[Federal Register Volume 61, Number 202 (Thursday, October 17, 1996)]
[Rules and Regulations]
[Pages 54303-54320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26069]


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DEPARTMENT OF AGRICULTURE
7 CFR Parts 272, 273, 278, and 279

[Amendment No. 364]
RIN 0584-AB60


Food Stamp Program: Simplification of Program Rules

AGENCY: Food and Consumer Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule finalizes provisions of a proposed rulemaking 
published on January 11, 1995. It amends Food Stamp Program rules 
relating to residency, social security numbers, combined allotments, 
excluded resources, contract income, self-employment expenses, 
certification periods, the notice of adverse action, recertification, 
and suspension. The amendments simplify regulatory requirements and 
increase State agency flexibility. The rule also makes several 
technical amendments to Food Stamp Program rules.

DATES: This final rule is effective November 18, 1996 and must be 
implemented no later than May 1, 1997, except the provisions of 7 CFR 
273.14(b)(2), which have been submitted to the Office of Management and 
Budget for approval under the Paperwork Reduction Act of 1995. The 
provisions of this section will become effective upon approval. FCS 
will publish a notice in the Federal Register announcing the effective 
date and implementation date.

FOR FURTHER INFORMATION CONTACT: Margaret Werts Batko, Assistant Branch 
Chief, Certification Policy Branch, Program Development Division, Food 
and Consumer Service, USDA, 3101 Park Center Drive, Alexandria, 
Virginia, 22302, (703) 305-2516.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget under Executive Order 12866.

Executive Order 12372

    The Food Stamp Program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.551. For the reasons set forth in the final 
rule in 7 CFR 3015, Subpart V and related Notice (48 FR 29115), this 
Program is excluded from the scope of Executive Order 12372 which 
requires intergovernmental consultation with State and local officials.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Ellen Haas, 
Under Secretary for Food, Nutrition, and Consumer Services, has 
certified that this proposed rule does 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 final rule contains information collection requirements 
subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The reporting and 
recordkeeping burden associated with the application, certification, 
and continued eligibility of food stamp applicants is approved under 
OMB No. 0584-0064. The burden for applications, including applications 
for recertification, is estimated to average .2290 hours per response.
    To determine the continued eligibility of food stamp recipients, 
State welfare agencies must recertify eligible households whose 
certification periods have expired, and households are required to 
submit a recertification form. Section 273.14(b)(2) of this rule 
authorizes State agencies to use a modified form of the application 
used for initial application.
    The amendments to 7 CFR 273.14(b)(2) made by this rule do not 
impose any new collection requirements. The methodology used to 
determine the current burden estimates for all applications assumes 
that some households will be recertified more often than other 
households. The methodology also assumes that every applicant will 
complete every line item on the application form; therefore, the burden 
is overestimated for some households and underestimated for others. 
Based on this methodology, we believe the current burden estimate 
sufficiently reflects the potential reduced burden resulting from use 
of a modified recertification form.
    Comments. Comments are invited on: (a) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used; (c) ways to enhance 
the quality, utility and clarity of the information to be collected; 
and (d) ways to minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. Comments may be 
sent to Department of Agriculture, Clearance Officer, OIRM, AG Box 
7630, Washington, DC 20250. Comments and recommendations on the 
proposed information collection must be received by December 16, 1996.

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.

Public Participation

    This rule contains technical amendments at 7 CFR 272.1(g)(74), 
273.2(f)(1), 273.4(a)(2), 273.4(a)(9), 273.4(a)(11), 273.20, 278.1(h), 
and 279.3 which were not part of the proposed rule published January 
11, 1995 and are unrelated to the provisions of the proposed rule. 
These amendments are being published without an opportunity

[[Page 54304]]

for public comment and will become effective 30 days following 
publication. The amendments are technical in nature and public comment 
would not be useful or necessary. Ellen Haas, Under Secretary for Food, 
Nutrition, and Consumer Services, has determined that, in accordance 
with 5 U.S.C. 553(b)(3)(B), good cause exists for publishing the 
technical amendments without taking public comment.

Background

    On January 11, 1995, the Department published a proposed rule at 60 
FR 2703 in which it proposed to revise Food Stamp Program regulations 
in response to State agency requests for waivers of Program 
requirements and suggestions for simplification of rules. In some 
cases, we proposed to amend the regulations to incorporate guidance we 
had already provided to State agencies. In other instances, we proposed 
to modify Program rules to provide more consistency with requirements 
in the Aid to Families with Dependent Children (AFDC) Program. Comments 
were solicited on the provisions of the proposed rule through March 13, 
1995, and a total of 26 comments were received. This final action 
addresses the commenters' concerns. Readers are referred to the 
proposed rule for a more complete understanding of this final action.

Combined allotments--7 CFR 273.2(i) and 274.2(b)

    In the January 11, 1995 rule, the Department proposed changes to 
the regulations on issuance of combined allotments. At the time the 
proposed rule was published, the regulations at 7 CFR 274.2(b)(3) 
provided that eligible households applying after the 15th of the month 
that qualify for expedited service would receive a combined allotment 
(prorated benefits for the application month and full benefits for the 
subsequent month) if they supplied all required verification within the 
5-day expedited service timeframe. If the household did not supply all 
required verification within the expedited service timeframe, the 
household received a prorated amount for the initial month issued 
within 5 days of application (with waived verification, if necessary, 
to meet the expedited timeframe) and a second allotment for the 
subsequent month issued after all necessary verification has been 
obtained. In the January 11, 1995 rule, the Department proposed to 
amend the regulations to require that if an eligible household applies 
for food stamps after the 15th of the month and is entitled to 
expedited service, it would receive the prorated initial month's 
allotment and the full allotment for the second month within the 
expedited timeframe. Additional verification requirements would be 
postponed until the end of the second month. The proposed amendments 
would bring the regulations into conformance with current food stamp 
policy on combined allotments, as announced in a June 16, 1993, policy 
memorandum issued to FCS regional Food Stamp Program directors.
    The Department also proposed to reorganize the regulations on 
combined allotments. At the time the proposed rule was published, the 
regulations on issuance of a combined allotment were contained at 7 CFR 
274.2(b)(2), (3), and (4). The Department proposed to move those 
combined allotment requirements out of 7 CFR 274.2(b) and into 7 CFR 
273.2(i)(4). In 7 CFR 274.2, the Department proposed to delete 
paragraphs (b)(2), (3), and (4), and redesignate paragraphs (b)(1), 
(c), (d), and (e) as paragraphs (b), (d), (e), and (f), respectively. 
The Department proposed to add two sentences to the end of redesignated 
paragraph (b) which would contain the requirements for issuing benefits 
to expedited service households. The Department also proposed to add a 
new paragraph (c) which would contain the provision of former paragraph 
(b)(2) concerning the State agency option to issue the combined 
benefits in one allotment or two, as long as they are provided at the 
same time and reference the combined allotment regulations at 7 CFR 
273.2.
    The above proposed organizational changes, with the exception of 
moving the combined allotment requirements formerly contained at 7 CFR 
274.2(b)(2), (3), and (4) into 7 CFR 273.2, have already been finalized 
in the Food Stamp Program's Benefit Delivery Rule, published on April 
25, 1995 at 60 FR 20178. In this rule, therefore, the Department is 
only finalizing the provisions moving the requirements formerly 
contained in 7 CFR 274.2(b) to 7 CFR 273.2.
    In the January 11, 1995 rule, the Department proposed to revise the 
regulations at 7 CFR 273.2(i)(4)(iii)(C), and to add two new 
paragraphs, 273.2(i)(4)(iii)(D) and (E). The proposed regulations at 7 
CFR 273.2(i)(4)(iii)(C) contained the requirements formerly contained 
at 7 CFR 274.2(b)(2), which concerned combined issuance for households 
certified under normal processing timeframes. The proposed regulations 
at 7 CFR 273.2(i)(4)(iii)(D) contained the new requirement that a 
household which applies after the 15th of the month and is processed 
under expedited service procedures shall be issued a combined allotment 
consisting of prorated benefits for the initial month of application 
and benefits for the first full month of participation. In these cases, 
any unsatisfied verification requirement would be postponed until the 
end of the first full month. The proposed regulations at 7 CFR 
273.2(i)(4)(iii)(E) contained the requirements formerly contained at 7 
CFR 274.2(b)(4), which concerned households not entitled to combined 
allotments.
    The Department received three comments on the proposed changes. One 
commenter opposed the proposed relocation of the combined allotment 
requirements from 7 CFR 274.2(b) to 273.2(i). The commenter believed 
that the relocation only promoted confusion. As noted above, however, 
the proposal to remove the combined allotment requirements from 7 CFR 
274.2(b) was finalized in the Benefit Delivery Rule. However, we now 
believe it is preferable to separate the combined allotment provisions 
for households processed under the normal 30-day processing standard 
from those for households certified under the expedited service 
provisions of 7 CFR 273.2(i). Therefore, we are adding a new paragraph 
to 7 CFR 273.2(g), Normal processing standard, to include the 
provisions of proposed Sec. 273.2(i)(4)(iii)(C) and former 7 CFR 
274.2(b)(2) concerning combined allotments for households processed 
under the 30-day requirement. This paragraph is titled Combined 
allotments and is designated Sec. 273.2(g)(2). Current paragraph (g)(2) 
is redesignated as paragraph (g)(3). Proposed paragraphs 
273.2(i)(4)(iii)(D) and (E) are paragraphs 273.2(i)(4)(iii)(C) and (D) 
in this final rule.
    The second commenter asked that the regulations at 7 CFR 273.2(b) 
and 274.2(b) specify that combined allotments apply only for those 
households initially applying for food stamps for which proration is a 
factor. As noted above, the regulations at 7 CFR 274.2 no longer 
provide detailed requirement for use of combined allotments. The 
regulations at 7 CFR 273.2(b) do not address combined allotments; 
however, the Department believes that the commenter meant 7 CFR 
273.2(i). The Department believes that the proposed regulations at 7 
CFR 273.2(i)(4)(iii)(D) are very specific as to when a combined 
allotment can be issued. Therefore, the Department is not adopting the 
commenter's suggestion and is adopting the proposed provisions as 
final.
    Another commenter thought that in relocating instructions on 
combined

[[Page 54305]]

