[Federal Register Volume 84, Number 22 (Friday, February 1, 2019)]
[Proposed Rules]
[Pages 980-993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28059]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 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. 84, No. 22 / Friday, February 1, 2019 / 
Proposed Rules  

[[Page 980]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 273

[FNS-2018-0004]
RIN 0584-AE57


Supplemental Nutrition Assistance Program: Requirements for Able-
Bodied Adults Without Dependents

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Proposed rule.

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SUMMARY: Federal law generally limits the amount of time an able-bodied 
adult without dependents (ABAWD) can receive Supplemental Nutrition 
Assistance Program (SNAP) benefits to 3 months in a 36-month period, 
unless the individual meets certain work requirements. On the request 
of a State SNAP agency, the law also gives the Department of 
Agriculture (the Department) the authority to temporarily waive the 
time limit in areas that have an unemployment rate of over 10 percent 
or a lack of sufficient jobs. The law also provides State agencies with 
a limited number of percentage exemptions that can be used by States to 
extend SNAP eligibility for ABAWDs subject to the time limit. The 
Department proposes to amend the regulatory standards by which the 
Department evaluates State SNAP agency requests to waive the time limit 
and to end the unlimited carryover of ABAWD percentage exemptions. The 
proposed rule would encourage broader application of the statutory 
ABAWD work requirement, consistent with the Administration's focus on 
fostering self-sufficiency. The Department seeks comments from the 
public on the proposed regulations.

DATES: Written comments must be received on or before April 2, 2019 to 
be assured of consideration.

ADDRESSES: The Food and Nutrition Service, USDA, invites interested 
persons to submit written comments on this proposed rule. Comments may 
be submitted in writing by one of the following methods:
     Preferred Method: Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Send comments to Certification Policy Branch, 
Program Development Division, FNS, 3101 Park Center Drive, Alexandria, 
Virginia 22302.
     All written comments submitted in response to this 
proposed 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. FNS will make the written 
comments publicly available on the internet via http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Certification Policy Branch, Program 
Development Division, FNS, 3101 Park Center Drive, Alexandria, Virginia 
22302. [email protected].

SUPPLEMENTARY INFORMATION:

Background

Acronyms or Abbreviations

[Phrase, Acronym or Abbreviation]
Able-Bodied Adult without Dependent(s), ABAWD(s)
Advanced Notice of Public Rulemaking, ANPRM
Bureau of Labor Statistics, BLS
Census Bureau's American Community Survey, ACS
Code of Federal Regulations, CFR
Department of Labor, DOL
Employment and Training Administration, ETA
Employment and Training, E&T
Food and Nutrition Act of 2008, Act
Food and Nutrition Service, FNS
Labor Market Area(s), LMA(s)
Labor Surplus Area(s), LSA(s)
Supplemental Nutrition Assistance Program, SNAP
The Personal Responsibility and Work Opportunity Reconciliation Act of 
1996, PRWORA
U.S. Department of Agriculture, the Department or USDA

References

    The following references may be useful to help inform those wishing 
to provide comments.

(1) Section 6(d) and section 6(o) of the Food and Nutrition Act of 
2008, as amended
(2) Title 7 of the Code of Federal Regulations, parts 273.7 and 
273.24
(3) Food Stamp Program: Personal Responsibility Provisions of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 
1996, Proposed Rule, 64 FR 70920 (December 17, 1999). Available at: 
https://www.federalregister.gov/documents/1999/12/17/99-32527/food-stamp-program-personalresponsibility-provisions-of-the-personalresponsibility-and-work
(4) Food Stamp Program: Personal Responsibility Provisions of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 
1996, Final Rule, 66 FR 4437 (January 17, 2001). Available at: 
https://www.federalregister.gov/documents/2001/01/17/01-1025/foodstamp-program-personal-responsibilityprovisions-of-the-personal-responsibilityand-work
(5) Guide to Serving ABAWDs Subject to Time-limited Participation, 
2015. Available at: https://fns-prod.azureedge.net/sites/default/files/Guide_to_Serving_ABAWDs_Subject_to_Time_Limit.pdf
(6) Guide to Supporting Requests to Waive the Time Limit for Able-
Bodied Adults without Dependents, 2016. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Guide-to-Supporting-Requests-to-Waive-the-Time-Limit-for-ABAWDs.pdf
(7) Expiration of Statewide ABAWD Time Limit Waivers, 2015. 
Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Expiration-of-Statewide-ABAWD-Time-Limit-Waivers.pdf
(8) ABAWD Time Limit Policy and Program Access, 2015. Available at: 
https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Time-Limit-Policy-and-Program-Access-Memo-Nov2015.pdf
(9) ABAWD Questions and Answers, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-June%202015.pdf
(10) ABAWD Questions and Answers, 2013. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-December-2013.pdf
(11) BLS Local Area Unemployment Statistics. Available at: https://www.bls.gov/lau/
(12) BLS Labor Surplus Area. Available at: https://www.doleta.gov/programs/lsa.cfm

The Rationale for Modifying Waiver Standards

    The President's Executive Order on Reducing Poverty in America by

[[Page 981]]

Promoting Opportunity and Economic Mobility (April 10, 2018) provided 
guiding principles for public assistance programs, one of which was to 
improve employment outcomes and economic independence by strengthening 
existing work requirements for work-capable individuals. The Executive 
Order directed Federal agencies to review regulations and guidance 
documents to determine whether such documents are consistent with the 
principles of increasing self-sufficiency, well-being, and economic 
mobility. Consistent with the Executive Order and the Administration's 
focus on fostering self-sufficiency, as well as the Department's 
extensive operational experience with ABAWD waivers, the Department has 
determined that the standards for waivers must be strengthened so that 
the ABAWD work requirement is applied to ABAWDs more broadly. The 
Department is confident that these changes would encourage more ABAWDs 
to engage in work or work activities if they wish to continue to 
receive SNAP benefits.
    The Department believes that the proposed changes reinforce the 
Act's intent to require these individuals to work or participate in 
work activities in order to receive SNAP benefits for more than 3 
months in a 36 month period. Section 6(o) of the Act, entitled, ``Work 
Requirements,'' allows these individuals to meet the ABAWD work 
requirement by working and/or participating in a qualifying work 
program at least 20 hours per week (averaged monthly to 80 hours per 
month) or by participating in and complying with workfare. For the 
purposes of meeting the ABAWD work requirement, working includes unpaid 
or volunteer work that is verified by the State agency. The Act 
specifically exempts individuals from the ABAWD time limit and 
corresponding work requirement for several reasons, including, but not 
limited to, age, unfitness for work, having a dependent child, or being 
pregnant.
    The Act authorizes waivers of the ABAWD time limit and work 
requirement in areas in which the unemployment rate is above 10 
percent, or where there is a lack of sufficient jobs. The Department 
believes waivers of the ABAWD time limit are meant to be used in a 
limited manner in situations in which jobs are truly unavailable to 
ensure enforcement of the ABAWD work requirements as much as possible 
to promote greater engagement in work or work activities.
    Immediately following the Great Recession, the vast majority of the 
States, including the District of Columbia, Guam, and the Virgin 
Islands, qualified for and implemented statewide ABAWD time limit 
waivers in response to a depressed labor market. In the years since the 
Great Recession, the national unemployment rate has dramatically 
declined. Despite the national unemployment rate's decline from 9.9 
percent in April 2010 to 3.9 percent in April 2018, a significant 
number of States continue to qualify for and use ABAWD waivers under 
the current waiver standards. Right now, nearly half of ABAWDs live in 
areas that are covered by waivers despite a strong economy. The 
Department believes waiver criteria need to be strengthened to better 
align with economic reality. These changes would ensure that such a 
large percentage of the country can no longer be waived when the 
economy is booming and unemployment is low.
    The Department is committed to enforcing the work requirements 
established by Congress and is concerned about the current level of 
waiver use in light of the current economy. The regulations afforded 
States broad flexibility to develop approvable waiver requests. The 
Department's operational experience has shown that some States have 
used this flexibility to waive areas in such a way that was likely not 
foreseen by the Department.
    Some of the key concerns have stemmed from the combining of data 
from multiple individual areas to waive a larger geographic area (e.g., 
a group of contiguous counties) and the application of waivers in 
individual areas with low unemployment rates that do not demonstrate a 
lack of sufficient jobs. For example, some States have maximized the 
number of areas or people covered by waivers by combining data from 
areas with high unemployment with areas with low unemployment. This 
grouping has resulted in the combined area qualifying for a waiver when 
not all individual sub-areas would have qualified on their own. States 
have combined counties with unemployment rates under 5 percent with 
counties with significantly higher unemployment rates in order to waive 
larger areas. For example, current regulations required the Department 
to approve a State request to combine unemployment data for a populous 
county with a high unemployment rate of over 10 percent with the 
unemployment data of several other less populous counties with very low 
unemployment rates that ranged between 3 and 4 percent. Other States 
have combined data from multiple areas that may only tenuously be 
considered an economic region. In some cases, States have grouped areas 
that are contiguous but left out certain low-unemployment areas that 
would otherwise logically be considered part of the region. In this 
manner, States have created questionable self-defined economic areas 
with gaping holes to leverage the flexibility of the regulations.
    The Department has also noted that, despite the improving economy, 
the lack of a minimum unemployment rate has allowed local areas to 
qualify for waivers based solely on having relatively high unemployment 
rates as compared to national average, regardless of how low local 
areas unemployment rates fall. Since the current waiver criteria have 
no floor, a certain percentage of States will continue to qualify for 
waivers even if unemployment continues to drop.
    It is the Department's understanding that the intent of Congress in 
passing the Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996 was to provide SNAP to unemployed ABAWDs on a temporary 
basis (3 months in any 3-year period) with the expectation that they 
work and/or engage in a work program at least 20 hours per week, or 
participate in workfare, to receive SNAP on an ongoing basis. The 
Department is committed to implementing SNAP as Congress intended and 
believes that those who can work should work. The widespread use of 
waivers has allowed some ABAWDs to continue to receive SNAP benefits 
while not meeting the ABAWD work requirement for longer than 3 months. 
The proposed rule addresses these areas of concern and places 
safeguards to avoid approving waivers that were not foreseen by 
Congress and the Department, and to restrict States from receiving 
waivers in areas that do not clearly demonstrate a lack of sufficient 
jobs.
    As stated above, given the widespread use of ABAWD waivers during a 
period of historically low unemployment, the Department believes that 
the current regulatory standards should be reevaluated. Based on the 
Department's approximately two decades' experience with reviewing ABAWD 
waivers, the Department is proposing that the standards for approving 
these waivers be updated to ensure the waivers are applied on a more 
limited basis. The application of waivers on a more limited basis would 
encourage more ABAWDs to take steps towards self-sufficiency.
    The Department proposes stricter criteria for ABAWD waiver 
approvals that would establish stronger, updated standards for 
determining when and where a lack of sufficient jobs justifies 
temporarily waiving the ABAWD time

