[Federal Register Volume 84, Number 234 (Thursday, December 5, 2019)]
[Rules and Regulations]
[Pages 66782-66812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26044]



[[Page 66781]]

Vol. 84

Thursday,

No. 234

December 5, 2019

Part III





Department of Agriculture





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





Food and Nutrition Service





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





7 CFR Part 273





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

  Federal Register / Vol. 84 , No. 234 / Thursday, December 5, 2019 / 
Rules and Regulations  

[[Page 66782]]


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

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: Final rule.

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

SUMMARY: USDA is finalizing its rulemaking proposed February 1, 2019. 
The rule revises the conditions under which USDA would waive, when 
requested by States, the able-bodied adult without dependents (ABAWD) 
time limit in areas that have an unemployment rate of over 10 percent 
or a lack of sufficient jobs. In addition, the rule limits carryover of 
ABAWD discretionary exemptions.

DATES: This rule is effective April 1, 2020, except for the amendment 
to 7 CFR 273.24(h), which is effective October 1, 2020.

ADDRESSES: SNAP Program Development Division, Food and Nutrition 
Service, USDA, 3101 Park Center Drive, Room 812, Alexandria, Virginia 
22302.

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

SUPPLEMENTARY INFORMATION:

Acronyms or Abbreviations

Able-Bodied Adults without Dependents, ABAWDs
Advanced Notice of Public Rulemaking, ANPRM
Agriculture Improvement Act of 2018 (Pub. L. 115-334), the 2018 Farm 
Bill
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)
Office of Management and Budget, OMB
Notice of Proposed Rulemaking, NPRM
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 helpful background.

(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) Historical Policy Document: Waivers of Work Requirement Time 
Limits Based on Insufficient Jobs, March 1997. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/HistoricalPolicyDocument_FSPWaiversofWorkRequirementTimeLimitsBasedonInsufficientJobs_Mar1997_0.pdf
(12) Historical Policy Document: Guidance for States Seeking Waivers 
for Food Stamp Limits, December 1996. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/HistoricalPolicyDocument_GuidanceforStatesSeekingWaiversforFoodStampLimits_December1996.pdf
(13) Overuse of the 15 Percent Able-Bodied Adults Without Dependents 
(ABAWD) Exemptions by States Agencies, November 2007. Available at: 
https://fns-prod.azureedge.net/sites/default/files/media/file/Overuse%20of%20the%2015%20Percent%20ABAWD%20Exemptions%20by%20States%20Agencies%20Nov%202007.pdf
(14) BLS Local Area Unemployment Statistics. Available at: https://
www.bls.gov/lau/
(15) DOL Labor Surplus Area. Available at: https://www.doleta.gov/programs/lsa.cfm
(16) Executive Order 13828: Reducing Poverty in America by Promoting 
Opportunity and Economic Mobility. Available at: https://www.federalregister.gov/documents/2018/04/13/2018-07874/reducing-poverty-in-america-by-promoting-opportunity-and-economic-mobility

Background on This Rulemaking

    Section 6(o) of the Food and Nutrition Act of 2008, as amended (the 
Act) 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 (the time 
limit), unless the individual meets certain work requirements. On the 
request of a State SNAP agency, the Act also gives the U.S. 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 Act also provides State agencies with 
a limited number of discretionary exemptions that can be used by States 
to extend SNAP eligibility for ABAWDs subject to the time limit.
    The ABAWD time limit and work requirement were initially enacted as 
part of the Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996 (PRWORA), which was signed into law on August 22, 1996. 
According to the Conference Report accompanying PRWORA, the main 
purpose of PRWORA was to ``[promote] work over welfare and self-
reliance over dependency, thereby showing true compassion for those in 
America who need a helping hand, not a handout'' (H. Rept. 104-725, p. 
261). Congress also explained that the legislation ``reforms welfare to 
make it more consistent with fundamental American values--by rewarding 
work and self-reliance, encouraging personal responsibility, and 
restoring a sense of hope in the future'' (H. Rept. 104-725, p. 263). 
By

[[Page 66783]]

adding the time limit and work requirement to the Food Stamp Act of 
1977 (now the Food and Nutrition Act of 2008, as amended) at section 
6(o), Congress highlighted the importance of work and self-sufficiency 
for the ABAWD population. Specifically, Congress noted that: ``It 
[PRWORA] makes substantial reforms in the Food Stamp Program, cracking 
down on fraud and abuse and applying tough work standards'' (H. Rept. 
104-725, p. 261). The time limit and work requirement for ABAWDs 
enacted by PRWORA has been maintained by Congress through several 
reauthorizations of the Federal law governing SNAP, most recently 
through the Agriculture Improvement Act of 2018, indicating that 
Congress remains committed to promoting work, self-reliance, and 
personal accountability among the ABAWD population.
    On April 2, 2018, the President signed Executive Order (E.O.) 
13828, on ``Reducing Poverty in America by Promoting Opportunity and 
Economic Mobility.'' E.O. 13828 sets forth the Administration's policy 
that, with regard to social welfare, the Federal Government's role is 
to clear paths to self-sufficiency and to invest in Federal programs 
that are effective at moving people into the workforce and out of 
poverty. Federal programs should empower individuals to seek employment 
and achieve economic independence, while reserving public assistance 
programs for those who are truly in need. Government must examine 
Federal policies and programs to ensure that they are consistent with 
principles that are central to the American spirit--work, free 
enterprise, and safeguarding human and economic resources.
    E.O. 13828 also provided a list of ``Principles of Economic 
Mobility'' that should inform and guide program administration in the 
context of applicable law. One such principle, relevant to this 
rulemaking, is to ``improve employment outcomes and economic 
independence.'' To advance this principle, the E.O. calls for Federal 
agencies to ``first enforce work requirements that are required by law 
[and to] also strengthen requirements that promote obtaining and 
maintaining employment in order to move people to independence.'' 
Moreover, E.O. 13828 directed Federal agencies to review regulations 
and guidance documents to advance these objectives consistent with the 
principles of increasing self-sufficiency, well-being, and economic 
mobility.
    In accordance with E.O.13828 and other Administration priorities, 
the Department undertook a review of its regulations and policies 
associated with ABAWDs. The time limit and work requirement for ABAWDs 
in SNAP clearly align with E.O. 13828 and the Department's shared 
principle that those who can work--adults who are able-bodied and do 
not have dependent care responsibilities--should work or participate in 
a work program, as a condition of receiving their benefits.
    The Department's review of these rules, along with its more than 20 
years of operational experience overseeing the States' administration 
of the ABAWD time limit, has led the Department to identify key 
weaknesses in the current regulations on ABAWD time limit waivers. Over 
the years, States have taken advantage of these weaknesses to request 
and qualify for waivers of the ABAWD time limit in areas where it is 
questionable as to whether the statutory conditions for approval as 
outlined in section 6(o)(4) of the Act, an unemployment rate over 10 
percent or a lack of sufficient jobs, are present. This manipulation is 
demonstrated by the fact that currently about half of the ABAWDs on 
SNAP live in waived areas, despite low unemployment levels across the 
majority of the country.
    Similarly, the current regulations' interpretation of section 
6(o)(6)(G) of the Act, which requires the Department to increase or 
decrease the number of exemptions available to the State during the 
fiscal year based on the prior year's usage, allows States to carryover 
and accumulate unused ABAWD discretionary exemptions indefinitely. As a 
result, States have accumulated extremely high amounts of unused 
discretionary exemptions that well exceed the number allotted to each 
State for the fiscal year. The Department views the accumulation of 
such significant amounts of unused exemptions to be an unintended 
outcome of the current regulations. In the Department's view, the 
indefinite carryover and accumulation of unused exemptions is 
inconsistent with Congress' decision to limit the number of exemptions 
available to States in a given fiscal year, as expressed by sections 
6(o)(6)(C), (D), and (E) of the Act.
    The Department is committed to providing SNAP benefits to those who 
truly need them, but it must also encourage participants to take 
proactive steps toward long-term self-sufficiency. In order to ensure 
these goals are met, the Department believes that waivers of the time 
limit should only be permitted when the circumstances clearly warrant 
that action and meet the statutory conditions for approval.
    Therefore, the Department is amending its regulations to address 
these policy issues by setting clear limitations and introducing new 
safeguards. In particular, the Department is codifying a strict 
definition of an ``area in which the individuals reside'' for purposes 
of a geographic area covered by a waiver; and redefining what 
demonstrates that such an area ``has an unemployment rate of over 10 
percent'' or ``does not have a sufficient number of jobs to provide 
employment for the individuals'' for purposes of such an area 
qualifying for a waiver. In addition, the Department is setting a 
reasonable limit on the carryover of unused discretionary exemptions. 
The Department is making these changes in order to encourage broader 
application of the time limit, to more appropriately target waivers and 
limit discretionary exemptions, and to incentivize ABAWDs to 
proactively pursue any and all work and/or work training opportunities 
within commuting distance of their residences.

Proposed Rule and Comments

    On February 1, 2019 (84 FR 980), the Department published a 
proposed rule, Supplemental Nutrition Assistance Program: Requirements 
for Able-Bodied Adults Without Dependents, proposing to amend the 
regulatory standards by which the Department evaluates State agency 
requests to waive the time limit for ABAWDs and to limit the carryover 
of ABAWD discretionary exemptions. The 60-day comment period ended on 
April 2, 2019. The comment period was reopened on April 8, 2019, for a 
period of 3 days ending April 10, 2019, due to problems with the 
Federal Register website on April 1 and 2, 2019, which contributed to 
commenters facing challenges when trying to submit comments.
    The Department received more than 100,000 comments. The comments 
came from a broad range of stakeholders, including Members of Congress, 
State agencies, State elected officials, local governments, advocacy 
groups, religious organizations, food banks, legal services 
organizations, private citizens, and others. The Department greatly 
appreciates the comments received on the proposed rule as they have 
been essential in developing the final rule.
    The Department reviewed and considered all comments received. Based 
on the Department's review of all the comments received, about one 
quarter were unique and/or substantive, with the remaining three 
quarters consisting of form letters, duplicates, or non-germane 
submissions. Generally

[[Page 66784]]

speaking, the Department viewed a comment as substantive if it provided 
an opinion or recommendation on a specific policy and included detailed 
reasoning. In the sections that follow, the Department's discussion 
focuses on those comments that provided substantive and specific 
feedback on particular proposed provisions and those comments that have 
most influenced the Department's decisions on whether to revise the 
proposed rule. The provisions are presented and discussed in a section-
by-section format for consistency with the proposed rule and the 
amendatory text to the extent possible. The majority of comments that 
were submitted generally opposed the proposed rule but did not comment 
on specific provisions or provide recommendations on how to address the 
policy issues identified by the Department. In general, the preamble 
does not address in detail these comments. Similarly, the preamble does 
not address in detail those comments that generally supported the 
proposed provisions.
    The Department also received comments that were outside the scope 
of the proposed rulemaking. By outside the scope, the Department means 
that commenters provided substantive feedback on policies that were not 
proposed to be changed as part of this rulemaking. Though the 
Department appreciates the feedback on those policies, comments that 
are clearly out of scope are not discussed in detail in this final 
rule.
    To view public comments on the proposed rule, go to 
www.regulations.gov and search for public submissions under docket 
number FNS-2018-0004.
    For a full understanding of the background of the provisions in 
this rule, see the proposed rulemaking, which was published in the 
Federal Register February 1, 2019, at 84 FR 980.

Establishing Core Standards for Approval

    The Department proposed the establishment of core standards for 
waivers in Sec.  273.24(f)(2). The proposed core standards would 
provide States with a set of consistent criteria for approval. Any 
supporting unemployment data provided by the State would need to rely 
on standard Bureau of Labor Statistics (BLS) data or methods, or data 
from BLS-cooperating agencies. BLS is the principal federal agency 
responsible for measuring labor market activity, working conditions, 
and price changes in the economy. BLS produces unemployment data that 
is accurate, objective, relevant, timely, and accessible, and that is 
generally considered by experts to be reliable and robust evidence for 
evaluating labor market conditions. For areas which BLS does not 
produce data, such as Indian Reservations and some U.S. Territories, 
the core standards would not apply.
    The Department did not receive any substantive comments on the 
general concept of establishing core standards; however, many comments 
were received on each specific core standard. These comments and the 
Department's responses are detailed in the following sections.

Core Standards: Retaining Waivers Based on a 12-Month Unemployment Rate 
Over 10 Percent

    The Department proposed to maintain the criterion allowing an area 
to qualify for a waiver when it has a recent 12-month average 
unemployment rate over 10 percent, and to include that criterion as a 
core standard.
    The comments provided on this particular proposal were generally 
supportive. Some comments suggested that this proposal was inadequate 
and that other time periods should be allowed to demonstrate an 
unemployment rate over 10 percent. The Department addresses these 
viewpoints in the Other Data and Evidence in Exceptional Circumstances 
and Other Changes to Waivers sections of the final rule.
    The final rule adopts this provision of the proposed rule at Sec.  
273.24(f)(2)(i) as written.

Core Standards: Establishing a Floor for Waivers Based on the 20 
Percent Standard

    Current regulations at Sec.  273.24(f)(2) and (3) provide for a 
waiver approval for a requested area that has been designated as a 
Labor Surplus Area (LSA) by the Department of Labor (DOL) for the 
current fiscal year. Prior to the final rule in 2001 that established 
Sec.  273.24(f), the Department introduced the use of LSAs for waivers 
in its December 1996 memorandum, Guidance for States Seeking Waivers of 
Food Stamp Limits. DOL designates LSAs based on specific unemployment 
rate criteria. In order to be designated as an LSA for the fiscal year, 
the area must have had an unemployment rate 20 percent or more above 
the national unemployment rate for the previous 2 calendar years. In 
addition, the area must have had an unemployment rate of 6 percent or 
higher for the same 24-month period, which DOL refers to as the 
``floor'' unemployment rate for LSAs. So, together, an area must have 
an average unemployment rate at least 20 percent above the national 
average and at least 6 percent for the previous 2 calendar years in 
order to be designated as an LSA.
    Current regulations at Sec.  273.24(f)(2) and (3) also provide for 
ABAWD time limit 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''). The Department 
introduced the 20 percent standard in its March 1997 memorandum FSP--
Waivers of Work Requirement Time Limits Based on Insufficient Jobs. The 
Department explained in that memo that its reason for introducing the 
20 percent standard was to give States a method to demonstrate a lack 
of sufficient jobs for areas that are not considered by DOL for LSA 
designation. In the current regulations, the Department adopted the 20 
percent standard as a standalone criterion beyond the LSA designation, 
to provide States with the flexibility to support waivers of areas that 
are not considered by DOL for LSA designation, and to allow States to 
use a more flexible 24-month reference period. Importantly, while the 
20 percent standard was modeled after and is similar to the calculation 
of an LSA, the 20 percent standard does not include an unemployment 
rate floor, as the LSA criteria does. Because the 20 percent standard 
lacks an unemployment rate floor, areas that do not clearly lack 
sufficient jobs qualify for waivers solely because they are 20 percent 
above the national unemployment rate. For example, the national average 
unemployment rate for the 24-month period of May 2017 through June 2019 
was 3.9 percent.\1\ Given this national average, a State could request 
and qualify for a waiver in areas with an unemployment rate as low as 
4.7 percent for the same 24-month period. Not including a floor has had 
the effect of allowing areas with low rates of unemployment to qualify 
for waivers.
---------------------------------------------------------------------------

    \1\ Calculations based on BLS unemployment data, not seasonally 
adjusted, pulled from https://www.bls.gov/data/#unemployment on 
August 15, 2019.
---------------------------------------------------------------------------

    In the February 1, 2019, proposed rule, the Department proposed to 
include a 7 percent unemployment rate floor within the 20 percent 
standard, meaning that an area would need to have an average 
unemployment rate at least 20 percent above the national average and of 
at least 7 percent for the 24-month period. In so doing, the

[[Page 66785]]

Department also requested evidence-based and data-driven feedback on 
the appropriate threshold for the floor, specifically whether a 6 
percent, 7 percent, or 10 percent floor would be most effective and 
consistent with the Act's requirement that waivers be determined based 
on a lack of sufficient jobs. In addition, the Department proposed to 
eliminate the LSA designation as a basis of waiver approval because the 
LSA unemployment rate floor of 6 percent was inconsistent with the 7 
percent unemployment rate the Department proposed for the similar 20 
percent standard.
    The vast majority of those who commented on the unemployment rate 
floor opposed setting any unemployment rate floor within the 20 percent 
standard. However, the Department did receive several other important 
comments with respect to the unemployment rate floor options described 
in the proposed rule. The comments regarding the 6 percent, 7 percent, 
and 10 percent options are addressed below, along with the comments of 
those who opposed any floor and comments recommending alternatives.

Comments on a 6 Percent Unemployment Rate Floor for the 20 Percent 
Standard

    Several commenters argued that, if the Department is to set an 
unemployment rate floor, then 6 percent is the best option. These 
commenters provided evidence-based support that the 20 percent standard 
with a 6 percent floor would demonstrate that an area lacks sufficient 
jobs better than 7 percent or other potential options. Some of these 
commenters stated that a 6 percent floor would align with DOL's LSA 
designation criteria. These commenters pointed out that LSA designation 
is a longstanding Federal standard for job insufficiency relied upon by 
Federal and State governments and other workforce development partners.
    Some commenters suggested that in the context of the 20 percent 
standard, setting the floor at 6 percent makes sense in that it could 
be viewed as 20 percent above the natural rate of unemployment,\2\ 
which has historically hovered around 5 percent and is one way to 
define a ``normal'' level of unemployment. These commenters indicated 
that it would be logical and appropriate to only allow areas at least 
20 percent above the natural rate of unemployment to be considered for 
waivers under this standard.
---------------------------------------------------------------------------

    \2\ For more information on the natural rate of unemployment, 
see https://fred.stlouisfed.org/series/NROU.
---------------------------------------------------------------------------

    A few commenters compared the proposed 7 percent floor to the 6 
percent floor, and provided data and evidence to show that including a 
6 percent floor would more appropriately target areas qualifying under 
the 20 percent standard to areas demonstrating a ``lack of sufficient 
jobs'' than would a 7 percent floor. In particular, a commenter 
provided analysis showing that, when looking at economic metrics other 
than unemployment rates, such as a county's poverty rates, education 
levels, and other demographics associated with poverty, counties with 6 
to 7 percent unemployment more closely resemble areas above 7 percent 
unemployment than areas below 6 percent unemployment, indicating that 6 
percent was a meaningful threshold for economic distress.
    The Department is persuaded and agrees with these commenters that 6 
percent is the best option for an unemployment rate floor within the 20 
percent standard. The Department finds 6 percent to be particularly 
justified, relative to the other options, in that it aligns with DOL's 
LSA standard. Including the 6 percent floor within the 20 percent 
standard would further align the 20 percent standard with the 
longstanding LSA criteria on which the 20 percent standard was 
originally based. The Department is also influenced by the data and 
analysis provided by commenters that demonstrated 6 percent as a 
relatively meaningful threshold for economic distress and for targeting 
waivers to areas with a ``lack of sufficient jobs''. Moreover, the 
Department has determined that as a practical outcome, a 6 percent 
floor will ensure that the 20 percent standard appropriately 
demonstrates a lack of sufficient jobs and acts as an effective 
safeguard against any future waiver misuse. For these reasons, the 
Department has decided that a 6 percent floor represents areas that 
demonstrate a lack of sufficient jobs better than the proposed rule's 7 
percent floor. As explained earlier in this section, a 20 percent 
standard without an unemployment rate floor can be misused because 
areas that do not clearly lack sufficient jobs will continue to qualify 
for waivers solely because they are 20 percent above the national 
unemployment rate.
    The Department also agrees with the comments suggesting that a 6 
percent floor could be viewed as sensible in that it is about 20 
percent above where the natural rate of unemployment has hovered. 
However, as discussed in detail in later sections, the Department 
acknowledges that the natural rate of unemployment is a theoretical 
concept that is not fixed at 5 percent, but fluctuates over time and 
has a large range of estimates, making it an impractical basis by which 
to set a floor for the 20 percent standard. As a result, the Department 
did not view the natural rate of unemployment as a deciding factor in 
its decision to set the floor at 6 percent. Rather, as explained in the 
preceding paragraphs, the Department's decision to set the floor at 6 
percent is primarily driven by the fact that it aligns with DOL's LSA 
standard and that it represents the most justified option relative to 
the proposed rule's 7 percent floor or other potential unemployment 
rate floors. While the comments received on the proposed rule included 
strong arguments, data, and evidence to support a 6 percent floor, they 
also exposed the relative weakness of the 7 percent proposal and the 10 
percent option.
    The Department is therefore adopting a 6 percent unemployment rate 
floor within the 20 percent standard at Sec.  273.24(f)(2)(ii). As 
explained later in this rule in the section entitled Restricting the 
Combining of Data to Group Substate Areas and Redefining ``Area'' and 
the section entitled Other Changes to Waivers, the Department is not 
including LSA designation as a criterion for waiver approval under the 
core standards because the Department is redefining ``area'' in such a 
way that will exclude civil jurisdictions used by DOL when designating 
LSAs.
    The following subsections will focus on the comments made regarding 
the proposed 7 percent floor, the 10 percent floor, and other options 
suggested by commenters. While the Department's decision not to adopt 
any of these other options is based, in part, on its belief that a 6 
percent floor has a stronger rationale for determining which areas 
demonstrate a lack of sufficient jobs than do these other options, the 
following subsections will not repeat the rationale for adopting the 6 
percent floor, as that has already been discussed.

