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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2016-30663

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** January 6, 2017
- **Citation:** 82 FR 2010

## Text

DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283, and 285
[FNS 2011-0008]
RIN 0584-AD87
Supplemental Nutrition Assistance Program (SNAP): Eligibility, Certification, and Employment and Training Provisions of the Food, Conservation and Energy Act of 2008

AGENCY:

Food and Nutrition Service, USDA.

ACTION:

Final rule and interim final rule.

SUMMARY:

This final rule implements 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 amends 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; clarify reporting requirements under simplified reporting; permit States to provide transitional benefits to households leaving State-funded cash assistance programs; allow States to establish telephonic and gestured signature systems; permit States to use E&T funds to provide job retention services; and update requirements regarding the E&T funding cycle. These provisions are intended to more accurately reflect needs, reduce barriers to participation, and improve efficiency in the administration of the program. This rule also replaces outdated language in SNAP certification regulations with the new program name and updates procedures for accessing SNAP benefits in drug and alcohol treatment centers and group living arrangements with use of electronic benefit transfer (EBT) cards. This rule provides States with regulatory options for conducting telephone interviews in lieu of face-to-face interviews and for averaging student work hours.

Finally, the Department is issuing an interim final rule (with a request for additional comment) that will require that drug and alcohol treatment and group living arrangements (GLA) centers to: Submit completed change report forms to the State agency when a resident leaves the center; notify the State agency within 5 days when the center is not able to provide the resident with their EBT card at departure; and return EBT cards to residents with pro-rated benefits based up on the date of their departure.

DATES:

Effective dates:
This final rule is effective March 7, 2017. The amendments to 7 CFR 273.11(e) and 273.11(f) are being issued as an interim final rule and are effective April 6, 2017. The amendments to 7 CFR 273.2(c)(1)(v) are effective January 8, 2018.

Comment date:
FNS will consider comments from the public on the amendments to 7 CFR 273.11(e) and 273.11(f). Comments must be received at one of the addresses provided below on or before March 7, 2017.

ADDRESSES:

FNS invites interested persons to submit comments on the interim rule provisions at 7 CFR 273.11(e) and 273.11(f). Comments may be submitted by one of the following methods:

•
Federal e-Rulemaking Portal:
Go to
http://www.regulations.gov.
Preferred method; follow the online instructions for submitting comments on docket FNS 2011-0008.

•
Fax:
Submit comments by facsimile transmission to: Sasha Gersten-Paal, Certification Policy Branch, Fax number 703-305-2486.

•
Mail:
Comments should be addressed to Sasha Gersten-Paal, Certification Policy Branch, 3101 Park Center Drive, Alexandria, VA 22302.

•
Hand Delivery or Courier:
Deliver comments to Sasha Gersten-Paal, Certification Policy Branch, 3101 Park Center Drive, Alexandria, VA 22302, Monday-Friday, 8:30 a.m.-5:00 p.m.

All comments submitted in response to the interim rule provision 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.

FOR FURTHER INFORMATION CONTACT:

Sasha Gersten-Paal, Branch Chief, Certification Policy Branch, Program Development Division, Food and Nutrition Service (FNS), 3101 Park Center Drive, Room 810, Alexandria, Virginia 22302, (703) 305-2507,
sasha.gersten-paal@fns.usda.gov.

SUPPLEMENTARY INFORMATION:

I. Background

What acronyms or abbreviations are used in this discussion?

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

Phrase
Acronym, abbreviation, or symbol

Code of Federal Regulations
CFR.

Electronic Benefit Transfer Card
EBT Card.

Federal Register
FR.

Federal Fiscal Year
FY.

Food and Nutrition Act of 2008
Act.

Food and Nutrition Service
FNS.

Food, Conservation and Energy Act of 2008 (Pub. L. 110-246)
FCEA.

Food, Security and Rural Investment Act of 2002 (Pub. L. 107-171)
FSRIA.

Office of Management and Budget
OMB.

Secretary of the U.S. Department of Agriculture
Secretary.

Section (when referring to Federal regulations)
§ or §§.

State Funded Cash Assistance Program
SFCA Program.

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 USDA.

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

The Food, Conservation and Energy Act of 2008 (Pub. L. 110-246) (FCEA), 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). This final rule implements FCEA provisions affecting the eligibility, benefits, and certification of program participants, as well as E&T requirements of the program. This rule also codifies into the SNAP regulations the FCEA's nomenclature changes from “Food Stamp Program” to “Supplemental Nutrition Assistance Program” (SNAP) throughout Part 273 of the SNAP regulations.

What were the FCEA mandatory provisions and when did States have to implement them?

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 final rule were mandated by the FCEA to be implemented by State agencies on October 1, 2008. These provisions, addressed in an implementing memo issued on July 3, 2008, describing both mandatory and optional 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.

What were the optional provisions in the FCEA?

The FCEA also created new program options that State agencies may include in their administration of the program, which State agencies were permitted to implement on October 1, 2008. These provisions, which are addressed in this rule, with corresponding FCEA sections include:

• Section 4105—Expanding simplified reporting;

• Section 4106—Expanding transitional benefits option;

• Section 4108—E&T funding of job retention services; and

• Section 4119—Telephonic signature systems.

FNS informed State agencies of implementation timeframes for all SNAP provisions in the July 3, 2008, FCEA memorandum. The memo is available on the FNS Web site at
http://www.fns.usda.gov/sites/default/files/070308_0.pdf.

When did the Department publish the proposed rule and how did commenters respond?

On May 4, 2011, the Department published a proposed rule (76 FR 25414) that would codify certain provisions of the FCEA as well as two discretionary provisions into SNAP's certification, eligibility, and E&T rules. The 60-day comment period ended on July 5, 2011. A total of 118 commenters submitted comments. These commenters included the following: 59 advocacy groups, 18 food banks, 15 individuals, 13 non-profit organizations, seven associations and six State agencies. The Department greatly appreciates the comments received on the proposed rule as they have been essential in developing the final rule. The Department received generally favorable feedback from the public on the proposed rule. Where commenters expressed concerns or questions, the Department has considered these issues, and where appropriate, incorporated these comments into the regulatory text.

In this final rule, the Department discusses each statutory and discretionary provision in the proposed rule and the comments made, with some general exceptions. Although the Department considered all comments, the preamble discussion focuses primarily on the most frequent comments and/or those that influenced revisions to the proposed rule, and modifications made to the proposed rule in response to public input. Comments supporting proposed provisions are generally not discussed in detail. The Department also does not discuss comments that only address technical corrections or inadvertent omissions in detail; however, the appropriate corrections are made. For provisions on which no comments were received, the Department is adopting those provisions as proposed. Other comments added value and clarity to the regulations and we incorporate those suggested revisions into the relevant regulatory provisions.

The Department also received comments on several provisions that were outside the scope of the proposed rulemaking. By outside the scope, the Department means that commenters provided substantive feedback on provisions that were not proposed for revisions as part of this rulemaking. Most of the comments that are outside the scope of the proposed rulemaking will generally be identified but not fully discussed in this final rule. Nevertheless, the Department appreciates the feedback on those issues and will consider incorporating some of those perspectives and suggestions in future guidance, rulemaking and/or policy discussions.

To view all public comments on the proposed rule go to
www.regulations.gov
and search for public submissions under docket number FNS-2011-0008.

Discussion of Specific Provisions and Comments

1. Program name change and Other Conforming Nomenclature Changes, Part 273

What changes are made to the program's name by this final rule?

This rule incorporates the nomenclature revisions proposed in the May 4, 2011 proposed rule. These changes are based on Section 4001 of the FCEA, which changed the name of the program as well as the name of the statute that governs the program. The Department is updating nomenclature in sections where substantial changes are being made or the necessary changes have already been identified. This is a long-term and incremental process. The nomenclature changes made in this final rule throughout part 273 include the following:

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.

food stamps
SNAP benefits.

In addition, this rule incorporates a change at 7 CFR 273.25 to update references to SFSP (Simplified Food Stamp Program) to S-SNAP wherever it occurs and FSP to SNAP.

Do State agencies have to use the new program name, SNAP?

No. Although the official name of the program changed on October 1, 2008, State agencies may continue to use State-specific names for SNAP. One commenter (State agency) asked whether States may exhaust existing inventory of materials prior to transitioning to a new program name. It has been a longstanding policy of the Department to allow States to use State-specific names. Therefore, it is also a State agency's discretion to deplete materials using the old name prior to changing to a new program name, whether it is SNAP or some other State-specific name. As mentioned in the preamble to the May 4, 2011 proposed rule, FNS continues to request that State agencies discontinue the use of the name, “Food Stamp Program”. In addition, FNS recommends that States that have yet to move to a name other than “Food Stamp Program” should consider adopting the official name, Supplemental Nutrition Assistance Program, or SNAP. Several commenters opposed the use of any other name than SNAP, and another commenter stressed the importance of having a national name for a national program. While we understand the reasoning behind this comment, because the Department has permitted States to use State-specific names for many years, it would be inappropriate and costly to require States to transition to the official Federal program name at this time. However, in recognition of commenters' support of the use of the updated program name exclusively, and in order to support consistency across the program, the Department is updating the final rule to include most of the above-mentioned nomenclature changes throughout Parts 271 through 285, not just in Part 273 as in the proposed rule. These sections include all Department SNAP and Food Distribution program regulations.

The proposed rule changed “food stamps” and “food coupons” to “benefits.” On further review after publication of the proposed rule, the Department determined that the reference to “benefits” is not specific enough in many instances throughout Parts 271 through 285. In this final rule, the Department will change references to “food stamps” to “SNAP benefits” through Parts 271 through 285 and “food coupons” to “SNAP benefits” through Part 273.

2. What changes were proposed to provisions on drug addiction and alcoholic (DAA) treatment centers and in group living arrangements (GLAs) in the proposed rule?

The Department proposed revising § 273.11(e) and § 273.11(f) to remove references to food coupons and to update the procedures for providing benefits via EBT cards to residents of DAA centers, and residents of GLAs. The purpose of this proposed provision was to update nomenclature to reflect the electronic issuance of benefits through EBT. Since these procedures are already in use by these types of centers, only the regulatory description of the procedures was proposed to be updated. The proposed regulation would have required that the center advise the State agency of the center's inability to refund the departing resident's benefits, but did not provide a time frame for this requirement.

What comments were received on the proposed revisions?

