[Federal Register Volume 85, Number 164 (Monday, August 24, 2020)]
[Rules and Regulations]
[Pages 52025-52033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16403]



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 Rules and Regulations
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  Federal Register / Vol. 85, No. 164 / Monday, August 24, 2020 / Rules 
and Regulations  

[[Page 52025]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271 and 274

[FNS-2016-0074]
RIN 0584-AE02


Supplemental Nutrition Assistance Program: 2008 Farm Bill 
Provisions on Clarification of Split Issuance; Accrual of Benefits and 
Definition Changes

AGENCY: Food and Nutrition Service, U.S. Department of Agriculture.

ACTION: Final rule.

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

SUMMARY: This final rule amends the Supplemental Nutrition Assistance 
Program (SNAP) regulations to implement provisions of the 2008 Farm 
Bill regarding monthly benefit issuance allotments, storage of benefits 
off-line, and permanent expungement of unused benefits, as well as 
related benefit expungement and off-line storage provisions of the 2018 
Farm Bill. This final rule also updates SNAP regulations to reflect the 
program's name change to SNAP and benefit issuance through Electronic 
Benefit Transfer (EBT) systems.

DATES: This final rule is effective September 23, 2020.

FOR FURTHER INFORMATION CONTACT: Vicky T. Robinson, Chief, Retailer 
Management and Issuance Branch, Retailer Policy and Management 
Division, Food and Nutrition Service (FNS), U.S. Department of 
Agriculture (USDA), 1320 Braddock Place, Alexandria, Virginia 22314, 
(703) 305-2476, [email protected].

SUPPLEMENTARY INFORMATION:

I. Executive Summary

Purpose of the Regulatory Action

    This rule finalizes the provisions of a proposed rule published on 
September 29, 2016 (81 FR 66866). With this final rule, the Department 
is amending 7 CFR part 274 to implement the benefit issuance, storage 
and expungement provisions of the Food, Conservation and Energy Act of 
2008, Public Law 110-234 (2008 Farm Bill).
    Since publication of the proposed rule, the President signed the 
Agriculture Improvement Act of 2018 (2018 Farm Bill), which made 
additional mandatory changes to the provisions governing the storage 
and expungement of unused benefits. Accordingly, the Department intends 
to adopt these 2018 Farm Bill provisions as final as well.
    Finally, this final rule will update terminology at 7 CFR part 271 
to reflect the program's new name and the issuance of benefits through 
Electronic Benefit Transfer (EBT) systems, as well as add new EBT-
related definitions to 7 CFR 271.2.

Summary of Changes From Proposed Rule

    The final rule incorporates the following modifications for 
clarity:
     The definitions of EBT Card, EBT System, Interoperability 
and Point-of-Sale Device will no longer refer to point-of-sale and card 
technology in order to take into account on-line and other emerging 
technologies.
     Amendatory language is being added to clarify that taking 
benefits off-line means making a household's entire SNAP EBT account 
inaccessible to the household, including any new benefits added to the 
account.
     Amendatory language is being added to clarify that any 
unexpired benefits taken off-line must be restored upon a household's 
recertification or reapplication for benefits or a general request for 
assistance.
     Amendatory language is being added to clarify that 
benefits must be expunged on a first-in-first-out (FIFO) basis.
    The Department is also making the following changes to the proposed 
provisions:
     The proposed change to the definition of ``Drug addiction 
or alcoholic treatment and rehabilitation program,'' is being withdrawn 
to provide the public another opportunity to comment as part of a 
future comprehensive rulemaking regarding group living arrangements.
     The proposed corrections to the definitions of 
``Employment and Training (E&T) component,'' and ``Employment and 
Training (E&T) mandatory participant.'' is being withdrawn because they 
will be included in a separate rulemaking on E&T provisions.
     State agencies will now have the option to maintain the 
current method of expunging unused benefits only from inactive accounts 
or to expunge benefits based on the date of issuance, regardless of 
account activity. The option the State chooses must be applied to all 
households.
     State agencies must expunge unused benefits after nine 
months (rather than 12 months) in accordance with one of the 
expungement processes above.
     States agencies must provide notice to individual 
households prior to expunging benefits no later than 30 days prior to 
the date the benefits will be expunged.
     State agencies may choose to take benefits off-line prior 
to expungement after three months of account inactivity (rather than 
six months).
     State agencies will not be required to remove off-line 
benefits from the Account Management Agent (AMA) as proposed. Instead, 
State agencies will be required to make the entire EBT account 
inaccessible to the household if they take benefits off-line.

II. Background

    SNAP regulations at 7 CFR part 274 already required several of the 
2008 Farm bill provisions addressed in the proposed rule. These include 
requirements to issue monthly benefits in one lump sum, expunge unused 
benefits after the household's account has been inactive for 12 months, 
and notify households prior to taking benefits off-line. The 
Department's implementing memo on October 1, 2008, addressed provisions 
requiring State agencies to wait until a SNAP account remains inactive 
for six months and to reinstate off-line benefits within 48 hours of a 
household's request.
    The Department published a proposed rule to solicit comments on 
various implementation details of the above provisions over which the 
Department has discretion, as well as to update 7 CFR part 271 to 
reflect ``SNAP'' as the new name of the program and the mandatory 
issuance of benefits through Electronic Benefit Transfer (EBT) systems.

