[Federal Register Volume 71, Number 111 (Friday, June 9, 2006)]
[Rules and Regulations]
[Pages 33376-33384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9001]


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

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

RIN 0584-AD32


Food Stamp Program: Employment and Training Program Provisions of 
the Farm Security and Rural Investment Act of 2002

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule finalizes the proposed provisions of a rule 
published on March 19, 2004 to amend Food Stamp Program regulations to 
codify Food Stamp Employment and Training (E&T) Program provisions of 
section 4121 of the Farm Security and Rural Investment Act of 2002 (the 
Farm Bill). This final rule establishes a reasonable formula for 
allocating the 100 percent Federal grant authorized under the Farm Bill 
to carry out the E&T Program each fiscal year. This final rule also 
codifies the Farm Bill provision that makes available up to $20 million 
a year in additional unmatched Federal E&T funds for State agencies 
that commit to offer an education/training or workfare opportunity to 
every applicant and recipient who is an able-bodied adult without 
dependents (ABAWD), limited to 3 months of food stamp eligibility in a 
36-month period, who would otherwise be terminated. This final rule 
eliminates the current Federal cost-sharing cap of $25 per month on the 
amount State agencies may reimburse E&T participants for work expenses 
other than dependent care. This final rule codifies Farm Bill 
provisions that expand State flexibility in E&T Program spending by 
repealing the requirements that State agencies earmark 80 percent of 
their annual 100 percent Federal E&T grants to serve ABAWDs; they meet 
or exceed their fiscal year 1996 State administrative spending levels 
to access funds made available by the Balanced Budget Act of 1997; and 
the Secretary be given the authority to establish maximum reimbursement 
costs of E&T Program components. Lastly, this final rule rescinds the 
balance of unobligated funds carried over from fiscal year 2001.

DATES: This final rule is effective August 8, 2006.

FOR FURTHER INFORMATION CONTACT: Micheal Atwell, Senior Program 
Analyst, Program Design Branch, Program Development Division, Food 
Stamp Program, Food and Nutrition Service, 3101 Park Center Drive, Room 
810, Alexandria, Virginia, 703-305-2449, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule was determined to be significant and was reviewed 
by the Office of Management and Budget (OMB) in conformance with 
Executive Order 12866.

Executive Order 12372

    The Food Stamp Program (FSP) 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 3105, subpart V and related Notice (48 FR 
29115, June 24, 1983), this Program is excluded from the scope of 
Executive Order 12372, which requires intergovernmental consultation 
with State and local officials.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is intended to have preemptive effect 
with respect to any State or local laws, regulations, or policies that 
conflict with its provisions or that would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the DATES paragraph of this final rule. Prior to 
any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
1320) requires that OMB approve all collections of information by a 
Federal agency before they can be implemented. Respondents are not 
required to respond to any collection of information unless it displays 
a current valid OMB control number. The information collections in this 
rule were previously approved under OMB control number 0584-0339. The 
rules in 7 CFR 273.7(d)(1)(i)(D) provide that, if a State Agency will 
not obligate or expend all of the funds allocated to it for a fiscal 
year (FY), the Food and Nutrition Service (FNS) will distribute the 
unobligated, unexpended funds during the current or subsequent FY on a 
first come-first served basis. State Agencies may request more funds, 
as needed. Typically, FNS receives nine such requests per year. The 
burden associated with OMB control number 0584-0339 has been revised by 
adding 9 hours to it to account for the time it takes State Agencies to 
prepare the

[[Page 33377]]

requests. The additional 9 hours were approved by OMB on August 22, 
2005.

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). Eric M. Bost, 
Under Secretary for Food, Nutrition, and Consumer Services, has 
certified that this rule will not have a significant economic impact on 
a substantial number of small entities. This rule does not regulate the 
activities of small businesses or other small entities; instead it 
regulates the administration of the FSP, which is administered only by 
State or county social service agencies.

Unfunded Mandate Analysis

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of UMRA, the 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to State, local, or tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of UMRA generally requires the Department to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, more cost-effective or least burdensome alternative 
that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of UMRA) that impose costs on State, local, or 
tribal governments or to the private sector of $100 million or more in 
any one year. Thus this rule is not subject to the requirements of 
section 202 and 205 of UMRA.

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. 
Where such actions have ``federalism implications,'' agencies are 
directed to provide a statement for inclusion in the preamble to the 
regulation describing the agency's considerations in terms of the three 
categories called for under section (6)(b)(2)(B) of Executive Order 
13132.

Prior Consultation With State Officials

    Prior to drafting the rule, we received input from State and local 
agencies at various times. Since 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 
regarding program implementation and policy issues. This arrangement 
allows State and local agencies to provide feedback that forms the 
basis for many discretionary decisions in this and other FSP rules. In 
addition, we presented our ideas and received feedback on program 
policy at various State, regional, national, and professional 
conferences. Lastly, the comments from State and local officials on the 
proposed Farm Bill rule were carefully considered in drafting this 
final rule.

Nature of Concerns and the Need To Issue This Rule

    State agencies generally want greater flexibility in their 
implementation of FSP work requirements and in the operation of the E&T 
Program. State agencies have indicated that providing them this 
flexibility would greatly enhance their ability to more efficiently 
administer the FSP. They also want current rules streamlined to allow 
them to conform to the rules of other means tested Federal programs.

Extent to Which FNS Meets Those Concerns

    FNS has considered the impact on State and local agencies. This 
rule deals with changes required by law, which were effective on May 
13, 2002. The overall effect is to lessen the administrative burden by 
providing increased State agency flexibility in E&T Program spending.

Government Paperwork Elimination Act

    FNS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies to provide 
the public with the option of submitting information or transacting 
business electronically to the maximum extent possible. State agencies 
have the option of submitting the Food Stamp Employment and Training 
Activity Report (FNS-583) (OMB 0584-0339 electronically via the Food 
Program Reporting System. Also, State agencies may submit their 
applications for additional Federal operating funds via e-mail.