[[Page 982]]

limit. The proposed rule would also ensure the Department only issues 
waivers based on representative, accurate, and consistent economic 
data, where it is available. Limiting waivers would make more ABAWDs 
subject to the time limit and thereby encourage more ABAWDs to engage 
in meaningful work activities if they wish to continue to receive SNAP 
benefits. The Department recognizes that long-term, stable employment 
provides the best path to self-sufficiency for those who are able to 
work. The Department believes it is appropriate and necessary to 
encourage greater ABAWD engagement with respect to job training and 
employment opportunities that would not only benefit ABAWDs, but would 
also save taxpayers' money. The Department and the States share a 
responsibility to help SNAP participants--especially ABAWDs--find a 
path to self-sufficiency. Through the stricter criteria for waiver 
approvals, the Department would encourage greater engagement in 
meaningful work activities and movement toward self-sufficiency among 
ABAWDs, thus reducing the need for nutrition assistance.

Waiver Standards Framework

    Current regulations at 7 CFR 273.24(f) set standards and 
requirements for the data and evidence that States must provide to FNS 
to support a waiver request. States enjoy considerable flexibility to 
make these waiver requests pursuant to the current regulations. For 
example, these regulatory standards give States broad flexibility to 
define the waiver's geographic scope. The discretion for States to 
define areas allows waivers based on data for combined areas that are 
not necessarily economically tied. An economically tied area is an area 
within which individuals can reside and find employment within a 
reasonable distance or can readily change employment without changing 
their place of residence. In addition, while the current regulations 
establish criteria for unemployment data that rely on standard Bureau 
of Labor Statistics (BLS) data or methods, the regulations also allow 
States to rely on alternative, less robust economic indicators, which 
include data other than unemployment data from BLS, to demonstrate a 
lack of sufficient jobs. Moreover, the waiver standards allow areas 
within States to qualify for waivers as a result of unemployment rates 
relative to the national average, without consideration for whether the 
national or local area unemployment rate is high or low. Put 
differently, under the current regulations, which do not include a 
local unemployment rate floor, even if the national unemployment rate 
falls, a particular area's unemployment rate may support a waiver if 
that area's unemployment rate is low but sufficiently higher than the 
national average. As a result of these and other shortcomings, the 
current regulations give States an opportunity to qualify for waivers 
and avoid the ABAWD time limit when economic conditions do not justify 
such relief. For these reasons, the Department believes that the waiver 
standards under this proposed rule will better identify areas that do 
not have a sufficient number of jobs to provide employment for ABAWDs.
    As of September 2018, the national unemployment rate is the lowest 
unemployment rate since 1969; however, States continue to request and 
qualify for ABAWD waivers based on the current waiver criteria, which 
define the lack of sufficient jobs in an area too broadly. In April 
2010, the national unemployment rate stood at 9.9 percent. From 2010 
through 2013, the vast majority of States qualified for and continued 
to implement statewide ABAWD time limit waivers. SNAP participation 
peaked at an average of 47.6 million recipients per month in FY 2013 
and has gradually declined since then. In July 2013, the national 
unemployment rate was 7.3 percent; 45 ABAWD time limit waivers covered 
the entire State,\1\ and 6 waivers covered specific areas within the 
State. In April 2018, SNAP participation totaled 39.6 million 
participants, and the national unemployment rate stood at 3.9 percent. 
In April 2018, 8 waivers applied to an entire State, and 28 covered 
specific areas within a State. Although the national unemployment rate 
has dropped from 9.9 percent in April 2010 to 3.9 percent in April 
2018, many States continue to qualify for and use ABAWD time limit 
waivers under the current waiver standards, and nearly half of all 
ABAWDs live in areas that are covered by waivers.
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    \1\ The term ``State'' refers to any of the 50 States, the 
District of Columbia, and the U.S. territories
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    The Department is concerned that ABAWD time limit waivers continue 
to cover significant portions of the country and are out of step with a 
national unemployment rate hovering at less than 4 percent. Since the 
current waiver criteria have no floor, a certain percentage of States 
will continue to qualify for waivers even if unemployment continues to 
drop. In other words, regardless of how strong the economy is, the 
criteria are written in such a way that areas will continue to qualify 
even with objectively low unemployment rates. Many currently-waived 
areas qualified based on 24-month local unemployment rates below 6 
percent.
    The current criteria for waiver approval permit States to qualify 
for waivers without a sufficiently robust standard for a lack of 
sufficient jobs. The waiver criteria should be updated to ensure States 
submit data that is more representative of the economic conditions in 
the requested areas. Such reforms would make sure the Department issues 
waivers based on representative, accurate, and consistent economic 
data.
    This proposed rule would set clear, robust, and quantitative 
standards for waivers of the ABAWD time limit. The proposal would also: 
Eliminate waivers for areas that are not economically tied together; 
eliminate the ability of an area to qualify for a waiver based on its 
designation as a Labor Surplus Area (LSA) by the Department of Labor; 
limit the use of alternative economic indicators to areas for which 
standard data is limited or unavailable, such as Indian Reservations 
and U.S. Territories; and provide additional clarity for States 
regarding the waiver request process. The proposed changes would ensure 
the Department issues waivers only to provide targeted relief to areas 
that demonstrate a lack of sufficient jobs or have an unemployment rate 
above 10 percent and that the ABAWD time limit encourages SNAP 
participants to find and keep work if they live in areas that do not 
lack sufficient jobs.

Background

Previous Action

    On February 23, 2018, the Department published an Advanced Notice 
of Public Rulemaking (ANPRM) entitled ``Supplemental Nutrition 
Assistance Program: Requirements and Services for Able-Bodied Adults 
Without Dependents'' (83 FR 8013) to seek public input to inform 
potential policy, program, and regulatory changes that could 
consistently encourage ABAWDs to obtain and maintain employment and 
thereby decrease food insecurity. The Department specifically asked 
whether changes should be made to: (1) The existing process by which 
State agencies request waivers of the ABAWD time limit; (2) the 
information and data States must provide to support the waiver request; 
(3) the Department's implementation of the waiver approval; and (4) the 
waiver's duration. The ANPRM generated nearly 39,000 comments from a 
range of stakeholders including private citizens, government

[[Page 983]]

agencies and officials, food banks, advocacy organizations, and 
professional associations.
    The comments addressed the broad scope of topics covered by the 
ANPRM. Comments about the ABAWD waiver included diverse perspectives, 
ranging from those who supported stricter waiver approval requirements 
to those who favored maintaining or expanding the criteria for waiver 
approval. Many commenters favored no change or expressed support for 
greater flexibility. Other commenters identified a number of areas of 
concern with current practices, including the use of waivers by States 
to waive the ABAWD work requirement and avoid promoting work, waiving 
areas with relatively low unemployment rates, and allowing the use of 
certain metrics for waiver approvals.
    The Department received more than 3,500 comments regarding 
potential reforms to the ABAWD time limit and waivers of the time limit 
through the Department's request for information (RFI) entitled, 
``Identifying Regulatory Reform Initiatives'' published July 17, 2017 
(82 FR 32649). This RFI requested ideas on how the Department can 
provide better customer service and remove unintended barriers to 
participation in the Department's programs in ways that least interfere 
with the Department's customers and allow the Department to accomplish 
its mission. The Department specifically requested ideas on 
regulations, guidance documents, or any other policy documents that 
require reform. While commenters disagreed with certain SNAP provisions 
outlined previously, specific changes to regulations and policies were 
not provided. The Department received a range of comments to the RFI in 
addition to the comments listed above that are not relevant to this 
proposed rule.

