[Federal Register Volume 61, Number 16 (Wednesday, January 24, 1996)]
[Proposed Rules]
[Pages 1849-1855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-887]



 ========================================================================
 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. 61, No. 16 / Wednesday, January 24, 1996 / 
Proposed Rules  

[[Page 1849]]


DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Parts 271, 272, 282, 284, and 285

[Amendment No. 371-2HT]
RIN 0584-AC14


Food Stamp Program, Regulatory Review: Alaska, the Commonwealth 
of the Northern Mariana Islands, PR, and Demonstration Projects

AGENCY: Food and Consumer Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This action proposes to amend Food Stamp Program rules 
affecting Alaska, the Commonwealth of the Northern Mariana Islands, 
Puerto Rico, and demonstration projects. This action is a result of a 
comprehensive, page-by-page review, of all existing Food Stamp Program 
regulations which was conducted in response to the President's efforts 
to reform the Federal regulatory system. The changes will eliminate 
prescriptive detailed processes and empower States to set their own 
procedures for case management and customer service; eliminate outdated 
and redundant regulatory requirements; and emphasize recipient 
responsibility for applying and reporting their circumstances properly.

DATES: Comments must be received on or before March 25, 1996 to be 
assured of consideration.

ADDRESSES: Comments should be submitted to Judith M. Seymour, Chief, 
Certification Policy Branch, Program Development Division, Food and 
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia 
22302. Comments may also be datafaxed to the attention of Ms. Seymour 
at (703) 305-2454. All written comments will be open for public 
inspection at the office of the Food and Consumer Service during 
regular business hours (8:30 a.m. to 5 p.m., Monday through Friday) at 
3101 Park Center Drive, Alexandria, Virginia, Room 720.

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

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866 and therefore was not 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 
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.

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 proposed 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 283 (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

    As part of his Regulatory Reform Initiative, the President 
instructed the heads of Executive departments and agencies in a March 
4, 1995 memorandum to, among other things, complete a page by page 
review of all agency regulations now in force and eliminate or revise 
those that are outdated or otherwise in need of reform. The review 
carefully considered the following issues:
    Is this regulation obsolete?
    Could its intended goal be achieved in more efficient, less 
intrusive ways?
    Are there better private sector alternatives, such as market 
mechanisms, that can better achieve the public good envisioned by the 
regulation?
    Could private business, setting its own standards and being subject 
to public accountability, do the job as well?
    Could the States or local governments do the job, making Federal 
regulation unnecessary?
    The Food and Consumer Service (FCS) has completed its review of all 
regulations governing the administration of the Food Stamp Program. 
Based on the findings of the review, FCS will be issuing several 
proposed rules designed to eliminate or substantially revise the 
regulations contained in 7 CFR Parts 271 through 285.
    In this rule, FCS is proposing to revise food stamp regulations 
affecting Alaska, Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, and demonstration projects. The revisions will streamline 
administration of the program, offer greater flexibility to State 

[[Page 1850]]
agencies in enacting policy, and improve customer service.

