[Federal Register Volume 75, Number 65 (Tuesday, April 6, 2010)]
[Rules and Regulations]
[Pages 17313-17315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7530]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 286

RIN 0970-AC40


Temporary Assistance for Needy Families (TANF) Carry-Over Funds

AGENCY: Administration for Children and Families (ACF), Department of 
Health and Human Services (HHS).

ACTION: Final rule.

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SUMMARY: This final rule implements the statutory change to section 
404(e) of the Social Security Act as enacted by the American Recovery 
and Reinvestment Act of 2009. This change allows States, Tribes and 
Territories to use Temporary Assistance for Needy Families (TANF) 
program funds carried over from a prior year for any allowable TANF 
benefit, service or activity. Previously these funds could be used only 
to provide assistance. This final rule applies to States, local 
governments, and Tribes that administer the TANF program.

DATES: Effective April 6, 2010, the interim final rule amending 45 CFR 
part 286 which was published at 74 FR 25161 on May 27, 2009, is adopted 
as a final rule without change.

FOR FURTHER INFORMATION CONTACT: Robert Shelbourne, Director, Division 
of State TANF Policy and Acting Director, Division of Tribal TANF 
Management, Office of Family Assistance, ACF, at (202) 401-5150.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

    Section 417 of the Social Security Act (42 U.S.C. 617) limits the 
authority of the Federal government to regulate State conduct or 
enforce the TANF provisions of the Social Security Act, except as 
expressly provided. We have interpreted this provision to allow us to 
regulate where Congress has charged HHS with enforcing certain TANF 
provisions by assessing penalties. Because the improper use of Federal 
TANF carry-over funds can result in a financial penalty pursuant to 42 
U.S.C. 609(a)(1), we have the authority to regulate in this instance.

II. American Recovery and Reinvestment Act of 2009

    On February 17, 2009, the President signed the American Recovery 
and Reinvestment Act of 2009 (Pub. L. 111-5), which included a 
provision to lift the restriction on unspent Federal TANF funds 
reserved or ``carried over'' into a succeeding fiscal year. Prior to 
Public Law 111-5, carry-over funds could only be used to provide 
assistance (i.e., ongoing basic needs payments, and supportive services 
such as transportation and child care to families who are not 
employed). Section 2103 of Division B of Public Law 111-5 amends 
section 404(e) of the Social Security Act (Act) by allowing States, 
District of Columbia, the Territories and Tribes to use the carry-over 
funds for any allowable TANF benefit, service, or activity (such as job 
skills training or re-training activities, employment counseling 
services, parental counseling services, teen pregnancy prevention 
activities, services for victims of domestic violence, after-school 
programs)--and not just assistance.

III. Response to Public Comment and Regulatory Provisions

    The interim final rule was published May 27, 2009, and provided a 
60-day comment period. Only one comment was received from an advocacy 
organization that simply expressed

[[Page 17314]]

support for the regulation; thus, no changes have been made to the 
provisions of the interim final rule in the final rule. As discussed 
below, section 2103 of Public Law 111-5 requires a change in the Tribal 
TANF regulation at 45 CFR 286.60. The TANF regulations at 45 CFR Part 
263, applicable to States and Territories, require no change.

PART 286--TRIBAL TANF PROVISIONS

Section 286.60: Must Tribes obligate all Tribal Family Assistance Grant 
funds by the end of the fiscal year in which they are awarded?

