[Federal Register Volume 68, Number 82 (Tuesday, April 29, 2003)]
[Rules and Regulations]
[Pages 22567-22576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10443]



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  Federal Register / Vol. 68, No. 82 / Tuesday, April 29, 2003 / Rules 
and Regulations  

[[Page 22567]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

[Amendment No. 376]
RIN: 0584-AB57


Food Stamp Program: Anticipating Income and Reporting Changes

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule finalizes provisions of a proposed rulemaking 
published December 17, 1996. It revises the current requirement that 
households report a change of more than $25 in monthly gross income by 
increasing the reporting threshold for unearned income to $50 and by 
allowing State agencies two options for reporting requirements for 
changes in the amount of earned income. The rule also provides State 
agencies with the option of establishing a quarterly reporting system 
for all nonexempt households. The rule also includes a technical 
amendment addressing procedures for the handling of certain recurring 
income in a retrospective budgeting system.

DATES: Effective date: This rule is effective May 29, 2003.
    Implementation date: This rule must be implemented no later than 
November 1, 2003.

FOR FURTHER INFORMATION CONTACT: Patrick Waldron, Branch Chief, 
Certification Policy Branch, Program Development Division, Food and 
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia, 
22302, (703) 305-2516. The e-mail address is 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Procedural Matters

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 part 3015, Subpart V and related Notice (48 FR 29115), 
this Program is excluded from the scope of Executive Order 12372 which 
requires intergovernmental consultation with State and local officials.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The Under 
Secretary for Food, Nutrition, and Consumer Services has certified that 
this final rule will not have a significant economic impact on a 
substantial number of small entities. State and local welfare agencies 
will be the most affected to the extent that they administer the Food 
Stamp Program (FSP).

Paperwork Reduction Act

    The information collection requirements associated with this 
rulemaking have been reviewed by the Office of Management and Budget 
(OMB) and approved under OMB No. 0584-0064. We did not publish a 
separate notice requesting comments on the proposed information 
collection associated with this rule. We did, however, solicit comments 
concerning the information collection in the proposed rule, which was 
published on December 17, 1996 at 61 FR 66233. We specifically 
requested comments on: (a) Whether the proposed collection of 
information was necessary; (b) the accuracy of the agency's burden 
estimate; (c) ways to enhance quality, utility, and clarity of the 
information to be collected; and (d) ways to minimize the burden of the 
collection of information on potential respondents. We received no 
comments specifically concerning the proposed information collection.
    Although this rule eliminates or reduces the need to report certain 
changes in household circumstances, households will still be required 
to report other changes. Therefore, we believe that households will 
still be required to submit an average of one change report form per 
year. At the time we issued the proposed rule we estimated that 
approximately 9,342,000 households are subject to change reporting. 
Based on an estimated average of .167 hours per report and one report 
per year, we estimated that the report form results in a total burden 
if 1,507,691 hours per year.

Executive Order 13132

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. We 
note that all references to State agencies when used in the context of 
Federalism also refer to local welfare agencies in States in which the 
FSP is administered by local governments. In developing this rule the 
Food and Nutrition Service (FNS) has considered the impact on State 
agencies. This rule increases State agency flexibility by increasing 
the number of options that State agencies will have regarding 
procedures for the reporting of information by Food Stamp Program 
recipients. To a large extent this rule codifies procedures that are 
currently being utilized by State agencies through waivers, and imposes 
no new requirements on State agencies.

Prior Consultation With State and Local Officials

    Before drafting this rule, we received input from State agencies at 
various times. Because the FSP is a State-administered, federally 
funded program, our regional offices have formal and informal 
discussions with State and local officials on an ongoing basis. These 
discussions involve implementation and policy issues. This arrangement 
allows State agencies to provide feedback that forms the basis for many 
discretionary decisions in this and other FSP rules. In addition, FNS 
officials attend regional, national, and professional conferences to 
discuss issues and receive feedback from State officials at all levels. 
Lastly, the comments on the proposed rule from State officials were 
carefully considered in drafting this final rule.

[[Page 22568]]

Nature and Concerns and the Need To Issue this Rule

    State agencies have generally wanted greater flexibility in the 
establishment of criteria for the reporting of changes in circumstances 
by participating households. FNS has responded to these concerns 
through the granting of waivers of current regulatory criteria with 
respect to household reporting. State agencies have indicated that they 
would prefer to have greater discretion without the need to go through 
the time-consuming and cumbersome waiver process. They believe that 
such discretion would enhance their ability to more efficiently 
administer the FSP.

Extent to Which FNS Meets Those Concerns

    FNS has considered the impact on State and local agencies. In 
response to State agency concerns we are amending 7 CFR 273.12 to 
provide State agencies with greater discretion regarding requirements 
for the reporting of changes in household circumstances. The rule also 
reduces the burden on households and State agencies by eliminating the 
need to report relatively small changes in income.
    This rule is intended to have a preemptive effect on any State law 
that conflicts with its provisions or that would otherwise impede its 
full implementation. FNS is not aware of any case where the provisions 
of the rule would preempt State law. To the extent the rule includes 
discretionary changes, the Department has established compliance time 
frames which give due consideration to State agency processes for 
notification of customers and stakeholders and for the implementation 
of the new procedures in local offices.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The 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 Dates 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.

Regulatory Impact Analysis

Need for Action
    This action is needed to respond to requests from State Food Stamp 
Program agencies for revision of the requirements for reporting changes 
in the amount of income received, to clarify procedures for averaging 
income, and to assist recipients in meeting their responsibility to 
comply with FSP requirements.
Benefits
    State agencies will benefit from this rule because households will 
better understand which changes in income they are required to report, 
and the number of reports requiring State agency action will be 
reduced. Recipients who work will benefit because they will have to 
report only significant changes in their income rather than changes 
that are minor and temporary.
Costs
    The revisions in requirements for reporting changes in income and 
acting on reported changes are estimated to cost $58 million over the 
2003 to 2007 period.