Civil Rights Impact Analysis

    FNS has reviewed this final rule in accordance with the Department 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and 
address any major civil rights impacts the rule might have on 
minorities, women, and persons with disabilities. After a careful 
review of the rule's intent and provisions, and the characteristics of 
food stamp households and individual participants, FNS has determined 
that there is no way to mitigate its impact on the protected classes. 
Other than how to allocate E&T funds among State agencies, FNS had no 
discretion in implementing any of these changes, which were effective 
upon enactment of the Farm Bill on May 13, 2002. All data available to 
FNS indicate that protected individuals have the same opportunity to 
participate in the FSP as non-protected individuals. FNS specifically 
prohibits the State and local government agencies that administer the 
Program from engaging in actions that discriminate based on race, 
color, national origin, gender, age, disability, marital or family 
status. (FSP nondiscrimination policy can be found at 7 CFR 272.6(a)). 
Where State agencies have options, and they choose to implement a 
certain provision, they must implement it in such a way that it 
complies with the regulations at 7 CFR 272.6.

Regulatory Impact Analysis

Need for Action

    This action is needed to implement the provisions of section 4121 
of the Farm Bill, which sets forth funding directives for the E&T 
program. Because the rules resulting from section 4121 will have 
generally applicability, they are best accomplished through regulatory 
action. The provisions of this regulation establish a reasonable 
formula for allocating the 100 percent Federal grant authorized under 
the Farm Bill to carry out the E&T Program each fiscal year; make 
available up to $20 million a year in additional unmatched Federal E&T 
funds for State agencies that commit to offer an education/training or 
workfare opportunity to every ABAWD applicant and recipient who would 
otherwise be terminated after 3 months of food stamp eligibility in a 
36-month period (3-month time limit); eliminate the current Federal 
cost-sharing cap of $25 per month on the amount State agencies may 
reimburse E&T participants for work expenses other than dependent care; 
repeal the requirement that State agencies earmark 80 percent of their 
annual 100 percent Federal E&T grants to serve ABAWDs; and repeal the 
requirement that State agencies meet or exceed their FY 1996 State 
administrative spending levels to access

[[Page 33378]]

funds made available by the Balanced Budget Act of 1997.

Benefits

    State agencies will benefit from the provisions of this rule 
because they streamline the annual E&T Program grant allocation 
process, expand State agency flexibility in serving at-risk ABAWDs and 
other work registrants, and eliminate unnecessary and complex rules on 
how State agencies can spend E&T Program funds.

Costs and Participation Impacts

    The regulatory impact analysis associated with this rule reports 
that the E&T provisions of the Farm Bill are expected to reduce Federal 
outlays by $36 million in FY 2005 and by $188 million in the 5 years FY 
2005 through FY 2009 (see Table 1). In accordance with OMB circular A-
4, FNS has used a pre-statutory baseline (FY2002) for this analysis. 
Because these provisions have already taken effect, it was possible to 
compare this pre-legislative baseline to current expectations for 
spending on E&T using the President's FY 2006 budget baseline, the most 
recent data available at the time of analysis. These assumptions have 
also been incorporated in the President's FY 2007 budget. The annual 
cost of the provisions was measured as the difference between the two 
cost streams. The standard E&T outlay factor of 84 percent was applied 
to the difference in expected obligations to estimate the expected 
impact on E&T outlays. This methodology assumes that differences 
between the pre-legislative baselines and post-reform projections are 
entirely due to the impact of provisions in this rule-making. To the 
extent that other outside factors have influenced E&T provision and 
spending, the impacts of this provision could be over-or understated.

               Table 1.--Cost Impact of E&T Provisions of the Farm Bill of 2002 (Federal Outlays)
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2005     2006     2007     2008     2009    5-year
----------------------------------------------------------------------------------------------------------------
100% E&T Grants...........................................      -36      -35      -36      -39      -42     -188
50% E&T Grants............................................       18       19       20       21       21       99
Participant Reimbursements................................        6        6        6        6        7       31
Participant Benefit Impact................................      -24      -27      -27      -26      -26     -130
                                                           -----------------------------------------------------
    Total Impact..........................................      -36      -37      -37      -38      -40     -188
----------------------------------------------------------------------------------------------------------------

    The items identified in Table 1 are described in more detail below:
    * 100% E&T Grants. The cost to the government of the provisions on 
100 percent Federal E&T grants was estimated based on expected 100 
percent E&T obligations prior to the legislation ($130 million in FY 
2002), indexed by economic projections from the Office of Management 
and Budget.
    * 50% E&T Grants. The cost to the Government of the provisions on 
50 percent Federal E&T grants was based on expected 50 percent E&T 
obligations prior to the legislation ($107 million in FY 2002), indexed 
by economic projections from the Office of Management and Budget.
    * Participant Reimbursements. The cost to the Government of the 
provisions on E&T participant reimbursements was based on expected 
obligations prior to the legislation ($31 million in FY 2002), indexed 
by economic projections from the Office of Management and Budget.
    Participant Benefit Impact. With new flexibility and decreased 
Federal E&T funding, some States likely reduced the level of E&T 
services they provide to ABAWDs, thereby making them ineligible for 
food stamps. Based on data from the FNS-583 FNS estimated that 14,000 
persons were made ineligible by these provisions in FY 2005. These 
impacts are already incorporated in the President's FY 2007 budget 
baseline. State agencies have already implemented any applicable 
changes and no further impact is expected following publication of this 
final rule. The savings in food stamp benefits was calculated based on 
the estimated number of ABAWDs made ineligible times the average 
monthly benefit per ABAWD, times 12 months. These savings were rounded 
to the nearest million dollars. (For example, in FY 2005, 14,000 
persons were made ineligible, times an average food stamp benefit of 
$141, times 12 months to yield a savings of $24 million.) The standard 
food stamp benefit outlay factor of 0.99 was used to estimate the 
impact on benefit outlays.
    While this regulatory impact analysis details the expected impacts 
on Food Stamp Program costs and the number of participants likely to be 
affected by the food stamp employment and training provisions of the 
Farm Security and Rural Investment Act of 2002, it does not provide an 
estimate of the overall societal costs of the provisions, nor does it 
include a monetized estimate of the benefits they bring to society. We 
anticipate that the provisions improve program operations by giving 
flexibility to States to provide employment and training services that 
better meet the needs of their food stamp populations. However, to the 
extent that some food stamp recipients are made ineligible, the 
provisions have made it more difficult for them to obtain a healthful 
diet.

