[Federal Register Volume 84, Number 142 (Wednesday, July 24, 2019)]
[Proposed Rules]
[Pages 35570-35581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15670]


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 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. 142 / Wednesday, July 24, 2019 / 
Proposed Rules  

[[Page 35570]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 273

[FNS-2018-0037]
RIN 0584-AE62


Revision of Categorical Eligibility in the Supplemental Nutrition 
Assistance Program (SNAP)

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

ACTION: Proposed rule.

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SUMMARY: Section 5(a) of the Food and Nutrition Act of 2008, as 
amended, provides that households in which each member receives 
benefits under a State program funded under part A of Title IV of the 
Social Security Act (SSA) (also known as Temporary Assistance for Needy 
Families (TANF) block grants \1\) shall be categorically eligible for 
the Supplemental Nutrition Assistance Program (SNAP). Currently, SNAP 
regulations broadly interpret ``benefits'' to mean cash assistance and 
non-cash or in-kind benefits or services from any TANF-funded 
program.\2\ In operation, this has allowed categorical eligibility for 
SNAP to be conferred on households based on receipt of minimal benefits 
issued by TANF-funded programs which may not conduct a robust 
eligibility determination and do not meaningfully move families toward 
self-sufficiency. The Food and Nutrition Act has clear parameters 
regarding the income and resource limits that SNAP households must 
meet, and categorical eligibility is intended to apply only when the 
conferring program has properly determined eligibility. Extending 
categorical eligibility to participants who have not been screened for 
eligibility compromises program integrity and reduces public confidence 
that benefits are being provided to eligible households.
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    \1\ State programs funded under part A of Title IV of the SSA 
include programs funded by Federal TANF block grant funds, as well 
as programs not funded by Federal TANF block grants but funded by 
State maintenance-of-effort dollars that allow a State to receive 
Federal TANF block grant funds. For simplicity, this proposed rule 
will refer to all State programs funded under part A of Title IV of 
the SSA as ``TANF-funded programs,'' and to benefits from such 
programs as ``TANF benefits.''
    \2\ While some benefits that meet the TANF definition of 
``assistance'' at 45 CFR 260.31, such as transportation and 
childcare, would be considered ``non-cash benefits'' in this 
proposed rule, references to ``assistance'' and ``benefits'' in this 
proposed rule are for SNAP categorical eligibility purposes only. 
The terms are not intended to align with the TANF use of 
``assistance'' or ``benefits'' in 45 CFR 260.31.
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    Therefore, the Department proposes updating the regulations to 
refine categorical eligibility requirements based on receipt of TANF 
benefits. Specifically, the Department proposes: (1) To define 
``benefits'' for categorical eligibility to mean ongoing and 
substantial benefits; and (2) to limit the types of non-cash TANF 
benefits conferring categorical eligibility to those that focus on 
subsidized employment, work supports and childcare. The proposed rule 
would also require State agencies to inform FNS of all non-cash TANF 
benefits that confer categorical eligibility.
    The proposed revisions would create a clearer and more consistent 
nationwide policy that ensures categorical eligibility is extended only 
to households that have sufficiently demonstrated eligibility by 
qualifying for ongoing and substantial benefits from TANF-funded 
programs designed to assist households and move them towards self-
sufficiency.
    In addition, the revisions would help ensure that receipt of 
nominal, one-time benefits or services do not confer categorical 
eligibility and would address program integrity issues that have 
surfaced since the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 changed the programs whose benefits confer 
categorical eligibility. The Department believes these revisions will 
maintain categorical eligibility's dual purpose of streamlining program 
administration while ensuring that SNAP benefits are targeted to the 
appropriate households.

DATES: Written comments must be received on or before September 23, 
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:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Send comments to Program Design Branch, Program 
Development Division, Food and Nutrition Service, USDA, 3101 Park 
Center Dr., Alexandria, VA 22302. Email: Send comments to 
[email protected]. Include Docket ID Number [FNS-2018-0037], 
``Revision of Categorical Eligibility in the Supplemental Nutrition 
Assistance'' in the subject line of the message.
     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: Program Design Branch, Program 
Development Division, Food and Nutrition Service, USDA, 3101 Park 
Center Dr., Alexandria, VA 22302. [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    The Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) outlines 
specific income and resource eligibility standards for SNAP. Generally, 
the statute requires that SNAP households who do not have elderly or 
disabled members must have a monthly gross income equal to or lower 
than 130% of the Federal Poverty Level (FPL) and a net income equal to 
or lower than 100% of the FPL in order to be eligible for SNAP.\3\ The 
statute also requires that SNAP households meet specific resource 
limits: One for households with elderly or disabled members, and one 
for all other households.
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    \3\ Households with an elderly or disabled member need only meet 
the net income test. All eligible one- and two-person households are 
guaranteed a minimum benefit.
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    Section 5(a) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2014(a)) provides categorical eligibility for households in which all 
members receive TANF

[[Page 35571]]

