[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Rules and Regulations]
[Pages 78151-78154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31459]



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 Rules and Regulations
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  Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / 
Rules and Regulations  

[[Page 78151]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271, 272, 273, and 276

[FNS-2008-0034]
RIN 0584-AD25


Supplemental Nutrition Assistance Program (SNAP): Clarifications 
and Corrections to Recipient Claim Establishment and Collection 
Standards

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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

SUMMARY: Supplemental Nutrition Assistance Program (SNAP) recipient 
claims are established and collected against households that receive 
more benefits than they are entitled to receive. This rulemaking 
corrects and clarifies provisions of the final rule on recipient claims 
published at 65 FR 41752 on July 6, 2000. The purposes of this final 
rulemaking are to remove a definition and several provisions that were 
made obsolete by the final rule; correct the typographical errors; 
correct the omission of the requirement that a copy of the claims 
management plan be submitted to the FNS Regional Office for 
informational purposes; reinforce current practices and requirements in 
the areas of fair hearings, fees, due dates, delinquent claims, 
retention, claim referrals, negligence and fraud; make conforming 
changes needed as a result of a subsequent rulemaking pertaining to a 
sponsor's responsibility for overissuances of an alien household; and 
to remove an overpayment exception that is no longer applicable to the 
Program.

DATES: This rule is effective January 14, 2011.

FOR FURTHER INFORMATION CONTACT: Jane Duffield, State Administration 
Branch, Program Accountability and Administration Division, Food and 
Nutrition Service, USDA, 3101 Park Center Drive, Room 818, Alexandria, 
Virginia 22302. Telephone: (703) 605-4385. Internet: 
[email protected].

SUPPLEMENTARY INFORMATION: On April 2, 2009 (74 FR 14935), the 
Department published a proposed rule clarifying and correcting 
provisions of the final rule on recipient claims published at 65 FR 
41752, July 6, 2000. One comment was received on the proposed rule. The 
comment addressed fair hearing and due process rights of recipients who 
are subject to a claim. Because these issues are not being considered 
in this rulemaking, we have not addressed the comment in this final 
rule. Therefore, without exception, the Department is adopting the 
proposed rule as final.

I. Procedural Matters

Executive Order 12866

    This final rule has been determined to be not significant and was 
not reviewed by the Office of Management and Budget under Executive 
Order 12866.

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). It has been 
certified that this rule will not have a significant impact on a 
substantial number of small entities. State and local welfare agencies 
will be the most affected to the extent that they administer the 
Program.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4 (UMRA), 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, 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.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
No. 10.551. For the reasons set forth in the final rule in 7 CFR part 
3015, Subpart V and related Notice (48 FR 29,115, June 24, 1983), this 
Program is excluded from the scope of Executive Order 12372 that 
requires intergovernmental consultation with State and local officials.

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. FNS has 
considered this rule's impact on State and local agencies and has 
determined that it does not have federalism implications under 
Executive Order 13132.

Executive Order 12988

    This 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 which 
conflict with its provisions or which would otherwise impede its full 
implementation. As addressed in the Dates paragraph, with the exception 
of providing an informational copy of the claims management plan, the 
provisions are already in force. Prior to any judicial challenge to the 
provisions of this rule or the application of its provisions, all 
applicable administrative procedures must be exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this final rule in accordance with the Department

[[Page 78152]]

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 
SNAP households and individual participants, FNS has determined that 
there are no civil rights impacts in this final rule. All data 
available to FNS indicate that protected individuals have the same 
opportunity to participate in SNAP as non-protected individuals.
    FNS specifically prohibits the State and local government agencies 
that administer the Program from engaging in actions that discriminate 
against any application or participant in any aspect of Program 
administration, including, but not limited to, the certification of 
households, the issuance of benefits, the conduct of fair hearings, or 
the conduct of any other Program service for reasons of age, race, 
color, sex, handicap, religious creed, national origin, or political 
beliefs. SNAP nondiscrimination policy can be found at 7 CFR 272.6(a). 
Discrimination in any aspect of Program administration is prohibited by 
these regulations, the Food and Nutrition Act of 2008, the Age 
Discrimination Act of 1975 (Pub. L. 94-135), the Rehabilitation Act of 
1973 (Pub. L. 93-112, section 504), and Title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000(d)). 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. 
Enforcement action may be brought under any applicable Federal law. 
Title VI complaints shall be processed in accord with 7 CFR part 15.

