# Supplemental Nutrition Assistance Program: Requirements for Able-Bodied Adults Without Dependents > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2019-26044 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** December 5, 2019 - **Citation:** 84 FR 66782 ## Text DEPARTMENT OF AGRICULTURE Food and Nutrition Service 7 CFR Part 273 [FNS-2018-0004] RIN 0584-AE57 Supplemental Nutrition Assistance Program: Requirements for Able-Bodied Adults Without Dependents AGENCY: Food and Nutrition Service (FNS), USDA. ACTION: Final rule. SUMMARY: USDA is finalizing its rulemaking proposed February 1, 2019. The rule revises the conditions under which USDA would waive, when requested by States, the able-bodied adult without dependents (ABAWD) time limit in areas that have an unemployment rate of over 10 percent or a lack of sufficient jobs. In addition, the rule limits carryover of ABAWD discretionary exemptions. DATES: This rule is effective April 1, 2020, except for the amendment to 7 CFR 273.24(h), which is effective October 1, 2020. ADDRESSES: SNAP Program Development Division, Food and Nutrition Service, USDA, 3101 Park Center Drive, Room 812, Alexandria, Virginia 22302. FOR FURTHER INFORMATION CONTACT: Certification Policy Branch, Program Development Division, FNS, 3101 Park Center Drive, Alexandria, Virginia 22302. SNAPCPBRules@usda.gov. SUPPLEMENTARY INFORMATION: Acronyms or Abbreviations Able-Bodied Adults without Dependents, ABAWDs Advanced Notice of Public Rulemaking, ANPRM Agriculture Improvement Act of 2018 (Pub. L. 115-334), the 2018 Farm Bill Bureau of Labor Statistics, BLS Census Bureau's American Community Survey, ACS Code of Federal Regulations, CFR Department of Labor, DOL Employment and Training Administration, ETA Employment and Training, E&T Food and Nutrition Act of 2008, Act Food and Nutrition Service, FNS Labor Market Area(s), LMA(s) Labor Surplus Area(s), LSA(s) Office of Management and Budget, OMB Notice of Proposed Rulemaking, NPRM Supplemental Nutrition Assistance Program, SNAP The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, PRWORA U.S. Department of Agriculture, the Department or USDA References The following references may be helpful background. (1) Section 6(d) and section 6(o) of the Food and Nutrition Act of 2008, as amended (2) Title 7 of the Code of Federal Regulations, parts 273.7 and 273.24 (3) Food Stamp Program: Personal Responsibility Provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Proposed Rule, 64 FR 70920 (December 17, 1999). Available at: https://www.federalregister.gov/documents/1999/12/17/99-32527/food-stamp-program-personalresponsibility-provisions-of-the-personalresponsibility-and-work . (4) Food Stamp Program: Personal Responsibility Provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Final Rule, 66 FR 4437 (January 17, 2001). Available at: https://www.federalregister.gov/documents/2001/01/17/01-1025/foodstamp-program-personal-responsibilityprovisions-of-the-personal-responsibilityand-work (5) Guide to Serving ABAWDs Subject to Time-limited Participation, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/Guide_to_Serving_ABAWDs_Subject_to_Time_Limit.pdf (6) Guide to Supporting Requests to Waive the Time Limit for Able-Bodied Adults without Dependents, 2016. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Guide-to-Supporting-Requests-to-Waive-the-Time-Limit-for-ABAWDs.pdf (7) Expiration of Statewide ABAWD Time Limit Waivers, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Expiration-of-Statewide-ABAWD-Time-Limit-Waivers.pdf (8) ABAWD Time Limit Policy and Program Access, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Time-Limit-Policy-and-Program-Access-Memo-Nov2015.pdf (9) ABAWD Questions and Answers, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-June%202015.pdf (10) ABAWD Questions and Answers, 2013. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-December-2013.pdf (11) Historical Policy Document: Waivers of Work Requirement Time Limits Based on Insufficient Jobs, March 1997. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/HistoricalPolicyDocument_FSPWaiversofWorkRequirementTimeLimitsBasedonInsufficientJobs_Mar1997_0.pdf (12) Historical Policy Document: Guidance for States Seeking Waivers for Food Stamp Limits, December 1996. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/HistoricalPolicyDocument_GuidanceforStatesSeekingWaiversforFoodStampLimits_December1996.pdf (13) Overuse of the 15 Percent Able-Bodied Adults Without Dependents (ABAWD) Exemptions by States Agencies, November 2007. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/Overuse%20of%20the%2015%20Percent%20ABAWD%20Exemptions%20by%20States%20Agencies%20Nov%202007.pdf (14) BLS Local Area Unemployment Statistics. Available at: https://www.bls.gov/lau/ (15) DOL Labor Surplus Area. Available at: https://www.doleta.gov/programs/lsa.cfm (16) Executive Order 13828: Reducing Poverty in America by Promoting Opportunity and Economic Mobility. Available at: https://www.federalregister.gov/documents/2018/04/13/2018-07874/reducing-poverty-in-america-by-promoting-opportunity-and-economic-mobility Background on This Rulemaking Section 6(o) of the Food and Nutrition Act of 2008, as amended (the Act) generally limits the amount of time an able-bodied adult without dependents (ABAWD) can receive Supplemental Nutrition Assistance Program (SNAP) benefits to 3 months in a 36-month period (the time limit), unless the individual meets certain work requirements. On the request of a State SNAP agency, the Act also gives the U.S. Department of Agriculture (the Department) the authority to temporarily waive the time limit in areas that have an unemployment rate of over 10 percent or a lack of sufficient jobs. The Act also provides State agencies with a limited number of discretionary exemptions that can be used by States to extend SNAP eligibility for ABAWDs subject to the time limit. The ABAWD time limit and work requirement were initially enacted as part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which was signed into law on August 22, 1996. According to the Conference Report accompanying PRWORA, the main purpose of PRWORA was to “[promote] work over welfare and self-reliance over dependency, thereby showing true compassion for those in America who need a helping hand, not a handout” (H. Rept. 104-725, p. 261). Congress also explained that the legislation “reforms welfare to make it more consistent with fundamental American values—by rewarding work and self-reliance, encouraging personal responsibility, and restoring a sense of hope in the future” (H. Rept. 104-725, p. 263). By adding the time limit and work requirement to the Food Stamp Act of 1977 (now the Food and Nutrition Act of 2008, as amended) at section 6(o), Congress highlighted the importance of work and self-sufficiency for the ABAWD population. Specifically, Congress noted that: “It [PRWORA] makes substantial reforms in the Food Stamp Program, cracking down on fraud and abuse and applying tough work standards” (H. Rept. 104-725, p. 261). The time limit and work requirement for ABAWDs enacted by PRWORA has been maintained by Congress through several reauthorizations of the Federal law governing SNAP, most recently through the Agriculture Improvement Act of 2018, indicating that Congress remains committed to promoting work, self-reliance, and personal accountability among the ABAWD population. On April 2, 2018, the President signed Executive Order (E.O.) 13828, on “Reducing Poverty in America by Promoting Opportunity and Economic Mobility.” E.O. 13828 sets forth the Administration's policy that, with regard to social welfare, the Federal Government's role is to clear paths to self-sufficiency and to invest in Federal programs that are effective at moving people into the workforce and out of poverty. Federal programs should empower individuals to seek employment and achieve economic independence, while reserving public assistance programs for those who are truly in need. Government must examine Federal policies and programs to ensure that they are consistent with principles that are central to the American spirit—work, free enterprise, and safeguarding human and economic resources. E.O. 13828 also provided a list of “Principles of Economic Mobility” that should inform and guide program administration in the context of applicable law. One such principle, relevant to this rulemaking, is to “improve employment outcomes and economic independence.” To advance this principle, the E.O. calls for Federal agencies to “first enforce work requirements that are required by law [and to] also strengthen requirements that promote obtaining and maintaining employment in order to move people to independence.” Moreover, E.O. 13828 directed Federal agencies to review regulations and guidance documents to advance these objectives consistent with the principles of increasing self-sufficiency, well-being, and economic mobility. In accordance with E.O.13828 and other Administration priorities, the Department undertook a review of its regulations and policies associated with ABAWDs. The time limit and work requirement for ABAWDs in SNAP clearly align with E.O. 13828 and the Department's shared principle that those who can work—adults who are able-bodied and do not have dependent care responsibilities—should work or participate in a work program, as a condition of receiving their benefits. The Department's review of these rules, along with its more than 20 years of operational experience overseeing the States' administration of the ABAWD time limit, has led the Department to identify key weaknesses in the current regulations on ABAWD time limit waivers. Over the years, States have taken advantage of these weaknesses to request and qualify for waivers of the ABAWD time limit in areas where it is questionable as to whether the statutory conditions for approval as outlined in section 6(o)(4) of the Act, an unemployment rate over 10 percent or a lack of sufficient jobs, are present. This manipulation is demonstrated by the fact that currently about half of the ABAWDs on SNAP live in waived areas, despite low unemployment levels across the majority of the country. Similarly, the current regulations' interpretation of section 6(o)(6)(G) of the Act, which requires the Department to increase or decrease the number of exemptions available to the State during the fiscal year based on the prior year's