benefits.\4\ Categorical eligibility simplifies the SNAP application 
process for both SNAP State agencies and households by reducing the 
amount of information that must be verified if a household already 
qualifies and has been determined eligible to receive benefits from 
another assistance program.
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    \4\ Section 5(a) also provides categorical eligibility for SNAP 
based on receipt of Supplemental Security Income (SSI) and General 
Assistance (GA). SSI and GA benefits are not affected by this 
proposed rule.
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    Categorical eligibility has changed significantly over time because 
of changes in the Social Security Act (SSA) (42 U.S.C. 601). Section 
5(a) of the Food and Nutrition Act dates back to the Food Security Act 
of 1985 (Pub. L. 99-198), which made households in which all members 
receive Aid to Families with Dependent Children (AFDC) or Supplemental 
Security Income (SSI) benefits categorically eligible for SNAP. AFDC 
was an entitlement program intended to support needy families by 
providing cash welfare payments to households who met certain State 
eligibility requirements. While each State designed its own eligibility 
criteria and benefit levels, these requirements were governed by 
Federal limitations; States received matching Federal funds for the 
cash payments to eligible households.5 6 Therefore, 
categorical eligibility as outlined in the Food and Nutrition Act was 
contemplated when State AFDC programs conferring categorical 
eligibility had specific income eligibility and resource \7\ criteria 
that were targeted toward low-income households. While States had some 
flexibility, overarching Federal parameters for AFDC meant there was 
greater consistency across States and general alignment with the 
standards for SNAP.
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    \5\ https://aspe.hhs.gov/system/files/pdf/167036/1history.pdf,
    \6\ https://aspe.hhs.gov/aid-families-dependent-children-afdc-and-temporary-assistance-needy-families-tanf-overview-0.
    \7\ ``States determined eligibility thresholds and benefit 
amounts. However, Federal law established a gross income limit (185% 
of the state-determined need standard); an asset test (no more than 
$1,000 in countable assets); and rules for how states count 
different forms of income, including earnings.'' Gene Falk, The 
Temporary Assistance for Needy Families (TANF) Block Grant: A 
Legislative History, Congressional Research Service 11 (April 2, 
2019), https://fas.org/sgp/crs/misc/R44668.pdf.
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    The Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 (Pub. L. 104-193) (PRWORA) amended the SSA and replaced the 
cash AFDC program with the TANF block grant, providing a set amount of 
funding for States to design and implement TANF-funded programs. 
Section 401 of the SSA outlined four broad purposes for TANF block 
grants: (1) To provide assistance to needy families so that children 
can be cared for in their own homes; (2) to reduce the dependence of 
needy parents on government benefits by promoting job preparation, 
work, and marriage; (3) to prevent and reduce the incidence of out-of-
wedlock pregnancies; and (4) to encourage the formation and maintenance 
of two-parent families. The State Maintenance-of-Effort (MOE) 
requirement in Section 409(a)(7) of the SSA (42 U.S.C. 609(a)(7)) 
requires States to spend a certain amount of their own funds for 
qualified purposes under TANF to receive Federal TANF block grants. 
PRWORA allowed States to use Federal TANF and State MOE funds to 
provide cash and non-cash benefits to serve needy families under TANF 
purposes one and two, as well as potentially broader populations under 
TANF purposes three and four.
    Under PRWORA, States gained significant flexibility in TANF-funded 
program administration, resulting in a wide array of programs designed 
to further TANF's four purposes, including ones that may not have 
meaningful eligibility criteria.\8\ For example, States define 
``needy'' for TANF purposes one and two and may develop their own 
eligibility criteria absent any Federal requirement or standard of 
``need''. As a result, TANF-funded programs vary greatly from State to 
State,\9\ with some States focusing more on basic cash assistance for 
needy households and other States developing programs that are less 
likely to focus on low-income households, and may not have appropriate 
income or resource tests.
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    \8\ Congressional Research Service, ``The Temporary Assistance 
for Needy Families (TANF) Block Grant: A Primer on TANF Financing 
and Federal Requirements,'' updated December 14, 2017, https://crsreports.congress.gov/product/pdf/RL/RL32748, p.13; Congressional 
Research Service, ``The Temporary Assistance for Needy Families 
(TANF) Block Grant: Responses to Frequently Asked Questions'', 
updated June 3, 2019, https://crsreports.congress.gov/product/pdf/RL/RL32760.
    \9\ https://www.acf.hhs.gov/ofa/resource/tanf-and-moe-spending-and-transfers-by-activity-fy-2017-contains-national-state-pie-charts. In Fiscal Year 2017, 22.7 percent of combined TANF Federal 
and State MOE funds were used for basic assistance (e.g., cash); 
10.5 percent were used for work, education, and training activities; 
and 16.1 percent were used for child care. In Fiscal Year 2017, 27 
States used less than 50 percent of their TANF Federal and State MOE 
funds on a combination of basic assistance; work, education, and 
training activities; and child care.
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    Prior to PRWORA, categorical eligibility for SNAP was conferred by 
receipt of cash AFDC benefits, as non-cash AFDC benefits did not exist. 
While PRWORA did not modify the categorical eligibility provision in 
Section 5(a) of the Food and Nutrition Act, the Department recognized 
that the changes enacted by PRWORA and the move from AFDC to TANF meant 
that categorical eligibility could be conferred by both cash and non-
cash benefits. As a result, programs conferring categorical eligibility 
would change in scope and types of benefits offered and might not 
target families in need. The Department issued regulations (65 FR 70133 
(November 21, 2000)) that further defined and limited the conferring of 
non-cash categorical eligibility. Specifically, the Department 
determined that, to appropriately limit categorical eligibility to 
needy households, those TANF-funded programs serving purposes three and 
four must have income eligibility criteria at or below 200% of the FPL. 
As discussed in the preamble to the November 21, 2000 rule, this 
threshold was based on advice provided to the Department by the U.S. 
Department of Health and Human Services (HHS), the agency with 
oversight of the TANF block grant program. HHS analysis indicated that 
most services with income eligibility criteria had income limits set at 
200% FPL or lower.
    However, after the change from AFDC to TANF, under current 
regulations, States have significant flexibility to determine what 
types of non-cash TANF-funded services and benefits can confer 
categorical eligibility for SNAP and what the eligibility criteria for 
those benefits should be. As of March 2019, 43 States have used this 
flexibility to expand categorical eligibility to households that 
receive non-cash TANF benefits, resulting in significant variation 
across States in the SNAP eligibility determination process, and in 
program rules and operations.\10\ When using non-cash TANF benefits as 
the basis of categorical eligibility decisions, many States use income 
thresholds and resource limits that are higher than the Federal 
standards for SNAP. Due to the current broad flexibility afforded 
States in the construction of TANF-funded programs, these households, 
who would not otherwise have qualified for SNAP due to their income or 
resources, are considered categorically eligible and therefore able to 
receive SNAP. As a result of these policies, it is estimated that 4.1% 
of currently participating SNAP households (767,000 households or 1.4 
million individuals) have resources above the SNAP limit and 4.9% have 
incomes above the Federal SNAP gross income limit of 130% FPL

[[Page 35572]]

(914,000 households or 1.7 million individuals).
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    \10\ https://fns-prod.azureedge.net/sites/default/files/snap/BBCE.pdf.
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Current Issues With Categorical Eligibility

    While categorical eligibility based on the receipt of non-cash TANF 
benefits reduces administrative burden for State agencies and 
households, and particularly benefits working households, the current 
regulation on categorical eligibility has created several issues. The 
current broad interpretation of ``benefits,'' which includes any non-
cash or in-kind benefits or services, and the significant variation 
across State TANF-funded programs permits nominal non-cash benefits or 
services, such as TANF-funded brochures or hotline numbers, to confer 
categorical eligibility for SNAP.11 12
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    \11\ USDA Office of Inspector General, ``FNS Quality Control 
Process for SNAP Error Rate
     Audit Report 27601-0002-41,'' https://www.usda.gov/oig/webdocs/27601-0002-41.pdf.
    \12\ Examples of nominal benefits are brochures provided to 
clients that explain referrals to social services, pregnancy 
prevention, or the 2-1-1 hotline. Additionally, States may simply 
provide information about these services or a phone number to 
contact for more information on the application for multiple benefit 
programs.
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    Federal auditors have raised program integrity concerns about the 
wide adoption of categorical eligibility policies and the prevalence of 
TANF benefits with minimal value. A 2012 General Accountability Office 
(GAO) audit found that the expansion of categorical eligibility beyond 
pure cash programs resulted in States conferring categorical 
eligibility to households in some cases without actually providing the 
TANF-funded benefit or service necessary to confer the categorical 
eligibility determination for SNAP.\13\ In some cases households may 
not receive the TANF-funded benefit until after their SNAP eligibility 
determination, may only receive the benefit upon request, or may not 
receive it at all, which weakens the intended linkage between the two 
programs. For example, a USDA Office of Inspector General (OIG) audit 
found that households who were determined categorically eligible based 
on the receipt of a family planning brochure did not actually receive 
the brochure unless they specifically requested it from the State.\14\
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    \13\ https://www.gao.gov/assets/600/593070.pdf The GAO estimated 
that in fiscal year 2010, 2.6 percent (473,000) of households that 
received Supplemental Nutrition Assistance Program (SNAP) benefits 
would not have been eligible for the program without expanded 
categorical eligibility because their incomes were over the Federal 
SNAP eligibility limits (95% confidence interval of 2.4-2.8%).
    \14\ USDA Office of Inspector General, ``FNS Quality Control 
Process for SNAP Error Rate Audit Report 27601-0002-41,'' https://www.usda.gov/oig/webdocs/27601-0002-41.pdf.
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    Further, because of the flexibility afforded States in the design 
and operation of TANF-funded programs, it is also possible that 
households who may not have undergone a meaningful TANF financial 
eligibility determination through the TANF-funded program become 
categorically eligible for SNAP. Policies in 41 States indicate that 
they have an income limit of 200% or less for their expanded 
categorical eligibility program, however, they also indicate that ``all 
households are eligible'' for the expanded categorical eligibility 
benefit.\15\ For example, four States utilize TANF funds to print their 
multi-benefit applications for SNAP, TANF, and other programs and 
include information and referrals to other services on those 
applications. The applications are provided to anyone who requests one, 
regardless of their gross income, and confer expanded categorical 
eligibility at the time the household receives the application. 
Conferring categorical eligibility in such cases compromises the 
integrity of SNAP by allowing households that did not undergo a 
financial eligibility determination before receiving TANF-funded 
benefits, to then be deemed categorically eligible to receive SNAP.
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    \15\ https://fns-prod.azureedge.net/sites/default/files/snap/BBCE.pdf.
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    In 2016, FNS issued subsequent guidance \16\ to State agencies 
following these audits regarding the proper procedures under which 
categorical eligibility may be conferred. The Department has 
determined, however, that due to the nominal nature of many benefits 
offered under current expanded categorical eligibility programs, 
further rulemaking is required in order to narrow the scope of 
potential TANF benefits conferring categorical eligibility, to ensure 
that applicant eligibility is properly assessed. Therefore, the 
Department wishes to further strengthen the requirements through this 
rulemaking to ensure that TANF-funded programs conferring categorical 
eligibility align more closely with SNAP eligibility standards outlined 
in the Food and Nutrition Act. The Department has an obligation to 
expend taxpayer funds in a fiscally responsible manner and in alignment 
with the intent of the Food and Nutrition Act to alleviate hunger among 
low-income households. Prior rulemaking regarding categorical 
eligibility was intended to use the streamlined approach of categorical 
eligibility to support households in need. The Department has seen 
that, given the significant operational flexibilities inherent in TANF-
funded programs, current regulations are insufficient to achieve this 
goal. As a result, the Department thinks revising the categorical 
eligibility regulations at 7 CFR 273.2(j)(2) and limiting categorical 
eligibility to those households receiving ongoing and substantial 
benefits from TANF-funded programs strikes a prudent and reasonable 
balance between administrative flexibility and program integrity. With 
this proposed rule, the Department intends to ensure consistency across 
TANF-funded programs whose benefits confer categorical eligibility and 
to discourage the types of practices that States developed for 
conferring categorical eligibility with TANF non-cash benefits. The 
Department believes that instituting an ongoing and substantial 
threshold for both cash and non-cash TANF benefits, as described below, 
is an appropriate way to achieve this goal.
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    \16\ https://fns-prod.azureedge.net/sites/default/files/snap/clarification-bbce-memo.pdf.
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Summary of Proposed Approach