Alaska--7 CFR 272.7

    On November 4, 1980, the Department issued a final rule (45 FR 
73003) establishing regulations for operation of the Food Stamp Program 
in rural Alaska. Those regulations provided for exceptions to normal 
program regulations designed to accommodate the unique demographic and 
climatic characteristics found in rural Alaska and, at the same time, 
to ensure the efficiency and effectiveness of program operations. Those 
regulations, though amended in parts during the past 15 years, have 
remained essentially the same since their original implementation.
    As part of the President's Regulatory Review Initiative, the 
Department has reviewed the regulations for rural Alaska at 7 CFR 272.7 
and has determined that consistent with the requirements of the Food 
Stamp Act of 1977, 7 U.S.C. 2011, et seq., they can be revised to grant 
the State of Alaska greater flexibility in administering the program. 
The Department is proposing to combine and reorganize some paragraphs 
in 7 CFR 272.7, and delete others. The major revisions are discussed 
below.
    Current regulations at 7 CFR 272.7(a) explain the need for a 
separate section of regulations designed to accommodate the unique 
characteristics in rural Alaska. Current regulations at 7 CFR 272.7(b) 
explain that the regulations contained in 7 CFR 272.7, with the 
exception of the section dealing with treatment of resources, apply 
only to areas of Alaska designated as rural. Section 272.7(b) also 
lists the procedures the State agency must follow when designating 
areas in Alaska as rural.
    Current regulations at 7 CFR 272.7(c) define some of the terms that 
appear in the regulations for rural Alaska. The regulations define 
``fee agent'', ``Rural I Alaska'', ``Rural II Alaska'', ``Urban 
Alaska'', and ``State agency.''
    Current regulations at 7 CFR 272.7(d) provide an exception to the 
merit personnel requirement at 7 CFR 272.4(a)(2) to permit fee agents 
to conduct the certification interviews required by 7 CFR 273.2(e).
    In order to simplify the regulations, the Department is proposing 
to revise 7 CFR 272.7 (a), (b), (c) and (d) as follows. The 
requirements currently contained in 7 CFR 272.7 (a) and (b) will be 
combined into one section, designated 7 CFR 272.7(a). Revised 7 CFR 
272.2(b) will be retitled ``Area Designations'', and will contain the 
definitions of ``Rural I Alaska'', ``Rural II Alaska'', and ``Urban 
Alaska.'' It will also include the procedures for designating areas as 
rural that were formerly contained in 7 CFR 272.7(b). Those procedures, 
however, will be greatly modified. The current provisions at 7 CFR 
272.7(b) require the State agency to establish criteria for designating 
areas of the State as ``rural'', determine the areas that meet the 
rural criteria, and include both the criteria for designating rural 
areas and the designated areas in the Alaska State Plan of Operation as 
an addendum to the Program and Budget Summary Statement. As the 
regulations, however, already designate all areas in Alaska as either 
urban, rural I or rural II, the revised procedures will provide that 
the State agency, in consultation with FCS, may change the designation 
of any Alaska subdivision. In lieu of specific detailed criteria, the 
Department is proposing to allow the Alaska State agency to change the 
designation of subdivisions to reflect changes in demographics and the 
cost of food. Changes would be reflected in the State Plan of Operation 
and would also be published in the Federal Register, pursuant to the 
Administrative Procedure Act, 5 U.S.C. 553.
    The proposed regulations at 7 CFR 272.7(c) will address fee agents. 
The revised section would contain the definition of fee agent currently 
contained in 7 CFR 272.7(c).
    The Department is proposing to delete from the regulations the 
special definition of ``State agency'' currently provided at 7 CFR 
272.7(c). That definition was included in the regulations to highlight 
a distinction between the State agency and fee agents. However, the 
Department believes that the definition of fee agent as provided in 7 
CFR 272.7(c) already clearly implies that fee agents, although employed 
by the State agency, are not representatives of the State agency for 
application processing purposes.
    The Department is also proposing to delete the merit personnel 
requirement currently contained at 7 CFR 272.7(d). As provided in 7 CFR 
272.7(c), the definition of fee agent clearly provides that fee agents 
may conduct required certification interviews, and the Department does 
not believe that the statement needs to be restated. The Department is 
proposing, however, to amend the merit personnel requirements at 7 CFR 
272.4(a)(2) to provide for an exception to the use of State merit 
system personnel in the interview and certification process for 
households residing in rural Alaska.
    The Department is also proposing to delete the current provisions 
of 7 CFR 272.7(e), which require the State agency to institute a 
continuing training program for fee agents. It is in the State agency's 
own interest, for program accountability reasons, to ensure that all 
fee agents are adequately trained in program requirements and 
procedures. Therefore, the Department believes it is unnecessary to 
include a training requirement in the regulations.
    The Department is proposing a major revision to the regulations 
currently at 7 CFR 272.7(f), which address application processing 
requirements. The current regulations go into minute detail as to how 
applications are to be processed, depending on whether they are 
submitted to a fee agent, in person to the State agency, or by mail to 
the State agency. It also addresses expedited service processing 
requirements and Supplemental Security Income (SSI) joint processing 
requirements. The Department is proposing to remove all prescriptive 
requirements from the section and allow the State agency to modify the 
regular application processing requirements contained at 7 CFR 273.2 as 
needed to ensure prompt delivery of services to applicant households. 
The proposed regulations will retain, however, those requirements which 
the State agency cannot modify when processing an application because 
of Food Stamp Act requirements. Those requirements are: (1) that if the 
application is submitted to a fee agent, the fee agent shall mail the 
application to the State agency within 5 days of receipt of the 
application; (2) that an application is considered filed when it is 
received by an office of the State agency; (3) that eligible households 
shall be provided an opportunity to participate as soon as possible but 
no later than 30 days after the application is received by an office of 
the State agency; (4) that households eligible for expedited service 
who submit their application to a fee agent shall be issued benefits 
within two working days following the date the application is received 
by an office of the State agency, and that households eligible for 
expedited service who submit their completed applications to the State 
agency in person or by mail will be processed in accordance with 
standard expedited service timeframes contained in 7 CFR 273.2(i); and 
(5) that Social Security Administration (SSA) workers shall mail all 
jointly processed applications to the appropriate State agency office 
within 5 days of receipt of the application, and that the household, if 
determined eligible, shall receive benefits retroactive to the first 
day of the month in which the jointly processed 

