3101 Park Center Drive, Alexandria,

Virginia, 22302, (703) 305–2516. Her

Internet address is:

Margaret.Batko@FNS.USDA.GOV.

Executive Order 12866

This final rule has been determined to

be economically significant and was

reviewed by the Office of Management

and Budget in conformance with

Executive Order 12866.

SUPPLEMENTARY INFORMATION:

Executive Order 13132

Federalism Summary Impact Statement

Executive Order 13132 requires

Federal agencies to consider the impact

of their regulatory actions on State and

local governments. FNS has considered

the impact on State agencies. For the

most part, this rule deals with changes

required by law, and implemented by

law in 1996. However, the Department

has made discretionary changes to

ensure client protections and access to

the Program and to simply the

administration of the requirements by

the State agencies. These changes

primarily affect food stamp recipients.

The effects on State agencies are

moderate. In some instances, the

changes result in modest increases in

administrative burdens. However, these

changes are legislatively mandated and

we have no discretion to minimize

them. This rule is intended to have

preemptive effect on any State law that

conflicts with its provisions or that

would otherwise impede its full

implementation. Generally, PRWORA

and other federal statutes required many

of the changes made in this rule, and

made most of them effective on

enactment and all of them effective

prior to the publication of this rule. FNS

is not aware of any case where the

discretionary provisions of the rule

would preempt State law.

Prior Consultation With State Officials

Before drafting this rule, we received

input from State agencies at various

times. Because the Program is a Stateadministered, federally funded program,

our regional offices have formal and

informal discussions with State and

local officials on an ongoing basis.

These discussions involve

implementation and policy issues. This

arrangement allows State agencies to

provide feedback that forms the basis for

many discretionary decisions in this

and other Program rules. In addition,

FNS officials attend regional, national,

and professional conferences to discuss

issues and receive feedback from State

officials at all levels. Lastly, the

comments on the proposed rule from

State officials were carefully considered

in drafting this final rule. The nature of

the concerns of the State and local

officials who commented on the

proposed rule, our position supporting

the need to issue this final rule, and the

extent to which the concerns expressed

by the State and local officials have

been met are discussed in detail in this

preamble.

Executive Order 12372

The Food Stamp Program is listed in

the Catalog of Federal Domestic

Assistance under No. 10.551. For the

reasons set forth in the final rule in 7

CFR part 3015, Subpart V and related

Notice (48 FR 29115), this Program is

excluded from the scope of Executive

Order 12372 which requires

intergovernmental consultation with

State and local officials.

Executive Order 12778

This final rule has been reviewed

under Executive Order 12778, Civil

Justice Reform. This rule is intended to

have preemptive effect with respect to

any State or local laws, regulations or

policies which conflict with its

provisions or which would otherwise

impede its full implementation. This

rule is not intended to have retroactive

effect unless so specified in the DATES

paragraph of this preamble. Prior to any

judicial challenge to the provisions of

this rule or the application of its

provisions, all applicable administrative

procedures must be exhausted.

Regulatory Flexibility Act

This rule has been reviewed with

regard to the requirements of the

Regulatory Flexibility Act of 1980 (5

U.S.C. 601–612). Shirley R. Watkins,

Under Secretary, Food, Nutrition, and

Consumer Services, has certified that

this rule will not have a significant

economic impact on a substantial

number of small entities. State and local

welfare agencies will be the most

affected to the extent that they

administer the Program.

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4439

Paperwork Reduction Act

The information collection burden

associated with the provisions in this

rule concerning eligibility, certification,

and continued eligibility of food stamp

recipients is approved under OMB

0584–0064. The information collection

burden associated with the request for a

waiver under the food stamp time limit

in 7 CFR 273.24 is approved under OMB

No. 0584–0479. The information

collection burden associated with

provisions in this rule which affect the

regulations at 7 CFR 273.16, the

Demand Letter for Over Issuance, is

approved under OMB 0584–0492. The

information collection burden that is

associated with the provisions in this

rule which affect the regulations at 7

CFR 272.2, the State Plan of Operations,

is approved under OMB 0584–0083.

Unfunded Mandate Reform Act of

1995 (UMRA) Title II of UMRA

establishes requirements for Federal

agencies to assess the effects of their

regulatory actions on State, local, and

tribal governments and the private

sector. Under Section 202 of the UMRA,

FNS generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures to State, local, or

tribal governments in the aggregate, or

to the private sector, of $100 million or

more in any one year. When such a

statement is needed for a rule, section

205 of the UMRA generally requires

FNS to identify and consider a

reasonable number of regulatory

alternatives and adopt the least costly,

more cost-effective or least burdensome

alternative that achieves the objectives

of the rule.

This rule contains no Federal

mandates (under the regulatory

provisions of Title II of the UMRA) for

State, local, and tribal governments or

the private sector of $100 million or

more in any one year. This rule is,

therefore, not subject to the

requirements of sections 202 and 205 of

the UMRA.

Civil Rights Impact Analysis

FNS has reviewed this final rule in

accordance with the Department

Regulation 4300–4, ‘‘Civil Rights Impact

Analysis,’’ to identify and address any

major civil rights impacts the proposed

rule might have on minorities, women,

and persons with disabilities. After a

careful review of the rule’s intent and

provisions, and the characteristics of

food stamp households and individual

participants, FNS has determined that

there is no way to soften their effect on

any of the protected classes. FNS has no

discretion in implementing many of

these changes. The changes required to

be implemented by law have been

implemented.

All data available to FNS indicate that

protected individuals have the same

opportunity to participate in the Food

Stamp Program as non-protected

individuals. FNS specifically prohibits

the State and local government agencies

that administer the Program from

engaging in actions that discriminate

based on race, color, national origin,

gender, age, disability, marital or family

status. Regulations at 7 CFR 272.6

specifically state that ‘‘State agencies

shall not discriminate against any

applicant or participant in any aspect of

program administration, including, but

not limited to, the certification of

households, the issuance of coupons,

the conduct of fair hearings, or the

conduct of any other program service for

reasons of age, race, color, sex,

handicap, religious creed, national

origin, or political beliefs.

Discrimination in any aspect of program

administration is prohibited by these

regulations, the Food Stamp Act of 1977

(the Act), the Age Discrimination Act of

1975 (Pub. L. 94–135), the

Rehabilitation Act of 1973 (Pub. L. 93–

112, section 504), and title VI of the

Civil Rights Act of 1964 (42 U.S.C.

2000d). Enforcement action may be

brought under any applicable Federal

law. Title VI complaints shall be

processed in accord with 7 CFR part

15.’’ Where State agencies have options,

and they choose to implement a certain

provision, they must implement it in

such a way that it complies with the

regulations at 7 CFR 272.6.

Regulatory Impact Analysis

Need for Action: On August 22, 1996

the President signed the PRWORA. This

rule implements 13 provisions of the

PRWORA. This rule (1) prohibits an

increase in food stamp benefits when

households’ income is reduced because

of a penalty imposed under a Federal,

State, or local means-tested public

assistance program for failure to perform

a required action, (2) prohibits an

increase in food stamp benefits when

households’ income is reduced because

of an act of fraud under a Federal, State,

or local means-tested public assistance

program; (3) allows States to disqualify

an individual from the Program if the

individual is disqualified from another

means-tested program for failure to

perform an action required by that

program; (4) clarifies that households

who are receiving grants under a State’s

Temporary Assistance for Needy

Families (TANF) Program and who are

sanctioned because their minor children

are not attending school, or if the adults

do not have (or are not working toward

attaining) a secondary school diploma

or its equivalent, may not be sanctioned

under the Program beyond those

sanctions provided for in 7 CFR

273.11(k) and (l); (5) makes individuals

convicted of drug-related felonies

ineligible for food stamps; (6) makes

fleeing felons and probation and parole

violators ineligible for food stamps; (7)

requires States to provide households’

addresses, Social Security numbers, or

photographs to law enforcement officers

to assist them in locating fugitive felons

or probation or parole violators; (8)

allows states to require food stamp

recipients to cooperate with child

support agencies as a condition of food

stamp eligibility; (9) allows states to

disqualify individuals who are in

arrears in court-ordered child support

payments; (10) doubles the penalties for

violating Program requirements; (11)

permanently disqualifies individuals

convicted of trafficking in food stamp

benefits of $500 or more; (12) makes

individuals ineligible for 10 years if

they misrepresent their identity or

residence in order to receive multiple

food stamp benefits; and (13) limits the

food stamp participation of most ablebodied adults without dependents

(ABAWDs) to three months in a threeyear period during times the individual

is not working at least half-time or

participating in a work program.

The changes in food stamp

requirements made by the provisions in

PRWORA addressed in this rule would

reduce Program costs for fiscal year (FY)

1999–2003 by approximately $1.810

billion. For FY 1999–2003, the

estimated yearly savings are (in

millions) $525, $431, $348, $263, and

$243, respectively. The majority of the

savings are realized from Section 824 of

PRWORA, time limited benefits for ablebodied adults without dependents.

Smaller savings are realized from the

following provisions: Section 819,

comparable disqualifications; Section

822, cooperation with child support

agencies; Section 823, disqualifications

for child support arrears; and Section

829 and 911, no increase in benefits.

The savings from the remaining

provisions in the rule are negligible and,

therefore, will not be discussed in this

analysis.

Comparable Disqualifications—

Section 819—This provision gives

States the option to impose the same

disqualification for food stamps as

imposed on a household member for

failure to take a required action under

a Federal, State, or local law relating to

a means-tested public assistance

program. The rule provides that: (1) The

4440 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

program has to be authorized by

Federal, State, or local law; (2) that a

Federal means-tested program includes

public and general assistance as defined

in 7 CFR 271.2; (3) the provision may

be applied selectively to programs since

it is an optional provision; (4) the

provision only applies if the person is

disqualified while receiving the other

assistance and food stamps; (5) the

provision does not apply to time-limited

benefits, exceeding the family cap,

failing to complete the application

process on time or failing to reapply; or

to purely procedural requirements such

as submitting a form; (6) only a

household member may be disqualified;

(7) the penalty must run concurrently

with the penalty in the other program,

and for the duration of the penalty in

the other program, but not to exceed one

year without review; (8) A State must

shorten the disqualification period

when it becomes aware that the person

is ineligible for means-tested public

assistance for another reason during that

time frame; (9) all of the resources and

all but pro rata share of the income of

the ineligible member must be counted

in accordance with 7 CFR 273.11(c)(2);

(10) the household rather than the State

agency will have to initiate the action of

adding a person back to the household;

(11) a disqualification may be imposed

in addition to allotment reductions

under section 829 of PRWORA; and (12)

States that elect to implement this

provision must include it in the Plan of

Operation.

This provision affects participants to

the extent States choose to implement

this provision and to the extent

individuals are disqualified or

sanctioned under another Federal

means-tested program. We estimate that

3,000 participants will be disqualified

from food stamp benefits due to this

provision in FY 1999. We estimate that

the FY 1999 cost savings from this

provision will be $5 million and the

five-year cost savings for FY 1999

through FY 2003 will be $25 million.

As a proxy for the number of

individuals disqualified from other

means-tested programs, we used

Department of Health and Human

Services’ Administration for Children

and Families data regarding the average

number of people sanctioned monthly

from the JOBS program in May 1994.

More recent data were not available.

There were almost 13,000 monthly first

sanctions, 1,876 monthly second

sanctions and 375 monthly third

sanctions. First sanctions were assumed

to result in instant compliance and

therefore last zero months in duration.

Second sanctions were assumed to have

an average duration of three months and

third sanctions were assumed to have an

average duration of six months.

The savings estimate was calculated

as the sum of the products of the

number of individuals sanctioned, an

estimated average food stamp benefit

per person ($73.74) and the duration of

the sanction [e.g. (12,999 cases of first

sanctions) times ($73.74 times 12

months for yearly benefits) times 0

months of sanction; (1,876 cases of

second sanctions) times ($73.74 times

12 months for yearly benefits) times 3

months of sanction; (375 cases of third

sanctions) times ($73.74 times 12

months for yearly benefits) times 6

months of sanction)].

Because Section 819 is optional, the

estimate was adjusted to account for the

proportion of food stamp households in

States choosing to exercise this

provision. State option data were based

on the May 1998 FNS report, State Food

Stamp Policy Choices Under Welfare

Reform: Findings of 1997 50-State

Survey, indicating which States have

adopted the optional provisions of

PRWORA as of the end of calendar year

1997. Thirteen States reported having

adopted this optional provision:

Arizona, California, Idaho, Illinois,

Kansas, Maine, Michigan, Mississippi,

North Dakota, Ohio, South Dakota,

Tennessee and Wyoming. According to

1998 food stamp quality control data,

these thirteen States account for

approximately 30 percent of all food

stamp public assistance households.

The savings estimate was, therefore,

adjusted to reflect 30 percent uptake by

States. The estimate of the number of

individuals disqualified because of the

section 819 provision equals the total

unrounded savings divided by an

estimated average food stamp benefit.

Cooperation with Child Support

Agencies—Section 822 of PRWORA—

This provision allows States to require

cooperation with child support agencies

as a condition of food stamp eligibility.

The provision is optional and can be

waived for the custodial parent for good

cause but not for the non-custodial

parent. The rule requires: (1) States to

refer appropriate individuals to the

agency funded under IV–D for a

determination of cooperation; (2) State

agencies to adopt the IV–A or IV–D

agency’s standards for good cause, (3)

the disqualification is for the individual

and not the entire household; (4) States

that elect to implement this provision to

include it in the Plan of Operation; and

(5) States to count all of the resources

and all but pro-rata share of the income

of the disqualified individual.

This provision affects participants to

the extent States choose to implement

this provision and to the extent they are

a custodial or non-custodial parent with

child support responsibilities and do

not cooperate with child support

agencies.

Custodial Parents

Using the fiscal year 2001 budget

baseline, we estimate that in FY 1999

approximately 4,000 custodial parents

will be disqualified due to sanctions for

noncompliance and 68,000 custodial

parents will have their benefits slightly

reduced due to compliance and

increased child support income as a

result of this provision. We estimate the

FY 1999 cost savings for the custodial

parents to be $15 million and the fiveyear cost savings for FY 1999 through

FY 2003 to be $85 million.

Because food stamp households

receiving public assistance are already

mandated to cooperate with child

support agencies, the impact of this

provision is expected to be realized

among food stamp-only custodial-parent

households. Based on the February 1995

FNS report, Participation in the Child

Support Enforcement Program Among

Non-AFDC Food Stamp Households,

food stamp-only custodial households

with child support needs that are not

cooperating with the child support

agencies account for roughly 2.8 percent

of all participating food stamp

households. According to the report, the

response of these custodial parents to

this provision was assumed to fall into

three categories: (1) Those that comply

and receive higher child support

payments; (2) those that do not comply

and face sanctions, and; (3) those that

opt to leave the Program rather than

comply.

First, in the 1995 report, custodial

parents choosing to comply with the

provision were found to account for

approximately 8.5 percent of food stamp

benefits and were expected to

experience a decline in food stamp

benefits of 2.0 percent as a result of

higher child support payments. Savings

from this group was calculated as the

proportion of total food stamp benefits

contributed to this group (8.5 percent)

times the expected decline of 2.0

percent (0.085 times 0.02 = .00170 or

0.17 percent).

Second, to estimate the cost for

households which are sanctioned for

noncompliance, the report indicated

that food stamp-only custodial

households accounted for 7.0 percent of

all food stamp households, and that

approximately 2.1 percent of such

households would choose to be

sanctioned rather than comply with the

provision. The total number of

participating households was calculated

by dividing a participation projection

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4441

from the fiscal year 2001 budget

baseline by the average household size

from 1998 food stamp quality control

data (2.4 persons). The monthly benefit

reduction for those sanctioned and

leaving food stamps rather than comply

was estimated to be the difference

between the maximum allotment for a

family of four and the maximum

allotment for a family of three

(difference =$90). The savings for this

group was calculated as the product of

total households, the proportion which

are food stamp-only custodial

households (7.0 percent), the proportion

choosing to be sanctioned rather than

comply with the provision (2.1 percent),

and the annual value of the sanction

(e.g., in FY 1999, 7,276 households

times 7 percent times 2.1 percent times

$90 times 12 months).

Third, the 1995 report indicated that

of food stamp-only custodial

households, 3.8 percent were expected

to leave the Program rather than comply

with the provision. The estimate of

savings from the group of custodial

parents choosing to leave food stamps

rather than comply was calculated as

the product of the number of total food

stamp households, the proportion

which are food stamp-only custodial

households (7.0 percent), the proportion

choosing to leave food stamps rather

than comply (3.8 percent), and the

annual value of the household benefit

lost (e.g., in FY 1999, 7,276 households

times 7 percent times 3.8 percent times

$221 benefit per month times 12

months).

The three group impacts were

summed and the estimate was adjusted

pursuant to assumptions regarding the

proportion of food stamp recipients in

States choosing to adopt this optional

provision—10 percent in FY 1997 and

growing to 20 percent by FY 2003. State

option data were based on the May 1998

FNS report, State Food Stamp Policy

Choices Under Welfare Reform:

Findings of 1997 50-State Survey. Seven

States reported having adopted this

optional provision as of the end of

calendar year 1997: Idaho, Kansas,

Maine, Michigan, Mississippi, Ohio and

Wisconsin. According to 1998 food

stamp quality control data, these seven

States account for approximately 10

percent of applicable food stamp

households.

The estimate of the number of

custodial parents disqualified for food

stamp benefits from this provision

(4,000 people) was calculated as the

total unrounded savings ($10.6 million)

attributable to the second and third

groups of custodial parents—those

continuing to not cooperate with child

support agencies—divided by the

annual value of their sanction ($221

times 12 months).

The estimate of the number of

custodial parents receiving reduced

benefits as a result of complying with

this provision and receiving increased

child support income (68,000 persons)

was calculated as the difference

between the total number of custodial

parents affected by the provision

(71,000 persons) and those being

disqualified for noncompliance (4,000

people) rounded to the nearest

thousand. The total number of custodial

parents affected was estimated as the

total target population of the

provision—2.8 percent of all households

according to the 1995 report—times the

projected number of participants from

the FY 2001 budget baseline, times the

State option phase-in assumptions.

Non-Custodial Parents

Using the fiscal year 2001 budget

baseline, we estimate that

approximately 4,000 non-custodial

parents will be disqualified by this

provision in FY 1999. We estimate the

FY 1999 cost savings for non-custodial

parents to be $5 million and the fiveyear cost savings for FY 1999 through

FY 2003 to be $25 million.

Estimates of the savings attributable to

the non-custodial parents in this

provision are based on information from

a 1995 report, Non-custodial Fathers:

Can They Afford to Pay More Child

Support, by Elaine Sorenson at the

Urban Institute. Data on non-custodial

parents is extremely limited and this

was the best available information. The

number of non-custodial parents not

cooperating with child support was

estimated to be more than 78,000 in

1990. This estimate was based on the

reported 5.9 million fathers in 1990 who

were not paying support, adjusted by 75

percent to account for those at lowincome levels, times the proportion

estimated to represent non-custodial

fathers receiving food stamps who had

no child support order—a proxy for

non-cooperation (1.77 percent which is

derived from the 1995 Urban Institute

report) (5.9 million times 0.75 times

0.0177 = 78,323). The estimate of the

number of non-custodial parents not

cooperating with their child support

agency was inflated by 1.5 percent

annually to account for growth in the

child support system. This inflation

factor is consistent with information

from the Department of Health and

Human Services on the child support

system. The savings were estimated as

the product of the number of noncustodial parents not cooperating and

an estimated average food stamp benefit

per person ($72.29 per month times

88,891 persons times 12 months).

The savings estimate for noncustodial parents was adjusted for the

proportion of households in States

choosing to adopt this optional

provision and assumptions regarding

the percent of non-cooperating noncustodial parents States are able to

identify and sanction. The State option

assumptions were based on the May

1998 FNS report, State Food Stamp

Policy Choices Under Welfare Reform:

Findings of 1997 50-State Survey. Three

States reported having adopted this

provision at the end of calendar year

1997: Maine, Mississippi, and

Wisconsin. According to 1998 quality

control data, these three States account

for roughly 5 percent of all applicable

households. Therefore, the savings

estimate in FY 1997 assumes only these

States implement this child support

provision, thereby affecting 5 percent of

all households that could be subject to

this provision, and further assumes a

gradual expansion of the States selecting

this option so that 10 percent of all

households are subject to this provision

by FY 2003. The estimate was adjusted

further based on the assumption that,

operating at maximum effectiveness,

States would only be able to correctly

identify and sanction 75 percent of

applicable offenders.

The estimate of the number of noncustodial parents disqualified for food

stamp benefits from this provision was

calculated as the total unrounded

savings from non-custodial parents ($3

million) divided by an estimated

average annual food stamp benefit

($867.48 = $72.29 times 12 months).

Summing together the estimates for

both custodial and non-custodial

parents, we estimate that 8,000 people

will be disqualified as a result of these

provisions in FY 1999. 68,000 custodial

parents will have benefits reduced due

to higher amounts of child support

income as a result of this provision. We

estimate the FY 1999 cost savings to be

$20 million and the five-year cost

savings for FY 1999 through FY 2003 to

be $110 million.

Disqualification for Child Support

Arrears—Section 823—This provision

allows States to disqualify individuals

for any month during which they are

delinquent in any court-ordered child

support payment. This provision is

optional. The rule requires that: (1) The

disqualification apply to the individual

and not the entire household; (2) if the

State later discovers that an individual

was delinquent in paying child support,

the State shall determine

disqualification and establish a claim

for the month’s benefits; (3) States that

4442 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

elect to implement this provision must

include it in the Plan of Operation; and,

(4) the States must count all of the

resources and all but a pro rata share of

the income of disqualified individuals.

This provision affects participants to

the extent States choose to implement

this provision and to the extent they

have court-ordered child support

responsibilities and they are delinquent

in their payments. We estimate that

approximately 3,000 persons will be

disqualified as a result of this provision

in FY 1999. We estimate the FY 1999

cost savings to be $5 million and the

five-year cost savings for FY 1999

through FY 2003 to be $25 million.

The estimate of savings for this

provision was based on the 1995 report,

Non-Custodial Fathers: Can They Afford

to Pay More Child Support, by Elaine

Sorenson at the Urban Institute. There

were an estimated 825,000 custodial

mothers participating in the child

support system (in IV–D programs) with

child support orders not receiving

support in 1990. It was assumed that for

every custodial mother with an order

and without support, there was a noncustodial father in arrears. Estimating

that almost 7 percent (the national

average of 1 in 14 Americans receiving

food stamps) of them were receiving

food stamp benefits, it was calculated

that in 1990 there were more than

56,000 non-custodial fathers receiving

food stamps who were in arrears for

court-ordered child support. This

number was inflated by 1.5 percent per

year to reflect growth in the child

support system, consistent with

information from the Department of

Health and Human Services. The

estimate of savings for this provision

was based on an estimated average

monthly benefit per person ($72.29).

The total savings was calculated as the

product of the number of non-custodial

fathers in arrears for child support times

the annual benefits they would lose due

to disqualification (64,883 people times

$72.29 per month times 12 months).

This product was adjusted for

assumptions regarding the proportion of

food stamp households in States

choosing to implement this provision

and the State’s ability to identify and

sanction the appropriate individuals.

The State option assumptions were

based on the May 1998 FNS report,

State Food Stamp Choices Under

Welfare Reform: Findings of 1997 50-

State Survey, indicating that three States

reported operating this provision at the

end of 1997: Ohio, Oklahoma and

Wisconsin. According to 1998 food

stamp quality control data, these three

States account for approximately 5

percent of all applicable households.

The savings estimate was adjusted to

reflect that 5 percent of the States would

implement this provision in FY 1997,

growing to 10 percent by FY 2003. The

estimate was adjusted further based on

the assumption that, operating at

maximum effectiveness, States would

only be able to correctly identify and

sanction 75 percent of applicable

offenders. In FY 1999, for example, the

savings was calculated by taking the

product of the 6 percent State phase-in

and the assumption of 75 percent

cooperation and multiplying it by the

total savings. The estimate of the

number of individuals disqualified for

food stamp benefits from this provision

was calculated as the total unrounded

savings ($2.5 million) divided by an

estimated average annual food stamp

benefit ($867.48).

Able-Bodied Adults without

Dependents—Section 824 of PRWORA—

This provision limits the receipt of food

stamps for certain able-bodied adults

without dependents (ABAWDs) to 3-

months in a 36 month period unless the

individual is either working at least

half-time or participating in an

approved work or work training

program for at least 20 hours per week.