usage, allows States to carryover and accumulate unused ABAWD discretionary exemptions indefinitely. As a result, States have accumulated extremely high amounts of unused discretionary exemptions that well exceed the number allotted to each State for the fiscal year. The Department views the accumulation of such significant amounts of unused exemptions to be an unintended outcome of the current regulations. In the Department's view, the indefinite carryover and accumulation of unused exemptions is inconsistent with Congress' decision to limit the number of exemptions available to States in a given fiscal year, as expressed by sections 6(o)(6)(C), (D), and (E) of the Act. The Department is committed to providing SNAP benefits to those who truly need them, but it must also encourage participants to take proactive steps toward long-term self-sufficiency. In order to ensure these goals are met, the Department believes that waivers of the time limit should only be permitted when the circumstances clearly warrant that action and meet the statutory conditions for approval. Therefore, the Department is amending its regulations to address these policy issues by setting clear limitations and introducing new safeguards. In particular, the Department is codifying a strict definition of an “area in which the individuals reside” for purposes of a geographic area covered by a waiver; and redefining what demonstrates that such an area “has an unemployment rate of over 10 percent” or “does not have a sufficient number of jobs to provide employment for the individuals” for purposes of such an area qualifying for a waiver. In addition, the Department is setting a reasonable limit on the carryover of unused discretionary exemptions. The Department is making these changes in order to encourage broader application of the time limit, to more appropriately target waivers and limit discretionary exemptions, and to incentivize ABAWDs to proactively pursue any and all work and/or work training opportunities within commuting distance of their residences. Proposed Rule and Comments On February 1, 2019 (84 FR 980), the Department published a proposed rule, Supplemental Nutrition Assistance Program: Requirements for Able-Bodied Adults Without Dependents, proposing to amend the regulatory standards by which the Department evaluates State agency requests to waive the time limit for ABAWDs and to limit the carryover of ABAWD discretionary exemptions. The 60-day comment period ended on April 2, 2019. The comment period was reopened on April 8, 2019, for a period of 3 days ending April 10, 2019, due to problems with the Federal Register website on April 1 and 2, 2019, which contributed to commenters facing challenges when trying to submit comments. The Department received more than 100,000 comments. The comments came from a broad range of stakeholders, including Members of Congress, State agencies, State elected officials, local governments, advocacy groups, religious organizations, food banks, legal services organizations, private citizens, and others. The Department greatly appreciates the comments received on the proposed rule as they have been essential in developing the final rule. The Department reviewed and considered all comments received. Based on the Department's review of all the comments received, about one quarter were unique and/or substantive, with the remaining three quarters consisting of form letters, duplicates, or non-germane submissions. Generally speaking, the Department viewed a comment as substantive if it provided an opinion or recommendation on a specific policy and included detailed reasoning. In the sections that follow, the Department's discussion focuses on those comments that provided substantive and specific feedback on particular proposed provisions and those comments that have most influenced the Department's decisions on whether to revise the proposed rule. The provisions are presented and discussed in a section-by-section format for consistency with the proposed rule and the amendatory text to the extent possible. The majority of comments that were submitted generally opposed the proposed rule but did not comment on specific provisions or provide recommendations on how to address the policy issues identified by the Department. In general, the preamble does not address in detail these comments. Similarly, the preamble does not address in detail those comments that generally supported the proposed provisions. The Department also received comments that were outside the scope of the proposed rulemaking. By outside the scope, the Department means that commenters provided substantive feedback on policies that were not proposed to be changed as part of this rulemaking. Though the Department appreciates the feedback on those policies, comments that are clearly out of scope are not discussed in detail in this final rule. To view public comments on the proposed rule, go to www.regulations.gov and search for public submissions under docket number FNS-2018-0004. For a full understanding of the background of the provisions in this rule, see the proposed rulemaking, which was published in the Federal Register February 1, 2019, at 84 FR 980. Establishing Core Standards for Approval The Department proposed the establishment of core standards for waivers in § 273.24(f)(2). The proposed core standards would provide States with a set of consistent criteria for approval. Any supporting unemployment data provided by the State would need to rely on standard Bureau of Labor Statistics (BLS) data or methods, or data from BLS-cooperating agencies. BLS is the principal federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy. BLS produces unemployment data that is accurate, objective, relevant, timely, and accessible, and that is generally considered by experts to be reliable and robust evidence for evaluating labor market conditions. For areas which BLS does not produce data, such as Indian Reservations and some U.S. Territories, the core standards would not apply. The Department did not receive any substantive comments on the general concept of establishing core standards; however, many comments were received on each specific core standard. These comments and the Department's responses are detailed in the following sections. Core Standards: Retaining Waivers Based on a 12-Month Unemployment Rate Over 10 Percent The Department proposed to maintain the criterion allowing an area to qualify for a waiver when it has a recent 12-month average unemployment rate over 10 percent, and to include that criterion as a core standard. The comments provided on this particular proposal were generally supportive. Some comments suggested that this proposal was inadequate and that other time periods should be allowed to demonstrate an unemployment rate over 10 percent. The Department addresses these viewpoints in the Other Data and Evidence in Exceptional Circumstances and Other Changes to Waivers sections of the final rule. The final rule adopts this provision of the proposed rule at § 273.24(f)(2)(i) as written. Core Standards: Establishing a Floor for Waivers Based on the 20 Percent Standard Current regulations at § 273.24(f)(2) and (3) provide for a waiver approval for a requested area that has been designated as a Labor Surplus Area (LSA) by the Department of Labor (DOL) for the current fiscal year. Prior to the final rule in 2001 that established § 273.24(f), the Department introduced the use of LSAs for waivers in its December 1996 memorandum, Guidance for States Seeking Waivers of Food Stamp Limits. DOL designates LSAs based on specific unemployment rate criteria. In order to be designated as an LSA for the fiscal year, the area must have had an unemployment rate 20 percent or more above the national unemployment rate for the previous 2 calendar years. In addition, the area must have had an unemployment rate of 6 percent or higher for the same 24-month period, which DOL refers to as the “floor” unemployment rate for LSAs. So, together, an area must have an average unemployment rate at least 20 percent above the national average and at least 6 percent for the previous 2 calendar years in order to be designated as an LSA. Current regulations at § 273.24(f)(2) and (3) also provide for ABAWD time limit waiver approvals for requested areas with an average unemployment rate at least 20 percent above the national average for a recent 24-month period, beginning no earlier than the same 24-month period that DOL uses to determine LSAs for the current fiscal year (otherwise known as the “20 percent standard”). The Department introduced the 20 percent standard in its March 1997 memorandum FSP—Waivers of Work Requirement Time Limits Based on Insufficient Jobs. The Department explained in that memo that its reason for introducing the 20 percent standard was to give States a method to demonstrate a lack of sufficient jobs for areas that are not considered by DOL for LSA designation. In the current regulations, the Department adopted the 20 percent standard as a standalone criterion beyond the LSA designation, to provide States with the flexibility to support waivers of areas that are not considered by DOL for LSA designation, and to allow States to use a more flexible 24-month reference period. Importantly, while the 20 percent standard was modeled after and is similar to the calculation of an LSA, the 20 percent standard does not include an unemployment rate floor, as the LSA criteria does. Because the 20 percent standard lacks an unemployment rate floor, areas that do not clearly lack sufficient jobs qualify for waivers solely because they are 20 percent above the national unemployment rate. For example, the national average unemployment rate for the 24-month period of May 2017 through June 2019 was 3.9 percent. 1 Given this national average, a State could request and qualify for a waiver in areas with an unemployment rate as low as 4.7 percent for the same 24-month period. Not including a floor has had the effect of allowing areas with low rates of unemployment to qualify for waivers. 