Summary of Proposed Changes

    The Department believes current regulations at 7 CFR 273.24(c) and 
7 CFR 273.24(f) should be updated and strengthened. The proposed rule 
focuses on updating the standards for ABAWD waivers. Current 
regulations at 7 CFR 273.24(f) set standards and requirements for the 
data and evidence that States must provide to FNS to support an ABAWD 
waiver request. States enjoy considerable flexibility to make these 
waiver requests pursuant to the current regulations. This flexibility 
has resulted in the widespread use of waivers during a period of low 
unemployment, which reduces the application of the work requirement.
    The Department proposes several changes. First, the proposed rule 
would limit the ability of areas to qualify for waivers as local 
economies and the overall national economy improve. Second, the 
proposed rule would no longer allow State agencies to combine 
unemployment data from areas with high unemployment with areas with 
lower unemployment and more plentiful employment opportunities in order 
to maximize the area waived. Instead, the proposed rule would ensure 
the Department issues waivers only to economically tied areas that meet 
the new criteria defining what is meant by a lack of sufficient jobs. 
The proposed rule would also limit the duration of waivers to one year, 
and curtail the use of less robust data to approve waivers. The 
subsequent sections provide details about the changes proposed in this 
rule.

Discussion of Proposed Changes

General

    The Department proposes that the rule, once finalized, would go 
into effect on October 1, 2019, which is the beginning of federal 
fiscal year 2020. All waivers in effect on October 1, 2019, or 
thereafter, would need to be approvable according to the new rule at 
that time. Any approved waiver that does not meet the criteria 
established in the new rule would be terminated on October 1, 2019. 
States would be able to request new waivers if the State's waiver is 
expected to be terminated. The Department requests feedback from States 
regarding the implementation date. In addition, the Department proposes 
clarifying that any State agency's waiver request must have the 
Governor's endorsement to ensure that such a critical request is 
supported at the highest levels of State government.

Establishing Core Standards for Approval

    The Department proposes updating criteria for ABAWD time limit 
waivers to improve consistency across States and only allow approvals 
in areas where waivers are truly necessary. These revisions would 
include the establishment of core standards that would allow a State to 
reasonably anticipate whether it would receive approval from the 
Department. These core standards would serve as the basis for approval 
for the vast majority of waiver requests, save for areas with 
exceptional circumstances or areas with limited data or evidence, such 
as Indian Reservations and U.S. Territories. The proposed rule would 
continue to allow approvals for waivers based on data from BLS or a 
BLS-cooperating agency that show an area has a recent, 12-month average 
unemployment rate over 10 percent.
    The proposed rule emphasizes that the basis for approval of waivers 
would be sound data and evidence that primarily relies on data from BLS 
or BLS-cooperating agencies. Any supporting unemployment data provided 
by the State would need to rely on standard BLS data or methods. BLS 
unemployment data is generally considered to be reliable and robust 
evidence for evaluating labor market conditions. BLS is an independent 
Federal statistical agency that is required to provide accurate and 
objective statistical information and is the principal fact-finding 
agency for the Federal government in the broad field of labor economics 
and statistics. It collects, processes, analyzes, and disseminates 
essential statistical data for the public and Federal agencies.
    The proposed core standards for waiver approval would be codified 
in 7 CFR 273.24(f)(2).
Core Standards: Retaining Waivers Based on an Unemployment Rate Over 10 
Percent
    The Department does not propose changes to the regulations for 
waivers when an area has an unemployment rate over 10 percent. The 
proposed rule would continue to allow approvals for waivers based on 
data from BLS or a BLS-cooperating agency that show an area has a 
recent, 12-month average unemployment rate over 10 percent.
Core Standards: Establishing a Floor for Waivers Based on the 20 
Percent Standard
    Current regulations at 7 CFR 273.24(f)(2) and (3) provide for 
waiver approvals for requested areas with an average unemployment rate 
at least 20 percent above the national average for a recent 24-month 
period, beginning no earlier than the same 24-month period that DOL 
uses to determine LSAs for the current fiscal year (otherwise known as 
the ``20 percent standard''). Under the current regulations, the 
Department adopted the 20 percent standard, in addition to LSA 
designation, to provide States with the flexibility to support waivers 
for areas in the country that are not considered by DOL for LSA 
designation and to allow States to use a more flexible 24-month 
reference period.
    There are key differences between the two standards. DOL's criteria 
for LSAs require an average unemployment rate that is at least 20 
percent above the national average and at least 6 percent for the 
preceding two calendar years (a

[[Page 984]]

24-month period). DOL's local unemployment rate floor of 6 percent 
prevents areas with unemployment rates below that threshold from 
qualifying as LSAs. The 20 percent standard is the same, except that it 
allows for a flexible 24-month data reference period (no earlier than 
that which is used for LSAs) and it does not include any unemployment 
rate floor.
    Based upon operational experience, the Department has observed 
that, without an unemployment rate floor, local areas will continue to 
qualify for waivers under the Department's 20 percent standard based on 
high unemployment relative to the national average even as local 
unemployment rates fall to levels as low as 5 to 6 percent (depending 
upon the national rate). The Department believes that amending the 
waiver regulations to include an unemployment floor is a critical step 
in achieving more targeted criteria. While the 20 percent standard is 
similar to the calculation of an LSA, the Department believes it is 
appropriate to request public comment to explore a floor that is 
designed specifically for ABAWD waivers.
    The Department believes a floor should be set for the 20 percent 
standard so that areas do not qualify for waivers when their 
unemployment rates are generally considered to be normal or low. The 
``natural rate of unemployment'' is the rate of unemployment expected 
given normal churn in the labor market, with unemployment rates lower 
than the natural rate tending to result in inflationary pressure on 
prices. Thus, unemployment rates near or below the ``natural rate of 
unemployment'' are more indicative of the normal delay in unemployed 
workers filling the best existing job opening for them than a ``lack of 
sufficient jobs'' in an area. Generally, the ``natural rate of 
unemployment'' hovers around 5 percent. The Department believes that 
only areas with unemployment rates above the ``natural rate of 
unemployment'' should be considered for waivers. The Department seeks 
to establish a floor that is in line with the Administration's effort 
to encourage greater engagement in work and work activities. The 
Department believes that the 7 percent floor for the 20 percent 
standard would strengthen the standards for waivers so that the ABAWD 
work requirement would be applied more broadly and fully consider the 
``lack of sufficient jobs'' criteria in the statute. Furthermore, this 
aligns with the proposal in the Agriculture and Nutrition Act of 2018, 
H.R. 2, 115th Cong. Sec.  4015 (as passed by House, June 21, 2018). As 
stated previously, the Department seeks to make the work requirements 
the norm rather than the exception to the rule because of excessive use 
of ABAWD time limit waivers to date. Using the proposed rule's 7 
percent floor for this criterion and eliminating waiver approvals based 
on an LSA designation (as well as utilizing the proposed limit on 
combining areas discussed below), an estimated 11 percent of ABAWDs 
would live in areas subject to a waiver. Currently, approximately 44 
percent of ABAWDs live in a waived area. The Department views the 
proposal as more suitable for achieving a more comprehensive 
application of work requirements so that ABAWDs in areas that have 
sufficient number of jobs have a greater level of engagement in work 
and work activities, including job training. In sum, the proposed rule 
modifies the current waiver criterion so that an area must have an 
average unemployment rate at least 20 percent above the national 
average and at least 7 percent for a recent 24-month period, beginning 
no earlier than the same 24-month period that DOL uses to determine 
LSAs for the current fiscal year, to qualify for a waiver. The 7 
percent floor prevents a requested area with an unemployment rate 20 
percent above the national average, but below 7 percent, from 
qualifying for a waiver.
    Although the Department believes the local unemployment floor 
should be set at 7 percent to best meet its goals of promoting self-
sufficiency and ensuring areas with unemployment rates generally 
considered normal are not waived, it is requesting evidence-based and 
data-driven feedback on the appropriate threshold for the floor. 
Specifically, the Department requests feedback on which unemployment 
rate floor--6 percent, 7 percent, or 10 percent--would be most 
effective at limiting waivers consistent with the Act's requirement 
that waivers be determined based on a lack of sufficient jobs.
    The Department is interested in public comments on establishing an 
unemployment floor of 6 percent, which would be consistent with DOL 
standards for LSAs. A 6 percent floor would require that an area 
demonstrate an unemployment rate of at least 20 percent above the 
national average for a recent 24-month period and at least a 6 percent 
unemployment rate for that same time period in order to receive waiver 
approval. The 6-percent floor also bears a relationship to the 
``natural rate of unemployment.'' in that it is approximately 20 
percent higher. As previously noted, the ``natural rate of 
unemployment'' generally hovers around 5 percent, meaning that 20 
percent above that rate is 6.0 percent. In combination with other 
changes in the proposed rule, the Department estimates that a 6-percent 
floor would reduce waivers to the extent that approximately 24 percent 
of ABAWDs would live in waived areas. The Department is concerned that 
too many areas would qualify for a waiver of the ABAWD time limit with 
a 6 percent floor and that too few individuals would be subject to the 
ABAWD work requirements, which can be met through working or 
participating in a work program or workfare program, thereby moving 
fewer individuals towards self-sufficiency.
    The Department would also like to receive comments on establishing 
a floor of 10 percent for the 20 percent standard. A 10-percent floor 
would allow for even fewer waivers than the other options and would 
result in the work requirements being applied in almost all areas of 
the country. In combination with other changes in the proposed rule, 
the Department estimates that a 10-percent floor would reduce waivers 
to the extent that approximately 2 percent of ABAWDs would live in 
waived areas.
    It is important to note that a 10-percent floor would be distinct 
from the criteria for approval of an area with an unemployment rate of 
over 10 percent. The 10-percent unemployment floor would be attached to 
the 20 percent standard, which would mean an area would require an 
average unemployment rate 20 percent above the national average for a 
recent 24-month period and at least 10 percent for the same period; the 
other similar, but separate standard requires an area to have an 
average unemployment rate of over 10 percent for a 12-month period.
    Based on the Department's analysis, nearly 90 percent of ABAWDs 
would live in areas without waivers and would be encouraged to take 
steps towards self-sufficiency if a floor of 7 percent was established. 
In comparison, a 6 percent floor would mean that 76 percent of ABAWDs 
would live in areas without waivers and a 10 percent floor would mean 
that 98 percent of ABAWDs would live in areas without waivers. A higher 
floor allows for the broader application of the time limit to encourage 
self-sufficiency.
    The Department is thus requesting comments on the various proposed 
options for setting a floor for the 20 percent standard. This will 
ensure that the Department fully considers the range of evidence 
available to establish a floor that meets the need of evaluating 
waivers.

