[Federal Register Volume 60, Number 108 (Tuesday, June 6, 1995)]
[Proposed Rules]
[Pages 29767-29771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13723]



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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 60, No. 108 / Tuesday, June 6, 1995 / 
Proposed Rules  

[[Page 29767]]

DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Part 273

[Amendment No. 365]
RIN 0584-AB98


Food Stamp Program: Monthly Reporting on Reservations Provision 
of the Food Stamp Program Improvements Act of 1994

AGENCY: Food and Consumer Service, USDA.

ACTION: Proposed rulemaking.

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SUMMARY: This rulemaking proposes to amend Food Stamp Program 
regulations to establish procedures for implementing the restrictions 
concerning use of monthly reporting for households residing on 
reservations contained in the Food Stamp Program Improvements Act of 
1994.

DATES: Comments must be received on or before August 7, 1995 to be 
assured of consideration.

ADDRESSES: Comments on this proposed rulemaking should be addressed to 
Margaret Thiel, Acting Supervisor, Eligibility and Certification 
Regulations Section, Certification and Policy Branch, Program 
Development Division, Food Stamp Program, Food and Consumer Service, 
USDA, 3101 Park Center Drive, Alexandria, Virginia 22302. (Datafax 
number 703-305-2454). All written comments will be open to public 
inspection at the office of the Food and Consumer Service, during 
regular business hours (8:30 a.m. to 5:00 p.m., Monday through Friday), 
at 3101 Park Center Drive, Alexandria, Virginia, Room 718.

FOR FURTHER INFORMATION CONTACT: Questions regarding this proposed 
rulemaking should be addressed to Margaret Thiel at the above address 
or by telephone at (703) 305-2496.
SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed 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 under No. 10.551. For the reasons set forth in the final 
rulemaking and related Notice(s) to 7 CFR 3105, Subpart V (Cite 48 FR 
29115, June 24, 1983; or 48 FR 54317, December 1, 1983, as appropriate, 
and any subsequent notices that apply), this program is excluded from 
the scope of Executive Order 12372 which requires intergovernmental 
consultation with State and local officials.

Regulatory Flexibility Act

    This proposed rulemaking has also been reviewed with respect to the 
requirements of the Regulatory Flexibility Act of 1980 (Pub. L. 96-354, 
94 Stat. 1164, September 19, 1980). The Administrator of the Food and 
Consumer Service (FCS), has certified that this proposal would not have 
a significant economic impact on substantial number of small entities. 
The primary impact of the procedures in this rulemaking would be on FCS 
Regional Offices, State governments, and individuals who might apply 
for benefits in State agencies that use monthly reporting procedures. 
To the extent that county or other local governments assist in the 
administration of the Food Stamp Program, they would also be affected.

Executive Order 12778

    This proposed rulemaking 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 section 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 (for 
rules related to nonquality control (QC) liabilities) or Part 283 (for 
rules related to QC liabilities); (3) for retailers and wholesalers--
administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7 
CFR 278.8.

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act of 1980 (44 U.S.C. 3507), 
reporting and recordkeeping requirements for monthly reporting and 
retrospective budgeting have been approved by the Office of Management 
and Budget (OMB) under current OMB No. 0584-0064. Although the 
provisions of the proposed rule change the content of certain notices 
to households, they do not impose additional reporting and 
recordkeeping burden requirements.
Background

