[Federal Register Volume 62, Number 165 (Tuesday, August 26, 1997)]
[Notices]
[Pages 45256-45258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22683]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary


Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 (PRWORA); Interpretation of ``Federal Means-Tested Public 
Benefit''

agency: Office of the Secretary, HHS.

Action: Notice with comment period.

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summary: This notice with comment period interprets the term ``Federal 
means-tested public benefit[s]'' as used in Title IV of the Personal 
Responsibility and work Opportunity Reconciliation Act of 1996 
(PRWORA), Pub. L. 104-193, to include only mandatory spending programs 
of the Federal Government in which eligibility for the programs' 
benefits, or the amount of such benefits, or both, are determined on 
the basis of income or resources of the eligibility unit seeking the 
benefit. At HHS, the benefit programs that fall within this definition 
(and are not explicitly excepted from the definition by Section 403(c)) 
are Medicaid and Temporary Assistance for Needy Families (TANF).

dates: Effective Date: This notice is effective on August 26, 1997.

comment period: Written comments will be considered if we receive them 
at the appropriate address, as provided in the addresses section below, 
no later than 5 p.m. on October 27, 1997.

addresses: Mail comments (1 original and 3 copies) to the following 
address: Division of Economic Support for Families, Office of the 
Assistant Secretary for Planning and Evaluation, Department of Health 
and Human Services, Room 404E, 200 Independence Ave., SW, Washington, 
DC 20201, Attention: David Nielsen.

for further information contact: David Nielsen, (202) 690-7148.
    Copies of comments may be inspected at the above address. Inquiries 
regarding how a particular program is affected by this notice should be 
submitted to DHHS program staff responsible for managing the program at 
either the appropriate Regional Office, or Headquarters in Washington, 
DC. The above contact should be used only to submit general comments 
regarding the policy interpretation contained in this notice.

[[Page 45257]]

supplementary information:

I. Background

    Title IV of PRWORA contains several references to the term 
``Federal means-tested public benefit[s].'' The most significant of 
these references are found in Sections 403 and 421. Section 403 denies 
``Federal means-tested public benefit[s]'' to aliens who entered the 
United States with a qualified alien status ``on or after the date of 
the enactment of this Act'' for 5 years beginning on the date of the 
aliens' entry into the United States. Section 421 provides that new 
sponsor-to-alien deeming rules apply to ``any Federal means-tested 
public benefits program.'' In the absence of a statutory definition of 
``Federal means-tested public benefit'', HHS is interpreting the term 
to include only benefits provided by means-tested, mandatory spending 
programs.
    Early versions of PRWORA contained a definition of ``Federal means-
tested public benefit'' that could have encompassed benefits provided 
by both discretionary spending programs and mandatory spending 
programs. (These early versions provided that, with certain exceptions, 
``the term `Federal means-tested public benefit' meant a public benefit 
(including cash, medical, housing, and food assistance and social 
services) of the Federal Government in which the eligibility of an 
individual, household, or family eligibility unit for benefits, or the 
amount of such benefits, or both are determined on the basis of income, 
resources, or financial need of the individual, household, or unit.'' 
142 Cong. Rec. S8481 (daily ed. July 22, 1996).) During debate over the 
bill in the Senate, a member of the Senate raised a point of order 
pursuant to the Byrd Rule, and the definition was struck. The Senate 
Parliamentarian upheld the Byrd Rule objection, the Senate did not 
appeal the ruling, and PRWORA was ultimately enacted without defining 
the term.
    PRWORA was subject to Section 313 of the Congressional Budget Act 
of 1974, also known as the ``Byrd Rule,'' because it was enacted as a 
budget reconciliation bill. Under the Byrd Rule, a Senator may raise a 
point of order to strike or prevent the incorporation of ``extraneous'' 
material. A provision in a reconciliation bill will be considered 
``extraneous'' and subject to a point of order if, among other things, 
``it produces changes in outlays or revenues which are merely 
incidental to the non-budgetary components of the provision.'' 2 U.S.C. 
Sec. 644(b)(1)(D). The legislative history of PRWORA indicates that the 
Senate understood the significance of the Byrd Rule objection in terms 
of limiting the scope of the definition of ``Federal means-tested 
public benefit'' to mandatory spending programs, while leaving 
discretionary programs unaffected. See 142 Cong. Rec. at S9403 (daily 
ed. August 1, 1996) (statement of Senator Chafee); 142 Cong. Rec. at 
S9400 (statements of Senators Graham, Kennedy and Exon). Therefore, to 
the extent the definition of ``Federal means-tested public benefit'' 
included benefits provided by discretionary spending programs, it was 
subject to a Byrd Rule objection.