Background

    On March 19, 2004, FNS published a rule at 69 FR 12981 in which we 
proposed to revise food stamp regulations at 7 CFR 273.7 regarding 
funding for the E&T Program. Comments on this proposed revision were 
solicited through May 18, 2004. A total of 24 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.

Funding for Food Stamp Employment and Training Programs

Allocation of E&T Grants

    FNS proposed to allocate one-half of the annual 100 percent Federal 
grant based on our estimate of the numbers of ``at-risk'' ABAWDs in 
each State (those who do not reside in an area subject to a waiver of 
the time limit or who are not included in each State agency's 15 
percent ABAWD exemption allowance) calculated using ABAWD data 
collected by Mathematica Policy Research, Incorporated (MPR) for its 
September 2001 report, ``Imposing a Time Limit on Food Stamp Receipt: 
Implementation of the Provisions and Effects on Food Stamp Program 
Participation.'' Based on the MPR study data, FNS established 
percentages for the numbers of waived and/or exempted ABAWDs in each 
State

[[Page 33379]]

and applied those percentages to Quality Control (QC) survey data to 
estimate each State agency's at-risk ABAWD population. FNS believed 
this to be the most accurate and reliable data available. FNS proposed 
to allocate the balance of the annual 100 percent E&T grant based on 
the number of work registrants reported by each State agency on the 
FNS-583, E&T Program Activity Report from the most recent complete FY.
    FNS received 22 comments regarding our proposed allocation 
methodology. Twenty commenters objected to our reliance on at-risk 
ABAWDs. They were concerned that this reliance would discourage States 
from using the two measures available to protect the eligibility of 
ABAWDs who are unable to obtain employment. The first measure is to 
request that FNS waive the time limit for a group of ABAWDs in a State 
if we determine that the area in which the individuals reside has an 
unemployment rate of over 10 percent or does not have a sufficient 
number of jobs to provide employment for the individuals. The second 
measure is the State option to exempt up to 15 percent of its ABAWD 
population that does not reside in waived areas each FY. The commenters 
point out that, by utilizing these measures, States will receive 
smaller E&T grants than if they had not used them. Several commenters 
pointed out that more than a few States have statewide waivers of the 
time limit due to high unemployment or a lack of jobs and these States 
will lose half of their potential annual E&T grants as a result. 
Several State agencies pointed out that the formula ignores the fact 
that waived and exempted ABAWDs are work registrants subject to E&T 
participation and, although they currently provide E&T services to 
exempt ABAWDs and to ABAWDs in waived areas, they will have to curtail 
or terminate these services because of reduced grants.
    Two commenters argued that FNS has flexibility under the law to 
adopt a formula that better serves the ABAWD population. They believe 
that the concept of ``at-risk ABAWDs'' should be significantly revised 
or dropped and that FNS should adopt a more practical approach to the 
requirement that it take into account the numbers of individuals not 
exempt from the work requirement under section 6(o) of the Food Stamp 
Act. They believe that FNS should consider other factors and apply 
necessarily inexact measures of those numbers.
    Eight commenters recommended that the ABAWD allocation be based on 
the total number of ABAWDs, not just at-risk ones. Three recommended 
that the entire grant be based on total ABAWDs. Several recommended 
that FNS use the most recent QC household characteristics data (OMB 
0584-0299) that reflects each State's share of the nation's food stamp 
recipients who are age 18 through 49, not disabled, and who do not live 
with children.
    One State agency recommended using a funding ratio of 10 to 20 
percent based on at-risk ABAWDs, 80 to 90 percent on work registrants.
    One State agency recommended using a multi-part formula that 
averages the number of ABAWDs determined from the QC sample and the 
number of ABAWDs participating in components that meet the ABAWD work 
requirement as reported on the FNS-583, E&T Program Activity Report. It 
also urged that State agencies be informed of the numbers to be used 
and given the opportunity to challenge them if they disagree.
    One State agency recommended that all 100 percent Federal E&T funds 
be allocated based on a point system that favors at-risk ABAWDs. It 
proposes assigning a value of 1.0 to all mandatory work registrants, 
excluding ABAWDs, and assigning a value of 1.3 to all ABAWDs.
    One State agency recommended using an allocation formula based one-
half on the number of E&T work registrants and one-half on the number 
of ABAWD E&T participants.
    FNS agrees with those commenters concerned that adhering to the 
proposed 50/50 split of the 100 percent Federal grant places too much 
emphasis on ABAWDs. The E&T program has two constituencies--ABAWDs 
subject to the time limit who need services that qualify them to remain 
eligible for benefits until they are able to find employment; and all 
other work registrants who also need services to improve their ability 
to become self-sufficient. Under the proposed split, a State's ABAWD 
population would determine half its grant amount; and, since all ABAWDs 
are work registrants, they would be counted again in determining the 
other half. For the FY 2005 $90 million grant allocation, FNS allocated 
$80 million based on work registrants and $10 million on at-risk 
ABAWDs. In addition, to lessen the negative impact on those State 
agencies with a large waived and exempted ABAWD population, FNS limited 
the cut in grant funding to no more than 20 percent of the FY 2004 
grant allocations. Our experience with the FY 2005 E&T grant allocation 
convinced us that the appropriate share to be allocated based on 
numbers of ABAWDs is 10 percent of the grant, with 90 percent allocated 
based on the overall universe of work registrants. We have incorporated 
this ratio into the final rule.
    FNS also agrees with the commenters who urged us to take a 
different approach to how we accomplish the annual allocation. FNS 
carefully considered each comment and weighed the suggested funding 
strategies against the statutory requirement that we take into account 
at-risk ABAWDs. FNS examined several alternatives for using data to 
capture the most reliable estimate of the numbers of ABAWDs in each 
State. The use of at-risk ABAWD estimates for each State was, of 
course, most desirable. However, after careful review FNS determined 
that these numbers were difficult to obtain and unreliable, due both to 
technical considerations and to continual shifts in the numbers of 
waived and exempted ABAWDs in most States. To ensure a reasonably 
accurate count of at-risk ABAWDs, State agencies would most likely have 
to create new computer programming and reporting requirements for at-
risk ABAWDs. FNS does not believe that such an additional State agency 
reporting burden is desirable or necessary. For the FY 2006 $90 million 
grant allocation, FNS used food stamp QC data for the most recently 
available completed FY (FY 2004) which reflected total ABAWD numbers 
instead of at-risk ABAWD estimates. The data, which is state-compiled 
and federally reviewed, provide a breakdown of each State's population 
of adults age 18 through 49, who are not disabled, and who do not live 
with children. These data mirror ABAWD characteristics, are readily and 
widely available, are consistent with commenters' requests, and, when 
compared to the less current percentages established by the September 
2001 MPR study, provide a more reliable estimate of the numbers of all 
ABAWDs in each State. Our experience indicates that using total ABAWD 
numbers is the most efficient, equitable way to allocate the ABAWD 
portion of the annual E&T grant, with currently available data-while 
still adhering to the statutory requirement to take into account at-
risk ABAWDs. This approach has the advantage over our earlier proposal 
in that it does not reduce funding for States that rely on waivers and 
exemptions, thus does not serve as a disincentive to use those tools.
    While some commenters questioned the validity of work registrant 
data from the FNS-583, E&T Program Activity Report, FNS remains 
convinced that it provides the most reliable work registration 
information available. State