[[Page 1851]]
application was received by the SSA worker. The proposed revised 
regulations would be contained at 7 CFR 272.7(d).
    The Department is also proposing a major revision to the 
regulations currently contained at 7 CFR 272.7(g), which address 
interview requirements. Current regulations require that the State 
agency or fee agent conduct a face-to-face interview with applicant 
households. If a face-to-face interview cannot be conducted for 
hardship reasons, then the State agency may interview the household by 
telephone or radiophone. If the household rejects, on privacy grounds, 
being interviewed by telephone or radiophone, the State agency may 
conduct the interview through private means of correspondence, such as 
written correspondence. The State agency also has the option of 
postponing the interview until after the household is certified in 
certain exceptional circumstances.
    In order to maximize State agency flexibility in administering the 
program, the Department is proposing to delete current interview 
requirements at 7 CFR 272.7(g) and instead simply require the State 
agency to interview applicant households in the most efficient manner 
possible, either by face-to-face contact, telephone, radiophone, or 
other means of correspondence including written correspondence. In 
instances in which an interview cannot be conducted before 
certification, the regulations will continue to grant the State agency 
the option to postpone the interview until after the household is 
certified. Since completing the interview is an integral part of 
application processing, the interview requirement will be included as 
paragraph (6) in the new application processing section at 7 CFR 
272.7(d) and not in its own section.
    In light of the proposals discussed above, current regulations at 7 
CFR 272.7(h), which address the determination of household eligibility 
and benefit levels, would be redesignated as 7 CFR 272.7(e), but would 
otherwise remain unchanged.
    Current regulations at 7 CFR 272.(i), which address resource 
requirements, will be redesignated as 7 CFR 272.2(f), but will 
otherwise remain unchanged.
    Current regulations at 7 CFR 272.7(j) address the household's 
responsibility for reporting changes. The regulations provide the 
household the option of reporting changes either directly to the State 
agency or to the fee agent, and then go on to describe in detail how 
fee agents are to process changes reported to them. The Department 
believes that it is unnecessary for Program regulations to delineate 
fee agent actions relating to handling reported changes and is 
therefore proposing to eliminate those provisions from the regulations. 
The revised regulations will retain, however, all the timeframes for 
processing changes currently contained in 7 CFR 272.7(j). The revised 
section will be redesignated as 7 CFR 272.7(g).
    The Department is proposing to delete the current regulations at 7 
CFR 272.7(k), which address timeframes for recertification. The 
regulations at 7 CFR 272.7(k) repeat the normal recertification 
timeframes contained at 7 CFR 273.14, and do not provide for any 
special exceptions for households residing in rural Alaska.
    Current regulations at 7 CFR 272.7(l) provide that if the State 
agency cannot conduct a personal conference with a household which 
wishes to contest its denial of expedited service within the two day 
timeframe specified in 7 CFR 273.15(d), it may conduct the conference 
by telephone or through other means of communication. Current 
regulations at 7 CFR 272.7(m) provide that the State agency may conduct 
fair hearings and administrative fraud hearings by telephone or other 
means of communication if the time standards contained at 7 CFR 273.15 
and 273.16 cannot be met through normal administrative procedures due 
to impediments such as weather conditions or distance.
    In order to maximize State agency flexibility in conducting 
required hearings and conferences, the Department is proposing to 
delete the current requirements at 7 CFR 272.7 (l) and (m). The 
Department will replace both sections with a single section that will 
apply to fair hearings, administrative fraud hearings, and agency 
conferences with households that wish to contest denial of expedited 
service. The new section, which will be designated 7 CFR 272.7(h), will 
require the State agency to conduct fair hearings, administrative fraud 
hearings, and agency conferences in the manner it deems most efficient, 
either by face-to-face contact, telephone, radiophone, or other means 
of correspondence including written correspondence, in order to meet 
the respective time standards contained in 7 CFR 273.15 and 273.16.
    Finally, the Department is proposing to revise current regulations 
at 7 CFR 272.7(n), which address issuance requirements. The Department 
is proposing to redesignate paragraph (n)(1) as 7 CFR 272.7(i), but 
otherwise leave the paragraph unchanged. The Department is also 
proposing to delete the current requirements contained at 7 CFR 
272.7(n) (2) and (3). Section 272.7(n)(2) allows the State agency to 
choose from a wide variety of issuance methods to fulfill the issuance 
service needs of the low income people in the State. Section 
272.7(n)(3) requires that the State agency assist households comprised 
of elderly or disabled members which have difficulty reaching an 
issuance office to obtain their monthly allotments. Neither provision 
represents a change from normal program operations as described in 7 
CFR 274.1 and 274.2. Therefore, the Department is proposing to delete 
both provisions.