    Section 1723 of the Mickey Leland Memorial Domestic Hunger Relief 
Act (Title XVII of the Food, Agriculture, Conservation, and Trade Act 
of 1990, Pub. L. 101-624, 104 Stat. 3359, November 28, 1990) amended 
Section 6(c)(1)(A)(i) of the Food Stamp Act of 1977, as amended (the 
Act), 7 U.S.C. 2015(c)(1)(A)(i), to exempt households residing on 
reservations from monthly reporting and retrospective budgeting (MRRB) 
effective February 1, 1992. The Department announced the regulatory 
adoption of the requirements of Section 1723 in a final rule amending 7 
CFR 273.21(b)(4) published on December 4, 1991, 56 FR 63605, and 
scheduled to take effect on February 1, 1992.
    Since that time, several pieces of legislation were enacted, each 
delaying the effective date of Section 1723. Implementation was 
initially postponed by Section 908 of the Food, Agriculture, 
Conservation, and Trade Act Amendments of 1991 (Pub. L. 102-237, 105 
Stat. 1818, December 13, 1991) until April 1, 1993, and then by Pub. L. 
103-11 (107 Stat. 41, April 1, 1993) until February 1, 1994. In 
response, in a November 1, 1993, rulemaking, the Department proposed at 
58 FR 58459 a new implementation date of February 1, 
[[Page 29768]] 1994. Following publication of that proposed rule, 
Section 1 of Pub. L. 103-205 (107 Stat. 2418) was enacted on December 
17, 1993, again postponing implementation of the prohibition concerning 
MRRB on reservations until March 15, 1994. State agencies were notified 
of this delay through an implementing memorandum dated January 6, 1994.
    On March 25, 1994, the Food Stamp Program Improvements Act of 1994 
(Pub. L. 103-225 (108 Stat. 106)) was enacted. Section 101(a) of that 
law modified the prohibition against monthly reporting for households 
residing on reservations that had been added to section 6(c)(1)(A) of 
the Act (7 U.S.C. 2015(c)(1), by Section 1723 of the Leland Act. 
Section 6(c)(1)(C)(iii) now prohibits State agencies which were not 
requiring households residing on reservations to submit monthly reports 
on March 25, 1994, from establishing monthly reporting requirements for 
these households. These households may be retrospectively budgeted. 
State agencies that were using monthly reporting on March 25, 1994, for 
households residing on reservations may continue to do so if certain 
enumerated conditions are met. On August 29, 1994, in the Miscellaneous 
Provisions of the Food, Agriculture, Conservation, and Trade Act 
Amendments of 1991 and Earned Income Tax Credit Amendment final rule 
(59 FR 44303), the Department addressed the prohibition against 
establishing new monthly reporting for households residing on 
reservations if no monthly reporting system was in place on March 25, 
1994.
    In this rulemaking, the Department is addressing the provisions in 
Section 101(a) of Pub. L. 103-225 dealing with the one-month grace 
period afforded reservation households for submitting required reports, 
7 U.S.C. 2015(c)(1)(C)(i) and (ii). This subparagraph establishes the 
following requirements on a State agency if it requires monthly 
reporting for households residing on reservations:
    (1) Reinstate benefits without requiring a new application for any 
household that submits a report not later than one month after the end 
of the issuance month; and
    (2) do not delay, reduce, suspend, or terminate the allotment of a 
household that submits a report not later than one month after the end 
of the month in which the report is due; and
    (3) establish two-year certification periods for households on 
reservations required to submit monthly reports, unless the State 
agency is granted a waiver for shorter certification periods.
    In order to implement these legislative requirements, the 
Department is proposing a new paragraph Sec. 273.21(t). The specific 
provisions of this new paragraph are discussed below.

Definition of Residing on a Reservation

    Section 3(j) of the Act defines a reservation as ``the 
geographically defined area or areas over which a tribal organization 
(as that term is defined in subsection (p) of this section) exercises 
governmental jurisdiction.'' Section 3(p) of the Act defines a tribal 
organization as ``the recognized governing body of an Indian tribe 
(including the tribally recognized intertribal organization of such 
tribes), * * * , as well as any Indian tribe, band, or community 
holding a treaty with a State government.'' Section 10(a) of Pub. L. 
103-225 did not modify the Act's definition of a reservation or tribal 
organization. Accordingly, the Department is proposing in 
Sec. 273.21(t)(1) to adopt these definitions for the purpose of 
determining whether a household shall be considered to be residing on a 
reservation.