[[Page 33380]]

agencies have been collecting and reporting work registrant data on the 
FNS-583 for many years and they are proficient in accurately counting 
their work registrants. Prior to 1996, the annual E&T grants were 
allocated based primarily on FNS-583 work registrant data. In addition, 
the universal use of computers and the development of sophisticated 
software to track program participation and compliance with eligibility 
requirements make the accurate calculation of the number of work 
registrants a relatively simple procedure. Finally, FNS has been 
working closely with states over the last few years to correct 
instances of misreporting E&T data.
    Thus, in response to comments and based on our experience, FNS is 
amending the final rule at 7 CFR 273.7(d)(1)(i)(B) to establish that 10 
percent of the annual 100 percent Federal E&T grant will be allocated 
among the 53 State agencies based on food stamp QC data for the most 
recently available completed FY that reflects each State's share of the 
nation's food stamp recipients who are age 18 through 49, not disabled, 
and who do not live with children, as a percentage of such individuals 
nationwide.
    The remaining 90 percent will be allocated based on the numbers of 
work registrants in each State as a percentage of work registrants 
nationwide. FNS will use work registrant data reported by each State 
agency on the FNS-583, Employment and Training Program Activity Report, 
from the most recent Federal FY.

Additional Funding for States That Serve ABAWDs

    The proposed rule contained the provision of an additional $20 
million in 100 percent Federal E&T funds each FY to be allocated among 
eligible State agencies to serve all ABAWDs subject to the time limit. 
To be eligible for a share of the additional $20 million, the 
Department proposed that a State agency must make and comply with a 
commitment, or pledge, to offer a qualifying education/training 
activity or workfare position to each ABAWD applicant or recipient who 
is ``at risk,'' i.e., one who is in the last month of the 3-month time 
limit; does not live in an area covered by a waiver of the time limit; 
and is not part of a State agency's 15 percent ABAWD exemption 
allowance. FNS proposed to allocate among them the $20 million based on 
the 2001 MPR study's estimate of the numbers of ABAWDs in each 
participating pledge State who do not reside in an area subject to a 
waiver granted in accordance with 7 CFR 273.24(f) or who are not 
included in each State agency's 15 percent ABAWD exemption allowance 
under 7 CFR 273.24(g), as a percentage of such ABAWDs in all the 
participating pledge States. Eligible State agencies must use their 
shares of the $20 million allocation to defray costs incurred in 
serving at-risk ABAWDs.
    Three commenters objected to our methodology. Two recommended that 
the allocation formula include all ABAWDs. One recommended that the 
money be allocated based on actual services provided and not just on 
the population eligible for service.
    For the reasons cited in the above discussion concerning the 
regular Federal E&T allocation, the Department agrees that the 
allocation formula should include all ABAWDs. While making it clear 
that the first priority of a participating State agency is to guarantee 
that all its at-risk ABAWDs are provided the opportunity to remain 
eligible while they acquire the skills and experience necessary to 
obtain employment, the Department, in the proposed rule, provided the 
option of allowing the State agency to use a portion of its additional 
funding to provide E&T services to ABAWDs who are not at risk. However, 
if a State agency uses waivers and/or its exemption allowance to 
protect all of its ABAWDs from the time limit, it is not eligible to 
share in the $20 million. Therefore, the formula included in this final 
rule bases the allocation of a participating pledge state's share of 
the $20 million on the total number of ABAWDs in the State as a 
percentage of ABAWDs in all participating States. For the reasons 
discussed in the previous section, the number of ABAWDs will be derived 
from QC data and not from the MPR study. One commenter urged that FNS 
revise this final regulation to properly reflect what it is that a 
State must pledge to do in order to be eligible for its share of the 
$20 million ABAWD allocation. The cost of serving at-risk ABAWDs is not 
an acceptable reason to fail to live up to the pledge. In other words, 
a slot must be available and the ABAWD must be served even if the State 
exhausts all of its 100 percent E&T funds and must use 50 percent State 
matching funds to serve all at-risk ABAWDs. This commenter believes 
that the language of the proposed regulation implied that to meet the 
pledge States have to pledge only to use their share of the $20 million 
to serve these individuals.
    The Department agrees. FNS has added language to the final rule to 
clarify that a participating pledge State must serve all its at-risk 
ABAWDs, and it must be prepared to use its own money to fulfill its 
commitment.