[[Page 52026]]

    With regard to benefit expungement, the proposed rule specifically 
solicited feedback on whether the expungement timeframe should continue 
to apply only to inactive EBT accounts as required under current SNAP 
policy, require State agencies to expunge benefits based on the date of 
issuance even if the account remains active, or provide States agencies 
the option to use either method.
    On December 20, 2018, the President signed the 2018 Farm Bill, 
which made additional changes to the provisions governing the storage 
and expungement of unused benefits. Section 4006 of the 2018 Farm Bill 
specifies that a State may take benefits off-line after three months 
(previously six months) and that States must expunge unused benefits 
after nine months (previously 12 months). States must also notify 
individual households before expunging their benefits. Because these 
provisions are mandatory and non-discretionary, the Department is 
including these provisions in this final rule without comment. State 
agencies will have 12 months from the effective date of this rule to 
implement these mandatory 2018 Farm Bill provisions.
    The Department solicited comments on the proposed rule for 60 days, 
ending November 28, 2016. The Department received 24 comments from 
various entities, including 13 advocate organizations, eight State or 
local government agencies, two Electronic Funds Transfer (EFT) 
associations, and one individual not identified with an organization or 
a State agency.

III. Summary of Comments and Explanation of Revisions

    Overall, commenters supported the proposed rule but wanted 
exemptions from the expungement and off-line provisions for certain 
groups, as well as greater protections for clients, especially the 
elderly and disabled. Commenters also wanted more clarification on the 
process for taking benefits off-line and restoring them. There was some 
opposition to the requirement to remove off-line benefits or the 
benefits of deceased households from the EBT system and the AMA, 
preferring that State agencies merely deactivate EBT cards. Some 
commenters also pointed out that some of the definitions related to EBT 
were too narrow and should be broadened to account for emerging 
technologies. Below is further discussion of the most substantive 
comments the Department received.

Definitions

    The Department proposed adding new definitions under 7 CFR part 271 
to update terminology for the EBT issuance system and ensure 
consistency with current policy. Commenters wanted the definitions of 
EBT card, EBT system, Interoperability, and point-of-sale (POS) 
terminal to account for possible technologies that do not require a POS 
terminal or EBT card, such as online shopping. The Department agrees 
that the proposed definitions may be too narrow as technology develops. 
Therefore, this final rule broadens these definitions. One commenter 
also noted that adding the definition for Contractor would be 
confusing, given such broad and varying use of the term throughout the 
SNAP program. This final rule will change the term Contractor to EBT 
contractor to distinguish it from other types of contractors used in 
SNAP. These changes are reflected at Sec.  271.2.

Split Issuance

    Section 4113 of the 2008 Farm Bill required State agencies to issue 
a household's ongoing monthly benefit allotment in one lump sum. The 
Department clarified existing regulations in the proposed regulations 
that affirm this requirement.
    Thirteen advocate and two industry organizations expressed strong 
support for prohibiting State agencies from splitting ongoing monthly 
allotments. They believe that lump sum monthly allotments provide SNAP 
households with maximum flexibility for managing how and when to 
purchase food within the time, transportation and other constraints 
that low-income shoppers often face. One commenter also commented that 
splitting monthly SNAP allotments would have a ``chilling effect'' on 
seniors receiving SNAP benefits. Others added that it would increase 
administrative costs at both the state and federal level. No commenters 
expressed opposition to this provision.
    The Department appreciates all comments on this issue, which 
provide additional support for requiring the issuance of monthly 
benefit allotments in a single lump sum. Given these comments and the 
fact that no comments expressed opposition, this provision remains 
unchanged in the final rule at 7 CFR 274.2(c).

Moving Benefits Off-Line

    Prior to the 2008 Farm Bill, regulations required three months of 
account inactivity before the State agency could exercise its 
discretion to move the inactive account benefits offline. However, the 
2008 Farm Bill mandated six months of account inactivity before the 
State agency could move the inactive account benefits offline. 
Accordingly, the Department proposed rules to reflect this new 
requirement. However, following publication of the proposed rule, 
Congress passed the 2018 Farm Bill which restored the original 
requirement of three months of inactivity. Because this statutory 
provision is mandatory and non-discretionary, the Department will not 
change the current regulation, which requires three months of 
inactivity prior to moving benefits offline.
    The Department also proposed to notify households in advance within 
10 days prior to moving inactive account benefits off-line. In 
addition, the Department proposed to require that any offline benefits 
must be restored within 48 hours of the recipient's request. Finally, 
the Department proposed to remove off-line benefits from the EBT system 
rather than merely deactivating the account.
    No comments opposed the requirement for the notice or the 
restoration of benefits within 48 hours of a recipient's requests. 
However, commenters did request exemptions for certain groups, 
consideration of potential barriers to participation in SNAP before 
moving inactive account benefits off-line, and clarification regarding 
removal of off-line benefits from the EBT and AMA systems. The 
Department summarizes these comments and provides its responses below.
    Nine advocate organizations requested that the Department make 
several household categories exempt from having their benefits taken 
off-line, such as the elderly, disabled and/or households that receive 
the minimum benefit allotment. The Department emphasizes that State 
agencies are not required to take benefits off-line prior to permanent 
expungement. Moreover, individual State agencies that choose to 
implement the off-line option have the discretion to exempt certain 
groups of households from having their inactive accounts stored off-
line. Therefore, the Department will not require certain household 
exemptions in this final rule. Instead, any State agency that chooses 
to implement the off-line option can exercise its own discretion as to 
whether to apply such exemptions.
    Six advocate organizations wanted the Department to require State 
agencies to investigate possible barriers facing the household before 
taking benefits off-line. Commenters suggested that State agencies 
should consider specific demographics of the SNAP household, whether 
the SNAP household received their EBT card and PIN, whether the SNAP 
household is aware of