Certification Periods

    In light of the amendments to Section 6(c)(1) of the Act made by 
Section 101(a) of Pub. L. 103-225, the Act now requires that State 
agencies establish two (2) year certification periods for households 
residing on reservations that are required to submit monthly reports (7 
U.S.C. 2015(c)(1)(C)(iv)). In order to implement this requirement, the 
Department is proposing at Sec. 273.21(t)(2) to require that monthly 
reporting households residing on a reservation be certified for two (2) 
years.
    However, Section 6(c)(1)(C)(iv) allows FCS to permit a State agency 
to establish certification periods for households residing on 
reservations shorter than two (2) years if the State agency can show 
good cause for a shorter certification period. Therefore, the 
Department is proposing in 7 CFR 273.21(2)(i) that a State agency may 
request a waiver to allow it to establish shorter certification periods 
for those households. In considering a request for a waiver to allow 
shorter certification periods, the Department has been urged by the 
Congress to consider both the reasons the State desires to implement a 
shorter certification period and the burden that households on the 
particular reservation would face in going through the recertification 
process more often. Cong. Rec. S2905, March 11, 1994. Further, Congress 
has also indicated that the Department should exercise its discretion 
to waive the two (2) year certification period requirement only after 
consultation with the appropriate tribal government and when 
extraordinary circumstances exist, such as widespread fraud, a 
substantial change in circumstances on a reservation which results in 
wide fluctuations in income for large numbers of food stamp recipients, 
or similar changes which require more frequent certification to protect 
the financial integrity of the Program and to maintain the lowest 
practicable error rates. Cong. Rec. S2906, March 11, 1994. In 
considering any approval of a waiver, the Department will be taking 
into account the administrative burdens of the State agency in 
administering the two (2) year certification periods, the input of the 
affected tribal organization, the quality control (QC) error rate for 
the affected households, and the impact on the households of requiring 
them to be interviewed more frequently than every two years.
    Anecdotal information provided to the Department by State agencies 
affected by this provision indicates that households frequently move 
off of and on to reservations. With this in mind, the Department is 
proposing to allow a State agency to opt either to continue the two-
year certification period for any household that moves off a 
reservation or to shorten the certification period as appropriate to 
the household's reporting requirements off the reservation. The 
Department is providing this option to increase flexibility for State 
agencies and to meet potential concerns about QC error rates. Switching 
households back and forth between two-year and shorter certification 
periods is administratively complex. However, the Department recognizes 
that long certification periods could result in increased payment 
errors, particularly if a household switches to change reporting when 
it is off a reservation. Accordingly, in 7 CFR 273.21(2)(ii), the 
Department is proposing that a State agency may opt to continue the 
two-year certification period for any household that moves off a 
reservation. If the State agency adopts this option and the household 
is still living off a reservation at recertification, the household 
shall be subject to the certification period requirements in 7 CFR 
273.10(f)(4). If the State agency does not adopt this option, any 
household that moves off a reservation shall have its certification 
period shortened. A household continuing to be subject to monthly 
reporting shall not have its certification period shortened to less 
than six months. A household becoming subject to change reporting shall 
not have its certification period end any earlier than the month 
following the month in [[Page 29769]] which the State agency determines 
that the certification period shall be shortened.

