[Federal Register Volume 75, Number 80 (Tuesday, April 27, 2010)]
[Proposed Rules]
[Pages 22027-22031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9645]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 253

[FNS-2009-0017]
RIN 0584-AD95


Food Distribution Program on Indian Reservations: Amendments 
Related to the Food, Conservation, and Energy Act of 2008

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to amend Food Distribution Program on 
Indian Reservations (FDPIR) regulations to conform FDPIR policy to the 
requirements included in the Food, Conservation, and Energy Act of 2008 
(the Farm Bill) for the Supplemental Nutrition Assistance Program 
(SNAP). The proposed rule is intended to improve program service to 
applicants and participants and ensure consistency between FDPIR and 
SNAP. When determining eligibility for FDPIR, the proposed rule would 
permanently exclude combat pay from being considered income and 
eliminate the

[[Page 22028]]

maximum dollar limit of the dependent care deduction. The rule would 
also exclude from resource consideration household funds held in 
qualified education savings accounts identified in the Farm Bill and 
would exclude any other education savings accounts for which an 
exclusion is allowed under SNAP. The proposed rule would also clarify 
that the current resource exclusion for retirement accounts is 
restricted to the qualified retirement accounts identified in the Farm 
Bill, but that a resource exclusion would be allowed for any other 
retirement account for which an exclusion is allowed under SNAP. 
Additionally, the rule would clarify that the FDPIR regulations 
regarding income eligibility refer to the SNAP net monthly income 
standard, not the SNAP gross monthly income standard.

DATES: To be assured of consideration, comments must be received on or 
before June 28, 2010.

ADDRESSES: The Food and Nutrition Service invites interested persons to 
submit comments on this proposed rule. You may submit comments, 
identified by RIN number 0584-AD95, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Preferred method; follow the online instructions 
for submitting comments on docket FNS-2009-0017.
     Fax: Submit comments by facsimile transmission to (703) 
305-2420.
     Mail: Send comments to Laura Castro, Branch Chief, Policy 
Branch, Food Distribution Division, Food and Nutrition Service, U.S. 
Department of Agriculture, Room 500, 3101 Park Center Drive, 
Alexandria, Virginia 22302-1594.
     Hand Delivery or Courier: Deliver comments to the above 
address during regular business hours.
    Comments submitted in response to this rule will be included in the 
record and will be made available to the public. Please be advised that 
the substance of the comments and the identity of the individuals or 
entities submitting the comments will be subject to public disclosure. 
The Department will make the comments publicly available on the 
Internet via http://www.regulations.gov.
    All written submissions will be available for public inspection at 
the address above during regular business hours (8:30 a.m. to 5:30 
p.m.), Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Laura Castro at the above address or 
telephone (703) 305-2662. A regulatory impact analysis has been 
prepared for this rule. You may request a copy of the analysis by 
contacting us at the above address, or by e-mail to 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Public Comment Procedures

    Your written comments on this proposed rule should be specific, 
confined to issues pertinent to the proposed rule, and should explain 
your reasons for any change recommended. Where possible, you should 
reference the specific section or paragraph of the proposal you are 
addressing. Comments received after the close of the comment period 
(see DATES) will not be considered or included in the Administrative 
Record for the final rule.
    Executive Order 12866 requires each agency to write regulations 
that are simple and easy to understand. We invite your comments on how 
to make these regulations easier to understand, including answers to 
questions such as the following:
    (1) Are the requirements in the rule clearly stated?
    (2) Does the rule contain technical language or jargon that 
interferes with its clarity?
    (3) Does the format of the rule (grouping and order of sections, 
use of headings, paragraphing, etc.) make it more or less clear?
    (4) Would the rule be easier to understand if it were divided into 
more (but shorter) sections?
    (5) Is the description of the rule in the preamble section entitled 
``Background and Discussion of the Proposed Rule'' helpful in 
understanding the rule? How could this description be more helpful?