1 Calculations based on BLS unemployment data, not seasonally adjusted, pulled from https://www.bls.gov/data/#unemployment on August 15, 2019. In the February 1, 2019, proposed rule, the Department proposed to include a 7 percent unemployment rate floor within the 20 percent standard, meaning that an area would need to have an average unemployment rate at least 20 percent above the national average and of at least 7 percent for the 24-month period. In so doing, the Department also requested evidence-based and data-driven feedback on the appropriate threshold for the floor, specifically whether a 6 percent, 7 percent, or 10 percent floor would be most effective and consistent with the Act's requirement that waivers be determined based on a lack of sufficient jobs. In addition, the Department proposed to eliminate the LSA designation as a basis of waiver approval because the LSA unemployment rate floor of 6 percent was inconsistent with the 7 percent unemployment rate the Department proposed for the similar 20 percent standard. The vast majority of those who commented on the unemployment rate floor opposed setting any unemployment rate floor within the 20 percent standard. However, the Department did receive several other important comments with respect to the unemployment rate floor options described in the proposed rule. The comments regarding the 6 percent, 7 percent, and 10 percent options are addressed below, along with the comments of those who opposed any floor and comments recommending alternatives. Comments on a 6 Percent Unemployment Rate Floor for the 20 Percent Standard Several commenters argued that, if the Department is to set an unemployment rate floor, then 6 percent is the best option. These commenters provided evidence-based support that the 20 percent standard with a 6 percent floor would demonstrate that an area lacks sufficient jobs better than 7 percent or other potential options. Some of these commenters stated that a 6 percent floor would align with DOL's LSA designation criteria. These commenters pointed out that LSA designation is a longstanding Federal standard for job insufficiency relied upon by Federal and State governments and other workforce development partners. Some commenters suggested that in the context of the 20 percent standard, setting the floor at 6 percent makes sense in that it could be viewed as 20 percent above the natural rate of unemployment, 2 which has historically hovered around 5 percent and is one way to define a “normal” level of unemployment. These commenters indicated that it would be logical and appropriate to only allow areas at least 20 percent above the natural rate of unemployment to be considered for waivers under this standard. 2 For more information on the natural rate of unemployment, see https://fred.stlouisfed.org/series/NROU. A few commenters compared the proposed 7 percent floor to the 6 percent floor, and provided data and evidence to show that including a 6 percent floor would more appropriately target areas qualifying under the 20 percent standard to areas demonstrating a “lack of sufficient jobs” than would a 7 percent floor. In particular, a commenter provided analysis showing that, when looking at economic metrics other than unemployment rates, such as a county's poverty rates, education levels, and other demographics associated with poverty, counties with 6 to 7 percent unemployment more closely resemble areas above 7 percent unemployment than areas below 6 percent unemployment, indicating that 6 percent was a meaningful threshold for economic distress. The Department is persuaded and agrees with these commenters that 6 percent is the best option for an unemployment rate floor within the 20 percent standard. The Department finds 6 percent to be particularly justified, relative to the other options, in that it aligns with DOL's LSA standard. Including the 6 percent floor within the 20 percent standard would further align the 20 percent standard with the longstanding LSA criteria on which the 20 percent standard was originally based. The Department is also influenced by the data and analysis provided by commenters that demonstrated 6 percent as a relatively meaningful threshold for economic distress and for targeting waivers to areas with a “lack of sufficient jobs”. Moreover, the Department has determined that as a practical outcome, a 6 percent floor will ensure that the 20 percent standard appropriately demonstrates a lack of sufficient jobs and acts as an effective safeguard against any future waiver misuse. For these reasons, the Department has decided that a 6 percent floor represents areas that demonstrate a lack of sufficient jobs better than the proposed rule's 7 percent floor. As explained earlier in this section, a 20 percent standard without an unemployment rate floor can be misused because areas that do not clearly lack sufficient jobs will continue to qualify for waivers solely because they are 20 percent above the national unemployment rate. The Department also agrees with the comments suggesting that a 6 percent floor could be viewed as sensible in that it is about 20 percent above where the natural rate of unemployment has hovered. However, as discussed in detail in later sections, the Department acknowledges that the natural rate of unemployment is a theoretical concept that is not fixed at 5 percent, but fluctuates over time and has a large range of estimates, making it an impractical basis by which to set a floor for the 20 percent standard. As a result, the Department did not view the natural rate of unemployment as a deciding factor in its decision to set the floor at 6 percent. Rather, as explained in the preceding paragraphs, the Department's decision to set the floor at 6 percent is primarily driven by the fact that it aligns with DOL's LSA standard and that it represents the most justified option relative to the proposed rule's 7 percent floor or other potential unemployment rate floors. While the comments received on the proposed rule included strong arguments, data, and evidence to support a 6 percent floor, they also exposed the relative weakness of the 7 percent proposal and the 10 percent option. The Department is therefore adopting a 6 percent unemployment rate floor within the 20 percent standard at § 273.24(f)(2)(ii). As explained later in this rule in the section entitled Restricting the Combining of Data to Group Substate Areas and Redefining “Area” and the section entitled Other Changes to Waivers, the Department is not including LSA designation as a criterion for waiver approval under the core standards because the Department is redefining “area” in such a way that will exclude civil jurisdictions used by DOL when designating LSAs. The following subsections will focus on the comments made regarding the proposed 7 percent floor, the 10 percent floor, and other options suggested by commenters. While the Department's decision not to adopt any of these other options is based, in part, on its belief that a 6 percent floor has a stronger rationale for determining which areas demonstrate a lack of sufficient jobs than do these other options, the following subsections will not repeat the rationale for adopting the 6 percent floor, as that has already been discussed. Comments on a 7 Percent Unemployment Rate Floor for the 20 Percent Standard Many commenters opposed the proposed 7 percent unemployment rate floor to the 20 percent standard. A number of commenters stated that the 7 percent floor lacks justification and is arbitrary, as the proposed rule did not clearly tie the 7 percent floor to evidence for lack of sufficient jobs. Some commenters pointed to the justification provided in the proposed rule that a 7 percent floor aligns with a proposal in the Agriculture and Nutrition Act of 2018, H.R. 2, 115th Cong. section 4015 (as passed by House, June 21, 2018). These commenters argued that this rationale is invalid because Congress ultimately did not include that provision when it enacted the Agriculture Improvement Act of 2018 (Pub. L. 115-334) (the 2018 Farm Bill). Several commenters argued that setting a floor at 7 percent unemployment is too high. Some commenters asserted that jobs are not widely available to all who may seek them when unemployment is below 7 percent. Commenters also suggested that ABAWDs face barriers to employment that the general population does not. These commenters noted that unemployment rates for ABAWDs, as a distinct group, would generally be higher than the official unemployment rate because many ABAWDs share demographic characteristics with subpopulations that have relatively high unemployment rates. One commenter pointed out that areas with unemployment rates just below the 7 percent floor would share many of the same characteristics as those above the 7 percent floor, for example: Unemployment higher than at any point nationally during the 2001-2002 recession; hidden unemployment due to cyclically low labor force participation; and, very limited employer demand for the “hardest to employ” groups, such as those with criminal records, lengthy periods of unemployment, or other barriers to work. Another commenter argued that the proposed 7 percent floor is too high because it is well above 4 percent, which is the statutory definition of full employment set by the Full Employment and Balanced Growth Act of 1978. Commenters also suggested that the proposed 7 percent floor would not adequately provide States with waiver coverage during times of rising unemployment because the combination of an unemployment rate floor with the lengthy 24-month data reference period would prevent many areas with rising unemployment from qualifying for waivers. One commenter provided data analysis showing that many areas considered “distressed communities” according to a series of economic metrics would not have met the 7 percent unemployment rate threshold. This commenter argued that the 7 percent floor fails to capture the economic realities of regions, and that this divergence highlights the shortcomings of a 7 percent unemployment rate floor. Many commenters provided specific examples that the proposed 7 percent floor would harm their State or locality, with some citing specific poor, food insecure, or economically distressed areas in their State, that would not currently meet the 7 percent floor. Several commenters suggested that the Department did not properly apply the concept of the natural rate of unemployment in choosing a 7 percent floor. Some commenters suggested that the proposed rule did not provide adequate justification to explain the relationship between the 7 percent floor and the natural rate of unemployment. The detailed comments in opposition to the 7 percent floor described in