    Given the substantial variation across all TANF State program 
operations, and in the interest of program integrity, the Department 
proposes revising the requirements for cash and non-cash TANF benefits 
that would confer categorical eligibility for SNAP. Such revisions 
would create a clearer and more consistent nationwide policy regarding 
the cash and non-cash TANF benefits that confer categorical 
eligibility. This proposal would limit cash and non-cash categorical 
eligibility to households that receive ongoing and substantial 
benefits. In addition, non-cash categorical eligibility would be 
limited to specific types of TANF benefits--subsidized employment, work 
supports, and/or childcare--that support family self-sufficiency. It is 
the Department's understanding that programs providing such benefits 
have meaningful eligibility determinations because of the value of the 
benefits provided. As SNAP and TANF eligibility determinations may be 
accomplished concurrently, the Department also understands that a 
household may not yet be in receipt of the TANF benefit (e.g., be in 
physical possession of a voucher or payment) at the time categorical 
eligibility is conferred. However, it is the Department's intent that 
the household be enrolled in a TANF-funded program expected to start on 
a date certain. Such programs would need to be ongoing and substantial 
in order to be considered one that could confer categorical

[[Page 35573]]

eligibility for SNAP. The Department requests comments to better 
understand the eligibility determination and enrollment processes for 
TANF-funded programs. Specifically, the Department is interested in 
comments on the processes by which TANF-funded programs actually 
determine applicant financial and non-financial eligibility for the 
conferring programs, and at what point in the TANF enrollment process 
this determination and delivery of benefit(s) to the household may take 
place relative to the SNAP eligibility determination.
    The Department believes the policies explained further below will 
ensure SNAP benefits reach those most in need while balancing 
administrative efficiency, customer service, and program integrity.

Simplification of Terminology

    The proposed rule simplifies some of the terminology used when 
addressing categorical eligibility. Current regulations at Sec.  
273.2(j)(2) provide for categorical eligibility based on the receipt of 
``non-cash or in-kind benefits or services.'' Because no meaningful 
distinction exists between ``non-cash'' and ``in-kind,'' or 
``benefits'' and ``services,'' in this context, the Department proposes 
simply using ``non-cash benefits'' in the revised Sec.  
273.2(j)(2)(i)(B).

Move From TANF Purposes to TANF Benefits

    Current regulations at Sec.  273.2(j)(2)(i)(B) and (C) allow non-
cash programs designed to further TANF block grant purposes one through 
four to confer categorical eligibility. The flexibility afforded States 
under the TANF block grant allows for variation in how States link 
their various TANF-funded programs to TANF purposes. The Department has 
learned through consultation with HHS that, for example, one State may 
designate a given benefit as furthering purposes one and two of the 
TANF block grant, while another State offering a substantially similar 
benefit may designate it as furthering TANF purposes three and four. 
Since the distinction between purposes is not necessarily meaningful in 
conferring non-cash categorical eligibility, the Department proposes to 
link categorical eligibility to specific types of TANF benefits rather 
than to TANF block grant purposes. Specifically, the Department is 
proposing to limit categorical eligibility to TANF non-cash benefits 
that support meaningful work opportunities--specifically, subsidized 
employment, work supports, and childcare support--that help move 
families from welfare to self-sufficiency. The Department's proposal 
would remove mention of TANF block grant purposes in Sec.  
273.2(j)(2)(i)(B) and eliminate Sec.  273.2(j)(2)(i)(C) and instead 
describe TANF benefits in Sec.  273.2(j)(2)(i)(B)(2).
    As described below, the Department is proposing that these non-cash 
benefits be both ongoing and substantial to confer categorical 
eligibility for SNAP.

