[Federal Register Volume 74, Number 100 (Wednesday, May 27, 2009)]
[Rules and Regulations]
[Pages 25161-25163]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12187]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 286

RIN 0970-AC40


Temporary Assistance for Needy Families (TANF) Carry-Over Funds

AGENCY: Administration for Children and Families (ACF), Department of 
Health and Human Services (HHS).

ACTION: Interim final rule.

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SUMMARY: This rule implements the statutory change to section 404(e) of 
the Social Security Act (42 U.S.C. 604(e)) as enacted by the American 
Recovery and Reinvestment Act of 2009 (Pub. L. 111-5). This change 
allows States, Tribes and Territories to use Temporary Assistance for 
Needy Families (TANF) program funds carried over from a prior year for 
any allowable TANF benefit, service or activity. Previously these funds 
could be used only to provide assistance. This interim final rule 
applies to States, local governments, and Tribes that administer the 
TANF program.

DATES: Effective Date: May 27, 2009.
    Comment Date: Comments are due on or before July 27, 2009.

ADDRESSES: You may mail or hand-deliver comments regarding this interim 
rule to the Administration for Children and Families, Office of Family 
Assistance, 370 L'Enfant Promenade, SW., 5th floor, Washington, DC 
20447. You also may transmit comments electronically via the Internet 
at: http://www.regulations.gov. You may download an electronic version 
of this rule at: http://www.regulations.gov.
    All comments received, including any personal information provided, 
will be available for public inspection Monday through Friday, 8:30 
a.m. to 5 p.m., at 901 D St., SW., 5th Floor, Washington DC.

FOR FURTHER INFORMATION CONTACT: Robert Shelbourne, Director, Division 
of State TANF Policy and Acting Director, Division of Tribal TANF 
Management, Office of Family Assistance, ACF, at (202) 401-5150.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

    Section 417 of the Social Security Act (42 U.S.C. 617) limits the 
authority of the Federal government to regulate State conduct or 
enforce the TANF provisions of the Social Security Act, except as 
expressly provided. We have interpreted this provision to allow us to 
regulate where Congress has charged HHS with enforcing certain TANF 
provisions by assessing penalties. Because the improper use of Federal 
TANF carry-over funds can result in a financial penalty pursuant to 42 
U.S.C. 609(a)(1), we have the authority to regulate in this instance.

Justification for Interim Final Rule

    The Administrative Procedures Act requirements under 5 U.S.C. 553 
for notice of proposed rulemaking do not apply to rules when the agency 
finds good cause that notice is impracticable, unnecessary, or contrary 
to the public interest (5 U.S.C. 553(b)). We find proposed rulemaking 
unnecessary because the policy was effective upon enactment and this 
regulatory action merely updates program regulations to reflect current 
law and avoid any unnecessary confusion on the part of States and 
Tribes. The change made to the TANF program by the Recovery Act on the 
use of carry-over funds was intended to provide increased flexibility 
immediately to States and Tribes to support work and families 
especially during this difficult economic period. If this regulation 
were delayed, States and Tribes might be hesitant to take advantage of 
the flexibility afforded by the statutory change because of the 
conflict with the regulation, and any confusion resulting from that 
conflict.
    For the same reason given above, we also find good cause for 
waiving the Administrative Procedures Act requirement under 5 U.S.C. 
553(d) which provides that a rule generally may not become effective 
less than 30 days after it is published in the Federal Register. Since 
the statute was effective upon enactment and because this regulation 
merely updates the regulations to reflect the current law, this rule is 
effective upon publication.