II. Background

    On December 17, 1996, we published a rule at 61 FR 66233 in which 
we proposed to revise FSP regulations at 7 CFR 273.10 and 7 CFR 273.12 
governing the income changes food stamp households are required to 
report during the certification period and the treatment of this income 
in determining benefits. Comments were solicited on the provisions of 
the proposed rule through February 18, 1997, and a total of 29 comments 
were received. This final rule addresses the commenters' concerns. 
Readers are referred to the proposed rule for a more complete 
description of the basis for the rule. Following is a discussion of the 
provisions of the proposed rule, the comments received, and changes 
made in the final rule.

1. Income Averaging--7 CFR 273.10(c)(3)(i)

    The proposed rule retained current 7 CFR 273.10(c)(3)(i) which 
provides that households (except destitute migrant and seasonal farm 
worker households) may elect to have their income averaged and that the 
State agency shall use the household's anticipation of monthly income 
fluctuations over the certification period. We proposed to provide in 
addition that an average must be recalculated at recertification and in 
response to changes in income in accordance with 7 CFR 273.12(c).
    We solicited comments on whether to continue to allow households 
the option of determining whether their income is averaged or whether 
to allow State agencies to make the determination. Seven commenters 
objected to the proposed continuation of the current provision allowing 
households to determine whether or not their income should be averaged. 
The commenters indicated that averaging should be at the option of the 
State agency, rather than the household. According to these commenters, 
use of an averaged income amount is administratively easier and an 
average more accurately reflects income received over the certification 
period. They believe income averaging is beneficial for households 
because it reduces the household's need to report changes, simplifies 
instructions to households concerning reporting responsibilities, and 
provides households a consistent level of benefits from month to month. 
One State agency recommended that to minimize administrative costs and 
to offer States more flexibility, FNS should allow States the option to 
average monthly income, except for destitute households or unless 
averaging would result in denial of an otherwise eligible case.
    The income of food stamp households frequently fluctuates from 
month to month, making it difficult for change reporting households to 
correctly report changes and for the State agency to provide accurate 
benefits based on the income received in a particular month. Averaging 
is an effective alternative to monthly reporting and retrospective 
budgeting, which is more costly for the State agency and burdensome for 
the household. State agencies have requested the flexibility to 
determine when averaging is appropriate so that the household's income 
can be budgeted consistently for food stamps and other assistance 
programs. Basing allotments on an average also assists households in 
budgeting for their needs by providing the same level of benefits over 
several months. Therefore, as revised by this rule, 7 CFR 
273.10(c)(3)(i) provides that the State agency may develop methods to 
be applied Statewide for averaging the income of categories of 
households. If income has been averaged, we believe State agencies 
should inform the household of the amount used to calculate the 
allotment, as many State agencies already do. Therefore, paragraph 
(c)(3)(i) also contains a provision to that effect.
    Another commenter suggested that the rule should prohibit income 
averaging for migrant and seasonal farm worker households if the income 
is earned by contract from one employer in less than a 12-month period. 
We are not adopting this suggestion because, as pointed out by the 
commenter, 7 CFR 273.10(c)(3)(ii) already prohibits treating the income 
of migrant or seasonal farm

[[Page 22569]]

workers as contract income. This type of income is required to be 
annualized or prorated over the period it is intended to cover. We also 
feel that this suggestion is beyond the scope of this rulemaking and 
that an additional reference to the prohibition against income 
averaging for such households is unnecessary.
    Another commenter asked that the final rule clarify that use of the 
income conversion factors in 7 CFR 273.10(c)(2) is not a form of income 
averaging. In the preamble to the proposed rule (61 FR at 66237), we 
discussed the difference between conversion and averaging but did not 
propose any change to 7 CFR 273.10(c)(2). However, we agree that some 
clarification in the regulations would be helpful. Therefore, we are 
adding a sentence to 7 CFR 273.10(c)(3) to specify that converting 
income to a monthly amount, as provided in paragraph (c)(2), does not 
constitute averaging for the purposes of paragraph (c)(3).

