[Federal Register Volume 60, Number 3 (Thursday, January 5, 1995)]
[Rules and Regulations]
[Pages 1707-1709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-239]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 3 / Thursday, January 5, 1995 / Rules 
and Regulations  
[[Page 1707]]

DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Parts 272 and 273

[Amendment No. 351]


Food Stamp Program--Distribution of Employment and Training 
Performance-Based Funds

AGENCY: Food and Consumer Service, USDA.

ACTION: Final rule.

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SUMMARY: State welfare agencies are responsible for administering the 
Food Stamp Program and are required to operate the Food Stamp 
Employment and Training (E&T) program. To assist in the operation of 
their E&T programs, the State agencies receive a Federal E&T grant, a 
portion of which is distributed on the basis of each State agency's 
performance in serving the targeted mandatory population. This final 
rule amends Food Stamp Program regulations as a result of the Food, 
Agriculture, Conservation, and Trade Act Amendments of 1991, enacted 
December 13, 1991 (FACT Act). The FACT Act reduces the annual 
performance standard for State agencies from 50 percent to no more than 
10 percent in FYs 1992 and 1993 and no more than 15 percent in FYs 1994 
and 1995. This final rule freezes the performance-based E&T grants at 
the level the State agencies received in Federal Fiscal Year 1993, for 
two years from the fiscal year in which this final rule is promulgated. 
The Department is taking this action in order to enable State agencies 
to exercise their option to serve fewer people, as provided by the FACT 
Act without reduction of performance-based E&T funds. This final rule 
supports efforts to target the E&T program toward more intensive 
components for a smaller segment of the targeted mandatory population. 
However, State agencies are not required to implement a more intensive 
E&T program and may continue to operate broad-based programs.

EFFECTIVE DATE: October 1, 1993.

FOR FURTHER INFORMATION CONTACT: Questions regarding this rulemaking 
should be directed to Ellen Henigan, Supervisor, Work Program Section, 
Food Stamp Program, Food and Consumer Service, USDA, 3101 Park Center 
Drive, Room 716, Alexandria, Virginia 22302. The telephone number is 
(703) 305-2762.

SUPPLEMENTARY INFORMATION:

Classification

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and therefore has not been reviewed by the Office 
of Management and Budget.

Executive Order 12372

    The Food Stamp Program is listed in the Catalog of Federal Domestic 
Assistance Programs under No. 10.551. For reasons set forth in the 
final rule related Notice(s) of 7 CFR Part 3015, subpart V (48 FR 
29115, June 24, 1983), 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 ``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)(10) 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; and 
(3) For program retailers and wholesalers --administrative procedures 
issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 278.8.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601 through 612). The 
Administrator of the Food and Consumer Service (FCS), has certified 
that this action does not have a significant economic impact on a 
substantial number of small entities. State and local welfare agencies 
will be the most affected because they administer the Program and the 
rule will affect the performance-based funding levels for each State 
agency.

Paperwork Reduction Act

    The provisions of this final rule do not contain new or additional 
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).

Background

    On January 19, 1994, the Department published a proposed rule at 59 
FR 2779 designed to amend 7 CFR 273.7(d)(1)(i)(B) to specify that the 
$15 million Food Stamp E&T performance-based funds be frozen at the 
levels the State agencies respectively received in FY 1993. On April 
11, 1994, the Department published the final rule implementing revised 
performance standards which supports efforts to allow State agencies to 
target the E&T program toward fewer participants. This final rule 
amends the regulations at 273.7(d), to allow State agencies the option 
of placing fewer participants through E&T programs and/or operate more 
intensive components of the E&T program, in keeping with Section 907(b) 
of the FACT Act. Comments were solicited on the provisions of the 
performance-based funding proposed rulemaking through March 21, 1994. 
This final action addresses the commenters' concerns. Readers are 
referred to the proposed rule for a more complete understanding of this 
final action.
    The Department received two comment letters from State agencies on 
the proposed rule; both concurred with the proposed provisions. The 
first commenter noted that the freeze of [[Page 1708]] performance-
based funds at the levels the State agencies received in Fiscal Year 
1993 for two years from promulgation of the final rule will allow State 
agencies to anticipate the available grant and plan for future needs.
    The second commenter favored the proposed provision because the 
freeze minimizes changes in funding until the implementation of 
outcome-based performance standards for the E&T program, and 
distributes funds based upon data reflecting State agency performance 
prior to the point in time when most states would have begun targeting 
their E&T programs to fewer participants. No other comments were 
received on the proposed rule. The Department is adopting the 
provisions of the proposed rule as final without change.