allotments from 7 CFR 274.2(b) to 7 CFR 273.2(i), the Department 
deleted the provision that the combined allotment may be in the form of 
two allotments issued at the same time. As indicated above, the Benefit 
Delivery rule moved this provision from 7 CFR 274.2(b) to new paragraph 
274.2(c). In this rule, we are including a reference to 7 CFR 274.2(c) 
in revised paragraph 273.2(i)(4)(iii)(C) and new paragraph 273.2(g)(2).
    In the January 11, 1995 rule, the Department proposed additional 
changes to the regulations at 7 CFR 273.2(i)(4) to bring those 
regulations into conformance with the new combined allotment 
requirements. The regulations at 7 CFR 273.2(i)(4)(iii)(B) currently 
require that a household which applies after the 15th of the month and 
is assigned a certification period of longer than one month, must have 
all postponed verification completed before it can be issued its second 
month's benefits. Migrant households which apply after the 15th of the 
month and are assigned certification periods of longer than one month 
must provide all postponed verification from within-State sources 
before the second month's benefits can be issued, and must provide all 
postponed verification from out-of-State sources before the third 
month's benefits are issued. Because of the change in policy regarding 
combined allotments, eligible households that are entitled to expedited 
service and apply after the 15th of the month must now receive a 
combined allotment which includes their first and second month's 
benefits. Since these households will have already received their 
second month's benefits, postponed verification must now be completed 
prior to issuance of the third month of benefits. As noted above, this 
is current policy for migrants in regard to completing out-of-State 
verification, and the Department proposed to broaden the requirement to 
make it mandatory for all households which apply after the 15th of the 
month and are assigned certification periods of longer than one month. 
The Department proposed to amend 7 CFR 273.2(i)(4)(iii)(B) accordingly. 
The Department also proposed to make a conforming amendment to 7 CFR 
273.10(a)(1)(iv), which contains a verification requirement similar to 
that currently contained in 7 CFR 273.2(i)(4)(iii)(B). The Department 
received no comments on the proposed changes and is adopting them as 
final.
    Under current regulations at 7 CFR 273.2(i)(4)(iii)(B), when 
households which apply for benefits after the 15th of the month provide 
the required postponed verification, the State agency is required to 
issue the second month's benefits within 5 working days from receipt of 
the verification or the first day of the second calendar month, 
whichever is later. Since the proposed changes in combined allotment 
procedures required that households be issued the prorated initial 
month's allotment and the full allotment for the second month within 
the expedited timeframe, the requirement at 7 CFR 273.2(i)(4)(iii)(B) 
is no longer applicable and the Department proposed to remove it in the 
January 11, 1995 rule. The Department received no comments on the 
proposal and is adopting it as final.
    Current regulations at 7 CFR 273.2(i)(4)(iii)(C) require that 
households which are eligible for expedited service and that apply 
after the 15th of the month must be issued their second month's 
benefits on the first working day of the second calendar month, not the 
day benefits would normally be issued in a State using staggered 
issuance. Because of the potentially lengthy period of time between 
issuance of the combined allotment for the month of expedited service 
and the first full month of participation and issuance of an allotment 
for the third month of participation in a staggered issuance system, 
the Department proposed to retain that issuance requirement at 7 CFR 
273.2(i)(4)(iii)(C) for the third month of benefits. The Department 
proposed to add a new paragraph 7 CFR 273.2(i)(4)(iii)(F) which 
required that in States with staggered issuance, households be issued 
their third allotment by the first working day of the third calendar 
month. For allotments in subsequent months, State agencies would employ 
their normal issuance mechanisms.
    The proposal that households be issued their third allotment by the 
first working day of the third calendar month received a substantial 
number of negative comments. Twelve commenters wrote to oppose the 
provision. The commenters felt that the provision would impose a 
tremendous administrative burden on State agencies. These commenters 
claimed that the proposed change would require costly computer 
reprogramming or necessitate a manual system for issuing benefits in 
the third month that would increase workloads and be error prone. In 
addition, commenters believed that households would be better served if 
they received their third month's allotments on the normal issuance 
date rather than on the first of the month. Early issuance in the third 
month could mean that the household would have to wait as long as six 
or seven weeks before receiving benefits for its fourth month of 
participation. One commenter did support the proposed provision, on the 
grounds that it promotes consistency with current policy for migrants.
    The Department accepts the arguments raised by the 12 commenters 
who opposed the proposed provision at 7 CFR 273.2(i)(4)(iii)(F) and is 
deleting it from this final rule. A household that receives a combined 
allotment and resides in a State with a staggered issuance system will, 
at some point during its certification period, have to stretch its 
benefits to cover a period longer than one month. The proposed 
procedure would not have prevented that, but would have imposed an 
unnecessary administrative burden on State agencies. Therefore, the 
Department is not adopting the proposed provision.
    Current regulations at 7 CFR 273.2(i)(4)(i)(B) require that 
households entitled to expedited service furnish an SSN for each 
household member before the first full month of participation. 
Households that are unable to provide the required SSNs or who do not 
have one prior to the first full month of participation can participate 
only if they satisfy the good cause requirements specified in 7 CFR 
273.6(d).
    Because of the change in combined allotment policy, eligible 
households that apply after the 15th of the month and are entitled to 
expedited service can receive their second month's benefits without 
having to furnish an SSN. In the preamble of the proposed rule, the 
Department stated its intention to revise the regulations at 7 CFR 
273.2(i)(4)(i)(B) to require that households entitled to expedited 
service that apply after the 15th of the month furnish an SSN for each 
person prior to the third month of participation. The Department 
received no negative comments on the proposal. One commenter, however, 
did note that the proposed change to 7 CFR 273.2(i)(4)(i)(B) discussed 
in the preamble was not accompanied by the proposed new regulatory 
language. The Department apologizes for the omission, but believes the 
public was given sufficient notice of the Department's intent. 
Therefore, the Department is adopting the proposed change to 7 CFR 
273.2(i)(4)(i)(B) discussed in the preamble to the proposed rule as 
final in this rule.
    Current regulations at 7 CFR 273.2(i)(4)(iii) provide that 
households that are certified for expedited service and have postponed 
verification requirements may be certified for either the month of 
application or for longer

[[Page 54306]]

periods, at the State agency's option. 7 CFR 273.2(i)(4)(iii)(A) 
currently addresses verification requirements for households that are 
certified only for the month of application, and 7 CFR 
273.2(i)(4)(iii)(B) currently addresses verification requirements for 
households that are certified for longer than the month of application. 
Neither section of the regulations addresses verification requirements 
for households that apply before the 15th of the month. The Department 
proposed to eliminate this deficiency in the January 11, 1995 rule by 
amending 7 CFR 273.2(i)(4)(iii)(A) to address verification requirements 
for households that apply on or before the 15th of the month and to 
amend 7 CFR 273.2(i)(4)(iii)(B) to address verification requirements 
for households that apply after the 15th of the month. The Department 
received no comments on these proposals and is adopting them as final.
    Current regulations at 7 CFR 273.2(i)(4)(iii) give State agencies 
the option of requesting any household eligible for expedited service 
which applies after the 15th of the month to submit a second 
application (at the time of initial certification) if the household's 
verification requirements have been postponed. Under current policy, 
that second application would be denied for the first month and acted 
on for the second month. However, now that expedited service households 
will be receiving a combined allotment of their first and second 
month's benefits, under our proposal, the second application would be 
denied for both the first and second months and acted on for the third 
month. Believing that current regulations do not allow for this 
procedure, the Department proposed to amend the regulations at 7 CFR 
273.10(a)(2)(i) to require that if a household files an application for 
recertification in any month in which it is receiving food stamp 
benefits, the State agency shall act on that application for 
eligibility and benefit purposes starting with the first month after 
the current certification period expires.
    Several commenters wrote to point out that the text of the proposed 
regulatory change to 7 CFR 273.10(a)(2)(i) did not appear in the 
proposed rule. The proposed change was inadvertently omitted, and the 
Department apologizes for any confusion the omission may have caused.
    Three commenters objected to the proposed procedure as described in 
the preamble. One thought it was unclear whether the proposed provision 
was tied to the State option of requesting the applicant for expedited 
service applying after the 15th of the month to submit a second 
application when verification is postponed, or if it would be 
appropriate for all recertifications. The commenter thought that if it 
applied to all cases, it could prove to be an administrative problem. 
Two commenters were concerned that the information on the application, 
if kept pending too long, would be outdated. One asked if a household 
certified for 12 months filed an application in its third month of 
eligibility, would the State agency have to keep track of and use the 
application for a certification period some 10 months later.
    The Department agrees with the commenters that the proposed 
language is unclear. The proposed provision was intended to be tied to 
the State option of requesting that the household applying for 
expedited service after the 15th of the month submit a second 
application when verification is postponed. It was meant to apply only 
in circumstances in which the household has been certified for only the 
month of application and the subsequent month. In these circumstances, 
the State agency would deny the second application for both the first 
and second months and act on it for the third month, as described in 
proposed section 273.2(i)(4)(iii)(F). It was not the Department's 
intention that a State agency act on an application that had been 
submitted more than a month and a half earlier. The Department, 
therefore, is not amending 7 CFR 273.10(a)(2)(i) to include the 
procedure. Since the procedure is only valid in instances in which the 
household is entitled to expedited service and applies after the 15th 
of the month, the Department thinks it would only promote confusion to 
have a reference to the procedure in any section of the regulations 
other than the section on expedited service. The Department is also 
removing discussion of the second application option from 7 CFR 
273.2(i)(4)(iii)(B). The procedures for acting on a second application 
are already addressed in detail in 7 CFR 273.2(i)(4)(iii)(E) of this 
rule and the Department sees no advantage to repeating that information 
at 7 CFR 273.2(i)(4)(iii)(B).
    One commenter noted that proposed regulatory language at both 7 CFR 
273.2(i)(4)(iii) (A) and (B) includes the requirement that during the 
certification interview, the State agency should give the household a 
recertification form and schedule an appointment for a recertification 
interview. The commenter thought that it was not clear that the 
requirement applied only if the State agency chooses the option at 7 
CFR 273.2(i)(4)(iii) to require a household entitled to expedited 
service that applies after the 15th of the month to submit a second 
application. The commenter felt that the requirement would be an 
unnecessary burden to State agencies that do not choose to require a 
second application.
    The Department agrees with the commenter that the requirement as 
proposed is unclear and has decided to remove the requirement from both 
7 CFR 273.2(i)(4)(iii)(A) and (B). The Department believes the 
requirement provides unnecessary instruction to State agencies.
    The same commenter raised a question on the proposed language at 7 
CFR 273.2(i)(4)(iii)(D). That section requires that combined allotments 
be issued in accordance with requirements at 7 CFR 274.2(c). The 
commenter thought that the benefits should be issued in accordance with 
the requirements at 7 CFR 273.2(i)(3)(i), which address expedited 
service processing standards. The proposed regulations at 7 CFR 
273.2(i)(4)(iii)(D) address combined allotments, which have different 
issuance requirements than normal expedited benefits. The issuance 
requirements for combined allotments are contained at 7 CFR 274.2(c).

Residency--7 CFR 273.3

    Current rules at 7 CFR 273.3 require food stamp households to live 
in the project area in which they apply unless the State agency has 
made arrangements for particular households to apply in nearby 
specified project areas. In order to increase consistency with the AFDC 
program and the Adult Assistance programs under Titles I, X, XI, and 
XVI of the Social Security Act, which require that applicants reside in 
the State but have no project area requirement, the Department proposed 
in the January 11, 1995 rulemaking to amend 7 CFR 273.3 to give State 
agencies the option of permitting households to live anywhere in the 
State rather than in the project area in which they apply for benefits. 
Under the proposal, State agencies still retained the authority to 
designate limited project areas and restrict where a given household 
could apply.
    The Department also proposed to add a new paragraph (iii) to 7 CFR 
273.2(c)(2) to address application processing timeframes in States 
which opt to allow Statewide residency. Under the proposal, if a State 
agency does not require that households apply in specified project 
areas, the application processing timeframes would begin the

[[Page 54307]]

day the application is received by any office.
    The Department also proposed a second amendment to 7 CFR 273.3 to 
clarify the requirements for transferring food stamp cases between 
project areas. The Department proposed to amend 7 CFR 273.3 to state 
that when a household moves within a State, the State agency may either 
require the household to reapply in the new project area or transfer 
the case from the previous project area to the new one and continue the 
household's certification without requiring a new application. If the 
State agency chooses to transfer the case, it must act on changes in 
the household's circumstances resulting from the move in accordance 
with 7 CFR 273.12(c) or 7 CFR 273.21. The State agency must also ensure 
that potential client abuse of case transfers from project area to 
project area is identifiable through the State agency's system of 
duplicate participation checks required by 7 CFR 272.4(f). Finally, the 
State agency must develop transfer procedures to guarantee that the 
transfer of a case from one project area to another does not affect the 
household adversely.
    We received six comments on the proposal. Five commenters wrote to 
support the proposal, though one of the five felt that the new 
provision might be costly to implement and may confuse State staff. 
Since Statewide residency is an option for State agencies, however, 
each State can determine for itself if the change in residency 
requirements is beneficial.
    The sixth commenter asked how the change to Statewide residency 
would affect the definition of mail loss liability as it relates to 
project areas in 7 CFR 276.2(b)(4)(i). The change to Statewide 
residency should have no effect on State agencies' mail loss 
liabilities. The Department believes that there is a clear distinction 
between Statewide residency for certification purposes and Statewide 
reporting of mail issuance. A State agency could opt for Statewide 
residency yet retain project area designations for purposes of mail 
loss liability.
    No negative comments were received on the proposed amendment to 7 
CFR 273.3, and the Department is adopting it as final without change.