II. Procedural Matters

A. Executive Order 12866

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

B. Regulatory Impact Analysis

Need for Action
    This action is needed to ensure that regulations are consistent 
between FDPIR and SNAP. FDPIR was established by Congress in 1977 as an 
alternative to the Food Stamp Program for low-income households living 
on Indian reservations and households near reservations or in Oklahoma 
that contain at least one person who is a member of a Federally-
recognized Tribe that does not have easy access to Food Stamp offices 
and authorized grocery stores. The name of the Food Stamp Program was 
changed to the Supplemental Nutrition Assistance Program pursuant to 
the Food, Conservation and Energy Act of 2008, Public Law 110-246 (Farm 
Bill). To avoid confusion, hereinafter, the terms Food Stamp Act and 
Food Stamp Program will not be used.
    FDPIR has similar eligibility criteria to SNAP, although certain 
administrative requirements have been simplified and streamlined under 
FDPIR. The proposed rulemaking will update FDPIR regulations to be 
consistent with recent changes to SNAP in accordance with Sections 
4101, 4103, and 4104 of the Farm Bill. Section 4101 permanently 
excludes combat pay (i.e., additional pay earned as a result of 
deployment to or service in a combat zone) as income for the purposes 
of determining SNAP eligibility. Section 4103 eliminates the maximum 
dollar limit to the dependent care deduction allowed under SNAP, and 
Section 4104 excludes from resources any household funds held in 
qualified retirement or education savings accounts when determining 
eligibility for SNAP. Section 4104 also excludes future qualified 
retirement accounts should they be created, and provides the Secretary 
with discretion to allow resource exclusions for other retirement plans 
and education savings accounts. This proposed rulemaking will also 
provide clarification that FDPIR regulations regarding income 
eligibility are referring to the SNAP net income guidelines, rather 
than the gross.
Benefits
    This rule would amend FDPIR regulations by aligning provisions with 
recent changes to SNAP as a result of the Farm Bill. These regulatory 
changes are designed to help ensure that FDPIR benefits are provided to 
low-income households living on Indian reservations and households near 
reservations or in Oklahoma that contain at least one person who is a 
member of a Federally-recognized Tribe that are in need of nutrition 
assistance. Because FDPIR regulations regarding resource limits and 
income exclusions would be altered by this rule, participation could 
potentially increase, thus expanding access to the program and 
increasing benefits to the targeted population.
    FNS has projected the impact of the proposed changes on FDPIR 
participation. The combined effect of the provisions in this proposed 
rule will potentially make a small number of households become newly 
eligible, primarily those households with sizeable dependent care 
expenses and/or funds in qualified education savings

[[Page 22029]]

accounts. However, individual households might benefit from more than 
one provision and the effect of the overlap could not be determined. 
Therefore, we are unable to determine with any certainty the total 
number of individuals that might be added as a result of this rule.
Costs
    This action is not expected to significantly increase costs of 
State and local agencies, or their commercial contractors. The combined 
impact of the proposed changes in this rulemaking is projected to 
increase Federal program costs by $1,000 in fiscal year (FY) 2010 and 
$7,000 over a five-year period (FY 2010 through FY 2014). These 
increased costs are attributable to potential increases in 
participation, primarily among those households that have funds in 
qualified education savings accounts.

C. Regulatory Flexibility Act

    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). It 
has been certified that this action will not have a significant impact 
on a substantial number of small entities. While Indian Tribal 
Organizations (ITOs) and State Agencies that administer FDPIR will be 
affected by this rulemaking, the economic effect will not be 
significant.

D. Public Law 104-4

    Title II of the Unfunded Mandates 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 the UMRA, FNS 
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 
the UMRA generally requires FNS 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 the UMRA) for State, local, 
and Tribal governments or the private sector of $100 million or more in 
any one year. This rule is, therefore, not subject to the requirements 
of sections 202 and 205 of the UMRA.

E. Executive Order 12372

    The program addressed in this action is listed in the Catalog of 
Federal Domestic Assistance under 10.567. For the reasons set forth in 
the final rule in 7 CFR Part 3015, Subpart V and related Notice (48 FR 
29115, June 24, 1983), the donation of foods in such programs is 
included in the scope of Executive Order 12372, which requires 
intergovernmental consultation with State and local officials.