Ongoing and Substantial Benefits in Conferring Programs

    This proposed rule would revise the interpretation of ``benefits'' 
under Section 5(a) of the Food and Nutrition Act to mean that, for 
purposes of categorical eligibility, TANF or State-MOE funded benefits 
must be ``ongoing'' and ``substantial''. The Department also proposes 
that, for the purposes of alignment across all types of TANF benefits, 
these thresholds be set for both cash and non-cash benefits.
    Current regulations at Sec.  273.2(j)(2)(i)(B) and (C) provide for 
categorical eligibility based on the receipt of ``non-cash or in-kind 
benefits or services,'' without further detail. As explained above, 
such a policy means an individual may be categorically eligible for 
SNAP even if the individual receives a one-time, minimal, non-cash TANF 
benefit such as an information brochure, hotline number, or referral to 
other services.\17\ This practice threatens the integrity of 
categorical eligibility, the purpose of which is to streamline services 
to households who have received an eligibility determination from a 
means-tested program.
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    \17\ https://fns-prod.azureedge.net/sites/default/files/snap/BBCE.pdf.
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    To help address these issues, the Department proposes clarifying in 
Sec.  273.2(j)(2)(i)(B)(1) that, to be considered ``ongoing'', 
``benefits'' under Section 5(a) must be those that a household receives 
or is authorized to receive for a period of at least six months. In the 
TANF context, this might include a household that would be eligible to 
receive benefits for a period of at least six months, barring changes 
in financial status or compliance. In addition, six months is the 
certification period length for many SNAP households and a mid-point 
for the most common certification period length of 12 months.\18\ The 
Department believes that six months is long enough to be considered 
ongoing, and would maintain program alignment. The Department welcomes 
comments about using the six-month standard, including whether another 
timeframe would be more appropriate. These proposed changes are 
reflected in Sec.  273.2(j)(2)(i)(A)(1) and Sec.  273.2(j)(2)(i)(B)(1).
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    \18\ https://fns-prod.azureedge.net/sites/default/files/ops/Characteristics2016.pdf. In Fiscal Year 2016, across all SNAP 
households the average certification period length was 13 months. 
25% of all SNAP households and 37% of SNAP households with children 
have a certification period length of 6 months. 50% of all SNAP 
households and 54% of SNAP households with children have a 
certification period length of 12 months.
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    The Department also proposes requiring in Sec.  
273.2(j)(2)(i)(A)(2) and Sec.  273.2(j)(2)(i)(B)(2) that cash and non-
cash benefits be ``substantial'' to confer categorical eligibility. In 
defining substantial, the Department wants to eliminate the practice of 
conferring categorical eligibility based on receipt of benefits that 
are nominal and of minimal value. Allowing categorical eligibility 
based on the receipt of benefits nominal in value may encourage cursory 
or nonexistent eligibility determinations because the amount of those 
TANF benefits do not warrant the cost of staff time and resources to 
administer. However, by requiring the benefits to be substantial, the 
proposed rule limits categorical eligibility to those TANF benefits for 
which a State is more likely to establish a meaningful eligibility 
determination and dedicate resources. The Department consulted with HHS 
to determine an appropriate definition of ``substantial''. Based on 
this consultation, the Department proposes that the benefit be valued 
at a minimum of $50 per month in order to confer categorical 
eligibility. There is no minimum benefit amount currently required by 
TANF, in keeping with the flexibility afforded to States by that 
program. However, should that ever change, the Department also proposes 
in Sec.  273.2(j)(2)(i)(A) that, should HHS develop a minimum threshold 
amount for TANF cash benefits, the Department would select the higher 
of the two standards.
    Because the types and amounts of TANF benefits vary greatly among 
States, the Department is particularly seeking comments on appropriate 
measures for ``substantial'' and ``ongoing'' benefits, as well as 
comments on the proposed $50 threshold. The Department will consider 
these comments when formulating the final rulemaking.

Types of Non-Cash Benefits Conferring Categorical Eligibility

    The President's Executive Order on Reducing Poverty in America by 
Promoting Opportunity and Economic Mobility (April 10, 2018) directed 
the

[[Page 35574]]

Department to review its regulations and to determine whether they are 
consistent with the principles of increasing self-sufficiency, well-
being and economic mobility. In keeping with the principles of the 
Executive order, and the Administration's focus on encouraging self-
sufficiency, the Department has determined that the types of benefits 
conferring categorical eligibility should be limited to those that, in 
addition to being ongoing and substantial, also provide meaningful 
opportunities for households to obtain employment and financial 
stability.
    Therefore, the Department proposes in Sec.  273.2(j)(2)(i)(B)(2) to 
limit the conferring of categorical eligibility to those non-cash TANF 
benefits that provide subsidized employment, work supports, and 
childcare benefits, that are substantial and ongoing as defined 
earlier. Based on consultation with HHS, the Department is proposing to 
limit these conferring benefits to the following types:
     Subsidized employment for which the employer or a third 
party receives a subsidy to offset some or all of the wages and costs 
of employing an individual;
     Work supports, including transportation benefits or 
vouchers to assist families to participate in employment or work 
activities; and/or
     Childcare subsidies or vouchers to support working 
families.
    The Department believes the existence of a ready market valuation 
for benefits conferring categorical eligibility is important for 
administrative ease and ensuring a consistent nationwide policy. The 
Department understands that additional non-cash TANF benefits, such as 
education and training, job search assistance, or work experience, are 
provided on an hourly or weekly basis to program participants. The 
Department is unsure how to determine a ready market valuation for such 
benefits, which are less concrete and measurable than subsidized 
employment, work supports, and child care benefits, which can be easily 
valued at a cash equivalent. However, the Department is interested in 
public comment as to whether and how the benefits from such hourly-
based programs could be valued for the purposes of conferring 
categorical eligibility, or other ways to determine whether such 
benefits could be ongoing and substantial.

Treatment of Non-Cash Benefit Conferring Programs

    The Department is seeking comments on the current regulation's 
distinction among non-cash TANF-funded programs conferring categorical 
eligibility based on the amount of Federal TANF and State MOE funding 
for the non-cash TANF-funded programs. Under current regulations, a 
non-cash TANF-funded program funded by more than 50 percent Federal 
TANF/State MOE funds and serving TANF purposes one and two must confer 
categorical eligibility (Sec.  273.2(j)(2)(i)(B)). At the State's 
option, categorical eligibility may be conferred if the TANF-funded 
program is funded by less than 50 percent Federal TANF/State MOE funds 
(Sec.  273.2(j)(2)(ii)). In such cases, the State must inform FNS if 
the program serves TANF purposes one and two. Programs serving TANF 
purposes three and four, no matter the funding makeup, must have income 
limits below 200 percent FPL; those funded by less than 50 percent 
Federal TANF/State MOE funds must also be approved by FNS.
    The proposed rule would maintain the funding distinction by: (1) 
Requiring that States confer categorical eligibility when a TANF-funded 
program providing ongoing and substantial non-cash benefits is funded 
with 50 percent or more of combined Federal TANF or State MOE money 
(Sec.  273.2(j)(2)(i)(B)); and (2) allowing States the option to confer 
categorical eligibility when a TANF-funded program that issues ongoing 
and substantial non-cash benefits is funded by less than 50 percent of 
a combination of Federal TANF or State MOE money. However, the 
Department seeks comments to better understand current State funding 
mixes for TANF-funded programs, and to learn whether these funding 
distinctions and practices have an impact on the type and scope of 
benefits provided to households. The Department is interested in 
whether eliminating the distinction, or adjusting the 50 percent 
funding threshold would help streamline SNAP regulations, ensure 
consistency in serving households through categorical eligibility, and 
simplify administration. The Department will take these comments into 
consideration in determining whether and how to adjust these 
requirements in final rulemaking.
    The Department would update the regulatory language at Sec.  
273.2(j)(2)(i)(B) and 273.2(j)(2)(ii) to reflect the proposed shift 
from conferring categorical eligibility based on TANF purposes to 
receipt of ongoing and substantial non-cash TANF benefits. In addition, 
the Department proposes to clarify the funding threshold. The 
regulatory language currently at Sec.  273.2(j)(2)(i)(B), 
273.2(j)(2)(i)(C), 273.2(j)(2)(ii)(A) and 273.2(j)(2)(ii)(B) describe 
TANF-funded programs that are ``more than 50 percent'' and ``less than 
50 percent'' funded by Federal TANF or State MOE money. The Department 
proposes in this rulemaking to change references from ``more than 50 
percent'' to ``50 percent or more'' so that it is clear into which 
category programs funded with 50 percent Federal TANF or State MOE 
money should fall. The Department also proposes conforming changes to 
Sec.  273.8 (e)(17) to align with the proposed definition of ``ongoing 
and substantial'' benefits and to strike paragraph references that 
would no longer be applicable given the changes this proposed rule 
would make to Sec.  273.2(j)(2)(i)(B) and Sec.  273.2(j)(2)(ii).
    The proposed rule retains the policy regarding household 
categorical eligibility based on an individual household member's 
receipt of qualifying benefits currently at Sec.  273.2(j)(2)(iii). 
Under this policy, if one member receives or is authorized to receive 
such benefits and the State determines the whole household benefits, 
the whole household would be categorically eligible. This policy allows 
a household to be categorically eligible for SNAP based on receipt of 
non-cash benefits that, while provided at the individual level, support 
overall family self-sufficiency. For example, a State may determine 
that a TANF-funded childcare voucher provided to a mother actually 
supports and benefits her and her two children; pursuant to such a 
determination, the entire household would be categorically eligible, 
thereby streamlining the family's process of applying for SNAP 
assistance. The Department proposes incorporating this policy into the 
revised Sec.  273.2(j)(2)(i)(B) and Sec.  273.2(j)(2)(ii) to 
consolidate the criteria for non-cash TANF benefit categorical 
eligibility.