Comments on a 7 Percent Unemployment Rate Floor for the 20 Percent 
Standard

    Many commenters opposed the proposed 7 percent unemployment rate 
floor to the 20 percent standard. A number of commenters stated that 
the 7 percent floor lacks justification and is arbitrary, as the 
proposed rule did not clearly tie the 7 percent floor to evidence for 
lack of sufficient jobs. Some commenters pointed to the justification 
provided in the proposed

[[Page 66786]]

rule that a 7 percent floor aligns with a proposal in the Agriculture 
and Nutrition Act of 2018, H.R. 2, 115th Cong. section 4015 (as passed 
by House, June 21, 2018). These commenters argued that this rationale 
is invalid because Congress ultimately did not include that provision 
when it enacted the Agriculture Improvement Act of 2018 (Pub. L. 115-
334) (the 2018 Farm Bill).
    Several commenters argued that setting a floor at 7 percent 
unemployment is too high. Some commenters asserted that jobs are not 
widely available to all who may seek them when unemployment is below 7 
percent. Commenters also suggested that ABAWDs face barriers to 
employment that the general population does not. These commenters noted 
that unemployment rates for ABAWDs, as a distinct group, would 
generally be higher than the official unemployment rate because many 
ABAWDs share demographic characteristics with subpopulations that have 
relatively high unemployment rates. One commenter pointed out that 
areas with unemployment rates just below the 7 percent floor would 
share many of the same characteristics as those above the 7 percent 
floor, for example: Unemployment higher than at any point nationally 
during the 2001-2002 recession; hidden unemployment due to cyclically 
low labor force participation; and, very limited employer demand for 
the ``hardest to employ'' groups, such as those with criminal records, 
lengthy periods of unemployment, or other barriers to work. Another 
commenter argued that the proposed 7 percent floor is too high because 
it is well above 4 percent, which is the statutory definition of full 
employment set by the Full Employment and Balanced Growth Act of 1978.
    Commenters also suggested that the proposed 7 percent floor would 
not adequately provide States with waiver coverage during times of 
rising unemployment because the combination of an unemployment rate 
floor with the lengthy 24-month data reference period would prevent 
many areas with rising unemployment from qualifying for waivers.
    One commenter provided data analysis showing that many areas 
considered ``distressed communities'' according to a series of economic 
metrics would not have met the 7 percent unemployment rate threshold. 
This commenter argued that the 7 percent floor fails to capture the 
economic realities of regions, and that this divergence highlights the 
shortcomings of a 7 percent unemployment rate floor.
    Many commenters provided specific examples that the proposed 7 
percent floor would harm their State or locality, with some citing 
specific poor, food insecure, or economically distressed areas in their 
State, that would not currently meet the 7 percent floor.
    Several commenters suggested that the Department did not properly 
apply the concept of the natural rate of unemployment in choosing a 7 
percent floor. Some commenters suggested that the proposed rule did not 
provide adequate justification to explain the relationship between the 
7 percent floor and the natural rate of unemployment.
    The detailed comments in opposition to the 7 percent floor 
described in the preceding paragraphs provided the Department with 
helpful perspective, in particular those that provided data and 
analysis to illustrate that some areas with unemployment rates below 7 
percent may be considered economically distressed or in recession. The 
Department took these comments into consideration in its decision to 
adopt DOL's 6 percent floor, instead of a 7 percent floor.
    A few commenters expressed support for the 7 percent unemployment 
rate floor. While these comments did not provide evidence or data to 
support that a 7 percent floor within the 20 percent standard would 
better demonstrate a lack of sufficient jobs, they did suggest that a 7 
percent floor represented a reasonable middle ground between a 10 
percent floor and a 6 percent floor. The Department appreciates that 
when considering among several options, it is sometimes prudent to 
select that option which best represents a reasonable middle ground, 
especially when there is a lack of data or evidence to distinguish one 
option as more or less justified as another. However, in this situation 
there is clear justification supporting a 6 percent floor versus the 
other options, as explained in the immediately preceding section.

Comments on a 10 Percent Unemployment Rate Floor for the 20 Percent 
Standard

    Many commenters opposed a 10 percent unemployment rate floor for 
the 20 percent standard. Some commenters argued that this proposal 
conflicts with Congressional intent. In particular, these commenters 
argued that Congress designated a 10 percent unemployment rate as one 
way for a State to qualify for a waiver, and a second criterion of 
``insufficient jobs'' as an alternative to demonstrating a 10 percent 
unemployment rate. These commenters stated that adopting a 10 percent 
unemployment rate floor would make the lack of sufficient jobs 
criterion too similar to the 10 percent unemployment rate criterion in 
the statute. Commenters also suggested that this proposal would be 
largely duplicative of existing criteria allowing waiver approval for 
areas with over 10 percent unemployment during a recent 12-month 
period.
    A few commenters supported setting an unemployment rate floor at 10 
percent. These commenters argued that this high floor would most 
effectively reduce the number of ABAWDs living in waived areas. One 
commenter used data to argue that a 10 percent floor would more often 
act to reduce the number of areas that would qualify than would a 7 
percent floor. Another commenter suggested that a 10 percent 
unemployment rate floor is appropriate because the current economic 
conditions in the United States are favorable for ABAWDs finding jobs.
    The Department has not been persuaded to adopt the 10 percent floor 
option presented in the proposed rule, in part, because the Department 
found the comments expressing concern over Congressional intent and 
duplication with other waiver standards to be valid, and in part 
because sufficient evidence-based and data-driven support was not 
provided to go in this direction.

Opposition to any Unemployment Rate Floor Within the 20 Percent 
Standard

    As previously mentioned, the vast majority of those who commented 
on the unemployment rate floor opposed setting any unemployment rate 
floor within the 20 percent standard. Commenters argued that the 
statutory language requires the Department to base the waiver standards 
on whether there are a lack of sufficient jobs for the specific ABAWD 
population, not the broader population. Many commenters opposed setting 
an unemployment floor because they argued unemployment rates fail to 
accurately capture the availability of jobs specifically for ABAWDs who 
face particular barriers to employment. They argued that the proposed 
rule represents an overreliance on unemployment data, especially with 
regard to an unemployment rate floor in the 20 percent standard. Many 
suggested that while the standard unemployment rate available in local 
areas does provide essential data, it does not accurately reflect labor 
market prospects for ABAWDs, and it does not fully account for the 
ability of ABAWDs to find and keep jobs due to lack of skills, 
training, or other barriers. Commenters argued that ABAWDs should not 
be subject to

[[Page 66787]]

the unemployment rate floor used in designating LSAs because ABAWDs 
face labor market disadvantages that the general public does not.
    Commenters also provided analysis, based on the 2017 USDA Household 
Characteristics data,\3\ that non-disabled individuals aged 18 through 
49 in households without children in SNAP report lower than average 
educational attainment. Commenters pointed to research indicating that, 
on average, unemployment rates for people with low-education attainment 
are much higher than what BLS unemployment rates for the general public 
indicate. Commenters provided research indicating that lower 
unemployment rates are less indicative of strong labor markets in 
recent years than in the past, and particularly for those with lower 
levels of education. Commenters also provided research indicating that 
employment rates for workers with low levels of education still have 
not recovered from the recession and pointed to evidence that workers 
with less education may be hit harder by recessions. In addition, 
commenters suggested that ABAWDs are more likely to have part-time 
work, irregular hours, seasonal work, underemployment, high turnover, 
and low job security within low-skill professions. Commenters pointed 
to analysis commissioned by the Department that indicates that those 
subject to SNAP work requirements face substantial barriers to 
employment. Commenters provided research indicating that involuntary 
part-time work is increasing at dramatically higher rates than other 
types of work. These commenters argued that this impacts the ability of 
ABAWDs to be able to meet the work requirement. Commenters provided 
data indicating that individuals who were projected to lose their 
benefits due to the time limit also faced other barriers to work. One 
State provided data indicating that ABAWDs have higher levels of 
homelessness than other SNAP participants. Commenters asserted that 
formerly incarcerated persons encounter obstacles attaching to 
employment quickly and provided data showing that unemployment rates 
among this population was significantly higher than the unemployment 
rate of the general public. Other commenters provided recent studies 
finding significant racial discrimination in the labor market and 
hiring in particular. These commenters asked the Department to consider 
racial discrimination and other reasons that result in significant 
racial and ethnic employment disparities, and these commenters argued 
that evidence of discrimination and employment disparities indicates 
that general unemployment rates are not a good predictor of job 
availability for people of color. Commenters also asked the Department 
to consider access to transportation, housing stability, and forced 
moves among the ABAWD population that lead to particular problems 
maintaining stable employment.
---------------------------------------------------------------------------

    \3\ The Department publishes a characteristics report and 
corresponding SNAP Quality Control data annually, which provide 
information about the demographic and economic circumstances of SNAP 
households.
---------------------------------------------------------------------------

    Commenters argued that the Department has previously acknowledged 
that time limit waivers were intended by Congress to recognize the 
challenges that the ABAWD population faces when finding permanent 
employment. Commenters pointed to the Department's December 1996 
guidance in which it offered several reflections on its understanding 
of Congressional intent at the time. In this guidance, the Department 
stated, ``USDA believes that the law provided authority to waive these 
provisions in recognition of the challenges that low-skilled workers 
may face in finding and keeping permanent employment. In some areas, 
including parts of rural America, the number of employed persons and 
the number of job seekers may be far larger than the number of vacant 
jobs. This may be especially so for person with limited skills and 
minimal work history.'' Commenters also argued that in its original 
rulemaking the Department realized that ABAWDs were a more diverse 
population than had originally been anticipated and that many faced 
barriers to employment. In response to these comments, the Department 
recognizes that ABAWDs may face barriers to employment and have more 
limited employment prospects than the general public due to low 
educational attainment or other factors discussed above. The Department 
also recognizes that there is no measure available for determining the 
number of available jobs specifically for ABAWDs participating in SNAP 
in any given area. However, notwithstanding the issues raised by these 
comments, the Department is resolute that establishing an unemployment 
rate floor within the 20 percent standard is necessary to ensure that 
the standard is designed to accurately reflect a lack of sufficient 
jobs in a given area. The Department's position is based on its 
operational experience, during which it has recognized that, without an 
unemployment rate floor, areas that do not clearly lack sufficient jobs 
will continue to qualify for waivers solely because they are 20 percent 
above the national unemployment rate. For example, the national average 
unemployment rate for the 24-month period of May 2017 through June 2019 
was 3.9 percent.\4\ Given this national average, a State could request 
and qualify for a waiver in areas with an unemployment rate as low as 
4.7 percent for the same 24-month period. Not including a floor has had 
the effect of allowing areas with low rates of unemployment to qualify 
for waivers.
---------------------------------------------------------------------------

    \4\ Calculations based on BLS unemployment data, not seasonally 
adjusted, pulled from https://www.bls.gov/data/#unemployment on 
August 15, 2019.
---------------------------------------------------------------------------

    As discussed in the previous section, the Department finds the 20 
percent standard with a 6 percent floor to be one of the most objective 
and defensible ways of determining a lack of sufficient jobs, as it 
aligns with a longstanding DOL measure of job insufficiency. The LSA 
designation criteria developed by DOL was used by the Department when 
originally developing the 20 percent standard. Including a 6 percent 
floor within the 20 percent standard would further align the 20 percent 
standard with the longstanding LSA standard on which it was originally 
based. This will improve the 20 percent standard and make it a better 
measure of job insufficiency.
    Some commenters argued that the proposed rule's justification for 
applying an unemployment rate floor is not in line with Congressional 
intent. One commenter pointed to the House Committee on Budget's report 
(H. Rept. 104-651) on its original version of The Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
(PRWORA), which stated that waivers would be based on ``high 
unemployment . . . or other specified circumstances'' limiting the 
availability of jobs. The commenter argued that the ``other specified 
circumstances'' language means that Congress did not intend for 
unemployment rates alone to govern waiver decisions. Commenters argued 
that unemployment rates measure the proportion of the workforce who are 
employed or unemployed, but they do not measure how many jobs are 
available. Commenters also suggested that, if Congress intended to 
include an unemployment rate threshold for the ``sufficient number of 
jobs'' criteria, Congress would have done so. Commenters stated that 
Congress did not intend for lack of sufficient jobs criteria to be 
based on whether there are

[[Page 66788]]

too many or too few waivers that result from the criteria--Congress did 
not establish a desired level of waiver coverage. Another commenter 
stated that Congress intended for there to be many different ways to 
meet ``insufficient jobs,'' and that the Department acknowledged this 
when first implementing the policy in the late 1990s and early 2000s.
    While the Department appreciates these commenters' references to 
the legislative history, the Department does not find setting an 
unemployment rate floor to be in conflict with Congressional intent. 
The Department is limiting the number of ways that a State may 
demonstrate a lack of jobs in order to prevent the misapplication of 
waivers in areas in which the lack of jobs is questionable. These 
changes are well within the authority under section 6(o)(4)(A) of the 
Act, which provides the Secretary with broad discretion on how to 
define what does and does not constitute a lack of sufficient jobs. By 
introducing a 6 percent unemployment rate floor, the Department aims to 
prevent the misapplication of waivers to areas with unemployment rates 
that do not demonstrate a lack of sufficient jobs.
    One commenter argued that the proposed rule's assertion that the 
current rate of waivers was unforeseen is inconsistent with the 
historical record. This commenter provided evidence that USDA's 
original estimate of the extent of waiver coverage under its rules is 
in line with current actual waiver coverage. This commenter pointed to 
a document sent from Department staff to Office of Management and 
Budget (OMB) staff in 1997 that stated, ``Thirty percent to 45 percent 
of the able-bodied caseload may be waived. However, USDA's best 
estimate is that the areas that have been waived represent 
approximately 35 percent of the able-bodied caseload in the nation as a 
whole.''
    In response to this comment, the Department sees fit to reiterate 
that its concern over the current number of waivers is based on the 
number of areas that continue to qualify when their unemployment rates 
are relatively low and the areas do not clearly demonstrate a lack of 
sufficient jobs. Over the past 20 years, the Department has identified 
the lack of a floor in the 20 percent standard as a particular weakness 
in the current regulations. The Department did not foresee the extent 
to which States would take advantage of this weakness to request and 
qualify for waivers in areas with unemployment rates not generally 
considered to indicate a lack of jobs, such as the 4.7 percent 
unemployment rate used as an example previously. The Department aims to 
address this and other weaknesses with reasonable policy changes, based 
on objective data and evidence. In the case of the 20 percent standard, 
the introduction of a 6 percent unemployment rate floor will ensure 
that the waiver standards appropriately account for fluctuations in the 
national unemployment rate without allowing areas in which unemployment 
is objectively low to qualify for waivers.
    Commenters also pointed to research asserting that there is no one 
way to identify conditions that make it difficult to secure employment, 
but there are several measures of labor market weakness that can 
indicate a lack of sufficient jobs. In stating their opposition to the 
floor, some commenters noted that unemployment relative to the national 
average is an important signal that the economic conditions warrant 
waiving work requirements. Commenters stated that, by generally tying 
waiver eligibility to a ratio threshold of the overall U.S. 
unemployment rate, as the Department currently does with the 20 percent 
standard, States are able to target their waivers to jurisdictions that 
are lagging behind in comparison to the state and national economy. 
Commenters provided data showing that these areas with higher relative 
unemployment share significant overlap with the areas that have the 
greatest rates of poverty and food insecurity. These commenters argued 
that adding an unemployment rate floor to the 20 percent standard 
provides less flexibility for States to capture insufficient jobs for 
the ABAWD population.
    The Department appreciates this information provided by commenters, 
but disagrees that a relative unemployment rate is a sufficient 
indicator of a lack of sufficient jobs in and of itself. As explained 
in several other sections of this rule, the Department is adding a 6 
percent floor to the 20 percent standard based on its operational 
experience, during which it has recognized that, without an 
unemployment rate floor, areas that do not clearly lack sufficient jobs 
will continue to qualify for waivers solely because they are 20 percent 
above the national unemployment rate.
    Some commenters argued that the natural rate of unemployment is an 
impractical measure by which to set a floor. They argued that it has a 
very wide range of estimates, is a macroeconomic concept that is not a 
fixed or precisely identifiable unemployment rate, has not been a 
useful tool for setting policy or for predicting inflation, and is the 
subject of disagreement among economists.
    As described previously, though substate unemployment data for the 
general population is available, the Department recognizes there is no 
measure available for determining the number of available jobs 
specifically for ABAWDs on SNAP in any given area. The Department also 
acknowledges that the natural rate of unemployment is a theoretical 
concept that is not fixed at 5 percent, but fluctuates over time and 
has a wide range of estimates, making it an impractical basis by which 
to set a floor for the 20 percent standard. As a result, the Department 
did not view the natural rate of unemployment as a deciding factor in 
its decision to set the floor at 6 percent. The Department is also not 
persuaded by the arguments for no unemployment rate floor. Rather, the 
Department is adopting a 6 percent floor within the 20 percent standard 
because it aligns with DOL's LSA standard and it represents the most 
meaningful, justified option relative to the proposed rule's 7 percent 
floor or other potential unemployment rate floors.

Alternative Measures of Unemployment Rates

    Several commenters argued that using the standard unemployment rate 
\5\--the U-3 rate, which is defined by BLS as the number of people 
unemployed as a percent of the civilian labor force--as a floor does 
not adequately capture job availability for ABAWDs and suggested that 
some alternative measures better represent labor market conditions for 
this population. Some commenters provided evidence that an alternative 
measure of unemployment published by BLS, known as the U-6 unemployment 
rate, indicates that job prospects for

[[Page 66789]]

some disadvantaged groups have not improved as much as the unemployment 
rate for the general population. The U-6 unemployment rate is defined 
by BLS as the total number of people unemployed, plus all marginally 
attached workers, plus the total number of people employed part time 
for economic reasons, as a percent of the civilian labor force and all 
persons marginally attached to the labor force. Put more generally, the 
U-6 measure is the percent of people unemployed, people underemployed, 
and people who want a job but are not looking because they are unable 
to find jobs or are discouraged. These commenters point out that the 
standard U-3 rate includes the employed and unemployed people who have 
searched for a job in the past 4 weeks. The commenter argued that the 
U-6 rate, which includes people who want full-time work but had to 
settle for part-time work and unemployed people who have looked for a 
job in the last 12 months, more accurately captures the condition of 
the labor market for ABAWDs. Commenters provided evidence showing that 
the U-6 unemployment rate recovered more slowly during the recovery 
from the Great Recession than did the U-3 rate. Additionally, one State 
suggested that the U-3 unemployment rate fails to include working-age 
people who are not in the labor force, and this group includes many so-
called ``discouraged workers'' who have given up on searching for 
employment. The State argued that because these individuals are not 
included in the BLS unemployment calculation, the BLS will 
underestimate the true joblessness rate in areas with proportionately 
larger populations of these individuals. Another State provided data 
showing that the Labor Force Participation Rate had increased by only 
0.1 percent between September 2014 and November 2018, even though the 
U-3 unemployment rate had fallen significantly over that time period. 
Commenters also suggested that an unemployment rate floor based on the 
U-3 rate could disadvantage rural areas or other areas that primarily 
rely on declining industries because ABAWDs living in these areas may 
ultimately be unable to secure employment even if it is not reflected 
in a sustained high U-3 unemployment rate. Other commenters said that, 
in addition to facing higher unemployment rates, racial minorities are 
more likely to be marginally attached to the workforce, and thus 
ignored by the U-3 unemployment rates.
---------------------------------------------------------------------------

    \5\ BLS publishes 6 measures of labor underutilization (U-1 
through U-6). U-3 is the official unemployment rate, and it is equal 
to the total number of unemployed persons, as a percent of the 
civilian labor force. The number of unemployed persons includes all 
jobless persons who are available to take a job and have actively 
sought work in the past four weeks. U-6 is an alternative measure 
defined as total unemployed persons, plus all marginally attached 
workers, plus total employed part time for economic reasons, as a 
percent of the civilian labor force plus all marginally attached 
workers. ``Marginally attached workers'' include ``discouraged 
workers'' who are persons who are not in the labor force, want and 
are available for work, and had looked for a job sometime in the 
prior 12 months. They are not counted as unemployed because they had 
not searched for work in the prior 4 weeks. Persons employed part 
time for economic reasons are those working less than 35 hours per 
week who want to work full time, are available to do so, and gave an 
economic reason (their hours had been cut back or they were unable 
to find a full-time job) for working part time. These individuals 
are sometimes referred to as involuntary part-time workers. U-6 data 
is not published by BLS on the substate level.
---------------------------------------------------------------------------

    While these comments about alternative unemployment measures are 
appreciated, the Department also recognizes that there is no measure 
available for precisely determining the number of available jobs 
specifically for SNAP ABAWDs in any given area. For example, while some 
commenters argued that the U-6 unemployment rate may better reflect the 
unemployment situation for ABAWDs, this measure is deficient for 
purposes of time limit waivers because it is not available at the 
substate level and therefore cannot be used to support or validate 
waiver requests for substate areas. Only U-3 unemployment data is 
available at the substate level.
    As stated previously, the Department believes that setting a 6 
percent floor within the 20 percent standard strengthens the standard 
by aligning it more closely with the DOL LSA criteria upon which it was 
originally modeled. Section 6(o)(4) of the Act states that the 
Secretary may waive the ABAWD time limit if an area has an unemployment 
rate of over 10 percent or if an area does not have a sufficient number 
of jobs. In this rule, the Department aims to prevent the 
misapplication of waivers to areas with unemployment rates that do not 
clearly meet the statutory conditions for waivers, and setting an 
unemployment rate floor using the BLS U-3 rate for the 20 percent 
standard is one of the means by which the Department will do so.

