[Federal Register Volume 87, Number 190 (Monday, October 3, 2022)]
[Rules and Regulations]
[Pages 59633-59660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21011]



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 Rules and Regulations
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  Federal Register / Vol. 87, No. 190 / Monday, October 3, 2022 / Rules 
and Regulations  

[[Page 59633]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

[FNS-2019-0055]
RIN 0584-AE75


Supplemental Nutrition Assistance Program: Requirement for 
Interstate Data Matching To Prevent Duplicate Issuances

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

ACTION: Interim final rule.

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SUMMARY: The Agriculture Improvement Act of 2018 requires the Secretary 
of Agriculture to establish an interstate data system called the 
National Accuracy Clearinghouse (NAC) to prevent issuance of 
Supplemental Nutrition Assistance Program (SNAP) benefits to an 
individual by more than one State agency simultaneously (also known as 
interstate duplicate participation). This interim final rule requires 
SNAP State agencies to provide information to the NAC regarding 
individuals receiving SNAP benefits in their States in order to ensure 
they are not already receiving benefits in another State. It also 
requires State agencies to take appropriate action with respect to each 
indication from the NAC that an individual may already be receiving 
SNAP benefits from another State agency. This rule aims to enhance 
Program integrity by reducing the risk of improper payments and improve 
customer service by incorporating best practices and lessons learned 
from the NAC pilot to require that State agencies take appropriate and 
timely action to resolve NAC matches. This rule also establishes 
safeguards to ensure households receive benefits for which they are 
eligible and are not incorrectly removed from the Program.

DATES: 
    Effective date: This rule is effective December 2, 2022.
    Implementation date: The USDA (or Department) intends to implement 
this nationwide NAC matching solution using a phased approach that will 
allow all State agencies to onboard over a period of 5 years. State 
agencies must comply with the provisions of this interim final rule no 
later than October 4, 2027.
    Comment date: To be considered, written comments on this interim 
final rule must be received on or before December 2, 2022.

ADDRESSES: Comments may be submitted in writing by one of the following 
methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Send written comments to State Administration 
Branch, Program Accountability and Administration Division, 
Supplemental Nutrition Assistance Program, Food and Nutrition Service, 
USDA, 1320 Braddock Place, 5th floor, Alexandria, VA, 22314.
     All written comments submitted in response to this interim 
final rule will be included in the record and will be made available to 
the public. Please be advised that the substance of the comments and 
the identity of the individuals or entities submitting the comments 
will be subject to public disclosure. FNS will make the written 
comments publicly available on the internet via https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Maribelle Balbes, Chief, State 
Administration Branch, Program Accountability and Administration 
Division, Supplemental Nutrition Assistance Program, Food and Nutrition 
Service, USDA, 1320 Braddock Place, 5th floor, Alexandria, VA 22314, by 
phone at (703) 605-4271 or via email at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. Statutory Authority

    Section 4011 of the Agriculture Improvement Act of 2018 (Pub. L. 
115-334, the ``Farm Bill'') amended Section 11 of the Food and 
Nutrition Act of 2008 (``the Act'') (7 U.S.C. 2020) by creating a new 
subsection (x). Section 11(x) of the Act requires that ``[t]he 
Secretary . . . establish an interstate data system, to be known as the 
`National Accuracy Clearinghouse,' to prevent multiple issuances of 
supplemental nutrition assistance program benefits to an individual by 
more than 1 State agency simultaneously.'' The Act further requires the 
Secretary to promulgate regulations to prevent multiple issuances of 
SNAP benefits, including specific mandates to ``incorporate best 
practices and lessons learned from the pilot program under Section 
4032(c) of the Agricultural Act of 2014'' and to ``require a State 
agency to take appropriate action, as determined by the Secretary, with 
respect to each indication of multiple issuance of supplemental 
nutrition assistance program benefits, or each indication that an 
individual receiving such benefits in 1 State has applied to receive 
such benefits in another State.''
    Section 4009 of the Farm Bill amended Section 11 of the Act. As 
amended, Section 11(e) of the Act states ``that for a household 
participating in the supplemental nutrition assistance program, the 
State agency shall pursue clarification and verification, if 
applicable, of information relating to the circumstances of the 
household received from data matches for the purpose of ensuring an 
accurate eligibility and benefit determination, only if the information 
. . . is obtained from data matches carried out under subsection (q), 
(r), or (x).''

B. Authority for Interim Final Regulation

    The Department is issuing this interim final rule at the direction 
of Congress. The Act, in a sub-section entitled ``Issuance of Interim 
Final Regulations'' provides that ``not later than 18 months after the 
date of enactment of the Agriculture Improvement Act of 2018, the 
Secretary shall promulgate regulations (which shall include interim 
final regulations) to carry out this subsection . . .'' 7 U.S.C. 
2020(x)(3). The Department will issue a final rule after considering 
public comments and obtaining additional information during the initial 
implementation.

[[Page 59634]]

C. Existing Requirements for Residency, Duplicate Participation, 
Recipient Claims, and Intentional Program Violations

Residency Requirement
    Under existing Program rules, an individual may not receive SNAP 
benefits from more than one State agency that administers the Program 
(henceforth referred to as State or State agency) for the same benefit 
month. Regulations at Sec.  273.3 require that a household live in the 
State where it files a SNAP application and stipulate that no 
individual may participate as a member of more than one household or in 
more than one project area (i.e., a State) in any month, unless an 
individual is a resident of a shelter for battered women and children 
as defined at Sec.  271.2. Program regulations at Sec.  273.2(f)(1)(vi) 
also require that State agencies verify applicants' residency before 
certifying a household initially applying.
Duplicate Participation
    Current SNAP regulations at Sec.  272.4(e) also require State 
agencies to establish systems to prevent individuals from participating 
in more than one household within one State (duplicate participation). 
The regulation stipulates that State agencies match against names and 
Social Security numbers at a minimum, and other identifiers such as 
birth dates or addresses as appropriate.
Recipient Claims
    Per Sec.  272.2(d)(1)(x), State agencies must submit a claims 
management plan as part of their State plan of operations, for 
informational purposes only, that describes their procedures for 
establishing and collecting overpayment claims. If duplicate 
participation is identified, State agencies follow the regulations at 
Sec.  273.18 to establish and collect claims for the amount of benefits 
overpaid. These claim regulations provide State agencies with 
flexibility to compromise or terminate claims under certain conditions 
and provide States with collection options. SNAP also participates in 
the Treasury Offset Program and provides assistance to help State 
agencies collect unpaid balances.
Intentional Program Violation
    An intentional Program violation, defined at Sec.  273.16(c), 
occurs when an individual intentionally makes a false or misleading 
statement or withholds facts; or an individual commits any act that 
constitutes a violation of the regulations for the purpose of 
trafficking SNAP benefits, which is the exchange of benefits for cash 
or other considerations. The regulations at Sec.  273.16(a) provide 
that State agencies shall be responsible for investigating any case of 
alleged intentional Program violation and ensuring that cases are acted 
upon, as appropriate, either through administrative disqualification 
hearings or referral to a court of appropriate jurisdiction. 
Furthermore, Section 6(j) of the Act states that members of a household 
who make a fraudulent statement or representation about their residence 
so as to receive multiple benefits simultaneously must be disqualified 
for a period of 10 years.
    However, an instance of duplicate participation does not 
necessarily indicate an intentional Program violation or fraud. For 
example, an individual may have recently moved between States and 
inadvertently failed to close their case, or a State agency failed to 
timely close a case for an individual that it knew had moved. The 
timeframe for when an individual must report a move depends on the 
reporting system to which the State agency has assigned the individual. 
However, prior to receiving benefits in a new State, the individual's 
existing case must either be closed or the individual must be removed 
from the previous household's existing case as an individual cannot 
participate in more than one project area in any given month. When a 
State agency receives a report of an out of State move, it must take 
action to close the case or remove the individual from a case in a 
timely manner. Failure by an individual to report a move, or a State 
agency to take prompt action to remove an individual from SNAP when 
reported, may lead to instances of duplicate participation but would 
not be considered an intentional Program violation or fraud. In these 
instances, the individual is not intentionally receiving benefits from 
more than one State agency simultaneously. Comments from the 
Congressional record regarding the Farm Bill \1\ state, ``We know that 
duplicate participation, when it does occur, is rarely intentional 
fraud, but rather is a result of a household or household member simply 
moving from one State to another and not successfully disenrolling in 
their previous home State. This could be caused by households not being 
able to get through to a call center to report the move or a State not 
taking the proper action to close the case or remove the household 
member [after a move is reported].''
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    \1\ https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf, paragraph 7.
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    Therefore, in order to determine whether fraud has occurred, a 
State agency is responsible for investigating and either: (1) 
determining through an administrative disqualification hearing if an 
individual committed an intentional Program violation or (2) referring 
a case for prosecution for fraud. Additional comments from the 
Congressional record on the Farm Bill further state that ``without 
evidence of a client's intent to defraud the program, State agencies 
should assume that dual enrollment discovered through the NAC is 
unintentional''.\2\ Given that the regulatory definition of an 
intentional Program violation at Sec.  273.16(c) requires that acts be 
committed intentionally, this is in keeping with the current Program 
operations. These Congressional Record comments also align with Section 
6(j) of the Farm Bill and Sec.  273.16(b)(5), both of which focus on an 
individual making fraudulent statements or representations concerning 
their residency. Thus, a State agency may only determine an individual 
has done this when there is evidence that the applicant knowingly 
engaged in duplicate participation with the intent to collect SNAP 
benefits in more than one State simultaneously. This is opposed to 
instances of administrative oversight, such as an applicant reporting a 
move and the State agency failing to close the case, which do not arise 
as a result of an individual's fraudulent statements or 
representations.
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    \2\ https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf, paragraph 7.
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D. The Current State of Interstate Duplicate Participation

    Individuals are prohibited from participating in SNAP as a member 
of more than one household or in more than one project area, except for 
residents of a shelter for battered women and children. Per Sec.  
272.4(e), State agencies already use existing processes to prevent 
duplicate participation within their States including, but not limited 
to validation of Social Security numbers, verification of identity and 
residency, and matching personal identifiers against its caseload. 
Additionally, many State agencies rely on a question on the SNAP 
application about receiving benefits in another State in order to 
prevent duplicate participation. An applicant's affirmative response to 
this question starts a manual process that can involve emailing or 
calling another State agency to inquire about the applicant, which may 
result in delays in the application process and prevent the applicant 
from receiving their benefits in a timely manner. A lack of 
comprehensive and automated data

[[Page 59635]]

sharing between State agencies can result in duplicate participation, 
as State agencies will have to determine eligibility within the 
application processing timeframe before verification from the previous 
project area is received. A manual process of resolving instances of 
duplicate participation also requires waiting to issue benefits because 
another State agency failed to take action to close a case, which can 
result in a delay of benefit determination. These challenges highlight 
the need for enhanced and required communication and data sharing 
between State agencies which are discussed later in this rule.
    Although SNAP regulations do not mandate it, most State agencies 
use the Department of Health and Human Services' Public Assistance 
Reporting Information System (PARIS) to identify individuals who may be 
current SNAP participants in more than one State. State agencies submit 
data to PARIS on varying schedules; some provide information once per 
quarter while others submit less often. PARIS checks for matches on a 
quarterly basis. Due to its quarterly matching frequency, PARIS can 
only help State agencies identify duplicate participation after-the-
fact and does not enable State agencies to prevent it from occurring. 
For example, there could be up to three months of duplicate 
participation before the State agency receives a match, resulting in 
the establishment of larger claims for the individual to repay than if 
the match had been detected immediately. Additionally, because PARIS 
conducts data matches on State-submitted data at a frequency of once 
per quarter or less, a match merely indicates that an individual was 
active in two States during the months being matched, but this does not 
necessarily indicate benefit receipt occurred simultaneously in a 
single month. For example, if duplicate participation is identified 
during the match of October, November, and December data, it's possible 
that the individual was participating in one State in October and 
another State in November and December. Determining any overlap in 
benefit issuance in such an instance typically involves a manual 
process and can be burdensome to State agencies to resolve.
    These existing processes that identify overpaid benefits after-the-
fact may have unintended consequences for households, oftentimes 
including unnecessary household burden, and can result in poor or 
inconsistent customer service. Because of the delays associated with 
after-the-fact matches and manual processes, there is an increased 
likelihood that an applicant who reported a move could still be flagged 
for duplicate participation and must navigate the claims recovery 
process even though they complied with Program rules.

E. The National Accuracy Clearinghouse Pilot

    The following paragraphs provide context surrounding the 
establishment of the National Accuracy Clearinghouse (NAC) pilot, its 
independent evaluation, lessons learned, final points, and Department's 
expectations for the NAC moving forward. The business process and 
system discussion in this section references how the NAC pilot 
operates, which is separate and different from the nationwide NAC being 
established by this rule. The nationwide NAC will be discussed in 
Section II.
    Beginning in 2013, the State of Mississippi established a pilot 
that was funded by the Office of Management and Budget's (OMB) 
Partnership Fund for Program Integrity Innovation.\3\ The pilot was 
designed to test the feasibility of improving upon existing processes 
by establishing a real-time interstate data matching system to prevent 
duplicate participation, this system is called the NAC pilot. The NAC 
pilot data matching operations began in June 2014 and consisted of five 
participating State agencies: Alabama, Florida, Georgia, Louisiana, and 
Mississippi. The NAC pilot is still in operation under administrative 
waivers. However, there are only four State agencies still operating 
the pilot under administrative waivers: Alabama, Florida, Georgia, and 
Mississippi.
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    \3\ https://obamawhitehouse./archives.gov/sites/default/files/omb/memoranda/2011/m11-01.pdf.
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    As part of the pilot, each participating State agency submits a 
daily file of its entire SNAP participant caseload, which is then 
integrated into a list of all SNAP participants receiving benefits in 
the participating States. State agencies query the system when they 
receive SNAP applications or add new members to an existing household. 
The NAC pilot checks these individuals against the list of active SNAP 
participants in the other pilot States. When a State agency identifies 
that an applicant is receiving benefits in another State, the SNAP 
State agency staff in the applicant State contact the State agency 
where the applicant is already receiving benefits to close the 
individual's case or remove the individual from the household. Once the 
applicant's out-of-State case is closed or the individual is removed 
from the household, the State agency receiving the application can move 
forward with the certification process. If the applicant is checked 
against the NAC pilot's list of active SNAP participants in other 
States and the applicant is not identified as receiving SNAP benefits 
elsewhere, then the State agency proceeds with the certification 
process as usual.
    The NAC pilot allowed for estimation on the prevalence of 
interstate duplicate participation in the five participating States. 
Analysis of data from before the NAC pilot began operations suggested 
that between 0.09 percent and 0.17 percent of the individual SNAP 
participants active in each pilot State's caseload in May 2014 were 
also receiving benefits in another one of the pilot States in May 2014. 
The Department notes, however, that this data only represent instances 
of interstate duplicate participation where both States issuing 
benefits were participating in the pilot. Accordingly, the NAC pilot 
could not discover any potential matches between a State participating 
in the NAC pilot and a State that was not participating in the NAC 
pilot. This limited ability to detect matches suggests that the 
nationwide NAC will only increase positive match frequency when new 
State agencies are added to the system. The positive match frequency is 
also expected to decrease gradually as State agencies adopt the 
nationwide NAC and NAC business processes implemented by this rule.
Independent Evaluation of the NAC Pilot \4\
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    \4\ https://risk.lexisnexis.com/-/media/files/government/report/b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf.
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    Pursuant to Section 4032(c) of the Agricultural Act of 2014, an 
independent evaluation assessed the NAC pilot's detection and 
prevention of duplicate participation between May 2013 and August 2015 
and reported on variations in implementation among the five State 
agencies. As the NAC pilot focused exclusively on interstate duplicate 
participation, intrastate duplicate participation was not assessed as a 
part of the NAC pilot evaluation. Overall, the evaluation found a 
relatively low occurrence of duplicate participation--ranging from less 
than one-tenth of one percent of Louisiana's eligible individuals in 
May 2014 to just below two-tenths of one percent of Georgia's.\5\ The 
evaluation report indicated that a significant percentage of duplicate 
participation occurs when a new member is being added to a