Social Security Numbers for Newborns--7 CFR 273.2(f)(1)(v), 7 CFR 
273.6(b)

    Current regulations at 7 CFR 273.6(a) require an applicant 
household to provide the State agency with the social security number 
(SSN) of each household member. A household member who does not have an 
SSN must apply for one before he or she can be certified, unless there 
is good cause for such failure as provided in 7 CFR 273.6(d). If a 
household member refuses or fails without good cause to apply for an 
SSN, the individual is ineligible to participate.
    In the January 11, 1995 proposed rule, the Department proposed to 
amend food stamp regulations to address the Social Security 
Administration's (SSA) ``Enumeration at Birth'' (EAB) program. Under 
EAB, parents of a newborn child may apply for an SSN for the child when 
the child is born if this service is available at the hospital. Most 
hospitals give parents Form SSA-2853, ``Message From Social Security.'' 
This receipt form, which describes the EAB process and how long it will 
take to receive an SSN, contains the child's name and is signed and 
dated by a hospital official. It is accepted by State agencies for 
welfare or other public assistance purposes. In the January 11, 1995 
rule, the Department proposed an amendment to 7 CFR 273.2(f)(1)(v) to 
allow a completed Form SSA-2853 to be acceptable as proof of SSN 
application for an infant. The Department received no negative comments 
on this proposal and is adopting it as final.
    Current regulations at 7 CFR 273.6(d) allow for good cause 
exceptions to the SSN requirement in cases in which a household is 
unable to provide or apply for an SSN for a newborn baby immediately 
after the baby's birth. The regulations allow the household member 
without an SSN to participate for one month in addition to the month of 
application. However, good cause does not include delays due to 
illness, lack of transportation or temporary absences of that household 
member from the household, and good cause must be shown monthly in 
order for the household member to continue to participate.
    To avoid a delay in adding a new member to the household, the 
Department proposed to amend 7 CFR 273.6(b) to provide that, in cases 
in which a household is unable to provide or apply for an SSN for a 
newborn baby immediately after the baby's birth, a household may 
provide proof of application for an SSN for a newborn infant at its 
next recertification. If the household is unable to provide an SSN or 
proof of application at its next recertification, the State agency 
would determine if the good cause provisions of 7 CFR 273.6(d) are 
applicable.
    The Department received four comments on this provision of the 
proposed rule. Two commenters thought that the Department should define 
``next'' recertification period. These commenters indicated that the 
absence of a definition could be a potential problem when a household 
reports the addition of a newborn to the State agency in the month 
before the expiration of the household's certification period. One of 
the commenters thought that the Department should amend the proposed 
good cause provisions to allow households with a newborn whose 
certification period ends in the birth month or in the month following 
the birth month with the same timeframes allowed those households with 
a newborn who have 10 to 12 months left in the certification period.
    The Department acknowledges the difficulties associated with using 
the concept of ``next certification period'' in the proposed provision. 
Therefore, the Department is revising the provision to allow households 
to submit an SSN or proof of application for an SSN at their next 
recertification or within six months following the month in which the 
baby is born, whichever is later. The Department believes that amending 
the provision to include a fixed time period will ensure that all 
households benefit equally from the change in procedures. The 
Department also believes that six months is sufficient time for 
households to acquire the necessary materials to apply for an SSN for a 
newborn. Accordingly, if the household cannot provide an SSN or proof 
of application at its next recertification after the birth of a new 
household member or within six months of the month in which the baby is 
born, the State agency shall determine if the good cause provisions of 
7 CFR 273.6(d) are applicable.
    Another commenter noted that AFDC does not have a good cause 
provision in its SSN regulations, and that the application for a 
newborn must be done by the end of the month following the month in 
which the mother is released from the hospital. The Department 
recognizes that the Food Stamp Program's good cause provision does not 
conform with the requirements of the AFDC program. The Department 
believes, however, that the provision is advantageous to participating 
households, which frequently encounter difficulty obtaining certified 
copies of birth certificates needed to apply for an SSN, and that this 
offsets the need for conformity in this area.
    Another commenter thought that the proposed change to the SSN 
requirement for newborns conflicted with expedited service processing 
requirements, and requested that final regulations clarify whether the 
newborn

[[Page 54308]]

SSN policy supersedes that under expedited processing.
    Current regulations at 7 CFR 273.2(i)(4)(i)(B) require that 
households entitled to expedited service furnish an SSN for each person 
or apply for one for each person before the first full month of 
participation. Those household members unable to provide the required 
SSNs or who do not have one prior to the first full month of 
participation are allowed to continue to participate only if they 
satisfy the good cause requirements with respect to SSNs specified in 7 
CFR 273.6(d).
    To avoid a conflict between the new SSN requirement for newborns 
and expedited service processing requirements, the Department is 
amending the expedited service requirements at 7 CFR 273.2(i)(4)(i)(B) 
to allow a newborn to participate for up to six months following the 
month of its birth before providing an SSN or proof of application for 
an SSN.

Funeral Agreements--7 CFR 273.8(e)(2)

    Current regulations at 7 CFR 273.8(e)(2) exclude the value of one 
burial plot per household member from resource consideration. In the 
proposed rule, we proposed to adopt a funeral agreement policy similar 
to that of the AFDC program. AFDC regulations at 45 CFR 
233.20(a)(3)(i)(4) exclude from resource consideration ``bona fide 
funeral agreements (as defined and within limits specified in the State 
plan) of up to a total of $1,500 of equity value or a lower limit 
specified in the State plan for each member of the assistance unit.'' 
Accordingly, we proposed to amend 7 CFR 273.8(e)(2) to allow for an 
exemption from resource consideration of up to $1,500 for bona fide, 
pre-paid funeral agreements that are accessible to the household. 
Funeral agreements that are inaccessible to a household were not 
affected by the proposed rule, as they are excluded from resource 
consideration under the provisions of 7 CFR 273.8(e)(8).
    Three commenters supported this provision. One commenter 
misunderstood the proposal and thought that the exclusion of up to 
$1,500 in a bona fide funeral agreement per household member replaced 
the exclusion of one burial plot per household member currently at 7 
CFR 273.8(e)(2). The funeral agreement exclusion is in addition to the 
exclusion of one burial plot per household member and is not intended 
to replace the burial plot exclusion. The provisions of the proposed 
rule are adopted as final.

Determining income--7 CFR 273.10(c)(2)

    Current regulations at 7 CFR 273.10(c)(2)(iii) provide that 
households receiving public assistance payments (PA) or general 
assistance (GA), Supplemental Security Income (SSI), or Old-Age, 
Survivors, and Disability Insurance (OASDI) benefits on a recurring 
monthly basis shall not have their monthly income from these sources 
varied merely because mailing cycles may cause two payments to be 
received in one month and none in the next month. In the proposed rule, 
it was noted that there are other instances in which a household may 
receive a disproportionate share of a regular stream of income in a 
particular month. For example, an employer may issue checks early 
because the normal payday falls on a weekend or holiday. We proposed, 
therefore, to amend 7 CFR 273.10(c)(2)(iii) to specify that income 
received monthly or semimonthly (twice a month, not every two weeks) 
shall be counted in the month it is intended to cover rather than the 
month in which it is received when an extra check is received in one 
month because of changes in pay dates for reasons such as weekends or 
holidays.
    Three commenters supported the proposed provision. A fourth 
commenter objected to the proposed provision being limited to income 
received on a monthly or semimonthly basis, arguing that income which 
is received on a weekly or biweekly basis may also be received early 
(or late) because the normal payday falls on a weekend or a holiday. 
The commenter thought that any type of payment schedule that is altered 
due to a holiday, weekend, or vacation should not affect a household's 
eligibility for food stamps.
    Current regulations at 7 CFR 273.10(c)(2)(1) already address 
fluctuations in income that is received on a weekly or biweekly basis. 
The regulations require that whenever a full month's income is 
anticipated but is received on a weekly or biweekly basis, the State 
agency shall convert the income to a monthly amount. Since conversion 
addresses the receipt of a fifth check (in weekly pay) or a third check 
(in biweekly pay), the Department is not adopting the commenter's 
suggestion. The provision is adopted as proposed.

Contract Income--7 CFR 273.10(c)(3)(ii)

    Section 5(f)(1)(A) of the Food Stamp Act, 7 U.S.C. 2014(f)(1)(A), 
provides that households which derive their annual income (income 
intended to meet the household's needs for the whole year) from 
contract or self-employment shall have the income averaged over 12 
months. Current regulations at 273.10(c)(3)(ii) implement this 
provision of the Act, stating that ``[h]ouseholds which, by contract or 
self-employment, derive their annual income in a period of time shorter 
than 1 year shall have that income averaged over a 12-month period, 
provided the income from the contract is not received on an hourly or 
piecework basis.'' The regulations at 7 CFR 273.11(a)(1)(iii) address 
how self-employment income which is not a household's annual income and 
is intended to meet the household's needs for only part of the year 
should be handled. 7 CFR 273.11(a)(1)(iii) provides that ``[s]elf-
employment income which is intended to meet the household's needs for 
only part of the year shall be averaged over the period of time the 
income is intended to cover.'' The regulations, however, fail to 
specify how contract income which is not a household's annual income 
and is intended to meet the household's needs for only part of the year 
should be handled. The Department proposed to rectify this omission in 
the proposed rule by amending 7 CFR 273.10(c)(3)(ii) to clarify that 
contract income which is not the household's annual income and is not 
paid on an hourly or piecework basis shall be averaged over the period 
the income is intended to cover. The Department received two comments 
supporting the proposed provision, and is adopting the provision as 
final.

Certification Periods--7 CFR 273.10(f)

    In the January 11, 1995 publication, the Department proposed 
changes in the certification period requirements at 7 CFR 273.10(f) to 
allow State agencies more flexibility in aligning the food stamp 
recertification and the PA/GA redetermination in joint cases. Section 
3(c) of the Food Stamp Act, 7 U.S.C. 2012(c), requires that the food 
stamp certification period of a GA or PA household coincide with the 
period for which the household is certified for GA or PA. However, 
because PA/GA and Food Stamp Program processing standards and the 
period for which benefits must be provided are not the same, it is 
often difficult to get the certification periods for the programs to 
coincide. The Department proposed three procedures which State agencies 
could employ to align PA/GA and food stamp certification periods. Under 
the first procedure, when a household is certified for food stamp 
eligibility prior to an initial determination of eligibility for PA/GA, 
the State agency would

[[Page 54309]]

assign the household a food stamp certification period consistent with 
the household's circumstances. When the PA/GA is approved, the State 
agency would reevaluate the household's food stamp eligibility. The 
household would not be required to submit a new application or undergo 
another face-to-face interview. If eligibility factors remained the 
same, the food stamp certification period would be extended up to an 
additional 12 months to align the household's food stamp 
recertification with its PA/GA redetermination. The State agency would 
be required to send a notice informing a household of any such changes 
in its certification period. At the end of the extended certification 
period the household would be sent a Notice of Expiration and would 
have to be recertified before being determined eligible for further 
food stamp assistance, even if the PA/GA redetermination had not been 
completed. In the event that a household's PA/GA redetermination is not 
completed at the end of the food stamp certification period and, as a 
result, the household's food stamp and PA/GA certification periods are 
no longer aligned, the State agency could again employ the procedure 
described above to align those certification periods.
    The second procedure for aiding State agencies in aligning PA/GA 
and food stamp certification periods was to allow State agencies to 
recertify a household currently receiving food stamps when the 
household comes into a State office to report a change in circumstances 
for PA/GA purposes. At that time, the State agency would require the 
household to fill out an application for food stamps and to undergo a 
face-to-face interview. If the household was determined eligible to 
continue receiving food stamps, its current certification period would 
end and a new one would be assigned.
    The third procedure for aiding State agencies in aligning PA/GA and 
food stamp certification periods was to allow State agencies to assign 
indeterminate certification periods to households certified for both 
food stamps and PA/GA. Under this procedure, a household's food stamp 
certification period would be set to expire one month after the 
household's scheduled PA/GA redetermination, so long as the period of 
food stamp certification did not exceed 12 months. Therefore, if a food 
stamp certification were set for 7 months and would expire the month 
after the month the PA redetermination was due, but the PA 
redetermination was not done on time, the food stamp certification 
period could be postponed up to an additional 5 months to align food 
stamp recertification and PA/GA redetermination. In the 12th month, the 
household would have to be recertified for food stamp purposes, even if 
the PA redetermination had not yet been completed.
    The Department received 12 comments on the proposed procedures for 
aligning certification periods. Five commenters wrote in support of all 
three proposed options. Three commenters suggested further changes to 
those procedures. Two asked that the options for aligning food stamp 
and PA/GA certification periods apply for aligning food stamp 
certification periods and those of the Medicaid program and other 
medical programs. One commenter suggested a fourth option in which food 
stamp certification reviews could be completed at the same time as AFDC 
reviews or applications. The remaining commenters raised various 
questions or criticized the proposed options. One commenter objected 
that the proposed changes did not address the 24-month certification 
period requirement for monthly reporting households residing on Indian 
reservation land. Another thought that the third option failed to 
address required client notices. One commenter thought that the first 
and third options appear error prone because specific criteria for 
extending certification periods is not provided. Two commenters felt 
that the second and third options would increase State agency workload 
rather than reduce it.
    The Department offered the options in order to simplify 
administration of the requirement in section 3(c)(1) of the Act that 
PA/GA certification periods be aligned with food stamp certification 
periods. In light of the comments received on the proposed provision, 
and the Department's commitment to extending flexibility to State 
agencies, the Department is further simplifying the requirements at 7 
CFR 273.10(f)(3). The section is revised to allow the State agency to 
shorten or extend a household's food stamp certification period in 
order to align the food stamp recertification date with the PA or GA 
redetermination date. The household's food stamp certification period 
can only be extended when the household is initially approved for PA/
GA. Although this rule offers considerable flexibility in aligning the 
food stamp and PA/GA recertifications, we anticipate that an extension 
of no more than 4 months will be necessary in most cases. The extension 
would generally be needed because of the difference in approval dates 
for food stamps and the other program in a joint PA or GA case, and 
extension of the food stamp certification for a few months would allow 
for alignment under normal circumstances. The food stamp certification 
period may be extended up to 12 months to align the food stamp 
certification period with the PA/GA redetermination period. If the 
household's certification period is extended, the State agency shall 
notify the household of the changes in its certification period. At the 
end of the extended certification period the household must be sent a 
Notice of Expiration and must be recertified before being eligible for 
further food stamp assistance, even if the PA or GA redetermination is 
not set to expire.
    If the household's certification period is shortened, the State 
agency shall send it a notice of expiration which informs the household 
that its certification period will expire at the end of the month 
following the month the notice of expiration is sent and that it must 
reapply if it wishes to continue to participate. The notice of 
expiration shall also explain to the household that its certification 
period is expiring in order that it may be recertified for food stamps 
at the same time that it is redetermined for PA or GA.
    In response to commenters' suggestions, the Department is further 
revising 7 CFR 273.10(f)(3) to offer State agencies the option of 
extending or shortening certification periods as noted above in order 
to align them with certification periods in Medicaid and other medical 
programs. The Department is offering this as an option instead of a 
requirement because the Food Stamp Act does not require that the food 
stamp certification period of a household also receiving Medicaid or 
other medical programs coincide with the period for which the household 
is certified for those programs.

