[Federal Register Volume 77, Number 7 (Wednesday, January 11, 2012)]
[Proposed Rules]
[Pages 1642-1649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-391]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 77, No. 7 / Wednesday, January 11, 2012 /
Proposed Rules
[[Page 1642]]
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 253
[FNS-2011-0036]
RIN 0584-AE05
Food Distribution Program on Indian Reservations: Income
Deductions and Resource Eligibility
AGENCY: Food and Nutrition Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to amend regulations for the Food
Distribution Program on Indian Reservations (FDPIR). The changes are
intended to simplify and improve the administration of and expand
access to FDPIR, and promote conformity with the Supplemental Nutrition
Assistance Program (SNAP). First, the Department proposes an amendment
that would eliminate household resources from consideration when
determining FDPIR eligibility. Second, to more closely align FDPIR and
SNAP regulations, the Department proposes to expand the current FDPIR
income deduction for Medicare Part B Medical Insurance and Part D
Prescription Drug Coverage premiums to include other monthly medical
expenses in excess of $35 for households with elderly and/or disabled
members. This rule also proposes to establish an income deduction for
shelter and utility expenses. Finally, the Department proposes
verification requirements related to the proposed income deductions and
revisions to the household reporting requirements that will more
closely align FDPIR and SNAP regulations.
DATES: To be assured of consideration, comments must be received on or
before April 10, 2012.
ADDRESSES: The Food and Nutrition Service (FNS) invites interested
persons to submit comments on this proposed rule. You may submit
comments identified by Regulatory Identifier Number (RIN) 0584-AE05, by
any of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov. In the Enter Keyword or ID field insert ``FNS-
2011-0036'', and then click on Search. Click on Submit a Comment.
Information on using Regulations.gov, including detailed
instructions for accessing documents, making comments, and viewing
submitted comments is available through the site's ``FAQs'' link.
Fax: Submit comments by facsimile transmission to (703)
305-2782.
Disk or CD-ROM: Submit comments on disk to Laura Castro,
Director, Food Distribution Division, Food and Nutrition Service, U.S.
Department of Agriculture, 3101 Park Center Drive, Room 504,
Alexandria, Virginia 22302-1594.
Mail: Send comments to Laura Castro at the above address.
Hand Delivery or Courier: Deliver comments to the above
address.
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.
FOR FURTHER INFORMATION CONTACT: Dana Rasmussen by telephone at (703)
305-2662.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Background and Discussion of the Proposed Rule
III. Procedural Matters
I. Public Comment Procedures
Your written comments on the proposed rule should be specific,
should be confined to issues pertinent to the proposed rule, and should
explain the reason(s) for any change you recommend or proposal(s) you
oppose. 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 proposed regulations easier to understand, including
answers to questions such as the following:
(1) Are the requirements in the proposed regulations clearly
stated?
(2) Does the rule contain technical language or jargon that
interferes with its clarity?
(3) Does the format of the rule (e.g., grouping and order of
sections, use of heading, and paragraphing) make it clearer or less
clear?
(4) Would the rule be easier to understand if it was 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 in
making the rule easier to understand?
II. Background and Discussion of the Proposed Rule
The Department proposes to amend the regulations for FDPIR at 7 CFR
part 253. These changes are intended to improve the administration of
FDPIR and service to program applicants and participants, and respond
to a resolution passed by the membership of the National Association of
Food Distribution Programs on Indian Reservations (NAFDPIR) in June
2009. These proposed provisions would simplify program administration
and promote conformity with SNAP. The Department proposes amendments
that would: (1) Eliminate household resources from consideration when
determining FDPIR eligibility; (2) expand the current income deduction
for Medicare Part B Medical Insurance and Part D Prescription Drug
Coverage premiums to include other monthly medical expenses in excess
of $35 for households with elderly and/or disabled members, as defined
at 7 CFR 253.2; (3) establish an income deduction for shelter and
utility expenses; and (4) establish verification requirements related
to the proposed income deductions and revise household reporting
requirements. The amendments are discussed in more detail below.
In the following discussion and regulatory text, the term ``State
agency,'' as defined at 7 CFR 253.2, is used to include Indian Tribal
Organizations (ITOs) authorized to operate FDPIR and
[[Page 1643]]
Food Distribution Program for Indian Households in Oklahoma (FDPIHO) in
accordance with 7 CFR parts 253 and 254. The term ``FDPIR'' is used in
this rulemaking to refer collectively to FDPIR and FDPIHO.