F. Executive Order 13132

    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 regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132.
    The programs affected by the regulatory proposals in this rule are 
all Tribal or State-administered, Federally-funded programs. The FNS 
National Office and Regional Offices have formal and informal 
discussions with State officials on an ongoing basis regarding program 
issues relating to the distribution of donated foods. FNS meets 
annually with the National Association of Food Distribution Programs on 
Indian Reservations (NAFDPIR), a national group of Tribal and State 
agencies, to discuss issues relating to food distribution.
    This rule is intended to provide consistency between FDPIR and 
SNAP. The rule was prompted by provisions contained in the Farm Bill, 
enacted on June 18, 2008. Section 4101 of the Farm Bill permanently 
excludes combat pay (i.e., additional pay earned as a result of 
deployment to or service in a combat zone) from income when determining 
eligibility for SNAP. Section 4103 removes the maximum limit on the 
dependent care deduction and Section 4104 excludes from resources any 
household funds held in qualified tuition program or retirement 
accounts when determining eligibility for SNAP.
    FNS has considered the impact of the proposed rule on ITOs and 
State agencies. The overall effect is to ensure that nutrition 
assistance is provided to low-income households. During the prior 
consultation period in advance of this rulemaking, FNS was not made 
aware of any adverse concerns by ITOs or State Agencies.

G. Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule, when finalized, 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 proposed rule 
would not have retroactive effect. Prior to any judicial challenge to 
the provisions of this rule or the application of its provisions, all 
applicable administrative procedures must be exhausted.

H. Civil Rights Impact Analysis

    FNS has reviewed this 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, FNS has determined that 
this rule will not in any way limit or reduce the ability of 
participants to receive the benefits of donated foods in food 
distribution programs on the basis of an individual's or group's race, 
color, national origin, sex, age, or disability. FNS found no factors 
that would negatively and disproportionately affect any group of 
individuals.

I. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
part 1320) requires that OMB approve all collections of information by 
a Federal agency from the public 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. This 
proposed rule does not contain any new information collection 
requirements that are subject to review and approval by OMB.

J. E-Government Act Compliance

    FNS is committed to compliance with the E-Government Act of 2002 to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

III. Background and Discussion of the Proposed Rule

    The proposed rule would amend the regulations for FDPIR at 7 CFR 
253.6 to be consistent with SNAP relative to the requirements set forth 
in the Farm Bill. FDPIR was established by Congress in 1977 as an 
alternative to SNAP for low-income households living on Indian 
reservations and households near

[[Page 22030]]

reservations or in Oklahoma that contain at least one person who is a 
member of a Federally-recognized Tribe that does not have easy access 
to SNAP offices and authorized grocery stores. Consequently, FDPIR has 
similar eligibility criteria to SNAP, although certain administrative 
requirements have been simplified and streamlined under FDPIR. The 
changes would improve program service by: (1) Excluding household funds 
held in education savings accounts specified in Section 4104 of the 
Farm Bill and any other education accounts for which a resource 
exclusion is provided under SNAP; (2) clarifying that the current FDPIR 
resource exclusion for retirement accounts is limited to qualified 
retirement accounts specified in Section 4104 of the Farm Bill and any 
other retirement accounts for which a resource exclusion is provided 
under SNAP; (3) clarifying that the FDPIR regulations regarding income 
eligibility are referring to the SNAP net monthly income standard, 
rather than the SNAP gross monthly income standard; (4) permanently 
excluding combat pay from income when determining eligibility for 
FDPIR; and (5) eliminating the maximum limit to the dependent care 
deduction.
    The proposed amendments would also impact the operation of the Food 
Distribution Program for Indian Households in Oklahoma (FDPIHO), 7 CFR 
Part 254, under which the eligibility and certification provisions of 7 
CFR Part 253 are adopted by reference at 7 CFR 254.5(a). The term 
``FDPIR,'' as used in this proposed rule, refers collectively to FDPIR 
and FDPIHO. The proposed amendments are discussed in more detail below.

