[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Proposed Rules]
[Pages 25413-25458]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10151]



[[Page 25413]]

Vol. 76

Wednesday,

No. 86

May 4, 2011

Part II





Department of Agriculture





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Food and Nutrition Service



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7 CFR Parts 271, 272 and 273



Supplemental Nutrition Assistance Program (SNAP): Eligibility, 
Certification, and Employment and Training Provisions; Proposed Rule

Federal Register / Vol. 76 , No. 86 / Wednesday, May 4, 2011 / 
Proposed Rules

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271, 272, and 273

RIN 0584-AD87


Supplemental Nutrition Assistance Program (SNAP): Eligibility, 
Certification, and Employment and Training Provisions

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement provisions of the Food, 
Conservation and Energy Act of 2008 (FCEA) affecting the eligibility, 
benefits, certification, and employment and training (E&T) requirements 
for applicant or participant households in the Supplemental Nutrition 
Assistance Program (SNAP). The rule would amend the SNAP regulations 
to: Exclude military combat pay from the income of SNAP households; 
raise the minimum standard deduction and the minimum benefit for small 
households; eliminate the cap on the deduction for dependent care 
expenses; index resource limits to inflation; exclude retirement and 
education accounts from countable resources; permit States to expand 
the use of simplified reporting; permit States to provide transitional 
benefits to households leaving State-funded cash assistance programs; 
allow States to establish telephonic signature systems; permit States 
to use E&T funds to provide post-employment job retention services; and 
limit the E&T funding cycle to 15 months. These provisions are intended 
to increase SNAP benefit levels for certain participants, reduce 
barriers to participation, and promote efficiency in the administration 
of the program.

DATES: Comments must be received on or before July 5, 2011.

ADDRESSES: The Food and Nutrition Service (FNS) invites interested 
persons to submit comments on this proposed rule. Comments may be 
submitted by any of the following methods:
    Federal eRulemaking Portal: Preferred method. Go to http://www.regulations.gov; follow the online instructions for submitting 
comments on Docket FNS-2011-0008.
    FAX: Submit comments by facsimile transmission to (703) 305-2486, 
attention: Lizbeth Silbermann.
    Mail: Send comments to Lizbeth Silbermann, Director, Program 
Development Division, FNS, 3101 Park Center Drive, Room 810, 
Alexandria, Virginia, 22302, (703) 305-2494.
    Hand delivery or Courier: Deliver comments to Ms. Silbermann at the 
above address.
    All comments on this proposed rule will be included in the record 
and will be made available to the public. Please be advised that the 
substance of the comments and the identity of the individuals or 
entities submitting the comments will be subject to public disclosure. 
FNS will make the comments publicly available on the Internet via 
http://www.regulations.gov. All submissions will be available for 
public inspection at FNS during regular business hours (8:30 a.m. to 5 
p.m., Monday through Friday) at 3101 Park Center Drive, Room 810, 
Alexandria, Virginia 22302-1594.

FOR FURTHER INFORMATION CONTACT: Angela Kline, Chief, Certification 
Policy Branch, Program Development Division, FNS, USDA, at the above 
address or by telephone at (703) 305-2495.

SUPPLEMENTARY INFORMATION:

I. Background

What acronyms or abbreviations are used in this supplementary 
discussion of the proposed provisions?

    In the discussion of the proposed provisions in this rule, we use 
the following acronyms or other abbreviations to stand in for certain 
words or phrases:


------------------------------------------------------------------------
                                             Acronym,  Abbreviation,  or
                  Phrase                               Symbol
------------------------------------------------------------------------
Code of Federal Regulations...............  CFR
Federal Register..........................  FR
Federal Fiscal Year.......................  FY
Food and Nutrition Act of 2008............  Act
Food and Nutrition Service................  FNS or we
Food, Conservation and Energy Act of 2008   FCEA
 (Pub. L. 110-246).
Food, Security and Rural Investment Act of  FSRIA
 2002 (Pub. L. 107-171).
Secretary of the U.S. Department of         Secretary
 Agriculture.
Section (when referring to Federal          Sec.
 regulations).
Supplemental Nutrition Assistance Program.  SNAP
Temporary Assistance for Needy Families...  TANF
United States Code........................  U.S.C.
U.S. Department of Agriculture............  the Department or we
------------------------------------------------------------------------

What changes in the law triggered the need for this proposed rule?

    The Food, Conservation and Energy Act of 2008 (Pub. L. 110-246) 
(FCEA), which was enacted on June 18, 2008, amended and renamed the 
Food Stamp Act of 1977, 7 U.S.C. 2011, et seq., as the Food and 
Nutrition Act of 2008 (the Act). The FCEA also renamed the ``Food Stamp 
Program'' as the ``Supplemental Nutrition Assistance Program'' (SNAP) 
and made numerous amendments to the benefits and operation of the 
program. This rule proposes to codify into the SNAP regulations 12 
provisions from the FCEA and also to make conforming nomenclature 
changes throughout part 273 of the SNAP regulations, including the 
change to the program's name. In addition, this rule proposes two 
changes to the SNAP certification and eligibility regulations to 
provide State options that are currently available to State agencies 
only through waiver requests. Finally, in Sec.  273.12, this rule 
proposes to clarify the applicability of various provisions to 
different client reporting systems. The provisions included in this 
rule affect the eligibility, benefits, and certification of program 
participants as well as the E&T portion of the program.

When were States required to implement the statutorily-based provisions 
covered in this rulemaking?

    The statutory provisions covered in this rule were effective on 
October 1, 2008. Many of the eligibility, certification and E&T 
provisions included in this proposed rule were mandated by the FCEA to 
be implemented by State agencies on October 1, 2008. These provisions 
with corresponding FCEA sections include:
     Section 4001--Changing the program name;
     Section 4101--Excluding military combat pay;
     Section 4102--Raising the standard deduction for small 
households;
     Section 4103--Eliminating the dependent care deduction 
caps;
     Section 4104(a)--Indexing the resource limits;
     Section 4104(b)--Excluding retirement accounts from 
resources;
     Section 4104(c)--Excluding education accounts from 
resources;
     Section 4107--Increasing the minimum benefit for small 
households; and
     Section 4122--Funding cycles for E&T programs.
    The FCEA created new program options that State agencies may 
include in their administration of the program. State agencies were 
also permitted to implement these provisions on October 1, 2008. These 
provisions, which are addressed in this rule, are identified below with 
the corresponding FCEA section:
     Section 4105--Expanding simplified reporting;

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     Section 4106--Expanding transitional benefits option;
     Section 4108--E&T funding of job retention services; and
     Section 4119--Telephonic signature systems.
    Still other FCEA provisions, which are not addressed in this 
proposed rule, cannot be implemented by State agencies until the final 
regulations are issued by the Department. FNS informed State agencies 
of implementation timeframes for all SNAP provisions in the FCEA in a 
memorandum dated July 3, 2008. The information also included a basic 
description of the statutory provisions and can be found on the FNS Web 
site at: http://www.fns.usda.gov/snap/whats_new.htm.

What changes are proposed in this rule?

1. Program Name Change and Other Conforming Nomenclature Changes, 
Section 4001
    Why did the law change the program's name?
    Section 4001 of the FCEA changed the name of the program from the 
``Food Stamp Program'' to the ``Supplemental Nutrition Assistance 
Program'' or ``SNAP''. This change in name reflects the fact that 
participants no longer receive stamps or coupons to make food 
purchases. The process of changing from paper coupons to electronic 
benefit transfer (EBT) cards began as a pilot project in 1984; the EBT 
system became available nationwide in June 2004. The FCEA de-obligated 
all remaining food coupons as legal tender for SNAP purchases on June 
18, 2009.
    Additionally, the new name reflects a focus on the nutritional 
aspect of the program. SNAP not only provides food assistance to low-
income people, but also promotes nutrition to improve their health and 
well-being.
    Do State agencies have to use the new program name, SNAP?
    No. Although the official name of the program was changed on 
October 1, 2008, State agencies may continue to use State-specific 
names for SNAP. The Department has encouraged State agencies, however, 
to discontinue the use of the name, ``Food Stamp Program''.
    Did the law make other name changes?
    Yes. Section 4001 of the FCEA also changed the name of the statute 
that governs the program from the Food Stamp Act of 1977 to the Food 
and Nutrition Act of 2008. This change was also effective on October 1, 
2008.
    What name changes does this rule propose to make?
    This rule proposes to make the following name changes in 7 CFR part 
273 of the SNAP regulations:

------------------------------------------------------------------------
             Previous name                           New name
------------------------------------------------------------------------
Food Stamp Program.....................  Supplemental Nutrition
                                          Assistance Program (SNAP).
Food Stamp Act of 1977.................  Food and Nutrition Act of 2008.
food stamp.............................  SNAP.
food coupons...........................  SNAP benefits or benefits.
food stamps............................  SNAP benefits or benefits.
------------------------------------------------------------------------

    Will these changes be made to the other Parts of the SNAP 
regulations?
    Yes. We will publish other proposed or final rulemakings that will 
make these changes in other parts of the SNAP regulations.
    Are there extensive revisions in part 273 resulting from these 
nomenclature changes?
    Yes. This rule proposes to revise Sec. Sec.  273.11(e) and 
273.11(f) to update the procedures for providing benefits via EBT cards 
to residents of drug and alcohol treatment and rehabilitation centers 
and residents of group living arrangements. These procedures are 
already in use by these types of centers; only the regulatory 
description of the procedures is being updated.
2. Income Exclusions and Deductions: Military Combat-Related Pay 
Exclusion, Section 4101
    What is the Combat-Related Pay Exclusion?
    Section 4101 of FCEA amended section 5(d) of the Act (7 U.S.C. 
2014(d)) to exclude special pay to United States Armed Services members 
that is received in addition to basic pay as a result of the member's 
deployment or service in a designated combat zone. The exclusion 
includes any special pay received pursuant to 37 U.S.C., Chapter 5 and 
any other payment that is authorized by the Secretary. To qualify for 
the exclusion, the pay must be received as a result of deployment to or 
service in a combat zone and must not have been received prior to 
deployment. Combat-related pay was first authorized as a SNAP exclusion 
in 2005 under the Consolidated Appropriations Act of 2005 (Pub. L. 108-
447). The exclusion was subsequently renewed annually through 
appropriation legislation.
    What is a Combat Zone?
    A combat zone is any area that the President of the United States 
designates by Executive Order as an area in which the U.S. Armed Forces 
are engaging or have engaged in combat.
    How is FNS proposing to implement this exclusion in the SNAP 
regulations?
    We propose to add a new paragraph (20) to Sec.  273.9(c) to exclude 
combat-related pay received by a household from a person who is serving 
in the U.S. Armed Forces who is deployed to or serving in a Federally-
designated combat zone. We propose to define combat-related pay as 
income received by the household member under 37 U.S.C., Chapter 5 or 
as otherwise designated by the Secretary. Combat-related income is 
excluded if it is:
     Received in addition to the service member's basic pay;
     Received as a result of the service member's deployment to 
or service in an area that has been designated as a combat zone; and
     Not received by the service member prior to his/her 
deployment to or service in the designated combat zone.
    How would combat-related pay be verified?
    For individuals deployed to or serving in a combat zone, the amount 
of income received by or from the individual that is combat-related 
must be determined. This includes itemized combat-related payments 
authorized under 37 U.S.C., Chapter 5 in addition to any other combat-
related payments authorized by the Secretary which were not received 
immediately prior to the deployment to or service in the combat zone. 
Although the specific means of verifying this information may vary by 
U.S. military service and by local area, a number of sources may be 
considered. Information regarding deployment to or service in a combat 
zone may be available via earnings and leave statements, military 
orders or public records on deployment of military units.
    Does all income received by the service member in a combat zone 
qualify for the exclusion?
    No. Only those funds authorized pursuant to 37 U.S.C., Chapter 5 or 
otherwise authorized by the Secretary that are provided as a result of 
deployment to or service in a combat zone qualify for the exclusion. 
Funds received by a household prior to the service member's deployment 
are included as household income requiring the State agency to 
differentiate between the service member's ``regular'' pay and combat-
related pay to determine the excluded amount. For example, consider a 
service member who typically provides a household with $500 a month 
prior to deployment; however, after deployment the service member 
receives an additional $200 in combat-related pay and makes that pay 
available to the household. As a result, the family receives a total of 
$700 a month, but only $500 is counted as income because the additional 
$200 is combat-related.

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    Is the deployed military member considered a household member?
    Military personnel who have been deployed are not included as 
household members for purposes of determining SNAP benefits as they are 
not living with the remaining eligible members of the household. 
However, income made available to the household by the deployed 
military member is considered household income, unless it is otherwise 
excluded under program rules.
3. Income Exclusions and Deductions: Standard Deduction Increase, 
Section 4102
    What is the standard deduction?
    The standard deduction was established under the Food Stamp Act of 
1977, which eliminated certain deductions and created a single standard 
deduction available to all households. The standard deduction is 
subtracted from a household's gross monthly income to determine a SNAP 
household's net income and to calculate the benefit amount, if 
eligible.
    How has the standard deduction changed over the years?
    The Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 (PRWORA) (Pub. L. 104-193), froze the standard deduction at 
$134 for all households residing in the 48 States and the District of 
Columbia. The Food, Security and Rural Investment Act of 2002 (Pub. L. 
107-171) (FSRIA) replaced the $134 standard deduction with a deduction 
that varied according to household size and was adjusted annually for 
cost-of-living increases. For households in the 48 contiguous States 
and the District of Columbia, Alaska, Hawaii, and the U.S. Virgin 
Islands, FSRIA set the deduction at 8.31 percent of the applicable net 
income limit based on household size and stipulated that no SNAP 
household may receive an amount less than the 2002 deduction amount 
($134 for most households) or more than the current standard deduction 
for a six-person household. Households residing in Guam receive a 
somewhat higher deduction.
    What changes did the FCEA make to the standard deduction?
    Section 4102 of the FCEA amended section 5(e) of the Act (7 U.S.C. 
2014(e)) to raise the minimum standard deduction for one, two, or three 
person households from $134 to $144. This change was effective in FY 
2009 for the 48 contiguous States and the District of Columbia. In 
addition, it changed the minimum standard deduction amounts for Alaska, 
Hawaii, the U.S. Virgin Islands, and Guam to $246, $203, $127, and 
$289, respectively. Beginning in FY 2010 and each fiscal year 
thereafter, FCEA indexed the minimum standard deduction to inflation.
    How is the minimum standard deduction indexed to inflation?
    Beginning FY 2010, the amount of the minimum standard deduction is 
adjusted each year on October 1 to reflect changes in the Consumer 
Price Index for All Urban Consumers (CPI-U) published by the Bureau of 
Labor Statistics of the Department of Labor, for items other than food. 
The amount is calculated based on the previous fiscal year amount 
adjusted for changes in the CPI-U for the 12-month period ending on the 
preceding June 30, rounded down to the nearest dollar.
    How does FNS plan to incorporate this change in the regulations?
    FNS is proposing to amend the regulations at Sec.  273.9(d)(1)(iii) 
to incorporate the FCEA changes in the minimum standard deduction. In 
addition, FNS plans to correct the citation at Sec.  273.12(e)(1)(B) 
from Sec.  273.9(d)(7) to Sec.  273.9(d)(1).
    How does increasing the minimum standard deduction affect eligible 
SNAP households?
    Increasing the minimum standard deduction strengthens the food 
purchasing power of low-income households, including working families 
with children, the elderly and disabled on fixed incomes, and 
individuals who have lost jobs due to economic conditions. This change 
will be of significant impact to smaller households of three or fewer 
people, primarily in the 48 contiguous States and DC, who would 
otherwise qualify for a smaller deduction and lower benefit amounts 
without the minimum standard. Adjusting the minimum standard deduction 
each fiscal year also protects eligible SNAP households from any future 
erosion in benefits due to inflation.
4. Income Exclusions and Deductions: Eliminating the cap on Dependent 
Care Expenses, Section 4103
    How does this change affect SNAP households?
    A deduction for dependent care costs is currently available when a 
SNAP household member must work, perform job seeking activities, attend 
required employment and training activities, or attend college or 
training in order to get a job. The deduction amount had been capped 
since 1993 at $200 per month for children under the age of 2 years and 
$175 for other dependents. Section 4103 of the FCEA amended section 
5(e)(3) of the Act (7 U.S.C. 2014(e)(3)) by eliminating the caps on the 
deduction for dependent care expenses and allowing eligible households 
to deduct the full amount of their dependent care costs.
    When was this change effective?
    The change was effective October 1, 2008. State agencies were 
required to implement the provision for new households applying for 
benefits as of that date. For ongoing households already on the 
program, the Department encouraged State agencies to implement the 
change in the deduction amount as soon as possible on or after October 
1, 2008, on a case-by-case basis, at the first opportunity to enter the 
household's case file.
    Why was this change made?
    Prior to the FCEA, the caps on the dependent care deduction had not 
been adjusted for many years and no longer reflected the actual 
dependent care costs that low-income households pay. Eliminating the 
caps ties the deduction to actual expenses and reflects these costs in 
determining assistance to working families.
    How is the Department proposing to revise the deduction for 
dependent care costs?
    We propose to amend Sec. Sec.  273.9(d)(4) and 273.10(e)(1)(i)(E) 
to eliminate the caps. We propose to clarify that in addition to direct 
payments made to the care provider for the actual cost of care, the 
expenses of transporting dependents to and from care and separate 
activity fees charged by the care provider that are required for the 
care arrangement are also deductible. We also propose to incorporate at 
Sec.  273.9(d)(4) longstanding guidance that defines dependent care to 
include children through the age of 15 as well as incapacitated persons 
of any age that are in need of dependent care. Finally, we propose to 
restore language to that section that permits households to deduct 
dependent care costs if a household member needs care for a dependent 
in order to seek employment. This provision was inadvertently removed 
from the regulations as part of a 1989 technical amendment to the 
regulations. Dependent care costs would be deductible for job seeking 
household members who are either complying with E&T requirements or an 
equivalent State agency job search requirement.
    What are actual costs of care?
    Section 5(e)(3) of the Act specifies that the actual costs that are 
necessary for the care of a dependent may be deducted if the care 
enables a household member to accept or continue employment, or to 
participate in training or education in preparation for employment. In 
the preamble to the proposed rule to implement the provisions of the 
Food Stamp Act of 1977 (43 FR 18890), published on May

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2, 1978, FNS stated that the dependent care deduction applies only to 
the direct compensation to the care provider. Since then, FNS has 
provided guidance on specific situations to determine ``actual costs of 
care'' or whether care was needed for employment or to prepare for 
employment. In some instances, this limited guidance defined these 
costs more broadly than the 1978 interpretation, particularly 
concerning the transportation of dependents to and from care.
    What are other dependent care expenses?
    In addition to direct payments to the care provider, we propose to 
permit households to deduct other out-of-pocket costs that are part of 
the total cost of dependent care incurred by SNAP households and 
necessary for the household to participate in or maintain the care 
arrangement. The following types of dependent care expenses would be 
deductible under this proposal:
     Transportation costs to and from the care facility; and
     Activity fees associated with structured care programs.
    Only those expenses that are separately identified, necessary to 
participate in the care arrangement, and not already paid by another 
source on behalf of the household would be deductible. Under current 
SNAP regulations at Sec.  273.2(f)(2) and Sec.  273.2(f)(3), State 
agencies may require households to verify any dependent care expenses 
and must verify any questionable information.
    Why include transportation?
    The Department has three reasons for including the expenses of 
transportation as part of the actual costs of dependent care. First, 
the removal of the dependent care caps by the FCEA indicates an 
important shift by Congress in recognizing that associated costs 
represent a major expense for working households. Second, a consistent 
national policy on this issue is needed. Despite FNS' initial 
interpretation (in the preamble to the 1978 proposed rule) limiting 
dependent care deductible expenses to direct payments to a dependent 
care provider, subsequent interpretations indicated that the cost of 
transporting dependents to and from care facilities were allowable. In 
the absence of a consistent national policy, some State agencies 
developed policies that permit the deduction of transportation costs 
and other dependent care costs. Third, during the floor discussions in 
both houses of Congress prior to the passage of the FCEA, members of 
Congress expressed support for allowing the deduction of transportation 
costs.
    What are activity fees and why include them?
    An activity fee is an expense associated with a structured care 
program. Examples of activity fees that may be deductible under this 
proposal include:
     The cost of an art class for an after school program or an 
adult day care program;
     Additional fees charged for attending a sports camp; and
     The cost of field trips sponsored by summer camps.
    The Department views the elimination of the dependent care caps as 
an indication of Congress' recognition of the importance of affordable, 
reliable, and safe care for the children or other dependents of SNAP 
households. Dependent care involves many different types of costs, 
including fees charged for activities that are part of structured 
dependent care programs, such as before and after school care, summer 
camps, or adult day care. For older children, dependent care expenses 
are more likely to include costs for participating in recreational or 
educational enrichment activities. As with other dependent care costs, 
a key to allowability of an activity fee is whether the activity 
enables a household member to be employed or pursue training or 
education to prepare for employment. To count toward the household's 
dependent care expenses, activity fees would have to be specific and 
identifiable additional costs.
    Since State agencies would be responsible for determining the 
allowability of specific costs claimed as activity fees, we encourage 
States and local agencies to provide comments on this proposal. 
Commenters might consider addressing the following questions: Are 
activity fees identifiable additional charges paid by households that 
can be verified? Is more detailed guidance needed to determine 
allowable costs, and what specific conditions would commenters wish to 
see in a final rule?
    Why set the upper age limit for child care at 15 years of age?
    As previously mentioned, FNS' longstanding policy permits dependent 
care expenses for children from birth through age 15 to be deductible. 
This upper age limit for children stems from requirements at section 
6(d)(1)(A)of the Act (7 U.S.C. 2015(d)(1)(A)) and Sec.  273.7(a) of the 
regulations that SNAP household members who turn 16 must register for 
work unless they are attending school at least half-time or are 
otherwise exempt from work registration. Although we have consistently 
indicated age 15 as the upper age limit for allowable dependent care 
expenses in response to specific situations, a formal nationwide policy 
has not been issued. Since questions about the upper age limit for 
deductible child care expenses continue to arise occasionally, this 
rule provides an opportunity to propose to codify FNS policy.
    Are there any age restrictions on dependent care expenses for 
disabled persons?
    No. Since a person can become incapacitated at any age and thus 
require dependent care, we propose to specify that dependent care costs 
for an incapacitated person of any age would be deductible. Although 
this proposal does not tie the allowability of dependent care expenses 
for incapacitated adults to the SNAP regulatory definition of ``elderly 
or disabled member'', we think that any adult requiring dependent care 
would be either disabled or elderly. The SNAP regulations at Sec.  
271.2 of this chapter define ``elderly or disabled member'' as someone 
who is 60 years of age or older or is determined to be disabled based 
on receipt of specific payments such as SSI, veterans' disability 
benefits, or other disability or retirement payments. Disability must 
be verified per Sec.  273.2(f)(1)(viii). We welcome comments on whether 
adult dependent care expenses should be limited only to adults that 
meet the regulatory definition of ``elderly or disabled member''.
5. Resources: Asset Indexation, Section 4104
    What changes did the law make to resource limits for SNAP 
households?
    Section 4104(a) of the FCEA amended Section 5(g) of the Act (7 
U.S.C. 2014(g)) to mandate that the current asset limits be indexed to 
inflation, rounding down to the nearest $250 beginning October 1, 2008.
    How does the Department propose to index assets?
    Current regulations at Sec.  273.8(b) limit SNAP households without 
disabled or elderly members to a maximum of $2,000 in resources and 
SNAP households with disabled or elderly members to a maximum of $3,000 
in resources. This rule proposes to revise Sec.  273.8(b) by indexing 
the current asset limits to inflation. Section 4104(a) of the FCEA 
mandated that the Department use the CPI-U published by the Bureau of 
Labor Statistics of the Department of Labor. Starting October 1, 2008, 
and each October 1 thereafter, the maximum allowable resources would be 
adjusted based on the previous year's rate of inflation. The value of a 
household's

[[Page 25418]]

resources would be rounded down to the nearest $250 increment.
    Why change the asset limits?
    These changes allow the resource limits to keep pace with 
inflation. Without this indexation, the maximum allowable resources 
would remain constant even as the prices of goods and services rise.
    When does the Department estimate that the maximum allowable 
resources will increase?
    The Department estimates that the maximum allowable resources will 
not increase until FY 2013.
6. Resources: Exclusion of Retirement Accounts From Resources, Section 
4104
    How would the proposed rule affect retirement accounts?
    Consistent with Section 4104(b) of the FCEA (Section 5(g)(7) of the 
Act), we propose to exclude all funds that are in tax-preferred 
retirement accounts from countable resources when determining 
eligibility for SNAP. This proposed revision would amend the SNAP 
regulations at Sec.  273.8(e)(2)(i).
    Which retirement accounts would be excluded?
    The proposed rule would exclude funds from countable resources if 
they are in accounts that fall under any of the following sections of 
the Internal Revenue Code of 1986 (Title 26 of the United States Code) 
(IRC): 401(a), 403(a), 403(b), 408, 408A plans, 457(b), 501(c)(18).
    IRC Section 401(a) plans include simple 401(k) plans and 
traditional 401(k) plans. Simple 401(k) plans are for small businesses, 
are subject to some limitations on employer contributions, and are 
exempt from some restrictions. Other 401(k) plans, also referred to as 
``cash or deferred arrangement'' (CODA) plans, allow employees to defer 
compensation in the plan.
    IRC section 403(a) plans are funded through annuity insurance. 
Section 403(b) plans are also called ``tax sheltered annuities'' or 
``custodial account plans'', are available to tax exempt nonprofit 
organizations and public schools, and are often funded through employee 
contributions.
    Section 408 of the IRC describes Individual Retirement Accounts and 
Annuities (IRAs), including simple retirement accounts and Simplified 
Employee Pension Plans (SEPs). IRAs are controlled by individuals 
rather than employers. Simple retirement account IRAs are only 
available to small businesses. SEPs are sponsored by small business 
employers and allow the employer to add funds to the account and 
function like IRAs.
    Roth IRAs are described in Section 408A of IRC. Qualified 
distributions to Roth IRAs are tax-free.
    Section 457 of IRC describes funded plans provided by State or 
local governments and unfunded plans offered by nonprofit 
organizations.
    The proposed rule would also exclude all funds in a Federal Thrift 
Savings Plan (5 U.S.C. 8439). Federal Thrift Savings Plans are plans 
offered by the Federal government to its employees.
    Why is the Department proposing to maintain discretion over future 
retirement accounts?
    The FCEA provides the Secretary with discretion to exclude future 
retirement accounts should new types of retirement accounts develop. 
Thus, the proposed rule would allow the Department to exclude any 
subsequently created retirement accounts that are exempt from Federal 
taxes. This would allow the Department to maintain consistency with 
regard to its treatment of retirement accounts.
7. Resources: Exclusion of Education Accounts From Resources, Section 
4104
    How does the proposed rule affect the treatment of education 
savings accounts?
    Consistent with Section 4104(c) of the FCEA, which amended Section 
5(g)(8) of the Act (7 U.S.C. 2014(g)(8)), the proposed rule would 
exclude all tax-preferred education savings accounts from resources 
when determining SNAP eligibility. This proposed provision would amend 
the SNAP regulations by adding a new paragraph at Sec.  273.8(e)(20).
    Which education savings accounts would be excluded?
    We propose to exclude all funds in education savings accounts from 
resources if the fund is described in section 529 or section 530 of the 
IRC. Section 529 of the IRC describes qualified tuition programs that 
allow a contributor to contribute funds or purchase tuition credits for 
qualified education expenses for a designated beneficiary. Section 529 
plans can only be used for qualified higher education expenses for 
tuition, fees, books, supplies, and equipment.
    Section 530 of the IRC describes Coverdell Education Savings 
Accounts, formerly known as ``Education Individual Retirement 
Accounts''. Coverdell Education Savings Accounts are trusts created to 
pay the education expenses of the designated beneficiary. The funds in 
a Coverdell Education Savings Account can be used for any qualified 
higher education expense or any qualified elementary and secondary 
education expense. These expenses could be for tuition, fees, tutoring, 
books, uniforms, room and board, transportation, supplies, and other 
equipment.
    How does the Department propose to handle future changes to 
education savings accounts?
    As with the retirement accounts, the FCEA provides the Secretary 
with discretion to exclude subsequent education savings accounts. Thus, 
this rule proposes that the Department maintain discretion over future 
tax-preferred education savings accounts. This would permit the 
Department to maintain consistent policy concerning education saving 
accounts should the IRC develop new types of tax-preferred education 
savings accounts.
8. State Options From the FCEA: Expansion of Simplified Reporting, 
Section 4105
    What is simplified reporting?
    Simplified reporting is an option available to State agencies under 
SNAP regulations at Sec.  273.12(a)(5) that requires minimal household 
reporting in comparison to the other types of household reporting 
systems that are available to State agencies under the SNAP 
regulations. During the certification period in a simplified reporting 
system, a household must only report when the following occurs:
     Gross monthly income exceeds the SNAP gross monthly income 
standard, which is set at 130 percent of the Federal income poverty 
guidelines; or
     The work hours of an able-bodied adult without dependents 
(ABAWD) falls below the minimum average of 20 hours.
    In addition, a household may also be required to submit a periodic 
report, generally about halfway through the certification period, for 
which certain changes that have occurred since certification must be 
reported. The reporting requirements for the periodic reports are 
limited in number and scope by Federal regulations, which have 
benefitted SNAP households as well as State agencies. Because of the 
reduced reporting burden, simplified reporting has afforded relatively 
stable benefit levels for households. In addition, with fewer periodic 
reports to process, simplified reporting has reduced State agencies' 
administrative workload as well as error rates. The popularity of 
simplified reporting has grown steadily since its addition to the 
regulations in November 2000; today, almost all State agencies place 
most households certified for at least 4 months on simplified 
reporting.
    How did the law expand simplified reporting?