Individuals are exempt from the time

limit if they are under 18 or 50 years or

older, medically certified as physically

or mentally unfit for employment, a

parent or other household member with

responsibility for a dependent child, or

exempt from work registration under

6(d)(2) of the Act, or pregnant.

Individuals can regain eligibility if they

work 80 hours in a 30 day period, and

they maintain eligibility as long as they

are satisfying the work requirement. If

individuals later lose their job, they can

receive an additional 3 months of food

stamps while not working. The

additional 3 months must be

consecutive, and begins on the date the

individual notifies the State that he/she

is no longer working. The Act allows

waivers of the time limit for groups of

individuals living in areas with an

unemployment rate of more than 10

percent or where there are not a

‘‘sufficient number of jobs to provide

employment for the individuals.’’

The rule: (1) Allows unpaid and work

for in-kind services to count as ‘‘work;’’

(2) allows the State agency to determine

good cause for missing work; (3) does

not count partial months toward the 3

month limit; (4) makes verification of

work hours mandatory; (5) makes

participants report changes in work

hours that bring the person below 20

hours a week; (6) counts all of the

resources and all but a pro rata share of

the income of the ineligible ABAWD as

available to the household; (7) exempts

individuals starting on their 50th

birthday; (8) exempts all adults in a

household where there is a child under

18; (9) prorates benefits back to the date

the ‘‘cure’’ is complete for regaining

eligibility (except in instances where

individuals regain eligibility by doing

workfare, at which point the benefits

will be prorated back to the date of

application); (10) requires States to

submit unemployment data based on

approved Bureau of Labor Statistics

methodologies when applying for a

waiver under the 10 percent criteria;

(11) approves a waiver for a time period

that bears some relationship to the

documentation provided, but for no

more than a year.

This provision affects participants to

the extent they are able-bodied adults

without dependents and to the extent

they are not fulfilling the work

requirement, exempt or covered by a

waiver. The methodology used in this

provision relies on current projections

of participation in the Program and

information on food stamp participants

prior to PRWORA who match the

ABAWD definition. We estimate that

345,000 individuals are subject to the

time limit in FY 1999 due to this

provision. We estimate that the FY 1999

cost savings from this provision will be

$490 million. We estimate that the fiveyear cost savings for FY 1999 through

FY 2003 will be $1.6 billion.

The caseload estimates were

generated by identifying program

participants in the 1996 food stamp

quality control data who are likely to

lose eligibility due to ABAWD work

requirement provisions (those between

the ages of 18 and 50 who have no

dependents, are not disabled, who do

not already have more earnings than

that of a 20 hour-per week job, etc.). The

size of this group of participants was

then adjusted to reflect the decline in

overall caseload between 1996 and

1999, resulting in a pool of just under

730,000 program participants who could

have been considered to be subject to

the ABAWD provisions in FY 1999. An

adjustment was then made to account

for the estimated number of ABAWDS

who lived in waived areas and were

exempt from the work requirement,

which narrowed this pool down to

approximately 523,000. An additional

adjustment of just under 180,000

participants was then taken to account

for persons who were able to retain

eligibility through the Food Stamp

Employment and Training (E&T)

program. The estimated 345,000

participants who remain represent the

final pool of ABAWDS in FY 99 who are

expected to lose their eligibility due to

the new work requirement. The cost

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4443

estimates for 1999 was then derived by

first multiplying the 345,000

participants by the average monthly

benefit for a single able-bodied Food

Stamp recipient ($118), and then

multiplying that amount by 12 to get the

annual cost. Cost estimates for FY 2000–

2003 also incorporated the expected

decline in food stamp participation as

well as the increased use of E&T funds

to provide qualifying work

opportunities.

Subsequent to the enactment of

PRWORA, the Balanced Budget Act of

1997 and the Agricultural Research,

Extension, and Education Reform Act of

1998 (AREERA) modified the ABAWD

provisions of PRWORA. The Balanced

Budget Act of 1997 increased funding to

the Food Stamp Employment and

Training Program to allow states to

create qualifying work opportunities to

help ABAWDs retain their Food Stamp

eligibility, and permitted states to

exempt up to 15 percent of their

unwaived able-bodied caseload from the

time limits. AREERA further modified

the level of funding for Employment

and Training Programs for ABAWDs.

Taken together both of these laws will

likely mitigate the effects of the ABAWD

provisions of PRWORA. The effects of

these more recent laws will be

addressed in future rulemaking.

No increase for Penalties in other

Programs—Section 829 and 911—

Section 829 provides that if a

household’s benefits are reduced under

a Federal, State, or local means-tested

public assistance program for failure to

perform a required action, the

household may not receive an increased

food stamp allotment as a result of the

decrease in income due to the reduced

public assistance payment. This applies

to both intentional and unintentional

failures to take a required action. In

addition to not increasing allotments,

States may reduce the Food Stamp

allotment by up to 25 percent. The rule

requires that: (1) Federal means-tested

public assistance programs include

public and general assistance as defined

in 7 CFR 271.2; (2) ‘‘reduced’’ means

denied, decreased, suspended, or

terminated; (3) the penalty must be

applied while the person is receiving

other assistance; (4) it only applies if the

other agency cooperates and it applies

to overlapping provisions but runs

concurrently; (5) States can prohibit an

increase by several different means and

reduce the allotment by up to 25

percent; (6) the whole household cannot

be denied and the reduction cannot be

more than 25 percent even if Title IV–

A has a larger reduction; (7) States that

elect to implement this 25 percent

reduction must include it in the Plan of

Operation; (8) the penalty will be for the

same duration as the assistance penalty

(but the State agency must review for

appropriateness if the penalty is in

effect after one year) and States must

end the prohibition when it becomes

aware that the person is ineligible for

assistance in the other program for some

other reason; and that the sanction goes

with the person when they move within

the State.

Section 911 prohibits an increase in

food stamp benefits as the result of a

decrease in Federal, State, or local

means-tested assistance benefits because

of fraud. The rule provides that this

provision be treated the same as 829.

Participants will be affected by these

provisions to the extent their benefits

are reduced for failure to perform a

required action or for fraud. The effect

of the provisions also depends on the

cooperation of other programs in

notifying the food stamp agency. We

estimate approximately 6,000

participants will be affected by these

provisions. We estimate the FY 1999

cost saving to be $5 million and the fiveyear cost savings for FY 1999 through

FY 2003 to be $40 million.

Food stamp savings from these

provisions results from two sources: (1)

A mandatory prohibition on increasing

food stamp benefits when individuals

receive lower benefits in other meanstested programs for failure to comply

with a required action; and (2) an

optional provision to decrease food

stamp benefits by no more than 25

percent.

The estimate for savings from the

mandatory prohibition on increasing

benefits was based on the Department of

Health and Human Services’

Administration for Children and

Families data regarding the average

number of people sanctioned monthly

from the JOBS program in May 1994.

This serves as a proxy for the number

of individuals that receive reduced

benefits from a means-tested programs

for failure to perform a required action

or for fraud, and is the best available

data. (Data on fraud in other programs

is unavailable.) There were almost

13,000 monthly first sanctions, 1,876

monthly second sanctions and 375

monthly third sanctions. First sanctions

were assumed to result in instant

compliance and therefore last zero

months in duration. This assumption is

based on 1994 information from the

Department of Health and Human

Service, Administration on Children

and Families (ACF). ACF does not have

any more recent information. Second

sanctions were assumed to have an

average duration of three months and

third sanctions were assumed to have an

average duration of six months. The

savings from the mandatory prohibition

on increasing food stamp benefits was

calculated as the sum of the products of

the number of individuals sanctioned,

the average AFDC benefit lost times the

FSP benefit reduction rate of 30 percent,

and the duration of the sanction. The

average AFDC benefit reduction was

taken from the average AFDC benefit per

person reported in the 1996 Green Book

and inflated over time. ((1,876 monthly

second sanctions times 12 months times

the 1999 estimated average AFDC

benefit lost which equals $143 times 30

percent FSP benefit reduction times 3

months) plus (375 monthly third

sanctions times 12 months times the

average AFDC benefit lost which equals

$143 times 30 percent FSP benefit

reduction times 6 months))

The estimate for savings from the

State option to decrease food stamp

benefits by no more than 25 percent was

based on an estimated average monthly

food stamp benefit per person and the

JOBS sanction data. The savings was

calculated as the product of the number

of individuals sanctioned, 25 percent of

the average food stamp benefit per

person and the duration of the sanction.

This estimate was adjusted to account

for the proportion of food stamp

households in States expected to

exercise this optional provision—10

percent in 1997 and growing to 20

percent by 2003. This was based on

information provided in the May 1998

FNS report, State Food Stamp Policy

Choices Under Welfare Reform:

Findings of 1997 50-State Survey. Seven

States reported having adopted this

optional provision at the end of 1997:

Connecticut, Iowa, Kentucky, Michigan,

Mississippi, Montana and Tennessee.

According to 1998 food stamp quality

control data, these seven States account

for approximately 10 percent of all food

stamp cash assistance households.

The savings estimates for the

mandatory and optional portions of the

provisions were summed. The estimate

of the number of individuals receiving

a reduction in food stamp benefits due

to these provisions was calculated as the

total unrounded savings divided by an

estimated average annual food stamp

benefit. ((1,876 monthly second

sanctions times 12 months times the

average AFDC benefit lost which equals

$143 times 30 percent Program benefit

reduction times 3 months) plus (375

monthly third sanctions times 12

months times the average AFDC benefit

lost which equals $143 times 30 percent

Program benefit reduction times 6

months) plus the sum of (1,876 times 12

months times the average FSP benefit

per AFDC household which equals

4444 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

$259.96 times .25 reduction times 3

months) and (375 times the average

Program benefit per AFDC household

which equals $259.96 times .25

reduction times 6 months))

Background

On August 22, 1996, the President

signed the Personal Responsibility and

Work Opportunity Reconciliation Act of

1996, Pub. L. 104–193 (PRWORA). The

PRWORA amended the Act by adding

new Program eligibility requirements,

increasing existing penalties for failure

to comply with Program rules, and

establishing a time limit for Program

participation of three months in three

years for able-bodied adults without

children who are not working at least

half time.

On December 17, 1999, we published

a rule proposing to codify the personal

responsibility provisions of PRWORA.

The period for comment on the

proposed rule ended February 17, 2000.

We received comments from 28 State

agencies, 37 advocate groups, 7

government entities, and 4 individuals.

In this final rule, we will not address

comments on provisions that are

required by law and on which we have

no discretion. We will not discuss

comments that supported our proposals.

We will not discuss comments that

concerned merely technical corrections

for inadvertent omissions, we have

simply made the corrections. We will

not discuss provisions on which we

received no comments, and we will

adopt these provisions as written. For a

full understanding of the background of

the provisions in this rule, see the

proposed rulemaking, which was

published in the Federal Register at 64

FR, 70920. With the exceptions noted

above, in response to the comments

made and for ease of reading we will

discuss each provision and the

comments made.

7 CFR 273.11—Action on Households

with Special Circumstances

Ban on Increased Benefits for Failure To

Take Required Action or Fraud—7 CFR

273.11(j)

Section 829 of PRWORA amended

Section 8(d) of the Act, 7 U.S.C. 2017(d),

to provide that, if the benefits of a

household are reduced under a Federal,

State, or local law relating to a meanstested public assistance program for the

failure of a person to perform an action

required under the law or program, then

the household may not receive an

increased food stamp allotment as the

result of that decrease for the duration

of the reduction. In addition, the State

agency may reduce the household’s food

stamp allotment by not more than 25

percent. This provision applies when

the act leading to the decrease in

benefits was intentional or

unintentional. If the reduction is the

result of a failure to perform an action

required under part A of title IV of the

Social Security Act, 42 U.S.C. 601, et

seq. (TANF), the State agency may use

the rules and procedures that apply

under part A of title IV to reduce the

food stamp allotment.

Section 911 of PRWORA provides that

if an individual’s benefits under a

Federal, State, or local law relating to a

means-tested welfare or public

assistance program are reduced because

of an act of fraud by the individual

under the law or program, the

individual may not, for the duration of

the reduction, receive increased food

stamp benefits as a result of a decrease

in income attributable to such

reduction. Since cases of fraud generally

involve a failure to take a required

action in another program, we proposed

to treat sections 829 and 911 similarly.

We received no comments on this

proposal. Therefore, in this rule we

continue to treat sections 829 and 911

similarly in 7 CFR 273.11(j).

We proposed to modify 7 CFR

273.11(k) to provide that a ‘‘meanstested public assistance program’’ for

purposes of the restriction imposed by

Section 829 of PRWORA would include

any public or assisted housing under

Title I of the United States Housing Act

of 1937, 42 U.S.C. 1437 et seq., any State

program funded under part A of Title IV

of the Social Security Act, and any

program for the aged, blind, or disabled

under Titles I, X, XIV, or XVI of the

Social Security Act, and State and local

general assistance as defined in 7 CFR

271.2. Title XIX of the Social Security

Act was not included because Medicaid

benefits are not counted as income for

food stamp purposes. A final rule

published November 21, 2000,

redesignated paragraph (k) as paragraph

(j). Therefore in this final, the paragraph

concerning no increase in benefits will

be referred to as paragraph (j). All

subsequent paragraphs in 273.11 will be

redesignated accordingly.

All but one of the comments we

received opposed the definition of

means-tested public assistance program.

Most of the commenters opposed the

inclusion of any public or assisted

housing under Title I of the United

States Housing Act of 1937.

Commenters pointed out that including

housing in this definition is

administratively burdensome and error

prone. In addition, as with Medicaid,

we have never counted housing as

income, and therefore, we should not

include it in this definition. Finally,

State agencies would not be aware if a

reduction in housing was caused by a

failure to comply with that program.

Several commenters opposed the

inclusion of Supplemental Security

Income (SSI) in the definition of

‘‘means-tested public assistance

program.’’ One commenter pointed out

that historically it has been difficult to

verify with the Social Security Agency

(SSA) whether or not a person’s SSI

overpayment was the direct result of

non-cooperation. Another commenter

said that the SSA is not able to provide

State agencies with this information

because SSA considers all

overpayments non-cooperation even if

agency caused. For example, if the

client reports a change, but the SSA

does not act on the change timely or

makes a computational error, the SSA

would consider this non-cooperation.

Many commenters suggested that we

restrict the definition of ‘‘means-tested

public assistance program’’ to the

current definitions of public assistance

and general assistance found in 7 CFR

271.2. Some commenters suggested that

we define ‘‘means-tested public

assistance programs’’ as TANF only.

One commenter suggested that we

restrict the definition of ‘‘means-tested

public assistance program’’ to TANF

only, but allow State agencies the option

of including general assistance in the

definition.

Based on these comments, we have

decided to modify the regulations at 7

CFR 273.11(j) to restrict the definition of

‘‘means-tested public assistance

programs’’ to that of ‘‘public assistance’’

and ‘‘general assistance’’ as defined in 7

CFR 271.2. We decided not to adopt the

one commenter’s suggestion to modify

the regulations further to give State

agencies the option of including

‘‘general assistance’’ in the definition.

General assistance is a means-tested

State or local assistance program. We

believe that not including it in the

definition of ‘‘means-tested assistance

program’’ would circumvent the law

which specifically provides that this

provision applies to ‘‘ * * * State or

local means-tested programs.’’

One commenter suggested we clarify

that by ‘‘assistance’’ we mean ‘‘cash

assistance’’ and not merely other

benefits or services funded by TANF.

While we agree, such non-cash benefits

are not counted as income for food

stamp purposes, and a reduction in

these services due to failure to comply

would not trigger an increase in food

stamp benefits. Therefore, we do not

believe that the regulations at 7 CFR

273.11(j) need to be clarified in this

manner.

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4445

We proposed that the restriction

imposed by section 829 of PRWORA

only apply if assistance benefits are

reduced for failure of a member of a

household to perform a required action

if the person was receiving assistance at

the time the reduction was imposed. In

other words, this provision would only

apply to reductions imposed during the

period benefits were originally

authorized by the other program and to

reductions imposed at the time of

application for continued benefits if

there is no break in participation, but

not to reductions imposed at initial

application. The majority of the

commenters supported this proposal.

Only three commenters opposed it.

They suggested that the ban on

increases apply to applicants of

assistance programs as well as

recipients. One commenter suggested

that this be a State agency option. We

are maintaining this provision as

proposed at 7 CFR 273.11(j).

We proposed that if a reduction in the

assistance benefits was in force at the

time the individual applied for food

stamps, the State agency would

compute the benefits in a manner that

would prevent a higher food stamp

allotment as a result of the failure to

take the required action. The majority of

the commenters suggested that the ban

on increases should only apply if the

individual was receiving food stamps at

the time he failed to take a required

action in the other program. Several

commenters said that the State agency

cannot prevent an increase in food

stamps if an individual is not receiving

food stamps at the time he fails to

perform a required action in the

assistance program. In addition, several

commenters stated that the State agency

should advise individuals of the

consequences of non-compliance in the

assistance program before imposing a

penalty in the Program. We agree with

these comments. Therefore, we are

modifying 7 CFR 273.11(j) to provide

that the ban on increasing food stamps

will only apply to individuals who are

receiving food stamps at the time of the

failure to perform a required action in

a means-tested assistance program.

We proposed that this provision not

apply to situations where individuals

reach a time limit for benefits, have a

child that is not eligible because of a

family cap, or fail to comply with purely

procedural requirements such as failure

to submit a monthly report or failure to

reapply for assistance. The majority of

the commenters supported these

proposals. One commenter opposed the

exclusion of procedural requirements

from those that would trigger a sanction

because in many cases procedural

requirements are in fact substantive.

Several commenters suggested we

clarify in the regulation what we

consider ‘‘procedural’’ (which would

not trigger a sanction) versus

‘‘substantive’’ (which would trigger a

sanction). One commenter suggested we

include an explicit definition of what is

required for a public assistance sanction

to trigger a disqualification under this

provision. s

Since TANF policies vary

substantially from State-to-State, and

sometimes even within States, we are

not confident that we could

conclusively resolve this issue with a

foolproof definition. However, based on

these comments, we are clarifying the

regulations at 7 CFR 273.11(j) to say that

this provision does not apply to

reaching a time limit for time-limited

benefits, having a child that is not

eligible because of a family cap, failing

to reapply or complete the reapplication

process for continued assistance under

the other program, or failure to perform

a purely procedural requirement.

Further, in this section, we are

providing the State agency with the

flexibility to determine procedural

versus substantive requirements within

the following parameters: A procedural

requirement, which would not trigger a

food stamp sanction, is a step that an

individual must take to continue

receiving benefits in the program such

as submitting a monthly report form or

providing verification of circumstances.

A substantive requirement, which

would trigger a food stamp sanction, is

a behavioral requirement designed to

improve the well being of the recipient

family, such as participating in job

search activities or ensuring that

children receive the proper

vaccinations.

Several commenters suggested we

clarify that the substantive action must

be within the power of the individual in

order to trigger a food stamp sanction.

For example, an individual is required

to attend parenting classes in order to

continue receiving assistance. The

individual is willing to take the class

but the individual is unable to because

the classes are full. We agree with this

comment. Therefore, we are modifying

7 CFR 273.11(j) to provide that failing to

perform an action because the

individual is unable to perform, as

opposed to refusing, shall not be

considered failure to perform a required

action.

One commenter suggested that the

person not taking the required action

must be a member of a certified food

stamp household in order for the

sanction to be imposed. In some

instances, the TANF family unit and the

food stamp household are not one and

the same. If an individual who is not a

member of the food stamp household

(such as a roomer) fails to take a

required action which precipitates a

decrease in the TANF grant, the

commenter believes the food stamp

allotment should be allowed to rise. We

agree with the commenter. Therefore,

we are clarifying that in order for this

provision to be effective, the individual

must be a member of a food stamp

household as defined in § 273.1,

including ineligible household members

such as students. If the individual is a

non-household member, such as a

roomer, a live-in attendant, or another

individual who shares living quarters

with the household but who does not

purchase food and prepare meals

together, this provision would not be

effective.

Section 8(d)(1)(A) of the Act, as

amended by section 829 of PRWORA,

provides that the household may not

receive an increase in food stamp

benefits and section (8)(d)(1)(B)

provides that State agencies may reduce

the food stamp allotments by not more

than 25 percent. Several commenters

suggested we modify the regulations to

provide that any percentage reduction

in benefits should be calculated from

the amount that the household would

have received under the regular food

stamp benefit formula, taking into

account its actual (reduced) income.

This would insure that the combination

of preventing an increase and further

reducing the food stamp allotments

would not result in a household

receiving an amount of food stamps that

is more than 25 percent less than the

amount the household would receive if

the usual food stamp calculation

formula were applied to the family’s

actual income. We agree with these

commenters. Therefore, we are

modifying the proposed regulations at 7

CFR 273.11(j) accordingly.

Section 829 of the PRWORA also

amended section 8(d)(2) of the Act to

provide that if benefits are reduced for

a failure of an individual to perform an

action required under a program under

Title IV–A of the Social Security Act

(TANF), the State agency may use the

TANF rules and procedures to reduce

the food stamp allotments. We

interpreted the reference to use of TANF

rules and procedures to apply only to

procedural aspects such as budgeting

and combined notices and hearings. A

few commenters pointed out that

budgeting procedures, such as use of

prospective or retrospective budgeting,

are substantive policies that could

significantly change the scope and

severity of the penalties. Since

4446 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

budgeting rules can routinely determine

whether someone is eligible in a month,

and what benefits an individual

receives, budgeting procedures should

be considered substantive and should

not be imported from TANF. State

agencies are currently mandated to use

TANF budgeting procedures when

determining eligibility for food stamp

households/TANF households. Current

regulations at 7 CFR 273.21(a)(2)

provide that State agencies must

‘‘determine eligibility, either

prospectively or retrospectively, on the

same basis that it uses for its (TANF)

program, unless it has been granted a

waiver by FNS.’’ Based on this, we are

retaining the provision as written.

We proposed that the prohibition on

increasing the food stamp allotment be

for the duration of the reduction in the

assistance program. At the same time we

proposed that the maximum length of

the food stamp sanction not exceed one

year. Several commenters pointed out

that there is a discrepancy between

these two provisions. We believe that

the prohibition on increasing benefits

must be for the same months as the

decrease in assistance to the extent

possible, even if there is a break in

participation. If the penalty in the other

program is six months, then the food

stamp sanction must be for the same six

months, to the extent possible. We also

believe that the prohibition on

increasing food stamp benefits not be

longer than a sanction for an Intentional

Program Violation (IPV), and, therefore,

we proposed that the prohibition not be

longer than a year. The majority of the

commenters supported the idea of a

time limit on the penalty. Several

suggested a shorter time frame, such as

six months. Several suggested State

agencies be allowed to set the time

frame as long as it was less than one

year. One commenter suggested the time

frame for the sanction be the same as the

food stamp certification period. A few

commenters opposed the one-year limit

because it was too short. These

commenters suggested State agencies

should be allowed to keep the food

stamp sanction in place as long as the

penalty in the other program is in effect

and the assistance program remains

open. The majority of the commenters

supported the concept of a time limit.

However, there was no consensus on

how long that time limit should be. Our

further legal review of the statutory

authority resulted in a modification of

the proposed rule. Therefore, we have

provided that the sanction shall not

exceed the sanction period in the other

program. If at any time the State agency

can no longer ascertain the amount of

the reduction, then the State agency

may terminate the food stamp sanction.

If the sanction is still in effect at the end

of one year, the State agency shall

review the case to determine if the

sanction continues to be appropriate. If,

for example, the household is not

receiving assistance, it would not be

appropriate to continue the sanction.

Sanctions extended beyond one year

must be reviewed at least annually but

may be ended by the State agency at any

time. In the final rule at 7 CFR 273.11(j)

we clarify that the ban on increasing

food stamps is for the duration of the

reduction in the assistance program.

The State agencies may determine the

length of the food stamp sanction

providing it does not exceed the

sanction in the other program, and does

not exceed one year, without review.

We proposed that the State agency be

allowed to shorten the prohibition on

increasing benefits to less than one year

if the individual becomes ineligible

during the sanction period for some

other reason. A few commenters

suggested that State agencies be allowed

to lift the sanction when the

individual’s case is closed in the other

assistance program. Several commenters

suggested that we require the State

agencies to do this. Several commenters

said that this would be administratively

burdensome: how would the State

agency know that the household was

ineligible for some other reason since

this isn’t a reportable change? We agree

that the individual should not be

sanctioned when he is no longer eligible

for the assistance program or when his

case is closed. We believe the

requirement to report a change in the

amount of income will generally capture

the instances when an individual whose

assistance grant is reduced then

becomes ineligible for another reason.