    Under prior law, section 404(e) of the Act, entitled ``Authority to 
Reserve Certain Amounts for Assistance,'' allowed States and Indian 
Tribes operating approved Tribal TANF programs (Tribes) to reserve 
Federal TANF funds that they receive ``for any fiscal year for the 
purpose of providing, without fiscal year limitation, assistance under 
the State or tribal program funded under this part'' (Title IV, Part A 
of the Act). Based on the reading of this section, we concluded that 
States and Tribes could only use reserve or ``carry-over'' funds to 
provide TANF assistance, defined in 45 CFR 260.31 for States and in 45 
CFR 286.10 for Tribes, and to pay for the administrative expenses 
associated with providing the assistance. The statutory wording also 
precluded States from transferring ``carry-over'' funds to either the 
Social Services Block Grant Program (SSBG) under title XX of the Act or 
the Child Care and Development Block Grant Program (also known as the 
Child Care Discretionary Fund within the Child Care and Development 
Fund (CCDF)). (The transfer provision in section 404(d) of the Act does 
not apply to Tribes.)
    Section 2103 of Division B of Public Law 111-5 (American Recovery 
and Reinvestment Act of 2009) amended section 404(e) of the Social 
Security Act. The amendment allows States and Tribes to use unspent 
Federal TANF funds carried over from prior fiscal years ``to provide, 
without fiscal year limitation, any benefit or service that may be 
provided under the State or tribal program funded under this part.'' 
Thus, States and Tribes are no longer restricted to using carry-over 
TANF funds to provide benefits that specifically meet the definition of 
assistance. States and Tribes may expend carry-over funds for any 
allowable TANF benefit, service, or activity. Because the amended 
section 404(e) continues to specify that carry-over funds may only be 
used ``under this part''--i.e., in the TANF program, States may not 
transfer any carry-over funds to either CCDF or the SSBG program. 
States may only transfer current year Federal TANF funds (up to the 
statutory limit) to these programs.
    Accordingly, we have amended Sec.  286.60 because the limitation on 
the use of carry-over funds explicitly appears in this section. We have 
deleted paragraph (b) which previously read, ``A Tribe may expend funds 
beyond the fiscal year in which awarded only on benefits that meet the 
definition of assistance at Sec.  286.10 or on the administrative costs 
directly associated with providing that assistance.'' This sentence is 
no longer accurate because the law removes the restriction. We have 
revised the remaining language to provide that a Tribe may reserve 
amounts awarded to it, without fiscal year limitation, to provide 
assistance, benefits, and services in accordance with the requirements 
under Sec.  286.35 or Sec.  286.40, if applicable.
    No change in the regulations related to the State TANF program is 
necessary, as those regulations speak more broadly to improper uses of 
TANF funds. Specifically, Sec.  263.11(b) currently states that ``We 
will consider use of funds in violation of * * * sections 404 and 408 
and other provisions of the Act * * * to be misuse of funds.'' This 
statement is not impacted by the change to section 404(e) of the Act.

IV. Paperwork Reduction Act

    There are no information collection activities imposed by this 
regulation, nor are any existing requirements changed as a result of 
their promulgation. Therefore, the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507) regarding reporting and 
recordkeeping, do not apply.

V. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 605(b)) requires the 
Federal government to anticipate and reduce the impact of rules and 
paperwork requirements on small businesses and other small entities. 
Small entities are defined in this Act to include small businesses as 
defined by the Small Business Administration, non-profit organizations 
that are not dominant in their markets, and small governmental 
jurisdictions. This rule will affect primarily the 50 States, the 
District of Columbia, certain Territories, and Indian Tribes operating 
approved Tribal TANF programs. Therefore, we certify that this rule 
will not have a significant impact on small entities.

VI. Regulatory Impact Analysis

    Executive Order 12866 requires the review of regulations to ensure 
that they are consistent with the priorities and principles set forth 
in the Executive Order. The Department has determined that this final 
rule is consistent with these priorities and principles. This 
regulation implements a statutory change in the use of Federal TANF 
block grant funds carried over from a prior fiscal year included in the 
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5). 
Further, we certify that this change is not an ``economically 
significant regulatory action'' under Section 3(f)(1) of Executive 
Order 12866. It will not have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities. TANF block grant awards remain the same; 
this change in statute simply allows carry-over funds under the TANF 
program to be used for broader purposes.
    The Department, however, has determined that this rule is 
significant for the purposes of review under Section 3(f)(4) of 
Executive Order 12866; accordingly, it was reviewed by the Office of 
Management and Budget (OMB).

VII. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any Federal mandate that may result 
in the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector, of $133 million or more in any one 
year. The Department has determined that this rule would not impose a 
mandate that will result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of more than 
$133 million in any one year.

VIII. Congressional Review

    This regulation is not a major rule as defined in 5 U.S.C. Chapter 
8.

IX. Assessment of Federal Regulation and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a proposed 
policy or regulation may negatively affect family well-being. If the 
agency's

[[Page 17315]]

determination is affirmative, then the agency must prepare an impact 
assessment addressing seven criteria specified in the law.
    The Department has determined that this regulation does not 
negatively affect family well-being. The purpose of the TANF program is 
to strengthen the economic and social stability of families. This rule 
lifts the restriction on the use of Federal TANF carry-over funds so 
that States and Tribes may provide the services that families need to 
attain and maintain self-sufficiency.

X. Executive Order 13132

    Executive Order 13132, Federalism, requires that Federal agencies 
consult with State and local government officials in the development of 
regulatory policies with Federalism implications. Consistent with this 
Executive Order, we solicited comments from State and local government 
officials on the interim final rule.

XI. List of Subjects in 45 CFR Part 286

    Carry-over, Reserve, Prior fiscal years, Federal TANF funds.

(Catalog of Federal Domestic Assistance Program Number 93.558, 
Temporary Assistance for Needy Families Program)

    Dated: November 20, 2009.
Carmen R. Nazario,
Assistant Secretary for Children and Families.
    Approved: January 19, 2010.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.

PART 286--TRIBAL TANF PROVISIONS

0
Accordingly, the interim final rule amending 45 CFR part 286 which was 
published at 74 FR 25161 on May 27, 2009, is adopted as a final rule 
without change.

[FR Doc. 2010-7530 Filed 4-5-10; 8:45 am]
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