[[Page 52027]]

transportation community services, and whether a lack of information 
exists regarding the appointment of an authorized representative.
    Currently, only six State agencies exercise the off-line option, 
without any such requirement in place. The Department does not have 
supporting information from those States to justify requiring States to 
now take affirmative steps prior to taking action to determine if 
households are experiencing barriers that prevent them from using their 
benefits. Furthermore, the action to take benefits off-line is not 
permanent. Households still have up to six months to have the benefits 
reinstated from the point that benefits are moved off-line. However, 
the Department encourages State agencies that opt to take benefits off-
line to include, in addition to how to reactivate the account, 
information in the off-line notice regarding transportation options, 
authorized representatives, and other assistance available to 
households.
    Eight advocate organizations wanted the Department to codify 
requirements for a simple and easy-to-use process for requesting 
restoration of benefits stored off-line, including notices that are 
easy to understand and an easy way to contact a SNAP worker to request 
reinstatement. The Department is not swayed by the comments suggesting 
simple and easy-to-use processes should be codified. However, in 
response to comments, the Department is requiring that any unexpired 
benefits taken off-line be restored upon recertification or 
reapplication for benefits without the household having to make a 
specific request and that, moreover, a general request for any type of 
assistance from a household that has had benefits moved off-line be 
considered a request for reinstatement of those benefits. States may 
continue to establish their own procedures for restoring benefits 
outside of the recertification or application process. Title 7 CFR 
274.2(h) is amended accordingly.

Removing Off-Line Benefits From the EBT System

    The Department proposed to require that, if a State exercised their 
option to take inactive account benefits off-line, the amount would 
also need to be removed from the AMA. The AMA is an accounting system 
that interfaces with the U.S. Department of Treasury to keep track of 
benefit authorizations, returned benefits such as expungements, and 
benefit redemptions. An industry organization opposed this proposed 
requirement because it would require all such benefits to be tracked by 
the eligibility system and reissued if requested by the household. 
Commenters added that this requirement would complicate AMA reporting 
because the accounting method would understate the true outstanding 
SNAP liability of SNAP benefits for States that move benefits off-line 
prior to expungement. Commenters suggested allowing States to leave the 
benefits on the EBT system and merely make them inaccessible to the 
client. Another industry organization disagreed with the need to take 
benefits off-line at all because of the overall complexity of tracking 
and reporting the benefits.
    The option for State agencies to take benefits off-line after three 
months of account inactivity is statutory and, therefore, the 
Department does not have the discretion to eliminate this option. 
However, we are persuaded by the commenters that the complexities 
associated with removing the benefits from AMA are unwarranted. 
Therefore, in this final rule, the Department is removing the proposed 
provision to require State agencies to remove off-line benefits from 
AMA. State agencies may continue to move benefits off-line after at 
least three months of inactivity by making inactive EBT account 
benefits inaccessible to the household without taking them off the AMA 
system. The Department will also clarify the meaning of taking benefits 
off-line to align with this change. Title 7 CFR 274.2(h) is amended 
accordingly.

Benefit Expungement

    The Department proposed keeping the current expungement process, 
which is based on account activity, unchanged. The Department also 
specifically asked commenters to provide feedback on amending the 
process so that unused benefits are expunged based on the issuance 
date, regardless of account activity. This alternative process would 
give households a finite period of time to use their benefits as 
opposed to allowing benefits to remain in household EBT accounts 
indefinitely, as long as there is account activity at least once every 
12 months. The Department also asked for comments on whether State 
agencies should have the option to choose either of the two methods for 
determining when benefits get expunged.
    Seventeen commenters in total, including all 13 advocate 
organizations, three State/local agencies, and one EFT association, 
preferred maintaining the current process of expunging only from 
inactive accounts. They cited the technological and financial burden on 
State agencies to make the necessary system changes as well as the view 
that there are practical and economic reasons for households to 
accumulate benefits which tend to impact the most vulnerable SNAP 
recipients--the elderly, disabled, and those with transportation, 
mobility and food access hurdles. Three advocate organizations wanted 
the Department to require State agencies to expunge benefits on a 
first-in-first-out (FIFO) basis under the alternative option to expunge 
benefits based on the issuance date.
    Four commenters, including two State agencies, preferred expunging 
benefits that have not been used by a specific timeframe, regardless of 
account activity. They believe this approach is more consistent with 
the purpose of the Program and that excessively high SNAP EBT account 
balances could indicate a lack of need or fraudulent activity, which 
undermines the public's perception of the program's integrity. Three 
other State agencies wanted to have the option to choose either 
expungement method.
    If the Department were to require States to change the current 
expungement process to require unused benefits be expunged based on the 
date of issuance, several commenters wanted the Department to exempt 
restored benefits from the expungement process or allow households a 
longer period of time to spend those benefits. Also, many of the same 
commenters who wanted exemptions from taking benefits off-line for 
certain households wanted similar exemptions to apply to benefit 
expungement as well.
    In the interest of State flexibility, the Department has decided to 
give State agencies the option to implement either of the two 
expungement methods described in the proposed rule. State agencies must 
designate which approach will be used in its State plan and apply the 
same approach uniformly to all households. The Department would also 
like to take this opportunity to clarify that State agencies are 
already required to apply household transactions against SNAP benefits 
on a FIFO basis and that, under either of the two expungement options, 
by definition, State agencies will continue to expunge the oldest 
benefits first.
    In accordance with Section 4006 of the 2018 Farm Bill, this final 
rule amends the expungement timeframe from 12 months to nine months. 
The Department considers nine months to be equal to 274 days. 
Therefore, State agencies may opt to either expunge households' 
individual benefit allotments, or any remaining portion thereof, nine 
months after the allotment was issued (i.e., made available to the 
household) or wait until the account has