[[Page 25419]]

    Section 4105 of the FCEA removed a restriction in section 
6(c)(1)(A) of the Act (7 U.S.C. 2015(c)(1)(A)) that prohibited periodic 
reporting for certain households. The households included homeless, 
migrant and seasonal farm workers, and disabled or elderly adults in 
households with no earnings. This restriction discouraged State 
agencies from including these households in their simplified reporting 
systems. The FCEA eliminated the ban on periodic reporting by these 
households but limited the frequency with which State agencies may 
require these households to file periodic reports. As a result, 
effective October 1, 2008, State agencies may place all households on 
simplified reporting, allowing elderly, disabled, homeless, and migrant 
and seasonal farm worker households to participate with only minimal 
change reporting requirements.
    What is the statutory limit for periodic reports for elderly, 
disabled, homeless and migrant or seasonal farm worker households?
    As amended by the FCEA, Section 6(c)(1)(A) of the Act limits the 
frequency of periodic reporting for homeless and migrant or seasonal 
farm worker households to every 4 months and for households in which 
all adult members are elderly or disabled with no earned income to once 
a year. The 4-month limitation on reporting frequency for homeless and 
migrant or seasonal farm worker households is consistent with current 
periodic reporting requirements. To be consistent with current law, 
regulations published on January 29, 2010 (75 FR 4912), specified the 
periodic reporting limitation of once per year for the elderly or 
disabled households with no earned income.
    How does this rule propose to implement the statutory change to 
simplified reporting?
    We propose to clarify in Sec.  273.12 the periodic reporting 
requirements and frequency of required periodic reporting for all 
households that are placed under the State agency's simplified 
reporting system. These revised provisions are located at proposed 
paragraphs (d)(6)(iii)(A) and (d)(6)(iii)(B), respectively.
    What other changes are proposed for Sec.  273.12?
    We are proposing to reorganize Sec.  273.12 to improve the 
readability of the section and to clarify aspects of current reporting 
requirements applicable under each reporting system. Currently, there 
are four SNAP client reporting systems. Three of these client reporting 
systems are covered in Sec.  273.12, as noted below:
     Change reporting--Sec.  273.12(a), (b), (c), and (d);
     Quarterly reporting--Sec.  273.12(a)(4), (b), and (c);
     Simplified reporting--Sec.  273.12(a)(5), (b), and (c); 
and
     Monthly reporting--Sec.  273.21.
    We propose to reorganize and clarify the requirements for the 
reporting systems currently covered under Sec.  273.12, as noted above. 
The reason for this is that all State agencies are currently using one 
or more of the reporting systems that are currently contained in Sec.  
273.12 for the majority of their SNAP households. States' use of 
monthly reporting, located in Sec.  273.21, is now negligible. We 
recognize that further reorganizations will probably be needed in 
future years to keep pace with the continuing evolution of client 
reporting requirements in SNAP. A future issue may be whether to remove 
regulations concerning a reporting system that is no longer utilized by 
any State agency.
    What is the rationale for revising Sec.  273.12?
    Like most sections in part 273, which covers the certification and 
eligibility requirements for SNAP households, Sec.  273.12 was 
initially written in the late 1970's to incorporate the provisions of 
the Food Stamp Act of 1977. At that time, client reporting requirements 
were contained under a single ``change reporting'' system. Later, Sec.  
273.12 was amended to add other client reporting options in addition to 
change reporting, without always completely identifying which of the 
required change reporting provisions also applied to the other 
reporting systems. Other incremental changes were made to reporting 
requirements over time as well. As a result, the regulations on 
specific provisions of various reporting systems are unclear. This lack 
of clarity is particularly noticeable in paragraphs (b), (c), and (d) 
of the current Sec.  273.12, which cover requirements for report forms, 
State agency action on changes, and household failure to report, 
respectively.
    How is FNS proposing to reorganize the section?
    We propose the following paragraphs for Sec.  273.12:
    Paragraph (a) General requirements;
    Paragraph (b) Change reporting;
    Paragraph (c) Quarterly reporting;
    Paragraph (d) Simplified reporting;
    Paragraph (e); Mass changes; and
    Paragraph (f) Optional reporting requirements for public assistance 
(PA) and general assistance (GA) households.
    Paragraph (a) would describe the general requirement for household 
reporting, identify the reporting systems currently permitted under the 
regulations, and list the location in the regulations for the client 
reporting systems.
    Paragraphs (b), (c), and (d) would describe the requirements 
appropriate to change, quarterly, and simplified reporting systems, 
respectively, addressing the following topics:
     Features;
     Included households;
     What households must report;
     Special procedures for child support payments;
     How households must report;
     When households must report;
     When households fail to report; and
     State agency action on changes.
    The provisions for State agency implementation of mass changes and 
reporting options for PA and GA households, currently located at 
paragraphs (e) and (f) of this section would remain unchanged other 
than nomenclature changes.
    FNS is interested in commenters' thoughts on this proposed 
revision. We think that there are positive aspects to using a 
systematic approach to describe the requirements for each respective 
reporting system. The most important advantage will be the ease in 
locating all requirements pertinent to each reporting system. In 
addition, we think that this revision will enable State agencies to 
compare the relative advantages and disadvantages of each reporting 
system more easily. The drawback to this approach is a certain amount 
of redundancy that will increase the overall length of the section.
    Is FNS proposing any clarification of reporting requirements beyond 
just a reorganization of Sec.  273.12?
    Yes. Although our primary intention is to explain the requirements 
of each reporting system covered in Sec.  273.12 in a more logical and 
consistent manner, we are also proposing to clarify aspects of certain 
reporting requirements. These clarifications include:
     Household requirement to report changes in liquid 
resources.
    We are proposing three clarifications that would apply to 
households subject to change, quarterly, and simplified reporting. 
First, we propose to clarify that elderly and disabled households would 
only report changes when liquid resources (i.e., cash, money in 
checking or savings accounts, saving certificates, stocks or bonds, and 
lump sum payments) reach or exceed the maximum amount permitted for 
these households under the Act. Second, we propose to specify that the 
maximum resource levels for elderly and disabled households and for all 
other households (currently set at $3,000 and $2,000,

[[Page 25420]]

respectively) will reflect adjustments for inflation under proposed 
Sec.  273.8(b)(1). Third, we propose language that would exempt 
households from reporting changes in liquid resources if the State 
agency excludes resources for categorically eligible households. 
Current FNS guidance provides a blanket waiver from the resource 
limitation reporting requirements for categorically eligible 
households, as provided under Sec.  273.2(j)(2)(v).
     Household requirement to report changes in vehicle 
acquisition. We propose to clarify that households will not have to 
report changes in vehicle acquisitions that are not fully excludable 
under SNAP regulations if the State agency uses TANF vehicle rules, as 
provided under Sec.  273.8(f)(4). Current FNS guidance provides for a 
blanket waiver of this reporting requirement if the State agency is 
using TANF vehicle rules in lieu of SNAP vehicle rules.
     Standardization of certain reporting requirement features. 
We are proposing to clarify that certain basic features currently 
applicable to one or more reporting systems are applicable to all three 
reporting systems covered in Sec.  273.12. These features include 
permitting households under a change reporting system to report changes 
by fax, e-mail, or through a State agency's Web site; specifying that 
the change report form must be written in clear, simple language and 
must meet SNAP bilingual requirements; and specifying that reporting 
requirements for applicants (currently located at Sec.  273.12(a)(3)) 
and provisions describing permissible claim action by State agencies 
when households fail to report (currently located at Sec.  273.12(d)) 
apply to quarterly and simplified reporting systems as well as change 
reporting systems.
9. State Options From the FCEA: Transitional Benefits Alternative, 
Section 4106
    What is the transitional benefit alternative (TBA)?
    TBA is an option provided at Section 11(s) in the Act (7 U.S.C. 
2020(s)) that permits State agencies to offer transitional SNAP 
benefits to households leaving certain public assistance programs. TBA 
was incorporated into the SNAP regulations at Sec.  273.12(f)(4) by a 
final rule, ``Noncitizen Eligibility and Certification Provisions of 
Pub. L. 104-193'', published on November 21, 2000 (65 FR 70183). TBA 
ensures that households that are leaving public assistance programs can 
continue to meet their nutritional needs as they transition from public 
assistance to the workforce. TBA guarantees a fixed SNAP benefit amount 
and eliminates reporting requirements during the transition period, 
which is up to five months. During this time, households receive SNAP 
benefits that equal the amount received immediately prior to the 
termination of TANF benefits, with adjustments made for the loss of 
TANF.
    How did the FCEA change this option?
    Section 4106 of the FCEA amended Section 11(s)(1) of the Act to 
permit State agencies to provide transitional SNAP benefits to 
households with children that cease to receive cash assistance under a 
State-funded public assistance program. Prior to this change in the 
law, States were able to provide transitional SNAP benefits only to 
households that stopped receiving Federally-funded TANF assistance. 
FCEA sought to provide similar treatment of State-funded programs, 
similar in purpose to TANF assistance.
    How will this change affect SNAP households?
    This provision enables State agencies to extend TBA to additional 
households with children that are being terminated from State-funded 
public assistance that is similar to TANF but not funded through TANF. 
For some households, this could mean an additional period of TBA 
eligibility if the State has a cash benefit program that follows after 
TANF ends. For other households that did not receive TANF, it provides 
an opportunity for stabilized SNAP benefits after the State-funded 
assistance program ends.
    What types of assistance programs would qualify under this 
provision?
    As specified in the Act at Section 11(s)(1)(B), eligible programs 
are those funded by States that provide cash assistance to families 
with children. These state-funded cash assistance programs would be 
separate from State-level TANF funding streams. An example of an 
eligible program would be a State general assistance program that 
provides cash assistance to families with children. Programs that would 
not be eligible under this provision include programs that are funded 
by local level governments and programs that do not provide a cash 
benefit.
    Is it possible for a household to receive TBA more than once--
first, when the TANF benefits end and again, when the State-funded cash 
assistance (SFCA) ends?
    Yes, provided that certain conditions exist. First, the household 
must be qualified to receive transitional benefits based on State 
agency criteria, which must be described in the State plan of 
operation, per Sec.  273.26. Second, the SFCA must meet the criteria in 
Section 11(s)(1)(B) of the Act as described above--that is, it must 
provide SFCA to families with children. Third, the SFCA must be 
provided after the family is terminated from TANF.
    How does the Department propose to implement this provision?
    We propose to amend State plan requirements at Sec.  272.2(d)(1)(H) 
and subpart H in part 273 of the SNAP regulations, to specify that 
household's eligibility for TBA may be based on SFCA in addition to 
TANF. We propose to specify that a household may qualify for an 
additional TBA period if it participates in a SFCA program that 
continues after TANF has ended. We also propose that in administering 
TBA based on SFCA, State agencies would follow the same procedures they 
currently use to administer TBA based on TANF. In making this change, 
we propose to add SFCA to numerous provisions in subpart H of part 273, 
which include:
     Sec.  273.26--introductory paragraph and paragraph (a);
     Sec.  273.27--paragraphs (a) and (c);
     Sec.  273.29--paragraphs (c) and (d); and
     Sec.  273.32.
10. Increasing Benefits for Small Households: Minimum Benefit Increase, 
Section 4107
    How did the FCEA increase minimum benefit amounts?
    Section 4107 of the FCEA amended section 8(a) of the Act (7 U.S.C. 
2017(a)) to increase the minimum benefit amount for one and two-person 
households from $10 to 8 percent of the maximum allotment for a one-
person household, rounded to the nearest whole dollar. The maximum 
allotment is based on the Thrifty Food Plan (TFP) (Section 4(u) of the 
Act (7 U.S.C. 2013(u) and 7 CFR 271.2). For FY 2009, this change 
effectively increased the minimum allotment from $10 to $14 for 
households in the 48 contiguous States and the District of Columbia 
(.08 x the one-person TFP of $176 = $14, rounded to the nearest whole 
dollar). The American Recovery and Reinvestment Act of 2009 (ARRA) 
(Pub. L. 111-5) further increased the minimum monthly benefit amount 
for these households from $14 to $16 by raising the maximum allotment, 
which is used in the minimum benefit calculation (.08 x the increased 
one-person TFP of $200, rounded to the nearest whole dollar), effective 
April 1, 2009. SNAP households residing in Alaska, Hawaii, Guam, and 
the U.S. Virgin Islands receive somewhat higher minimum

[[Page 25421]]

benefit amounts since these geographic areas have higher TFP amounts, 
reflecting higher food prices in these areas.
    How does FNS propose to incorporate this change in the regulations?
    We propose to amend the regulations at Sec.  273.10(e)(2)(ii)(C) to 
incorporate the FCEA provision indexing the minimum benefit amount to 8 
percent of the maximum allotment for a one-person household, rounded to 
the nearest whole dollar. In addition, FNS proposes to update the 
definition of ``minimum benefit'' in Sec.  271.2 to remove the 
reference to the former minimum benefit amount of $10 and specify that 
the minimum benefit shall be based on the provisions of Sec.  273.10.
    How does increasing the minimum benefit affect SNAP households?
    The Food Stamp Act of 1977 established a monthly minimum benefit of 
$10 per month for one- and two-person households, and the amount has 
not been adjusted since that time. As a result, this minimum benefit no 
longer purchases the same amount of food today as it did more than 30 
years ago. Since the TFP is adjusted each fiscal year to reflect price 
changes, tying the minimum benefit amount to the TFP maintains the 
purchasing power for smaller households and ensures that future minimum 
benefit amounts reflect increases in food prices.
11. Employment and Training (E&T): Funding for Job Retention Services, 
Section 4108
    What changes did the law make in E&T program components?
    Section 6(d)(4) of the Act (7 U.S.C. 2015(d)(4)) specifies 
components that State agencies must include as part of E&T programs. 
Current regulations at Sec.  273.7(e)(1) provide that a State agency 
must include one or more of the following components:
     A job search program;
     A job search training program;
     A workfare program;
     A work experience and/or training program;
     A project, program or experiment aimed at accomplishing 
the purpose of the E&T program;
     Educational programs or activities; and
     A program to improve the self-sufficiency of recipients 
through self-employment.
    Section 4108 of the FCEA amended Section 6(d)(4) of the Act to add 
a new E&T component. Under the amendment, State agencies are allowed to 
provide job retention services for up to 90 days to an individual who 
secured employment after receiving other employment/training services 
under the E&T program offered by the State agency.
    What are job retention services?
    The Department proposes to amend Sec.  273.7(e)(1)(viii) of the 
SNAP regulations to define job retention as services provided to 
individuals who have secured employment to help achieve satisfactory 
performance, keep the job, and to increase earnings over time. Such 
services and reimbursable participant costs may include but are not 
limited to:
     Counseling;
     Coaching;
     Support services;
     Life skill classes;
     Referrals to other services;
     Clothing required for the job;
     Equipment or tools required for the job;
     Test fees;
     Union dues; and
     Licensing and bonding fees.
    Can job retention services be provided to individuals after their 
benefits have ended?
    State agencies electing to provide job retention services may 
extend these services to households leaving SNAP up to the 90 day 
limit. Job retention services are a time-limited training and support 
process that assist the individual in assessing job needs and provides 
assistance and resources as needed. As the individual gains job 
independence, less assistance is required and the goal of self-
sufficiency is achieved. Therefore, the State agency may provide job 
retention services to individuals losing benefits as a result of 
increased earnings, consequently, keeping households on track to 
independence and reducing the possibility of returning to the program.
    Would an individual who refuses to accept job retention services be 
considered an ineligible household member?
    Under current regulations at Sec.  273.7(f)(1), a non-exempt 
individual who fails to comply without good cause is ineligible. Under 
a strict interpretation of Section 6(d)(1) of the Act (7 U.S.C. 
2015(d)(1)), an E&T participant who obtains suitable employment, 
remains eligible, and fails to accept job retention services may be 
considered non-compliant. Imposing a penalty on an employed, otherwise 
eligible individual for choosing not to accept job retention services 
would place an undue burden on the household and would only serve to 
block the path to self sufficiency.
    Current rules at Sec.  273.7(e)(4) allow voluntary participation in 
program components without penalty for failure to comply with E&T 
requirements. The Department proposes that otherwise eligible 
individuals be treated the same as a volunteer if the individual elects 
not to accept job retention services offered by the State agency. Such 
individuals would not be subject to E&T program participation 
requirements imposed by the State agency. Failure to participate in a 
job retention program would not result in disqualification.
    How did the changes in the law affect voluntary participants?
    Section 4108 of the FCEA also modified Section 6(d)(4) of the Act 
(7 U.S.C. 2015(d)(4)) to permit individuals voluntarily participating 
in employment and training programs to participate beyond the required 
maximum of a number of hours based on their benefit divided by the 
minimum wage. The Department is proposing to amend current rules at 
Sec.  273.7(e)(4)(iii) to indicate that voluntary participants are not 
subject to the limitations specified in Sec.  273.7(e)(3) which limit 
the number of hours spent in an E&T component. Under current 
regulations the total amount of time spent each month by a participant 
in an E&T work program, combined with hours worked in a workfare 
program, and hours worked for compensation must not exceed 120 hours. 
The total number of hours, which the State agency can mandate (120 
hours), would be unaffected.
12. State Options From the FCEA: Telephonic Signature Systems, Section 
4119
    What is the statutory authority for these proposed changes?
    Section 4119 of FCEA amended section 11(e) of the Act (7 U.S.C. 
2020(e)) to permit a State agency to accept spoken signatures, subject 
to certain conditions. Congress used the term ``recorded verbal 
assent'' in the statute. In this proposed rule, the Department uses the 
term ``spoken signature'' to reflect the range of changes regarding 
signatures for households' SNAP documents.
    What are SNAP's current regulations regarding signatures?
    SNAP's current regulations at Sec.  273.2(c)(1) provide for 
handwritten and electronic signatures. There is no mention of spoken 
signatures, or of gestured signatures, for those individuals unable to 
provide spoken assent. By gestured signatures, the Department means a 
household's attestation or assent through a purely visual language, 
like American Sign Language (ASL).
    The Department's current policy, which would remain in place under 
this proposed rule, is two-fold:

[[Page 25422]]

     A State agency must accept handwritten signatures from 
applying households, and
     No State agency must accept unwritten signatures if it 
chooses not to do so.
    In particular, the Department has consistently recommended that 
every State agency consult legal counsel to verify that the verbal 
assent constitutes a valid signature pursuant to State law.
    What is the Department proposing about signatures for SNAP 
applications?
    Essentially, the Department is proposing four changes regarding 
signatures for SNAP applications:
     To implement Section 4119 of the FCEA by stating clearly 
that a State agency may accept spoken signatures;
     To implement that statute's restrictions on spoken 
signatures;
     To apply those restrictions to other signatures, both 
written and unwritten; and
     To permit gestured, or visual signatures, as an 
alternative for those individuals who are unable to provide spoken 
verbal assent.
    These proposed changes would apply to applications submitted at 
initial certification and recertification and to reports required to be 
submitted under the client periodic reporting systems allowed by SNAP 
regulations (monthly, quarterly, or simplified reporting systems).
    What is a spoken signature?
    A spoken signature is intended to include means of assenting to 
information other than written or electronic. An obvious example would 
involve an interactive interview with a SNAP household over the 
telephone. The State agency would elicit responses from the household. 
At the end of the interview the household would agree that the 
information is correct and that the household understands its rights 
and responsibilities. An audio recording of the agreement would be made 
and linked to the case. That spoken agreement is one example of a 
spoken signature. The interactive interview and the signature then 
become part of the household's permanent case record.
    May a State agency accept spoken signatures?
    Yes, subject to certain requirements, which are discussed later.
    Must a State agency accept spoken signatures?
    No. This would be a matter for each State agency to decide. 
However, the Department encourages State agencies to explore this 
format because of the benefit that it provides to households. For 
example, people with less acute vision or limited mobility would be 
able to apply more easily and State agencies could accept applications 
and conduct interviews over the telephone with less administrative 
burden.
    What are the specific conditions for spoken signatures?
    The Department is proposing three conditions that the Act contains 
and one additional condition. First, section 11(e)(2)(C)(iii)(IV) of 
the Act (7 U.S.C. 2020(e)(2)(C)(iii)(IV)) requires a State agency to 
give a household a written copy of the completed application, along 
with simple instructions for correcting errors or omissions. Although 
the copy need not be a transcript of the conversation, the copy must 
contain the information that the State agency uses to determine the 
household's eligibility and to calculate its SNAP benefit. Since the 
State agency wants to provide the household with a correct 
determination, it is in the State agency's interest to ensure that the 
information in its possession is accurate and complete. The interests 
of the State agency, the household, and the Department conform exactly 
on this point.
    Second, the Act (at Section 11(c)(iii)(VI), 7 U.S.C. 
2020(c)(iii)(VI)) requires the State agency to treat the date of the 
spoken signature as the date of application. Section 11(e)(2)(B)(iv) of 
the Act (7 U.S.C. 2020(e)(2)(B)(iv)) requires that the date of 
application is the date on which a signed application with the 
applicant's name and address arrives at the State agency's office. In 
the case of a spoken signature, that signature would arrive at the 
State agency's office as it is being transmitted, in other words, on 
that very day. This would eliminate the delay in the filing date that 
occurs when submitting a paper application via mail, thereby improving 
client access.
    Third, under the Department's proposal, a State agency's system for 
accepting spoken signatures would have to comply with SNAP's bilingual 
requirements for the use of appropriate bilingual personnel and printed 
material in the administration of the program. Section 11(e)(1)(B) of 
the Act requires a State agency to ``comply with regulations of the 
Secretary requiring the use of appropriate bilingual personnel and 
printed material in the administration of the program in those portions 
of political subdivisions in the State in which a substantial number of 
members of low-income households speak a language other than English''. 
These bilingual regulations are found at Sec.  272.4(b) of this 
chapter.
    Fourth, the Department is also proposing that the State agency give 
the household at least ten days to return any corrections. This is 
SNAP's current standard for providing verification; a consistent 
standard would simplify the situation for both the household and the 
State agency.
    May a State agency accept electronic signatures?
    Yes. Current program rules at Sec.  273.2(c)(1) allow an agency to 
accept electronic signatures. This proposed rule clarifies that this 
provision is subject to the same restrictions and conditions the 
Department is proposing for spoken signatures that were discussed 
above. This is SNAP's current policy, and allows State agencies to 
continue to explore and to adopt these technologies as a way to improve 
their service to households and to simplify their management of SNAP 
cases.
    If a State agency accepts electronic, spoken, or gestured 
signatures anywhere in the State, must it do so statewide?
    No. The Department is not proposing that any such system be 
statewide. We are taking this approach for two reasons. First, a State 
agency may want to phase such a system into place over a long period of 
time. This would be particularly true in a State that was adopting 
other administrative enhancements, like new computer systems and call 
centers. Second, some State agencies supervise SNAP, but it is the 
States' counties that actually administer SNAP. In those States, some 
counties or groups of counties may be capable of accepting these other 
forms of signatures, while others may not use those technologies. The 
Department does not want to delay the use of these new systems until a 
State agency could operate them statewide.
    The only signature format that would be statewide, as required in 
section 11(e)(2)(C)(iii)(III) of the Act, is the handwritten signature.
    What does the Department mean by a gestured signature?
    Although this is not currently used in the administration of SNAP, 
it is conceivable that a State agency would want to conduct an 
interview over a video link. In such a situation, an applicant with 
limited hearing could converse with the State agency in a language 
other than English, like American Sign Language (ASL) or another form 
of Manually Coded English (MCE), to use two examples.
    Why is the Department proposing that gestured signatures be 
acceptable?
    There are three reasons. First, it provides those with less acute 
hearing equal access to SNAP and promotes program access for these 
individuals.
    Second, the Department does not want to impose the unnecessary 
burden of a handwritten signature if a State agency considers a 
gestured signature to

[[Page 25423]]

be legally sufficient under its own State laws.
    Third, the Department envisions a gestured signature to be part of 
an interactive interview as described above regarding spoken 
signatures. If a gestured signature is acceptable to a State agency, 
there would be no reason to treat those with less acute hearing 
differently from those with more acute hearing.
    Would all the restrictions and conditions about spoken and 
electronic signatures also apply to gestured signatures?
    Yes, and for the same reasons.
    Could a State agency require a household to provide an unwritten 
signature of any type?
    No. The Act at section 11(e)(2)(C)(iii)(III) prohibits a State 
agency from taking any action to ``deny or interfere with the right of 
the household to apply in writing''. In addition, the SNAP regulations 
already provide that a State agency must make applications available to 
potential applicants and to other interested parties. For these 
reasons, the Department is proposing rules that will make it absolutely 
clear that a household has the right to obtain a printed application, 
to sign that application in writing, to submit that signed application, 
and thus to begin the process of application.
    Handwritten communication is convenient, portable, and completely 
independent of modern technology. It is available to almost everyone. 
So while spoken signatures are extremely useful, particularly for those 
with less acute vision, the household's right to submit a handwritten 
signature must be preserved.
    What changes is the Department proposing about handwritten 
signatures?
    Only one, regarding signing with an ``X''. In 1980, FNS issued a 
policy memorandum that accepted an ``X'' as a valid signature. However, 
at that time FNS required that someone sign the application as a 
witness. The witness could be the person who accepted the application 
on the State agency's behalf. The Department's current policy is that a 
signature is acceptable if the State agency accepts it. So the 
Department is proposing to add ``X'' as an acceptable signature if the 
State agency decides that it is acceptable, and to remove the 
requirement that the ``X'' be witnessed. However, a State agency could 
continue to require a witness if the State's law requires it.
    What are the requirements that the Department is proposing to place 
on all signatures?
    The Act at section 11(e)(2)(C)(iii) requires that a State agency's 
system for spoken signatures meet certain requirements. We propose to 
extend the following requirements to all types of signatures:
     Record for future reference the assent of the household 
member and the information to which assent was given;
     Include effective safeguards against impersonation, 
identity theft, and invasions of privacy;
     Not deny or interfere with the right of the household to 
apply in writing;
     Promptly provide to the household member a written copy of 
the completed application, with instructions for a simple procedure for 
correcting any errors or omissions (except that this requirement does 
not apply to an application that a household signs by hand);
     Comply with the SNAP regulations regarding bilingual 
requirements; and
     Satisfy all requirements for a signature on an application 
under this Act and other laws applicable to SNAP, with the date on 
which the household member provides verbal assent considered as the 
date of application for all purposes.
    Why is the Department proposing that all signatures meet these 
conditions?
    These are sound administrative practices which will enhance both 
SNAP's integrity and households' security. With the exception of the 
provision about safeguards, these conditions are essentially already in 
place. Current SNAP regulations already require a State agency to 
maintain records, already define the date of application consistent 
with this provision, and already impose bilingual standards.
    With regard to safeguarding privacy, the Department does not think 
that this requirement would be a significant burden to a State agency. 
State agencies already protect households' privacy by observing the 
regulations on the confidentiality of households' records (Sec.  
272.1(c)) and by prudent administrative practices.
    How would a State agency protect a household against impersonation?
    The Department is not proposing a specific method for doing this. 
SNAP already requires that State agencies verify the identity of 
everyone who applies for SNAP. Identity is the only criterion that all 
SNAP households must verify, even under expedited service procedures 
and disaster programs. The Department thinks that ordinary verification 
of identity would be a sufficient safeguard in almost all 
circumstances; a State agency always has the authority to require 
additional verification when identity remains questionable even after 
the household provides initial verification.
    Is the Department proposing similar changes for periodic reporting 
forms?
    Yes. There are three types of periodic reporting systems--monthly, 
quarterly, and simplified, each with specific reporting requirements 
and forms. Periodic reporting forms are functionally equivalent to 
applications in that they are clients' signed statements of 
circumstances. Since non-written signatures suffice for applications, 
the Department believes that non-written signatures should also suffice 
for periodic reporting forms. However, as with applications, a State 
agency is not required to accept non-written signatures. (See proposed 
revisions at Sec. Sec.  273.12(c)(4)(ii)(F), 273.12(d)(4)(ii)(F), and 
273.21(h)(2)(vi)).
    Is the Department proposing similar changes for the reporting forms 
used by change reporters?
    No. There is no Federal requirement that a household assigned by 
the State agency to a change reporting system must sign the report form 
provided by the State agency. Therefore there is no need for Federal 
regulations that would accommodate non-written signatures for these 
forms.
    Would SNAP's ordinary recordkeeping requirements, including 
timeframes, apply to these recordings?
    Yes. Although the Department is not proposing this specifically, if 
the Department adopts this proposal as a final rule the recordkeeping 
requirements for case records would automatically apply to these 
recordings. These requirements appear in SNAP's regulations at Sec.  
272.1(f).
    How does the Department propose to implement this provision?
    We propose to amend various provisions in Sec. Sec.  273.2(b), 
273.2(c), 273.12(c) and (d), 273.14(b), and 273.21(h) to specify the 
conditions under which a household may attest to the accuracy of a SNAP 
application or a periodic report of changed information.
13. Employment and Training (E&T): Funding Cycle, Section 4122
    How long are unexpended employment and training funds available?
    Current rules at Sec.  273.7(d)(1)(i) provide that each State 
agency will receive a 100 percent Federal grant each fiscal year to 
operate an E&T program. Regulations at Sec.  273.7(d)(1)(i)(D) provide 
that if a State agency does not obligate or expend all of the funds 
allocated to it for a fiscal year, FNS will reallocate the unobligated, 
unexpended

[[Page 25424]]

funds to other State agencies each fiscal year or subsequent fiscal 
year. Prior to enactment of the FCEA, the Act provided these funds 
remain available until expended. However, Section 4122 of FCEA amended 
Section 16(h)(1)(A) of the Act (7 U.S.C. 2025(h)(1)(A)) to limit the 
time unspent unmatched Federal funding for E&T program expenses may 
remain available to 15 months. Unspent carryover funding will no longer 
remain available until expended.
    The only reference in the regulations to the amount of time these 
funds will remain available can be found at Sec.  273.7(d)(3)(ix); the 
regulations at Sec.  273.7(d)(1) are silent on this matter. Therefore, 
the Department proposes to revise Sec.  273.7(d)(3)(ix) to remove the 
reference that the funds allocated in accordance with paragraph Sec.  
273.7(d)(1) will remain available until obligated or expended. In 
accordance with current policy, if a State agency does not obligate or 
expend all of the funds allocated for a fiscal year, FNS will continue 
to reallocate the unobligated, unexpended funds to other State agencies 
as practicable within the legislatively mandated timeframe of 15 
months. State agencies are encouraged to promptly advise FNS of all 
unobligated, unexpended funds. State agencies would continue to have 12 
months to spend their annual Federal E&T grants.
14. Other State Options Proposed by FNS: Telephone Interviews at 
Initial Certification and Recertification
    What is the current requirement concerning interviews at initial 
application and recertification?
    Current regulations at Sec.  273.2(e)(1) mandate a face-to-face 
interview at initial application and at least every 12 months after 
that, except for certain households certified for more than 12 months. 
Under Sec.  273.2(e)(2), the State agency may waive the face-to-face 
interview in lieu of a telephone interview if requested by the 
household based on a hardship such as disability, inadequate 
transportation, or an employment conflict. If the State agency waives 
the face-to-face interview based on household hardship, it must 
document the waiver in the household's case file. Under Sec.  
273.14(b)(3), State agencies must meet the same interview requirements 
for households at recertification including a face-to-face interview 
and may waive the face-to-face interview as provided in Sec.  273.2(e).
    How is FNS is proposing to change the face-to-face interview?
    FNS is proposing to amend Sec. Sec.  273.2(e)(2) and 273.14(b)(3) 
to allow State agencies to use a telephone interview rather than a 
face-to-face interview without documenting hardship. State agencies 
would be required to provide a face-to-face interview if requested by 
the household or if the State agency determines that one is necessary. 
However, if a household that meets the State agency's hardship criteria 
requests to waive the in-office interview, the State agency would be 
required to conduct the interview by telephone or to schedule a home 
visit. FNS clarified this policy in a June 25, 2009 memorandum, which 
can be found on the FNS Web site at: http://www.fns.usda.gov/snap/rules/Memo/2009/062509.pdf.
    Why is FNS proposing this change?
    To date, FNS has approved 39 waivers allowing State agencies to use 
telephone interviews in lieu of face-to-face interviews at initial 
application and/or recertification without requiring that the agency 
document hardship in the case file. These waivers have benefited both 
State agencies by providing increased flexibility and households by 
eliminating the need to travel to the local office for a face-to-face 
interview. FNS has collected information on the outcomes of these 
waivers; these data indicates that substituting telephone interviews 
for in-office face-to-face interviews has had no discernible impact on 
quality control error rates. Making this policy an option in the 
regulations rather than a waiver simplifies State administration and 
eliminates the need for States to submit requests for FNS approval.
15. Other State Options Proposed by FNS: Averaging Student Work Hours
    What is the student work requirement?
    Under Section 6(e) of the Act (7 U.S.C. 2015(e)) and Sec.  
273.5(b), students enrolled at least half-time in an institution of 
higher education, are ineligible to participate in SNAP unless they 
meet at least one of several criteria. One criterion allows students to 
participate if they are employed for a minimum of 20 hours a week. In 
the absence of a methodology for calculating the 20-hour limit, FNS has 
interpreted this to mean that, as a condition of eligibility full-time 
college students must work a minimum of 20 hours every week.
    How is FNS proposing to change the work requirement?
    We propose to amend Sec.  273.5(b)(5) to provide State agencies 
with the option to determine compliance with the 20-hour minimum work 
requirement by averaging the number of hours worked over the month 
using an 80-hour monthly minimum.
    Why is FNS proposing this change?
    FNS has approved waivers to 13 State agencies allowing them to 
average the number of hours worked over a month in determining 
compliance with the student work requirement of Sec.  273.5(b)(5). 
These waivers provide State agencies with additional administrative 
flexibility and reduce the burden associated with determining 
compliance with an absolute minimum weekly standard. Averaging the 
numbers of hours worked also better reflects the nature of student 
employment, which frequently has a varied work schedule to accommodate 
academic demands. We also note that other SNAP work requirements, such 
as those for able-bodied adults without dependents (ABAWDs) mandated by 
Sec.  273.24(a)(1), provide for the averaging of the number of hours 
worked to determine compliance with the requirement. Finally, SNAP 
eligibility is otherwise determined on a monthly rather than a weekly 
basis.
16. Miscellaneous: Proposed Corrections To Remove Outdated Language
    Finally, FNS proposes to remove an outdated provision and to make 
other minor corrections. The provision that we propose to remove, Sec.  
272.3(c)(5), contains a reference to an outdated reference in the Act 
and is no longer relevant. Additionally, we propose to remove 
references to the Job Training Partnership Act (JTPA) at Sec. Sec.  
273.9(b)(1)(iii), 273.9(b)(1)(v), and 273.9(c)(10) and to replace them 
with current references to the Workforce Investment Act of 1998 (WIA).