State Notification to FNS of Non-Cash Conferring Benefits

    For appropriate oversight purposes, the proposed Sec.  
273.2(j)(2)(i)(B) would also require State agencies to inform FNS of 
the non-cash TANF benefits that confer categorical eligibility. Current 
regulations require that State agencies inform FNS if they elect the 
option to confer categorical eligibility through a program that is less 
than 50 percent funded by Federal TANF or State MOE dollars, and that 
furthers purposes one and two of the TANF block grant. States are not 
currently required to inform FNS of conferring programs that are more 
than 50 percent funded and that further purposes one and two. Under the 
proposed rule, a State would be required to inform FNS of all non-cash 
TANF benefits that confer categorical

[[Page 35575]]

eligibility. The notification requirement would ensure appropriate 
monitoring and transparency, as well as help ensure consistency 
nationwide. States would be required to report when this rule takes 
effect and any time there is a subsequent change to the conferring 
programs. The Department expects the notification requirement would not 
unduly burden most State agencies because the TANF benefits that confer 
categorical eligibility do not frequently change.

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

    The Department estimates the net reduction in Federal spending 
associated with the proposed rule to be approximately $9.386 billion 
over the five years 2019-2023. Included in this is an estimated 
reduction in Federal transfers of approximately $10.543 billion over 
the five-year period as well as a $1.157 billion increase in Federal 
administrative costs. The Department estimates an additional $1.157 
billion in Federal reimbursement of administrative costs to State 
agencies (for a total of $2.314 billion in additional administrative 
costs). In addition, the Department estimates that households that 
remain eligible for SNAP and new SNAP applicants will face additional 
burden associated with the application process, at a cost of 
approximately $5 million annually. The proposed rule may also 
negatively impact food security and reduce the savings rates among 
those individuals who do not meet the income and resource eligibility 
requirements for SNAP or the substantial and ongoing requirements for 
expanded categorical eligibility.
    The Department estimates that approximately 9 percent of currently-
participating SNAP households (an estimated 1.7 million households in 
FY 2020, containing 3.1 million individuals) will not otherwise meet 
SNAP's income and asset eligibility prerequisites under the proposed 
rule. These households are nearly evenly split between those that fail 
the Federal SNAP income test (4.9 percent) and those that fail the 
Federal resource test (4.1 percent). Collectively, these households 
receive about 5 percent of total SNAP benefits. However, households who 
would not meet the eligibility requirements due to the resource test 
account for 80 percent of the expected reduction in benefits. This is 
because they have lower incomes relative to households that fail the 
Federal income test, and thus receive larger monthly SNAP allotments.
    Households with one or more elderly individual(s) and/or earned 
income would be disproportionately affected. Approximately 13.2 percent 
of all SNAP households with elderly members will lose benefits (7.4 
percent will fail the income test and 5.8 percent will fail the 
resource test), as will 12.5 percent of households with earnings (8.6 
percent will fail the income test and another 3.9 percent will fail the 
resource test). The proposed rule is relatively less likely to affect 
households with children--only 7.4 percent are expected to no longer 
meet eligibility requirements (4.1 percent will fail the income test 
and 3.4 percent will fail the resource test).

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, 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 and SNAP 
participants. State agencies in affected States will need to revise 
their procedures for processing SNAP applications and recertifications 
and will face increased administrative costs associated with the 
revised procedures.
    Small entities, such as smaller SNAP-authorized 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 the 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 most 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 $3 billion per year. This would equate to about a $183 loss of 
revenue per small authorized retailer on average per month [(3 billion 
x 15%)/(200,000 stores/12 months)]. In 2017, the average small store 
redeemed about $3,800 in SNAP each month; the potential loss of 
benefits represents less than 5 percent of their SNAP redemptions and 
only a small portion of their gross sales. Based on 2017 store data, a 
4.8 percent reduction in SNAP redemptions represented between 0.01 and 
0.95 percent of these stores' average 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 
regulatory action. We estimate that it would impose $415 million in 
annualized costs at a 7% discount rate, discounted to a 2016 
equivalent, over a perpetual time horizon.

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 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 necessary, Section 205 of the UMRA 
generally requires the Department to identify and consider a reasonable 
number of regulatory alternatives and adopt the most cost

[[Page 35576]]

effective or least burdensome alternative that achieves the objectives 
of the rule. This proposed rule contains Federal mandates (under the 
regulatory provisions of Title II of the UMRA) that are expected to 
result in aggregate expenditures by State, local and tribal governments 
or the private sector of more per year. Thus, the rule is subject to 
the requirements of sections 202 and 205 of the UMRA.
    The Regulatory Impact Analysis conducted by FNS in connection with 
this proposed rule includes a cost/benefit analysis and explains the 
alternatives considered to modify categorical eligibility regulations. 
Based on this analysis, the Department believes there are no 
alternatives to the proposal that would accomplish the stated 
objectives in a less burdensome manner. However, the Department invites 
comments regarding less burdensome approaches to achieving the stated 
objectives. Per the Food and Nutrition Act, the Federal government 
would pay 50 percent of allowable State administrative costs required 
under this proposed rule.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
No. 10.551. For the reasons set forth in the Federal Register notice, 
published June 24, 1983 (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 considered the impact of this rule on State and 
local governments and has determined that this rule does not have 
federalism implications. Therefore, under section 6(b) of the Executive 
Order, a federalism summary 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. Before any judicial challenge to the provisions of 
the final rule, all applicable administrative procedures must be 
exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with USDA 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex or disability. 
After review and analysis of the rule and available data, it has been 
determined that there is a potential for civil rights impacts to result 
if the proposed action is implemented because more elderly individuals 
may not otherwise meet the SNAP eligibility requirements.

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 
briefed Tribes on this rule at the February 14, 2019, listening 
session; Tribes were subsequently provided the opportunity for 
consultation on the issue, but the Department received no feedback. If 
a tribe requests consultation in the future, FNS will work with OTR to 
ensure meaningful consultation is provided.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR part 
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 contains existing information collection requirements 
that are subject to review and approval by the Office of Management and 
Budget; therefore, the Department is submitting for public comment the 
changes in the information collection burden that would increase the 
OMB burden inventory as a result of adoption of the proposals in the 
rule. These existing requirements impact a current collection that has 
been used without a valid OMB control number or expiration date. The 
Department plans to bring these burden requirements into compliance, 
contingent upon OMB approval under the Paperwork Reduction Act of 1995. 
FNS plans to account for and maintain these burden hours under a new 
OMB control number assigned by OMB. Written comments on the information 
collection in this information must be received by September 23, 2019. 
When the information collection requirements have been approved, FNS 
will publish a separate action in the Federal Register announcing OMB's 
approval.
    Send written comments to the Office of Information and Regulatory 
Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20503. 
Please also send a copy of your comments to Requests for additional 
information or copies of this information collection should be directed 
to Program Design Branch, Program Development Division, Food and 
Nutrition Service, USDA, 3101 Park Center Dr., Alexandria, VA 22302. E-
mail: Send comments to [email protected]. For further information, 
or for copies of the information collection requirements, please 
contact the Program Design Branch at the address indicated above. 
Comments will also be accepted through the Federal eRulemaking Portal. 
Go to http://www.regulations.gov, and follow the online instructions 
for submitting comments electronically.
    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,

