[Federal Register Volume 60, Number 152 (Tuesday, August 8, 1995)]
[Proposed Rules]
[Pages 40311-40313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19525]



 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 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.
 
 ========================================================================
 

  Federal Register / Vol. 60, No. 152 / Tuesday, August 8, 1995 / 
Proposed Rules  


[[Page 40311]]


DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Part 273

[Amendment No. 369]
RIN: 0584-AC08


Food Stamp Program: Failure to Comply With Federal, State, or 
Local Welfare Assistance Program Requirements

AGENCY: Food and Consumer Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This action proposes to amend Food Stamp Program regulations 
to prohibit an increase in food stamp benefits when a household's 
Federal, State or local welfare assistance payment decreases as a 
result of a penalty for failure to comply with a Federal, State or 
local welfare program requirement. The revision is necessary to more 
fully implement congressional intent that the Food Stamp Program should 
reinforce, not mitigate, another program's penalties.

DATES: Comments must be received on or before September 22, 1995, to be 
assured of consideration.

ADDRESSES: Comments should be submitted to Margaret Thiel, Acting 
Supervisor, Eligibility and Certification Regulation Section, 
Certification Policy Branch, Program Development Division, Food Stamp 
Program, Food and Consumer Service, USDA, 3101 Park Center Drive, 
Alexandria, Virginia, 22302. Comments may also be datafaxed to the 
attention of Mrs. Thiel at (703) 305-2454. All written comments will be 
open to public inspection at the offices 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 
720.

FOR FURTHER INFORMATION CONTACT: Questions regarding the proposed 
rulemaking should be addressed to Mrs. 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 significant for 
purposes of Executive Order 12866, and therefore, has been reviewed by 
the Office of Management and Budget.

Executive Order 12778

    This proposed 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 that 
conflict with its provisions or that 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 
non-Quality Control liabilities) or Part 283 (for rules related to 
Quality Control liabilities); (3) for program retailers and 
wholesalers--administrative procedures issued pursuant to 7 U.S.C. 2023 
set out at 7 CFR 278.8.

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 and related Notice(s) to 7 CFR 3105, subpart V (48 FR 29115, June 
24, 1983; or 48 FR 54317, December 1, 1983, as appropriate), 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 rule 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). William E. Ludwig, Administrator of 
the Food and Consumer Service (FCS), has certified that this proposal 
would not have a significant economic impact on a substantial number of 
small entities. The changes would affect food stamp applicants and 
recipients who intentionally fail to comply with other Federal, State 
or local welfare assistance program requirements. The proposal would 
also affect State and local welfare agencies which administer the Food 
Stamp Program. State welfare agencies are reimbursed at a 50/50 
matching rate for Food Stamp Program administrative costs.

Paperwork Reduction Act

    This proposed 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).

Background

    The Food Stamp Act Amendments of 1982 (Pub. L. 97-2253, Subtitle E, 
Sec. 164, Sept. 8, 1982) amended the Food Stamp Act of 1977, as 
amended, (Act) to add a new provision (Section 8(d)) which prohibits 
increases in food stamp benefits which are due to decreases in 
household income resulting from a penalty levied by a Federal, State, 
or local welfare assistance program for intentional failure to comply 
with the other program's requirements. 7 U.S.C. 2017(d). As currently 
written in the Food Stamp Program regulations at 7 CFR 273.11(k), the 
prohibition only applies to penalty situations in which overissued 
benefits resulting from such intentional noncompliance are being 
recouped from the household's public assistance benefits which would 
otherwise result in a reduction in countable income for Food Stamp 
Program purposes.
    The Department is proposing to expand the current regulations to 
include all situations in which a decrease in public assistance income 
occurs as a result of a penalty being imposed for intentional failure 
to comply with a Federal, State, or local welfare program requirement. 
This proposal stems from several incidents in recent years when States, 
working with the Department in developing welfare reform proposals, 
have asked that we not allow food stamp benefits to rise 