1. Eliminate the Eligibility Criterion Based on Household Resources--7
CFR 253.6(d)
Currently, the FDPIR household resource limits are $3,250 for
households with at least one elderly/disabled member and $2,000 for all
other households. In response to a separate rulemaking published in the
Federal Register on April 27, 2010 (75 FR 22027), which proposed to
amend FDPIR regulations by aligning provisions with changes to SNAP as
a result of the Food, Conservation, and Energy Act of 2008, FNS
received numerous comment letters regarding the FDPIR household
resource eligibility criterion. Many of the comment letters supported
elimination of the FDPIR resource test or alignment of FDPIR and SNAP
policies. Based on the comments received, the Department proposes to
eliminate the household resource eligibility criterion in FDPIR. In the
regulatory impact analysis of this proposed rule, we estimate that
eliminating the resource test would increase FDPIR participation by
less than one percent. Removal of the resource test would streamline
the certification process for new and currently participating
households and simplify program administration, reducing the burden on
State agency certification staff and improving service to those in need
of nutrition assistance. To eliminate the resource standard from
current regulations, the Department proposes to remove the regulatory
provisions at 7 CFR 253.6(d). This proposal does not affect the
requirement that households meet maximum FDPIR income limits and other
eligibility criteria provided under current program regulations.
The Department also proposes conforming amendments to remove
reference to the resource test throughout the current FDPIR
regulations. The proposed amendments to 7 CFR 253.6(c) on categorical
eligibility remove reference to resource eligibility. This rule would
also remove 7 CFR 253.7(f)(2)(i), which currently references resources
of disqualified household members. The rule would redesignate the
current paragraphs at 7 CFR 253.7(f)(2)(ii) and (f)2)(iii) as
paragraphs (f)(2)(i) and (f)(2)(ii), respectively.
The Department also proposes an amendment to 7 CFR
253.6(e)(3)(viii) (to be redesignated as 7 CFR 253.6(d)(3)(viii)),
which currently references non-recurring lump sum payments, such as
security deposits on rental property or utilities, tax refunds, and
retroactive Social Security payments. The amendment would remove the
language that provides these payments are counted as resources in the
month received. Therefore, non-recurring lump sum payments would not be
considered in determining the eligibility of households for FDPIR.
The Department proposes similar treatment of periodic per capita
payments that are derived from the profits of Tribal enterprises and
distributed to Tribal members less frequently than monthly. As with
non-recurring lump sum payments, the amount and time of receipt of
periodic per capita payments cannot always be anticipated by FDPIR
participants in order to be considered during the household's income
eligibility determination. Consequently, non-monthly per capita
payments are reported upon receipt in accordance with the change
reporting requirements at 7 CFR 253.7(c). In most instances, receipt of
these payments does not impact household eligibility in the month of
receipt because there is not sufficient time for the State agency to
take action to terminate the household if the payment results in the
household's ineligibility. In accordance with 7 CFR 253.7(c),
households must report a change within 10 calendar days, and the State
agency must act on the reported change and issue a notice of adverse
action no later than 10 days after the change is reported. The notice
of adverse action must provide a minimum of 10 days from the date of
the notice to the date upon which the termination becomes effective.
Under current regulations, funds from the per capita payment that
remain available to the household in the month after receipt are
considered a resource.
In accordance with the proposal to remove consideration of
household resources in determining eligibility for FDPIR, the
Department proposes to amend 7 CFR 253.6(e)(3)(viii) (to be
redesignated as 7 CFR 253.6(d)(3)(viii)) to specify that non-recurring
lump sum payments and non-monthly per capita payments would no longer
be considered in determining the eligibility of households for FDPIR.
Furthermore, the Department proposes to amend 7 CFR 253.6(e)(2)(ii) (to
be redesignated as 7 CFR 253.6(d)(2)(ii)) to clarify that per capita
payments received monthly are considered unearned income in the month
received. This is consistent with current program policy.
2. Medical Expense Deduction--7 CFR 253.6(f) (To Be Redesignated as 7
CFR 253.6(e))
The Department proposes a change that would revise the provisions
at 7 CFR 253.6(f)(4) (to be redesignated as 7 CFR 253.6(e)(4)) to
expand the current deduction for Medicare Part B Medical Insurance and
Part D Prescription Drug Coverage premiums to include other monthly
medical expenses in excess of $35 incurred by any household member who
is elderly or disabled as defined in 7 CFR 253.2. This change would
align FDPIR and SNAP regulations. Also, this change would respond to
Resolution 2009-01 passed by the membership of NAFDPIR in June 2009.