[[Page 59636]]

household with an existing case. As presented in Table 19 of the 
evaluation report, an average of 47 percent of duplicate participation 
instances found were from individuals residing in households where all 
members are not duplicate participants. The Department interprets these 
occurrences of duplicate participation as instances where 
administrative processes need to be improved and better customer 
service provided, particularly for individuals or households that move 
between States. It is likely that these individuals either failed to 
report their move or were not promptly disenrolled by the State agency. 
Table 21 further emphasizes the need for greater customer service by 
evaluating claims data on cases including duplicate participants 
identified at initial matching of the NAC pilot. Out of the claims data 
reported, more than 27 percent of claims were due to State agency error 
or inadvertent client error. Based on this information, the Department 
determines that there is a greater need for enhanced customer service 
for applicants and participants who move between States or households, 
as well as better training for eligibility workers to identify these 
individuals and prevent inadvertent household errors and State agency 
errors that may result in the establishment of a claim and added 
burden.
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    \5\ https://risk.lexisnexis.com/-/media/files/government/report/b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf, 
page 10.
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    Although the evaluation found that the rate of duplication 
participation is infrequent, the report found a 46 percent reduction in 
the number of SNAP participants receiving benefits in more than one 
pilot State after one year of NAC pilot operation. Each of the five 
States experienced a reduction in duplicate participation, but the 
scale of the reductions varied. Two of the five States had 81 percent 
fewer instances of SNAP participants receiving benefits in another 
State compared to pre-NAC pilot levels (for example, from a monthly 
average of 882 instances down to 166 in Mississippi), while another two 
saw reductions of less than 30 percent (for example, from a monthly 
average of 3,383 to 2,446 instances in Florida). The Department 
believes that improving administrative processes will further diminish 
households' inadvertent duplicate participation.
    The NAC pilot evaluation also measured each State agency's 
effectiveness in using the NAC pilot to prevent duplicate 
participation, comparing positive matches generated by queries 
regarding SNAP applicants or new household members to subsequent 
positive indications of active duplicate participation. Matches on SNAP 
applicants or new household members that subsequently became active 
duplicate participants indicate that the information from the NAC pilot 
failed to prevent an individual from receiving benefits from more than 
one State agency simultaneously due to participant State agencies not 
taking appropriate actions when notified of a match and/or a lack of 
communication between State agencies. Again, there was significant 
variation in how effectively the five pilot State agencies used the NAC 
pilot to prevent duplicate participation. In two of the five States, 
less than 10 percent of individuals identified in NAC pilot matches 
resulted in subsequent duplicate participation. Other pilot State 
agencies were not as effective. The least effective State agency 
consistently saw about 40 percent of instances of individuals 
identified in matches resulting in duplicate participation.
NAC Pilot Lessons Learned
    The overall findings from the evaluation indicate that the rate of 
duplicate participation is low; that when it does occur, it is 
sometimes inadvertent, such as a State agency failing to promptly 
disenroll an individual that had moved between States and/or 
households, and not fraud; and that use of the NAC can effectively 
reduce duplicate participation if State agencies apply lessons learned 
from the pilot as they implement the nationwide NAC data match. The 
pilot State agencies with larger reductions in duplicate participation 
were the same State agencies with better rates of preventing duplicate 
participation. The NAC pilot evaluation found that these State agencies 
were more successful largely due to the extent that they automated NAC 
processes. They used web services to link their State systems with the 
NAC pilot. This enabled real-time querying of the NAC pilot in a manner 
similar to a manual portal query, where eligibility workers checked for 
NAC matches by manually inputting data, with the added advantage of 
limiting eligibility worker intervention to only those instances in 
which a match is generated. For example, if a State agency eligibility 
worker needs to process an application on the same day the application 
is received, the web services approach allows for sending and receiving 
information from the NAC pilot that same day. Pilot States that were 
less effective in terms of preventing and reducing duplicate 
participation used a batch process model where information is not 
returned until the following day. This sometimes led to the 
certification of an application before the caseworker became aware that 
there was a positive match from the NAC pilot indicating an active case 
in another State.
    The more successful States in the NAC pilot also integrated the 
pilot with their SNAP eligibility systems and into existing workflows. 
State agency eligibility workers received flags to take additional 
steps only in the event of a positive match, rather than having to 
check the NAC pilot portal for every application they processed and 
every person they added to a case.
    The differences in business processes and systems integration not 
only provide at least a partial explanation for the varied outcomes 
achieved by State agencies, but also support a set of practices that 
may be adopted to improve upon and maximize the effectiveness of the 
NAC pilot. Additionally, the evaluation report recommended that State 
agencies conduct comprehensive front-line training. This includes 
dedicating resources to delivering hands-on training for eligibility 
workers using real-world examples for the approach the State agency 
will use to operationalize the tool and communicate with other State 
agencies. These best practices from the NAC pilot combined with 
feedback from State agencies inform the design and implementation of 
the nationwide NAC solution created by this rule.
NAC Pilot Final Results
    The NAC pilot evaluation estimated the total benefit overpayments 
averted by the NAC pilot and the potential benefit overpayments that 
could be saved if the NAC were implemented nationwide. The evaluation 
compared the decay rate (the decline in the percentage of clients who 
remain duplicate participants in the five months following program 
entry) of duplicate participation by comparing entries from December 
2013 (pre-pilot) and December 2014 (during pilot), and following the 
same individuals for five months between January and May. The 
difference represents the effectiveness of using the NAC pilot to 
prevent and timely resolve duplicate participation. In each State, the 
entries of duplicate participation fell from December 2013 to December 
2014. However, anywhere from 25.8 percent to 41.45 percent of instances 
of duplicate participation identified in December 2013 continued five 
months later into May 2014. Once the NAC pilot was implemented, the 
total number of duplicate participant instances fell for each State and 
the percentage of individuals remaining as duplicate participants after 
five months fell from 21 percent to 0 percent in

[[Page 59637]]

Alabama, 51.4 percent to 17.8 percent in Florida, 49.6 percent to 17.1 
percent in Georgia, 41.4 percent to 6.5 percent in Louisiana, and 34.9 
percent to 3.2 percent in Mississippi. In each case, the NAC pilot was 
effective as reducing the rate of duplicate participation.
    The NAC evaluation also calculated savings resulting from the pilot 
by estimating the savings per month per instance of duplicate 
participation prevention in each of the pilot States and multiplying 
those savings by the median months of duplicate participation avoided. 
To establish the median length of duplicate participation for an 
individual, the NAC evaluation identified the eligibility date in each 
State, selected the latest of the two dates to establish when 
overlapping eligibility began, identified the next recertification date 
for the individual's case in each State, and selected the soonest of 
the two recertification months. The number of months between the start 
of overlapping eligibility and the next recertification month 
establishes the median expected length of duplicate participation per 
State, which ranged from 6 to 11 months. The evaluation avoided double 
counting the prevention of duplicate participation in both States by 
assuming the individual was eligible to participate in one of the 
States. The estimated State agency costs of NAC participation were then 
subtracted from these savings to yield a total estimated net impact for 
the NAC pilot of more than $5.6 million per year in the five NAC pilot 
States.
    The evaluation estimated the potential impact of a nationwide NAC 
from the results of the NAC pilot, including the potential cost savings 
associated with its implementation. These savings estimates of the 
pilot States were converted to percentages of total fiscal year (FY) 
2014 SNAP benefit issuance in each pilot State, then averaged and 
applied to the Program-wide total FY 2014 benefit issuance. The 
evaluation estimated that nationwide implementation of the NAC would 
have saved more than $114 million in SNAP benefit overpayments in FY 
2014, or 0.16 percent of total SNAP issuance. As a result of this 
successful pilot, as evidenced by the evaluation report findings, 
Congress passed legislation to expand the NAC nationwide and mandated 
State agency participation.
Nationwide NAC
    The Department finds, based in part on the NAC pilot discussed 
above and feedback from State agencies and FNS Regional offices, that 
an automated and real-time nationwide NAC will help State agencies more 
effectively prevent duplicate participation and facilitate 
communication among State agencies, which can improve application 
processing timeliness and Program access. The NAC will prevent and 
detect interstate duplicate participation by ensuring that State 
agencies are accurately issuing benefits to individuals in the State in 
which they are eligible to receive them. State agencies will verify 
residency and identity prior to checking the NAC using existing 
verification requirements at Sec.  273.2(f). If State agencies receive 
a positive match from the NAC for an individual, the State agency will 
work to quickly resolve the match and communicate with the other State 
agency identified in the match to ensure the individual's timely access 
to benefits. The State where the household previously resided will 
promptly respond to the other State agency identified in the match and 
work with the other State agency and the household to ensure proper and 
timely disenrollment as applicable. The NAC also requires and improves 
State-to-State communication and collaboration through automation and 
improved tracking. State agencies must take appropriate actions to 
resolve match results and provide adequate notice to individuals who 
are identified as potential duplicate participants to ensure the timely 
processing of applications. SNAP applicants and participants will be 
relieved of the burden they previously had to resolve a positive match, 
as these new requirements place the burden on State agencies to resolve 
a match and communicate with one another once notified of a match. 
Through the use of the NAC, State agencies will be able to more 
effectively and timely disenroll and enroll individuals in the 
appropriate States. Clients are less likely to be adversely impacted by 
inaccurate flags that could result in burdensome or costly claims 
collections processes with an automated NAC process. Senator Stabenow, 
chairwoman of the Committee on Agriculture, Nutrition, and Forestry, 
reiterated the importance of timely processing of applications by 
stating ``the conference committee expects that USDA's Food and 
Nutrition Service, FNS, and States will establish procedures for the 
NAC that will not interfere with current application and enrollment 
procedures, particularly, the speedy processing of applications.'' \6\
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    \6\ https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf, paragraph 8.
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    This rule does not change the existing requirements for household 
member residency, monitoring of intrastate duplicate participation, or 
claims against households. Additionally, it does not change existing 
requirements and procedures for investigating and disqualifying 
violators.
    The Department intends to implement a nationwide NAC using a phased 
approach that will onboard all State agencies over a period of 5 years, 
depending on their readiness, emphasizing training and proper 
implementation to minimize undue burden on the State agencies, Program 
participants, and applicants. The nationwide NAC will incorporate best 
practices and lessons learned from the NAC pilot in order to implement 
a system that prevents and detects duplicate participation efficiently 
and effectively, in a manner that does not delay the certification 
process. The NAC will allow FNS and State agencies to meet the 
statutory and regulatory requirements for NAC matches. The Department 
will provide technical assistance to State agencies to assist with NAC 
implementation and ensure State agencies take appropriate actions in 
response to NAC matches. The improved data sharing between State 
agencies is expected to reduce duplicate participation, reduce claims 
issued against individuals found to be duplicate participants, and help 
streamline the application process all while ensuring there is no delay 
in benefit determination.

II. Discussion of the Interim Final Rule

State Agency Stakeholder Sessions

    The Department conducted 28, hour-long stakeholder sessions with 20 
State agencies to better shape this rule, develop the system, and apply 
lessons learned from the NAC pilot. These sessions were held from 
December 2020 through August 2021 and included State agencies from 
Texas, Louisiana, Massachusetts, Montana, Iowa, Missouri, New Jersey, 
Illinois, Idaho, Utah, Maryland, Arizona, South Dakota, Nebraska, 
Connecticut, Kentucky, South Carolina, Washington, Nevada, and Alabama. 
These sessions informed the Department about State agency eligibility 
systems, existing State agency workflows, how State agencies currently 
process duplicate enrollment, capabilities and limitations of State 
agency technology, and how existing required data matches currently 
work from a front- and back-end perspective. FNS followed these 
sessions with technical email inquiries to the States to gather 
additional details needed to create a user-friendly system.

[[Page 59638]]

State Agency Requirements
    Section 11(x)(2) of the Act requires the Secretary to ``establish 
an interstate data system, to be known as the `National Accuracy 
Clearinghouse,' to prevent multiple issuances of [SNAP] benefits to an 
individual by more than 1 State agency simultaneously.'' Therefore, to 
establish a system that is truly interstate, the Department is adding 
Sec.  272.18(a)(1) and (2) through this interim final rule that 
establish the NAC and require each State agency to participate in the 
NAC matching program and use information from it to achieve the purpose 
set forth in Section11(x)(2) of the Act. The NAC will, in real or near-
real time, receive information from State agencies about all 
individuals receiving SNAP benefits in each State and notify State 
agencies when an individual is receiving SNAP benefits in another 
State.
    The Department is committed to ensuring all statutory and 
regulatory requirements for the system and its documentation will be 
met and all required information will be provided in the Computer 
Matching Agreement (CMA), but many details that must be provided are 
dependent on the final System design. Therefore, this interim final 
rule includes several requirements for State agencies for which the 
exact procedures for completing them through the system will be 
provided in the CMA and related documents. State agencies are required 
to provide information to the NAC on all individuals participating in 
SNAP, except as provided in newly created Sec.  272.18(b)(3). The 
Department has determined that the elements that are necessary to 
determine a match and that must be reported to the NAC are an 
individual's name, Social Security number, and date of birth. However, 
since these data elements are personally identifiable information 
(PII), the Department is establishing secure procedures for submitting 
this information to the NAC and requiring State agencies to abide by 
them. In order to protect participant information, State agencies will 
not submit the names, Social Security numbers, and dates of birth to 
the NAC. Rather, State agencies will use a privacy-preserving record 
linkage (PPRL) process to convert these data elements to a secure 
cryptographic hash before sharing the information to the NAC. The PPRL 
process allows the NAC to accurately match individuals, while 
preventing the collection and storage of the names, Social Security 
numbers, and dates of birth in the NAC system. A positive match is 
identified by the NAC when two or more hashes match. State agencies are 
also required to provide a participant ID to the NAC to allow the State 
agency to connect the match in the NAC to an individual in the State 
agency's system. In other words, the participant ID is used to help the 
State agency resolve a match. When a match is found, the NAC will 
create a match record with a unique match ID and notify the affected 
State agencies of the match. State agencies will use the participant ID 
they provided previously, now included in the match record, to find the 
matched individual in the State agency's eligibility system. This 
approach enhances security and privacy protections of applicant and 
participant information by ensuring the NAC does not store names, 
Social Security numbers and dates of birth. Additional security 
measures employed by the NAC include encryption of information in 
transit between State agencies and the NAC and within the NAC, as well 
as controlled access through e-authentication and role-based 
permissions.
    Currently, under Sec.  272.4(e)(1), each State agency must 
establish a process to prevent duplicate participation, while also 
ensuring that applications are processed timely and participants only 
receive benefits in the State in which they reside and are otherwise 
eligible, in accordance with regulations Sec. Sec.  273.2(a)(2) and 
273.3, respectively. Now that the Department is establishing the NAC 
and associated procedures through this interim final rule, the process 
provided for under Sec.  273.4(e)(1) must include compliance with the 
NAC data matching regulations and other related requirements including 
the Privacy Act at 5 U.S.C. 552a, a signed Computer Matching Agreement 
(CMA) and Interconnection Security Agreement (ISA), and the NAC System 
of Record Notice that will be published in the Federal Register after 
publication of this interim final rule. FNS will provide technical 
assistance for State agency integration with the NAC system.
    Section 11(x)(2)(B) of the Act specifically authorizes the 
Department ``to require that State agencies make available to the 
National Accuracy Clearinghouse only such information as is necessary 
for the purpose . . .'' of preventing duplicate participation. Through 
this interim final rule, the Department is adding Sec.  272.18(b) to 
require State agencies to provide such information to the NAC. Section 
272.18(b)(1) requires that each State agency provide information on all 
active SNAP participants to the NAC. This paragraph also defines, for 
the purpose of the NAC, an ``active participant'' as an individual who 
is approved to receive benefits for the month in which the State agency 
is uploading the data. The Department is adding Sec.  272.18(b)(2), 
which indicates that all State agencies will use the information 
provided to the NAC to identify duplicate participation via NAC matches 
and that each State agency shall provide information on all active SNAP 
participants once per working day in accordance with the procedures 
provided by FNS in the CMA. It is important that information in the NAC 
be as current as possible to prevent a ``false positive'' match, 
indicating duplicate participation, that could generate unnecessary 
work for another State agency or the household. Conversely, any delay 
in adding an individual who has become part of a State agency's active 
caseload would limit the NAC's ability to prevent or curtail duplicate 
participation, potentially resulting in false positives and months of 
undetected duplicate participation, as has been the case when using the 
quarterly PARIS match to detect duplicate participation in SNAP.
    To discover if an individual is already receiving SNAP benefits, 
information on that individual must be compared to the information 
previously provided by all other State agencies, as described later in 
this rule. The Department has identified three data elements that are 
essential for a positive match and that must be submitted to the NAC. 
These NAC data matching elements are: name, date of birth, and Social 
Security number. However, in order to prevent this information from 
being stored in the NAC, the Department is establishing secure 
procedures to protect this information and is requiring State agencies 
to abide by them. These requirements and procedures are described in 
the Computer Matching and Interconnection Security Agreement package. 
The Department is adding Sec.  272.18(c)(1) to outline the NAC matching 
process. State agencies must report the NAC data matching elements 
using the secure procedures established by FNS. The use of these data 
elements is necessary to implement a critical finding of the NAC pilot 
evaluation, which found that, with virtually no exceptions, matches 
using these combined data elements were valid. By comparison, Social 
Security number-only matches were often the result of data entry 
errors. Therefore, to avoid false positives and the burdens they place 
on State agencies and households to resolve, all three data elements 
must match to be deemed a positive match by the NAC.
    A Social Security number is required as a NAC data matching element 
because a Social Security number is a