the preceding paragraphs provided the Department with helpful perspective, in particular those that provided data and analysis to illustrate that some areas with unemployment rates below 7 percent may be considered economically distressed or in recession. The Department took these comments into consideration in its decision to adopt DOL's 6 percent floor, instead of a 7 percent floor. A few commenters expressed support for the 7 percent unemployment rate floor. While these comments did not provide evidence or data to support that a 7 percent floor within the 20 percent standard would better demonstrate a lack of sufficient jobs, they did suggest that a 7 percent floor represented a reasonable middle ground between a 10 percent floor and a 6 percent floor. The Department appreciates that when considering among several options, it is sometimes prudent to select that option which best represents a reasonable middle ground, especially when there is a lack of data or evidence to distinguish one option as more or less justified as another. However, in this situation there is clear justification supporting a 6 percent floor versus the other options, as explained in the immediately preceding section. Comments on a 10 Percent Unemployment Rate Floor for the 20 Percent Standard Many commenters opposed a 10 percent unemployment rate floor for the 20 percent standard. Some commenters argued that this proposal conflicts with Congressional intent. In particular, these commenters argued that Congress designated a 10 percent unemployment rate as one way for a State to qualify for a waiver, and a second criterion of “insufficient jobs” as an alternative to demonstrating a 10 percent unemployment rate. These commenters stated that adopting a 10 percent unemployment rate floor would make the lack of sufficient jobs criterion too similar to the 10 percent unemployment rate criterion in the statute. Commenters also suggested that this proposal would be largely duplicative of existing criteria allowing waiver approval for areas with over 10 percent unemployment during a recent 12-month period. A few commenters supported setting an unemployment rate floor at 10 percent. These commenters argued that this high floor would most effectively reduce the number of ABAWDs living in waived areas. One commenter used data to argue that a 10 percent floor would more often act to reduce the number of areas that would qualify than would a 7 percent floor. Another commenter suggested that a 10 percent unemployment rate floor is appropriate because the current economic conditions in the United States are favorable for ABAWDs finding jobs. The Department has not been persuaded to adopt the 10 percent floor option presented in the proposed rule, in part, because the Department found the comments expressing concern over Congressional intent and duplication with other waiver standards to be valid, and in part because sufficient evidence-based and data-driven support was not provided to go in this direction. Opposition to any Unemployment Rate Floor Within the 20 Percent Standard As previously mentioned, the vast majority of those who commented on the unemployment rate floor opposed setting any unemployment rate floor within the 20 percent standard. Commenters argued that the statutory language requires the Department to base the waiver standards on whether there are a lack of sufficient jobs for the specific ABAWD population, not the broader population. Many commenters opposed setting an unemployment floor because they argued unemployment rates fail to accurately capture the availability of jobs specifically for ABAWDs who face particular barriers to employment. They argued that the proposed rule represents an overreliance on unemployment data, especially with regard to an unemployment rate floor in the 20 percent standard. Many suggested that while the standard unemployment rate available in local areas does provide essential data, it does not accurately reflect labor market prospects for ABAWDs, and it does not fully account for the ability of ABAWDs to find and keep jobs due to lack of skills, training, or other barriers. Commenters argued that ABAWDs should not be subject to the unemployment rate floor used in designating LSAs because ABAWDs face labor market disadvantages that the general public does not. Commenters also provided analysis, based on the 2017 USDA Household Characteristics data, 3 that non-disabled individuals aged 18 through 49 in households without children in SNAP report lower than average educational attainment. Commenters pointed to research indicating that, on average, unemployment rates for people with low-education attainment are much higher than what BLS unemployment rates for the general public indicate. Commenters provided research indicating that lower unemployment rates are less indicative of strong labor markets in recent years than in the past, and particularly for those with lower levels of education. Commenters also provided research indicating that employment rates for workers with low levels of education still have not recovered from the recession and pointed to evidence that workers with less education may be hit harder by recessions. In addition, commenters suggested that ABAWDs are more likely to have part-time work, irregular hours, seasonal work, underemployment, high turnover, and low job security within low-skill professions. Commenters pointed to analysis commissioned by the Department that indicates that those subject to SNAP work requirements face substantial barriers to employment. Commenters provided research indicating that involuntary part-time work is increasing at dramatically higher rates than other types of work. These commenters argued that this impacts the ability of ABAWDs to be able to meet the work requirement. Commenters provided data indicating that individuals who were projected to lose their benefits due to the time limit also faced other barriers to work. One State provided data indicating that ABAWDs have higher levels of homelessness than other SNAP participants. Commenters asserted that formerly incarcerated persons encounter obstacles attaching to employment quickly and provided data showing that unemployment rates among this population was significantly higher than the unemployment rate of the general public. Other commenters provided recent studies finding significant racial discrimination in the labor market and hiring in particular. These commenters asked the Department to consider racial discrimination and other reasons that result in significant racial and ethnic employment disparities, and these commenters argued that evidence of discrimination and employment disparities indicates that general unemployment rates are not a good predictor of job availability for people of color. Commenters also asked the Department to consider access to transportation, housing stability, and forced moves among the ABAWD population that lead to particular problems maintaining stable employment. 3 The Department publishes a characteristics report and corresponding SNAP Quality Control data annually, which provide information about the demographic and economic circumstances of SNAP households. Commenters argued that the Department has previously acknowledged that time limit waivers were intended by Congress to recognize the challenges that the ABAWD population faces when finding permanent employment. Commenters pointed to the Department's December 1996 guidance in which it offered several reflections on its understanding of Congressional intent at the time. In this guidance, the Department stated, “USDA believes that the law provided authority to waive these provisions in recognition of the challenges that low-skilled workers may face in finding and keeping permanent employment. In some areas, including parts of rural America, the number of employed persons and the number of job seekers may be far larger than the number of vacant jobs. This may be especially so for person with limited skills and minimal work history.” Commenters also argued that in its original rulemaking the Department realized that ABAWDs were a more diverse population than had originally been anticipated and that many faced barriers to employment. In response to these comments, the Department recognizes that ABAWDs may face barriers to employment and have more limited employment prospects than the general public due to low educational attainment or other factors discussed above. The Department also recognizes that there is no measure available for determining the number of available jobs specifically for ABAWDs participating in SNAP in any given area. However, notwithstanding the issues raised by these comments, the Department is resolute that establishing an unemployment rate floor within the 20 percent standard is necessary to ensure that the standard is designed to accurately reflect a lack of sufficient jobs in a given area. The Department's position is based on its operational experience, during which it has recognized that, without an unemployment rate floor, areas that do not clearly lack sufficient jobs will continue to qualify for waivers solely because they are 20 percent above the national unemployment rate. For example, the national average unemployment rate for the 24-month period of May 2017 through June 2019 was 3.9 percent. 4 Given this national average, a State could request and qualify for a waiver in areas with an unemployment rate as low as 4.7 percent for the same 24-month period. Not including a floor has had the effect of allowing areas with low rates of unemployment to qualify for waivers. 