[[Page 52028]]

been inactive for nine months before expunging any benefits at the 
allotment level. In this final rule, the amended expungement provisions 
are at 7 CFR 274.2(i) and the proposed paragraph (i) is now paragraph 
(j).
    If expunging benefits based on the issuance date, the Department 
was interested in feedback with regard to lump sum benefits issued as a 
result of a fair hearing determination to determine if an exception 
process was feasible or practical. Since then, the Department has 
determined that an exception process that allows households additional 
time beyond nine months to access their benefits would not be 
consistent with the 2018 Farm Bill requirement and, therefore, is not 
allowable. However, State agencies that choose the option to expunge 
benefits based on the issuance date could mitigate the potential 
problem of lump sum issuances by splitting up the retroactive payments 
and issuing them in separate months. The 2008 Farm Bill provision 
specifically makes an exception to the split issuance prohibition in 
cases where a benefit correction is necessary. No changes have been 
made in the final rule regarding this issue.
    Section 4006 of the 2018 Farm Bill also requires States to provide 
notice to individual households prior to expunging that household's 
SNAP benefits, including benefits stored off-line, so that the 
household has the opportunity to access the benefits and avoid 
expungement. Currently, State agencies are required to notify 
individual households prior to taking benefits off-line, but not prior 
to permanently expunging unused benefits.
    Because the 2018 Farm Bill specifically requires the notice to 
include the date upon which benefits must be expunged, the Department 
is requiring State agencies to provide individual notification that is 
closely tied to the expungement date, but not later than 30 days before 
the first benefits get expunged. General notification of the change in 
the expungement timeframes should be done at certification/
recertification and in training materials, as has been the case before 
this requirement. This general notification, however, cannot replace 
the individual notification to households whose benefits are scheduled 
to be expunged within at least 30 days.
    As proposed and as currently required, benefits must be expunged 
individually at the monthly allotment level; however a notice is only 
being required prior to expunging the first allotment. State agencies 
are not being required to provide monthly expungement notices prior to 
expunging each benefit allotment. If the expungement process stops for 
a household for any reason, including when the household accesses their 
benefits or requests restoration of remaining off-line benefits, the 
State would need to provide the household with a new expungement notice 
if the household's benefits become subject to expungement again.
    Consistent with other required formal notices to households, the 
Department is requiring that this notice must be written in easily 
understandable language and include the date that benefit expungement 
will begin, the action needed to prevent the expungement, and the 
household's right to request a fair hearing. This expungement 
notification provision is being codified at 7 CFR 274.2(i)(2).

Expunging Benefits of Deceased Households

    In general, commenters did not oppose the proposed requirement to 
expunge benefits when all certified household members are determined to 
be deceased in accordance with 7 CFR 272.14, regardless of account 
activity or the benefit issuance date. However, two State/local 
agencies wanted the Department to allow State agencies to merely make 
benefits of deceased households inaccessible until they age off, rather 
than permanently expunging them at the time of the death match, to 
avoid possible misidentification of deceased individuals. The same two 
State agencies cited concerns with necessary system programming changes 
and the need to make benefits quickly available again in instances when 
the death match is erroneous.
    While the Department understands concerns that a household account 
might erroneously be expunged due to a false death match, several State 
agencies have already been expunging benefits of deceased one-person 
households under the Agency's waiver authority. Under 7 CFR 272.14, 
State agencies are required to independently verify death matches and 
provide the household notice and the opportunity to respond prior to 
terminating benefits. To date, the Agency has not had any indication 
that false death matches have created an issue that would justify 
allowing benefits to remain in the EBT accounts of deceased single-
person households.
    Furthermore, State agencies are already required to close single-
person household cases when a death match is verified. Therefore, 
requiring States to expunge the account of such households does not add 
any additional risks which do not already exist. Should such an error 
occur, the State agency could correct the mistake by reissuing the 
benefits as a new benefit just as when off-line benefits are reinstated 
if they have been removed from the EBT system or when lump sum benefits 
are restored as a result of a fair hearing determination.
    In contrast, having benefits of a deceased household remain in the 
account, even if deactivated, would leave such benefits susceptible to 
fraud, such as being activated by unauthorized individuals. Since there 
are no longer any certified individuals entitled to the benefits of 
deceased households, these benefits cannot be reinstated. Leaving these 
benefits in EBT accounts would also misrepresent the outstanding 
liability to the Federal government. For all these reasons, the 
Department is maintaining the provision to permanently expunge benefits 
upon the verified death match of all certified members of the household 
at 7 CFR 274.2(i)(4).

Implementation Deadline

    The implementation deadline for all provisions in this rule is 12 
months from the rule's effective date. With respect to the expungement 
provisions, no later than 12 months from the effective date of this 
rule, State agencies must issue individual notices to households who 
will have benefits scheduled for expungement within at least 30 days, 
based on the new nine-month expungement timeframe. Therefore, actual 
benefit expungement under the new nine-month timeframe must begin no 
later than 13 months from the effective date of this rule, after 
providing the minimum 30-day notices to the affected individual 
households.
Procedural Matters
Executive Order 12866 and Executive Order 13563
    Executive Orders 12866 and 13563, direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, 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 not significant 
and was not reviewed by the

[[Page 52029]]