The Department received 11 comments that addressed client rights as related to residents of these DAA centers and GLAs. In particular, commenters believed that both DAA treatment centers and GLAs should be required to return a pro-rata share of benefits to residents who leave in the middle of the month, return EBT cards to departing residents, and report when residents leave the center. Commenters also said that these centers should not be allowed to act as an authorized representative for the SNAP recipient. Prior to EBT, such centers were required to redeem residents' paper coupons through authorized food stores. Under EBT, both DAA treatment centers and GLAs centers are allowed to be authorized as retailers in order to redeem benefits directly through a financial institution. Both DAA treatment centers and GLAs then use the cash to purchase food for their residents.

One commenter suggested that the Department strengthen the procedures used when residents leave these centers and enhance protections for these vulnerable SNAP participants. The comment included the following specific recommendations: (1) Require both DAA centers and GLAs to submit a completed change report form to the State when the residents depart; (2) require centers to provide EBT cards to departing residents; (3) and require that the EBT cards returned to the departing residents include pro-rated benefits. The commenter pointed out that the current and proposed regulations raise concerns because residents of both DAA treatment centers and GLAs may not be receiving the full amount of benefits they are entitled to when they leave the center. The commenter pointed out that prorating by day is a basic rule in SNAP and recommended pro-rating by day for substance use disorder treatment centers whose residents have departed. FNS believes that these concerns and recommendations are important to ensure that residents of DAA treatment centers and GLAs do not lose SNAP benefits when they leave.

What is required by current regulations regarding GLAs and DAA treatment centers when a resident receiving SNAP befits leaves the center?

Current regulations require the State to ensure that its procedures prohibit DAA treatment centers from obtaining more than one-half of the household's (typically a single individual) allotment prior to the 16th of the month unless the center permits the return of the benefits to the household's EBT account through a refund, transfer, or other means. The EBT procedures for residents in GLAs vary depending on whether all the residents are certified together as one household or are certified individually.

The current regulations require that the DAA treatment center must provide the household with its EBT card if the center has possession of card when a resident leaves. In the case where the household has already left and the treatment center is unable to return the benefits, the center must promptly inform the State agency and the State agency must provide the household with the EBT card.

The current regulations provide that the day of the month that the resident leaves the treatment center determines how the resident will receive their unspent benefits once they leave the center. Generally, if the household leaves prior to the 16th of the month, the State must ensure that its

procedures prohibit the DAA treatment center from obtaining more than one-half of the household's allotment and return of one-half of the allotment to the household's EBT account through a refund, transfer, or other means if the household leaves prior to the 16th of the month. If the household leaves on or after the 16th day of the month, the State agency, at its option, may require the DAA treatment center to give the household a portion of its allotment, but this is not required. If no benefits have been spent on behalf of the individual household, the center must return the full value, including any benefits already debited from the household's current monthly allotment but not yet spent. In situations where benefits have already been debited from the EBT account and any portion spent on behalf of household, the DAA treatment center has several options to ensure clients receive the balance of their benefits for that month.

Are the rights of clients residing in DAA treatment centers and in GLAs also changed by the final rule?

Yes. Even though the Department did not propose any changes to the rights of clients at these centers, the comments received on this topic convinced the Department of the need for changes to these provisions to better protect these vulnerable participants. Consequently, the Department has decided to issue several changes to provisions in § 273.11(e) and § 273.11(f) as an interim final rule to ensure that this vulnerable population receives the benefits they are entitled to as soon as possible. The Department has determined that these changes to the current rules are necessary to ensure that this vulnerable population begins receiving all the benefits to which they are entitled as soon as possible. Therefore, the Department has determined pursuant to 5 U.S.C. 553(b)(B) that there is good cause to forego the notice of proposed rulemaking procedure since, in this instance, it is contrary to the public interest. The Department will accept and consider comments on these provisions prior to issuing a final rule. The Department will accept and consider comments on these provisions prior to issuing a final rule.

Most significantly, the rule requires that both DAA treatment centers and GLAs (referred to below as “centers”) must now return a prorated amount of the household's monthly allotment back to the EBT account based on the number of days in the month that the household resided at the center regardless of whether the household leaves before, on, or after the 16th day. No matter the method used by the center to redeem a household's benefits, the household, not the center, will now have sole access to the prorated benefits in the EBT account if the household leaves the center. States' automated systems and EBT make the precise, day-by-day, prorating of benefits easy.

In addition, the interim final rule requires that centers notify the State agency of the household's change in address, and new address if available, and that the center is no longer the household's authorized representative. The center must provide the household with a change report form as soon as it has knowledge the household plans to leave the facility and advise the household to report to the State agency any changes that the household is required to report within 10 days of the change. 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.

If the household has already left the center, and as a result, the center is unable to refund the benefits to the household, the center is required to notify the State agency within five days of the of the household's departure that the center was unsuccessful in its effort to refund the prorated share. Once notified, the State agency must effect the refund from the center's bank account to the household's EBT account within a reasonable period of time. These procedures are applicable at any time during the month. Five days is a reasonable and necessary amount of time given that the household will have no access to these funds during the time and may be unable to purchase food.

The center is also required to provide the household with its EBT card within 5 days of the household's departure and to return any EBT card not provided to departing residents to the State agency within 5 days.

If the center completed any part of its monthly shopping by the time a household departs, the food purchased on behalf of the departed resident will remain in the center and will be used to feed other residents.

The Department will also consider changing the terminology used in SNAP rules from DAA treatment centers to the more medically correct “Substance Use Disorder” treatment centers. Any such action would be made in future rulemaking, and not for purposes of this interim final rule, to ensure the terminology is changed throughout the SNAP regulations.

Finally, the Department revises outdated references to § 273.1(e)(2) in this final rule. Section 273.1(e)(2) previously discussed the allowability of certain residents of public institutions to apply for SNAP benefits jointly with their SSI application. This language is now contained at 273.11(i). The Department replaces the references to § 273.1(e)(2) with § 273.11(i) in the two sections of the regulations where the old reference is contained, at §§ 273.2 and 273.10.

3. Military Combat-Related Pay Exclusion § 273.9(c)(20)

What changes did the FCEA make regarding the exclusion of military combat-related pay from income in SNAP eligibility determinations?

Section 4101 of FCEA added Section 5(d)(19) of the Act (7 U.S.C. 2014(d)(19)) to exclude special pay to United States Armed Forces members that is received in addition to basic pay as a result of a 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 United States Code and any other payment that is authorized by the Secretary as appropriate to be excluded under Section 5(d)(19) of the Act. 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 immediately prior to the service or deployment in the combat zone.

How did FNS propose to implement this exclusion in the SNAP regulations?

FNS proposed to add a new paragraph (20) to § 273.9(c) to exclude special combat-related pay received by a household from a person who is serving in the U.S. Armed Forces and is deployed to or serving in a Federally-designated combat zone. This special pay must be received in addition to basic pay and must not be received immediately prior to the service or deployment in the combat zone.

What types of pay must be excluded from the eligibility determination under this requirement?

A total of 59 commenters provided feedback on this provision. Forty-nine of those commenters requested guidance to assist State and local agencies identify what constitutes the special pay that is to be excluded from household income. Eleven commenters further requested that the Department explicitly identify what pay is excluded from the service member's leave and earnings statements (LES), for example, hostile fire pay and hazardous duty incentive pay. They requested that the Department expand specific guidance

issued in 2005 on the exclusion of military combat pay and provide a link to the Department of Defense (DoD) Defense Finance and Accounting Service (DFAS) Web site at
http://www.dfas.mil/dfas/militarymembers.html.
That being said, nine of those 11 commenters also acknowledged that listing this link in the regulation could require more frequent regulation updates, and that guidance may be more helpful. One commenter requested that the Department periodically update guidance to reflect changes in designated combat zones. Eleven commenters recommended that the Department clarify that only money made available to the household should be counted as income, and one commenter recommended specific procedures for calculating the amount of money that is available to household members when the service member keeps some of the special pay.

In considering these comments, FNS consulted with staff at DoD's DFAS. DFAS explained that there are complexities with combat pay; for example, combat zones change and some people may receive special pay when they are not deployed to a combat zone. DFAS recommended issuing guidance, which the Department intends to do shortly after publication of this rule. 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. DFAS recommended that eligibility workers review a service member's LES to determine what additional pay categories he or she received as a result of the deployment to the combat zone. In most cases, the amount to be excluded should be identifiable by comparing the LES reflecting pay immediately prior to deployment to the LES after deployment. When questions arise as to specific issues or payment codes, DFAS recommended that State agency staff contact the service members' supporting finance office.

The Department is not the Federal agency charged with determining combat zone designations. DoD, and in particular DFAS, has the expertise on specific types of pay a service member receives during a deployment to a combat zone and an understanding of the various issues that can arise in combat-related pay issues. The language in the proposed rule reflects the broader language of Section 5(d)(19) of the Act in that the pay is limited to those special pays listed at Chapter 5 of Title 37 of the United States Code. In addition, the pay must be received in addition to basic pay, received as a result of deployment, and not received before the deployment or service in a combat zone. The Department also wishes to reiterate that only income made available to the household is considered for the purposes of determining a household's eligibility and benefit level. The Department believes that these criteria are sufficiently clear for State agencies to make a determination on the appropriate income exclusion. For these reasons, the Department adopts the proposed provision at § 273.9(c)(20) without change as final and is committed to providing additional guidance shortly after publication of this rulemaking.

4. Standard Deduction Increase § 273.9(d)(1)(iii)

How did the law change the SNAP 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 from $134 to $144, 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 mandated that the minimum standard deduction must be indexed to inflation. FNS calculates this amount and releases it annually to State agencies.

How did the Department propose to incorporate this change in the regulations?

The Department proposed amending the regulations at § 273.9(d)(1)(iii) to incorporate the FCEA changes to the minimum standard deduction. In addition, the Department proposed a technical revision to correct the citation at § 273.12(e)(1)(B) from § 273.9(d)(7) to § 273.9(d)(1).

Will the Department adopt the provision as proposed?

Yes. Sixty-two commenters indicated their general approval of the proposals regarding the standard deduction. No commenters shared concerns with the proposal.

Does the Department intend to provide any additional guidance on the standard deduction provision?