Missing and Incomplete Monthly Reports

    Section 101(a) of Pub. L. 103-225 (Section 6(c)(1)(C)(ii), 7 U.S.C. 
2015(c)(1)(C)(ii)) prohibits a State agency from delaying, reducing, 
suspending, or terminating the benefits of a household residing on a 
reservation that submits a report not later than one month after the 
end of the month in which the report is due. Normally, if a complete 
monthly report is not received within the time frames specified in 7 
CFR 273.21, the State agency would terminate the household. Under 
Section 101(a) of Pub. L. 103-225, a State agency must now issue 
benefits to a household residing on a reservation on its normal 
issuance date even if it has failed to submit a monthly report. In 
order to implement this provision, the Department is proposing in 
Sec. 273.21(t)(3)(i) to require the State agency to provide a household 
residing on a reservation which does not submit its monthly report by 
the issuance date with the same benefit amount that the household 
received the previous month. This issuance must be provided to the 
household on the household's normal issuance date. If the household's 
report is received prior to the issuance date, but too late to be 
processed without delaying the household's issuance, the household 
shall be issued its benefits on the normal issuance date.
    The Department is also proposing in Sec. 273.21(t)(3)(ii) to 
require a State agency to provide a household residing on a reservation 
its benefits on the normal issuance date if the household submits an 
incomplete monthly report that cannot be completed by the normal 
issuance date. The State agency would be required to attempt to have 
the household complete the report prior to the normal issuance date, in 
accordance with the procedures in 7 CFR 273.21(j). Section 101(a) of 
Pub. L. 103-225 does not address incomplete reports. However, the 
legislative history indicates that the State agency should not take any 
action against the household for failing to submit an incomplete 
report. ``The purpose of this grace period is to provide ample 
opportunity to resolve misunderstandings and ensure that households do 
not suffer * * * when they unintentionally submit incomplete reports. * 
* *'' Cong. Rec. S2905, March 11, 1994. Thus, the intent of the 
legislation is to provide benefits even if an incomplete report has 
been submitted.
    The legislative intent of the grace period is to ensure that 
households are not penalized for administrative reasons. Therefore, if 
there is complete and verified information for some of the monthly 
report, there is no reason for the State agency to not act on that 
information. Such action would result in more accurate benefits being 
provided to the household.
    In enacting this legislation, Congress did not intend that 
households residing on reservations participate indefinitely without 
submitting monthly reports. ``Households that do not submit reports by 
the end of the grace period would have their benefits suspended.'' 
Cong. Rec. S2905, March 11, 1994. Accordingly, the Department is 
proposing in Sec. 273.21(t)(3)(iii) that if a household failed to 
submit a monthly report or submitted an incomplete monthly report that 
was never completed and then fails to submit the next consecutive 
monthly report or submits an incomplete report for the next consecutive 
monthly report that is not completed by the issuance date, the 
household would be terminated in accordance with the provisions in 7 
CFR 273.21(m).
    In Sec. 273.21(t)(3)(iii), the Department is also proposing that 
the household would not be terminated if it fails to ever submit or 
complete the first missing monthly report so long as it submits the 
next report by the end of the month in which it is due. The intent of 
the grace period is to prevent interruptions in benefits for 
administrative reasons. Receipt of old information as opposed to more 
current information does not serve the purpose of requiring monthly 
reports on household circumstances. To require that the missing or 
incomplete report be submitted/completed at the same time as requiring 
the next month's monthly report would be confusing to the households. 
It would also be an unnecessary administrative burden to require the 
State agency to process the missing report.

Benefit Determination

    Despite the one-month grace period provided to households residing 
on reservations to submit monthly reports by Section 101(a) of Pub. L. 
103-225
(7 U.S.C. 2015(c)(1)(C)(ii)), it is the intent of Congress that 
benefits be issued based on actual household circumstances. Cong. Rec. 
S2905, March 11, 1994. Therefore, to the extent possible, incomplete 
reports should be completed prior to the issuance of benefits. The 
Department is proposing that State agencies follow the procedures in 7 
CFR 273.21(j)(1) (i) through (v) to attempt to obtain a complete report 
prior to the issuance date. The Department is proposing in 
Sec. 273.21(t)(4) that the State agency repeat the previous month's 
benefit amount if a report is not received by the issuance date. In 
addition, the Department is proposing in Sec. 273.21(t)(4) that the 
State agency issue the household's benefits based on the previously 
submitted report without regard to any changes in the household's 
circumstances that were not completed or verified. Finally, the 
Department is proposing in Sec. 273.21(t)(4) that the State agency 
adjust the amount of the benefits issued if there is any information on 
the incomplete report that can be used as submitted. As discussed 
earlier, the grace period was established to ensure that households 
were not penalized for administrative reasons. However, there is no 
reason for the State agency not to adjust benefits to reflect 
information that is complete and verified.
Reinstatement

    Section 101(a) of Pub. L. 103-225 (7 U.S.C. 2015(c)(1)(C)(i)) 
provides that, if a household is terminated for failing to submit or to 
complete a monthly report, the household shall be reinstated without 
being required to submit a new application if a monthly report is 
received no later than the last day of the month following the month 
the household was terminated. Accordingly, the Department is proposing 
at Sec. 273.21(t)(5) to require that a State agency reinstate a 
household terminated in accordance with Sec. 273.21(t)(3)(iii) without 
the household's being required to submit a new application if a monthly 
report is received no later than the last day of the month following 
the month the household was terminated.