[[Page 59639]]

requirement for SNAP participation. Regulations at Sec.  273.6 require 
that a household participating or applying for participation in SNAP 
provide the State agency with the Social Security number of each 
household member or apply for one before certification. If the 
individual does not yet have a Social Security number but can provide 
proof that a Social Security number has been applied for, the State 
agency will continue with the eligibility determination process as 
appropriate. Once the individual receives a Social Security number and 
reports it to the State agency, it shall be added to the daily active 
participant upload using procedures established by FNS and any 
potential match will be indicated during the monthly bulk match.
    The new regulation at Sec.  272.18(b)(4) will require State 
agencies to submit additional data elements to help them resolve 
matches and to better protect those who may be considered vulnerable 
individuals. These additional required data elements include a 
vulnerable individual flag if applicable, and a participant ID, as 
previously mentioned. The NAC will share these additional data elements 
with State agencies as part of the notification of a NAC match to 
provide useful context about the SNAP case in the other State and aid 
in the match resolution process. The additional data elements will have 
no impact on what is considered a positive match and is information 
that can be obtained by the State agency during the certification 
process.
    While the NAC protects the information of all individuals 
throughout the matching process, this rule adds additional protection 
for those who are considered vulnerable individuals. The Department is 
requiring that a vulnerable individual flag be provided to the NAC, 
when applicable, because Section 11(x)(2)(C)(iv) specifies that 
information made available to the NAC be used in a manner that protects 
the identity and location of SNAP applicants and participants who are 
vulnerable. (Vulnerable individuals, defined by the newly created Sec.  
272.18(c)(9), are discussed later in this rule.) Automatically 
including a vulnerable individual flag at the time of the match, rather 
than relying on manual sharing of this information, ensures each State 
agency is immediately aware of the individual's vulnerable status and 
the need to take extra precautions to protect the identity and location 
of that person as they verify information and take action on the 
related SNAP case. The Department requires extra precautions to include 
removing the location of vulnerable individuals when issuing a notice 
of match results or a combined notice. States must also exclude 
location information from any written or verbal communications that 
happen as a result of a NAC match. For example, absent this 
requirement, an abusive spouse who received a notice of match results 
could attempt to bypass protections by contacting a toll-free State 
hotline and asking a call center employee to identify the source State 
of the NAC data match. Thus, the Department expects that State agencies 
take preventive measures to ensure the privacy and protection of 
vulnerable individuals, including those required by this rule, and that 
these practices are established in State agency business processes, 
documented in writing, and that State agency employees are trained 
regarding how to implement these protections.
    The Department requires State agencies to provide a participant ID 
that identifies an individual within the State agencies' own system to 
allow them to identify those individuals for whom they have received a 
notification of a NAC match. When a match is found, the NAC will create 
a match record with a unique match ID and notify the affected State 
agencies of the match. State agencies will then use the participant ID 
they provided previously, which is included in the match record in the 
NAC, to find the matched individual in the State agency system. The 
participant ID shall not use any sensitive PII.
    The Department is aware that there are other data elements that, 
while not necessary for the match, could help a State agency resolve a 
match, such as a case number, a case closure date, or the date of last 
issuance. However, not all States have these data elements available, 
and of those that do, not all States have the same understating of what 
data is meant by these terms. While the Department can define such 
elements in regulation, making the terms uniform throughout the States, 
the impact a new definition and the immediacy of the implementation of 
this interim rule would have on the various State systems is not clear. 
Additionally, there may also be other data elements that the Department 
is unaware of that would help State agencies resolve a match. 
Therefore, in this interim final rule, the Department is not requiring 
State agencies to report additional data elements to the NAC but is 
signaling its intent to require in the final rule that State agencies 
report additional data elements if available, including a case number, 
a case closure data, and the date of last issuance. The Department is 
soliciting comments regarding these data elements, additional data 
elements State agencies have the ability to report, which data elements 
would be most helpful, and how they would be most helpful.
    The Department is adding Sec.  272.18(c)(2) requiring that State 
agencies follow existing verification procedures outlined at Sec.  
273.2(f)(1)(v), (vi), and (vii) for verifying Social Security numbers, 
residency, and identity prior to checking the NAC. This will ensure 
that State agencies have reliable information prior to checking the 
NAC. This requirement is based on existing regulations that require 
other data matches to verify match data at the time of application, 
including the prisoner verification system required at Sec.  272.13(c), 
the deceased matching system required at Sec.  272.14(c)(1), and the 
disqualified recipient database required at Sec.  273.2(f)(11)(i)(B). 
These existing regulations require data matches ``prior to 
certification'' or ``at the time of application'' but do not further 
specify the timing of the required match. The State agency must follow 
Social Security number, residency, and verification requirements for a 
household as described at Sec.  273.2(f)(1)(v), (vi), and (vii) before 
checking the NAC to ensure that they are potentially eligible to 
receive benefits in the State in which they are applying. This step is 
being added to minimize the likelihood of inaccurate data matches. Once 
the State agency completes these verification requirements, it may 
continue with the application process and the State agency may check 
the NAC for a match. The Department will assist the State agency in 
providing training to eligibility workers on their State agency's 
processes for using the NAC, which may include information on how and 
when to conduct matches, how to respond in the event of a match, 
verifying information, ensuring timely application processing, and 
providing necessary notices. The Department further recommends that 
State agencies automate NAC processes to the greatest extent possible. 
This is a significant recommendation from the NAC pilot evaluation that 
suggests integrating the NAC with existing eligibility systems, real 
time queries of the NAC, and the automation of match notification 
emails as options for further automation.
    It is important that new individuals who join existing SNAP 
households are checked against the NAC's database of active 
participants in other States. The NAC pilot evaluation found that 47 
percent of individuals receiving SNAP benefits from multiple State 
agencies were part of households where all other

[[Page 59640]]

household members were not receiving benefits from multiple State 
agencies. These data suggest that a significant percentage of 
interstate duplicate participation occurs when a new member is added to 
an existing case. For example, if an individual is a member of a 
household receiving benefits in one State, but then moves to another 
State and applies for benefits, a NAC match will indicate that that 
individual is already participating in another State as a part of a 
household. The previous household that the individual has moved away 
from will receive a notice from the State agency indicating that a NAC 
match was received and that they will need to either contest the 
findings or update their household composition to indicate the 
individual separated from them so that the individual can begin 
receiving benefits in the new State without causing duplicate 
participation. This follows the existing process for data matches in 
notifying the previous address of the match, providing them with an 
opportunity to contest, prior to taking adverse action. In this 
example, the previous household was not attempting to receive duplicate 
benefits from multiple States, and they were entitled to receive 
benefits in the State in which they reside. In a scenario where a State 
agency receives a positive match for a child moving between households 
due to a custody arrangement the State agency must resolve the match in 
order to determine what actions must be taken on the case. The State 
agency may be able to resolve the match based on existing information 
known to the State agency or it may need to pursue additional 
information or verify questionable information.
    There is flexibility on exact timing when the State agency must 
submit new household member information to the NAC, but it must do so 
before adjusting household benefits to account for the new member as 
described in Sec.  273.12(c)(1)(ii). Depending on a household's 
reporting system, it is not always required to immediately report 
changes in household composition. Therefore, a household may report a 
new member before the prior household reports losing the individual 
without either household committing a violation of Program rules.
    The Department is adding Sec.  272.18(c)(6) requiring State 
agencies to note instances where there is a match in the participant's 
casefile. This requirement is necessary to ensure proper case 
documentation for the purposes of oversight as described in part 275, 
regarding performance reporting systems.
Bulk Data Matching Requirements
    The NAC will automatically conduct bulk matches on a monthly basis 
(``monthly bulk matches'') of the NAC data matching elements provided 
by all participating State agencies. The monthly bulk match compares 
the secure hash of all active participants included in the most current 
daily upload from each participating State agency to discover all 
instances of duplicate participation that exist at the time the match 
is conducted. The NAC will create a match record for each instance of 
duplicate participation found and will notify State agencies when 
duplicate participation is discovered for participants in their State. 
The Department is adding Sec.  272.18(c)(4) to reflect this. The 
Department considers information that is received by State agencies as 
a result of a monthly bulk match unclear information because it is a 
match received during the certification period for an individual 
currently participating in SNAP. State agencies must pursue 
clarification and verification of this information by following the 
unclear information procedures provided in Sec.  273.12(c)(3)(iv) 
(discussed in the next section) to provide notice and an opportunity to 
contest the information received before taking any adverse action. The 
NAC pilot evaluation indicated that bulk matches alone were 
insufficient in identifying and preventing duplicate participation; 
however, when implemented with other matches, bulk matching better 
identified matches that were missed or not acted upon. The Department 
will provide ongoing technical assistance to State agencies emphasizing 
the importance of States approaching the resolution of these matches 
consistently as well as maintaining Program access for SNAP applicants 
and recipients to State agencies.
Procedures and Requirements for Acting on NAC Data Matches
    State agencies using matching information from the NAC must comply 
with the requirements set forth at 5 U.S.C. 552a(p) and Sec.  
272.12(c). Pursuant to these requirements, State agencies may not take 
any adverse action to terminate, deny, suspend, or reduce benefits to 
an applicant or SNAP participant based on information produced by the 
NAC until the information has been independently verified by the State 
agency and the applicant or participant receives a notice from the 
State agency containing a statement of its findings, informing the 
individual of the opportunity to contest such findings, and the 
allowable timeframe to do so. State agency action upon receiving a NAC 
match varies depending on when the match is received; for example, 
during the certification period versus at the time of application. 
Therefore, the Department is adding Sec.  272.18(c)(3) to describe the 
actions a State agency must take in response to a positive NAC match 
received at application, recertification, and addition of a new 
household member. When a State receives a positive NAC match on an 
individual at initial application, recertification, or when a new 
household member is added, the State agency must independently verify 
the information if there is a potential for adverse action in 
accordance with Sec.  272.12(c)(1). Action only needs to be taken on 
positive matches. If there is no positive match, benefit determination 
continues following existing regulations.
    The Department also establishes at Sec.  272.18(c)(3) a 10-day 
timeframe for State agencies to initiate action to resolve a positive 
match at application, recertification, and addition of a new household 
member; as well as a requirement to promptly inform the other State 
agency indicated in the match of the initiated action. The 10-day 
timeframe is consistent with existing timeframes for other 
certification and recertification matches at Sec.  273.2(f) and will 
help prevent delays in eligibility determination.
    While State agencies have 10 days to initiate action to resolve a 
match and report that action to the other State agency, they are 
encouraged to resolve matches as quickly as possible. State agencies 
are also encouraged to maintain contact with one another throughout the 
match resolution process to quickly resolve a match and keep the 
applicant informed of progress. After State agencies have determined 
the appropriate disposition on the case, they must also notify each 
other of the final resolution of the match. If there is no match 
indicated during a NAC query, then the State agency must continue with 
the eligibility determination process. The requirement for State agency 
communication addresses a key finding of the NAC pilot evaluation where 
pilot States identified examples of SNAP cases not being closed due to 
another State not communicating or taking timely action. Greater 
communication also ensures that State agencies are assisting the 
applicant in the event of the match by being required to issue notices 
to the client to verify information obtained through a NAC match as 
well as providing an opportunity to contest. Applicants are

[[Page 59641]]

also aided through State-to-State communication as State agencies are 
required to communicate with one another within 10 days of a match and 
communicate case disposition to the other State to ensure the 
individual is receiving benefits in the State in which they are 
eligible.
    If there has been no contact from the other State agency within the 
established timeframe, and all other eligibility and verification 
requirements are met, the State agency must continue processing the 
application and issue benefits to the applicant. A NAC data match shall 
not delay processing of the application and provision of benefits 
beyond the normal processing standards in Sec. Sec.  273.2(g) and 
273.14(d), or expedited service standards in Sec.  273.2(i), whichever 
applies to the applicant household. If a State agency is not notified 
of initial action from the other State agency indicated in the match 
within 10 days, then the application can continue to be processed. 
Delays in processing caused by a positive NAC match where household 
verification is otherwise incomplete shall be handled in accordance 
with Sec.  273.2(h). However, delays in communication or action between 
State agencies regarding verification of information associated with a 
positive NAC match must not prevent the eligibility determination of an 
applicant, recertifying participant, or newly added household member 
per the added regulation at Sec.  272.18(c)(3)(v).
    The Act provides that an applicant's right to an eligibility 
determination is triggered by the filing of an application and not by 
State action. Section 11(e)(2)(B)(iv) of the Act requires that State 
agencies consider an application that contains the name, address, and 
signature of the applicant to be filed on the date the applicant 
submits the application. Additionally, Section 11(e)(2)(B)(i) requires 
timely, accurate, and fair service to applicants for, and participants 
in, SNAP. As a result, the Department expects State agencies to be 
responsive in resolving NAC data matches to ensure applications are 
processed timely, in accordance with the Act, and to assist households 
to resolve residency issues due to a NAC data match.
    A State agency that is notified of a NAC match during the 
certification period is required to take initial action to resolve a 
match as well as issue a combined notice. The State agency is also 
encouraged to assist the individual with closing their case, when 
applicable. For example, if an individual indicated in the match 
contacts a State agency and verbally requests it to expedite the 
closure of their case, that State agency must take prompt action to do 
so and provide a letter confirming voluntary withdrawal to the address 
on file, or the new one as specified by the individual making the 
request, consistent with regulations at Sec.  273.13(b)(12) to ensure 
the individual has proof of closure so that they can apply for benefits 
in the new State. Per newly established regulations at Sec.  
272.18(b)(5), State agencies are required to maintain accurate and up 
to date daily uploads of NAC data elements regarding the status of 
individuals participating in SNAP to prevent the possibility of false 
positives and any delays in benefit issuance. This would include 
maintaining appropriate security and privacy standards per the NAC CMA 
and ISA. If the NAC system is not operational due to unforeseen 
circumstances, as will be outlined in the CMA and technical guidance, 
State agencies will continue the eligibility determination process 
without the initial NAC query. Any instances of duplicate participation 
will be discovered during the monthly bulk match once the system is 
again operational. For disaster situations, State agencies should 
follow their Disaster SNAP (D-SNAP) procedures for data entry and 
certification per FNS guidance.\7\ This guidance explains that State 
agencies are required to screen for duplicate participation in disaster 
situations. State agencies must either check for duplicate 
participation utilizing the NAC in the State's D-SNAP system, or the 
State agency must accept applications and inform applicants that 
eligibility is contingent upon a subsequent check for duplicate 
participation. Any check for duplicate participation must be done using 
the NAC.
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    \7\ https://www.fns.usda.gov/snap/dsnap/state-agencies-partners-resources.
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    Section 11(e)(26) of the Act requires States to ``pursue 
clarification and verification, if applicable, of information relating 
to the circumstances of the household'' when that information is 
received from data matches related to prisoners, deceased individuals, 
and the NAC. The Department considers match information that is 
received from the NAC during the certification period to be unclear 
information. This is consistent with how information from other Federal 
systems such as the Prisoner Verification system and Deceased matching 
system, is treated by the Department. The procedures for pursuing 
clarification and verification of unclear information received from 
prisoner and deceased individual data matches during the certification 
period are described in existing regulations at Sec.  273.12(c)(3). 
Therefore, the Department is adding Sec.  273.12(c)(3)(iv) to describe 
what actions a State agency must take when it receives unclear 
information during the certification period from a NAC match. Those 
actions are described below.
    This interim final rule amends Sec.  273.12(c)(3)(i) to add 
information received from NAC matches to the types of unclear 
information for which State agencies must pursue clarification and 
verification when received during a certification period. Unclear 
information is defined per Sec.  273.12(c)(3) as information that is 
not verified or information that is verified but additional information 
is needed to act on the change. The Department is adding Sec.  
272.18(c)(5) to describe procedures to be followed for matches 
containing unclear information related to a NAC match during the 
certification period and further describes those procedures in Sec.  
273.12(c)(3)(iv). These procedures are different from procedures 
related to information received from a NAC match at application, 
recertification, or for a newly added household member as further 
discussed earlier in this rule. These procedures for unclear 
information are different from existing procedure for Deceased Matching 
and Prisoner Match as the added regulations at Sec.  273.12(c)(3)(iv) 
implements the requirement to initiate action to resolve the match and 
to communicate with the other State agency within 10 days of receipt of 
the match notification. Additionally, the added regulation Sec.  
273.12(c)(3)(iv)(A) implements the combined notice of match result and 
notice of adverse action.
    To maintain consistency with timeframes established during 
application and recertification, the newly established regulations at 
Sec.  272.18(c)(3)(i) establishes that State agencies will have 10 days 
from the time a match is received to initiate action to resolve a match 
and to notify the other State agency of that initiating action. State 
agencies must also provide resolution of the match to the other State 
agency, similar to regulations at Sec.  272.18(c)(3).
NAC Data Match Notice Requirements
    This interim final rule requires that State agencies send a notice 
of match results to households that received a positive match at 
application, at recertification, or for a newly added household member 
if the information indicated in the match could lead to a

[[Page 59642]]

denial of benefits or other adverse action on the case. The Department 
is adding this requirement for a notice of match results at Sec.  
272.18(c)(3)(iii)(A) to provide the individual with an opportunity to 
contest findings in a data match prior to adverse action or denial of 
benefits. The notice of match results must clearly explain what 
information is needed from the household, and that failing to respond 
within 10 days, could result in a denial of benefits or adverse action, 
as appropriate.
    To aid the NAC resolution process for applicants, recertifying 
participants, and newly added household members and ensure they are 
receiving their benefits in a timely manner, this interim final rule 
clarifies that if State agencies have enough information to resolve the 
match, and there is no potential for adverse action, State agencies are 
not required to send a notice of match results. The Department is 
adding Sec.  272.18(c)(3)(iii)(B) to clarify the NAC match resolution 
process for the individual if there is no potential of adverse action. 
For example, if a positive match is identified for an individual during 
the interview process and the individual can immediately verify the 
information from the match, and there is no potential of adverse 
action, no notice of match results is required. In situations like 
this, the State agency must provide a verbal notification of a match 
and must document that verbal notification in the case file before 
continuing with the eligibility determination process.
    This interim final rule requires that State agencies send a 
combined notice of match results and notice of adverse action to 
households that received a positive NAC match during the certification 
period. The Department is adding this requirement for a combined notice 
for action on NAC matches at Sec.  273.12(c)(3)(iv)(A) to streamline 
the notice process for State agencies, reduce the likelihood of 
duplicate participation and the need to establish claims, while still 
providing the household with an opportunity to contest per 5 U.S.C. 
552a(p). To maintain compliance with the notice of adverse action 
requirements at Sec.  273.13, the Department is also amending Sec.  
273.13(a)(2) to add language stating that a notice of match results and 
notice of adverse action may be combined to meet the requirements in 
Sec.  273.12(c)(3)(iv). This change is consistent with similar 
allowances provided for Income Eligibility Verification System (IEVS) 
and Systematic Alien Verification for Entitlements (SAVE) computer 
matches at Sec.  273.2(f).
    The consequences for failing to respond to the combined notice 
depend on the reporting system to which the household has been assigned 
as explained at Sec.  273.12(c)(3)(iii)(A) and (B). If the household is 
subject to change reporting and fails to respond to the combined 
notice, which clearly explains what information is needed from the 
household and the consequences of failing to respond, the State agency 
must terminate the case. If the household is assigned to any other 
reporting system besides change reporting and the household fails to 
respond sufficiently to the combined notice, then the State agency must 
remove the subject individual and the individual's income from the 
household and adjust the benefits accordingly.