II. Procedural Matters

Executive Orders 12866 and 13563

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993) and Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011). 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 rule has been designated an 
``economically'' significant rule, under section 3(f)(1) of Executive 
Order 12866. Accordingly,

[[Page 25425]]

the rule has been reviewed by the Office of Management and Budget. 
Consistent with the requirements of Executive Orders 12866 and 13563, a 
Regulatory Impact Analysis (RIA) was developed for this proposed rule.. 
The conclusions of this analysis are summarized below.
    Statement of Need: This proposed rulemaking is necessary to amend 
SNAP regulations to implement provisions of the FCEA that establish new 
eligibility and certification requirements for the receipt of SNAP 
benefits. These provisions are intended to increase SNAP benefit levels 
for certain participants, reduce barriers to participation, and promote 
efficiency in the administration of the program.
    Benefits: There are many potential societal benefits of this 
proposed rule. Some provisions, such as excluding combat-related income 
and excluding certain types of savings from resources, may make some 
households newly eligible for SNAP benefits. Other provisions, such as 
increasing the minimum standard deduction and minimum benefit, may 
increase SNAP benefits for certain households. Provisions such as 
expanding simplified reporting and allowing States to accept telephonic 
signatures will reduce the administrative burden for households and 
make it easier for households to apply for SNAP. We estimate that all 
the provisions contained in this rule will reduce household-level 
burden by over 20 million hours.
    Costs: As noted above, the changes in the proposed rule result in a 
major reduction of paperwork burden for SNAP clients and State 
agencies. We estimated that this reduction in burden reflects an 
overall annualized cost savings of $147.4 million.
    Transfers: The Department has estimated the total SNAP costs to the 
Federal Government of the FCEA provisions implemented in the proposed 
rule at $831 million in FY 2010 and $5.619 billion over the 5 years FY 
2010 through FY 2014. These impacts are already incorporated into the 
President's budget baseline.

Regulatory Impact Analysis

0584-AD87

Supplemental Nutrition Assistance Program (SNAP): Eligibility, 
Certification, and Employment and Training Provisions of the Food, 
Conservation and Energy Act of 2008

I. Statement of Need

    This proposed rulemaking is necessary to amend SNAP regulations to 
implement provisions of the FCEA that establish new eligibility and 
certification requirements for the receipt of SNAP. The rule would 
amend the SNAP regulations to: Exclude military combat pay from the 
income of SNAP households; raise the minimum standard deduction and the 
minimum benefit for small households; eliminate the cap on the 
deduction for dependent care expenses; index resource limits to 
inflation; exclude retirement and education accounts from countable 
resources; permit States to expand the use of simplified reporting; 
permit States to provide transitional benefits to households leaving 
State-funded cash assistance programs; allow States to establish 
telephonic signature systems; permit States to use E&T funds to provide 
post-employment job retention services; and limit the E&T funding cycle 
to 15 months. These provisions are intended to increase SNAP benefit 
levels for certain participants, reduce barriers to participation, and 
promote efficiency in the administration of the program.

II. Summary of Impacts

    The Department has estimated the total SNAP costs to the Government 
of the FCEA provisions implemented in the proposed rule as $831 million 
in fiscal year (FY) 2010 and $5.619 billion over the 5 years FY 2010 
through FY 2014. These impacts are already incorporated into the 
President's budget baseline. The Federal budget impacts are summarized 
below; these estimates are categorized as transfers in the accounting 
statement that follows.

                                   Table 1--Summary of Federal Budget Impacts
----------------------------------------------------------------------------------------------------------------
                                                  FY2010     FY2011     FY2012     FY2013     FY2014     Total
----------------------------------------------------------------------------------------------------------------
Nomenclature Revisions--Section 4001..........          *          *          *          *          *          *
Military Combat Pay Exclusion--Section 4101...         $1         $1         $1         $1         $1         $5
Increase the Standard Deduction Minimum to            265        322        387        472        543      1,989
 $144 in FY 2009 and Index--Section 4102......
Eliminating the Dependent Care Deduction Cap--        153        161        156        147        139        756
 Section 4103.................................
Indexing the Asset Limit--Section 4104(a).....          0          0          0          0          4          4
Excluding Retirement Savings--Section 4104(b).        191        301        289        270        254      1,305
Excluding Educational Savings--Section 4104(c)          2          4          4          3          3         16
Simplified Reporting Expansion--Section 4105..        114        179        171        160        151        775
Transitional Benefits Option--Section 4106....          7         11         11         11         10         50
Minimum Benefit Increase--Section 4107........         76         99         94         88        104        461
Employment and Training Funding for Job                 *          *          *          *          *          *
 Retention--Section 4108......................
Telephonic Signature Systems--Section 4119....         22         47         67         63         59        258
Employment and Training Cycle Reduction--               *          *          *          *          *          *
 Section 4122.................................
Option to Conduct Telephone Interviews at               *          *          *          *          *          *
 Certification and Recertification............
Option to Average Student Work Hours..........          *          *          *          *          *          *
----------------------------------------------------------------------------------------------------------------

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

[[Page 25426]]



                                          Table 2--Accounting Statement
----------------------------------------------------------------------------------------------------------------
                                                      Primary                                         Period
                                                     estimate       Year dollar    Discount rate      covered
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Qualitative: Provisions will improve program delivery by simplifying program rules, reducing reporting burdens,
 and providing States with greater administrative flexibility and options on how they administer the program. In
 addition, the provisions reflect Congressional desire to increase program access, for example, by excluding
 certain savings accounts from countable resources.
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/year)...........            -138            2010              7%     FY2010-2014
                                                            -143            2010              3%
----------------------------------------------------------------------------------------------------------------
                                                    Transfers
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/year)...........          $1,111            2010              7%     FY2010-2014
                                                          $1,118            2010              3%
From the Federal Government to Participating
 Households.
----------------------------------------------------------------------------------------------------------------

    In the discussion that follows, we provide a section by section 
description of the potential impacts.

Section by Section Analysis of Impacts

    Many of the cost estimates rely on microsimulation models to 
estimate the impacts of potential changes to SNAP on the number and 
characteristics of eligible and participating persons and the effect on 
total benefit costs. A microsimulation model is composed of an 
underlying database and a computer program with a set of parameters and 
methods. The database is constructed from a nationally representative 
sample of households and the set of parameters and methods translate 
the rules of SNAP into a series of conditions that determine a 
household's eligibility and benefit level. By changing the parameters 
and methods, we can evaluate whether a change to SNAP rules will have a 
relatively small or large effect on households and overall SNAP benefit 
costs. FNS has two microsimulation models: one uses SNAP Quality 
Control (QC) data \1\ to estimate impacts on current SNAP participants 
and the other model uses the U.S. Census Bureau's Survey of Income and 
Program Participation (SIPP) \2\ to estimate impacts on both 
potentially eligible households and current SNAP participants.
---------------------------------------------------------------------------

    \1\ SNAP Quality Control Data available online at: http://hostm142.mathematica-mpr.com/fns/.
    \2\ For more information see: http://www.census.gov/sipp/.
---------------------------------------------------------------------------

Nomenclature Revisions--Section 4001

    Discussion: Section 4001 of the FCEA changed the name of the 
program from the Food Stamp Program to the Supplemental Nutrition 
Assistance Program or SNAP. This change in name reflects the fact that 
participants no longer receive stamps or coupons to make food 
purchases. Additionally, the new name reflects a focus on the 
nutritional aspect of the program. SNAP not only provides food 
assistance to low-income people, but also promotes nutrition to improve 
their health and well-being.
    Effect on Low-Income Families: There could be some confusion among 
low-income families regarding the new program name. We expect that many 
people will continue to use the term Food Stamps and will adopt the new 
name of Supplemental Nutrition Assistance Program or SNAP over time.
    Federal Cost Impact: We do not anticipate any additional cost to 
the Government from this name change. We are using the existing 
inventory of printed materials and will change the name and logos when 
we re-order materials.
    Participant Impacts: We do not anticipate any significant change in 
participation resulting from the program name change.

Military Combat Pay Exclusion--Section 4101

    Discussion: Current regulations define the permissible items that 
may be excluded from household income when determining SNAP 
eligibility. Section 4101 of FCEA amended section 5(d) of the Act to 
exclude special pay to United States Armed Services members that is 
received in addition to basic pay as a result of the member's 
deployment or service in a designated combat zone. The exclusion 
includes any special pay received pursuant to chapter 5 of title 37 of 
the USC and any other payment that is authorized by the Secretary. The 
special pay may include Combat, Imminent Danger, Hardship, Family 
Separation Allowance, Combat-related Injury and Rehabilitation Pay. To 
qualify for the exclusion, the pay must be received as a result of 
deployment to or service in a combat zone and must have not been 
received prior to deployment.
    Effect on Low-Income Families: This provision affects a subset of 
what is already a small population: very few military families receive 
SNAP, approximately 2,000 households. Department of Defense studies \3\ 
and SNAP QC both indicate that a small percentage of SNAP recipients 
serve in the Armed Forces.
---------------------------------------------------------------------------

    \3\ Food Stamp Usage in the Military, Unpublished Department of 
Defense Report, Office of the Under Secretary of Defense Personal 
and Readiness, Directorate of Compensation, Military Personnel 
Policy, May 2003.
---------------------------------------------------------------------------

    Moreover, military SNAP recipients will qualify for the special pay 
income exclusions only during those time(s) that their military service 
specifically places them in a combat zone. We estimate that only 20 
percent of SNAP military households would receive any of the relevant 
special pays.
    Federal Cost Impact: There is minimal cost to the program for FY 
2010 through FY 2014. The anticipated cost for FY 2010 is $1 million, 
which remains unchanged for each year through FY 2014, for a total 5 
year cost of $5 million. These impacts are already incorporated into 
the President's budget baseline.
    To estimate the effect of this provision, we assume that 
approximately 15 percent of the 2,000 military households receiving 
SNAP would receive special combat or imminent danger pay. This 
percentage comes from a Department of Defense Manpower Data Center 
report \4\ that

[[Page 25427]]

indicates that 15 percent of the total Active Force is currently 
deployed to the war zones in Iraq and Afghanistan. The standard amount 
for combat or imminent danger pay is $225 \5\ which would affect the 
SNAP benefit as follows: the $225 increase in monthly earned income 
would ordinarily decrease a military household's SNAP benefit by 
approximately $70.20 ($225 less 20 percent for earned income deduction 
times a 39 percent benefit reduction rate). This benefit reduction rate 
represents the average incremental change in benefits for each dollar 
change in the standard deduction (when we calculate the weighted 
average of the benefit reduction rate for households with and without 
the shelter deduction, we get an average benefit reduction rate of 39 
percent).
---------------------------------------------------------------------------

    \4\ Active Duty Military Personnel Strengths by Regional Area 
and by Country Quarterly Report, Defense Manpower Data Center, 
Department of Defense, September 30, 2010.
    \5\ For more information see Defense Finance and Accounting 
Service at http://www.dfas.mil/army2/specialpay/hostilefireimminentdangerpay.html.
---------------------------------------------------------------------------

    The Family Separation Allowance is currently $250 per month,\6\ and 
based on the Department of Defense Manpower Data Center report, we 
estimate that approximately 20 percent of military SNAP households may 
receive this pay--either due to deployment in a war zone or deployment 
to another location where the service member is not permitted to bring 
a family. Excluding the Family Separation Allowance from countable 
income would increase the household SNAP benefit by $78.
---------------------------------------------------------------------------

    \6\ For more information see Defense Finance and Accounting 
Service at http://www.dfas.mil/militarypay/woundedwarriorpay/familyseparationallowancefsa.html.
---------------------------------------------------------------------------

    Hardship Duty Pay ranges between $50 and $150 per month.\7\ We 
assume $100 per month for estimating purposes and that the same 15 
percent deployed to the war zones also receive Hardship Duty Pay. 
Excluding the Hardship Duty Pay from countable income would increase 
the household SNAP benefit by $31.20. Finally, Combat Related Injury 
and Rehabilitation Pay ranges between $430 and $205 per month 
(depending on the receipt of Combat Pay, and only continues for 
approximately 3 months). Since the nature of a qualifying injury would 
be one that is serious enough to require rehabilitation, but not 
serious enough to separate the injured service member from the Armed 
Forces, we estimate that a very small percentage of military SNAP 
households (less than one percent) will receive this pay.
---------------------------------------------------------------------------

    \7\ For more information see Figure 17-1. Hardship Duty Location 
Pay for Designated Areas: http://comptroller.defense.gov/fmr/07a/07a_17.pdf.
---------------------------------------------------------------------------

    The total anticipated cost per year from excluding the various 
special pays as countable income is estimated at approximately $1 
million. (The total number of households affected by a particular type 
of special pay is multiplied by the monthly amount of that pay, less 
the 20 percent earned income deduction and the 39 percent benefit 
reduction rate, multiplied by the number of months, 3 or 12, that the 
special pay is in effect).
    Participation Impacts: No impact on current military SNAP 
participants is anticipated as a result of this provision, as the 
households that may be affected already receive SNAP. We do not 
anticipate that this provision will make any families newly eligible.
    Uncertainty: Aside from anecdotal evidence that receives publicity 
from time to time; little research had been done to quantify the extent 
of SNAP participation in the Armed Forces. The Department of Defense 
has conducted its own studies during the late 1990s and as recently as 
2003.\8\ Those reports have typically found that very few (usually 
between 1000 and 2000) military households receive SNAP. FNS QC data 
also seem to corroborate the Department of Defense figures. Because 
these estimates are largely based on a non-USDA study and one of the 
employment status variables in the QC database, there is some 
uncertainty in their accuracy. The effect of this provision is also 
dependent on contingencies surrounding current military operations 
during this period. For example, the extent to which more or fewer 
military personnel will be required to deploy to combat zones in the 
future will affect the cost of this provision to the government. 
Finally, changes in military special pay and allowances may also alter 
the cost impact.
---------------------------------------------------------------------------

    \8\ Food Stamp Usage in the Military, Unpublished Department of 
Defense Report, Office of the Under Secretary of Defense Personal 
and Readiness, Directorate of Compensation, Military Personnel 
Policy, May 2003.
---------------------------------------------------------------------------

Increase the Standard Deduction Minimum to $144 in FY 2009 and Index--
Section 4102

    Discussion: The standard deduction is one of the allowable 
deductions subtracted from a household's gross monthly income to help 
determine a SNAP household's net income and benefit amount, if 
eligible. Current regulations set the standard deduction at 8.31 
percent of the applicable net income limit based on household size, but 
no less than the deduction in place in 2002 ($134 for most households). 
Section 4102 of the FCEA, raised the minimum standard deduction for FY 
2009 for the 48 States and the District of Columbia from $134 to $144. 
In addition, it changed the minimum standard deduction amounts for 
Alaska, Hawaii, the U.S. Virgin Islands, and Guam to $246, $203, $127, 
and $289, respectively. Beginning FY 2010 and each fiscal year 
thereafter, the minimum standard deduction is indexed to inflation.
    Effect on Low-Income Families: This provision will affect some low-
income families not already receiving the maximum SNAP benefit by 
allowing them to claim a larger standard deduction and to obtain higher 
SNAP benefits. Smaller households with one, two or three members will 
be affected by the provision--larger households will not be affected 
because their standard deduction is already higher than the amount 
provided in this provision, and they will be allowed to claim the 
larger of the two.
    Federal Cost Impact: The cost to the Government is estimated to be 
$265 million in FY 2010 and $1.99 billion over the 5 years from FY 2010 
through FY 2014. This cost was estimated using a simulation model \9\ 
and 2007 QC data. These impacts are already incorporated in the 
President's budget baseline. We estimate that this provision results in 
a slight increase in benefits for current participants living in one, 
two and three-person households.
---------------------------------------------------------------------------

    \9\ Model technical documentation available online: http://hostm142.mathematica-mpr.com/fns/ fns/.
---------------------------------------------------------------------------

    To estimate the effect of this provision, we assumed a change in 
the standard deduction beginning in FY 2009, where the new minimum 
standard deduction is equal to $144 and indexed to the Consumer Price 
Index (CPI) in FY 2010 and later. We then compared this revised 
standard deduction to the previous deduction. The previous deduction 
was the greater of $134 or 8.31 percent of the monthly Federal poverty 
guideline values by household size, as calculated by the U.S. 
Department of Health and Human Services (HHS) and used for SNAP 
eligibility standards. The guidelines are published in January or 
February of each year and are the SNAP net income limits in the 
following fiscal year. The poverty guidelines used for setting the FY 
2010 SNAP net income limits were published on January 23, 2009. The 
poverty threshold values used in FY 2011 and beyond were calculated by 
inflating the FY 2010 values by the Calendar Year CPI for All Urban 
Consumers as forecasted in the Office of Management and Budget's 
economic assumptions. For each household size and for each year, these 
values were multiplied by 8.31 percent.

[[Page 25428]]

    The new standard deduction, therefore, is the higher of the new 
minimum standard deduction of $144 in FY 2009 indexed to inflation, or 
8.31 percent of the poverty level corresponding to household size. For 
example, for a three person family in FY 2009, the standard deduction 
of $144 is higher than $121, which is 8.31 percent of the poverty level 
for a three person household. This family would receive the higher 
standard deduction of $144, which represents a $10 increase from the 
previous minimum standard deduction of $134.

                      Expected Dollar Increase in the SNAP Standard Deduction by Household Size and Fiscal Years 2009 Through 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Household size                            2009            2010            2011            2012            2013            2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 person................................................              10               7               9              11              13              16
2 persons...............................................              10               7               9              11              13              16
3 persons...............................................              10               7               9              11              13              16
4 persons...............................................               0               0               0               0               0               0
5 persons...............................................               0               0               0               0               0               0
6+ persons..............................................               0               0               0               0               0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    To determine the total cost of this proposal, we estimated the 
number of households affected for each household size and in each year. 
The projections were adjusted based on data for the proportion of 
households of each size receiving less than the maximum allotment, 
tabulated from 2007 QC data, the most recent data available. The cost 
of this provision was then calculated for each household size in each 
year. The cost equaled the product of the change in the standard 
deduction for each household size, the number of households affected, 
12 months, and a benefit reduction rate of 39 percent. This is then 
applied to the standard deduction. The individual costs for each 
household size were summed in each year and rounded to the nearest 
million dollars.
    Participant Impacts: While we do not expect this provision to 
significantly increase SNAP participation, we estimate that setting the 
standard deduction equal to $144 in FY 2009 and indexing to inflation 
will raise benefits among one, two and three-person households 
currently participating. In FY 2010 we estimate that approximately 13.7 
million participants will receive higher benefits due to this 
provision, with an average increase in monthly benefits of $1.61 per 
participant.
    Uncertainty: Because these estimates are largely based on recent 
2007 QC data, they have a moderate level of certainty. To the extent 
that the distribution of SNAP households by household size and income 
changes over time, the cost to the Government could be larger or 
smaller. To the extent that actual poverty guidelines are higher or 
lower than projected, the cost to the Government could be larger or 
smaller.

Eliminating the Dependent Care Deduction Cap--Section 4103

    Discussion: A deduction for dependent care costs is available when 
a SNAP household member must work, perform job seeking activities, 
attend required employment and training activities, or attend college 
or training in order to get a job. Under current regulations, there is 
a cap on the dependent care deduction of $200 for children under age 2 
and $175 for older dependents. Section 4103 of the FCEA amended section 
5(e)(3) of the Act by eliminating the cap on the deduction for 
dependent care expenses and allowing eligible households to deduct the 
full amount of their dependent care costs. In addition, dependent care 
expenses also include the costs of transporting dependents to and from 
the care facility and the costs of activity fees that are associated 
with dependent care.
    Effect on Low-Income Families: The effect of this provision will be 
to increase the benefit of current SNAP participants who incur and 
claim dependent care costs in excess of the current cap, who do not 
already receive the maximum SNAP allotment. It will potentially make a 
small number of households with sizeable dependent care expenses, whose 
gross income is under the gross income threshold but whose net income 
currently exceeds the net income threshold, to become newly eligible.
    Federal Cost Impact: The total cost to the Government of this 
provision is expected to be $153 million in FY 2010. The 5-year total 
for FY 2010 through FY 2014 is $756 million. These impacts are already 
incorporated into the President's FY 2010 budget baseline.
    The cost to the Government of eliminating the dependent care cap is 
expected to be $82 million in 2010 and $408 million for the 5 years 
from FY 2010 through FY 2014. For this cost estimate, we used numbers 
produced by the Congressional Budget Office (CBO),\10\ adjusted by 
changes in SNAP caseloads and issuance.
---------------------------------------------------------------------------

    \10\ Unpublished cost estimate provided by CBO.
---------------------------------------------------------------------------

    The cost to the Government of allowing transportation costs to be 
included in the dependent care deduction is expected to be $71 million 
in FY 2010. The 5-year total for FY 2010 through FY 2014 is $348 
million.
    To estimate the impact of allowing transportation costs, we used a 
micro-simulation model based on the 2007 QC data. We have no data for 
transportation costs associated with dependent care costs, but we do 
know that some States allow Temporary Assistance for Needy Families 
(TANF) participants to claim up to $60 per month. We simulated the 
impact of increasing the dependent care deduction by $60 for all 
households using the deduction. However, eleven States (Alabama, 
Arizona, Georgia, Illinois, Kentucky, Massachusetts, Missouri, Montana, 
Texas, Wisconsin, and the District of Columbia) already include 
transportation costs as an allowable dependent care expense, so we 
excluded those States from our simulation. The simulation estimates 
that the increased deduction will increase costs by 0.24 percent, or 
$143 million in FY 2010.
    However, we had to make an adjustment because not all families with 
dependent care expenses incur any transportation costs. From the 2004 
Green Book,\11\ we know that 29 percent of families in poverty using 
some form of childcare have immediate family members provide childcare 
(such as staggered work schedules between parents, an unemployed 
father, or an older child), 19 percent use a relative or friend to care 
for the child in the child's home, 21 percent use a day care center, 
and 31 percent use a family day care home. We assume that those using

[[Page 25429]]

immediate family members don't use the dependent care deduction. We 
assume that none of those with children cared for at home incur 
transportation costs, all of those using a day care center incur 
transportation costs, and half of those using family day care homes 
incur transportation costs. Since roughly half of those who incur 
dependent care expenses also incur transportation costs, we halved the 
cost to $71 million in FY 2010.
---------------------------------------------------------------------------

    \11\ 2004 Green Book, Background Material and Data on Programs 
Within the Jurisdiction of the Committee on Ways and Means, March 
2004.
---------------------------------------------------------------------------

    We do not anticipate any significant cost impact from including 
activity fees in dependent care expenses.
    Participation Impact: As a result of eliminating the dependent care 
cap, an estimated 479,000 people living in 145,000 households will 
receive larger benefits in FY 2010. We estimate that the average 
benefit increase per household will be $47 per month. We have no data 
on any new participants, but the number is expected to be minimal. 
These estimates are based on numbers provided by the CBO,\12\ adjusted 
by changes in SNAP caseloads.
---------------------------------------------------------------------------

    \12\ Unpublished cost estimate provided by CBO.
---------------------------------------------------------------------------

    As a result of allowing transportation costs to be included as 
deductable dependent care expenses, we estimate that 614,000 
individuals will receive larger benefits in FY 2010. Using the micro-
simulation model based on 2007 QC data, we estimated the impact of 
increasing the dependent care deduction by $60, which is the amount 
that some States allow TANF households to claim. The model, which 
excludes the 11 States already allowing transportation costs to be 
counted, estimates that 3.51 percent of SNAP participants (1.2 million 
people) will receive larger benefits. However, because many households 
who claim the dependent care deduction do not incur transportation 
costs, we halve the estimate. We estimate that 614,000 people receive 
an average monthly benefit increase of nearly $9.68 per person in FY 
2010.
    Uncertainty: There is a moderate level of uncertainty associated 
with the estimate for eliminating the dependent care cap. The cost and 
participation impacts came from CBO, which derived their estimate from 
QC data. However, although the QC data file has a variable showing the 
actual dependent care expense, in many cases, the coded expense is the 
same amount as the cap. Thus, the QC data file underestimates the 
number of households that would receive a larger benefit if the 
dependent care expense deduction cap was eliminated. To address this 
limitation, the CBO, in their scoring, imputed dependent care values to 
many households with dependent care expenses. The accuracy of this 
estimate depends on the quality of their imputation.
    There is a large degree of uncertainty associated with the estimate 
for including transportation costs and activity costs as allowable 
dependent care expenses. We have no data on the actual transportation 
or activity costs incurred by low-income families who have dependent 
care expenses, requiring us to make some broad assumptions.

Indexing the Asset Limit--Section 4104(a)

    Discussion: Current regulations at Sec.  273.8(b) limit SNAP 
households without disabled or elderly members to a maximum of $2,000 
in resources and SNAP households with disabled or elderly members to a 
maximum of $3,000 in resources. This rule proposes to revise Sec.  
273.8(b) by indexing the current asset limits to inflation. The 
Department proposes to use the Consumer Price Index for All Urban 
Consumers published by the Bureau of Labor Statistics of the Department 
of Labor. Starting October 1, 2008, and each October 1 thereafter, the 
maximum allowable resources would be adjusted based on the previous 
year's rate of inflation. Each adjusted resource limit would be rounded 
down to the nearest $250.
    Effect on Low-Income Families: This provision will allow some 
households to become newly-eligible for the program. It will not affect 
those currently participating. It also will not affect those who apply 
and are found to be categorically eligible and, thus, not subject to 
the asset test.
    Moreover, based on assumptions regarding increases in the cost of 
living indices, the provision will have no impact until FY 2014, when 
the asset limit for households with elderly and disabled members 
increases. The asset limit for all other households will increase in FY 
2016.
    Federal Cost Impact: There is no cost impact for FY 2010 through FY 
2013. The estimated cost to the Government in FY 2014 is $4 million for 
a total 5 year cost of $4 million. These impacts are already 
incorporated into the President's budget baseline.
    To estimate the effect of this provision, we used data from the 
U.S. Census Bureau's 2005 SIPP which includes information on household 
income and expenses. We simulated the impact of increasing the asset 
limit from $3,000 to $3,250 for households with elderly and disabled 
members in FY 2014. In our simulation, the cost of benefits increases 
by 0.051 percent in FY 2014.
    The first adjustment is to the participation rate of those made 
eligible by this provision. The simulation model overestimates the 
participation rate of those newly eligible. The model assumes that 
about half of those newly eligible will participate. However, studies 
on the impact of relaxing the asset limit show that only a quarter of 
new eligibles participate,\13\ so we adjust the impact by halving it.
---------------------------------------------------------------------------

    \13\ Wemmerus, Nancy and Bruce Gottlieb. Relaxing the FSP 
Vehicle Asset Test: Findings from the North Carolina Demonstration. 
Report submitted to the U.S. Department of Agriculture, Food and 
Nutrition Service. Alexandria, VA: Mathematica Policy Research, 
January 22, 1999.
---------------------------------------------------------------------------

    A second adjustment is to allow for a phase-in period. Studies on 
the impact of relaxing the asset limit show that it takes several years 
before all who ultimately come on the program are participating. For 
this estimate, we assume that the take-up period lasts three years. For 
FY 2014, we only assume a take-up rate of one-third. The cost estimate 
is $5 million for FY 2014.
    Participation Impacts: Among current SNAP participants, there is no 
impact. However, this provision could make some families newly eligible 
if their assets are above the current limit but under the new limit. 
Some of these newly eligible families may choose to participate in the 
program, potentially increasing program costs. In our simulation, the 
number of participants increases by 0.042 percent in FY 2014. We 
applied the same adjustments as in the cost impact for the 
participation rate and phase-in period. The estimated number of new 
participants is 2,000 in FY 2014.
    Uncertainty: Because these estimates are largely based on a model 
that uses a large national database, they have a moderate level of 
certainty. The data are based on information collected in fall 2005 
and, to the extent that asset holdings of low-income households have 
changed since then, the cost to the Government could be larger or 
smaller. Also, to the extent that actual changes in the cost of living 
are larger or smaller than forecasted in the President's 2010 Budget, 
the asset limit may be adjusted sooner or later than the cost estimate 
assumes. Finally, we lack recent data showing the actual participation 
rate of eligible people with assets, so there is some uncertainty with 
the participation rate adjustment.

Excluding Retirement Savings--Section 4104(b)

    Discussion: Current regulations include the value of funds held in

[[Page 25430]]

Individual Retirement Accounts (IRAs) and Keogh plans as countable 
resources (but 401K retirement accounts are currently excluded) and 
applies the value toward the $2,000 asset limit ($3,000 for households 
with at least one disabled or elderly member). This provision excludes 
such accounts as countable resources.
    Effect on Low-Income Families: This provision will allow some 
households to become newly eligible for the program if excluding IRAs 
and Keogh plans as countable resources lowers their assets below the 
asset limit. It will not affect those currently participating. It also 
will not affect those who apply and are found to be categorically 
eligible and, thus, not subject to the asset test.
    Federal Cost Impact: We estimate that the cost to the Government of 
this provision will be $191 million in FY 2010 and $1.305 billion over 
the 5 years from FY 2010 through FY 2014. These impacts are already 
incorporated into the President's budget baseline.
    To estimate the cost impact of this provision, we used SIPP data 
which includes information on household income and expenses. We 
simulated the impact of excluding IRA and Keogh accounts. In our 
simulation, the program cost increases by 1.71 percent.
    However, the simulation model overestimates the participation rate 
of those newly eligible. The model assumes that about half of those 
newly eligible will participate. However, those with retirement savings 
typically have work histories and short eligibility spells, so we 
assume that only a small fraction--one-sixth--will actually 
participate. Thus, we divide the cost impact by three.
    A second adjustment is to allow for a phase-in period. Studies on 
the impact of relaxing the asset limit show that it takes several years 
before all who ultimately come on the program are participating. For 
this estimate, we assume that the take-up period lasts three years. We 
assume a take-up rate of one-third in 2009 (the first year that this 
provision took effect), two-thirds in 2010, and 100 percent in FY 2011 
through FY 2014.
    Finally, four States--Illinois, Minnesota, Ohio, and Pennsylvania--
already exclude retirement savings. The model does not incorporate this 
exclusion, so we make an out-of-model adjustment. The four States 
accounted for 14.27 percent of benefits issued in FY 2008, so we 
reduced the cost by the same percentage.
    Thus, the cost estimate is $191 million for 2010. The cost estimate 
is $1.305 billion for the 5 year period from FY 2010 to FY 2014.
    Participation Impacts: Among current SNAP participants, there is no 
impact. However, this provision could make some families newly eligible 
if excluding IRA and Keogh savings accounts causes their countable 
assets to fall below the asset limit. Some of these newly eligible 
families may choose to participate in the program, potentially 
increasing program costs. In our simulation, the number of participants 
increases by 1.39 percent.
    We applied the same adjustments as in the cost impact for the 
participation rate and phase-in period. Finally, we make an out-of-
model adjustment for the four States--Illinois, Ohio, Pennsylvania, and 
Minnesota--that already exclude all retirement savings accounts. The 
four States accounted for 13.84 percent of participants in FY 2008, so 
we reduced the number of new participants by that percentage. Thus, the 
estimated number of new participants is 93,000 in 2010 and 148,000 in 
2011, when the take-up rate reaches 100 percent.
    Uncertainty: Because these estimates are largely based on a model 
that uses a large national database, they have a moderate level of 
certainty. The data are based on information collected in fall 2005 
and, to the extent that asset holdings of low-income households have 
changed since then, the cost to the Government could be larger or 
smaller. Finally, we lack recent data showing the actual participation 
rate of eligible people with assets, so there is some uncertainty with 
the participation rate adjustment.