4 Calculations based on BLS unemployment data, not seasonally adjusted, pulled from https://www.bls.gov/data/#unemployment on August 15, 2019. As discussed in the previous section, the Department finds the 20 percent standard with a 6 percent floor to be one of the most objective and defensible ways of determining a lack of sufficient jobs, as it aligns with a longstanding DOL measure of job insufficiency. The LSA designation criteria developed by DOL was used by the Department when originally developing the 20 percent standard. Including a 6 percent floor within the 20 percent standard would further align the 20 percent standard with the longstanding LSA standard on which it was originally based. This will improve the 20 percent standard and make it a better measure of job insufficiency. Some commenters argued that the proposed rule's justification for applying an unemployment rate floor is not in line with Congressional intent. One commenter pointed to the House Committee on Budget's report (H. Rept. 104-651) on its original version of The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which stated that waivers would be based on “high unemployment . . . or other specified circumstances” limiting the availability of jobs. The commenter argued that the “other specified circumstances” language means that Congress did not intend for unemployment rates alone to govern waiver decisions. Commenters argued that unemployment rates measure the proportion of the workforce who are employed or unemployed, but they do not measure how many jobs are available. Commenters also suggested that, if Congress intended to include an unemployment rate threshold for the “sufficient number of jobs” criteria, Congress would have done so. Commenters stated that Congress did not intend for lack of sufficient jobs criteria to be based on whether there are too many or too few waivers that result from the criteria—Congress did not establish a desired level of waiver coverage. Another commenter stated that Congress intended for there to be many different ways to meet “insufficient jobs,” and that the Department acknowledged this when first implementing the policy in the late 1990s and early 2000s. While the Department appreciates these commenters' references to the legislative history, the Department does not find setting an unemployment rate floor to be in conflict with Congressional intent. The Department is limiting the number of ways that a State may demonstrate a lack of jobs in order to prevent the misapplication of waivers in areas in which the lack of jobs is questionable. These changes are well within the authority under section 6(o)(4)(A) of the Act, which provides the Secretary with broad discretion on how to define what does and does not constitute a lack of sufficient jobs. By introducing a 6 percent unemployment rate floor, the Department aims to prevent the misapplication of waivers to areas with unemployment rates that do not demonstrate a lack of sufficient jobs. One commenter argued that the proposed rule's assertion that the current rate of waivers was unforeseen is inconsistent with the historical record. This commenter provided evidence that USDA's original estimate of the extent of waiver coverage under its rules is in line with current actual waiver coverage. This commenter pointed to a document sent from Department staff to Office of Management and Budget (OMB) staff in 1997 that stated, “Thirty percent to 45 percent of the able-bodied caseload may be waived. However, USDA's best estimate is that the areas that have been waived represent approximately 35 percent of the able-bodied caseload in the nation as a whole.” In response to this comment, the Department sees fit to reiterate that its concern over the current number of waivers is based on the number of areas that continue to qualify when their unemployment rates are relatively low and the areas do not clearly demonstrate a lack of sufficient jobs. Over the past 20 years, the Department has identified the lack of a floor in the 20 percent standard as a particular weakness in the current regulations. The Department did not foresee the extent to which States would take advantage of this weakness to request and qualify for waivers in areas with unemployment rates not generally considered to indicate a lack of jobs, such as the 4.7 percent unemployment rate used as an example previously. The Department aims to address this and other weaknesses with reasonable policy changes, based on objective data and evidence. In the case of the 20 percent standard, the introduction of a 6 percent unemployment rate floor will ensure that the waiver standards appropriately account for fluctuations in the national unemployment rate without allowing areas in which unemployment is objectively low to qualify for waivers. Commenters also pointed to research asserting that there is no one way to identify conditions that make it difficult to secure employment, but there are several measures of labor market weakness that can indicate a lack of sufficient jobs. In stating their opposition to the floor, some commenters noted that unemployment relative to the national average is an important signal that the economic conditions warrant waiving work requirements. Commenters stated that, by generally tying waiver eligibility to a ratio threshold of the overall U.S. unemployment rate, as the Department currently does with the 20 percent standard, States are able to target their waivers to jurisdictions that are lagging behind in comparison to the state and national economy. Commenters provided data showing that these areas with higher relative unemployment share significant overlap with the areas that have the greatest rates of poverty and food insecurity. These commenters argued that adding an unemployment rate floor to the 20 percent standard provides less flexibility for States to capture insufficient jobs for the ABAWD population. The Department appreciates this information provided by commenters, but disagrees that a relative unemployment rate is a sufficient indicator of a lack of sufficient jobs in and of itself. As explained in several other sections of this rule, the Department is adding a 6 percent floor to the 20 percent standard based on its operational experience, during which it has recognized that, without an unemployment rate floor, areas that do not clearly lack sufficient jobs will continue to qualify for waivers solely because they are 20 percent above the national unemployment rate. Some commenters argued that the natural rate of unemployment is an impractical measure by which to set a floor. They argued that it has a very wide range of estimates, is a macroeconomic concept that is not a fixed or precisely identifiable unemployment rate, has not been a useful tool for setting policy or for predicting inflation, and is the subject of disagreement among economists. As described previously, though substate unemployment data for the general population is available, the Department recognizes there is no measure available for determining the number of available jobs specifically for ABAWDs on SNAP in any given area. The Department also acknowledges that the natural rate of unemployment is a theoretical concept that is not fixed at 5 percent, but fluctuates over time and has a wide range of estimates, making it an impractical basis by which to set a floor for the 20 percent standard. As a result, the Department did not view the natural rate of unemployment as a deciding factor in its decision to set the floor at 6 percent. The Department is also not persuaded by the arguments for no unemployment rate floor. Rather, the Department is adopting a 6 percent floor within the 20 percent standard because it aligns with DOL's LSA standard and it represents the most meaningful, justified option relative to the proposed rule's 7 percent floor or other potential unemployment rate floors. Alternative Measures of Unemployment Rates Several commenters argued that using the standard unemployment rate 5 —the U-3 rate, which is defined by BLS as the number of people unemployed as a percent of the civilian labor force—as a floor does not adequately capture job availability for ABAWDs and suggested that some alternative measures better represent labor market conditions for this population. Some commenters provided evidence that an alternative measure of unemployment published by BLS, known as the U-6 unemployment rate, indicates that job prospects for some disadvantaged groups have not improved as much as the unemployment rate for the general population. The U-6 unemployment rate is defined by BLS as the total number of people unemployed, plus all marginally attached workers, plus the total number of people employed part time for economic reasons, as a percent of the civilian labor force and all persons marginally attached to the labor force. Put more generally, the U-6 measure is the percent of people unemployed, people underemployed, and people who want a job but are not looking because they are unable to find jobs or are discouraged. These commenters point out that the standard U-3 rate includes the employed and unemployed people who have searched for a job in the past 4 weeks. The commenter argued that the U-6 rate, which includes people who want full-time work but had to settle for part-time work and unemployed people who have looked for a job in the last 12 months, more accurately captures the condition of the labor market for ABAWDs. Commenters provided evidence showing that the U-6 unemployment rate recovered more slowly during the recovery from the Great Recession than did the U-3 rate. Additionally, one State suggested that the U-3 unemployment rate fails to include working-age people who are not in the labor force, and this group includes many so-called “discouraged workers” who have given up on searching for employment. The State argued that because these individuals are not included in the BLS unemployment calculation, the BLS will underestimate the true joblessness rate in areas with proportionately larger populations of these individuals. Another State provided data showing that the Labor Force Participation Rate had increased by only 0.1 percent between September 2014 and November 2018, even though the U-3 unemployment rate had fallen significantly over that time period. Commenters also suggested that an unemployment rate floor based on the U-3 rate could disadvantage rural areas or other areas that primarily rely on declining industries because ABAWDs living in these areas may ultimately be unable to secure employment even if it is not reflected in a sustained high U-3 unemployment rate. Other commenters said that, in addition to facing higher unemployment rates, racial minorities are more likely to be marginally attached to the workforce, and thus ignored by the U-3 unemployment rates. 