III. Discussion of Limited Use of NAC, Use and Disclosure, Protecting 
Vulnerable Individuals, and Privacy Act Implications

Limited Use of NAC
    Section 11(x)(2)(C) of the Act explicitly limits the use of the NAC 
to preventing duplicate participation--it may be not used for other 
Federal, State, or local programs or other purposes. In compliance with 
both this requirement and Section 11(x)(3)(D) of the Act, which 
requires the establishment of safeguards for information submitted to 
or retained by the NAC, the NAC will not retain SNAP applicant or 
participant information longer than needed to accomplish the purpose of 
preventing duplicate participation. To comply with this requirement, 
only NAC data matching elements on active participant information will 
be uploaded to the system once each working day. This information will 
not be stored in the NAC. Upon match, only the match record is stored 
in the system. Additionally, the NAC data elements will be submitted 
using the secure procedures established by FNS. Once an individual is 
no longer an active SNAP participant, that individual's information 
will no longer be included in the daily upload, and their information 
can no longer be matched against. The Department is codifying these 
procedures to safeguard information submitted or retained to the NAC at 
Sec.  272.18(b)(5).
Use and Disclosure
    Current disclosure requirements at Section 11(e)(8)(A) of the Act, 
and regulations at Sec.  272.1(c) permit the disclosure of SNAP 
applicant or participant information to persons directly administering 
assistance programs. Section 11(x)(2)(B) and (C) of the Act only allow 
the Department to require State agencies to submit to the NAC 
information needed to prevent interstate duplicate participation and 
prohibits the use of information from the NAC beyond preventing 
interstate duplicate participation. This restricts the use and 
disclosure of information from the NAC beyond the disclosure 
requirements in current regulations at Sec.  272.1(c). The Department 
acknowledges the blanket authorities for data sharing provided by other 
Federal laws; however, sharing of NAC data beyond its original intent 
is currently prohibited by Section 11(x)(2)(C) of the Act. 
Congressional action to amend the Act would be required to allow data 
sharing beyond the purpose of preventing duplicate participation in 
SNAP.
    Accordingly, the Department is adding Sec.  272.1(c)(4) through 
this interim final rule to limit the disclosure of NAC data ``to only 
persons directly connected with the administration or enforcement of 
the provisions of the Food and Nutrition Act of 2008 or regulations.'' 
The regulation also requires that NAC data may only be used for the 
purpose of preventing multiple issuances of SNAP benefits.
Protecting Vulnerable Individuals
    Section 11(x)(2)(C)(iv) of the Act requires that information made 
available to the NAC be used in a manner that protects the identity and 
location of SNAP applicants and participants who are vulnerable 
individuals. Also, Section 3(m)(5)(C) of the Act and existing 
regulations at Sec.  273.3(a) exempt certain residents of shelters for 
battered women and children from the requirement that SNAP participants 
not participate as a member of more than one household or in more than 
one project area, in any month. Effectively, duplicate participation is 
permitted temporarily among this vulnerable portion of SNAP 
participants. Consistent with these existing requirements and 
reflecting the Congressional mandate in the Act to protect such 
individuals, a process to protect the identity and whereabouts of 
vulnerable individuals will be established in the NAC system, including 
location protection of individuals in verbal and written communication 
with any household associated with a vulnerable individual match. 
Therefore, the Department is adding Sec.  272.18(c)(9) which 
establishes a definition for vulnerable individuals specific to the 
NAC. This definition covers those who would be endangered by the 
dissemination of their information, including but not limited

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to, residents of shelters for battered women and children as defined in 
Sec.  272.1, residents of domestic violence shelters, or a person who 
self-identifies as fleeing domestic violence at any point during 
application, recertification, during the certification period, or when 
there is a newly added household member, regardless of the individual's 
age or gender.
    Additionally, current regulations at Sec.  273.11(g) require the 
State agency to take prompt action to ensure the former household's 
eligibility or allotment reflects the change in the household's 
composition by issuing a notice of adverse action in accordance with 
Sec.  273.13. However, any communication with a household as a result 
of a NAC match, whether written via a notice or verbal, cannot contain 
the location of the individual indicated in the match per the newly 
added Sec.  272.18(c)(3)(iii). To ensure consistency across notices, 
the new regulations at Sec.  272.18(c)(9) also describes that when a 
vulnerable individual is indicated in a positive match, State agencies 
must take steps to ensure that any information resulting from a NAC 
match, including identity and location, is protected during 
verification and resolution. The State's determination of the 
individual's status as a vulnerable individual could come from 
information reported by the household on its application or voluntarily 
disclosed during its interview, or from knowledge of the individual's 
residence at a domestic violence shelter or shelter for battered women 
and children; however, the Department does not require or expect the 
State agency to solicit this information as a part of the certification 
process. Furthermore, the Department expects State agencies to include 
processes for protecting vulnerable individuals and ensure all 
applicable staff, including front line eligibility workers, call center 
operators, fraud investigators, and claims staff--receive hands-on 
training using real-world examples of how to protect vulnerable 
individuals.
Privacy Act Implications
    The Privacy Act of 1974 (Privacy Act), as amended by the Computer 
Matching and Privacy Protection Act of 1988 and the Computer Matching 
and Privacy Protection Amendments of 1990, set the requirements for 
matching programs at 5 U.S.C. 552a(o). As a Federal system of records 
being used in a matching program, the NAC is subject to these 
requirements. The Department will ensure all requirements of the 
Privacy Act, Federal Information Security Management Act of 2002 
(FISMA), and National Institute of Standards and Technology (NIST) are 
met within the system development process, including the development of 
all documentation required for approval of the matching program by the 
Department's Data Integrity Board. Documentation will include a System 
of Records Notice (SORN), a Computer Matching Agreement (CMA), and 
multiple system-specific documents that provide details about system 
design and data security and privacy protocols. Agencies participating 
in a matching program are required to enter into a written agreement, 
referred to here as a CMA. This interim final rule includes this 
requirement in Sec.  272.18(a)(3).

IV. 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 interim final rule has been determined to be economically 
significant and has been 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 interim final rule. It follows this rule 
as an appendix. The following summarizes the conclusions of the 
regulatory impact analysis:
    The Department estimates the net reduction in Federal SNAP spending 
associated with the interim final rule to be nearly $463 million over 
the five years 2022-2026. This reduction in spending represents a 
decrease in Federal transfers (SNAP benefit payments) of approximately 
$498 million over five years due to prevention of duplicate 
participation, partially offset by increases in Federal systems costs 
related to implementing, operating, and maintaining the system ($18.3 
million) and in the Federal share of State administrative costs (nearly 
$16 million). In addition, the Department estimates an increase in the 
State share of administrative costs (nearly $16 million over five 
years) for start-up costs and costs associated with submitting data and 
following up on matches. This rule will also increase administrative 
burden on SNAP households by nearly $1.2 million over five years. 
Households identified as potential duplicate participants through NAC 
matches will need to provide verification and respond to notices and 
requests for information from State Agencies.

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 interim final rule will 
not have an impact on small entities because the rule primarily impacts 
SNAP State agencies. As part of the requirements, State agencies will 
have to develop procedures for submitting data and following up on 
matches when they occur. Small entities, such as smaller retailers, 
will not be subject to any new requirements.

Congressional Review Act

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

Unfunded Mandate Reform Act

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA) 
established 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 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 to State, local, or tribal governments in the 
aggregate, or to the private sector, of $100 million or more in any one 
year. When such a statement is needed for a rule, Section 205 of UMRA 
generally requires the Department to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, more 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule.
    This interim final rule contains no Federal mandates (under the 
regulatory provisions of Title II of UMRA) for

[[Page 59644]]

State, local and tribal governments, or the private sector, of $100 
million or more in any one year. Therefore, this rule is not subject to 
the requirements of Sections 202 and 205 of UMRA.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
No. 10.551. For the reasons set forth in the Federal Register notice, 
published June 24, 1983 (48 FR 29115), this program is excluded from 
the scope of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials.

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under Section (6)(b)(2)(B) of Executive Order 13132.
    The Department has considered the impact of the NAC and determined 
that this rule has federalism impacts. However, this rule is required 
by statute, so under Section (6)(b) of the Executive order, a 
federalism summary is not required. The Department requests comments 
from State and local officials as to the need for the NAC and any 
alternatives to the regulations proposed.

Executive Order 12988, Civil Justice Reform

    This interim 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 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 interim final rule, in accordance with 
Department Regulation 4300-004, Civil Rights Impact Analysis, to 
identify and address any major civil rights impacts the rule might have 
on minorities, women, and persons with disabilities. A comprehensive 
Civil Rights Impact Analysis (CRIA) was conducted on the interim final 
rule, including an analysis of participant data and provisions 
contained in the interim final rule. The CRIA outlines outreach, 
mitigation, and monitoring strategies to lessen any possible civil 
rights impacts. The CRIA concludes by stating FNS believes that the 
promulgation of this interim final rule will impact State Agencies and 
the way they process applications for SNAP benefits. Additionally, the 
rule may impact SNAP applicants and participants if identified by the 
NAC for duplicate participation. However, FNS finds that the 
implementation of the outreach, mitigation, and monitoring strategies 
may lessen these impacts. Outreach initiatives will include making the 
publication of the interim final rule available in alternative formats, 
including 508 compliant and in other language for persons with limited 
English proficiency, upon request. Additionally, the Department will 
work with the Office of Tribal Relations to ensure meaningful 
consultation is provided. To lessen any possible impact of the interim 
final rule, the program will implement a phased approach over a period 
of 5 years from the date of publication. If deemed necessary, FNS will 
propose further mitigation and outreach strategies 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. Additionally, other policy 
statements or actions that have substantial direct effects on one or 
more Indian Tribes, the relationship between the Federal Government and 
Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes also require 
consultation.
    This regulation does not appear to have significant tribal 
implications, so consultation is not required. Additionally, FNS 
discussed this rule at a listening session on February 12, 2020, and no 
issues with the rule were identified. No tribes have requested 
consultation to this point, but if consultation is requested, the USDA 
Office of Tribal Relations (OTR) will work with FNS to ensure quality 
consultation is provided.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR part 
1320) requires the Office of Management and Budget (OMB) to 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 
interim final rule contains information collections that are subject to 
review and approval by the Office of Management and Budget; therefore, 
FNS is requesting a new OMB Control Number 0584-NEW. Upon approval, FNS 
intends to merge a portion of these burden estimates into OMB Control 
Number: 0584-0064, Expiration Date: 2/29/2024. These burden estimates 
are contingent upon OMB approval under the Paperwork Reduction Act of 
1995. When the final rulemaking information collection request is 
approved, the Department FNS will publish a separate notice in the 
Federal Register announcing OMB's approval.
    Comments on this interim final rule must be received by December 2, 
2022. Send comments to Office of Information and Regulatory Affairs, 
OMB, Attention: Desk Officer for FNS, Washington, DC 20403, Fax: 202-
395-7285, or email to [email protected]. Please also send a 
copy of your comments to Evan Sieradzki at the Food and Nutrition 
Service, U.S. Department of Agriculture, 1320 Braddock Place, 5th 
floor, Alexandria, VA 22314. For further information please contact the 
State Administration Branch Chief, Maribelle Balbes, at the above 
address. Comments are invited on: (a) Whether the proposed collection 
of information is necessary for the proper performance of the functions 
of the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    All responses to this notification will be summarized and included 
in the request for OMB approval. All comments will also become a matter 
of public record.
    Title: Supplemental Nutrition Assistance Program: Requirement for

[[Page 59645]]

Interstate Data Matching to Prevent Multiple Issuances.
    OMB Control Number: 0584-NEW.
    Expiration Date: Not yet determined.
    Type of Request: NEW.
    Abstract: The Agriculture Improvement Act of 2018 requires the 
Secretary of Agriculture to establish an interstate data system called 
the National Accuracy Clearinghouse (NAC) to prevent multiple issuances 
of Supplemental Nutrition Assistance Program (SNAP) benefits to an 
individual by more than one State agency simultaneously in the same 
month (also known as interstate duplicate participation). FNS is 
requesting a new OMB Control Number for the requirements in this 
interim final rule. The majority of the burden requirements established 
in this rule are consistent with estimates currently approved under OMB 
Control Number 0584-0064; Expiration Date: 2/29/2024. This rule will 
modify current regulations resulting in an increase in the reporting 
burden for State agencies and Individuals/Households. Upon approval of 
the new OMB control number the Department will merge the change in 
burden hours associated with this rule with OMB Control Number 0584-
0064. Any new requirements not consistent with currently approved 
activities under OMB Control Number 0584-0064 are denoted as such. This 
interim final rule incorporates best practices and lessons learned from 
the NAC pilot. The NAC pilot is a shared data clearinghouse that allows 
States to check whether a SNAP applicant is receiving SNAP benefits in 
another pilot State in real or near-real time. Five States participate 
in the NAC pilot: Alabama, Florida, Georgia, Louisiana, and 
Mississippi. The NAC pilot program began exploring the prevalence of 
duplicate participation and the feasibility of a system to prevent it 
in July 2013. NAC pilot data matching operations began in June 2014 and 
continue today in Alabama, Florida, Georgia, and Mississippi.
    In the NAC pilot, the State agencies of Alabama, Florida, Georgia, 
Louisiana, and Mississippi each submit a file daily of its entire SNAP 
caseload, which is integrated into a list of all SNAP participants 
receiving benefits in the participating States. State agencies query 
the system when they receive SNAP applications or add new members to a 
household. State agencies then check the new individuals against the 
NAC pilot's list of active SNAP participants in other States. If an 
applicant is identified as receiving benefits in another NAC pilot 
State, that State is contacted by the matching State agency responsible 
for administering SNAP benefits to close the individual's case. Once 
the applicant's out-of-State case is closed, the State receiving the 
application can move forward with the certification process. If the 
applicant is checked against the NAC pilot's list of active SNAP 
participants in other States and the applicant is not identified as 
receiving SNAP benefits elsewhere, then the State proceeds with the 
certification process.
    In addition to screening applicants, the NAC pilot also notifies 
State agencies when an active member of its caseload is simultaneously 
active in another State. Upon receiving this information, NAC pilot 
States issue a Request for Contact to the individual's household, 
informing the household of the match and requesting proof of residency 
and proof of closure of the out-of-state case identified by the match. 
Regulations at Sec.  273.12(c)(9) describe how State agencies must 
respond to information like a NAC pilot data match received during the 
certification period. The existing regulations prevent States from 
acting on NAC data matches before their next scheduled contact with the 
household, so States participating in the NAC pilot operate under an 
administrative waiver (Sec.  272.3(c); 17(b)(1) of the Food and 
Nutrition Act of 2008). The waiver allows the State to issue a Request 
for Contact to the household upon receiving a pilot NAC data match 
regarding an active member of its caseload. In lieu of a Request for 
Contact, the interim final rule will instead use a notice of match 
results or, if there is no possibility of adverse action, verbally 
request verification of information in the State with the new 
household, recertifying household, or when there is a newly added 
household member, and note that communication in the casefile; the 
notice of match results will serve the same purpose as a Request for 
Contact. If an individual is indicated in a positive match during the 
certification period, the State agency will instead issue a combined 
notice of match results and notice of adverse action. Each of these 
activities serve similar purposes and only vary depending on when the 
match is discovered. For example, a combined notice of match results 
and notice of adverse action could not be issued to an individual 
during the application or recertifying process, because there is not 
yet an active case for the State to take adverse action upon. 
Therefore, when a notice is sent for a match discovered during 
application, recertification, or for a newly added household member the 
activity will be known as notice of match results. When a notice is 
sent for a match discovered during the certification period, the 
activity will be known as a combined notice of match results and notice 
of adverse action.
    This interim final rule requires SNAP State agencies to provide 
information to the NAC regarding individuals or households receiving 
SNAP benefits in their States at Sec.  272.18(b)(1) and to screen all 
Individuals/Households known as SNAP Program applicants using Social 
Security numbers, date of birth, and name at Sec.  272.18(b)(3), to 
ensure they are not already receiving benefits in another State. Per 
Sec.  272.18(b)(4) State agencies are also required to submit to the 
NAC participant ID, and indicate if the individual is considered a 
vulnerable individual using the vulnerable individual flag if the State 
becomes aware of the status during the certification process and the 
information is available in the State's SNAP eligibility system. Under 
Sec. Sec.  272.18(c)(3) and (c)(5), 273.13(a), 273.2(f)(1) and (2), and 
273.12(c)(3)(iv) State agencies are required to take appropriate action 
with respect to each indication from the NAC that an individual is 
receiving SNAP benefits from more than one State agency simultaneously. 
This appropriate action includes either a notice of match results or, 
verbal indication (if there is no possibility of adverse action), or a 
combined notice of match results and notice of adverse action to verify 
information after a match, as appropriate. Following OMB approval of 
this NEW information collection under the Paperwork Reduction Act, the 
burden hours described below will be merged with the existing OMB 
control number 0584-0064, expiration date 2/29/2024. While the agency 
anticipates roughly 32 State agency respondents to be covered in this 
collection due to the phased approach for system operation, we are 
requesting 53 total respondents to cover full implementation.
First Year (One-Time Burden)
State Agencies
    The one-time burden for this interim final rule includes an 
increase of 208,555 hours and 10,706 responses for State agency 
activities associated with set up, training, and computer matching 
agreements for the 53 State agencies participating in the NAC. Under 
Sec.  272.18(b)(1), 53 State agencies must set-up a new system to 
report their caseloads to the NAC. FNS estimates this will produce 
approximately 1 response per State agency for a total of 53 responses 
total. FNS also estimates it