Calculating Boarder Income--7 CFR 273.11(b)

    Current rules at 7 CFR 273.11(b) provide that State agencies must 
use the maximum food stamp allotment as a basis of establishing the 
cost of doing business for income received from boarders when the 
household does not own a commercial boardinghouse. Boarders are not 
included as members of the household to which they are paying room and 
board. The households receiving the room and board payments must 
include those payments as self-employment income, but can exclude that 
portion of the payments equal to the cost of doing business. The rules 
provide that the cost of doing business is either (1) the maximum food 
stamp allotment for a household size equal to

[[Page 54310]]

the number of boarders; or (2) the actual documented cost of providing 
room and meals, if that cost exceeds the maximum allotment.
    In the proposed rule, the Department proposed to revise 7 CFR 
273.11(b)(1)(ii)(C) to provide State agencies with an additional option 
for calculating boarder income. Under the proposal, State agencies 
would have the option to use actual costs, the maximum allotment for a 
household size equal to the number of boarders, or a flat amount or 
fixed percentage of gross income from boarders to determine the cost of 
doing business of households with boarders. The Department noted in the 
proposed rule that the AFDC program used a flat percentage equal to 75 
percent of the boarder-generated income (45 CFR 233.20(a)(6)(v)(B)). 
We, however, did not propose a percentage limit, but requested 
suggestions on an appropriate percentage from commenters.
    We received 11 comments on the proposed provision. One commenter 
recommended that we set the percentage of gross income at 75 percent. A 
second commenter suggested that we use the same percentage limit as is 
used in the AFDC program. A third commenter said that they were not 
opposed to an additional method of calculating boarder income as long 
as they are able to coordinate it with their AFDC program. Another 
commenter said that the AFDC program in their State does not provide 
for an exclusion of 75 percent of boarder-generated income. It provides 
for the exclusion of the actual cost of doing business. If that cost is 
not documented, or if it is below $60 a month, the State agency 
excludes $60 as the cost of doing business. Another commenter suggested 
not setting a percentage limit, but allowing State agencies to use a 
percentage that reflects circumstances in their State.
    Since there was no consensus among commenters on the percentage of 
gross income from boarders that should be used to determine the cost of 
doing business of households with boarders, the Department has decided 
to retain the language of the proposed rule and allow State agencies to 
set their own flat amount or fixed percentage of boarder-generated 
income to determine the cost of doing business for households with 
boarders. As in the proposed rule, the method used to determine the 
flat amount or fixed percentage must be objective, justifiable, and 
stated in the State's food stamp manual. If the State agency selects 
the fixed percentage option to determine the cost of doing business for 
households with boarders, it must give households the opportunity to 
claim actual costs.
    One commenter asked that the final rule clearly reflect that it is 
the State agency, not the household, that chooses the options available 
for the household to use as a cost of doing business. Another commenter 
asked if the State agency must choose only one of the three proposed 
options and apply it to all households that do not opt to use actual 
business expenses, or can a household or State agency choose any of the 
three options on a case-by-case basis.
    The Department believes that the household should be allowed to 
choose the method used to determine its boarder-generated income. The 
Department is amending the proposed provision at 7 CFR 273.11(b)(1)(ii) 
to clearly state this policy.

Day Care Providers--Sec. 273.11(b)(2)

    Under current regulations at 7 CFR 273.11(a)(4)(i), households 
which provide in-home day care can claim the cost of meals provided to 
individuals in their care as a cost of doing business, provided they 
can document the cost of each meal. In the proposed rule, the 
Department proposed to allow households who are day care providers to 
use a standard amount per individual as a cost of doing business. The 
Department believed that use of a standard reimbursement rate 
(standard) for the cost of providing day care would eliminate the 
burden on day care providers to document itemized costs incurred for 
producing the income and would increase the benefits for households 
that fail to adequately document business costs. Use of a standard 
would also decrease the amount of time needed to process self- 
employment cases of this type and reduce payment errors.
    Under the proposed provision, State agencies would be required to 
inform households of their opportunity to verify actual meal expenses 
and use actual costs if higher than the fixed amount. When establishing 
a standard amount, State agencies would take into account the 
differences in cost for full-day and part-day care. Households that are 
reimbursed for the cost of meals provided to individuals in their care, 
for example through the FCS Child and Adult Care Food Program, would 
not be able to claim the standard but could claim actual expenses that 
exceed the amount of their reimbursement.
    One commenter found the preamble of the proposed rule confusing, 
noting that it begins and ends with a discussion of the cost of 
providing meals by day care providers, yet in the body refers to 
allowing use of a standard for ``determining self-employment 
expenses,'' which the commenter interpreted to mean that all allowable 
costs could be standardized if they are incurred as a cost of doing 
business. The commenter asked if that is what the Department is 
proposing.
    The proposed standard is intended to cover only the costs of meals 
and not other self-employment expenses that the household providing in-
home day care may incur. The purpose of the provision was to 
incorporate into regulations a procedure found to be effective through 
the Department's waiver process. As noted in the proposed rule, several 
State agencies were granted waivers to use a flat dollar amount, such 
as $5 a day, or to use the FCS Child and Adult Care Food Program 
reimbursement rates, to cover the cost of meals provided by day care 
households to individuals in their care instead of requiring the 
households to document actual meal costs. Those State agencies have 
reported that use of a standard benefits households by eliminating the 
need for them to keep extensive records on actual meal costs. It is 
also advantageous to the State agencies as it eliminates the need for 
workers to verify actual meal costs.
    Another commenter thought that the proposed rule was unclear as to 
whether or not the standard reimbursement amount had to be established 
separately for food stamps or whether a reimbursement amount approved 
for use in a State public assistance (PA) program could be used without 
separate approval from FCS.
    It is the Department's intention that State agencies develop their 
own meal cost standards. State agencies are free, therefore, to use the 
same standard as is used in their PA or general assistance programs. 
Furthermore, State agencies do not need to seek departmental approval 
of the standard they choose to use. State agencies must, however, 
inform households of their right to verify actual meal expenses and use 
those actual costs if they exceed the standard amount.
    Two commenters requested further clarification on the Department's 
recommendation in the proposed rule that, when establishing a standard 
amount, State agencies take into account the differences in cost for 
full-day and part-day care. One commenter wanted to know if it meant 
that the State agency should have separate standards for part-day and 
full-day care. The other requested a definition of part-time.
    As noted above, the Department intends for State agencies to 
develop their own meal standards. The statement in the proposed rule 
that State agencies consider the differences in part-day and full-day 
care when setting

[[Page 54311]]

the standard was, therefore, only a recommendation, and the Department 
is not requiring State agencies to differentiate between the two when 
creating a standard. Consequently, the Department is not providing a 
definition of part-day care, but will leave it up to State agency 
discretion.
    The comments received on the proposed provision requested 
clarification of the preamble and not changes to the regulatory 
language of the provision. Therefore, the Department is adopting the 
proposed amendment to 7 CFR 273.11(b)(2) as final without change.

Exemption from Providing a Notice of Adverse Action--7 CFR 
273.13(b)

    Current regulations at 7 CFR 273.13(a) require State agencies to 
send a notice of adverse action (NOAA) to a household prior to any 
action to reduce or terminate the household's benefits, except as 
provided in 7 CFR 273.13(b). That section does not include an exception 
to the NOAA requirements when mail sent to a household is returned with 
no known forwarding address. The AFDC regulations at 45 CFR 
205.10(a)(4)(ii) do not require an advance notice of adverse action in 
this situation. In the proposed rule, the Department suggested adding 
an exemption from sending a NOAA if agency mail has been returned with 
no known forwarding address. Since it is unlikely that the Postal 
Service can deliver a NOAA mailed to an address which is no longer 
correct, it is reasonable to specify in regulations that no notice is 
required if delivery cannot be reasonably expected.
    Four commenters supported the proposed provision. One commenter 
noted, however, that although the cited AFDC regulation does not 
require advance notice if delivery cannot be reasonably expected, 
notice is still required.
    The Department does not believe it is necessary to send a notice to 
an address known to be incorrect. A recipient whose benefits were 
reduced or terminated and who did not receive a notice would still be 
entitled to a fair hearing in accordance with 7 CFR 273.15 and 
restoration of benefits, as provided in 7 CFR 273.17. However, to allow 
State agencies to use the same procedure for food stamps and AFDC, we 
are adding a new paragraph (c) to 7 CFR 273.13 to provide that State 
agencies may at their option send an adequate notice to households 
whose mail has been returned with no known forwarding address.

Recertification--7 CFR 273.14

    In the January 11, 1995 rule, the Department proposed several 
changes to current regulations at 7 CFR 273.14 which govern 
recertification procedures. The Department proposed a general 
reorganization of the section in order to provide a clearer expression 
of recertification requirements. The Department also proposed several 
changes in recertification procedures which it believed would provide 
State agencies with more flexibility when recertifying households. Each 
proposed change is discussed in detail below.
    The Department received two general comments on the proposed 
changes to 7 CFR 273.14, one positive and one negative. One commenter 
strongly supported all the proposed changes, believing that they will 
simplify and improve the recertification process. The other commenter 
thought that the proposed changes clearly added unfunded Federal 
mandates. The commenter wrote that the discussion in the preamble 
implied that States were being given options for handling the 
recertification process but in the proposed regulations only a single 
process which encourages the State agency to send a recertification 
form, an interview appointment letter, and a statement of needed 
verification with each notice of expiration was stated. The commenter 
felt that the procedure was an unfunded Federal mandate and was counter 
productive to any automated system based on interactive interviews. The 
commenter thought that if a State was currently experiencing no 
problems with the recertification process, there was no need to 
complicate the process by developing an additional form to use just for 
recertification or by establishing different procedures.
    It was not the Department's intention in the proposed rule to 
impose new recertification requirements on State agencies. The proposed 
procedures, which were drawn from State agency waiver requests, were 
meant only as options which State agencies can employ to simplify the 
recertification process. State agencies which do not find the proposed 
options beneficial should not employ them.

1. Reorganization

    In the January 11, 1995 rule, the Department proposed to reorganize 
7 CFR 273.14 in an attempt to provide a clearer expression of the 
recertification requirements. Revised section 273.14(a) contained 
general introductory statements regarding actions the household and the 
State agency must take to ensure that eligible households receive 
uninterrupted benefits. Revised section 273.14(b) contained the 
requirements for the notice of expiration, the recertification form, 
the interview and verification. Revised section 273.14(c) contained the 
filing deadlines for timely applications for recertification. Current 
sections 273.14(d), (e), and (f) were revised into two new sections 7 
CFR 273.14 (d) and (e). New section 7 CFR 273.14(d) combined all of the 
provisions of the previous sections relating to timeframes for 
providing benefits when all processing deadlines are met. New section 7 
CFR 273.14(e) addressed situations in which the household or the State 
agency fail to meet processing deadlines.
    The Department received no comments on the proposed structural 
revision of the section and is retaining it in the final rule.

