17628 Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations

PART 400—EMPLOYEE FINANCIAL

DISCLOSURE AND ETHICAL

CONDUCT STANDARDS

REGULATIONS

§ 400.101 Cross-reference to employee

financial disclosure and ethical conduct

standards regulations.

Employees of the Export-Import Bank

of the United States (Bank) should refer

to:

(a) The executive branch-wide

financial disclosure regulations at 5 CFR

part 2634;

(b) The executive branch-wide

Standards of Ethical Conduct at 5 CFR

part 2635; and

(c) The Bank regulations at 5 CFR part

6201 which supplement the executive

branch-wide standards.

Authority: 5 U.S.C. 7301.

[FR Doc. 95–8593 Filed 4–6–95; 8:45 am]

BILLING CODE 6690–01–P

DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Parts 272 and 273

[Amendment No. 359]

RIN 0584–AB78

Food Stamp Program: Medical

Expense Deduction

AGENCY: Food and Consumer Service,

USDA.

ACTION: Final rule.

SUMMARY: This rule finalizes an interim

rulemaking published on October 3,

1994. The interim rulemaking amended

food stamp regulations to simplify the

means by which households with

elderly and disabled members claim

deductions from income for verified,

prospective, non-reimbursed medical

expenses.

DATES: The amendments to

§ 272.1(g)(138), § 273.10(d)(4), and

§ 273.21(f)(2)(iv), § 273.21(i) and

§ 273.21(j)(3)(ii)(C) are effective May 8,

1995 and must be implemented no later

than September 5, 1995. The remaining

provisions of the interim rule which are

being adopted as final without change,

were effective October 1, 1994.

FOR FURTHER INFORMATION CONTACT:

Eligibility and Certification Rulemaking

Section, Certification Policy Branch,

Program Development Division, Food

and Consumer Service, USDA, 3101

Park Center Drive, Alexandria, Virginia,

22302, (703) 305–2496.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be

significant and was reviewed by the

Office of Management and Budget under

Executive Order 12866.

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 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.

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). Ellen Haas, the Under

Secretary for Food, Nutrition, and

Consumer Services, has certified that

this interim 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.

Paperwork Reduction Act

This rule does not contain reporting

or recordkeeping requirements subject

to approval by the Office of

Management and Budget (OMB) under

the Paperwork Reduction Act of 1980

(44 U.S.C. 3507).

Executive Order 12778

This 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

EFFECTIVE DATE 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. In the Food Stamp

Program the administrative procedures

are as follows: (1) For Program benefit

recipients—State administrative

procedures issued pursuant to 7 U.S.C.

2020(e)(1) and 7 CFR 273.15; (2) for

State agencies—administrative

procedures issued pursuant to 7 U.S.C.

2023 set out at 7 CFR 276.7 (for rules

related to non-quality control (QC)

liabilities) or Part 284 (for rules related

to QC liabilities); (3) for Program

retailers and wholesalers—

administrative procedures issued

pursuant to 7 U.S.C. 2023 set out at 7

CFR 278.8.

Background

On October 3, 1994, the Department

published an interim rule at 59 FR

50153 (interim regulation) amending the

food stamp regulations to simplify the

means by which households with

elderly and disabled members claim

deductions from income for verified,

prospective, non-reimbursed medical

expenses. Comments were solicited on

the provisions of the interim rule

through December 2, 1994. This final

action addresses the commenters’

concerns. Readers are referred to the

interim rule for a more complete

understanding of this final action.

The Department received 5 comments

on the interim rule. Two of the

commenters supported the interim rule,

believing that it benefitted households

and State agencies alike by eliminating

unnecessary reporting requirements.

Four of the five commenters raised

issues which are addressed below.

Budgeting of Medical Expenses

A commenter noted that, although the

interim regulations require State

agencies to allow households to

estimate, prospectively, recurring

medical expenses, they do not explicitly

prohibit retrospective budgeting of those

expenses. Such retrospective budgeting

is prohibited by section 5(e) of the Food

Stamp Act of 1977, as amended, 7 USC

2014(e) (Act). Since only households in

which all members are elderly or

disabled with no earned income are

amongst those groups of households

exempt from retrospective budgeting,

the interim rule’s failure to explicitly

prohibit the retrospective budgeting of

medical expenses leaves open the

possibility that some households’

medical expenses would be budgeted in

that manner.