Executive Order 13175

    USDA will undertake, within 6 months after this rule becomes 
effective, a series of Tribal consultation sessions to gain input by 
elected Tribal officials or their designees concerning the impact of 
this rule on Tribal governments, communities and individuals. These 
sessions will establish a baseline of consultation for future actions, 
should any be necessary, regarding this rule. Reports from these 
sessions for consultation will be made part of the USDA annual 
reporting on Tribal Consultation and Collaboration. USDA will respond 
in a timely and meaningful manner to all Tribal government requests for 
consultation concerning this rule and will provide additional venues, 
such as webinars and teleconferences, to periodically host 
collaborative conversations with Tribal leaders and their 
representatives concerning ways to improve this rule in Indian country. 
The policies contained in this rule would not have Tribal implications 
that preempt Tribal law.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
part 1320) requires that the Office of Management and Budget (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. Information collections in this final rule 
have been previously approved under OMB Nos. 0584-0069, expiration date 
8/2012, 0584-0446, expiration date 2/2013 and 0584-0492, expiration 
date 7/2011.

FNS-209 Report (OMB No. 0584-0069)

    Claims activity is reported by State agencies on the Status of 
Claims Against Households (FNS-209) report. The OMB approved the 
information collection requirements for completing and submitting the 
FNS-209 report under OMB Control Number 0584-0069. This rule does not 
change this burden.

Federal Collection Methods for Supplemental Nutrition Assistance

Program Recipient Claims (0584-0446)

    The information collection burden for Federal collections of 
recipient claims is covered under OMB Control Number 0584-0446. This 
rule makes some changes to those requirements. This rule does not 
change this burden.

Repayment Demand and Program Disqualification (0584-0492)

    The burden associated with providing notice and demand for payment 
to households has been approved under OMB Control Number 0584-0492. 
This rule does not change this burden.

E-Government Act Compliance

    FNS is committed to compliance with the E-Government Act of 2002 
(Pub. L. 107-347) (E-Gov), 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 
to the extent possible.

II. Background

    Prior to the July 6, 2000 final rule, the last major revision to 
the SNAP recipient claim regulations was in 1983. The July 6, 2000 
final rule accomplished several specific objectives while updating the 
SNAP recipient claims regulations. First, it incorporated changes 
mandated by the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (Pub. L. 104-193). Second, it streamlined 
the presentations of our policies, and in some cases, the policies 
themselves. Third, it incorporated Federal debt management regulations 
and statutory revisions into recipient claim management. Finally, that 
rule provided State agencies with additional tools to facilitate the 
establishment, collections and disposition of recipient claims.

Purpose of this Rule

    This rulemaking corrects and clarifies provisions of the July 6, 
2000 final rule on recipient claims published at 65 FR 41752, July 6, 
2000. This rule does not create new standards for establishing and 
collecting SNAP recipient claims. Rather, consistent with what we 
indicated in our proposals, this rulemaking clarifies areas of the 
final rule, as published, to reflect longstanding policy. Additionally, 
this rule makes minor technical changes and corrects typographical 
errors. With this final rule we continue to improve claims management 
in SNAP while affirming our longstanding position that State agencies 
have a great amount of flexibility in their efforts to increase claim 
collection.

Areas of Policy Clarification

    The following policy areas are being clarified in this rulemaking: 
fair hearings, fees, due dates, delinquency date, retention of 
collections, and claim referral timeframes. All of these policy areas 
fall within 7 CFR 273.18.