2. Reporting Requirement for Unearned Income--7 CFR 273.12(a)(1)(i)(A)

    We wish to preface our discussion regarding the reporting 
requirements contained in this final rule by noting that on November 
21, 2000, we published a final rule at 65 FR 70134, which included, 
among several other provisions, an amendment to 7 CFR 273.10(f) giving 
the State agencies more discretion with respect to the assignment of 
certification periods. This rule amended 7 CFR 273.12(a)(1) by adding a 
new paragraph (vii) that provided State agencies with the option of 
limiting reporting for households with earned income that are assigned 
certification period of at least six months to only changes in their 
gross monthly income that result in household gross income greater that 
130 percent of the Federal poverty guideline. In States electing this 
option, households with earned income that are assigned certification 
periods greater than six months are required to submit reports of their 
households circumstances every six months. Section 4109 of the Farm 
Security and Rural Investment Act of 2002 (Public Law 107-171) expanded 
this option, limited to earned income households through regulation, to 
all households not statutorily exempt from periodic reporting. Although 
twenty States have currently adopted this option in some form and 
several other may do so in the future, to maximize State agency 
flexibility we have elected, subject to the modifications discussed 
below, to provide State agencies with most of the options contained in 
the 1996 proposed rule.
    We did not propose any change in the requirement that households 
report a change of more than $25 in unearned income and we solicited 
comments on ways State agencies could use information from computer 
matches to update unearned income amounts rather than relying on 
household reports. As proposed, the regulation would have continued to 
require that households report changes of more than $25 in unearned 
income. Change in earned income would be handled in accordance with one 
of the options specified by the State agency. Seven commenters 
recommended that the reporting threshold for earned and unearned income 
should be the same. Three commenters indicated that the unearned income 
threshold should be increased to $50.
    Although it would be administratively simpler and less confusing if 
the reporting threshold for earned and unearned income were the same, 
raising the threshold for unearned income to the same level as the 
earned income threshold could result in a greater increase in Program 
costs than only raising the threshold for earned income. According to 
the Fiscal Year (FY) 2000 ``Characteristics of Food Stamp Households,'' 
78.7 percent of food stamp households receive some unearned income, 
compared to the 27.2 percent of households that receive earned income. 
We believe some increase in the unearned income reporting threshold is 
justified, however, because of inflation since the $25 figure was 
established in regulations in 1974. Therefore, we are adopting the $50 
threshold suggested by commenters. Changes in households' public 
assistance and jointly processed general assistance grants are still 
excluded from unearned income reporting since the State agency has 
prior knowledge of all changes in these grants.
    Although we did not propose any changes in current procedures we 
solicited comments regarding the use of computer matching as an 
alternative to the reporting of changes in certain types of unearned 
income such as supplemental security income (SSI), Old Age, Survivors, 
and Disability Insurance (OASDI), and unemployment compensation. Five 
State agencies commented that information from computer matching with 
other agencies would not be received in time to make changes within the 
10-day periods generally required by current regulations at 7 CFR 
273.12(c). One State agency is pursuing the possibility of developing 
an interface with the Social Security Administration (SSA) that will 
provide on-line access to benefit information. That would enable the 
State to identify and act on changes in benefits provided under Titles 
II and XVI of the Social Security Act within the current time frames. 
Other State agencies pointed out that information is received overnight 
from SSA only if requested; new information is not provided 
automatically. Also, households are required to report prospective 
changes in income; however, the data match may not show a discrepancy 
until the month in which the change actually occurred. At the time that 
the proposed rule was published the use of data obtained through 
matches would generally not have been feasible since changes based on 
matched data could not be made as quickly as changes reported by the 
household.
    One State agency commented that households should not be required 
to report changes in unearned income if the State has an FNS-approved 
computer matching process that reports these changes at least monthly. 
Another State agency supported the ability of States to automatically 
use information received from sources such as SSA, but commented that 
States should not have to act on information more frequently than 
monthly. The State agency believes the payment information should be 
received once a month whether workers must take an action or the 
actions are automated. The State agency believes use of computer match 
information is difficult in a prospective budgeting system.
    We are retaining the requirement that households are responsible 
for reporting changes in unearned income. Since the proposed rule was 
published, a number of States now have online access to data from the 
SSA. Although we are not eliminating the requirement that households 
report changes in SSI and OASDI, we will consider waiver requests to 
eliminate the requirement that households report of changes in those 
forms of income if the State agency making the request has online 
access to data from SSA and can implement changes within the timeframes 
specified under 7 CFR 273.12(c). We also wish to note that as the 
result of the November 21, 2000, final rule and the recently enacted 
legislation limiting reporting only to changes that result in household 
gross income in excess of 130 percent of the poverty level, a 
significant number of households are no longer subject to change 
reporting.

[[Page 22570]]

    As revised in response to comments, 7 CFR 273.12(a)(1)(i)(A) 
provides that change reporting households are required to report a 
change greater than $50 in the amount of unearned income, except 
changes in public assistance (PA) or jointly processed general 
assistance (GA). Changes in households' public assistance and jointly 
processed general assistance grants are still excluded from unearned 
income reporting since the State agency has prior knowledge of all 
changes in these grants.

3. Reporting Requirement for Changes in Earned Income--7 CFR 
273.12(a)(1)(i)(C)

    The proposed rule offered State agencies three reporting options 
for earned income. Under these options, a household with earned income 
would be required to report one of the following, as determined by the 
State agency:
    [sbull] A change in wage rate and a change in part-time or full-
time status, provided the household is certified for no more than 3 
months;
    [sbull] A change in wage rate and a change of more than 5 hours a 
week in the number of hours worked that is expected to continue for 
more than a month; or
    [sbull] A change in the amount earned of more than $80 a month.
    State agencies commenting on the proposed rule were generally in 
favor of the increased flexibility offered by the options. There was, 
however, some concern expressed that different reporting requirements 
for earned and unearned income may result in confusion.
    We believe that the revised requirements will reduce the number of 
small ($25) or temporary changes households have to report, minimizing 
any possible burden of the different reporting requirements. Also, very 
few households would be affected because, according to data derived 
from the FY 2000 ``Characteristics of Food Stamp Households,'' less 
than 20 percent of households had both earned and unearned income.
    One State agency expressed concern that the proposed changes might 
give change reporting States an advantage over monthly reporting States 
and suggested that certification errors should not be cited in monthly 
reporting States for amounts not required to be reported in States 
without monthly reporting. State agencies have the flexibility under 7 
CFR 273.21 to determine what information should be reported on the 
monthly report form, to limit monthly reporting to certain categories 
of households, and to discontinue requiring monthly reports. We believe 
it is to the advantage of all State agencies to increase the number of 
available reporting options.
    A commenter feared that recipients that move to a different State 
would be confused if the State had different reporting requirements. It 
is true that increasing State agency flexibility decreases the 
consistency offered by national Program requirements. However, 
reporting requirements have varied from State to State since monthly 
reporting was made optional in 1988. Administrative waivers and welfare 
reform demonstration projects have also resulted in a variety of 
reporting requirements. We expect that State agencies will explain 
reporting procedures to all households so that the requirements will be 
understood.
    The same commenter believes households will report more changes 
than necessary and there will be no reduction in the work of the food 
stamp office. State agencies that have a waiver similar to the first 
earned income reporting option indicate that the revised reporting 
requirement reduces the number of changes that are reported and require 
action by the caseworker. We believe this rule contains reporting 
requirements that are easier for households to understand and apply.
    The commenter also pointed out that current rules at 7 CFR 
273.10(f)(4)(ii) require one or two-month certification periods if 
income cannot be reasonably predicted. Although State agencies always 
have the option of certifying households with extremely unstable 
circumstances (such as some homeless households or migrants) for one or 
two months, we believe it would be an unnecessary burden on both State 
agencies and households to certify all households with fluctuating 
earned income for such a short period. We also wish to note that the 
previously referenced November 21, 2000 rule included an amendment to 7 
CFR 273.10(f) giving the State agencies more discretion with respect to 
the assignment of certification periods. One of the changes in that 
rule was the elimination of mandatory one and two month certification 
periods.
    One commenter noted that the proposed rule is not clear as to 
whether the same reporting system has to be used in all parts of the 
State or if different options can be used in different locations. The 
commenter supported an option for States to use different methods in 
different parts of the State. Since some State agencies delegate a 
significant amount of autonomy to political subdivisions (counties and/
or cities) with respect to the operation of their food stamp programs, 
and since conditions may vary significantly within a State, in the 
interest of maximizing State flexibility we are adopting the option 
suggested by the commenter.
    The same commenter indicated that the proposed rule does not allow 
State agencies to update information at random times outside of the 
change reporting time frames. For example, according to the commenter, 
a household cannot be required to return a mailer updating case 
information during a certification period. The mailer can be sent, but 
if it is not returned, the case cannot be closed. To find out why the 
household did not return the report, the State agency is required to 
call the household in for a formal recertification. The commenter 
believes the regulations should allow States to do regular reviews of 
case circumstances without requiring excessive formal administrative 
procedures. The same commenter also suggested shortening the 
certification period if the household fails to return the form. We feel 
that the issue of shortening certification periods in response to a 
household's failure to return a form requesting information on changes 
is not within the scope of this rule and, therefore, we are not 
addressing it here.
a. Status Reporting--7 CFR 273.12(a)(1)(i)(C)(1)
    In addition to current change reporting procedures and the six-
month reporting option contained in the November 21, 2000 final rule, 
this rule provides State agencies with three reporting options with 
respect to earned income. Under the first reporting option, households 
that are required to report only a change in source, wage-rate, and 
part-time or full-time employment status (status reporting households) 
would be assigned certification periods of no more than 3 months. 
Twenty-one commenters (all State or local agencies) opposed limiting 
this option to households certified for 3 months; one commenter 
supported the proposal. Four commenters suggested a 6-month limit and 
one suggested 4-month certification periods.
    We proposed that status reporting households be certified for no 
more than 3 months to limit any potential cost to the FSP of removing 
the $25 reporting requirement. Under the status reporting proposal, 
some households certified on the basis of a small number of hours of 
part-time work could be required to work progressively more hours from 
week-to-week and experience a substantial increase in income without 
having to report the change. Without a