The Department agrees with the

commenter that the interim regulations

failed to explicitly prohibit the

retrospective budgeting of medical

expenses. Therefore, the Department is

amending current regulations at 7 CFR

273.21(f)(2)(iv) to require that State

agencies prospectively budget recurring

medical expenses.

Verification of Medical Expenses

The same commenter requested

clarification of the procedures for State

agency action on a household’s

voluntary report of a change in medical

expenses. Although reporting of changes

in medical expenses during the
Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations 17629

certification period was not required by

the interim rule, the household was

given the option of voluntarily reporting

any changes in medical expenses it

incurred between certifications. If the

household voluntarily reported a change

in its medical expenses, the interim rule

required the State agency to act on the

change in accordance with current

regulations at 7 CFR 273.12(c).

The commenter felt that the reference

was unclear and that further

clarification was necessary. The

commenter was particularly concerned

about instances in which a household

voluntarily reports a change in medical

expenses that would cause a decrease in

the household’s allotment. Under

current regulations at 7 CFR 273.12(c),

the State agency may act on a reported

change that would decrease the

household’s allotment or make the

household ineligible without

verification, though verification which

is required by 7 CFR 273.2(f) has to be

obtained prior to the household’s

recertification. The commenter felt that

it should be clear in the regulatory

language at 7 CFR 273.2, that if the

household voluntarily reports a change

in its recurring medical expenses that

would decrease its allotment, the State

agency should act on the change

without requiring the household to

verify it.

The Department agrees with the

commenter that, with respect to State

agency action on a household’s

voluntary report of changes in medical

expenses, additional clarification of the

requirements is desirable. Therefore, the

Department is amending 7 CFR

273.10(d)(4) and 7 CFR 273.21(i) and

(j)(iii)(C) to describe the procedures for

acting on a household’s voluntary report

of changes in its medical expenses. The

State agency is required to verify

reported changes that would increase a

household’s allotment. The State agency

has the option of either requiring

verification prior to acting on the

changes, or requiring the verification

prior to the second normal monthly

allotment after the change is reported. In

the case of a reported change that would

decrease the household’s allotment, or

make the household ineligible, the State

agency shall act on the change without

verification, though verification which

is required by 7 CFR 273.2(f) has to be

obtained prior to the household’s

recertification.

Restored Benefits

A commenter stated that the interim

rule should have provided for

restoration of benefits back to October 1,

1991; the effective date of section 1717

of the Mickey Leland Memorial

Domestic Hunger Relief Act of 1990

(1990 Leland Act), Title XVII, Public

Law 101–624. The commenter argued

that, because the Department failed to

issue regulations in connection with

section 1717 of the 1990 Leland Act,

elderly and disabled households were

wrongfully denied allotments based on

recurring medical expenses during the

period beginning October 1, 1991 (the

effective date of section 1717 of the

1990 Leland Act) to October 1, 1994 (the

effective date of the October 3, 1994

interim rule). The commenter believed

that the interim regulations should

permit these households to receive

restored benefits back to October 1,

1991.

Another commenter, however,

questioned the need for the restoration

of benefits under the interim rule. The

commenter noted that under previous

regulations, eligible households were

receiving allowable medical expense

deductions and that the interim rule

merely simplified the process through

which households can claim that

deduction. Since eligible households

were already receiving a deduction, the

commenter asked in what case would a

household be entitled to restored

benefits.

The Department agrees with the

second commenter that restored benefits

are not necessary in connection with the

interim rule. The provisions of the

interim rule did not change eligibility

requirements for the medical deduction,

but only simplified reporting

procedures for claiming the deduction.

Households that claimed the deduction

under the previous rules should have

received a benefit similar to that

received under current rules.

It could be argued that some eligible

households may have refrained from

claiming the medical deduction under

the old rules because they felt that the

former reporting requirements were too

exacting, and that if the simplification

provisions of the October 3, 1994

interim regulation had been published

by the effective date of the 1990 Leland

Act, those households would have

claimed the medical deduction.

However, restored benefits would not be

appropriate for such households since

the Department’s former reporting

requirements were consistent with the

statute and within the Department’s

discretion. Therefore, such households

could not argue they were wrongfully

denied benefits.

At the time the 1990 Leland Act was

enacted, the Department believed that

its then existing regulations adequately

addressed the intent of section 1717.