[[Page 985]]

Core Standards: Retaining the Extended Unemployment Benefits 
Qualification Standard
    Under the proposed rule, the Department would continue to approve a 
State's waiver request that is based upon the requesting State's 
qualification for extended unemployment benefits, as determined by 
DOL's Unemployment Insurance Service. Extended unemployment benefits 
are available to workers who have exhausted regular unemployment 
insurance benefits during periods when certain economic conditions 
exist within the State. The extended benefit program is triggered when 
the State's unemployment rate reaches certain levels. Qualifying for 
extended benefits is an indicator, based on DOL data, that a state 
lacks sufficient jobs. Current regulations include this criterion as 
evidence of lack of sufficient jobs. The Department has consistently 
approved waivers based on qualification for extended unemployment 
benefits because it has been a clear indicator of lack of sufficient 
jobs and an especially responsive indicator of sudden economic 
downturns, such as the Great Recession. Therefore, the Department 
proposes to continue to include this criterion, reframed as a core 
standard for approval in this proposed regulation.
    The three provisions described above (the unemployment rate over 10 
percent standard, the 20 percent standard, and the qualification for 
extended unemployment benefits standard), would be considered the core 
standards for approval and, thus, the basis for most conventional 
waiver requests and approvals. The core standards would be codified in 
7 CFR 273.24(f)(2).

Criteria Excluded From Core Standards

    The proposed core standards would not include some of the current 
ABAWD time limit waiver criteria that are rarely used, sometimes 
subjective, and not appropriate when other more specific and robust 
data is available, such as unemployment rates from BLS. These excluded 
criteria include a low and declining employment-to-population ratio, a 
lack of jobs in declining occupations or industries, or an academic 
study or other publication(s) that describes an area's lack of jobs. 
These standards would no longer suffice for a waiver's approval if BLS 
data is available. These proposed changes would ensure that ABAWD time 
limit waiver requests are only approved in areas where waivers are 
truly necessary.
    The proposed rule would emphasize sound data and evidence that 
primarily relies on BLS and other DOL data for waiver approvals. Any 
supporting unemployment data that a State provides must, under the core 
standards, rely on standard data from BLS or a BLS-cooperating agency.

Other Data and Evidence in Exceptional Circumstances

    The proposed core standards would form the primary basis for 
determining waiver approval. However, the rule also proposes that the 
Department can approve waiver requests in exceptional circumstances 
based on other data and evidence. The Department proposes that other 
data and evidence still primarily rely on BLS unemployment data. Such 
alternative data would only be considered in exceptional circumstances 
or if BLS data is limited, unavailable, or if BLS develops a new method 
or data that may be applicable to the waiver review process. Given that 
economic conditions can change quickly, the Department believes it is 
appropriate to maintain a level of flexibility to approve waivers as 
needed in extreme, dynamic circumstances. Such waiver requests must 
demonstrate that an area faces an exceptional circumstance and provide 
data or evidence that the exceptional circumstance gives rise to an 
area not having a sufficient number of jobs to provide employment for 
the individuals in the area. For example, an exceptional circumstance 
may arise from the rapid disintegration of an economically and 
regionally important industry or the prolonged impact of a natural 
disaster. A short-term aberration, such as a temporary closure of a 
plant, would not fall within the scope of exceptional circumstances. 
For waiver requests in exceptional circumstances, the State agency may 
use additional data or evidence other than those listed in the core 
standards to support its need for a waiver under exceptional 
circumstances. In these instances, the State may provide data from the 
BLS or a BLS-cooperating agency showing an area has a most recent 
three-month average unemployment rate over 10 percent. This provision 
to strengthen the standards for waivers would be codified in 7 CFR 
273.24(f)(3).

Restricting Statewide Waivers

    Current regulations at 7 CFR 273.24(f)(6) and the Department's 
policy guidance provide States with the discretion to define the areas 
to be covered by waivers. A State may request that a waiver apply to 
the entire State (statewide) or only to certain areas within the State 
(e.g., individual counties, cities, or towns), as long as the State 
provides data that corresponds to each requested area showing that the 
area meets one of the qualifying standards for approval.
    The proposed rule would eliminate statewide waiver approvals when 
substate data is available through BLS, except for those waivers based 
upon a State's qualification for extended unemployment benefits as 
determined by DOL's Unemployment Insurance Service. The Department 
proposes this change so that waivers of the ABAWD time limit are more 
appropriately targeted to those particular areas in which unemployment 
rates are high. Since statewide unemployment figures may include areas 
in which unemployment rates are relatively low, the Department believes 
that a more targeted approach would ensure that waivers exist only in 
areas that do not have a sufficient number of jobs to provide 
employment for the individuals living in that specific area. This 
proposed change further supports the Department's goal that more 
individuals are subject to the ABAWD time limit and work requirement, 
which can be met through working or participating in a work program or 
workfare program, consistent with the intent of the Act.
    The Department requests public comment specific to the proposed 
restriction on statewide waivers, especially with consideration to how 
the change may affect different States in different ways based upon 
geographic size, population, and other factors.
    These changes would be codified in 7 CFR 273.24(f)(4).

Restricting the Combining of Data to Group Substate Areas

    Current regulations at 7 CFR 273.24(f)(6) and the Department's 
policy guidance provide States considerable flexibility to define areas 
covered by ABAWD waivers. This flexibility allows States to combine 
data to group two or more substate areas, such as counties, together 
(otherwise referred to as ``grouped'' areas or ``grouping''). In order 
to meet the requirement for qualifying data or evidence that 
corresponds to the requested area, States use the unemployment and 
labor force data from the individual areas in the group to calculate an 
unemployment rate representative of the whole group. States can only 
group areas and support approval based on qualifying unemployment data. 
Under current regulations, States must demonstrate that the areas 
within any such group are contiguous and/or share the same Federal- or 
State-recognized economic region. For example, two or more contiguous 
counties could be grouped together, and the group's average 
unemployment rate could be calculated,