Notices

    The changes proposed above that provide for separate and different 
treatment of monthly reporting households residing on reservations 
require the notice requirements contained in 7 CFR 273.21(j)(2) to be 
modified for these households. The intent of Congress is that State 
agencies provide all the notices currently required for monthly 
reporting households in 7 CFR 273.21(j)(2), modified as necessary to 
reflect the alternative termination and reinstatement impacts for 
missing and incomplete reports. Cong. Rec. S2905, March 11, 1994. 
Accordingly the Department is proposing in Sec. 273.21(t)(6) modified 
notice requirements. [[Page 29770]] 
    In Sec. 273.21(t)(6)(i), the Department is proposing that all 
notices regarding changes in a household's benefits meet the definition 
of adequate notice as defined in 7 CFR 271.2. This will ensure that 
households receive due process in any action that may negatively impact 
their Food Stamp Program participation.
    The Department is proposing in Sec. 273.21(t)(6)(ii) that the State 
agency provide a notice to the household about missing or incomplete 
reports that requests that the household take the action necessary to 
submit the missing report or to complete an incomplete report. The 
notification requirements are the same as those in 7 CFR 273.21(j)(3) 
except that the notice shall advise the household that, if a report is 
not submitted or if information provided on the incomplete report is 
not completed or verified as required, the household's benefits would 
be issued based on the previous month's circumstances.
    In order to ensure that the household receives adequate notice of 
any State agency action affecting the household's benefits, the 
Department is proposing in 7 CFR 273.21(t)(5)(iii) that the State 
agency notify a household, if its report has not been received or if it 
is incomplete, simultaneously with the issuance that the benefits being 
provided are based on the previously submitted report and that this 
benefit does not reflect any changes in the household's circumstances 
that have not been reported or verified as required. This notice shall 
also advise the household that, if the next monthly report is not filed 
timely and completely, the household will be terminated. This notice 
requirement conforms notice requirements for these special 
circumstances with current notice requirements for monthly reporting.
    Under current regulations at 7 CFR 273.21(m), if a household does 
not submit a complete monthly report, that household is required to be 
terminated. Under Section 6(c)(1)(C)(i) and (ii) of the Act, as amended 
by Section 101(a) of Pub. L. 103-225, households residing on 
reservations were granted a grace period of one month for non-submittal 
of a complete monthly report. However, if a household residing on a 
reservation does not submit a monthly report in the consequent month as 
well or submits an incomplete report, that household is required to be 
terminated. In order to ensure that the household is aware of the 
termination and its right to reinstatement, the Department is proposing 
in 7 CFR 273.21(t)(6)(iv) that, if the household is terminated in the 
consequent month, the State agency shall send the notice so the 
household receives it no later than the date benefits would have been 
received. This notice shall advise the household of its right to 
reinstatement if a complete monthly report is submitted by the end of 
the month following termination. This notice requirement is consistent 
with current notice requirements for monthly reporting.

Supplements and Claims

    As noted above, the Department is not proposing to require that 
households submit the missing report simultaneously with the submittal 
or after the submittal of the consequent monthly report. Nevertheless, 
a household's report may be submitted or completed after the 
household's issuance has been provided. In this circumstance, the 
intent of Congress is that the State agency would take action based on 
the eligibility factors contained in the monthly report when it is 
submitted. Cong. Rec. S2905, March 11, 1994. Therefore, the Department 
is proposing in 7 CFR 273.21(t)(7) that, if the household submits or 
completes a monthly report after the issuance date but in the issuance 
month, the State agency provide the household with a supplement if 
warranted. Also, if the household submits or completes a monthly report 
or the State agency becomes aware of a change that would have decreased 
benefits in some other manner at any time after the issuance date, the 
Department is proposing that the State agency file a claim for any 
benefits overissued. The Department is not proposing that households 
which submit reports after the issuance month receive restored 
benefits. This is consistent with current food stamp policy in 7 CFR 
273.17(a) which provides for restored benefits whenever the loss was 
caused by an error by the State agency or by an administrative 
disqualification which was subsequently reversed. Under current 
regulations, restored benefits are not provided for losses caused by a 
household error. Failure to submit a complete monthly report is a 
household error.