That resolution requested an income deduction for unreimbursed medical
expenses for prescription drugs and other medical expenses, other than
for plastic surgery. As provided above, in order to reflect the
proposed elimination of 7 CFR 253.6(d), we are proposing to redesignate
current 7 CFR 253.6(f) as proposed paragraph (e).
The Department proposes to adopt SNAP policy at 7 CFR 273.9(d)(3)
in regard to allowable medical costs. The proposed allowable medical
costs are:
(a) Medical and dental care, including psychotherapy and
rehabilitation services, provided by a licensed practitioner authorized
by State law or other qualified health professional;
(b) Hospitalization or outpatient treatment, nursing care, and
nursing home care, including payments by the household for an
individual who was a household member immediately prior to entering a
hospital or nursing home, provided by a facility recognized by the
State;
(c) Prescription drugs when prescribed by a licensed practitioner
authorized under State law and other over-the-counter medication
(including insulin) when approved by a licensed practitioner or other
qualified health professional; in addition, costs of medical supplies,
sick-room equipment (including rental) or other prescribed equipment
are deductible;
(d) Health and hospitalization insurance policy premiums. Costs
that are not deductible include health and accident policies such as
those payable in lump sum settlements for death or dismemberment, or
income maintenance policies such as those that continue mortgage or
loan payments while the beneficiary is disabled;
(e) Medicare premiums related to coverage under Title XVIII of the
Social Security Act; any cost-sharing or spend down expenses incurred
by Medicaid recipients;
[[Page 1644]]
(f) Dentures, hearing aids, and prosthetics;
(g) Securing and maintaining a seeing eye or hearing dog including
the cost of dog food and veterinarian bills;
(h) Eye glasses prescribed by a physician skilled in eye disease or
by an optometrist;
(i) Reasonable cost of transportation and lodging to obtain medical
treatment or services; and
(j) Maintaining an attendant, homemaker, home health aide, child
care services, or housekeeper, necessary due to age, infirmity, or
illness.
SNAP regulations at 7 CFR 273.9(d) include an income deduction for
all Medicare premium expenses in excess of $35. Current FDPIR
regulations at 7 CFR 253.6(f)(4) and program policy permit only a
deduction for the full amounts of Medicare Part B Medical Insurance and
Part D Prescription Drug Coverage premiums, respectively. In order to
simplify program administration and in recognition of the significantly
expanded range of deductible medical costs considered allowable under
SNAP, the Department proposes to align the Medicare provision with SNAP
by permitting deductions for all Medicare premiums in excess of $35.
The SNAP regulations at 7 CFR 273.9(d)(3)(x) allow a deduction for
an amount equal to the SNAP benefit for a one-person household if the
household furnishes the majority of a home care attendant's meals. The
Department proposes to adopt this same provision for FDPIR.
Regarding the proposed meal-related deduction, the Department
purchases the USDA foods provided under FDPIR at a reduced cost due to
high volume purchases under long-term contracts with vendors.
Consequently, the estimated average monthly per person FDPIR food
package cost, which is adjusted annually, does not represent the retail
value of the food package if identical foods were purchased by a family
at a grocery store. The Department believes that it would be
appropriate to adopt the SNAP policy of basing the meal-related
deduction for the attendant on the maximum SNAP allotment for a one-
person household. The SNAP allotments are based on the Thrifty Food
Plan (TFP), which reflects current dietary recommendations, food
consumption patterns, food composition data, and food prices.
The Department would provide the State agencies, on an annual
basis, the updated amount of the maximum SNAP allotment for a one-
person household. The State agency would not be required to update the
meal-related deduction amount until the household's next scheduled
recertification, but may opt to do so earlier if that amount is
available. If a household incurs attendant care costs that could
qualify under both the medical deduction and dependent care deduction,
the State agency would treat the cost as a medical expense.
3. Shelter and Utility Expense Deduction--7 CFR 253.6(f) (To Be
Redesignated as 7 CFR 253.6(e))
The Department proposes a change that would revise the provisions
at 7 CFR 253.6(f) (to be redesignated as 7 CFR 253.6(e)) to establish
region-specific standard income deductions for monthly shelter and
utility expenses. This change would respond to Resolution 2009-01
passed by the membership of NAFDPIR in June 2009. The resolution noted
that shelter expenses such as home heating fuel and utilities may
impact a household's ability to obtain food, and such factors are not
currently factored into FDPIR eligibility determinations. SNAP
regulations under 7 CFR Part 273 allow standard income deductions for
shelter expenses in determining eligibility for that program.