[[Page 59646]]

will take each State agency approximately 1,920 hours for a total of 
101,760 annual burden hours. This program change reflects new one-time 
burden of 1,920 hours for each State Agency to reflect the time 
associated with the set-up of a new system. This burden is informed by 
the evaluation report of the NAC pilot outlining State start up time 
and costs. The Department assumes the set-up of a new system will 
require four full-time staff for approximately twelve weeks. Depending 
on system design, set-up can include arranging an automated daily 
export of active participants to send to the NAC and updating software 
that manages workflows for certification, recertification, as well as 
the addition of new household members to query the NAC before 
certifying benefits.
    Under Sec.  272.18(b)(1), approximately 200 eligibility workers 
from each of the 53 State agencies that participate in the NAC will 
receive one time training on how to properly incorporate the system 
into existing certification and recertification processes. FNS 
estimates this will produce approximately 200 workers per State agency 
for a total of 10,600 workers. FNS also estimates it will take each 
State agency approximately 10 hours to train an eligibility worker for 
a total of 106,600 new one-time burden hours. This includes general 
training on business practices for the NAC as well as the NAC system, 
testing and troubleshooting, and authentication for eligibility workers 
to access the system.
    Under Sec.  272.12(b), 53 State agencies will enter into a State 
agency computer matching agreement with FNS in order to participate in 
the NAC. FNS estimates this will produce approximately 1 response per 
State agency for a total of 53 responses. FNS estimates it will take 
approximately 15 hours for each State agency to review, complete any 
necessary draft changes, and submit a computer matching agreement to 
FNS for a total of 795 burden hours. The total combined new one-time 
burden hours for State agencies is 208,555 hours.
Ongoing Burden
    Following approval of OMB control 0584-NEW, burden in the State 
Agencies and Individual/Households sections below will be merged with 
OMB Control Number 0584-0064. Burden that will remain with OMB control 
number 0584-NEW will be denoted as such.
State Agencies
    The establishment of the NAC includes State agencies uploading 
their SNAP caseload data to the NAC. Under Sec.  272.18(b)(1) and (2) 
and (c)(4), 53 out of 53 State agencies will submit their SNAP 
caseloads to the NAC once per working day. Due to the establishment of 
this system, State agencies have never uploaded their caseload to the 
NAC. As there are approximately 261 working days in a year, FNS 
estimates 261 annual responses per State agencies for estimated 13,833 
total annual responses. The upload of this information is to ensure 
that State agencies can check their caseloads against the caseloads of 
other State agencies in real or close to real time. FNS estimates 1 
hours for each State agency to reflect the time associated with 
uploading their caseloads to the NAC for the first time. This 
represents an additional annual burden of 13,833 hours for State 
agencies collectively. This burden will be recorded under OMB control 
number 0584-NEW.
    Upon implementation of the NAC, State agencies will be required to 
query individual case files of those who are applying, recertifying, or 
are a newly added household member against the NAC. Under Sec.  
272.18(c)(2), all 53 State agencies will query applicants against the 
NAC. FNS estimates approximately 340,435.55 total annual responses per 
State agency will be screened for a total of 18,043,084.00 estimated 
total annual responses. It will take approximately 0.0167 hours (1 
minute per State agency) for a total annual burden estimate of 
300,718.07 ongoing burden hours. This burden will remain under OMB 
control number 0584-NEW.
    Under Sec. Sec.  272.18(c)(3) and (5), 273.12(c)(3)(iv), and 
273.2(f)(1) and (2), 53 State agencies will be required to verify 
information following a positive NAC match. FNS estimates this will 
produce approximately 4,611.57 responses per State agency for a total 
annual number of 244,413.10 NAC matches for State agencies to 
communicate and initiate action upon. This estimate is based on the NAC 
pilot evaluation estimates of 1.355% of initial applications for that 
year resulting in a positive match. FNS also estimates it will take 
each State agency approximately 0.1002 hours (6 minutes per State 
agency) for a total of 24,490.19 on-going annual burden hours. While 
State agencies that rely primarily on manual processes may result in a 
greater burden, this estimate is informed by the fact that the 
Department is strongly recommending the use of automated processes, 
including automated emails to resolve actions among States, as a lesson 
learned from the NAC pilot evaluation. Verification of information 
includes the use of documentation or contact with applicant or other 
State agency to confirm the accuracy of statements or additional 
information as needed. It can also include communicating action to 
resolve a match, final resolution, and additional communication with 
the household as needed. The previously approved burden for this 
activity is 29,302 burden hours approved under OMB control number 0584-
0064 expiration 2/29/2024. This program change reflects an increase of 
24,490.19 hours to reflect the time associated with verification of 
information and communication between State agencies and individuals/
households. While this is an increase in burden for State agencies, the 
Department believes that there were components of the manual process 
for the monitoring of duplicate participation that was not fully 
accounted for in previous estimates. This increase in burden is a 
combination of more accurate estimation and increased burden. While 
components of this interim final rule, such as the daily upload of 
active SNAP participants, does require more effort on the part of State 
agencies, it is also reducing the previously manual process of checking 
for duplicate participation and reallocating the burden from households 
to State agencies to follow up on matches and resolve instances of 
duplicate participation.
    Under Sec.  272.18(c)(3)(iii), 53 State agencies will be required 
to issue a notice of match results to an individual/household following 
a positive NAC match on an applicant, recertifying individual, or a 
newly added household member. These estimates are based on data 
outlined in the NAC Pilot Evaluation. FNS estimates that a notice of 
match results-will produce approximately 7,731 responses per State 
agency for a total annual number of 409,709.52 notice of match results. 
FNS also estimates it will take each State agency approximately .0501 
hours (3 minutes per State agency) for a total of 20,526.45 ongoing 
annual burden hours. The previously approved burden for this activity 
is 24,015.13 burden hours approved under OMB 0584-0064 expiration 2/29/
2024. This program change reflects an increase of 20,526.45 hours to 
reflect the time associated with issuing a Notice of Match Results.
    Under Sec. Sec.  272.18(c)(5), 273.12(c)(3)(iv)(A), and 
273.13(a)(2), 53 State agencies will be notified of a positive match 
for an individual during the certification period and will be required 
to issue a combined notice of match results and notice of adverse 
action. All 53 State agencies will be required to issue this combined 
notice for a match on an individual during the

[[Page 59647]]

certification period prior to a change in SNAP benefit allotment to a 
participant as a result of a match found through the NAC. These 
estimates are based on data outlined in the NAC Pilot Evaluation. FNS 
estimates this will produce approximately 7,730.37 responses per State 
agency for a total annual number of 409,709.52 combined notice of match 
results and notice of adverse action. FNS also estimates it will take 
each State agency approximately .0501 hours (3 minutes per State 
agency) for a total of 20,526.45 ongoing annual burden hours to send 
this notice. The previously approved burden for this activity is 
72,773.21 burden hours approved under OMB control number 0584-0064 
expiration 2/29/2024. This program change reflects an increase of 
20,526.45 hours to reflect the time associated with issuing a notice of 
adverse action.
Individuals/Households Burden
    Under Sec. Sec.  272.18(c)(3) and (5), 273.12(c)(3)(iv), and 
273.2(f)(1) and (2) approximately 244,413.1 Individuals/Households will 
aid in verification of information following a positive NAC match. FNS 
estimates this will produce approximately 1 response per individual/
household for an annual total of 244,413.1 responses. FNS also 
estimates it will take each Individual/Household approximately .0668 
hours (4 minutes) for a total of 16,326.79 ongoing annual burden hours. 
This is based on the assumption from the NAC pilot that the Individual/
Household assistance in verification occurred within existing State 
business processes, such as the interview, and did not require an 
entirely new process. The previously approved burden for this activity 
is 34,289.58 burden hours approved under OMB control number 0584-0064 
expiration 2/29/2024. This program change reflects an increase of 
16,326.79 burden hours for this activity.
    Under Sec.  272.18(c)(3)(ii), 409,709.52 Individuals/Households 
will be required to respond to a notice of match results issued by the 
State agency following a positive NAC match. FNS estimates this will 
produce approximately 1 response per household for a total of 409,710 
responses annually. FNS also estimates it will take each Individual/
Household approximately .0835 hours (5 minutes) for a total of 
34,210.75 ongoing annual burden hours. The previously approved burden 
for this activity is 32,020.16 burden hours approved under OMB control 
number 0584-0064 expiration 2/29/2024. This program change reflects an 
increase of 34,210.75 burden hours for this activity.
    Under Sec. Sec.  272.18(c)(5), 273.12(c)(3)(iv)(A), and 
273.13(a)(2), 409,709.52 Individuals/Households will be required to 
respond to a combined notice of match results and notice of adverse 
action following a positive NAC match on an active participant. FNS 
estimates this will produce approximately 1 response per household for 
a total of 409,70 responses annually. FNS also estimates it will take 
each Individual/Household approximately .0853 hours (5 minutes) for a 
total of 34,210.75 ongoing annual burden hours. The previously approved 
burden for this activity is 97,030.92 burden hours approved under OMB 
control number 0584-0064 expiration 2/29/2024. This program change 
reflects an increase of 34,210.75 burden hours for this activity.
Reporting
    Affected public: State, Local or Tribal agencies, Individuals/
Households.
    Estimated Number of Respondents: 53 State Agencies, 5 State 
agencies, 1,000 eligibility workers for NAC pilot training, 10,600 
eligibility workers for NAC training, and 1,148,087.62 individuals/
households.
    Regulation Section: 7 CFR 272.18, 273.13.
    Estimated Total annual responses: Ongoing 20,205,993.28.
    Estimated Total Annual Burden Hours: Ongoing 881,952.44.
    Estimated Number of Responses per Respondent: 17.43.

[[Page 59648]]



----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                           PRA
                                                                                                                                                                                        violation
                                                                                                                                                                                         current
                                                    Estimated     Estimated   Estimated total   Estimated    Estimated   Hourly cost                      Fringe                        burden in   Previously   Difference   Difference
          Regulation            Burden activity     number of     responses        annual       hours per      total          to      Estimated cost   benefits  (x      With fully        use       approved      due to       due to
                                                   respondents       per         responses       response      annual     respondent   to respondent       0.33)        loaded wages     without   under 0584-    program     adjustment
                                                                  respondent                                   hours                                                                       OMB         0064       changes
                                                                                                                                                                                         control
                                                                                                                                                                                           No.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                REPORTING
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           State Agency Burden
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Startup:
    72.18(b)(1)..............  Set-up for                 53.00         1.00            53.00     1,920.00   101,760.00       $11.33   $1,152,940.80     $380,470.46    $1,533,411.26  ..........  ...........   101,760.00  ...........
                                system to
                                report caseload
                                to NAC.
    272.18(b)(1).............  Training               10,600.00         1.00        10,600.00        10.00   106,000.00        11.33    1,200,980.00      396,323.40     1,597,303.40  ..........  ...........   106,000.00  ...........
                                Eligibility
                                workers across
                                53 States to
                                use NAC System.
    272.12(b)................  State Agency               53.00         1.00            53.00        15.00       795.00        11.33        9,007.35        2,972.43        11,979.78  ..........  ...........       795.00  ...........
                                matching system
                                agreements.
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Startup Subtotal.....  ................       10,653.00         1.00        10,706.00        19.48   208,555.00        11.33    2,362,928.15      779,766.29     3,142,694.44  ..........  ...........  ...........  ...........
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing:
    272.18(b)(1),              NAC--Data Upload           53.00       261.00        13,833.00         1.00    13,833.00        11.33      156,727.89       51,720.20       208,448.09  ..........  ...........    13,833.00  ...........
     272.18(b)(4), 272.18(c
     )(3).
    272.18(c)(2).............  NAC--NAC Query..           53.00   340,435.55    18,043,084.00       0.0167   300,718.07        11.33    3,407,135.70    1,124,354.78     4,531,490.47  ..........  ...........   300,718.07  ...........
    272.18(c)(3),              NAC--Verificatio           53.00     4,611.57       244,413.10       0.1002    24,490.19        11.33      277,473.88       91,566.38       369,040.26  ..........    29,302.00    24,490.19  ...........
     273.2(f)(1)(2),            n of
     272.18(c)(5),              questionable/
     273.12(c)(3)(iv).          unclear
                                information
                                following a
                                positive NAC
                                match.
    272.18(c)(3)(iii)........  NAC--Notice of             53.00     7,730.37       409,709.52       0.0501    20,526.45        11.33      232,564.65       76,746.33       309,310.98  ..........    24,015.13    20,526.45  ...........
                                Match Results.
    272.18(c)(5),              NAC--Combined              53.00     7,730.37       409,709.52       0.0501    20,526.45        11.33      232,564.65       76,746.33       309,310.98  ..........    72,773.21    20,526.45  ...........
     273.12(c)(3)(iv)(A),       Notice of Match
     273.13(a)(2).              Results and
                                Notice of
                                Adverse Action.
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Ongoing Subtotal.....  ................           53.00   360,768.85    19,120,749.14       0.0199   380,094.15        11.33    4,306,466.75    1,421,134.03     5,727,600.78  ..........  ...........  ...........  ...........
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            State Agency       ................           53.00   360,970.85    19,131,455.14       0.0308   588,649.15        11.33    6,669,394.90    2,200,900.32     8,870,295.22  ..........  ...........  ...........  ...........
             Grand Total.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Household burden
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing:
    272.18(c)(3),              Verification of       244,413.10         1.00       244,413.10       0.0668    16,326.79         7.25      118,369.26       39,061.86       157,431.12  ..........    34,289.58    16,326.79  ...........
     273.2(f)(1)(2),            questionable/
     272.18(c)(5),              unclear
     273.12(c)(3)(iv).          information
                                following
                                positive NAC
                                match.
    272.18(c)(5),              NAC--Notice of        409,709.52         1.00       409,709.52       0.0835    34,210.75         7.25      248,027.90       81,849.21       329,877.11  ..........    32,020.16    34,210.75  ...........
     273.12(c)(3)(iii).         Match Results.

[[Page 59649]]

 
    272.18(c)(5), 273.13(a)..  NAC--Combined         409,709.52         1.00       409,709.52       0.0835    34,210.75         7.25      248,027.90       81,849.21       329,877.11  ..........    97,030.92    34,210.75  ...........
                                Notice of Match
                                Results and
                                Notice of
                                Adverse Action.
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Household Ongoing      ................    1,063,832.14         1.00     1,063,832.14       0.0797    84,748.29         7.25      614,425.07      202,760.27       817,185.34  ..........  ...........  ...........  ...........
         Subtotal.
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Reporting Grand    ................    1,074,485.14        18.81    20,205,993.28   0.04364806   881,952.44  ...........    9,646,748.12    3,183,426.88    12,830,175.00  ..........   289,431.00   673,397.44  ...........
             Total.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 59650]]

E-Government Act Compliance

    The Department is committed to complying with the E-Government Act, 
2002 to promote the use of the internet and other information 
technologies to provide increased opportunities for citizen access to 
government information and services, and for other purposes. A Privacy 
Impact Assessment was completed by the FNS program office and privacy 
and information security teams concurrent with systems Authorization to 
Operate collaboration.

List of Subjects

7 CFR Part 272

    Civil rights, Grant programs-social programs, Reporting and 
recordkeeping requirements, Supplemental Nutrition Assistance Program.

7 CFR Part 273

    Administrative practice and procedure, Grant programs-social 
programs, Reporting and recordkeeping requirements, Supplemental 
Nutrition Assistance Program.

    For the reasons set out in the preamble, 7 CFR parts 272 and 273 
are amended as follows:

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

0
1. The authority citation for 7 CFR part 272 continues to read as 
follows:

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

0
2. In Sec.  272.1, add paragraph (c)(4) to read as follows:


Sec.  272.1  General terms and conditions.

* * * * *
    (c) * * *
    (4) Disclosure of information obtained from the National Accuracy 
Clearinghouse (NAC), as described in Sec.  272.18, shall be restricted 
to persons directly connected with the administration or enforcement of 
the provisions of the Food and Nutrition Act of 2008, as amended, or 
SNAP regulations in this subchapter. Information obtained from the NAC 
may only be used for the purpose of preventing multiple issuances of 
SNAP benefits to an individual by more than one State agency in a given 
month. Recipients of information from the NAC must adequately protect 
the information against disclosure to unauthorized persons and use for 
purposes not specified in this paragraph (c)(4).
* * * * *

0
3. Add Sec.  272.18 to read as follows:


Sec.  272.18  National Accuracy Clearinghouse.