[[Page 986]]

by combining the unemployment and labor force data from each individual 
county.
    The Department's existing general conditions for the grouping of 
areas--that the areas must be either contiguous and/or share the same 
economic region--were intended to ensure that the areas grouped 
together are economically tied. However, in practice, the Department 
has learned that its standards for combining areas provide too much 
flexibility for State agencies and are often ineffective at ensuring 
that States are only grouping areas that are economically tied. For 
example, some States have grouped nearly all contiguous counties in the 
State together while omitting a few counties with relatively low 
unemployment in order to maximize the waived areas in the State. In 
other cases, States have grouped certain towns together that share the 
same economic region while omitting others with relatively low 
unemployment from the group, thereby maximizing the waived areas in the 
State.
    The proposed rule would prohibit States from grouping areas, except 
for areas that are designated a Labor Market Area (LMA) by the Federal 
government.\2\ This change would ensure that only areas that are 
economically tied are grouped together. Moreover, the proposed rule 
would require States to include the unemployment data representative of 
all areas in the LMA in the State. As a result, States would be unable 
to omit certain areas within the LMA in the State for the purposes of 
achieving a qualifying unemployment rate for part of an LMA. These 
changes would be codified in 7 CFR 273.24(f)(5).
---------------------------------------------------------------------------

    \2\ An LMA is an economically integrated geographic area within 
which individuals can reside and find employment within a reasonable 
distance or can readily change employment without changing their 
place of residence. LMAs include Federally-designated statistical 
areas such as metropolitan statistical areas, micropolitan 
statistical areas, and other combined statistical areas. A 
nationwide list of every LMA is maintained by BLS.
---------------------------------------------------------------------------

    The Department requests public comments on whether it should 
include Labor Market Areas (LMAs) defined by the Federal government as 
the basis for grouping areas or whether it should prohibit grouping 
entirely. If grouping were prohibited entirely, waived areas would be 
limited to individually qualifying jurisdictions with corresponding 
data (for example, counties and their equivalents, cities, and towns). 
The Department requests comments on the potential impacts of either 
policy. The Department believes that only allowing the use of Federally 
designated LMAs will limit the combination of areas that are not 
contiguous and economically integrated. The Department is interested in 
feedback on whether the LMA definition will target waivers to 
jurisdictions with a demonstrable lack of sufficient jobs without 
including jurisdictions that do not lack sufficient jobs.

Duration of Waiver Approvals and Timeliness of Data

    The proposed approach would limit the duration of waiver approvals. 
Under the current regulations, the Department typically approves 
waivers for one year. However, the current regulations allow the 
Department to approve shorter or longer waivers in certain 
circumstances. The Department proposes limiting a waiver's duration to 
one year, but continuing to allow a waiver for a shorter period at a 
State's request. The Department believes that a one year waiver term 
allows sufficient predictability for States to plan and implement the 
waiver; at the same time, a one-year waiver term ensures that the 
waiver request reflects current economic conditions.
    The proposed rule would also prioritize recent data by preventing 
States from requesting to implement waivers late in the Federal fiscal 
year, which broadens the available data reference period. Through 
operational experience, the Department has observed that several States 
that have historically requested 12-month waivers on a fiscal year 
basis (i.e., October 1 of one year through September 30 of the 
following year), have shifted their waiver request and implementation 
dates to later in the fiscal year (e.g., September 1 through August 
31). The States that have made this shift have supported their waivers 
based on the 20 percent standard. In the current regulations, the 24-
month data reference period for this waiver is tied to the fiscal year 
and only updates each year on October 1. The Department has noticed 
that as the unemployment rates have improved, States that shift the 
waiver operational period to later in the fiscal year have been able to 
capitalize on older data and qualify for waivers of the ABAWD time 
limit for additional time. States are able to take advantage of this 
loophole if their unemployment rates for the requested areas have been 
improving relative to the national average. As a result, these States 
are able to obtain a waiver and maximize the areas waived into the next 
fiscal year, using data that is no longer appropriate as of the October 
1 update.
    To curtail this practice, the Department proposes that waivers 
based on the 20 percent standard would not be approved beyond the 
fiscal year in which the waiver is implemented. In addition, these 
waivers must utilize data from a 24-month period no less recent than 
that DOL used in its current fiscal year LSA designation. Such an 
approach ensures waivers rely on sufficiently recent data for the 
current fiscal year and prevents States from using older data, which 
may not accurately reflect current economic conditions.
    This provision would streamline the implementation of the program 
and would be codified in 7 CFR 273.24(f)(6).

Areas With Limited Data or Evidence

    Current practices provide flexibility to State agencies to rely on 
alternative data sources regardless of whether the area has 
corresponding BLS unemployment data available. Currently, the 
Department may approve requests supported by an estimated unemployment 
rate of an area based on available data from BLS and Census Bureau's 
American Community Survey (ACS), a low and declining employment-to-
population ratio, a lack of jobs as a consequence of declining 
occupations or industries, or an academic study or other publication 
describing the area's lack of a sufficient number of jobs. At times, 
State agencies will use these alternative data sources to justify a 
waiver request even when the corresponding BLS data shows that the 
unemployment rate in the area is relatively low. As stated previously, 
the Department believes that waivers of the ABAWD time limit should be 
limited to only circumstances in which the area clearly does not have a 
sufficient number of jobs to provide employment for the individuals. By 
not restricting the use of these alternative to areas with limited data 
or evidence, the Department has permitted States to take advantage of 
these alternative data sources, when BLS employment data is readily 
available.
    Under the proposed rule, all of these criteria would only be 
applicable to areas for which BLS or a BLS-cooperating agency data is 
limited or unavailable, such as a reservation area or U.S. Territory. 
In these areas, the Department could approve requests supported by an 
estimated unemployment rate of an area based on available data from BLS 
and ACS, a low and declining employment-to-population ratio, a lack of 
jobs as a consequence of declining occupations or industries, or an 
academic study or other publication describing the area's lack of a 
sufficient number of jobs. Waiver requests for an area for which 
standard data from BLS or a BLS-

[[Page 987]]

cooperating agency is limited or unavailable would not be required to 
conform to the criteria for approval proposed under paragraphs (f)(2), 
(f)(3), (f)(4), (f)(5), and (f)(6). Additionally, the Department would 
consider other data in line with BLS methods or considered reliable. 
This allows for flexibility if new methods or data are developed for 
Indian Reservation or U.S. Territory regions currently with limited or 
no data.
    Using an estimated unemployment rate based on available data from 
BLS and ACS is part of current practice. The Department proposes 
codifying this criteria in the regulations only for areas with limited 
data or evidence, such as a reservation area or U.S. Territory. 
Currently, States often estimate unemployment rates for reservation 
areas by applying data from ACS to available BLS data. In addition, 
some tribal governments generate their own labor force and/or 
unemployment data, which would remain acceptable to support a waiver.
    These changes would be codified in 7 CFR 273.24(f)(7).

Other Changes to Waivers

    The proposed rule would eliminate three provisions in current 
regulations: The designation as an LSA as a criterion for approval; the 
implementation of waivers before approval; and the historical seasonal 
unemployment as a criterion for approval. These provisions are 
eliminated to ensure that the ABAWD work requirement is applied in 
accordance with the Department's goal to strengthen work requirements.
    The proposed rule would no longer allow an area to qualify for a 
waiver based on DOL's Employment and Training Administration (ETA) 
designation of the area as an LSA for the current fiscal year. This 
change is central to the Department's efforts to raise the standards by 
which it determines whether an area is lacking a sufficient number of 
jobs to provide employment for ABAWDs in order to require more ABAWDs 
to engage in work, work training, or workfare if they wish to receive 
SNAP. As explained in a previous section, DOL's criteria for LSAs 
require an average unemployment rate that is at least 20 percent above 
the national average and at least 6 percent for the preceding two 
calendar years (a 24-month period). The Department is eliminating LSA 
designation as a basis for waiver approval because LSAs are determined 
using a minimum unemployment rate floor of 6 percent, whereas the 
Department proposes using a minimum unemployment rate of 7 percent for 
its similar, but more flexible, 20 percent standard. Continuing to 
allow LSA designation as a basis for waiver approval would be 
inconsistent. Moreover, LSAs are not designated for all different types 
of areas across the country, and having an LSA criteria separate from 
the 20 percent criteria could be seen as unnecessary moving forward.
    The proposed rule would bar States from implementing a waiver prior 
to its approval. Though rarely used, current regulations allow a State 
to implement an ABAWD waiver as soon as the State submits the waiver 
request based on certain criteria.\3\ By removing the current pertinent 
text in 273.24(f)(4), the proposed rule would require States to request 
and receive approval before implementing a waiver. This would allow the 
Department to have a more accurate understanding of the status of 
existing waivers and would provide better oversight in the waiver 
process. It would also prevent waivers from being implemented until the 
Department explicitly reviewed and approved the waiver.
---------------------------------------------------------------------------

    \3\ Under current regulations, the State must certify that data 
from the BLS or the BLS-cooperating agency show a most recent 12-
month average unemployment rate over 10 percent or that ETA 
designated the area as an LSA for the current fiscal year.
---------------------------------------------------------------------------

    The proposed rule would also remove the criterion of a historical 
seasonal unemployment rate over 10 percent as a basis for approval. 
Historical seasonal unemployment does not demonstrate a prolonged lack 
of sufficient number of jobs to provide employment for the individuals. 
Historical seasonal unemployment rates, by definition, are limited to a 
relatively short period of time each year. Nor does a historical 
seasonal unemployment rate indicate early signs of a declining labor 
market. Historical seasonal unemployment rates are cyclical rather than 
indicative of declining conditions. Based on operational experience, 
the Department has not typically seen the use of this criterion by 
States. The Department has not approved a waiver under this criterion 
in more than two decades. For these reasons, the Department proposes 
removing a historical seasonal average unemployment rate as a way to 
qualify for a waiver.
    In addition, as stated previously, the proposed rule would no 
longer provide for statewide waivers except for those waivers approved 
based upon a state's qualification for extended unemployment benefits.