Under this proposal, an FDPIR applicant household would receive a
standard deduction if it incurs the cost of at least one allowable
shelter/utility expense. The Department proposes to indicate that
allowable shelter and utility expenses would conform to those expenses
allowable for SNAP under 7 CFR 273.9(d)(6)(ii). Such expenses include
the following:
(a) Continuing charges for the shelter occupied by the household,
including rent, mortgage, condominium and association fees, or other
continuing charges leading to the ownership of the shelter such as loan
repayments for the purchase of a mobile home, including interest on
such payments.
(b) Property taxes, State and local assessments, and insurance on
the structure itself, but not separate costs for insuring furniture or
personal belongings.
(c) The cost of fuel for heating or cooling (i.e., the operation of
air conditioning systems or room air conditioners); electricity or fuel
used for purposes other than heating or cooling; water; sewerage; well
installation and maintenance; septic tank system installation and
maintenance; garbage and trash collection; all service fees required to
provide service for one telephone, including, but not limited to, basic
service fees, wire maintenance fees, subscriber line charges, relay
center surcharges, 911 fees, and taxes; and fees charged by the utility
provider for initial installation of the utility. One-time deposits are
not deductible.
(d) The shelter costs for the home if temporarily not occupied by
the household because of employment or training away from home,
illness, or abandonment caused by a natural disaster or casualty loss.
For costs of a home vacated by the household to be included in the
household's shelter costs, the household must intend to return to the
home; the current occupants of the home, if any, must not be claiming
the shelter costs for program purposes; and the home must not be leased
or rented during the absence of the household.
(e) Charges for the repair of a home that was substantially damaged
or destroyed due to a natural disaster such as a fire or flood. Shelter
costs cannot include charges for repair of the home that have been or
will be reimbursed by private or public relief agencies, insurance
companies, or from any other source.
The amount of the deduction would be regionally based. The
Department proposes to implement shelter/utility expense standard
deductions specific to four regions: (1) Northeast/Midwest, (2)
Southeast/Southwest, (3) Mountain Plains, and (4) West. The Department
would, on an annual basis, calculate the shelter/utility standard
deductions for each region, starting from a region-specific baseline
deduction. The proposed baseline for each FDPIR regional shelter/
utility standard deduction is provided below, which assumes
implementation in Fiscal Year 2013.
Projected FY 2013 FDPIR Standard Shelter/Utility Expense Deductions Baseline by Region
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Shelter/
Region States currently with FDPIR programs utility
deduction
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Northeast/Midwest............................. Michigan, Minnesota, New York, Wisconsin........ $350
Southeast/Southwest........................... Mississippi, New Mexico, North Carolina, 300
Oklahoma, Texas.
Mountain Plains............................... Colorado, Kansas, Montana, Nebraska, North 400
Dakota, South Dakota, Utah, Wyoming.
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West.......................................... Alaska, Arizona, California, Idaho, Nevada, 350
Oregon, Washington.
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In developing the regional groupings and baseline shelter/utility
standard deductions, the Department considered data from a number of
sources, including national surveys of shelter costs and data on SNAP
participants' shelter deductions. The Department also considered where
FDPIR programs currently operate. If new programs are approved to
administer FDPIR in States not listed above, the Department would
identify the appropriate regional grouping for each new State.
The Department would, on an annual basis, calculate the shelter/
utility standard deductions for each region. As part of the annual
calculation, the Department would adjust the previous year's regional
shelter/utility expense standard deduction amounts to account for
changes to SNAP Quality Control data, rounding to the nearest $50. The
Department would issue the revised shelter/utility standard deductions
prior to October 1 each year.
Under the proposed provision, an applicant household that would
qualify for a shelter/utility standard deduction would have the option
to receive the appropriate deduction amount for the State in which the
household resides or the State in which the State agency's central
administrative office is located. These States could potentially be
located in two different regions which have different shelter/utility
expense standard deductions.
The Department believes that the proposed shelter/utility
provisions are easy to understand and promote simplicity and efficiency
in program administration. Because the Department would issue the
regional shelter/utility standard deductions annually, no undue burden
would be placed on State agencies to determine such amounts.
Furthermore, as proposed, FDPIR households would not be required to
produce documentation for all shelter/utility expenses; households
would need only to provide documentation for one allowable shelter/
utility expense. The State agency would apply the appropriate regional
standard shelter deduction and would not be required to perform an
additional calculation to determine the household's shelter deduction
amount. This simplifies the application and certification processes,
preventing an undue burden on applicants and State agency staff.