Quality Control Procedures

    The legislative history provides that ``a State [agency] will not 
be adversely affected in regard to its quality control efforts related 
to those households whose monthly reports are not submitted until a 
month after the report is due.'' Cong. Rec. S2905, March 11, 1994. To 
implement this provision, the Department is proposing that those 
certification errors attributable to missing or incomplete monthly 
reports covered under the grace period of this legislation shall be 
excluded from the error determination process.
Implementation

    The Food Stamp Program Improvements Act of 1994 was effective upon 
enactment, March 25, 1994. On March 31, 1994, the Department issued a 
memorandum notifying State agencies of the provisions of the 
legislation and the March 25, 1994, effective date. State agencies were 
directed to implement the requirements immediately. Recognizing that 
the statutory amendments regarding the monthly reporting on 
reservations have already been implemented through the above described 
memorandum and in order to provide for the orderly implementation of 
the specific provisions of this proposed rule, the Department is 
proposing to require that this rule be effective in any given State 
upon implementation by the State agency but in no event later than the 
first day of the month 60 days after publication of the final rule. 
Variances resulting from implementation of this provision would be 
excluded from the payment error rate for 120 days from the required 
implementation date, in accordance with section 13951 of Pub. L. 103-
66, which amended section 16(c)(3)(A) of the Act, 7 U.S.C. 
2025(C)(3)(A).

List of Subjects in 7 CFR Part 273

    Administrative practice and procedures, Aliens, Claims, Food 
stamps, Grant programs--social programs, Penalties, Reporting and 
recordkeeping requirements, Social security, Students.

    Accordingly, 7 CFR part 273 is proposed to be amended as follows:
    1. The authority citation of part 273 continues to read as follows:

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

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    2. In Sec. 273.21, a new paragraph (t) is added to read as follows:


Sec. 273.21  Monthly Reporting and Retrospective Budgeting (MRRB).