5 BLS publishes 6 measures of labor underutilization (U-1 through U-6). U-3 is the official unemployment rate, and it is equal to the total number of unemployed persons, as a percent of the civilian labor force. The number of unemployed persons includes all jobless persons who are available to take a job and have actively sought work in the past four weeks. U-6 is an alternative measure defined as total unemployed persons, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers. “Marginally attached workers” include “discouraged workers” who are persons who are not in the labor force, want and are available for work, and had looked for a job sometime in the prior 12 months. They are not counted as unemployed because they had not searched for work in the prior 4 weeks. Persons employed part time for economic reasons are those working less than 35 hours per week who want to work full time, are available to do so, and gave an economic reason (their hours had been cut back or they were unable to find a full-time job) for working part time. These individuals are sometimes referred to as involuntary part-time workers. U-6 data is not published by BLS on the substate level. While these comments about alternative unemployment measures are appreciated, the Department also recognizes that there is no measure available for precisely determining the number of available jobs specifically for SNAP ABAWDs in any given area. For example, while some commenters argued that the U-6 unemployment rate may better reflect the unemployment situation for ABAWDs, this measure is deficient for purposes of time limit waivers because it is not available at the substate level and therefore cannot be used to support or validate waiver requests for substate areas. Only U-3 unemployment data is available at the substate level. As stated previously, the Department believes that setting a 6 percent floor within the 20 percent standard strengthens the standard by aligning it more closely with the DOL LSA criteria upon which it was originally modeled. Section 6(o)(4) of the Act states that the Secretary may waive the ABAWD time limit if an area has an unemployment rate of over 10 percent or if an area does not have a sufficient number of jobs. In this rule, the Department aims to prevent the misapplication of waivers to areas with unemployment rates that do not clearly meet the statutory conditions for waivers, and setting an unemployment rate floor using the BLS U-3 rate for the 20 percent standard is one of the means by which the Department will do so. Alternative Unemployment Rate Floors Some commenters suggested that, if the Department is to set an unemployment rate floor within the 20 percent standard, the floor should be set at or closer to the natural rate of unemployment. In particular, some commenters suggested that the Department set a floor at the current estimate of the natural rate of unemployment or adopt a fluctuating floor based on the quarterly estimates of the natural rate of unemployment from the Congressional Budget Office (CBO). The Department appreciates these alternative suggestions. However, as previously discussed the Department believes that setting a fluctuating floor could be administratively difficult and setting a floor based solely on the current natural rate of unemployment may not account for changes to the natural rate of unemployment in the future. The Department is not persuaded by the arguments for alternative unemployment rate floors, and, as previously discussed, is adopting a 6 percent floor within the 20 percent standard. Ceiling for the 20 Percent Standard A commenter argued that imposing a floor similar to that used in LSA determinations is inconsistent with the Department's decision not to apply the LSA unemployment ceiling at 10 percent. The commenter stated that FNS is picking and choosing elements of LSA determinations without rationale. The Department acknowledges that the LSAs have a 10 percent ceiling and that any civil jurisdiction above 10 percent unemployment for the appropriate 24-month period qualifies as an LSA regardless of whether the area is 20 percent above the national average. However, the Department believes it is unnecessary to include a 10 percent ceiling in the 20 percent standard, as the Department will continue to approve waivers for areas that have an unemployment rate over 10 percent during a recent 12-month period. As this commenter pointed out, areas with an unemployment rate over 10 percent during a recent 24-month period typically also have an unemployment rate above 10 percent for a recent 12-month period. For this reason, the Department is not adopting a 10 percent ceiling at § 273.24(f)(2)(ii). Core Standards: Eliminating the Extended Unemployment Benefits Qualification Standard The Department proposed that it would continue to approve any waiver request that is supported by the requesting State's qualification for extended unemployment benefits, as determined by DOL's Unemployment Insurance Service. The Department also proposed to prohibit statewide waivers when substate data is available, except for those States qualifying under the extended unemployment benefits standard. Although the Department did not receive many comments with regard to retaining the extended unemployment benefits standard, some commenters supported the proposal to retain the extended unemployment benefits standard, arguing that this standard is an appropriate indicator that a State lacks sufficient jobs. Some of those who supported the proposal also argued that it is insufficient to have this as the only remaining criterion for statewide waivers, as this criterion does not adequately capture all States with a lack of sufficient jobs. These commenters noted that, under the extended unemployment benefits criterion, States must have increasing unemployment, and States that have continuing high unemployment that is flat and not increasing would not qualify under this criterion. Other commenters cited research finding that extended unemployment triggers are set too high and asserted that Congress has had to step in too often to establish temporary programs of extended unemployment insurance benefits. Commenters also argued that States should not need to wait until statewide labor market conditions become so dire that the State qualifies for extended unemployment benefits before they are eligible for a statewide waiver. Although the Department appreciates these comments in support of the criterion, the Department has decided not to adopt the rule as proposed because the Department is concerned that the extended unemployment benefits criterion would allow States to receive statewide waivers even when there is not a lack of sufficient jobs within certain areas of the State. One commenter stated that, while remaining sensitive to the administrative burden placed on State agencies, the Department should strive to approve waivers for distinct economic regions, as State boundaries often encompass multiple labor markets with significant variation in economic conditions. The Department agrees that waivers should be targeted to economically-tied areas with a lack of sufficient jobs, rather than entire states that contain distinct economic regions. In fact, the Department referenced a similar concept in the preamble to proposed rule for the current regulations at § 273.24, noting that statewide unemployment averages may mask “slack” job markets (insufficient jobs) in some substate areas. 6 The Department maintains the validity of this concept, and notes it is also true that statewide averages may mask tight labor markets in some substate areas. Additionally, as discussed later in the Restricting the Combining of Data to Group Substate Areas and Establishing Strict Definition of Waiver “Area” section, the Department is choosing to provide a strict definition of a waiver area that will also restrict statewide waivers. Therefore, the Department is removing the extended unemployment benefits criterion from the core standards, which was included at § 273.24(f)(2)(iii) in the proposed rule, as qualification for extended unemployment benefits is designated only at the state level, not at the LMA level. Accordingly, the Department is also eliminating the proposed exception to the restriction on statewide waivers for extended unemployment benefits that was included at § 273.24(f)(4) in the proposed rule. The Department believes this change will ensure that waivers of the ABAWD time limit are more appropriately targeted to those particular areas that have unemployment rates over 10 percent or lack sufficient jobs, rather than the larger areas of entire states. This is discussed further in the later section, Restricting Statewide Waivers. 6 Food Stamp Program: Personal Responsibility Provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Proposed Rule, 64 FR 70920 (December 17, 1999). Criteria Excluded From Core Standards The Department proposed excluding some of the current ABAWD time limit waiver criteria when standard BLS unemployment data is available. These excluded criteria include a low and declining employment-to-population ratio, a lack of jobs in declining occupations or industries, or an academic study or other publication(s) that describes an area's lack of jobs. Many commenters opposed excluding these criteria. Some commenters argued specifically that a low and declining employment-to-population ratio should be retained as a criterion for all areas. These commenters stated that this metric is well-defined and widely-used. Commenters asserted that data for this metric is readily available from the U.S. Census Bureau and BLS, and BLS regularly calculates this metric. Commenters argued that because employment-to-population ratio includes individuals who are employable but have not looked for a job in more than a year, during periods of severe and long-term economic recessions, the number of individuals in this category will grow and the employment-to-population ratio will paint a clearer picture of the strength of the labor market than other measures. Commenters argued that the employment-to-population ratio captures valuable information about discouraged workers and those classified as “marginally attached to the workforce” who are not actively looking for work, which is valuable because labor market depressions can discourage some ABAWDs from even searching for employment. Commenters argued that, compared to U-3 unemployment rates, the employment-to-population ratio is a more appropriate measure in some cases for labor market conditions for low-skill workers who face serious barriers to employment. Commenters provided evidence that researchers routinely use the employment-to-population ratio in addition to, or