Because the shelter/utility standard deductions would be region-
specific, such deductions would recognize the variability in shelter
and utility costs across the nation.
4. Verification Requirements and Household Reporting--7 CFR
253.7(a)(6)(i) and 7 CFR 253.7(c)(1)
The Department proposes new household verification requirements
related to the two proposed income deductions discussed above.
Amendments are proposed to 7 CFR 253.7(a)(6)(i) to revise the current
verification requirements for Medicare Part B and Part D premiums to
reflect the proposed expanded medical expense deduction. Also, an
amendment is proposed to add a verification requirement for shelter and
utility expenses at 7 CFR 253.7(a)(6)(i). As indicated above, applicant
households must show proof of at least one allowable shelter/utility
expense to receive the FDPIR standard deduction for shelter/utility
expenses.
The Department also proposes amendments to the reporting
requirements at 7 CFR 253.7(c)(1) to reorganize this section for better
comprehension, and to improve the administration of FDPIR and service
to program applicants and participants. First, the Department proposes
a requirement for households to report a change in residence and when
they no longer have shelter/utility expenses. Households that do not
have shelter/utility expenses would not qualify for the standard
deduction for shelter/utility expenses proposed in this rulemaking.
Therefore, the Department believes it is reasonable to require
households to report if they no longer have such expenses so the State
agency can determine if the household continues to meet the FDPIR
financial eligibility criteria. A change in residence often results in
a change to shelter/utility expenses. In addition, a change in
residence may also impact a household's eligibility if the household no
longer meets the residency requirement under FDPIR. Eligible households
must reside on a participating reservation or in approved FDPIR service
areas outside of a reservation or in the state of Oklahoma. Therefore,
a change in residence might result in a household becoming ineligible
for FDPIR benefits.
The Department also proposes a new requirement under 7 CFR
253.7(c)(1) that households report changes in the legal obligation to
pay child support. Households that do not have a legal obligation to
pay child support do not qualify for the current child support
deduction. Therefore, the Department believes it is reasonable to
require the reporting of this change so that service providers can
determine if households continue to meet the FDPIR financial
eligibility criteria.
Finally, the Department proposes a revision regarding the reporting
of changes in income. The current provisions at 7 CFR 253.7(c)(1)
require households to report changes in income that would necessitate a
change in the eligibility determination. The State agencies are
required to advise each household at the time of certification the
maximum monthly income limit for its household size, so the household
will know to report an increase in income above that limit. The
Department does not believe that this methodology is practical. A
household's monthly net income amount, which is compared to the monthly
income limit, is calculated by subtracting allowable deductions from
the household's gross income. Households cannot be expected to know how
an increase in monthly gross income will impact its monthly net income
amount, because such households are not knowledgeable about the net
monthly income calculation. Therefore, the Department proposes an
amendment to regulations at 7 CFR 253.7(c)(1) to require households to
report an increase of more than $100 in gross monthly income. This
change would provide a more effective guideline for households to
determine when changes in income must be reported.
III. Procedural Matters
A. Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic,
[[Page 1646]]
environmental, public health and safety effects, distributive impacts,
and equity). Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility.
This proposed rule has been designated a ``significant regulatory
action,'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget.
B. Regulatory Impact Analysis
1. Need for Action
This action is needed to ensure that regulations pertaining to
income deductions are more consistent between FDPIR and SNAP. FDPIR was
established by the Congress in 1977 as an alternative to SNAP for low-
income households living on or near Indian reservations; these
households may not have easy access to SNAP offices and authorized
grocery stores. Both programs offer a standard deduction, an earned
income deduction, a child support deduction, and a dependent care
deduction. SNAP also offers an excess medical expense deduction and an
excess shelter expense deduction. Unlike SNAP, the medical deduction
currently offered in FDPIR is limited to the amount households pay for
Medicare Part B and Part D premiums. FDPIR does not offer an income
deduction for shelter and utility expenses.
This proposed rulemaking responds to a resolution passed by the
membership of the NAFDPIR in June 2009 that requested income deductions
for home heating expenses and other utilities, prescription
medications, and other out-of-pocket medical expenses. The NAFDPIR
resolution stated that the FDPIR income eligibility criteria unfairly
penalizes households whose net monthly income is determined to be over
the income standard by as little as one dollar, while many of these
households have monthly shelter, utility, and/or medical expenses.
NAFDPIR believes that some low-income households are forced to choose
between paying for food and paying for heat and/or medicine.
FNS received numerous comment letters in response to separate
proposed rulemaking supporting elimination of the FDPIR resource test
or alignment of FDPIR and SNAP policies. This proposed rule would
eliminate the household resource eligibility criterion for FDPIR.