However, we recognize that there are

instances where food stamp reporting

requirements won’t capture this

information. Therefore, we are

modifying the regulations at 7 CFR

273.11(j) to provide that the State

agency must lift the ban on increasing

food stamp benefits when it becomes

aware that the individual is ineligible

during the sanction period for some

other reason, or when his case is closed.

We proposed that if an individual

fails to perform a required action in a

State or local assistance program, and

the individual moves within the State,

the prohibition on increasing benefits

goes with that person. We proposed that

it be terminated if the person is

ineligible for the assistance program for

some other reason or if the individual

moves out of State. We proposed that if

an individual fails to perform a required

action in a Federal program, and the

individual moves, either interstate or

intrastate, the State verify the status and

continue the disqualification if

appropriate. The majority of the

commenters opposed tracking penalties,

particularly from State-to-State because

it is administratively burdensome and

error prone. We agree with these

comments. Therefore, we are removing

the provision at 7 CFR 273.11(j) which

requires tracking penalties from Stateto-State. However, we believe if an

individual moves intrastate, the State

agency should be aware of penalties

levied by Federal, State or local public

assistance programs. Therefore, we are

retaining the provision which provides

if an individual moves within the State,

the prohibition on increasing benefits

shall be applied to the gaining

household unless that person is

ineligible for the assistance program for

some other reason.

We proposed to remove the exception

from 7 CFR 273.11(j) that the

prohibition on increasing food stamp

benefits did not apply in the case of

individuals or households subject to the

food stamp work sanction imposed

pursuant to 7 CFR 273.7(g)(2). We

believe the law allows the State agency

to disqualify the individual for food

stamp purposes and prohibit an increase

in food stamps as the result of the

reduction of assistance. We failed to

mention in the preamble of the

proposed rule that the law also permits

the State agency to further reduce the

food stamp allotment by up to 25

percent even if there is some overlap.

Several commenters opposed the

proposal that the same conduct could be

subject to multiple punishments. They

pointed out that the subsequent penalty

could be more severe than an IPV. One

commenter suggested that the law did

not authorize State agencies to ‘‘pile on’’

penalties, but gave them a choice among

penalty systems. This commenter

suggested that where both section 8(d)

(no increase in benefits and or reduction

by 25 percent) and section 6(i)

(comparable disqualification), or section

6(d) (disqualification for failure to

comply with TANF work requirements)

of the Act apply to the same conduct,

the household should receive the most

severe of the penalties that apply in any

given month, not the combined effect

for them all, and the food stamp penalty

should take precedence.

We consulted our legal authority and

have determined that we do not have

the discretion to limit the penalties the

State agency may apply under sections

8(d) and sections 6(i) of the Act. The

law clearly prohibits State agencies from

increasing food stamp allotments and

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4447

gives them the option to further

decrease the food stamp allotment by 25

percent. Separate and apart from these

provisions, it gives them the option to

disqualify individuals who are

disqualified from a means-tested

assistance program. There is no

connection between the two penalties

which can be construed as giving us the

discretion to limit them. Therefore, we

are not adopting the commenters’

suggestions to limit the penalties by

making only the most severe penalty

apply. However, we urge the State

agencies to carefully balance desires to

support TANF policies with family food

needs when choosing which optional

provisions to apply.

We are retaining our proposal to

remove the exception from 7 CFR

273.11(j) that the prohibition on

increasing food stamp benefits did not

apply in the case of individuals or

households subject to the food stamp

work sanction imposed pursuant to 7

CFR 273.7(g)(2). If an individual who is

exempt from food stamp work

registration is sanctioned under TANF

for failing to comply with TANF work

requirements, the individual must be

disqualified from the Program. If we

keep the exception in place,

individual’s food stamp benefits would

rise in response to the decrease in

income caused by the TANF sanction.

One of the main thrusts of PRWORA

was to help individuals become self

sufficient by encouraging them to work

if they are able. One of the main reasons

behind these provisions (section 829

and 819 of PRWORA) was to support

other programs’ penalties. Individuals

who fail to comply with a means-tested

assistance program for any other reason

and are subsequently disqualified from

that program can be disqualified from

the Program and have their food stamp

benefits held constant. To make an

exception for individuals who fail to

comply with TANF work requirements

is inconsistent with the spirit of the law.

Therefore, we are removing the

exception as proposed.

We emphasized in the preamble of the

proposed rule that during the sanction

the State agency must act on changes

that would affect the household’s

benefits which are not related to the

assistance violation. Several

commenters pointed out that we left this

out of the regulation language. This was

an inadvertent error and we have

corrected it in the final rule.

One commenter suggested that the

rule should explicitly state that if the

public assistance program determines

that the reduction was not appropriate,

any food stamps that the household was

denied under this provision be restored.

We agree that a household should not

suffer if the public assistance program

or the State agency administering the

Program later determines that the

reduction in the public assistance grant

was not appropriate. At the same time,

we cannot support the household’s

unduly benefiting. For example, if the

public assistance program restores

benefits, then the household would not

be entitled to restored food stamp

benefits. However, if the State agency

chooses the option to further reduce the

food stamp benefits by up to 25 percent

and it is later determined that the

reduction in the public assistance grant

was inappropriate, then the household

would be entitled to restored benefits.

Currently, the regulations at 7 CFR

273.17 require the State agency to

restore lost benefits if the loss was

caused by an error by the State agency,

an IPV which was reversed or if there

is a statement elsewhere in the

regulations specifically stating that the

household is entitled to restoration of

lost benefits. Instead of detailing all of

these circumstances in the regulations,

we have decided to modify 7 CFR

237.11(j) to provide that the State

agency must restore lost benefits when

necessary if it is later determined that

the reduction in the public assistance

program was not appropriate.

We proposed to revise 7 CFR

273.9(b)(5)(i) so that the total amount of

welfare or public assistance, rather than

the total amount minus the repayment

amount, is counted as income for food

stamps purposes when the overissuance

in the PA program was caused by the

household. The majority of the

commenters opposed this proposal.

Several commenters argued that this

proposal is administratively complex

and error prone. The State agency

would have to contact the other program

to determine if the overpayment was

administrative or client caused. Several

commenters argued that we should not

assume all overpayments are the result

of a failure to take a required action or

even fraud, as many overpayments are

either inadvertent household errors or

errors caused by the program. Several

commenters stated that this would

result in a form of double jeopardy—we

would count benefits as income in the

usual manner, and again when they are

recouped after the overpayment is

found. A few commenters suggested we

only count the amount of the repayment

in the case of fraud. In light of these

comments, we have decided not to make

the proposed change at 7 CFR

273.9(b)(5)(i).

One commenter pointed out that we

require State agencies to indicate in

their State Plan of Operations if they are

implementing optional provisions of

this rule. However, we failed to require

State agencies to indicate in their plans

if they have chosen to implement the

optional provision to reduce the food

stamp allotments by up to 25 percent.

This was an inadvertent error. We have

modified 7 CFR 272.2 and 273.11(j)

accordingly.

Comparable Disqualifications—7 CFR

273.11(k)

Section 819(a) of the PRWORA

amended Section 6 of the Act, 7 U.S.C.

2015, to provide that if a

disqualification is imposed on a

member of a food stamp household for

a failure of the member to perform an

action required under a Federal, State,

or local law relating to a means-tested

public assistance program, the State

agency may impose the same

disqualification on the member of the

household under the Food Stamp

Program. In addition, the State agency

may use the rules and procedures that

apply under TANF to impose the same

disqualification under the Food Stamp

Program. Finally, after the

disqualification period has expired, the

member may apply for food stamp

benefits and shall be treated as a new

applicant.

We proposed to add a new section, 7

CFR 273.11(l) to codify this provision

(now § 273.11(k)). Several of our

proposals under this provision

paralleled our proposals to implement

section 829 and 911 of PRWORA at 7

CFR 273.11(j). For example, we

proposed that neither of these

provisions would apply to individuals

who are initially applying for benefits

from a means-tested assistance program.

In general, the comments we received

spoke to the parallel provisions. Where

the provisions are similar we have

discussed the comments and our

rationale for our decisions in the

previous discussion of section 829 and

911 of PRWORA, or 7 CFR 273.11(j).

Therefore, we will not repeat the

discussion here. However, we lay out

our proposals and our decisions as they

relate to this particular section. Where

the provisions and our proposals differ,

we provide a complete discussion of the

provision, our proposal, the comments

we received and our decision.

Parallel Provisions

(1) We proposed at 7 CFR 273.11(l)

that the penalty applied only if an

individual was receiving assistance at

the time the disqualification was

imposed by the other program and at the

time of application for continued

benefits if there was no break in

participation. We proposed that this

4448 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

provision would not apply if the person

was disqualified upon initially applying

for an assistance program. We are

maintaining this provision as written at

7 CFR 273.11(k).

(2) We proposed at §273.11(l) that if

an individual was disqualified from an

assistance program and the

disqualification was still in effect when

he initially applies for food stamps, then

the State agency may disqualify him

from food stamps at the initial

application. We have revised this

provision at 7 CFR 271.11(k) to provide

that the individual must be receiving

food stamps at the time of the

disqualification in the other program in

order to be disqualified from food

stamps.

(3) We proposed at 7 CFR 273.11(l)

that this provision not apply to reaching

a time limit for time-limited benefits or

having a child that is not eligible

because of a family cap. In addition, we

proposed that this provision not apply

to purely procedural requirements such

as a failure to submit a monthly report

or failure to reapply for assistance. We

are clarifying the regulations at 7 CFR

273.11(k) to provide that this provision

does not apply to: (1) Reaching a time

limit for time-limited benefits, (2)

having a child that is not eligible

because of a family cap, (3) failing to

reapply or complete the reapplication

process for continued assistance under

the other program, (4) failing to perform

an action that the individual is unable

to perform as opposed to refusing to

perform, or, (5) failing to perform a

purely procedural requirement. We are

providing that the State agency has the

flexibility to determine procedural

versus substantive requirements within

the following parameters: (1) A

procedural requirement, which would

not trigger a sanction, is a step that an

individual must take to continue

receiving benefits in the program such

as submitting a monthly report form or

providing verification of circumstances;

and (2) a substantive requirement,

which would trigger a sanction, is a

behavioral requirement designed to

improve the well-being of the recipient

family, such as participating in job

search activities or ensuring that

children receive the proper

vaccinations.

(4) We proposed that the food stamp

disqualification period be limited to the

same period of time as the

disqualification in the assistance

program, to the extent possible. We also

proposed that the maximum length of

the food stamp disqualification in these

circumstances be no more than one

year. We are retaining the provision that

the disqualification be concurrent to the

extent possible with the disqualification

in the other program. We are also

providing that the State agency may

determine the length of the

disqualification as long as it does not

exceed the disqualification in the other

program. If the sanction is still in effect

at the end of one year, the State agency

shall review the case to determine if the

sanction continues to be appropriate. If,

for example, the household is not

receiving assistance, it would not be

appropriate to continue the sanction.

Sanctions extended beyond one year

must be reviewed at least annually but

may be ended by the State agency at any

time.

(5) We proposed at 7 CFR 273.11(l)

that the State agency be allowed to

shorten the food stamp disqualification

period if the person becomes ineligible

to participate in the other program for

some other reason during that one-year

time period. We are modifying the

regulations at 7 CFR 273.11(k) to

provide that a State agency must lift the

food stamp disqualification when it

becomes aware that the individual is

ineligible for assistance for some other

reason.

(6) We are modifying 7 CFR 237.11(k)

to provide that the State agency must

restore lost benefits when necessary if it

is later determined that the reduction in

the public assistance grant was not

appropriate.

Provisions Unique to 7 CFR 273.11(k)

We proposed at 7 CFR 273.11(l) that

the assistance program under which the

disqualification was imposed, has to be

authorized by Federal, State or local

law, but that the specific

disqualification penalty does not have

to be specified in the law. Several

commenters argued that in order for a

State to sanction an individual under

this provision, the action, not just the

program, should be explicitly required

by law. One commenter argued that the

action should be required under law or

formal written policy. We believe that

the law provides that the program not

the action must be specified in the law.

Therefore, in the final rule at § 273.11(k)

we are retaining the provision as

proposed.

We interpreted the term, ‘‘meanstested public assistance program’’ to

include any public or assisted housing

under Title I of the United States

Housing Act of 1937; any State

temporary assistance for needy families

funded under part A of Title IV of the

Social Security Act; and any program

for the aged, blind, or disabled under

Titles I, X, XIV, or XVI of the Social

Security Act; Medicaid under Title XX

of the Social Security Act; and State and

local general assistance as defined in 7

CFR 271.2. The majority of the

commenters opposed this provision for

the same reasons they opposed this

definition for Section 829 of PRWORA.

In addition, they opposed the inclusion

of Medicaid in this definition. They

suggested that the definition be

restricted to the definition of ‘‘public

assistance’’ and ‘‘general assistance’’ as

defined in the food stamp regulations.

Based on these comments, and in the

interest of consistency with section 7

CFR 273.11(j), we have decided to

modify the regulations at 7 CFR

273.11(k) to restrict the definition of

‘‘means-tested public assistance

programs’’ to that of ‘‘public assistance’’

and ‘‘general assistance’’ as defined in 7

CFR 271.2

Since the law makes the comparable

disqualification provision a State

option, we proposed to allow State

agencies the discretion to apply this

provision to some, but not all, meanstested public assistance programs.

Further, we proposed to allow State

agencies to choose which

disqualifications within a specific

program it wants to impose for food

stamp purposes. The majority of the

comments we received supported this

provision. Only one commenter

opposed the provision that allows the

State agency to apply it selectively.

Because the majority of the commenters

supported these provisions, and we

believe that allowing State choice would

further Program goals, we are retaining

them as written at 7 CFR 273.11(k).

We proposed that for food stamp

purposes only the individual can be

disqualified, rather than the whole

household. The majority of the

commenters supported this provision.

Therefore, we are retaining it as written.

We proposed that when a household

member is disqualified from food stamp

eligibility under section 6(a)(2) of the

Act, the State agency count all of the

member’s resources and either all or a

pro rata share of the income and

deductible expenses as available to the

household. The majority of the

comments opposed allowing the State

agencies the option of counting all of

the individual’s income as available to

the household. They argue that this is

too punitive. They contend that if a

State agency chose to count all of the

income as available to the household, it

would be imposing the same penalty as

for an IPV and that penalties

comparable to IPVs should come at the

direction of Congress as it did in the

cases of drug felons and immigrants

ineligible under section 6(f) of the Act.

We agree with these comments and,

accordingly, we have decided to modify

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4449

the regulations at 7 CFR 273.11(k) to

provide that the State agency must

count all of the resources and all but a

pro-rata share of the income of the

disqualified member as available to the

household in accordance with 7 CFR

273.11(c)(2).

School Attendance—7 CFR 273.11(l)

Section 103 of PRWORA amended

Part A of Title IV of the Social Security

Act, 42 U.S.C. 601, et seq., to provide for

block grants to States for TANF. The

title of Section 404 of the amended Part

A of Title IV is ‘‘Use of Grants.’’ Section

404(i) provides that a State to which a

grant is made under section 403 shall

not be prohibited from sanctioning a

family that includes an adult who has

received assistance under the Food

Stamp Program, if such adult fails to

ensure that the minor dependent

children of such adult attend school as

required by the law of the State in

which the minor children reside.

Section 404(j) provides that a State to

which a grant is made under section 403

shall not be prohibited from sanctioning

a family that includes an adult who is

older than age 20 and younger than age

51 and who has received assistance

under the Program, if such adult does

not have, or is not working toward

attaining, a secondary school diploma or

its recognized equivalent unless such

adult has been determined in the

judgment of medical, psychiatric, or

other appropriate professionals to lack

the requisite capacity to successfully

complete a course of study that would

lead to a secondary school diploma or

its recognized equivalent.

We interpreted these provisions to

pertain to TANF sanctions only. We

proposed that States may not apply a

separate food stamp sanction to

households based on sections 404(i) and

(j). We included a reference to these

provisions in 7 CFR 273.11, Action on

Households with Special

Circumstances. In addition, we

proposed that if an individual was

sanctioned under TANF, then the State

agency must apply 7 CFR 273.11(j),

prohibiting an increase in food stamp

benefits as a result of a reduction in

public assistance benefits, and it may

apply 7 CFR 273.11(k), regarding

comparable disqualifications. We also

proposed that if a State agency elected

the optional reduction, then it should

include it in its State Plan of Operation.

All of the comments we received

supported our interpretation that these

provisions applied to TANF sanctions

only. One commenter stated that our

regulations were unnecessarily long,

and that a simple statement that these

provisions do not provide independent

authority for food stamp sanctions

beyond any that may apply though

sections 6(i) or 8(d) of the Act would be

sufficient. One commenter questioned

the necessity to include these provisions

in the State Plan of Operation since they

are already included under 7 CFR

273.11(j) and (k). We agree with both of

these commenters. Therefore, we are

combining these two provisions into a

single provision at 7 CFR 273.11(l). We

are providing that these provisions do

not provide for a separate food stamp

sanction beyond those that are provided

for in 7 CFR 273.11(j) and (k). In

addition, we are removing the

requirement at 7 CFR 272.2 that State

agencies include this in their State Plan

of Operations. Finally, we are not

including these individuals in the list of

non-household members at 7 CFR

273.1(b).

Cooperation with Law-Enforcement

Authorities—7 CFR 272.1(c)(1)(vii)

We proposed amending 7 CFR

272.1(c)(1) to implement section 837 of

PRWORA which requires State agencies

to disclose certain information regarding

food stamp participants to law

enforcement officers. Under proposed

paragraph 7 CFR 272.1(c)(1)(vii), which

essentially tracks the statutory language,

a State agency, upon the written request

(including the name of the household

member) of a Federal, State, or local law

enforcement officer, would be required

to disclose the address, social security

number and, if available, a photograph

of any household member where the

member is: (1) Fleeing to avoid

prosecution, or custody or confinement

after conviction, for a crime (or attempt

to commit a crime) that, under the law

of the place the member is fleeing, is a

felony (or, in the case of New Jersey, a

high misdemeanor); or (2) is violating a

condition of probation or parole

imposed under Federal or State law; or

(3) has information that is necessary for

the officer to conduct an official duty

related to a member of the household

who is fleeing to avoid prosecution or

custody for a felony.

One commenter generally opposed

the proposed provision based on the

belief that it is unnecessary since State

agencies are already free to cooperate

with law enforcement agencies. Another

commenter wanted to know if the State

agency should withhold an eligibility

determination if a law enforcement

officer is seeking information regarding

an applicant who may be fleeing from

prosecution or custody for a felony or

may have violated a condition of

probation or parole. Other commenters

requested clarification of some of the

provisions in the proposed rule,

specifically regarding information about

a household member who is not a

violator him or herself but who may

have information regarding a violator. In

response to these comments we are

making the language of the final rule

more specific. We are clarifying that a

request from a law enforcement officer

for information regarding a household

member who may be fleeing to avoid

prosecution or custody would not be

sufficient to withhold an eligibility

determination or to terminate the

participation of such an individual.

However, as provided by the

amendment made by sections 115 and

821 of PRWORA (discussed below),

documentation that the household

member is, in fact, a fleeing felon, or is

violating a condition of probation or

parole, would be sufficient to terminate

the eligibility or deny the application of

the member. We are also clarifying that

this provision authorizes law

enforcement officers to obtain

information regarding household

members who, although not fleeing to

avoid prosecution or custody

themselves, have information regarding

other members who are, in fact, fleeing

felons. We are taking this opportunity to

remind State agencies that this

provision in no way requires them to

collect photo IDs as a condition of

eligibility. Though the regulations at 7

CFR 273.2(f) require State agencies to

verify identity, they are very clear that

any document which reasonably

establishes the applicant’s identity must

be accepted. The State agency may not

impose a requirement for a specific type

of document such as a photo ID.

Finally, the rule notes that the State

agency shall only disclose the

information as is necessary to comply

with a specific written request, which is

authorized by the rule, of the law

enforcement agency.

Verification of Criteria Related to the

Commission of Crimes (Drug-related

Felonies, Flight to Avoid Prosecution or

Incarceration, and Violations of Parole

or Probation)—7 CFR 273.2(f)(1)(ix)

Under section 115 of PROWRA, an

individual convicted (under Federal or

State law) of any offense which is

classified as a felony by the law of the

jurisdiction involved and which has as

an element the possession, use, or

distribution of a controlled substance

(as defined in section 102(6) of the

Controlled Substances Act, 21 U.S.C.

802(6)) is not eligible to participate in

the Food Stamp Program unless the

State agency through legislation elects

to opt out of the disqualification

provisions of the statute. Under section

6(k) of the Act, 7 U.S.C. 2015(k) as

4450 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

amended by section 821 of PRWORA,

individuals who are fleeing to avoid

prosecution, or custody or confinement

after conviction, for a crime classified as

a felony under the law of the place from

which the individual is fleeing, or

violating a condition of probation or

parole imposed under a Federal or State

law are ineligible to participate in the

Program. We proposed amending 7 CFR

273.2(f)(1) to require that each State

agency establish a system or systems to

verify the status of food stamp

applicants/recipients to determine if

they would be subject to

disqualification under section 115 or

section 821 of PRWORA. One

commenter expressed general support of

the rule as written. A number of

commenters expressed strong

opposition to this proposal indicating

that establishment of a system of

verification would result in a significant

burden on affected State agencies.

Several State agencies indicated that

since access to existing databases

containing criminal records is generally

limited to law enforcement agencies,

State agencies would not be able to

utilize such databases to determine

whether an applicant would be subject

to disqualification under section 115 or

821, making verification extremely

difficult since there is no current

nationwide database which is accessible

to State welfare agencies.

Based on their experience, a number

of State agencies expressed the opinion

that a statement on the application form

requiring individuals subject to

disqualification based on convictions

for drug related felonies to identify

themselves as such would be sufficient

to identify those individuals for the

purposes of the Program. In response to

these comments, we are eliminating the

requirement that State agencies

establish systems to verify whether an

applicant has been convicted of a drugrelated felony. With respect to

verification of other criminal activity

such as flight to avoid prosecution or

custody, or violation of a condition of

probation or parole, we feel that, based

on the comments, it would be

impracticable to mandate the

establishment of State systems to verify

such activity. We also believe that in the

overwhelming majority of cases as soon

as a household member is identified by

a law enforcement agency as an

individual who is fleeing to avoid

prosecution or custody for a felony, or

has violated a condition of parole or

probation, that individual would be

taken into custody, and as such, would

no longer be a member of a household

eligible to participate in the program.

Based on these factors the final rule will

not include a provision mandating the

establishment of systems to verify

whether applicants are fleeing to avoid

prosecution or custody, or have violated

a condition of probation or parole.

Applicability of SSI Categorical

Eligibility to Individuals Subject to

Disqualification Under Section 115 of

PRWORA—7 CFR 273.2(j)(2)(vii)

Since publication of the proposed

rule, it has come to our attention that it

will be necessary to address the issue of

whether section 115 of PRWORA

(disqualification based on a conviction

of a drug-related felony) applies to

individuals who are categorically

eligible to participate in the Program

based on their eligibility to participate

in the Supplemental Security Income

(SSI) Program. Under 7 CFR 273.2(j)(2),

households in which all persons receive

or are authorized to receive SSI are

considered categorically eligible to

participate in the Program. Under 7 CFR

273.2(j)(2)(vii)), certain individuals who

are statutorily ineligible based on

nonfinancial eligibility criteria shall not

be considered as part of an otherwise

categorically eligible household. We

believe that individuals who are

ineligible to participate in the Program

as the result of the operation of section

115 of PRWORA are similarly situated

since their ineligibility is the result of a

statutory provision unrelated to

financial eligibility. Accordingly, we are

amending 7 CFR 273.2(j)(2)(vii) by

adding a new subparagraph (D) which

specifically provides that an individual

who is ineligible under 7 CFR 273.11(m)

by virtue of a conviction for a drugrelated felony shall not be included in

a categorically eligible household.