[[Page 22571]]

certification period limit, this change could exist for several months 
before it came to the attention of the State agency at recertification.
    One State agency commented that households with a reliable wage 
history merit a certification period up to 12 months. Households with 
new employment or a less stable work history would be assigned a 
shorter certification period. This would allow the agency to tailor a 
certification period to the household's circumstances rather than 
arbitrarily assigning a certification period based on the type of 
income the household receives.
    The State agency was also concerned about the administrative impact 
of the requirement for a 3-month certification period and indicated 
that households certified for longer than 2 months would receive a 
notice of expiration in the calendar month before the month their 
certification ends. Generally, the recertification interview is also 
conducted at the end of the month before the month the certification 
ends. In that State, a household certified for 3 months could have a 
recertification appointment in the same month it receives the approval 
notice, which would be administratively burdensome and confusing. The 
State agency also believes that certifying households with earned 
income for no more than 3 months could create a barrier to 
participation. While the State agency can offer flexible appointment 
times to accommodate work hours, other arrangements such as 
transportation or child care availability may pose a challenge for 
these households. They may be unable to cope with the requirement to 
appear for an interview.
    Another commenter indicated that the State would assign 3-month 
certification periods to households with able-bodied adults without 
dependents to ensure they do not exceed the limit of 3 months of 
participation in 36 months. Adding another population to the 3-month 
certifications would unnecessarily burden clients and local offices 
with added paperwork and office visits and have an adverse impact on 
Program integrity and client services. This commenter believes that 
shorter certification periods do not guarantee that clients will report 
changes correctly.
    Other commenters opposed the 3-month certification period limit 
because it would hamper efforts to make reporting and certification 
requirements consistent across assistance programs, it is not necessary 
for households with stable earned income, and it is not consistent with 
Program simplification and the changing role of the caseworker, which 
requires frequent contact with clients during the certification period. 
Several commenters indicated that State agencies with waivers that 
allow status reporting without a limited certification period have not 
reported problems with the waivers and that State agencies should be 
allowed to use their discretion in setting certification period length.
    As pointed out by several commenters, the requirement to be 
recertified every 3 months could place a substantial burden on low-
income working households, as well as on State agencies. We considered 
offering the status reporting option for only those households with 
fluctuating income because it was unnecessary to certify households 
with stable earned income every 3 months. However, although the term 
``fluctuating income'' is often used and understood, it is difficult to 
define for purposes of regulation. Consequently, to avoid complicating 
the status reporting option, we proposed to apply it to all earned 
income.
    We have considered all of the commenters' objections to the 3-month 
certification period limit and agree that certifying earned income 
households no more than 3 months can create problems for both State 
agencies and households. We understand the need for State agencies to 
have uniform requirements across programs and to simplify procedures as 
much as possible. Nevertheless, we cannot support assigning 12-month 
certification periods for earned income households who are required to 
report changes in their work status rather than changes in the amount 
of their income. As provided in the option for semi-annual reporting 
set forth in the November 21, 2000, final rule and as evidenced in the 
recent amendments to the Food Stamp Act (section 4109 of the Farm 
Security and Rural Investment Act of 2002), the Department believes 
that State agencies should have some contact with households with 
earnings at 6-month intervals. The contact may be a recertification or 
a periodic report. Therefore, paragraph 273.12(a)(1)(i)(C)(1) of this 
final rule, provides that households subject to status reporting shall 
be certified for no more than 6 months. This gives State agencies 
flexibility to set certification periods appropriate for the stability 
of the household's circumstances while maintaining program integrity 
and limiting costs. The Department is also amending the implementation 
provision of the proposed rule to give States until January 1, 2004 to 
implement the 6-month certification limit for households subject to 
status reporting.
    One commenter assumed incorrectly that under the proposal, 
households certified for more than 3 months would be subject to the $25 
reporting requirement. The intent of the proposed revision was to 
eliminate the $25 reporting requirement for earned income. If a State 
agency selects the status reporting option only, all households with 
earned income will be subject to it regardless of the length of the 
certification period actually assigned. Quality control will consider 
the certification period assigned to status reporting households and 
review cases certified for more than 12 months under the procedures for 
households with expired certification periods.
    The proposed rule did not specifically allow State agencies to 
select more than one of the earned income reporting options. After the 
rule was published, several State agencies requested and were granted 
waivers to use a combination of reporting requirements. For example, 
State agencies have obtained waivers to use status reporting for 
households with fluctuating income that are certified for up to 3 
months and the $80 option for households certified for more than 3 
months, such as households with stable income or self-employment income 
that has not been annualized. We believe it is appropriate to tailor 
reporting requirements to households with different types of earned 
income. Consequently, in 7 CFR 273.12 of this final rule, paragraph 
(a)(1)(i)(C) specifies that State agencies may use one or more of the 
options for categories of households with different types of earned 
income. However, only one option would apply to an individual 
household.
    In response to 7 CFR 273.12 of the proposed rule, several 
commenters indicated that the word ``and'' in paragraph (a)(1)(i)(C)(1) 
should be ``or'' so that the option would read: ``A change in wage rate 
of earned income or a change in part-time or full-time employment 
status.'' The word ``and'' was used in the proposed rule to indicate 
that both of these changes are components of this option. A State 
agency cannot choose to implement one component or the other. We 
intended that a household would be required to report if a member had 
either a change in wage rate or a change in part-time or full-time 
employment, not that both events had to occur to trigger a report. To 
clarify our intent, we are changing ``and'' to ``or'' in the final 
rule. We are also adding the words ``or salary'' after wage rate 
because not all recipients are paid by the hour. To reduce the burden 
on both State agencies and affected households, in the final rule we 
are