Office of Management and Budget (OMB) in conformance with Executive 
Order 12866.
Regulatory Impact Analysis
    This final rule has been designated as not significant by the 
Office of Management and Budget; therefore, no Regulatory Impact 
Analysis is required.
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, this 
final rule is certified not to have a significant impact on a 
substantial number of small entities.
    This final rule would not have an impact on small entities because 
the provisions only impact State agencies responsible for administering 
the Supplemental Nutrition Assistance Program.
Congressional Review Act
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule as defined by 5 U.S.C. 804(2).
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 rule is not an E.O. 13771 regulatory action because it is not 
significant under E.O. 12866.
Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local or tribal 
governments, in the aggregate, or the private sector, of $100 million 
or more in any one year. When such a statement is needed for a rule, 
Section 205 of the UMRA generally requires the Department to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the most cost effective or least burdensome alternative that achieves 
the objectives of the rule.
    This 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 $100 million or more in any 
one year. Thus, the rule is not subject to the requirements of sections 
202 and 205 of the UMRA.
Executive Order 12372
    The Supplemental Nutrition Assistance Program is listed in the 
Catalog of Federal Domestic Assistance under Number 10.551 and is not 
subject to Executive Order 12372, which requires intergovernmental 
consultation with State and local officials.
Federalism Summary Impact Statement
    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under Section (6)(b)(2)(B) of Executive Order 13132.
    The Department has considered the impact of this rule on State and 
local governments and has determined that this rule does not have 
federalism implications. Therefore, under section 6(b) of the Executive 
order, a federalism summary is not required.
Executive Order 12988, Civil Justice Reform
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is intended to have preemptive effect 
with respect to any State or local laws, regulations or policies which 
conflict with its provisions or which would otherwise impede its full 
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
    The Department has reviewed this final rule in accordance with USDA 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex or disability.
    Although the 2018 Farm Bill reduces the amount of time from 12 
months to nine months, during which all households must use or access 
their benefits before benefits are permanently expunged, mitigation 
efforts are imbedded in the legislation and this rule by requiring that 
each individual household be given notice prior to expungement. The 
notice must be provided at least 30 days in advance, state the date 
when expungement will begin, and specify the action the household must 
take to prevent the expungement from occurring. There is no expungement 
notice requirement under the current requirement to expunge benefits 
after 12 months of SNAP account inactivity.
    Without prior notification, the Department estimates that, on 
average, approximately 16 percent of SNAP households currently get some 
amount of benefits expunged from their SNAP accounts. The Department 
estimates that, on average, one month's allotment is expunged for each 
household affected. The Department anticipates that the new 
notification requirement will reduce the number of expungements despite 
the reduced timeframe for using benefits.
    Currently, only six States are opting to take benefits off-line 
prior to expungement after six months of account inactivity. The 2018 
Farm bill now allows States to take benefits off-line after three 
months of inactivity. In the States that take benefits off-line, the 
Department estimates that 14 percent of households have their benefits 
taken off-line and that six percent of those households have those 
benefits reinstated prior to expungement. Providing individual 
household notification prior to taking benefits off-line is required 
under both the current regulation and the regulation being implemented 
by this rule.
    Because of the new requirement to notify households prior to 
expungement, the Department estimates that a greater percentage of 
households that get their benefits taken off-line will get their 
benefits reinstated than under the new regulation, mitigating the 
impact of the reduced timeframe for taking benefits off-line due to 
account inactivity.
    The Department is also codifying in this rule that States should 
automatically restore any off-line benefits upon a household's 
recertification or reapplication, and that a general request for 
assistance should be considered a request for reinstatement of off-line 
benefits.
    While specific demographic data is not readily available, after a 
careful review of the rule's intent and provisions and based on the 
above analysis the Department has determined

[[Page 52030]]

that this final rule is not expected to affect the participation of 
protected individuals in SNAP.
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. We are unaware of any current 
Tribal laws that could be in conflict with this rule.
Paperwork Reduction Act
    The Paperwork Reduction Act of 1995 (44 U.S.C. chap. 35; see 5 CFR 
part 1320) requires the Office of Management and Budget (OMB) approve 
all collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number.
    In accordance with the Paperwork Reduction Act of 1995, this final 
rule contains information collections that are subject to review and 
approval by the Office of Management and Budget. These existing 
requirements impact a current collection that has been used without a 
valid OMB control number or expiration date. The Department plans to 
bring these burden requirements into compliance, contingent upon OMB 
approval under the Paperwork Reduction Act of 1995. FNS plans to 
account for and maintain these burden hours under a new OMB control 
number assigned by OMB. Because the changes in the information 
collection burden that will result from adoption of provisions in this 
final rule were not submitted for public comment in the proposed rule, 
a separate 60-day notice was published on February 11, 2020, in the 
Federal Register at 85 FR 7716.
    All responses received to this published notice will be summarized 
and included in the information collection request for OMB approval. 
All comments are also a matter of public record. These changes are 
contingent upon OMB approval under the Paperwork Reduction Act of 1995. 
When the information collection requirements associated with this 
rulemaking have been approved, the Department will publish a separate 
notice in the Federal Register announcing OMB's approval.
    Title: SNAP Benefit Storage and Expungement: Notices and Off-Line 
Benefit Reinstatement.
    OMB Number: 0584-NEW.
    Expiration Date: N/A.
    Type of Request: New.
    Abstract: This is a new information collection request. Although 
the agency has been collecting this information, we were unware that 
collecting this information is in violation of the Paperwork Reduction 
Act. This final rule implements benefit issuance provisions of the 
Food, Conservation and Energy Act of 2008, Public Law 110-234 (2008 
Farm Bill) and the Agricultural Improvement Act of 2018, Public Law 
115-334, (2018 Farm Bill). Both Farm Bills amend the Food and Nutrition 
Act of 2008 (the Act), which includes benefit issuance, storage and 
expiration requirements for administering the program. State agencies 
are responsible for issuing benefits to those households entitled to 
benefits under the Act. This burden request covers activities 
associated with the required notices sent to individuals/household SNAP 
participants related to taking benefits off-line prior to permanent 
expungement after three months of SNAP EBT account inactivity and 
permanently expunging benefits after nine months of account inactivity. 
In addition, this burden request covers the activities associated with 
reinstating the off-line benefits to those SNAP participants upon 
contact by the household.
    Respondents: 53 State agencies and 2,961,834 individuals/households 
SNAP participants. The respondents and activities are broken out below 
based on activities.
    Respondents: State/Local/Tribal Government Burden (53).
Off-Line Benefit Storage Notice
    Estimated Number of Respondents: 6.
    Estimated Number of Responses per Respondent: 90,136.33.
    Estimated Total Annual Responses: 540,818.00.
    Estimated Average Hours per Response Annually: 0.05 minutes or 
0.0083 hours.
    Estimated Total Annual Burden on Respondents: 4,515.83.
Expungement Notice
    Estimated Number of Respondents: 53.
    Estimated Number of Responses per Respondent: 55,883.66.
    Estimated Total Annual Responses: 2,961,834.00.
    Estimated Average Hours per Response Annually: 0.05 minutes or 
0.0083 hours.
    Estimated Total Annual Burden on Respondents: 24,731.31.
Off-Line Benefit Reinstatement
    Estimated Number of Respondents: 6.
    Estimated Number of Responses per Respondent: 5,543.33.
    Estimated Total Annual Responses: 33,260.00.
    Estimated Average Hours per Response Annually: 3 minutes or 0.0501 
hours.
    Estimated Total Annual Burden on Respondents: 1,666.33.
    Respondents: Individual/Household Notice.
Off-Line Storage Notice
    Estimated Number of Respondents: 540,818.00.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Responses: 540,818.00.
    Estimated Average Hours per Response Annually: 3.5 minutes or 
0.0583 hours.
    Estimated Total Annual Burden on Respondents: 31,529.69.
Expungement Notice
    Estimated Number of Respondents: 2,961,834.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Responses: 2,961,834.00.
    Estimated Average Hours per Response Annually: 2 minutes or 0.0334 
hours.
    Estimated Total Annual Burden on Respondents: 98,925.26.
Off-line Benefit Reinstatement
    Estimated Number of Respondents: 33,260.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Responses: 33,260.00.
    Estimated Average Hours per Response Annually: 5 minutes or 0.0835 
hours.
    Estimated Total Annual Burden on Respondents: 2,777.21.
    The total burden for this rulemaking is 5,923,668.00 total annual 
responses and 163,970.49 burden hours.