Alternative Unemployment Rate Floors

    Some commenters suggested that, if the Department is to set an 
unemployment rate floor within the 20 percent standard, the floor 
should be set at or closer to the natural rate of unemployment. In 
particular, some commenters suggested that the Department set a floor 
at the current estimate of the natural rate of unemployment or adopt a 
fluctuating floor based on the quarterly estimates of the natural rate 
of unemployment from the Congressional Budget Office (CBO).
    The Department appreciates these alternative suggestions. However, 
as previously discussed the Department believes that setting a 
fluctuating floor could be administratively difficult and setting a 
floor based solely on the current natural rate of unemployment may not 
account for changes to the natural rate of unemployment in the future. 
The Department is not persuaded by the arguments for alternative 
unemployment rate floors, and, as previously discussed, is adopting a 6 
percent floor within the 20 percent standard.

Ceiling for the 20 Percent Standard

    A commenter argued that imposing a floor similar to that used in 
LSA determinations is inconsistent with the Department's decision not 
to apply the LSA unemployment ceiling at 10 percent. The commenter 
stated that FNS is picking and choosing elements of LSA determinations 
without rationale.
    The Department acknowledges that the LSAs have a 10 percent ceiling 
and that any civil jurisdiction above 10 percent unemployment for the 
appropriate 24-month period qualifies as an LSA regardless of whether 
the area is 20 percent above the national average. However, the 
Department believes it is unnecessary to include a 10 percent ceiling 
in the 20 percent standard, as the Department will continue to approve 
waivers for areas that have an unemployment rate over 10 percent during 
a recent 12-month period. As this commenter pointed out, areas with an 
unemployment rate over 10 percent during a recent 24-month period 
typically also have an unemployment rate above 10 percent for a recent 
12-month period. For this reason, the Department is not adopting a 10 
percent ceiling at Sec.  273.24(f)(2)(ii).

Core Standards: Eliminating the Extended Unemployment Benefits 
Qualification Standard

    The Department proposed that it would continue to approve any 
waiver request that is supported by the requesting State's 
qualification for extended unemployment benefits, as determined by 
DOL's Unemployment Insurance Service. The Department also proposed to 
prohibit statewide waivers when substate data is available, except for 
those States qualifying under the extended unemployment benefits 
standard.
    Although the Department did not receive many comments with regard 
to retaining the extended unemployment benefits standard, some 
commenters supported the proposal to retain the extended unemployment 
benefits standard, arguing that this standard is an appropriate 
indicator that a State lacks sufficient jobs. Some of those who 
supported the proposal also argued that it is insufficient to have this 
as the only remaining criterion for statewide waivers, as this 
criterion does not adequately capture all States with a lack of 
sufficient jobs. These commenters noted that, under the extended 
unemployment benefits criterion, States must have increasing 
unemployment, and States that have continuing high unemployment that is 
flat and not increasing would not qualify under this

[[Page 66790]]

criterion. Other commenters cited research finding that extended 
unemployment triggers are set too high and asserted that Congress has 
had to step in too often to establish temporary programs of extended 
unemployment insurance benefits. Commenters also argued that States 
should not need to wait until statewide labor market conditions become 
so dire that the State qualifies for extended unemployment benefits 
before they are eligible for a statewide waiver.
    Although the Department appreciates these comments in support of 
the criterion, the Department has decided not to adopt the rule as 
proposed because the Department is concerned that the extended 
unemployment benefits criterion would allow States to receive statewide 
waivers even when there is not a lack of sufficient jobs within certain 
areas of the State. One commenter stated that, while remaining 
sensitive to the administrative burden placed on State agencies, the 
Department should strive to approve waivers for distinct economic 
regions, as State boundaries often encompass multiple labor markets 
with significant variation in economic conditions. The Department 
agrees that waivers should be targeted to economically-tied areas with 
a lack of sufficient jobs, rather than entire states that contain 
distinct economic regions. In fact, the Department referenced a similar 
concept in the preamble to proposed rule for the current regulations at 
Sec.  273.24, noting that statewide unemployment averages may mask 
``slack'' job markets (insufficient jobs) in some substate areas.\6\ 
The Department maintains the validity of this concept, and notes it is 
also true that statewide averages may mask tight labor markets in some 
substate areas. Additionally, as discussed later in the Restricting the 
Combining of Data to Group Substate Areas and Establishing Strict 
Definition of Waiver ``Area'' section, the Department is choosing to 
provide a strict definition of a waiver area that will also restrict 
statewide waivers. Therefore, the Department is removing the extended 
unemployment benefits criterion from the core standards, which was 
included at Sec.  273.24(f)(2)(iii) in the proposed rule, as 
qualification for extended unemployment benefits is designated only at 
the state level, not at the LMA level. Accordingly, the Department is 
also eliminating the proposed exception to the restriction on statewide 
waivers for extended unemployment benefits that was included at Sec.  
273.24(f)(4) in the proposed rule. The Department believes this change 
will ensure that waivers of the ABAWD time limit are more appropriately 
targeted to those particular areas that have unemployment rates over 10 
percent or lack sufficient jobs, rather than the larger areas of entire 
states. This is discussed further in the later section, Restricting 
Statewide Waivers.
---------------------------------------------------------------------------

    \6\ 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).
---------------------------------------------------------------------------

Criteria Excluded From Core Standards

    The Department proposed excluding some of the current ABAWD time 
limit waiver criteria when standard BLS unemployment data is available. 
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.
    Many commenters opposed excluding these criteria. Some commenters 
argued specifically that a low and declining employment-to-population 
ratio should be retained as a criterion for all areas. These commenters 
stated that this metric is well-defined and widely-used. Commenters 
asserted that data for this metric is readily available from the U.S. 
Census Bureau and BLS, and BLS regularly calculates this metric. 
Commenters argued that because employment-to-population ratio includes 
individuals who are employable but have not looked for a job in more 
than a year, during periods of severe and long-term economic 
recessions, the number of individuals in this category will grow and 
the employment-to-population ratio will paint a clearer picture of the 
strength of the labor market than other measures. Commenters argued 
that the employment-to-population ratio captures valuable information 
about discouraged workers and those classified as ``marginally attached 
to the workforce'' who are not actively looking for work, which is 
valuable because labor market depressions can discourage some ABAWDs 
from even searching for employment. Commenters argued that, compared to 
U-3 unemployment rates, the employment-to-population ratio is a more 
appropriate measure in some cases for labor market conditions for low-
skill workers who face serious barriers to employment. Commenters 
provided evidence that researchers routinely use the employment-to-
population ratio in addition to, or instead of, the unemployment rate 
to measure labor market conditions. One commenter asserted that the 
employment-to-population ratio provides useful information in assessing 
labor market conditions over the business cycle because it takes into 
account changes in labor market ``slack'' due to changes in both 
unemployment and labor-force participation. This commenter noted that 
employment-to-population ratio is a measure that labor economists use 
to capture weak labor markets in areas where there is a notable lack of 
jobs relative to the size of the working-age population. The commenter 
also pointed to previous Department guidance which stated that the 
employment-to-population ratio complements measures of unemployment by 
taking into account working age persons who may have dropped out of the 
labor force altogether, and that a decline in this ratio over a period 
of months could indicate an adverse job growth rate for the area. This 
commenter provided data indicating that an improved unemployment rate 
does not necessarily directly correspond to an improvement of the 
employment situation, and only a stable participation rate allows for 
unambiguous conclusions from a changing unemployment rate. This 
commenter also pointed out that States have used the employment-to-
population criterion sparingly, and the Department requires States to 
provide additional evidence showing the requested area's labor market 
weakness for approval.
    The Department is not adding the low and declining employment-to-
population ratio criterion to the core standards and is maintaining 
this criterion only for areas with limited data or evidence, consistent 
with the proposed rule. While the employment-to-population ratio metric 
is standardized, it is not produced by BLS at the substate level. Just 
as importantly, the employment-to-population ratio's meaning in terms 
of job-availability can be ambiguous due to shifting demographics at 
the local or national level. As one of the commenters pointed out, due 
to the potential for ambiguity, the Department currently requires the 
few States using the employment-to-population criterion to provide 
additional evidence showing the requested area's labor market 
weaknesses. Therefore, the Department believes this criterion is not as 
robust as standard unemployment data in demonstrating a lack of 
sufficient jobs and is not adding the low-and-declining population 
ratio criterion.
    Commenters also argued that information about declining industries 
or occupations should be retained as a criterion, arguing that such 
information

[[Page 66791]]

provides appropriate flexibility for local labor conditions. One 
commenter argued that, while a population may as a whole remain 
employed, a large subset may be significantly affected by declining 
occupations. Another commenter argued that this criterion is especially 
important for smaller, rural areas in which the loss of a single job 
provider, such a major manufacturing plant or mining industry, can have 
a major effect on local job availability. The commenter stated that the 
impact of a plant closure may not impact a 24-month unemployment rate 
until several months, or even a year, have passed. The commenter argued 
that the criterion regarding declining industries or occupations allows 
waivers to quickly respond to deteriorating labor market conditions. 
This commenter pointed out that, although states have rarely used this 
criterion to request waivers, the Department has approved them on a 
limited case-by-case basis, including cases in which the State agencies 
provided evidence of the number of workers affected by layoffs and 
rapidly increasing unemployment rates over a short period of time due 
to plant closings. A few commenters also stated that academic studies 
and publications can often provide a more accurate description of a 
region's unemployment or can more accurately describe job availability 
among the ABAWD population than unemployment rates.
    The Department agrees that information about declining industries 
or occupations, and academic studies can be used to help understand 
employment changes in an area. However, information about declining 
industries or occupations, and academic studies are not as standardized 
and reliable as unemployment data, and the Department believes the best 
data should be used when it is available.
    Commenters broadly argued that excluding 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), along with 
the change to include an unemployment rate floor in the 20 percent 
standard, results in an overreliance on unemployment rates. These 
commenters assert, as previously noted, that unemployment rates do not 
precisely capture job availability for ABAWDs, and States should have 
other options to demonstrate a lack of sufficient jobs, through other 
evidence and consideration of other economic factors. Commenters stated 
that States should retain flexibility to rely on metrics other than 
BLS' U-3 unemployment rates in their waiver requests. Commenters 
pointed to the fact that labor market participation has not recovered 
since the Great Recession, even though unemployment rates have. As 
already noted, commenters stated that U-3 unemployment rates do not 
capture the underemployed and those who drop out of the labor force 
altogether. One commenter stated that the unemployment rate is a 
lagging indicator and does not indicate job insufficiency soon enough, 
so a one-size fits all approach is ill-advised. Another commenter 
asserted that, due to weaknesses in existing data sets and challenges 
in defining economic conditions, many researchers use qualitative data 
to support an understanding of employment challenges. This commenter 
noted that even the National Bureau of Economic Research does not use a 
single formula or data set for a definition of a recession. Some 
commenters stated that not including these criteria in the core 
standards would undercut a more nuanced understanding of local job 
markets. Commenters also argued that Congress intended for there to be 
many different ways to meet ``insufficient jobs'' and stated that the 
Department acknowledged this when implementing in the late 1990s and 
early 2000s.
    Although the Department believes 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) can enhance 
the understanding of the job market, the arguments made by the 
commenters were not sufficiently compelling to justify making changes 
to the proposed rule. The core standards established in this final rule 
are designed to provide States with a set of consistent criteria for 
approval based on reliable and robust available evidence for evaluating 
labor market conditions. Through its operational experience, the 
Department has recognized that 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) are less 
reliable and consistent than standard unemployment data in 
demonstrating a lack of sufficient jobs. Therefore, the Department does 
not believe that these criteria should be included as part of the core 
standards for waiver approval. The final rule, however, is including 
these criteria as available for areas with limited data or evidence as 
the Department believes these are appropriate alternative measures when 
standard unemployment data is not available for an area. The final rule 
is adopting the language for those criteria as proposed. This language 
was included within Sec.  273.24(f)(7) in the proposed rule, and is 
located within Sec.  273.24(f)(6) in the final rule.

Other Data and Evidence in an Exceptional Circumstance

    The Department proposed that waiver requests that are supported by 
data or evidence other than the core standards may be approved if the 
request demonstrates an exceptional circumstance in an area. Though 
requests tied to an exceptional circumstance need not necessarily meet 
the core standards, the Department proposed that the requests include 
some form of data or evidence showing that the exceptional circumstance 
has caused a lack of sufficient jobs in the area. As an example of the 
kind of data or evidence that could support a waiver under exceptional 
circumstances, the Department cited a most recent three-month average 
unemployment rate over 10 percent. Under the proposed rule, any 
supporting unemployment data provided by the State under this criterion 
must rely on standard BLS data or methods.

Exceptional Circumstances

    A few commenters expressed concerns with elements of this 
provision. Commenters pointed out that the proposed language in Sec.  
273.24(f)(3) would require that the request demonstrate that the 
exceptional circumstance has caused a lack of sufficient jobs, but then 
provided an example of a State showing that an area has a most recent 
3-month average unemployment rate over 10 percent. Commenters noted 
that the Act provides for two separate bases for waiver approvals, if 
the area ``has an unemployment rate of over 10 percent'' or ``does not 
have a sufficient number of jobs to provide employment for the 
individuals.'' The Department acknowledges that an example of an 
exceptional circumstance causing a 3-month average unemployment rate 
over 10 percent is an example of ``an unemployment rate of over 10 
percent.'' The Department is, therefore, correcting this language at 
Sec.  273.24(f)(3) to include the phrase ``or an unemployment rate over 
10 percent'' after the phrase ``has caused a lack of sufficient number 
of jobs.'' Some commenters suggested that the term ``exceptional 
circumstance'' was unclear. As stated in the preamble to the proposed 
rule, given that economic conditions can change dramatically due to 
sudden and unforeseen forces, the Department believes it is appropriate 
to maintain a

[[Page 66792]]

level of flexibility to approve waivers as needed in extreme, dynamic 
circumstances. Therefore, the Department does not believe an exhaustive 
list of all circumstances that will be considered exceptional can be 
provided. However, the Department can reiterate and further clarify the 
examples provided in the proposed rule. An exceptional circumstance may 
arise from the rapid disintegration of an economically and regionally 
important industry, the prolonged impact of a natural disaster, or a 
sharp continuing economic decline. As stated in the proposed rule, a 
short-term aberration, such as a temporary closure of a plant, would 
not constitute an exceptional circumstance.
    One commenter pointed to the closing of an automobile plant earlier 
this year. This commenter stated that this plant was major driver of 
the economy in the region, and its closing is having an immediate and 
massive ripple effect throughout the area. The commenter noted that the 
county the plant was located in would have qualified under the current 
regulations, but was unsure if the area would qualify under the new 
regulations, including the exceptional circumstance criterion. The 
Department would like to make it clear that permanent closure of a 
large plant (relative to the labor market area) or an ongoing 
significant reduction in the plant's workforce would be considered an 
exceptional circumstance, as long as it is not a temporary closing. If 
the closing were temporary and its impact not ongoing, then it would 
not justify a waiver. To provide more clarity regarding this criterion, 
the Department is editing the amendatory text at Sec.  273.24(f)(3) to 
require that, under the exceptional circumstance criterion, the waiver 
request demonstrate that the impact of the exceptional circumstance is 
ongoing at the time of the request.
    Based on these comments, the Department also sees fit to underscore 
that the example provided in the proposed regulatory text, a 3-month 
average unemployment rate over 10 percent, is not the only potential 
way that States could demonstrate that an area has an unemployment rate 
over 10 percent or a lack of sufficient jobs due to an exceptional 
circumstance. The Department is editing the amendatory text at Sec.  
273.24(f)(3) to more clearly indicate that this is simply one example. 
States are free to provide other data and/or evidence and to construct 
arguments that there are not enough jobs for individuals in an area due 
to an exceptional circumstance. For example, a State might provide 
unemployment data or other evidence that is similar to the core 
standards except in that it covers a shorter duration because the 
area's economy suffered a rapid decline due to the exceptional 
circumstance that is not yet demonstrated by a full 12-month or 24-
month data period. The Department will evaluate requests made based on 
exceptional circumstances carefully to ensure that that the sudden lack 
of jobs or high unemployment in the area is clearly connected to a 
recent exceptional circumstance, that the lack of jobs or high 
unemployment is ongoing, and that the lack of jobs or high unemployment 
is demonstrated by recent data or evidence.

3-Month Unemployment Rate of Over 10 Percent

    Commenters argued that restricting the use of a recent 3-month 
unemployment rate of over 10 percent to exceptional circumstances, 
rather than including it as a core standard, is contrary to the 
proposed rule's stated preference that waivers reflect current economic 
conditions. The Department points out that, while the current 
regulations suggest that States could submit evidence that an area has 
a recent 3-month average unemployment rate over 10 percent provide to 
support a claim of unemployment over 10 percent, the current 
regulations do not categorize this type of waiver as ``readily 
approvable.'' In this way, the Department believes that the proposed 
rule is relatively similar to the current regulations in excluding a 
recent 3-month average unemployment rate over 10 percent from the core 
standards. Moreover, the Department believes that requiring a 3-month 
average unemployment rate over 10 percent be tied to an exceptional 
circumstance will strengthen this criterion so that a 3-month average 
would not be used to grant a year-long waiver when that 3-month average 
is simply a short-term aberration or reflective of regular seasonal 
employment.
    Commenters also argued that restricting the use of a recent 3-month 
unemployment rate of over 10 percent to only exceptional circumstances, 
along with the elimination of the historical seasonal unemployment rate 
over 10 percent criterion, is inconsistent with the Act. Commenters 
noted that the proposed rule would essentially leave only one 
criterion--having a 12-month average unemployment rate over 10 
percent--as the basis for approval using an average unemployment rate 
over 10 percent. These commenters argued that these changes are 
inconsistent with the Act, as the Act does not specify requirements 
regarding the duration of time that an area must have an unemployment 
rate above 10 percent.
    Commenters argued that the Department has previously discussed 
shortcomings with requiring a 12-month average unemployment rate to 
demonstrate an unemployment rate over 10 percent. Commenters noted that 
in guidance issued in December 1996, the Department stated that it 
would not require a 12-month average to approve a waiver based on an 
unemployment rate over 10 percent. Commenters noted that this guidance 
stated, ``A 12-month average will mask portions of the year when the 
unemployment rate rises above or falls below 10 percent. In addition, 
requiring a 12-month average before a waiver could be approved would 
necessitate a sustained period of high unemployment before an area 
became eligible for a waiver.'' Commenters argued that to address these 
issues, the guidance document stated, ``. . . states have several 
options. First, a state might opt to use a shorter moving average. A 
moving average of at least three months is preferred. In periods of 
rising unemployment, a three-month average provides a reliable and 
relatively early signal of a labor market with high unemployment. A 
state might also consider using historical unemployment trends to show 
that such an increase is not part of a predictable seasonal pattern to 
support a waiver for an extended period (up to one year).'' Commenters 
argued that this guidance was reinforced in the preamble of the 1999 
proposed rule.
    Commenters also argued that eliminating the 3-month average 
unemployment rate over 10 percent as the basis for waiver approval is 
contrary to the Department's preference that waivers reflect current 
economic conditions, as stated in the 2019 proposed rule. These 
commenters asserted that a most recent three-month average unemployment 
rate over 10 percent is the criterion that most closely aligns with 
current economic conditions and signals deteriorating labor market 
conditions in an area.
    The Department believes the changes being made are consistent with 
the Act. In fact, the current regulations also include duration 
requirements to demonstrate an area has an unemployment rate above 10 
percent, and only guarantee approval of waivers based on unemployment 
over 10 percent for a 12-month period. For example, an area with a 1-
month unemployment rate of over 10 percent cannot qualify for a waiver 
based on that evidence alone. Similarly, in order for a State to 
demonstrate an area has an unemployment rate above 10 percent,

[[Page 66793]]

the core standards in the final regulations only guarantee approval of 
waivers based on unemployment over 10 percent for a 12-month period. As 
the Act does not specify duration requirements, the Department is 
within its authority to define how 10 percent unemployment is to be 
measured through the rulemaking process, as it did when it originally 
promulgated regulations regarding the ABAWD time limit.
    One commenter also argued that requiring that the 3-month 
unemployment rate be above 10 percent is too high and provided data 
from recent economic downturns to argue that a 10 percent unemployment 
rate is not always reached, even in times that are considered times of 
severe economic distress. The commenter argued that the waiver 
standards need to be more responsive to economic declines in order to 
serve as an automatic stabilizer and help mitigate the negative 
economic impacts of the decline. As explained in the preceding section, 
in the event of an exceptional circumstance a recent 3-month 
unemployment rate is only one example of evidence that can be provided 
to support a waiver.