[[Page 22572]]

qualifying the reporting requirement regarding changes in employment to 
specify that a household is required to report a change in employment 
only if that change is accompanied by a change in the household's 
income.
    In response to the above comments, we are revising the first earned 
income reporting option at 7 CFR 273.12(a)(1)(i)(C)(1) to read as 
follows: ``a change in the wage rate or salary or a change in full-time 
or part-time employment status (as determined by the employer or as 
defined in the State's PA program),''.
    Seven State agencies commented on the requirement in 7 CFR 
273.12(a)(2) that changes be reported within 10 days of the date the 
change becomes known to the household. These State agencies recommended 
that the date a change becomes known to the household should be the 
date of receipt of the first payment. In response to those comments and 
as result of our experience with waivers, we are amending 7 CFR 
273.12(a)(2) to allow State agencies to use a range to define the date 
that the change must be reported. Under the amendment, the State could 
define the date that the change must be reported as early as the date 
that the change becomes known to the household or as late as the date 
that the household receives its first payment as a result of the 
change. To maximize State agency flexibility, in addition to income 
from new employment, the amendment to 7 CFR 273.12(a)(2) would also 
allow State agencies to use the same criteria for the reporting of 
other changes of income, such as changes in the amount of income (both 
earned and unearned) or a change resulting from a new source of 
unearned income. We are also amending 7 CFR 273.12(a)(2) to clarify 
that households subject to the semi-annual reporting requirement at 7 
CFR 273.12(a)(1)(vii) must report changes no later than 10 days from 
the end of the calendar month in which the change occurred, provided 
that the household has a minimum of 10 days within which to report the 
change. To reflect the elimination of the requirement that FNS approve 
State agency forms provided under the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, we are making a technical 
correction to the second sentence of 7 CFR 273.12(a)(2) by removing the 
words, ``FNS-approved'' prior to the reference to joint reporting 
forms.
b. Changes in Wage Rate and/or Hours Worked--7 CFR 
273.12(a)(1)(i)(C)(2)
    The second proposed earned income reporting option would allow 
State agencies to require households to report a change in wage rate 
and a change in hours worked of more than 5 hours a week that is 
expected to continue for more than a month. We received 11 comments on 
this option. Five commenters supported the proposal, and six found it 
confusing or suggested modifications. Currently, only three State 
agencies are utilizing the 5-hour reporting option (through approved 
waivers). Of the three States, one State limits 5-hour reporting to 
households in which earned income is received in the form of hourly 
wages while another State appears likely to replace the 5-hour 
reporting requirement with the 6-month reporting option. Because of the 
very small number of States utilizing this option and the possible 
confusion resulting from the difficulty of determining whether a change 
in the hours worked will continue for more than one month we decided 
not to include this option in the final rule.
    As indicated above, the primary concern among the commenters was 
that households might not know how long a change would last, especially 
if the work environment involves work hours that fluctuate from month 
to month. Therefore, it might not be reasonable to expect a household 
to know for how long a change in hours is expected to continue and the 
proposed requirement would be error-prone. One of these commenters 
suggested the option would be more effective and less error-prone if it 
simply required a household to report a change of more than 5 hours per 
week without having to decide how long this change might last. While 
this alternative would be less confusing we elected not to adopt it 
since it could result in the reporting of temporary changes in earned 
income.
    Another commenter asked whether ``a month'' would be a calendar 
month or 30 days and if quality control would cite an error if the 
client did not report an increase in hours on the expectation that the 
increase would not continue, but in fact the individual is required to 
continue working more hours. This commenter thought that clients would 
become confused about the 5 hours, what a month means, and whether the 
change is anticipated to be longer than a month. Another commenter 
asked if the 5-hour threshold should be applied each week or averaged 
over the month. In view of the potential for confusion on the part of 
clients and the difficulty of determining whether a change is expected 
to continue we decided not to provide the 5-hour earned income 
reporting option in the final rule, although we will continue to 
consider waivers regarding this option.
c. $100 Earned Income Reporting Threshold--7 CFR 273.12(a)(1)(i)(C)(3)
    The third proposed earned income reporting option would allow State 
agencies to require households to report a change in the amount of 
earned income of more than $80. Commenters were evenly divided on this 
option with six supporting it and six opposing it. Three commenters 
suggested that the amount should be increased to $100, and one thought 
$80 was too high. We have considered these comments and examined 
possible alternatives. We believe the earned income reporting 
requirement should be realistic in terms of current wages and a 
reasonable expectation of future increases. $100 per month is slightly 
less than 5 hours of additional work per week at the current minimum 
wage rate of $5.15 an hour. Therefore, we are increasing the $80 
threshold to $100.
    Three State agencies suggested that the phrase ``and is expected to 
continue for more than one month'' should be added. We are not 
accepting the commenters' suggestion. We believe that any change of 
more than $100 a month should be reported. The eligibility worker can 
then determine whether the change is expected to continue, in 
accordance with the addition to 7 CFR 273.12(c) as discussed below, and 
document the case file accordingly.
    Several commenters indicated that raising the $25 threshold to $80 
does not address the problems with the requirement for fluctuating 
income and that it will still be too difficult for a household to know 
when a change occurs. It is true that many problems associated with 
having a dollar threshold will remain, even if the threshold is raised 
considerably. One problem with a fixed dollar threshold is that when 
income is averaged or converted, households may not know the base 
figure from which to measure a change. Therefore, we are revising the 
proposed option to provide at 7 CFR 273.12(a)(1)(i)(C)(2) that the base 
amount is the amount used by the eligibility worker the last time the 
allotment was calculated. Since changes in earned income of less than 
$100 would not be implemented until the household's next 
recertification, we are including in 7 CFR 273.12(a)(1)(i)(C)(2) a 
provision that households subject to this reporting option be assigned 
certification periods of no more than six months. Consistent with the 
reasons noted previously for the status reporting option, the final 
rule establishes a 6-month limit on the length of certification periods 
provided under this option. Consistent with the status