instead of, the unemployment rate to measure labor market conditions. One commenter asserted that the employment-to-population ratio provides useful information in assessing labor market conditions over the business cycle because it takes into account changes in labor market “slack” due to changes in both unemployment and labor-force participation. This commenter noted that employment-to-population ratio is a measure that labor economists use to capture weak labor markets in areas where there is a notable lack of jobs relative to the size of the working-age population. The commenter also pointed to previous Department guidance which stated that the employment-to-population ratio complements measures of unemployment by taking into account working age persons who may have dropped out of the labor force altogether, and that a decline in this ratio over a period of months could indicate an adverse job growth rate for the area. This commenter provided data indicating that an improved unemployment rate does not necessarily directly correspond to an improvement of the employment situation, and only a stable participation rate allows for unambiguous conclusions from a changing unemployment rate. This commenter also pointed out that States have used the employment-to-population criterion sparingly, and the Department requires States to provide additional evidence showing the requested area's labor market weakness for approval. The Department is not adding the low and declining employment-to-population ratio criterion to the core standards and is maintaining this criterion only for areas with limited data or evidence, consistent with the proposed rule. While the employment-to-population ratio metric is standardized, it is not produced by BLS at the substate level. Just as importantly, the employment-to-population ratio's meaning in terms of job-availability can be ambiguous due to shifting demographics at the local or national level. As one of the commenters pointed out, due to the potential for ambiguity, the Department currently requires the few States using the employment-to-population criterion to provide additional evidence showing the requested area's labor market weaknesses. Therefore, the Department believes this criterion is not as robust as standard unemployment data in demonstrating a lack of sufficient jobs and is not adding the low-and-declining population ratio criterion. Commenters also argued that information about declining industries or occupations should be retained as a criterion, arguing that such information provides appropriate flexibility for local labor conditions. One commenter argued that, while a population may as a whole remain employed, a large subset may be significantly affected by declining occupations. Another commenter argued that this criterion is especially important for smaller, rural areas in which the loss of a single job provider, such a major manufacturing plant or mining industry, can have a major effect on local job availability. The commenter stated that the impact of a plant closure may not impact a 24-month unemployment rate until several months, or even a year, have passed. The commenter argued that the criterion regarding declining industries or occupations allows waivers to quickly respond to deteriorating labor market conditions. This commenter pointed out that, although states have rarely used this criterion to request waivers, the Department has approved them on a limited case-by-case basis, including cases in which the State agencies provided evidence of the number of workers affected by layoffs and rapidly increasing unemployment rates over a short period of time due to plant closings. A few commenters also stated that academic studies and publications can often provide a more accurate description of a region's unemployment or can more accurately describe job availability among the ABAWD population than unemployment rates. The Department agrees that information about declining industries or occupations, and academic studies can be used to help understand employment changes in an area. However, information about declining industries or occupations, and academic studies are not as standardized and reliable as unemployment data, and the Department believes the best data should be used when it is available. Commenters broadly argued that excluding a low and declining employment-to-population ratio, a lack of jobs in declining occupations or industries, or an academic study or other publication(s), along with the change to include an unemployment rate floor in the 20 percent standard, results in an overreliance on unemployment rates. These commenters assert, as previously noted, that unemployment rates do not precisely capture job availability for ABAWDs, and States should have other options to demonstrate a lack of sufficient jobs, through other evidence and consideration of other economic factors. Commenters stated that States should retain flexibility to rely on metrics other than BLS' U-3 unemployment rates in their waiver requests. Commenters pointed to the fact that labor market participation has not recovered since the Great Recession, even though unemployment rates have. As already noted, commenters stated that U-3 unemployment rates do not capture the underemployed and those who drop out of the labor force altogether. One commenter stated that the unemployment rate is a lagging indicator and does not indicate job insufficiency soon enough, so a one-size fits all approach is ill-advised. Another commenter asserted that, due to weaknesses in existing data sets and challenges in defining economic conditions, many researchers use qualitative data to support an understanding of employment challenges. This commenter noted that even the National Bureau of Economic Research does not use a single formula or data set for a definition of a recession. Some commenters stated that not including these criteria in the core standards would undercut a more nuanced understanding of local job markets. Commenters also argued that Congress intended for there to be many different ways to meet “insufficient jobs” and stated that the Department acknowledged this when implementing in the late 1990s and early 2000s. Although the Department believes a low and declining employment-to-population ratio, a lack of jobs in declining occupations or industries, or an academic study or other publication(s) can enhance the understanding of the job market, the arguments made by the commenters were not sufficiently compelling to justify making changes to the proposed rule. The core standards established in this final rule are designed to provide States with a set of consistent criteria for approval based on reliable and robust available evidence for evaluating labor market conditions. Through its operational experience, the Department has recognized that a low and declining employment-to-population ratio, a lack of jobs in declining occupations or industries, or an academic study or other publication(s) are less reliable and consistent than standard unemployment data in demonstrating a lack of sufficient jobs. Therefore, the Department does not believe that these criteria should be included as part of the core standards for waiver approval. The final rule, however, is including these criteria as available for areas with limited data or evidence as the Department believes these are appropriate alternative measures when standard unemployment data is not available for an area. The final rule is adopting the language for those criteria as proposed. This language was included within § 273.24(f)(7) in the proposed rule, and is located within § 273.24(f)(6) in the final rule. Other Data and Evidence in an Exceptional Circumstance The Department proposed that waiver requests that are supported by data or evidence other than the core standards may be approved if the request demonstrates an exceptional circumstance in an area. Though requests tied to an exceptional circumstance need not necessarily meet the core standards, the Department proposed that the requests include some form of data or evidence showing that the exceptional circumstance has caused a lack of sufficient jobs in the area. As an example of the kind of data or evidence that could support a waiver under exceptional circumstances, the Department cited a most recent three-month average unemployment rate over 10 percent. Under the proposed rule, any supporting unemployment data provided by the State under this criterion must rely on standard BLS data or methods. Exceptional Circumstances A few commenters expressed concerns with elements of this provision. Commenters pointed out that the proposed language in § 273.24(f)(3) would require that the request demonstrate that the exceptional circumstance has caused a lack of sufficient jobs, but then provided an example of a State showing that an area has a most recent 3-month average unemployment rate over 10 percent. Commenters noted that the Act provides for two separate bases for waiver approvals, if the area “has an unemployment rate of over 10 percent” or “does not have a sufficient number of jobs to provide employment for the individuals.” The Department acknowledges that an example of an exceptional circumstance causing a 3-month average unemployment rate over 10 percent is an example of “an unemployment rate of over 10 percent.” The Department is, therefore, correcting this language at § 273.24(f)(3) to include the phrase “or an unemployment rate over 10 percent” after the phrase “has caused a lack of sufficient number of jobs.” Some commenters suggested that the term “exceptional circumstance” was unclear. As stated in the preamble to the proposed rule, given that economic conditions can change dramatically due to sudden and unforeseen forces, the Department believes it is appropriate to maintain a level of flexibility to approve waivers as needed in extreme, dynamic circumstances. Therefore, the Department does not believe an exhaustive list of all circumstances that will be considered exceptional can be provided. However, the Department can reiterate and further clarify the examples provided in the proposed rule. An exceptional circumstance may arise from the rapid disintegration of an economically and regionally important industry, the prolonged impact of a natural disaster, or a sharp continuing economic decline. As stated in the proposed rule, a short-term