This claim was made in a proposed rule

(Miscellaneous Provisions of the Mickey

Leland Memorial Domestic Hunger

Relief Act, June 28, 1991, 56 FR 29594),

and no comment was received to the

contrary. After learning that some States

may have been confused and were

misapplying the reporting requirements,

the Department first issued regional

memoranda and then exercised its

discretion to revise and simplify its

rules in a way designed to ease the

reporting burden on both households

and State agencies.

The Department maintains that its old

rules satisfied the requirements of

section 1717 of the 1991 Leland Act.

Under the rules that existed at that time,

a household’s medical expense

deduction for the certification period

was still based on the household’s

prospectively estimated recurring

medical expenses and there was no

change in the procedures that occur at

the time of certification or

recertification. Households were,

however, required to report

unanticipated changes of $25 or more

which occurred during the certification

period.

The major simplification provision of

the interim rule was the elimination of

the household’s requirement to report

unanticipated changes of $25 or more in

its medical expenses that it experienced

during the certification period. The

Department believes that this

simplification was not required by

section 1717 of the 1990 Leland Act but

was within the discretion of the

Department to further simplify medical

deduction reporting procedures for

households and beleaguered State

agencies alike.

The Department disagrees with the

commenter that households eligible for

the medical deduction should be issued

restored benefits. First, the provisions of

the interim rule merely simplified

discretionary reporting requirements

and did not alter eligibility

requirements. Households eligible for

the medical deduction would have

received essentially the same benefit

under the old rules as they did under

the interim regulations. Second, though

some households may have refrained

from claiming the medical expense

deduction because of the reporting

requirements connected with the

deduction, the Department contends

that since the regulations in effect prior

to the interim rule were reasonably

within the Department’s discretion

when implementing the medical

expense provisions of the 1990 Leland

Act, no household was wrongly denied

benefits.

Consistent with the above, the

Department is not amending the interim

regulations to provide for the restoration
17630 Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations

of benefits back to October 1, 1991 for

households eligible for the medical

expense deduction. The Department,

however, is amending the interim

regulations at 7 CFR 272.1(g)(138) to

eliminate the requirement that restored

benefits be issued back to October 1,

1994, the effective date of the interim

rule, for households converted to the

interim rule’s procedures after the

effective date. As noted by the second

commenter, households eligible for the

medical expense deduction were

receiving correct deductions under prior

regulations, and thus restored benefits

are not necessary. If the household

properly reported and verified its

allowable medical expenses, it should

have received the correct amount of

benefits.

On a related issue, a commenter wrote

that State agencies should be required to

notify eligible households immediately

of the provisions of the interim rule.

The interim rule required State agencies

to implement the changes in medical

deduction policy on October 1, 1994,

and all households that newly apply for

Program benefits on or after October 1,

1994 would be subject to the interim

rule procedures. For households

participating prior to October 1, 1994,

the interim rule required that they be

subject to the new provisions at their

request, at the time of recertification, or

when their case is next reviewed,

whichever occurs first. The State agency

is required to provide restored benefits

to such households back to the required

implementation date or the date of

application, whichever is later.

The commenter felt that since

households are unlikely to know about

the changes in medical deduction policy

required by the October 3, 1994 interim

rule and, therefore, are unlikely to

request benefit conversion to the new

policy, State agencies should be

required to notify households of the

provisions of the interim rule

immediately and not wait until the

household’s next recertification or case

review. The commenter noted that

households with elderly or disabled

persons are likely to have longer

certification periods, perhaps up to 24

months. Therefore, waiting until a

household’s next recertification could

delay implementation of the interim

rule’s provisions for several years. The

commenter also contended that restored

benefits are insufficient because they

force vulnerable, hungry households to

go without benefits during the

certification period when they most

need the assistance.

The provisions of the interim rule

simplify the means by which

households with elderly and disabled

members can claim the medical

deduction. Those provisions benefit

both eligible households and State

agencies by reducing the reporting

burden associated with the deduction.

The Department agrees with the

commenter, therefore, that it is in the

best interest of both households and

State agencies for eligible households to

be made aware of the interim rule’s

procedures as soon as possible.

Therefore, the Department is revising

the implementation regulations of the

interim rule at 7 CFR 272.1(g)(138) to

require that State agencies notify all

households eligible for the medical

expense deduction of the change in

medical deduction reporting procedures

and of their right to be converted to

those new procedures immediately. The

method of notification is being left up

to the State agencies.