Removal of the resource test would streamline the certification process
for new and currently participating households and simplify program
administration, reducing the burden on State agency certification staff
and improving service to those in need of nutrition assistance.
2. Benefits
This rule proposes to amend FDPIR regulations to improve the
administration of and expand access to FDPIR. This rule also promotes
parity with the eligibility requirements in SNAP. These regulatory
changes are designed to help ensure that FDPIR benefits are provided to
low-income households living on or near Indian reservations that are in
need of nutrition assistance. The proposed changes to the FDPIR
regulations could potentially increase participation, thus expanding
access to FDPIR and increasing nutrition assistance for the targeted
population.
FNS projects the impact of the proposed changes on FDPIR
participation, as follows:
(a) Elimination of the Household Resource Limit. This provision is
projected to increase participation ranging from approximately 189
individuals in the first year of implementation to 568 individuals 3
years later;
(b) Medical Expense Deduction. This provision would potentially
make some elderly and/or disabled individuals with sizeable monthly
medical expenses newly eligible for FDPIR. The projected increase in
participation ranges from approximately 67 individuals in the first
year of implementation to 201 individuals three years later; and
(c) Shelter/Utility Expense Deduction. This provision is projected
to increase participation ranging from approximately 752 individuals in
the first year of implementation to 2,257 individuals three years
later.
There is some uncertainly associated with the estimates above given
the limitations on relevant data pertaining to FDPIR participants.
Also, the impact of each provision on participation was evaluated
independently from the other provisions, so the combined effect or
overlap of these provisions is unknown. It is expected that some
individuals might benefit from more than one provision. For example, an
elderly household may qualify for both the medical expense deduction
and the shelter/utility expense deduction.
3. Cost
This action is not expected to significantly increase costs of
State and local agencies, or their commercial contractors, though these
costs cannot be determined with any accuracy. ITOs and State agencies
that administer FDPIR are required to provide 25 percent of the funds
necessary to operate the program. This requirement may be waived with
FNS approval if compelling justification exists. Any increased ITO/
State agency costs resulting from this rulemaking would be related to
an increase in the ITO/State agency share of administrative costs to
serve additional households made eligible by this rule.
FNS projects the impact of the proposed changes on federal costs
(i.e., program benefits), which are attributable to potential increases
in participation.
(a) Elimination of the Household Resource Limit. FNS estimates that
this provision would cost $1,857,000 over a 5-year period.
(b) Medical Expense Deduction. FNS estimates that this provision
would cost $656,000 over a five-year period.
(c) Shelter/Utility Expense Deduction. FNS estimates that this
provision would cost $7,375,000 over a five-year period.
As with the estimates on the impact on participation, there is some
uncertainty associated with the cost estimates above. Also, as
indicated above, the impact of each provision on participation was
evaluated independently from the other provisions, so the combined
effect or overlap of these provisions is unknown. If individuals
benefit from more than one provision, the estimated cost to the federal
government would be less.
C. Regulatory Flexibility Act
This proposed 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. While program
participants and ITOs and State agencies that administer FDPIR and the
Food Distribution Program for Indian Households in Oklahoma 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, 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 by State, local, or Tribal
governments, in the aggregate, or
[[Page 1647]]
by 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 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 the UMRA) that impose on State, local, and
Tribal governments or the private sector expenditures 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 No. 10.567. For the reasons set forth
in the final rule in 7 CFR part 3015, Subpart V, and related Notice
published at 48 FR 29114, 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.
1. Prior Consultation With Tribal/State Officials
The programs affected by the regulatory proposals in this rule are
all Tribal or State-administered federally funded programs. FNS'
national and regional offices have formal and informal discussions with
State agency officials and representatives on an ongoing basis
regarding program issues relating to FDPIR. FNS meets annually with the
NAFDPIR membership, a national group of Tribal and State-appointed
FDPIR Program Directors, to discuss issues relating to FDPIR. FNS also
meets with the NAFDPIR Board on a more frequent basis.
The changes proposed in this rulemaking related to the deduction
for shelter and utility expenses are based on a resolution passed by
the NAFDPIR membership in June 2009, and were discussed with the
NAFDPIR Board and its membership. This rulemaking was also the subject
of formal consultation with Tribal officials held in seven locations in
October 2010 through January 2011, as discussed below.