Excluding Educational Savings--Section 4104(c)

    Discussion: Current regulations include the value of funds held in 
tax-preferred education savings accounts (such as 529 College Savings 
accounts or Coverdale accounts) as countable resources and applies the 
value toward the $2,000 asset limit ($3,000 for households with at 
least one disabled or elderly member). This provision excludes such 
accounts as countable resources.
    Effect on Low-Income Families: This provision will allow some 
households to become newly eligible for the program if excluding 
educational savings accounts as countable resources lowers their assets 
below the asset limit. It will not affect those currently 
participating. It also will not affect those who apply and are found to 
be categorically eligible and thus not subject to the asset test.
    Federal Cost Impact: We estimate that the cost to the Government of 
this provision will be $2 million in FY 2010 and $16 million over the 5 
years from FY 2010 through FY 2014. These impacts are already 
incorporated into the President's budget baseline.
    SIPP data does not include information on educational savings 
accounts, so we used the 2004 Survey of Consumer Finances (SCF) \14\ to 
tabulate the number of low-income households (defined as below 200 
percent of poverty) that had educational savings accounts and compared 
that figure to the number that had IRAs or Keogh accounts. According to 
the SCF, approximately 2 million low-income households had IRA or Keogh 
accounts, but only 28,000 (1.4 percent) had educational savings 
accounts. We estimated the cost impact of excluding educational savings 
accounts as being 1.4 percent of the impact of excluding IRA and Keogh 
accounts, or 0.024 percent (1.71 percent times 1.40 percent).
---------------------------------------------------------------------------

    \14\ For more information see: http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html.
---------------------------------------------------------------------------

    However, the simulation model overestimates the participation rate 
of newly-eligible. The model assumes that about half of those newly-
eligible will participate. However, those with education savings 
typically have work histories and short eligibility spells, so we 
assume that only a small fraction--one-sixth--will actually 
participate.\15\ Thus, we divide the cost impact by three.
---------------------------------------------------------------------------

    \15\ There is no extant data to estimate how many households 
made newly-eligible by this provision would choose to participate. 
This assumption is based on the professional judgment of Federal 
SNAP administrators.
---------------------------------------------------------------------------

    A second adjustment is to allow for a phase-in period. Studies on 
the impact of relaxing the asset limit show that it takes several years 
before all who ultimately come on the program are participating. For 
this estimate, we assume that the take-up period lasts three years. We 
assume a take-up rate of one-third in 2009, two-thirds in 2010, and 100 
percent in 2010-2014.
    Finally, six States--Illinois, Massachusetts, Maryland, Michigan, 
Ohio, and Pennsylvania--already exclude retirement savings. The model 
does not incorporate this exclusion, so we make an out-of-model 
adjustment. The six States accounted for 21.57 percent of benefits 
issued in FY 2008, so we reduced the cost by that percentage.
    Thus, the cost estimate is $2 million for 2010. The cost estimate 
is $16 million for the 5 year period from FY 2010 to FY 2014.
    Participation Impacts: Among current SNAP participants, there is no 
impact. However, this provision could make some families newly eligible 
if

[[Page 25431]]

excluding educational savings causes their countable assets to fall 
below the asset limit. Some of these newly eligible families may choose 
to participate in the program, potentially increasing program costs.
    SIPP data does not include information on educational savings 
account, so we used the SCF to tabulate the number of low-income 
households (defined as below 200 percent of poverty) that had 
educational savings accounts and compared that figure to the number 
that had IRAs or Keogh accounts. According to the SFC, approximately 2 
million low-income households had IRA or Keogh accounts, but only 
28,000 (1.4 percent) had educational savings accounts. We estimated the 
participant impact of excluding educational savings accounts as being 
1.4 percent of the impact of excluding IRA and Keogh accounts, or 0.019 
percent (1.39 percent times 1.40 percent).
    We applied the same adjustments as in the cost impact for the 
participation rate and phase-in period. Finally, six States--Illinois, 
Massachusetts, Maryland, Michigan, Ohio, and Pennsylvania--already 
exclude retirement savings. The model does not incorporate this 
exclusion, so we make an out-of-model adjustment. The six States 
accounted for 21.31 percent of participants issued in FY 2008, so we 
reduced the number of new participants by that percentage.
    Thus, the estimated number of new participants is 1,000 in 2010 
(34,972,000 baseline participants times the 0.019 percent impact, times 
the 33.33 percent participation adjustment, times the 66.67 percent 
take-up rate adjustment, and times the 78.69 percent from excluding the 
six States).
    Uncertainty: There is a moderate amount of uncertainty with these 
estimates. The estimates are derived from using the ratio of people 
with educational savings accounts to IRAs and Keogh accounts and 
applying it to the SIPP-based micro-simulation result. This assumes 
that excluding the educational accounts will have the same proportional 
impact, which is a reasonable, but untested hypothesis. Moreover, the 
SIPP data are based on information collected in fall 2005 and the SCF 
data is based on information collected in 2004. To the extent that 
asset holdings of low-income households have changed since the data 
were collected, the cost to the Government could be larger or smaller.

Simplified Reporting Expansion--Section 4105

    Discussion: Simplified reporting is an option available to State 
agencies under SNAP regulations at Sec.  273.12(a)(5) that requires 
minimal household reporting in comparison to the other types of 
household reporting systems that are available to State agencies under 
the SNAP regulations. Section 4105 of the FCEA removed a restriction 
that had discouraged State agencies from placing certain households 
(homeless, migrant and seasonal farm workers, and elderly or disabled 
adults with no earned income) on simplified reporting.
    Effect on Low-Income Families: This provision will reduce the 
paperwork burden on low-income participants in the States that 
implement it by over 200,000 burden hours. It may result in more 
families continuing to receive benefits, given that they will be 
required to submit fewer reports in order to maintain eligibility.
    Federal Cost Impact: The cost to the Government is estimated to be 
$114 million in FY 2010 and $775 million over the 5 years from FY 2010 
through FY 2014. These impacts are already incorporated in the 
President's budget baseline.
    The cost of this provision comes from the income changes that are 
no longer captured as quickly with simplified reporting which, in turn, 
may affect benefit levels. Our approach is to measure the difference 
between a perfect change reporting system, where all income changes are 
captured in a timely manner, to a system where no income changes are 
reported. Then we reduce this difference by the misreporting already 
occurring for elderly and disabled SNAP participants. The result is the 
reporting changes that are lost to simplified reporting.
    To determine the cost to the government, we use a simulation model 
with SIPP data to estimate the benefit impact from perfect change 
reporting to ignoring all income changes. From this we subtract the 
small percentage of over and underpayments that occur from errors in 
reporting income (less than one percent). We then factor in the 
percentage of households that we estimate will continue to report 
changes more frequently than required (10 percent of households), and 
the percentage of States that we estimate are likely to act on those 
changes (50 percent of States). From this we determine a net cost, and 
adjust it by an assumed State take-up rate of 33 percent in 2009, 67 
percent in 2010 and 100 percent in 2011 and beyond.
    Participant Impacts: This provision affects participants in the 
States that opt to implement it. All households who are placed in a 
simplified reporting system benefit by reduced frequency of required 
reporting.
    Uncertainty: There is uncertainty in the number of households that 
will continue to report changes with greater frequency than is 
required, the percentage of States that will take action based on 
information that is reported more frequently than is required, and the 
number of States that will implement this option. In general, increases 
in income occur more often for low-income households than do decreases 
in income. If delayed reporting results in higher income not being 
reported sooner, then we would anticipate the cost to the Government to 
be higher.

Transitional Benefits Option--Section 4106

    Discussion: Prior to the FCEA, transitional benefits were available 
only to those leaving the TANF program. Section 4106 of the FCEA 
allowed States to provide transitional benefits to families leaving 
State-funded cash assistance programs. Programs that would not be 
eligible under this provision include programs that are funded by local 
level governments and programs that do not provide a cash benefit.
    Effect on Low-Income Families: This provision provides low-income 
families leaving State-funded assistance programs with five additional 
months of SNAP benefits. As a result, these families have more money 
available for food, helping ease the transition out of State cash 
assistance programs.
    Federal Cost Impact: The cost to the Government is estimated to be 
$7 million in FY 2010 and $50 million over the 5 years from FY 2010 
through FY 2014. These impacts are already incorporated in the 
President's budget baseline.
    To determine the cost to the Government, using SNAP QC data we 
first estimated the monthly cost of transitional benefits for 
households with children leaving TANF at approximately $54. We used 
this per household cost as a proxy for the per household cost of 
families with children leaving State-funded assistance programs. We 
then multiplied the per household cost by 22,000 households estimated 
to leave State-funded assistance programs to determine the maximum 
total cost. Additionally, we applied phase-in assumptions to account 
for the phase-in of this provision among the States with State-funded 
benefits. We assume that

[[Page 25432]]

25 percent of States with State-funded benefits would implement this 
provision in 2009, increasing to a maximum of 75 percent of these 
States in 2011.
    Participant Impacts: This provision will not increase the number of 
participants, but it will allow households with children receiving 
State-funded cash assistance to extend their SNAP benefits for a period 
of five months after they stop receiving cash assistance.
    Uncertainty: The cost of this provision could vary depending on the 
number and timing of States that choose to implement it. It could also 
increase if more States adopted State-funded cash assistance programs, 
but this appears unlikely given the relatively static number of States 
that have offered these benefits over time.

Minimum Benefit Increase--Section 4107

    Discussion: Current regulations set the minimum benefit at $10.00. 
Section 4107 of the FCEA mandated that, effective October 1, 2008 and 
each fiscal year thereafter, the minimum benefit amount for households 
of one and two persons is 8 percent of the maximum allotment for a 
household of one, rounded to the nearest whole dollar.
    Effect on Low-Income Families: This provision will affect low-
income participants receiving the minimum benefit by increasing their 
monthly benefit. An eligible household's SNAP benefit is computed by 
subtracting 30 percent of its net income from the maximum benefit. All 
one and two person households are guaranteed to receive at least the 
minimum benefit (except during the initial month of participation).
    Federal Cost Impact: The cost to the Government is $76 million in 
FY 2010 and $461 million over the 5 years from FY 2010 through FY 2014. 
These impacts are already incorporated in the President's budget 
baseline. Using the microsimulation model with 2007 QC data, we 
estimate that in FY 2010 this provision increases benefits for 
approximately 3.6 percent of participants, or 1.25 million people, who 
will receive an average monthly benefit increase of $5.
    The cost of this provision was estimated by comparing the previous 
minimum benefit of $10 to 8 percent of the one-person maximum 
allotment.

                                                    Expected Dollar Increase in SNAP Minimum Benefit
                                                           [By fiscal years 2009 through 2014]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Household size                            2009            2010            2011            2012            2013            2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
Minimum benefit under prior law.........................              10              10              10              10              10              10
Minimum benefit under current law.......................              14              15              15              15              16              16
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The estimate cost of raising the minimum benefit was derived using 
a microsimulation model with FY 2007 QC data. The model indicated that 
the provision would increase total SNAP benefits by 0.13 percent in FY 
2010, increasing to 0.20 percent of total benefits in FY 2014. We then 
applied this percentage to total baseline benefits to derive the total 
cost.
    Participant Impacts: The model indicated that in 2010 approximately 
3.6 percent of participants will receive higher benefits. We applied 
this percentage to the total number of participants and determined that 
approximately 1.25 million participants will receive a benefit increase 
due to this provision, with an average monthly benefit increase per 
affected participant of $5 in FY 2010, rising to $7 in FY 2014.
    Uncertainty: There is a small degree of uncertainty associated with 
the estimate to raise the minimum benefit. The estimate is based on 
2007 QC data and assumes that the proportion of participants receiving 
the minimum benefit will remain constant over time. If the proportion 
of participants receiving the minimum benefit were to increase or 
decrease, the cost of this provision would also increase or decrease 
accordingly.

Employment and Training Funding for Job Retention--Section 4108

    Discussion: Section 6(d)(4) of the Act (7 U.S.C. 2015(d)(4)) 
specifies components that State agencies must include as part of E&T 
programs. Current regulations at Sec.  273.7(e)(1) provide for seven 
approved uses of (Employment and Training) E&T funds. Section 4108 of 
the FCEA amended Section 6(d)(4) of the Act to add a new approved use 
of E&T funds. Job retention services for up to 90 days to an individual 
who secured employment after receiving other employment/training 
services under the E&T program offered by the State agency. It also 
clarifies that any individual voluntarily electing to participate in an 
E&T program is not subject to the hour of work limitation.
    Effect on Low-Income Families: This provision could enable 
participants to more rapidly acquire the skills they need to become 
employed or increase their earnings, which could have a positive effect 
on family income.
    Federal Cost Impact: We do not anticipate any significant cost 
impact to the Government from this provision, through either a change 
in benefits or State spending on E&T services.
    Participant Impacts: We do not anticipate an effect on SNAP 
participation from this provision.

Telephonic Signature Systems--Section 4119

    Discussion: Under current regulations there is no provision for 
accepting a spoken or gestured signature. This provision allows States 
to establish a system by which an applicant may sign an application 
through a recorded verbal agreement over the telephone.
    Effect on Low-Income Families: This option would allow new low-
income participants to begin receiving benefits an estimated three days 
sooner. We estimate that for the average newly participating household, 
this could provide approximately $25 to $30 in additional benefits at 
the start of their benefit receipt.
    Federal Cost Impact: The cost to the Government is estimated to be 
$22 million in FY 2010 and $258 million over the 5 years from FY 2010 
through FY 2014. These impacts are already incorporated in the 
President's budget baseline. We estimate that this provision will 
provide benefits 2-3 days sooner than if applicants mailed their 
applications.\16\ The cost estimate is based on an additional 3 days of 
benefits for new applicant households.
---------------------------------------------------------------------------

    \16\ This assumption is based on the professional judgment of 
Federal SNAP administrators.
---------------------------------------------------------------------------

    To estimate this provision, we examined the baseline participant 
estimates for each fiscal year and derived the expected year to year

[[Page 25433]]

growth in the number of participants. We then took the average monthly 
participant benefit and multiplied it by 2.23 to create the average 
household benefit. The 2007 QC data indicates that the average 
household benefit is 2.23 times the average monthly benefit per 
participant. We then divided the monthly household benefit by 30 (days) 
to determine the average value of one day of household benefits, and 
multiplied that by 3 (days) to come up with the average cost of three 
additional days of household benefits.
    Furthermore, we did not assume that all States would take up this 
option immediately, or ever. We assume a phase-in for this provision, 
with States providing telephonic signatures to 2 percent of new 
participants in FY 2009, increasing to a maximum of 15 percent \17\ of 
new participants in FY 2012 and beyond.
---------------------------------------------------------------------------

    \17\ There is no extant data on how many States might choose 
this option. This assumption is based on the professional judgment 
of Federal SNAP administrators.
---------------------------------------------------------------------------

    Participant Impacts: We do not anticipate any significant impact on 
the number of participants from this provision. However, it will 
provide benefits to participants sooner than if all applications were 
required to be mailed. The total number of new participants affected 
depends on the number of States choosing the option of telephonic 
signatures. At most, we estimate that 15 percent of new participants 
will sign their applications telephonically.
    Uncertainty: The uncertainty in this provision relates to the 
number of States that will take up this option. We assume that at most, 
States will utilize this option for 15 percent of new participants. If 
more or fewer States were to choose this option, the number of 
participants receiving benefits sooner would either increase or 
decrease accordingly.

Employment and Training Cycle Reduction--Section 4122

    Discussion: Current rules at Sec.  273.7(d)(1)(i) provide that each 
State agency will receive a 100 percent Federal grant each fiscal year 
to operate an E&T program. Regulations at Sec.  273.7(d)(1)(i)(D) 
provide that if a State agency does not obligate or expend all of the 
funds allocated to it for a fiscal year, FNS will reallocate the 
unobligated, unexpended funds to other State agencies each fiscal year 
or subsequent fiscal year. Prior to enactment of the FCEA, the Act 
provided these funds remain available until expended. However, Section 
4122 of FCEA amended Section 16(h)(1)(A) of the Act (7 U.S.C. 
2025(h)(1)(A)) to limit the time unspent unmatched Federal funding for 
E&T program expenses may remain available to 15 months. Unspent 
carryover funding will no longer remain available until it's expended.
    Effect on Low-Income Families: We do not anticipate any effect on 
low-income families from this provision.
    Federal Cost Impact: We do not anticipate any significant cost 
impact for the Government from this provision.
    Participant Impacts: We do not anticipate any impact on 
participation from this provision.

Option To Conduct Telephone Interviews at Certification and 
Recertification

    Discussion: FNS is proposing to amend Sec. Sec.  273.2(e)(2) and 
273.14(b)(3) to allow State agencies to use a telephone interview 
rather than a face-to-face interview without documenting hardship. 
State agencies would be required to provide a face-to-face interview if 
requested by the household or if the State agency determines that one 
is necessary. However, if a household that meets the State agency's 
hardship criteria requests to waive the in-office interview, the State 
agency would be required to conduct the interview by telephone or to 
schedule a home visit.
    Effect on Low-Income Families: We do not anticipate any effect on 
low-income families from this provision.
    Federal Cost Impact: We do not anticipate any significant cost 
impact for the Government from this provision since many States are 
already employing this option. FNS has approved 39 waivers allowing 
State agencies to use telephone interviews in lieu of face-to-face 
interviews if requested by the household or if the State agency 
determines that one is necessary.
    Participant Impacts: We do not anticipate any impact on 
participation from this provision.

Option To Average Student Work Hours

    Discussion: Under Section 6(e) of the Act and Sec.  273.5(b), 
students enrolled at least half-time in an institution of higher 
education, are ineligible to participate in SNAP unless they meet at 
least one of several criteria. One criterion allows students to 
participate if they are employed for a minimum of 20 hours a week. We 
propose to amend Sec.  273.5(b)(5) to provide State agencies with the 
option to determine compliance with the 20-hour minimum work 
requirement by averaging the number of hours worked over the month 
using an 80-hour monthly minimum.
    Effect on Low-Income Families: This provision may enable some low-
income students to become eligible for SNAP if the student is able to 
meet the minimum work requirement under the proposed State option. The 
number of students who may become eligible for SNAP is likely very 
small so that the cost impact would be minimal.
    Federal Cost Impact: We do not anticipate any significant cost 
impact for the Government from this provision, as some States are 
already employing this option. FNS has approved waivers to 13 State 
agencies allowing them to average the number of hours worked in 
determining compliance with the student work requirement.
    Participant Impacts: We do not anticipate any impact on 
participation from this provision.

III. Alternatives Considered

    Most aspects of the proposed rule are non-discretionary and tie to 
explicit, specific requirements for SNAP in the FCEA. The mandatory 
effective date of most SNAP provisions in the FCEA was October 1, 2008. 
However, the Department did consider alternatives in implementing of 
Section 4103 of the FCEA, Elimination of caps on dependent care 
deduction.
    Section 5(e)(3) of the Act specifies that the actual costs that are 
necessary for the care of a dependent may be deducted if the care 
enables a household member to accept or continue employment, or to 
participate in training or education in preparation for employment. 
Section 4103 of the FCEA eliminated the caps that had been placed on 
the amount of monthly dependent care costs that households could 
deduct; eligible households have been able to deduct the full amount of 
their dependent care costs since the October 1, 2008 effective date for 
this provision.
    Only those expenses that are separately identified, necessary to 
participate in the care arrangement, and not already paid by another 
source on behalf of the household would be deductible. As part of the 
proposed rule, the Department is clarifying the types of dependent care 
expenses permitted under the deduction. It considered the following 
alternatives:
     Include the costs of transporting dependents to and from 
care and separate activity fees charged by the care provider required 
for the care arrangement. During the floor discussions prior to passage 
of the FCEA, it was recognized that some States already allow 
transportation costs to be deducted for dependent care, but no limit 
was placed in the law. This

[[Page 25434]]

change would result in a nominal increase in program costs, but would 
ensure that national policy is consistent in ensuring that dependent 
care-related transportation costs do not compromise access to the 
program for clients.
     Limit the deductions to direct compensation to the care 
provider. Historical policy applied the deduction more narrowly to 
direct compensation to the care provider. Like the option above, this 
would create a consistent national policy. It would nominally lower 
program costs, but would force some States to eliminate these 
deductions and may result in an increased administrative burden for 
States.
    After careful consideration, the Department chose the first 
alternative. The removal of the dependent care caps by the FCEA 
indicates an important shift by Congress in recognizing that associated 
costs represent a major expense for working households, and this 
alternative appropriately recognizes that dependent care involves many 
different types of costs, including transportation costs and fees 
charged for activities in structured dependent care programs.

IV. References

Food Stamp Usage in the Military, Unpublished Department of Defense 
Report, Office of the Under Secretary of Defense Personal and 
Readiness, Directorate of Compensation, Military Personnel Policy, 
May 2003.
Leftin, Joshua, Andrew Gothro and Esa Eslami. Characteristics of 
Supplemental Nutrition Assistance Households: Fiscal Year 2009. 
Report submitted to the U.S. Department of Agriculture, Food and 
Nutrition Service. Alexandria, VA: Mathematica Policy Research, 
October 2010. http://www.fns.usda.gov/ora/menu/Published/SNAP/FILES/Participation/2009Characteristics.pdf.
Wemmerus, Nancy and Bruce Gottlieb. Relaxing the FSP Vehicle Asset 
Test: Findings from the North Carolina Demonstration. Report 
submitted to the U.S. Department of Agriculture, Food and Nutrition 
Service. Alexandria, VA: Mathematica Policy Research, January 22, 
1999. http://www.mathematica-mpr.com/publications/pdfs/relaxreport1.pdf.
2004 Green Book, Background Material and Data on Programs Within the 
Jurisdiction of the Committee on Ways and Means, March 2004. http://www.gpoaccess.gov/wmprints/green/index.html.
SNAP Quality Control Data available online at: http://hostm142.mathematica-mpr.com/fns/.
Technical documentation for microsimulation models available online 
at: http://hostm142.mathematica-mpr.com/fns/.
U.S. Census Bureau Survey of Income and Program Participation: 
http://www.census.gov/sipp/.
The Federal Reserve Board Survey of Consumer Finances: http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html.
Active Duty Military Personnel Strengths by Regional Area and by 
Country Quarterly Report, Defense Manpower Data Center, Department 
of Defense, September 30, 2010. http://siadapp.dmdc.osd.mil/personnel/MILITARY/history/hst1009.pdf.
Defense Finance and Accounting Service Hostile Fire and Imminent 
Danger Pay: http://www.dfas.mil/army2/specialpay/hostilefireimminentdangerpay.html.
Defense Finance and Accounting Service Family Separation Allowance: 
http://www.dfas.mil/militarypay/woundedwarriorpay/familyseparationallowancefsa.html.
Hardship Duty Location Pay for Designated Areas, see Figure 17-1: 
http://comptroller.defense.gov/fmr/07a/07a_17.pdf.

Executive Order 13175

    USDA will undertake, within 6 months after this rule becomes 
effective, a series of Tribal consultation sessions to gain input by 
elected Tribal officials or their designees concerning the impact of 
this rule on Tribal governments, communities and individuals. These 
sessions will establish a baseline of consultation for future actions, 
should any be necessary, regarding this rule. Reports from these 
sessions for consultation will be made part of the USDA annual 
reporting on Tribal Consultation and Collaboration. USDA will respond 
in a timely and meaningful manner to all Tribal government requests for 
consultation concerning this rule and will provide additional venues, 
such as Webinars and teleconferences, to periodically host 
collaborative conversations with Tribal leaders and their 
representatives concerning ways to improve this rule in Indian country.
    The policies contained in this rule would not have Tribal 
implications that preempt Tribal law.

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 small 
entities. Pursuant to that review, it is certified that this proposed 
rule would not have a significant impact on small entities.
    The provisions of this proposed rule, affecting the eligibility, 
benefits, certification, and employment and training requirements for 
applicant or participant households in the Supplemental Nutrition 
Assistance Program (SNAP), are implemented through State agencies, 
which are not small entities as defined by the Regulatory Flexibility 
Act. In addition, the majority of this rule's provisions have been in 
implementation since the enactment of the Food, Conservation, and 
Energy Act of 2008 (FCEA). This rule proposes to amend the SNAP 
regulations to be consistent with the requirements of FCEA.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under Section 202 of the UMRA, the 
Department generally must prepare a written statement, including a 
cost/benefit analysis, for proposed and final rules with Federal 
mandates that may result in expenditures 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 the 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 rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) that impose costs on State, local, 
or Tribal governments or to the private sector of $100 million or more 
in any one year. This rule is, therefore, not subject to the 
requirements of Sections 202 and 205 of the UMRA.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
No. 10.551. For the reasons set forth in the final rule in 7 CFR 3015, 
subpart V and related Notice (48 FR 29115), the Program is included in 
the scope of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials.

Federalism Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions. 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

[[Page 25435]]

(6)(b)(2)(B) of the Executive Order 13132.
Prior Consultation With State Officials
    After the FCEA was enacted on June 18, 2008, FNS held a series of 
conference calls with State agencies and FNS regional offices to 
explain the SNAP provisions included in the public law and to answer 
questions that State agencies had about implementing the changes to the 
program. On July 3, 2008, FNS issued an implementation memorandum that 
described each SNAP-related provision in the FCEA and provided basic 
information to assist State agencies in meeting statutorily-mandated 
implementation timeframes. FNS responded to additional questions that 
State agencies submitted and posted the answers on the FNS Web site. 
Another forum for consultation with State officials on implementation 
of the FCEA provisions included various conferences hosted by FNS 
regional offices, State agency professional organizations, and program 
advocacy organizations. During these conferences, held in the latter 
part of 2008 and early months of 2009, FNS officials responded to a 
range of questions posed by State agency officials related to 
implementation of FCEA provisions.
Nature of Concerns and the Need To Issue This Rule
    This rule proposes to implement changes required by the FCEA. State 
agencies were generally interested in understanding the timeframes for 
implementing the various provisions and the implications of the 
statutory provisions on State agency administration workload and on 
applicants and participants. FNS was able to answer questions that 
directly related to the mandatory or optional nature of the provisions 
and to confirm the statutorily-mandated timeframes for implementation. 
FNS was also able to respond to questions that involved current 
regulations or written policy. An example of such an issue was whether 
uncapped dependent care claimed by an applicant or participant must be 
verified. FNS was able to answer this question by drawing on current 
policy at Sec.  273.2(f), which requires that dependent care expenses, 
like other household costs, must only be verified if questionable or if 
the State agency opts to require verification of such costs. However, 
State agencies raised a number of questions that required policy 
development and could not be answered without promulgation of a new 
rulemaking. These types of questions raised by State agencies or 
program advocacy organizations contributed directly to the development 
of policy proposed in this rule. For example, State agencies asked 
whether transportation costs associated with getting a dependent to and 
from care could be counted as part of dependent care expenses and thus 
be deducted. Specific SNAP policy on this issue had not been 
sufficiently developed prior to this rule; thus, we have proposed a 
clarification in this area.
Extent to Which We Met Those Concerns
    FNS has considered the impact of the proposed rule on State and 
local agencies. This rule proposes to make changes that are required by 
law. All but two of the provisions in this rule would implement 
provisions of the FCEA, which were effective on October 1, 2008. The 
two additional provisions that we have proposed are discretionary in 
nature and would give State agencies regulatory options that currently 
may only be waived through SNAP's administrative waiver request 
procedures.

Executive Order 12988

    This 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 that 
conflict with its provisions or that would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the ``Effective Date'' paragraph of this rule. 
Prior to any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted. In the Supplemental Nutrition Assistance Program, 
the administrative procedures are as follows: (1) For program benefit 
recipients--State administrative procedures issued pursuant to Section 
11(e) of the Act (7 U.S.C. 2020(e)(1)) and regulations at Sec.  273.15; 
(2) for State agencies--administrative procedures issued pursuant to 
Section 14 of the Act (7 U.S.C. 2023) and regulations at Sec.  276.7 
(for rules related to non-Quality Control liabilities) or part 283 (for 
rules related to Quality Control liabilities); (3) for Program 
retailers and wholesalers--administrative procedures issued pursuant to 
Section 14 of the Act (7 U.S.C. 2023) and 7 CFR 279.

Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with the 
Department Regulation 4300-4, ``Civil Rights Impact Analysis,'' to 
identify and address any major civil rights impacts the rule might have 
on minorities, women, and persons with disabilities. After a careful 
review of the rule's intent and provisions, and of the characteristics 
of SNAP households and individual participants, we have determined that 
this rule would not have a disproportionate impact on any of these 
groups. We have no discretion in implementing many of these changes. 
The changes that are required to be implemented by law have already 
been implemented as of October 1, 2008. FNS expects that the 
discretionary provisions included in this proposed rule will benefit 
applicants and participants that are among the protected classes of 
individuals. All data available to FNS indicate that protected 
individuals have the same opportunity to participate in SNAP as non-
protected individuals. FNS specifically prohibits the State and local 
government agencies that administer the Program from engaging in 
actions that discriminate based on race, color, national origin, sex, 
religion, age, disability, marital or family status (SNAP's 
nondiscrimination policy can be found at Sec.  272.6(a)). Where State 
agencies have options, and they choose to implement a certain 
provision, they must implement it in such a way that it complies with 
the regulations at Sec.  272.6.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35; see 5 
CFR part 1320) requires that OMB approve all collections of information 
by a Federal agency from the public 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. This 
proposed rule contains new provisions that will affect reporting and 
recordkeeping burdens under currently approved collections and will be 
merged into OMB No. 0584-0064 and No. 0584-0083 once approved by OMB. 
The changes in burden that would result from the provisions in the 
proposed rule are described below, and are subject to review and 
approval by OMB. When the information collection requirements have been 
approved, FNS will publish a separate action in the Federal Register 
announcing OMB's approval.
    Comments on the information collection in this proposed rule must 
be received by July 5, 2011. Send comments to the Office of Information 
and Regulatory Affairs, OMB, Attention: Desk Officer for FNS, 
Washington, DC 20503. Please also send a copy of your comments to 
Lizbeth Silbermann, Supplemental Nutrition Assistance Program, Food and 
Nutrition Service,

[[Page 25436]]

U.S. Department of Agriculture, 3101 Park Center Drive, Room 812, 
Alexandria, Virginia 22302. For further information, or for copies of 
the information collection requirements, please contact Ms. Silbermann 
at the address indicated above.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the Agency's 
functions, including whether the information will have practical 
utility; (2) the accuracy of the Agency's estimate of the proposed 
information collection burden, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility and clarity of the information to be collected; and (4) 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 request for comments will be summarized and 
included in the request for OMB approval. All comments will also become 
a matter of public record.