Not at this time. While only eight commenters requested guidance on the standard deduction, 59 commenters noted a problem with timely updating of standard deduction increases for households participating under demonstration projects. These commenters requested that the Department ensure that States with combined application projects (CAPs) and other demonstration projects make annual updates to the standard deduction on a timely basis. States are already required to comply with the terms and conditions of demonstration projects such as CAPs and make annual updates according to existing SNAP policy.

5. Eliminating the Cap on Dependent Care Expenses § 273.9(d)(4)

What changes did the law make to the dependent care deduction?

Section 4103 of the FCEA amended section 5(e)(3) of the Act (7 U.S.C. 2014(e)(3)) to eliminate the caps on the deduction for dependent care expenses, thereby allowing eligible households to deduct the full amount of their dependent care costs. The change was effective October 1, 2008. The law required State agencies 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. Prior to this change in the law, the caps on the dependent care deduction had not been adjusted for many years, and the caps no longer reflected the actual dependent care costs that low-income households pay. Eliminating the caps enables households to deduct the full costs of dependent care that are allowable and not already reimbursed by another program, and results in a benefit increase for some families with high dependent care costs.

How did the Department propose to revise the deduction for dependent care costs?

The Department proposed to amend §§ 273.9(d)(4) and 273.10(e)(1)(i)(E) to eliminate the caps on dependent care. In addition, the Department proposed to clarify that expenses for 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 as part of the actual costs of care.

The Department also proposed to incorporate into § 273.9(d)(4) longstanding guidance that limits dependent care to include care for children through the age of 15 as well

as incapacitated persons of any age that are in need of dependent care. The Department invited comments on whether the definition of “elderly or disabled” in 7 CFR 271.2 should be used to define an incapacitated person. Finally, the Department proposed to restore language that permits households to deduct dependent care costs if a household member needs care for a dependent in order to seek employment. A 1989 technical amendment to the regulations had removed the previously codified provision.

What dependent care issues did commenters focus on?

Overall, commenters supported the Department's proposal to remove the dependent care caps from the SNAP regulations. Commenters from the advocacy community strongly supported the proposals to include transportation costs and activity fees as part of dependent care expenses, but these commenters opposed the proposed limits based on age or incapacitation.

What concerns did commenters express about transportation-related dependent care costs?

Most of the 81 commenters that addressed dependent care changes enthusiastically supported the proposal to allow households to deduct transportation costs to and from dependent care facilities. Only one commenter opposed the proposal. However, some commenters, including several State agencies, expressed concern about the error-prone nature of determining transportation costs specifically related to dependent care and provided several suggestions to help reduce potential errors. Their suggestions included making transportation costs optional, permitting the use of standard transportation allowances (either developed by the Department or by individual States), and allowing States additional time to implement this provision since it will be new policy for some States. Concerning the potential that transportation costs associated with dependent care may be more error-prone, the Department notes that a number of State agencies have been allowing households to deduct dependent care related transportation costs for years and this has not been identified as a major source of quality control errors.

What is Federal policy on verifying child care costs?

Current regulations do not require verification of dependent care costs unless the amount being claimed is considered questionable, per § 273.2(f)(2). However, SNAP regulations at § 273.2(f)(3) also permit State agencies to verify on a project level basis or a statewide basis certain eligibility factors that are not otherwise required to be verified under Federal regulations.

Should State agencies require verification of transportation-related dependent care costs?

A number of commenters, representing both State agencies and advocates, argued that States should not have to verify transportation costs unless questionable. In particular, commenters noted the difficulty of verifying transportation costs related to dependent care. Many commenters from the advocacy community urged the Department to restrict States' use of the optional verification provision at § 273.2(f)(3) for transportation-related dependent care costs. While the Department understands the concern of these commenters, the Department declines the request to impose such a restriction. That is, State agencies have the option to verify transportation costs if questionable. This option allows States to be responsive to current information, such as QC data, which may indicate a need for verification of certain information, whether it be statewide or just in certain project areas. The provisions of § 273.2(f)(2) require that questionable items be verified on a case-by-case basis, but States must establish guidelines for determining what is questionable.

What are activity fees?

As discussed in the preamble to the proposed rule, an activity fee is an expense associated with a structured care program. The activity should both be necessary for the dependent to experience the typical daily activities offered in the care and enable a household member to be employed, seek employment, or pursue training or education to prepare for employment. We define activity fees in the final regulatory text as an activity or other fee associated with the care provided to the dependent that are necessary for the household to participate in the care. An activity fee does not have to be mandatory to be deductible under this provision, but it does need to be specific and identifiable as with all deductible dependent care costs. Examples of activity fees that may be deductible as dependent care costs include the cost of an art class for an after-school program or an adult day care program, additional equipment fees charged for attending a sports camp, or the cost of field trips sponsored by summer camps. Activity fees that are necessary for the dependent to experience the typical daily activities offered in care should be allowed.

What feedback did commenters provide on activity fees?

In the proposed rule, the Department requested that commenters provide feedback on the proposal to allow households to deduct separately identifiable activity fees that are necessary for the household to participate in or maintain care. The Department stressed its interest in receiving commenter input on activity fees since State agencies will be responsible for determining whether specific costs qualify as allowable activity fees. In particular, we asked commenters to address whether activity fees are identifiable additional charges paid by households that can be verified, if more detailed guidance was needed to determine allowable costs, and what specific conditions commenters would wish to see in a final rule.

Commenters generally approved of the proposal to allow activity fees. Some commenters addressed the preamble request for feedback on whether activity fees are easily identified and verified and whether more information or guidance is needed on activity fees. Generally, commenters requested clarification on activity fees without giving particular feedback. Eight commenters, mostly advocates, responded that FNS needs to clarify what is meant by activity fees; one State agency disagreed. Other commenters requested guidance on specific issues, such as whether activity fees for a home day care are allowable deductions and when an activity fee is required. One commenter writing on behalf of a group of eligibility workers indicated that identifying and verifying activity fees is dependent on State or local dependent care licensing requirements, and that unregulated or informal dependent care facilities are unlikely to have documented costs such as activity fees. The Department did not make any substantive changes due to the overall general nature of the comments. One technical correction was made. In the final regulatory text, the Department includes an activity or other fee associated with dependent care as an allowable dependent care cost.

What particular other costs may be deducted in caring for a dependent under the final rule?

Commenters, mostly from the advocacy community, requested clarification on other allowable costs related to dependent care, such as subsidy copays (70), payments made to individuals, related or unrelated, residing with the household but not receiving SNAP benefits (62), payments for the care of non-household members such as a relative that the household is responsible for (3), and payments made for reasonable fees including late fees (14). One commenter suggested there be a standard deduction for the costs.

Such dependent care costs are allowable if they are necessary for a household member to search for employment, or to accept or continue employment, training, or education in preparation for a job (see Section 5(e)(3) of the Act). For example, although the Department will not address other specific additional allowable costs in the regulatory language beyond transportation and activity fees, subsidy co-pays and late fees or application fees would meet the statutory definition at section 5(e)(3) of the Act. However, whether other dependent care costs mentioned by commenters involving household members or non-household members are allowed requires a closer examination of the specific situations to determine whether the costs would meet the statutory definition. If State agencies have questions about specific or complex situations, we recommend that they work with their FNS Regional Office to determine whether these costs qualify for the dependent care deduction.

Commenters also suggested that in order to address a persistent source of confusion, the final rule should specify that care is deductible even if provided by a relative as long as that person is not receiving SNAP benefits as part of the same household as the dependent receiving care. The Department agrees with this suggestion and has included it in the final rule.

Are dependent care costs incurred due to job search deductible?

Sixty-nine commenters requested that the final rule explicitly allow a deduction for dependent care costs incurred by households with individuals looking for work. The preamble to the proposed rule stated that the Department intended to reinsert language about the deductibility of dependent care costs incurred by job seekers into § 273.9(d)(4), which had been inadvertently dropped in a rulemaking in 1989. However, despite this stated intention, the proposed regulatory language at § 273.9(d)(4) did not actually include this language. We appreciate this observation from commenters and, to address this oversight, the Department is revising the proposed provision at § 273.9(d)(4) to allow household members who are seeking work to deduct dependent care costs.

How did commenters react to the age and incapacitation criteria for allowable dependent care costs?

Most commenters who addressed the provision (66) opposed both criteria and did not want to use the regulatory definition of “elderly or disabled member” to define “incapacitation”; one State agency disagreed. In particular, commenters from the advocacy community opposed any restrictions on the dependent care deduction as long as the household is able to provide documentation if questioned by the State agency. We received conflicting comments as to the age restriction, with suggestions that the age be limited to children until their sixteenth birthday and that the deduction be permitted to children through their eighteenth birthday.

One commenter noted that households with older teens (16 years of age and older) may have legitimate dependent care needs not related to incapacitation, such as enrollment in outside-school care for safety, truancy, foster care or court-ordered supervision requirements. The commenter pointed out that 16-year-olds are required to register for work unless in school half-time or otherwise exempt from registering, but being required to register for work does not necessarily mean a 16 or 17 year old does not need supervision. The comment went on to argue that adolescents may need to be enrolled in after-school or summer programs due to an incapacity or disability. Parents may not have a government-funded option, or may have to private pay a fee for older children to participate in adult supervised activities.

Commenters also questioned what the Department meant by “incapacitation”, which was not defined in the proposed rule.

What does the final rule require relative to limiting dependent care costs based on age or incapacitation?

While the limit on the use of the dependent care deduction with regard to age reflects longstanding guidance from 1987, the Department agrees that there are circumstances where a child 16 or older may still be in need of supervision and has revised this restriction in the final rule to include all children under the age of 18.

The other proposed criterion, incapacitation, accounts for persons who have some physical or mental limitation that requires them to receive dependent care. This also reflects longstanding guidance, although it does not appear to have been widely disseminated. The regulatory definition of disabled is stringent and the proposed definition would not necessarily capture the breadth of situations. The Department wishes to clarify that, for the purpose of this provision only, incapacitation refers to any permanent or temporary condition that prevents an individual from participating fully in normal activities, including but not limited to work or school, without supervision and that requires the care of another person to ensure the health and safety of the individual, or a condition or situation that makes a lack of supervision risky to the health and safety of that individual. By extending dependent care to those who are incapacitated, the dependent care needs of any SNAP household member expected to comply with work requirements, or who is working, in training or education programs, or seeking work, would be allowable as a deduction. The Department believes that this clarification provides both a reasonable consideration of the dependent care expenses of older youth and adults and a measure of protection to the program from abuse.