    (a) General. (1) FNS shall establish an interstate data system, 
known as the National Accuracy Clearinghouse (NAC) to prevent 
individuals from receiving SNAP benefits in more than one State in a 
given month and shall institute processes and procedures for 
interacting with the system to prevent duplicate participation and 
assist households with disenrollment.
    (2) Each State agency that administers SNAP shall participate in 
the NAC data matching system. State agencies shall take action on 
matches from the NAC to ensure participants are only receiving benefits 
in the State in which they reside and are otherwise eligible to receive 
them. State agencies are encouraged to integrate and automate NAC 
processes into SNAP eligibility systems and existing workflows to the 
fullest extent possible.
    (3) Each participating State agency shall enter into a written 
computer matching agreement with FNS consistent with the requirements 
for matching programs in the Privacy Act of 1974, as amended by the 
Computer Matching and Privacy Protection Act of 1988 and the Computer 
Matching and Privacy Protection Amendments of 1990 (5 U.S.C. 552a(o)), 
prior to participating in the NAC.
    (b) States' reporting requirements. (1) State agencies shall 
provide information for each active SNAP participant to the NAC 
according to procedures and formats established by FNS. For the 
purposes of the NAC, an active SNAP participant is defined as an 
individual who is approved to receive benefits for the benefit month in 
which the State agency is uploading the data. State agencies shall 
establish procedures to ensure the information provided is accurate and 
only includes active participants.
    (2) Information provided to the NAC will be used for matching by 
other State agencies also matching with the NAC. Each State agency 
shall provide, once per working day in accordance with FNS procedures, 
the NAC data matching elements and other information as noted in 
paragraphs (b)(3) and (4) of this section for each active SNAP 
household member.
    (3) For each individual, State agencies must report the following 
identifying information, referred to as NAC data matching elements, to 
the NAC: name, Social Security number, and date of birth. State 
agencies must transmit the NAC data matching elements to the system per 
the process specified by FNS. The NAC data matching elements are used 
by the NAC to determine the existence of positive matches.
    (4) State agencies shall also report the following information: 
participant ID and, when applicable, a vulnerable individual flag. All 
information shall be reported in accordance with procedures provided by 
FNS. State agencies must comply with 7 CFR 273.6 in instances where a 
Social Security number is not available.
    (i) A vulnerable individual flag is used to identify when 
precautions must be taken to protect the individual's information in 
the event of a match. A vulnerable individual can self-identify during 
the application or recertification process. State agencies also have 
the discretion to determine whether an individual meets the vulnerable 
individual definition in paragraph (a)(9) of this section if the 
individual does not self-identify.
    (ii) A participant ID is the State agency's unique identifier for a 
participant or applicant.
    (5) State agencies shall maintain the security, privacy, and 
accuracy of information submitted to the NAC, including ensuring that 
information provided to the NAC follows the standards and procedures 
provided by FNS and only includes active SNAP participants.
    (c) Use of match data. (1) NAC queries are conducted by the State 
agency by submitting the NAC data matching elements described in 
paragraph (b)(3) of this section for an individual, per the process 
specified by FNS. The system will compare the query against the daily 
upload of active SNAP participants provided to the NAC by the State 
agencies to determine if an individual is currently receiving SNAP 
benefits in another State. The NAC will indicate a positive match when 
the NAC data matching elements submitted for comparison are the same as 
those in one or more records in the NAC.
    (2) Prior to conducting a NAC query at application, 
recertification, or the addition of a household member, the State 
agency shall follow verification procedures described in 7 CFR 
273.2(f)(1)(v) for Social Security numbers, (f)(1)(vi) for residency, 
and (f)(1)(vii) for identity. After following these verification 
procedures, State agencies shall conduct a NAC query on the individual 
applying, recertifying, or being added to a household.
    (3) When a State agency receives a positive match from a NAC query 
at application, recertification, or when adding a household member:
    (i) The State agency shall have 10 days from the date the match is 
received to initiate action to resolve the match as described in 
paragraph (c)(3)(ii) of this section and notify the other State agency 
of the initiated action.
    (ii) The State agency must resolve the match to determine the 
appropriate

[[Page 59651]]

actions to take on the case. To resolve a match, State agencies may use 
information known to the State agency, must verify any questionable 
information in accordance with 7 CFR 273.2(f)(2), and must notify the 
individual of the match. States may not take any action to deny, 
terminate, suspend, or reduce SNAP benefits based on information 
received from the NAC until the information has been verified by the 
State agency and the individual has been provided notice of the match 
and an opportunity to respond to the notice, in accordance with Sec.  
272.12(c)(1).
    (iii) Any communication or notice resulting from a NAC match must 
not include the location of the individual(s) identified in the match 
to protect vulnerable individuals.
    (A) If the State agency needs more information to resolve the match 
or if the information it has could lead to a denial of benefits or 
other adverse action on the case, the State agency shall provide a 
written notice of match results that clearly explains what information 
is needed from the household and the consequences of failing to respond 
within the timeline provided in the notice. The notice must comply with 
this paragraph (c)(3)(iii) and Sec.  272.4(b) bilingual requirements 
and must afford at least 10 days from the date the notice is mailed for 
a response.
    (B) If the State agency is able to resolve the match and there is 
no potential for adverse action, a written notice of match results is 
not required. However, the State agency must provide a verbal 
notification of a match, which must be documented in the case file.
    (iv) After the State agency has determined the appropriate 
disposition of the case, it shall promptly share the resolution 
information with the other State agency.
    (v) The State agency must follow timeliness standards set forth in 
7 CFR 273.2(g) and 273.14(d) for normal processing, and 7 CFR 273.2(i) 
for expedited service, as applicable. A lack of timely action or 
communication required by paragraph (c)(3)(i) of this section between 
the State agencies must not delay the determination of benefits for an 
individual.
    (4) The NAC shall automatically conduct bulk matches on a monthly 
basis (``monthly bulk matches'') of the NAC data matching elements 
provided by all participating State agencies from the daily upload of 
active SNAP participants to discover existing duplicate participation 
and shall provide notifications to State agencies when matches are 
found for participants in their State.
    (5) If a State agency receives information related to a NAC data 
match during the certification period for an individual currently 
participating in SNAP in the State, it must pursue clarification and 
verification by following the unclear information procedures provided 
in 7 CFR 273.12(c)(3)(iv) to provide notice and an opportunity to 
contest the information received before taking any adverse action. 
Information related to a NAC data match that may be received during the 
certification period includes:
    (i) Notification of data matches directly from the NAC indicating 
that an active SNAP participant is receiving benefits in another State; 
and
    (ii) Communication from another State agency based on a NAC data 
match indicating that an active SNAP participant is part of an 
applicant household or was added to an active household in another 
State.
    (6) State agencies shall report and document instances in the 
household's case file where there is a match and the actions taken to 
resolve it per existing State operations.
    (7) State agencies shall provide for the establishment and 
collection of claims as appropriate. The State agency that fails to 
meet the requirements in paragraph (c)(3) of this section or 
requirements at 7 CFR 273.12(c)(3)(iv) will be considered responsible 
for any duplicate participation that occurs. That State agency shall be 
responsible for the establishment and collection of the claim in 
accordance with regulations at 7 CFR 273.18.
    (8) Information obtained from the NAC is subject to the disclosure 
provisions in Sec.  272.1(c)(4). State agencies shall not use 
information obtained from the NAC for any purpose other than to prevent 
duplicate participation.
    (9) State agencies shall establish a process to prevent the 
disclosure of any location information received from the NAC about any 
SNAP applicant or participant who is considered a vulnerable 
individual. A vulnerable individual, for the purpose of the NAC, 
includes but is not limited to, those who would be endangered by the 
dissemination of their information, regardless of their age or gender, 
such as a resident of a shelter for battered women and children as 
described in 7 CFR 271.2, a resident of a domestic violence shelter, or 
a person who self-identifies as fleeing domestic violence at any point 
during application, recertification, certification, or addition of a 
new household member. State agencies shall take steps to ensure that 
any information resulting from a NAC match, including identity and 
location, is protected during verification or resolution when a 
vulnerable individual is indicated in a positive match. The change in 
the household composition resulting from the move of the vulnerable 
individual must be communicated to the former household via a notice of 
adverse action per 7 CFR 273.11(g).

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

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

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

0
5. In Sec.  273.12:
0
a. Revise the last sentence of paragraph (c)(3)(i) introductory text.
0
b. Add a sentence before the last sentence of paragraph (c)(3)(iii) 
introductory text.
0
c. Add paragraph (c)(3)(iv).
    The revision and additions read as follows:


Sec.  273.12  Reporting requirements.

* * * * *
    (c) * * *
    (3) * * *
    (i) * * * The procedures for unclear information regarding matches 
described in Sec.  272.18 of this chapter are found in paragraph 
(c)(3)(iv) of this section.
* * * * *
    (iii) * * * If a State receives information from a match described 
in Sec.  272.18 of this chapter, the State shall follow up with a 
combined notice of match results and adverse action as described in 
paragraph (a)(2) of this section. * * *
    (iv) If a State agency receives unclear information during the 
certification period from a match described in Sec.  272.18 of this 
chapter, the State agency shall initiate action to resolve the match 
and communicate with the other State agency within 10 days of receipt 
of the match notification, in accordance with paragraphs (c)(3)(iv)(A) 
and (B) of this section.
    (A) The State agency that receives a NAC data match shall provide 
to the household a notice of match results and notice of adverse action 
as described at Sec.  273.13. The notice must clearly explain what 
information is needed from the household and the consequences of not 
responding in a timely manner as described at paragraphs (c)(3)(iii)(A) 
and (B) of this section. Any communication with the household, 
including a written notice, must not include the location of the

[[Page 59652]]

individual(s) identified in a match and must follow bilingual 
requirements at Sec.  272.4(b) of this chapter. State agencies must 
also follow regulations at Sec.  272.18(c)(9) of this chapter for those 
who are considered vulnerable individual. Consistent with verification 
standards in Sec.  273.2(f), the State agency must give the household 
at least 10 days to provide required verification.
    (B) The State agency shall communicate with the other State agency 
to inform them they have initiated action to resolve the match. After 
the State agency has determined the appropriate disposition of the 
case, they shall promptly share the resolution information with the 
other State agency.
* * * * *

0
6. In Sec.  273.13, add a sentence to the end of paragraph (a)(2) to 
read as follows:


Sec.  273.13  Notice of adverse action.

    (a) * * *
    (2) * * * A notice of adverse action that combines a notice of 
match results received through a National Accuracy Clearinghouse (NAC) 
computer match shall meet the requirements in Sec.  273.12(c)(3)(iv) 
and Sec.  272.18(c)(5) of this chapter.
* * * * *

Cynthia Long,
Administrator, Food and Nutrition Service.

    Note: The following appendix will not appear in the Code of 
Regulations.

Appendix A--Supplemental Nutrition Assistance Program: Requirement for 
Interstate Data Matching To Prevent Multiple Issuances

I. Summary of Impacts

    The Department estimates the net reduction in Federal 
Supplemental Nutrition Assistance Program (SNAP) spending associated 
with the interim final rule establishing a nationwide National 
Accuracy Clearinghouse (NAC) to be approximately $463 million over 
the five years 2022-2026. This reduction in spending represents a 
decrease in Federal transfers (SNAP benefit payments) of 
approximately $498 million over five years due to prevention of 
duplicate participation, partially offset by increases in Federal 
systems costs related to implementing, operating, and maintaining 
the system ($18.3 million) and in the Federal share of State 
administrative costs (nearly $16 million). In addition, the 
Department estimates an increase in the State share of 
administrative costs (nearly $16 million over five years) for start-
up costs and costs associated with submitting data and following up 
on matches. This rule will also increase administrative burden on 
SNAP households by $1.2 million over five years. Households 
identified as potential duplicate participants through NAC matches 
will need to provide verification and respond to notices and 
requests for information from State agencies.
    The impacts of the interim final rule are summarized in Table 1, 
below; SNAP benefit payments are categorized as transfers in the 
accounting statement that follows.

                                                               Table 1--Summary of Impacts
                                                                [In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              FY 2022         FY 2023         FY 2024         FY 2025         FY 2026         Total *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers--SNAP benefit spending:
    Reduction in SNAP benefit payments **...............           $0.00          $43.35         $106.60         $161.43         $186.12         $497.50
    Discounted Transfer Stream:
        7 percent.......................................            0.00           37.86           87.02          123.15          132.70          380.74
        3 percent.......................................            0.00           40.86           97.55          143.43          160.55          442.39
Costs--Federal and State Administrative Costs and
 Household Burden:
    State Administrative Costs--Implementation..........            1.68            2.24            2.24            1.26            0.00            7.42
    State Administrative Costs--Ongoing.................            0.00            1.60            4.80            8.00           10.15           24.55
        Federal Systems Costs...........................            4.36            3.46            3.46            3.56            3.46           18.31
        Household Burden................................            0.00            0.14            0.27            0.38            0.41            1.20
            Total.......................................            6.04            7.44           10.77           13.20           14.02           51.48
    Discounted Cost Stream:.............................
        7 percent.......................................            5.64            6.50            8.79           10.07           10.00           41.01
        3 percent.......................................            5.86            7.01            9.86           11.73           12.10           46.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Sums may not total due to rounding.
** Reduction in SNAP benefit payments are prorated for States during their first year of implementation to reflect anticipated staggered implementation
  throughout each fiscal year.

    As required by OMB Circular A-4, in Table 2 below, the 
Department has prepared an accounting statement showing the 
annualized estimates of benefits, costs, and transfers associated 
with the provisions of this interim final rule.

                                          Table 2--Accounting Statement
----------------------------------------------------------------------------------------------------------------
                                   Primary estimate ($)     Year dollar     Discount rate (%)    Period covered
----------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized...................  N/A.................               2022                  7       FY 2022-2026
    Monetized ($millions/year)...  N/A.................               2022                  3
----------------------------------------------------------------------------------------------------------------
Qualitative--This rule will result in the identification and prevention of actual and potential duplicate
 participation in SNAP nationally, thereby improving program integrity..
----------------------------------------------------------------------------------------------------------------
Costs:
    Annualized...................  10.00...............               2022                  7      FY 2022-2026.
    Monetized ($millions/year)...

[[Page 59653]]

 
10.17............................  2022................                  3
----------------------------------------------------------------------------------------------------------------
Federal costs of implementing and maintaining NAC; State administrative expense for implementing NAC matches,
 staff training on new procedures, notices, and verification of circumstances for identified potential matches;
 household administrative burden..
----------------------------------------------------------------------------------------------------------------
Transfers:
    Annualized...................  -92.86..............               2022                  7       FY2022-2026.
    Monetized ($millions/year)...  -$96.60.............               2022                  3
----------------------------------------------------------------------------------------------------------------
Reduced SNAP benefit payments due to the prevention of duplicate participation..................................
----------------------------------------------------------------------------------------------------------------

II. Section-by-Section Analysis

Background

    SNAP is a key component of the social safety net in the United 
States. Ensuring that SNAP participants do not receive benefits in 
more than one State in the same month is essential to safeguarding 
program integrity. Under existing SNAP rules, an individual may not 
receive SNAP benefits from more than one State agency for the same 
benefit month (except certain victims of domestic violence). 
Regulations require that a household live in the State where it 
files a SNAP application and stipulate that no individual may 
participate as a member of more than one household or in more than 
one project area (e.g., a State) in any month. Program regulations 
also require State agencies verify applicants' residency before 
approving their applications.
    Current SNAP rules also require State agencies to match new 
applicants against the existing SNAP caseload within the State at 
the time of certification to prevent dual participation, but do not 
require State agencies to check for dual participation across State 
lines. This rule requires State SNAP agencies to expand the check 
for dual participation to all States' SNAP caseloads.

The NAC Pilot

    Beginning in 2013, the State of Mississippi established the NAC 
pilot that was funded by the Office of Management and Budget's (OMB) 
Partnership Fund for Program Integrity Innovation.\1\ The pilot was 
designed to test the feasibility of improving upon existing 
processes by establishing a real-time interstate data matching 
system to prevent duplicate participation. NAC pilot data matching 
operations began in June 2014 and consisted of five participating 
States: Alabama, Florida, Georgia, Louisiana, and Mississippi. The 
NAC pilot is still in operation at the time of this interim final 
rule under administrative waivers. However, there are only four 
States still operating the NAC pilot under administrative waivers: 
Alabama, Florida, Georgia, and Mississippi.
---------------------------------------------------------------------------

    \1\ https://obamawhitehouse./archives.gov/sites/default/files/omb/memoranda/2011/m11-01.pdf.
---------------------------------------------------------------------------

    As part of the pilot, each participating State submits a daily 
file of its entire SNAP participant caseload, which is integrated 
into a list of all SNAP participants receiving benefits in the 
participating pilot States. State agencies query the system when 
they receive SNAP applications or add new members to an existing 
household during recertification. The NAC pilot checks these 
individuals against the list of active SNAP participants in the 
other pilot States. When a State identifies that an applicant is 
receiving benefits in another State, the State agency staff 
responsible for administering SNAP in the applicant State contacts 
the State where the applicant is already receiving benefits to close 
the individual's case or remove the individual from the household. 
Once the applicant's out-of-State case is closed or the individual 
is removed from the household, the State receiving the application 
can move forward with the certification process. If the applicant is 
checked against the NAC pilot's list of active SNAP participants in 
other pilot States and the applicant is not identified as receiving 
SNAP benefits elsewhere, then the State proceeds with the 
certification process as usual.
    The NAC pilot allowed for estimation of the prevalence of 
interstate duplicate participation in the participating States. 
Analysis of data from before the NAC pilot began operations 
suggested that between 0.09 percent and 0.17 percent of the 
individual SNAP participants active in each pilot State's caseload 
in May 2014 were also receiving benefits in another one of the pilot 
States in May 2014. The Department notes, however, that these data 
only represent instances of interstate duplicate participation where 
both States issuing benefits were participating in the pilot. 
Accordingly, the NAC pilot could not discover any potential matches 
between a State participating in the NAC pilot and a State that was 
not participating in the NAC pilot. This limit in ability to detect 
matches suggests that the nationwide NAC will only increase positive 
match frequency when new States are added to the system. The 
positive match frequency is also expected to decrease gradually as 
States adopt the nationwide NAC and NAC business processes 
implemented by this rule.

Independent Evaluation of the NAC Pilot \2\
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    \2\ https://risk.lexisnexis.com/-/media/files/government/report//b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf.