OMB Number: 0584--NEW

    Title: Supplemental Nutrition Assistance Program Forms--
Applications, Periodic Reporting, and Notices.
    Type of Request: New.
    Abstract: This rule proposes to codify into SNAP regulations 12 
provisions from FCEA and to make conforming changes throughout Sec.  
273, including the change to the program's name. The rule also proposes 
two changes to the SNAP certification and eligibility regulations to 
provide State options that are currently available only through 
waivers. The FCEA provisions affect eligibility, benefits, and 
certification of program participants as well as the employment and 
training (E&T) portion of the program. This rulemaking proposes a new 
information collection to account for changes required by FCEA.
    The average burden per response and the annual burden hours for 
this new information collection are explained and summarized in the 
following chart. A burden reduction of 20,397,156.60 hours will be 
merged with OMB No. 0584-0064 once approved by OMB.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Estimated avg.
                                                                Form       Estimated     Report filed    Total annual      number of     Estimated total
       Section of regulation                  Title            number      number of       annually        responses     manhours per    manhours  (Col.
                                                              (if any)    respondents                     (Col. DxE)       response           FxG)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A                                    B.....................          C               D               E               F               G                 H
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        REPORTING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   STATE AGENCY LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 273...........................  Change of Program Name  .........              44            1.00           44.00          8.0000            352.00
273.9(c)...........................  Exclusion of combat-    .........  ..............            0.00            0.00  ..............              0.00
                                      related pay.
273.9(d)(1)(iii)...................  Increase of minimum     .........  ..............            0.00            0.00  ..............              0.00
                                      standard deduction.
Sec.  Sec.   273.9(d)(4) &           Elimination of cap on   .........              53            1.00           53.00          8.0000            424.00
 273.10(e)(1)(i)(E).                  dependent care
                                      expenses--SA
                                      Operation Manual
                                      update.
 Do................................  Newly certified         .........              53        7,317.75      387,840.75          0.0835         32,384.70
                                      households w/
                                      dependent care.
 Do................................  Existing households w/  .........              53       10,778.26      571,247.78          0.0334         19,079.68
                                      dependent care.
273.10(e)(2)(ii)(C)................  Minimum benefit         .........              53            1.00           53.00          0.5000             26.50
                                      increase.
273.8(b)...........................  Asset indexation......  .........              53           16.98          900.00          0.0167             15.03
273.8(e)(2)(i).....................  Exclusion of            .........  ..............  ..............  ..............  ..............  ................
                                      retirement accounts
                                      from resources.
 Do................................  Newly certified         .........              53          792.45       42,000.01          0.0167            701.40
                                      households.
 Do................................  New and Existing        .........              53      138,528.30    7,342,000.01          0.0167       -122,611.40
                                      households.
273.8(e)...........................  Exclusion of education  .........  ..............  ..............  ..............
                                      accounts from
                                      resources.
 Do................................  Newly certified         .........              53           18.87        1,000.11          0.0167             16.70
                                      households.
 Do................................  New households          .........              53            8.59          455.01          0.0167             -7.60
                                      (existing households
                                      not included, already
                                      captured in
                                      respondents under
                                      retirement accounts
                                      provision).
Sec.  Sec.   273.12(a)(5), (b), and  Expansion of            .........  ..............  ..............  ..............  ..............  ................
 (c).                                 simplified reporting.
 Do................................  Newly added elderly or  .........              47       53,000.00    2,491,000.00          0.1837        457,596.70
                                      disabled households.
Sec.   272.2(d)(1)(H) and 273        Transitional benefits   .........  ..............            0.00            0.00  ..............              0.00
 Subpart H.                           alternative.
Sec.  Sec.   273.2(b) & (c),         Telephonic signature..  .........               3            1.00            3.00        120.0000            360.00
 273.12(c) and (d), 273.14(b), and
 273.21(h).
Sec.  Sec.   273.2(e)(2) &           Telephonic interviews.  .........              40            1.00           40.00          2.0000            -80.00
 273.14(b)(3).
273.5(b)(5)........................  Averaging student work  .........              53       13,431.30      711,858.90          0.0835        -59,440.22
                                      hours.
Sec.  Sec.   273.7(e)(1)(viii) &     Employment and          .........  ..............  ..............  ..............  ..............              0.00
 273.7(e)(4)(iii).                    Training: Job
                                      retention services.
    State Agency Burden Total.........................................              53      223,897.50   11,548,495.56  ..............        328,817.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     HOUSEHOLD LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 273...........................  Change of Program Name  .........  ..............            0.00            0.00  ..............              0.00
273.9(c)...........................  Exclusion of combat-    .........  ..............            0.00            0.00  ..............              0.00
                                      related pay.
273.9(d)(1)(iii)...................  Increase of minimum     .........  ..............            0.00            0.00  ..............              0.00
                                      standard deduction.

[[Page 25437]]

 
Sec.  Sec.   273.9(d)(4) &           Elimination of cap on   .........  ..............  ..............  ..............  ..............  ................
 273.10(e)(1)(i)(E).                  dependent care
                                      expenses.
 Do................................  Newly certified         .........         387,841            1.00      387,841.00          0.0835         32,384.72
                                      households w/
                                      dependent care.
 Do................................  Existing households w/  .........  ..............            1.00      571,248.00          0.0334         19,079.68
                                      dependent care.
 Do................................  ......................  .........         571,248  ..............  ..............  ..............  ................
273.10(e)(2)(ii)(C)................  Minimum benefit         .........  ..............            0.00            0.00  ..............              0.00
                                      increase.
273.8(b)...........................  Asset indexation......  .........  ..............            0.00            0.00  ..............              0.00
273.8(e)(2)(i).....................  Exclusion of            .........  ..............  ..............  ..............  ..............  ................
                                      retirement accounts
                                      from resources.
 Do................................  New and existing        .........       7,342,000            1.00    7,342,000.00          0.0167       -122,611.40
                                      households.
273.8(e)...........................  Exclusion of education  .........  ..............  ..............  ..............  ..............  ................
                                      accounts from
                                      resources.
 Do................................  New households          .........             455            1.00          455.00          0.0167             -7.60
                                      (existing households
                                      not included, already
                                      captured in
                                      respondents under
                                      retirement accounts
                                      provision).
Sec.  Sec.   273.12(a)(5), (b), and  Expansion of            .........       2,491,000            1.00    2,491,000.00          0.0835        207,998.50
 (c).                                 simplified reporting.
Sec.   272.2(d)(1)(H) and 273        Transitional benefits   .........  ..............            0.00            0.00  ..............              0.00
 Subpart H.                           alternative.
Sec.  Sec.   273.2(b) & (c),         Telephonic signature..  .........  ..............            0.00            0.00  ..............              0.00
 273.12(c) and (d), 273.14 (b) and
 273.21(h).
Sec.  Sec.   273.2(e)(2) &           Telephonic interviews.  .........      10,431,409            1.00   10,431,409.00          2.0000    -20,862,818.00
 273.14(b)(3).
273.5(b)(5)........................  Averaging student work  .........  ..............            0.00            0.00  ..............              0.00
                                      hours.
Sec.  Sec.   273.7(e)(1)(viii) &     Employment and          .........  ..............  ..............  ..............  ..............              0.00
 273.7(e)(4)(iii).                    Training: Job
                                      retention services.
Household burden total................................................      21,223,953            6.00   21,223,953.00  ..............    -20,725,974.09
    Total Reporting burden of Eligibility, Certification and E&T        ..............  ..............  ..............  ..............     -20,397,156.6
     Proposed Rule.
    Total Existing Reporting Burden for OMB No. 0584-0064.............  ..............  ..............  ..............  ..............        24,893,623
    Total Reporting Burden for 0584-0064 with Eligibility,              ..............  ..............  ..............  ..............         4,496,466
     Certification and E&T Proposed Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      RECORDKEEPING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   STATE AGENCY LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
No recordkeeping burden incurred as  ......................          0               0               0               0               0                 0
 a result of the proposed rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     HOUSEHOLD LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
No recordkeeping burden incurred as  ......................          0               0               0               0               0                 0
 a result of the proposed rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Reporting

1. Renaming the Program--Part 273
    As indicated earlier, Section 4001 of the FCEA renamed the Food 
Stamp Program the Supplemental Nutrition Assistance Program (SNAP). 
Under the proposed rule, the new program name and other nomenclature 
changes are updated throughout part 273 of the SNAP regulations. State 
agencies, however, are not required to change the local program name to 
the official Federal name under the FCEA and may continue to use state-
specific names for SNAP. The Department has, however, encouraged States 
to discontinue the use of the name Food Stamp Program. If a State 
agency chooses to adopt the official Federal program name or change 
from Food Stamps to an alternative name in response to FCEA, it will 
incur the initial burden costs of updating the State agency Web site 
and print materials such as operation manuals, program forms, and 
client information packets.
    State agency burden: To date, 27 States have adopted the official 
program name. A total of 17 States are adopting or have adopted an 
alternate program name and 9 States are undecided and/or are still 
using the Food Stamp Program name. For the 44 State agencies that have 
adopted SNAP or an alternate name for the program, FNS estimates 352 
burden hours (44 State agencies x 8 burden hours = 352 total burden 
hours).
    Household burden: No household burden is estimated for this 
requirement.
2. Exclusion of Combat-Related Pay--Sec.  273.9(c)
    Under the Act, State agencies would be required to exclude combat-
related pay from consideration as income in determining SNAP 
eligibility and benefit amounts. State agencies would require 
verifiable documentation from households that differentiates regular 
income from combat-related pay. The process of excluding combat-related 
pay will create an upfront cost burden for the State, which includes 
updating operation manuals and staff with the changes of this 
provision. FNS proposes to add a new paragraph (20) to Sec.  273.9(c)

[[Page 25438]]

describing the exclusion requirement of combat-related pay.
    State agency burden: The Consolidated Appropriations Act, 2005, 
Public Law 108-447, allowed State agencies to exclude combat-related 
pay from consideration as income. Since States have incorporated this 
requirement in compliance with the Appropriations Act of 2005, which is 
now codified under the FCEA, FNS does not assume additional burdens to 
State agencies from this provision. In addition, FNS does not assume 
additional costs related to verification of combat-related pay since 
eligibility workers are already obtaining and verifying income on the 
household's military income.
    Household burden: FNS does not estimate an additional burden to the 
household for this provision since households are already verifying 
income.
3. Increasing the Standard Deduction for Small Households--Sec.  
273.9(d)(1)(iii)
    FNS proposes to amend the regulation at Sec.  273.9(d)(1)(iii) to 
include the changes in the standard deduction required by the Act. The 
FCEA required State agencies to implement the new minimum standard 
deduction approved by this rulemaking for FY 2009 for all 53 State 
agencies and to index the amounts annually beginning in FY 2010. The 
increased minimum standard deduction was incorporated as a means to 
increase the purchasing power of households. This provision would not 
impose an additional burden on State agencies or households since the 
standard deduction amounts are already modified and updated on an 
annual basis. State agencies can adjust the standard deduction to 
reflect the increased figure as part of the benefit calculation.
    State agency burden: No burden estimated for State agencies.
    Household burden: No burden estimated for households.
4. Elimination of Dependent Care Caps--Sec. Sec.  273.9(d)(4) and 
273.10(e)(1)(i)(E)
    FNS proposes to amend Sec. Sec.  273.9(d)(4) and 273.10(e)(1)(i)(E) 
to eliminate the caps on dependent care expenses. The FCEA stipulates 
that State agencies would no longer cap a household's deduction for 
dependent care. Working households with children are allowed to deduct 
the entire amount of child care expenses when determining benefits. 
Applying this requirement to existing SNAP households does pose an 
additional burden on State agencies because this requirement would be 
applied on a case-by-case basis. The burden would result from 
additional administrative steps required to apply the new provisions.
    State agency burden: FNS estimates a burden of 8 hours, totaling 
424 burden hours (8 hours x 53 State agencies = 424 burden hours), for 
State agencies to develop procedures and modify manuals to incorporate 
the new dependent care requirements. As for applying these provisions 
toward new households, FNS estimates a State agency burden of 5 minutes 
or .0835 hours at the initial interview per household and 2 minutes or 
.0334 hours at recertification per household. According to the National 
Data Bank Survey (NDB), there are 8,618,690 newly certified households 
and 12,694,400 existing households in SNAP. Approximately 4.5 percent 
or 387,841 new households and 571,248 existing households receive 
dependent care (Characteristics of Food Stamp Households of 2007). 
Based on this information, FNS estimates a combined burden of 51,465 
hours (387,841 newly certified households with dependent care x .0835 
hours = 32,385 burden hours; 571,248 existing households with dependent 
care x .0334 hours = 19,080 burden hours) to implement the requirements 
under the new dependent care provision.
    Household burden: Households may have to provide additional 
verification of costs greater than $175 to $200 and for additional 
types of expenses associated with dependent care (i.e. transportation 
and activity fees). FNS estimates that newly certified households will 
incur an additional burden of 5 minutes or .0835 hours (5 minutes or 
.0835 hours x 387,841 new households = 32,385 burden hours) to obtain 
additional verification information and a burden of 2 minutes or .0334 
hours (2 minutes or .0334 hours x 571,248 recertified households = 
19,080 burden hours) for existing households. The combination of newly 
certified and existing households results in 51,465 burden hours.
5. Increasing the Minimum Benefit for Small Households--Sec.  
273.10(e)(2)(ii)(C)
    FNS proposes to amend Sec.  273.10(e)(2)(ii)(C) to include the FCEA 
increase in the minimum benefit amount for one and two-person 
households from $10 to 8 percent of the maximum allotment. State 
agencies would have a minimum burden associated with implementing this 
change in the benefit amount, since it will now be adjusted annually 
rather than being a fixed amount.
    State agency burden: FNS estimates a burden of 30 minutes per State 
agency, totaling 27 burden hours (30 minutes or .5 hr x 53 State 
agencies = 27 burden hours) for State agencies to incorporate this 
provision.
    Household burden: No burden is estimated for households.
6. Indexing Asset Limits to Inflation--Sec.  273.8(b)
    The FCEA authorized several changes to resource limits. The Act 
stipulated that the asset limit be indexed to inflation to the nearest 
$250 increment. This change in the Act allows resource limits to keep 
pace with rising prices of goods and services. Initially, the changes 
proposed by the rule will lead to changes in the State agency's system 
and operational manual. This will be a minimal burden to State 
agencies. This rulemaking proposes to amend Sec.  273.8(b) by indexing 
current asset limits to inflation.
    State agency burden: FNS estimates an additional burden of 15 hours 
to State agencies for the implementation of this provision (900 initial 
certification applications x 1 minute or .0167 hours = 15 burden 
hours). This burden will not be incurred by State agencies until FY2013 
when this provision will be fully implemented.
    Household burden: No household burden estimated.
7. Exclusion of Retirement Accounts From Resources Sec. Sec.  
273.8(e)(2)(i) and Education Accounts 273.8(e)
    Additionally, FNS is proposing that all funds in tax-preferred 
retirement accounts and education savings accounts be excluded from 
countable resources for the purposes of SNAP. State agencies would no 
longer need to consider retirement accounts and education savings 
accounts as resources. Because these resources will no longer be 
considered as part of the SNAP eligibility process, State agencies may 
see growth in the volume of applications which can lead to a small 
administrative burden. FNS proposes to revise SNAP regulations at 
Sec. Sec.  273.8(e)(2)(i) and 273.8(e) to incorporate these changes.
    According to FNS' Office of Research and Analysis, based on Quality 
Control data, 46 percent of all SNAP households are not categorically 
eligible and, therefore, are impacted by this provision. Categorically-
eligible households are not subjected to the income and asset standard 
tests, and thus are not affected by the exclusion of retirement and 
educational savings accounts from the asset tests. Households that are 
not categorically-

[[Page 25439]]

eligible (7,342,000) are affected by this legislation and are able to 
have those two types of assets excluded. The number of people 
positively affected would be roughly the same for both groups, except 
that more people were made eligible by excluding retirement savings 
then by excluding educational savings. Therefore, existing households 
were not included in the education resources burden estimate since 
these households have been captured within the burden estimates for the 
exclusion of retirement accounts.
    State agency burden: Under this provision, a State agency will no 
longer need to consider retirement accounts and education savings 
accounts as resources. This will reduce the State's resource 
verification burden. However, State agencies will need to consider the 
potential growth in SNAP applications and the potential administrative 
burden associated with it. FNS estimates a 1 minute burden or .0167 
hours associated with additional administrative processes resulting 
from the exclusion of retirement account resources (*42,000 newly 
certified households associated with retirement accounts x .0167 hours 
= 701 burden hours), totaling 701 burden hours. FNS assumes a total of 
122,611 (.0167 hours x *7,342,000 newly certified and existing 
households = 122,611 reduced burden hours) reduced burden hours 
associated with the FCEA retirement resources provision.
    FNS estimates a 1 minute burden or .0167 hours associated with 
additional administrative processes resulting from the exclusion of 
education account resources (1,000 newly certified households with 
education accounts x .0167 hours = 17 burden hours), totaling 17 burden 
hours. FNS assumes an 8 hour burden reduction (.0167 hours x *455 newly 
certified households = 8 burden hours) for newly certified households 
impacted by the exclusion of education resources.
    Household burden: Households will no longer need to provide 
necessary supporting documents for the tax-preferred accounts. FNS 
estimates a 1 minute or .0167 burden hour reduction since households 
are no longer required to provide verification of retirement accounts, 
totaling 122,611 reduced burden hours (.0167 hours x *7,342,000 newly 
certified and existing households = 122,611 reduced burden hours). FNS 
estimates a 1 minute or .0167 burden hours reduction since households 
are no longer required to provide verification of education accounts, 
totaling a reduction of 8 hours (.0167 hours x *455 newly certified 
households = 8 burden hours). *Household estimates provided by the 
Office of Research and Analysis.
8. Expanding Simplified Reporting--Sec. Sec.  273.12(a)(5), (b), and 
(c)
    The expansion of simplified reporting under the FCEA allows State 
agencies to place all households on simplified reporting. Elderly, 
disabled, homeless, migrant and seasonal farm workers are no longer 
prohibited from periodic reporting. This provision greatly reduces the 
reporting burden for households and State agencies. FNS proposes to 
revise Sec. Sec.  273.12(a)(5), (b), and (c) to reflect that the 
frequency of periodic reporting for elderly and disabled households 
without earned income has been limited to one report every twelve 
months.
    State agency burden: Based on information available to FNS, 47 
States have expanded simplified reporting beyond earned income 
households. As indicated by the NDB Participation by State Program 
data, 12,694,400 existing households may be added to the expanded 
simplified reporting option. Of these, 2,491,000 are elderly and/or 
disabled households without earnings (FY2008 Quality Control Data; 8th 
Edition State Options Report). FNS estimates that with the 
implementation of this rulemaking, 2,491,000 elderly and/or disabled 
households may be added to the expanded simplified reporting option. 
FNS assumes that without simplified reporting these households would 
otherwise have been subject to change reporting or status reporting. By 
expanding simplified reporting to all households, elderly and/or 
disabled households without earnings that submitted 2 reports annually 
under change reporting can submit 1 annual report under simplified 
reporting. FNS estimates that a State agency spends 11 minutes or .1837 
hours processing each report. Prior to the expansion of simplified 
reporting to the elderly and/or disabled households without earnings, 
the total State agency burden was 915,193 hours (2,491,000 elderly and/
or disabled households x 2 reports under change reporting = 4,982,000 
reports x 11 minutes or .1837 hrs = 915,193 burden hours). Under this 
rulemaking, the State burden is reduced from 915,193 to 457,597 burden 
hours (11 minutes or .1837 hours x 2,491,000 reports = 457,597 burden 
hours).
    Household burden: The provision reduces household reporting burden 
because of the limited number of reports required under simplified 
reporting. F NS estimates that it takes a household 5 minutes or .0835 
hours to complete a change report. By expanding simplified reporting to 
all households, elderly and/or disabled households without earnings can 
submit one report, thereby reducing the household burden from 415,997 
hours to complete a change report (2,491,000 elderly and/or disabled 
households x 2 reports under change reporting = 4,982,000 reports x 5 
minutes or .0835 hrs = 415,997 burden hours) to 207,999 burden hours 
under simplified reporting (2,491,000 elderly and/or disabled 
households x 1 report = 2,491,000 reports x 5 minutes or .0835 = 
207,999 burden hours).
9. Expanding Transitional Benefits--Sec.  272.2(d)(1)(H) and 273 
Subpart H
    FCEA provides State agencies the option to offer transitional 
benefits to households with children that cease to receive cash 
assistance from state-funded public assistance programs. To begin the 
process of transitional benefits, State agencies should provide the 
household with a notice of expiration (NOE) and a transition notice 
(TN). It is assumed that the burden for the TN would be minimal since 
the TN can sometimes replace the NOE. FNS proposes a revision of State 
plan requirements at Sec.  272.2(d)(1)(H) and subpart H in part 273 of 
the SNAP regulations to reflect this option. In addition, this 
provision requires a revision to the State plan which is incorporated 
in the new information collection burden entitled, ``Operating 
Guidelines, Forms, and Waivers.''
    State agency burden: Current regulations require that States that 
offer transitional benefits provide households leaving cash assistance 
programs with a TN. If no transitional benefit is offered, State 
agencies would provide households with a NOE prior to the end of the 
certification period or a Notice of Adverse Action. Since State 
agencies would automatically generate a notice, regardless of the type 
of notice, FNS does not estimate an additional burden for State 
agencies.
    Household burden: Upon exiting a cash assistance program, the SNAP 
household's benefits are recalculated to account for the reduction in 
income. Therefore, no additional information is collected or required 
from the household. No additional burden to the household is estimated 
if transitional benefits are received or not.
10. Telephonic Signatures--Sec. Sec.  273.2(b) & (c), 273.12(c) & (d), 
273.14(b), and 273.21(h)
    The Act allows State agencies to establish a system by which an 
applicant may sign an application through recorded verbal assent over 
the telephone. FNS proposes several changes to incorporate this option:

[[Page 25440]]

     State clearly that a State agency may accept a spoken 
signature;
     Implement restrictions on spoken signatures;
     Apply restrictions to other signatures, written as well as 
unwritten; and
     Allow gestured or visual signatures as alternatives for 
those individuals that are unable to provide verbal assent.
    Since the telephonic signature process would be a component of the 
application process, periodic reporting process, and recertification 
process, it is estimated that the State agency will incur an upfront 
cost burden of 120 hours to implement system changes and train staff on 
system usage. FNS proposes to revise Sec. Sec.  273.2(b) & (c), 
273.12(c) & (d), 273.14(b), and 273.21(h) to specify conditions under 
which a household may attest to the accuracy of a SNAP application or 
periodic report.
    State agency burden: SNAP current policy allows State agencies to 
continue to explore and to adopt technologies as a way to improve their 
service to households and to simplify their management of SNAP. State 
agencies that may want to incorporate a system that supports the 
recording of telephonic signatures may need to phase such a system into 
place over a long period of time. Based on this, FNS assumes that in 
each fiscal year, over the next 3 years, three State agencies will work 
toward incorporating a system that supports the capabilities required 
under this provision. FNS estimates an upfront cost burden of 120 hours 
per State agency over the course of 3 years. This results in a total of 
360 burden hours for three State agencies in the first 3 years.
    Household burden: While this rulemaking should improve access for 
clients, the application process remains the same. Therefore, FNS does 
not assume a burden for households.
    FNS Proposed State Options: This rule also proposes two changes to 
the program certification and eligibility regulations to offer State 
options that are currently available only through waivers--telephone 
interviews at certification and recertification, and averaging student 
work hours. The reporting burdens for these proposed options are 
discussed below.
11. Telephone Interviews--Sec. Sec.  273.2(e)(2) and 273.14(b)(3)
    FNS proposes to amend Sec. Sec.  273.2(e)(2) and 273.14(b)(3) to 
allow states to use a telephone interview rather than a face-to-face 
interview without documenting hardship. State agencies would be 
required to conduct a face-to-face interview if requested by the 
household or if the State agency determines one is necessary. 
Currently, 40 states are conducting telephone interviews under a face-
to-face waiver. Per this provision, State agencies will no longer be 
required to collect data on information based on the type of interview 
that households received, nor will they be required to document 
household hardship. The result is a reduction in state burden hours due 
to simplification of the certification and recertification process.
    State agency burden: Since a large number of States have 
incorporated telephone interviews through the waiver process, FNS 
assumes that the implementation of this provision will result in a 
reduction in administrative burden to State agencies due to no longer 
requiring the approval of waivers for telephonic interviews. FNS 
estimates a 2 hour reduction in burden hours for State agencies, 
totaling 80 reduced burden hours (2 hours x 40 States with active face-
to-face waivers = 80 reduced burden hours).
    Household burden: This proposed provision permits households to 
fulfill the interview requirement without the need to visit the local 
SNAP office, reducing transportation costs and potential loss of wages 
for households. Assuming that 80% of households within States that have 
approved face-to-face waivers are having telephone interviews, FNS 
estimates a 2 hour reduction in household burden, totaling 20,862,818 
reduced burden hours (13,039,262 households under approved waiver x 80% 
= 10,431,409 households x 2 hours = 20,862,818 reduced burden hours).
12. Averaging Student Work Hours--Sec.  273.5(b)(5)
    FNS also proposes to amend Sec.  273.5(b)(5) to give States the 
option to determine compliance of the 20-hour minimum work requirement 
by averaging the number of student hours worked over a month using a 
80-hour monthly minimum. Modification of the existing regulation grants 
States the additional administrative flexibility and reduced burden 
associated with determining compliance with minimum weekly work 
standards.
    State agency burden: Based on limited waiver data, FNS estimates 
that 3.34 percent of a State agency's caseload is composed eligible 
student households. Based on this assumption, the modification of Sec.  
273.5(b)(5) would decrease the State agency burden hours by 5 minutes 
or .0835 hours, totaling 59,440 reduced burden hours annually 
(21,313,090 newly certified and existing households x 3.34% = 711,857 
eligible student households x .0835 hours = 59,440 reduced burden 
hours).
    Household burden: Student households must continue to provide 
documentation to support the number of hours worked. Therefore, no 
additional burden is estimated under this provision for the household.
13. E&T Job Retention Services--Sec. Sec.  273.7(e)(1)(viii) & 
273.7(e)(4)(iii)
    FCEA amended section 6(d)(4) of the Act to incorporate a new 
employment and training component. The provision permits the use of 
education and training funds for post-employment job retention services 
for up to 90 days. It clarifies that any individual voluntarily 
electing to participate in an E&T program is not subject to the 120 
hour work limit. FNS proposes to amend Sec. Sec.  273.7(e)(1) (viii) 
and 273.7(e)(4)(iii) of the SNAP regulations to define job retention as 
services provided to individuals who have secured employment to help 
achieve satisfactory performance, keep the job and increase earnings 
over time.
    State agency burden: No burden is estimated under this provision 
for State agencies.
    Household burden: No burden is estimated under this provision for 
households.

Recordkeeping

    Maintaining case records: Section 4119 of the FCEA amended Section 
11(e)(2)(C) of the Act (7 U.S.C. 2020(e)(2)(C)) to allow State agencies 
to establish a system by which an applicant may sign an application 
through recorded verbal assent over the telephone. The system must 
record the verbal assent, include effective safeguards against 
impersonation, identity theft and invasions of privacy, not interfere 
with the right to apply in writing, provide the household a written 
copy of the application with instructions for correcting any errors, 
and make the date of application the date of the verbal assent. State 
agencies are to implement changes to their telephone system for the 
efficient collection, storage, and protection of large amounts of data 
to meet the requirements under Section 11(a) of the Act (7 U.S.C. 
2020(a)) and Sec.  271.4(a)(6) of the SNAP regulations concerning 
record maintenance.
    State agencies that incorporate a system that records verbal assent 
would be required to keep record of the information gathered and 
submitted to FNS. We do not foresee an additional record keeping burden 
resulting from the maintenance of recorded verbal data since the 
information that is recorded is

[[Page 25441]]

the same as the information collected with paper applications. 
Therefore, the recordkeeping burden remains unchanged under this 
information collection.

OMB Number: 0584--NEW

    Title: Operating Guidelines, Forms, and Waivers.
    Forms: Not Applicable.
    Type of Request: New.
    Abstract: The regulations at Sec.  272.2 require that State 
agencies plan and budget program operations and establish objectives 
for each year. State agencies are required to submit program activity 
statements and State plan of operation updates to FNS Regional Offices 
for review and approval. The FCEA provided that the employment and 
training provision and optional provisions, included in this proposed 
rule, may be implemented by State agencies on October 1, 2008.
    The average burden per response and the annual burden hours for 
this new information collection are explained and summarized below. A 
total of 34 burden hours will be merged with OMB No. 0584-0083 once 
approved by OMB.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        Estimated avg.
                                                     Form number       Estimated       Report filed     Total annual     no. of man-     Estimated total
     Section of regulation            Title            (if any)        number of         annually        responses        hours  per    man-hours  (Col.
                                                                      respondents                        (Col. DxE)        response           FxG)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A                               B................                C                D                E                F                G                 H
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        REPORTING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   STATE AGENCY LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   273.7(d)(3)(ix)........  Shortening the     ...............  ...............  ...............  ...............  ...............             0.000
                                 E&T funding
                                 cycle.
Sec.   272.2(d)...............  Simplified         ...............               47                1               47              .25             11.75
                                 Reporting.
                                Transitional       ...............               19                1               19              .25              4.75
                                 Benefits.
                                E&T for Job        ...............               12                1               12              .25                 3
                                 Retention.
                                Telephonic         ...............                3                1                3              .25               .75
                                 Signature.
                                Telephonic         ...............               40                1               40              .25                10
                                 Interviews.
                                Averaging of       ...............               15                1               15              .25              3.75
                                 Student.
                                work hrs.........  ...............  ...............  ...............  ...............  ...............  ................
State Agency Level Totals.........................................               47                6              136  ...............                34
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      RECORDKEEPING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   STATE AGENCY LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
No recordkeeping burden         .................  ...............  ...............  ...............  ...............  ...............  ................
 incurred as a result of the
 proposed rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Reporting

1. Shortening the E&T Funding Cycle--Sec.  273.7(d)(3)(ix)
    Section 4122 of the FCEA, which amended section 16(h)(1)(A) of Act 
(7 U.S.C. 2025(h)(1)(A)), limits the timeframe States can keep unspent 
unmatched Federal funding for E&T purposes and limited the timeframe of 
availability of unspent unobligated funds to 15 months. FNS proposes to 
reallocate the unexpended funds to other state agencies as practicable. 
State agencies are required to provide FNS with a report of changes to 
the E&T plan as they occur. FNS proposes to revise Sec.  
273.7(d)(3)(ix) of the regulations to incorporate this change.
    State agency burden: FNS does not estimate a burden to State 
agencies.
2. Describing State Options in State Plan of Operation--Sec.  272.2(d)
    Additionally, FNS proposes to amend Sec.  272.2(d) of the SNAP 
regulations in order for State agencies that opt to implement certain 
provisions of the FCEA, to include such options in the State Plan of 
Operation.
    The optional provisions are: Simplified reporting; transitional 
benefits; employment and training funding of job retention services; 
telephonic signature systems; telephonic interviews at certification 
and recertification; and averaging student work hours. The regulations 
at Sec.  272.2(f) require that State agencies provide FNS with changes 
to these plans as they occur. Since these options are newly provided by 
FCEA, State agencies that choose these options must include them in 
their State Plans of Operation the year the options are implemented. 
Additionally, if there are changes to the options in subsequent years, 
State agencies must update their State Plans of Operation to reflect 
the changes.
    Estimates of burden: 47 States have expanded simplified reporting; 
19 States have adopted transitional benefits; 12 States have opted to 
use employment and training funding for job retention services; 3 
States are expected to adopt the telephonic signature systems in the 
next year; 40 States have approved waivers for telephonic interviews; 
15 States have adopted averaging student work hours.
    FNS estimates an average burden of 15 minutes or .25 hours per 
State agency per option selected, totaling 34 burden hours (47 
simplified reporting States x .25 hours = 11.75; 19 transitional 
benefit States x .25 = 4.75; 12 States have incorporated E &T training 
funding for job retention services x .25 hours = 3; 3 telephonic 
signature States per year x .25 = .75; 40 telephonic interview States x 
.25 = 10; 15 States that average student work hours x .25 = 3.75) for 
the year.

Recordkeeping

    No recordkeeping burden was incurred under this proposed rule.

E-Government Act Compliance

    FNS 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.

List of Subjects

7 CFR Part 271

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

7 CFR Part 272

    Alaska, Civil rights, Food stamps, Grant programs-social programs, 
Penalties, Reporting and recordkeeping requirements, Unemployment 
compensation, Wages.