Although 7 CFR 273.2(j) also confers

food stamp categorical eligibility on

persons who are authorized to receive

assistance under the TANF Program, it

is not necessary to address the

applicability of disqualification under

section 115 of PRWORA to potentially

categorically eligible TANF recipients

convicted of drug-related felonies since

section 115 of PRWORA also prohibits

individuals convicted of drug-related

felonies from participating in the TANF

Program.

Disqualification Based on the

Conviction of a Drug-Related Felony—7

CFR 273.11(m) and 273.11(c)(1)

Under Section 115 of PRWORA, an

individual convicted (under Federal or

State law) of any offense which is

classified as a felony by the law of the

jurisdiction involved and which has as

an element the possession, use, or

distribution of a controlled substance

(as defined in section 102(6) of the

Controlled Substances Act) is not

eligible to participate in the Program

unless the State agency through

legislation elects to opt out of the

disqualification provisions of the

statute. Three commenters requested

that we clarify the effective date of this

provision. Although we addressed this

issue in the implementation section of

the preamble of the proposed rule, we

have revised the language of 7 CFR

273.11(m) in the final rule to expressly

provide that the disqualification

provision only applies to convictions for

crimes occurring subsequent to August

22, 1996. Some commenters also

expressed the opinion that counting the

resources and income of a person

disqualified based on a drug-related

felony conviction was unduly punitive.

We are retaining the provision in the

proposed rule since it is based directly

on the statute (section 115(b)(2) of

PRWORA) with no agency discretion.

One commenter wanted to know if a

conviction for a drug-related felony

occurring during the certification period

should be considered a reportable

change. We are not mandating that the

conviction be a reportable change

although we anticipate that State

agencies would act to disqualify a

household member who is convicted of

a drug-related felony during the

certification period if the household

voluntary reports such a change or if it

becomes otherwise known to the State

agency. We also believe that in most

cases a conviction for a drug-related

felony (as opposed to a misdemeanor)

would result in the incarceration of the

household member resulting in a

reportable change based on household

composition since the individual

convicted and subsequently

incarcerated would no longer be a

household member. One commenter

suggested that the regulation provide

more detail regarding the treatment of

the disqualified member’s income and

resources. Although we feel that the

current regulations (including the

proposed changes adding convicted

drug felons) at 7 CFR 273.11(c) provide

sufficient detail regarding the treatment

of the income and resources of certain

disqualified household members and

that an expanded description of the

applicable procedures is unnecessary,

we have added a cross-reference to 7

CFR 273.11(c)(1) at 273.11(m).

For general information, the following

19 States have either opted out or

limited the disqualification time period:

Louisiana, Oklahoma, Illinois,

Michigan, Minnesota, Ohio, Wisconsin,

New Hampshire, New York, Vermont,

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4451

New Jersey, North Carolina, Colorado,

Iowa, Utah, Hawaii, Nevada, Oregon

and Washington.

7 CFR 273.11(n)—Disqualification of

Fleeing Felons and Probation/Parole

Violators

Under section 821 of PRWORA,

individuals who are fleeing to avoid

prosecution, or custody or confinement

after conviction, for a crime classified as

a felony under the law of the place from

which the individual is fleeing, or

violating a condition of probation or

parole imposed under a Federal or State

law are ineligible to participate in the

Program. One commenter expressed

concern regarding the vagueness of the

term, ‘‘violating a condition of probation

or parole’’. Although we agree that the

term is somewhat vague we do not

believe that it would be possible to

provide a definition with any specificity

since conditions of probation or parole

vary greatly among individuals. We also

wish to note that, in most cases once a

determination is made that an

individual is violating a condition of

probation or parole, the individual will

be taken into custody and would be

ineligible to participate in the Program

on the basis that the individual is a

resident of an institution rather than a

member of the household. One

commenter suggested that we clarify

that once an individual is released from

supervision he or she would no longer

be considered in violation of a condition

of probation or parole. We have

considered the comment and have

elected not to specifically address the

issue in the regulatory language since

we feel that the determination of

whether an individual is considered to

be violating a condition of parole or

probation would be a determination of

(State or Federal) courts and/or law

enforcement authorities.

One commenter suggested we include

a cross reference to 7 CFR 273.11(c)(1)

regarding the treatment of income and

resources of the ineligible member. We

agree with the commenter and are

making the change at § 273.11(n) to

include the cross reference.

Cooperation With Child Support—7 CFR

273.11(o) and (p)

Section 822 of PRWORA amended

section 6(l) of the Act (7 U.S.C. 2015(l))

to allow State agencies to disqualify a

natural or adoptive parent or other

individual (collectively referred to as

‘‘the individual’’) who is living with and

exercising parental control over a child

under the age of 18 if the custodial

parent does not cooperate with the State

agency administering the program

established under Part D of Title IV of

the Social Security Act (42 U.S.C. 651

et seq.,) (the State Child Support

Agency) in establishing paternity and

collecting support for the child and or

the individual without good cause. The

provision requires the Department, in

consultation with the Department of

Health and Human Services (DHHS), to

develop standards for what will

constitute ‘‘good cause’’ for refusal of a

custodial parent to cooperate. Section

822 of PRWORA also amended Section

6 of the Act by adding subsection (m) to

give State agencies the option to

disqualify the non-custodial parent who

refuses to cooperate with the State Child

Support Agency in establishing the

paternity of a child and providing

support for the child.

One commenter suggested we define

‘‘custodial parent’’ versus ‘‘noncustodial parent’’ for purposes of these

provisions. We agree that a definition is

warranted. Therefore, for purposes of

this provision, a custodial parent is one

who lives with his or her child under

the age of 18. A ‘‘non-custodial parent’’

is one who does not live with his or her

child who is under the age of 18.

Several commenters suggested that we

require the State agencies to notify

applicants of the requirement to

cooperate with the State Child Support

Agency as a condition of eligibility.

Without knowledge that a cooperation

requirement exists and what will be

required to comply, an individual

cannot be expected to comply. We agree

with these comments. Therefore, we are

modifying both 7 CFR 273.11 (o) and (p)

to require the State agency provide

notification of this requirement in

writing to applicants for initial benefits

and for continued benefits.

Custodial Parent—7 CFR 273.11(o)

We proposed that the State agency

make the cooperation and the good

cause determination. Several

commenters argued that we do not have

the authority to determine if an

individual is cooperating with the State

Child Support Agency. A couple of

commenters pointed out that the Social

Security Act, as amended by section

5548 of Pub. L. 105–33, gives the State

Child Support Agency the authority to

make this determination. Section

454(29)(A) of the Social Security Act

provides that the State Child Support

Agency ‘‘shall make the determination

(and redetermination at appropriate

intervals) as to whether an individual

who has applied for or is receiving

assistance under * * * the Food Stamp

Program * * * is cooperating in good

faith with the State in establishing the

paternity of, or in establishing,

modifying or enforcing a support order

for, any child of the individual by

providing the State Child Support

agency with the name of, and such other

information as the State Child Support

agency may require with respect to, the

non-custodial parent of the child,

subject to good cause and other

exceptions * * *.’’ Furthermore,

section 454(4)(A)(IV) of the Social

Security Act provides that the State

Child Support Agency ‘‘* * * provide

services relating to the establishment of

paternity or the establishment,

modification, or enforcement of child

support obligations * * * with respect

to each child for whom cooperation is

required pursuant to section 2015(l)(1)

of title 7 (the Food Stamp Program)

* * *.’’ One commenter suggested that

our regulations simply clarify the

process by which the State agency

would be notified by the State Child

Support Agency that the individual has

failed to cooperate. Section 454(29)(E)

provides that the IV–D agency must

‘‘promptly notify the individuals and

the State agency administering * * *

the Food Stamp Program * * * of each

determination, and if non-cooperation is

determined, and the basis thereof

* * *.’’

When PRWORA was enacted in

August of 1996, it did not include

changes to the Social Security Act

which addressed cooperation with the

State Child Support Agency for food

stamp recipients. However, the

Balanced Budget Act of 1997 (Pub. L.

105–33) amended the Social Security

Act to include references to the Food

Stamp Program as detailed above.

Subsequently, TANF has published

final regulations implementing section

454 of the Social Security Act which

also requires TANF applicants and

recipients to cooperate with the State

Child Support Agency as an eligibility

requirement. Based on these

developments, and on comments, we

have decided to modify the proposed

regulations at 7 CFR 273.11(o) to

provide that if the State Agency chooses

to implement this provision, it must

refer the appropriate individuals to the

State Child Support Agency.

The proposed definition of

cooperation was based on wording used

at the time by DHHS. We proposed that

the individual must cooperate with the

State agency in obtaining support by: (1)

Establishing the paternity of a child

born out of wedlock; (2) obtaining

support payments for the child or the

individual and the child; and (3)

obtaining any other payments or

property due the child or the individual

and the child. We also proposed that the

following actions be included in the

definition: (1) Appearing at an office of

4452 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

the State or local agency or the child

support agency to provide verbal or

written information; (2) appearing as a

witness at judicial or other hearings or

proceedings; (3) supplying information

in establishing paternity; and (4) paying

to the child support agency any support

payments received from the absent

father. We received a number of

comments on our proposed definition.

Several commenters suggested that we

refer to the final TANF regulations as an

example. Several other commenters

suggested changes to the proposed

language defining cooperation.

However, because it is the State Child

Support Agency that makes the

cooperation determination, and the

definition of cooperation is embedded

in section 454(29) of the Social Security

Act, we have decided that it is not

necessary to detail in our regulations the

definition of cooperation beyond what

is provided for in section 822 of

PRWORA. Therefore, in this final rule at

7 CFR 273.11(o), we are deleting our

proposed definition of cooperation and

replacing it with an abbreviated version

which is based on section 822 of

PRWORA and section 454(29) of the

Social Security Act. We provide that the

individual must cooperate with the

State Child Support Agency in

establishing paternity, and in

establishing, modifying, or enforcing a

support order with respect to the child

in accordance with section 454(29) of

the Social Security Act.

A few commenters suggested that, if

an individual is already participating in

TANF, Medicaid or the State Child

Support program, the individual would

already be deemed as cooperating for

food stamp purposes. We believe this

would simplify the administration of

this provision. Therefore, we are

modifying 7 CFR 273.11(o) to provide

accordingly.

Several commenters suggested that

since this is an optional provision we

allow the State agencies to apply this

provision selectively, e.g. to parents but

not other individuals. One commenter

suggested we give State agencies the

option to limit this provision to those

groups of people who the State agency

decides that child support cooperation

requirements are appropriate. One

commenter suggested that we define

‘‘other individual’’ as a ‘‘legally

responsible adult.’’ We believe that the

State agency at a minimum should

apply this provision to natural and

adoptive parents. However, we agree

that the State agency should have some

latitude to apply this provision to those

other individuals that it deems

appropriate, whether or not those

individuals are the ‘‘legally responsible

adults.’’ Therefore, we are modifying the

regulations at 7 CFR 273.11(o) to

provide that if the State agency chooses

to implement this provision it must

apply it to all natural and adoptive

parents and, at State option, it may

apply it to other individuals. This

information must be included in the

State Plan of Operation as required at 7

CFR 272.2

We proposed to adopt DHHS’

provisions concerning good cause

exceptions. We listed the circumstances

under which cooperation may be against

the best interests of the child and would

not be required. Again, we received a

multitude of comments on this subject.

The commenters either suggested we be

less prescriptive and let the State

agencies define good cause, or more

prescriptive, but adjust the wording to

encompass more situations which

would be considered good cause. One

commenter said we should allow the

State agencies to recognize additional

situations in which cooperation would

be contrary to the best interests of the

child. A few commenters suggested we

have a less onerous burden of good

cause. For example, the emotional or

physical harm should not have to be to

the extent that it ‘‘reduces [the

individual’s] ability to care for the child

adequately’’ or that the ‘‘emotional

impairment * * * substantially affects

the individual’s functioning.’’ Several

commenters suggested that we go

beyond that which is in the best

interests of the child and take into

consideration the best interests of the

parent or other individual. Several

commenters suggested that our good

cause exemptions related to domestic

violence are too narrowly drawn and

would require the food stamp agencies

to make impossible and dangerous

judgments. Several commenters

suggested we allow a good cause

exemption based on the TANF

exemption for victims of domestic

violence. Finally, several commenters

suggested that the inability to cooperate

be considered good cause.

We have been advised by the DHHS

that the definition and determination of

good cause is left up to either the State

Child Support Agency or the State

TANF program. Based on the comments

and our consultation with DHHS and in

the interest of conforming to current

TANF and Medicaid regulations,

simplifying the administration of this

provision, and reducing the potential for

errors, we have decided to modify our

regulations. Therefore, at 7 CFR

273.11(o) in this final rule, we provide

that if a State agency chooses to

implement this provision, it must, adopt

the good cause criteria that its State

TANF program or its State Child

Support Agency uses, whichever agency

defines good cause for non-cooperation.

In addition, if those good cause

provisions do not take into

consideration the threat of domestic

violence, State agencies must consider if

cooperating with the State Child

Support Agency would make it more

difficult for individuals to escape

domestic violence or unfairly penalize

such individuals who are or have been

victimized by such violence, or

individuals who are at risk of further

domestic violence. For purposes of this

provision, the term ‘‘domestic violence’’

means the individual or child would be

subject to physical acts that result in, or

are threatened to result in, physical

injury to the individual; sexual abuse;

sexual activity involving a dependent

child; being forced as the caretaker

relative of a dependent child to engage

in nonconsensual sexual acts or

activities; threats of, or attempts at

physical or sexual abuse; mental abuse;

or neglect or deprivation of medical

care.

Finally, we provide that the State

agency may define additional good

cause criteria in consultation with the

State Child Support Enforcement

Agency or the State TANF Program,

whichever agency is appropriate, and

identify the additional criteria in the

State plan.

One commenter noted that good cause

should address situations where a

parent or caretaker may be willing but

unable to pursue child support

enforcement. For example, the parent or

caretaker may lack information about

the absent parent. Some custodial

parents and other caretakers may simply

not know the identity of a child’s father.

We agree with this commenter that there

are instances where the individual

cannot provide any information on the

father. However, we believe this

situation will be covered by the State

Child Support or TANF agency’s

definition of good cause. As indicated

above, the State agency must adopt the

same criteria as the State Child Support

or TANF agency uses for good cause. In

the event that this situation is not

covered by the State Child Support or

TANF agency’s definition of good cause,

we urge State agencies to adopt the

criteria that the inability to provide

information about the father is

considered good cause.

One commenter suggested that if the

State TANF and Medicaid programs

have already granted good cause then

we should also do so for food stamp

purposes. We agree with the

commenter, especially since we are

adopting the good cause provisions from

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4453

the State TANF program or the State

Child Support Agency. Therefore, we

are modifying the regulations at 7 CFR

273.11(p), to provide that if the State

TANF program or State Child Support

Agency has already established that the

individual has good cause for noncooperation, then the State agency must

accept that for food stamp purposes. If

the State TANF program or the State

Child Support Agency determines that

the individual does not have good cause

for refusing to cooperate, then the State

agency must determine if the individual

meets the good cause criteria for

domestic violence or for any additional

criteria the State agency has identified.

We proposed that the individual

provide evidence to corroborate the

claim of good cause. We received

several comments regarding our

proposal. All of the comments opposed

our requirements as being too

burdensome. A few commenters

suggested that individuals be permitted

to substantiate claims with a sworn

statement. One commenter suggested we

broaden our definition of good cause so

those individuals should not have to

offer additional proof that these

circumstances would make the pursuit

of child support against the best

interests of the child.

Again we consulted with our

counterparts at DHHS. Based on the

comments and our discussions with

DHHS, we have decided that the State

agency must adopt the corroboration

standards mandated by either the State

Child Support Agency or the State

TANF program, whichever agency in

the State defines and determines good

cause. We believe this will simplify

administration of this provision and

provide consistency with TANF,

Medicaid and the State Child Support

Agency. Therefore, we provide

accordingly in this final rule at 7 CFR

273.11(o).

We proposed that if the State agency

determines that the custodial parent has

not cooperated without good cause, then

that individual (and not the entire

household) would be ineligible to

participate in the Program. We received

no comments on this provision and are

adopting it as final at 7 CFR 273.11(o).

We proposed that the disqualification

period be over as soon as it is

determined that the individual is

cooperating with the State Child

Support Agency. An integral aspect of

this requirement is that the State agency

must have procedures in place to requalify an individual once cooperation

has been established. We solicited

comments on systems already in use.

We received none. Therefore, we are

adopting these provisions as final.

We proposed that the State agency

count all of the disqualified individual’s

resources, but to give State agencies the

option to count all or all but a pro rata

share of the individual’s income as

available to the household. The majority

of the comments we received on these

provisions opposed allowing the State

agencies the option to count all of the

income as available to the household.

They believe this is too punitive and is

not in the best interest of the children.

We agree. Therefore, in this final

rulemaking we are amending 7 CFR

273.11(c) and 7 CFR 273.11(o) to

provide that all but a pro rata share of

the ineligible member’s income is

counted as available to the household.

Section 6(l) of the Act prohibits the

payment of a fee or other cost for

services provided under a Part D of Title

IV, the Child Support Enforcement

Program. Subsequently, section 454(6)

of the Social Security Act (42 U.S.C.

654(6)) has been amended to prohibit

the State Child Support Agency from

charging application fees for furnishing

such services if cooperation is required

from the Food Stamp Program. All the

comments we received on this provision

were supportive. We are adopting this

provision as final.

We proposed that if a State agency

exercises its option to permit the

disqualification of an individual who

refuses to cooperate without good cause,

the option must be included in its State

Plan of Operation. We received no

comments on this provision. We are

adopting this provision as final at 7 CFR

272.2.

We proposed that prior to making a

final determination of good cause for

refusing to cooperate, the State agency

would afford the State Child Support

Agency the opportunity to review and

comment on the findings and the basis

of the proposed determination and

consider any recommendation from the

State Child Support Agency. We

received no comments on this proposal.

However, we have since been advised

that it may not be the State Child

Support Agency that defines and

determines good cause. It could be the

TANF agency. Accordingly, we are

modifying the language at 7 CFR

273.11(o) to specify that the State

agency will afford the State Child

Support Agency or the agency which

administers the program funded under

Part A of the Social Security Act the

opportunity to review and comment on

the findings.

We proposed that the State agency

will not deny, delay or discontinue

assistance pending a determination of

good cause for refusal to cooperate if the

applicant or recipient has complied

with the requirements to furnish

corroborative evidence and information.

We received several comments

suggesting that we clarify that the 30-

day processing standards still apply

pending this determination. We agree

with these comments and are, therefore,

modifying this provision accordingly at

7 CFR 273.11(p).

Noncustodial Parent—7 CFR 273.11(p)

Section 822 of PRWORA also

amended section 6 of the Act by adding

subsection (m) to give State agencies the

option to disqualify the non-custodial

parent who refuses to cooperate with

the State Child Support Agency in

establishing the paternity of a child and

providing support for the child.

We proposed to adopt DHHS’

definition of cooperation. We also

proposed that the State agency make the

determination as to whether or not the

individual is refusing to cooperate with

the State Child Support Agency. We

proposed that refusal to cooperate

occurs if: (1) The non-custodial parent

refuses to appear for an interview; (2)

refuses to furnish requested

documentation; (3) refuses DNA testing;

or (4) fails to make payments to the

State Child Support Agency.

One commenter argued that pursuant

to section 454(29)(A) of the Social

Security Act (42 U.S.C. 654(29)(A)), as

amended by section 5548 of Pub. L.

105–33, the State Child Support Agency

‘‘shall make the determination (and

redetermination at appropriate

intervals) as to whether an individual

who has applied or is receiving

assistance under * * * the Food Stamp

Program is cooperating in good faith

* * *.’’ This same commenter pointed

out that this provision conflicts with

section 6(l)(2) of the Food Stamp Act, 7

U.S.C. 2015(l)(2), which was added to

the Act by section 822 of PRWORA

which provides that the Secretary of

Agriculture must, in consultation with

the Secretary of Health and Human

Services, ‘‘ * * * develop guidelines on

what constitutes a refusal to cooperate

* * * and that the ‘‘ * * * State agency

shall develop procedures, using

guidelines developed under (the

preceding provision), for determining

whether an individual is refusing to

cooperate.’’ Based on these two

statutory provisions, this same

commenter suggested that the State

Child Support Agency make the

determination of non-cooperation and

that the food stamp State agency make

the determination as to whether or not

the non-cooperation constitutes a

refusal to cooperate. We agree that this

clear delineation of responsibilities

better serves the program. Therefore, we

4454 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

are modifying the regulations at 7 CFR

273.11(p) to provide that if the State

agency implements this option, it must

refer non-custodial parents of a child

under the age of 18 to the State Child

Support Agency. If the State Child

Support Agency determines that the

individual is not cooperating in good

faith, it must notify the State agency of

this determination and the basis of its

determination. The State agency must

then determine whether this noncooperation constitutes a refusal to

cooperate.

Based on this modification, we have

determined that there is no need to

define in the regulations what

constitutes cooperation, only what

constitutes refusal. We received several

comments suggesting we clarify that the

non-custodial parent can only be

disqualified for refusing to cooperate, as

opposed to failing or being unable to

cooperate. Therefore, we have decided

to modify the regulations at 7 CFR

273.11(p) by deleting the definition of

cooperation, and replacing it with a

definition of refusal. The State agency

must determine that an individual’s

non-cooperation with the State Child

Support Agency is a refusal to cooperate

if the individual demonstrates an

unwillingness to cooperate as opposed

to an inability to cooperate.

We proposed that the individual and

not the entire household would be

ineligible to participate in the Program.

The comments we received were

supportive. We adopting it as final at 7

CFR 273.11(p).

We proposed that the State agency

count all of the disqualified individual’s

resources as available to the household,

but that it may choose to count all or all

but a pro rata share of the ineligible

member’s income as available to the

household. The majority of the

comments we received opposed this

proposal as being potentially too

punitive to the non-custodial parent’s

household. They suggested that we

require the State agency to count all but

a pro rata share of the income as

available to the household. We agree

with these comments. We are modifying

the regulations at 7 CFR 273.11(p) and

7 CFR 273.11(c)(2) accordingly.

We proposed that the disqualification

period be over as soon as it is

determined that the individual is

cooperating with the State Child

Support Agency. The State agency must

have procedures in place to re-qualify

an individual once cooperation has been

established. We solicited comments on

those systems already in use. We

received none. We are adopting this

provision as final at 7 CFR 273.11(p).

Section 6(l) of the Act prohibits the

payment of a fee or other cost for

services provided under a Part D, Title

IV, Child Support Enforcement Program.

In addition, section 654(6) of the Social

Security Act prohibits the State Child

Support Agency from charging

application fees for furnishing such

services if cooperation is required from

the Food Stamp Program. We proposed

to prohibit the charging of such fees or

costs. The comments we received on

this provision were supportive. We are

adopting this provision as final at 7 CFR

273.11(p)

Section 6 of the Act, as amended by

section 822 of PRWORA also requires

the State agency to provide safeguards

to restrict the use of information

collected by the State agency to

purposes for which the information is

collected. We proposed the State agency

should have flexibility to establish the

specific safeguards. We received no

comments on this provision.

Accordingly, we are adopting it as final

at 7 CFR 273.11(p).

We proposed that if a State agency

opts to disqualify the non-custodial

parent who refuses to cooperate, it

include this policy in its State Plan of

Operation. In addition, we proposed to

add a new section 7 CFR

272.2(d)(1)(xiv) to require that the States

that elect to implement this provision

include these safeguards in their Plan of

Operation. We received no comments

on these proposals. We are adopting

them as final at 273.2(d)(xiii).

Disqualification for Child Support

Arrears—7 CFR 273.11(q)

Section 823 of PRWORA amended

section 6 of the Act by adding

subsection (n) (7 U.S.C. 2015(n)) to give

State agencies the option to disqualify a

member of any household during any

month that the individual is delinquent

in any payment due under a court order

for the support of the individual’s child.

The provision also specifies that if a

court is allowing the individual to delay

payment or the individual is complying

with a payment plan approved by a

court or the State Child Support

Agency, the individual will not be

disqualified. We proposed that the

disqualification apply to the offending

individual and not the entire household.

We proposed that for any month for

which it later discovers that the

individual was delinquent and should

have been disqualified, the State agency

must establish a claim against the

household. We received several

comments on this provision, both for

and against this procedure. Several

commenters opposed the provision in

general because it was too punitive and

further hampered individuals’ ability to

become self-sufficient and productive.

Several commenters opposed it because

it was too administratively burdensome.