Demonstration, Research, and Evaluation Projects--Part 282

    Current regulations at 7 CFR Part 282 cite the legislative 
authority for conducting demonstration, research, and evaluation 
projects, establish Federal financial participation requirements, and 
set forth various conditions under which the projects operate. Part 282 
also contains regulations published to establish the procedures for the 
operation of some previous demonstration projects.
    It is the Department's belief that, aside from 7 CFR 282.1 and 
282.6, which deal with statutory authority and financial participation 
and 282.5(a) which provides for public notice procedures for 
demonstration projects, the regulations contained in this section are 
duplicative, superfluous, or obsolete.
    Sections 282.2, 3, 4, and 5(c) contain general information and 
procedures which are repeated in much greater detail in the Notices of 
Intent published by the Department when it undertakes demonstration, 
research or evaluation projects.
    Sections 282.10 through 14 and sections 282.16 through 19 comprise 
the regulations published concerning past demonstrations (sections 
282.7, 8, 9, and 15 were reserved). Each of the demonstrations have 
been terminated or are permanent operational programs.
    The Department, therefore, is proposing to revise Part 282 by (1) 
combining the requirements currently contained at 7 CFR 282.1, 282.5 
(a) and (b) and 282.6 into one new section 7 CFR 282.1, which will 
address the Secretary's legislative authority to conduct demonstration, 
research, and evaluation projects and Federal financial participation 
in such projects, and (2) deleting the remainder of Part 282.

The Commonwealth of the Northern Mariana Islands--Part 284

    This rule proposes to remove and reserve Part 284 of the Food Stamp 


[[Page 1852]]
Program regulations--Provision of a Nutrition Assistance Program for 
the Commonwealth of the Northern Mariana Islands (CNMI)--and to remove 
the Northern Mariana Islands from the definition of ``State'' in 7 CFR 
271.2 of the regulations. The Nutrition Assistance Program which has 
been operating in the CNMI since 1982 is governed by a Memorandum of 
Understanding (MOU), the terms of which are renegotiated annually by 
the Department and the CNMI. The regulations in Part 284 are 
unnecessary for the continued operation of CNMI Nutrition Assistance 
Program. For example, a similar program operates in American Samoa 
without regulations; it is simply governed by an MOU. The Department's 
proposal to eliminate Part 284 should not be construed as an intent to 
modify the current CNMI Nutrition Assistance Program.

Puerto Rico--Part 285

    On July 27, 1982, the Department published a final rule at 47 FR 
32409 to implement Title I, Section 116(a) of the 1981 Omnibus Budget 
Reconciliation Act (Pub. L. 97-35, 95 Stat. 357), 7 U.S.C. Sec. 2028. 
This section converted the Federal Food Stamp Program in the 
Commonwealth of Puerto Rico to a capped nutrition assistance block 
grant effective July 1, 1982. The original implementing regulations set 
forth in Part 285 at that time have been amended four times during 
their existence. On April 19, 1983 a rule was published at 48 FR 16831 
pertaining to the termination of the Food Stamp Program in Puerto Rico. 
On May 27, 1983 a rule was published at 48 FR 23804 which prohibited 
the Commonwealth from using a cash benefit delivery system and 
restricted the amount of cash change which could be returned to a 
nutrition assistance recipient in the Commonwealth to 99 cents under 
any non-cash benefit delivery system Puerto Rico would implement. On 
December 21, 1984 a rule was published at 49 FR 49581 which permitted 
the Commonwealth to operate a cash rather than a coupon benefit 
delivery system for use in its block grant program. Finally, on May 21, 
1986 a rule was published at 51 FR 18744 which permitted Puerto Rico to 
designate more than one agency to administer or supervise the 
administration of the food assistance program in the Commonwealth. Some 
of these amendments, together with portions of the original 
implementing regulations, are no longer applicable to the program as it 
currently operates in the Commonwealth. Other portions of Part 285, as 
currently written, are superfluous and no longer required for the 
efficient administration and operation of the block grant program in 
Puerto Rico. As a result, the Department proposes to amend Part 285 to 
effect the following changes.

Plan of Operation--7 CFR 285.3

    The second sentence of paragraph (a) specifies that the submittal 
date for the initial plan of operation for fiscal years 1982 and 1983 
is to be no later than April 1, 1982. Additionally, subparagraph 
(b)(3)(iii) permits Puerto Rico to provide recipients with cash change 
in amounts of 99 cents or less if change in an amount of less than $1 
is required. Since the 1982 and 1983 plans of operation were submitted 
many years ago, and Puerto Rico no longer operates a coupon delivery 
system to distribute its block grant benefits, both of these provisions 
are no longer applicable to the Commonwealth's nutrition assistance 
program and the Department proposes to delete them from this section.
    The Department also proposes to incorporate the provisions of 
section 285.4 into this section. Both sections deal with Puerto Rico's 
state plan of operation and the Department believes that both sections 
should be consolidated into one for ease of reference.