II. American Recovery and Reinvestment Act of 2009

    On February 17, 2009, the President signed the American Recovery 
and Reinvestment Act of 2009 (Pub. L. 111-5), which included a 
provision to lift the restriction on unspent Federal TANF funds 
reserved or ``carried over'' into a succeeding fiscal year. Prior to 
Public Law 111-5, carry-over funds could only be used to provide 
assistance (i.e., ongoing basic needs payments, and supportive services 
such as transportation and child care to families who are not 
employed). Section 2103 of Division B of Public Law 111-5 amends 
section 404(e) of the Social Security Act (Act) by allowing States, 
District of Columbia, the Territories and Tribes to use the carry-over 
funds for any allowable TANF benefit, service, or activity (such as job 
skills training or re-training activities, employment counseling 
services, parental counseling services, teen pregnancy prevention 
activities, services for victims of domestic violence, after-school 
programs)--and not just assistance.
    Thus, the policy reflected in this interim final rule is effective 
immediately and applies to all Federal TANF funds carried over into 
fiscal year 2009 as well as to all future Federal TANF funds carried 
over into a subsequent year.
    Herein after and as defined in section 419(5) of the Social 
Security Act, we will use ``States'' to mean the 50 States of the 
United States, the District of Columbia, the Commonwealth of Puerto 
Rico, the United States Virgin Islands, Guam, and American Samoa. 
(However, American Samoa has chosen not to participate in the TANF 
program.)

III. Regulatory Provisions

    As discussed below, section 2103 of Public Law 111-5 requires a 
change in the Tribal TANF regulation at 45 CFR 286.60. The TANF 
regulations at 45 CFR Part 263, applicable to States and Territories, 
require no change.

Part 286--Tribal TANF Provisions

Section 286.60: Must Tribes obligate all Tribal Family Assistance Grant 
funds by the end of the fiscal year in which they are awarded?

    Under prior law, section 404(e) of the Act, entitled ``Authority to 
Reserve Certain Amounts for Assistance,'' allowed States and Indian 
Tribes

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operating approved Tribal TANF programs (Tribes) to reserve Federal 
TANF funds that they receive ``for any fiscal year for the purpose of 
providing, without fiscal year limitation, assistance under the State 
or tribal program funded under this part'' (Title IV, Part A of the 
Act). Based on the reading of this section, we concluded that States 
and Tribes could only use reserve or ``carry-over'' funds to provide 
TANF assistance, defined in 45 CFR 260.31 for States and in 45 CFR 
286.10 for Tribes, and to pay for the administrative expenses 
associated with providing the assistance. The statutory wording also 
precluded States from transferring ``carry-over'' funds to either the 
Social Services Block Grant Program (SSBG) under title XX of the Act or 
the Child Care and Development Block Grant Program (also known as the 
Child Care Discretionary Fund within the Child Care and Development 
Fund (CCDF)). (The transfer provision in section 404(d) of the Act does 
not apply to Tribes.)
    Section 2103 of Division B of Public Law 111-5 (American Recovery 
and Reinvestment Act of 2009) amended section 404(e) of the Social 
Security Act. The amendment allows States and Tribes to use unspent 
Federal TANF funds carried over from prior fiscal years ``to provide, 
without fiscal year limitation, any benefit or service that may be 
provided under the State or tribal program funded under this part.'' 
Thus, States and Tribes are no longer restricted to using carry-over 
TANF funds to provide benefits that specifically meet the definition of 
assistance. States and Tribes may expend carry-over funds for any 
allowable TANF benefit, service, or activity. Because the amended 
section 404(e) continues to specify that carry-over funds may only be 
used ``under this part''--i.e., in the TANF program, States may not 
transfer any carry-over funds to either CCDF or the SSBG program. 
States may only transfer current year Federal TANF funds (up to the 
statutory limit) to these programs.
    Accordingly, we have amended Sec.  286.60 because the limitation on 
the use of carry-over funds explicitly appears in this section. We have 
deleted paragraph (b) which previously read, ``A Tribe may expend funds 
beyond the fiscal year in which awarded only on benefits that meet the 
definition of assistance at Sec.  286.10 or on the administrative costs 
directly associated with providing that assistance.'' This sentence is 
no longer accurate because the law removes the restriction. We have 
revised the remaining language to provide that a Tribe may reserve 
amounts awarded to it, without fiscal year limitation, to provide 
assistance, benefits, and services in accordance with the requirements 
under Sec.  286.35 or Sec.  286.40, if applicable.
    No change in the regulations related to the State TANF program is 
necessary, as those regulations speak more broadly to improper uses of 
TANF funds. Specifically, Sec.  263.11(b) currently states that ``We 
will consider use of funds in violation of * * * sections 404 and 408 
and other provisions of the Act * * * to be misuse of funds.'' This 
statement is not impacted by the change to section 404(e) of the Act.