Several commenters suggest that the

State agency be allowed to disqualify

the individual the month after the

month it learns that the individual has

been delinquent in child support

payments. Others suggested that State

agencies be allowed to establish a grace

period of several months. For example,

if an individual has not paid child

support after four months, the

individual should be disqualified until

the individual starts to comply. One

commenter said that since this is not a

reportable change, we have no authority

to set up a claim. Several commenters

supported our proposal as the only way

to remain faithful to the statute. The

statute provides that a State agency may

disqualify an individual ‘‘* * * during

any month the individual is delinquent

in any payment * * * ’’ and, therefore,

we have no option but to set up a claim.

Our analysis has determined that we

have no discretion to permit the State

agencies to implement the provision any

other way than the way we proposed.

The law is very clear that the individual

is to be disqualified the month that he

is delinquent. Therefore, we are

adopting the provision as proposed at 7

CFR 273.11(q).

A few commenters suggested that we

provide a good cause exception for this

provision. One commenter suggested

that this provision should only apply

when an individual refuses to pay as

opposed to being unable to pay. The

Statute does provide exceptions to this

provision: (1) If the court is allowing the

individual to delay payment, or (2) the

individual is complying with a payment

plan approved by a court or the State

Child Support Agency. However, since

this is a State agency option, we have

decided to give State agencies the

option to identify additional good cause

exemptions. We are adopting the

provision at 7 CFR 273.11(q)

accordingly.

One commenter suggested that this

provision only apply to non-custodial

parents. We believe that there are

situations in which a custodial parent is

still obligated to pay child support. For

example, the parents are separated, and

the non-custodial parent is required to

pay child support. During the

separation, the non-custodial parent

does not comply with the support order

for one reason or another. Even if the

parents reunite, the former noncustodial parent is still obligated to pay

for the period of time the parents were

separated. However, we also recognize

that some State agencies might view this

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4455

as too punitive. Therefore, since this is

a State agency option, we have decided

to give State agencies the option to

apply this provision to custodial or noncustodial parents.

We proposed that the State agency

consider all of the disqualified

individuals’ resources, and at State

agency option, either all or all but a pro

rata share of the income as available to

the household. All of the comments we

received opposed this proposal as being

too punitive to the household. Many of

the commenters argued that if the State

agency chose to count all of the income,

the children in the household would

suffer. We agree with these comments.

Therefore, in this final rule at 7 CFR

237.11(q) and 7 CFR 273.11(c)(2) we are

providing that if a State chooses this

option, it must count all of the

individuals’ resources and all but a pro

rata share of the income as available to

the household.

We proposed that the State agency

must disqualify the individual and not

the whole household. All the comments

we received on this provision were

supportive. We are adopting the

provision as proposed at 7 CFR

273.11(q).

7 CFR 273.16—Disqualification for

Intentional Program Violation

The current regulations at 7 CFR

273.16 outline the procedures involved

with Intentional Program Violations

(IPVs) and IPV-related disqualifications.

The proposed rule contained extensive

revisions to this section of the

regulations. These changes included the

increased and additional IPV-related

disqualification penalties brought about

by sections 813, 814 and 820 of

PRWORA. In addition, the proposed

rule contained a change necessitated by

a judicial decision on the imposition of

disqualification periods. Clarification

was also being provided in the proposed

rule for a number of issues, including

the definition of an IPV. Lastly, as part

of an effort to streamline the regulatory

requirements and to increase State

agency flexibility in the area, the

Department proposed to remove

prescriptive language and some

requirements in many discretionary

areas concerning IPVs and the IPV

disqualification process.

IPV Procedures and Rights of

Individuals

With respect to this streamlining

effort, the Department received

numerous comments expressing

concern about removing much of this

prescriptive language. By doing so,

according to the commenters, we are

also omitting a number of protections

necessary for ensuring fairness and due

process for individuals facing the

possibility of disqualification or

criminal prosecution. The Department

has found many of these arguments

compelling. Although the Department

believes the original goals of

streamlining and increased State

flexibility were worthy of the effort and

may be revisited at some later date, we

do not think such changes should come

at the possible expense of the

elimination of individuals’ rights.

Therefore, unless specifically addressed

below, we are restoring in this final rule

the language of the existing regulations

as it pertained to discretionary areas

concerning IPVs and the IPV

disqualification process. Included in the

restored language are such provisions as

the Administrative Disqualification

Hearing (ADH) and court referral

process, notice requirements, waiver

and consent forms, ADH decision

format, and local level hearings. Finally,

one commenter expressed concern that

a significant number of innocent people,

lacking adequate representation, are

intimidated into signing ADH waivers.

The commenter suggests that

individuals may be threatened with

criminal prosecution though the

evidence against the individual is far

from convincing. The Department in

this preamble would like to clarify its

position with respect to the use of false

and/or misleading statements to obtain

ADH waivers. While the Department

believes strongly that those found guilty

of IPVs should be removed from

participation in the FSP, we would

emphasize that the purpose of the FSP

is to provide assistance to those in need.

The use of investigative techniques that

may lead to the disqualification of

innocent participants is inconsistent

with the intended purpose of the FSP.

To this purpose, the current regulations

provide for certain safeguards against

intimidation, including a two-party

review to ensure that evidence against

an individual is sufficiently clear to

merit an ADH before an ADH waiver is

offered. The ADH waiver should not be

used as a shortcut to the investigative

process, but should only be offered after

the investigation has yielded evidence

adequate to bring before an ADH

hearing official. Though the Department

believes that no modification of the

current regulations is necessary, we

would emphasize our desire that these

safeguards be observed.

Administrative Versus Criminal

Pursuit—7 CFR 273.16(a)(1) and

(e)(3)(iii)(H)

The Department received two

comments in support of and four in

opposition to our clarification that both

an administrative disqualification

hearing (ADH) and a criminal

prosecution may be initiated

simultaneously for the same offense.

One of the opposing comments

suggested that permitting simultaneous

proceedings placed an enormous burden

on individuals or their legal

representatives to provide adequate

representation in two separate

proceedings. As a matter of fairness and

to ensure that each individual has an

appropriate opportunity to provide an

adequate defense, the Department agrees

with this argument and is clarifying in

this final rule that both an ADH and a

civil or criminal proceeding may be

initiated by the State but not

simultaneously. Further, the initiation

of a civil or criminal proceeding is

permitted regardless of the outcome of

the ADH. This is not a change from our

current policy as reflected in § 273.16(a)

of this final rule.

Definition of an IPV—7 CFR 273.16(c)

The Department proposed updating

this definition to provide a clarification

on trafficking as well as to account for

the improper acquisition and use of

electronic benefit transfer (EBT) cards.

One commenter suggested that we make

the definition more consistent with

section 6(b)(1) of the Act (7 U.S.C.

2035(b)(1)) by replacing ‘‘relating to the

use, presentation’’ as it appears in the

current regulations with ‘‘for the

purpose of using, presenting’’ as it

appears in the Act. We agree that this

wording better reflects the appropriate

intent and is reflected in Section

273.16(c) in this final rule.

PRWORA Section 813—Doubled

Penalties for Violating FSP Rules

The proposed rule contained the

provision in section 813 of PRWORA

that increases the penalties twofold for

the non-permanent offenses.

Specifically, unless the offense falls

under a specific category requiring a

more stringent penalty, section 6(b)(1) of

the Act (7 U.S.C. 2015(b)(1)) now

requires that an individual be

disqualified for one year for a first

finding of IPV, and for two years for a

second finding of IPV. The penalty for

a third finding of IPV, permanent

disqualification, remains the same. For

convictions involving the trading of

controlled substances for coupons,

section 813 of PRWORA requires that an

individual be disqualified for two years

for the first offense.

The comments received by the

Department concerning the doubling of

the current disqualification penalties

expressed general support. Since the

4456 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

Department is retaining the structure of

the current rule, these changes will be

reflected in § 273.16(b) of the final rule.

PRWORA Section 814—Disqualification

of Individuals Convicted of Trafficking

$500 or More

The proposed rule included the

provision in section 814 of PRWORA

that permanently disqualifies

individuals from FSP participation if

they are convicted of a trafficking

offense of $500 or more.

The statutory language provides for

this penalty to take effect where there is

an actual conviction. The proposed rule

extended the applicability of this

penalty to include signed

disqualification consent agreements in

connection with deferred adjudications.

The Department received two comments

objecting to this extension of penalties.

Specifically, the commenters believed

that since there is no actual

determination of guilt, there is no actual

conviction as required by section 6(b) of

the amended Act. This is a valid point.

Therefore, the final rule adds language

to permanently disqualify individuals

from FSP participation if they are

convicted of a trafficking offense of $500

or more. The proposed language

specifying that this penalty also applies

to deferred adjudications does not

appear in the final rule.

This change does not affect our

current long-standing policy in 7 CFR

273.16(b)(9) that allows the penalties

associated with trading coupons for

firearms, ammunition, explosives or

controlled substances to be imposed

using agreements obtained in deferred

adjudications. The basis for the

difference between this policy and the

new trafficking penalty is the different

respective requirements in the Act. As

discussed above, Section 6(b)(1)(iii)(IV)

of the Act (7 U.S.C. 2025 (b)(1)(iii)(IV))

requires a conviction for the new

PRWORA trafficking penalty.

Conversely, the existing firearms,

ammunition, explosives and controlled

substances penalties requires only a

court finding (rather than a conviction)

(7 U.S.C. 2025 (b)(1)). Therefore, the

current policy regarding these longstanding penalties remain unchanged.

A number of comments were received

regarding the $500 trafficking

benchmark associated with this penalty.

The preamble to the proposed rule (64

FR 70933) specified that, if the

cumulative amount of the related

infractions making up the IPV is greater

than $500, then the individual would be

subject to the increased trafficking

penalty. Three of the comments were

from State agencies expressing that it

would be difficult to track dollar

amounts of individual convictions. This

is not our intention. Aggregating

involves the accumulation of dollar

amounts for separate but related

trafficking offenses leading up to the

prosecution of a single IPV. All evidence

necessary for the prosecution of a case,

regardless of the number of offenses,

should include the dollar amounts for

each. It should then be relatively simple

to aggregate these amounts to determine

whether the total reaches the $500

benchmark for permanent

disqualification. Comparing or

aggregating individual conviction

amounts are not necessary (or even

appropriate) in these instances.

The Department also received one

comment indicating that the aggregating

of the dollar amounts of individual

trafficking offenses to reach the

threshold of $500 is unfair to affected

individuals and households. The

commenter suggested that Congress

intended to severely punish the more

serious offenders while allowing the

lesser offenders to learn from their

mistakes. Therefore, according to the

commenter, individual trafficking

incidents should not be combined.

While the Department does not disagree

with the suggested intent, we believe

that the trafficking of $500 or more,

whether in an single transaction or in

aggregate, is a serious offense and is

deserving of the more serious penalty.

Further, permanent disqualification is

applicable, as clarified above, in such

cases only when referred to the court

and a conviction is obtained. The final

determination will thus belong to the

court. The Department would also like

to point out that those individuals that

receive less than $500 per month in

food stamp benefits would have to

participate in multiple intentional

violations to reach the $500 benchmark

for permanent disqualification. Without

aggregating, these same individuals,

though they be chronic serious

offenders, would never be subject to the

penalty intended by Congress.

Conversely, without aggregating, the

Department would be in the position of

unfairly holding only those that receive

$500 or more per month in food stamp

benefits potentially liable for the more

severe penalty. However, even this latter

group could avoid ever receiving a

permanent disqualification by

intentionally limiting trafficking

transactions to $499 or less. The

Department does not believe that this is

what Congress intended and the

requirement concerning aggregating will

be retained in the final rule.

PRWORA Section 820—Ten Year

Disqualification for Multiple

Participation

The proposed rule included the

provision in section 820 of PRWORA

which amended section 6 of the Act by

adding paragraph (j), 7 U.S.C. 2015 (j),

to provided for a ten year

disqualification for making a fraudulent

statement or misrepresentation in order

to receive multiple benefits

simultaneously duplicate participation.

Two of the commenters expressed

general support for this provision and

for the criteria used in determining

duplicate participation. Two additional

commenters suggested that there must

be a dollar loss before duplicate

participation is considered to have

occurred. The Department disagrees.

The amendment made by section 120

applies by its terms to fraudulent

statements or representations with

respect to identity or place of residence

in order to receive multiple benefits

simultaneously. It is not specified that

such statements or representations must

be successful in order for the 10-year

disqualification to apply. As long as

there is sufficient evidence that the

individual made such statements or

representations, it is not necessary to

establish a dollar loss. Unsuccessful

attempts to commit fraud through

duplicate participation should be dealt

with in the same manner as successful

attempts. To do otherwise would

undermine the integrity of the Program.

The final rule at § 273.16(b)(5) remains

unchanged.

Finally, one respondent asked for

clarification on whether continuing to

receive benefits in one State after

moving to a second constitutes

duplicate participation. If so, which

State should pursue the IPV and

establish the claim: the State the

individual moved from or the State the

individual moved to. In such cases, the

State where the individual resides

should initiate the IPV investigation and

establish the claim.

Applicability of PRWORA

Disqualification Penalties

The proposed rule discussed whether

these new PRWORA IPV

disqualification penalties should be

applied to all ADHs, court hearings, and

similar proceedings held subsequent to

enactment of the law (regardless of

when the actual offense occurred) or

only to those cases in which the actual

offense occurred subsequent to State

agency implementation of the new

legislation. PRWORA set the date of

enactment, August 22, 1996, as the

effective date for these provisions of the

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4457

law. As a result, State agencies were

permitted discretion as to whether the

new or increased penalties should apply

to offenses that occurred prior to State

agency implementation of the new

legislation. It was, therefore, impractical

in the proposed rule for the Department

to introduce standards on an issue for

which action has already been taken.

The Department received two

comments stating that offenses

occurring prior to the date of enactment

(August 22, 1996) should not trigger the

new penalties. While we understand the

commenters’ position, the Department

still believes that retroactively imposing

new standards for an action that has

already been taken would be an

inappropriate burden to place on States.

The final rule remains unchanged.

Another respondent asked the

Department to specify which penalties

apply when the offense occurs prior to

August 22, 1996. Again, since State

agencies have already used their

discretion in implementing this

provision, this will remain a State

option and will not be regulated by the

Department. We would add, however,

that we expect that the penalties a State

has decided to use in this circumstance,

will be applied in all such cases.

Two respondents suggested that a

second offense for the trafficking of a

controlled substance that occurs after

August 22, 1996 (the date of enactment

of PRWORA) when the first offense

occurred prior to that date should not

trigger a permanent disqualification.

While PRWORA required the doubling

of the first offense for the trafficking of

a controlled substance, the permanent

disqualification for a second such

offense existed prior to PRWORA. This

provision was part of Section 13942 of

the Mickey Leland Childhood Hunger

Relief Act (Pub. L. 103–66). The

Department already implemented this

non-discretionary provision in

regulations published on August 22,

1995 (60 FR 43513) and this provision

is not changed in this final rule.

Imposition of Disqualification

Penalties—7 CFR 273.16(a), (e), (f), (g)

and (h)

In response to a lawsuit (Garcia v.

Concannon and Espy, 67 F. 3d 256

(1995)), the Department proposed to

require State agencies to impose a

disqualification period for all IPVrelated disqualifications as soon as

administratively possible, regardless of

eligibility. We received four comments

supporting this change of policy. One

commenter, however, believed that this

change was too burdensome to

implement since those that are no

longer on the Program now need to have

their disqualification periods tracked.

We disagree. This policy adds no new

requirements for State agencies, it

actually eliminates one. State agencies

have always been required to impose

disqualifications immediately when the

individual being disqualified remained

otherwise eligible to participate in the

Program. That will not change with this

policy except that State agencies will no

longer need to track pending

disqualifications until the individual

reapplies and is found eligible for

benefits. The final rule retains the

proposed provision. (See

§ 273.16(b)(13).)

ADH Timeframes

The current regulations at 7 CFR

273.16(e)(2) require that the State

agency reach a decision and inform the

individual within 90 days of the date

the hearing is scheduled. The proposed

rule required that the individual be

notified within 180 days after the date

of discovery of the suspected violation

or within 60 days of the date of the

hearing, whichever is sooner.

The Department received 12

comments opposing at least one aspect

of this change. Most commenters

thought 180 days was too short a period

to properly develop evidence, build a

case, hold the hearing and arrive at a

decision. The commenters suggested

retaining the current requirement of 90

days from the date of the initial

notification to the individual. Given the

general disagreement with the

Department’s proposal and support for

retention of the current standard, we

have decided to retain the existing 90-

day standard as required in the current

rule.

Local-Level ADHs

The proposed rule made clear our

long-standing policy that either the

affected individual or local agency must

be given the opportunity to seek some

form of an appellate review of a locallevel decision. The Department received

one comment disagreeing with this

position. The commenter believed that

State agencies should not be allowed to

hold a second hearing on the same

charge when the individual has already

been ‘‘cleared.’’ We disagree. The

Department believes that there are

instances in which a State appeal would

be appropriate. We also believe that

State agencies will not abuse this

authority and only reserve these appeals

for those instances in which policy is

clearly misapplied. The current

language in the existing regulations is

retained without change.

Reporting Requirements—7 CFR

273.16(i)

The Department received one

comment seeking clarification whether

the Department’s reporting system for

disqualifications, DRS, would accept the

new IPV disqualification penalties. DRS

will currently accept a disqualification

penalty of any length. The system does

contain edits that alert the user when a

non-standard penalty has been

submitted, but this in no way prevents

the system from accepting the

disqualification record. The penalty for

duplicate participation and the more

severe penalties for trafficking will also

trigger an alert. FNS is currently

exploring ways to avoid this latter

circumstance. State agencies should

contact their FNS regional DRS

Coordinator if they need further

assistance.

7 CFR 273.24—Time Limit for AbleBodied Adults Without Dependents

(ABAWDs)

Section 824 of PRWORA amended

section 6 of the Act by adding a new

subsection (o) 7 U.S.C. 2015(o) that

limits the receipt of food stamps for

certain able-bodied adults to three

months in a three-year period unless the

individual is working 20 hours per week

or participating in a work program 20

hours per week, or is participating in a

workfare program. Individuals can

regain eligibility, and may receive an

additional three months of food stamps

while not working in certain

circumstances. Amended section 6(o)

includes some exceptions, and receiving

food stamps while exempt does not

count towards an individual’s time

limit. In recognition that it may be

difficult for individuals to find work in

depressed labor markets, the statute

authorizes waivers for individuals in

areas in which the unemployment rate

is above ten percent, or where there is

a lack of sufficient jobs.

We proposed to codify the time limit

for ABAWDs at 7 CFR 273.25. However,

on Friday, September 3, 1999, we

published an interim final rule called

The Food Stamp Provisions of the

Balanced Budget Act of 1997. This rule

implemented the changes to the Food

Stamp Act brought about by the

Balanced Budget Act of 1997, which

included a provision allowing the State

agencies to exempt from the time limit

up to 15 percent of ‘‘covered

individuals.’’ This provision was

codified at 7 CFR 273.24. Because these

two provisions are related, we have

decided to merge the two. Therefore in

this final rule, we have modified 7 CFR

4458 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

273.24 to include the time limit for

ABAWDs.

We proposed that for purposes of this

provision, 20 hours a week equals 80

hours a month. The majority of the

commenters supported this proposal. A

few commenters suggested that weekly

earnings which equal the minimum

wage times 20 should be the equivalent

of working 20 hours a week. The statute

refers specifically to ‘‘working 20 hours

a week.’’ In addition, it provides for an

exception if an individual is exempt

under section 6(d)(2) of the Act. One of

the exemptions under section 6(d)(2) of

the Act is if an individual’s weekly

earnings equal 30 times the minimum

wage. We believe if Congress intended

for 20 times the minimum wage to count

as meeting the work requirement it

would have specified so in the Act and

not have referenced the section 6(d)(2)

exemption. Therefore, we are not

adopting the commenters’ suggestion.

We proposed that for purposes of this

provision unpaid work under standards

established by the State agency, and

work for in-kind services count as work.

The majority of the commenters

supported this proposal. Only one

commenter opposed the provision as

not consistent with the goal of selfsufficiency. Several commenters

suggested that unpaid work be classified

as comparable workfare so it would

include worker protections and hour

limitations. One commenter elaborated

further saying this suggestion is

consistent with congressional intent that

persons working for no compensation

other than the opportunity to receive

food stamps should not be required to

work more hours than the minimum

wage divided into those benefits. Also,

limiting the hours any individual

recipient must volunteer would allow

non-profits to create slots for more

recipients. While we agree that

individuals working for no

compensation should not have to work

more than their food stamp allotment

divided by the minimum wage, we do

not have the discretion to require State

agencies to create a comparable

workfare program in accordance with

§ 273.7(m)(10). We do encourage all

State agencies to create comparable

workfare programs in order to restrict

the number of hours an individual has

to work in a volunteer position in order

not to be subject to the time limit.

However, in those situations where

State agencies do not have enough

workfare slots or have not created a

comparable workfare program, we

believe individuals should have the

opportunity to fulfill the work

requirement by volunteering 20 hours a

week averaged monthly. We also

received several comments supporting

this proposal. Therefore, we are

adopting the provision as written at 7

CFR 273.24.

We proposed that work include

unpaid work under standards

established by the State agency. Several

commenters suggested that we clarify in

the regulations that the State agency

may only set standards for verification

of work, but they may not set standards

for the work itself. One commenter

pointed out that we allow in-kind work

to count without referencing state-set

standards and that we should allow the

same for unpaid work. This same

commenter stressed that any individual

who can demonstrate that the

individual is doing 20 hours of unpaid

work a week, averaged monthly, should

be able to receive food stamps. While

we agree, we also believe that the State

agency should have some control over

unpaid work. We believe it should be

able to require whatever verification it

wants to in order to verify unpaid work.

Therefore, we are modifying the

regulation to provide that work means

unpaid work, verified under standards

set by the State agency.

Several commenters queried how the

State agencies would determine the

hourly value of in-kind work. One

commenter suggested the State agencies

be responsible for determining the value

of in-kind work. We would like to

reiterate that the State agency has to

verify with the employer the number of

hours an individual works, no matter

what currency that individual is being

paid in—money, commodities, or

housing. If an individual is receiving

housing in exchange for being the

superintendent of the apartment

complex, but the individual only works

at that position 10 hours a week, then

that individual is not fulfilling the work

requirement, unless the total of all types

of work and participation in work

programs meet the 20 hours per week

requirement. We believe we do not have

to clarify the regulations any further.

A few commenters suggested counting

all work experience programs as

workfare programs. We do not have the

discretion to do this. Workfare and work

experience programs are two distinct

programs governed by different

provisions in the Act. Workfare is

governed by section 20 of the Act, 7

U.S.C. 2029. Work experience programs

are components of the Employment and

Training Program (E&T Program)

governed by section 6(d)(4) of the Act,

7 U.S.C. 2015(d)(4). Section 824 of

PRWORA references both separately.

Section 824 added paragraph (o) to

section 6 of the Act to provide that the

individual must participate and comply

with a work program (which

encompasses an E&T Program) 20 hours

a week, or a workfare program under

Section 20 of the Act. It does not

reference an hourly requirement in the

workfare program since everyone’s

workfare obligation is different.

Therefore, we are not adopting the

commenters’ suggestion.

We proposed that someone who has

missed work for good cause as

determined by the State agency will be

considered to be satisfying the work

requirement if the absence from work is

temporary and the individual retains the

job. The majority of the commenters

supported this provision. A few

opposed it as administratively time

consuming and error prone and feared

that it would not be uniformly applied.

A few commenters suggested we

include in the regulations a nonexhaustive list of what constitutes good

cause. We believe the State agencies are

in a better position to define good cause

for purposes of this provision. However,

we also believe that the good cause

provision for ABAWDS fulfilling the

work requirements should parallel the

good cause provisions for work

registration and E&T Program

requirements. Therefore, we are

modifying the regulations at 7 CFR

273.24 to provide that good cause shall

include circumstances beyond the

member’s control, such as, but not

limited to, illness, illness of another

household member requiring the

presence of the member, a household

emergency, or the unavailability of

transportation.

A few commenters suggested that we

extend this provision to workfare and

employment and training (E&T). As

mentioned above, the regulations at 7

CFR 273.7(i) already provide a good

cause clause for work registration and

E&T. We believe that putting it in the

regulations at 7 CFR 273.24 would be

redundant. Therefore, we are not

adopting the commenter’s suggestion.