Restricting the Combining of Data to Group Substate Areas and 
Establishing a Strict Definition of Waiver ``Area''

Comments on Restricting the Combining of Data to Group Substate Areas

    The Department proposed to prohibit States from combining 
unemployment data from individual substate areas to calculate an 
unemployment rate for the combined area (otherwise referred to as 
``grouped'' areas or ``grouping''), unless the combined area is 
designated as a Labor Market Area (LMA) by the Federal government. 
According to DOL, an LMA is an economically integrated area within 
which individuals can reside and find employment within a reasonable 
distance or can readily change jobs without changing their place of 
residence. LMAs are an exhaustive level of substate geography 
delineated in partnership by DOL and OMB, then published by the DOL BLS 
Local Area Unemployment Statistics program.\7\ The Department also 
proposed that States would not be able to omit certain areas within the 
LMA in the State from the area covered by the waiver. In addition, the 
Department specifically asked for comment on whether grouping should be 
limited to LMAs or whether grouping should be prohibited entirely.
---------------------------------------------------------------------------

    \7\ For more information on LMAs, please visit https://www.bls.gov/lau/laugeo.htm.
---------------------------------------------------------------------------

    Some commenters generally supported the restriction on States' 
ability to group areas, stating that using LMAs would limit grouping to 
regions with demonstrable economic ties and prevent manipulative 
grouping practices by States. Commenters noted that LMAs are a relevant 
and reliable tool for evaluating labor market conditions within a local 
area. Commenters stated that States should not be able to combine areas 
on the basis of their own judgment, as they will seek to maximize any 
discretion in order to receive and use as much Federal money as 
possible. One commenter noted that allowing States to combine areas has 
led to combining low unemployment counties with high unemployment 
counties as a means to waive the work requirement for as many ABAWDs as 
possible, which this commenter considered abuse.
    Many commenters opposed the proposed restriction on grouping to 
only LMAs. Some commenters argued that the current discretion given to 
States works and that this is shown by evidence that States are 
gradually phasing out waivers in the areas with the lowest rates of 
unemployment as the economy improves. The Department does not share 
this view. Based on the Department's extensive experience reviewing and 
processing ABAWD waiver requests, it believes that many areas have 
remained under waivers for longer than appropriate due to, in 
particular, States' strategic use of grouping to maximize the 
geographic coverage of waived areas rather than to demonstrate high 
unemployment or a lack of sufficient jobs for ABAWDs, as outlined in 
the Act. In the Department's view, States' strategic use of grouping to 
maximize the geographic coverage of waived areas subverts the Act's 
condition that waivers apply where unemployment exceeds 10 percent or 
there is a lack of sufficient jobs.
    Some commenters suggested the Department used too narrow of a 
definition of the terms ``economically tied'' and ``labor market 
area.'' They suggested that LMAs are not the only appropriate areas for 
grouping because LMAs are based on commuting patterns of the general 
workforce and are not specific to low-income, low-skilled ABAWDs who 
lack affordable transportation options. Commenters argued that LMAs are 
not always an accurate indication of which communities interact 
economically or are accessible for the purposes of employment. 
Commenters stated that the LMA designation does not take into account 
variations by industry or socioeconomic characteristics. Commenters 
provided research showing that a given county may belong to multiple 
commuting areas depending on the industry or type of occupation. 
Commenters also stated that job losses in some LMAs can have 
significant ripple effects in other neighboring LMAs. Commenters gave 
examples in which some LMAs are too big to properly define commuting 
patterns for ABAWDs because it could take more than two hours without 
traffic to commute one way from one end of an LMA to the other by car 
and provided examples where it is impossible to access most of the 
communities within an LMA using public transportation. Commenters 
argued that the LMA methodology misses the fact that, in some counties, 
workers may have to travel in all directions and often beyond a 
contiguous county for their job, and, therefore, LMAs are too small in 
some cases. Commenters provided research indicating that the change in 
proximity to jobs in recent years varies by socioeconomic 
characteristics, with poor, minority residents seeing the biggest 
decline in jobs within a reasonable commuting distance.
    The Department is not compelled by the commenters' suggestions 
described in the preceding paragraphs, which generally argue that LMAs 
do not account for specific ABAWD commuting patterns and other factors 
specific to ABAWDs. While commenters suggested alternatives that the 
Department considered, as discussed below, LMAs remain the best 
available and most appropriate delineation to address the issue of 
grouping, as there are no Federally-designated areas that specifically 
assess commuting patterns and other related economic factors for 
ABAWDs. According to DOL, an LMA is an economically integrated area 
within which individuals can reside and find employment within a 
reasonable distance or can readily change jobs without changing their 
place of residence; therefore the Department maintains that they are 
the best available and most appropriate area delineation at this time. 
However, the Department notes that if in the future a more robust 
delineation becomes available from a Federal source, the Department may 
consider its appropriateness in the context of future rulemaking.
    Other commenters argued that States have the best understanding of 
the regional patterns in their labor markets, local commuting burdens, 
and other local nuances specific to ABAWDs, and should retain 
flexibility in combining data to group areas. A State agency commented 
that each State has the

[[Page 66794]]

contextual knowledge and experience to identify the most appropriate 
grouping areas for a waiver. Commenters suggested that the proposal to 
impose restrictions on grouping substate areas is inconsistent with the 
philosophy that the government closest to the people governs best. 
Commenters stated that an erosion of State autonomy in forming these 
substate groupings could result in SNAP participants being removed from 
the program despite a demonstrable lack of sufficient jobs in their 
labor market.
    Commenters argued that in its original rulemaking the Department 
recognized that it did not have sufficient expertise to evaluate 
whether local labor markets could offer ``a sufficient number of jobs 
to provide employment for the individuals'' because the Department was 
not in a position to know where new jobs were located or the 
feasibility of commuting to them given driving times and public 
transportation. Commenters argued that in its original rulemaking the 
Department found that county unemployment rates were the most available 
measure of the vitality of local labor markets, and the Department 
specifically allowed States to determine which areas would be grouped 
together to receive waivers because the patterns of employment and 
mobility for the low-skilled employment market can be quite different 
from those for the overall employment market. Commenters argued that 
the Department concluded that States were best-equipped to determine 
whether high unemployment in some areas adversely affected employment 
prospects in others.
    Commenters suggested that there are numerous reasons that a State 
would choose to group towns other than by LMA, such as cost of living, 
lack of access to or availability of transportation, lack of employers 
with a certain job field, or other demographic considerations.
    Commenters argued that the proposed change to State flexibility in 
grouping areas is contrary to years of FNS guidance and departs from 
USDA's longstanding position without reasoned support. They pointed out 
that in regulations and guidance over the past two decades, the 
Department has given States broad discretion to define areas and has 
never expressed that commuting patterns be the primary or only basis 
for whether or not substate areas could be grouped together.
    The Department appreciates and has considered the comments 
described in the preceding paragraphs, which broadly argue that States 
should maintain their current flexibility to group substate areas. 
However, the Department disagrees. The Department has learned through 
its extensive operational experience that this flexibility allows 
States to strategically group substate areas to maximize the geographic 
coverage of waived areas rather than to demonstrate high unemployment 
or a lack of sufficient jobs for ABAWDs, as outlined in the Act. The 
Department has determined that this problem is one of the primary 
reasons why about half of the ABAWDs participating in SNAP live in 
waived areas, despite current low unemployment levels across the 
majority of the country. Therefore, the need to address this problem 
outweighs the arguments received in support of States' need to maintain 
current flexibility.
    The Department is within its authority to revise its regulations as 
the statute does not define what constitutes an ``area'', and the 
Department's operational experience has shown that current regulations 
provide States with too much flexibility. As previously stated, States 
are grouping areas in such a way to maximize waived areas rather than 
demonstrate high unemployment or lack of sufficient jobs for ABAWDs. As 
noted in the proposed rule, the Department has learned that its 
standards for combining areas provide too much flexibility for State 
agencies. While the Department has attempted to clarify its intention 
that areas be economically tied through policy guidance,\8\ this has 
not prevented States from strategically using grouping to maximize 
waived areas. 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.
---------------------------------------------------------------------------

    \8\ 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.
---------------------------------------------------------------------------

    A few commenters stated that the proposed rule's restriction on 
grouping contradicts the statutory language permitting waivers for 
``any group of individuals in the State if the Secretary makes a 
determination that the area in which the individuals reside'' has an 
unemployment rate above 10 percent or lacks sufficient jobs. Commenters 
suggested that Congress intended to allow States to use their 
discretion in how to group regions together for the purposes of 
obtaining a waiver. Commenters argued that States are not using waivers 
in ways that were ``not foreseen by Congress'' as described in the 
proposed rule. Commenters noted that Congress specifically considered 
language in the House-passed version of the 2018 Farm Bill that would 
have limited grouping and then rejected this provision in the final 
enacted 2018 Farm Bill. Commenters also pointed to the Conference 
Report that accompanied the 2018 Farm Bill, which states, in 
particular, ``[t]he Managers intend to maintain the practice that 
bestows authority on the State agency responsible for administering 
SNAP to determine when and how waiver requests for ABAWDs are 
submitted.'' These commenters argued that to add new geographic 
restrictions through this rulemaking would contradict the intent of 
Congress.
    In response to these comments, the Department points out that 
Congress has been silent on the specific issue of combining data to 
group substate areas. Nothing in the statute or legislative history 
clearly states how the Department should handle this issue. The 
Department believes the Conference Report that accompanied the 2018 
Farm Bill is referring broadly to maintaining the States' ability to 
choose which areas it wishes to request when submitting a request to 
the Department, not referring to maintaining the discretion of States 
to combine data from substate areas to form an economic region.
    Other commenters argued that the LMA standard is reliant on 
outdated data. They pointed out that the current list of LMAs are based 
on population data from the 2010 Census and commuting data from the 
American Community Survey five-year dataset for 2006-2010. These 
commenters argued that LMAs are not updated frequently enough to 
capture recent labor market trends. Commenters also stated that OMB has 
cautioned that LMA delineations (specifically Metropolitan Statistical 
Area and Micropolitan Statistical Area delineations) should not be used 
to develop and implement Federal, State, and local non-statistical 
programs and policies without full consideration of the effects of 
using these delineations for such purposes.
    The Department appreciates the concerns described in the preceding 
paragraph regarding the age of the data used for LMAs and using caution 
when applying LMAs to implementing Federal policies. However, after 
assessing alternative options, the Department has not identified any 
other labor market definition that uses more

[[Page 66795]]

recent data and would equally address the problem of States' 
manipulative usage of grouping substate areas to maximize waived areas. 
The Department is resolute that it must address this problem, and that 
LMAs represent the best available and most practical solution.
    Commenters also stated that the proposed rule ignores that a 
variety of other factors that can account for areas having ``economic 
ties,'' such as employer recruiting practices, regional workforce 
development strategies, regional economic development and investment 
patterns, service delivery models, and migration patterns. Commenters 
asserted that States consider multiple factors when grouping areas to 
align resources, administrative capacity, and service delivery, and may 
also consider the location of SNAP E&T services, Workforce Innovation 
and Opportunity Act (WIOA) services, and other work programs or grant 
programs. In particular, commenters stated that the proposed 
restriction on grouping would reduce States' ability to allocate and 
coordinate E&T resources effectively. One commenter provided examples 
of States that coordinated E&T programs with unwaived areas when the 
State could not provide or guarantee SNAP E&T slots in all counties. 
Commenters argued that the proposed rule would make State planning more 
difficult given the inability to group areas consistent with Workforce 
Development Boards. Commenters suggested that the Department consider 
other alternative frameworks for grouping areas, such as areas covered 
by Workforce Development Boards. They noted that, under WIOA, states 
have discretion to define regions and are encouraged to take an 
integrated approach to account for a range of different factors, 
starting with LMAs, but then also considering funding streams and 
service delivery.
    While the Department appreciates that States consider 
administrative needs, the availability of work programs and employment 
and training services, and other factors in considering when and where 
to request a waiver, the Department interprets the Act to plainly mean 
that the Department's authority to grant waivers is limited to areas 
with unemployment rates of over 10 percent or areas that demonstrate 
lack of sufficient jobs. The Department is not compelled by arguments 
that E&T services or other work program availability should be factored 
in when defining which areas have high unemployment or lack sufficient 
jobs. However, the Department also notes that States still maintain the 
ability to choose which areas to request. If the State wants to choose 
areas to request, among those that qualify, based on E&T services or 
other work programs, the State is free to do so.
    Commenters also suggested that the Department allow grouping 
consistent with Bureau of Economic Analysis (BEA) economic areas. 
Commenters pointed out that these areas were listed as an example of an 
area for grouping in past Department guidance. The Department 
appreciates these suggestions but has evaluated BEA economic areas and 
determined that they are no longer appropriate for grouping areas for 
ABAWD waiver requests, as BEA is no longer producing or publishing this 
data.

Commuting Zones

    Some commenters urged the Department to consider using Commuting 
Zones (CZs) as another, possibly more accurate, metric for evaluating 
labor market conditions within a local area and grouping substate areas 
for waivers. Some commenters pointed out that, while many LMAs 
encompass a single county, very few CZs do. Other commenters asserted 
that the USDA Economic Research Service (ERS) created CZs to better 
reflect commuting patterns in rural areas. One commenter pointed to 
research by ERS examining the relationship between labor market area 
conditions and length of SNAP participation spell, which found that 
using the CZ definition had the largest estimated effects among several 
labor market definitions. Other commenters argued that the Department 
should consider replacing LMAs with CZs because it would result in the 
application of the work requirement in more areas. One commenter stated 
that limiting grouping to either LMAs or CZs would be a vast 
improvement over current rules. Another commenter argued that CZs face 
the same limitation as LMAs in that they are based on commuting 
patterns of the general public and do not account for other factors 
specific to ABAWDs.
    While the Department appreciates the suggestions to consider using 
CZs, the Department is not adopting this alternative proposal. While 
CZs were originally developed by USDA ERS, the list of CZs is no longer 
published by a government agency. This is in contrast to the LMA list, 
which is still published by DOL. Though university researchers 
published data similar to USDA ERS's CZs following the 2010 Census, the 
Department believes the basis for approval of waivers must be sound 
data and evidence that primarily relies on data from BLS or BLS-
cooperating agencies. For these reasons, the Department views the use 
of LMAs for ABAWD waivers as vastly superior to CZs, and does not think 
it prudent to include CZs as a substitute for LMAs nor as an additional 
means by which to group substate areas.

Establishing Strict Definition of Waiver ``Area''

    The Act states that ``the Secretary may waive the applicability of 
[the time limit] to any group of individuals in the State if the 
Secretary makes a determination that the area in which the individuals 
reside . . . has an unemployment rate of over 10 percent; or . . . does 
not have a sufficient number of jobs to provide employment for the 
individuals.'' Current regulations generally allow States to define 
``the area in which the individuals reside.'' That is, the current 
regulation at Sec.  273.24(f)(6) provides the following: ``States may 
define areas to be covered by waivers. We encourage State agencies to 
submit data and analyses that correspond to the defined area. If 
corresponding data does not exist, State agencies should submit data 
that corresponds as closely to the area as possible.''
    In response to the proposed rule's restriction on the combining of 
data to group substate areas, one commenter suggested that the 
Department should instead define ``area'' as a jurisdiction, such as a 
county, and then adopt a two-step approach to approving waivers. During 
this two-step process, the Department would first determine whether the 
requested jurisdiction would meet any of the waiver criteria, and, if 
it does, the Department should also determine whether the commuting 
zone surrounding the jurisdiction would also meet the waiver criteria. 
Unless the waiver criteria is met in both steps, both for the 
jurisdiction in which the individual resides and for the larger CZ, the 
waiver would not be granted.
    The Department does not believe that defining ``area'' in this way 
and adding this two-step process would be consistent with section 
6(o)(4) of the Act. The Act gives the Secretary authority to waive an 
``area in which the individuals reside,'' if the area ``has an 
unemployment rate of over 10 percent'' or ``does not have a sufficient 
number of jobs to provide employment for the individuals.'' Including 
the two step process suggested by the commenter would actually result 
in many individual jurisdictions, defined as ``areas,'' being denied 
waivers even if the area demonstrates an unemployment rate of over 10 
percent or a lack of