A. Excluding Household Funds Held in Education Savings Accounts From 
Consideration as a Resource

    This proposed rule would amend FDPIR regulations at 7 CFR 
253.6(d)(2) to ensure consistent treatment of certain resources in 
determining FDPIR and SNAP eligibility. In accordance with Section 4104 
of the Farm Bill, which amended Section 5(g) of the Food and Nutrition 
Act 2008 (7 U.S.C. 2014(g)), funds that are held in qualified tuition 
program accounts described in section 529 of the Internal Revenue Code 
of 1986 or in a Coverdell education savings account under section 530 
of that Code are excluded from the calculation of household resources 
when determining eligibility for SNAP. This rule proposes to amend 7 
CFR 253.6(d)(2) to exclude any funds held in these accounts from being 
considered FDPIR resources.
    Section 4104 of the Farm Bill also provides the Secretary with 
discretion to exclude in the calculation of resources under SNAP any 
other education programs, contracts or accounts as determined by the 
Secretary. This rule proposes to amend 7 CFR 253.6(d)(2) to allow a 
resource exclusion for any other education savings accounts for which a 
resource exclusion is allowed under SNAP. This would allow FNS to 
maintain consistent policy in the treatment of education savings 
accounts and promote consistency in policy between FDPIR and SNAP.

B. Clarification Regarding the Resource Exclusion for Qualified 
Retirement Accounts

    This proposed rule would amend FDPIR regulations at 7 CFR 
253.6(d)(2) to ensure consistent treatment of certain resources in 
determining FDPIR and SNAP eligibility. In accordance with Section 
4104, funds that are held in qualified retirement accounts are excluded 
when determining eligibility for SNAP. Specifically, that section of 
the Farm Bill excludes the value of funds held in retirement accounts 
described in sections 401(a), 403(a), 403(b), 408, 408A, 457(b), and 
501(c)(18) of the Internal Revenue Code of 1986 and the value of funds 
held in a Federal Thrift Savings Plan account as described in 5 U.S.C. 
8439.
    In accordance with FDPIR regulations and policy, retirement 
accounts and pension plans are excluded as long as the funds remain in 
the accounts. However, for clarification purposes and to ensure 
consistency between FDPIR and SNAP, this rule proposes to amend 7 CFR 
253.6(d)(2) to exclude under FDPIR the comprehensive list of qualified 
retirement accounts specified in Section 4104 of the Farm Bill.
    Section 4104 of the Farm Bill also provides for the exclusion of 
retirement accounts that may be enacted and determined to be exempt 
from tax under the Internal Revenue Code of 1986, and any other 
retirement plans, contracts, or accounts as determined by the 
Secretary. To allow FNS to maintain consistency with regard to its 
treatment of retirement accounts and promote consistency in policy 
between FDPIR and SNAP, this rule proposes to amend 7 CFR 253.6(d)(2) 
to allow a resource exclusion for any other retirement accounts for 
which a resource exclusion is allowed under SNAP.

C. Clarifying the Application of SNAP Net Income Standards to FDPIR

    Current FDPIR regulations at 7 CFR 253.6(e)(1)(i) state that the 
FDPIR income eligibility standards shall be the ``monthly income 
eligibility standards for the Food Stamp Program.'' However, SNAP 
eligibility procedures employ two separate income standards--a gross 
monthly income standard and a net monthly income standard. It is FNS 
policy that the SNAP net monthly income standard is the applicable 
income standard for determining income eligibility for FDPIR. However, 
due to lack of clarity in the regulations, FNS has received requests 
for policy clarification regarding which SNAP income guideline is 
applicable under FDPIR. Therefore, FNS is proposing an amendment to the 
regulations at 7 CFR 253.6(e)(1)(i) to clarify that FDPIR applies the 
SNAP net income standard, not the gross income standard. This change 
would clarify the regulatory language at 7 CFR 253.6(e)(1)(i), but not 
change current FDPIR policy nor revise current FDPIR income guidelines 
or eligibility criteria.

D. Excluding Combat Pay From Income

    Appropriation legislation in FY 2005 through FY 2008 excluded 
combat pay (i.e., additional pay earned as a result of deployment to or 
service in a combat zone) from income for the purposes of determining 
eligibility for SNAP. This policy was adopted for FDPIR and implemented 
by policy memorandum for those fiscal years. Section 4101 of the Farm 
Bill amended Section 5(d) of the Food and Nutrition Act of 2008 (7 
U.S.C. 2014(d)) to permanently exclude combat pay from income for the 
purposes of determining SNAP eligibility. This change was implemented 
under FDPIR by policy memorandum on July 16, 2008. FNS is proposing a 
conforming amendment to FDPIR regulations at 7 CFR 253.6(e)(3)(xi) to 
permanently exclude combat pay from income when determining eligibility 
for FDPIR. The proposed change would align FDPIR regulations with 
current FDPIR and SNAP policy.