[[Page 25442]]

7 CFR Part 273

    Administrative practice and procedure, Aliens, Claims, Employment, 
Food stamps, Fraud, Government employees, Grant programs-social 
programs, Income taxes, Reporting and recordkeeping requirements, 
Students, Supplemental Security Income, Wages.

    Accordingly, 7 CFR parts 271, 272 and 273 are proposed to be 
amended as follows:
    1. The authority citation for parts 271, 272 and 273 continues to 
read as follows:

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

PART 271--GENERAL INFORMATION AND DEFINITIONS

    2. In Sec.  271.2, revise the definition of Minimum benefit to read 
as follows:


Sec.  271.2  Definitions.

* * * * *
    Minimum benefit means the minimum monthly amount of SNAP benefits 
that one- and two-person households receive. The amount of the minimum 
benefit shall be determined according to the provisions of Sec.  273.10 
of this chapter.
* * * * *

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

    3. In Sec.  272.2, revise paragraphs (d)(1)(xvi)(A) through (H) to 
read as follows:


Sec.  272.2  Plan of operation.

* * * * *
    (d) * * *
    (1) * * *
    (xvi) * * *
    (A) Section 273.2(c)(7)(viii) of this chapter, it must include in 
the Plan's attachment the option to accept spoken signatures on the 
application and reapplication forms;
    (B) Sections 273.2(e)(2) and 273.14(b)(3) of this chapter, it must 
include in the Plan's attachment the option to provide telephone 
interviews in lieu of face-to-face interviews at initial application 
and reapplication;
    (C) Sections 273.2(f)(1)(xii), 273.2(f)(8)(i)(A), 273.9(d)(5), and 
273.9(d)(6)(i) of this chapter, it must include in the Plan's 
attachment the options it has selected;
    (D) Section 273.5(b)(5) of this chapter, it must include in the 
Plan's attachment the option to average student work hours;
    (E) Section 273.9(c)(3) of this chapter, it must include in the 
Plan's attachment a statement that the option has been selected and a 
description of the types of educational assistance being excluded under 
the provision;
    (F) Sections 273.9(c)(18) and 273.9(c)(19) of this chapter, it must 
include in the Plan's attachment a statement of the options selected 
and a description of the types of payments or the types of income being 
excluded under the provisions;
    (G) Sections 273.12(b), 273.12(c), and 273.12(d) of this chapter, 
it must include in the Plan's attachment a statement of the household 
reporting system or systems has/have been selected and a description of 
any options available under each reporting system it has selected and 
the types of households assigned to each reporting system used by the 
State agency; and
    (H) Section 273.26 of this chapter, it must include in the Plan's 
attachment a statement that transitional SNAP benefits are available 
and a description of the eligible programs by which households may 
qualify for transitional benefits; if one of the eligible programs 
includes a State-funded cash assistance program, whether household 
participation in that program runs concurrently or sequentially to 
TANF; the categories of households eligible for such benefits; the 
maximum number of months for which transitional benefits will be 
provided; and any other items required to be included under subpart H 
of part 273 of this chapter.
* * * * *


Sec.  272.3  [Amended]

    4. In Sec.  272.3, remove paragraph (c)(5) and redesignate 
paragraphs (c)(6) and (c)(7) as paragraphs (c)(5) and (c)(6), 
respectively.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    5. Part 273 of this chapter is proposed to be amended as follows:
    a. Remove the words ``the Food Stamp Program'' and add in their 
place, the word ``SNAP'' each time they appear in this part;
    b. Remove the words ``Food Stamp Program'' and add in their place, 
the word ``SNAP'' each time they appear in this part;
    c. Remove the words ``Food Stamp Act'' and ``Food Stamp Act of 
1977'' and add in their place, the words ``Food and Nutrition Act of 
2008'' each time they appear in this part;
    d. Remove the words ``food stamp'' and add in their place, the word 
``SNAP'' each time it appears in this part; and
    e. Remove the words ``food stamps'' wherever they appear and add in 
their place, the words ``SNAP benefits''.
    6. In Sec.  273.2:
    a. Add new paragraph (b)(1)(x);
    b. Revise paragraphs (c)(1) and (c)(3);
    c. Add new paragraph (c)(7);
    d. Revise paragraph (e)(2);
    e. Revise the first and last sentences of paragraph (i)(3)(i);
    f. Revise paragraph (i)(3)(ii);
    g. Revise the last sentence of paragraph (k)(1)(i)(O);
    h. Amend the first sentence of paragraph (n)(4)(i)(C) by removing 
the word ``coupons'' and replacing it with the word ``benefits''; and
    i. Amend paragraph (n)(4)(iii) by removing the words 
``authorization documents or coupons'' and replacing them with the 
words ``EBT accounts''.
    The additions and revisions read as follows:


Sec.  273.2  Office operations and application processing.

* * * * *
    (b) * * *
    (1) * * *
    (x) A State agency may consider an application form to be an on-
line document, a recorded spoken conversation, or a recorded signed 
conversation. If a State agency uses a non-paper application form, the 
State agency shall provide the household with a paper copy of the form 
that complies with paragraphs (b)(1)(i) through (b)(1)(ix) of this 
section.
* * * * *
    (c) * * *
    (1) Household's right to file. (i) Where to file. Households must 
file SNAP applications by submitting the forms to the SNAP office 
either in person, through an authorized representative, by fax or other 
electronic transmission, by mail, or by completing an on-line 
electronic application.
    (ii) Right to file in writing. All households have the right to 
apply or to re-apply for SNAP in writing. The State agency shall 
neither deny nor interfere with a household's right to apply or to re-
apply in writing.
    (iii) Right to same-day filing. Each household has the right to 
file an application form on the same day it contacts the SNAP office 
during office hours. The household shall be advised that it does not 
have to be interviewed before filing the application and may file an 
incomplete application form as long as the form contains the 
applicant's name and address, and is signed by a responsible member of 
the household or the household's authorized representative. Regardless 
of the type of system the State agency uses (paper or electronic), the 
State agency must provide a means for applicants to immediately begin 
the application process with name, address and signature.

[[Page 25443]]

    (iv) Recording the filing date. State agencies shall document the 
date the application was filed by recording on the application the date 
it was received by the SNAP office. When a resident of an institution 
is jointly applying for SSI and SNAP benefits prior to leaving the 
institution, the filing date of the application to be recorded by the 
State agency on the SNAP application is the date of release of the 
applicant from the institution.
    (v) Non-paper applications. These provisions apply when a household 
completes any application, other than a paper application.
    (A) Opportunity to review information. The State agency shall give 
the household at least 10 days to review the information that has been 
recorded electronically and must provide it with a copy of that 
information for its records.
    (B) A copy. The State agency shall give the household a copy of the 
submitted or recorded information for their records.
    (vi) Date of application. State agencies must document the date the 
application was filed by recording the date of receipt at the SNAP 
office.
    (vii) Residents of institutions. The following special provisions 
apply to residents of institutions.
    (A) Filing date. When a resident of an institution is jointly 
applying for SSI and SNAP benefits prior to leaving the institution, 
the filing date of the application that the State agency must record is 
the date of release of the applicant from the institution.
    (B) Processing deadline. The length of time a State agency has to 
deliver benefits is calculated from the date the application is filed 
in the SNAP office designated by the State agency to accept the 
household's application, except when a resident of a public institution 
is jointly applying for SSI and SNAP benefits prior to his/her release 
from an institution in accordance with Sec.  273.1(e)(2).
    (C) Certification procedures. Residents of public institutions who 
apply for SNAP prior to their release from the institution shall be 
certified in accordance with Sec.  273.2(g)(1) or Sec.  273.2(i)(3)(i), 
as appropriate.
* * * * *
    (3) Availability of the application form. (i) General availability. 
The State agency shall make application forms readily accessible to 
potentially eligible households. The State agency shall also provide an 
application form to anyone who requests the form. Regardless of the 
type of system the State agency uses (paper or electronic), the State 
agency must provide a means for applicants to immediately begin the 
application process with name, address and signature. If the State 
agency maintains a Web page, it must make the application available on 
the Web page in each language in which the State agency makes a printed 
application available. The State agency must provide on the Web page 
the addresses and phone numbers of all State SNAP offices and a 
statement that the household should return the application form to its 
nearest local office. The applications must be accessible to persons 
with disabilities in accordance with Section 504 of the Rehabilitation 
Act of 1973, Public Law 93-112, as amended by the Rehabilitation Act 
Amendments of 1974, Public Law 93-516, 29 U.S.C. 794.
    (ii) Paper forms. The State agency must make paper application 
forms readily accessible and available even if the State agency also 
accepts application forms electronically or through other media.
* * * * *
    (7) Signing an application or reapplication form. In this 
paragraph, the word ``form'' refers to applications and reapplications.
    (i) Requirement for a signature. An application must be signed to 
establish a filing date and to determine the State agency's deadline 
for acting on the application. The State agency shall not certify a 
household without a signed form.
    (ii) Right to provide written signature. All households have the 
right to sign a SNAP form in writing.
    (iii) Unwritten signatures. The State agency shall decide whether 
unwritten signatures are acceptable. The State agency is not required 
to accept unwritten signatures.
    (A) These may include electronic signature techniques, handwritten 
signatures that the household transmits by fax or other electronic 
transmission, recorded spoken signatures, or recorded gestured 
signatures.
    (B) A State agency is not required to obtain a written signature in 
addition to an unwritten signature.
    (iv) Who may sign the form. (A) An adult member of the household. 
The State agency decides who is an adult.
    (B) An authorized representative, as described in Sec.  
273.2(n)(1).
    (v) Criteria for all signatures. All systems for signatures must 
meet all of the following criteria:
    (A) Record for future reference the assent of the household member 
and the information to which assent was given;
    (B) Include effective safeguards against impersonation, identity 
theft, and invasions of privacy;
    (C) Not deny or interfere with the right of the household to apply 
in writing;
    (D) Promptly provide to the household member a written copy of the 
completed application, with instructions for a simple procedure for 
correcting any errors or omissions (except that this requirement does 
not apply to an application that a household signs by hand);
    (E) Comply with the SNAP regulations regarding bilingual 
requirements at Sec.  272.4(b) of this chapter; and
    (F) Satisfy all requirements for a signature on an application 
under the Act and other laws applicable to SNAP, with the date on which 
the household member provides verbal assent considered as the date of 
application for all purposes.
    (vi) Handwritten signatures. These provisions apply specifically to 
handwritten signatures.
    (A) If the signatory cannot sign with a name, an X is a valid 
signature.
    (B) The State agency may require a witness to attest to an X.
    (C) An employee of the State agency may serve as a witness.
    (vii) Electronic signatures. These provisions apply specifically to 
electronic signatures.
    (A) The State agency may accept an electronic signature but is not 
required to do so.
    (B) Some examples of electronic signature are the use of a Personal 
Identification Number (PIN), a computer password, clicking on an ``I 
accept these conditions'' button on a computer screen, and clicking on 
a ``Submit'' button on a computer screen.
    (C) The State agency shall promptly provide to the household member 
a written copy of the completed application, with instructions for a 
simple procedure for correcting any errors or omissions.
    (D) The State agency's procedure shall allow the household at least 
10 calendar days to return corrections; and
    (E) The State agency shall regard the date of the signature as the 
date of application for all purposes.
    (viii) Spoken signatures. These provisions apply specifically to 
spoken signatures.
    (A) The State agency may accept a spoken signature but is not 
required to do so. A State agency that chooses to accept spoken 
signatures under this paragraph (c)(7)(viii) must specify in its State 
plan of operation that it has selected this option.

[[Page 25444]]

    (B) An example of a spoken signature is saying ``Yes'' or ``No'', 
``I agree'' or ``I do not agree'', or otherwise clearly indicating 
assent or agreement during an interview over the telephone.
    (C) The State agency shall promptly provide to the household member 
a written copy of the completed application, with instructions for a 
simple procedure for correcting any errors or omissions.
    (D) The State agency's procedure shall allow the household at least 
10 calendar days to return corrections;
    (E) The State agency shall regard the date of the signature as the 
date of application for all purposes.
    (ix) Gestured signatures. These provisions apply specifically to 
gestured signatures.
    (A) The State agency may accept a gestured signature but is not 
required to do so.
    (B) Gestured signatures include the use of signs and expressions to 
communicate ``Yes'' or ``I agree'' in American Sign Language (ASL), 
Manually Coded English (MCE) or another similar language or method 
during an interview, in person or over a video link.
    (C) The State agency shall promptly provide to the household member 
a written copy of the completed application, with instructions for a 
simple procedure for correcting any errors or omissions.
    (D) The State agency's procedure shall allow the household at least 
10 calendar days to return corrections.
    (E) The State agency shall regard the date of the signature as the 
date of application for all purposes.
* * * * *
    (e) * * *
    (2) The State agency may waive the face-to-face interview required 
in paragraph (e)(1) of this section in favor of a telephone interview 
on a case-by-case basis because of household hardship situations as 
determined by the State agency; for specified categories of households; 
or for all applicant households. However, the State agency must grant a 
face-to-face interview to any household that requests one. The State 
agency has the option of conducting a telephone interview or a home 
visit that is scheduled in advance with the household if the office 
interview is waived. A State agency that chooses to interview 
households by telephone in lieu of the face-to-face interview must 
specify this choice in its State plan of operation and describe the 
types of households that will be routinely offered a telephone 
interview in lieu of a face-to-face interview.
* * * * *
    (i) * * *
    (3) * * *
    (i) * * * For households entitled to expedited service, the State 
agency shall post benefits to the household's EBT card and make them 
available to the household not later than the 7th calendar day 
following the date an application was filed. * * * Whatever systems a 
State agency uses to ensure meeting this delivery standard shall be 
designed to allow a reasonable opportunity for providing the household 
with an EBT card and PIN no later than the 7th calendar day following 
the day the application was filed.
    (ii) Drug addicts and alcoholics, group living arrangement 
facitilies. For residents of drug addiction or alcoholic treatment and 
rehabilitation centers and residents of group living arrangements who 
are entitled to expedited service, the State agency shall make benefits 
available to the recipient not later than the 7 calendar days following 
the date an application was filed.
* * * * *
    (k) * * *
    (1) * * *
    (i) * * *
    (O) * * * It shall also include the client's rights and 
responsibilities (including fair hearings, authorized representatives, 
out-of-office interviews, reporting changes and timely reapplication), 
information on how and where to obtain an EBT card and PIN and how to 
use an EBT card and PIN (including the commodities clients may purchase 
with SNAP benefits.
* * * * *
    7. In Sec.  273.5, revise paragraph (b)(5) to read as follows:


Sec.  273.5  Students.

* * * * *
    (b) * * *
    (5) Be employed for a minimum of 20 hours per week; and be paid for 
such employment or, if self-employed, be employed for a minimum of 20 
hours per week and receiving weekly earnings at least equal to the 
Federal minimum wage multiplied by 20 hours. The State agency may 
determine compliance with this requirement by averaging the number of 
hours worked per week based on employment of a minimum of 80 hours per 
month. A State agency that chooses to average student work hours must 
specify this choice in its State plan of operation.
* * * * *
    8. In Sec.  273.7:
    a. Amend paragraph (d)(3)(ix) by removing the first sentence;
    b. Add new paragraph (e)(1)(viii);
    c. Revise paragraph (e)(4)(iii);
    e. Amend introductory paragraph (k) by removing the words ``SNAP 
coupon'' and adding in their place the words ``SNAP benefit'';
    f. Amend paragraph (k)(4) by removing the words ``SNAP coupon'' and 
adding in their place the words ``SNAP benefit'';
    g. Amend paragraph (k)(6) by removing the words ``SNAP coupon'' and 
adding in their place the words ``SNAP benefit'';
    h. Amend paragraph (m)(1) by removing the word ``coupon'' and 
adding in its place the word ``benefit''; and
    i. Amend paragraph (m)(5)(ii) by removing the word ``coupon'' and 
adding in its place the word ``benefit''.
    The addition and revision read as follows:


Sec.  273.7  Work provisions.

* * * * *
    (e) * * *
    (1) * * *
    (viii) Job retention services that are designed to help achieve 
satisfactory performance, retain employment and to increase earnings 
over time. The State agency may offer job retention services for up to 
90 days to an individual who has secured employment. The State agency 
may provide job retention services to households leaving SNAP up to the 
90-day limit. The participant must have secured employment after 
receiving other employment/training services under the E&T program 
offered by the State agency. An otherwise eligible individual who 
refuses or fails to accept job retention services offered by the State 
agency may not be disqualified as specified in paragraph (f)(2) of this 
section.
* * * * *
    (4) * * *
    (iii) Voluntary participants are not subject to the limitations 
specified in paragraph (e)(3) of this section.
* * * * *
    9. In Sec.  273.8:
    a. Revise paragraphs (b), (c)(1), and (e)(2); and
    b. Add a new paragraph (e)(20).
    The revisions and addition read as follows:


Sec.  273.8  Resource eligibility standards.

* * * * *
    (b) Maximum allowable financial resources. The maximum allowable 
liquid and non-liquid financial resources of all members of a household 
without elderly or disabled members shall not exceed $2,000, as 
adjusted for inflation in accordance with paragraph (b)(1) of this 
section. For households including one or more disabled or

[[Page 25445]]

elderly members or one or more members over age 60, such financial 
resources shall not exceed $3,000, as adjusted for inflation in 
accordance with paragraph (b)(2) of this section.
    (1) Beginning October 1, 2008, and each October 1 thereafter, the 
maximum allowable financial resources shall be adjusted and rounded 
down to the nearest $250 to reflect changes in the Consumer Price Index 
for the All Urban Consumers published by the Bureau of Labor Statistics 
of the Department of Labor (for the 12-month period ending the 
preceding June).
    (2) Each adjustment shall be based on the unrounded amount for the 
prior 12-month period.
    (c) * * *
    (1) Liquid resources, such as cash on hand, money in checking and 
savings accounts, saving certificates, stocks or bonds, and lump sum 
payments as specified in Sec.  273.9(c)(8); and
* * * * *
    (e) * * *
    (2) Household goods, personal effects, the cash value of life 
insurance policies, one burial plot per household member, and the value 
of one bona fide funeral agreement per household member, provided that 
the agreement does not exceed $1,500 in equity value, in which event 
the value above $1,500 is counted. The cash value of pension plans or 
funds shall be excluded. The following retirement accounts shall be 
excluded:
    (i) Funds in a plan, contract, or account that meet the following 
sections of the Internal Revenue Code of 1986:
    (A) Section 401(a), which includes funds commonly known as ``tax 
qualified plans'' or ``401(k) plans'';
    (B) Section 403(a), which includes funds that are similar to 401(a) 
but are funded through annuity insurance;
    (C) Section 403(b), which includes retirement plans for some 
employees of public schools and tax exempt organizations;
    (D) Section 408, which includes traditional Individual Retirement 
Accounts and Annuities (IRAs);
    (E) Section 408A plans, which include plans commonly known as Roth 
IRAs;
    (F) Section 457(b); and
    (G) Section 501(c)(18).
    (ii) Funds in a Federal Thrift Savings Plan as defined by 5 U.S.C. 
83.
    (iii) Any other retirement plan that is designated tax-exempt under 
a similar provision of the Internal Revenue Code of 1986.
    (iv) FNS reserves the right to exclude other retirement accounts 
from financial resources and will provide notification of these 
provisions through policy memoranda.
* * * * *
    (20) The following education accounts are excluded from allowable 
financial resources:
    (i) Funds in a qualified tuition program, as defined by section 529 
of the Internal Revenue Code of 1986; and
    (ii) Coverdell education savings accounts, as defined by section 
530 of the Internal Revenue Code of 1986.
    (iii) FNS reserves the right to exclude other education programs, 
contracts, or accounts from financial resources and will provide 
notification of these provisions through policy memoranda.
* * * * *
    10. In Sec.  273.9:
    a. Amend paragraph (a)(4) by removing the Web site 
``www.fns.usda.gov/fsp'' and replacing them with the Web site 
``www.fns.usda.gov/snap''
    b. Amend the second sentence of paragraph (b)(1)(iii) by removing 
the words in the second sentence ``Job Training Partnership Act'' and 
replacing them with the words ``Workforce Investment Act of 1998'';
    c. Amend the first sentence of paragraph (b)(1)(v) by removing the 
words ``section 204(b)(1)(C) or section 264(c)(1)(A)'' and replacing 
them with the words ``title 1 of the Workforce Investment Act of 
1998'';
    d. Amend paragraph (c)(10)(v) by removing the words ``Job Training 
Partnership Act (Pub. L. 90-300)'' and replacing them with the words 
``Workforce Investment Act of 1998'';
    e. Add new paragraph (c)(20);
    f. Revise paragraphs (d)(1)(iii);
    g. Amend the second sentence of paragraph (d)(3)(x), by removing 
the word ``coupon'' and replacing it with the word ``benefit''; and
    h. Revise paragraph (d)(4).
    The addition and revisions read as follows:


Sec.  273.9  Income and deductions.

* * * * *
    (c) * * *
    (20) Income received by a member of the United States Armed Forces 
under 37 U.S.C., Chapter 5 or otherwise designated by the Secretary as 
excludable that is:
    (i) Received in addition to the service member's basic pay;
    (ii) Received as a result of the service member's deployment to or 
service in an area designated as a combat zone as determined pursuant 
to Executive Order or Public Law; and
    (iii) Not received by the service member prior to the service 
member's deployment to or service in a Federally-designated combat 
zone.
    (d) * * *
    (1) * * *
    (iii) Minimum deduction levels. Notwithstanding paragraphs 
(d)(1)(i) and (d)(1)(ii) of this section, the standard deduction for FY 
2009 for each household in the 48 States and the District of Columbia, 
Alaska, Hawaii, Guam, and the Virgin Islands shall not be less than 
$144, $246, $203, $289, and $127, respectively. Beginning FY 2010 and 
each fiscal year thereafter, the amount of the minimum standard 
deduction is equal to the unrounded amount from the previous fiscal 
year adjusted to the nearest lower dollar increment to reflect changes 
for the 12-month period ending on the preceding June 30 in the Consumer 
Price Index for All Urban Consumers published by the Bureau of Labor 
Statistics of the Department of Labor, for items other than food.
* * * * *
    (4) Dependent Care. Payments for dependent care when necessary for 
a household member to accept or continue employment, comply with the 
employment and training requirements as specified under Sec.  273.7(e), 
or attend training or pursue education that is preparatory to 
employment, except as provided in Sec.  273.10(d)(1)(i). Costs that may 
be deducted are limited to the care of a household member who requires 
dependent care, including care of a child through the age of 15 or an 
incapacitated person of any age in need of dependent care. Dependent 
care expenses must be separately identified, necessary to participate 
in the care arrangement, and not already paid by another source on 
behalf of the household. Allowable dependent care costs include:
    (i) The costs of care given by an individual care provider or care 
facility;
    (ii) Transportation costs to and from the care facility; and
    (iii) Activity fees associated with the care provided to the 
dependent that are necessary for the household to participate in or 
maintain the care.
* * * * *
    11. In Sec.  273.10:
    a. Amend paragraph (e)(1)(i)(E) by removing the words ``up to a 
maximum amount'';
    b. Revise paragraph (e)(2)(ii)(C); and
    c. Amend paragraph (e)(2)(vi) by replacing the word ``housholds'' 
with the word ``households''.
    The revision read as follows:


Sec.  273.10  Determining household eligibility and benefit levels.

* * * * *

[[Page 25446]]

    (e) * * *
    (2) * * *
    (ii) * * *
    (C) Except during an initial month, all eligible one-and two-person 
households shall receive minimum monthly allotments equal to the 
minimum benefit. The minimum benefit is 8 percent of the maximum 
allotment for a household of one, rounded to the nearest whole dollar.
* * * * *
    12. In Sec.  273.11:
    a. Remove paragraph (e)(2)(iii) and redesignate paragraph 
(e)(2)(iv) as paragraph (e)(2)(iii);
    b. Redesignate paragraphs (e)(5), (e)(6), and (e)(7) as paragraphs 
(e)(6), (e)(7), and (e)(8);
    c. Add a new paragraph (e)(5);
    d. Revise newly redesignated paragraph (e)(6);
    e. Revise the last sentence of newly redesignated paragraph (e)(7);
    f. Revise the second and fourth sentences of newly redesignated 
paragraph (e)(8);
    g. Remove the last sentence of paragraph (f)(4);
    h. Revise paragraph (f)(5);
    i. Redesignate paragraphs (f)(6) and (f)(7) as paragraphs (f)(7) 
and (f)(8);
    j. Add a new paragraph (f)(6);
    k. Revise the first sentence of newly redesignated (f)(7); and
    l. Revise the first sentence of newly redesignated (f)(8).
    The additions and revisions read as follows:


Sec.  273.11  Action on households with special circumstances.

* * * * *
    (e) * * *
    (5) DAA centers may redeem benefits in various ways depending on 
the State's EBT system design. The designs may include DAA use of 
individual household EBT cards at authorized stores, authorization of 
DAA centers as retailers with EBT access via POS at the center, DAA use 
of a center EBT card that is an aggregate of individual household 
benefits, and other designs. Regardless of the process elected, the 
State must ensure that the EBT design or DAA procedures prohibit the 
DAA from obtaining more than one-half of the household's allotment 
prior to the 16th of the month or permit the return of benefits to the 
household's EBT account through a refund, transfer, or other means. 
Guidelines for approval of EBT systems are contained in part 274 of 
this chapter.
    (6) When a household leaves the center, the center must perform the 
following:
    (i) Notify the State agency. If possible, the center must provide 
the household with a change report form to report to the State agency 
the household's new address and other circumstances after leaving the 
center and must advise the household to return the form to the 
appropriate office of the State agency within 10 days. After the 
household leaves the center, the center can no longer act as the 
household's authorized representative for certification purposes or for 
obtaining or using benefits.
    (ii) Provide the household with its EBT card if it was in the 
possession of the center. The center must return to the State agency 
any EBT card not provided to departing residents by the end of each 
month.
    (iii) If no benefits have been spent on behalf of the individual 
household, the center must return the full value of any benefits 
already debited from the household's current monthly allotment back 
into the household's EBT account at the time the household leaves the 
center.
    (iv) If the benefits have already been debited from the EBT account 
and any portion spent on behalf of the household, the following 
procedures must be followed.
    (A) If the household leaves prior to the 16th day of the month, the 
center must ensure that the household has one-half of its monthly 
benefit allotment remaining in its EBT account unless the State agency 
issues semi-monthly allotments and the second half has not been posted 
yet.
    (B) If the household leaves on or after the 16th day of the month, 
the State agency, at its option, may require the center to give the 
household a portion of its allotment. If the center is authorized as a 
retailer, the State agency may require the center to provide a refund 
for that amount back to the household's EBT account at the time that 
the household leaves the center. Under an EBT system where the center 
has an aggregate EBT card, the State agency may, but is not required 
to, transfer apportion of the household's monthly allotment from a 
center's EBT account back to the household's EBT account. In either 
case, the household, not the center, must be allowed to have sole 
access to any benefits remaining in the household's EBT account at the 
time the household leaves the center.
    (v) If the household has already left the center, and as a result, 
the center is unable to return the benefits in accordance with this 
paragraph, the center must advise the State agency, and the State 
agency must effect the return instead. These procedures are applicable 
at any time during the month.
    (7) * * * The organization or institution shall be strictly liable 
for all losses or misuse of benefits and/or EBT cards held on behalf of 
resident households and for all overissuances which occur while the 
households are residents of the treatment center.
    (8) * * * The State agency shall promptly notify FNS when it has 
reason to believe that an organization or institution is misusing 
benefits and/or EBT cards in its possession. * * * The State agency 
shall establish a claim for overissuances of benefits held on behalf of 
resident clients as stipulated in paragraph (e)(7) of this section if 
any overissuances are discovered during an investigation or hearing 
procedure for redemption violations. * * *
* * * * *
    (f) * * *
    (5) When the household leaves the facility, the GLA, either acting 
as an authorized representative or retaining use of the EBT card and 
benefits on behalf of the residents (regardless of the method of 
application), shall return the EBT card (if applicable) to the 
household. The household, not the GLA, shall have sole access to any 
benefits remaining in the household's EBT account at the time the 
household leaves the facility. The State agency must ensure that the 
EBT design or procedures for GLAs permit the GLA to return unused 
benefits to the household through a refund, transfer, or other means.
    (6) If, at the time the household leaves, no benefits have been 
spent on behalf of that individual household, the facility must return 
the full value of any benefits already debited from the household's 
current monthly allotment back into the household's EBT account. These 
procedures are applicable at any time during the month. However, if the 
facility has already debited benefits and spent any portion of them on 
behalf of the individual, the facility shall do the following:
    (i) If the household leaves the GLA prior to the 16th day of the 
month, the facility shall provide the household with its EBT card (if 
applicable) and one-half of its monthly benefit allotment. Where a 
group of residents has been certified as one household and a member of 
the household leaves the center:
    (A) The facility shall return a pro rata share of one-half of the 
household's benefit allotment to the EBT account and advise the State 
agency that the individual is entitled to that pro rata share; and
    (B) The State agency shall create a new EBT account for the 
individual,

[[Page 25447]]

issue a new EBT care and transfer the pro rata share from the original 
household's EBT account to the departing individual's EBT account. The 
facility will instruct the individual on how to obtain the new EBT card 
based on the State agency's card issuance procedures.
    (ii) If the household or an individual member of the group 
household leaves on or after the 16th day of the month and the benefits 
have already been debited and used, the household or individual does 
not receive any benefits.
    (iii) The GLA shall return to the State agency any EBT cards not 
provided to departing residents at the end of each month. Also, if the 
household has already left the facility and as a result, the facility 
is unable to perform the refund or transfer in accordance with this 
paragraph, the facility must advise the State agency, and the State 
agency must effect the return or transfer instead.
    (iv) Once the resident leaves, the GLA no longer acts as his/her 
authorized representative. The GLA, if possible, shall provide the 
household with a change report form to report to the State agency the 
individual's new address and other circumstances after leaving the GLA 
and shall advise the household to return the form to the appropriate 
office of the State agency within 10 days.
    (7) The same provisions applicable to drug and alcoholic treatment 
center in paragraphs (e)(7) and (e)(8) of this section also apply to 
GLAs when acting as an authorized representative. * * *
    (8) If the residents are certified on their own behalf, the 
benefits may either be debited by the GLA to be used to purchase meals 
served either communally or individually to eligible residents or 
retained by the residents and used to purchase and prepare food for 
their own consumption. * * *
* * * * *
    12. In Sec.  273.12:
    a. Revise paragraphs (a), (b), (c), and (d);
    b. Amend paragraph (e)(1)(B) by removing the reference 
``273.9(d)(7)'' and replacing it with the reference ``273.9(d)(1); and
    c. Amend paragraph (e)(1)(C) by removing the reference 
``273.9(d)(8)'' and replacing it with the reference ``273.9(d)(6)''.
    The revisions read as follows:


Sec.  273.12  Reporting requirements.