[[Page 66796]]

sufficient jobs based on robust, reliable BLS data. This is because an 
additional area (e.g., the commuting zone) would also need to 
demonstrate an unemployment rate of over 10 percent or a lack of 
sufficient jobs. In other words, two areas (the jurisdiction and the 
commuting zone) would need to meet the criteria in the Act for a waiver 
to be approved, which the Department believes is inconsistent with the 
Act.
    In response to the proposed rule's restriction on the combining of 
data to group substate areas, some commenters also argued that States 
should not have the option to request varying levels of jurisdictions 
within the same waiver and that States should not be able to choose 
when to apply for a combined area using the LMA definition and when to 
apply for a single-jurisdiction waiver. Commenters argued that areas 
should not qualify for waivers if there are available jobs within a 
reasonable commuting distance. Commenters also argued that ABAWD time 
limit waiver policy should not stifle geographic mobility by 
reinforcing perverse incentives for working-age individuals to remain 
in an economically depressed area to receive SNAP benefits for an 
unlimited period of time without working or engaging in work training. 
In addition, commenters asserted that ``area'' should be defined to 
ensure the maximum number of people possible are moved off of SNAP and 
into the workforce, where they can improve their lives, families, and 
communities. Commenters provided data indicating that not allowing 
States to waive the ABAWD time limit unless the LMA qualifies for the 
waiver would result in a broader application of the time limit.
    The Department agrees with the comments described in the preceding 
paragraph. Therefore, the Department is expanding upon the proposed 
rule's restriction on the combining of data to group substate areas to 
explicitly define the statutory phrase ``an area in which the 
individuals reside'' to mean an area considered to be an LMA, as 
defined by OMB/DOL. The Department is also including the intrastate 
part of an interstate LMA, an Indian reservation area, and a U.S. 
Territory in this new waiver area definition, as explained later in 
this section. In general, this means that the final rule will only 
allow for waivers covering LMAs; not individual jurisdictions within 
LMAs, such as counties or county equivalents, and not for any State-
defined groupings of substate areas. Thus, this change effectively 
replaces the proposed amendatory text of Sec.  273.24(f)(4) and (5) of 
the proposed rule, which had proposed restricting Statewide waivers and 
the combining of data to group substate areas (grouping).
    The Department is making this change in the final rule because it 
is concerned about the potential for misuse by States if States have 
the choice to obtain waivers for LMAs or individual jurisdictions, such 
as counties and county equivalents. For example, if a State has the 
choice to obtain waivers for LMAs or for individual counties, and a 
given LMA does not qualify but a county within it does qualify, the 
State could waive the county without consideration for the job 
availability in its surrounding LMA. Consistent with the aforementioned 
comments, the Department does not think providing this type of choice 
is appropriate in the context of ABAWD time limit waivers. The 
Department is therefore establishing a strict definition of waiver area 
because it believes that individual jurisdictions, such as counties or 
county equivalents, should not receive waivers if there are jobs 
available in a nearby jurisdiction, within a reasonable commuting 
distance. LMAs, as listed by DOL, represent the best available 
government definition of an area for defining a reasonable commuting 
distance.
    The Department also believes that generally restricting waivers to 
qualifying LMAs will result in a broader application of the time limit, 
encourage geographic mobility among ABAWDs, and reduce dependence on 
government benefits. In other words, the Department is implementing a 
clear regulatory definition of ``area'' for waiver purposes because it 
expects unemployed ABAWDs to proactively pursue any and all work and/or 
work training opportunities within reasonable commuting distance of 
their homes. In that same vein, the Department expects States to 
support ABAWDs in their efforts to find work and meet the work 
requirement by expanding access to work programs and other supportive 
services for ABAWDs.
    Some commenters pointed out that many LMAs cross State lines, while 
individual States are responsible for requesting waivers for areas 
within each State. Commenters noted that the proposed rule did not 
explain what would happen in these circumstances. In the final rule, 
the Department is choosing to require that waiver approval be based on 
data from the entire interstate LMA, not data from the part of the LMA 
within the State. In other words, a State with an interstate LMA may 
request and be approved for the portion of the LMA that falls within 
its jurisdiction as long as the entire interstate LMA qualifies. The 
Department believes this requirement is consistent with the rationale 
that areas should not qualify for waivers if there are available jobs 
within a reasonable commuting distance, and is consistent with the 
restriction on waiving individual jurisdictions within LMAs. Therefore, 
the Department is specifically including the intrastate part of an 
interstate LMA in its strict definition of an area.
    The Department sees fit to point out that if an entire State is 
encompassed by one larger interstate LMA, then the State may request 
and be approved for a statewide waiver if the entire interstate LMA 
qualifies. Currently, the only example of this situation would be the 
District of Columbia, which is encompassed by one larger interstate 
LMA.
    Based on the Department's decision to strictly define waiver area 
as an LMA (or the intrastate part of an interstate LMA, a reservation 
area, or a U.S. Territory), the Department also sees fit to clarify a 
few potential points of confusion about LMA data availability. In the 
proposed rule, the Department proposed that the practice of grouping be 
restricted to only LMAs by amending 273.24(f)(5) to stipulate that the 
State agency ``may only combine data from individual areas that are 
collectively considered to be Labor Market Area by DOL.'' However, in 
the proposed rule the Department did not reference the fact that BLS 
publishes directly corresponding, representative unemployment data for 
all LMAs, just as it does for counties, county equivalents, and a 
limited number of other areas.\9\ To clarify, because corresponding LMA 
data is available, States would not need to use unemployment data and 
labor force data from individual areas within an LMA (e.g., for multi-
county LMAs) to calculate an unemployment rate representative of the 
LMA. In other words, under the final rule's strict definition of waiver 
area, States requesting waivers for an LMA would not be required to 
combine data. Therefore, the Department has revised the amendatory text 
in the final rule to better reflect that directly corresponding, 
representative BLS unemployment data is currently available for LMAs. 
If such corresponding data were to become unavailable in the future, 
States may combine the data of the individual areas within the LMA 
(e.g., for multi-county LMAs) to calculate an unemployment rate 
representative of the LMA. The Department is addressing the potential

[[Page 66797]]

scenario in the amendatory text so that if corresponding data were to 
become temporarily or permanently unavailable in the future for any 
LMA, that States would continue to be able to exercise their option to 
request and support waivers for any LMA.
---------------------------------------------------------------------------

    \9\ For more information on the available BLS data, please visit 
https://www.bls.gov/lau/laugeo.htm.
---------------------------------------------------------------------------

    As noted in a preceding paragraph, the final rule also includes 
Indian reservation areas and U.S. Territories in the strict definition 
of waiver area. This means that though other individual jurisdictions 
(e.g., counties or county-equivalents within a larger LMA) are not 
allowable waiver areas, reservation areas and U.S. Territories are 
allowable waiver areas, consistent with longstanding policy. The U.S. 
Government has a unique legal relationship with Indian tribal 
governments that differentiates reservation areas from other areas 
within the United States. Agencies have been instructed by Executive 
Order 13175 to respect Indian tribal self-government and sovereignty, 
honor tribal treaty and other rights, and strive to meet the 
responsibilities that arise from the unique legal relationship between 
the Federal Government and Indian tribal governments. As such, the 
Department recognizes that reservation areas have unique circumstances 
and do not fit neatly within the LMA definition. In addition, U.S. 
Territories participating in SNAP, including Guam and the U.S. Virgin 
Islands, do not have Labor Market Areas and would therefore have no 
basis for qualifying for a waiver if they were not explicitly included 
in the strict definition of an area. Therefore, the Department is 
recognizing these areas as potential waiver areas in the amendatory 
text. The Department sees fit, however, to also explain that while 
reservation areas could be waived independently, they may be also be 
waived as part of one or more LMAs that they are geographically located 
within, without the need for the State to request to waive that 
reservation area independently.
    The Department is adopting these changes to establish a strict 
definition of waiver area, to include an LMA, the intrastate part of an 
interstate LMA, a reservation area, or a U.S. Territory, at Sec.  
273.24(f)(4).

Restricting Statewide Waivers

    The Department proposed eliminating statewide waiver approvals 
requested on the basis of statewide data averages when substate data 
averages are 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.
    A few commenters supported this proposal. One commenter, in 
particular, stated that while remaining sensitive to the administrative 
burden placed on State agencies, the Department should strive to 
approve waivers for distinct economic regions, as State boundaries 
often encompass multiple labor markets with significant variation in 
economic conditions.
    As discussed previously in the Core Standards: Eliminating the 
Extended Unemployment Qualification Standard section, the Department 
agrees with this comment and notes that statewide data may mask tight 
labor markets in some substate areas. Additionally, as discussed in the 
immediately preceding section, Restricting the Combining of Data to 
Group Substate Areas and Establishing a Strict Definition of Waiver 
``Area'', the Department is choosing to codify a strict definition of 
waiver ``area'' that will also effectively restrict statewide waivers.
    In addition, as discussed in the Core Standards: Eliminating the 
Extended Unemployment Benefits Qualification Standard section, the 
Department is modifying its proposals to remove the extended 
unemployment benefits criterion from the core standards that was 
included at Sec.  273.24(f)(2)(iii) in the proposed rule and to 
eliminate the proposed exception for extended unemployment benefits 
from the restriction on statewide waivers that was included at Sec.  
273.24(f)(4) in the proposed rule. These changes will effectively 
eliminate all statewide waivers based on statewide data, except for 
U.S. Territories, as explained in preceding sections. Consistent with 
the general rationale for restricting statewide waivers, the Department 
believes this change will ensure that waivers of the ABAWD time limit 
are more appropriately targeted to those particular areas that have 
unemployment rates over 10 percent or lack sufficient jobs. However, 
the Department sees fit to point out a particular nuance on the 
restriction of statewide waivers. That is, while this change generally 
eliminates statewide waivers based on statewide data, it would be 
possible for all LMAs in a State to qualify for waivers provided that 
each requested LMA separately meets the standards for approval. 
Similarly, it would be possible for a single LMA's boundaries to match 
or encompass a State's boundaries, in which case a waiver for the LMA 
would effectively waive the entire State. The Department does not see 
the potential for such scenarios to be problematic because they would 
not contradict the strict definition of waiver area in that the waiver 
area would still consist of one or more individually qualifying LMAs.
    Many commenters expressed opposition to the proposed restriction of 
statewide waivers. A few of these commenters argued that this proposal 
is arbitrary and capricious because it departs from USDA's longstanding 
position without reasoned support. In particular, these commenters 
argued that the Department fails to identify data or evidence that 
justifies a restriction on statewide waivers. A commenter also provided 
text from the House Committee on Budget report (H. Rept. 104-651) from 
June 1996, when it reported out its original version of PRWORA, which 
stated, ``The committee understands that there may be instances in 
which high unemployment rates in all or part of a State or other 
specified circumstances may limit the jobs available for able-bodied 
food stamp participants between 18 and 50 years with no dependents.'' 
Another commenter provided text from the House Committee on Agriculture 
materials when it marked up the Food Stamp Reform and Commodity 
Distribution Act in March 1995, which eventually was incorporated into 
PRWORA and was the basis for what is now section 6(o) of the Act. These 
materials stated, ``The new work requirement could be waived by the 
Secretary, for some or all individuals within a State or part of a 
State, if, on a State's request, the Secretary finds that the area has 
an unemployment rate of over 10 percent, or the area does not have a 
sufficient number of jobs to provide employment to those subject to the 
new requirement (but, the Secretary must report to Congress on the 
basis on which the waiver decision was made).''
    Commenters also challenged the Department's rationale that 
statewide unemployment figures may include areas in which unemployment 
rates are relatively low and that eliminating statewide waivers will 
help target areas in which unemployment rates are high. These 
commenters asserted that this proposal is arbitrary because variation 
in unemployment rates exists at all geographic levels. One commenter 
also asserted that the proposed rule's stated rationale ignores the 
statistical principle of weighted averages. This commenter said that, 
in order for an entire State to qualify under current rules, 
unemployment rates in the State must be generally high across the 
State, particularly in the most populous areas of the state. Commenters 
said that statewide waivers are appropriate when

[[Page 66798]]

the areas being impacted by economic forces are fluid and the State can 
demonstrate an overall lack of sufficient jobs.
    The Department is not compelled by commenters' suggestions that the 
elimination of statewide waivers is arbitrary. The Department believes 
this change will ensure that waivers of the ABAWD time limit are more 
appropriately targeted to those particular areas that have unemployment 
rates over 10 percent or lack sufficient jobs, as required by the Act. 
Moreover, as pointed out in a preceding paragraph, it would be possible 
for all LMAs in a State to qualify for waivers provided that each 
requested LMA meets the standards for approval, or for a single LMA's 
boundaries to match or encompass a State's boundaries.
    Some commenters, including a State agency, expressed disagreement 
with the idea that an entire State should not be treated as a large 
``economically tied'' area. The State agency argued that residents of a 
State are economically tied together in that they share the same State 
minimum wage laws, labor regulations, occupational licensing 
requirements, and income tax rates.
    Several commenters stated that this proposal would limit State 
flexibility and would increase administrative complexities and burdens. 
Another commenter argued that there is no evidence of States abusing 
statewide waivers. One commenter pointed to data showing that the 
number of statewide waivers has been decreasing as the economy has 
improved, indicating that there is no need for this provision.
    The Department has observed that statewide waivers have resulted in 
the waiving of substate areas that do not have unemployment rates over 
10 percent nor lack sufficient jobs. In these cases, the statewide 
averages mask tight labor markets in some substate areas, just as they 
may mask slack labor markets in other substate areas. For example, two 
recent statewide waiver requests included multiple substate areas with 
individual unemployment rates of under 4 percent. Under current 
regulations, these statewide waiver requests qualify because they are 
based on the statewide averages that meet the current standards for 
approval. In the Department's view, informed by over 20 years of 
operational experience, it is more appropriate, precise, and accurate 
to base ABAWD time limit waiver approvals on robust, reliable substate 
BLS data when it is available. Moreover, as explained in the preceding 
section Establishing a Strict Definition of Waiver ``Area,'' the 
Department is including LMAs, intrastate portions of interstate LMAs, 
U.S. Territories, and reservation areas in its strict definition of 
waiver area which are generally based on substate (and sometimes 
include interstate) data.
    The Department is modifying the proposal to restrict statewide 
waivers because it is no longer explicitly restricting statewide 
waivers, as was included at Sec.  273.24(f)(4) in the proposed rule. 
Instead, the Department is effectively restricting statewide waivers by 
removing the extended unemployment benefits criterion from the core 
standards that was included at Sec.  273.24(f)(2)(iii) in the proposed 
rule, and by including a strict definition of waiver area limited to an 
LMA, the intrastate part of an interstate LMAs, and a reservation area 
or a U.S. Territory at Sec.  273.24(f)(4).

Duration of Waiver Approvals and Timeliness of Data

Limiting a Waiver's Duration to One Year or Less

    The Department proposed to limit a waiver's duration to one year 
and continue to allow a waiver for a shorter period at a State's 
request. This proposal was included in paragraph Sec.  273.24(f)(6) in 
the proposed rule. Commenters stated that requiring annual waiver 
requests during very poor economic conditions was unnecessary, 
burdensome, and wasteful, and that it could cause delays in waiver 
implementation. Another commenter stated that two-year waivers had 
historically been used in narrow, appropriate circumstances because 
two-year waivers already have burdensome data requirements that ensure 
that they are not implemented in inappropriate circumstances.
    The Department is maintaining this provision as proposed. In the 
final rule, this provision is included in paragraph Sec.  273.24(f)(5). 
The Department believes that a 1-year waiver term allows sufficient 
predictability for States to plan and implement the waiver. At the same 
time, a 1-year waiver term ensures that the waiver request reflects 
recent economic conditions.

Timeliness of Data

    The Department proposed that waivers based on the 20 percent 
standard would not be approved beyond the fiscal year in which the 
waiver is implemented. This provision was included in paragraph Sec.  
273.24(f)(6) in the proposed rule. This proposal is connected to the 
existing regulation that these waivers must be supported by data from a 
24-month period no less recent than what DOL used in its current fiscal 
year Labor Surplus Area (LSA) designation. When these waivers start 
late in the fiscal year, the data period used by the State may meet 
current regulatory requirements for waivers starting in that fiscal 
year, but it also may be relatively outdated support for a full 12-
month approval period that spans into the next fiscal year. This is 
because when the waiver approval crosses fiscal years, the data 
supporting the waiver may, in fact, be older than the data used by DOL 
for LSAs for the more recent fiscal year. By proposing to limit the 
duration of these waivers to the current fiscal year, the Department 
sought to stop States from using older data to waive more areas than 
justified by more recent data used by DOL.
    Commenters, including State agencies, suggested that this proposal 
would be administratively burdensome. One State agency argued that the 
proposed change would be inefficient, as its E&T programs and its own 
fiscal year calendar is different than the Federal fiscal year 
calendar. A State agency also requested that it retain its right to 
request waivers for durations exceeding the current fiscal year if it 
has compelling reasons.
    Based on these comments, the Department is modifying this provision 
to preserve State flexibility and to allow qualifying 20 percent 
standard waivers to be implemented for 12-month periods that may cross 
fiscal years. At the same time, the modification also addresses the 
Department's concerns about the timeliness of data. Instead of limiting 
the implementation of 20 percent standard waivers to the fiscal year, 
as proposed, the modification will require that States always use data 
as recent as DOL uses to determine LSAs for a given fiscal year, no 
matter the month in which the waiver would start. States will maintain 
the discretion to set their own waiver schedule, but only if they 
support their request with qualifying, recent data. The modification is 
modeled after DOL's data reference period for LSAs and explained in 
detail in the following paragraphs.
    In determining which areas qualify as LSAs for each fiscal year, 
DOL reviews areas' unemployment rates for the 2 preceding calendar 
years (the LSA data reference period). If an area qualifies, it is an 
LSA for the 12-month duration of the coming fiscal year, which starts 
in October and runs through September of the following year. Put 
simply, there are 21 months from the last month of the LSA data 
reference period through the last month in which the LSA designation is 
effective. For example, for an LSA designation of October 2020 through 
September 2021, the data from

[[Page 66799]]

the previous 2 calendar years is from January 2018 through December 
2019. The number of months from December 2019 (the last month of the 
LSA data reference period) through September 2021 (the last month in 
which the LSA designation is effective) is 21 months.
    Similarly, for the 20 percent standard data to be considered 
recent, the Department is requiring that there be no more than 21 
months from the last month of the data reference period through the 
last month in which the waiver would be effective. Below are examples 
of how the policy will work in practice.
    Example 1: The State has requested a 12-month waiver for October 
2020 through September 2021. The State provided a 24-month data period 
from June 2018 through May 2020 showing that the requested areas meet 
the 20 percent standard. The waiver is approvable as requested, since 
the number of months from the end of May 2020 through the end of 
September 2021 is 16 months and does not exceed 21 months.
    Example 2: The State has requested a 12-month waiver for January 
2020 through December 2020. The State provided a 24-month data period 
from April 2017 through March 2019 showing that the requested areas 
meet the 20 percent standard. The waiver is approvable, since the 
number of months from the end of March 2019 through the end of December 
2020 equals 21 months and does not exceed 21 months.
    In modifying this provision to preserve State flexibility, the 
Department also sees fit to explain the potential for a State to 
request a waiver for less than 1 year and still support that request 
using the 20 percent standard data. In this potential scenario, the 
Department would follow the same requirement that there be no more than 
21 months from the last month of the data reference period through the 
last month in which the waiver would be effective--but the waiver would 
not be approvable for a 1-year period.
    For example, the State requested a 6-month waiver for June 2020 
through December 2020. The State provided a 24-month data period from 
April 2017 through March 2019 showing that the requested areas meet the 
20 percent standard. The waiver is approvable, since the number of 
months from the end of March 2019 through the end of December 2020 
equals 21 months and does not exceed 21 months. The Department is 
adopting this change in the core standards at Sec.  273.24(f)(2)(ii) 
and is including the revised provision regarding approval periods for 
waivers based on the 20 percent standard in paragraph Sec.  
273.24(f)(5).

Areas With Limited Data or Evidence

    The Department proposed that waiver requests for areas 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 that is required of 
other areas. This provision was included in paragraph Sec.  
273.24(f)(7) in the proposed rule.
    One State agency asked that the U.S. Territories and reservation 
areas be specifically exempted from the core standards, rather than 
listed as examples of areas in which standard BLS data or data from a 
BLS cooperating agency may be limited or unavailable, citing its unique 
economic circumstances.
    The Department is adopting the provision mostly as proposed with 
two exceptions. The first exception is that the Department is not 
including the proposed language describing the potential for the 
combining of data within this subparagraph of the amendatory text. The 
Department has determined that language to be unnecessary. The second 
exception that the Department has added is that the data or evidence 
provided by the State must be ``recent.'' The Department is making this 
change for consistency with the general requirement that the data or 
evidence used to support a waiver request be reflective of the current 
economic circumstances in the area.
    In the final rule, this provision is included in paragraph Sec.  
273.24(f)(6). As previously described, the Department is including 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) as criteria for areas with limited data or evidence at 
Sec.  273.24(f)(6).