Ending the ``Carryover'' of ABAWD Exemptions

    The proposed rule would end the unlimited carryover and 
accumulation of ABAWD percentage exemptions, previously referred to as 
15 percent exemptions before the enactment of the Agriculture 
Improvement Act of 2018. Upon enactment, Section 6(o)(6) of the Act 
provides that each State agency be allotted exemptions equal to an 
estimated 12 percent of ``covered individuals,'' which are the ABAWDs 
who are subject to the ABAWD time limit in the State in Fiscal Year 
2020 and each subsequent Fiscal Year. States can use these exemptions 
available to them to extend SNAP eligibility for a limited number of 
ABAWDs subject to the time limit. When one of these exemptions is 
provided to an ABAWD, that one ABAWD is able to receive one additional 
month of SNAP benefits. The Act and current regulations give States 
discretion whether to use these exemptions, and, as a result, some 
States use the exemptions that are available to them and others do not.
    Each fiscal year, the Act requires the Department to estimate the 
number of exemptions that each State be allotted and to adjust the 
number of exemptions available to each State. Based on the Act's 
instructions, the regulations provide the specific formulas that the 
Department must use to estimate the number of exemptions, which are 
referred to as ``earned'' exemptions, and to adjust the exemptions 
available to the State each year. The proposed rule would not change 
any part of the calculation that the Department follows to estimate 
earned exemptions, or any other part of 273.24(g). The proposed rule 
would only change the calculation that the Department uses to adjust 
the number of exemptions available for each fiscal year at 7 CFR 
273.24(h).
    The regulation's current interpretation of Section 6(o)(6)(G) of 
the Act, which requires the adjustment of exemptions, causes unused 
exemptions to carry over and accumulate from one year to the next, 
unless the State uses all of its available exemptions in a given year. 
For FY 2018, States earned approximately 1.2 million exemptions, but 
had about an additional 7.4 million exemptions available for use due to 
the carryover of unused exemptions from previous fiscal years. The 
Department views the carryover of significant amounts of unused 
exemptions to be an unintended outcome of the current regulations. The 
Department is concerned that such an outcome is inconsistent with 
Congressional intent to limit the number of exemptions

[[Page 988]]

available to States each year. Concerns about the carryover of 
exemptions were also expressed by the September 2016, USDA Office of 
the Inspector General (OIG) audit report ``FNS Controls Over SNAP 
Benefits for Able-Bodied Adults Without Dependents.'' Therefore, the 
Department proposes revising 7 CFR 273.24(h) to end the unlimited 
carryover of unused percentage exemptions. The Department proposes this 
change to implement the Act more effectively and to advance further the 
Department's goal to promote self-sufficiency.
    In order to address the carryover issue, the proposed rule would 
change the adjustment calculation that the Department uses to increase 
or decrease the number of exemptions available to each State for the 
fiscal year based on usage during the preceding fiscal year. The 
proposed rule would no longer allow for unlimited carryover from all 
preceding years. Instead, each State agency's adjustment would be based 
on the number of exemptions earned in the preceding fiscal year minus 
the number of exemptions used in the preceding fiscal year. The 
resulting difference would be used to adjust (by increasing or 
decreasing) the earned exemption amount. In addition, the adjustment 
will apply only to the fiscal year in which the adjustment is made.
    The three examples below show how the proposed rule's adjustment 
calculation would work in practice based on no exemption use, varied 
exemption use, and exemption overuse. These examples assume that a 
State earns five new exemptions every year over a 4-year period.
Example 1, No Exemption Use
    Example 1 shows how the proposed adjustment calculation would work 
for a State that uses zero exemptions, and how it would end the 
carryover and accumulation of unused exemptions. The State earned five 
exemptions for the current fiscal year (FY) of 2021 in this example 
(row A). The State's adjustment for FY 2021 is based on the number of 
exemptions earned in the previous year (FY 2020) minus the number of 
exemptions used for the previous year (FY 2020). In this example, we 
assume the State earned five exemptions in FY 2020 and used no 
exemptions in FY 2020, so the adjustment for FY 2021 is five (row B). 
The adjustment of five (row B) is then added to the five earned for FY 
2021 (row A) to obtain the State's total of 10 exemptions after 
adjustment for FY 2021 (row C). In FY 2021, the State uses zero 
exemptions (row D), so it does not have any overuse liability for that 
year because row E results in a positive number. In FY 2022, FY 2023, 
and FY 2024, the calculation is the same and results are the same each 
year. The number of exemptions available to the State is increased 
based on the number earned for and used in the preceding fiscal year, 
but the State does not carryover accumulated exemptions indefinitely. 
Whereas the State would have 25 total exemptions after adjustment for 
FY 2024 under the current regulations, the State would have 10 total 
exemptions after adjustment for FY 2024 under the proposed regulation.

                                                    Example 1
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Earned for                     5               5               5               5
                                 current FY.
B.............................  (+) Adjustment                 5               5               5               5
                                 for current FY
                                 (earned minus
                                 used for
                                 previous FY).
C.............................  (=) Total after               10              10              10              10
                                 adjustment for
                                 current FY.
D.............................  (-) Used in                    0               0               0               0
                                 current FY.
E.............................  (=) Liability            10 (No)         10 (No)         10 (No)         10 (No)
                                 for overuse?
                                 (Yes or No).
----------------------------------------------------------------------------------------------------------------

Example 2, Varied Exemption Use
    Example 2 shows how the proposed adjustment calculation would work 
for a State that uses different amounts of exemptions each fiscal year 
and therefore receives an increase or decrease in the exemptions 
available to it each subsequent fiscal year. In other words, the number 
of exemptions available to the State is adjusted for an increased total 
exemptions one year, then a decreased total exemptions the next. The 
State earned five exemptions for the current FY of 2021 (row A). The 
State's adjustment for FY 2021 is based on the number of exemptions 
earned in the previous year (FY 2020) minus the number of exemptions 
used for the previous year (FY 2020). We assume the State earned five 
exemptions in FY 2020 but used zero exemptions in FY 2020, so the 
State's total after adjustment for FY 2021 is 10 (row C). In FY 2021, 
the State uses eight exemptions (row D), so it does not have any over-
usage liability for that year (row E). That is, though the State only 
earned 5 exemptions for FY 2021, the adjustment allowed the State to 
avoid any over usage liability for FY 2021. However, for the purposes 
of adjustment in FY 2022, the 8 used exemptions are subtracted from the 
5 earned exemptions for FY 2021, not from the 10 adjusted exemption 
amount available in FY 2021. Therefore, the adjustment amount for FY 
2022 is negative three. In FY 2022, the State again earns five 
exemptions but the adjustment is negative three (the result of 
subtracting row D, FY 2021 from row A, FY 2022). The State then has a 
total of two exemptions for FY 2022. The State chooses to use two 
exemptions for FY 2022, therefore it has no overuse in FY 2022. This 
example shows how the proposed regulation increases or decreases the 
number of exemptions available to States while also limiting the 
average number of exemptions in effect to 12 percent over time. As 
shown in row D, the State can use no more than 10 exemptions over the 
course of any 2-year period, which is equal to the 10 exemptions earned 
over every 2-year period.

                                                    Example 2
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Earned for                     5               5               5               5
                                 current FY.
B.............................  (+) Adjustment                 5              -3               3              -3
                                 for current FY
                                 (earned minus
                                 used for
                                 previous FY).
C.............................  (=) Total after               10               2               8               2
                                 adjustment for
                                 current FY.
D.............................  (-) Used in                    8               2               8               2
                                 current FY.

[[Page 989]]

 
E.............................  (=) Liability             2 (No)          0 (No)          0 (No)          0 (No)
                                 for overuse?
                                 (Yes or No).
----------------------------------------------------------------------------------------------------------------

Example 3, Exemption Overuse
    Example 3 shows how the proposed adjustment calculation would work 
for a State that overuses exemptions. In this example, we again assume 
the State earned five exemptions in FY 2020 but used zero exemptions in 
FY 2020, so the State's total after adjustment for FY 2021 is 10 (row 
C). In FY 2021, the State uses six exemptions (row D); once again, it 
does not have any over-usage liability for that year (row E), but the 
adjustment for FY 2022 will be negative one (the result of subtracting 
row D, FY 2021 from row A, FY 2022). Put differently, the five 
exemptions earned for FY 2022 offset the adjustment of negative one. 
The State then has a total of four exemptions for FY 2022 (row C). 
However, the State uses six exemptions in FY 2022. Because the State 
used more exemptions in FY 2022 than its total after adjustment for FY 
2022, it has an overuse liability of two for FY 2022. The Department 
would consider the exemption overuse an overissuance and would hold the 
State liable for the total dollar value of the exemptions, as estimated 
by the Department.