Another commenter requested

clarification of a State agency’s

obligation to establish claims or provide

supplemental benefits to households as

a result of the changes in medical

deduction policy. As noted above, a

household’s medical deduction is based

on expenses reported at certification

and changes in those expenses that can

be reasonably anticipated. The

household does not have to report any

changes in its medical expenses during

the certification period. The State

agency would learn of any difference

between the deduction and actual costs

at the household’s next recertification,

when the household would be required

to report and verify all of its current

medical expenses. However, the State

agency would not be allowed to apply

this information to the previous (i.e.,

ending) certification period.

Because of the change in policy

regarding the reporting of medical

expenses during the certification period,

the State agency shall not issue

supplements to or establish claims

against households that choose not to

report and/or verify changes in medical

expenses when they occur during the

certification period. The Department is

amending the interim regulations at 7

CFR 273.10(d)(4) to clarify this

requirement.

Implementation

Under the interim rule, the provisions

addressed in this final rule were

effective October 1, 1994. The

Department received one comment

criticizing the short implementation

time of the interim rule. The commenter

wrote that State agencies are put in an

awkward position whenever regulatory

changes are made effective prior to the

date of release of a regulation. This

anomaly, the commenter noted, usually

results because of the statutory

implementation date of a provision. The

provisions of the October 3, 1994

interim rule, however, were

discretionary, and the commenter felt

that the Department could have afforded

State agencies a reasonable period of

time for implementation.

The Department understands the

difficulties State agencies encounter

when the effective date of a rule

precedes its publication date. However,

the Department felt that, due to

apparent misapplication of the reporting

requirements by some State agencies,

the provisions of the interim rule were

important enough to warrant a

retroactive implementation date. In

addition, in the Spring of 1994, the

Department informed State agencies

through its regional offices of the

likelihood of a change in regulations

regarding the medical expense

deduction, thus giving State agencies

the opportunity to do advanced

planning in regard to implementing the

rule. No change in the interim rule’s

effective date is being made in this final

rule.

The provisions of this final action

which adopt as final without change

provisions of the interim rule were

effective as of October 1, 1994. The

provisions of this final action which

require alteration of State procedures

are to be effective May 8, 1995 and must

be implemented no later than

September 5, 1995.

Any variance resulting from the

implementation of the provisions of this

final rule shall be excluded from quality

control error analysis for 120 days from

the required implementation date in

accordance with 7 CFR 275.12(d)(2)(vii).

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

procedure, Aliens, Claims, Food stamps,

Fraud, Grant programs—social

programs, Penalties, Records, Reporting

and recordkeeping requirements, Social

security.

Accordingly, the interim rule

amending 7 CFR 272 and 273 which

was published at 59 FR 50153 on

October 3, 1994, is adopted as a final

rule with the following changes:

1. The authority citation for 7 CFR

parts 272 and 273 continues to read as

follows:

Authority: 7 U.S.C. 2011–2032.
Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations 17631

PART 272—REQUIREMENTS FOR

PARTICIPATING STATE AGENCIES

2. In § 272.1, paragraph (g)(138) is

revised to read as follows:

§ 272.1 General terms and conditions.

* * * * *

(g) Implementation * * *

(138) Amendment No. 359 The

provision of Amendment No. 359

regarding the medical expense

deduction is effective and must be

implemented no later than October 1,

1994. Any variances resulting from

implementation of the provisions of this

amendment shall be excluded from

error analysis for 120 days from this

required implementation date in

accordance with 275.12(d)(2)(vii) of this

chapter. The provision must be

implemented for all households that

newly apply for Program benefits on or

after the required implementation date.

State agencies must notify households

eligible for the deduction of the change

in medical deduction reporting

requirements and the right of the

household to be converted to those new

procedures immediately. The current

caseload shall be converted to these

provisions at the household’s request, at

the time of recertification, or when the

case is next reviewed, whichever occurs

first.

* * * * *

PART 273—CERTIFICATION OF

ELIGIBLE HOUSEHOLDS

3. In § 273.10, the eighth sentence of

paragraph (d)(4) is removed, and three

new sentences are added to the end of

paragraph to read as follows:

§ 273.10 Determining household eligibility

and benefit levels.