Other Changes to Waivers

Eliminating the Labor Surplus Area (LSA) Waiver Criterion

    Current regulations at Sec.  273.24(f) include the LSA designation 
by DOL as a basis of ABAWD time limit waiver approval. As stated 
earlier, the Department proposed to eliminate the LSA designation as a 
basis of waiver approval as the LSA unemployment rate floor of 6 
percent is inconsistent with the 7 percent unemployment rate that was 
proposed for the 20 percent standard.
    Commenters, including States, stated opposition to eliminating the 
LSA designation as a basis for waiver approval. Some commenters pointed 
out that the LSA designation criteria is a long-accepted Federal 
standard for job insufficiency, developed by experts at DOL, and relied 
upon by Federal and State governments. Commenters also provided 
language from the Conference Report that accompanied the 2018 Farm 
Bill, in which the managers ``acknowledge that waivers from the ABAWD 
time limit are necessary in times of recession and in areas with labor 
surpluses or higher rates of unemployment.''
    Commenters argued that LSAs target specific areas of job 
insufficiency. Commenters pointed to previous guidance provided by the 
Department in December 1996, which stated, ``Labor surplus areas are 
classified on the basis of civil jurisdictions rather than on a 
metropolitan area or labor market area basis. By classifying labor 
surplus areas in this way, specific localities with high unemployment 
rather than all civil jurisdictions within a metropolitan area, (not 
all of which may suffer from the same degree of unemployment) can be 
identified. This feature also makes the classification potentially 
useful to identify areas for which to seek waivers.''
    Commenters argued that eliminating the LSA designation criterion 
would increase administrative burden on States and the Department. 
Commenters stated that the LSA designation criterion is one of the 
least burdensome ways for States to submit a request and for the 
Department to evaluate a request, as the list of areas is simply 
published by DOL. These commenters argued that increasing the 
administrative burden in this way is inconsistent with the fact that 
the Department asked for public input in 2018 on how to simplify the 
waiver process.
    Commenters also argued that eliminating LSA designation as a basis 
for waiver approval would hinder the ability of SNAP to respond to 
severe setbacks in local economies because the LSA classification 
procedures also provide for the designation of LSAs under exceptional 
circumstance criteria. These procedures provide for LSA classification 
when an area experiences a significant increase in unemployment which 
is not temporary or seasonal, and which was not reflected in the data 
for the 2-year reference period. The current criteria for an LSA 
exceptional circumstance classification are: An area's unemployment 
rate is at least the LSA qualifying rate of 20 percent above the 
national average and 6 percent for each of the three most recent 
months; a projected unemployment rate of at least

[[Page 66800]]

the LSA qualifying rate for each of the next 12 months; and 
documentation (a list of the areas with the average unemployment rate 
of the three most recent months) that the exceptional circumstance 
event has already occurred. In order for an area to be classified as a 
LSA under the exceptional circumstance criteria, the State workforce 
agency must submit a petition requesting such classification to ETA.
    The Department did not receive any comments that specifically 
stated support for eliminating LSA designation as a waiver criterion.
    While the Department appreciates the comments received in 
opposition to eliminating LSA designation as a waiver criterion, the 
Department is choosing to eliminate this criterion, as proposed. As 
discussed in the preceding sections, the final rule is establishing a 
strict definition of waiver ``area'' to include an LMA, the intrastate 
part of an interstate LMA, a reservation area, or a U.S. Territory. 
LMAs and LSAs are often geographically inconsistent. Therefore, 
including LSA designation as a waiver criterion would be inconsistent 
with the final rule's definition of an area. The Department believes 
that States should not be able to pick and choose when to use the LMA 
definition and when to apply for a single-jurisdiction waiver. The 
Department also believes that areas should not qualify for waivers if 
there are available jobs within a reasonable commuting distance.

Eliminating Waiver Implementation Prior to Approval

    The Department proposed removing the current provision at Sec.  
273.24(f)(4), which allows a State to implement an ABAWD waiver as soon 
as the State submits the waiver request, provided the State certifies 
that the requested area has a most recent 12-month unemployment rate 
over 10 percent; or the area has been designated a Labor Surplus Area 
by DOL for the current fiscal year. As a result of the removal of this 
provision, States would no longer have the discretion to implement a 
waiver prior to requesting and receiving FNS approval.
    One commenter stated that the proposed change would hinder States' 
ability to respond to sudden economic changes. In response to this 
comment, the Department notes that the current regulations at Sec.  
273.24(f)(4) require States to provide either 12-months of data 
demonstrating the requested area has a most recent unemployment rate 
above 10 percent or evidence that the requested area has been 
designated an LSA for the current fiscal year, which is generally based 
on 24-months of data from the preceding 2 calendar years. Given that 
sudden economic changes take time to impact an area's 12-month or 24-
month average, the Department does not find the current regulations at 
Sec.  273.24(f)(4) particularly relevant to responding to sudden 
economic changes. Moreover, when the Department proposed Sec.  
273.24(f)(4) in 1999, it made no mention of this particular provision 
in terms of the responding to sudden economic changes, but did so in 
detail with regard to other proposed provisions.\10\
---------------------------------------------------------------------------

    \10\ 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
---------------------------------------------------------------------------

    Several commenters stated opposition to the proposal on the grounds 
that it would increase administrative burden and cause uncertainty for 
States. For example, commenters asserted that the Department's 
rationale for the proposal is unclear and that the proposal runs 
contrary to the proposed rule's stated purpose of improving certainty 
and consistency in the waiver process. One commenter recommended 
allowing automatic implementation for the proposed core standards and 
for the exceptional circumstance standard to encourage efficiency and 
reduce unnecessary review processes.
    The Department agrees that it is sometimes appropriate to balance 
flexibility with accountability in the interest of easing 
administrative burden, when doing so is effective and necessary. The 
Department also recognizes that, when it proposed Sec.  273.24(f)(4) in 
1999, it explained that it did so in the interest of making the waiver 
request process ``as simple as possible,'' while also noting that ``FNS 
must be able to reexamine the basis for waivers in those areas.'' 
However, based on the Department's over 20 years of operational 
experience, this flexibility has been used on an exceedingly rare basis 
and has not proven to be particularly necessary or effective at 
simplifying the waiver request process. Because the Department has been 
committed to responding to waiver requests prior to the State's 
requested implementation date, and has met this commitment 
consistently, it does not see a need to allow implementation prior to 
approval.
    Other commenters stated that the proposal's application process 
limitations would harmfully restrict States' ability to implement 
waivers, as States need to take several steps to prepare to implement 
the time limit, including to identify and notify individuals subject to 
the time limit, develop policies and guidance to support 
implementation, train workers, ready computer systems, and potentially 
develop slots in work programs. In response to these comments, the 
Department sees fit to underscore the fact that ABAWD time limit 
waivers are temporary (generally 12 months or less) and only waive the 
3-month participation time limit for ABAWDs. These waivers do not waive 
States' responsibility to identify ABAWDs (screen household members for 
the exceptions from the time limit at Sec.  273.24(c)) or to measure 
and track the 36-month period. In short, States must maintain their 
administrative capacity to implement the 3 in 36-month time limit for 
ABAWDs continuously, and waiver implementation prior to approval is 
irrelevant to that administrative requirement.
    The Department carefully reviews all State waiver requests, which 
includes independently obtaining and validating the data and evidence 
presented by the State in support of all requested areas to determine 
if the areas meet the standards for approval. For example, it is not 
uncommon for FNS to identify discrepancies or inaccuracies in the data 
presented by the waiver requesting State. In some cases, these issues 
result in FNS denying the waiver request or only partially approving 
the waiver request because not all areas meet the standards for 
approval.
    For the reasons noted in the preceding paragraphs, the Department 
is maintaining the proposed change to eliminate waiver implementation 
prior to approval.

Eliminating the Historical Seasonal Unemployment Waiver Criterion

    The Department proposed removing the criterion of a historical 
seasonal unemployment rate over 10 percent as a basis for approval. The 
Department stated that historical seasonal unemployment is not an 
appropriate measure because it does not demonstrate a prolonged lack of 
jobs and does not indicate early signs of a declining labor market. The 
Department also noted that it has not approved a waiver under this 
criterion in more than two decades.
    Some commenters stated opposition to this provision. Some of these 
commenters argued that seasonal unemployment was an issue that SNAP was 
designed to address and that the time limit should be able to be waived 
during the time period of high seasonal

[[Page 66801]]

unemployment, so that seasonal workers are not unfairly punished for 
not being able to find work in the off-season. Another commenter argued 
that the proposed rule improperly considers the duration of the 
unavailability of jobs, and argues that this is contrary to the Act. 
This commenter stated that the intent of the current historical 
seasonal unemployment criteria, according to Departmental guidance, was 
to align the period covered by the waiver to the period when 
unemployment is high, and that the proposed rule would designate an 
arbitrary unemployment duration requirement without proper 
justification. Other commenters suggested that the mere fact that the 
historical seasonal unemployment criterion has not been utilized is not 
sufficient to justify the removal of the provision and that States 
would be more likely to use the criterion in the future if other 
criteria were removed, as proposed.
    Despite these comments, the Department is maintaining the 
elimination of the historical seasonal unemployment criterion as 
proposed. The Department believes that the historical seasonal 
unemployment criterion was not appropriate, as an area could receive a 
waiver for up to 12 months, even though it only demonstrated a few 
months of high unemployment per year. The Department is also relying on 
the fact that States have not utilized this metric in more than 20 
years, through many economic changes. The Department believes this 
provides important evidence that this is not a necessary metric for 
waiver approval.

Requiring That Waiver Requests Be Supported by the Chief Executive 
Officer of the State

    The Department proposed clarifying that any State agency's waiver 
request must ``be endorsed by the State's governor.'' Those who 
commented on this provision opposed it. Some commenters argued that the 
proposal is inconsistent with the 2018 Farm Bill, which requires that 
any State agency's waiver request have only ``the support of the chief 
executive officer of the State.'' Other commenters expressed concerns 
over the proposed rule's use of the word ``endorsed,'' which they 
suggested implies that a signature is required. Commenters opined that 
this provision would lengthen the waiver request process and require 
unnecessary administrative steps for States and potentially Tribal 
governments. Commenters also noted that the House-passed version of the 
Farm Bill provided that the waiver request must have the ``approval'' 
of the chief executive officer of the State. These commenters argued 
that the language was changed from ``approval'' in the House-passed 
bill to ``support'' in the final enacted law to indicate that the chief 
executive officer is not required to personally sign the waiver 
request. These commenters also pointed to the Conference Report that 
accompanied the 2018 Farm Bill,\11\ which states, in particular, ``nor 
should the language result in any additional paperwork or 
administrative steps under the waiver process.'' Additionally, while 
the proposed rule used the title ``Governor,'' the 2018 Farm Bill used 
the title ``chief executive officer.'' Chief executive officer is the 
equivalent of a Governor but better captures all States and State 
agencies. For example, the chief executive officer in Washington, DC is 
the Mayor.
---------------------------------------------------------------------------

    \11\ The Conference Report states, ``The Managers intend to 
maintain the practice that bestows authority on the State agency 
responsible for administering SNAP to determine when and how waiver 
requests for ABAWDs are submitted. In response to concerns that have 
been raised by some Members that State agencies have not fully 
communicated to the chief executive their intent to request a waiver 
under section 6(o), the Managers have included a provision to 
encourage communication between the State agency and the chief 
executive officer of the State. The Managers agree that State 
agencies should have the support of these officials in their 
application for waiver, ensuring maximum State coordination. It is 
not the Managers' intent that USDA undertake any new rulemaking in 
order to facilitate support for requests from State agencies, nor 
should the language result in any additional paperwork or 
administrative steps under the waiver process.''
---------------------------------------------------------------------------

    The Department finds these comments compelling. Based on these 
comments, the Department is adjusting the proposed language in Sec.  
273.24(f)(1) to state, ``with the support of the chief executive 
officer of the State,'' in order to more closely match the language 
from the 2018 Farm Bill. The Department also agrees that the language 
should refer to the chief executive officer rather than the Governor, 
to be inclusive of all the States, Washington, DC, and the U.S. 
Territories.
    On the other hand, the Conference Report did express ``concerns 
that have been raised by some Members that State agencies have not 
fully communicated to the chief executive their intent to request a 
waiver under section 6(o).'' In order to avoid these concerns in the 
future, the Department is requiring State agencies to indicate that the 
request has the support of the chief executive officer in whatever 
method they see fit.
    Commenters also argued that this provision should not be included 
in the rulemaking due to the language in the Conference Report that 
states, ``It is not the Managers' intent that USDA undertake any new 
rulemaking in order to facilitate support for requests from State 
agencies.'' Other commenters stated that this provision is unnecessary 
because Governors appoint department directors and cabinet members for 
the purpose of delegating control over certain areas of government, and 
requiring Governors to become involved in something as specific as SNAP 
ABAWD time limit waiver requests interferes with the ability of State 
governments to function efficiently and productively. However, since 
the 2018 Farm Bill requires that ABAWD time limit waiver requests have 
the support of the chief executive officer of the State, the Department 
does not believe there is discretion to dismiss this statutory 
requirement and thinks it appropriate to codify the requirement.

Implementation Date for Waiver Changes

    The Department proposed that the changes to the waiver standards, 
once finalized, would go into effect on October 1, 2019, and stated 
that all waivers in effect on October 1, 2019, or thereafter, would 
need to be approvable according to the new rule at that time, and 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.
    Commenters who commented on this provision opposed it. Commenters, 
including several States, opposed this implementation date because it 
did not provide States with enough time to implement the provision 
successfully. Commenters said that this timeline would provide States 
with an unrealistic, impractical, and inadequate amount of time to 
understand the final rule, send a request to amend their current 
waivers, and have that request reviewed by the Department. Commenters 
suggested that this implementation date would lead to errors, 
confusion, and potential violation of individuals' procedural due 
process rights. In addition, commenters argued that implementing the 
provisions so quickly would result in significant administrative costs. 
Several commenters expressed concern that the Department did not 
acknowledge the additional burden it would place on States to devote 
resources to quickly analyzing data for new requests and implementing 
the time limit in new areas. These commenters argued that the October 
1, 2019, implementation date would not provide sufficient time for the 
State to coordinate with counties and provide adequate notice so that

[[Page 66802]]

individuals properly understand the ABAWD time limit. Commenters stated 
that forcing such a large, complex change so quickly will make it 
difficult for States to plan sufficiently and provide appropriate 
oversight and training for counties.
    In addition, commenters argued that this timeline does not give 
adequate time for E&T providers and community based organizations to 
prepare for the impacts of the waiver changes. Some commenters asserted 
that the proposed implementation date demonstrates that the 
Administration does not fully understand the significant barriers that 
many people face and the significant investment it would take to engage 
every unemployed and underemployed ABAWDs in meaningful work 
activities.
    Although those who commented on this provision generally agreed 
that the proposed implementation date was too soon to ensure successful 
implementation of the provisions, commenters offered several 
suggestions on how the date could be modified. Some commenters 
recommended that the final rule should not be implemented any sooner 
than October 1, 2020. Other commenters recommended that, at a minimum, 
the Department should honor any currently approved waiver's expiration 
date and not end the waiver pre-maturely. In addition, some Tribes 
requested that the Department delay implementation for at least one 
calendar year, in order to allow the Department enough time to more 
properly and accurately address the economic ramifications of the 
government shutdown that occurred from December 22, 2018, until January 
25, 2019, which particularly impacted Tribes, and conduct meaningful 
consultation with Tribal leaders on this rule.
    In response to these comments, the Department has modified the 
implementation dates for the final rule. Regarding waivers of the ABAWD 
time limit, the Department recognizes that States will need some time 
after the publication of the final rule to analyze data, request new 
waivers, train certain staff, inform ABAWDs of the rules, and otherwise 
prepare to implement the ABAWD work requirement in an effective manner. 
However, the Department also notes that it has provided ongoing 
guidance to States that States must continue to track ABAWDs, even when 
a waiver is in place. The Department also believes the changes to ABAWD 
waivers should happen as soon as possible to bring to an end current 
waiver practices by States.
    Therefore, the Department is modifying the implementation date in 
the final rule regarding the final rule's changes to Sec.  273.24(f), 
which concern the ABAWD waiver approval standards. The implementation 
date will be April 1, 2020. Waivers beginning before April 1, 2020, 
will be evaluated under the current regulatory standards for waivers, 
but these waivers will not be approved beyond March 31, 2020. Waivers 
that are currently in place will not be in effect beyond March 31, 
2020, or their current expiration date, whichever occurs sooner. If a 
State chooses to submit a new waiver request after the publication of 
this rule, the new waiver request would need to meet the new standards 
in order to be approvable beyond March 31, 2020. As of April 1, 2020, 
State agencies must have received a new waiver approval under the new 
standards set at Sec.  273.24(f) by this final rule in order to waive 
the time limit. Waivers approved under the previous standards will not 
be in effect. For areas not waived, the State must administer the ABAWD 
time limit as appropriate.
    The Department believes that the implementation period will provide 
enough time for States to pose questions about the final rule and for 
the Department to provide clarifying guidance to the States. During the 
implementation period, States with existing waivers will also have the 
opportunity to request new waivers based on the approval standards of 
the final rule.
    The final rule's changes to Sec.  273.24(h), which involve changes 
to discretionary exemptions, will be implemented on October 1, 2020, as 
described in another section below.

Limiting the ``Carryover'' of ABAWD Discretionary Exemptions

    Prior to enactment of the 2018 Farm Bill, section 6(o)(6) of the 
Food and Nutrition Act provided that each State agency be allotted 
exemptions from the ABAWD time limit equal to 15 percent of covered 
individuals. These were generally referred to as 15 percent exemptions 
and were codified in the regulations at Sec.  273.24(g) and (h). The 
2018 Farm Bill amended section 6(o)(6) of the Act to reduce the amount 
of exemptions from 15 percent to 12 percent, starting in fiscal year 
2020. (The Department intends to codify this change in the regulations 
through a future rulemaking, Employment and Training Opportunities in 
the Supplemental Nutrition Assistance Program, RIN: 0584-AE68.) In the 
proposed rule, the Department referred to these as ``percentage 
exemptions'' as a way to avoid confusion as the calculation 
transitioned from 15 percent to 12 percent. In this final rule, the 
Department has chosen to refer to these exemptions as ``discretionary'' 
exemptions. The Department believes this term better describes these 
exemptions because States have discretion on whether to use these 
exemptions. This is in contrast to the list of ``exceptions'' in 
section 6(o)(3) of the Act and Sec.  273.24(c), which are not 
discretionary. States must exempt individuals from the ABAWD time limit 
if the individual meets at least one of those listed exceptions. The 
Department intends to make the regulatory change to replace the name 
``15 percent exemptions'' with ``discretionary exemptions'' through the 
above referenced future rulemaking (RIN: 0584-AE68).
    The Department proposed to end the unlimited carryover and 
accumulation of ABAWD discretionary exemptions at Sec.  273.24(h). The 
regulation's current interpretation of Section 6(o)(6)(G) of the Act, 
which requires the adjustment of exemptions, allows any unused 
exemptions to carry over and accumulate from one year to the next, 
indefinitely. As a result, States have accumulated extremely high 
amounts of unused discretionary exemptions that well exceed the number 
allotted to each State for the fiscal year. For example, in FY 2019, 
States earned approximately 1.3 million exemptions, but had about 7.4 
million exemptions available for use in total due to the carryover of 
unused exemptions from previous fiscal years. The Department views the 
indefinite carryover and accumulation of such significant amounts of 
unused exemptions to be an unintended outcome of the current 
regulations. In the Department's view, the indefinite carryover and 
accumulation of unused exemptions is inconsistent with Congress' 
decision to limit the number of exemptions available to States in a 
given fiscal year, as expressed by sections 6(o)(6)(C), (D), and (E) of 
the Act.
    The Department proposed changing the adjustment calculation to no 
longer allow for unlimited carryover from all preceding years. Instead, 
each State agency's carryover 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. In addition, the 
Department proposed that the carryover adjustment would apply only to 
the fiscal year in which the adjustment is made.
    Many commenters stated their opposition to the proposal to end the 
unlimited carryover and accumulation