[[Page 52031]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Estimated
                                                                    Responses                   avg. number                                    Total
                                                      Estimated      annually    Total annual     of hours      Estimated    Hourly wage    annualized
          Respondent                 Activity       annual number      per         responses        per       annual total       rate         cost of
                                                     respondent     respondent                    response        hours                     respondent
                                                                                                  annually                                    burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individuals or Households SNAP  Benefit              2,961,834.00         1.00    2,961,834.00       0.0334       98,925.26        $7.25     $717,208.14
 Recipients.                     Expungement
                                 Notice.
                                Off-Line Benefit       540,818.00         1.00      540,818.00       0.0583       31,529.69         7.25      228,590.25
                                 Storage Notice.
                                Off-Line Benefit        33,260.00         1.00       33,260.00       0.0835        2,777.21         7.25       20,134.77
                                 Reinstatement.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Sub-Total of Individual/    .................    2,961,834.00         1.00    2,961,834.00       0.1752      133,232.16         7.25      965,933.16
     Households SNAP
     Recipients.
--------------------------------------------------------------------------------------------------------------------------------------------------------
State Agencies................  Benefit                     53.00    55,883.66    2,961,834.00       0.0083       24,583.22        23.50      577,705.67
                                 Expungement
                                 Notice.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Off-Line Benefit             6.00    90,136.33      540,818.00       0.0083        4,488.79        23.50      105,486.57
                                 Storage Notice.
                                Off-Line Benefit             6.00     5,543.33       33,260.00       0.0501        1,666.33        23.50       39,158.76
                                 Reinstatement.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Sub-Total of State          .................           53.00    55,883.66    2,961,834.00       0.0677       30,738.34        23.50      722,351.00
     Agencies.
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Grand Total Reporting   .................    2,961,887.00       2.0000    5,923,668.00       0.0277      163,970.49  ...........    1,688,284.16
         Burden with both
         Affect Public.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * Each State Eligibility worker is counted once as all State Agency employees.
** Based on the Bureau of Labor Statistics May 2020 Occupational and Wage Statistics (http://www.bls.gov/oes/current/)--the salaries of the case
  managers are considered to be ``Social Workers--other'' (21-1029) functions valued at $30.12 per staff hour. The salaries of the eligibility workers
  are considered to be ``Eligibility Interviewers, government programs'' (43-4061) functions valued at $22.34. The salaries of Office and Administrative
  Support Workers, All other (43-9199) is $18.02 per hour. Assuming an applicant staff person with an average salary of $23.50 is needed to complete the
  applications, the total annualized dollars spent on respondent burden with fully loaded wages is $2,245,417.93. The base cost to respondents is
  $1,688,284.16 (x 1.33 fringe benefit cost) as depicted in the table above.
*** The $7.25 used to calculate a cost to SNAP applicants (individuals/households) is the Federal minimum wage.

E-Government Act Compliance
    The Food and Nutrition Service 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 Parts 271 and 274

    Food stamps, Grant programs-social programs, Reporting and 
recordkeeping requirements.

    For reason set forth in the preamble, 7 CFR chapter II is amended 
as follows:

SUBCHAPTER C--[AMENDED]

0
1. Under the authority of 7 U.S.C 2011, in the heading of subchapter C 
of chapter II, remove the words ``Food Stamp'' and add in their place 
the words ``Supplemental Nutrition Assistance''.