* * * * *

(d) Determining deductions. * * *

(4) Anticipating expenses. * * * If

the household voluntarily reports a

change in its medical expenses, the

State agency shall verify the change in

accordance with § 273.2(f)(8)(ii) if the

change would increase the household’s

allotment. The State agency has the

option of either requiring verification

prior to acting on the change, or

requiring the verification prior to the

second normal monthly allotment after

the change is reported. In the case of a

reported change that would decrease the

household’s allotment, or make the

household ineligible, the State agency

shall act on the change without

requiring verification, though

verification which is required by

§ 273.2(f)(8) shall be obtained prior to

the household’s recertification.

* * * * *

4. In § 273.21:

a. Paragraph (f)(2)(iv) is amended by

adding the words ‘‘, except medical

expenses,’’ after the words ‘‘prorated

over two or more months’’ in the first

sentence, and by adding a new sentence

after the first sentence.

b. The third sentence of paragraph (i)

is revised and a fourth sentence is

added.

c. Paragraph (j)(3)(iii)(C) is revised.

The revisions and addition read as

follows:

§ 273.21 Monthly Reporting and

Retrospective Budgeting (MRRB).

* * * * *

(f) Calculating allotments for

households following the beginning

months. * * *

(2) Income and deductions. * * *

(iv) * * * Medical expenses shall be

budgeted prospectively. * * *

* * * * *

(i) Verification. * * * If the

household voluntarily reports a change

in its medical expenses, the State

agency shall verify the change in

accordance with § 273.2(f)(8)(ii) before

acting on it if the change would increase

the household’s allotment. In the case of

a reported change that would decrease

the household’s allotment, or make the

household ineligible, the State agency

shall act on the change without

requiring verification, though

verification which is required by

§ 273.2(f)(8)(i) shall be obtained prior to

the household’s recertification.

(j) State agency action on reports.

* * *

(3) Incomplete filing. * * *

(iii) * * *

(C) If a household fails to verify a

change in reported medical expenses in

accordance with § 273.2(f)(8), and that

change would increase the household’s

allotment, the State agency shall not

make the change. The State agency shall

act on reported changes without

requiring verification if the changes

would decrease the household’s

allotment, or make the household

ineligible.

* * * * *

Dated: March 30, 1995.

Ellen Haas,

Under Secretary for Food, Nutrition, and

Consumer Services.

[FR Doc. 95–8492 Filed 4–6–95; 8:45 am]

BILLING CODE 3410–30–U

Animal and Plant Health Inspection

Service

7 CFR Part 354

[Docket No. 95–003–1]

Commuted Traveltime Periods:

Overtime Services Relating to Imports

and Exports

AGENCY: Animal and Plant Health

Inspection Service, USDA.

ACTION: Final rule.

SUMMARY: We are amending the

regulations concerning overtime

services provided by employees of Plant

Protection and Quarantine by removing

and adding commuted traveltime

allowances for travel between various

locations in Oregon, Washington, and

Wyoming. Commuted traveltime

allowances are the periods of time

required for Plant Protection and

Quarantine employees to travel from

their dispatch points and return there

from the places where they perform

Sunday, holiday, or other overtime

duty. The Government charges a fee for

certain overtime services provided by

Plant Protection and Quarantine

employees and, under certain

circumstances, the fee may include the

cost of commuted traveltime. This

action is necessary to inform the public

of commuted traveltime between these

locations.

EFFECTIVE DATE: April 7, 1995.

FOR FURTHER INFORMATION CONTACT: Mr.

Paul R. Eggert, Assistant to the Deputy

Administrator, Resource Management

Staff, PPQ, APHIS, Suite 4C03, 4700

River Road Unit 130, Riverdale, MD

20737–1228; (301) 734–7764.

SUPPLEMENTARY INFORMATION:

Background

The regulations in 7 CFR, chapter III,

and 9 CFR, chapter I, subchapter D,

require inspection, laboratory testing,

certification, or quarantine of certain

plants, plant products, animals, animal

byproducts, or other commodities

intended for importation into, or

exportation from, the United States.

When these services must be provided

by an employee of Plant Protection and

Quarantine (PPQ) on a Sunday or

holiday, or at any other time outside the

PPQ employee’s regular duty hours, the

Government charges a fee for the

services in accordance with 7 CFR part

354. Under circumstances described in

§ 354.1(a)(2), this fee may include the

cost of commuted traveltime. Section

354.2 contains administrative

instructions prescribing commuted

traveltime allowances, which reflect, as