2. Recertification Forms

    In the January 11, 1995 rule, the Department proposed to revise 7 
CFR 273.14(b)(2) to allow State agencies the option of using a modified 
application form for recertifying households. This form could be used 
only for those households which apply for recertification before the 
end of their current certification period. The State agency would be 
required to devise its own form, and would have to include on it the 
information required by 7 CFR 273.2(b)(1)(i), (ii), (iii), (iv) and 
(v). This information is required by section 11(e)(2) of the Act, 7 
U.S.C. 2020(e)(2), and apprises applicants of their rights and 
responsibilities under the Program. The information regarding the 
Income and Eligibility Verification System in 7 CFR 273.2(b)(2) may be 
provided on a separate form. In accordance with section 11(e)(2) of the 
Act, which requires that the Department approve all deviations from the 
uniform national food stamp application, all recertification forms 
would have to be approved by FCS before they could be used.
    The Department received three comments on the recertification form 
proposal. One commenter supported the provision. Another commenter 
thought that the proposed regulatory language made it mandatory for the 
State agency to use a recertification form and did not allow the option 
to use the regular initial application at recertification. The 
Department had intended to indicate that the proposed recertification 
form is meant as an option for State agencies and is not mandatory. The 
Department is revising the proposed language at 7 CFR 273.14(b)(2)(i) 
to clarify this.

[[Page 54312]]

    The third commenter noted that if a recertification form is to be 
used for joint food stamps/SSI processing in accordance with 7 CFR 
273.2(k), State agencies must obtain SSA approval as well as FCS 
approval before using the form. The Department agrees and is revising 
the proposed language at 7 CFR 273.14(b)(2)(i) to clarify this.
2-A. Face-to-Face Interviews
    Under current regulations, State agencies are required to conduct 
face-to-face interviews with households applying for recertification. 
In the January 11, 1995 rule, we proposed to revise 7 CFR 273.14(b)(3) 
to allow State agencies to interview by telephone any household that 
has no earned income and whose members are all elderly or disabled. We 
also proposed to give State agencies the option of conducting a face-
to-face interview only once a year with a food stamp household that 
receives PA or GA. The interview could be conducted at the same time 
the household is scheduled for its PA or GA face-to-face interview. At 
any other recertification during that time period, the State agency may 
choose to interview the household by telephone. However, the State 
agency would be required to grant a face-to-face interview to any 
household that requests one.
    We received nine comments on the proposed provision. One commenter 
thought that the definition of ``stable households'' in the proposed 
rule was unclear, and that the final rule should specify the households 
for which telephone interviews may be conducted.
    The Department believes that the proposed regulatory language at 7 
CFR 273.14(b)(3) clearly specified those categories of households for 
which the face-to-face interview could be waived. It may be waived for 
those households that have no earned income and in which all members 
are elderly or disabled, and it may be waived for food stamp households 
also receiving PA or GA. In the latter case, a household would have to 
receive at least one face- to-face interview a year.
    Another commenter thought that the provision allowing State 
agencies to interview by telephone any household that has no earned 
income and whose members are all elderly or disabled is more 
restrictive than, and contradicts, the Food Stamp Act. Section 11(e)(2) 
of the Food Stamp Act, 7 U.S.C. 2020(e)(2), currently provides for the 
waiver of the face-to-face interview on a case-by-case basis for those 
households for whom a visit to the food stamp office would be a 
hardship. The commenter apparently thought that the Department was 
proposing to prohibit such waivers in the future. That is not the 
Department's intent.
    Current food stamp regulations at 7 CFR 273.2(e) provide for a 
waiver of the face-to-face interview requirement for hardship reasons. 
The Department did not propose in the January 11, 1995 rule to change 
that provision, and, in fact, proposed to include a reference to it in 
7 CFR 273.14(b)(3). The commenter may have been confused by the 
discussion on Federal Register page 2709 of the proposed rule 
concerning a suggestion made previously by State agencies to allow case 
workers to determine on a case-by-case basis which households needed to 
be interviewed. The Department rejected the suggestion, believing that 
providing for the waiving of face-to-face interviews based on a 
caseworker's personal determination that a face-to-face interview is 
not necessary in a particular case could compromise the right to equal 
treatment guaranteed all food stamp recipients under section 11(c) of 
the Act, 7 U.S.C. 2020(c).
    One commenter thought that the option to waive face-to-face 
interviews should be extended to households subject to monthly 
reporting and retrospective budgeting (MRRB). The commenter thought 
that since the circumstances of these households are updated monthly, a 
telephone interview should be sufficient to complete the household's 
recertification determinations.
    Another commenter thought that the option to waive face-to-face 
interviews should also be extended to include group living arrangement 
residents even if they have earned income. The commenter explained that 
the resident is usually not able to complete the application process so 
it is completed by the authorized representative (AR) (usually the case 
manager) and all verifications are submitted by the AR. One case 
manager is responsible for numerous residents, and face-to-face 
interviews are very time consuming both for them and State staff. The 
commenter thought that since all the information is received through 
the AR for those households, a telephone interview of the AR should be 
sufficient.
    The Department agrees that the changes suggested by the above two 
commenters have merit. However, the Department believes that such 
significant changes to current regulations should be proposed in order 
to give interested parties the opportunity to comment. Therefore, the 
Department is not adopting either suggestion at this time, but will 
consider both in future rulemakings.
    Two commenters addressed the proposal to allow one face-to-face 
interview a year for joint food stamp/PA households. One commenter 
wrote to support the provision. The other suggested that the Department 
make food stamps and PA/GA requirements even more compatible by 
allowing mail-in recertifications when the household is not due for its 
face-to-face interview.
    The Department agrees with the commenter that it is advantageous to 
both households and State agencies to have food stamp and PA 
requirements align as closely as possible. Therefore, the Department is 
revising 7 CFR 273.14(b)(3)(ii) to allow for mail-in recertifications 
at any recertification in an annual period in which the household does 
not receive a face-to-face interview for PA or GA. Telephone interviews 
should be conducted with the household if any of its reported 
circumstances are questionable.
    The remaining three commenters objected to the proposed provision 
at 7 CFR 273.14(b)(3). That provision required the State agency to 
reschedule a missed interview if the interview had been scheduled 
before the household had submitted a recertification form. One of the 
commenters noted that under current regulations at 7 CFR 273.14(c)(2), 
it is the household's responsibility to reschedule a missed interview 
even if that interview was scheduled prior to the household filing a 
timely application.
    The Department agrees with the commenters that the proposed 
provision added an additional recertification requirement, and is 
therefore making no change to current requirements at 7 CFR 
273.14(c)(2).

3. Verification

    Current regulations at 7 CFR 273.14(c)(3) give State agencies the 
option of establishing timeframes for submission of verification 
information. To increase consistency with procedures for initial 
applications and provide sufficient time for households to obtain the 
required verification information, the Department proposed in the 
January 11, 1995 rule to revise 7 CFR 273.14(b) to add a new paragraph 
(4) to require State agencies to allow households a minimum of 10 days 
in which to satisfy verification requirements.
    One commenter noted that there is no provision for the situation in 
which the required 10-day period would extend beyond the end of the 
certification period. Current regulations at 7 CFR 273.14(d)(2) require 
that if a household's eligibility is not determined by the end of the 
current certification

[[Page 54313]]

period because of the time period allowed for submitting missing 
verification, and the household is subsequently found eligible, it must 
receive an opportunity to participate within 5 working days after 
submission of the required verification. The Department is revising the 
proposed regulations at 7 CFR 273.14(b)(4) to include this requirement.
    The Department also proposed to simplify the requirements for 
verifying information at recertification. Current regulations at 7 CFR 
273.2(f)(8)(i) require State agencies to verify at recertification a 
change in income or actual utility expenses if the source has changed 
or the amount has changed by more than $25. State agencies are also 
required to verify previously unreported medical expenses and total 
recurring medical expenses which have changed by $25 or more. Section 
273.2(f)(8)(i) also prohibits State agencies from verifying income, 
total medical expenses, or actual utility expenses which are unchanged 
or have changed by $25 or less, unless the information is ``incomplete, 
inaccurate, inconsistent, or outdated.'' The Department proposed to 
amend 7 CFR 273.2(f)(8)(i)(A) and (C), and (ii) to replace the terms 
``incomplete, inaccurate, inconsistent or outdated'' with the term 
``questionable.''
    One commenter was concerned that as a result of the change in 
wording, State agencies might interpret ``questionable'' to mean 
something other than incomplete, inaccurate, inconsistent, or outdated, 
and that they will not reverify information that falls in these 
categories.
    To avoid any possibility that incomplete, inaccurate, inconsistent, 
or outdated information might not be reverified, the Department has 
decided not to make the proposed change.

4. Filing Deadline

    Currently, 7 CFR 273.14(c)(1) provides that for monthly reporting 
households the deadline for filing an application for recertification 
is the normal date for filing a monthly report. Several State agencies 
have requested that, for the purpose of administrative efficiency and 
flexibility, the Department make the filing deadline for monthly 
reporters the 15th of the last month of the household's certification 
period (recertification month), the same as it is for nonmonthly 
reporting households. We proposed in the January 11, 1995 publication 
to revise 7 CFR 273.14(c) to give State agencies the option of making 
the filing deadline for monthly reporters either the 15th of the 
recertification month or the household's normal date for filing a 
monthly report. The Department received no comments on the proposed 
provision and is adopting it as final.

5. Early Denial

    Under current regulations at 7 CFR 273.14(a)(3), a State agency may 
deny a household's application for recertification at the time a 
household's certification period expires or within 30 days after the 
date the application was filed as long as the household has had 
adequate time to satisfy verification requirements. Under current 
regulations at 7 CFR 273.14(a)(2), a household that fails to attend a 
scheduled interview or to provide required verification information 
within required timeframes loses its right to uninterrupted benefits 
but cannot be denied eligibility at that time, unless the household 
fails to cooperate or the household's certification period has elapsed.
    In the January 11, 1995 rule, the Department proposed a change in 
provisions for handling the recertification of households which do not 
comply with the requirements for interviews or verification. We 
proposed to include in revised section 7 CFR 273.14(e) a provision to 
allow State agencies the option of denying eligibility to households as 
soon as a failure to comply with the interview or verification 
requirement occurs. The State agency would be required to send the 
household a denial notice informing it that its application for 
recertification has been denied. The notice would have to contain the 
reason for the denial, the action required to continue participation, 
the date by which it must be accomplished, the consequences of failure 
to comply, notification that the household's participation will be 
reinstated if it complies within 30 days after its application for 
recertification was filed and is found eligible, and that the household 
has a right to a fair hearing. If the household subsequently requests 
an interview or provides the required verification information within 
30 days of the date of its recertification application and is found 
eligible, the State agency must reinstate the household. Under this 
option, benefits must be provided within 30 days after the application 
for recertification was filed or within 10 days of the date the 
household provided the required verification information or completed 
the interview, whichever is later.
    The Department received four comments on the proposed provision. 
Two commenters support the proposal, and the other two suggested that 
it apply at initial certification as well as at recertification.
    The Department is not adopting the commenters' recommendation. The 
commenters' suggestion goes beyond the provision of the proposed rule. 
As noted earlier in this section, the Department believes that 
significant changes to current regulations should be proposed in order 
to provide an opportunity for public comment. Therefore, the Department 
is not accepting the commenter's suggestion at this time but will 
consider it for future rulemakings.

6. Proration of Benefits at Recertification

    Current regulations at 273.14(f)(2) provide that any application 
for recertification not submitted in a timely manner shall be treated 
as an application for initial certification, except for verification 
requirements. If the household does not submit a recertification form 
before its certification period expires, the household's benefits for 
the first month of the new certification period are prorated in 
accordance with 7 CFR 273.10(a)(2). However, section 13916 of the 1993 
Leland Act amended section 8(c)(2)(B) of the Act, 7 U.S.C. 
2017(c)(2)(B), to eliminate proration of first month's benefits if a 
household is recertified for food stamps after a break in participation 
of less than one month. Therefore, if a household submits an 
application for recertification after its certification period has 
expired, but before the end of the month after expiration, the 
application is not considered an initial application and the 
household's benefits for that first month are not prorated. In the 
final rule, we proposed to include this new provision in revised 
section 7 CFR 273.14(e)(2)(ii). The Department received no comments on 
the proposed provision and is adopting it as final.