We discussed in the preamble to the

proposed regulation the merits of our

proposal that a qualifying work program

need not be an FNS E&T Program under

7 CFR 273.7(f). Section 6(o) only

requires that a qualifying work program

not be a job search or job search training

program and that it meet standards

approved by the Governor of the State.

We proposed that we would not review

plans for these programs, but cautioned

State agencies to scrutinize these

programs carefully so that they are not

later determined through the quality

control process to not meet the

requirements of the statute. We received

several comments voicing concern that

this implied our quality control

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4459

reviewers would be reviewing the

programs themselves to ensure that they

meet standards set by the Governor. We

want to clarify that as part of our

oversight duties we may evaluate,

through our management evaluation

process, and not our quality control

process, these programs to ensure that

they meet the requirements of the

statute.

We proposed that a qualifying work

program may contain job search as a

subsidiary component but that the job

search activity must be less than half of

the requirement. The majority of the

commenters supported this proposal.

One commenter opposed the proposal

as being too restrictive because many

E&T programs are made up of job search

and job search training activities. One

commenter suggested we modify the

wording so the job search component be

‘‘not more than half,’’ that way the

program could be 50 percent work and

50 percent job search. Section 824 of

PRWORA specifically provides that

participation in an E&T Program,

OTHER THAN a job search or job search

training program, would satisfy the

work requirement. We acknowledge that

prior to PRWORA the bulk of food

stamp E&T Programs consisted of job

search. We also acknowledge that job

search and job search training are

valuable aspects of the these programs.

However, in amending Section 6 of the

Act, Congress specifically prohibited

E&T job search activities as fulfilling the

work requirement. We decided to allow

job search as a subsidiary component,

but do not believe we have the

discretion to allow it as an equal or

dominant component. Therefore, we are

not adopting the commenters’

suggestions.

We proposed that an individual could

combine work and participation in a

work program to meet the 20 hours per

week requirement. The majority of the

commenters supported this proposal.

One commenter suggested that we

clarify in the regulations that time spent

off-site preparing for E & T activities

count towards meeting the

requirements. This is up to the State

agency. If the State Agency recognizes

such activities for E & T purposes then

the individual is fulfilling the work

requirement.

We proposed that the State agencies

have the option of how to measure and

track the 36-month period. They may

use a ‘‘fixed’’ or ‘‘rolling’’ 36-month

‘‘clock.’’ The majority of the

commenters supported this proposal. A

few commenters suggested that we

allow State agencies to switch back and

forth from fixed to rolling at any time.

Several State agencies switched from a

rolling period to a fixed period in

December 1999, the end of the first 36-

months. Several other State agencies

switched once they had solved their

potential ‘‘Y2K’’ computer problems.

We believe that switching back and

forth frequently could negatively affect

recipients. However, we also believe

State agencies are in the best position to

determine how to measure and track

this period of time and should have the

flexibility to change tracking systems if

they determine it is necessary. We urge

State agencies to choose which method

they are going to use by the

implementation date of this rule. After

such time, we provide in this final rule

at 7 CFR 273.24 that once the

implementation date of this rule has

passed, State agencies must inform us if

they switch tracking methods for this

time period.

We proposed that partial months not

count towards the 3-month time limit.

The majority of the commenters

supported this proposal. One

commenter suggested that we clarify

that prorated months will not count as

opposed to not counting the month of

application. Another commenter

suggested we clarify the regulations by

saying ‘‘. . . after the first of the

month.’’ According to the regulations at

7 CFR 237.10, initial months’ benefits

are prorated from the date of

application. This implies that, unless an

individual applies on the first day of the

issuance cycle, his benefits are prorated

and are in effect for only part of the

month, not the full month. While we

believe our proposal that a countable

month is one in which an individual

receives a full month’s benefit is clear,

we will modify it to say that a countable

month is one in which an individual

receives a full month’s benefit, and not

benefits that are prorated in accordance

to 7 CFR 273.10(a)(1)(ii).

We proposed that State agencies may

opt to consider benefits erroneously

received as having been received until

they are repaid in full. Several of the

commenters opposed the option of

tracking benefits erroneously received

as too complex. One commenter

suggested that when determining the

amount a client has to pay back on an

overissuance, State agencies can

exclude a month that was paid in error

if that month was treated as a countable

month for ABAWD purposes. A few

commenters argued that benefits should

count no matter what if they have been

posted to an EBT account since the

quality control system considers a case

active and benefits received under this

situation. One commenter suggested

that State agencies be allowed to

consider benefits to have been received

unless or until it files a claim to recover

the overissuance. The intent of this

proposal was to give State agencies

different options on how to treat

benefits that are received in error. We

believe that if an ABAWD receives

benefits erroneously and then pays them

back, that month should not be

considered a countable month.

Therefore, we are modifying the

regulation to provide that State agencies

must count benefits erroneously

received as having been received for

purposes of this provision, until the

individual repays them in full.

We proposed that unreported work

would ‘‘erase’’ a countable month. Only

one commenter supported this proposal.

The majority of the comments we

received opposed it. They said it was

complex, administratively burdensome

and not consistent with income

reporting requirements and regulations

governing IPVs. One commenter said

that it rewards a recipient who did not

comply with the program requirement

to report income. Another commenter

argued that current rules state a

household’s benefit cannot be restored if

the household fails to report the

information and he questions why we

should have different standards for

ABAWDs. Another commenter said that

as reinforcement to the reporting

requirements the countable months

should not be adjusted in this situation.

In light of these comments, we believe

State agencies are in the best position to

determine whether or not they should

count an unreported job as ‘‘work’’ for

purposes of this provision. We believe

that if a State agency erases a countable

month if it later determines the

individual was in fact working in an

unreported job, it will have acted within

the law. However, we also realize from

the comments that some State agencies

would choose not to do this. Therefore,

we are modifying the provision and

giving State agencies the option to count

unreported work as ‘‘work’’ for this

provision.

We proposed at 7 CFR

273.2(f)(1)(xiv)(A) that State agencies

must verify work hours for individuals

subject to the time limit. Several

commenters opposed mandating

verification of work hours as overly

prescriptive. One commenter suggested

that the State agency only be required to

verify that information if it is

questionable. We understand that State

agencies may see this requirement as

burdensome. However, we believe it is

necessary in order to ensure the proper

implementation of a basic eligibility

factor. Therefore, we are retaining this

proposal as written.

4460 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

We proposed at 7 CFR 273.12 that

individuals be required to report if their

work hours fell below 20 hours a week,

averaged monthly. The majority of the

commenters opposed this provision.

They said it was complicated,

burdensome, not family friendly, and in

contrast to reporting simplification

measures of the President’s July 1999

Initiative. One commenter suggested

that individuals be required to report if

their work hours fell below 80 hours a

month. We believe that in order to be

faithful to the law, we must require

individuals subject to the time limit to

report if their hours fall below 20 hours

a week averaged monthly, or as defined

earlier, 80 hours a month. However, we

also recognize that State agencies have

different kinds of reporting systems for

different types of households. We do not

want to prescribe the type of reporting

system a State agency must assign a

potential ABAWD. However, we want to

emphasize that State agencies are

required to adhere to the statutory

requirement of time-limited benefits for

individuals who are not fulfilling the

work requirement. Therefore, we are

modifying the regulations to provide

that individuals are required to report

when their number of hours worked fall

below 20 hours a week, averaged

monthly (80 hours a month). Regardless

of the type of reporting system the State

agency assigns to potential ABAWDs,

the State agency must adhere to the

statutory requirements of time-limited

benefits for individuals who are not

fulfilling the work requirement.

We proposed at 7 CFR 273.2(f)(8) that

the State agency must verify the

countable months an individual has

used in another State if there is an

indication that the individual

participated in another State. We also

proposed that the State agency may

accept the other State’s assertion as to

the number of countable months the

individual has used in the other State.

The majority of the comments we

received opposed this provision.

Commenters argued that this proposal is

complex, especially since State agencies

have different tracking systems for the

36-month clock. A few commenters

argued that this would delay application

processing. Several commenters said

that until a national database exists,

they should not be required to verify

this information. Some commenters

suggested State agencies only verify this

information if questionable. Other

commenters indicated that they should

not rely on other States’ assertions as to

the number of countable months since

in fair hearings and IPV challenges,

State agencies must obtain copies of all

relevant supportive materials. To be

faithful to the statute, we believe we

must require State agencies to verify the

number of countable months an

individual has participated in another

State where there is an indication that

the individual has participated in

another State. Because commenters have

expressed concern that this may delay

the application, we are reminding State

agencies at 7 CFR 273.2(f) that the

normal processing standards of 7 CFR

273.2(g) apply. In addition, and in an

attempt to simplify and hasten this

verification process, we have decided to

retain in the regulations the provision

that the State may accept another State’s

assertion as to the number of countable

months an individual has used in

another State. The other State’s

assertion will be acceptable for quality

control review purposes.

We proposed that all of the resources

and all but a pro rata share of the

income of the ineligible ABAWD would

be counted as available to the

household. We received wide variety of

comments. Several commenters argued

that this proposal was too harsh,

especially in light of the fact the

ineligible ABAWD would not have

much money or resources anyway. They

suggested that none of the income and

none of the resources be considered as

available to the household. Other

commenters said this was too lenient,

and that the State agency should count

all of the income and resources as

available to the household. Other

commenters suggested that this should

be a State agency option. Since this is

a mandatory provision, we do not

believe we may give the State agency an

option as to how to treat the income and

resources of the ineligible ABAWD,

especially since we are now mandating

how the State agency treat it for

individuals ineligible under optional

provisions, such as comparable

disqualification, cooperation with child

support agencies, and disqualification

for child support arrears. In addition,

we do not believe we should be punitive

and require the State agencies to count

all of the income and resources of the

individual since he has failed to meet

his responsibilities. Finally, we do not

believe we should require the State

agency to ignore the income and

resources of these individuals, given

that they have not ‘‘complied’’ with a

food stamp eligibility requirement.

Therefore, we have decided to retain the

language as written at 7 CFR 273.24 and

7 CFR 273.(11)(c)(2) and provide that

the State agency must count all of the

resources and all but a pro rata share of

the income as available to the

household. We believe this is the most

equitable treatment.

Exemptions

We proposed in accordance with the

section 6(o)(3)(A) of the Act, that an

individual is exempt from this

requirement if he is under 18 or older

than 50 years of age. A few commenters

suggested we clarify that an individual

becomes exempt on his or her 50th

birthday, in accordance with current

policy. We agree with this comment.

Therefore we are clarifying in the

regulations that an individual is exempt

if he is under 18 or 50 years or older.

We proposed that an individual is

medically certified as physically or

mentally unfit for employment if he

provides a statement from a physician

or a licensed or certified psychologist

that he is physically or mentally unfit

for employment. Several commenters

supported our proposal of not requiring

individuals to meet a more stringent

definition of ‘‘disability.’’ However, the

majority of the commenters suggested

that we let the eligibility worker certify

the individual as physically or mentally

unfit if the unfitness is obvious. A few

commenters argued that it is too

difficult and expensive for individuals

to get a statement from a physician or

a licensed or certified psychologist and

that we allow a statement from a nurse,

a nurse practitioner, or a designated

staff member of the doctor’s office to

suffice. Several commenters suggested

that we do away with this provision and

rely solely on the regulations at 7 CFR

273.7(b). As explained in the preamble,

we incorporated the ‘‘unfit for

employment’’ exemption from 7 CFR

273.7(b) into the ABAWD provision

except, in accordance with the statute,

we required that for purposes of this

provision, the medical certification be

mandatory in all cases. However, our

comment analysis has led us to believe

that that this level of verification is not

necessary. Therefore, we have decided

to require a medical certification only in

cases where the unfitness is not evident

to the eligibility worker. In addition, we

have decided that a statement from a

nurse, nurse practitioner, designated

representative at a doctor’s office, social

worker, or other medical personnel the

State agency deems appropriate would

suffice as a medical certification. We are

modifying the regulations at 7 CFR

273.24 accordingly.

We proposed that an individual is

exempt if the individual is a parent

(natural, adoptive, or step) of a

household member under the age of 18,

or is living in a household where a

member is under the age of 18. The

majority of the commenters supported

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4461

this proposal. A few commenters

opposed the proposal as defeating the

purpose of welfare reform. A couple of

commenters suggested that only one

parent should be exempt, not both, and

that all the other adults in the house

should work. A few commenters

suggested that we clarify that even if the

individual who is under 18 is not

eligible for food stamps, the individual’s

presence in the house exempts those

adults who are living in the household.

As discussed in the preamble to the

proposed rule, we believe it is

administratively burdensome, and in

this day and age virtually impossible,

for the State agency to determine who

is ‘‘responsible’’ for a dependent child.

We believe that in many cases, more

than one adult has responsibility for a

dependent child. Therefore, we are

retaining the provision as written.

However, we are clarifying in the

regulations that even if the household

member who is under 18 is not eligible

for food stamps, the other individuals in

the household are still exempt from the

time limit.

All the other comments concerning

the proposals on the exemptions were

supportive. Therefore, we are retaining

them as written.

Regaining Eligibility

We proposed that an individual can

regain eligibility if the individual works

80 hours in a 30-day period. For

purposes of this provision, we proposed

that a 30-day period be any 30

consecutive days. We received only a

few comments on this proposal. One

commenter opposed this provision and

suggested that the 30-day period

immediately precede application. One

commenter suggested we clarify in the

regulations that the 30-day period need

not immediately precede application.

One commenter suggested that we

modify the language so that an

individual can regain eligibility if the

individual works 80 hours in a calendar

month. Our proposal basically mirrored

the language of the law which provides

that individuals can regain eligibility if

they work 80 hours during a 30-day

period. As discussed in the proposed

rule, the statute does not require that the

30-day period be a calendar month, nor

does it require that the 30-day period

immediately precede the date of

application. Therefore, in order to afford

flexibility and be faithful to the statute,

we are retaining the proposal as written.

We proposed that the State agency

have the option to prorate benefits from

the date the ‘‘cure’’ is complete or back

to the date of application for individuals

that complete the cure by working or

participating in a work program. One

commenter said that it is burdensome to

keep the application open and pending

until an applicant completes the cure.

Two commenters suggested that we

allow State agencies to determine

eligibility prospectively. For example, if

an individual applies and has a job

lined up to start the next week, which

guarantees him the number of hours

necessary to regain eligibility, the State

agency should be allowed to determine

that he has completed the cure. We

agree with these comments. Therefore,

we are modifying the regulations to

provide that the State agency also has

the option to determine eligibility for

ABAWD purposes prospectively.

We proposed in the preamble that

there be no limit to the number of times

an individual could regain eligibility by

working 80 hours in a 30-day period.

Two commenters supported this

proposal as written. One of these

commenters suggested we codify this in

the regulations. One commenter said

that this proposal is too burdensome to

track. This same commenter suggested

that once an individual has regained

eligibility, the individual should be

eligible at any time he is meeting the

work requirement. The individual

should not have to work another 80

hours to regain eligibility. We recognize

the complexity of this provision.

However, we believe that the proper

reading of the law requires that an

individual who has lost eligibility must

regain it by working 80 hours in a 30-

day period. We agree that this needs to

be codified in the regulations.

Therefore, we are modifying the

regulations at 7 CFR 273.24 to provide

that there is no limit on the number of

times an individual may regain and then

maintain eligibility by fulfilling the

work requirement.

We proposed that the window of

eligibility for the second three-month

period start on the day the State agency

learns that an individual has lost his

job. Several commenters argued that this

is very difficult to administer, especially

if someone notifies the State agency in

the middle of the month. These

commenters suggested that the window

of eligibility start the month after the

month in which the individual notifies

the State agency that he has lost his job.

The regulations already provide for this.

According to the regulations at 7 CFR

273.10, benefits are prorated back to the

date of application. In addition,

according to the regulations at the

newly designated §273.24, partial

months are not countable months for

ABAWD purposes. The individual

would be entitled to benefits back to the

date of application, but the first or

partial month would not count for

ABAWD purposes. The individual

would still be entitled to three full

consecutive countable months. We

believe the regulations at 7 CFR

273.24(e) are clear when they state, ‘‘An

individual * * * is eligible for three

consecutive countable months (as

defined in paragraph (b) of this section).

* * *), emphasis added. Therefore, we

are retaining the provision as written.

One commenter asked us to clarify if

the ‘‘window of opportunity’’ opens

whether or not an individual applies for

benefits and if the State agency must

take action if an individual does not

apply for benefits. We believe in most

cases, the State agency will be dealing

with either current recipients or initial

applicants. If an individual is a current

food stamp recipient, the individual

will notify the State agency in

accordance with reporting requirements

that the individual has lost his job and

the window of eligibility starts then. Or,

if the individual is a workfare

participant, the State agency will

become aware that the individual is no

longer participating. However, if an

individual is not a recipient, the

individual probably will not notify the

State agency that he has lost his job

until he applies for benefits. At such

time, the State agency must take action

on the case. We believe it is very rare

that a State agency is notified by a

former recipient, or becomes aware that

a former recipient is no longer

employed, except at the time the former

recipient is reapplying for benefits.

Several commenters disagreed with

our proposal that when an individual

‘‘forfeits’’ the opportunity to use the

three consecutive countable months (for

example, due to a voluntary quit

sanction), the individual may work

another 80 hours in a 30-day period and

regain eligibility again for the three

consecutive countable months. These

commenters argued that this is

confusing and difficult to administer

since the State agency does not track

individuals’ ‘‘window of eligibility.’’

One commenter suggested that if an

individual is not eligible for the three

consecutive countable months because

of a sanction, the individual may not

regain eligibility for another three

month period. One commenter

suggested we include language that

limits eligibility for the additional three

months to those who lose a job or

placement through no fault of their own,

thus eliminating the confusion that

would result from trying to reconcile the

relationship between the voluntary quit

sanction period and the additional three

months of eligibility. Another

commenter suggested that if the

individuals were ineligible to receive

4462 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

benefits during those three months, they

may ‘‘bank’’ the three months and then

reapply for them once their sanction is

over and not have to work 80 hours in

a 30-day period again. We understand

the tracking difficulties this provision

implies. At the same time, we cannot

ignore the fact that if an individual is

under a sanction during the period the

individual is eligible for benefits the

three consecutive months, the

individual does not ‘‘receive’’ food

stamps. The language of the law states

clearly that an ‘‘individual shall not

receive benefits pursuant to clause (i)

for more than a single 3-month period

in any 36-month period.’’ In addition,

the law provides that if an individual

loses eligibility the individual must

regain it by working 80 hours in a 30-

day period. If an individual does not

‘‘receive’’ the benefits for which the

individual is eligible due to a sanction,

the individual may regain eligibility and

‘‘receive’’ them in the future. We do not

believe we have the discretion to limit

this provision as suggested by the

commenters. Therefore, we are retaining

the provision as written.

One commenter suggested that we

clarify that anyone who has lost

eligibility can requalify, not just

individuals who are denied benefits. We

agree with this comment and are

modifying the regulations to provide

that an individual denied eligibility

under paragraph (b) of this section, or

who does not reapply for benefits

because the individual is not meeting

the work requirements of 7 CFR 273.7,

can regain eligibility.

This same commenter suggested we

clarify in the regulations that an

individual can re-qualify by becoming

exempt. We believe the regulations are

clear that if a person meets one of the

exemption criteria the person is exempt,

and does not have to fulfill the work

requirement, including regaining

eligibility. However, we have modified

the regulations at 7 CFR 273.24 to

provide that an individual can requalify

by becoming exempt.

Waivers

Section 824 of PRWORA amended

section 6(o)(4) of the Act to allow the

Secretary, at the request of a State

agency, to waive the time limit for any

group of individuals if the Secretary

determines that the area in which the

individuals reside has an

unemployment rate of over ten percent,

or ‘‘does not have a sufficient number of

jobs to provide employment for the

individuals.’’

On December 3, 1996, we published

guidance which contained basic

procedures for applying for a waiver,

identified data sources which could be

used to substantiate requests, and

described some approaches that could

support a request based on ‘‘lack of

sufficient jobs.’’ Because the guidance

was extensive and detailed we proposed

not to include it in the regulations.

Instead, we proposed a general

framework for waiver requests with the

understanding that State agencies could

submit requests with no limit on the

supporting documentation, and every

request would be weighed on its own

individual merits. We received several

comments suggesting we include all or

some of the guidance in the regulations.

Commenters argued that unless the

guidance is incorporated into the

regulations, a subsequent administration

could abolish it without public

comment. Based on these comments, we

have decided to incorporate some of the

more pertinent aspects of the guidance

into the regulation. More specifically,

we have modified the regulations at 7

CFR 273.24(f) to include a nonexhaustive list of the kinds of

information a State agency may submit

to support a claim of 10 percent

unemployment or ‘‘lack of sufficient

jobs.’’ For example, a State agency could

provide evidence that an area has 10

percent unemployment if it has: (1) A

recent 12 month average unemployment

rate over 10 percent which indicates a

period of sustained high unemployment

rates; (2) a recent three month average

unemployment rate over 10 percent

which indicates an early signal of a

labor market with high unemployment;

or (3) an historical seasonal

unemployment rate of over 10 percent.

States may submit evidence of a lack of

sufficient jobs by submitting data that

the area: (1) Was designated as a Labor

Surplus Area by the Department of

Labor’s Employment and Training

Administration (ETA); (2) was

determined by the Department of

Labor’s Unemployment Insurance

Service as qualifying for extended

unemployment benefits; (3) has a low

and declining employment-topopulation ratio; (4) has a lack of jobs

in declining occupations or industries;

or (5) has a 24 month average

unemployment rate 20 percent above

the national average for the same period.

To facilitate the waiver process, we

have decided to incorporate into the

regulations a paragraph describing three

types of waiver requests we currently

approve and will continue to approve

based on clear quantitative standards.

Specifically, we provide that we will

approve a waiver if a State agency

submits and we confirm (1) data from

the BLS or the BLS cooperating agency

that shows an area has a most recent 12

month average unemployment rate over

10 percent; (2) data from the BLS or the

BLS cooperating agency that an area has

a 24 month average unemployment rate

that exceeds the national average by 20

percent for any 24-month period no

earlier than the same period the ETA

uses to designate LSAs for the current

fiscal year; or (3) evidence that the area

has been designated a Labor Surplus

Area by the ETA for the current fiscal

year.

We proposed that States seeking

waivers for areas with unemployment

rates higher than 10 percent be required

to submit data that relies on standard

Bureau of Labor Statistics (BLS) data or

methods. We also proposed that, to the

extent that a ‘‘lack of sufficient jobs’’

waiver is based on labor force and

unemployment data, States be required

to submit data that relies on standard

BLS data or methods. Several

commenters opposed the mandate that

State agencies be restricted to this data.

One commenter pointed out that some

states have already obtained waivers

based on adverse employment-topopulation ratios using BLS

employment data and Census Bureau

population estimates, or academic

studies showing particularly severe

employment barriers. We should weigh

these requests on their own merits and

not dismiss them out of hand. Other

commenters suggested we consider data

from the Bureau of Indian Affairs.

As discussed in the preamble,

established Federal policy requires

Federal executive branch agencies to

use the most recent National, State or

local labor force and unemployment

data from the BLS for all program

purposes. This policy is contained in

Statistical Policy Directive No. 11,

issued by the Office of Federal

Statistical Policy Standards, Office of

Management and Budget. This policy

ensures the standardization of collection

methods and the accuracy of data used

to administer Federal programs.

Therefore, we have no choice but to

require State agencies that are

submitting requests based on

unemployment rates to submit the most

recent data acquired from BLS or its

cooperating agency in the State. This

includes requests under the ‘‘lack of

sufficient jobs’’ criteria which are using

unemployment data as supporting

evidence (e.g. low or declining

employment-to-population ratios, or

unemployment 20 percent above the

national average for more than two

years). As discussed above, this does not

preclude any State agency from

submitting other data to prove ‘‘lack of

sufficient jobs’’ such as an academic

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4463

study, designation of Labor Surplus

Areas status, or data from the Bureau of

Indian Affairs. Therefore, we are

retaining the requirement as written.

We proposed that in areas for which

the State certifies that data from BLS

show an unemployment rate above 10

percent, the State may begin to operate

the waiver at the time the waiver

request is submitted, and that we would

contact the State if the waiver needed to

be modified. One commenter suggested

that, in addition, we allow immediate

implementation of waivers for areas

where the Employment and Training

Administration, U.S. Department of

Labor (ETA), has designated such areas

as Labor Surplus Areas (LSA), since our

current policy defers to these

designations in granting waivers. We

agree with this comment. We are

modifying the regulations at 7 CFR

273.24 accordingly.