[[Page 22573]]

reporting option, the Department is also amending the implementation 
provision of the proposed rule to give States until January 1, 2004 to 
implement the 6-month certification limit for households subject to the 
$100 earned income reporting option.
    Another commenter indicated that the fifth check received in a 
five-payday month should not be counted for purposes of determining 
when a change should be reported. We believe the periodic problem of 
extra paychecks is addressed in the revised version of the option. 
Whether actual weekly or biweekly income is used, converted, and/or 
averaged, the amount last used to calculate the allotment is the figure 
from which a change should be measured. We believe it is the State 
agency's responsibility to inform households of this amount and are 
including this provision in 7 CFR 273.10(c)(3)(i).
    We are aware that we did not propose any changes to the provisions 
of current 7 CFR 273.2(f)(8)(i) and (f)(8)(ii) regarding changes 
required to be verified at recertification and when reported during the 
certification period. These provisions prohibit the State agency from 
requiring verification of changes in income or certain expenses that 
have not changed by more than $25. To reflect the new minimum reporting 
requirement for unearned income, we are amending 7 CFR 273.2(f)(8)(i) 
and (f)(8)(ii) to require verification of changes in income only if the 
amount of the change is greater than $50 per month.

4. Quarterly Reporting--7 CFR 273.12(a)(4) and 7 CFR 273.12(b)(2)

    Two States expressed disappointment that the rule did not include 
an option for quarterly reporting. During the period from 1993 through 
1995, we granted a limited number of waivers allowing State agencies to 
operate quarterly reporting systems for a part of their caseloads. As 
the result of the favorable reaction to the original quarterly 
reporting waivers, we have expanded the quarterly reporting option 
through waivers, and are now granting waivers allowing State agencies 
to utilize quarterly reporting for all households not statutorily 
exempt from periodic reporting (specifically migrant or seasonal 
farmworker households or households consisting entirely of homeless 
persons).
    Based on the comments and the positive response from State agencies 
that are currently operating under quarterly reporting waivers, we have 
elected to provide a comprehensive quarterly reporting option for all 
households, except for those statutorily exempt from periodic 
reporting. The option is described in a new paragraph 7 CFR 273.12 
(a)(4). Current paragraphs (a)(4) and (5) will be redesignated as 
paragraphs (5) and (6), respectively. We note that we have elected to 
continue to describe the current option for the quarterly reporting of 
the child support obligation separately in redesignated paragraph 
(a)(5). We have done so based in the belief that State agencies may 
elect to utilize the quarterly reporting option for the child support 
obligation while continuing to require change reporting of the other 
factors of eligibility.
    The following conditions apply to quarterly reporting systems. 
First, a State agency may not include migrant or seasonal farmworker 
households or households in which all members are homeless individuals 
in its quarterly reporting system. These categories of households are 
exempt from any type of periodic reporting under Section 6(c)(1)(A) of 
the Food Stamp Act of 1977 (7 U.S.C. 2015(c)(1)(A)), including 
quarterly reporting. This final rule also specifies that households 
subject to the reporting requirements of 7 CFR 273.12(a)(1)(vii) may 
not be included in a quarterly reporting system since semi-annual 
reporting under 7 CFR 273.12(a)(1)(vii) and quarterly reporting are 
intended to be mutually exclusive options. The State agency would have 
the option of including all households, subject to the above 
exceptions, in its quarterly reporting system or may limit the system 
to certain categories of households. We anticipate that a number of 
State agencies may elect to exclude households with annualized self-
employment income since that type of income would normally not change 
on a monthly or quarterly basis. The State agency must notify affected 
households of the quarterly reporting requirement, including the 
consequences that would result from the failure to file the report in a 
timely manner. Other conditions include the requirement that the State 
agency provide the household with a reminder notice if the household 
does not file the report by the due date, or files an incomplete 
report, and the requirement that the State agency send the household an 
adequate notice (which may be combined with the reminder notice) 
notifying the household that its benefits will be reduced or terminated 
if it fails to submit a complete report. This final rule also provides 
that the household not be terminated solely for failure to provide 
information regarding deductible expenses. The rule specifies that in 
cases in which a household fails to provide sufficient information 
regarding a deductible expense or fails to provide the necessary 
verification of the expense, the household's eligibility and benefits 
would be determined without consideration of the deduction. This rule 
also specifies that the changes reported outside of the quarterly 
report are subject to the requirements of 7 CFR 273.12(c) and that the 
quarterly report form shall be the sole reporting requirement for any 
information which must be included in the form. This rule also provides 
that changes in the number of hours worked by individuals subject to 
the work requirement of 7 CFR 273.24 must be reported whenever their 
work hours fall below 20 hours per week, averaged monthly, pursuant to 
7 CFR 273.12(a)(1)(viii), regardless of whether the State agency elects 
to include the household in a quarterly reporting system. We are also 
revising 7 CFR 273.12(b)(2) to reflect that the quarterly report form 
applies to quarterly reporting in general rather than the quarterly 
reporting of the child support obligation.