7. Expedited Service

    Section 11(e)(9) of the Act, 7 U.S.C. 2020(e)(9), requires State 
agencies to provide coupons within 5 days after the date of application 
to destitute migrant or seasonal farmworkers; households with gross 
incomes less than $150 a month and liquid resources that do not exceed 
$100; homeless households; and households whose combined gross income 
and liquid resources are less than their monthly rent, mortgage and 
utilities.
    In the January 11, 1995 rule, the Department proposed to eliminate 
expedited service at recertification. The Department proposed to create 
a new section, 7 CFR 273.14(f), which would clarify that households 
which punctually apply for recertification, or which apply late but 
within the

[[Page 54314]]

certification period, are not entitled to expedited service. However, 
households which do not apply for recertification until the month after 
their certification period ends are entitled to expedited service if 
they are otherwise eligible for such service. A conforming amendment to 
7 CFR 273.2(i)(4)(iv) was also proposed.
    The Department received eight comments on the proposed rule. Three 
commenters supported the proposed provision. Four commenters strongly 
opposed granting expedited service to households that reapply in the 
month immediately following the month of their last certification 
period. The commenters thought that households would use the provision 
to manipulate State agencies' issuance systems in order to receive 
benefits earlier than usual.
    The Department believes there is no substantive evidence to support 
the commenters' claim that households will purposefully fail to submit 
timely applications for recertification in order to receive their first 
month's benefits earlier than they would under their normal issuance 
cycle. Anecdotal evidence received from State agencies which have 
applied for waivers of the expedited service requirement indicates 
rather that households prefer to receive their allotments for the first 
month of their new certification period in their normal issuance cycle. 
The Department, therefore, is making no change to the proposed 
provision and is adopting it as final.
    The last commenter requested clarification on the interaction of 
the rules on expedited service, proration, and combined allotments. At 
initial application, a household eligible for expedited service must 
receive such service. If the household applies before the 15th of the 
month, it receives prorated benefits for the first month if eligible 
(assuming it timely satisfies all application requirements). If the 
household applies after the 15th of the month and is eligible for 
expedited service, it must receive a prorated allotment for the first 
month and a full allotment for the second month within the 5-day 
expedited service timeframe with postponed verification, if necessary, 
to meet the expedited timeframe.
    At recertification, if the household timely reapplies for benefits 
and timely satisfies all application processing requirements, it is not 
eligible for expedited service, its benefit for the first month is not 
prorated, and it does not receive a combined allotment. If the 
household reapplies in the month after the end of its last 
certification period, it must receive expedited service if eligible in 
accordance with the provisions of 7 CFR 273.14(f) finalized in this 
rule. In accordance with the new provisions at 7 CFR 273.14(e)(2)(ii), 
the household's benefits for the first month cannot be prorated if it 
satisfies all application processing requirements on a timely basis.
    A household that reapplies after the 15th of the month in the month 
following the end of its last certification period, is not eligible for 
a combined allotment. Section 8(c)(3)(B) of the Act requires a combined 
allotment when a household that is entitled to expedited service 
applies after the 15th day of the month in lieu of its ``initial'' 
allotment and its regular allotment for the following month. Section 
8(c)(2)(B) defines an initial month as one that follows any period of 
more than one month in which the household was not participating in the 
program. Since the month in which the household is reapplying is not an 
initial month, a combined allotment would not be required. The 
household, if eligible, would be entitled to a full month's allotment 
for the month in which it reapplies.

8. Miscellaneous Provisions

    One commenter thought that the proposed requirement at 7 CFR 
273.14(d)(2) that households be notified of their eligibility or 
ineligibility by the end of their current certification period places a 
hardship on State agency staff. The commenter thought that, in 
administering the rule, consideration must be given to weekends, 
holidays, and mail time which shortens the timeframe for making an 
eligibility determination. The commenter thought the regulation should 
be amended to require that the eligibility determination be made by the 
end of the current certification period.
    The proposed provision represented no change from existing policy 
as currently contained at 7 CFR 273.14(d)(2) and 273.10(g)(1)(iii). The 
Department understands the difficulty State agencies may encounter when 
determining household eligibility. However, the Department believes 
households should be informed of their eligibility prior to the end of 
their certification period to ensure that they are aware of their 
eligibility or ineligibility prior to the date they expect to receive 
their next allotment. The Department is adopting the proposed provision 
as final.
    The same commenter also suggested a change to the proposed 
regulations at 7 CFR 273.14(e)(1). Those regulations state that 
households which have submitted an application for recertification in a 
timely manner but, due to State agency error, are not determined 
eligible in sufficient time to provide for issuance of benefits by the 
household's next normal issuance date shall receive an immediate 
opportunity to participate. The commenter thought that the phrase 
``immediate opportunity to participate'' should be replaced with a 
definitive timeframe. The commenter felt that consideration must be 
given to different issuance systems and the need to mail benefits so 
that the phrase ``immediate opportunity'' has widely varying 
interpretations.
    Because issuance systems vary between States, the Department is 
unsure of what timeframe would be appropriate. The Department does not 
wish to impose a timeframe that would be burdensome for many State 
agencies to meet, or a timeframe that is too broad and therefore 
further penalizes households who have not been given an opportunity to 
participate within their normal issuance cycle because of an error on 
the part of the State agency. For these reasons, the Department is not 
adopting the commenter's suggestion but is adopting the proposed 
provision as final. This will allow the State agency more flexibility 
to fit the requirement into its issuance system.

Retrospective Suspension--7 CFR 273.21(n)

    Current regulations at 7 CFR 273.21(n) allow State agencies the 
option of suspending issuance of benefits to a household that becomes 
ineligible for one month. State agencies that do not choose suspension 
must terminate a household's certification when it becomes ineligible, 
and the household must reapply to reestablish its eligibility for the 
Program.
    The need for suspension typically occurs when a household paid 
weekly (or biweekly) receives an extra check in a month with five (or 
three) paydays. Under current policy, State agencies which opt to 
suspend rather than terminate a household's participation must 
anticipate prospectively which month the household will be ineligible 
and suspend the household's participation for that month.
    In the proposed rule, the Department proposed to amend 7 CFR 
273.21(n) to grant State agencies the option of suspending households 
either retrospectively or prospectively. Under retrospective 
suspension, the State agency suspends the household for the issuance 
month corresponding to the budget month in which the household receives 
the extra check. This is the method used for suspension in the

[[Page 54315]]

AFDC program. The proposed rule required that the option to suspend and 
the method of suspension must be applied Statewide.
    The Department received four comments on the proposed provision. 
Two were supportive of the provision, while two requested that the 
option of suspending issuance of benefits to a household that becomes 
ineligible for one month, which is currently limited to retrospectively 
budgeted households, be extended to prospectively budgeted households.
    The Department agrees with the commenters that it is desirable to 
allow suspension for prospectively budgeted households, for it would 
eliminate the burden on both the household and State agency caused by 
the current requirement to reapply and complete the entire application 
process if eligibility is terminated for one month. Therefore, in 
addition to adopting the proposed amendment to 7 CFR 273.21(n) as 
final, we are also adding a provision to 7 CFR 273.12(c)(2) to allow 
State agencies to suspend prospectively budgeted households that become 
ineligible for one month for any reason.

Technical Amendments

    In a final rule published June 9, 1994, titled ``Technical 
Amendments to Various Provisions of Food Stamp Rules'', the Department 
made several corrections to existing regulations. It has come to our 
attention that additional changes are needed. Therefore, we are making 
the following additional technical amendments:
    1. Paragraphs (A) and (B) in 7 CFR 272.1(g)(74)(ii)(A) are 
redesignated as paragraphs (1) and (2).
    2. The comma after the word ``elderly'' is being removed from 7 CFR 
273.1(e)(1)(i).
    3. 7 CFR 273.20(a) is being revised to complete the removal of 
references to Wisconsin, which formerly participated in the cash-out 
demonstration project and to revise the heading of the section.
    4. In the fourth sentence of 7 CFR 278.1(h), the spelling of the 
word ``applicant'' is corrected.
    5. A typographical error in the first sentence of 7 CFR 279.3(a) is 
corrected.
    The Department is also taking this opportunity to amend 7 CFR 
273.4(a) to remove paragraphs (9) and (11). These paragraphs were added 
to the regulations by a final rule published May 29, 1987 (52 FR 20058) 
to implement provisions of the Immigration Reform and Control Act 
(IRCA) of 1986.
    Paragraph (9) provides that aliens granted lawful temporary 
resident status at least 5 years prior to applying for food stamps and 
who subsequently gained lawful permanent resident status would be able 
to participate if otherwise eligible. The program to grant lawful 
temporary resident status to certain aliens has now ended and this 
paragraph is therefore obsolete. Aliens granted lawful temporary 
resident status under the provision have now either been granted lawful 
permanent resident status or are ineligible for benefits.
    Paragraph (11) provides that an alien who is lawfully admitted for 
temporary residence as an additional special agricultural worker 
(Replenishment Agricultural Worker) as of October 1, 1989 through 
September 30, 1993, in accordance with section 210A(a) of the 
Immigration and Nationality Act, is not prohibited from participating 
in the Food Stamp Program. A final rule published by the Immigration 
and Naturalization Service (INS) at 59 FR 24031, May 10, 1994, amended 
the INS regulations to remove provisions pertaining to the RAW program 
because the program expired at the end of Fiscal Year 1993. The 
preamble to the regulation indicates that in the 3 years during which 
the program was in place, no immigration benefits were ever granted 
through the RAW program. Since the program has now expired, the 
provision is obsolete and is being removed from 7 CFR 273.4(a).
    Conforming amendments are also being made to redesignate 7 CFR 
273.4(a)(10) as 273.4(a)(9), to remove the reference to 7 CFR 
273.4(a)(9) from 7 CFR 273.4(a)(2), and to change the reference in 7 
CFR 273.2(f)(1)(ii)(A) and (D) from 7 CFR 273.4(a)(11) to 273.4(a)(9). 
These technical amendments are effective 30 days after publication.

Implementation

    Except for the provisions of 7 CFR 273.14(b)(2), this final rule is 
effective November 18, 1996 and must be implemented no later than May 
1, 1997. The provisions of 7 CFR 273.14(b)(2) allowing use of a 
modified recertification form must be approved by OMB under the 
Paperwork Reduction Act of 1995 before they can become effective. We 
will publish a notice in the Federal Register announcing the effective 
date when OMB approval is received. The provisions must be implemented 
for all households that newly apply for Program benefits on or after 
either the required implementation date or the date the State agency 
implements the provision prior to the required implementation date. The 
current caseload shall be converted to these provisions following 
implementation at the household's request, at the time of 
recertification, or when the case is next reviewed, whichever occurs 
first. The State agency must provide restored benefits to such 
households back to the required implementation date or the date the 
State agency implemented the provision prior to the required 
implementation date. If for any reason a State agency fails to 
implement by the required implementation date, restored benefits shall 
be provided, if appropriate, back to the required implementation date 
or the date of application whichever is later, but for no more than 12 
months in accordance with Sec. 273.17(a). For quality control purposes, 
any variances resulting from the implementation of the rule shall be 
excluded from error analysis for 120 days from the required 
implementation date, in accordance with 7 CFR 275.12(d)(2)(vii) and 7 
U.S.C. 2025(c)(3)(A).

List of Subjects

7 CFR Part 272

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

7 CFR Part 273

    Administrative practice and procedure, Aliens, Claims, Food stamps, 
Fraud, Grant programs-social programs, Penalties, Records, Reporting 
and recordkeeping requirements, Social security.

7 CFR Part 278

    Administrative practice and procedure, Banks, Banking, Claims, Food 
stamps, Groceries--retail, Groceries--general line and wholesaler, 
Penalties.

7 CFR Part 279

    Administrative practice and procedure, Food stamps, General line--
wholesalers, Groceries, Groceries--retail.

    Accordingly, 7 CFR Parts 272, 273, 278, and 279 are amended as 
follows:
    1. The authority citation for Parts 272, 273, 278, and 279 
continues to read as follows:

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

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

    2. In Sec. 272.1:
    a. Paragraph (g)(74) is amended by redesignating paragraphs 
(g)(74)(ii)(A)(A) and (B) as (g)(74)(ii)(A)(1) and (2).
    b. a new paragraph (g)(147) is added in numerical order to read as 
follows:

[[Page 54316]]

Sec. 272.1   General terms and conditions.

* * * * *
    (g) Implementation * * *
    (147) Amendment No. 364. Except for the provisions of 
Sec. 273.14(b)(2), the provisions of Amendment No. 364 are effective 
November 18, 1996 and must be implemented no later than May 1, 1997. 
The effective date and implementation date of the provisions of 
Sec. 273.14(b)(2) will be announced in a document in the Federal 
Register. The provisions must be implemented for all households that 
newly apply for Program benefits on or after either the required 
implementation date or the date the State agency implements the 
provision prior to the required implementation date. The current 
caseload shall be converted to these provisions following 
implementation at the household's request, at the time of 
recertification, or when the case is next reviewed, whichever occurs 
first. The State agency must provide restored benefits to required 
implementation date or the date the State agency implemented the 
provision prior to the required implementation date. If for any reason 
a State agency fails to implement by the required implementation date, 
restored benefits shall be provided, if appropriate, back to the 
required implementation date or the date of application whichever is 
later, but for no more than 12 months in accordance with Sec. 273.17(a) 
of this chapter. Any variances resulting from implementation of the 
provisions of this amendment shall be excluded from error analysis for 
120 days from this required implementation date in accordance with 
Sec. 275.12(d)(2)(vii) of this chapter and 7 U.S.C. 2025(c)(3)(A).