Approval--7 CFR 285.4

    The first sentence of paragraph (a) states that FCS shall approve 
or disapprove the initial plan of operation for fiscal year 1982 and 
1983 no later than 30 days from the date the Commonwealth of Puerto 
Rico submits such plan. This approval process was completed many years 
ago and the sentence is no longer applicable to program operations. The 
Department, therefore, proposes to delete this provision and combine 
the remainder of the section with section 285.3 as both of these 
sections deal in various ways with the submission and approval of the 
Commonwealth's plan of operation for its nutrition assistance program.

Records and Reports--7 CFR 285.5

    This section provides that the Commonwealth of Puerto Rico shall 
follow procedures, and maintain and submit to FCS such records and 
reports, as agreed upon by the Commonwealth of Puerto Rico and FCS for 
the nutrition assistance program as outlined in the plan of operation. 
Procedures for the submission of required reports and their content as 
well as for the retention of program records have been in place since 
inception of the block grant and are generally outlined in annual state 
plans of operation submitted by the Commonwealth. The Department, 
therefore, believes that this section is no longer necessary for 
efficient program operations and proposes to delete it in its entirety.

Review--7 CFR 285.8

    This section provides that FCS shall provide for the review of the 
programs for provision of nutrition assistance under the block grant. 
FCS has been reviewing Puerto Rico's nutrition assistance program on an 
agreed upon and periodic basis since its inception in 1982. Since this 
procedure is a well established one to which both parties agree, the 
Department believes this section is no longer required and should be 
deleted in its entirety.

Technical Assistance--7 CFR 285.9

    This section provides that FCS may provide technical assistance to 
the Commonwealth of Puerto Rico to assist in various aspects of the 
implementation and operation of its nutrition assistance program. This 
assistance has been an integral part of FCS's efforts to cooperate with 
the Commonwealth in ensuring the success of its block grant program 
since its inception in 1982. Since this assistance is an ongoing and 
well recognized facet of the relationship between Puerto Rico and FCS, 
the Department believes that this section is no longer required and 
should be deleted in its entirety.

Termination of the Food Stamp Program in the Commonwealth of Puerto 
Rico--7 CFR 285.10

    This section contains a number of provisions pertaining to the 
cessation of Food Stamp Program operations in the Commonwealth. Since 
the Food Stamp Program ceased operation in Puerto Rico as of July 1, 
1982 and the block grant nutrition assistance program was implemented 
in its place at that time, this section is no longer applicable to 
current program operations. The Department is, therefore, proposing 
that the section be deleted in its entirety.

Implementation

    The Department is proposing that the provisions of this rulemaking 
be effective no later than 30 days after publication of the final rule. 
State agencies may implement the provisions any time after that date.

List of Subjects

7 CFR Part 271

    Administrative practice and procedure, Food stamps, Grant programs-
social programs. 

[[Page 1853]]


7 CFR Part 272

    Alaska, Civil Rights, Food stamps, Grant programs--social programs, 
Reporting and recordkeeping requirements.

7 CFR Part 282

    Food stamps, Governmental contracts, Grant programs--social 
programs, Research.

7 CFR Part 284

    Administrative practice and procedure, Food assistance programs, 
Grant programs--social programs, Health, Nutrition.

7 CFR Part 285

    Accounting, Food assistance programs, Grant programs--agricultural, 
Grant programs--social programs, Intergovernmental relations, Puerto 
Rico, Technical assistance, Reporting and recordkeeping requirements.

    Accordingly, 7 CFR parts 271, 272, 282, 284, and 285 are proposed 
to be amended as follows:

PART 271--GENERAL INFORMATION AND DEFINITIONS

    1. The authority citations for 7 CFR parts 271, 272, 282, 284, and 
285 continue to read as follows:

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


Sec. 271.2  [Amended]

    2. In Sec. 271.2, the definition of ``State'' is amended by 
removing the words ``the Northern Mariana Islands,''.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES


Sec. 272.4  [Amended]

    3. In Sec. 272.4, the third sentence of paragraph (a)(2) is amended 
by adding the words, ``, Sec. 272.7(d) for households residing in rural 
Alaska,'' before the words ``and Part 280 for disaster victims.''
    4. Sec. 272.7 is revised to read as follows:


Sec. 272.7  Procedures for program administration in Alaska.