    (a) General requirements. Households participating in SNAP have a 
responsibility to report changes in their circumstances based on 
reporting system to which they are assigned by the State agency. 
Households that are participating in Transitional Benefits Alternative 
are not required to report, but may report changes in their 
circumstances that occur while they are receiving SNAP transitional 
benefits. There are four client reporting systems to which State 
agencies may assign participating households. A State agency may not 
assign a household to more than one client reporting system for any 
given month. Whenever the State agency switches a household to a 
different reporting system, the State agency must notify the household 
of the change and explain any different reporting requirements with 
which the household must comply. The State agency must specify in its 
State plan of operation the client reporting systems selected, describe 
any option available under each reporting system that the State agency 
has chosen to implement, and identify the types of households that will 
be subject to each reporting system. For each client reporting system, 
State agencies shall not impose any additional reporting requirements 
on households beyond the requirements described in the SNAP regulations 
as follows:
    (1) For change reporting, Sec.  273.12(b);
    (2) For monthly reporting, Sec.  273.21;
    (3) For quarterly reporting, Sec.  273.12(c); and
    (4) For simplified reporting, Sec.  273.12(d).
    (b) Change reporting. The State agency may establish a system of 
incident or change reporting. The following requirements are applicable 
to change reporting systems.
    (1) Features. Households assigned to change reporting must report 
to the State agency whenever a change in any household circumstance 
identified in paragraph (b)(3) of this section occurs. Generally, 
changes must be reported within 10 days of the occurrence or within 10 
days of the end of the month in which the change occurred.
    (2) Included households. A State agency may assign any household to 
a change reporting system.
    (3) What households must report. Households assigned to change 
reporting must report the following changes:
    (i) A change of more than $50 in unearned income, excluding 
households with jointly processed PA/SNAP or GA/SNAP cases;
    (ii) A change in the source of income, including starting or 
stopping a job or changing jobs, if the amount of income changes;
    (iii) A change in one of the following in earned income for 
households certified for 6 months or less:
    (A) A change in the wage rate or salary or a change in full-time or 
part-time employment status (as determined by the employer or as 
defined in the State's PA program); or
    (B) A change of more than $100 in monthly earnings.
    (iv) A change in household composition;
    (v) A change in residence and resulting shelter cost changes;
    (vi) Acquisition of a licensed vehicle that is not fully excludable 
under Sec.  273.8(e), unless the State agency uses TANF vehicle rules, 
as provided at Sec.  273.8(f)(4);
    (vii) A change in liquid resources, such as cash, stocks, bonds, 
and bank accounts that reach or exceed $3,000 for elderly or disabled 
households or $2,000 for all other households, unless the State agency 
excludes resources when determining PA or SSI eligibility, as provided 
at Sec.  273.2(j)(2)(v);
    (viii) Reduced work hours for able-bodied adults without dependents 
(ABAWDs) subject to time limits of Sec.  273.24, if the number of hours 
worked each week falls below 20 hours, based on a monthly average, as 
provided in Sec.  273.24(a)(1)(i); and
    (ix) A change in child support payments, if the household has a 
legal obligation to pay, unless the State agency has chosen to receive 
this information from the State Child Support Enforcement (CSE) agency, 
as provided at Sec.  273.2(f)(1)(xii).
    (4) Special procedures for child support payments. For households 
eligible for the child support exclusion at Sec.  273.9(c)(17) or 
deduction at Sec.  273.9(d)(5), the State agency may use information 
provided by the State CSE agency in determining the household's legal 
obligation to pay child support, the amount of its obligation and 
amounts the household has actually paid if the household pays its child 
support exclusively through its State CSE agency and has signed a 
statement authorizing release of its child support payment records to 
the State agency. Households do not have to provide any additional 
verification unless they disagree with the information provided by the 
State CSE. If a State agency chooses to utilize information provided by 
the State CSE agency in accordance with this paragraph, it must specify 
this choice in its State plan of operation. If the State agency does 
not choose to utilize information provided by its State CSE agency, the 
State agency may make reporting child support payments an optional 
change reporting item in accord in accordance with paragraph (b)(3)(ix) 
of this section.

[[Page 25448]]

    (5) How households must report. (i) Acceptable ways of reporting. 
Households must notify the State agency of changes that have occurred 
to the household. The household may report by sending a change report 
form, by telephone, or in person. The State agency may also permit the 
household to report changes by other electronic means such as by fax, 
e-mail, or through the State agency's Web site.
    (ii) Change report form. The State agency must provide the 
household with a form for reporting changes that occur during the 
certification period. At a minimum, the State agency must provide a 
change report form to households at certification, recertification, and 
whenever a change report form is returned by the household. A change 
report may be provided to households more often at the State agency's 
option. The change report form must be written in clear, simple 
language, and must meet the bilingual requirements described in Sec.  
272.4(b) of this chapter. The State agency shall pay for postage for 
return of the form. The report form must include:
    (A) A list of the reportable items described in paragraph (b)(3) of 
this section and a statement that the household must report if any of 
these items have changed for the household since certification or the 
last change report filed, whichever is later;
    (B) Space for the household to report whether the change will 
continue beyond the report month;
    (C) The civil and criminal penalties for violations of the Act in 
understandable terms and in prominent and boldface lettering;
    (D) A reminder to the household of its right to claim actual 
utility costs if its costs exceed the standard;
    (E) The number of the SNAP office and a toll-free number or a 
number where collect calls will be accepted for households outside the 
local calling area; and
    (F) If the State agency has chosen to disregard reported changes 
that affect some deductions in accordance with paragraph (b)(8)(ii) of 
this section, a statement explaining that the State agency will not 
change certain deductions until the household's next recertification 
and identifying those deductions.
    (6) When households must report. (i) Applicants must report changes 
that occur after the interview but before the date of the notice of 
eligibility within 10 days of the date of the notice.
    (ii) For all changes other than income, households must report 
changes within 10 days of the date the change becomes known to the 
household, or at the State agency's option, the household must report 
changes within 10 days of the end of the month in which the change 
occurred.
    (iii) For reportable changes in income, the State agency may 
require the changes to be reported as early as within 10 days of the 
date that the household becomes aware of the change or as late as 10 
days after that the household received the first payment attributable 
to the change. For example, in the case of new employment, the State 
may require the household to report the change within 10 days of the 
date that the household becomes aware of the new employment, within 10 
days of the date the employment begins or within 10 days of the date 
that the household receives its first paycheck.
    (iv) If the State agency requires verification of changes that 
increase benefits, the household must provide the verification within 
10 days from the date the change is reported to provide verification 
required by Sec.  273.2(f)(8)(ii).
    (7) When households fail to report. If the State agency discovers 
that the household failed to report a change as required by paragraph 
(b) of this section and, as a result, received benefits to which it was 
not entitled, the State agency shall file a claim against the household 
in accordance with Sec.  273.18. If the discovery is made within the 
certification period, the household is entitled to a notice of adverse 
action if the household's benefits are reduced. A household shall not 
be held liable for a claim because of a change in household 
circumstances that it is not required to report in accordance with 
Sec.  273.12(b)(3). Individuals shall not be disqualified for failing 
to report a change, unless the individual is disqualified in accordance 
with the disqualification procedures specified in Sec.  273.16.
    (8) State agency action on changes. (i) General requirement to act. 
The State agency shall take prompt action on all changes to determine 
if a change affects the household's eligibility or benefit level. 
However, the State agency has the option to disregard a reported change 
to an established deduction in accordance with paragraph (b)(8)(ii) of 
this section.
    (A) Exception for temporary income changes. If the change is not 
expected to continue for at least 1 month beyond the month in which the 
change is reported, the State agency is not required to act on the 
change.
    (B) Exception for medical changes. The State agency must not act on 
changes in the medical expenses of households eligible for the medical 
expense deduction unless the changes are considered verified upon 
receipt and do not require contact with the household to verify. If 
changes to the household's medical expenses are considered verified 
upon receipt, then the State agency shall act on the changes as 
described in paragraph (b)(8) of this section.
    (ii) State agency postponement of action on reported changes. (A) 
Changes in certain deductible expenses. Except for changes described in 
paragraph (b)(8)(ii)(C)(1) of this section, the State agency may 
postpone acting on reported changes to deductions allowed under Sec.  
273.9(d) and established at certification. If the State agency chooses 
to act on changes that affect a deduction, it may not act on changes to 
the deduction in only one direction, i.e., changes that only increase 
or decrease the amount of the deduction, but must act on all changes 
that affect the deduction. A State agency that chooses to postpone 
changes in deductions must state in its State plan of operation that it 
has selected this option and specify the deductions affected. When the 
State agency opts to disregard a change in a deduction, the deduction 
amount established at certification will continue until the following 
occurs:
    (1) The next recertification or after the 6th month of 
certification for households certified for 12 months that report a 
change in deductions during the first 6 months of the certification 
period;
    (2) The required 12-month contact occurs for elderly or disabled 
households certified for 24 months in accordance with Sec.  
273.10(f)(1) that report a change in deductions during the first 12 
months of the certification period;
    (3) The 13th month of certification for households residing on 
reservations certified for 24 months in accordance with Sec.  
273.10(f)(2) and are required to submit monthly reports that report a 
change in deductions during the first 12 months of the certification; 
and
    (4) The next recertification for households certified for 24 months 
in accordance with Sec.  273.10(f)(1) and (f)(2) that report a change 
in deductions during the second 12 months of the certification period.
    (B) Changes in other reportable items. Except for the changes 
described in paragraph (b)(8)(ii)(C)(2) of this section, the State 
agency may also postpone action on certain reportable items described 
in paragraph (b)(3) of this section when the changes are reported by 
the household or when the State agency learns of the changes from a 
source other than the household. The timeframes for required State 
agency action on the postponed reported items

[[Page 25449]]

shall be the same as for required State agency action on postponed 
deductions as described in paragraphs (b)(8)(ii)(A)(1)-(b)(8)(ii)(A)(4) 
of this section.
    (C) Changes that cannot be postponed. State agencies may not 
postpone action on reported changes described in paragraphs 
(b)(8)(ii)(C)(1) and (b)(8)(ii)(C)(2) of this section.
    (1) Residence and shelter costs. When a household reports a change 
in residence within the first 6 months of the certification period, the 
State agency must investigate and take action on corresponding changes 
in shelter costs. However, if a household fails to provide information 
regarding the associated changes in shelter costs within 10 days of the 
reported change in residence, the State agency should notify the 
household that its allotment will be recalculated without the 
deduction. The notice must explain that the household does not need to 
wait for its first utility or rental payments to contact the SNAP 
office. Alternative forms of verification may be accepted, if 
necessary.
    (2) Earned income and new deductions. State agencies must act on 
reported changes in these items in accordance with paragraphs (b)(8)(v) 
and (b)(8)(vi) of this section.
    (iii) Notifying the household. The State agency must notify the 
household of the receipt of the change report and how the reported 
change affects the household's eligibility or benefit level. The State 
agency must provide another change report form to the household. The 
State agency must also advise the household of additional verification 
requirements, if any, and inform the household that failure to provide 
verification will result in any increases in benefits reverting to the 
original level.
    (iv) Case file documentation. The State agency must document the 
reported change in the household's case file, even if there is no 
change in the household's eligibility or benefit level. The State 
agency must document the date a change is reported, which shall be the 
date the State agency receives a report form or is advised of the 
change over the telephone or by a personal visit.
    (v) Changes that increase benefits.
    (A) Timeframes for increasing benefit levels.
    (1) If verification is required. If the household provides 
verification on a timely basis as described in paragraph (b)(6)(iv) of 
this section, the State agency shall increase benefit levels no later 
than the first allotment issued 10 days after the date the change was 
reported. If the household does not provide verification on a timely 
basis as described in paragraph (b)(6)(iv) of this section but does 
provide the verification at a later date, the State agency shall 
increase benefit levels no later than the first allotment issued 10 
days after the verification was received. If the household does not 
provide required verification, the State agency shall not increase the 
household's benefits in response to the reported change.
    (2) Household composition or reduced income. For changes that 
result in an increase in a household's benefits due to the addition of 
a new household member who is not a member of another certified 
household, or due to a decrease of $50 or more in the household's gross 
monthly income, the State agency shall make the change effective not 
later than the first allotment issued 10 days after the date the change 
was reported. However, in no event shall these changes take effect any 
later than the month following the month in which the change is 
reported. If it is too late for the State agency to adjust the 
following month's allotment, the State agency shall issue supplementary 
benefits or otherwise provide an opportunity for the household to 
obtain the increase in benefits by the 10th day of the following month, 
or the household's normal issuance cycle in that month, whichever is 
later. For example, a household reporting a $100 decrease in income at 
any time during May would have its June allotment increased. If the 
household reported the change after the 20th of May and it was too late 
for the State agency to adjust the benefits normally issued on June 
1st, the State agency would issue supplementary benefits for the amount 
of the increase by June 10th.
    (3) All other changes. The State agency shall make the change 
effective no later than the first allotment issued 10 days after the 
date the change was reported to the State agency. For example, a $30 
decrease in income reported on the 15th of May would increase the 
household's June allotment. If the same decrease was reported on May 
28th, and the household's normal issuance cycle was on June 1st, the 
household's allotment would have to be increased by July 1st.
    (B) Restoration of benefits. The State agency shall restore lost 
benefits if it fails to act on a change that resulted in an increase of 
benefits and was reported in a timely manner, as described in paragraph 
(b)(8)(v)(A) of this section.
    (vi) Changes that decrease benefits.
    (A) Timeframes for decreasing benefits.
    (1) Notice of adverse action. The State agency shall issue a notice 
of adverse action within 10 days of the date the change was reported, 
unless one of the exemptions described at Sec.  273.13(a)(3) or Sec.  
273.13(b) applies. The effective date of the benefit reduction shall be 
no later than the allotment for the month following the month in which 
the notice of adverse action period has expired, unless the household 
has requested a fair hearing and continuation of benefits.
    (2) Adequate notice. If one of the exemptions described at Sec.  
273.13(a)(3) or Sec.  273.13(b) applies, the State agency may issue an 
adequate notice instead of a notice of adverse action. The adequate 
notice must arrive no later than the date the benefit reduction is 
effective. The effective date of the benefit reduction shall be no 
later than the month following the change was reported.
    (B) Verified information that reduces benefits. If the household 
submits verification of a change results in reduced benefits, the State 
agency shall establish a claim for the overissuance in accordance with 
Sec.  273.18. If State agency determines that a household has refused 
to cooperate as defined in Sec.  273.2(d), the State agency shall issue 
a notice of adverse action and terminate the household's eligibility. 
If a household has refused to provide verification as a part of the 
State agency's reporting system requirements, the household must 
provide the required verification at a subsequent certification or 
recertification.
    (C) Suspension of benefits. The State agency may suspend a 
household's certification prospectively for 1 month if the household 
becomes temporarily ineligible because of a periodic increase in 
recurring income or other change not expected to continue in the 
subsequent month. If the suspended household again becomes eligible, 
the State agency shall issue benefits to the household on the 
household's normal issuance date. If the suspended household does not 
become eligible after 1 month, the State agency shall terminate the 
household's certification. Households are responsible for reporting 
changes as required by paragraph (b) of this section during the period 
of suspension.
    (vii) Unclear information. During the certification period, the 
State agency may obtain information about changes in a household's 
circumstances from which the State agency cannot readily determine the 
effect of the change on the household's benefit amount. The State 
agency might receive such unclear information from a third party or 
from the household itself. The State agency must pursue clarification 
and verification of household circumstances using the following 
procedure:

[[Page 25450]]

    (A) Issue a request for contact. The State agency must issue a 
written request for contact (RFC) which clearly advises the household 
of the verification it must provide or the actions it must take to 
clarify its circumstances, which affords the household at least 10 days 
to respond and to clarify its circumstances, either by telephone or by 
correspondence, as the State agency directs, and which states the 
consequences if the household fails to respond to the RFC.
    (B) Acceptable response to the RFC. When the household responds to 
the RFC and provides sufficient information, the State agency must act 
on the new circumstances in accordance with paragraphs (b)(8)(i), 
(b)(8)(v) or (b)(8)(vi) of this section.
    (C) Failure to respond acceptably to the RFC. The State agency has 
two options.
    (1) Option One--Termination. If the household does not respond to 
the RFC, or does respond but refuses to provide sufficient information 
to clarify its circumstances, the State agency must issue a notice of 
adverse action as described in Sec.  273.13, which terminates the case, 
explains the reasons for the action, and advises the household of the 
need to submit a new application if it wishes to continue participating 
in the program.
    (2) Option Two--Suspension. If the household does not respond to 
the RFC, or does respond but refuses to provide sufficient information 
to clarify its circumstances, the State agency may elect to issue a 
notice of adverse action as described in Sec.  273.13, which suspends 
the household for 1 month before the termination becomes effective, 
explains the reasons for the action, and advises the household of the 
need to submit a new application if it wishes to continue participating 
in the program. If a household responds satisfactorily to the RFC 
during the period of suspension, the State agency must:
    (i) Reinstate the household without requiring a new application;
    (ii) Issue the allotment for the month of suspension; and
    (iii) If necessary, adjust the household's participation with a new 
notice of adverse action.
    (c) Quarterly reporting. The State agency may establish a system of 
quarterly reporting. The following requirements are applicable to 
quarterly reporting systems.
    (1) Features. SNAP households that are assigned to quarterly 
reporting must submit changes in household circumstances on a report 
form provided by the State agency three times a year. Except for the 
requirement to report reduction in ABAWD work hours, as described at 
Sec.  273.12(c)(3)(i), the State agency may determine what information 
households must report, including items required to be reported under 
the change reporting system described at Sec.  273.12(c)(3)(ii). State 
agencies are required to act on changes reported by the household or 
otherwise become known in accordance with Sec.  273.12(c)(8).
    (2) Included households. The State agency may include all 
households within a quarterly reporting system, except migrant or 
seasonal farm worker households, households that have no earned income 
and in which all adult members are elderly or disabled, households in 
which all members are homeless individuals, or households assigned to 
the monthly reporting and simplified reporting systems described at 
Sec. Sec.  273.21(b) and 273.12(d), respectively. The State agency may 
also limit quarterly reporting to specific categories of households.
    (3) What households must report. Households assigned to quarterly 
reporting to must report the following changes:
    (i) Reduced work hours for able-bodied adults without dependents 
(ABAWDs) subject to time limits of Sec.  273.24, if the number of hours 
worked each week falls below 20 hours, based on a monthly average, as 
provided in Sec.  273.24(a)(1)(i); and
    (ii) Other changes as required by the State agency, which may 
include the following items:
    (A) A change of more than $50 in unearned income, excluding 
households with jointly processed PA/SNAP or GA/SNAP cases;
    (B) A change in the source of income, including starting or 
stopping a job or changing jobs, if the amount of income changes;
    (C) A change in earned income for households certified for 6 months 
or less:
    (1) A change in the wage rate or salary or a change in full-time or 
part-time employment status (as determined by the employer or as 
defined in the State's PA program); or
    (2) A change of more than $100 in monthly earnings.
    (D) A change in household composition;
    (E) A change in residence and resulting shelter cost changes;
    (F) Acquisition of a licensed vehicle that is not fully excludable 
under Sec.  273.8(e), unless the State agency uses TANF vehicle rules, 
as provided at Sec.  273.8(f)(4);
    (G) A change in liquid resources, such as cash, stocks, bonds, and 
bank accounts reach or exceed $3,000 for elderly or disabled households 
or $2,000 for all other households, unless the State agency excludes 
resources when determining PA or SSI eligibility, as provided at Sec.  
273.2(j)(2)(v); and
    (H) A change in child support payments, if the household has a 
legal obligation to pay, unless the State agency receives this 
information from the State CSE agency, as provided at Sec.  
273.2(f)(1)(xii).
    (4) Special procedures for child support payments. For households 
eligible for the child support exclusion at Sec.  273.9(c)(17) or 
deduction at Sec.  273.9(d)(5), the State agency may use information 
provided by the State CSE agency in determining the household's legal 
obligation to pay child support, the amount of its obligation and 
amounts the household has actually paid if the household pays its child 
support exclusively through its State CSE agency and has signed a 
statement authorizing release of its child support payment records to 
the State agency. Households do not have to provide any additional 
verification unless they disagree with the information provided by the 
State CSE. If a State agency chooses to utilize information provided by 
the State CSE agency in accordance with this paragraph (c)(4), it must 
specify this choice in its State plan of operation. If the State agency 
does not choose to utilize information provided by its State CSE 
agency, the State agency may make reporting child support payments an 
optional quarterly reporting item in accord in accordance with 
paragraph (c)(3)(ix) of this section.
    (5) How households must report. Households must file a quarterly 
report form as required by the State agency. Except for reporting 
reduced work hours by ABAWD household members as described at Sec.  
273.12(c)(3)(i), the quarterly report shall be the sole reporting 
requirement for information that is required to be reported on the 
form. The State agency may limit the report to specific items while 
requiring that households report other items through the use of the 
change report form described at Sec.  273.12(b)(5)(ii). If a household 
reports a change outside of the quarterly reporting timeframes 
established by the State agency, the State agency must act on the 
change in accordance with paragraph (c)(8) of this section.
    (i) State agency notification of household reporting requirements. 
The State agency must notify households of the quarterly reporting 
requirement, including the consequences of failure to

[[Page 25451]]

file a report, at initial certification and recertification.
    (ii) Quarterly report form. The State agency must provide the 
household with a form for reporting changes on a quarterly basis. At a 
minimum, the State agency must provide a quarterly report form to 
households at certification, recertification, and after a quarterly 
report form is returned by the household. The quarterly report form 
must be written in clear, simple language, and must meet the bilingual 
requirements described in Sec.  272.4(b) of this chapter. The report 
form must include:
    (A) A list of the reportable items described in paragraph (c)(3) of 
this section and a statement that the household must report if any of 
these items have changed for the household since certification or the 
last quarterly report filed, whichever is later;
    (B) The date by which the agency must receive the form;
    (C) The consequences of submitting a late or incomplete form, 
including whether the State agency will delay payment if the form is 
not received by a specified date;
    (D) The verification that the household must submit with the form;
    (E) Where the household may call to obtain help in completing the 
form;
    (F) A statement to be signed by a member of the household (in 
accordance with Sec.  273.2(c)(7) regarding acceptable methods of 
signature) indicating his or her understanding that the information 
provided may result in reduction or termination of benefits;
    (G) A brief description of the SNAP fraud penalties;
    (H) If the State agency has chosen to disregard reported changes 
that affect certain deductions in accordance with paragraph (c)(8)(ii) 
of this section, a statement explaining that the State agency will not 
change certain deductions until the household's next recertification 
and identify those deductions; and
    (I) If the form requests social security numbers, the following 
information, which may be on the form itself or included as an 
attachment to the form:
    (1) A statement of the State agency's authority to require social 
security numbers (including the statutory citation, the title of the 
statute, and the fact that providing social security numbers is 
mandatory);
    (2) The purpose of requiring social security numbers;
    (3) The routine uses for social security numbers; and
    (4) The consequences of not providing social security numbers.
    (6) When households must report. (i) Changes occurring prior to 
certification. Applicants in a quarterly reporting system must report 
changes that occur after the interview but before the date of the 
notice of eligibility no later than 10 days from the date the notice 
was received.
    (ii) Reduced ABAWD work hours. Households must report changes 
described in Sec.  273.12(c)(3)(i) no later than 10 days from the end 
of the month in which the reduced work hours occurred.
    (iii) Filing the quarterly report. The State agency shall specify 
the date by which each quarterly report must be filed. The State agency 
shall provide the household a reasonable period after the end of the 
last month covered by the report in which to return the report.
    (7) If households fail to report. (i) Quarterly report. If a 
household fails to file a complete report by the specified filing date, 
the State agency must send a notice to the household advising it of the 
missing or incomplete report no later than 10 days from the date the 
report should have been submitted. If the household does not respond to 
the notice, the household's participation must be terminated. The State 
agency may combine the notice of a missing or incomplete report with 
the adequate notice of termination described in paragraph (c)(8) of 
this section. A household shall not be held liable for a claim because 
of a change in household circumstances that it is not required to 
report in accordance with Sec.  273.12(c)(3).
    (ii) Reportable changes outside of the quarterly report. If the 
State agency discovers that the household failed to report a reduction 
in the hours worked by an ABAWD household member, as required by 
paragraph (c)(3)(i) of this section and, as a result, received benefits 
to which it was not entitled, the State agency shall file a claim 
against the household in accordance with Sec.  273.18. If the discovery 
is made within the certification period, the household is entitled to a 
notice of adverse action if the household's benefits are reduced.
    (8) State agency action on changes. (i) General requirement to act. 
The State agency shall take prompt action on all changes to determine 
if a change affects the household's eligibility or benefit level. 
However, the State agency has the option to disregard a reported change 
to an established deduction in accordance with paragraph (c)(8)(ii) of 
this section.
    (A) Exception for temporary income changes. If the change is not 
expected to continue for at least 1 month beyond the month in which the 
change is reported, the State agency is not required to act on the 
change.
    (B) Exception for medical changes. The State agency must not act on 
changes in the medical expenses of households eligible for the medical 
expense deduction unless the changes are considered verified upon 
receipt and do not require contact with the household to verify. If 
changes to the household's medical expenses are considered verified 
upon receipt, then the State agency shall act on the changes as 
described in paragraph (b)(8) of this section.
    (ii) State agency postponement of action on reported changes. (A) 
Changes in certain deductible expenses. Except for changes described in 
paragraph (c)(8)(ii)(C)(1) of this section, the State agency may 
postpone acting on reported changes to deductions allowed under Sec.  
273.9(d) and established at certification. If the State agency chooses 
to act on changes that affect a deduction, it may not act on changes to 
the deduction in only one direction, i.e., changes that only increase 
or decrease the amount of the deduction, but must act on all changes 
that affect the deduction. A State agency that chooses to postpone 
changes in deductions must state in its State plan of operation that it 
has selected this option and specify the deductions affected. When the 
State agency opts to disregard a change in a deduction, the deduction 
amount established at certification will continue until the following 
occurs:
    (1) The next recertification or after the 6th month of 
certification for households certified for 12 months that report a 
change in deductions during the first 6 months of the certification 
period;
    (2) The required 12-month contact occurs for elderly and disabled 
households certified for 24 months in accordance with Sec.  
273.10(f)(1) that report a change in deductions during the first 12 
months of the certification period;
    (3) The 13th month of certification for households residing on 
reservations certified for 24 months in accordance with Sec.  
273.10(f)(2) and are required to submit monthly reports that report a 
change in deductions during the first 12 months of the certification; 
and
    (4) The next recertification for households certified for 24 months 
in accordance with Sec.  273.10(f)(1) and (f)(2) that report a change 
in deductions during the second 12 months of the certification period.
    (B) Changes in other reportable items. Except for the changes 
described in paragraph (c)(8)(ii)(C)(2) of this section, the State 
agency may also postpone action on certain reportable items described 
in paragraph (c)(3) of this

[[Page 25452]]

section when the changes are reported by the household or when the 
State agency learns of the changes from a source other than the 
household. The timeframes for required State agency action on the 
postponed reported items shall be the same as for required State agency 
action on postponed deductions as described in paragraphs 
(c)(8)(ii)(A)(1)-(c)(8)(ii)(A)(1)(4) of this section.
    (C) Changes that cannot be postponed. State agencies may not 
postpone action on reported changes described in paragraphs 
(c)(8)(ii)(C)(1)-(c)(8)(ii)(C)(2) of this section.
    (1) Residence and shelter costs. When a household reports a change 
in residence within the first 6 months of the certification period, the 
State agency must investigate and take action on corresponding changes 
in shelter costs. However, if a household fails to provide information 
regarding the associated changes in shelter costs within 10 days of the 
reported change in residence, the State agency should notify the 
household that its allotment will be recalculated without the 
deduction. The notice must explain that the household does not need to 
wait for its first utility or rental payments to contact the SNAP 
office. Alternative forms of verification may be accepted, if 
necessary.
    (2) Earned income and new deductions. If the State agencies must 
act on reported changes in these items in accordance with paragraphs 
(c)(8)(v) and (c)(8)(vi) of this section.
    (ii) Notifying the household. The State agency must notify the 
household of the receipt of the quarterly report and how the report 
affects the household's eligibility or benefit level. The State agency 
must also provide another quarterly report form to the household. The 
State agency must also advise the household of additional verification 
requirements, if any, and inform the household that failure to provide 
verification will result in any increases in benefits reverting to the 
original level.
    (iii) Case file documentation. The State agency must document 
receipt of the quarterly report in the household's case file, even if 
there is no change in the household's eligibility or benefit level. The 
State agency must document the date the report is received. The State 
agency shall also document the date any other change is reported by the 
household in addition to the quarterly report.
    (iv) Changes that increase benefits. (A) Timeframes for increasing 
benefit levels. (1) If verification is required. If the household 
provides verification on a timely basis as required by the State 
agency, the State agency shall increase benefit levels no later than 
the first allotment issued 10 days after the quarterly report was 
received. If the household does not provide verification on a timely 
basis as required by the State agency but does provide the verification 
at a later date, the State agency shall increase benefit levels no 
later than the first allotment issued 10 days after the verification 
was received. If the household does not provide required verification, 
the State agency shall not increase the household's benefits in 
response to the change reported on the quarterly report.
    (2) Household composition or reduced income. For changes that 
result in an increase in a household's benefits due to the addition of 
a new household member who is not a member of another certified 
household, or due to a decrease of $50 or more in the household's gross 
monthly income, the State agency shall make the change effective not 
later than the first allotment issued 10 days after the date the change 
was reported. However, in no event shall these changes take effect any 
later than the month following the month in which the change is 
reported. If it is too late for the State agency to adjust the 
following month's allotment, the State agency shall issue supplementary 
benefits or otherwise provide an opportunity for the household to 
obtain the increase in benefits by the 10th day of the following month, 
or the household's normal issuance cycle in that month, whichever is 
later. For example, a household reporting a $100 decrease in income at 
any time during May would have its June allotment increased. If the 
household reported the change after the 20th of May and it was too late 
for the State agency to adjust the benefits normally issued on June 
1st, the State agency would issue supplementary benefits for the amount 
of the increase by June 10th.
    (3) All other changes. The State agency shall make the change 
effective no later than the first allotment issued 10 days after the 
date the change was reported to the State agency. For example, a $30 
decrease in income reported on the 15th of May would increase the 
household's June allotment. If the same decrease was reported on May 
28, and the household's normal issuance cycle was on June 1st, the 
household's allotment would have to be increased by July.
    (B) Restoration of benefits. The State agency shall restore lost 
benefits if it fails to act on a change that resulted in an increase of 
benefits and was reported in a timely manner, as described in paragraph 
(c)(5)(ii) of this section.
    (v) Changes that decrease benefits. (A) Timeframes for decreasing 
benefits. (1) Notice of Adverse action. The State agency shall issue a 
notice of adverse action within 10 days of the date the change was 
reported, unless one of the exemptions described at Sec.  273.13(a)(3) 
or (b) applies. The effective date of the benefit reduction shall be no 
later than the allotment for the month following the month in which the 
notice of adverse action period has expired, unless the household has 
requested a fair hearing and continuation of benefits.
    (2) Adequate notice. If one of the exemptions described at Sec.  
273.13(a)(3) or (b) applies, the State agency may issue an adequate 
notice instead of a notice of adverse action. The adequate notice must 
arrive no later than the date the benefit reduction is effective. The 
effective date of the benefit reduction shall be no later than the 
month following the change was reported.
    (B) Verified information that reduces benefits. If the household 
submits verification of a change results in reduced benefits, the State 
agency shall establish a claim for the overissuance in accordance with 
Sec.  273.18. If State agency determines that a household has refused 
to cooperate as defined in Sec.  273.2(d), the State agency shall issue 
a notice of adverse action and terminate the household's eligibility. 
If a household has refused to provide verification as a part of the 
State agency's reporting system requirements, the household must 
provide the required verification at a subsequent certification or 
recertification.
    (C) Suspension of benefits. The State agency may suspend a 
household's certification prospectively for 1 month if the household 
becomes temporarily ineligible because of a periodic increase in 
recurring income or other change not expected to continue in the 
subsequent month. If the suspended household again becomes eligible, 
the State agency shall issue benefits to the household on the 
household's normal issuance date. If the suspended household does not 
become eligible after one month, the State agency shall terminate the 
household's certification. Households are responsible for reporting 
changes as required by paragraph (c) of this section during the period 
of suspension.
    (vi) Unclear information. During the certification period, the 
State agency may obtain information about changes in a household's 
circumstances from which the State agency cannot readily determine the 
effect of the change on the household's benefit amount. The State 
agency might receive such unclear information from a third party or 
from