Allocation of Carryover Funding

    The Department, in the proposed rule, provided for the first come-
first served reallocation of unspent 100 percent Federal E&T grant 
funds carried over into the subsequent FY. FNS would notify all State 
Agencies of the availability of the funds each year.
    One commenter pointed out that State Agencies that may benefit from 
an allocation of carryover funds to augment their annual grants will 
not be aware of the availability of such funds until after critical 
program adjustments must be made.
    FNS agrees that State Agencies may find it difficult to rely on 
carryover funding because they are notified of its availability well 
into the annual budget and spending cycle. However, FNS does not know 
how much carryover funding remains until completion of the close-out of 
financial accounts for the preceding year, which is not normally 
accomplished until the second quarter of the current year. Thus, FNS is 
unable to allocate available carryover funding until that time.
    FNS urges interested State Agencies to submit their requests for 
carryover funding, with accompanying justification, as early as 
possible in the FY. FNS will act upon the requests as quickly as 
possible.

Participant Reimbursements

    The Farm Bill eliminated the $25 per month per participant 
limitation on Federal cost sharing for reimbursement for the costs of 
transportation and other actual costs other than dependent care.
    One commenter believes that the language of the proposed rule 
related to the E&T State plan suggests that there is only one 
reimbursement rate for participant expenses other than dependent care. 
States may desire to have different reimbursement policies for 
households that experience different types of expenses, or they may 
want to establish different levels of reimbursement for different areas 
of the State where, for example, costs of transportation are higher. 
The commenter recommends that FNS revise the language to allow for more 
than one reimbursement rate for transportation and other expenses.
    The Department agrees that the language of the E&T State plan 
provision relating to participant reimbursements should be revised to 
allow for varying rates of reimbursements. This final rule will include 
language in 7 CFR 273.7(c)(6)(xv) to clarify that, if the State

[[Page 33381]]

agency proposes to provide different reimbursement amounts to account 
for varying levels of expenses, for instance, for greater or lesser 
costs for transportation in different areas of the State, it must 
include them here.
    One commenter encourages FNS to consider allowing E&T reimbursement 
for participants for up to 30 days following placement into 
unsubsidized employment. Mandatory participants may not receive their 
first paycheck for up to four weeks. This causes hardships for E&T 
participants who need to get back and forth to work until they receive 
a paycheck. Also, the participant may have a need for employment-
related items such as clothing, work boots, bonding, tools, etc. once a 
job is accepted.
    FNS believes that expanding the range of possible covered costs 
eligible for a Federal match for reimbursement is desirable because 
doing so supports the goal of the E&T Program to help food stamp 
applicants and recipients obtain employment and achieve self-
sufficiency. In our discussion of expanded reimbursements in the 
proposed rule we stated that expenses such as license and bonding fees 
required for employment, for which the E&T participant is liable, could 
also be considered for reimbursement by State agencies. However, after 
reviewing comments on the proposed rule and reconsidering the scope of 
the E&T Program, FNS wants to take this opportunity to amend that 
statement. While we understand wanting to support employed persons, the 
use of Federal funds to provide services associated with starting and 
keeping a job is beyond the scope of the E&T Program and must be 
disallowed.
    Congress established the E&T Program to assist members of 
households participating in the FSP in gaining skills, training, work, 
or experience that will increase their ability to obtain regular 
employment. It defined an E&T program as one that contains one or more 
components providing job search; job search training; workfare; actual 
work experience or training, or both; educational programs or 
activities; self-employment activities; and, as approved by the 
Secretary, other employment, education and training programs, projects, 
and experiments. Lastly, Congress required that Federal funds provided 
to a State agency may be used only for operating an E&T program as 
defined. It required that States may be reimbursed 50 percent of their 
costs incurred in connection with transportation costs and other 
expenses reasonably necessary and directly related to participation in 
an E&T program as defined.
    Based on this language in the Food Stamp Act and on the legislative 
history of the E&T Program, Congress clearly intended to limit the 
scope of the Program to preparing for and obtaining employment. Post-
employment services were never part of the Program's mandate.
    One reason for this limitation is the relatively small Federal 
grant authorized by Congress to fund the Program. With limited 
resources, along with the requirement to provide qualifying education 
and training opportunities that allow ABAWDs to remain eligible beyond 
the 3-month time limit, the Program must focus on relatively 
inexpensive components designed to provide basic services.
    Further, although some States may desire more flexibility to align 
their E&T policies on participant reimbursements with those for 
Temporary Assistance for Needy Families (TANF) work supportive 
services, the significant differences that exist between the E&T and 
TANF work programs preclude FNS from allowing States to cover the 
entire array of expenditures considered suitable under TANF guidelines. 
These differences involve the nature of the authorizing legislation and 
funding mechanisms (block grant with time-limits versus Federal 
entitlement with limited education and training funds), the range of 
purposes served, the degree to which exemptions are available, and the 
sizes of the populations receiving benefits.
    Since the E&T Program is defined by its components and all the 
components are designed to enable participants to obtain jobs, 
reimbursing the costs of goods and services associated with employment 
retention are beyond the scope of what can be allowed. Thus, FNS must 
limit participation reimbursements to those costs involved in 
successful component participation and disallow costs associated with 
starting and keeping a job once one has been offered.
    Keep in mind, however, that employed individuals may participate in 
regular, approved E&T program components and receive participant 
reimbursements to cover their expenses. For example, an individual 
works less than 30 hours a week, or earns less than the Federal minimum 
wage equivalent of 30 hours. The individual--who is otherwise eligible 
for food stamps and is subject to all program work requirements, 
including E&T--is assigned to and participates in a General Equivalency 
Diploma (GED) preparation component. The State agency is authorized to 
claim reimbursement for any administrative costs associated with the 
individual's participation, as well as half of the costs of participant 
expenses, such as transportation, course materials, etc.