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    Pursuant to Section 4032(c) of the Agricultural Act of 2014, an 
independent evaluation assessed the NAC pilot's detection and 
prevention of duplicate participation between May 2013 and August 
2015 and reported on variations in implementation between the five 
States. As the NAC pilot focused exclusively on interstate duplicate 
participation, intrastate duplicate participation was not assessed 
as a part of the NAC pilot evaluation. Overall, the evaluation found 
a relatively low occurrence of dual participation--ranging from less 
than one-tenth of one percent of Louisiana's eligible individuals in 
May 2014 to just below two-tenths of one percent of Georgia's.\3\ 
The evaluation report indicated that a significant percentage of 
duplicate participation occurs when a new member is being added to 
an existing household with an existing case. In Table 19 of the 
evaluation report, an average of almost half, 47 percent, of 
duplicate participation found was from individuals residing in 
households where all members are not duplicate participants. The 
Department interprets these occurrences of duplicate participation 
as instances where administrative processes need to be improved and 
better customer service provided, particularly for individuals or 
households that move between States. It is likely that these 
individuals either failed to report their move or were not promptly 
disenrolled by the State agency. Table 21 further emphasizes the 
need for greater customer service by evaluating claims data on cases 
including dual participants identified at initial matching of the 
NAC pilot. Out of the claims data reported as initial match agency 
error, inadvertent client error, and intentional Program violation, 
nearly 28 percent of claims were due to something other than 
intentional Program violation. Based on this information, the 
Department determines that there is a greater need for enhanced 
customer service for applicants and participants who move between 
States or households, as well as better training for eligibility 
workers to identify these individuals and prevent inadvertent 
household errors and agency errors that may result in the 
establishment of a claim and added burden.
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    Although the evaluation found that the rate of duplication 
participation is infrequent, the report found a 46 percent reduction 
in the number of SNAP participants receiving benefits in more than 
one pilot State after one year of NAC pilot operation. Each of the 
five States experienced a reduction in duplicate participation, but 
the scale of the reductions varied. Two of the five States had 81 
percent fewer instances of SNAP participants

[[Page 59654]]

receiving benefits in another State compared to pre-NAC pilot levels 
(for example, from a monthly average of 882 instances down to 166 in 
Mississippi), while another two saw reductions of less than 30 
percent (for example, from a monthly average of 3,383 to 2,446 
instances in Florida). The Department believes that improving 
administrative processes will further diminish households' 
inadvertent duplicate participation.
    The NAC pilot evaluation also measured each State's 
effectiveness in using the NAC pilot to prevent duplicate 
participation, comparing positive matches generated by queries 
regarding SNAP applicants or new household members to subsequent 
positive indications of active duplicate participation. Matches on 
SNAP applicants or new household members that subsequently became 
active duplicate participants indicate that the information from the 
NAC pilot failed to prevent an individual from receiving benefits 
from more than one State agency simultaneously due to participant 
States not taking appropriate actions when notified of a match and/
or a lack of communication between State agencies. Again, there was 
significant variation in how effectively the five pilot States used 
the NAC pilot to prevent duplicate participation. In two of the five 
States, less than 10 percent of instances of individuals in NAC 
pilot matches resulted in duplicate participation. Other pilot 
States were not as effective. The least effective State consistently 
saw about 40 percent of instances of individuals identified in 
matches resulting in duplicate participation.

NAC Pilot Lessons Learned

    The overall findings from the evaluation indicate that the rate 
of duplicate participation is low; that when it does occur, it is 
more commonly the result of administrative reasons, such as data 
entry errors or a State failing to promptly disenroll an individual 
that had moved between States and/or households, and not fraud; and 
that NAC can effectively reduce duplicate participation if State 
agencies apply lessons learned from the pilot as they implement the 
nationwide NAC data match. The pilot States with larger reductions 
in duplicate participation were the same States with better 
statistics when it came to preventing duplicate participation. The 
NAC pilot evaluation found that these States were more successful 
largely due to the extent that they automated NAC processes. They 
used web services to link their State systems with the NAC pilot. 
This enabled real-time querying of the NAC pilot database in a 
manner similar to a manual portal query, with the added advantage of 
limiting caseworker intervention to only those instances in which a 
match is generated. For example, if a State agency eligibility 
caseworker needs to process an application on the same day the 
application is received, the web services approach allows for 
sending and receiving information from the NAC that same day. NAC 
pilot States that were less effective in terms of preventing and 
reducing duplicate participation used a batch process model where 
information is not returned until the following day. This sometimes 
led to the certification of an application before the caseworker 
became aware that there was a positive match from the NAC pilot 
indicating an active case in another State.
    The more successful States in the NAC pilot also integrated the 
NAC with their SNAP eligibility systems and into existing workflows. 
State agency eligibility caseworkers received flags to take 
additional steps only in the event of a positive match, rather than 
having to check the NAC pilot portal for every application they 
processed and every person they added to a case.
    The differences in business processes and systems integration 
not only provide at least a partial explanation for the varied 
outcomes achieved by States, but also support a set of practices 
that may be adopted to improve upon and maximize the effectiveness 
of the NAC pilot. Additionally, the evaluation report also 
recommended that State agencies conduct comprehensive front-line 
training. This includes dedicating resources to delivering hands-on 
training for eligibility workers using real-world examples for the 
approach the state will use to operationalize the tool and 
communicate with other states. These best practices from the NAC 
pilot combined with feedback from State agencies inform the design 
and implementation of the nationwide NAC solution implemented by 
this rule.

NAC Pilot Final Results

    The NAC pilot evaluation estimated the total benefit 
overpayments averted by the NAC pilot and the potential benefit 
overpayments that could be saved if the NAC were implemented 
nationwide. The evaluation compared the decay rate of dual 
participation over the course of five months starting from both 
before the NAC pilot began in December of 2013 and during the course 
of the pilot in December of 2014. The difference represents the 
effectiveness of using the NAC pilot to prevent and timely resolve 
duplicate participation. In each State, the entries of duplicate 
participation fell from December 2013 to December 2014. However, 
anywhere from 25.8 percent to 41.45 percent of instances of dual 
participation identified in December 2013 continued five months 
later into May 2014. Once the NAC pilot was implemented, the total 
number of duplicate participant entries fell for each State and the 
percentage of individuals remaining as duplicate participants after 
five months fell from 21 percent to 0 percent in Alabama, 51.4 
percent to 17.8 percent in Florida, 49.6 percent to 17.1 percent in 
Georgia, 41.4 percent to 6.5 percent in Louisiana, and 34.9 percent 
to 3.2 percent in Mississippi. In each case, the NAC pilot was 
effective as reducing the rate of duplicate participation.
    The NAC evaluation also calculated actual savings by estimating 
the savings per month per instance of duplicate participation 
prevention in each of the pilot States and multiplying those savings 
by the median months of duplicate participation avoided. To 
establish the median length of duplicate participation for an 
individual, the NAC evaluation identified the eligibility date in 
each State, selected the latest of the two dates to establish when 
overlapping eligibility began, identified the next recertification 
date for the individual's case in each State, and selected the 
soonest of the two recertification months. The number of months 
between the start of overlapping eligibility and the next 
recertification month establishes the median expected length of dual 
participation per State, which ranged from 6 to 11 months. The 
evaluation avoided double counting the prevention of duplicate 
participation in both States by assuming the individual was eligible 
to participate in one of the States. The estimated State agency 
costs of NAC participation were then subtracted from these savings 
to yield a total estimated net impact for the NAC pilot of more than 
$5.6 million per year in the five NAC pilot States.
    The evaluation estimated the potential impact of a nationwide 
NAC from the results of the NAC Pilot, including the potential cost 
savings associated with its implementation. These estimated savings 
for the pilot States were converted to percentages of total fiscal 
year (FY) 2014 SNAP benefit issuance in each pilot State, then 
averaged and applied to the program-wide total FY 2014 benefit 
issuance. The evaluation estimated that nationwide implementation of 
the NAC would have saved more than $114 million in FY 2014, or 0.16 
percent of total SNAP issuance. As a result of this successful 
pilot, as evidenced by the evaluation report findings, Congress 
passed legislation to expand the NAC nationwide and mandated State 
participation.

Establishment of the Nationwide NAC

    The nationwide NAC will help States enforce existing SNAP 
residency requirements by conducting data matches on SNAP caseloads 
across States and notifying State agencies when there is evidence of 
an applicant participating in another State for the same benefit 
month. The mechanics of the NAC are simple--States contribute daily 
files of their active SNAP participants in a common format to a 
centralized database. States also submit information requests to the 
database on new program applicants, at recertification, and when a 
new household member is added to an existing SNAP case. Then, the 
NAC looks for overlapping information on a range of data points, 
including Social Security number, name, and date of birth (DOB), to 
determine if the household or individual is already a SNAP 
participant in another state.
    The interim final rule requires every State SNAP agency to 
participate in the NAC within five years. On at least a daily basis, 
States must provide, at a minimum: full name, Social Security number 
(SSN), and date of birth for each active SNAP household member. When 
available, State agencies must also provide additional data elements 
that are intended to increase accuracy of matches, including: a flag 
to identify vulnerable individuals,\4\ participant ID, case number, 
participant closing date, and recent benefit

[[Page 59655]]

issuance dates. The NAC will compare required data elements (name, 
SSN, and date of birth) for active SNAP recipients, SNAP applicants, 
and newly added household members among States. The NAC will also 
conduct monthly bulk matches of the NAC data elements provided by 
all participating State agencies to discover existing duplicate 
participation.
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    \4\ The interim final rule establishes a definition for 
vulnerable individuals specific to the NAC at Sec.  272.18(c)(9). 
This definition includes, but is not limited to, those who would be 
endangered by the dissemination of their information, such as 
residents of shelters for battered women and children as defined in 
7 CFR 272.1, or a person fleeing domestic violence.
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    Prior to certification or to the addition of a new household 
member, States will be required to submit information about each 
member of a SNAP applicant household and each new household member 
for comparison with information about active SNAP recipients in 
other States. Upon receiving a data match from the NAC indicating 
that a member of the applicant household or a newly added household 
member is already an active SNAP recipient, the State agency shall 
follow a 10-day timeframe established at 7 CFR 272.18(c)(3) to 
resolve the match and report that action to the other State agency. 
States are prohibited from contacting any third parties or otherwise 
disclosing any information regarding a positive NAC data match 
involving an individual who the State agency determines would be 
endangered by dissemination of their identity or location, because 
they are a resident of a shelter for battered women and children or 
they are fleeing domestic violence. Therefore, the interim final 
regulation allows for a vulnerable individual flag to be used to 
identify when precautions must be taken to protect the individual's 
information in the event of a match.
    When a NAC match is received at application, recertification or 
for a newly added household member, States are required to follow 
existing SNAP procedures governing the receipt of unclear 
information about a household and to clarify whether the individual 
is, in fact, participating in another State by sending the household 
a Notice of Match Results (NMR) that clearly explains what 
information is needed from the household and the consequences of 
failing to respond to the notice.
    The interim final rule establishes procedures to be followed for 
NAC matches containing unclear information during the certification 
period at 7 CFR 272.18(c)(5). If the household is currently 
certified in the State that received the NAC match, the State agency 
will combine the NMR with a Notice of Adverse Action (NOAA). The 
Department is adding this combined notice for action on NAC matches 
only to expedite the notice process for State agencies, reduce the 
likelihood of duplicate participation and thus establishment of a 
claim against a household, while providing the household with an 
opportunity to contest.

Effect on State Agencies

    State agencies will upload data that is de-identified to the 
NAC. State agencies will upload this data at least once each working 
day. State agencies must act on the matches by contacting the 
individual, sending a notice, contacting the other State agency 
indicated in the match, or through other methods of further 
verifying the match before taking adverse action. Specific actions 
will depend on when the match takes place, whether it be for a new 
applicant, newly added household member, recertifying participant, 
or during certification. State agencies will also be required to 
complete and sign a Computer Matching Agreement (CMA) which will 
outline requirements for State agencies to join the NAC. However, 
there is the potential for States to have to follow up on a large 
number of cases at initial implementation of their and other States' 
participation in NAC.
    Estimates of the administrative costs to implement and 
participate in the NAC are based on the NAC pilot evaluation, 
discussed in detail above. The evaluation found that the total 
monthly administrative cost to operate the NAC for the five pilot 
states was about $82,000 and ranged from $5,499-$21,763 for the five 
pilot States. The total annual cost was nearly $1 million ($984,000 
per year), or an average of about $200,000 per State, per year. 
Based on this annual average, the Department projects that the 
annual operating cost of participating in the NAC would be 
approximately $10.6 million if the NAC were implemented nationwide. 
The pilot evaluation also found that States spent on average about 
$140,000 on planning, programming, and staff training when 
implementing NAC.
    The Department expects 12 States will implement the NAC in FY 
2023, an additional 16 States will conduct the match in FY 2024 (28 
States, total, including the 12 States that implement in FY 2023), 
16 more States will implement in FY 2025 (44 States, total), and in 
FY 2026 the remaining 9 States will implement (53 States, total). 
These estimates are based on States' expressed interest in 
participating in the NAC and the Department's ability to provide 
infrastructure and technical assistance to the States. The costs in 
the following table reflect this phase-in rate. As indicated in 
Table 3, implementation costs are not expected to continue beyond FY 
2025, while ongoing annual operating costs will continue into future 
years.

            Table 3--Calculation of State Administrative Expense for Implementation NAC Data Matching
----------------------------------------------------------------------------------------------------------------
       Dollars in millions             2022            2023            2024            2025            2026
----------------------------------------------------------------------------------------------------------------
Per State Implementation Cost
 $0.14
Per State Annual Cost $0.20
States Conducting NAC Matching..               0              12              28              44              53
Implementation Costs *..........           $1.68           $2.24           $2.24           $1.26           $0.00
Annual Operating Costs **.......           $0.00           $1.60           $4.80           $8.00          $10.15
                                 -------------------------------------------------------------------------------
    Total State Administrative             $1.68           $3.84           $7.04           $9.26          $10.15
     Costs (Federal + State)....
----------------------------------------------------------------------------------------------------------------
* States face implementation costs in the year prior to implementation only.
** Annual operating costs are prorated for States during their first year of implementation to reflect staggered
  implementation throughout the fiscal year.

    State Administrative Expense (SAE) is split evenly between 
Federal and State governments. Thus, the State share of increased 
SAE is expected to be $0.84 million in FY 2022 and $15.98 million 
over five years. These costs will only accrue to those States that 
have implemented NAC data sharing. Costs may be somewhat higher at 
implementation due to detection of existing duplicate participation.

Effect on Federal Spending

    As SAE is shared between Federal and State governments, Federal 
spending for SAE is expected to increase by $0.84 million in FY 2022 
and $15.98 million over five years. In addition, the Federal 
Government will face costs associated with developing and 
maintaining the NAC. The Department estimates that it will cost $4.4 
million to develop, implement, maintain, and provide support 
services for the nationwide NAC in FY 2022, and $18.3 million over 
five years. This estimate is based on contractual costs for system 
design, development, and operations and for Help Desk support. Thus, 
the Federal costs for administering the NAC are expected to be $5.2 
million in FY 2022 and $34.3 million over five years (Table 4). The 
Department also expects to provide technical assistance and other 
support to States as they join the NAC.

[[Page 59656]]



              Table 4--Calculation of Federal Costs of Implementing and Operating NAC Data Matching
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                       2022            2023            2024            2025            2026
----------------------------------------------------------------------------------------------------------------
Federal Share of State                     $0.84           $1.92           $3.52           $4.63           $5.08
 Administrative Expense *.......
System Development, Operation, &             2.7             3.0             3.0             3.0             3.0
 Maintenance....................
System Design...................             1.1             0.0             0.0             0.0             0.0
System Help Desk................             0.5             0.5             0.5             0.6             0.5
                                 -------------------------------------------------------------------------------
    Total Federal Costs.........             5.2             5.4             7.0             8.2             8.5
----------------------------------------------------------------------------------------------------------------
* Annual administrative expenses are prorated for States during their first year of implementation to reflect
  staggered implementation throughout the fiscal year. The Department received an additional $5 million in
  appropriations in FYs 2020 and 2021 for NAC development.

    Federal administrative costs would be more than offset by 
reduced SNAP benefit spending (transfers) due to prevention of 
duplicate participation at application. The NAC pilot evaluation 
estimated the potential reduction in SNAP benefit spending and 
concluded that if the NAC were used by all State SNAP agencies, 
benefit spending net of administrative costs would be reduced by:
     0.191 percent by preventing duplicate participation 
(avoidance); and
     0.069 percent as States identify and act upon existing 
(active) cases of duplicate participation across state lines at the 
initial implementation of the NAC.
    These estimates were calculated as follow:
     The total number of duplicate cases that could be 
prevented was estimated by comparing the percentage of cases that 
were duplicate participants prior to NAC pilot implementation to the 
percentage of cases that were duplicate participants 4 months after 
implementation. By using percentages rather than raw numbers, this 
methodology accounts for changes in the overall SNAP caseload over 
the course of the pilot.
     The estimated number of duplicate cases was adjusted to 
avoid double-counting matches. Households were assumed to remain 
eligible in one State (their actual State of residence), so they 
discontinue participation in only one State (rather than two). After 
adjustment, the number of duplicate cases prevented per month ranged 
from 41 cases to 248 cases across the 5 pilot States. The median 
number of months of duplicate participation avoided during the NAC 
pilot varied by State from 6 months to 11 months.
     Monthly benefit savings per case varied from $123 to 
$135. Based on analysis of pilot redemption data, total savings per 
State were reduced by 12 percent to account for the fact that some 
duplicate participants only redeemed benefits from one State. This 
resulted in total monthly savings that ranged by State from $40,438 
to $176,433.
     The NAC pilot only detected duplicate participation 
that occurred with other NAC pilot States. However, as the NAC is 
expanded nationwide, more duplicate participants are likely be 
found. Data on Public Assistance Reporting Information System 
(PARIS) matches was used to estimate the additional expected number 
of matches if the NAC were nationwide.\5\ Among the NAC pilot 
States. the percentage of PARIS matches with other NAC pilot States 
varied from 18.9 percent to 52.5 percent of all matches; the 
remainder of matches were with cases in other States. This 
proportion was used to estimate the additional potential savings for 
each pilot State if NAC matches were conducted with all States.
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    \5\ PARIS is a data matching service used to check whether 
recipients of public assistance receive duplicate benefits in two or 
more States.
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     Potential savings per State were then calculated as a 
proportion of total SNAP benefit payments in the State. Expected 
benefit savings varied by State from a low of 0.12 percent to a high 
of 0.30 percent of benefit payments.
     The 0.191 percent estimate is a weighted average of all 
pilot State results (Table 5).