IV. Paperwork Reduction Act

    There are no information collection activities imposed by this 
regulation, nor are any existing requirements changed as a result of 
their promulgation. Therefore, the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507) regarding reporting and 
recordkeeping, do not apply.

V. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 605(b)) requires the 
Federal government to anticipate and reduce the impact of rules and 
paperwork requirements on small businesses and other small entities. 
Small entities are defined in this Act to include small businesses as 
defined by the Small Business Administration, non-profit organizations 
that are not dominant in their markets, and small governmental 
jurisdictions. This rule will affect primarily the 50 States, the 
District of Columbia, certain Territories, and Indian Tribes operating 
approved Tribal TANF programs. Therefore, we certify that this rule 
will not have a significant impact on small entities.

VI. Regulatory Impact Analysis

    Executive Order 12866 requires the review of regulations to ensure 
that they are consistent with the priorities and principles set forth 
in the Executive Order. The Department has determined that this interim 
final rule is consistent with these priorities and principles. This 
regulation implements a statutory change in the use of Federal TANF 
block grant funds carried over from a prior fiscal year included in the 
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5). 
Further, we certify that this change is not an ``economically 
significant regulatory action'' under Section 3(f)(1) of Executive 
Order 12866. It will not have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities. TANF block grant awards remain the same; 
this change in statute simply allows carry-over funds under the TANF 
program to be used for broader purposes.
    The Department, however, has determined that this rule is 
significant for the purposes of review under Section 3(f)(4) of 
Executive Order 12866 and therefore has been reviewed by the Office of 
Management and Budget (OMB).

VII. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any Federal mandate that may result 
in the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector, of $133 million or more in any one 
year. The Department has determined that this rule would not impose a 
mandate that will result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of more than 
$133 million in any one year.

VIII. Congressional Review

    This regulation is not a major rule as defined in 5 U.S.C. Chapter 
8.

IX. Assessment of Federal Regulation and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a proposed 
policy or regulation may negatively affect family well being. If the 
agency's determination is affirmative, then the agency must prepare an 
impact assessment addressing seven criteria specified in the law.
    The Department has determined that this regulation does not 
negatively affect family well being. The purpose of the TANF program is 
to strengthen the economic and social stability of families. This rule 
lifts the restriction on the use of Federal TANF carry-over funds so 
that States and Tribes may provide the services that families need to 
attain and maintain self-sufficiency.

X. Executive Order 13132

    Executive Order 13132, Federalism, requires that Federal agencies 
consult with State and local government officials in the development of 
regulatory policies with Federalism implications. Consistent with this

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Executive Order, we specifically solicited comments from State and 
local government officials on this interim final rule. We will 
seriously consider these comments in developing the final rule.

 List of Subjects in 45 CFR Part 286

    Carry over, Reserve, Prior fiscal years, Federal TANF funds.

(Catalog of Federal Domestic Assistance Program Number 93.558, 
Temporary Assistance for Needy Families Program)

    Dated: March 30, 2009.
Curtis L. Coy,
Acting Assistant Secretary for Children and Families.
    Approved: April 28, 2009.
Charles E. Johnson,
Acting Secretary, Department of Health and Human Services.

0
For the reasons stated in the preamble, we are amending 45 CFR chapter 
II by amending part 286 as set forth below:

PART 286--TRIBAL TANF PROVISIONS

0
1. The authority citation for part 286 is revised to read as follows:

    Authority: 42 U.S.C. 601, 604, and 612; Public Law 111-5.


0
2. Revise Sec.  286.60 to read as follows:


Sec.  286.60  Must Tribes obligate all Tribal Family Assistance Grant 
funds by the end of the fiscal year in which they are awarded?

    No. A Tribe may reserve amounts awarded to it, without fiscal year 
limitation, to provide assistance, benefits, and services in accordance 
with the requirements under Sec.  286.35 or Sec.  286.40, if 
applicable.

[FR Doc. E9-12187 Filed 5-26-09; 8:45 am]
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