Reduction in Work Effort

    In the proposed rule FNS clarified its policy concerning reduction 
in work effort. We proposed to amend the regulations to state that an 
individual exempt from FSP work requirements because he or she is 
working a minimum of 30 hours a week who reduces his or her work hours 
to less than 30, but who continues to earn more in weekly wages than 
the Federal minimum wage multiplied by 30 hours, remains exempt from 
FSP work requirements and is not subject to disqualification.
    One commenter supports the clarification of the minimum wage 
equivalency as it applies to the reduction in work effort. The 
commenter does, however, recommend that the final rule clarify when 
States should and should not apply the minimum wage equivalency 
analysis. The commenter points out that the work hours of low-skill 
workers typically fluctuate considerably from month to month. Many 
small reductions in work hours occur either involuntarily or for good 
cause. The commenter believes that FNS can reduce administrative 
burdens on State agencies and households alike by specifying in the 
final rule that reductions of 5 hours or less do not trigger a 
sanction.
    The Department agrees that such situations sometimes occur, 
resulting in a work week less than 30 hours or weekly earnings less 
than the minimum wage equivalency. State agencies must take such 
situations into account when determining whether a disqualification for 
reduction in work effort should apply. However, FNS disagrees that 
provision for a 5-hour leeway is appropriate. By initiating such a 
policy, FNS would, in effect, alter the federally mandated 30-hour 
minimum.
    The Department has, in this final rule, included a reminder to 
State agencies that minor variations in the number of hours worked or 
in the weekly minimum wage equivalent wages are inevitable and must be 
taken into consideration when assessing a recipient's compliance with 
Program work rules.

State E&T Plans

    FNS is taking this opportunity to make a technical correction to 
the language at 7 CFR 273.7(c)(7), which requires that State agencies 
submit their

[[Page 33382]]

State E&T Plans biennially. FNS is revising this to annual submissions. 
While the basics of E&T plans, such as components offered and program 
reporting and coordination methodologies, may remain constant, the 
requirement for annual participation, budget, and funding estimates, 
along with a discussion of program changes, and other pertinent 
information demands a yearly submission, which State agencies do. This 
correction acknowledges that requirement. Although we did not address 
this issue in the preamble to the proposed rule, FNS did inadvertently 
include the revised regulatory language. FNS did not receive any 
comments concerning the change.

List of Subjects

7 CFR Part 272

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

7 CFR Part 273

    Administrative practice and procedures, Food stamps, Grant 
programs-social programs, Penalties, Reporting and recordkeeping.


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, add paragraph (g)(172) to read as follows:


Sec.  272.1  General terms and conditions.

* * * * *
    (g) * * *
    (172) Amendment No. 400. The provisions of Amendment No. 400, 
regarding the Employment and Training Program Provisions of the Farm 
Security and Rural Investment Act of 2002 are effective August 8, 2006.


Sec.  272.2  [Amended]

0
3. In Sec.  272.2, paragraph (e)(9) is amended by removing the 
reference to ``Sec.  273.7(c)(7)'' and adding in its place a reference 
to ``Sec.  273.7(c)(8)''.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

0
4. In Sec.  273.7:
0
a. paragraph (c)(6)(ii) is amended by removing the period at the end of 
sentence three and adding in its place a semi-colon, and by removing 
the last sentence
0
b. paragraph (c)(6)(vii) is revised;
0
c. new paragraphs (c)(6)(xv) and (c)(6)(xvi) are added;
0
d. paragraphs (c)(7), (c)(8), (c)(9), (c)(10), (c)(11), (c)(12), 
(c)(13), and (c)(14) are redesignated as paragraphs (c)(8), (c)(9), 
(c)(10), (c)(11), (c)(12), (c)(13), (c)(14), and (c)(15), respectively, 
and new paragraph (c)(7) is added;
0
e. newly redesignated paragraph (c)(8) is amended by removing the word 
``biennially'' in the first sentence and adding in its place the word 
``annually'';
0
f. newly redesignated paragraphs (c)(9), (c)(10), and (c)(11) are 
revised;
0
g. paragraph (d)(1)(i) is revised;
0
h. paragraph (d)(1)(ii) is amended by removing paragraphs 
(d)(1)(ii)(A), (d)(1)(ii)(B), (d)(1)(ii)(C), and (d)(1)(ii)(D), and 
redesignating paragraphs (d)(1)(ii)(E), (d)(1)(ii)(F), (d)(1)(ii)(G), 
and (d)(1)(ii)(H) as paragraphs (d)(1)(ii)(A), (d)(1)(ii)(B), 
(d)(1)(ii)(C), and (d)(1)(ii)(D), respectively;
0
i. paragraphs (d)(1)(iii) and (d)(1)(iv) are removed;
0
j. paragraphs (d)(3), (d)(4), (d)(5), and (d)(6) are redesignated as 
(d)(4), (d)(5), (d)(6), and (d)(7), respectively, and new paragraph 
(d)(3) is added;
0
k. newly redesignated paragraph (d)(4) introductory text is amended by 
adding a new second sentence after the first sentence of the 
introductory text, removing the references ``paragraphs (d)(3)(i) and 
(d)(3)(ii)'' in sentences four and seven and adding in their place the 
references ``paragraphs (d)(4)(i) and (d)(4)(ii)'', and by removing the 
references ``paragraphs (d)(3)(i) and (d)(3)(ii)'' in sentence eight 
and adding in its place the reference ``paragraph (d)(4)(i)'';
0
l. newly redesignated paragraph (d)(4)(i) is amended by removing the 
last sentence;
0
m. newly redesignated paragraph (d)(4)(ii) is amended by removing the 
last sentence;
0
n. newly redesignated paragraph (d)(4)(v) is amended by removing the 
reference ``paragraphs (d)(3)(i) and (d)(3)(ii)'' in the second 
sentence and adding in its place the reference ``paragraphs (d)(4)(i) 
and (d)(4)(ii)'', and removing the reference ``paragraph (d)(3)(i)'' in 
the last sentence and adding in its place the ``paragraph (d)(4)(i)'';
0
o. paragraph (f)(7)(ii) is amended by removing the reference 
``paragraphs (b)(1)(iii) and (b)(1)(v)'' in the second sentence and 
adding in its place the reference ``paragraphs (b)(1)(iii) or 
(b)(1)(v)'';
0
p. paragraph (f)(7)(iv) is amended by removing words ``exemptions 
provided in paragraphs (b)(1)(iii) and (b)(1)(v)'' in the first 
sentence and adding in their place the words ``exemption in paragraph 
(b)(1)(iii)'';
0
q. paragraph (j)(3)(iii) is amended by removing the last sentence and 
adding two new sentences in its place.
    The revisions and additions read as follows:


Sec.  273.7  Work provisions.