0
2. The authority citation for 7 CFR parts 271 and 274 continues to read 
as follows:

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

PART 271--GENERAL INFORMATION AND DEFINITIONS


Sec.  271.1  [Amended]

0
3. In Sec.  271.1:
0
a. Remove the word ``coupons'' from the fourth sentence of paragraph 
(b) and add in its place ``SNAP benefits''; and
0
b. Remove the word ``coupon'' from the tenth sentence of paragraph (b) 
and add in its place ``benefit''.

0
4. In Sec.  271.2:
0
a. Amend the definition of Allotment by removing the word ``coupons'' 
and adding in its place the word ``benefits'';
0
b. Remove the definition of Authorization to participate card (ATP);
0
c. Add definitions for Benefit and Benefit issuer in alphabetical 
order;
0
d. Remove the definitions of Bulk storage point, Coupon issuer, and 
Direct access system;
0
e. Add definitions for Electronic Benefit Transfer (EBT) account, 
Electronic Benefit Transfer (EBT) card, Electronic Benefit Transfer 
(EBT) contractor or vendor, and Electronic Benefit Transfer (EBT) 
system in alphabetical order;
0
f. Amend the definition of Eligible foods by removing the word 
``coupons'' where it appears twice in paragraph (3) of the definition 
and adding in its place the words ``SNAP benefits'';
0
g. Amend the definition of Firm's practice by removing the words ``food 
coupons'' and adding in their place the words ``SNAP benefits'';
0
h. Add definitions for Interoperability, Manual transaction, and Manual 
voucher in alphabetical order;
0
i. Amend the definition of Overissuance by removing the word 
``coupons'' and adding in its place the word ``benefits'';
0
j. Add definitions for Personal identification number (PIN), Point-of-
sale (POS) terminal, and Primary account number (PAN) in alphabetical 
order;
0
k. Remove the definition of Program; and
0
l. Add definitions for Retailer EBT Data Exchange (REDE) system and 
Supplemental Nutrition Assistance Program (SNAP or Program) in 
alphabetical order.
    The additions read as follows:


Sec.  271.2  Definitions.

* * * * *
    Benefit means the value of supplemental nutrition assistance 
provided to a household by means of an EBT system or other means of 
providing assistance, as determined by the Secretary.
    Benefit issuer means any office of the State agency or any person, 
partnership,

[[Page 52032]]

corporation, organization, political subdivision or other entity with 
which a State agency has contracted for, or to which it has delegated 
functional responsibility, in connection with the issuance of benefits 
to households.
* * * * *
    Electronic Benefit Transfer (EBT) account means a set of records 
containing demographic, card, benefit, transaction and balance data for 
an individual household within the EBT system that is maintained and 
managed by a State or its contractor as part of the client case record.
    Electronic Benefit Transfer (EBT) card means a method to access EBT 
benefits issued to a household member or authorized representative 
through the EBT system by a benefit issuer. This method may include an 
on-line magnetic stripe card, an off-line smart card, a chip card, a 
contactless digital wallet with a stored card, or any other similar 
benefit access technology approved by FNS.
    Electronic Benefit Transfer (EBT) contractor or vendor means an 
entity that is selected to perform EBT-related services for the State 
agency.
    Electronic Benefit Transfer (EBT) system means an electronic 
payments system under which household benefits are issued from and 
stored in a central databank, maintained and managed by a State or its 
contractor, and uses electronic funds transfer technology for the 
delivery and control of food and other public assistance benefits.
* * * * *
    Interoperability means a system that enables program benefits 
issued to be redeemed outside the State that issued the benefits.
* * * * *
    Manual transaction means an EBT transaction that is processed with 
the use of a paper manual voucher when there is an EBT system outage.
    Manual voucher means a paper document signed by the EBT cardholder 
that allows a retailer to redeem benefits through a manual transaction.
* * * * *
    Personal identification number (PIN) means a numeric code selected 
by or assigned to a household and used to verify the identity of an EBT 
cardholder when performing an EBT transaction.
* * * * *
    Point-of-Sale (POS) terminal means a range of devices deployed at 
authorized retail food stores for redeeming benefits by initiating 
electronic debits and credits of household EBT accounts and retailer 
bank accounts.
    Primary account number (PAN) means a number embossed or printed on 
the EBT card and encoded onto the card to identify the State and EBT 
account holder.
* * * * *
    Retailer EBT Data Exchange (REDE) system means the FNS system that 
allows the automated exchange of authorized retailer demographic data 
between FNS and the State and/or EBT contractor for notification of 
changes in retailer Program participation.
* * * * *
    Supplemental Nutrition Assistance Program (SNAP or Program) means 
the program operated pursuant to the Food and Nutrition Act of 2008.
* * * * *


Sec.  271.4  [Amended]

0
5. In Sec.  271.4(a)(2), remove the word ``coupons'' and add in its 
place ``SNAP benefits and EBT cards''.


Sec.  271.5  [Amended]

0
6. In Sec.  271.5:
0
a. Remove ``Coupons'', ``Coupon'', ``coupon'', and ``coupons'' wherever 
they appear and add in their place ``Benefits'', ``Benefit'', 
``benefit'', and ``benefits'', respectively;
0
b. Amend paragraph (a) by adding ``and EBT cards'' at the end of the 
last sentence;
0
c. Amend the introductory text of paragraph (b) by removing ``ATP'' and 
adding in its place ``EBT'';
0
d. Remove paragraphs (b)(1) through (3);
0
e. Amend paragraph (c) by removing ``ATP's'' wherever it appear and 
adding in its place ``EBT cards''.