5. State Agency Action on Changes--7 CFR 273.12(c)

    We proposed to amend 7 CFR 273.12(c) to provide that if a household 
reports a change in income, the State agency shall act on the change if 
the new circumstance is expected to continue for at least one month 
beyond the month in which the change is reported. We received two 
comments in support of this proposal. Therefore, we are adopting the 
addition to the regulations as proposed.

6. Technical Amendment to 7 CFR 273.21(f)(2)(v)

    On October 17, 1996, the Department published a final rule at 61 FR 
54303 entitled ``Food Stamp Program: Simplification of Program Rules.'' 
The rule amended 7 CFR 273.10(c)(2)(iii) to require that income 
received on a recurring monthly or semimonthly basis be counted for the 
month which it is intended to cover rather than the month in which it 
is received. The amendment specified that the amount of monthly income 
attributed to the household should not be 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. It was our intent 
that this principle apply to both prospectively and retrospectively 
budgeted households. Because 7 CFR 273.10(c) applies primarily to 
prospectively budgeted households, and 7 CFR 273.21(f)(2)(v) in its 
current form addresses only monthly income rather

[[Page 22574]]

than both monthly and semimonthly income, we are amending 7 CFR 
273.21(f)(2)(v) to enhance consistency and to ensure that recurring 
income received on a monthly or semimonthly basis by households subject 
to retrospective budgeting will be counted only for the month which it 
is intended to cover.

III. Implementation

    The proposed rule provided that State agencies would be required to 
implement the rule no later than the first day of the month 180 days 
after publication of the final rule. No comments were received 
regarding the implementation date. This rule provides in 7 CFR 272.1(g) 
that the rule is effective May 29, 2003 and must be implemented no 
later than November 1, 2003. The provisions must be implemented for all 
households that newly apply for FSP 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 
change reporting caseload shall be converted to these provisions no 
later than the required implementation date in accordance with 
procedures established by the State agency. However, for households 
subject to status reporting or $100 earned income reporting, the State 
agency has until January 1, 2004 to convert households to 6-month 
certification periods. Monthly reporting households shall be changed to 
the new procedures at 7 CFR 273.21(f)(2)(v) in accordance with 7 CFR 
273.21(r). For quality control purposes, any variances resulting from 
the implementation of this 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).
    Since the publication of the proposed regulations, we have granted 
a number of waivers of the requirements for change reporting households 
to allow State agencies to utilize the reporting options available in 
the proposed regulations. Nearly half of all State agencies currently 
have approved waivers to implement one or more of these options. All 
existing waivers of 7 CFR 273.12(a)(1)(i), including those that allow 
quarterly reporting, will be obsolete when the State agency implements 
the final rule or on the required implementation date, whichever is 
sooner. Since the requirement that households report changes in gross 
monthly income of more than $25 will be superseded by the reporting 
options contained in this rule, State agencies which are still 
requiring households to report changes of more than $25 in gross 
monthly income will be required to adopt one of the reporting options 
upon implementation of this rule.

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, Students.


0
Accordingly, 7 CFR parts 272 and 273 are amended as follows:
0
1. The authority citation for parts 272 and 273 continues to read as 
follows:

    Authority: 7 U.S.C. 2011-2036.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

0
2. In Sec. 272.1, a new paragraph (g)(167) is added to read as follows:


Sec.  272.1  General terms and conditions.

* * * * *
    (g) * * *
    (167) Amendment No. 376. The provisions of Amendment No. 376 are 
effective May 29, 2003 and must be implemented no later than November 
1, 2003. 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 change 
reporting caseload shall be converted to these provisions no later than 
the required implementation date in accordance with procedures 
established by the State agency. However, for households subject to the 
reporting requirements at Sec.  273.12(a)(1)(i)(C)(1) or (2) of this 
chapter, the State agency has until January 1, 2004 to convert 
households to 6 month certification periods. Monthly reporting 
households shall be converted in accordance with Sec.  273.21(r) of 
this chapter. For quality control purposes, any variances resulting 
from the implementation of this rule shall be excluded from error 
analysis for 120 days from the required implementation date, in 
accordance with Sec.  275.12(d)(2)(vii) of this chapter.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS


Sec.  273.2  [Amended]

0
3. In Sec. 273.2: a. The first sentence of paragraph (f)(8)(i)(A) is 
amended by removing the words ``or actual utility expenses''.
0
b. The second sentence of paragraph (f)(8)(i)(A) is amended by adding a 
comma and the words ``actual utility expenses'' after the phrase, 
``Previously unreported medical expenses''.
0
c. The first and third sentences of paragraph (f)(8)(i)(A) and the 
first sentence of paragraph (f)(8)(ii) are amended by removing the 
figure ``$25'' and adding in its place the figure ``$50''.

0
4. In Sec.  273.10, paragraph (c)(3)(i) is revised to read as follows:


Sec.  273.10  Determining household eligibility and benefit levels.

* * * * *
    (c) * * *
    (3) * * *
    (i) Income may be averaged in accordance with methods established 
by the State agency to be applied Statewide for categories of 
households. When averaging income, the State agency shall use the 
household's anticipation of monthly income fluctuations over the 
certification period. An average must be recalculated at 
recertification and in response to changes in income, in accordance 
with Sec.  273.12(c), and the State agency shall inform the household 
of the amount of income used to calculate the allotment. Conversion of 
income received weekly or biweekly in accordance with paragraph (c)(2) 
of this section does not constitute averaging.
* * * * *

0
5. In Sec.  273.12:
0
a. The section heading, the introductory text of paragraph (a)(1) and 
paragraph (a)(1)(i) are revised.
0
b. Paragraph (a)(2) is revised.
0
c. Paragraphs (a)(4) and (a)(5) are redesignated as paragraphs (a)(5) 
and (a)(6) respectively, and a new paragraph (a)(4) is added.
0
d. Paragraph (b)(2) is revised.
0
e. The introductory text of paragraph (c) is amended by adding two 
sentences after the first sentence.
    The revisions and additions read as follows:


Sec.  273.12  Requirements for change reporting households.