Allowable medical expenses may be deducted under the excess medical deduction or the dependent care deduction but not both provisions. Prior to the removal of the dependent care caps by Section 4103 of the FCEA, adult dependent care needs were still an allowable deduction under 273.9(d) as medical expenses. Individuals who meet the specific legal definition of “elderly or disabled persons” at § 271.2 have been able to deduct dependent care monthly costs over the $35 threshold of the excess medical deduction as described in § 273.9(d)(3)(x). This provision allows for the costs of “maintaining an attendant, homemaker, home health aide, or child care services, housekeeper, necessary due to age, infirmity, or illness.” Allowing a household with an elderly or adult member with a disability to deduct the entire monthly dependent care costs under the dependent care deduction provision rather than the excess medical deduction provides these households with an additional $35 per month in

dependent care deductions. The Department is revising the language at §§ 273.9(d)(3)(x) and 273.9(d)(4) to ensure that dependent care costs are not double counted under both the dependent care deduction provision and the excess medical deduction provision.

Accordingly, for the reasons noted above, the Department is revising the provision from the proposed language at § 273.9(d)(4) to instead specify that dependent care expenses incurred during a job search are deductible, provided the costs are not already paid by another source on behalf of the household, and to clarify that the costs of care provided by a relative may be deducted so long as the relative providing care is not part of the same household as the child or dependent adult receiving care. The Department is also revising proposed § 273.9(d)(4) and current § 273.9(d)(3)(x) to state that the same dependent care costs for a qualifying household member who is elderly or has a disability may be deducted under § 273.9(d)(4) or § 273.9(d)(3)(x) but not both.

6. Asset Indexation § 273.8(b)

How did the law change SNAP asset limits?

Section 4104(a) of the FCEA amended Section 5(g) of the Act (7 U.S.C. 2014(g)) to mandate that current asset limits be indexed to inflation, rounding down to the nearest $250, beginning October 1, 2008.

How did the Department propose to implement this change in SNAP regulations?

The Department proposed to amend § 273.8(b) to specify that the asset limits are indexed to inflation as of October 1, 2008, and adjusted on October 1 of each following year. As mandated by the Act, 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. Each adjustment shall be based on the unrounded amount for the prior 12-month period.

What comments did the Department receive on this proposal?

Five commenters addressed this provision. Three commenters approved of the methodology in the proposed rule. One State agency argued that the provision would be difficult to administer as it only affects applicants, and suggested that the Department issue guidance to explain how to handle asset increases for new and ongoing cases. One member of the public stated that the asset limit for a person with a disability should be raised to $5,700.

As stated in the proposed rule, the provision will not adversely affect those currently participating. Participating households have already met a lower resource limit. For example, when the resource limit for the elderly or those with a disability increased to $3,250, effective October 2012, no action was required for ongoing cases of elderly participants because they already met the existing $3,000 limit. Changes to households' resources will be captured on recertification consistent with existing program requirements. The Department has considered the comments and has determined that additional guidance is not necessary to implement this provision successfully.

For the reasons noted above, FNS will adopt in this final rule the provision at § 273.8(b) as proposed, with one technical correction revising the reference to the inflation adjustment procedure at § 273.8(b)(1) for both households with a member who is elderly or has a disability and all other households.

7. Exclusion of Retirement Accounts From Resources § 273.8(e)(2)

How did the law change the handling of retirement accounts as a SNAP resource?

Section 4104(b) amended Section 5(g)(7) of the Act (7 U.S.C. 2014(g)(7)) to exclude from resources any funds in a plan, contract, or account, described in sections 401(a), 403(a), 403(b), 408, 408A, 457(b), and 501(c)(18) of the Internal Revenue Code (IRC) of 1986 and the value of funds in a Federal Thrift Savings Plan account as provided for in 5 U.S.C. 8439.

How did the Department propose to codify this provision in the SNAP regulations?

The Department proposed to amend SNAP regulations at § 273.8(e)(2) to exclude funds from countable resources if they are in accounts that fall under any of the sections of the IRC as noted above.

How did commenters react to the proposed provision?

The Department received 85 comments generally approving the proposed provision; 81 commenters requested that the Department provide detailed guidance on identifying tax-exempted accounts. Nine of these commenters recommended that we should work with the IRS to develop guidelines for identifying the tax-exempted accounts that are excludable. One commenter believes the Department's generic use of the term plans such as “408A plans” implies that other 408A accounts or contracts are not excluded. The commenter recommended the Department amend the regulations to consistently refer to all retirement accounts excluded under this provision. Two commenters recommended that the language be more open-ended, allowing for new programs to be added as Congress approves without the need to do a new rule. The Department believes that the proposed language regarding 408A accounts is clear and will adopt the provision as proposed.

Eleven commenters recommended increasing the $1,500 limit on the value of funeral agreements specified in § 273.8(e)(2), arguing that the $1,500 limit is outdated and unrealistic. Commenters also suggested that the Department adjust the limit for inflation by using the Consumer Price Index for all Urban Consumers. The Department agrees with the commenters that the value of funeral agreements is out of date. However, because the original intent of this limit was to conform SNAP to Aid to Families with Dependent Children policy, which no longer exists, continuing to have a limit is unnecessary. The final rule excludes the value of funeral arrangements from SNAP resources altogether.

While most commenters supported the retirement account provisions of the proposed rule, several urged the Department to issue guidance on how to identify the types of retirement accounts on the source documents that are excludable. One commenter acknowledged the chart the Department included in August 29, 2008 guidance as an important first step in helping identify the type of retirement accounts excluded under this provision (see
http://www.fns.usda.gov/snap/questions-and-answers-certification-issues-2008-farm-bill-2
). This commenter concluded that households would need to provide verification that a particular retirement account is excluded. The Department notes that Federal regulations do not require the verification of resources. Information on resources must be verified only if the State agency has opted to require verification (see §§ 273.2(f)(2) and 273.2(f)(3)).

The Department has considered these comments and believes the policy guidance on exclusion of retirement accounts from resources provides sufficient guidance in this area and

detailed and accurate information on which plans are excluded. In view of this, any additional guidance that the Department may issue in the future will address new questions or issues as they arise.

In this final rule the Department also made minor technical changes to streamline the language from the proposed § 273.8(e)(2)(v) on tax-preferred accounts. Finally, legislation subsequent to this proposed rule added funds in Achieving a Better Life Experience (ABLE) program accounts as tax-favored savings accounts for people with disabilities under IRC Section 529A through the Tax Increase Prevention Act of 2014, Public Law 113-295. The Department is adding qualified ABLE programs as excludable resources at § 273.8(e)(2)(ii), consistent with Department policy issued on April 4, 2016.

8. Exclusion of Education Accounts From Resources § 273.8(e)(20)

How did the law change the handling of education accounts as a SNAP resource?

Section 4104(c) of the FCEA, which amended Section 5(g)(8) of the Act (7 U.S.C. 2014(g)(8)), excluded education savings accounts described in Sections 529 and 520 of the IRC from resources in SNAP eligibility determinations. The FCEA provided the Secretary with discretion to exclude other education savings accounts.

How did the Department propose to codify this provision in the SNAP regulations?

The Department proposed to add a new paragraph § 273.8(e)(20) to exclude all funds in education savings accounts from resources if the funds are 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 530 of the IRC describes Coverdell Education Savings Accounts, which are trusts created to pay the education expenses of the designated beneficiary.) The Department would also maintain discretion to exclude other tax-preferred education savings accounts in the future.

How did commenters react to the proposed provision?

Virtually the same number of commenters that provided comments on the proposed exclusion of qualifying retirement accounts also provided comments on the exclusion of qualifying education accounts, the only difference being that one hunger advocate commented only on the retirement account provision and one nonprofit commented only on the education account provision. As with the retirement account provision, all commenters generally approved of the proposal.

Several commenters urged the Department to exercise its discretion by excluding any future education accounts if the fund is described in section 529 or section 530 of the IRC, as provided in the FCEA. The Department cannot anticipate changes in the tax law or predict how future education savings accounts will be structured. Therefore, the Department will not amend the regulatory language from the proposed rule to accommodate this comment.

Commenters urged the Department to issue guidance on how to identify the type of education accounts excluded under this provision. The Department appreciates the commenters' recommendation and may develop guidance outside this rulemaking to assist State agencies identify qualified tuition programs described in sections 529 and 530 of the IRC.

One commenter suggested the location of the exclusion of retirement accounts at 7 CFR 273.8(e)(2) while educational accounts are excluded at 7 CFR 273.8(e)(20) may cause some readers to miss the educational accounts exclusion. The Department considered the comment but decided the location of the provisions was not sufficiently critical to relocate the educational accounts exclusion.

In this final rule the Department also made minor technical changes to streamline the language from the proposed § 273.8(e)(20)(iii) on education savings accounts.

9. Expansion and clarification of simplified reporting provisions, § 273.12(a)

How did the law expand simplified reporting?

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, including homeless, migrant and seasonal farm workers, and adults who are elderly or have a disability in households with no earnings. The previous statutory restriction discouraged State agencies from including these households in their simplified reporting systems. As amended by the FCEA, Section 6(c)(1)(A) of the Act now 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 have disabilities with no earned income to once a year. To be consistent with current law, regulations published on January 29, 2010 (75 FR 4912), extended simplified reporting to all households that are certified for at least 4 months.

Did commenters address these proposed changes to simplified reporting?

Yes, the Department received several comments on the proposed language at § 273.12(d)(6)(iii)(B) pertaining to the due dates for periodic reports. One commenter suggested using language similar to that provided for filing monthly reports at § 273.21(h)(1)(i). Another commenter stated that requiring the periodic report between 4 months and 6 months after certification was too rigid a time period and risked the possibility of case closure due to procedural reasons. This commenter also noted that the proposed language on due dates for receipt of periodic reports is too vague and needs to specify the period of time for which changes must be reported.

Although these comments are directed to a paragraph about simplified reporting that the Department had proposed to clarify, the commenters focused on language that had not actually been updated but had been included only as part of a proposed reorganization of § 273.12. For this reason, the Department considers many of these comments to be outside the scope of the proposed rule and will not amend the proposed text to incorporate these comments. However, the Department appreciates the feedback and encourages commenters to resubmit these comments in any future rulemaking that addresses substantive changes to client reporting systems. As discussed below, the Department decided to make certain changes in this rule that were recommended by a commenter that will clarify the regulations.