* * * * *
    (c) * * *
    (6) * * *
    (vii) The method the State agency uses to count all work 
registrants as of the first day of the new fiscal year;
* * * * *
    (xv) The combined (Federal/State) State agency reimbursement rate 
for transportation costs and other expenses reasonably necessary and 
directly related to participation incurred by E&T participants. If the 
State agency proposes to provide different reimbursement amounts to 
account for varying levels of expenses, for instance for greater or 
lesser costs of transportation in different areas of the State, it must 
include them here.
    (xvi) Information about expenses the State agency proposes to 
reimburse. FNS must be afforded the opportunity to review and comment 
on the proposed reimbursements before they are implemented.
    (7) A State agency interested in receiving additional funding for 
serving able-bodied adults without dependents (ABAWDs) subject to the 
3-month time limit, in accordance with paragraph (d)(3) of this 
section, must include in its annual E&T plan:
    (i) Its pledge to offer a qualifying activity to all at-risk ABAWD 
applicants and recipients;
    (ii) Estimated costs of fulfilling its pledge;
    (iii) A description of management controls in place to meet pledge 
requirements;
    (iv) A discussion of its capacity and ability to serve at-risk 
ABAWDs;
    (v) Information about the size and special needs of its ABAWD 
population; and
    (vi) Information about the education, training, and workfare 
components it will offer to meet the ABAWD work requirement.
* * * * *
    (9) The State agency will submit an E&T Program Activity Report to 
FNS no later than 45 days after the end of each Federal fiscal quarter. 
The report will contain monthly figures for:
    (i) Participants newly work registered;
    (ii) Number of ABAWD applicants and recipients participating in 
qualifying components;

[[Page 33383]]

    (iii) Number of all other applicants and recipients (including 
ABAWDs involved in non-qualifying activities) participating in 
components; and
    (iv) ABAWDs subject to the 3-month time limit imposed in accordance 
with Sec.  273.24(b) who are exempt under the State agency's 15 percent 
exemption allowance under Sec.  273.24(g).
    (10) The State agency will submit annually, on its first quarterly 
report, the number of work registrants in the State on October 1 of the 
new fiscal year.
    (11) The State agency will submit annually, on its final quarterly 
report:
    (i) A list of E&T components it offered during the fiscal year and 
the number of ABAWDs and non-ABAWDs who participated in each; and
    (ii) The number of ABAWDs and non-ABAWDs who participated in the 
E&T Program during the fiscal year. Each individual must be counted 
only once.
* * * * *
    (d) * * *
    (1) * * *
    (i) Allocation of grants. Each State agency will receive a 100 
percent Federal grant each fiscal year to operate an E&T program in 
accordance with paragraph (e) of this section. The grant requires no 
State matching.
    (A) In determining each State agency's 100 percent Federal E&T 
grant, FNS will apply the percentage determined in accordance with 
paragraph (d)(1)(i)(B) of this section to the total amount of 100 
percent Federal funds authorized under section 16(h)(1)(A) of the Act 
for each fiscal year.
    (B) FNS will allocate the funding available each fiscal year for 
E&T grants using a formula designed to ensure that each State agency 
receives its appropriate share.
    (1) Ninety percent of the annual 100 percent Federal E&T grant will 
be allocated based on the number of work registrants in each State as a 
percentage of work registrants nationwide. FNS will use work registrant 
data reported by each State agency on the FNS-583, Employment and 
Training Program Activity Report, from the most recent Federal fiscal 
year.
    (2) Ten percent of the annual 100 percent Federal E&T grant will be 
allocated based on the number of ABAWDs in each State, as determined by 
food stamp QC data for the most recently available completed fiscal 
year, which provide a breakdown of each State's population of adults 
age 18 through 49 who are not disabled and who do not live with 
children.
    (C) No State agency will receive less than $50,000 in Federal E&T 
funds. To ensure this, FNS will, if necessary, reduce the grant of each 
State agency allocated more than $50,000. In order to guarantee an 
equitable reduction, FNS will calculate grants as follows. First, 
disregarding those State agencies scheduled to receive less than 
$50,000, FNS will calculate each remaining State agency's percentage 
share of the fiscal year's E&T grant. Next, FNS will multiply the 
grant--less $50,000 for every State agency under the minimum--by each 
remaining State agency's same percentage share to arrive at the revised 
amount. The difference between the original and the revised amounts 
will represent each State agency's contribution. FNS will distribute 
the funds from the reduction to State agencies initially allocated less 
than $50,000.
    (D) If a State agency will not obligate or expend all of the funds 
allocated to it for a fiscal year under paragraph (d)(1)(i)(B) of this 
section, FNS will reallocate the unobligated, unexpended funds to other 
State agencies during the fiscal year or the subsequent fiscal year on 
a first come-first served basis. Each year FNS will notify all State 
agencies of the availability of carryover funding. Interested State 
agencies must submit their requests for carryover funding to FNS. If 
the requests are determined reasonable and necessary, FNS will allocate 
carryover funding to meet some or all of the State agencies' requests, 
as it considers appropriate and equitable. The factors that FNS will 
consider when reviewing a State agency's request will include the size 
of the request relative to the level of the State agency's E&T spending 
in prior years, the specificity of the State agency's plan for spending 
carryover funds, and the quality of program and scope of impact for the 
State's E&T program and proposed use of carryover funds.
* * * * *
    (3) Additional allocations. In addition to the E&T program grants 
discussed in paragraph (d)(1) of this section, FNS will allocate $20 
million in Federal funds each fiscal year to State agencies that ensure 
availability of education, training, or workfare opportunities that 
permit ABAWDs to remain eligible beyond the 3-month time limit.
    (i) To be eligible, a State agency must make and comply with a 
commitment, or ``pledge,'' to use these additional funds to defray the 
cost of offering a position in an education, training, or workfare 
component that fulfills the ABAWD work requirement, as defined in Sec.  
273.24(a), to each applicant and recipient who is:
    (A) In the last month of the 3-month time limit described in Sec.  
273.24(b);
    (B) Not eligible for an exception to the 3-month time limit under 
Sec.  273.24(c);
    (C) Not a resident of an area of the State granted a waiver of the 
3-month time limit under Sec.  273.24(f); and
    (D) Not included in each State agency's 15 percent ABAWD exemption 
allotment under Sec.  273.24(g).
    (ii) While a participating pledge State may use a portion of the 
additional funding to provide E&T services to ABAWDs who do not meet 
the criteria discussed in paragraph (d)(3)(i) of this section, it must 
guarantee that the ABAWDs who do meet the criteria are provided the 
opportunity to remain eligible.
    (iii) State agencies will have one opportunity each fiscal year to 
take the pledge described in paragraph (d)(3)(i) of this section. An 
interested State agency, in its E&T Plan for the upcoming fiscal year, 
must include the following:
    (A) A request to be considered as a pledge State, along with its 
commitment to comply with the requirements of paragraph (d)(3)(i) of 
this section;
    (B) The estimated costs of complying with its pledge;
    (C) A description of management controls it has established to meet 
the requirements of the pledge;
    (D) A discussion of its capacity and ability to serve vulnerable 
ABAWDs;
    (E) Information about the size and special needs of the State's 
ABAWD population; and
    (F) Information about the education, training, and workfare 
components that it will offer to allow ABAWDs to remain eligible.
    (iv) If the information provided in accordance with paragraph 
(d)(3)(iii) of this section clearly indicates that the State agency 
will be unable to fulfill its commitment, FNS may require the State 
agency to address its deficiencies before it is allowed to participate 
as a pledge State.
    (v) If the State agency does not address its deficiencies by the 
beginning of the new fiscal year on October 1, it will not be allowed 
to participate as a pledge State.
    (vi) No pledges will be accepted after the beginning of the fiscal 
year.
    (vii)(A) Once FNS determines how many State agencies will 
participate as pledge States in the upcoming fiscal year, it will, as 
early in the fiscal year as possible, allocate among them the $20 
million based on the number of ABAWDs in each participating State, as a 
percentage of ABAWDs in all the participating States. FNS will 
determine the number of ABAWDs in each