[[Page 66803]]

of discretionary exemptions. Several commenters argued that this 
proposal was out of line with Congressional intent and pointed to the 
Conference Committee Report that accompanied the 2018 Farm Bill, which 
states that ``States will maintain the ability to exempt up to 12 
percent of their SNAP population subject to ABAWD work requirements, 
down from 15 percent, and continue to accrue exemptions and retain any 
carryover exemptions from previous years, consistent with current 
law.''
    Commenters also raised concerns over the complexity associated with 
the new calculation, the difficulty in planning based on variation from 
year to year, the likelihood of increased errors, and the likelihood of 
increased overuse resulting in legal liability.
    Other commenters asserted that this proposed change would punish 
States for being judicious administrators of their exemptions. One 
commenter stated that there is no economic rationale for imposing a 
``use it or lose it'' provision. The commenter reasoned that, under the 
current system, States have the flexibility to target the use of 
exemptions to people in the greatest need. Another commenter stated 
that implementing a ``use it or lose it'' system in regard to the 
carryover of ABAWD exemptions may actually incentivize States to use 
exemptions at a higher rate, something which seems inconsistent with 
the stipulated goal of reducing waste.
    A few commenters stated that the proposal would cause retroactive 
harm to States by removing already earned exemptions and penalizing 
States for usage of earned exemptions in the fiscal year before the 
rule is finalized or implemented.
    Some commenters stated that the proposal would negatively impact 
the ability of States to respond to unknown, future recessions and 
other economic hardships. Commenters, including States, argued that the 
rule is too focused on current national economic conditions and that 
States often use discretionary exemptions to respond to quickly 
deteriorating economic conditions, the deterioration of a major local 
industry or employer, or other similar situations where areas do not 
yet qualify for waivers.
    Several commenters stated that discretionary exemptions are used to 
help individuals achieve self-sufficiency and to deal with changing 
policies. Some of these commenters, including counties, stated that 
some States have structured the use of exemptions so that they can be 
used to encourage individuals to engage in employment and training 
activities. For example, exemptions could be used for individuals who 
are engaged in employment and training but who do not reach 80 hours a 
month. Commenters noted that some States also use them for people 
participating in ``non-qualifying education or training activities'' 
when such training is in the best interest of specific clients. One 
State agency commented that the proposal would limit a State's ability 
to respond to new circumstances and policies, such as E&T vendor 
transitions, in addition to also using these exemptions in specific 
situations, such as the first month of a certification period if an 
ABAWD applies on the first day of the month.
    Commenters also argued that discretionary exemptions should not be 
restricted because they are used to help people remain food secure when 
these individuals have barriers to work that are not listed in the 
specific exception list at Sec.  273.24(c). As indicated in the 
comments, these individuals include domestic violence victims, youth 
leaving foster care, people leaving incarceration, veterans, homeless 
individuals, rural residents with no transportation, certain students, 
those suffering from addiction in waiting lines for treatment, those 
transitioning into the new requirements, those facing employment 
discrimination or temporary change in work hours, and those who can 
work but lack credentials for white-collar jobs but cannot do physical 
labor.
    One State recommended modifying the proposal to permanently 
grandfather current discretionary exemptions, allow new exemptions to 
be carried over for 3 years, and not penalize States when they use the 
carried-over exemptions.
    In response to these comments, the Department is adopting a 
modification to the proposal at Sec.  273.24(h) that will limit 
carryover and allow States to carry over only one year's worth of 
exemptions from previous years. Specifically, the modification will 
limit or cap the amount that could be carried over to 12 percent of the 
covered individuals in the State for the preceding fiscal year. The 
modification, as described in the following paragraphs, will provide 
States with more time to use exemptions but will not allow the States 
to indefinitely accumulate discretionary exemptions.
    The modification will address several of the concerns expressed by 
commenters. It will allow unused exemptions to carry over, but will 
still achieve the Department's goal to limit that carryover to 12 
percent of covered individuals consistent with the rationale explained 
earlier in this section and the proposed rule. In addition, the 
modification will be less complex than what was in the proposed rule. 
Under the modification, States will face less variation from year to 
year, and States will know in advance the number of exemptions they 
could use for the fiscal year. Although States will continue to be 
liable for overuse of discretionary exemptions, the Department does not 
believe that this rule will increase the likelihood of errors or legal 
liability, as they will be able to plan in advance. The rule will give 
States some flexibility to ``save up'' a limited number of exemptions 
and carry them over into a future year in order to deal with potential 
unforeseen sharp economic declines or other quickly changing 
circumstances. The Department agrees that these comments demonstrate 
the importance of discretionary exemptions, but does not believe they 
provide compelling evidence that these exemptions should be carried 
over indefinitely.
    The Department also sought comments on how to best handle the State 
agencies' existing accumulated discretionary exemptions, which in some 
cases have been carried over and accumulated for many years. As stated 
previously, some commenters said that States should retain these 
existing exemptions and that removing them would punish States for 
demonstrating restraint in the past. The final rule will not allow 
States to retain their existing accumulated discretionary exemptions 
past the end of FY 2020. As explained earlier, the Department views the 
accumulation of unused exemptions over several years to be 
inappropriate and inconsistent with the Act.
    As proposed, the Department is also taking the opportunity to 
correct a cross-reference in Sec.  273.24(h)(1). The corrected language 
cross-references Sec.  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 Sec.  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. The Department did not receive any comments on 
this proposed action. The Department also notes that it intends to 
change the reference to ``15 percent'' in Sec.  273.24(g)(3) through 
the previously referenced future rulemaking (RIN: 0584-AE68), in order 
to codify the statutory change from 15 percent to 12 percent made in 
the 2018 Farm Bill.
    The Department did not propose an implementation date with regard 
to the provision to restrict the carryover of ABAWD discretionary 
exemptions but

[[Page 66804]]

sought comments on when this provision should be implemented. The 
Department also noted that, under the proposed rule, the adjusted 
number of exemptions was based on the preceding fiscal year, and the 
change in regulatory text will, therefore, impact a State's ability to 
use exemptions in the fiscal year preceding the fiscal year that the 
provision goes into effect.
    One State recommended implementing these changes in October 2020. 
This State suggested that many States utilize their exemptions over 
broad sections of population and that States may need to make 
significant changes to ensure they do not overuse exemptions. As 
discussed previously, other commenters stated that the Department 
should ensure that this provision does not have a retroactive impact.
    Based on these comments, the final rule is adopting an 
implementation date of October 1, 2020, for this provision. The 
Department agrees that it is prudent to implement changes to 
discretionary exemptions during the next scheduled adjustment in Fiscal 
Year (FY) 2021, rather than to make changes during this fiscal year, 
which is already underway. Implementing this change during this fiscal 
year could make it difficult for States to properly plan their 
exemption use for this fiscal year and avoid liability status, as they 
have already begun using exemptions this fiscal year. States will not 
be adversely affected for actions taken before the rule is finalized, 
as the changes to carryover will not go into effect until FY 2021. 
Unlike the proposed rule, which could have sent a State into liability 
status based solely on the amount of exemptions earned and used in the 
previous year, the modification in the final rule provides States with 
one year to offset any overuse, consistent with current policy.
    Under the final rule, the Department will continue to provide 
States with their estimated number of exemptions earned for each 
upcoming fiscal year as data becomes available, typically in September. 
The Department will also continue to provide States with the exemption 
adjustments as soon as updated caseload data is available and States 
have provided final data on exemptions from the preceding fiscal year, 
typically in January.
    In addition, in the final rule, the Department has decided it 
prudent to codify its exemptions overuse policy, which was set by FNS 
through its November 8, 2007, policy memorandum Overuse of the 15 
Percent Able-Bodied Adults Without Dependents (ABAWD) Exemptions by 
States Agencies. As referenced in an earlier paragraph of this section 
and in the proposed rule, this policy allows a State one year to 
``offset'' a negative exemption balance using the new exemptions 
estimated for the State by FNS for the subsequent fiscal year. If the 
negative exemption balance is not fully offset, FNS will hold the State 
liable for the remaining negative balance. The Department is codifying 
this policy at Sec.  273.24(h)(2)(ii).The four examples below show how 
the rule's adjustment calculation will work in practice based on no 
exemption use, varied exemption use, maximum exemption use, and 
exemption overuse.

Example 1, No Exemption Use

    Example 1 shows how the adjustment calculation will work for a 
State that uses zero exemptions, and how it will limit the carryover of 
unused discretionary exemptions. In this example, the State had a 
balance of 50 exemptions for FY 2020 (row A). The State used no 
exemptions in FY 2020 (row B). The State had a potential carryover of 
50 exemptions for FY 2021 (row C), but the State is limited to 12 
percent of the covered individuals in the State estimated by FNS for FY 
2020 (row D), which is equal to the number of exemptions earned for FY 
2020. In this example, we assume the State earned 10 exemptions in FY 
2020. The carryover of 10 exemptions (row D) is then added to the 10 
earned for FY 2021 (row E) to obtain the State's total balance of 20 
exemptions after adjustment for FY 2021 (row F). The State has a 
positive balance and does not have any overuse liability for that year. 
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 remains the same every year as it is earning the same amount 
and using zero exemptions each year. The State does not accumulate 
exemptions indefinitely, even though it is not using exemptions. 
Whereas the State would have a balance of 90 total exemptions after 
adjustment for FY 2024 under the current regulations, the State will 
have a balance of 20 total exemptions after adjustment for FY 2024 
under the final rule.

                                                    Example 1
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Balance for                   50              20              20              20
                                 prior FY.
B.............................  (-) Used in                    0               0               0               0
                                 prior FY.
C.............................  (=) Potential                 50              20              20              20
                                 carryover for
                                 current FY.
D.............................  (=) Actual                    10              10              10              10
                                 carryover cap
                                 for current FY.
E.............................  (+) Earned                    10              10              10              10
                                 exemptions for
                                 current FY.
F.............................  (=) Balance for               20              20              20              20
                                 current FY.
G.............................  Liability for                 No              No              No              No
                                 overuse? (Yes
                                 or No).
----------------------------------------------------------------------------------------------------------------

Example 2, Varied Exemption Use and Earnings

    Example 2 shows how the adjustment calculation will work for a 
State that uses and earns different amounts of exemptions each fiscal 
year. In this example, the State again had a balance of 50 exemptions 
for prior fiscal year (FY) of 2020 (row A). However, this time, the 
State used 30 exemptions in FY 2020 (row B). The State had a potential 
carryover of 20 exemptions for FY 2021 (row C), but the State is 
limited to the number of exemptions earned for FY 2020. In this 
example, we assume the State earned 10 exemptions in FY 2020. The 
carryover of 10 exemptions (row D) is then added to the 30 earned for 
FY 2021 (row E) to obtain the State's total balance of 40 exemptions 
after adjustment for FY 2021 (row F). The State has a positive balance 
and does not have any overuse liability for that year. For FY 2022, the 
State has a potential carryover of negative 10 exemptions because it 
used 50 exemptions in the prior year (row B) but only had a balance of 
40 exemptions to use (row A). The State earned 35 exemptions for FY 
2022, so the 35 earned exemptions offset the negative 10 exemptions, 
resulting in a balance of 25 exemptions for FY 2022. In FY 2022, the 
State uses exactly 25 exemptions, so they have no carryover for FY 
2023.

[[Page 66805]]



                                                    Example 2
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Balance for                   50              40              25              35
                                 prior FY.
B.............................  (-) Used in                   30              50              25              20
                                 prior FY.
C.............................  (=) Potential                 20             -10               0              15
                                 carryover for
                                 current FY.
D.............................  (=) Actual                    10             -10               0              15
                                 carryover cap
                                 for current FY.
E.............................  (+) Earned                    30              35              35              30
                                 exemptions for
                                 current FY.
F.............................  (=) Balance for               40              25              35              45
                                 current FY.
G.............................  Liability for                 No              No              No              No
                                 overuse? (Yes
                                 or No).
----------------------------------------------------------------------------------------------------------------

Example 3, Maximum Exemption Use

    Example 3 shows how the adjustment calculation will work for a 
State that uses its entire balance of exemptions every year, but does 
not overuse. In this example, the State again had a balance of 50 
exemptions for prior fiscal year (FY) of 2020 (row A). In this example, 
the State used 50 exemptions in FY 2020 (row B). The State had a 
potential carryover of 0 exemptions for FY 2021 (row C), and therefore 
has no carryover for FY 2021 (row D). The State earned 10 exemptions 
for FY 2021 (row E). Since there is no carryover for FY 2021, the 
State's total balance is equal to the 10 that they earned for that year 
(row F). The State has a positive balance and does not have any overuse 
liability for that year. In FY 2022 and FY 2023, the State again uses 
all the exemptions it earns and has no carryover for the following 
year. For each of these years and FY 2024, the State earns 10 
exemptions (row E) and has a balance of 10 exemptions (row F).

                                                    Example 3
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Balance for                   50              10              10              10
                                 prior FY.
B.............................  (-) Used in                   50              10              10              10
                                 prior FY.
C.............................  (=) Potential                  0               0               0               0
                                 carryover for
                                 current FY.
D.............................  (=) Actual                     0               0               0               0
                                 carryover cap
                                 for current.
E.............................  (+) Earned                    10              10              10              10
                                 exemptions for
                                 current FY.
F.............................  (=) Balance for               10              10              10              10
                                 current FY.
G.............................  Liability for                 No              No              No              No
                                 overuse? (Yes
                                 or No).
----------------------------------------------------------------------------------------------------------------

Example 4, Exemption Overuse

    Example 4 shows how the adjustment calculation will work for a 
State that overuses exemptions. We again assume the State had a balance 
of 50 exemptions for prior fiscal year (FY) of 2020 (row A). In this 
example, the State used 60 exemptions in FY 2020 (row B). The State had 
a potential carryover of negative 10 exemptions for FY 2021 (row C), 
and therefore has negative 10 carryover for FY 2021 (row D). The State 
earned 10 exemptions for FY 2021 (row E), which offset the negative 10 
carryover, and the State's total balance is zero for that year (row F). 
The State does not have any overuse liability for FY 2021 (row G). Even 
though the State had a balance of zero for FY 2021 (row F), the State 
used 20 exemptions in FY 2021 (row B). As a result, the State had a 
potential carryover of negative 20 exemptions for FY 2022 (row C), and 
therefore has negative 20 carryover for FY 2022 (row D). The State only 
earned 10 exemptions for FY 2022 (row E). The State's overuse results 
in a negative balance for FY 2022 (row F). Consistent with current 
policy, States will have 1 year to offset any overuse. In this case, 
the State will not go into liability status in FY 2022, but it will go 
into liability status in FY 2023 because the 10 exemptions earned for 
FY 2023 do not fully offset its overuse in FY 2022. Consistent with 
longstanding policy, the Department will consider the exemption overuse 
an overissuance.

                                                    Example 4
----------------------------------------------------------------------------------------------------------------
                                Fiscal year (FY)       2021            2022            2023            2024
----------------------------------------------------------------------------------------------------------------
A.............................  Balance for                   50               0             -10              -5
                                 prior FY.
B.............................  (-) Used in                   60              20               5               0
                                 prior FY.
C.............................  (=) Potential                -10             -20             -15              -5
                                 carryover for
                                 current FY.
D.............................  (=) Actual                   -10             -20             -15              -5
                                 carryover cap
                                 for current FY.
E.............................  (+) Earned                    10              10              10              10
                                 exemptions for
                                 current FY.
F.............................  (=) Balance for                0             -10              -5               5
                                 current FY.
G.............................  Liability for                 No              No             Yes              No
                                 overuse? (Yes
                                 or No).
----------------------------------------------------------------------------------------------------------------

Comments on the Rationale for the Rule

    The Department's overall rationale for the proposed rule was that 
reducing the number of waivers and discretionary exemptions would 
improve economic outcomes, promote self-sufficiency, and encourage 
greater engagement in meaningful work activities among ABAWDs. The 
Department believes these goals are consistent with the stated goals of 
Congress when enacting PRWORA and with the principles the President 
outlined in E.O. 13828. In addition, the Department noted several times 
in the proposed rule that, based on its operational experience, the 
Department saw several areas of opportunity for the regulations to be 
amended to safeguard against the misapplication of waivers.

[[Page 66806]]

    Some commenters supported the proposed rule as a way to encourage 
people to become self-sufficient. These commenters argued that applying 
the ABAWD time limit in more places and to more individuals would be 
effective in promoting self-sufficiency and beneficial to unemployed 
individuals. These commenters asserted that waivers are trapping people 
in poverty and long-term government dependency. Other comments argued 
that applying the ABAWD time limit in more places would help foster 
stronger communities. Some commenters argued that reducing the number 
of waived areas would reduce the number of SNAP beneficiaries, which 
the commenters felt is too high during current times of low national 
unemployment. Commenters suggested that the current regulations 
disincentivize economic independence and waste taxpayer money on people 
who should not qualify for waivers. Commenters argued that reducing the 
number of waived areas would encourage more people to fill open jobs 
and participate in employment and training programs.
    Several of these commenters also argued that the current 
regulations need to be updated and that the rule as proposed would 
address waiver misuse and abuse. Commenters suggested it would address 
issues of States manipulating their unemployment data to receive 
waivers. Commenters argued that the current regulations go against the 
purpose of the waivers, which is to provide extended aid only for 
individuals who reside in areas with little economic opportunity.
    The majority of commenters disagreed with the overall rationale for 
the proposed rule that reducing the number of waivers and discretionary 
exemptions would promote self-sufficiency for ABAWDs. These commenters 
were very critical of the Department's assertion that a broader 
application of time limits on SNAP eligibility would help adults find 
work. Commenters cited multiple recent academic studies and analyses 
which found that work rates for ABAWDs are generally similar in areas 
with and without waivers, supporting the notion that the proposed rule 
would not increase work. Commenters referred to studies commissioned by 
the Department in four States that found that, while a significant 
percentage of ABAWDs who left SNAP after the implementation of the time 
limit in the late 1990s were employed, their earnings and incomes were 
low and their poverty rates were high. Commenters pointed out that one 
of the main conclusions of these studies was that self-sufficiency was 
unlikely for many of those who left SNAP. While each of the studies in 
the four States was different and did not generally compare employment 
outcomes in waived areas against unwaived areas, commenters pointed to 
the study in South Carolina, which found that outcomes for ABAWDs who 
left SNAP in counties waived from the ABAWD time limit were similar to 
outcomes of ABAWDs leaving the program in unwaived counties. Commenters 
also cited numerous studies on TANF and Medicaid to support the 
assertion that work requirements harm program recipients while 
producing few lasting gains in employment. Commenters also cited a 
recent study finding that counties that lost waivers saw significant 
declines in ABAWD caseloads in SNAP, without any evidence of 
improvement in individual economic outcomes or well-being, when 
compared to economically similar counties with waivers. Several other 
commenters cited a study which found that ABAWD work requirements 
increased work participation by only 2 percent while decreasing SNAP 
participation by 8-10 percent.
    Commenters cited recent research on SNAP work requirements that 
found that a majority of individuals exposed to these requirements were 
already attached to the labor force and were working part of the year, 
but many would be unable to consistently meet the ABAWD work 
requirement due to volatility in the low-wage labor market. One 
commenter provided research based on SNAP and unemployment insurance 
data during the Great Recession suggesting that ABAWDs who access SNAP 
are low-income workers who rely on SNAP while working and when they 
experience a spell of unemployment but they are not accessing SNAP 
while unemployed by some artifact of moral hazard. Other commenters 
cited research indicating that one of the most significant barriers 
inhibiting SNAP recipients from meeting work requirements is a lack of 
long-term employment opportunities that provide stable hours above the 
80-hour-per-month threshold. Commenters referred to research finding 
that volatile hours and unstable employment are particularly common in 
the kind of low-paying jobs that employ the largest numbers of working-
class people who are likely to receive SNAP. Commenters said that work 
documentation requirements are unduly burdensome for workers with 
unpredictable hours or multiple jobs. Some of these commenters argued 
that the proposed rule would lead to more ``churn'' because working 
SNAP participants who lose eligibility due to administrative hurdles 
would need to reapply, increasing administrative costs for the program.
    Commenters argued that, as States began to implement the time limit 
after the passage of PRWORA in 1996, concern grew about its impact on 
people who are willing to work but could not find work, and that 
concern resulted in Congress passing legislation in 1997 to authorize 
15 percent exemptions and increase funding for employment and training 
programs. Commenters argued that the combination of 15 percent 
exemptions, E&T slots, and waivers was seen as a way to mitigate the 
impact of the time limit on people who want to work but who could not 
find jobs.
    Commenters also stressed the importance of SNAP and cited research 
indicating that receipt of SNAP improves health outcomes, and that work 
requirements harm health and productivity. Commenters cited studies 
indicating that access to SNAP benefits helps people find and maintain 
work. Commenters pointed to research studies, including those by the 
Department, indicating that the increased receipt of SNAP benefits 
stimulated local economic activity and increased employment during the 
Great Recession. Commenters also argued that the value of SNAP benefits 
is too small to disincentivize individual ABAWDs from finding work. 
Commenters argued that, even without work requirements, the SNAP 
benefit structure is already designed to incentivize work through the 
earned income deduction and gradual benefit phase-out as earned income 
increases.
    In addition, commenters asserted that the proposed rule did nothing 
to expand E&T programs for ABAWDs or decrease unemployment barriers for 
this population. Commenters expressed concern that the proposed rule 
could result in increased poverty and food insecurity for ABAWDs newly 
subject to the time limit who are unable to meet work requirements, 
which commenters felt contradicts the objectives of the E.O. 13828, 
cited by the Department. Commenters noted that there are significant 
limitations on SNAP E&T availability and accessibility.
    The Department appreciates these comments but believes that, as 
explained earlier in the Background on this Rulemaking section of this 
final rule, in passing PRWORA, Congress intended to promote work by 
requiring ABAWDs to work or participate in a work program as a 
condition of eligibility. While the Department appreciates the studies 
provided by the

[[Page 66807]]

commenters and the concerns expressed related to the rationale provided 
in the proposed rule, this does not change the statutory work 
requirements established by Congress. The policy changes made by this 
final rule are based on the Department's goal to promote work by 
expanding the application of the ABAWD time limit, in line with the 
intent of Congress when passing PRWORA. The Department also believes 
that, as stated in E.O. 13828, assistance programs, such as SNAP, need 
to make reforms to increase self-sufficiency, well-being, and economic 
mobility. Many of the changes in the final rule are based on the 
Department's more than 20 years of operational experience. Through this 
experience, the Department has learned that the current regulations 
lack certain important limitations and safeguards to prevent the 
misapplication of ABAWD waivers and the accumulation of unused ABAWD 
discretionary exemptions, as illustrated by the numerous practical 
examples included in the proposed rule and this final rule. Therefore, 
the Department is putting limitations and safeguards into regulation 
that will address these weaknesses. Moreover, the Department believes 
that those who can work should work and that SNAP recipients should be 
expected to seek work whenever possible. While the Department 
acknowledges that the rule does not in and of itself provide ABAWDs 
with additional job opportunities, the Department expects States 
agencies to do what they can to increase the employability of ABAWDs, 
and help them find and gain work. The Department believes that the 
Department, and other partners, share the responsibility to ensure that 
SNAP participants can achieve self-sufficiency and better their lives.