How did the Department propose to reorganize § 273.12?

The Department proposed to reorganize § 273.12 to improve the readability of the section and to clarify aspects of current reporting requirements applicable to the reporting systems covered in this section of the SNAP regulations. Currently, there are four SNAP client reporting systems authorized in SNAP regulations. Three of these client reporting systems—change reporting (also known as incident reporting), quarterly reporting,

and simplified reporting—are covered in § 273.12. Monthly reporting is covered in § 273.21.

The proposed change would have reorganized § 273.12 so that all provisions applicable to each of the three reporting systems contained in this section of the regulations (change, quarterly, and simplified) would be located together for ease of reference.

What comments did the Department receive on the proposed reorganization of § 273.12?

The Department received comments from 66 individuals and groups about the proposed changes to this section of SNAP regulations. Commenters opposed specific provisions within § 273.12, most of which have been part of codified regulations for years and were not proposed to be revised. Three commenters addressed the proposed reorganization, and they were generally critical of the proposal. Several commenters pointed out that our proposed reorganization was duplicative because the same provisions that applied to all three reporting systems were repeated three times in the reorganized text. They recommended an alternate approach to reorganizing reporting system provisions and also noted numerous technical errors in the proposed reorganized text. They recommended that the Department combine all periodic reporting systems—quarterly, simplified and monthly reporting systems—into a single subsection and extend the client protections that they believe to be part of the monthly reporting system to quarterly and simplified reporting.

Does this final rule include a reorganization of § 273.12?

No. In view of the negative response from commenters, the Department has decided to exclude the proposed reorganization of client reporting systems in the final rule. The number and specificity of comments about codified regulations on client reporting systems indicates that this is an area of program operations that needs a more detailed approach to improve clarity over and above a reorganization of text. Indeed, the complexity of the issues as well as the continuing evolution of client reporting systems, particularly as State agencies modernize their eligibility and certification systems, indicate such a revision warrants a separate rulemaking. Thus, although we believe that regulations on client reporting systems would benefit from reorganization, we agree that more substantive changes should be considered beyond the proposed reorganization.

What changes to § 273.12 are made in the final rule?

The Department will adopt the proposed changes that clarify the timeframes for periodic reporting by certain households under simplified reporting in § 273.12(a)(5)(iii)(A) and § 273.12(a)(5)(iii)(B). The Department is also making edits to the requirement to report changes in vehicle assets at § 273.12(a)(1)(iv) and in liquid resources at § 273.12(a)(1)(v). These changes are made to clarify that households need not report changes in vehicles and liquid resources, if those resources are excluded from the SNAP eligibility determination per § 273.8. In addition, based on comments, the Department is clarifying the provision dealing with State action on “unclear” information at § 273.12(c)(3), and the requirement regarding the timeframe during which households must report changes in income at § 273.12(a)(2).

The comments regarding State action on unclear information obtained by a State focused on data matches, but also apply to any information that is not considered to be verified upon receipt. The commenter pointed out that the information obtained may be old, outdated, or otherwise inaccurate. The commenter suggested that States be prohibited from requiring households to provide verification as a result of a data match unless the information is current and suggests the household is ineligible.

The Department agrees that many data matches that deal with income are “old” because income data is typically reported by quarter and is not available until a month or two after the end of a quarter. Data from new hire, employer, and unearned income data bases are generally more current, but not all data matches will be made prior to the household's current participation. This is why both the current and proposed rules treat such information as unclear.

Some income matches may show minor discrepancies with the income reported by the household, may be based upon data that may be several months old, and may not have been required to be reported. When this occurs, State agencies sometimes follow up using a Request for Contact (RFC). Households that struggle to understand and respond timely to the State's inquiries can inadvertently lose eligibility, even if the unclear information was not accurate or would not have affected eligibility. If a household does not respond to a Request for Contact, they could ultimately be terminated, have to reapply and experience a loss of benefits in the process; even if the matching information was outdated or generally consistent with the information that the household had already reported to the State. This can clearly create an access issue for eligible households. It also contributes to “churning” where households go on and off the program, losing benefits in the process and adding to the States' administrative burdens.

Some data (usually from governmental sources) that provide current information directly from the specific source may be considered to be verified upon receipt and can be acted upon without requiring contact with the household. If a State receives current information that is verified upon receipt—for example, because it is from a highly reliable government source—the State must act on that change using the other information it has in the case file, such as removing income for an individual no longer in the household. If that action results in a reduction in benefits, the State must issue a notice of adverse action that explains why the change was made, so that if a household disagrees with the underlying data that resulted in the change, the household has the ability to provide evidence to the State.

In response to comments, under the final rule, States may not follow up on unclear information with an RFC unless the information the State receives: (1) Is less than 60 days old; and (2) reflects information that, if true, was required to be reported under the applicable reporting requirements in 7 CFR 273.12 for the reporting system to which the household has been assigned. For example, in the case of households assigned to simplified reporting, the unclear information would, if true, place the household's income above 130 percent of the federal poverty line. Or, in the case of households assigned to change reporting, the information, if true, would result in an income change that was above the $100 reporting threshold or reflect a change in household composition.

Under simplified reporting, households are not required to report changes in income outside of the periodic report or a recertification action unless the change would result in an income level above the household's gross income limit as specified at § 273.12(a)(5)(v). It is inconsistent to tell households they are not required to report changes in income below this limit and then, based upon a data match, require that they respond to information (and potentially lose benefits if they fail to respond) that does

not appear to exceed their income limit. Therefore, this rule prohibits States from following up on unclear information that does not meet the reporting criteria for simplified reporting described in 273.12(a)(5) until the next recertification action or periodic report.

Likewise, a similar policy will be applied to households assigned to change reporting. For these households, a State would only follow up on current, unclear information if the information would have been required to be reported if correct. It is also inconsistent to tell households they are not required to report changes in income below $100 and then, based upon a data match, require that they respond to a request for information (and potentially lose benefits if they fail to respond) that does not appear to exceed this threshold. Thus, unclear information that suggests income changed by less than the $100 income change reporting threshold would not be followed up on. Therefore for households subject to change reporting, this rule prohibits States from following up on unclear information that does not meet the criteria for what must be reported in 272.12(a)(1) until the next recertification action or periodic report.

For example, at application a household reports that it has earned income based upon working between 25 and 32 hours a week at $12 an hour. The State verifies the most recent 30 days of income and correctly projects about $1,400 a month in earned income over the certification period based upon working about 27 hours per week. Six months into the certification, an automated data match indicates that the income averaged $1,600 per month for a three-month period. Under the final rule, for a household subject to simplified reporting, a State may not pursue the matter until the household applies for recertification since the income does not exceed the gross income limit and was not required to be reported. For a household subject to change reporting, a State would pursue the matter with an RFC because this discrepancy exceeds the $100 reporting threshold.

Under any reporting system, unclear information that indicates that the information that the State used at the time of certification may have been incorrect is a different matter. States should consistently follow up on new information that indicates differences with the information used at the time of certification as this new information is not a “change” in circumstances subject to reporting and can represent integrity issues. For example, if a work number data match shows earnings in the month of certification that a household member failed to report during the certification process, the State should follow up with an RFC and potentially file a claim against the household for any resulting over-issuance if the household does not provide evidence that the data are incorrect. If the earnings occurred after certification (and was thus a change in circumstances) and did not appear to bring the households eligibility into question, in the case of a household assigned to simplified reporting, the State would follow up on the information at the next certification action or periodic report, but not before.

In the case of household composition changes, if the information is verified upon receipt, the State must take action, regardless of the household's reporting system. Furthermore, a State may not issue an RFC based on unclear information that is not current, or is about a change in household composition that a household would not have been required to report, if accurate.

There are two types of household composition changes that follow different procedures. Under the final rule, if a State receives match information pursuant to a match described in § 272.13 or § 272.14, the State will follow up with a notice of match results and use the procedures in § 273.12(c)(3)(iii). The Department makes conforming changes at § 272.13(b)(4) and § 272.14(c)(4) to reference the verification process in § 273.12(c)(3)(iii).

For households subject to change reporting, if the household fails to respond to the notice of match results or does respond but fails to provide sufficient information to clarify its circumstances, the State agency must issue a notice of adverse action as described in § 273.13 that terminates the case.

For any households subject to reporting requirements other than change reporting, if the household fails to respond to the notice of match results or does respond but refuses to provide sufficient information to clarify its circumstances, the State agency must act on that change using only the other information it has in the case file, such as removing an individual that is no longer in the household and removing his or her income. If benefits are decreased or the household is to be terminated from program participation, the State agency must issue a notice of adverse action as described in § 273.13.

The notices of match results must clearly explain what information is needed from the household and the consequences of failing to respond to the notice as explained above.

For information that does not meet the above criteria related to when a State must follow up on unclear information, the State agency shall not act or follow up on the unclear information until the household's next recertification action or when its next periodic report is due. However, a State may follow up with a household to provide information on a voluntary basis if the information would result in an increase in benefits, but the State may not take adverse action if the household does not respond. The final rule also clarifies that unclear information is information that is not verified or verified information where the effect on the household's certification is not apparent. These provisions are in this final rule at § 273.12(c)(3).

FNS will be updating Quality Control (QC) materials as necessary to ensure that if States follows the requirements laid out in the final rule and households reports any changes in accordance with their reporting system's requirements, there is no household or agency error.

Comments were also received regarding some important differences between the regulatory requirements governing the procedures for monthly reporting at § 273.21 and periodic reporting in § 273.12(a)(5). The comments pointed out that the monthly reporting provisions offered certain protections to households that failed to file required reports on time that were absent from the periodic reporting provisions. The Department examined these differences and included changes in this final rule that would better conform the provisions of the two reporting systems. The additions to the periodic reporting provisions include a requirement to provide household with a notice reminding them of the need to submit a periodic report and the option of reinstating households that provide reports before the end of the issuance month. The final rule also includes language that codifies current policy and practice regarding using a combined report form for SNAP and TANF or Medicaid and that non-applicant household or family members need not provide SSNs or information about citizenship or immigration status on periodic report forms.

In addition, based on a comment received, the Department has made a clarification by referencing the asset limits as indexed to inflation as described in § 273.8(b). Therefore, with this modification, we will adopt the proposed clarification on household requirements for reporting changes of

the value of liquid assets. This provision is found in this final rule at § 273.12(a)(1)(v). This final rule also adopts the Department's proposed language on reporting the acquisition of licensed vehicles at § 273.12(a)(1)(iv).