[[Page 25453]]

the household itself. The State agency must pursue clarification and 
verification of household circumstances using the following procedure:
    (A) Issue a request for contact (RFC). The State agency must issue 
a written RFC which clearly advises the household of the verification 
it must provide or the actions it must take to clarify its 
circumstances, which affords the household at least 10 days to respond 
and to clarify its circumstances, either by telephone or by 
correspondence, as the State agency directs, and which states the 
consequences if the household fails to respond to the RFC.
    (B) Acceptable response to the RFC. When the household responds to 
the RFC and provides sufficient information, the State agency must act 
on the new circumstances in accordance with paragraphs (c)(8)(i), 
(c)(8)(v), or (c)(8)(vi) of this section.
    (C) Failure to respond acceptably to the RFC. The State agency has 
two options.
    (1) Option One--Termination. If the household does not respond to 
the RFC, or does respond but refuses to provide sufficient information 
to clarify its circumstances, the State agency must issue a notice of 
adverse action as described in Sec.  273.13, which terminates the case, 
explains the reasons for the action, and advises the household of the 
need to submit a new application if it wishes to continue participating 
in the program.
    (2) Option Two--Suspension. If the household does not respond to 
the RFC, or does respond but refuses to provide sufficient information 
to clarify its circumstances, the State agency may elect to issue a 
notice of adverse action as described in Sec.  273.13, which suspends 
the household for 1 month before the termination becomes effective, 
explains the reasons for the action, and advises the household of the 
need to submit a new application if it wishes to continue participating 
in the program. If a household responds satisfactorily to the RFC 
during the period of suspension, the State agency must:
    (i) Reinstate the household without requiring a new application;
    (ii) Issue the allotment for the month of suspension; and
    (iii) If necessary, adjust the household's participation with a new 
notice of adverse action.
    (d) Simplified reporting. The State agency may establish a 
simplified reporting system. The following requirements are applicable 
to simplified reporting systems. A State agency that chooses to use 
simplified reporting procedures in accordance with this section must 
indicate this choice in its State Plan of Operation and specify the 
types of households to whom the simplified reporting requirements 
apply.
    (1) Features. Simplified reporting requires minimal household 
reporting in comparison to the other types of household reporting 
systems that are available to State agencies under the SNAP 
regulations. During the certification period, a household must only 
report if gross monthly income exceeds the SNAP gross monthly income 
standard and if the work hours of an ABAWD falls below the minimum 
average of 20 hours. In addition, the State agency must require all 
households certified for longer than 6 months, except for households in 
which all adults are elderly or disabled with no earnings, to submit a 
periodic report. The periodic report is generally due about halfway 
through the certification period, for which certain changes that have 
occurred since certification must be reported.
    (2) Included households. The State agency may include any household 
certified for at least 4 months within a simplified reporting system.
    (3) What households must report. (i) At any time during the 
certification period, households must report:
    (A) Gross monthly income that exceeds 130 percent of the monthly 
Federal poverty income guideline for the household's size that existed 
at the most recent certification or recertification regardless of any 
changes in household size; and
    (B) Reduced work hours for ABAWDs subject to time limits of Sec.  
273.24, if the number of hours worked each week falls below 20 hours, 
based on a monthly average, as provided in Sec.  273.24(a)(1)(i).
    (ii) Households required to file a periodic report as described in 
paragraph (d)(5)(ii) of this section must report changes in the 
following:
    (A) A change of more than $50 in unearned income, excluding 
households with jointly processed PA/SNAP or GA/SNAP cases;
    (B) A change in the source of income, including starting or 
stopping a job or changing jobs, if the amount of income changes;
    (C) A change in earned income for households certified for 6 months 
or less:
    (1) A change in the wage rate or salary or a change in full-time or 
part-time employment status (as determined by the employer or as 
defined in the State's PA program); or
    (2) A change of more than $100 in monthly earnings.
    (D) A change in household composition;
    (E) A change in residence and resulting shelter cost changes;
    (F) Acquisition of a licensed vehicle that is not fully excludable 
under Sec.  273.8(e), unless the State agency uses TANF vehicle rules, 
as provided at Sec.  273.8(f)(4);
    (G) A change in liquid resources, such as cash, stocks, bonds, and 
bank accounts reach or exceed $3,000 for elderly or disabled households 
or $2,000 for all other households, unless the State agency excludes 
resources when determining PA or SSI eligibility, as provided at Sec.  
273.2(j)(2)(v); and
    (H) A change in child support payments, if the household has a 
legal obligation to pay, unless the State agency receives this 
information from the State CSE agency, as provided at Sec.  
273.2(f)(1)(xii);
    (4) Special procedures for child support payments. For households 
eligible for the child support exclusion at Sec.  273.9(c)(17) or 
deduction at Sec.  273.9(d)(5), the State agency may use information 
provided by the State CSE agency in determining the household's legal 
obligation to pay child support, the amount of its obligation and 
amounts the household has actually paid if the household pays its child 
support exclusively through its State CSE agency and has signed a 
statement authorizing release of its child support payment records to 
the State agency. Households do not have to provide any additional 
verification unless they disagree with the information provided by the 
State CSE. If a State agency chooses to utilize information provided by 
the State CSE agency in accordance with this paragraph (d)(4), it must 
specify this choice in its State plan of operation. If the State agency 
does not choose to utilize information provided by its State CSE 
agency, the State agency may make reporting child support payments an 
optional periodic reporting item in accordance with paragraph 
(d)(3)(ii)(H) of this section.
    (5) How households report changes. All households subject to 
simplified reporting requirements must report the changes described in 
paragraph (d)(3)(i) using procedures required by the State agency. 
Households subject to periodic reporting must also report the changes 
listed in paragraph (d)(3)(ii) on the periodic form provided by the 
State agency.
    (i) State agency notification of household reporting requirements. 
The State agency must explain the simplified reporting requirements to 
households at certification, recertification, and if the State agency

[[Page 25454]]

transfers the household to simplified reporting. The State agency must 
provide the following information to the household:
    (A) A written or oral explanation of how simplified reporting 
works, including what needs to be reported and verified and the 
consequences of failing to report changes;
    (B) For households required to submit a periodic report, the 
additional changes that must be addressed in the periodic report, when 
the periodic report must be filed and how to obtain assistance in 
filing the periodic report; and
    (C) A telephone number (toll-free number or a number where collect 
calls will be accepted outside the local calling area) that the 
household may call to ask questions or obtain help in reporting changes 
or completing the periodic report; and
    (D) Special assistance in completing and filing periodic reports to 
households whose adult members are all either mentally or physically 
disabled or are non-English speaking or otherwise lacking in reading 
and writing skills that prevent them from completing and filing the 
report.
    (ii) Periodic report forms. The periodic report shall be the sole 
reporting instrument for changes required to be reported under 
paragraph (d)(3)(ii) of this section, and the State agency may not 
require additional information to be reported on the periodic report 
form other than the requirements described under paragraph (d)(3)(ii) 
of this section. The State agency must provide periodic report forms to 
all households that are required to file periodic reports as described 
at paragraph (d)(6)(iii) of this section. At a minimum, the State 
agency must provide a periodic report form to households at 
certification, recertification, and after a periodic report form is 
returned by the household. The periodic report form must be written in 
clear, simple language, and must meet the bilingual requirements 
described in Sec.  272.4(b) of this chapter. The periodic report form 
must include:
    (A) A list of the reportable items described in paragraph (d)(3) of 
this section and a statement that the household must report if any of 
these items have changed for the household since certification or the 
last periodic report was filed, whichever is more recent;
    (B) The date by which the agency must receive the form;
    (C) The consequences of submitting a late or incomplete form;
    (D) The verification that the household must submit with the form;
    (E) Where the household may call for help in completing the form;
    (F) A statement to be signed by a member of the household (in 
accordance with Sec.  273.2(c)(7) regarding acceptable methods of 
signature) indicating his or her understanding that the information 
provided may result in reduction or termination of benefits;
    (G) A brief description of the SNAP fraud penalties;
    (H) If the State agency has chosen to disregard reported changes 
that affect certain deductions in accordance with paragraph (d)(8)(ii) 
of this section, a statement explaining that the State agency will not 
change certain deductions until the household's next recertification 
and identify those deductions; and
    (I) If the form requests social security numbers, the following 
information, which may be on the form itself or included as an 
attachment to the form:
    (1) A statement of the State agency's authority to require social 
security numbers (including the statutory citation, the title of the 
statute, and the fact that providing social security numbers is 
mandatory);
    (2) The purpose of requiring social security numbers;
    (3) The routine uses for social security numbers; and
    (4) The consequences of not providing social security numbers.
    (6) When households must report. (i) Changes occurring prior to 
certification. Applicants in a simplified reporting system must report 
changes that occur after the interview but before the date of the 
notice of eligibility no later than 10 days from the end of the 
calendar month in which the eligibility notice was received.
    (ii) Reduced ABAWD work hours or excess gross monthly income. A 
household must report when average weekly hours worked by an ABAWD 
member of the household falls below 20 hours. A household must also 
report when its gross monthly income exceeds the gross monthly income 
limit for its size. A household must report either of these changes no 
later than 10 days from the end of the calendar month in which the 
change occurred, provided that the household has at least 10 days 
within which to report the change.
    (iii) Periodic reports. (A) Exempt households. The State agency 
must not require the submission of periodic reports by households 
certified for 12 months or less in which all adult members are elderly 
or disabled with no earned income.
    (B) Submission of periodic reports by non-exempt households. 
Households that are certified for longer than 6 months, except those in 
which all adult members are elderly or disabled with no earned income, 
must file a periodic report between 4 months and 6 months, as required 
by the State agency. Households in which all adult members are elderly 
or disabled with no earned income and that are certified for periods 
lasting between 13 months and 24 months must file a periodic report 
once a year. In selecting a due date for the periodic report, the State 
agency must provide itself sufficient time to process reports so that 
households that have reported changes that will reduce or terminate 
benefits will receive adequate notice of action on the report in the 
first month of the new reporting period.
    (7) When households fail to report. (i) Reportable changes outside 
of the periodic report. If the State agency discovers that the 
household failed to report a change as required by paragraphs (d)(3)(i) 
and (d)(3)(ii) of this section and, as a result, received benefits to 
which it was not entitled, the State agency shall file a claim against 
the household in accordance with Sec.  273.18. If the discovery is made 
within the certification period, the household is entitled to a notice 
of adverse action if the household's benefits are reduced.
    (ii) Periodic report. If a household fails to file a complete 
periodic report by the filing date required by the State agency, the 
State agency must send a notice to the household advising it of the 
missing or incomplete report no later than 10 days from the date the 
report should have been submitted. If the household does not respond to 
the notice, the household's participation must be terminated. The State 
agency may combine the notice of a missing or incomplete report with 
the adequate notice of termination described in paragraph (d)(8) of 
this section. A household shall not be held liable for a claim because 
of a change in household circumstances that it is not required to 
report in accordance with Sec.  273.12(d)(3).
    (8) State agency action on changes. (i) General requirement to act. 
The State agency shall take prompt action on all changes described in 
paragraphs (d)(8)(iii) or (d)(8)(iv) of this section to determine if a 
change affects the household's eligibility or benefit level. However, 
the State agency has the option to disregard a reported change to an 
established deduction in accordance with paragraph (d)(8)(ii) of this 
section.
    (A) Exception for temporary income changes. If the change is not 
expected to continue for at least 1 month beyond the month in which the 
change is reported, the State agency is not required to act on the 
change.

[[Page 25455]]

    (B) Exception for medical changes. The State agency must not act on 
changes in the medical expenses of households eligible for the medical 
expense deduction unless the changes are considered verified upon 
receipt and do not require contact with the household to verify. If 
changes to the household's medical expenses are considered verified 
upon receipt, then the State agency shall act on the changes as 
described in paragraph (d)(8) of this section.
    (ii) State agency postponement of action on reported changes. (A) 
Changes in certain deductible expenses. Except for changes described in 
paragraph (d)(8)(ii)(C)(1) of this section, the State agency may 
postpone acting on reported changes to deductions allowed under Sec.  
273.9(d) and established at certification. If the State agency chooses 
to act on changes that affect a deduction, it may not act on changes to 
the deduction in only one direction, i.e., changes that only increase 
or decrease the amount of the deduction, but must act on all changes 
that affect the deduction. A State agency that chooses to postpone 
changes in deductions must state in its State plan of operation that it 
has selected this option and specify the deductions affected. When the 
State agency opts to disregard a change in a deduction, the deduction 
amount established at certification will continue until the following 
occurs:
    (1) The next recertification or after the 6th month of 
certification for households certified for 12 months that report a 
change in deductions during the first 6 months of the certification 
period;
    (2) The required 12-month contact occurs for elderly and disabled 
households certified for 24 months in accordance with Sec.  
273.10(f)(1) that report a change in deductions during the first 12 
months of the certification period;
    (3) The 13th month of certification for households residing on 
reservations certified for 24 months in accordance with Sec.  
273.10(f)(2) and are required to submit monthly reports that report a 
change in deductions during the first 12 months of the certification; 
and
    (4) The next recertification for households certified for 24 months 
in accordance with Sec. Sec.  273.10(f)(1) and (f)(2) that report a 
change in deductions during the second 12 months of the certification 
period.
    (B) Changes in other reportable items. Except for the changes 
described in paragraph (d)(8)(ii)(C)(2) of this section, the State 
agency may also postpone action on certain reportable items described 
in paragraph (d)(3) of this section when the changes are reported by 
the household or when the State agency learns of the changes from a 
source other than the household. The timeframes for required State 
agency action on the postponed reported items shall be the same as for 
required State agency action on postponed deductions as described in 
paragraphs (d)(8)(ii)(A)(1)-(d)(8)(ii)(A)(4) of this section.
    (C) Changes that cannot be postponed. State agencies may not 
postpone action on reported changes described in paragraphs 
(d)(8)(ii)(C)(1)-(d)(8)(ii)(C)(2) of this section.
    (1) Residence and shelter costs. When a household reports a change 
in residence within the first 6 months of the certification period, the 
State agency must investigate and take action on corresponding changes 
in shelter costs. However, if a household fails to provide information 
regarding the associated changes in shelter costs within 10 days of the 
reported change in residence, the State agency should notify the 
household that its allotment will be recalculated without the 
deduction. The notice must explain that the household does not need to 
wait for its first utility or rental payments to contact the SNAP 
office. Alternative forms of verification may be accepted, if 
necessary.
    (2) Earned income and new deductions. If the State agencies must 
act on reported changes in these items in accordance with paragraphs 
(d)(8)(v) and (d)(8)(vi) of this section.
    (iii) State agency action on changes reported outside of a periodic 
report. Unless the State agency has opted to postpone acting on changes 
permitted under paragraph (d)(8)(ii) of this section, the State agency 
must act when the household reports that its gross monthly income 
exceeds the gross monthly income limit for its household size or if the 
household reports that the work hours of an ABAWD household member fall 
below the required 20-hour weekly average. The State agency must act on 
all other changes reported by a household outside of a periodic report 
in accordance with one of the following two methods:
    (A) Act on any change in household circumstances that becomes known 
to the State agency; or
    (B) Act only on changes that result in an increase of the 
household's SNAP benefits. However, if the State agency chooses this 
option, it must also act on the following changes that result in a 
decrease of the household's SNAP benefits:
    (1) The household has voluntarily requested that its case be closed 
in accordance with Sec.  273.13(b)(12);
    (2) The State agency has information about the household's 
circumstances considered verified upon receipt; or
    (3) There has been a change in the household's PA grant, or GA 
grant in project areas where GA and SNAP cases are jointly processed in 
accord with Sec.  273.2(j)(2).
    (iv) State agency action on changes reported on the periodic 
report. The State agency shall promptly determine if a change affects 
the household's eligibility or benefit level and take appropriate 
action. If the change is not expected to continue for at least one 
month beyond the month in which the change is reported, the State 
agency is not required to act on the change.
    (A) Notifying the household. The State agency must notify the 
household of the receipt of the periodic report and how the report 
affects the household's eligibility or benefit level. The State agency 
must also provide another periodic report form to the household. The 
State agency must also advise the household of additional verification 
requirements, if any, and inform the household that failure to provide 
verification will result in any increases in benefits reverting to the 
original level.
    (B) Case file documentation. The State agency must document receipt 
of the periodic report in the household's case file, even if there is 
no change in the household's eligibility or benefit level. The State 
agency must document the date the report is received. The State agency 
shall also document the date any other change is reported by the 
household in addition to the periodic report.
    (v) Changes that increase benefits. (A) Timeframes for increasing 
benefit levels. (1) If verification is required. If the household 
provides verification on a timely basis as required by the State 
agency, the State agency shall increase benefit levels no later than 
the first allotment issued 10 days after the periodic report was 
received. If the household does not provide verification on a timely 
basis as required by the State agency but does provide the verification 
at a later date, the State agency shall increase benefit levels no 
later than the first allotment issued 10 days after the verification 
was received. If the household does not provide required verification, 
the State agency shall not increase the household's benefits in 
response to the change reported on the periodic report.
    (2) Household composition or reduced income. For changes that 
result in an increase in a household's benefits due to the addition of 
a new household member who is not a member of another

[[Page 25456]]

certified household, or due to a decrease of $50 or more in the 
household's gross monthly income, the State agency shall make the 
change effective not later than the first allotment issued 10 days 
after the date the change was reported. However, in no event shall 
these changes take effect any later than the month following the month 
in which the change is reported. If it is too late for the State agency 
to adjust the following month's allotment, the State agency shall issue 
supplementary benefits or otherwise provide an opportunity for the 
household to obtain the increase in benefits by the 10th day of the 
following month, or the household's normal issuance cycle in that 
month, whichever is later. For example, a household reporting a $100 
decrease in income at any time during May would have its June allotment 
increased. If the household reported the change after the 20th of May 
and it was too late for the State agency to adjust the benefits 
normally issued on June 1st, the State agency would issue supplementary 
benefits for the amount of the increase by June 10th.
    (3) All other changes. The State agency shall make the change 
effective no later than the first allotment issued 10 days after the 
date the change was reported to the State agency. For example, a $30 
decrease in income reported on the 15th of May would increase the 
household's June allotment. If the same decrease was reported on May 
28th, and the household's normal issuance cycle was on June 1st, the 
household's allotment would have to be increased by July.
    (B) Restoration of benefits. The State agency shall restore lost 
benefits if it fails to act on a change that resulted in an increase of 
benefits and was reported in a timely manner, as described in paragraph 
(d)(5)(ii) of this section.
    (vi) Changes that decrease benefits. (A) Timeframes for decreasing 
benefits. (1) Notice of Adverse action. The State agency shall issue a 
notice of adverse action within 10 days of the date the change was 
reported, unless one of the exemptions described at Sec.  273.13(a)(3) 
or (b) applies. The effective date of the benefit reduction shall be no 
later than the allotment for the month following the month in which the 
notice of adverse action period has expired, unless the household has 
requested a fair hearing and continuation of benefits.
    (2) Adequate notice. If one of the exemptions described at Sec.  
273.13(a)(3) or (b) applies, the State agency may issue an adequate 
notice instead of a notice of adverse action. The adequate notice must 
arrive no later than the date the benefit reduction is effective. The 
effective date of the benefit reduction shall be no later than the 
month following the change was reported.
    (B) Verified information that reduces benefits. If the household 
submits verification of a change results in reduced benefits, the State 
agency shall establish a claim for the overissuance in accordance with 
Sec.  273.18. If State agency determines that a household has refused 
to cooperate as defined in Sec.  273.2(d), the State agency shall issue 
a notice of adverse action and terminate the household's eligibility. 
If a household has refused to provide verification as a part of the 
State agency's reporting system requirements, the household must 
provide the required verification at a subsequent certification or 
recertification.
    (C) Suspension of benefits. The State agency may suspend a 
household's certification prospectively for 1 month if the household 
becomes temporarily ineligible because of a periodic increase in 
recurring income or other change not expected to continue in the 
subsequent month. If the suspended household again becomes eligible, 
the State agency shall issue benefits to the household on the 
household's normal issuance date. If the suspended household does not 
become eligible after 1 month, the State agency shall terminate the 
household's certification. Households are responsible for reporting 
changes as required by paragraphs (d)(8)(i), (d)(8)(iv), or (d)(8)(vi) 
of this section during the period of suspension.
    (vii) Unclear information. During the certification period, the 
State agency may obtain information about changes in a household's 
circumstances from which the State agency cannot readily determine the 
effect of the change on the household's benefit amount. The State 
agency might receive such unclear information from a third party or 
from the household itself. The State agency must pursue clarification 
and verification of household circumstances using the following 
procedure:
    (A) Issue a Request for Contact (RFC). The State agency must issue 
a written RFC which clearly advises the household of the verification 
it must provide or the actions it must take to clarify its 
circumstances, which affords the household at least 10 days to respond 
and to clarify its circumstances, either by telephone or by 
correspondence, as the State agency directs, and which states the 
consequences if the household fails to respond to the RFC.
    (B) Acceptable response to the RFC. When the household responds to 
the RFC and provides sufficient information, the State agency must act 
on the new circumstances in accordance with paragraph (d)(8) of this 
section.
    (C) Failure to respond acceptably to the RFC. The State agency has 
two options.
    (1) Option One--Termination. If the household does not respond to 
the RFC, or does respond but refuses to provide sufficient information 
to clarify its circumstances, the State agency must issue a notice of 
adverse action as described in Sec.  273.13 which terminates the case, 
explains the reasons for the action, and advises the household of the 
need to submit a new application if it wishes to continue participating 
in the program.
    (2) Option Two--Suspension. If the household does not respond to 
the RFC, or does respond but refuses to provide sufficient information 
to clarify its circumstances, the State agency may elect to issue a 
notice of adverse action as described in Sec.  273.13 which suspends 
the household for 1 month before the termination becomes effective, 
explains the reasons for the action, and advises the household of the 
need to submit a new application if it wishes to continue participating 
in the program. If a household responds satisfactorily to the RFC 
during the period of suspension, the State agency must:
    (i) Reinstate the household without requiring a new application;
    (ii) Issue the allotment for the month of suspension; and
    (iii) If necessary, adjust the household's participation with a new 
notice of adverse action.
* * * * *


Sec.  273.13  [Amended]

    13. Amend paragraph (b)(10) by removing the words ``food stamp 
coupon'' and adding in their place the words ``Snap benefit''.
    14. In Sec.  273.14:
    a. Amend paragraph (b)(2) by adding a new fourth sentence; and
    b. Amend the first and fourth sentences of paragraph (b)(3) by 
removing the words '' a face-to-face interview'' and adding in their 
place the words ``an interview''.
    The addition reads as follows:


Sec.  273.14  Recertification.

* * * * *
    (b) * * *
    (2) * * * The provisions of Sec.  273.2(c)(7) regarding acceptable 
signatures on applications also apply to applications used at 
recertification. * * *
* * * * *
    15. In Sec.  273.15:

[[Page 25457]]

    a. Revise the second sentence of paragraph (c)(1);
    b. Amend paragraph (c)(2) by removing the word ``coupon'' and 
replacing it with the words ``SNAP benefit'';
    c. Amend paragraph (c)(3) by removing the word ``coupon'' and 
replacing it with the words ``SNAP benefit'';
    d. Amend paragraph (q)(4) by removing the word ``coupon'' and 
replacing it with the words ``SNAP benefit''; and
    e. Amend introductory paragraph(s) by removing the word ``coupon'' 
and replacing it with the words ``SNAP benefit''.
    The revision reads as follows:


Sec.  273.15  Fair hearings.

* * * * *
    (c) * * *
    (1) * * * Decisions that result in an increase in household 
benefits shall be reflected in the household's EBT account within 10 
days of the receipt of the hearing decision even if the State agency 
must provide supplementary benefits or otherwise provide the household 
with an opportunity to obtain the benefits outside of the normal 
issuance cycle. * * *
* * * * *
    16. In Sec.  273.16, revise paragraph (c)(2) to read as follows:


Sec.  273.16  Disqualification for internal program violation.

* * * * *
    (c) * * *
    (2) committed any act that constitutes a violation of SNAP, SNAP 
regulations, or any State statute for the purpose of using, presenting, 
transferring, acquiring, receiving, possessing or trafficking of SNAP 
benefits or EBT cards.
* * * * *


Sec.  273.18  [Amended]

    17. In Sec.  273.18, remove paragraph (f)(4) and redesignate 
paragraphs (f)(5), (f)(6), and (f)(7) as paragraphs (f)(4), (f)(5), and 
(f)(6).
    18. In Sec.  273.21, revise paragraph (h)(2)(vi) to read as 
follows:


Sec.  273.21  Monthly Reporting and Retrospective Budgeting (MRRB).

* * * * *
    (h) * * *
    (2) * * *
    (vi) Include a statement to be signed by a member of the household 
(in accordance with Sec.  273.2(c)(7) regarding acceptable methods of 
signature), indicating his or her understanding that the provided 
information may result in changes in the level of benefits, including 
reduction and termination;
* * * * *
    19. In Sec.  273.25:
    a. Revise the section heading, and paragraph (a)(1);
    b. Amend the heading of (b) and introductory paragraph by removing 
the word ``SFSP'' and replacing it with the word ``S-SNAP'';
    c. Amend paragraph (b)(1) by removing the word ``SFSP'' and 
replacing it with the word ``S-SNAP and by removing the word ``FSP'' 
wherever it occurs and replacing it with the word ``SNAP'';
    d. Amend paragraphs (b)(2) and (b)(3) by removing the word ``SFSP'' 
wherever it occurs and replacing it with the word ``S-SNAP'';
    e. Amend paragraph (c) by removing the word ``SFSP'' wherever it 
occurs in the first sentence and replacing it with the word ``S-SNAP'' 
and by revising the third sentence; and
    f. Amend paragraphs (d) and (e) by removing the word ``SFSP'' 
wherever it occurs and replacing it with the word ``S-SNAP''.
    The revisions read as follows:


Sec.  273.25  Simplified SNAP.

    (a) * * *
    (1) Simplified SNAP (S-SNAP) means a program authorized under 7 
U.S.C. 2035.
* * * * *
    (c) * * * The State agency must determine under regular SNAP rules 
the eligibility and benefits of any household that it has found 
ineligible for TANF assistance because of time limits, more restrictive 
resource stands, or other rules that do not apply to SNAP.
* * * * *
    20. Revise Sec.  273.26 to read as follows:


Sec.  273.26  General eligibility guidelines.

    (a) Eligible programs. The State agency may elect to provide 
transitional SNAP benefits to households whose participation in the 
following programs is ending:
    (1) TANF; or
    (2) A State-funded cash assistance (SFCA) program that provides 
assistance to families with children.
    (b) Description of State transitional benefits. A State agency that 
chooses to provide transitional benefits must describe features of its 
transitional SNAP benefits alternative in its plan of operation, as 
specified in Sec.  272.2(d)(1)(xvi)(H) and as described in Sec. Sec.  
273.26(b)(1)-- 273.26(b)(6).
    (1) A statement that transitional benefits are available;
    (2) The eligible programs by which households may qualify for 
transitional benefits;
    (3) If the State agency is offering transitional benefits through a 
SFCA program, in addition to TANF, whether the SFCA program 
participation runs concurrently or sequentially to TANF;
    (4) The categories of households eligible for such benefits;
    (5) The maximum number of months for which transitional benefits 
will be provided; and
    (6) Any other items required to be included under this subpart H.
    (c) Eligible households. The State agency may limit transitional 
benefits to households in which all members had been receiving TANF or 
SFCA, or it may provide such benefits to any household in which at 
least one member had been receiving TANF or SFCA.
    (d) Ineligible households. The State agency may not provide 
transitional benefits to a household that is leaving TANF or SFCA when:
    (1) The household is leaving TANF due to a TANF sanction or the 
household is leaving the SFCA program due to a SFCA program sanction;
    (2) The household is a member of a category of households 
designated by the State agency as ineligible for transitional benefits;
    (3) All household members are ineligible to receive SNAP benefits 
because they are:
    (i) Disqualified for an intentional program violation in accordance 
with Sec.  273.16;
    (ii) Ineligible for failure to comply with a work requirement in 
accordance with Sec.  273.7;
    (iii) Receiving SSI in a cash-out State in accordance with Sec.  
273.20;
    (iv) Ineligible students in accordance with Sec.  273.5;
    (v) Ineligible aliens in accordance with Sec.  273.4;
    (vi) Disqualified for failing to provide information necessary for 
making a determination of eligibility or for completing any subsequent 
review of its eligibility in accordance with Sec.  273.2(d) and Sec.  
273.21(m)(1)(ii);
    (vii) Disqualified for knowingly transferring resources for the 
purpose of qualifying or attempting to qualify for the program as 
provided at Sec.  273.8(h);
    (viii) Disqualified for receipt of multiple SNAP benefits;
    (ix) Disqualified for being a fleeing felon in accordance with 
Sec.  273.11(n); or
    (x) ABAWD who fail to comply with the requirements of Sec.  273.24.
    (e) Optional household exclusions. The State agency has the option 
to exclude households where all household members are ineligible to 
receive SNAP benefits because they are:

[[Page 25458]]

    (1) Disqualified for failure to perform an action under Federal, 
State or local law relating to a means-tested public assistance program 
in accordance with Sec.  273.11(k);
    (2) Ineligible for failing to cooperate with child support agencies 
in accordance with Sec.  273.11(o) and 273.11(p); or
    (3) Ineligible for being delinquent in court-ordered child support 
in accordance with Sec.  273.11(q).
    (f) Recalculating eligibility for denied households. The State 
agency must use procedures at Sec.  273.12(f)(3) to determine the 
continued eligibility and benefit level of households denied 
transitional benefits under Sec.  273.26.
    21. In Sec.  273.27:
    a. Revise the first and fourth sentences of paragraph (a); and
    b. Revise the first and third sentences of paragraph (c).
    The revisions read as follows:


Sec.  273.27  General administrative guidelines.

    (a) When a household leaves TANF or a SFCA program, the State 
agency may freeze for up to 5 months, the household's benefit amount 
after making an adjustment for the loss of TANF or the SFCA. * * * 
Before initiating the transitional period, the State agency must 
recalculate the household's SNAP benefit amount by removing the TANF 
payment or the SFCA payment from the household's SNAP income. * * *
* * * * *
    (c) When a household leaves TANF or the SFCA program, the State 
agency at its option may end the household's existing certification 
period and assign the household a new certification period that 
conforms to the transitional period. * * * If the transitional period 
results in a shortening of the household's certification period, the 
State agency shall not issue a household a notice of adverse action 
under Sec.  273.10(f)(4) but shall specify in the transitional notice 
required under Sec.  273.29 that the household must be recertified when 
it reaches the end of the transitional benefit period or if it returns 
to TANF or the SFCA program during the transitional period.
    22. In Sec.  273.29, revise paragraphs (c) and (d) to read as 
follows:


Sec.  273.29  Transitional notice requirements.

* * * * *
    (c) A statement that if the household returns to TANF or the SFCA 
program during its transitional benefit period, the State agency will 
either reevaluate the household's SNAP case or require the household to 
undergo a recertification. However, if the household has been assigned 
a new certification period in accordance with Sec.  273.27(c), the 
notice must inform the household that it must be recertified if it 
returns to TANF or the SFCA program during its transitional period;
    (d) A statement explaining any changes in the household's benefit 
amount due to the loss of TANF income or SFCA program income and/or 
changes in household circumstances learned from another State or 
Federal means-tested assistance program;
* * * * *
    23. In Sec.  273.32, revise the heading and the first and third 
sentences to read as follows:


Sec.  273.32  Households who return to TANF or a SFCA program during 
the transitional period.

    If a household receiving transitional benefits returns to TANF or 
the SFCA program during the transitional period, the State agency shall 
end the household's transitional benefits and follow the procedures in 
Sec.  273.31 to determine the household's continued eligibility and 
benefits for SNAP. * * * However, for a household assigned a new 
certification period in accordance with Sec.  273.27(c), the household 
must be recertified if it returns to TANF or the SFCA program during 
its transitional period.

    Dated: April 20, 2011.
Kevin Concannon,
Under Secretary, Food, Nutrition and Consumer Services.
[FR Doc. 2011-10151 Filed 5-3-11; 8:45 am]
BILLING CODE 3410-30-P