[[Page 40312]]
when work sanctions are imposed on recipients of other benefits for 
failure to comply with work requirements. Also, any other sanctions for 
an intentional failure to comply with welfare program requirements 
could not be used to allow food stamp benefits to rise.
    When a recipient of the Aid to Families with Dependent Children 
(AFDC) Program, for example, fails to comply with a Jobs Opportunity 
and Basic Skills (JOBS) program requirement, the assistance unit is 
sanctioned by excluding the individual's needs in determining the 
unit's need for AFDC benefits and the amount of the payment. Unless the 
JOBS requirement is ``comparable'' to a Food Stamp Employment and 
Training (E&T) requirement, the household's food stamp allotment will 
increase as a result of the decrease in income it sustains because of 
the JOBS sanction. Raising the food stamp benefit level lessens the 
impact of the penalty imposed by AFDC. If a comparable E&T requirement 
exists, failure to comply with JOBS is treated the same as if the 
individual failed to comply with an E&T requirement, and the individual 
(or household) is ineligible for food stamp benefits for 60 days.
    Because the Department does not have the authority to waive the 
current restrictive provision at 7 CFR 273.11(k), the Department has 
had to deny State requests to hold food stamp benefits constant when 
sanctioning a person for noncompliance with another program's 
requirements. The Department believes the current policy should be 
broadened to more fully reflect Congressional intent which indicates 
that the Food Stamp Program should reinforce, not mitigate, another 
program's penalties (Sen. Rpt. No. 97-504, July 26, 1982, p. 44).
    Accordingly, the Department proposes to amend 7 CFR 273.11(k) to 
provide that when a recipient's benefit under a Federal, State, or 
local means-tested welfare assistance program (such as but not limited 
to Supplemental Security Income, Aid to Families with Dependent 
Children, General Assistance) is decreased due to a penalty for 
intentional noncompliance with a requirement under such program, food 
stamp allotments will not increase as a result. This proposal more 
fully reflects the Food Stamp Amendments of 1982. A penalty for 
purposes of this provision is the amount by which a welfare assistance 
payment has been decreased. The Department intends that the term 
decrease for the purposes of this rule means a reduction, suspension or 
termination. The language of the Food Stamp Act specifically addresses 
a penalty which results in a decrease in income (termination or 
reduction of benefits) as a result of a penalty.
    It is important to note that some State welfare reform projects 
have policies that cause the benefits of other programs to be held 
constant even though changes in household circumstances occur that 
would otherwise cause a rise in benefits. The Department is clarifying 
in this proposed rulemaking that situations which result in a freeze on 
the other program's current benefit level do not constitute a penalty 
subject to the provisions of this proposal. Also, changes in household 
circumstances which are not related to the penalty and result in an 
increase in food stamp benefits shall likewise not be affected by the 
provisions of this paragraph. For example, a household may be receiving 
a reduced level of general assistance benefits for a 6-month period as 
the result of a penalty imposed because one of its members refused to 
comply with a work requirement of that program. The household's food 
stamp benefits would not go up as a result of the decreased benefits. 
However, if during the 6-month period another member of the household 
suffered a reduction in nonassistance income, the food stamp benefits 
could go up even though the penalty was still in effect. This is 
because the factors resulting in the increase in food stamp benefits 
were unrelated to the penalty.
    This proposal does not imply that Food Stamp Program administrators 
take a role in determining whether an individual's failure to comply 
with another programs' requirements was intentional or not. That 
determination is left to those responsible for administering those 
other programs. Under this proposal, Food Stamp Program administrators 
would only determine if a decrease in public assistance benefits is the 
result of a penalty being levied for intentional noncompliance. If so, 
Food Stamp Program eligibility workers would calculate food stamp 
benefits in such situations by using the assistance payment which would 
have been issued by the other assistance program if no penalty had been 
imposed for the violation.

Implementation

    The provisions of this rulemaking are proposed to be effective and 
to be implemented by State welfare agencies on the first day of the 
month following 120 days from the publication date of the final rule.
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:

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    1. The authority citation of part 273 continues to read as follows:

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

    2. In Sec. 273.11, paragraph (k) is revised to read as follows:


Sec. 273.11  Action on households with special circumstances.

* * * * *
    (k) Failure to comply with another assistance program's 
requirements. The State agency shall ensure that there is no increase 
in food stamp benefits to a household as the result of a penalty 
imposed for intentional failure to comply with a Federal, State, or 
local means-tested welfare program which distributes publicly funded 
benefits. When a recipient's current benefit level under a Federal, 
State, or local means-tested welfare assistance program (such as but 
not limited to SSI, AFDC, GA) is decreased (by reduction, suspension or 
termination) due to a penalty for intentional noncompliance with a 
requirement under such program, the State agency shall identify that 
portion of the decrease which is the penalty. The penalty for purposes 
of this provision shall be that portion of the decrease attributed to 
the repayment of benefits overissued as a result of the household's 
intentional noncompliance or the amount by which the other program's 
benefits have been otherwise decreased as the result of the intentional 
noncompliance. The State agency shall calculate the food stamp benefits 
using the benefit amount which would be issued by that program if no 
penalty had been applied against the benefit amount. A situation which 
results in the benefits of the other program being frozen at the 
current level shall not constitute a penalty subject to the provisions 
of this paragraph. Changes in household circumstances which are not 
related to the penalty and result in an increase in food stamp benefits 
shall likewise not be affected by the provisions of this paragraph.


[[Page 40313]]

    Dated: August 2, 1995.
Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 95-19525 Filed 8-7-95; 8:45 am]
BILLING CODE 3410-30-U