Comments Expressing General Opposition to Work Requirements

    Many commenters expressed general opposition to work requirements 
and the ABAWD time limit. The Department is not responding in detail to 
these comments in the final rule as they are considered outside the 
scope of the rule because they did not provide feedback on provisions 
that were proposed for revisions as part of this rulemaking. Moreover, 
the ABAWD time limit and work requirement are statutory provisions and 
therefore cannot be removed through the rulemaking process.

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 final 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 by Executive Order 12866, a Regulatory Impact Analysis 
(RIA) was developed for this final 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 SNAP 
spending associated with the final rule to be approximately $109 
million in fiscal year (FY) 2020 and $5.48 billion over the five years 
2020-2024. This savings represents a reduction in federal transfers 
(SNAP benefit payments), offset by a small increase in the federal 
share of State administrative costs; the reduction in transfers 
represents a 1.8 percent decrease in projected SNAP benefit spending 
over this time period. In addition, the Department estimates a small 
increase ($1.4 million) in State costs related to administrative burden 
for verifying work hours and exemptions and sending notices. ABAWD 
households will also face additional burden associated with verifying 
their circumstances and reading notices, at a cost of less than $1 
million.
    Under current authority, the Department estimates that less than 
half of ABAWDs live in areas that are not covered by a waiver and thus 
face the ABAWD time limit. Under the revised waiver criteria the 
Department estimates that about 88 percent of ABAWDs will live in such 
areas. Of those newly subject to the time limit, the Department 
estimates that 688,000 individuals (in FY 2021) will not meet the work 
requirement or be otherwise exempt.

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, the 
Secretary certifies that this rule will not have a significant impact 
on a substantial number of small entities.
    This final rule will not have an impact on small entities because 
the rule primarily impacts State agencies. As part of the requirements, 
State agencies will 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, will not be 
subject to any new requirements. However, retailers in geographic areas 
that lose the time limit wavier would likely see a drop in the amount 
of SNAP benefits redeemed at stores when these provisions are 
finalized, although impacts on small retailers are not expected to be 
disproportionate compared to impact on large entities. As of FY 2017, 
approximately 76 percent of authorized SNAP retailers (about 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 final rule is expected to reduce SNAP benefit payments by an 
average of about $1.1 billion per year. The rule is estimated to result 
in approximately 77 percent of counties losing their current time limit 
waiver. Assuming SNAP-authorized retailers are proportionately 
represented in these areas, this would equate to about a $177 loss of 
revenue per small store on average per month ($1.1 billion x 15%)/
(77,420 stores/12 months). In 2017, the average small store redeemed 
more than $3,300 in SNAP each month; the potential loss of benefits 
represents about 5 percent of their SNAP redemptions and only a small 
portion of their gross sales. Based on 2017 redemption data, a 1.8 
percent reduction in SNAP redemptions represented between 0.01 and 0.7 
percent of these stores' gross sales.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs has designated this as 
a major rule, as defined by 5 U.S.C. 804(2).

[[Page 66808]]

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 final rule is considered an E.O. 13771 regulatory action. 
The Department estimates that it will impose $0.16 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 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 $146 million 
or more (when adjusted for inflation; GDP deflator source: Table 1.1.9 
at http://www.bea.gov/iTable) 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 final 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 $146 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 
Number 10.551. For the reasons set forth in Department of Agriculture 
Programs and Activities Excluded from Executive Order 12372 (48 FR 
29115, June 24, 1983), 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, imposes substantial 
direct compliance costs on State and local government, and is not 
required by statute, 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 has federalism 
implications. However, this rule does not impose substantial or direct 
compliance costs on State and local governments, nor does it preempt 
State or local law. Therefore, under section 6(b) of the Executive 
Order, a federalism summary is not required.

Executive Order 12988, Civil Justice Reform

    This final 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 final rule, in accordance with the Department 
Regulation 4300-004, Civil Rights Impact Analysis, to identify and 
address any major civil rights impacts the final rule might have on 
minorities, women, and persons with disabilities. A comprehensive Civil 
Rights Impact Analysis (CRIA) was conducted on the final rule, 
including an analysis of participant data and provisions contained in 
the final rule. The CRIA outlines outreach and mitigation strategies to 
lessen any possible civil rights impacts. The CRIA concludes by stating 
while the Department believes that a reduction in the number of ABAWD 
waivers granted to States will affect potential SNAP program 
participants in all groups who are unable to meet the ABAWD work 
requirements, and have the potential for impacting certain protected 
groups due to factors affecting rates of employment of members of these 
groups, the Department finds that the implementation of mitigation 
strategies and monitoring by the FNS Civil Rights Division and FNS SNAP 
may lessen these impacts. If deemed necessary, the FNS Civil Rights 
Division will propose further rule changes to alleviate impacts that 
may result from the implementation of the final rule.

Executive Order 13175

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes. FNS briefed Tribes on this 
rule at the February 14th, 2019 listening session; Tribes were 
subsequently provided the opportunity for consultation on the issue but 
FNS received no feedback. If a tribe requests consultation in the 
future, FNS will work with the Office of Tribal Relations to ensure 
meaningful consultation is provided.

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 final 
rule contains information collections that are subject to review and 
approval by the Office of Management and Budget; therefore, the 
Department submitted the proposed rule for public comment regarding 
changes in the information collection burden that would result from 
adoption of the proposals in this final rule.
    These changes are contingent upon OMB approval under the Paperwork 
Reduction Act of 1995. When the information collection requirements 
have been approved, the Department will publish a separate action in 
the Federal Register announcing OMB approval.
    Title: Supplemental Nutrition Assistance Program Waiver of Section 
6(o) of the Food and Nutrition Act.
    Form Number: N/A.
    OMB Number: 0584-0479.
    Expiration Date: July 31, 2020.
    Type of Request: Revision of a currently approved collection.

[[Page 66809]]

    Abstract: This rule revises the conditions under which USDA would 
waive, when requested by State agencies, the able-bodied adult without 
dependents (ABAWD) time limit in areas that have an unemployment rate 
of over 10 percent or a lack of sufficient jobs. In addition, the rule 
limits carryover of ABAWD discretionary exemptions. In the proposed 
rule, the Department proposed to revise the existing information 
collection OMB Control #0584-0479 (expiration date July 31, 2021) by 
adjusting the burden hours associated with submitting a waiver request. 
Commenters to the proposed rule noted that the rulemaking will increase 
the administrative burden for State agencies. The Department has 
addressed these concerns by including the burden for additional 
activities in the burden estimates.
    The final rule includes an adjustment to the estimated burden for 
the submission of ABAWD waiver requests by State agencies, the burden 
created by the requirement to obtain and indicate the support of the 
State's chief executive office, and the one-time burden for State 
agencies and SNAP households associated with noticing and verification.
    There is no new recordkeeping burden required for this new 
information collection request. The recordkeeping burden for State 
agencies for application processing is currently covered under the 
approved information collection burden, OMB Control #0584-0064 
(expiration date: 7/31/2020).

First Year (One-Time Burden)

    The reduction of areas waived because of this final rule will 
subject more individuals to the ABAWD time limit. FNS estimates 
implementation of the final rule will create a one-time burden of 
170,229 hours for State agencies and SNAP households. The burden is a 
result of the requirement to submit a second waiver requests in a 12-
month period, verifying work hours, and issuing notices of adverse 
action. The revised burden estimates in the final rule also include the 
burden to SNAP households for receiving notices of adverse action and 
verifying work hours.
State Agencies
    The ABAWD waiver request process includes collection of data, 
analysis of data, and preparing and submitting a request. Based on the 
experience of FNS during calendar year 2018, FNS projects that 36 out 
of 53 State agencies will 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. State agencies typically only submit one 
waiver request in each 12-month period; however, the implementation 
timeline for the final rule will require State agencies that wish to 
continue waivers for FY 2020 to submit an additional waiver request. 
This initial waiver request based on the revised regulations will 
require one or more individuals in the State agency to understand the 
changes, train individuals who develop waiver requests, and develop the 
waiver request. FNS estimates a response time of 28.5 hours for each 
waiver request based on labor market data, which require detailed 
analysis of labor markets within the State. FNS is adding 120 hours for 
each State to reflect the time associated with understanding the new 
regulations and preparing the initial waiver based on the revised 
regulations. This represents an additional one-time burden of 5,346 
hours for State agencies collectively.
    The final rule will also newly subject an estimated 1,087,000 
ABAWDs to the time limit. The Department estimates the vast majority, 
approximately 688,000, will not meet the work requirement. As a result, 
it is estimated that State agencies will have to issue Notice of 
Adverse Action (NOAAs) to those 688,000 ABAWDs who do not meet the work 
requirement. While the issuance of NOAAs is currently approved under 
OMB #0584-0064, it is estimated these 688,000 NOAAs will be considered 
a one-time activity upon implementation of this final rule. FNS used 
existing estimates from the approved OMB #0584-0064 as a basis to 
determine it would take each State agency approximately4 minutes to 
issue a NOAA. In general FNS used the existing collection as a starting 
point but has reestimated in instances where those estimates were not 
adequate. Therefore, FNS estimates 45,867 hours for this one-time 
activity.
    FNS also estimates 399,000 will meet the work requirement or be 
exempt from the time limit. As a result, State agencies will have to 
verify work hours and exemptions for 399,000 ABAWDs that meet the work 
requirement or are exempt. FNS used existing estimates from the 
approved OMB #0584-0064 as a basis to determine the verification of 
work hours and exemptions. The current burden estimates a 3 minute 
burden. FNS increased this estimate to 5 minutes for each verification 
because it did not adequately capture the time needed to ensure the 
verifications that are provided area sufficient. While the activities 
related to verification are currently approved under OMB #0584-0064, it 
is estimated these 399,000 verifications will be considered a one-time 
activity upon implementation of this final rule. Therefore, FNS 
estimates 33,250 one-time burden hours for State agency verification of 
work hours and exemptions. These two activities collectively account 
for 79,116 hours. The total start up burden for State agencies, 
including the additional waiver request submission, will result in 
84,463 burden hours.
Households
    The 1,087,000 ABAWDs newly subjected to the time limit will face a 
one-time burden as well. FNS estimates 688,000 ABAWDS will not meet the 
work requirement and receive a NOAA. While the issuance of NOAAs is 
currently approved under OMB #0584-0064, it is estimated the reading of 
these 688,000 NOAAs will be considered a one-time activity upon 
implementation of this final rule. FNS estimates it would take each 
household 4 minutes to read a NOAA. Therefore, FNS estimates 45,867 
burden hours for SNAP households for this one-time activity.
    FNS estimates 399,000 will meet the work requirement. ABAWDs 
meeting the work requirement will have to respond to State agency 
request for verification of work hours. FNS used existing estimates 
from the approved OMB #0584-0064 as a basis to determine the response 
to State agency request for verification of work hours and exemptions 
will take the SNAP household approximately 6 minutes for each 
verification. While the activities related to household response to 
request for State agency verification are currently approved under OMB 
#0584-0064, it is estimated these 399,000 verifications will be 
considered a one-time activity upon implementation of this final rule. 
Therefore, FNS estimates 39,900 one-time burden hours for household 
verification of work hours and exemptions. These two startup burdens 
will result in an increase of 85,767 hours for SNAP households.

[[Page 66810]]



------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Response                                        Previous   Differences
                                                               Estimated     annually      Total     Hours per    Annual    submission     due to    Differences    Hourly wage   Estimated cost
     OMB No. 0584-0479           Requirement and citation        number        per        annual     response     burden       total      program       due to         rate       to respondents
                                                              respondents   respondent   responses                 hours       hours      changes     adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Affected Public: State Agencies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Start-Up...................  7 CFR 2(f)(1)&(2)--Additional             36       11,083     399,000        0.08      33,250           0       33,250            0          $32.01   $1,064,332.50
                              one-time verification of hours
                              worked and exemptions for
                              ABAWDs newly subject to the
                              work requirement.
                             7 CFR 273.13(a)--One-time                 36       19,111     688,000        0.07      45,867           0       45,867            0           32.01    1,468,192.00
                              Issuance of Notice of Adverse
                              Action to ABAWDs who do not
                              meet the work requirement.
                             7 CFR 273.24(f)--One-time                 36            1          36       148.5       5,346           0        5,346            0     32.01/45.45      229,897.97
                              Submission of waiver request
                              based on labor market data.
                             7 CFR 273.24 (f)--One-time                 0            0           0           0           0           0            0            0     32.01/45.45            0.00
                              Submission of waiver request
                              based on Labor Surplus Area
                              designation.
Ongoing....................  7 CFR 273.24(f)--Submission of            36            1          36        28.5       1,026        1190         -164            0     32.01/45.45       33,570.82
                              waiver request based on labor
                              market data.
                             7 CFR 273.24 (f)--Submission of            0            0           0           0           0           8           -8            0     32.01/45.45            0.00
                              waiver request based on Labor
                              Surplus Area designation.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Reporting Totals........................................           36  ...........   1,087,072        0.08      85,489        1198       84,291            0  ..............    2,795,993.30
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Affected Public: Households
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Start-Up...................  7 CFR 2(f)(1)&(2)--One Time--        399,000            1     399,000         0.1      39,900           0       39,900            0            7.25      289,275.00
                              respond to verification of
                              hours worked.
                             7 CFR 273.13(a)--One-time            688,000            1     688,000        0.07       45867           0       45,867            0            7.25      332,533.33
                              Review of Notice of Adverse
                              Action.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Reporting Totals........................................    1,087,000  ...........   1,087,000        0.08      85,767           0       85,767            0  ..............      621,808.33
                            --------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Total Reporting Burden..............................    1,087,036  ...........   2,174,072        0.08     171,255        1198      170,057            0  ..............    3,417,801.63
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Ongoing Burden
    The ABAWD waiver request process includes collection of data, 
analysis of data, and preparing and submitting a request. The final 
rule establishes clear limitations under which waivers can be approved; 
generally, State agencies will only be able to receive waiver approval 
for areas defined as Labor Market Areas (LMAs). The final rule 
establishes clear core standards and eliminates the ability for States 
to group areas. The ability to group areas required States greater 
flexibility and resulted in more options for waiver requests. The core 
standards provide a simpler basis for requests. As a result, the 
Department has estimated a reduction in burden hours for State agencies 
to submit waiver requests.
    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 jobs.
    In the currently approved information collection for OMB Control 
No.0584-0479, FNS estimates it takes 35 hours for each State agency to 
submit a waiver request. FNS assumed 34 States would request waivers 
using labor market data and two States would request waivers under the 
Labor Surplus Area delineation.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Response                                        Previous   Differences
                                                               Estimated     annually      Total     Hours per    Annual    submission     due to    Differences    Hourly wage   Estimated cost
     OMB No. 0584-0479           Requirement and citation        number        per        annual     response     burden       total      program       due to         rate       to respondents
                                                              respondents   respondent   responses                 hours       hours      changes     adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Affected Public: State Agencies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting Burden...........  7 CFR 273.24(f)--Submission of            36            1          36        28.5       1,026       1,190         -164            0   $32.01/$45.45      $16,785.41
                              waiver request based on labor
                              market data.
                             7 CFR 273.24 (f)--Submission of            0            0           0           0           0           8           -8            0               0               0
                              waiver request based on Labor
                              Surplus Area designation.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    State Agency Totals.....................................           36  ...........  ..........  ..........       1,026        1198         -172            0  ..............       16,785.41
                            --------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Total Reporting Burden..............................  ...........  ...........  ..........  ..........  ..........  ..........         -172  ...........  ..............       16,785.41
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    FNS now expects 36 States to request waivers using labor market 
data since the Labor Surplus Area delineation is no longer a basis for 
approval. State agencies that previously used the Labor Surplus Area 
delineation as a criterion for waiver requests will face an increased 
burden for waiver requests. FNS estimated in the proposed rule the time 
for a State agency to submit a waiver request based on labor market 
data would be reduced to 28 hours. The

[[Page 66811]]

final rule maintains this reduction and also adds .5 hours per response 
to incorporate the requirement to obtain and indicate the support of 
the chief executive of the State agency. This results in a total annual 
burden of 1,026 hours for State agencies to submit an ABAWD waiver 
request. Once merged with OMB Control #0584-0479 upon approval, this 
will result in a reduction of 172 annual burden hours, for a total of 
1,026 hours.
    Affected public: State agencies, SNAP households.
    Estimated number of respondents: 36 State Agencies, 1,087,000 
individuals.
    Regulation Section: 7 CFR 272.24.
    Estimated total annual responses: First year 2,174,036; Ongoing 36.
    Estimated annual burden hours: First year 170,229 hours; Ongoing 
1,026 hours.

E-Government Act Compliance

    The Department is committed to complying with the E-Government Act, 
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, 7 CFR part 273 is amended 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, with the support of the 
chief executive officer of the State, 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 supported by 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 
paragraphs (f)(1)(i) and (ii) of this section 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; or
    (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 6 
percent. In order for the 24-month data period to be considered recent, 
the number of months from the end of the last month of the 24-month 
data period through the last month that the waiver would be effective 
must not exceed 21 months.
    (3) Other data and evidence in an exceptional circumstance. FNS may 
approve waiver requests that are supported by data or evidence other 
than those listed under paragraph (f)(2) of this section if the request 
demonstrates an exceptional circumstance in an area. The request must 
demonstrate that the exceptional circumstance has caused a lack of 
sufficient jobs or an unemployment rate over 10 percent, for example 
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. In 
addition, the request must demonstrate that the impact of the 
exceptional circumstance is ongoing at the time of the request. 
Supporting unemployment data provided by the State must rely on 
standard BLS data or methods.
    (4) Definition of area. For the purposes of this paragraph, 
``area'' means:
    (i) An area considered a Labor Market Area (LMA) by DOL. The State 
agency must support a waiver for an LMA using corresponding LMA data 
from the BLS. If such corresponding data is unavailable, the State 
agency may obtain corresponding data by combining data from sub-LMA 
areas that are collectively considered to be a LMA by DOL;
    (ii) The intrastate part of an interstate LMA. Intrastate parts of 
interstate LMAs may qualify for waivers based on data from the entire 
interstate LMA. If the State Agency's geographic boundaries are 
entirely within one interstate LMA, such as the District of Columbia, 
the entire State may qualify for a waiver based on data from the entire 
interstate LMA;
    (iii) A reservation area or a U.S. Territory. Each of these is 
considered to be an area for the purposes of waivers.
    (5) 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. Waivers under paragraph (f)(2)(ii) of this 
section will be approved in accordance with paragraph (f)(2)(ii).
    (6) Areas with limited data or evidence. Waiver requests for an 
area for which standard BLS data or data from a BLS-cooperating agency 
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), (3), and (5) of this section. The supporting 
data or evidence provided by the State must be recent and 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 the U.S. Census Bureau;
    (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) [Reserved]
* * * * *

0
3. Effective October 1, 2020, Sec.  273.24 is further amended by 
revising paragraph (h) to read as follows:


Sec.  273.24  Time Limit for able-bodied adults.

* * * * *
    (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 participants 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 adjust 
the number of exemptions available to a State agency based on the 
number of exemptions in effect in the State for the preceding fiscal 
year. In doing so, FNS will determine the State's exemption balance for 
the fiscal year (the total number of exemptions available to the State 
for the fiscal year).
    (i) If the State agency did not use all of its exemption balance 
for the

[[Page 66812]]

preceding fiscal year, FNS will add to the State agency's exemption 
balance a portion of the unused exemptions not to exceed 12 percent of 
the covered individuals in the State estimated by FNS for the preceding 
fiscal year.
    (ii) If the State agency used more than its exemption balance for 
the preceding fiscal year, FNS will decrease the State agency's 
exemption balance by the corresponding number. If this decrease results 
in a negative exemption balance, the State agency must offset the 
negative balance using the new exemptions estimated by FNS for the 
subsequent fiscal year. If the negative exemption balance is not fully 
offset, FNS will hold the State liable for the remaining negative 
balance.
* * * * *

    Dated: November 25, 2019.
Stephen L. Censky,
Deputy Secretary, U.S. Department of Agriculture.
[FR Doc. 2019-26044 Filed 12-4-19; 8:45 am]
 BILLING CODE 3410-30-P