Claims and Fair Hearings

    Section 11(e)(10) of the Food and Nutrition Act of 2008, as amended 
(7 U.S.C. 2020(e)(10)) specifically provides for a fair hearing when a 
claim for an over issuance is established against a household. We are 
concerned that the omission of the word ``fair'' in paragraphs 
273.18(e)(3)(iii) and 273.18(e)(3)(iv)(I) could inadvertently deprive a 
household of its due process rights. Therefore, we are adding the word 
``fair'' into the regulatory text. By adding this text, we are 
affirming the household's right to a fair hearing.

Due Dates

    In accordance with paragraph 273.18(e)(3)(iv), when a claim is 
established, the State issues an initial notification letter or demand 
letter to the household. Among other things, current rules require that 
the initial notification letter include a due date or time frame to 
either repay or make

[[Page 78153]]

arrangements to repay the claim unless the State agency is going to 
impose allotment reduction. However, we recognize that households that 
may initially repay their claims through allotment reduction may at 
some point cease to receive benefits. In order to ensure that all 
households are treated fairly, we expect that these households will be 
notified of a due date or time frame to either repay or make 
arrangements to repay the claim should they cease to receive benefits 
while they have an outstanding claim. Therefore, we are adding new 
language at paragraph 273.18(e)(3)(iv)(O) that reinforces this 
expectation that all households be notified of a due date in the 
initial notification letter.

Delinquency Date

    FNS is required by the Debt Collection Improvement Act of 1996 
(Pub. L. 104-134), to submit eligible SNAP recipient debts to the 
Treasury Offset Program (TOP) for collection. One of the requirements 
is that a SNAP recipient debt must be at least 180 days delinquent in 
order to be submitted to TOP. We consider the starting point for 
counting the 180 days to be the delinquency date. We intend that the 
delinquency date, once established, remain the same throughout the 
existence of the claim. The change in regulatory text contained in this 
rulemaking at paragraph 273.18(e)(5)(iii) emphasizes that post-
delinquency repayment agreements do not alter the delinquency date.

Retention of Claims

    Section 16(a) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2024(a)) permits States to retain 35 percent collected for Intentional 
Program Violation (IPV) claims and 20 percent for Inadvertent Household 
Error (IHE) claims. We are adding provisions at paragraph 273.18(k)(2) 
to clarify that there is no retention by the State in situations where 
payments are not returned to the State because the household is ordered 
by a court to perform community service in lieu of a claim or in 
situations where payments made to a court are not forwarded to the 
State. This was inadvertently not addressed in the July 6, 2000, 
rulemaking.

Claim Referral and Establishment

    Under the Claim Referral Management section at paragraph 273.18(d), 
State agencies have a standard timeframe for establishing claims. These 
timeframes are intended to be used primarily as a management tool by 
States to prevent the backlog of claims and to reinforce our 
expectation that States run an efficient and effective claims 
management system. States have always had the option to develop and 
follow their own claims referral management plan. We do not consider 
recipient claims that have been established outside of these timeframes 
invalid claims. However, claims that are established timely have a 
better chance of being collected. Therefore, we are adding a paragraph 
at paragraph 273.18(d)(3) that clarifies FNS's position that States 
must establish SNAP recipient claims even if they cannot be established 
within the referral management timeframes outlined in paragraph 
273.18(d).

Additional Actions of this Regulation

    Other final actions included in this rule are corrections as a 
result of typographical errors and changes that were neglected at the 
time of the July 6, 2000 rulemaking; removal of the definition for 
``Claims Collection Point''' from Sec.  271.2 because the term is no 
longer used; addition of the requirement at paragraph 272.2(d)(1)(x) 
for State agencies to submit an informational copy of the claims 
management plan to the FNS regional office; changes to conform 
paragraph 273.18(a)(4) to subsequent changes made by the November 21, 
2000 (65 FR 70134) final regulation on sponsored aliens, which 
eliminated the sponsor's liability for overpayments of the alien 
household's benefits; and removal of the exception to overpayments 
caused by households transacting Authorization to Participate (ATP) 
cards, as they are no longer used in the Program.