The Department also received a comment regarding the need to index the amounts of change to income that trigger a report for households assigned to change reporting and the need to make the amount for general assistance (GA) consistent with unearned income generally. The Department agrees with this comment and has increased the amount of change in GA benefits that will require a household to report (in cases that are not jointly processed.) from $50 to $100. The Department has also indexed the $100 amounts that trigger household's reporting requirements to the Consumer Price Index (CPI).

Beginning in FY 2018, and for every fiscal year thereafter, the dollar amounts will be adjusted and rounded to the nearest $25 to reflect changes in the CPI 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).

Finally, based upon a comment received, the Department has clarified the requirement regarding the timeframe in which State agencies shall require households to report changes in income. Current regulations say that the State agency has the flexibility to require the change in income to be reported as early as 10 days from the date that the household becomes aware of the change or as late as 10 days from the date that the household receives the first payment attributable to the change. This flexibility has created confusion when a household reports a change in income, but cannot verify the new amount. If the household waits to report until it has a paycheck in hand, the time spent waiting for the verification may be beyond the required timeframe. Therefore, to improve consistency with reportable changes in income, § 273.12(a)(2) has been modified to require reporting within 10 days of receipt of the first payment attributable to the change. Additionally, § 273.12(a)(2) of the final rule retains language that appeared in the proposed rule at 273.12(b)(6)(ii) that provides States with the option to require that households report changes within 10 days of the end of the month in which the change occurred.

10. Transitional Benefits Alternative (TBA) §§ 272.2, 273.26, 273.27, 273.29, 273.32

How did the FCEA change the TBA 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 cash assistance program (SFCA). Prior to this change in the law, States had the option to provide transitional SNAP benefits only to households that stopped receiving Federally-funded TANF assistance.

How did the Department propose to implement this provision?

The Department proposed to amend State plan requirements at § 272.2(d)(1)(xvi)(H) and Subpart H in part 273 of the SNAP regulations, to specify that a household's eligibility for TBA may be based on the termination of SFCA in addition to the termination of TANF. The Department proposed to specify that a household may qualify for an additional TBA period if the household participates in a SFCA program that continues after TANF has ended, and then the household subsequently stops participating in the SFCA. The Department also proposed that, in administering TBA based on the termination of SFCA, State agencies would follow the same procedures they currently use to administer TBA based on termination of TANF. In making this change, we proposed to add SFCA to the following provisions in Subpart H of part 273:

• § 273.26—introductory paragraph and paragraph (a);

• § 273.27(a) and (c);

• § 273.29(c) and (d); and

• § 273.32.

What types of cash assistance are covered under TBA?

Sixty-two commenters requested clarification on the eligibility of households receiving cash assistance, TANF or State Maintenance of Effort (MOE) funded assistance, or SFCA. Specifically, they requested clarification that the exit must be from cash assistance for both TANF and State-funded benefits programs. One commenter requested examples of what would be considered a SFCA program.

Section 11(s)(1)(A) of the Act authorizes States to provide TBA for a household that ceases to receive cash assistance under a State program funded under Part A of Title IV of the Social Security Act. TANF is authorized under part A of Title IV of the Social Security Act, and the cash assistance that eligible low-income households receive may be funded in part by the TANF Federal grant or by State MOE funds. The Department is clarifying the description of TANF at § 273.26(a)(1) as the program authorized under Part A of Title IV of the Social Security Act, and that Federal cash assistance may include both TANF and State MOE funds.

Based on the language in Section 11(s)(1)(B) of the Act, the Department is clarifying in § 273.26(a)(2) that SFCA programs include State-funded programs that provide cash assistance to families with children. These SFCA programs are separate and distinct from State-level programs funded by TANF. An example of an eligible SFCA program would be a State general assistance program that provides cash assistance to families with children. Programs that are not intended for families with children or do not provide a cash benefit are ineligible under this provision. TBA ensures that households with children that are leaving cash assistance for either TANF or State-funded benefits programs can continue to meet their nutritional needs as they transition from these cash assistance programs to the workforce.

What about programs funded by local governments?

Ten commenters requested clarification on whether SFCA programs that rely on local funds would qualify under this provision. Several commenters noted that some States require local governments to contribute funding to statewide SFCA programs. FNS guidance issued on August 29, 2008, (see
http://www.fns.usda.gov/questions-and-answers-certification-issues-2008-farm-bill-2
) stated that county-funded programs were not eligible SFCA programs for TBA. While we continue to hold to this guidance, we agree with commenters that SFCA programs may include local level funds as part of the funding stream. Thus, the Department will amend proposed § 273.26(a)(2) to clarify that eligible SFCA programs that are funded by both State and local funds provided that the programs are intended to be statewide.

What is the relationship between participation in TANF and SFCA and receipt of TBA?

Two commenters requested clarification on eligibility for TBA when participation in the SFCA program is concurrent, sequential or provided as an alternative to TANF. They also requested that the regulatory language clarify that State agencies may provide

TBA for households leaving TANF for SFCA and again when leaving SFCA. In the August 29, 2008, guidance previously identified, the Department indicated that a household may receive TBA when leaving TANF and again when leaving SFCA, resulting in an additional period of TBA eligibility for the household. If participation in a SFCA program is ending, whether concurrently with TANF or as an alternative to TANF, the household would be eligible for one period of TBA up to 5 months, as described in the State's plan of operation. The Department amended the proposed § 273.26(b)(3) to reflect that the SFCA program may be concurrent, sequential, or alternative to TANF.

What issues raised by commenters on TBA are considered outside of the scope of the rule?

Commenters raised a number of questions or asked for clarifications on issues that were not addressed in the proposed rule. Such comments addressed aspects of TBA that the Department did not propose to revise. The Department included the existing TBA regulations in the proposed rule in order to incorporate the change in the law with regard to SFCA programs. The Department did not propose amendments to the basic provisions of TBA that are codified in the SNAP regulations. The more frequently mentioned comments included requests for clarification that households with partial sanctions in TANF or SFCA may still receive TBA (63 commenters) and requests for further explanation on the issue of TBA being a frozen benefit that may not be changed except in two instances (62 commenters). For this reason, we consider such comments to be outside the scope of the proposed rule because they did not specifically address issues related to the proposal to add of SFCA programs to the TBA regulations.

We appreciate the effort that commenters put into providing these comments. As with the comments received on client reporting systems, it appears that commenters, particularly those in the advocacy community, have noted a number of TBA-related issues that could benefit from additional guidance. The Department appreciates the thoughts and feedback on TBA issues, and encourages commenters to re-submit these suggestions in future rulemakings.

Were any additional changes made based upon the comments received on TBA?

Yes, one commenter pointed out that the regulations should be revised to clarify that SNAP households should be able to shift from the transitional benefit period back to the regular SNAP program based on a joint TANF/SNAP application. The commenter believed that the TANF application should be treated as a joint TANF/SNAP application, consistent with current 7 CFR 273.2(j). As required for all SNAP non-expedited applications, the State would have 30 days to determine the household's SNAP eligibility using information from the new application. Consistent with these changes, the commenter suggested that the TBA notice be revised to state that households that reapply for TANF cash assistance will be asked to reapply for SNAP at the same time. The commenter also recommended revising the regulations to acknowledge that the State agency may adjust the SNAP benefit to account for automatic annual changes in benefit rules, such as the annual cost of living, standard deduction adjustments and excess shelter deduction cap adjustments. The Department agrees that a revision to the final regulation is needed to clarify this process and made the necessary changes.

The Department is also making minor changes to clarify 273.26(b) and (d) to add MOE and clarify that SFCA may be received concurrently, sequentially or alternatively to TANF, based upon comments. In addition, the Department is amending § 273.27 to again include the State MOE funds and clarify that States need not obtain additional information from household prior to their participation in TBA. Finally, based on a comment that the Department is amending § 273.29 and § 273.32 to clarify that TBA households applying for TANF or SFCA benefits shall be jointly processed for SNAP benefits.

One commenter noted that while 40 States have sanction policies that terminate cash assistance because of noncompliance, it is also common for States to reduce the cash assistance benefit amount by removing the individually sanctioned household member. The Department appreciates this insight and is altering the regulatory language to clarify that when a household has a member who has been sanctioned, the remaining eligible household members may receive transitional SNAP benefits if the cash assistance ends for another reason.

11. Increasing Benefits for Small Households: Minimum Benefit Increase §§ 271.2 and 273.10(e)(2)(ii)(C)

What is the legal basis for raising the minimum benefit?

The Food Stamp Act of 1977 established a monthly minimum benefit of $10 per month for one-person and two-person households, and the amount has not been adjusted since that time. 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-person and two-person households from $10 to eight percent of the maximum allotment for a one-person household, rounded to the nearest whole dollar.

What did the Department propose regarding the minimum benefit?

The Department proposed to amend the regulations at § 273.10(e)(2)(ii)(C) to incorporate the FCEA provision indexing the minimum benefit amount to eight percent of the maximum allotment for a one-person household, rounded to the nearest whole dollar. In addition, the Department proposed to update the definition of minimum benefit in § 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 § 273.10.

How did the public respond to the minimum benefit proposal?

Sixty-one commenters generally approved of the proposal regarding the minimum benefit. Fifty-eight commenters suggested that the Department ensure that States with combined application projects (CAPs) and other demonstration projects make annual updates on a timely basis. Eight commenters requested general guidance. One individual generally agreed with the proposal, but suggested that the minimum benefit amount should be $50.

The Department appreciates commenters' feedback. The FCEA required the increase of the minimum benefit and the Department made a straightforward update to the regulations to implement it. Existing procedures and requirements surrounding the minimum benefit remain. The Department is adopting the provisions as proposed. Any additional guidance will be provided outside of the rulemaking process.

12. Employment and Training (E&T): Funding for Job Retention Services, § 273.7(e)(1)

What changes did the Department propose to make to the E&T program?

The Department proposed to implement Section 4108 of the FCEA, which amended Section 6(d)(4) of the Act, to add job retention services of up to 90 days as an allowable E&T component. The Department proposed to revise the SNAP regulations at § 273.7(e)(1) to incorporate this change. We received 64 comments in total on this provision.

Will the Department permit State agencies to determine when the 90 days of services start?