    (a) Purpose. To achieve the efficient and effective administration 
of the Food Stamp Program in rural areas of Alaska, FCS has determined 
that it is necessary to develop additional regulations which are 
specifically designed to accommodate the unique demographic and 
climatic characteristics which exist in these rural areas. The 
regulations established in this section, except for paragraph (f) of 
this section, shall apply only in those areas of Alaska designated as 
``rural'' in paragraph (b) of this section. All regulations not 
specifically modified by this section shall remain in effect.
    (b) Area designations. (1) Rural I Alaska TFP refers to a Thrifty 
Food Plan (TFP) that is the higher of the TFP that was in effect in 
each area on October 1, 1985, or 28.52 percent higher than the 
Anchorage TFP, as calculated by FCS, with rounding and other reductions 
that are appropriate. It is to be used in the following areas: In all 
places in Kodiak Island Borough with the exception of Kodiak; in all 
places in the Kenai Peninsula Borough that are west of Cook Inlet 
(including Tyonek, Kustatan, Kalgin Island, Iliamna, Chenik, and 
Augustine Island) and Chugach Island, English Bay, Port Graham, 
Portlock, Pt. Gore, Pye Island, and Seldovia. In the Yukon-Koyukuk 
Census Area, the city of Nenana; and Skwentna in the Matanuska-Susitna 
Borough. In the Valdez-Cordova Census Area, all places except Dayville 
and Valdez; and in the Southeast Fairbanks Census Area all places 
except Big Delta, Delta Junction, and Fort Greely. In the Skagway-
Yakutat-Angoon Census Area, all places except Skagway; in Sitka Borough 
all places except Sitka; in the Wrangell-Petersburg Census Area, all 
places except Wrangell and Petersburg; in the Ketchikan Gateway 
Borough, all places except Ketchikan, Saxman, and Ward Cove; in the 
Prince of Wales-Outer Ketchikan Census Area, all places except Craig, 
Hyder, and Metlakatla.
    (2) Rural II Alaska TFP refers to a TFP that is 56.42 percent 
higher than the Anchorage TFP, as calculated by FCS, with rounding and 
other reductions that are appropriate. It is to be used in the 
following areas: North Slope Borough; Kobuk Census Area; Nome Census 
Area; Yukon-Koyukuk Census Area except for the city of Nenana; Wade 
Hampton Census Area; Bethel Census Area; Denali in the Matanuska-
Susitna Borough; Dillingham-Bristol Bay Borough; and in all places in 
the Aleutian Islands except for Cold Bay and Adak.
    (3) Urban Alaska TFP refers to a TFP that is the higher of the TFP 
that was in effect in each area on October 1, 1985, or .79 percent 
higher than the Anchorage TFP, as calculated by FCS, with rounding and 
other reductions that are appropriate. It is to be used in the 
following areas: Cold Bay and Adak in the Aleutian Islands; Kodiak in 
Kodiak Island Borough; Valdez and Dayville in the Valdez-Cordova Census 
Area; all places in Kenai Peninsula Borough that are on the Kenai 
Peninsula except for those specifically designated as Rural I; the 
entire Anchorage Borough; the entire Matanuska-Susitna Borough except 
for Denali and Skwentna; the entire Fairbanks-North Star Borough; the 
entire Juneau Borough; the entire Haines Borough; Sitka in the Sitka 
Borough; Skagway in the Skagway-Yakutat-Angoon Census Area; Wrangell 
and Petersburg in the Wrangell-Petersburg Census Area; Ketchikan, 
Saxman, and Ward Cove in the Ketchikan-Gateway Borough; Craig, Hyder, 
and Metlakatla in the Prince of Wales-Outer Ketchikan Census Area; and 
Big Delta, Delta Junction, and Fort Greely in the Southeast-Fairbanks 
Census Area.
    (4) The State agency may, in consultation with FCS, change the 
designation of any Alaska subdivision to reflect changes in 
demographics or the cost of food within the subdivision.
    (c) Fee agents. ``Fee agent'' means a paid agent who, on behalf of 
the State, is authorized to make applications available to low-income 
households, assist in the completion of applications, conduct required 
interviews, secure required verification, forward completed 
applications and supporting documentation to the State agency, and 
provide other services as required by the State agency. Such services 
shall not include making final decisions on household eligibility or 
benefit levels.
    (d) Application processing. The State agency may modify the 
application processing requirements in Sec. 273.2 of this chapter as 
necessary to insure prompt delivery of services to eligible households. 
The following restrictions apply:
    (1) Fee agent processing. If the signed application is first 
submitted by a household to a fee agent, the fee agent shall mail the 
application to the State agency within 5 days of receipt. The fee agent 
shall give the household the maximum amount of time to provide needed 
verification as long as the five-day processing period is met.
    (2) Application filing date. An application is considered filed for 
purposes of timely processing when it is received by an office of the 
State agency.
    (3) Application processing timeframes. Eligible households must be 
provided an opportunity to participate as soon as possible but no later 
than 30 days after the application is received by an office of the 
State agency.
    (4) Expedited service.
    (i) If the signed application is first submitted by a household to 
a fee agent, the fee agent shall mail the application to the State 
agency within 5 days of receipt. If the household is eligible for 
expedited service, the State agency will mail the coupons no later than 
the close of business of the second working day following the date the 
application was received by the State agency. 