List of Subjects

7 CFR Part 271

    SNAP, Grant programs--social programs, Reporting and recordkeeping 
requirements.

7 CFR Part 272

    Alaska, Civil rights, SNAP, Grant programs--social programs, 
Reporting and recordkeeping requirements.

7 CFR Part 273

    Administrative practice and procedure, Aliens, Claims, SNAP, Fraud, 
Grant programs--social programs, Penalties, Reporting and recordkeeping 
requirements, Social Security, Students.

7 CFR Part 276

    Administrative practice and procedure, SNAP, Fraud, Grant 
programs--social programs.

0
Accordingly, 7 CFR parts 271, 272, 273, and 276 are amended as follows:

0
1. The authority citation for parts 271, 272, 273 and 276 continues to 
read as follows:

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

PART 271--GENERAL INFORMATION AND DEFINITIONS


Sec.  271.2  [Amended]

0
2. In Sec.  271.2, remove the definition for ``Claims Collection 
Point''.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

0
3. In Sec.  272.2 revise paragraph (d)(1)(x) to read as follows.


Sec.  272.2  Plan of operation.

* * * * *
    (d) * * *
    (1) * * *
    (x) Claims Management Plan as required by Sec.  273.18(a)(3) to be 
submitted for informational purposes only; not subject to approval as 
part of the plan submission procedures under paragraph (e) of this 
section.
* * * * *

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

0
4. In Sec.  273.18:
0
a. Remove paragraph (a)(4)(ii) and redesignate (a)(4)(iii) as 
(a)(4)(ii);
0
b. Amend paragraph (b)(3) by removing the last sentence;
0
c. Amend paragraph (c)(1)(ii)(D) by removing ``(e)(1)(ii)(C)'' and 
adding in its place ``(c)(1)(ii)(C)'';
0
d. Add paragraph (d)(3);
0
e. Amend paragraph (e)(1) by removing ``(g)(2)'' and adding in its 
place ``(e)(2)'';
0
f. Remove ``a hearing'' and add in its place ``a fair hearing'' in 
paragraphs (e)(3)(iii) and (e)(3)(iv)(I);
0
g. Redesignate paragraph (e)(3)(iv)(O) as (e)(3)(iv)(P) and add a new 
paragraph (e)(3)(iv)(O);
0
h. Revise the first sentence of paragraph (e)(5)(iii);
0
i. Revise paragraph (k)(2).
0
The additions and revisions read as follows:


Sec.  273.18  Claims against households.

* * * * *
    (d) * * *
    (3) States must establish claims even if they cannot be established 
within the timeframes outlined under paragraph (d) of this section.
    (e) * * *
    (3) * * *
    (iv) * * *
    (O) If allotment reduction is to be imposed, a due date or time 
frame to either repay or make arrangements to

[[Page 78154]]

repay the claim in the event that the household stops receiving 
benefits.
* * * * *
    (5) * * *
    (iii) The date of delinquency for a claim covered under paragraph 
(e)(5)(i)(B) of this section is the due date of the missed installment 
payment unless the claim was delinquent prior to entering into a 
repayment agreement, in which case the due date will be the due date on 
the initial notification/demand letter. * * *
* * * * *
    (k) * * *
    (2) These rates do not apply to:
    (i) Any reduction in benefits when you disqualify someone for an 
IPV;
    (ii) The value of court-ordered public service performed in lieu of 
the payment of a claim; or
    (iii) Payments made to a court that are not subsequently forwarded 
as payment of an established claim.
* * * * *

PART 276--STATE AGENCY LIABILITIES AND FEDERAL SANCTIONS


Sec.  276.2  [Amended]

0
5. In Sec.  276.2, amend paragraph (c) by removing ``273.18(h)'' and 
adding in its place ``273.18(l)''.

    Dated: December 2, 2010.
Julia Paradis,
Administrator, Food and Nutrition Service.
[FR Doc. 2010-31459 Filed 12-14-10; 8:45 am]
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