* * * * *
    (t) Monthly reporting requirements for households residing on 
reservations. The following procedures shall be used for households 
which reside on reservations and are required to submit monthly 
reports:
    (1) For purposes of this section, the term ``reservation'' shall 
mean the geographically defined area or areas over which a tribal 
organization exercises governmental jurisdiction. The 
[[Page 29771]] term ``tribal organization'' shall mean the recognized 
governing body of an Indian tribe (including the tribally recognized 
intertribal organization of such tribes), as well as any Indian tribe, 
band, or community holding a treaty with a State government.
    (2) Certification periods. Any household residing on a reservation 
that is required to submit a monthly report shall be certified for two 
(2) years.
    (i) A State agency may request a waiver from FCS to allow it to 
establish certification periods of less than two (2) years if it is 
able to justify the need for the shorter periods. Any request for a 
waiver shall include input from the affected Indian tribal 
organization(s) and quality control error rate information for the 
affected households.
    (ii) The State agency may opt to continue the two-year 
certification period for any household that moves off the reservation. 
If the State agency adopts this option and the household is still 
living off the reservation at the time it is subject to required 
recertification, the household shall be subject to the certification 
period requirements in Sec. 273.10(f)(4). If the State agency does not 
adopt this option, any household that moves off the reservation shall 
have its certification period shortened. A household continuing to be 
subject to monthly reporting shall not have its certification period 
shortened to less than six months. A household becoming subject to 
change reporting shall not have its certification period end any 
earlier than the month following the month in which the State agency 
determines that the certification period shall be shortened.
    (3) Missing and incomplete reports. The State agency shall take the 
following actions when a household residing on a reservation fails to 
submit a monthly report or complete a monthly report the State agency 
has indicated is incomplete:
    (i) Failure to submit a monthly report by the issuance date. If a 
household does not submit its monthly report by the issuance date, the 
State agency shall provide the household with the same issuance that 
the household received the previous month. This issuance must be 
provided to the household on the household's normal issuance date. If 
the household's monthly report is received prior to the issuance date, 
but too late to be processed without delaying the household's issuance, 
the household shall be provided its issuance on the normal issuance 
date.
    (ii) Failure to submit a complete monthly report by the issuance 
date. If a household does submit its monthly report prior to the 
issuance date, but that report is incomplete, the State agency shall 
attempt to have the household complete the report prior to the normal 
issuance date, in accordance with the procedures in paragraph (j) of 
this section. If the report cannot be completed by the normal issuance 
date, the State agency shall provide the household its issuance on the 
normal issuance date.
    (iii) Failure to submit two consecutive monthly reports or to 
complete two consecutive monthly reports. If a household failed to 
submit a monthly report or submitted an incomplete monthly report that 
was never completed and then fails to submit the next consecutive 
monthly report or submits an incomplete report that is not completed by 
the issuance date, the household shall be terminated in accordance with 
the provisions in paragraph (m) of this section. The household shall 
not be terminated if it fails to ever submit or complete the first 
missing monthly report but does submit a completed report for the 
following month.
    (4) Benefit determination. If a household's report is not completed 
by the issuance date, the State agency shall issue the household's 
benefits based on the previously submitted report without regard to any 
changes in the household's circumstances that were not completed or 
verified. The State agency shall adjust the benefits issued if there is 
any information on the incomplete report that can be used as submitted.
    (5) Reinstatement. If a household is terminated for failing to 
submit or to complete a monthly report, the household shall be 
reinstated without being required to submit a new application if a 
monthly report is submitted no later than the last day of the month 
following the month the household was terminated.
    (6) Notices.
    (i) All notices regarding changes in a household's benefits shall 
meet the definition of adequate notice as defined in Sec. 271.2 of this 
chapter.
    (ii) If a household fails to file a monthly report, or files an 
incomplete report, by the specified filing date, the State agency shall 
notify the household within five days of the filing date:
    (A) That the monthly report is either overdue or incomplete;
    (B) What the household must do to complete the form;
    (C) If any verification is missing;
    (D) That the Social Security number of a new member must be 
reported, if the household has reported a new member but not the new 
member's Social Security number;
    (E) What the extended filing date is;
    (F) That the State agency will assist the household in completing 
the report; and
    (G) That the household's benefits will be issued based on the 
previous month's submitted report without regard to any changes in the 
household's circumstances if the missing report is not submitted or if 
incomplete or unverified information on the incomplete report is not 
completed or verified as required.
    (iii) Simultaneously with the issuance, the State agency shall 
notify a household, if its report has not been received or if it is 
incomplete, that the benefits being provided are based on the previous 
month's submitted report and that this benefit does not reflect any 
changes in the household's circumstances. This notice shall also advise 
the household that, if a complete report is not filed timely, the 
household will be terminated.
    (iv) If the household is terminated, the State agency shall send 
the notice so the household receives it no later than the date benefits 
would have been received. This notice shall advise the household of its 
right to reinstatement if a complete monthly report is submitted by the 
end of the month following termination.
    (7) Supplements and claims. If the household submits or completes a 
monthly report after the issuance date but in the issuance month, the 
State agency shall provide the household with a supplement if 
warranted. If the household submits or completes a monthly report after 
the issuance date or the State agency becomes aware of a change that 
would have decreased benefits in some other manner, the State agency 
shall file a claim for any benefits overissued.

    Dated: May 26, 1995.
William E. Ludwig,
Administrator, Food and Consumer Service.
[FR Doc. 95-13723 Filed 6-5-95; 8:45 am]
BILLING CODE 3410-30-U