[[Page 35577]]

electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    All responses to this document will be summarized and included in 
the request for Office of Management and Budget approval. All comments 
will be a matter of public record.
    Title: Revision of Categorical Eligibility in the Supplemental 
Nutrition Assistance Program.
    OMB Number: 0584-NEW.
    Expiration Date: [Not Yet Determined.]
    Type of Request: New collection.
    Abstract: Section 5(a) of the Food and Nutrition Act of 2008, as 
amended, (the Act), provides that households in which each member 
receives benefits under a State program funded under part A of Title IV 
of the Social Security Act (SSA) (also known as Temporary Assistance 
for Needy Families (TANF) block grants) shall be categorically eligible 
for SNAP. Originally, categorical eligibility was intended to reduce 
administrative burden for States and households, making the application 
process easier for households that qualified for benefits under means-
tested programs similar to SNAP by removing the requirement that these 
households verify eligibility twice for two separate programs. However, 
TANF-funded programs provide States with considerable flexibility in 
program administration, resulting in programs that vary greatly from 
State to State.
    Under current regulations, all States must confer categorical 
eligibility to households in which all members receive cash assistance 
from TANF, General Assistance (GA), or SSI. States have significant 
flexibility to determine what types of non-cash TANF-funded services 
and benefits can confer categorical eligibility for SNAP. Currently, 43 
States have expanded categorical eligibility to households that receive 
non-cash TANF benefits and thirty-seven of these States currently have 
no resource test.
    The proposed rule would provide a clearer and more consistent 
nationwide policy that limits categorical eligibility to households 
that qualify for TANF-funded programs designed to help move them 
towards self-sufficiency and ensure that receipt of nominal, one-time 
benefits or services does not confer categorical eligibility. Section 
5(j) of the Act indicates that households who are considered to be 
categorically eligible are considered to have met the SNAP resource 
standards and therefore these households do not undergo another 
resource determination. The proposed restriction of categorical 
eligibility would reduce the number of households who would be 
categorically eligible and, therefore, would require States to assess 
more households' income and resources to determine if they are eligible 
for SNAP benefits. Under current policies, it is estimated that 4.9% of 
SNAP households have resources above the SNAP limit and 4.1% have 
incomes above the Federal SNAP gross income limit of 130% FPL. However, 
the proposed rule has a greater impact on the need to verify resources 
since all households (both eligible and ineligible) that are not 
categorically eligible would be subject to the resource verification 
requirements, and as noted earlier, this rule would reduce the number 
of households who are categorically eligible.
    As discussed further below, to date, FNS has been conducting the 
information collection and imposing burden for a limited set of States 
and SNAP applicant households regarding resource verification without 
OMB approval.
    This is an existing collection in use without an OMB control number 
and FNS is seeking OMB approval. FNS is requesting a new OMB Control 
Number for these requirements in this proposed rule, Revision of 
Categorical Eligibility in SNAP. Because State agencies do not verify 
resources for applicants that are currently considered categorically 
eligible per 5(j) of the Act, they would be required to make changes to 
their application process to assess the resources of those households' 
that would no longer be categorically eligible. Out of 53 State 
agencies, 43 State agencies have adopted expanded categorical 
eligibility policies: Therefore, only 10 States are currently 
collecting resource information as part of the SNAP eligibility 
determination process. The ten (10) State agencies that have not taken 
the option to expand categorical eligibility will be unaffected by this 
proposed rule; these States are currently conducting the information 
collection and imposing burden for States and SNAP applicant households 
regarding resource verification without OMB approval.
    There is no new recordkeeping burden required for this new 
information collection request. The recordkeeping burden for State 
agencies is currently covered under the approved information collection 
burden for application processing, OMB Control Number 0584-0064 
(expiration date: 7/31/2020), which already accounts for the casefile 
documentation that States must maintain for each SNAP household at 
Sec.  273.2(f)(6).
    Description of Costs and Assumptions: This rule will narrow the 
types of programs whose benefits may confer categorical eligibility. 
The proposed restriction of categorical eligibility would reduce the 
number of households who would be categorically eligible for SNAP and, 
therefore, would require States to assess more households' resources to 
determine if they are eligible for SNAP benefits; under the rule, all 
53 State agencies (including the 10 States currently collecting this 
data without OMB approval) will now be required to collect resource 
information from more households. For example, States and households 
will need to contact financial institutions, Departments of Motor 
Vehicles and other entities to obtain documentation of household's 
resources.
    Reporting Burden Activities: Currently, all applicant households 
are required to meet the SNAP resource limits at Sec.  273.8 (Resource 
eligibility standards); applicants who are categorically eligible are 
considered to have met the SNAP resource standards (Section 5(j) of the 
Food and Nutrition Act). Recent data \19\ shows that 21.9% of SNAP 
households are pure public assistance households (i.e., categorically 
eligible through receipt of SSI, cash TANF or GA); these households are 
considered to have met the SNAP income and resource requirements. 
Therefore, the household estimates in this burden narrative do not 
include the 21.9% of households who would remain categorically eligible 
through their pure public assistance status, and therefore not subject 
to any additional burden under this rulemaking. Under this rulemaking, 
fewer SNAP households will be categorically eligible through their 
receipt of non-cash TANF benefits and therefore considered to have met 
the resource standards. As fewer SNAP households will be categorically 
eligible, more households will therefore need to have their resources 
evaluated by SNAP eligibility workers to determine whether or not these 
households meet the SNAP resource standards. Resources are one of 
several elements of eligibility that are used to determine SNAP 
eligibility and are subject to verification if questionable (Sec.  
273.2 (f)(2)). To come up with a reporting burden estimate of how much 
burden would be added to SNAP state agencies and households, FNS 
consulted with States to learn about current State practices around 
resource verification.
---------------------------------------------------------------------------

    \19\ Characteristics of SNAP Households, FY2017, Table B.12; 
https://fns-prod.azureedge.net/sites/default/files/resource-files/Characteristics2017.pdf.

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

[[Page 35578]]

State Agency Burden Assessment Feedback

    FNS first needed to estimate the amount of time that resource 
verification would take for State agencies. To do so, FNS consulted 
with eight States that currently do not have expanded categorical 
eligibility and, therefore, subject SNAP households to a resource test 
and asked these States to provide estimates of the amount of time that 
State agency staff spent verifying resources with clients at initial 
and recertification. FNS learned that four of these States verify 
resources when resources are close to the resource limit, two States 
only verify resources when questionable and two States verified 
resources at all times. FNS therefore estimates that, of the 43 States 
who, under this proposed rule, would now be required to conduct 
substantially more resource verification, 22 would adopt a policy to 
verify a household's resources if close to the resource limit (for the 
purposes of this discussion, ``High Limit States''), 10 would verify 
resources only when deemed questionable (``Self-Attestation States'') 
and 11 would verify resources for households at all times (``Always'' 
States). The burden table column ``Estimated Total Burden Hours'' also 
accounts for the 10 States that are currently collecting resource 
information without OMB approval (5 ``High Limit'' States, 3 ``Self-
Attestation States'' and 2 ``Always'' States; so that the total burden 
reflected in the table is for all 53 State agencies at both initial as 
well as recertification.
    Using the estimates that each group of States provided for the 
amount of time needed to verify resources and averaging the responses, 
FNS estimates that State agency staff in States with a policy to verify 
resources if close to the limit or questionable would on average spend 
12.3 minutes (0.205 hours) per case at initial certification and 7.4 
minutes (0.123 hours) per case at recertification. FNS estimates that 
State agency staff in States who would adopt a policy to verify 
resources at all times would have a higher burden: 43.75 minutes (0.729 
hours) per case at initial certification and 26.25 minutes (0.4375 
hours) per case at recertification.
    FNS then needed to estimate the percentage of a State's caseload 
that would be subject to these resource verification requirements in 
order to calculate the State agency burden. In the estimated 13 States 
where caseworkers would verify resources at all times, the entire 
caseload would be subject to verification. In ``High Limit'' and 
``Self-Attestation'' States, only a certain percent of SNAP applicants 
would meet the criteria (e.g. substantial resources or questionable 
information) that would necessitate the caseworker undertaking resource 
verification. Using caseload data on households' resource levels from a 
recent study to determine how many households would have resources 
close to the resource limit,\20\ FNS estimates that States that verify 
resources near the limit (27) would have to verify about 27% of the 
time; FNS rounded up to 30% to take into account caseworker discretion 
to verify when questionable. For the States that verify only when 
questionable (13) FNS estimates that resources would be verified 10% of 
the time. Accordingly, in the burden tables the estimated number of 
households whose resources would be verified by a caseworker are 
adjusted to 30% of the caseload in the estimated 22 ``High Limit'' 
States and 10% of the caseload in the estimated 10 ``Self-Attestation'' 
States. The estimated number of households for the 13 ``Always'' States 
would be all SNAP applicant households in those States.
---------------------------------------------------------------------------