E. Amending the Dependent Care Deduction

    Current FDPIR regulations at 7 CFR 253.6(f)(2) state that the 
dependent care deduction cannot exceed the maximum allowable under 
SNAP. Section 4103 of the Farm Bill amended Section 5(e)(3)(A) of the 
Food and Nutrition Act of 2008 (7 U.S.C. 2014(e)(3)(A)) and eliminated 
the maximum dollar limit to the SNAP dependent care deduction, allowing 
participants to claim the full cost of their dependent care expenses. 
FNS implemented this change under FDPIR by the same policy memorandum 
mentioned in the previous paragraph.

[[Page 22031]]

This proposed revision would remove regulatory language at 7 CFR 
253.6(f)(2) that imposes a maximum limit on dependent care deductions, 
thereby aligning the FDPIR regulations with current FDPIR and SNAP 
policy.

List of Subjects in 7 CFR Part 253

    Administrative practice and procedure, Food assistance programs, 
Grant programs, Social programs, Indians, Reporting and recordkeeping 
requirements, Surplus agricultural commodities.

    Accordingly, 7 CFR Part 253 is proposed to be amended as follows:

PART 253--ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR 
HOUSEHOLDS ON INDIAN RESERVATIONS

    1. The authority citation for 7 CFR Part 253 continues to read as 
follows:

    Authority: 91 Stat. 958 (7 U.S.C. 2011-2032).

    2. In Sec.  253.6:
    a. Revise paragraph (d)(2)(i);
    b. Redesignate paragraphs (d)(2)(ii) through (d)(2)(iv) as 
(d)(2)(iii) through (d)(2)(v), respectively;
    c. Add new paragraph (d)(2)(ii);
    d. Add new paragraph (d)(2)(vi);
    e. Revise the second sentence of paragraph (e)(1)(i);
    f. Add new paragraph (e)(3)(xi); and
    g. Remove the second sentence of paragraph (f)(2).
    The revisions and additions read as follows:


Sec.  253.6  Eligibility of households.

* * * * *
    (d) * * *
    (2) * * *
    (i) The cash value of life insurance policies and the first $1,500 
of the equity value of one bona fide pre-paid funeral agreement per 
household member. The equity value of a pre-paid funeral agreement is 
the value that can be legally converted to cash by the household 
member. For example, an individual has a $1,200 pre-paid funeral 
agreement with a funeral home. The conditions of the agreement allow 
the household to cancel the agreement and receive a refund of the 
$1,200 minus a service fee of $50. The equity value of the pre-paid 
funeral agreement is $1,150.
    (ii) The value of funds held in retirement accounts described in 
sections 401(a), 403(a), 403(b), 408, 408A, 457(b), and 501(c)(18) of 
the Internal Revenue Code of 1986; the value of funds held in a Federal 
Thrift Savings Plan account as described in 5 U.S.C. 8439; and any 
other retirement program or account for which a resource exclusion is 
allowed under the Supplemental Nutrition Assistance Program (SNAP).
* * * * *
    (vi) The value of funds held in a qualified education savings 
program described in section 529 of Internal Revenue Code of 1986 or in 
a Coverdell education savings account under section 530 of that Code, 
and any other education savings program or account for which a resource 
exclusion is allowed under SNAP.
* * * * *
    (e) * * *
    (1) * * *
    (i) * * * The income eligibility standards shall be the applicable 
SNAP net monthly income eligibility standards for the appropriate area, 
increased by the amount of the applicable SNAP standard deduction for 
that area.
* * * * *
    (3) * * *
    (xi) Combat pay. Combat pay is defined as additional payment that 
is received by or from a member of the United States Armed Forces 
deployed to a combat zone, if the additional pay is the result of 
deployment to or service in a combat zone, and was not received 
immediately prior to serving in a combat zone.
* * * * *

    Dated: April 20, 2010.
Kevin W. Concannon,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2010-9645 Filed 4-22-10; 11:15 am]
BILLING CODE 3410-30-P