[[Page 1854]]

    (ii) If the signed application is submitted directly to the State 
agency in person by a rural resident or its authorized representative 
or by mail, the State agency shall process the application and issue 
coupons to households eligible for expedited service in accordance with 
the time standards contained in Sec. 273.2(i)(3) of this chapter.
    (iii) If an incomplete application is submitted directly to the 
State agency by mail, the State agency shall conduct the interview by 
the first working day following the date the application was received 
if the fee agent can contact the household or the household can be 
reached by telephone or radio-phone and does not object to this method 
of interviewing on grounds of privacy. Based on information obtained 
during the interview, the State agency shall complete the application 
and process the case. Because of the mailing time in rural areas, the 
State agency shall not return the completed application to the 
household for signature. The processing standard shall be calculated 
from the date the application was filed.
    (5) SSI joint processing. SSA workers shall mail all jointly 
processed applications to the appropriate State agency office within 5 
days of receipt of the application. A jointly processed application 
shall be considered filed for purposes of timely processing when it is 
received by an office of the State agency. The household, if determined 
eligible, shall receive benefits retroactive to the first day of the 
month in which the jointly processed application was received by the 
SSA worker.
    (6) Interviews. The State agency shall interview applicant 
households in the most efficient manner possible, either by face-to-
face contact, telephone, radiophone, or other means of correspondence 
including written correspondence. In instances in which an interview 
cannot be conducted, the State agency may postpone the interview until 
after the household is certified.
    (e) Determining household eligibility and benefit level. If a 
household submits its application to a fee agent, it shall, if 
eligible, receive benefits retroactive to the date the application is 
received by the fee agent. If a household submits its application 
directly to a State agency office, it shall, if determined eligible, 
receive benefits retroactive to the date the application is received by 
the State agency.
    (f) Resources. In areas of the State where there are no licensing 
requirements, snowmobiles and boats used by the household for basic 
transportation shall be evaluated in accordance with Sec. 273.8(h) of 
this chapter even though they are unlicensed. Vehicles necessary for 
subsistence hunting and fishing shall not be counted as a household 
resource.
    (g) Reporting changes. The State agency shall allow the household 
to choose to report changes either directly to the State agency or to 
the fee agent. If the household reports the change to the fee agent, 
the fee agent will mail the change report to the State agency office 
within two working days of the date of receipt. The household's 
obligation to report the change will have been met if it submits the 
change to the fee agent within 10 days of the date the change becomes 
known to the household. However, for purposes of State agency action 
for increasing or decreasing benefits, the change will be considered to 
have been reported when it is received by a State agency office.
    (h) Fair hearings, fraud hearings, and agency conferences. The 
State agency shall conduct fair hearings, administrative fraud 
hearings, and agency conferences with households that wish to contest 
denial of expedited service in the most efficient manner possible, 
either by face-to-face contact, telephone, radiophone, or other means 
of correspondence including written correspondence, in order to meet 
the respective time standards contained in Sec. 273.15 and Sec. 273.16 
of this chapter.
    (i) Issuance services. With the approval of FCS, coupons may be 
mailed on a quarterly or semiannual basis to certain rural areas of 
Alaska when provisions are not available on a monthly basis. The 
decision to allow the distribution of coupons in this manner will be 
made on an annual basis. These areas shall be listed in the State's 
Plan of Operation. The State agency shall advise households that live 
in rural areas where quarterly or semiannual allotments are authorized. 
If, as the result of the issuance of quarterly or semiannual 
allotments, food coupons are overissued or underissued, the State 
agency shall process claim determinations and restore lost benefits.

PART 282--DEMONSTRATION, RESEARCH, AND EVALUATION PROJECTS

    5. Sec. 282.1 is revised to read as follows:


Sec. 282.1  Legislative authority and notice requirements.

    (a) Legislative Authority. Section 17 of the Act authorizes the 
Secretary to conduct demonstration, research, and evaluation projects. 
In conducting such projects, the Secretary may waive all or part of the 
requirements of the Act and implementing regulations necessary to 
conduct such projects, except that no project, other than a project 
involving the payment of the average value of allotments by household 
size in the form of cash to eligible households or a project conducted 
to test improved consistency or coordination between the food stamp 
employment and training program and the Job Opportunities and Basic 
Skills program under Title IV of the Social Security Act, may be 
undertaken which would lower or further restrict the established income 
and resource standards or benefit levels.
    (b) Notices. At least 30 days prior to the initiation of a 
demonstration project, FCS shall publish a General Notice in the 
Federal Register if the demonstration project will likely have a 
significant impact on the public. The notice shall set forth the 
specific operational procedures and shall explain the basis and purpose 
of the demonstration project. If significant comments are received in 
response to this General Notice, the Department will take such action 
as may be appropriate prior to implementing the project. If the 
operational procedures contained in the General Notice described above 
are significantly changed because of comments, an amended General 
Notice will be published in the Federal Register at least 30 days prior 
to the initiation of the demonstration project, except where good cause 
exists supporting a shorter effective date. The explanation for the 
determination of good cause will be published with the amended General 
Notice. The amended General notice will also explain the basis and 
purpose of the change.