    \20\ Ratcliffe, Caroline, Sara Armstrong, Emma Kalish, Signe-
Mary McKernan, Christina Oberlin, Catherine Ruggles, and Laura 
Wheaton. 2016. ``Asset Limits, SNAP Participation, and Financial 
Stability.'' Washington, DC. Prepared by the Urban Institute and 
Orlin Research for the U.S. Food and Nutrition Service. Available 
online: https://fns-prod.azureedge.net/sites/default/files/ops/SNAPAssets.pdf.
---------------------------------------------------------------------------

    This rule would also require State agencies to inform FNS of the 
types of non-cash TANF benefits that confer categorical eligibility in 
their States. This specific reporting would be a new reporting 
requirement under this rule. FNS estimates that it would take one hour 
of a State agency staff person's time to prepare and send this 
information to FNS. As 10 States do not currently have non-cash TANF-
funded programs that confer categorical eligibility and would not be 
required to report to FNS, FNS anticipates that only the current 43 
States with non-cash programs would be required to report to FNS under 
the new rule. This additional burden is included in the burden tables 
below. The Department seeks additional comment on how long it would 
take States to gather, review and report this information.
Household Burden
    The Department then had to estimate the burden hours for households 
to provide verification. FNS referenced the currently approved 
estimated number of applicants in OMB Control Number 0584-0064; 
Expiration Date: 7/31/2020 and updated these numbers to reflect the 
most recently available participation data (FY18) for SNAP initial 
applicants and recertification applicant households.\21\
---------------------------------------------------------------------------

    \21\ National Data Bank data from FY2018, FNS 366-B, Total 
Initial Applications and Total Recertification Applications.
---------------------------------------------------------------------------

    The Department finds it reasonable to use the estimates from OMB 
approved Information Collection 0054-0064 regarding household burden 
for providing verification and estimates that providing verification 
would take 4 minutes or .0668 hours per household at initial 
certification and 6 minutes or .1002 hours at recertification. Using 
the estimates above for the number of households in each State subject 
to verification requirements (100% in 11 States, 30% in 22 States and 
10% in 10 States), we then calculated the total number of households 
that would have to participate in this annual burden. We have rounded 
these burden times in the chart below.
    The Department is very interested in States comments on the 
requested information burden, as the vast majority of households in 
most States have been certified under expanded categorical eligibility, 
and therefore have not been subject to resource verification in recent 
years. All comments will be reviewed and considered in the rulemaking 
process. To date, The Department has been conducting the information 
collection and imposing burden for States and SNAP applicant households 
regarding resource verification without OMB approval; however, as 
discussed earlier, due to expanded categorical eligibility policies, 
few States are currently collecting resource information as part of the 
SNAP eligibility determination process. The Department has estimated 
the current reporting burden for the States without expanded 
categorical eligibility policies and provided these numbers in the 
chart.
    The burden estimates we are using without OMB approval is for the 
current ten states without expanded categorical eligibility; the 
overall burden collected without OMB approval is 833,745.10 burden 
hours, this burden total includes 691,092.51 total annual burden hours 
and 1,747,515.79 total annual responses for State agencies and 
142,652.58 total annual burden hours and 1,747,515.79 total annual 
responses for Individuals/Households (SNAP Participants). The overall 
estimated burden we are requesting for both the Individuals/Households 
and State agencies is 5,154,728.15 total annual burden hours and 
20,602,334 total annual responses. The reporting burden details are 
provided below for State Agencies and SNAP applicant households. This

[[Page 35579]]

request associated with rulemaking reflects an increase of 3,622,736.20 
total annual burden hours and 8,553,672.90 total annual responses for 
State agencies and 698,246.85 total annual burden hours and 
8,553,629.901 total annual responses for Households (SNAP 
Participants).
    Estimated Number of Respondents: 53 State Agencies.
    Estimated Frequency of Responses per Year: 643,822.61.
    Estimated Total Annual Responses: 10,301,188.69.
    Estimated Time per Response: 0.418769993.
    Estimated Total Annual Burden Hours: 4,313,828.72.
    Estimated Number of Respondents: 10,301,146 (SNAP households).
    Estimated Frequency of Response per Year: 1.
    Estimated Total Annual Responses: 10,301,146.
    Estimated Time per Response: 0.081631642.
    Estimated Total Annual Burden Hours: 840,899.43.

[[Page 35580]]