Federal Funding for E&T Programs

    Section 16(h), 7 U.S.C. 2025(h), of the Food Stamp Act of 1977 
(Act) authorizes the Secretary to distribute $75 million each year in 
unmatched Federal funds to State agencies to operate their E&T 
programs. As specified under Section 16(h)(1)(C) of the Food Stamp Act, 
$60 million of the Federal E&T grant--the nonperformance based 
portion--is distributed on the basis of each State agency's work 
registrant population as a percent of the total work registrant 
population nationwide. Pursuant to Section 16(h)(1)(B), the remaining 
$15 million of the Federal E&T grant must be distributed on the basis 
of State agency performance.
    Accordingly, the Department is amending 7 CFR 273.7(d)(1)(i)(B) in 
this rulemaking to specify that the $15 million performance-based funds 
will be frozen at the levels the State agencies received in FY 1993. In 
accordance with current rules, performance-based funds will be 
allocated by the ratio of the number of E&T mandatory participants 
placed in an E&T program by an eligible State agency to the number of 
E&T mandatory participants placed in all eligible State agencies in 
Calendar Year 1991.
    Each State agency must continue to meet established performance 
standards (e.g., 10 percent in FY 1994) in order to be eligible for its 
share of these funds as is required under 7 CFR 273.7(d)(1)(i)(B). 
Should a State agency fail to meet the performance standard in a given 
fiscal year, the Department will determine if good cause exists to 
excuse the shortfall. Should the Department determine that no good 
cause exists, the State agency would be ineligible to receive its share 
of performance-based funding in the second following fiscal year. The 
Department will recalculate the performance-based funds payable to the 
State agencies on the basis of Calendar Year 1991 data, but excluding 
the State agencies which did not meet their standard.
    The Department will not take into account corrected E&T report 
forms (FNS-583) received later than March 1 when determining whether a 
State agency is eligible for performance-based funding. If the data on 
the reports show that a State agency did not meet its performance 
standard or a good cause determination was not made by the Department 
by March 1, the State agency shall not be eligible for performance-
based funding.

Implementation

    The Department is amending 7 CFR 272.1 to add a new paragraph 
(g)(139) to reflect that the provisions of this final rule are 
effective October 1, 1993. State agencies are not required to take any 
action to implement these provisions.
    Federal fiscal year 1993 levels will be used for the two Federal 
fiscal years following the Federal fiscal year in which this rule is 
published. The Department is anxious to receive suggestions for ways 
the performance-based funds could be distributed beyond that, until 
outcome-based performance standards are implemented.

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, Reporting and 
recordkeeping requirements, Social security, Students.

    Accordingly, 7 CFR Parts 272 and 273 are amended as follows:
    1. The authority citation for 7 CFR Parts 272 and 273 continues to 
read as follows:

    Authority: 7 U.S.C. 2011-2032.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

    2. In Sec. 272.1, a new paragraph (g)(139) is added to read as 
follows:


Sec. 272.1  General terms and conditions.

* * * * *
    (g) * * *
    (139) Amendment No. 351. The provisions of Amendment No. 351 to 
amend 7 CFR 273.7(d) are effective October 1, 1993. State agencies are 
not required to take any action to implement these provisions.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    3. In Sec. 273.7, paragraph (d)(1)(i)(B) is revised to read as 
follows:


Sec. 273.7  Work requirements.

* * * * *
    (d) Federal financial participation.
    (1) Employment and training grants.
    (i) * * *
    (B) In Federal fiscal year 1993, the Secretary shall allocate $15 
million of the Federal funds available for unmatched employment and 
training grants based on the ratio of the number of E&T mandatory 
participants placed (as defined under paragraph (o) of this section) in 
a food stamp E&T program in an eligible State to the number of E&T 
mandatory participants placed in all eligible States in Calendar Year 
1991. Beginning in Federal fiscal year 1994, and each subsequent 
Federal fiscal year until FY 1998, the Secretary shall allocate $15 
million of Federal funds on the basis of the amount of performance-
based funding each State agency received in Federal fiscal year 1993, 
provided the State agency has met the performance standard (as defined 
under paragraph (o) of this section) for the second preceding Federal 
fiscal year. For example, to receive performance-based funding in 
Federal fiscal year 1996, the State agency must have met its 
performance standard in Federal fiscal year 1994. Corrections to 
reports required to be submitted in accordance with paragraph (c) of 
this section must be received by FCS, and State agency good cause 
appeals must be resolved no later than March 1, to be used in 
determining whether a State agency is eligible for performance-based 
funding for the Federal fiscal year beginning the following October. If 
the data on the reports show that a State agency did not meet its 
performance standard or a good cause determination was not made by FCS 
by March 1, the State agency shall not be eligible for performance-
based funding. In this instance, the Secretary shall redistribute the 
$15 million Federal funds to eligible State agencies on the basis of 
Calendar Year 1991 data as prescribed under this paragraph, excluding 
the noncompliant States.
* * * * * [[Page 1709]] 
    Dated: December 28, 1994.
Yvette S. Jackson,
Acting Administrator, Food and Consumer Service.
[FR Doc. 95-239 Filed 1-4-95; 8:45 am]
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