The Department received 61 comments requesting that the rule specify State agency discretion on the start date of job retention services. The Department agrees that individual circumstances may warrant job retention services that begin at various times, such as on the day a job offer is accepted, the day the individual reports the information to his or her E&T case manager, the first day of the job, or other time based on the availability and type of services. Therefore, the Department will permit State agencies to identify when the 90 days of job retention services start.

The Department also received one comment requesting that job retention services be available to an E&T participant for each new job the individual obtains. The Act provides for a period of not more than 90 days of job retention services after an individual who received E&T services gains employment. For example, if an individual gains employment through a new job, receives 90 days of job retention services, and then later finds a different job, he or she would generally not be eligible for a new 90-day period of job retention services. However, if the individual re-engaged in E&T services and then gains new employment, he or she would be eligible for additional job retention services. For example, there may be circumstances where an individual participates in job search, gains employment and receives 90 days of job retention services. This individual may later reengage with E&T after a job loss to search for work or obtain career or technical training to find a better job and could qualify for an additional 90 days of job retention services. The Department does not want to limit State agencies in helping clients obtain regular employment with good wages and career progression. We understand that State agencies are in a better position to determine when job retention services might be appropriate for a new hire and the Department is allowing for State agency flexibility for this issue in § 273.7(e)(1)(viii).

Because job retention services are an E&T component, they need to be connected to receipt of SNAP even as we recognize that they may not begin until after a job commences and, in some cases, a household has left the SNAP program. The Department is taking this opportunity to clarify that an individual must be receiving SNAP benefits in the month of or the month prior to beginning job retention services. The Department is amending § 273.7(e)(1)(viii) in this final rule to this effect.

Are job retention services available to those who previously received E&T services, whether or not it led to employment?

The Department received one comment asking whether job retention services would be available to E&T participants if the components they participated in did not lead directly to employment. The Act provides that these services intend to ensure job retention after an individual who received E&T services gains employment. The Act does not require a link between the E&T activity and employment itself. Additionally, we recognize that it may be difficult to establish a link between participation in an E&T component and gained employment when there is a gap in services or a component does not have a direct link to a job. Therefore, the Department is not requiring evidence of a link between an E&T component and job entry in order for the State agency to provide job retention services. State agencies have discretion on the amount of time that may pass between an E&T component and start of job retention services. However, this rule does require that the household must have been receiving SNAP in the month of or the month prior to beginning job retention services.

Are job retention services limited to those who leave the program due to increased earnings?

The Department received 62 comments stating that the proposed rule unnecessarily limited job retention services to individuals losing SNAP benefits as a result of increased earnings. The comments pointed out that there may be circumstances such as where someone leaving SNAP would not have increased earnings but would need job retention services, such as an individual who took a job with reduced hours at a good wage with the hope that hours would increase or a lower-paying job with the opportunity for quick promotion.

The Department agrees that there may be circumstances where job retention services are appropriate for households leaving SNAP. However, there may also be circumstances where an individual or household is leaving SNAP due to an intentional program violation or failure to comply with SNAP work requirements without good cause. Therefore, the Department is clarifying in § 273.7(e)(1)(viii) that State agencies may extend job retention services to individuals who participated in another E&T component and are leaving SNAP for any reason other than a disqualification. As provided in this rule, the State agency may not disqualify an individual who refuses or fails to comply with job retention services.

The Department is taking this opportunity to clarify that an individual need not complete an E&T component in order to start receiving job retention services. For example, an individual assigned to two months of job search may find a job after two weeks and would then be eligible for job retention services.

Does the 90-day limit apply to case management?

The Department received one comment asking for clarification on the limits of case management. State agencies may provide E&T case management to participants as long as a participant is engaged in an E&T program or component. Since job retention is an E&T component, individuals receiving job retention services are eligible for case management up to the 90-day limit.

Are child care and transportation allowable participant reimbursements under a job retention component?

The Department received 60 comments requesting that child care and transportation be included as allowable participant reimbursements under a job retention component. The Department omitted transportation and dependent care from the list of allowable services and reimbursable participation costs in the preamble to the proposed rule because Section (6)(d)(4)(I) of the Act specifically provides for transportation and dependent care as allowable E&T participant reimbursements. The Department is clarifying that transportation and dependent care are allowable participant reimbursements under the job retention component,

including for individuals no longer receiving SNAP.

13. Application Signature Systems §§ 273.2(c)(1), 273.2(c)(3) and 273.2(c)(7)

What is the statutory authority for the proposed changes regarding signatures?

Section 11(e)(2)(C)(i) of the Act allows for various types of signatures. Section 4119 of FCEA amended section 11(e) of the Act (7 U.S.C. 2020(e)) to permit a State agency to accept telephonic signatures, subject to certain conditions. These conditions, described at Section 11(e)(1)(C)(ii) of the Act, require that a State agency:

• Record for future reference the verbal 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 household's right to apply in writing;

• Promptly provide to the applicant a written copy of the complete application with instructions for a simple procedure to allow correction of any errors or omission;

• Comply with all statutory provisions for processing applications described at Section 11(e)(1)(B) of the Act;

• Satisfy all requirements in the Act and other laws applicable to SNAP and that the date of the verbal assent is considered to be the date the application is signed; and

• Comply with all other standards established by the Secretary.

In the proposed rule, the Department used the term “spoken signature” to include means of assenting to information other than written or electronic signatures, with the most obvious example being an interactive interview with a SNAP household over the telephone. However, the term “spoken signature” has resulted in confusion and questions as to whether a “spoken signature” and a “telephonic signature” is interchangeable.

To clarify this confusion, the Department uses the term “telephonic signature” in this final rule, which more directly reflects the statutory language. The language in Section 4119 refers to the option for a “telephonic signature”, and lays out requirements for a system to capture telephonic signatures allowing households to sign an application through a recorded verbal assent over the telephone. Although the Department no longer uses the term “spoken signature” in this final rule, an in-office spoken signature may be necessary in some circumstances, for example, as a reasonable accommodation for an applicant with disabilities.

How did the Department propose to implement the telephonic signature option?

To implement the statutory provisions for telephonic signatures, the Department proposed new § 273.2(c)(7), which addressed specific types of application signatures. As proposed at § 273.2(c)(7)(viii), a State agency opting to accept telephonic signatures must:

• Specify in its State plan that it has chosen this option;

• Use terms that clearly indicate to the household how to provide assent or agreement during an interview, such as “yes”, “no”, “I agree” or “I do not agree”;

• Promptly provide to the applicant a written copy of the completed application, with instructions for a simple procedure for correcting any errors or omissions;

• Allow the household at least 10 calendar days to return the corrections; and

• Use the date of the telephonic signature as the date of the application.

What other changes were proposed for application signature systems?

The Department proposed a number of requirements for application signature systems described in proposed § 273.2(c)(7), both to implement the FCEA and to clarify additional standards for such systems. First, the Department proposed to extend certain statutory criteria for telephonic signatures to all types of application signatures, namely the requirements to: Record for future reference the information and the assent to the information on the application; include effective safeguards against impersonation identity theft, and invasions of privacy; not interfere with a household's right to apply in writing; provide applicants a written copy of the completed application with instructions for a simple procedure to correct errors or omissions (excluding applications with a written signature); comply with SNAP regulations for bilingual requirements; and satisfy all applicable statutory requirements for SNAP applications with the date of verbal consent by the household considered to be the date of the application for all purposes.

Second, the Department proposed to specify unique criteria relevant to certain types of signatures. The signature types identified in the proposed rule were handwritten signatures (which may include signing with a mark or “X”), electronic signatures, telephonic signatures, and gestured signatures. As explained in the preamble to the proposed rule, the Department included gestured signatures to provide those with hearing disabilities equal access to SNAP. As a State option under SNAP regulations, a gestured or visual signature may provide an alternative to a handwritten signature and may be an efficient means of giving assent as part of an interactive interview. Gestured signatures to indicate “yes” or “I agree” would include those in American Sign Language, Manually Coded English, or similar language or method during an interview. Except for handwritten signatures, the Department proposed that applicants have at least 10 calendar days to review and correct any errors or omissions to applications with electronic, telephonic or gestured signatures. The Department proposed that States have the option to accept unwritten signatures and written signatures using a mark or “X”, but are not required to do so.

Third, the Department proposed amendments to the regulations so that the provisions would also apply to applications submitted at recertification (§ 273.14(b)(2)) and to monthly, quarterly, and simplified periodic reports (§§ 273.21(h)(2)(vi), 273.12(c)(5)(ii)(F), and 273.12(d)(5)(ii)(F), respectively) required to be submitted under the client periodic reporting systems. Periodic reporting forms are functionally equivalent to applications in that they are clients' signed statements of circumstances. Since unwritten signatures suffice for applications and reapplications, the Department proposed that unwritten signatures should also suffice for periodic reporting forms. However, as with applications, a State agency is not required to accept unwritten signatures. The Department did not propose to extend this option to change reporting forms, since there is no Federal requirement that a household assigned to a change reporting system must sign the report form.

Did the Department propose any other changes to the application process?

Yes. As part of a general updating of application submission procedures and availability of application provisions, we proposed to reorganize §§ 273.2(c)(1) and 273.2(c)(3). In doing so, the Department reaffirmed certain fundamental aspects to the SNAP application process, including the household's right to file an application

the same day it contacts the SNAP office during office hours without an interview, and with only a name of a responsible member of the household or the authorized representative, address and signature. The Department also proposed to specify that households have a right to apply or reapply in writing, and the State agency must not interfere with this right. The Department also proposed at § 273.2(c)(1)(v) that the State agency must give all households who file non-paper applications a copy of the information provided and that these households must have 10 days to review the information that has been recorded electronically. Under proposed § 273.2(c)(3)(ii), the Department specified that the State agency must make paper application forms readily accessible and available even if the State agency also accepts application through electronic means.

The Department also proposed to add a new provision for application forms at § 273.2(b)(1)(x) to specify that an application form may be an on-line document, a recorded telephonic conversation, or a recorded visually signed conversation.

What did commenters say about gestured signatures?

Many commenters (55) approved of the Department's proposal to add gestured signatures as an optional type of signature for SNAP applications. The Department received no negative comments on this proposal, and the final rule retains the provision, with some modifications, as an optional signature type, described at § 273.2(c)(7)(ix). Those modifications include specifying that a State agency that chooses to accept gestured signatures must specify it has taken this option in its State plan of operation, and eliminating the ten-day period for households to return corrections to the State agency.