Secs. 282.2-282.19  [Removed]

    6. Secs. 282.2 through 282.19 are removed.
    7. A new Sec. 282.2 is added to read as follows:


Sec. 282.2  Funding.

    Federal financial participation may be made available to 
demonstration, research, and evaluation projects awarded by FCS through 
grants and contracts. Funds may not be transferred from one project to 
another. FCS will pay all costs incurred during the project, up to the 
level established in the grant, or in the terms and conditions of the 
contract. FCS may grant time extensions of the project upon approval. 
Funding for additional costs is subject to existing Federal grant and 
contract procedures.

PART 284--[REMOVED AND RESERVED]

    8. Part 284 is removed and reserved.
    
[[Page 1855]]


PART 285--PROVISION OF A NUTRITION ASSISTANCE GRANT FOR THE 
COMMONWEALTH OF PUERTO RICO


Sec. 285.2  [Amended]

    9. In Sec. 285.2, the first sentence of paragraph (b) is amended by 
removing the citations ``Secs. 285.4 and 285.7 in this part'' and 
adding ``Secs. 285.3 and 285.5'' in their place.
    10. In Sec. 285.3:
    a. The second sentence of paragraph (a) is removed.
    b. The third sentence of paragraph (a) is amended by removing the 
word ``subsequent''.
    c. Paragraph (b)(3)(iii) is removed.
    d. New paragraphs (d), (e), (f), (g), and (h) are added.
    The additions read as follows:


Sec. 285.3  Plan of operation.

* * * * *
    (d) FCS shall approve or disapprove any plan of operation no later 
than August 1 of the year of its submission. FCS approval of the plan 
of operation shall be based on an assessment that the nutrition 
assistance program, as defined in the plan of operation, is:
    (1) Sufficient to permit analysis and review;
    (2) Reasonably targeted to the most needy persons as defined in the 
plan of operation;
    (3) Supported by an assessment of the food and nutrition needs of 
needy persons;
    (4) Reasonable in terms of the funds requested;
    (5) Structured to include safeguards to prevent fraud, waste, and 
abuse in the use of grant funds; and
    (6) Consistent with all applicable Federal laws.
    (e) FCS shall approve or disapprove any amendments to those 
provisions of the plan of operation specified in paragraph (b) of this 
section. If FCS fails either to approve or deny the amendment, or to 
request additional information within 30 days, the amendment to the 
plan of operation is approved. If additional information is requested, 
the Commonwealth of Puerto Rico shall provide this as soon as possible, 
and FCS shall approve or deny the amendment to the plan of operation. 
Payment schedules and other program operations may not be altered until 
an amendment to the plan of operation is approved. The Commonwealth of 
Puerto Rico shall, for informational purposes, submit to FCS any 
amendments to those provisions of the plan of operation not specified 
in paragraph (b) of this section. Such submittal shall be made at least 
30 days prior to the effective date of the amendment. If circumstances 
warrant a waiver of the 30-day requirement, the Commonwealth of Puerto 
Rico shall submit a waiver request to FCS for consideration. Should FCS 
determine that such an amendment relates to the provisions of paragraph 
(b) of this section, FCS approval as established in this paragraph will 
be necessary for the amendment to be implemented.
    (f) FCS may approve part of any plan of operation or amendment 
submitted by the Commonwealth of Puerto Rico contingent on appropriate 
action by the Commonwealth of Puerto Rico with respect to the problem 
areas in the plan of operation.
    (g) If all or part of the plan of operation is disapproved, FCS 
shall notify the appropriate agency in the Commonwealth of Puerto Rico 
of the problem area(s) in the plan of operation and the actions 
necessary to secure approval.
    (h) In accordance with the provisions of Sec. 285.5, funds may be 
withheld or denied when all or part of a plan of operation is 
disapproved.


Secs. 285.4-285.5  [Removed]

    11. Sec. 285.4 and Sec. 285.5 are removed.


Sec. 285.6  [Redesignated as Sec. 285.4]

    12. Sec. 285.6 is redesignated Sec. 285.4.


Sec. 285.7  [Amended]

    13. In Sec. 285.7:
    a. The section is redesignated 285.5.
    b. The first sentence of paragraph (a) is amended by removing the 
citation ``Sec. 285.6'' and adding ``Sec. 285.4'' in its place.
    c. The first sentence of paragraph (b) is amended by removing the 
citation ``Sec. 285.6'' and adding ``Sec. 285.4'' in its place.


Secs. 285.8-285.10  [Removed]

    14. Sec. 285.8 through Sec. 285.10 are removed.

    Dated: January 5, 1996.
Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 96-887 Filed 1-23-96; 8:45 am]
BILLING CODE 3410-30-U