                                                           Estimated Annual Burden for 0584-New, Revision of Categorical Eligibility in the Supplemental Nutrition Assistance
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                          Previous
                                                      Description of      Estimated       Estimated     Total annual      Number of       Estimated     burden in use    Differences   Difference due    Hourly wage   Estimated cost to
          Reg. section            Respondent type        activity         number of     frequency of      responses     burden hours    total burden       without     due to program  to adjustments       rate*         respondents
                                                                         respondents      response                      per response        hours         approval         changes
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Affected Public: State Agencies
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
273.2(f)(1) & (2)..............  State Agency       Verification of                13      255,661.04    3,323,593.55          0.7292    2,423,564.42      372,856.06            0.00    2,050,708.35          $21.45     $51,985,456.79
                                  Eligibility        resources at
                                  Worker.            initial
                                                     application
                                                     (States
                                                     verifying all
                                                     resources).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
273.2(f)(1) & (2)..............  State Agency       Verification of                13       25,566.10      332,359.36           0.205       68,133.67       15,723.15            0.00       52,410.51           21.45       1,461,467.18
                                  Eligibility        resources at
                                  Worker.            initial
                                                     application
                                                     (States
                                                     verifying
                                                     resources if
                                                     questionable).
273.2(f)(1) & (2)..............  State Agency       Verification of                27       76,698.31    2,070,854.44           0.205      424,525.16       78,615.77            0.00      345,909.39           21.45       9,106,064.71
                                  Eligibility        resources at
                                  Worker.            initial
                                                     application
                                                     (States
                                                     verifying
                                                     resources if
                                                     close to limit).
273.2(f)(8)(i).................  State Agency       Verification of                13      204,211.53    2,654,749.93          0.4375    1,161,453.09      178,685.09            0.00      982,768.00           21.45      24,913,168.86
                                  Eligibility        resources at
                                  Worker.            recertification
                                                     (States
                                                     verifying all
                                                     resources).
273.2(f)(8)(i).................  State Agency       Verification of                13       20,421.15      265,474.99           0.123       32,653.42        7,535.41            0.00       25,118.02           21.45         700,415.95
                                  Eligibility        resources at
                                  Worker.            recertification
                                                     (States
                                                     verifying
                                                     resources if
                                                     questionable).
273.2(f)(8)(i).................  State Agency       Verification of                27       61,263.46    1,654,113.42           0.123      203,455.95       37,677.03            0.00      165,778.92           21.45       4,364,130.13
                                  Eligibility        resources at
                                  Worker.            recertification
                                                     (States
                                                     verifying
                                                     resources if
                                                     close to limit).
273.2(j)(2)(ii) &                State Agencies...  Inform FNS of                  43               1              43               1              43               0           43.00            0.00           19.47             837.21
 273.2(j)(2)(i)(B).                                  TANF programs
                                                     that confer
                                                     categorical
                                                     eligibility.
                                                                      ------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Sub-Total State Agencies.........................................              53      643,822.61   10,301,188.69         0.41877    4,313,828.72      691,092.51            0.00    3,622,736.20           21.17      92,531,540.82
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Affected Public: Individual/Households
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
273.2(f)(1) & (2)..............  Applicants for     Verification of         5,726,807               1       5,726,807          0.0668      382,550.73       64,897.00      317,653.73            0.00            7.25       2,773,492.80
                                  initial            resources at
                                  certification.     initial
                                                     application.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
273.2(f)(8)(i).................  Applicants for     Verification of         4,574,338               1       4,574,338          0.1002      458,348.70       77,755.58      380,593.12            0.00            7.25       3,323,028.09
                                  recertification.   resources at
                                                     recertification.
                                                                      ------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Sub-Total Individual/Households..................................      10,301,146               1      10,301,146       0.0816316      840,899.43      142,652.58      698,246.85            0.00            7.25       6,096,520.89
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
        Grand Total Reporting Burden with both affected public.......      10,301,199               0      20,602,334       0.2502012    5,154,728.15      833,745.10    4,320,983.05            0.00            7.25      98,628,061.71
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The column ``Estimated number of respondents'' for rows with the regulatory citation 273.2(f) (1) & (2) and 273.2(f)(8)(i) includes both the 10 State Agencies collecting this information without OMB approval and the 43 that
  would collect this information as a result of the rulemaking, for a total of 53 State agencies affected at application and recertification.
Based on the Bureau of Labor Statistics May 2017 Occupational and Wage Statistics--the salaries of the eligibility workers are considered to be ``Eligibility Interviewers, Government Programs'' functions performed by State and local
  agency staff are valued at $21.45 per staff hour 43-4061 (http://www.bls.gov/oes/current/oes434061.htm). Social and Human Service Assistants 21-1093 functions are valued at $19.74 and the $7.25 used to calculate a cost to
  applicants is the Federal minimum wage.


[[Page 35581]]

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

    Administrative practices and procedure, Grant programs-social 
programs, Supplemental Security Income (SSI), Reporting and 
recordkeeping.

    Accordingly, 7 CFR part 273 is proposed to be amended to read as 
follows:

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

0
1. The authority citation for 7 CFR part 273 continues to read as 
follows:

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

0
2. In Sec.  273.2:
0
a. Revise paragraph (j)(2)(i)(A);
0
b. Revise paragraph (j)(2)(i)(B);
0
c. Remove and reserve paragraph (j)(2)(i)(C);
0
d. Revise paragraph (j)(2)(ii) introductory text and remove 
(j)(2)(ii)(A) and (B);
0
e. Remove and reserve paragraph (j)(2)(iii); and
0
f. Amend paragraph (j)(2)(iv) by removing the phrase ``paragraphs 
(j)(2)(i), (j)(2)(ii), and (j)(2)(iii)'' and adding in its place 
``paragraphs (j)(2)(i) and (j)(2)(ii)''.
    The revisions and additions read as follows:


Sec.  273.2  Office operations and application processing

* * * * *
    (j) * * *
    (2) * * *
    (i) * * *
    (A) Any household (except those listed in paragraph (j)(2)(vii) of 
this section) in which all members receive or are authorized to receive 
ongoing and substantial cash benefits through a PA program funded in 
full or in part with Federal money under Title IV-A or with State money 
counted for maintenance of effort (MOE) purposes under Title IV-A;
    (1) For the purposes of this paragraph (j)(2)(i)(A), ongoing cash 
benefits are benefits that a household receives or is authorized to 
receive for at least six months.
    (2) For the purposes of this paragraph (j)(2)(i)(A), substantial 
cash benefits are benefits that a household receives or is authorized 
to receive that are valued at a minimum of $50 per month or any minimum 
threshold determined by the Secretary of Health and Human Services for 
Title IV-A programs, whichever is higher.
    (B) Any household (except those listed in paragraph (j)(2)(vii) of 
this section) in which all members receive or are authorized to receive 
ongoing and substantial non-cash benefits, as specified in paragraphs 
(j)(2)(i)(B)(1) and (2) of this section, from a program that is funded 
with 50 percent or more State money counted for MOE purposes under 
Title IV-A of the Social Security Act (Pub. L. 74-271) or Federal money 
under Title IV-A of the Social Security Act. States must inform FNS of 
the types of non-cash TANF benefits that confer categorical eligibility 
under this paragraph. If one household member receives or is authorized 
to receive such benefits and the State determines the whole household 
benefits, the whole household shall be categorically eligible (except 
those listed in (j)(2)(vii) of this section).
    (1) For the purposes of paragraphs (j)(2)(i)(B) and (j)(2)(ii) of 
this section, ongoing non-cash benefits are benefits a household 
receives or is authorized to receive for at least six months.
    (2) For the purposes of paragraphs (j)(2)(i)(B) and (j)(2)(ii) of 
this section, substantial non-cash benefits are benefits that a 
household receives or is authorized to receive that are valued at a 
minimum of $50 per month and that are of at least one of the following 
types: Subsidized employment for which the employer or a third party 
receives a subsidy from TANF or other public funds to offset some or 
all of the wages and costs of employing an individual; work supports, 
including transportation benefits or other allowances for work-related 
expenses; and/or child care subsidies or vouchers.
    (C) [Reserved] * * *
* * * * *
    (ii) The State agency, at its option, may extend categorical 
eligibility to any households (except those listed in paragraph 
(j)(2)(vii) of this section) in which all members receive or are 
authorized to receive ongoing and substantial non-cash benefits, as 
specified in paragraphs (j)(2)(i)(B)(1) and (2) of this section, from a 
program that is less than 50 percent funded with State money counted 
for MOE purposes under Title IV-A of the Social Security Act (Pub. L. 
74-271) or Federal money under Title IV-A of the Social Security Act. 
States must inform FNS of the types of non-cash TANF benefits that 
confer categorical eligibility under this paragraph. If one household 
member receives or is authorized to receive such benefits and the State 
determines the whole household benefits, the whole household shall be 
categorically eligible (except those listed in (j)(2)(vii) of this 
section). The State agency may exercise this option only if doing so 
will further the purposes of the Food and Nutrition Act of 2008.
    (iii) [Reserved]
* * * * *
0
3. In Sec.  273.8, revise the third sentence of paragraph (e)(17).
    The additions and revisions read as follows:


Sec.  273.8  Resource Eligibility Standards

* * * * *
    (e) * * *
    (17) * * * For purposes of this paragraph (e)(17), if an individual 
receives ongoing and substantial non-cash benefits from a program 
specified in Sec. Sec.  273.2(j)(2)(i)(B) or (j)(2)(ii), the State 
agency must determine whether the individual or the household benefits 
from the assistance provided. * * *
* * * * *

    Dated: July 16, 2019.
Brandon Lipps,
Acting Deputy Under Secretary Food, Nutrition, and Consumer Services.
[FR Doc. 2019-15670 Filed 7-23-19; 8:45 am]
 BILLING CODE 3410-30-P