                              Table 5--Calculation of Potential Benefit Savings From Prevention of Duplicate Participation
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                                                                   AL                 FL                 GA                 LA                 MS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monthly Savings per State:
    Cases prevented monthly \1\..........................                263                361                378                114                149
    Percentage ``owned'' by State........................              54.8%              68.8%              32.6%              36.0%              46.7%
    Adjusted cases (A)...................................                144                248                123                 41                 70
    Median spell length (B)..............................                  6                  6                 11                  9                 10
    Average monthly benefit (C)..........................               $123               $135               $134               $124               $127
    Savings per duplicate case (B x C)...................               $739               $807             $1,475             $1,120             $1,271
    Monthly savings (A x B x C)..........................           $106,562           $200,493           $181,730            $45,952            $88,426
    Share of duplicate benefits ever redeemed............                88%                88%                88%                88%                88%
                                                          ----------------------------------------------------------------------------------------------
        Adjusted monthly savings (D).....................            $93,775           $176,433           $159,923            $40,438            $77,815
Adjustment for Nationwide Expansion:
    Share of PARIS matches with other NAC States (E).....              52.5%              18.9%              38.5%              31.1%              34.6%
    Total monthly savings if NAC were nationwide (D/E)...           $178,619           $933,510           $415,383           $130,026           $224,899
Monthly Savings as a Percentage of Monthly Issuance:
    Average monthly issuance, FY 2014....................       $109,844,464       $456,069,500       $235,654,490       $107,359,689        $76,082,125
    Share of benefits to duplicate participants..........              0.16%              0.21%              0.18%              0.12%              0.30%
        Average for NAC pilot States.....................             0.191%
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\1\ Based on Top 5 matches.
Sums may not total due to rounding.


[[Page 59657]]

    Using data from the NAC pilot evaluation, the Department also 
estimated the potential benefit savings due to earlier detection of 
ongoing cases of duplicate participation. The benefit savings were 
estimated as follows:
     As described in the preceding discussion, to estimate 
the number of duplicate cases that could be prevented after 
implementation, the evaluation compared the percentage of duplicate 
cases prior to implementation to the percentage four months after 
implementation. The latter figure represented the potential 
prevention of new duplicate participants. The remainder represents 
the percentage of cases that would be identified as on-going 
duplicate participants at the time of implementation.
     The same assumptions were made regarding the average 
monthly benefit, share of duplicate benefits that would not be 
redeemed, overlap between NAC States, and impacts of nationwide 
expansion.
     Rather than using the 6-11 month median spell length, 
we assumed that on average cases would be closed 2 months earlier 
than in the absence of the NAC. This assumption reflects that the 
duplicate cases would be detected 1-3 months earlier than they would 
through quarterly PARIS matches.
     As with the prevention estimate, potential savings were 
calculated as a weighted average of savings in all States, for an 
average of 0.069 percent of benefits per State (Table 6). Because 
these savings are the result of earlier detection of ongoing 
duplicate participation, the savings only occur in the first year of 
operation.

                    Table 6--Calculation of Potential Benefit Savings From Earlier Identification of Ongoing Duplicate Participation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   AL                 FL                 GA                 LA                 MS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monthly Savings per State:
    Cases prevented monthly \1\..........................               1014                187                160                255                629
    Percentage ``owned'' by State........................              54.8%              68.8%              32.6%              36.0%              46.7%
        Adjusted cases (A)...............................                555                129                 52                 92                294
    Median spell length (B)..............................                  2                  2                  2                  2                  2
    Average monthly benefit (C)..........................               $123               $135               $134               $124               $127
    Savings per duplicate case (B x C)...................               $246               $269               $268               $249               $254
    Monthly savings (A x B x C)..........................           $136,893            $34,589            $13,949            $22,812            $74,640
    Share of duplicate benefits ever redeemed............                88%                88%                88%                88%                88%
                                                          ----------------------------------------------------------------------------------------------
        Adjusted monthly savings (D).....................           $120,466            $30,438            $12,275            $20,074            $65,683
Adjustment for Nationwide Expansion:
    Share of PARIS matches with other NAC States (E).....              52.5%              18.9%              38.5%              31.1%              34.6%
    Total monthly savings if NAC were nationwide (D/E)...           $229,459           $161,048            $31,883            $64,547           $189,836
Monthly Savings as a Percentage of Monthly Issuance:
    Average monthly issuance, FY 2014....................       $109,844,464       $456,069,500       $235,654,490       $107,359,689        $76,082,125
    Share of benefits to duplicate participants..........             0.209%             0.035%             0.014%             0.060%             0.250%
        Average for NAC pilot States.....................             0.069%  .................  .................  .................  .................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Based on Top 5 matches.
Sums may not total due to rounding.

    Once the NAC is successfully implemented nationwide, the 
Department expects that active cases of duplicate participation 
across State lines will largely be eliminated. To reflect this, 
savings from identification of active duplicate cases are phased out 
after all States have implemented. The Department acknowledges a 
small number of active duplicate participation cases may still occur 
because of imperfect use of the NAC, but anticipates that it would 
be a small number of cases.
    Because the Department expects NAC participation to be phased in 
over time, and because it cannot predict which States will begin 
participating in each year after implementation begins, our 
estimated reduction in benefits assumes that NAC coverage of the 
SNAP caseload phases in at the same rate as State participation. In 
other words, if 25 percent of States participate in a given fiscal 
year, then 25 percent of the potential benefit reduction will occur, 
prorated to reflect expected staggered implementation throughout the 
fiscal year. The estimated savings are for prevention and 
identification of duplicate participation (Table 7).

Table 7--Calculation of Reduction in SNAP Benefit Spending Due to Earlier Detection of Ongoing and Prevention of
                                           New Duplicate Participation
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                       2022            2023            2024            2025            2026
----------------------------------------------------------------------------------------------------------------
Projected SNAP benefit spending   ..............         $97,694         $99,364         $97,850         $95,613
 *..............................
Estimated from avoidance                    $0.0         -$28.15         -$85.99        -$141.13        -$174.97
 (0.191%) **....................
Estimated savings from                      $0.0         -$15.20         -$20.61         -$20.30         -$11.16
 identifying active duplicate
 participation (0.069%).........
Percentage of States                         0.0            22.6            52.8            83.0           100.0
 participating..................
                                 -------------------------------------------------------------------------------
    Total reduction in SNAP                 $0.0         -$43.35        -$106.60        -$161.43        -$186.12
     benefit spending...........
----------------------------------------------------------------------------------------------------------------
* Source: Internal USDA Estimates.
** Savings from avoidance for newly implementing States are prorated to reflect expected staggered
  implementation throughout the fiscal year as States join the NAC.


[[Page 59658]]

Effect on SNAP Participants

    This rule will not affect the monthly benefit allotments of SNAP 
participants, except for those who are participating in more than 
one State in the same month or who attempt to do so. The interim 
final rule includes provisions to protect participants from being 
incorrectly removed from the program due to an inaccurate match, to 
protect participants' privacy, and to reduce participants' burden in 
responding to a match. The NAC can also protect households/
individuals from claims as a result of inadvertently participating 
in more than one State simultaneously. Under the current process, 
State agencies rely primarily on manual processes to track and act 
upon data matches, which can be error-prone and time-consuming. For 
example, a household could report to State A that they moved to 
State B and begin receiving SNAP in State B, but State A failed to 
close the case in a timely fashion. By preventing duplicate 
participation, the NAC can reduce the need to establish claims 
against households/individuals who complied with program rules.
    Households/individuals that are identified as potential 
duplicate participants will face additional administrative burden. 
For households/individuals identified by a match during the 
certification or recertification process, or when adding a new 
household member, this burden includes providing additional 
verification of residency when needed (309 hours per State, on 
average) and responding to a Notice of Match Results (NMR) (646 
hours per State, on average). This would be an ongoing burden in 
every year after initial implementation. The NMR will provide 
households/individuals incorrectly identified as potential duplicate 
participants an opportunity to dispute the match and prevent people 
from incorrectly being removed from SNAP as a result of an 
inaccurate NAC match. For households/individuals identified as a 
possible active duplicate participant during the certification 
period, burden includes reading/responding to a combined NMR and 
Notice of Adverse Action (NOAA), and providing additional 
verification when needed. This combined burden (646 hours per State, 
on average) would primarily take place as States newly implement the 
NAC, when active duplicate participants are expected to be 
identified. Because the Department expects active cases of duplicate 
participation to decline as the NAC is implemented nationwide, 
household burden related active duplicate participation is phased 
out as the NAC is phased in. Altogether, this administrative burden 
is expected to cost households $1.2 million over five years (Table 
8).

                             Table 8--Calculation of Household Administrative Burden
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                       2022            2023            2024            2025            2026
----------------------------------------------------------------------------------------------------------------
Total States participating in                  0              12              28              44              53
 NAC............................
States newly implementing NAC...               0              12              16              16               9
Household burden hours * for:
    Verification (309 hours per                0           3,708           8,651          13,595          16,376
     State on average) *........
    Responding to NMR (646 hours               0           7,746          18,074          28,401          34,211
     per State) *...............
    Responding to combined NMR                 0           7,746          10,328          10,328           5,809
     and NOAA (646 hours per
     State) *...................
                                 -------------------------------------------------------------------------------
        Total Hours.............               0          19,199          37,053          52,324          56,396
                                 -------------------------------------------------------------------------------
            Total Cost..........           $0.00           $0.14           $0.27           $0.38           $0.41
----------------------------------------------------------------------------------------------------------------
* Household burden expressed as an average per State. Verification hours assume an average of 4,612 households
  per State spend 4 minutes each (on average) on verification. NMR hours per State assume an average of 7,730
  households per State spend 5 minutes each reviewing a NMR. Combined NMR and NOAA hours assume an average of
  7,730 households per State spend 5 minutes each.

    Some households/individuals identified as potential duplicate 
participants may be false positive matches and may face additional 
administrative burden associated with verifying their circumstances. 
However, as matching against name, Social Security number, and date 
of birth will be required, the Department expects to minimize such 
false positive matches.\6\ Additionally, States are expected to 
ensure they have reliably valid information about the identity of 
all members of an applicant household and their intent to receive 
SNAP benefits prior to submitting information to the NAC to minimize 
the risk of false positive matches.
---------------------------------------------------------------------------

    \6\ The NAC pilot evaluation found that, with virtually no 
exceptions, matches on all three of these data elements were valid.
---------------------------------------------------------------------------

    To minimize risks to the privacy of SNAP participants, the 
Department will ensure that the NAC maintains strict security 
standards to prevent the unauthorized disclosure or modification of 
information. The NAC system will not store or retain any personal 
identifiable information (PII) and the interim final rule requires 
that the NAC use only de-identified personal information for 
enhanced security of SNAP participants. Additionally, NAC data 
cannot be used for any purpose other than detecting duplicate 
participation.

III. Uncertainties

    There are several uncertainties regarding the estimated impacts 
of the NAC rule.
     First, while the Department intends to vigorously push 
States to implement this rule, experience indicates that States face 
a variety of challenges when required to implement program changes 
that rely heavily on changes to their automated systems. These 
challenges can delay full implementation for years when, for 
example, a State is in the process of building and implementing a 
new system to replace a legacy system. This results in a high level 
of uncertainty regarding how quickly States will begin implementing 
the NAC. The estimates in this analysis rely on the Department's 
conversations with States to gauge their interest and readiness to 
implement the NAC. Table 9 below illustrates how those estimates 
might vary if implementation were slower than expected.

                                                   Table 9--Impact of Alternative Phase-In Assumptions
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2022         2023         2024         2025         2026        5-year      10-year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expected Phase In (by 2026):
    States Implementing......................................            0           12           28           44           53  ...........  ...........
    Reduction in SNAP benefit payments.......................         $0.0         -$43        -$107        -$161        -$186        -$497      -$1,493

[[Page 59659]]

 
    Federal/State Administrative Costs (total)...............         $6.0         $7.3        $10.5        $12.8        $13.6        $50.3       $121.1
    Household Burden.........................................         $0.0        $0.14        $0.27        $0.38        $0.41         $1.2         $3.0
Assume Slower Phase In (by 2029)
    States Implementing......................................            0            8           16           24           32  ...........  ...........
    Reduction in SNAP benefit payments.......................        $0.00         -$29         -$60         -$88        -$113        -$290      -$1,216
    Federal/State Administrative Costs (total)...............         $5.5         $5.6         $7.4         $9.1        $10.6        $38.2       $105.4
    Household Burden.........................................        $0.00        $0.09        $0.15        $0.20        $0.26        $0.70        $2.54
--------------------------------------------------------------------------------------------------------------------------------------------------------

     Second, the costs and savings described in this 
analysis are based on the five-state NAC pilot, and it is uncertain 
whether the pilot results will be replicated nationwide. For 
example, the NAC evaluation found that the extent of automation 
might affect States' ability to follow up on match results. The NAC 
evaluation also found that savings per match and monthly savings due 
to prevention of duplicate participation varied widely across the 
pilot States. As a percentage of total SNAP allotments in the pilot 
States, the reduction in benefit payments due to avoidance of 
duplicate participation ranged from 0.12 percent to 0.30 percent 
(see Table 5). The reduction in benefit payments due to 
identification of active duplicate participants ranged from 0.014 
percent to 0.250 percent (see Table 6). In addition, the NAC Pilot 
evaluation used data from PARIS matches to extrapolate how NAC 
savings might increase were the system to expand to additional 
States. The estimates presented in this analysis are based on a 
weighted average of the pilot State results (0.191 percent in 
avoidance savings and 0.069 percent in savings from identifying 
active duplicate participants). Table 10 below illustrates how the 
total reduction in SNAP benefits might change if the reduction in 
benefit payments were lower or higher.

                                              Table 10--Impact of Alternative Benefit Reduction Assumptions
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2022         2023         2024         2025         2026        5-year      10-year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction in SNAP benefit payments:
    Reduction = weighted average.............................
        0.191% avoidance savings and 0.069% active duplicate          $0.0         -$43        -$107        -$161        -$186        -$497      -$1,493
         participation savings...............................
    Reduction = lower bound:.................................
        0.121% avoidance savings and 0.014% active duplicate           0.0          -21          -59          -93         -113         -286         -917
         participation savings...............................
    Reduction = upper bound:.................................
        0.296% avoidance savings and 0.250% active duplicate           0.0          -99         -208         -292         -312         -911       -2,452
         participation savings...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------

     Third, these estimates assume cases that are prevented 
from becoming duplicate participants would otherwise have 
participated for 6-11 months. Because States regularly conduct 
matches through PARIS, it is possible that the actual spell length 
could be shorter than the spell length in the pilot States. Table 11 
illustrates how the reduction in SNAP benefit payments would vary 
based on spell length.

                                                Table 11--Impact of Alternative Spell Length Assumptions
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2022         2023         2024         2025         2026        5-year      10-year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction in SNAP benefit payments if:
    Spell Length = 6-11 months...............................         $0.0         -$43        -$107        -$161        -$186        -$497      -$1,493
    Spell Length = 3 months..................................          0.0          -33          -62          -85          -87         -266         -679
--------------------------------------------------------------------------------------------------------------------------------------------------------

     Fourth, the per-State administrative costs for NAC 
pilot States varied considerably. Estimates in this analysis are 
based on an average across all pilot States. Administrative costs 
included both the costs of initial implementation, ongoing costs 
associated with conducting matches, and the costs of working matched 
cases. Costs varied based on the number of matches found, inquiries 
received from other States, staffing costs, and the extent of 
automation within the State. Thus, actual administrative costs may 
be higher or lower than predicted.
     Finally, the Department notes that the estimates 
related to earlier detection of ongoing duplicate participants do 
not include any savings related to establishment of claims for prior 
overpayments. Savings in a given year will depend upon States' 
efforts to establish claims and the timing of when different States 
implement NAC.

IV. Alternatives Considered

    The language in Section 4011 of the Agriculture Improvement Act 
of 2018 is very specific; however, the option to modify an existing 
system to fulfill the purpose of the

[[Page 59660]]

NAC was considered. Existing systems, including The Department of 
Health and Human Services' Public Assistance Reporting Information 
System (PARIS) and USDA's Store Tracking and Redemption System 
(STARS) were considered. These alternatives were ruled out because 
the Agriculture Improvement Act of 2018 required that the NAC could 
only be used for preventing duplicate participation. Therefore, 
existing systems with additional purposes could not be used. 
Additionally, the cost and difficulty to re-design PARIS for the 
purposes of preventing duplicate participation was deemed too 
significant. In this RIA, we considered a longer implementation 
period as an alternative to the five-year period. The uncertainties 
section above discusses how alternative assumptions regarding the 
rate of implementation among States would affect the estimates 
presented in this analysis. A longer implementation period results 
in a lower reduction in SNAP benefits payments over both the five- 
and ten-year marks (-$290 versus -$497 at five years and -$1,216 
versus -$1,493 at 10 years).

[FR Doc. 2022-21011 Filed 9-30-22; 8:45 am]
BILLING CODE 3410-30-P