2. Nature of Concerns and the Need To Issue This Rule
Eligible low-income households living in areas served by FDPIR may
choose to participate in either FDPIR or SNAP. SNAP regulations offer
an income deduction for excess shelter expenses and an income deduction
for allowable monthly medical expenses in excess of $35 for households
with elderly and/or disabled members. This proposed rulemaking would
respond to a resolution passed by the membership of the NAFDPIR in June
2009 that requested income deductions for home heating expenses and
utilities, prescription medications, and other out-of-pocket medical
expenses. The NAFDPIR resolution read that the FDPIR income eligibility
criteria unfairly penalizes households whose net monthly income is
determined to be over the income standard by as little as one dollar,
while many of these households have monthly shelter, utility and/or
medical expenses. NAFDPIR believes that some low-income households are
forced to choose between paying for food and paying for heat and/or
medicine.
FNS also received numerous comment letters in response to separate
proposed rulemaking supporting elimination of the FDPIR resource test
or alignment of FDPIR and SNAP policies. This proposed rulemaking
responds to the concerns raised by commenters.
3. Extent to Which We Meet Those Concerns
The Department has considered the impact of this rule on ITOs and
State agencies that administer FDPIR. The Department does not expect
the provisions of this rule to conflict with any State or local law,
regulations, or policies. The overall effect of this rule is to ensure
that low-income households living on or near Indian reservations
receive nutrition assistance.
G. Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
``Civil Justice Reform.'' Although the provisions of this rule are not
expected to conflict with any State or local law, regulations, or
policies, the 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. Prior to any
judicial challenge to the provisions of this rule or the applications
of its provisions, all applicable administrative procedures must be
exhausted.
H. Civil Rights Impact Analysis
The Department 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. Consistent with
current SNAP regulations, the proposed provision to expand the current
income deduction for Medicare Part B Medical Insurance and Part D
Prescription Drug Coverage premiums to include other allowable monthly
medical expenses in excess of $35 would apply only to households with
elderly and/or disabled members, as defined at 7 CFR 253.2. However,
after a careful review of the rule's intent and provisions, the
Department 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, political beliefs,
religious creed, or disability. The Department found no factors that
would negatively affect any group of individuals.
I. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 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.
Information collections related to the provisions in this proposed rule
were previously approved under OMB No. 0584-0293.
This rule would impact the reporting and recordkeeping burden for
ITOs and State agencies under OMB No. 0584-0293 due to an expected
change in number of households participating in FDPIR as a result of
this rule and related changes to verification and household reporting
requirements. Documentation supporting the eligibility of all
participating households must be maintained by the ITOs and State
agencies.
The approved information collection estimates under OMB No. 0584-
0293 are as follows:
Estimated total annual burden: 1,079,172.92.
[[Page 1648]]
Estimated annual recordkeeping burden: 746,400.42.
Estimated annual reporting burden: 332,772.49.
Changes resulting from this proposed rule would result in the
following changes to OMB No. 0584-0293:
Estimated total annual burden: 1,081,071.76.
Estimated annual recordkeeping burden: 746,428.44.
Estimated annual reporting burden: 334,643.32.
These information collection requirements will not become effective
until approved by OMB. Once they have been approved, FNS will publish a
separate action in the Federal Register announcing OMB's approval.
J. E-Government Act Compliance
The Department is committed to complying with the E-Government Act
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.
K. Executive Order 13175
Executive Order 13175 requires Federal agencies to consult and
coordinate with Tribes on a government-to-government basis on policies
that have Tribal implications, including regulations, legislative
comments or proposed legislation, and other policy statements or
actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes. In late 2010 and early 2011,
USDA engaged in a series of consultative sessions to obtain input by
Tribal officials or their designees concerning the effect of this and
other rules on Tribes or Indian Tribal governments, or whether this
rule may preempt Tribal law. In regard to the provisions of this rule,
a session attendee spoke in support of the provision that would
eliminate the resource eligibility criteria. Another attendee spoke
about Tribal per capita payments and how receipt of these payments
negatively affects the eligibility of some households under current
rules.
Reports from the consultative sessions will be made part of the
USDA annual reporting on Tribal Consultation and Collaboration. USDA
will offer future opportunities, such as Webinars and teleconferences,
for collaborative conversations with Tribal leaders and their
representatives concerning ways to improve rules with regard to their
affect on Indian country.
We are unaware of any current Tribal laws that could be in conflict
with the proposed rule. We request that commenters address any concerns
in this regard in their responses.
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. 2011-2036).