                                                    Example 3
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Earned for                     5               5               5               5
                                 current FY.
B.............................  (+) Adjustment                 5              -1              -1               1
                                 for current FY
                                 (earned minus
                                 used for
                                 previous FY).
C.............................  (=) Total after               10               4               4               6
                                 adjustment for
                                 current FY.
D.............................  (-) Used for                   6               6               4               4
                                 current FY.
E.............................  (=) Liability             4 (No)        -2 (Yes)          0 (No)          2 (No)
                                 for overuse?
                                 (Yes or No).
----------------------------------------------------------------------------------------------------------------

    Under the proposed rule, the Department would continue to provide 
States with its estimated number of exemptions earned for each upcoming 
fiscal year as data becomes available, typically in September. The 
Department would also continue to provide States with the exemption 
adjustments as soon as updated caseload data is available and states 
have provided final data on the number of exemptions used in the 
preceding fiscal year, typically in January.
    The Department also seeks comments from States on how to treat 
State agencies' existing total number of percentage exemptions, which 
in some cases have carried over and accumulated over many years, and on 
when the proposed change should be implemented. Under the proposed 
rule, these accumulated percentage exemptions would not be available to 
States once the change is implemented. Additionally, because the 
adjusted number of exemptions is based on the preceding fiscal year, 
the change in regulatory text will impact State's ability to use 
exemptions in the fiscal year preceding the fiscal year that the 
provision goes into effect. Therefore, the Department seeks comment on 
how to best handle these issues.
    The proposed rule would not change or affect the ``caseload 
adjustments'' at 273.24(h)(1), which apply to any State that has a 
change of over 10 percent in its caseload amount. However, the 
Department is taking this opportunity to correct the cross-reference 
that this paragraph makes to 273.24(g)(2) for accuracy. The proposed 
regulation cross-references 273.24(g)(3), instead of (g)(2). The 
Department is making this change because it is more accurate and 
precise to cross-reference to 273.24(g)(3), given that the caseload 
adjustments apply to the number of exemptions estimated as earned for 
each State for each fiscal year.

Procedural Matters

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

Regulatory Impact Analysis

    As required for rules that have been designated as economically 
significant by the Office of Management and Budget, a Regulatory Impact 
Analysis (RIA) was developed for this proposed rule. It follows this 
rule as an Appendix. The following summarizes the conclusions of the 
regulatory impact analysis:
    The Department has estimated the net reduction in federal spending 
associated with the proposed transfer rule to be approximately $1.1 
billion in fiscal year (FY) 2020 and $7.9 billion over the five years 
2020-2024. This is a reduction in federal transfers (SNAP benefit 
payments); the reduction in transfers represents a 2.5 percent decrease 
in projected SNAP benefit spending over this time period.
    Under current authority, the Department estimates that about 60 
percent of ABAWDs live in areas that are not subject to a waiver and 
thus face the ABAWD time limit. Under the revised waiver criteria the 
Department estimates that nearly 90 percent of ABAWDs would live in 
such an area. Of those newly subject to the time limit, the Department 
estimates that approximately two-thirds (755,000 individuals in FY 
2020) would not meet the requirements for failure to engage 
meaningfully in work or work training.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies 
to analyze the impact of rulemaking on small entities and consider 
alternatives that would minimize any significant impacts on a 
substantial number of small entities. Pursuant to that review,

[[Page 990]]

it has been certified that this rule would not have a significant 
impact on a substantial number of small entities.
    This proposed rule would not have an impact on small entities 
because the proposed rule primarily impacts State agencies. As part of 
the requirements, State agencies would have to update their procedures 
to incorporate the new criteria for approval associated with requesting 
waivers of ABAWD time limit. Small entities, such as smaller retailers, 
would not be subject to any new requirements. However, all retailers 
would likely see a drop in the amount of SNAP benefits redeemed at 
stores if these provisions were finalized, but impacts on small 
retailers are not expected to be disproportionate to impact on large 
entities. As of FY 2017, approximately 76 percent of authorized SNAP 
retailers (nearly 200,000 retailers) were small groceries, convenience 
stores, combination grocery stores, and specialty stores, store types 
that are likely to fall under the Small Business Administration gross 
sales threshold to qualify as a small business for Federal Government 
programs. While these stores make up the majority of authorized 
retailers, collectively they redeem less than 15 percent of all SNAP 
benefits. The proposed rule is expected to reduce SNAP benefit payments 
by about $1.7 billion per year. This would equate to about a $100 loss 
of revenue per small store on average per month ($1.7 billion x 15%/
200,000 stores/12 months). In 2017, the average small store redeemed 
more than $3,800 in SNAP each month; the potential loss of benefits 
represents less than 3 percent of their SNAP redemptions and only a 
small portion of their gross sales. Based on 2017 redemption data, a 
2.7 percent reduction in SNAP redemptions represented between 0.01 and 
0.5 percent of these stores gross sales.

Executive Order 13771

    Executive Order 13771 directs agencies to reduce regulation and 
control regulatory costs and provides that the cost of planned 
regulations be prudently managed and controlled through a budgeting 
process.
    This proposed rule is expected to be an Executive Order 13771 
deregulatory action. The rule does not include any new costs. FNS is 
proposing a reduction in burden hours since State agencies are no 
longer able to group areas together for waiver approval. The reduction 
would result in an estimated collective savings of $12,092 for State 
Agencies.

Unfunded Mandates Reform Act

    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 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 most cost effective or least burdensome alternative that achieves 
the objectives of the rule.
    This proposed rule does not contain 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. Thus, the rule is 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 codified in 7 
CFR part 3015, subpart V and related Notice (48 FR 29115), this Program 
is excluded from the scope of Executive Order 12372, which requires 
intergovernmental consultation with State and local officials.

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have Federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the 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 Department has determined that this rule does not have 
Federalism implications. Therefore, under Section 6(b) of the Executive 
Order, a Federalism summary impact statement is not required.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not 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 and timely implementation. This rule is not intended to have 
retroactive effect unless so specified in the Effective Dates section 
of the final rule. Prior to any judicial challenge to the provisions of 
the final rule, all applicable administrative procedures must be 
exhausted.

Civil Rights Impact Analysis

    FNS has reviewed the proposed rule, in accordance with the 
Department Regulation 4300-4, ``Civil Rights Impact Analysis'' to 
identify and address any major civil rights impacts the proposed rule 
might have on minorities, women, and persons with disabilities. While 
we believe that a reduction in the number of ABAWD waivers granted to 
State agencies will adversely affect potential program participants in 
all groups who are unable to meet the employment requirements, and have 
the potential for disparately impacting certain protected groups due to 
factors affecting rates of employment of members of these groups, we 
find that the implementation of mitigation strategies and monitoring by 
the Civil Rights Division of FNS will lessen these impacts.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' 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.
    The USDA's Office of Tribal Relations (OTR) has assessed the impact 
of this rule on Indian tribes and determined that this rule has tribal 
implications that require tribal consultation under E.O. 13175. FNS 
invited Tribal leaders to a consultation held on March 14, 2018. Tribal 
leaders did not provide any statement or feedback to the Department on 
the rule. FNS and OTR will determine if a future consultation is 
needed. If a Tribe requests consultation, FNS will work with the Office 
of Tribal Relations to ensure meaningful consultation is provided where 
changes, additions, and modifications identified herein are not 
expressly mandated by Congress.