PART 274--ISSUANCE AND USE OF BENEFITS

0
7. In Sec.  274.2:
0
a. Revise paragraph (c);
0
b. Amend paragraph (e)(1) by removing ``of paragraphs (e) through (h)'' 
and removing ``Sec.  274.6 and Sec.  274.7'' and adding in its place 
``Sec. Sec.  274.6 and 274.7'';
0
c. Amend paragraph (g)(3) by removing ``paragraph (h)(3)'' and adding 
in its place ``paragraph (j)'';
0
d. Revise paragraph (h);
0
e. Add paragraphs (i) and (j).
    The revisions and additions read as follows:


Sec.  274.2  Providing benefits to participants.

* * * * *
    (c) Benefit allotments. (1) State agencies shall not issue ongoing 
monthly benefit allotments to a household in more than one issuance 
during a month except with respect to the issuance of benefits to a 
resident of a drug and alcohol treatment and rehabilitation program in 
accordance with Sec.  273.11(e) of this chapter or when a benefit 
correction is necessary.
    (2) For those households which are to receive a combined allotment, 
the State agency shall provide the benefits for both months as an 
aggregate (combined) allotment, or as two separate allotments, made 
available at the same time in accordance with the timeframes specified 
in Sec.  273.2 of this chapter.
* * * * *
    (h) Off-line storage. If a household's EBT account is inactive for 
three months (91 days) or longer, State agencies may elect to store all 
benefits in that account off-line.
    (1) An EBT account is inactive if the household has not initiated 
activity that affects the balance of the household's SNAP EBT account, 
such as a purchase or return.
    (2) Taking benefits off-line means that the household's SNAP EBT 
account, including all existing benefits in the account and any new 
issuances deposited into the account, is no longer accessible to the 
household unless and until the account and its benefits are reinstated 
upon contact by the household.
    (3) The State agency shall send written notification to the 
household up to 10 days prior to or concurrent with the action to store 
benefits off-line. If an inactive account has a zero balance, a notice 
to the household is not required. At a minimum, the notice shall 
include information on:
    (i) The steps necessary to bring the benefits back on-line; and
    (ii) The State agency's permanent expungement policy.
    (4) Benefits stored off-line that have not been expunged in 
accordance with paragraph (i) of this section shall be reinstated and 
made available within 48 hours of reapplication or contact by the 
household. In addition to a specific request for benefit restoration, 
household contact shall include, but is not limited to:
    (i) Recertification or reapplication for benefits; and
    (ii) A general request for assistance.
    (i) Expungement. (1) State agencies shall apply SNAP transactions 
against a household's SNAP benefits on a first-in-first-out basis. As a 
result, the oldest SNAP benefits are used first. On a daily basis, the 
State agency shall expunge benefits from EBT accounts at the monthly 
benefit allotment level in accordance with either paragraph (i)(1)(i) 
or (ii) of this section. State agencies must designate which approach 
will be used in its State plan and use the same approach for all 
households within the State.

[[Page 52033]]

    (i) Inactive EBT accounts. Benefits allotments, or portion thereof, 
shall be expunged from EBT accounts that have been inactive, per 
paragraph (h)(1) of this section, for a period of nine months (274 
days) in accordance with the following:
    (A) When the oldest benefit allotment has not been accessed by the 
household for nine months, the State agency shall expunge benefits from 
the EBT account or off-line storage at the monthly benefit allotment 
level as each benefit allotment ages to nine months since the date of 
issuance or since the last date of account activity, whichever date is 
later.
    (B) The State agency shall not expunge any benefits from active 
accounts even if there are benefit allotments older than nine months. 
If at any time after the expungement process begins, the household 
initiates activity affecting the balance of the account, the State 
shall stop expunging benefits from the account and start the account 
aging process over again for the remaining benefits.
    (ii) Unused benefits. The State agency shall expunge individual 
benefit allotments, or portion thereof, that remain in a household's 
EBT account nine months (274 days) after the date the allotment was 
issued to the household, regardless of any account activity that may 
have taken place.
    (2) Not later than 30 days before benefit expungement is scheduled 
to begin, State agencies shall provide notice to the household that 
benefits in their EBT account are approaching expungement due to 
nonuse/inactivity. At a minimum, the notice shall include:
    (i) The date upon which benefits are scheduled to be expunged; and
    (ii) The steps necessary to prevent the expungement, including an 
opportunity to request that any benefits stored off-line be restored to 
the household in accordance with paragraph (h) of this section;
    (3) Expunged benefits shall be removed from the Account Management 
Agent and shall not be reinstated.
    (4) Notwithstanding paragraph (i)(1) of this section, in instances 
when the State agency verifies a death match for all certified members 
of the household and closes the SNAP case in accordance with Sec.  
272.14 of this chapter, the State agency shall expunge the remaining 
SNAP balance in the household's EBT account at that time. In accordance 
with Sec.  273.13(b)(2) of this chapter, expungement notices, per 
paragraph (i)(2) of this section, are not required for these 
households.
    (j) Procedures to adjust SNAP accounts. Procedures shall be 
established to permit the appropriate managers to adjust SNAP benefits 
that have already been posted to an EBT account prior to the household 
accessing the account, or to remove benefits from inactive accounts for 
off-line storage or expungement in accordance with paragraphs (h) and 
(i) of this section.
    (1) Whenever benefits are stored off-line or expunged, the State 
agency shall document the date, amount of the benefits, and storage 
location in the household case file.
    (2) Issuance reports shall reflect the adjustment to the State 
agency issuance totals to comply with monthly issuance reporting 
requirements prescribed under Sec.  274.4.


Sec.  274.8  [Amended]

0
8. In Sec.  274.8(f)(8), remove ``Sec.  274.2(h)(2)'' and add in its 
place ``Sec.  274.2(i)''.

Pamilyn Miller,
Administrator, Food and Nutrition Service.
[FR Doc. 2020-16403 Filed 8-21-20; 8:45 am]
BILLING CODE 3410-30-P