II. Interpretation

    In light of the statutory language and legislative history, HHS is 
defining ``Federal means-tested public benefit'' to apply only to 
benefits provided by Federal means-tested, mandatory spending programs, 
and not to any discretionary spending programs or to any mandatory 
spending programs that are not means-tested. For purposes of this 
Federal Register notice, a program is considered ``means-tested'' if 
eligibility for the program's benefits, or the amount of such benefits, 
or both, are determined on the basis of income or resources of the 
eligibility unit seeking the benefit.
    The following HHS programs are means-tested, mandatory spending 
programs: Medicaid, Temporary Assistance for Needy Families (TANF), 
Foster Care, Adoption Assistance, and part of the Child Care 
Development Block Grant. Foster Care and Adoption Assistance, however, 
are explicitly exempted from the term ``Federal means-tested public 
benefit'' under Section 403(c)(2)(F). The Child Care Development Block 
Grant program is unique in that it is funded from both mandatory and 
discretionary parts of the budget. Since the funds are operationally 
commingled at the state and local level, and since the mixed nature of 
the funding results in budgetary effects more closely akin to those of 
a discretionary spending program, we are treating Child Care as a 
discretionary spending program for purposes of interpreting ``Federal 
means-tested public benefit.'' Therefore, the HHS programs that 
constitute ``Federal means-tested public benefits'' under PRWORA are 
Medicaid and TANF.
    This interpretation pertains only to HHS and its benefit programs. 
Other Executive Branch agencies whose programs may be subject to 
PROWORA will make independent determinations about the scope of the 
term.

III. Comment Period and Effective Date

    Although HHS is soliciting public comment on this interpretation, 
we believe that it is necessary to apply this interpretation to HHS 
programs immediately, prior to receipt and consideration of any 
comments.
    PRWORA was enacted in August, 1996, and since that time HHS has 
received numerous inquiries regarding the application of the term 
``Federal means-tested public benefit.'' Additional delay will cause 
unnecessary or incorrect administrative actions by agencies or entities 
that administer our programs. We also believe it is possible that due 
to confusion about the application of the term ``Federal means-tested 
public benefit'' people may have been denied critical benefits and 
services who, according to the interpretation in this notice, are 
otherwise eligible. Without prompt issuance of this interpretation, 
state and local governments and other public and private benefit 
providers will remain confused over how to implement the requirements 
of Title IV of PRWORA. Finally, some states have indicated their 
intention to define the term ``Federal means-tested public benefit'' on 
their own if Federal guidance is not forthcoming soon. Independent 
interpretations by states will only compound the confusion on this 
issue since there is no certainty that each state will arrive at the 
same definition of the term. In sum, although we are providing a 60-day 
period for public comment, as indicated at the beginning of this 
notice, this interpretation is effective immediately.

IV. Economic Impact

    The Department has analyzed the costs and benefits of this notice 
to determine whether it has a substantial economic effect on the 
economy as a whole, on states, or on small entities. The purpose of 
this analysis was to identify less burdensome or more beneficial 
alternatives and thereby to influence the requirements imposed by the 
notice.
    PRWORA creates major economic effects, a large portion of which 
results from changes in the law relating to immigrants' eligibility for 
Federal benefits. We estimated the 1997-2002 Federal budget savings to 
Medicaid due to the immigrant restrictions would be $5.1 billion. There 
were no Federal budget savings estimated for TANF because, as a block 
grant, its spending levels were fixed regardless of caseload size. 
These Medicaid budget effects are essentially due to the eligibility 
restrictions contained in the statute.

[[Page 45258]]

This notice provides HHS' interpretation as to whether any other HHS 
programs are subject to the PRWORA requirements regarding immigrants' 
eligibility for ``Federal means-tested'' benefits, and thereby serves 
to prevent confusion among administering agencies, grantee agencies, 
benefit providers, and the public. This interpretation has no effect on 
overall spending levels for any discretionary-funded HHS programs. Nor 
does this interpretation create burdens or mandates on states or small 
entities.
    As a result of the PRWORA eligibility restrictions, this notice is 
classified as economically ``significant'' under Executive Order 
12866's criterion of an economic effect of more than $100 million. For 
the same reason, it is classified as a ``major rule'' for purposes of 
Congressional review under 5 U.S.C. Sec. 801 et. seq., Subtitle E of 
the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 
104-121). And, for the same reasons noted in section III above, this 
notice is effective immediately under the exception procedures of 
Sec. 808 of that statute because we have determined for good cause that 
delayed implementation is impractical and contrary to the public 
interest.

    Dated: August 21, 1997.

Donna E. Shalala,
Secretary.
[FR Doc. 97-22683 Filed 8-25-97; 8:45 am]
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