[[Page 991]]

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR 
1320) requires the Office of Management and Budget (OMB) approve all 
collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number. 
In accordance with the Paperwork Reduction Act of 1995, this proposed 
rule will contain information collections that are subject to review 
and approval by the Office of Management and Budget; therefore, FNS is 
submitting for public comment the changes in the information collection 
burden that would result from adoption of the proposals in the rule.
    Comments on this proposed rule must be received by April 2, 2019. 
Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.
    Title: Supplemental Nutrition Assistance Program Waivers of Section 
6(o) of the Food and Nutrition Act.
    OMB Number: 0584-0479.
    Expiration Date: [July 31, 2021].
    Type of Request: Revision of a currently approved collection.
    Abstract: Section 6(o) of the Food and Nutrition Act of 2008, (the 
Act, as amended through Pub. L. 113-xxx), limits the amount of time an 
able-bodied adult without dependents (ABAWD) can receive Supplemental 
Nutrition Assistance Program (SNAP) benefits to 3 months in a 36-month 
period, unless the individual is working and/or participating in a work 
program half-time or more, or participating in workfare. The Act 
exempts individuals from the time limit for several reasons, including 
age, unfitness for work, or having a dependent child. The ABAWD time 
limit and work requirement currently apply to people ages 18 through 
49, unless they are already exempt from the general work requirements, 
medically certified as physically or mentally unfit for employment, 
responsible for a child under 18, or pregnant. ABAWDs are also work 
registrants and must meet the general work requirements. In addition, 
ABAWDs subject to the time limit must work and/or participate in a work 
program 80 hours per month or more, or participate in and comply with 
workfare to receive SNAP for more than 3 months in a 36-month period. 
Participation in SNAP E&T, which is a type of work program, is one way 
a person can meet the 80 hour per month ABAWD work requirement, but 
other work programs are acceptable as well.
    The Act also provides State agencies with flexibility to request a 
waiver of this time limit if unemployment is high or the area does not 
have a sufficient number of jobs to provide employment. State agencies 
can request to waive the ABAWD time limit if an area has an 
unemployment rate of over 10 percent or the State can meet one of the 
regulatory options to show it does not have a sufficient number of jobs 
to provide employment. If the time limit is waived, individuals are not 
required to meet the ABAWD work requirement to receive SNAP for more 
than 3 months in a 36-month period. This collection of information is 
necessary for FNS to perform its statutory obligation to review waivers 
of the SNAP ABAWD time limit.
    This is a revision of a currently approved information collection 
request associated with this rulemaking. In the previous submission, 
the Food and Nutrition Service (FNS) estimated 35 hours for each waiver 
request for a total of 1,198 hours. Based on the experience of FNS 
during calendar year 2018, FNS projects that 36 out of 53 State 
agencies would submit requests for a waiver of the time limit for ABAWD 
recipients based on a high unemployment rate or lack of sufficient 
number of jobs. FNS estimates a response time of 28 hours for each 
waiver request based on labor market data, which require detailed 
analysis of labor markets within the State. FNS projects a total of 
1,008 hours, which would be a reduction of 190 hours compared to the 
1,198 hours estimated provided in the pending approval.
    FNS is proposing a reduction in burden hours since State agencies 
are no longer able to group areas together for waiver approval. The 
reduction will burden hours would result in an estimated collective 
savings of $12,092 for State Agencies. This rule does not require any 
recordkeeping burden. Reporting detail burden details are provided 
below.
    Respondents: State agencies.
    Estimated Number of Respondents: 36.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 1,008.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Estimated       Response        Total                     Annual      Previous     Differences     Differences
              OMB No. 0584-0479                Requirement (7 CFR 273.24(f)      number of     annually per      annual     Hours per      burden     submission  due to program      due to
                                                                                respondents     respondent     responses     response      hours     total hours      changes       adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Affected Public: State Agencies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting burden............................  Submissions of waiver request               36               1           36           28        1,008        1,190            -182               0
                                               based on labor market data.
                                              7 CFR 273.24(f)--Submission of               0               0            0            0            0            8              -8               0
                                               waiver request based on Labor
                                               Surplus Area designation.
                                                                             -------------------------------------------------------------------------------------------------------------------
Reporting totals............................  ..............................              36  ..............  ...........  ...........        1,008  ...........            -190  ..............
                                                                             -------------------------------------------------------------------------------------------------------------------

[[Page 992]]

 
Total Reporting Burden due to Rulemaking....  ..............................  ..............  ..............  ...........  ...........        1,008  ...........  ..............  ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

E-Government Act Compliance

    The Department is committed to complying 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.

List of Subjects in 7 CFR Part 273

    Able-bodied adults without dependents, Administrative practice and 
procedures, Employment, Indian reservations, Time limit, U.S. 
territories, Waivers, Work requirements.

    Accordingly, FNS proposes to amend 7 CFR part 273 to read as 
follows:

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

0
1. The authority citation for part 273 continues to read as follows:

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

0
2. In Sec.  273.24, revise paragraph (f) to read as follows:


Sec.  273.24  Time Limit for able-bodied adults.

* * * * *
    (f) Waivers--(1) General. The State agency may request FNS approval 
to temporarily waive the time limit for a group of individuals in the 
State in the area in which the individuals reside. To be considered for 
approval, the request must be endorsed by the State's governor and 
supported with corresponding data or evidence demonstrating that the 
requested area:
    (i) Has an unemployment rate of over 10 percent; or
    (ii) Does not have a sufficient number of jobs to provide 
employment for the individuals.
    (2) Core standards. FNS will approve waiver requests under (1)(i) 
and (ii) that are supported by any one of the following:
    (i) Data from the Bureau of Labor Statistics (BLS) or a BLS-
cooperating agency that shows an area has a recent 12-month average 
unemployment rate over 10 percent;
    (ii) Data from the BLS or a BLS-cooperating agency that shows an 
area has a 24-month average unemployment rate 20 percent or more above 
the national rate for a recent 24-month period, but in no case may the 
24-month average unemployment rate of the requested area be less than 7 
percent. The 24-month period must be no earlier than the same 24-month 
period used by the Department of Labor's Employment and Training 
Administration to designate Labor Surplus Areas for the current fiscal 
year; or
    (iii) Evidence that an area qualifies for extended unemployment 
benefits as determined by the Department of Labor (DOL).
    (3) Other data and evidence. FNS may approve waiver requests that 
are supported by data or evidence other than that listed under 
paragraph (f)(2) of this section if the request demonstrates an 
exceptional circumstance in an area. In addition, the request must 
demonstrate that the exceptional circumstance has caused a lack of 
sufficient number of jobs, such as data from the BLS or a BLS-
cooperating agency that shows an area has a most recent three-month 
average unemployment rate over 10 percent. Supporting unemployment data 
provided by the State must rely on standard BLS data or methods.
    (4) Restriction on statewide waivers. FNS will not approve 
statewide waiver requests if data for the requesting State at the 
substate level is available from BLS, except for waivers under 
paragraph (f)(2)(iii) of this section.
    (5) Restricting the combining of data to group substate areas. The 
State agency may only combine data from individual areas that are 
collectively considered to be a Labor Market Area by DOL.
    (6) Duration of waiver approvals. In general, FNS will approve 
waivers for one year. FNS may approve waivers for a shorter period at 
the State agency's request and waivers under paragraph (f)(2)(ii) of 
this section will not be approved for a period beyond the fiscal year 
in which the waiver is implemented.
    (7) Areas with limited data or evidence. Waiver requests for an 
area for which standard BLS data or a BLS-cooperating agency data is 
limited or unavailable, such as a reservation area or U.S. Territory, 
are not required to conform to the criteria for approval under 
paragraphs (f)(2), (f)(3), (f)(4), (f)(5) and (f)(6) of this section. 
The supporting data or evidence provided by the State must correspond 
to the requested area.
    (i) FNS may approve waivers for these areas if the requests are 
supported by sufficient data or evidence, such as:
    (A) Estimated unemployment rate based on available data from BLS 
and Census Bureau's American Community Survey;
    (B) A low and declining employment-to-population ratio;
    (C) A lack of jobs in declining occupations or industries; or
    (D) An academic study or other publication describing the area as 
lacking a sufficient number of jobs to provide employment for its 
residents.
    (ii) In areas with limited data or evidence, such as reservation 
areas or U.S. Territories, FNS may allow the State agency to combine 
data from individual areas to waive a group of areas if the State 
agency demonstrates that the areas are economically integrated.
* * * * *
0
3. In Sec.  273.24, revise paragraph (h) to read as follows:
* * * * *
    (h) Adjustments. FNS will make adjustments as follows:
    (1) Caseload adjustments. FNS will adjust the number of exemptions 
estimated for a State agency under paragraph (g)(3) of this section 
during a fiscal year if the number of SNAP recipients in the State 
varies from the State's caseload by more than 10 percent, as estimated 
by FNS.
    (2) Exemption adjustments. During each fiscal year, FNS will 
increase or decrease the number of exemptions allocated to a State 
agency based on the difference between the number of exemptions used by 
the State for the preceding fiscal year and the number of exemptions 
estimated for the State for the preceding fiscal year under paragraphs 
(g)(3) and (h)(1) of this section. The increase or decrease will only 
apply for the fiscal year in which the adjustment is made. For example:
    (i) If the State agency uses fewer exemptions in the preceding 
fiscal year than were estimated for the State agency by FNS for the 
preceding fiscal year under paragraphs (g)(3) and (h)(1) of this 
section, FNS will increase the number of exemptions allocated to the 
State agency for the current fiscal year by the

[[Page 993]]

difference to determine the adjusted exemption amount.
    (ii) If the State agency uses more exemptions in the preceding 
fiscal year than were estimated for the State agency by FNS for the 
preceding fiscal year under paragraphs (g)(3) and (h)(1) of this 
section, FNS will decrease the number of exemptions allocated to the 
State agency for the current fiscal year by the difference to determine 
the adjusted exemption amount.
* * * * *

    Dated: December 20, 2018.
Brandon Lipps,
Acting Deputy Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2018-28059 Filed 1-31-19; 8:45 am]
 BILLING CODE 3410-30-P