[[Page 33384]]

participating State using food stamp QC data for the most recently 
available completed fiscal year, which provide a breakdown of each 
State's population of adults age 18 through 49 who are not disabled and 
who do not live with children.
    (B) Each participating State agency's share of the $20 million will 
be disbursed in accordance with paragraph (d)(6) of this section.
    (C) Each participating State agency must meet the fiscal 
recordkeeping and reporting requirements of paragraph (d)(7) of this 
section.
    (viii) If a participating State agency notifies FNS that it will 
not obligate or expend its entire share of the additional funding 
allocated to it for a fiscal year, FNS will reallocate the unobligated, 
unexpended funds to other participating State agencies during the 
fiscal year, as it considers appropriate and equitable, on a first 
come-first served basis. FNS will notify other pledge States of the 
availability of additional funding. To qualify, a pledge State must 
have already obligated its entire annual 100 percent Federal E&T grant, 
excluding an amount that is proportionate to the number of months 
remaining in the fiscal year, and it must guarantee in writing that it 
intends to obligate its entire grant by the end of the fiscal year. A 
State's annual 100 percent Federal E&T grant is its share of the 
regular 100 percent Federal E&T allocation plus its share of the 
additional $20 million (if applicable). Interested pledge States must 
submit their requests for additional funding to FNS. FNS will review 
the requests and, if they are determined reasonable and necessary, will 
reallocate some or all of the unobligated, unspent ABAWD funds.
    (ix) Unlike the funds allocated in accordance with paragraph (d)(1) 
of this section, the additional pledge funding will not remain 
available until obligated or expended. Unobligated funds from this 
grant must be returned to the U.S. Treasury at the end of each fiscal 
year.
    (x) The cost of serving at-risk ABAWDs is not an acceptable reason 
to fail to live up to the pledge. A slot must be made available and the 
ABAWD must be served even if the State agency exhausts all of its 100 
percent Federal E&T funds and must use State funds to guarantee an 
opportunity for all at-risk ABAWDs to remain eligible beyond the 3-
month time limit. State funds expended in accordance with the approved 
State E&T Plan are eligible for 50 percent Federal match. If a 
participating State agency fails, without good cause, to meet its 
commitment, it may be disqualified from participating in the subsequent 
fiscal year or years.
    (4) * * * The Federal government will fund 50 percent of State 
agency payments for allowable expenses, except that Federal matching 
for dependent care expenses is limited to the maximum amount specified 
in paragraph (d)(4)(i) of this section. * * *
* * * * *
    (j) * * *
    (3) * * *
    (iii) * * * If the individual reduces his or her work hours to less 
than 30 a week, but continues to earn weekly wages that exceed the 
Federal minimum wage multiplied by 30 hours, the individual remains 
exempt from Program work requirements, in accordance with paragraph 
(b)(1)(vii) of this section, and the reduction in work effort provision 
does not apply. Minor variations in the number of hours worked or in 
the weekly minimum wage equivalent wages are inevitable and must be 
taken into consideration when assessing a recipient's compliance with 
Program work rules.
* * * * *


Sec.  273.24  [Amended]

0
5. In Sec.  273.24, paragraph (a)(4)(i) is amended by removing the 
reference ``Sec.  273.22'' and adding in its place the reference 
``Sec.  273.7(m)''.

    Dated: June 1, 2006.
Kate Coler,
Deputy Under Secretary, Food, Nutrition and Consumer Services.
 FR Doc. E6-9001 Filed 6-8-06; 8:45 am]
BILLING CODE 3410-30-P