We proposed that waivers would not

be approved for more than one year.

One commenter suggested we clarify

that yearlong waivers are routinely

available in order to reassure States that

they will not be subject to more

burdensome requirements. We agree

with this comment. Therefore, we are

modifying the regulations at 7 CFR

273.24 to provide that generally, we will

approve waivers for one year. However,

we reserve the right to approve waivers

for a shorter period if the data is

insufficient, or to approve waivers for

longer periods if the reasons are

compelling.

One commenter suggested we allow

waivers to be granted retroactively at the

request of a State agency where the data

supports a waiver during the months in

question. This commenter pointed out

that it sometimes takes longer than

anticipated for a State agency to get the

necessary paperwork together and to get

a waiver request cleared through the

proper channels. States that know they

have solid data in support of a waiver

should be able to implement or continue

implementing a waiver they are

confident will be granted during these

delays and while they await USDA’s

approval. We recognize that it may take

time for the State agency to draft and

clear its request, whether it be for an

initial or extension requests. However,

as already discussed above, States may

begin operating a waiver immediately

upon requesting one if it has data that

indicates the area has a 12 month

average unemployment rate above 10

percent or has been designated a LSA by

the ETA. For all other requests, in the

event a State agency submits a request

to us in an untimely fashion due to

circumstances beyond its control, we

reserve the right to make a retroactive

approval. However, we believe these

decisions should be made on a case-bycase basis and not codified in

regulations. We encourage State

agencies to begin working on waiver

requests (both initial and extensions)

and submit them to us in a timely

fashion, taking into consideration the

amount of time it will take to get such

a request cleared through the proper

State channels, so that retroactive

approval does not become an issue. We

will continue to expedite the approval

of these requests, and in those

circumstances which warrant it, we will

grant retroactive approval.

We proposed that State agencies have

complete discretion to define the

geographic areas covered by waivers so

long as they provide data for the

corresponding area. Most of the

comments we received supported this

proposal. We received one comment

suggesting that State agencies may want

to define areas that do not correspond

with census tracts or the catchment

areas of unemployment compensation

offices, making a mismatch between

data and areas. This commenter

suggested we clarify in the regulations

that this is permissible. For simplicity

sake, we encourage States to define

areas for which corresponding data

exists. We believe this is very easily

done, especially since unemployment

data goes down to the census tract level.

However, we also realize that there are

situations where data does not

correspond to already defined areas,

such as Indian Reservations. In these

situations, we suggest State agencies

submit data that corresponds as closely

to the area as possible. We will consider

it and decide on a case-by-case basis

whether or not to approve the request.

In this final rule we are modifying the

regulation at 7 CFR 273.24 to provide

that if corresponding data does not

exist, State agencies should submit data

that corresponds as closely to the area

as possible.

Implementation

This rule is effective no later than

April 2, 2001, except for the amendment

to 7 CFR 272.2(d)(1)(xiii) which is

effective August 1, 2001. State agencies

must implement the provisions in this

final rule no later than August 1, 2001.

List of Subjects

7 CFR Part 272

Alaska, Civil rights, Food stamps,

Grant programs-social programs,

Reporting and recordkeeping

requirements.

7 CFR Part 273

Administrative practice and

procedures, Claims Food stamps, Grant

programs-social programs, Penalties,

Reporting and recordkeeping, Social

security, Students.

Accordingly, 7 CFR parts 272 and 273

are amended as follows:

1. The authority citation for parts 272

and 273 continues to read as follows:

Authority: 7 U.S.C. 2011–2036.

PART 272—REQUIREMENTS FOR

PARTICIPATING STATE AGENCIES

2. In § 272.1, add paragraph (c)(1)(vii)

and paragraph (g)(165) to read as

follows.

§ 272.1 General terms and conditions.

* * * * *

(c) * * *

(1) * * *

(vii) Local, State or Federal law

enforcement officers, upon written

request, for the purpose of obtaining the

address, social security number, and, if

available, photograph of any household

member, if the member is fleeing to

avoid prosecution or custody for a

crime, or an attempt to commit a crime,

that would be classified as a felony (or

in the State of New Jersey, a high

misdemeanor), or is violating a

condition of probation or parole

imposed under a Federal or State law.

The State agency shall not require a

household to present photographic

identification as a condition of

eligibility and must accept any

document that reasonably establishes

the applicant’s identity. The State

agency shall also provide information

regarding a household member, upon

the written request of a law enforcement

officer acting in his or her official

capacity, where such member has

information necessary for the

apprehension or investigation of another

member who is fleeing to avoid

prosecution or custody for a felony, or

has violated a condition of probation or

parole. If a law enforcement officer

provides documentation indicating that

a household member is fleeing to avoid

prosecution or custody for a felony, or

has violated a condition of probation or

parole, the State agency shall terminate

the participation of the member. A

request for information absent

documentation would not be sufficient

to terminate the member’s participation.

The State agency shall disclose only

such information as is necessary to

comply with a specific written request

of a law enforcement agency authorized

by this paragraph.

* * * * *

(g) * * *

4464 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

(165) Amendment No. 387—This rule

is effective no later than {insert the first

day of the month 60 days after

publication of the final rule, except for

the amendment to 7 CFR

272.2(d)(1)(xiii) which is effective

August 1, 2001. State agencies must

implement the provisions in this final

rule no later than August 1, 2001.

3. In § 272.2, new paragraph

(d)(1)(xiii) is added to read as follows:

§ 272.2 Plan of operation.

* * * * *

(d) * * *

(1) * * *

(xiii) If the State agency chooses to

implement the optional provisions

specified in (273.11(k), (l), (o), (p), and

(q) of this chapter, it must include in the

Plan’s attachment the options it

selected, the guidelines it will use, and

any good cause criteria under paragraph

(o). For § 273.11(k) of this chapter, the

State agency must identify which

sanctions in the other programs this

provision applies to. The State agency

must also include in the plan a

description of the safeguards it will use

to restrict the use of information it

collects in implementing the optional

provision contained in § 273.11(p) of

this chapter.

* * * * *

PART 273—CERTIFICATION OF

ELIGIBLE HOUSEHOLDS

4. In § 273.1, new paragraphs

(b)(7)(viii), (b)(7)(ix), (b)(7)(x), (b)(7)(xi),

and (b)(7)(xii) are added to read as

follows:

§ 273.1 Household concept.

* * * * *

(b) * * *

(7) * * *

(viii) Individuals who are ineligible

under § 273.11(m) because of a drugrelated felony conviction.

(ix) At State agency option,

individuals who are disqualified in

another assistance program in

accordance with § 273.11(k).

(x) Individuals who are fleeing to

avoid prosecution or custody for a

crime, or an attempt to commit a crime,

or who are violating a condition of

probation or parole who are ineligible

under § 273.11(n).

(xi) Individuals disqualified for

failure to cooperate with child support

enforcement agencies in accordance

with § 273.11(o) or (p), or for being

delinquent in any court-ordered child

support obligation in accordance with

§ 273.11(q).

(xii) Persons ineligible under § 273.24,

the time limit for able-bodied adults.

* * * * *

5. In § 273.2:

a. A new paragraph (f)(1)(xiv)is

added.

b. Paragraph (f)(8)(i)(C) is

redesignated as paragraph (f)(8)(i)(D),

and a new paragraph (f)(8)(i)(C) is

added.

c. Paragraph (j)(2)(vii)(D) is added.

The additions read as follows:

§ 273.2 Application processing.

* * * * *

(f) * * *

(1) * * *

(xiv) Additional verification for ablebodied adults subject to the time limit. 

(A) Hours worked. For individuals

subject to the food stamp time limit of

§ 273.24 who are satisfying the work

requirement by working, by combining

work and participation in a work

program, or by participating in a work

or workfare program that is not operated

or supervised by the State agency, the

individuals’ work hours shall be

verified.

(B) Countable months in another

state. For individuals subject to the food

stamp time limit of § 273.24, the State

agency must verify the number of

countable months (as defined in

§ 273.24(b)(1)) an individual has used in

another State if there is an indication

that the individual participated in that

State. The normal processing standards

of 7 CFR 273.2(g) apply. The State

agency may accept another State

agency’s assertion as to the number of

countable months an individual has

used in another State.

* * * * *

(8) * * *

(i) * * *

(C) For individuals subject to the food

stamp time limit of § 273.24 who are

satisfying the work requirement by

working, by combining work and

participation in a work program, or by

participating in a work program that is

not operated or supervised by the State

agency, the individuals’ work hours

shall be verified.

* * * * *

(j)* * *

(2) * * *

(vii)* * *

(D) Any member of that household is

ineligible under § 273.11(m) by virtue of

a conviction for a drug-related felony.

* * * * *

6. In § 273.11:

a. The introductory text of paragraph

(c) is revised, and the heading and

introductory text of paragraphs (c)(1)

and (c)(2) are revised.

b. Paragraph (c)(4)(ii) is revised.

c. Paragraph (j) is revised.

d. Paragraphs (k), (l), (m), (n), (o), (p),

and (q) are added.

The additions and revisions read as

follows:

§ 273.11 Action on households with

special circumstances.

* * * * *

(c) * * *

During the period of time that a

household member cannot participate

for the reasons addressed in this section,

the eligibility and benefit level of any

remaining household members shall be

determined in accordance with the

procedures outlined in this section.

(1) Intentional Program violation,

felony drug conviction, or fleeing felon

disqualifications, and workfare or work

requirement sanctions. The eligibility

and benefit level of any remaining

household members of a household

containing individuals determined

ineligible because of a disqualification

for an intentional Program violation, a

felony drug conviction, their fleeing

felon status, noncompliance with a

work requirement of § 273.7, or

imposition of a sanction while they

were participating in a household

disqualified because of failure to

comply with workfare requirements

shall be determined as follows:

* * * * *

(2) SSN disqualifications, comparable

disqualifications, child support

disqualifications, and ineligible

ABAWDs. The eligibility and benefit

level of any remaining household

members of a household containing

individuals determined to be ineligible

for refusal to obtain or provide an SSN,

for meeting the time limit for ablebodied adults without dependents or for

being disqualified under paragraphs (k),

(o), (p), or (q) of this section shall be

determined as follows:

* * * * *

(4) * * *

(ii) Disqualified or determined

ineligible for reasons other than

intentional Program violation. If a

household’s benefits are reduced or

terminated within the certification

period for reasons other than an

Intentional Program Violation

disqualification, the State agency shall

issue a notice of adverse action in

accordance with § 273.13(a)(2) which

informs the household of the

ineligibility, the reason for the

ineligibility, the eligibility and benefit

level of the remaining members, and the

action the household must take to end

the ineligibility.

* * * * *

(j) Reduction of public assistance

benefits. If the benefits of a household

that is receiving public assistance are

reduced under a Federal, State, or local

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4465

means-tested public assistance program

because of the failure of a food stamp

household member to perform an action

required under the assistance program

or for fraud, the State agency shall not

increase the household’s food stamp

allotment as the result of the decrease in

income. In addition to prohibiting an

increase in food stamp benefits, the

State agency may impose a penalty on

the household that represents a

percentage of the food stamp allotment

that does not exceed 25 percent. The 25

percent reduction in food stamp benefits

must be based on the amount of food

stamp benefits the household should

have received under the regular food

stamp benefit formula, taking into

account its actual (reduced) income.

However, under no circumstances can

the food stamp benefits be allowed to

rise. Reaching a time limit for timelimited benefits, having a child that is

not eligible because of a family cap,

failing to reapply or complete the

application process for continued

assistance under the other program,

failing to perform an action that the

individual is unable to perform as

opposed to refusing to perform, or

failing to comply with a purely

procedural requirement, shall not be

considered a failure to perform an

action required by an assistance

program for purposes of this provision.

A procedural requirement, which would

not trigger a food stamp sanction, is a

step that an individual must take to

continue receiving benefits in the

assistance program such as submitting a

monthly report form or providing

verification of circumstances. A

substantive requirement, which would

trigger a food stamp sanction, is a

behavioral requirement in the assistance

program designed to improve the well

being of the recipient family, such as

participating in job search activities.

The State agency shall not apply this

provision to individuals who fail to

perform a required action at the time the

individual initially applies for

assistance. The State agency shall not

increase food stamp benefits, and may

reduce food stamp benefits only if the

person is receiving such assistance at

the time the reduction in assistance is

imposed or the reduction in assistance

is imposed at the time of application for

continued assistance benefits if there is

no break in participation. The

individual must be certified for food

stamps at the time of the failure to

perform a required action for this

provision to apply. Assistance benefits

shall be considered reduced if they are

decreased, suspended, or terminated.

(1) For purposes of this provision a

Federal, State or local ‘‘means-tested

public assistance program’’ shall mean

public or general assistance as defined

in § 271.2 of this chapter, and is referred

to as ‘‘assistance’’. This provision must

be applied to all applicable cases. If a

State agency is not successful in

obtaining the necessary cooperation

from another Federal, State or local

means-tested welfare or public

assistance program to enable it to

comply with the requirements of this

provision, the State agency shall not be

held responsible for noncompliance as

long as the State agency has made a

good faith effort to obtain the

information. The State agency, rather

than the household, shall be responsible

for obtaining information about

sanctions from other programs and

changes in those sanctions.

(2) The prohibition on increasing food

stamp benefits applies for the duration

of the reduction in the assistance

program. If at any time the State agency

can no longer ascertain the amount of

the reduction, then the State agency

may terminate the food stamp sanction.

However, the sanction may not exceed

the sanction in the other program. If the

sanction is still in effect at the end of

one year, the State agency shall review

the case to determine if the sanction

continues to be appropriate. If, for

example, the household is not receiving

assistance, it would not be appropriate

to continue the sanction. Sanctions

extended beyond one year must be

reviewed at least annually but may be

ended by the State agency at any time.

It shall be concurrent with the reduction

in the other assistance program to the

extent allowed by normal food stamp

change processing and notice

procedures.

(3) The State agency shall determine

how to prevent an increase in food

stamp benefits. Among other options,

the State agency may increase the

assistance grant by a flat percent, not to

exceed 25 percent, for all households

that fail to perform a required action in

lieu of computing an individual amount

or percentage for each affected

household.

(4) If the allotment of a household is

reduced under Title IV–A of the Social

Security Act, the State agency may use

the same procedures that apply under

Title IV–A to prevent an increase in

food stamp benefits as the result of the

decrease in Title IV–A benefits. For

example, the same budgeting

procedures and combined notices and

hearings may be used, but the food

stamp allotment may not be reduced by

more than 25 percent.

(5) The State agency must lift the ban

on increasing food stamp benefits if it

becomes aware that the person has

become ineligible for the assistance

program during the disqualification

period for some other reason, or the

person’s assistance case is closed.

(6) If an individual moves within the

State, the prohibition on increasing food

stamp benefits shall be applied to the

gaining household unless that person is

ineligible for the assistance program for

some other reason. If such individual

moves to a new State the prohibition on

increasing benefits shall not be applied.

(7) The State agency must restore lost

benefits when necessary in accordance

with § 273.17 if it is later determined

that the reduction in the public

assistance grant was not appropriate.

(8) The State agency must act on

changes which are not related to the

assistance violation and that would

affect the household’s benefits.

(9) The State agency must include in

its State Plan of Operations any options

it has selected in this paragraph (j).

(k) Comparable disqualifications. If a

disqualification is imposed on a

member of a household for failure to

perform an action required under a

Federal, State or local means-tested

public assistance program, the State

agency may impose the same

disqualification on the member of the

household under the Food Stamp

Program. The program must be

authorized by a Federal, State, or local

law, but the provision itself does not

have to be specified in the law. A State

agency may choose to apply this

provision to one or more of these

programs, and it may select the types of

disqualifications within a program that

it wants to impose on food stamp

recipients. The State agency shall be

responsible for obtaining information

about sanctions from other programs

and changes in those sanctions.

(1) For purposes of this section

Federal, State or local ‘‘means-tested

public assistance program’’ shall mean

public and general assistance as defined

in § 271.2 of this chapter.

(2) The State agency shall not apply

this provision to individuals who are

disqualified at the time the individual

initially applies for assistance benefits.

It may apply the provision if the person

was receiving such assistance at the

time the disqualification in the

assistance program was imposed and to

disqualifications imposed at the time of

application for continued assistance

benefits if there is no break in

participation with the following

exceptions: Reaching a time limit for

time-limited benefits, having a child

that is not eligible because of a family

4466 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

cap, failing to reapply or complete the

application process for continued

assistance, failing to perform an action

that the individual is unable to perform

as opposed to refusing to perform, and

failing to perform purely procedural

requirements, shall not be considered

failures to perform an action required by

an assistance program. A procedural

requirement, which would not trigger a

food stamp sanction, is a step that an

individual must take to continue

receiving benefits in the assistance

program such as submitting a monthly

report form or providing verification of

circumstances. A substantive

requirement, which would trigger a food

stamp sanction, is a behavioral

requirement in the assistance program

designed to improve the well being of

the recipient family, such as

participating in job search activities.

The individual must be receiving food

stamps at the time of the

disqualification in the assistance

program to be disqualified from the

Food Stamp Program under this

provision.

(3) The State agency must stop the

food stamp disqualification when it

becomes aware that the person has

become ineligible for assistance for

some other reason, or the assistance case

is closed.

(4) If a disqualification is imposed for

a failure of an individual to perform an

action required under a program under

Title IV–A of the Social Security Act,

the State may use the rules and

procedures that apply under the Title

IV–A program to impose the same

disqualification under the Food Stamp

Program.

(5) Only the individual who

committed the violation in the

assistance program may be disqualified

for food stamp purposes even if the

entire assistance unit is disqualified for

Title IV–A purposes.

(6) A comparable disqualification for

food stamp purposes shall be imposed

concurrently with the disqualification

in the assistance program to the extent

allowed by normal food stamp

processing times and notice

requirements. The State agency may

determine the length of the

disqualification, providing that the

disqualification does not exceed the

disqualification in the other program. If

the sanction is still in effect at the end

of one year, the State agency shall

review the case to determine if the

sanction continues to be appropriate. If,

for example, the household is not

receiving assistance, if would not be

appropriate to continue the sanction.

Sanctions extended beyond one year

must be reviewed at least annually but

may be ended by the State agency at any

time.

(7) If there is a pending

disqualification for a food stamp

violation and a pending comparable

disqualification, they shall be imposed

concurrently to the extent appropriate.

For example, if the household is

disqualified for June for a food stamp

violation and an individual is

disqualified for June and July for an

assistance program violation, the whole

household shall be disqualified for June

and the individual shall be disqualified

for July for food stamp purposes.

(8) The State agency must treat the

income and resources of the disqualified

individual in accordance with

§ 273.11(c)(2).

(9) After a disqualification period has

expired, the person may apply for food

stamp benefits and shall be treated as a

new applicant or a new household

member, except that a current

disqualification based on a food stamp

work requirement shall be considered in

determining eligibility.

(10) A comparable food stamp

disqualification may be imposed in

addition to any coupon allotment

reductions made in accordance with

paragraph (j) of this section.

(11) State agencies shall state in their

Plan of Operation if they have elected to

apply comparable disqualifications,

identify which sanctions in the other

programs this provision applies to, and

indicate the options and procedures

allowed in paragraphs (k)(1), (k)(2),

(k)(3), (k)(4), and (k)(10) of this section

which they have selected.

(12) The State agency must act on

changes which are not related to the

assistance violation and that would

affect the household’s benefits.

(13) The State agency must restore

lost benefits when necessary in

accordance with 7 CFR 273.17 if it is

later determined that the reduction in

the public assistance grant was not

appropriate.

(l) School Attendance. Section 404(i)

of Part A of the Social Security Act, 42

U.S.C. 601, et seq., provides that any

state receiving a TANF block grant

cannot be prohibited from sanctioning a

family that includes an adult who has

received assistance financed with

federal TANF dollars or provided from

the food stamp program if such adult

fails to ensure that the minor dependent

children of such adult attend school as

required by the law of the State in

which the minor children reside.

Section 404(j) of Part A of the Social

Security Act, 42 U.S.C. 601, et seq.,

provides that States shall not be

prohibited from sanctioning a family

that includes an adult who is older than

20 and younger than 51 and who has

received assistance that is either

financed with federal TANF funds or

provided through the food stamp

program if such adult does not have, or

is not working toward attaining, a

secondary school diploma or recognized

equivalent. These provisions do not

provide independent authority for food

stamp sanctions beyond any that may

apply through paragraphs (j) and (k) of

this section.

(m) Individuals convicted of drugrelated felonies. An individual

convicted (under Federal or State law)

of any offense which is classified as a

felony by the law of the jurisdiction

involved and which has as an element

the possession, use, or distribution of a

controlled substance (as defined in

section 102(6) of the Controlled

Substance Act, 21 U.S.C. 802(6)) shall

not be considered an eligible household

member unless the State legislature of

the State where the individual is

domiciled has enacted legislation

exempting individuals domiciled in the

State from the above exclusion. If the

State legislature has enacted legislation

limiting the period of disqualification,

the period of ineligibility shall be equal

to the length of the period provided

under such legislation. Ineligibility

under this provision is only limited to

convictions based on behavior which

occurred after August 22, 1996. The

income and resources of individuals

subject to disqualification under this

paragraph (m) shall be treated in

accordance with the procedures at

paragraph (c)(1) of this section.

(n) Fleeing felons and probation or

parole violators. Individuals who are

fleeing to avoid prosecution or custody

for a crime, or an attempt to commit a

crime, that would be classified as a

felony (or in the State of New Jersey, a

high misdemeanor) or who are violating

a condition of probation or parole under

a Federal or State law shall not be

considered eligible household members.

The income and resources of the

ineligible member shall be handled in

accordance with (c)(1) of this section.

(o) Custodial parent’s cooperation

with the State Child Support Agency.

For purposes of this provision, a

custodial parent is a natural or adoptive

parent who lives with his or her child,

or other individual who is living with

and exercises parental control over a

child under the age of 18.

(1) Option to disqualify custodial

parent for failure to cooperate. At the

option of a State agency, subject to

paragraphs (o)(2) and (o)(4) of this

section, no natural or adoptive parent

or, at State agency option, other

individual (collectively referred to in

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4467

this paragraph (o) as ‘‘the individual’’)

who is living with and exercising

parental control over a child under the

age of 18 who has an absent parent shall

be eligible to participate in the Food

Stamp Program unless the individual

cooperates with the agency

administering a State Child Support

Enforcement Program established under

Part D of Title IV of the Social Security

Act (42 U.S.C. 651, et seq.), hereafter

referred to as the State Child Support

Agency.

(i) If the State agency chooses to

implement paragraph (o)(1) of this

section, it must notify all individuals of

this requirement in writing at the time

of application and reapplication for

continued benefits.

(ii) If the State agency chooses to

implement paragraph (o)(1) of this

section, it must refer all appropriate

individuals to the State Child Support

Agency.

(iii) If the individual is receiving

TANF or Medicaid, or assistance from

the State Child Support Agency, and has

already been determined to be

cooperating, or has been determined to

have good cause for not cooperating,

then the State agency shall consider the

individual to be cooperating for food

stamp purposes.

(iv) The individual must cooperate

with the State Child Support Agency in

establishing paternity of the child, and

in establishing, modifying, or enforcing

a support order with respect to the child

and the individual in accordance with

section 454(29) of the Social Security

Act (42 U.S.C. 654(29)).

(v) Pursuant to Section 454(29)(E) of

the Social Security Act (42 U.S.C.

654(29)(E) the State Child Support

Agency will notify the individual and

the State agency whether or not it has

determined that the individual is

cooperating in good faith.

(2) Claiming good cause for noncooperation. Prior to requiring

cooperation under paragraph (o)(1) of

this section, the State agency will notify

the household in writing at initial

application and at application for

continued benefits of the right to good

cause as an exception to the cooperation

requirement and of all the requirements

applicable to a good cause

determination. Paragraph (o)(1) of this

section shall not apply to the individual

if good cause is found for refusing to

cooperate, as determined by the State

agency:

(i) Circumstances under which

cooperation may be ‘‘against the best

interests of the child.’’ The individual’s

failure to cooperate is deemed to be for

‘‘good cause’’ if:

(A) The individual meets the good

cause criteria established under the

State program funded under Part A of

Title IV or Part D of Title IV of the

Social Security Act (42 U.S.C. 601, et

seq, or 42 U.S.C. 651, et seq.)