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS


Sec. 273.1   [Amended]

    3. In Sec. 273.1, paragraph (e)(1)(i) is amended by removing the 
comma after the word ``elderly''.
    4. In Sec. 273.2:
    a. A new paragraph (c)(2)(iii) is added.
    b. Paragraph (f)(1)(ii)(A) is amended by removing the reference 
``(a)(11)'' and adding the reference ``(a)(9)'' in its place.
    c. Paragraph (f)(1)(ii)(D) is amended by removing the reference 
``Sec. 273.4(a)(8) through (11)'' and adding in its place the reference 
``Sec. 273.4(a)(8) and (a)(9)''.
    d. A new sentence is added to the end of paragraph (f)(1)(v).
    e. Paragraph (g)(2) is redesignated as paragraph (g)(3) and a new 
paragraph (g)(2) is added.
    f. The third and fourth sentences of the undesignated paragraph 
following paragraph (i)(4)(i)(B) are amended by removing the word 
``first'' wherever it appears in both sentences and adding in its place 
the word ``second''.
    g. The fourth sentence of the undesignated paragraph following 
paragraph (i)(4)(i)(B) is further amended by adding the words ``, 
except that households with a newborn may have up to 6 months following 
the month the baby was born to supply an SSN or proof of an application 
for an SSN for the newborn in accordance with Sec. 273.6(b)(4)'' before 
the period.
    h. The third sentence of paragraph (i)(4)(iii) introductory text is 
amended by adding the words ``and is certified for the month of 
application and the subsequent month only'' before the words ``to 
submit a second application''.
    i. Paragraphs (i)(4)(iii)(A), (i)(4)(iii)(B), and (i)(4)(iii)(C) 
are revised.
    j. New paragraphs (i)(4)(iii)(D) and (i)(4)(iii)(E) are added.
    k. A new sentence is added at the end of paragraph (i)(4)(iv).
    The additions and revisions read as follows:


Sec. 273.2.   Application processing.

* * * * *
    (c) Filing an application. * * *
    (2) Contacting the food stamp office. * * *
    (iii) In State agencies that elect to have Statewide residency, as 
provided in Sec. 273.3, the application processing timeframes begin 
when the application is filed in any food stamp office in the State.
* * * * *
    (f) Verification. * * *
    (1) Mandatory verification. * * *
    (v) Social security numbers. * * * A completed SSA Form 2853 shall 
be considered proof of application for an SSN for a newborn infant.
* * * * *
    (g) Normal processing standard. * * *
    (2) Combined allotments. Households which apply for initial month 
benefits (as described in Sec. 273.10(a)) after the 15th of the month, 
are processed under normal processing timeframes, have completed the 
application process within 30 days of the date of application, and have 
been determined eligible to receive benefits for the initial month of 
application and the next subsequent month, may be issued a combined 
allotment at State agency option which includes prorated benefits for 
the month of application and benefits for the first full month of 
participation. The benefits shall be issued in accordance with 
Sec. 274.2(c) of this chapter.
* * * * *
    (i) Expedited service. * * *
    (4) Special procedures for expediting service. * * *
    (iii) * * *
    (A) For households applying on or before the 15th of the month, the 
State agency may assign a one-month certification period or assign a 
normal certification period. Satisfaction of the verification 
requirements may be postponed until the second month of participation. 
If a one-month certification period is assigned, the notice of 
eligibility may be combined with the notice of expiration or a separate 
notice may be sent. The notice of eligibility must explain that the 
household has to satisfy all verification requirements that were 
postponed. For subsequent months, the household must reapply and 
satisfy all verification requirements which were postponed or be 
certified under normal processing standards. If the household does not 
satisfy the postponed verification requirements and does not appear for 
the interview, the State agency does not need to contact the household 
again.
    (B) For households applying after the 15th of the month, the State 
agency may assign a 2-month certification period or a normal 
certification period of no more than 12 months. Verification may be 
postponed until the third month of participation, if necessary, to meet 
the expedited timeframe. If a two-month certification period is 
assigned, the notice of eligibility may be combined with the notice of 
expiration or a separate notice may be sent. The notice of eligibility 
must explain that the household is obligated to satisfy the 
verification requirements that were postponed. For subsequent months, 
the household must reapply and satisfy the verification requirements 
which were postponed or be certified under normal processing standards. 
If the household does not satisfy the postponed verification 
requirements and does not attend the interview, the State agency does 
not need to contact the household again. When a certification period of 
longer than 2 months is assigned and verification is postponed, 
households must be sent a notice of eligibility advising that no 
benefits for the third month will be issued until the postponed 
verification requirements are satisfied. The notice must also advise 
the household that if the verification process results in changes in 
the household's eligibility or level of benefits, the State agency will 
act on those changes without advance notice of adverse action.

[[Page 54317]]

    (C) Households which apply for initial benefits (as described in 
Sec. 273.10(a)) after the 15th of the month, are entitled to expedited 
service, have completed the application process, and have been 
determined eligible to receive benefits for the initial month and the 
next subsequent month, shall receive a combined allotment consisting of 
prorated benefits for the initial month of application and benefits for 
the first full month of participation within the expedited service 
timeframe. If necessary, verification shall be postponed to meet the 
expedited timeframe. The benefits shall be issued in accordance with 
Sec. 274.2(c) of this chapter.
    (D) The provisions of paragraph (i)(4)(iii)(C) of this section do 
not apply to households which have been determined ineligible to 
receive benefits for the month of application or the following month, 
or to households which have not satisfied the postponed verification 
requirements. However, households eligible for expedited service may 
receive benefits for the initial month and next subsequent month under 
the verification standards of paragraph (i)(4) of this section.
    (E) If the State agency chooses to exercise the option to require a 
second application in accordance with paragraph (i)(4)(iii) of this 
section and receives the application before the third month, it shall 
not deny the application but hold it pending until the third month. The 
State agency will issue the third month's benefits within 5 working 
days from receipt of the necessary verification information but not 
before the first day of the month. If the postponed verification 
requirements are not completed before the end of the third month, the 
State agency shall terminate the household's participation and shall 
issue no further benefits.
    (iv) * * * The provisions of this section shall not apply at 
recertification if a household reapplies before the end of its current 
certification period.
* * * * *
    5. In Sec. 273.3:
    a. The existing undesignated paragraph is designated as paragraph 
(a), and is further amended by removing the first sentence and adding 
two sentences in its place.
    b. Paragraph (b) is added.
    The additions read as follows:


Sec. 273.3   Residency.

    (a) A household shall live in the State in which it files an 
application for participation. The State agency may also require a 
household to file an application for participation in a specified 
project area (as defined in Sec. 271.2 of this chapter) or office 
within the State. * * *
    (b) When a household moves within the State, the State agency may 
require the household to reapply in the new project area or it may 
transfer the household's casefile to the new project area and continue 
the household's certification without reapplication. If the State 
agency chooses to transfer the case, it shall act on changes in 
household circumstances resulting from the move in accordance with 
Sec. 273.12(c) or Sec. 273.21. It shall also ensure that duplicate 
participation does not occur in accordance with Sec. 272.4(f) of this 
chapter, and that the transfer of a household's case shall not 
adversely affect the household.


Sec. 273.4   [Amended]

    6. In Sec. 273.4:
    a. paragraph (a)(2) is amended by removing the words ``paragraphs 
(a)(8) or (a)(9)'' and adding in their place the words ``paragraph 
(a)(8)''.
    b. paragraphs (a)(9) and (a)(11) are removed and paragraph (a)(10) 
is redesignated as paragraph (a)(9).
    7. In Sec. 273.6, a new paragraph (b)(4) is added to read as 
follows:


Sec. 273.6   Social security numbers.

* * * * *
    (b) Obtaining SSNs for food stamp household members. * * *
    (4) If the household is unable to provide proof of application for 
an SSN for a newborn, the household must provide the SSN or proof of 
application at its next recertification or within 6 months following 
the month the baby is born, whichever is later. If the household is 
unable to provide an SSN or proof of application for an SSN at its next 
recertification within 6 months following the baby's birth, the State 
agency shall determine if the good cause provisions of paragraph (d) of 
this section are applicable.
* * * * *
    8. In Sec. 273.8, the first sentence of paragraph (e)(2) is revised 
to read as follows:


Sec. 273.8   Resource eligibility standards.

* * * * *
    (e) Exclusions from resources. * * *
    (2) Household goods, personal effects, the cash value of life 
insurance policies, one burial plot per household member, and the value 
of one bona fide funeral agreement per household member, provided that 
the agreement does not exceed $1,500 in equity value, in which event 
the value above $1,500 is counted. * * *
* * * * *
    9. In 273.10:
    a. The second sentence of paragraph (a)(1)(iv) is amended by adding 
the words ``second full'' after the words ``benefits for the''.
    b. Paragraph (a)(1)(iv) is further amended by removing the third 
and fourth sentences.
    c. Paragraph (c)(2)(iii) is revised.
    d. A new sentence is added at the end of paragraph (c)(3)(ii).
    e. Paragraph (f)(3) is revised.
    f. The first sentence of paragraph (g)(2) is amended by adding the 
words ``if the household has complied with all recertification 
requirements'' after ``current certification period''.
    The additions and revision read as follows:


Sec. 273.10   Determining household eligibility and benefit levels.

* * * * *
    (c) Determining income. * * *
    (2) Income only in month received. * * *
    (iii) Households receiving income on a recurring monthly or 
semimonthly basis shall not have their monthly income varied merely 
because of changes in mailing cycles or pay dates or because weekends 
or holidays cause additional payments to be received in a month.
    (3) Income averaging. * * *
    (ii) * * * Contract income which is not the household's annual 
income and is not paid on an hourly or piecework basis shall be 
prorated over the period the income is intended to cover.
* * * * *
    (f) Certification periods. * * *
    (3)(i) Households in which all members are included in a single PA 
or GA grant shall have their food stamp recertifications at the same 
time they are redetermined for PA or GA. Definite food stamp 
certification periods must be assigned to these households in 
accordance with the provisions of this section, however, those periods 
may be shortened or extended in order to align the food stamp 
recertification date with the PA or GA redetermination date. The 
household's food stamp certification period can only be extended when 
the household is initially approved for PA/GA. The food stamp 
certification period may be extended up to 12 months to align the food 
stamp certification period with the PA/GA redetermination period. If 
the household's certification period is extended, the State agency 
shall notify the household of the changes in its certification period. 
At the end of the extended certification period the household must be 
sent a Notice of Expiration and must be recertified before being 
eligible for further food stamp assistance, even if the PA or GA

[[Page 54318]]

redetermination is not set to expire. If the household's certification 
period is shortened, the State agency shall send it a notice of 
expiration which informs the household that its certification period 
will expire at the end of the month following the month the notice of 
expiration is sent and that it must reapply if it wishes to continue to 
participate. The notice of expiration shall also explain to the 
household that its certification period is expiring in order that it 
may be recertified for food stamps at the same time that it is 
redetermined for PA or GA.
    (ii) Households in which all members receive assistance under Title 
XIX of the Social Security Act or other medical assistance program may 
have their food stamp recertification at the same time they are 
redetermined for assistance under Title XIX or other medical assistance 
program. The State agency must follow the same requirements that apply 
in paragraph (f)(3)(i) of this section.
* * * * *
    10. In Sec. 273.11:
    a. The heading of paragraph (b) and the heading of the introductory 
text of paragraph (b)(1) are revised;
    b. The introductory text of paragraph (b)(1)(ii) is revised;
    c. Paragraph (b)(1)(ii)(B) is amended by removing the period at the 
end of the paragraph and adding in its place a semicolon and the word 
``or''.
    d. A new paragraph (b)(1)(ii)(C) is added;
    e. A new paragraph (b)(2) is added.
    The revisions and additions read as follows:


Sec. 273.11   Action on households with special circumstances.