    (a) Household responsibility to report. (1) Monthly reporting 
households are required to report as provided in Sec.  273.21. 
Quarterly reporting households are subject to the procedures as 
provided in paragraph (a)(4) of this section. Certified change

[[Page 22575]]

reporting households are required to report the following changes in 
circumstances:
    (i) (A) A change of more than $50 in the amount of unearned income, 
except changes relating to public assistance (PA) or general assistance 
(GA) in project areas in which GA and food stamp cases are jointly 
processed. The State agency is responsible for identifying changes 
during the certification period in the amount of PA, or GA in jointly 
processed cases. If GA and food stamp cases are not jointly processed, 
the household is responsible for reporting changes in GA of more than 
$50.
    (B) A change in the source of income, including starting or 
stopping a job or changing jobs, if the change in employment is 
accompanied by a change in income.
    (C) One of the following, as determined by the State agency 
(different options may be used for different categories of households 
as long as no household is required to report under more than one 
option; the State may also utilize different options in different 
project areas within the State):
    (1) A change in the wage rate or salary or a change in full-time or 
part-time employment status (as determined by the employer or as 
defined in the State's PA program), provided that the household is 
certified for no more than 6 months; or
    (2) A change in the amount earned of more than $100 a month from 
the amount last used to calculate the household's allotment, provided 
that the household is certified for no more than 6 months.
* * * * *
    (2) Certified households must report changes within 10 days of the 
date the change becomes known to the household. For reportable changes 
of income, the State agency may require that change to be reported as 
early as within 10 days of the date that the household becomes aware of 
the change or as late as within 10 days of the date that the household 
receives the first payment attributable to the change. For example, in 
the case of new employment, the State may require the household to 
report the change within 10 days of the date that the household becomes 
aware of the new employment, within 10 days of the date the employment 
begins or within 10 days of the date that the household receives its 
first paycheck. For households subject to semi-annual reporting, the 
household must report changes no later than 10 days from the end of the 
calendar month in which the change occurred, provided that the 
household has at least 10 days within which to report the change. 
Optional procedures for reporting changes are contained in paragraph 
(f) of this section for households in States with forms for jointly 
reporting food stamp and public assistance changes and food stamp and 
general assistance changes.
* * * * *
    (4) The State agency may establish a system of quarterly reporting 
in lieu of the change reporting requirements specified under paragraph 
(a)(1) of this section. The following requirements are applicable to 
quarterly reporting systems:
    (i) Included households. The State agency may include all 
households within a quarterly reporting system, except migrant or 
seasonal farmworker households, households that have no earned income 
and in which all adult members are elderly or disabled, households in 
which all members are homeless individuals, or households subject to 
the reporting requirement under paragraph (a)(1)(vii) of this section. 
The State agency may also limit quarterly reporting to specific 
categories of households.
    (ii) Notification of the quarterly reporting requirement. The State 
agency must notify households of the quarterly reporting requirement, 
including the consequences of failure to file a report, at initial 
certification and recertification.
    (iii) Failure to file a complete form by the specified filing date. 
If a household fails to file a complete report by the specified filing 
date, the State agency will send a notice to the household advising it 
of the missing or incomplete report no later than 10 days from the date 
the report should have been submitted. If the household does not 
respond to the notice, the household's participation shall be 
terminated. The State agency may combine the notice of a missing or 
incomplete report with the adequate notice of termination described in 
paragraph (a)(4)(v) of this section.
    (iv) Content of the quarterly report form.
    The State agency may include all of the items subject to reporting 
under paragraph (a)(1) of this section in the quarterly report, except 
changes reportable under paragraphs (a)(1)(vii) or (a)(1)(viii) of this 
section, or may limit the report to specific items while requiring that 
households report other items through the use of the change report 
form.
    (v) Reduction or termination of benefits. If the household files a 
complete report resulting in reduction or termination of benefits, the 
State agency shall send an adequate notice, as defined in Sec.  271.2 
of this chapter. The notice must be issued so that it will be received 
by the household no later than the time that its benefits are normally 
received. If the household fails to provide sufficient information or 
verification regarding a deductible expense, the State agency will not 
terminate the household, but will instead determine the household's 
benefits without regard to the deduction.
    (vi) Changes reported outside of the quarterly report. The State 
agency must act on any changes reported outside of the quarterly report 
in accordance with paragraph (c) of this section.
    (vii) Sole reporting requirement. The quarterly report form shall 
be the sole reporting requirement for any information that is required 
to be reported on the form, except that able-bodied adults subject to 
the time limit of Sec.  273.24 shall report whenever their work hours 
fall below 20 hours per week, averaged monthly.
* * * * *
    (b) * * *
    (2) The quarterly report form, including the form for the quarterly 
reporting of the child support obligation, must be written in clear, 
simple language, and must meet the bilingual requirements described in 
Sec.  272.4(b) of this chapter. In addition, the form must specify the 
date by which the agency must receive the form and the consequences of 
submitting a late or incomplete form. The form (or an attachment) must 
specify the verification the household must submit with the form, 
inform the household where to call for help in completing the form, and 
include a statement to be signed by a member of the household 
indicating his or her understanding that the information provided may 
result in reduction or termination of benefits. The form should also 
include a brief description of the Food Stamp Program fraud penalties.
* * * * *
    (c) * * * If a household reports a change in income, and the new 
circumstance is expected to continue for at least one month beyond the 
month in which the change is reported, the State agency shall act on 
the change in accordance with paragraphs (c)(1) and (c)(2) of this 
section. The time frames in paragraphs (c)(1) and (c)(2) of this 
section apply to these actions. * * *
* * * * *
    6. In Sec.  273.21, paragraph (f)(2)(v) is revised to read as 
follows:

[[Page 22576]]

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

* * * * *
    (f) * * *
    (2) * * *
    (v) The State agency shall budget income received on a recurring 
monthly or semimonthly basis for the month that it is intended to 
cover. The State agency shall not vary the budgeting of such income 
merely because it is received during another month as the result of 
changes in mailing cycles or pay dates, or because weekends or holidays 
result in an additional or missed payment.
* * * * *

    Dated: April 18, 2003.
Eric M. Bost,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 03-10443 Filed 4-28-03; 8:45 am]
BILLING CODE 3410-30-P0000