(whichever agency is authorized to

define and determine good cause) for

failing to cooperate with the State Child

Support Agency; or

(B) Cooperating with the State Child

Support Agency would make it more

difficult for the individual to escape

domestic violence or unfairly penalize

the individual who is or has been

victimized by such violence, or the

individual who is at risk of further

domestic violence. For purposes of this

provision, the term ‘‘domestic violence’’

means the individual or child would be

subject to physical acts that result in, or

are threatened to result in, physical

injury to the individual; sexual abuse;

sexual activity involving a dependent

child; being forced as the caretaker

relative of a dependent child to engage

in nonconsensual sexual acts or

activities; threats of, or attempts at

physical or sexual abuse; mental abuse;

or neglect or deprivation of medical

care.

(C) The individual meets any other

good cause criteria identified by the

State agency. These criteria will be

defined in consultation with the Child

Support Agency or TANF program,

whichever is appropriate, and identified

in the State plan according to § 272.2(d)

(xiii).

(ii) Proof of good cause claim. (A) The

State agency will accept as corroborative

evidence the same evidence required by

Part A of Title IV or Part D of Title IV

of the Social Security Act (42 U.S.C.

601, et seq. or 42 U.S.C. 651, et seq.) to

corroborate a claim of good cause.

(B) The State agency will make a good

cause determination based on the

corroborative evidence supplied by the

individual only after it has examined

the evidence and found that it actually

verifies the good cause claim.

(iii) Review by the State Child Support

or TANF Agency. Prior to making a final

determination of good cause for refusing

to cooperate, the State agency will

afford the State Child Support Agency

or the agency which administers the

program funded under Part A of the

Social Security Act the opportunity to

review and comment on the findings

and the basis for the proposed

determination and consider any

recommendation from the State Child

Support or TANF Agency.

(iv) Delayed finding of good cause.

The State agency will not deny, delay,

or discontinue assistance pending a

determination of good cause for refusal

to cooperate if the applicant or recipient

has complied with the requirements to

furnish corroborative evidence and

information. In such cases, the State

agency must abide by the normal

processing standards according to

§ 273.2(g).

(3) Individual disqualification. If the

State agency has elected to implement

this provision and determines that the

individual has not cooperated without

good cause, then that individual shall be

ineligible to participate in the Food

Stamp Program. The disqualification

shall not apply to the entire household.

The income and resources of the

disqualified individual shall be handled

in accordance with paragraph(c)(2) of

this section.

(4) Fees. A State electing to

implement this provision shall not

require the payment of a fee or other

cost for services provided under Part D

of Title IV of the Social Security Act (42

U.S.C. 651, et seq.)

(5) Terminating the Disqualification.

The period of disqualification ends once

it has been determined that the

individual is cooperating with the State

Child Support Agency. The State agency

must have procedures in place for requalifying such an individual.

(p) Non-custodial parent’s

cooperation with child support

agencies. For purposes of this provision,

a ‘‘non-custodial parent’’ is a putative or

identified parent who does not live with

his or her child who is under the age of

18.

(1) Option to disqualify non-custodial

parent for refusal to cooperate. At the

option of a State agency, subject to

paragraphs (p)(2) and (p)(4) of this

section, a putative or identified noncustodial parent of a child under the age

of 18 (referred to in this subsection as

‘‘the individual’’) shall not be eligible to

participate in the Food Stamp Program

if the individual refuses to cooperate

with the State agency administering the

program established under Part D of

Title IV of the Social Security Act (42

U.S.C. 651, et seq.), hereafter referred to

as the State Child Support Agency, in

establishing the paternity of the child (if

the child is born out of wedlock); and

in providing support for the child.

(i) If the State agency chooses to

implement paragraph (p)(1) of this

section, it must notify all individuals in

writing of this requirement at the time

of application and reapplication for

continued benefits.

(ii) If the individual is receiving

TANF, Medicaid, or assistance from the

State Child Support Agency, and has

already been determined to be

cooperating, or has been determined to

have good cause for not cooperating,

4468 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

then the State agency shall consider the

individual is cooperating for food stamp

purposes.

(iii) If the State agency chooses to

implement paragraph (p)(1) of this

section, it must refer all appropriate

individuals to the State Child Support

Agency established under Part D of Title

IV of the Social Security Act (42 U.S.C.

651, et seq.).

(iv) The individual must cooperate

with the State Child Support Agency in

establishing the paternity of the child (if

the child is born out of wedlock), and

in providing support for the child.

(v) Pursuant to Section 454(29)(E) of

the Social Security Act (42 U.S.C.

654(29)(E)), the State Child Support

Agency will notify the individual and

the State agency whether or not it has

determined that the individual is

cooperating in good faith.

(2) Determining refusal to cooperate.

If the State Child Support Agency

determines that the individual is not

cooperating in good faith, then the State

agency will determine whether the noncooperation constitutes a refusal to

cooperate. Refusal to cooperate is when

an individual has demonstrated an

unwillingness to cooperate as opposed

to an inability to cooperate.

(3) Individual disqualification. If the

State agency determines that the noncustodial parent has refused to

cooperate, then that individual shall be

ineligible to participate in the Food

Stamp Program. The disqualification

shall not apply to the entire household.

The income and resources of the

disqualified individual shall be handled

according to paragraph (c)(2) of this

section.

(4) Fees. A State electing to

implement this provision shall not

require the payment of a fee or other

cost for services provided under Part D

of Title IV of the Social Security Act (42

U.S.C. 651, et seq.)

(5) Privacy. The State agency shall

provide safeguards to restrict the use of

information collected by a State agency

administering the program established

under Part D of Title IV of the Social

Security Act (42 U.S.C. 651, et seq.) to

purposes for which the information is

collected.

(6) Termination of disqualification.

The period of disqualification ends once

it has been determined that the

individual is cooperating with the child

support agency. The State agency must

have procedures in place for requalifying such an individual.

(q) Disqualification for child support

arrears.

(1) Option to disqualify. At the option

of a State agency, no individual shall be

eligible to participate in the Food Stamp

Program as a member of any household

during any month that the individual is

delinquent in any payment due under a

court order for the support of a child of

the individual. The State agency may

opt to apply this provision to only noncustodial parents.

(2) Exceptions. A disqualification

under paragraph (q)(1) of this section

shall not apply if:

(i) A court is allowing the individual

to delay payment;

(ii) The individual is complying with

a payment plan approved by a court or

the State agency designated under Part

D of Title IV of the Social Security Act

(42 U.S.C., 651 et seq.) to provide

support of a child of the individual; or

(iii) The State agency determines the

individual has good cause for nonsupport.

(3) Individual disqualification. If the

State agency has elected to implement

this provision and determines that the

individual should be disqualified for

child support arrears, then that

individual shall be ineligible to

participate in the Food Stamp Program.

The disqualification shall not apply to

the entire household. The income and

resources of the disqualified individual

shall be handled according to paragraph

(c)(2) of this section.

(4) Collecting claims. State agencies

shall initiate collection action as

provided for in § 273.18 for any month

a household member is disqualified for

child support arrears by sending the

household a written demand letter

which informs the household of the

amount owed, the reason for the claim

and how the household may pay the

claim. The household should also be

informed as to the adjusted amount of

income, resources, and deductible

expenses of the remaining members of

the household for the month(s) a

member is disqualified for child support

arrears.

7. In § 273.12, a new paragraph

(a)(1)(viii) is added to read as follows:

§ 273.12 Reporting changes.

(a) * * *

(1) * * *

(viii) For able-bodied adults subject to

the time limit of § 273.24, any changes

in work hours that bring an individual

below 20 hours per week, averaged

monthly, as defined in § 273.24(a)(1)(i).

An individual shall report this

information in accordance with the

reporting system for income to which he

is subject.

* * * * *

8. In § 273.16

a. Remove the last sentence in

paragraph (a)(1).

b. Revise paragraphs (b) and (c).

c. Revise paragraph (e)(8)(i).

d. Remove paragraph (e)(8)(iii) and

redesignate paragraph (e)(8)(iv) as

paragraph (e)(8)(iii).

e. Remove paragraph (f)(2)(iii) and

redesignate paragraph (f)(2)(iv) as

paragraph (f)(2)(iii).

f. Remove paragraph (g)(2)(ii) and

redesignate paragraph (g)(2)(iii) as

paragraph (g)(2)(ii).

g. Remove paragraph (h)(2)(ii) and

redesignate paragraph (h)(2)(iii) as

paragraph (h)(2)(ii).

The revisions read as follows:

§ 273.16 Disqualification for intentional

Program violation.

* * * * *

(b) Disqualification penalties.

(1) Individuals found to have

committed an intentional Program

violation either through an

administrative disqualification hearing

or by a Federal, State or local court, or

who have signed either a waiver of right

to an administrative disqualification

hearing or a disqualification consent

agreement in cases referred for

prosecution, shall be ineligible to

participate in the Program:

(i) For a period of twelve months for

the first intentional Program violation,

except as provided under paragraphs

(b)(2), (b)(3), (b)(4), and (b)(5) of this

section;

(ii) For a period of twenty-four

months upon the second occasion of

any intentional Program violation,

except as provided in paragraphs (b)(2),

(b)(3), (b)(4), and (b)(5) of this section;

and

(iii) Permanently for the third

occasion of any intentional Program

violation.

(2) Individuals found by a Federal,

State or local court to have used or

received benefits in a transaction

involving the sale of a controlled

substance (as defined in section 102 of

the Controlled Substances Act (21

U.S.C. 802)) shall be ineligible to

participate in the Program:

(i) For a period of twenty four months

upon the first occasion of such

violation; and

(ii) Permanently upon the second

occasion of such violation.

(3) Individuals found by a Federal,

State or local court to have used or

received benefits in a transaction

involving the sale of firearms,

ammunition or explosives shall be

permanently ineligible to participate in

the Program upon the first occasion of

such violation.

(4) An individual convicted by a

Federal, State or local court of having

trafficked benefits for an aggregate

amount of $500 or more shall be

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4469

permanently ineligible to participate in

the Program upon the first occasion of

such violation.

(5) Except as provided under

paragraph (b)(1)(iii) of this section, an

individual found to have made a

fraudulent statement or representation

with respect to the identity or place of

residence of the individual in order to

receive multiple food stamp benefits

simultaneously shall be ineligible to

participate in the Program for a period

of 10 years.

(6) The penalties in paragraphs (b)(2)

and (b)(3) of this section shall also apply

in cases of deferred adjudication as

described in paragraph (h) of this

section, where the court makes a finding

that the individual engaged in the

conduct described in paragraph (b)(2)

and (b)(3) of this section.

(7) If a court fails to impose a

disqualification or a disqualification

period for any intentional Program

violation, the State agency shall impose

the appropriate disqualification penalty

specified in paragraphs (b)(1), (b)(2),

(b)(3), (b)(4), and (b)(5) of this section

unless it is contrary to the court order.

(8) One or more intentional Program

violations which occurred prior to April

1, 1983 shall be considered as only one

previous disqualification when

determining the appropriate penalty to

impose in a case under consideration.

(9) Regardless of when an action taken

by an individual which caused an

intentional Program violation occurred,

the disqualification periods specified in

paragraphs (b)(2) and (b)(3) of this

section shall apply to any case in which

the court makes the requisite finding on

or after September 1, 1994.

(10) For the disqualification periods

in paragraphs (b)(1), (b)(5) or (b)(6) of

this section, if the offense occurred prior

to the implementation of these

penalties, the State agency may

establish a policy of disqualifying these

individuals in accordance with the

disqualification periods in effect at the

time of the offense. This policy must be

consistently applied for all affected

individuals.

(11) State agencies shall disqualify

only the individual found to have

committed the intentional Program

violation, or who signed the waiver of

the right to an administrative

disqualification hearing or

disqualification consent agreement in

cases referred for prosecution, and not

the entire household.

(12) Even though only the individual

is disqualified, the household, as

defined in § 273.1, is responsible for

making restitution for the amount of any

overpayment. All intentional Program

violation claims must be established

and collected in accordance with the

procedures set forth in § 273.18.

(13) The individual must be notified

in writing once it is determined that he/

she is to be disqualified. The

disqualification period shall begin no

later than the second month which

follows the date the individual receives

written notice of the disqualification.

The disqualification period must

continue uninterrupted until completed

regardless of the eligibility of the

disqualified individual’s household.

(c) Definition of intentional Program

violation. Intentional Program violations

shall consist of having intentionally:

(1) made a false or misleading

statement, or misrepresented, concealed

or withheld facts; or

(2) committed any act that constitutes

a violation of the Food Stamp Act, the

Food Stamp Program Regulations, or

any State statute for the purpose of

using, presenting, transferring,

acquiring, receiving, possessing or

trafficking of coupons, authorization

cards or reusable documents used as

part of an automated benefit delivery

system (access device).

* * * * *

(e) * * *

(8) * * *

(i) If the hearing authority rules that

the individual has committed an

intentional Program violation, the

household member must be disqualified

in accordance with the disqualification

periods and procedures in paragraph (b)

of this section. The same act of

intentional Program violation repeated

over a period of time must not be

separated so that separate penalties can

be imposed.

* * * * *

10. In § 273.24:

a. the section heading is revised.

b. paragraph (a) introductory text is

revised.

c. paragraphs (a)(1) and (a)(2) are

redesignated as paragraphs (a)(5) and

(a)(6).

d. paragraphs (b), (c), (d), and (e) are

redesignated as paragraphs (g), (h), (i)

and (j).

e. the heading of the newly designated

paragraph (g) is revised to read ‘‘15

percent exemptions.’’

f. paragraphs (a)(1) through (a)(4) and

paragraphs (b) through (f) are added as

follows.

§ 273.24 Time limit for able-bodied adults.

(a) Definitions. For purposes of the

food stamp time limit, the terms below

have the following meanings:

(1) Fulfilling the work requirement

means:

(i) Working 20 hours per week,

averaged monthly; for purposes of this

provision, 20 hours a week averaged

monthly means 80 hours a month;

(ii) Participating in and complying

with the requirements of a work

program 20 hours per week, as

determined by the State agency;

(iii) Any combination of working and

participating in a work program for a

total of 20 hours per week, as

determined by the State agency; or

(iv) Participating in and complying

with a workfare program;

(2) Working means:

(i) Work in exchange for money;

(ii) Work in exchange for goods or

services (‘‘in kind’’ work); or

(iii) Unpaid work, verified under

standards established by the State

agency.

(iv) Any combination of paragraphs

(a)(2)(i), (a)(2)(ii) and (a)(2)(iii) of this

section.

(3) Work Program means:

(i) A program under the Workforce

Investment Act (Pub. L. 105–220);

(ii) A program under section 236 of

the Trade Act of 1974 (19 U.S.C. 2296);

or

(iii) An employment and training

program, other than a job search or job

search training program, operated or

supervised by a State or political

subdivision of a State that meets

standards approved by the Governor of

the State, including a program under

§ 273.7(f). Such a program may contain

job search or job search training as a

subsidiary component as long as such

component is less than half the

requirement.

(4) Workfare program means:

(i) A program under § 273.22; or

(ii) A comparable program established

by a State or political subdivision of a

State.

* * * * *

(b) General Rule. Individuals are not

eligible to participate in the Food Stamp

Program as a member of any household

if the individual received food stamps

for more than three countable months

during any three-year period, except

that individuals may be eligible for up

to three additional countable months in

accordance with paragraph (e) of this

section.

(1) Countable months. Countable

months are months during which an

individual receives food stamps for the

full benefit month while not:

(i) Exempt under paragraph (c) of this

section;

(ii) Covered by a waiver under

paragraph (f) of this section;

(iii) Fulfilling the work requirement

as defined in paragraph (a)(1) of this

section; or

(iv) Receiving benefits that are

prorated in accordance with § 273.10.

4470 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

(2) Good cause. As determined by the

State agency, if an individual would

have worked an average of 20 hours per

week but missed some work for good

cause, the individual shall be

considered to have met the work

requirement if the absence from work is

temporary and the individual retains his

or her job. Good cause shall include

circumstances beyond the individual’s

control, such as, but not limited to,

illness, illness of another household

member requiring the presence of the

member, a household emergency, or the

unavailability of transportation.

(3) Measuring the three-year period.

The State agency may measure and track

the three-year period as it deems

appropriate. The State agency may use

either a ‘‘fixed’’ or ‘‘rolling’’ clock. If the

State agency chooses to switch tracking

methods it must inform FNS in writing.

With respect to a State, the three-year

period:

(i) Shall be measured and tracked

consistently so that individuals who are

similarly situated are treated the same;

and

(ii) Shall not include any period

before the earlier of November 22, 1996,

or the date the State notified food stamp

recipients of the application of Section

824 of the Personal Responsibility and

Work Opportunity Reconciliation Act of

1996 (Pub. L. 104–193).

(4) Treatment of income and

resources. The income and resources of

an individual made ineligible under this

paragraph (b) shall be handled in

accordance with § 273.11(c)(2).

(5) Benefits received erroneously. If an

individual subject to this section

receives food stamp benefits

erroneously, the State agency shall

consider the benefits to have been

received for purposes of this provision

unless or until the individual pays it

back in full.

(6) Verification. Verification shall be

in accordance with § 273.2(f)(1) and

(f)(8).

(7) Reporting. A change in work hours

below 20 hours per week, averaged

monthly, is a reportable change in

accordance with § 273.12(a)(1)(viii).

Regardless of the type of reporting

system the State agency assigns to

potential ABAWDs, the State agency

must adhere to the statutory

requirements of time-limited benefits for

individuals who are subject to the work

requirement. The State agency may opt

to consider work performed in a job that

was not reported according to the

requirements of § 273.12 ‘‘work.’’

(8) Applicability of Food Stamp Act.

Nothing in this paragraph (b) shall make

an individual eligible for food stamp

benefits if the individual is not

otherwise eligible for benefits under the

other provisions of these regulations

and the Food Stamp Act of 1977, as

amended.

(c) Exemptions. An individual is

exempt from the time limit if he or she

is;

(1) Under 18 or 50 years of age or

older;

(2) Determined by the State agency to

be medically certified as physically or

mentally unfit for employment. An

individual is medically certified as

physically or mentally unfit for

employment if he or she:

(i) Is receiving temporary or

permanent disability benefits issued by

governmental or private sources;

(ii) Is obviously mentally or

physically unfit for employment as

determined by the State agency; or

(iii) If the unfitness is not obvious,

provides a statement from a physician,

physician’s assistant, nurse, nurse

practitioner, designated representative

of the physician’s office, a licensed or

certified psychologist, a social worker,

or any other medical personnel the State

agency determines appropriate, that he

or she is physically or mentally unfit for

employment.

(3) Is a parent (natural, adoptive, or

step) of a household member under age

18, even if the household member who

is under 18 is not himself eligible for

food stamps;

(4) Is residing in a household where

a household member is under age 18,

even if the household member who is

under 18 is not himself eligible for food

stamps;

(5) Is otherwise exempt from work

requirements under section 6(d)(2) of

the Food Stamp Act, as implemented in

regulations at § 273.7(b); or

(6) Is pregnant.

(d) Regaining eligibility. (1) An

individual denied eligibility under

paragraph (b) of this section, or who did

not reapply for benefits because he was

not meeting the work requirements

under paragraph (b) of this section, shall

regain eligibility to participate in the

Food Stamp Program if, as determined

by the State agency, during any 30

consecutive days, he or she:

(i) Worked 80 or more hours;

(ii) Participated in and complied with

the requirements of a work program for

80 or more hours;

(iii) Any combination of work and

participation in a work program for a

total of 80 hours; or participated in and

complied with a workfare program; or

(iv) At State agency option, verifies

that the he or she will meet one of the

requirements in paragraphs (d)(1)(i),

(d)(1)(ii), (d)(1)(iii), or (d)(1)(v) of this

section, within the 30 days subsequent

to application; or

(v) Becomes exempt.

(2) An individual regaining eligibility

under paragraph (d)(1) of this section

shall have benefits calculated as

follows:

(i) For individuals regaining eligibility

by working, participating in a work

program, or combining hours worked

and hours participating in a work

program, the State agency may either

prorate benefits from the day the 80

hours are completed or from the date of

application, or

(ii) For individuals regaining

eligibility by participating in a workfare

program, and the workfare obligation is

based on an estimated monthly

allotment prorated back to the date of

application, then the allotment issued

must be prorated back to this date.

(3) There is no limit on how many

times an individual may regain

eligibility and subsequently maintain

eligibility by meeting the work

requirement.

(e) Additional three-month eligibility.

An individual who regained eligibility

under paragraph (d) of this section and

who is no longer fulfilling the work

requirement as defined in paragraph (a)

of this section is eligible for a period of

three consecutive countable months (as

defined in paragraph (b) of this section),

starting on the date the individual first

notifies the State agency that he or she

is no longer fulfilling the work

requirement, unless the individual has

been satisfying the work requirement by

participating in a work or workfare

program, in which case the period starts

on the date the State agency notifies the

individual that he or she is no longer

meeting the work requirement. An

individual shall not receive benefits

under this paragraph (e) more than once

in any three-year period.

(f) Waivers.

(1) General. On the request of a State

agency, FNS may waive the time limit

for a group of individuals in the State

if we determine that the area in which

the individuals reside:

(i) Has an unemployment rate of over

10 percent; or

(ii) Does not have a sufficient number

of jobs to provide employment for the

individuals.

(2) Required data. The State agency

may submit whatever data it deems

appropriate to support its request.

However, to support waiver requests

based on unemployment rates or labor

force data, States must submit data that

relies on standard Bureau of Labor

Statistics (BLS) data or methods. A nonexhaustive list of the kinds of data a

State agency may submit follows:

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4471

(i) To support a claim of

unemployment over 10 percent, a State

agency may submit evidence that an

area has a recent 12 month average

unemployment rate over 10 percent; a

recent three month average

unemployment rate over 10 percent; or

an historical seasonal unemployment

rate over 10 percent; or

(ii) To support a claim of lack of

sufficient jobs, a State may submit

evidence that an area: is designated as

a Labor Surplus Area (LSA) by the

Department of Labor’s Employment and

Training Administration (ETA); is

determined by the Department of

Labor’s Unemployment Insurance

Service as qualifying for extended

unemployment benefits; has a low and

declining employment-to-population

ratio; has a lack of jobs in declining

occupations or industries; is described

in an academic study or other

publications as an area where there are

lack of jobs; has a 24-month average

unemployment rate 20 percent above

the national average for the same 24-

month period. This 24-month period

may not be any earlier than the same 24-

month period the ETA uses to designate

LSAs for the current fiscal year.

(3) Waivers that are readily

approvable. FNS will approve State

agency waivers where FNS confirms:

(i) Data from the BLS or the BLS

cooperating agency that shows an area

has a most recent 12 month average

unemployment rate over 10 percent;

(ii) Evidence that the area has been

designated a Labor Surplus Area by the

ETA for the current fiscal year; or

(iii) Data from the BLS or the BLS

cooperating agency that an area has a 24

month average unemployment rate that

exceeds the national average by 20

percent for any 24-month period no

earlier than the same period the ETA

uses to designate LSAs for the current

fiscal year.

(4) Effective date of certain waivers. In

areas for which the State certifies that

data from the BLS or the BLS

cooperating agency show a most recent

12 month average unemployment rate

over 10 percent; or the area has been

designated as a Labor Surplus Area by

the Department of Labor’s Employment

and Training Administration for the

current fiscal year, the State may begin

to operate the waiver at the time the

waiver request is submitted. FNS will

contact the State if the waiver must be

modified.

(5) Duration of waiver. In general,

waivers will be approved for one year.

The duration of a waiver should bear

some relationship to the documentation

provided in support of the waiver

request. FNS will consider approving

waivers for up to one year based on

documentation covering a shorter

period, but the State agency must show

that the basis for the waiver is not a

seasonal or short term aberration. We

reserve the right to approve waivers for

a shorter period at the State agency’s

request or if the data is insufficient. We

reserve the right to approve a waiver for

a longer period if the reasons are

compelling.

(6) Areas covered by waivers. States

may define areas to be covered by

waivers. We encourage State agencies to

submit data and analyses that

correspond to the defined area. If

corresponding data does not exist, State

agencies should submit data that

corresponds as closely to the area as

possible.

Dated: January 9, 2001.

Shirley R. Watkins,

Under Secretary, Food, Nutrition, and

Consumer Services.

[FR Doc. 01–1025 Filed 1–16–01; 8:45 am]

BILLING CODE 3410–30–U