* * * * *
    (b) Households with income from boarders and day care.
    (1) Households with boarders. * * *
    (ii) Cost of doing business. In determining the income received 
from boarders, the State agency shall exclude the portion of the 
boarder payment that is a cost of doing business. The amount allowed as 
a cost of doing business shall not exceed the payment the household 
receives from the boarder for lodging and meals. Households may elect 
one of the following methods to determine the cost of doing business:
* * * * *
    (C) A flat amount or fixed percentage of the gross income, provided 
that the method used to determine the flat amount or fixed percentage 
is objective and justifiable and is stated in the State's food stamp 
manual.
* * * * *
    (2) Income from day care. Households deriving income from day care 
may elect one of the following methods of determining the cost of meals 
provided to the individuals:
    (i) Actual documented costs of meals;
    (ii) A standard per day amount based on estimated per meal costs; 
or
    (iii) Current reimbursement amounts used in the Child and Adult 
Care Food Program.
* * * * *
    11. In Sec. 273.12, the text of paragraph (c)(2) is redesignated as 
(c)(2)(i) and a new paragraph (c)(2)(ii) is added to read as follows:


Sec. 273.12  Reporting changes.

* * * * *
    (c) State agency action on changes. * * *
    (2) Decreases in benefits. * * *
    (ii) The State agency may suspend a household's certification 
prospectively for one month if the household becomes temporarily 
ineligible because of a periodic increase in recurring income or other 
change not expected to continue in the subsequent month. If the 
suspended household again becomes eligible, the State agency shall 
issue benefits to the household on the household's normal issuance 
date. If the suspended household does not become eligible after one 
month, the State agency shall terminate the household's certification. 
Households are responsible for reporting changes as required by 
paragraph (a) of this section during the period of suspension.
* * * * *
    12. In Sec. 273.13, a new paragraph (c) is added to read as 
follows:


Sec. 273.13  Notice of adverse action.

* * * * *
    (c) Optional notice. The State agency may, at its option, send the 
household an adequate notice as provided in paragraph (b)(3) of this 
section when the household's address is unknown and mail directed to it 
has been returned by the post office indicating no known forwarding 
address.
    13. Sec. 273.14 is revised to read as follows:


Sec. 273.14  Recertification

    (a) General. No household may participate beyond the expiration of 
the certification period assigned in accordance with Sec. 273.10(f) 
without a determination of eligibility for a new period. The State 
agency must establish procedures for notifying households of expiration 
dates, providing application forms, scheduling interviews, and 
recertifying eligible households prior to the expiration of 
certification periods. Households must apply for recertification and 
comply with interview and verification requirements.
    (b) Recertification process. (1) Notice of expiration. (i) The 
State agency shall provide households certified for one month or 
certified in the second month of a two-month certification period a 
notice of expiration (NOE) at the time of certification. The State 
agency shall provide other households the NOE before the first day of 
the last month of the certification period, but not before the first 
day of the next-to-the-last month. Jointly processed PA and GA 
households need not receive a separate food stamp notice if they are 
recertified for food stamps at the same time as their PA or GA 
redetermination.
    (ii) Each State agency shall develop a NOE. A model form (Form FCS-
439) is available from FCS. The NOE must contain the following:
    (A) The date the certification period expires;
    (B) The date by which a household must submit an application for 
recertification in order to receive uninterrupted benefits;
    (C) The consequences of failure to apply for recertification in a 
timely manner;
    (D) Notice of the right to receive an application form upon request 
and to have it accepted as long as it contains a signature and a 
legible name and address;
    (E) Information on alternative submission methods available to 
households which cannot come into the certification office or do not 
have an authorized representative and how to exercise these options;
    (F) The address of the office where the application must be filed;
    (G) The household's right to request a fair hearing if the 
recertification is denied or if the household objects to the benefit 
issuance;
    (H) Notice that any household consisting only of Supplemental 
Security Income (SSI) applicants or recipients is entitled to apply for 
food stamp recertification at an office of the Social Security 
Administration;
    (I) Notice that failure to attend an interview may result in delay 
or denial of benefits; and
    (J) Notice that the household is responsible for rescheduling a 
missed interview and for providing required verification information.
    (iii) To expedite the recertification process, State agencies are 
encouraged to send a recertification form, an interview appointment 
letter, and a statement of needed verification required by 
Sec. 273.2(c)(5) with the NOE.

[[Page 54319]]

    (2) Application form. (i) The State agency shall provide each 
household with an application form to obtain all information needed to 
determine eligibility and benefits for a new certification period. The 
State agency may use either its regular application as defined in 
Sec. 273.2(b) or a special recertification form. The recertification 
form can only be used by households which are applying for 
recertification before the end of their current certification period. 
Recertification forms must be approved by FCS as required by 
Sec. 273.2(b)(3). Recertification forms used for joint food stamps/SSI 
processing must be approved by SSA in accordance with 
Sec. 273.2(k)(1)(i)(B). The recertification form must elicit from the 
household sufficient information regarding household composition, 
income and resources that, when added to information already contained 
in the casefile, will ensure an accurate determination of eligibility 
and benefits. The information required by 
Sec. 273.2(b)(1)(i),(b)(1)(ii), (b)(1)(iii), (b)(1)(iv) and (b)(1)(v) 
must be included on the recertification form. The information regarding 
the Income and Eligibility Verification System in Sec. 273.2(b)(2) may 
be provided on a separate form. A combined form for PA and GA 
households may be used in accordance with Sec. 273.2(j). Monthly 
reporting households shall be recertified as provided in 
Sec. 273.21(q). State agencies may use the same form for households 
required to report changes in circumstances and monthly reporting 
households.
    (ii) The State agency may request that the household bring the 
application form to the interview or return the form by a specified 
date (not less than 15 days after receipt of the form).
    (3) Interview. (i) As part of the recertification process, the 
State agency shall conduct a face-to-face interview with a member of 
each household. The face-to-face interview may be waived in accordance 
with Sec. 273.2(e). The State agency may also waive the face-to-face 
interview for a household that has no earned income if all of its 
members are elderly or disabled. The State agency has the option of 
conducting a telephone interview or a home visit for those households 
for whom the office interview is waived. However, a household that 
requests a face-to-face interview must be granted one.
    (ii) If a household receives PA/GA and will be recertified for food 
stamps more than once in a 12-month period, the State agency may choose 
to conduct a face-to-face interview with that household only once 
during that period. The face-to-face interview shall be conducted at 
the same time that the household receives a face-to-face interview for 
PA/GA purposes. At any other recertification during that year period, 
the State agency may interview the household by telephone, conduct a 
home visit, or recertify the household by mail.
    (iii) The State agency may schedule the interview prior to the 
application filing date, provided that the household's application is 
not denied at that time for failure to appear for the interview. The 
State agency shall schedule the interview on or after the date the 
application was filed if the interview has not been previously 
scheduled, or the household has failed to appear for any interviews 
scheduled prior to this time and has requested another interview. State 
agencies shall schedule interviews so that the household has at least 
10 days after the interview in which to provide verification before the 
certification period expires.
    (4) Verification. Information provided by the household shall be 
verified in accordance with Sec. 273.2(f)(8)(i). The State agency shall 
provide the household a notice of required verification as provided in 
Sec. 273.2(c)(5) and notify the household of the date by which the 
verification requirements must be satisfied. The household must be 
allowed a minimum of 10 days to provide required verification 
information. Any household whose eligibility is not determined by the 
end of its current certification period due to the time period allowed 
for submitting any missing verification shall receive an opportunity to 
participate, if eligible, within 5 working days after the household 
submits the missing verification.
    (c) Timely application for recertification. (1) Households 
reporting required changes in circumstances that are certified for one 
month or certified in the second month of a two-month certification 
period shall have 15 days from the date the NOE is received to file a 
timely application for recertification.
    (2) Other households reporting required changes in circumstances 
that submit applications by the 15th day of the last month of the 
certification period shall be considered to have made a timely 
application for recertification.
    (3) For monthly reporting households, the filing deadline shall be 
either the 15th of the last month of the certification period or the 
normal date for filing a monthly report, at the State agency's option. 
The option chosen must be uniformly applied to the State agency's 
entire monthly reporting caseload.
    (4) For households consisting only of SSI applicants or recipients 
who apply for food stamp recertification at SSA offices in accordance 
with Sec. 273.2(k)(1), an application shall be considered filed for 
normal processing purposes when the signed application is received by 
the SSA.
    (d) Timely processing. (1) Households that were certified for one 
month or certified for two months in the second month of the 
certification period and have met all required application procedures 
shall be notified of their eligibility or ineligibility. Eligible 
households shall be provided an opportunity to receive benefits no 
later than 30 calendar days after the date the household received its 
last allotment.
    (2) Other households that have met all application requirements 
shall be notified of their eligibility or ineligibility by the end of 
their current certification period. In addition, the State agency shall 
provide households that are determined eligible an opportunity to 
participate by the household's normal issuance cycle in the month 
following the end of its current certification period.
    (e) Delayed processing. (1) Delays caused by the State agency. 
Households which have submitted an application for recertification in a 
timely manner but, due to State agency error, are not determined 
eligible in sufficient time to provide for issuance of benefits by the 
household's next normal issuance date shall receive an immediate 
opportunity to participate upon being determined eligible, and the 
allotment shall not be prorated. If the household was unable to 
participate for the month following the expiration of the certification 
period because of State agency error, the household is entitled to 
restored benefits.
    (2) Delays caused by the household. (i) If a household does not 
submit a new application by the end of the certification period, the 
State agency must close the case without further action.
    (ii) If a recertification form is submitted more than one month 
after the timely filing deadline, it shall be treated the same as an 
application for initial certification. In accordance with 
Sec. 273.10(a)(1)(ii), the household's benefits shall not be prorated 
unless there has been a break of more than one month in the household's 
certification.
    (iii) A household which submits an application by the filing 
deadline but does not appear for an interview scheduled after the 
application has been filed, or does not submit verification within the 
required timeframe, loses its right to uninterrupted benefits. The

[[Page 54320]]

State agency has three options for handling such cases:
    (A) Send the household a denial notice as soon as the household 
either fails to appear for an interview or fails to submit verification 
information within the required timeframe. If the interview is 
completed, or the household provides the required verification 
information within 30 days of the date of application and is determined 
eligible, the household must be reinstated and receive benefits within 
30 calendar days after the application was filed or within 10 days of 
the date the interview is completed or required verification 
information is provided, whichever is later. In no event shall a 
subsequent period's benefits be provided before the end of the current 
certification period.
    (B) Deny the household's recertification application at the end of 
the last month of the current certification period. The State agency 
may on a Statewide basis either require households to submit new 
applications to continue benefits or reinstate the households without 
requiring new applications if the households have been interviewed and 
have provided the required verification information within 30 days 
after the applications have been denied.
    (C) Deny the household's recertification request 30 days after 
application. The State agency may on a Statewide basis either require 
households to submit new applications to continue benefits or reinstate 
households without requiring new applications if such households have 
been interviewed and have provided the required verification within 30 
days after the applications have been denied.
    (f) Expedited service. A State agency is not required to apply the 
expedited service provisions of Sec. 273.2(i) at recertification if the 
household applies for recertification before the end of its current 
certification period.
    14. In Sec. 273.20, the section heading and paragraph (a) are 
revised to read as follows:


Sec. 273.20  SSI cash-out.

    (a) Ineligibility. No individual who receives supplemental security 
income (SSI) benefits and/or State supplementary payments as a resident 
of California is eligible to receive food stamp benefits. The Secretary 
of the Department of Health and Human Services has determined that the 
SSI payments in California have been specifically increased to include 
the value of the food stamp allotment.
* * * * *
    15. In Sec. 273.21, paragraph (n)(1) is amended by adding a 
sentence to the end of the paragraph to read as follows:


Sec. 273.21  Monthly Reporting and Retrospective Budgeting (MRRB)

* * * * *
    (n) Suspension. * * *
    (1) * * * The State agency may on a Statewide basis either suspend 
the household's certification prospectively for the issuance month or 
retrospectively for the issuance month corresponding to the budget 
month in which the noncontinuing circumstance occurs.
* * * * *

PART 278--PARTICIPATION OF RETAIL FOOD STORES, WHOLESALE FOOD 
CONCERNS AND INSURED FINANCIAL INSTITUTIONS


Sec. 278.1  [Amended]

    16. In Sec. 278.1, the fourth sentence of paragraph (h) is amended 
by removing the word ``appliant'' and adding the word ``applicant'' in 
its place.

PART 279--ADMINISTRATIVE AND JUDICIAL REVIEW--FOOD RETAILERS AND 
FOOD WHOLESALERS


Sec. 279.3  [Amended]

    17. In Sec. 279.3, the introductory text of paragraph (a) is 
amended by removing the word ``A'' and adding the word ``An'' in its 
place.

    Dated: September 27, 1996.
Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 96-26069 Filed 10-16-96; 8:45 am]
BILLING CODE 3410-30-U