How did commenters respond to the State option to establish telephonic signature systems?

Most commenters supported the Department's inclusion of non-traditional signatures for applications, including telephonic signatures, but several requested clarifications with regard to telephonic signature systems. One commenter considered the proposed rule unclear on how to submit applications as recorded oral conversations, and requested that the Department clearly specify that applications may be made by telephone.

The Department wishes to distinguish between applying for SNAP benefits by telephone and providing a telephonic signature to complete an application. Telephonic signatures are not limited to telephonic applications and can be used to sign any application regardless of the means by which the application is completed (
e.g.,
online, telephonically, paper).

The FCEA requires that these systems record “the verbal assent of the household member and the information to which assent was given.” For a signature to be considered a telephonic signature, the system must make an audio recording over the telephone of the household's verbal assent as well as a summary of what the household is agreeing to, but not the entire telephone conversation. The Department envisions that an acceptable summary could include an eligibility worker's reiteration of the information the household provided during the call, such as updates to income, household composition, or deductions. This definition is not met if State or local office staff attest to securing the verbal assent over the telephone without actually making an audio recording over the telephone of the household member's attestation. The Department encourages States to consult with their legal counsel to ensure that the captured telephonic signature meets the State's legal definition of a signature and the recorded portion constitutes “assent” under that definition. In the final rule, the Department clarifies this requirement at § 273.2(c)(7)(viii)(B).

To be a valid telephonic signature, the recorded verbal assent must be linked to the application itself. This is to ensure the State agency has ready access to the audio file containing the recorded verbal assent. Telephonic signature files must be retrievable and must also comply with Federal records retention requirements in 7 CFR 272.1(f). The Department is revising the proposed regulations at § 273.2(c)(7)(viii)(C) to make this clear. The Department notes that it is also revising the proposed regulations for handwritten, gestured and telephonic signatures, for clarity and consistency, to indicate that the date of application is the date the application is received by the State agency, and that if the application is received outside normal business hours the State agency will consider the date of application the next business day.

Two commenters noted that an application should be treated as filed whenever a household leaves it with a community partner or similar entity charged by the State agency to assist with application processing. These commenters emphasized that households submitting applications at locations other than traditional local SNAP offices should not have their benefits delayed, and treating the application as filed when it is submitted to the community partner would help to address this problem.

In accordance with 273.2(c)(1), the date of the application is the date it is received by the State agency. However, a State may enter into a formal agreement, such as a contract or Memorandum of Understanding (MOU), in which a third-party accepts applications on behalf of the State agency. Such an agreement may stipulate that the date the application is received by the third-party is the date of the application. FNS does not have the authority to enforce program time requirements on entities other than State SNAP agencies. Organizations that fail to deliver the applications on the same date they receive them from a household are delaying the household's filing date and, potentially, the timeframe in which they will begin to receive assistance. Organizations or entities informally engaged in application assistance who do not have a contract or MOU with the State should make every effort to submit applications timely to the State agency so that the filing date will be as early as possible and benefits will not be delayed.

State agencies that choose to implement a telephonic signature process with a contracted third-party, or a third-party acting on behalf of the State agency through a MOU, such as a community-based organization, must ensure the records in the contractor's possession are readily accessible. Also, the State must ensure that the electronic signature files are readily accessible.

In addition, State agencies using a third party should be aware of the following:

• State agencies must follow the appropriate merit system personnel policy.

• Regardless of where the telephonic signature file is stored, the State owns the signature and any other data produced under contract by a third-party entity using Federal funding.

• Telephonic signature files and related data stored on third-party hardware must be transferred to the State agency in a usable format should the third party relationship with the State agency terminate. The third-party cannot retain these records.

• FNS recommends that the State agency include appropriate language in their memorandums of understanding or contractual agreements to ensure the third-party is in compliance with program requirements.

Commenters also requested various clarifications as to the filing date. These include requests to require the automatic recording of the date for applications filed electronically, that the filing date should be the day received by the office during business hours, to allow States to use a statewide definition of receipt of applications, and to allow applications for pre-released institutionalized applicants to be the actual date submitted (not when released). FNS finds that existing program requirements in the regulations and policy memos provide sufficient guidance on these matters.

One commenter spoke to the proposed criteria for effective safeguards against impersonation, identity theft and invasions of privacy for telephonic signature systems, and requested more information on the nature of these safeguards and how states might implement them. As discussed further below, FNS expects States to develop a telephonic signature process that includes necessary safeguards against impersonation, identity theft, and invasions of privacy, as is required by the Act. States have discretion to determine those safeguards and implement them effectively.

What did commenters say about the optional nature of unwritten signatures?

Four commenters disagreed with the Department's proposal at § 273.2(c)(7)(iii) that it be optional for States to accept unwritten signatures, arguing that States should be required to accept unwritten signatures unless an alternative exists that provides comparable access to program for people with disabilities.

Relatedly, one commenter stressed that the Department should emphasize that handwritten signatures should always be counted as a signature. The Department agrees. Handwritten signatures transmitted electronically must still be considered a signature for program purposes. For example, signatures received by facsimile are not unwritten signatures.

Section 11(e) of the Act allows telephonic signatures as an option, not a requirement. As stated in the preamble to the proposed rule, the Department has consistently recommended that State agencies consult legal counsel to verify that verbal assent constitutes a valid signature pursuant to State law. Following the statutory option for telephonic signatures, the Department also proposed to give States the option to accept or not accept other types of unwritten signatures, such as gestured or electronic signatures. We also note that for those States choosing not to take the option, unwritten or alternative signatures may still be required for some applicants with disabilities as a reasonable accommodation under Section 504 of the Rehabilitation Act or in compliance with other civil rights laws. These unwritten or alternative signatures that are not part of a formal State option must still meet the requirements of the final rule. For these reasons, the Department will adopt the provision proposed at § 273.2(c)(7)(iii) without change except for a revision to remove the reference including faxed signatures as unwritten signatures at 273.2(c)(7)(iii)(A), and to add clarifying language regarding compliance with civil rights laws.

What did commenters say about giving households 10 days to review and correct non-paper applications?

A total of 13 commenters, including advocates, State agencies, and related associations, opposed the 10-day review period for non-paper applications (
i.e.,
electronically submitted applications and applications with telephonic or gestured signatures). One State agency commented that the 10-day review period makes no sense for online applications, and stated that a regulation already exists for handling changes between application filing and certification. Another State agency objected to extending the opportunity to review and change information on a signed application for households who complete the application themselves, such as an online application that the households signs electronically and submits, and that for applications submitted by households (either electronic or paper), the interview is the point when information on the application can be corrected or clarified. This commenter recommended that the Department keep the post-signature review opportunity only for households that are signing by voice or gesture, and allow State agencies to determine the process by which these households will be able to review and provide corrections to their applications.

Sixty-two commenters requested clarification on the 10-day review period, stressing that the application process must not be delayed during the time period and that all applications must meet normal/expedited processing times. Most of these commenters said failure to return the form should not result in an intentional program violation (IPV), other sanctions or termination. Four commenters asked for clarification that one signature is sufficient.

Does the final rule keep the 10-day review period?

No. The Department finds commenters' objections to the proposed 10-day review period persuasive. The Department agrees that the 10-day review proposal would have caused unnecessary action and delay, both for State agencies and applicants. Accordingly, we have dropped proposed language at §§ 273.2(c)(1)(v)(A), 273.2(c)(7)(vii)(D), 273.2(c)(7)(viii)(D), and 273.2(c)(7)(ix)(D).

What types of applications retain the post-signature review and correction process?

The final rule retains the post-signature review and correction process for applications with telephonic or gestured signatures. It is statutorily required for applications with telephonic signatures per Section 11(e)(2)(C)(iii)(IV) of the Act, and the Department continues to believe that this process is also appropriate for applications with gestured signatures because these applications are anticipated to be completed initially by a SNAP eligibility worker who will record information provided by the household during an interactive interview. The Department agrees that a post-signature review and correction process is unnecessary for households that have independently entered information on the application and submitted an electronically-signed application. Accordingly, this language is removed from §§ 273.2(c)(1)(v)(A) and 273.2(c)(7)(vii)(D) is removed entirely.

In response to other commenter requests for clarification, the Department wishes to clarify that the application process must not be delayed as a result of the State procedure for household review and correction of information on applications, and that all applications must meet normal/expedited processing times. In addition, only one signature is necessary to be considered a complete application, provided that the signature is provided in a form that is accepted by the State agency. Finally, the household's failure to return the copy of the application or the summarized information used by the State agency to determine eligibility and benefit levels must not result in an IPV, other sanction, or termination.

Additionally, the Department is making technical corrections to this section. First, the Department is removing several references in this section to “paper or electronic” and combining all references to the filing date of the application in

§ 273.2(c)(1)(iv). Next, the Department has reorganized sections § 273.2(e)(2)(i) and § 273.2(e)(2)(ii) and added § 273.2(e)(2)(iii) and § 273.2(e)(2)(iv). The paragraphs have been renumbered accordingly.

What did commenters say about the availability of paper applications?

Eight commenters agreed with the Department's proposal that paper application forms must always be available and that States must not interfere with a household's right to file a written application. These commenters further stated that States should affirmatively encourage the filing of paper applications and that the regulations should prohibit States from suggesting to households disadvantages of filing a paper application. The Department understands the concern of commenters that certain low-income populations, such as the elderly, those with a disability and individuals with limited English proficiency, may be discouraged from applying for benefits as States move to an increasingly electronic environment for applying for SNAP benefits, but the Department also believes that the proposed rule language strongly supports household access to paper application and the right to apply in writing. Accordingly, the final rule retains the language proposed at §§ 273.2(c)(1)(ii) and 273.2(c)(3)(ii).

The Department notes a clarification in this final rule at § 273.2(c)(3) that, when filing an application, an applicant must be able to file the application with only a name, address and signature. The existing language had suggested that the process begins with name, address and signature. Technological advances have led to more States using methods other than traditional paper applications for SNAP. We want to emphasize that, regardless of the method used, an applicant's filing date is preserved when name, address and signature is received by the State agency and that all State application procedures—including, but not limited to, paper, online, and telephone processes—must afford applicants the ability to submit an application with just these elements and must make it readily apparent to applicants that this option is available to them. The Department believes it is important to make clear, consistent with longstanding po

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2016-30663. Public record. Not legal advice.