2. In Sec. 253.6:
a. Amend the heading of paragraph (c) by removing the words ``and
resource'';
b. Amend paragraph (c)(1) by removing the words ``and resources'';
c. Amend paragraph (c)(2) by removing the words ``and resources'';
d. Remove paragraph (d) and redesignate paragraphs (e) and (f) as
paragraphs (d) and (e), respectively;
e. In redesignated paragraph (d), redesignate paragraph
(d)(2)(ii)(F) as paragraph (d)(2)(ii)(G), and add new paragraph
(d)(2)(ii)(F);
f. Amend redesignated paragraph (d)(3)(viii) by removing the second
sentence;
g. Add a new paragraph (d)(3)(xii);
h. In redesignated paragraph (e), revise paragraph (e)(4), and, add
a new paragraph (e)(5).
The revision and additions read as follows:
Sec. 253.6 Eligibility of households.
* * * * *
(d) * * *
(2) * * *
(ii) * * *
(F) Per capita payments that are derived from the profits of Tribal
enterprises and distributed to Tribal members on a monthly basis.
* * * * *
(3) * * *
(xii) Per capita payments that are derived from the profits of
Tribal enterprises and distributed to Tribal members less frequently
than monthly (e.g., quarterly, semiannually or annually) are excluded
from consideration as income.
* * * * *
(e) * * *
(4) Households must receive a medical deduction for that portion of
medical expenses in excess of $35 per month, excluding special diets,
incurred by any household member who is elderly or disabled as defined
in Sec. 253.2 of this chapter. Spouses or other persons receiving
benefits as a dependent of a Supplemental Security Income (SSI), or
disability and blindness recipient are not eligible to receive this
deduction; however, persons receiving emergency SSI benefits based on
presumptive eligibility are eligible for this deduction. The allowable
medical costs are those permitted at 7 CFR 273.9(d)(3) for the
Supplemental Nutrition Assistance Program (SNAP).
(5) Households that incur monthly shelter and utility expenses will
receive a shelter/utility standard deduction, subject to the provisions
below.
(i) The household must incur, on a monthly basis, at least one
allowable shelter/utility expense. The allowable shelter/utility
expenses are those permitted at 7 CFR 273.9(d)(6)(ii) for SNAP.
(ii) The shelter/utility standard deduction amounts are set by FNS
on a regional basis. The standard deductions are adjusted annually to
reflect changes to SNAP Quality Control data. FNS will advise the State
agencies of the updates prior to October 1 of each year.
(iii) If eligible to receive a shelter/utility standard deduction,
the applicant household may opt to receive the appropriate deduction
amount for the State in which the household resides or the State in
which the State agency's central administrative office is located.
* * * * *
3. In Sec. 253.7:
a. Revise paragraph (a)(6)(i)(C);
b. Add new paragraph (a)(6)(i)(D);
c. Revise paragraph (c)(1);
d. Remove paragraph (f)(2)(i) and redesignate paragraphs (f)(2)(ii)
and (f)(2)(iii) as paragraphs (f)(2)(i) and (f)(2)(ii), respectively.
The revisions and addition read as follows:
Sec. 253.7 Certification of households.
(a) * * *
(6) * * *
(i) * * *
(C) Excess medical expense deduction. The State agency must obtain
verification for those medical expenses that the household wishes to
deduct in accordance with 7 CFR 253.6(e)(4). The allowability of
services
[[Page 1649]]
provided (e.g., whether the billing health professional is a licensed
practitioner authorized by State law or other qualified health
professional) must be verified, if questionable. Only out-of-pocket
expenses can be deducted. Expenses reimbursed to the household by an
insurer are not deductible. The eligibility of the household to qualify
for the deduction (i.e., the household includes a member who is elderly
or disabled) must be verified, if questionable.
(D) Standard shelter/utility deduction. A household must incur, on
a monthly basis, at least one allowable shelter/utility expense in
accordance with 7 CFR 253.6(e)(5)(i) to qualify for the standard
shelter/utility deduction. The State agency must verify that the
household incurs the expense.
* * * * *
(c) * * *
(1) The State agency must develop procedures for how changes in
household circumstances are reported. Changes reported over the
telephone or in person must be acted on in the same manner as those
reported in writing. Participating households are required to report
the following changes within 10 calendar days after the change becomes
known to the household:
(i) A change in household composition;
(ii) An increase in gross monthly income of more than $100;
(iii) A change in residence;
(iv) When the household no longer incurs a shelter and utility
expense; or
(v) A change in the legal obligation to pay child support.
* * * * *
Dated: December 29, 2011.
Janey Thornton,
Acting Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2012-391 Filed 1-10-12; 8:45 am]
BILLING CODE 3410-30-P