aberration, such as a temporary closure of a plant, would not constitute an exceptional circumstance. One commenter pointed to the closing of an automobile plant earlier this year. This commenter stated that this plant was major driver of the economy in the region, and its closing is having an immediate and massive ripple effect throughout the area. The commenter noted that the county the plant was located in would have qualified under the current regulations, but was unsure if the area would qualify under the new regulations, including the exceptional circumstance criterion. The Department would like to make it clear that permanent closure of a large plant (relative to the labor market area) or an ongoing significant reduction in the plant's workforce would be considered an exceptional circumstance, as long as it is not a temporary closing. If the closing were temporary and its impact not ongoing, then it would not justify a waiver. To provide more clarity regarding this criterion, the Department is editing the amendatory text at § 273.24(f)(3) to require that, under the exceptional circumstance criterion, the waiver request demonstrate that the impact of the exceptional circumstance is ongoing at the time of the request. Based on these comments, the Department also sees fit to underscore that the example provided in the proposed regulatory text, a 3-month average unemployment rate over 10 percent, is not the only potential way that States could demonstrate that an area has an unemployment rate over 10 percent or a lack of sufficient jobs due to an exceptional circumstance. The Department is editing the amendatory text at § 273.24(f)(3) to more clearly indicate that this is simply one example. States are free to provide other data and/or evidence and to construct arguments that there are not enough jobs for individuals in an area due to an exceptional circumstance. For example, a State might provide unemployment data or other evidence that is similar to the core standards except in that it covers a shorter duration because the area's economy suffered a rapid decline due to the exceptional circumstance that is not yet demonstrated by a full 12-month or 24-month data period. The Department will evaluate requests made based on exceptional circumstances carefully to ensure that that the sudden lack of jobs or high unemployment in the area is clearly connected to a recent exceptional circumstance, that the lack of jobs or high unemployment is ongoing, and that the lack of jobs or high unemployment is demonstrated by recent data or evidence. 3-Month Unemployment Rate of Over 10 Percent Commenters argued that restricting the use of a recent 3-month unemployment rate of over 10 percent to exceptional circumstances, rather than including it as a core standard, is contrary to the proposed rule's stated preference that waivers reflect current economic conditions. The Department points out that, while the current regulations suggest that States could submit evidence that an area has a recent 3-month average unemployment rate over 10 percent provide to support a claim of unemployment over 10 percent, the current regulations do not categorize this type of waiver as “readily approvable.” In this way, the Department believes that the proposed rule is relatively similar to the current regulations in excluding a recent 3-month average unemployment rate over 10 percent from the core standards. Moreover, the Department believes that requiring a 3-month average unemployment rate over 10 percent be tied to an exceptional circumstance will strengthen this criterion so that a 3-month average would not be used to grant a year-long waiver when that 3-month average is simply a short-term aberration or reflective of regular seasonal employment. Commenters also argued that restricting the use of a recent 3-month unemployment rate of over 10 percent to only exceptional circumstances, along with the elimination of the historical seasonal unemployment rate over 10 percent criterion, is inconsistent with the Act. Commenters noted that the proposed rule would essentially leave only one criterion—having a 12-month average unemployment rate over 10 percent—as the basis for approval using an average unemployment rate over 10 percent. These commenters argued that these changes are inconsistent with the Act, as the Act does not specify requirements regarding the duration of time that an area must have an unemployment rate above 10 percent. Commenters argued that the Department has previously discussed shortcomings with requiring a 12-month average unemployment rate to demonstrate an unemployment rate over 10 percent. Commenters noted that in guidance issued in December 1996, the Department stated that it would not require a 12-month average to approve a waiver based on an unemployment rate over 10 percent. Commenters noted that this guidance stated, “A 12-month average will mask portions of the year when the unemployment rate rises above or falls below 10 percent. In addition, requiring a 12-month average before a waiver could be approved would necessitate a sustained period of high unemployment before an area became eligible for a waiver.” Commenters argued that to address these issues, the guidance document stated, “. . . states have several options. First, a state might opt to use a shorter moving average. A moving average of at least three months is preferred. In periods of rising unemployment, a three-month average provides a reliable and relatively early signal of a labor market with high unemployment. A state might also consider using historical unemployment trends to show that such an increase is not part of a predictable seasonal pattern to support a waiver for an extended period (up to one year).” Commenters argued that this guidance was reinforced in the preamble of the 1999 proposed rule. Commenters also argued that eliminating the 3-month average unemployment rate over 10 percent as the basis for waiver approval is contrary to the Department's preference that waivers reflect current economic conditions, as stated in the 2019 proposed rule. These commenters asserted that a most recent three-month average unemployment rate over 10 percent is the criterion that most closely aligns with current economic conditions and signals deteriorating labor market conditions in an area. The Department believes the changes being made are consistent with the Act. In fact, the current regulations also include duration requirements to demonstrate an area has an unemployment rate above 10 percent, and only guarantee approval of waivers based on unemployment over 10 percent for a 12-month period. For example, an area with a 1-month unemployment rate of over 10 percent cannot qualify for a waiver based on that evidence alone. Similarly, in order for a State to demonstrate an area has an unemployment rate above 10 percent, the core standards in the final regulations only guarantee approval of waivers based on unemployment over 10 percent for a 12-month period. As the Act does not specify duration requirements, the Department is within its authority to define how 10 percent unemployment is to be measured through the rulemaking process, as it did when it originally promulgated regulations regarding the ABAWD time limit. One commenter also argued that requiring that the 3-month unemployment rate be above 10 percent is too high and provided data from recent economic downturns to argue that a 10 percent unemployment rate is not always reached, even in times that are considered times of severe economic distress. The commenter argued that the waiver standards need to be more responsive to economic declines in order to serve as an automatic stabilizer and help mitigate the negative economic impacts of the decline. As explained in the preceding section, in the event of an exceptional circumstance a recent 3-month unemployment rate is only one example of evidence that can be provided to support a waiver. Restricting the Combining of Data to Group Substate Areas and Establishing a Strict Definition of Waiver “Area” Comments on Restricting the Combining of Data to Group Substate Areas The Department proposed to prohibit States from combining unemployment data from individual substate areas to calculate an unemployment rate for the combined area (otherwise referred to as “grouped” areas or “grouping”), unless the combined area is designated as a Labor Market Area (LMA) by the Federal government. According to DOL, an LMA is an economically integrated area within which individuals can reside and find employment within a reasonable distance or can readily change jobs without changing their place of residence. LMAs are an exhaustive level of substate geography delineated in partnership by DOL and OMB, then published by the DOL BLS Local Area Unemployment Statistics program. 7 The Department also proposed that States would not be able to omit certain areas within the LMA in the State from the area covered by the waiver. In addition, the Department specifically asked for comment on whether grouping should be limited to LMAs or whether grouping should be prohibited entirely. 7 For more information on LMAs, please visit https://www.bls.gov/lau/laugeo.htm. Some commenters generally supported the restriction on States' ability to group areas, stating that using LMAs would limit grouping to regions with demonstrable economic ties and prevent manipulative grouping practices by States. Commenters noted that LMAs are a relevant and reliable tool for evaluating labor market conditions within a local area. Commenters stated that States should not be able to combine areas on the basis of their own judgment, as they will seek to maximize any discretion in order to receive and use as much Federal money as possible. One commenter noted that allowing States to combine areas has led to combining low unemployment counties with high unemployment counties as a means to waive the work requirement for as many ABAWDs as possible, which this commenter considered abuse. Many commenters opposed the proposed restriction on grouping to only LMAs. Some commenters argued that the current discretion given to States works and that this is shown by evidence that States are gradually phasing out waivers in the areas with the lowest rates of unemployment as the economy improves. The Department does not share this view. Based on the Department's extensive experience reviewing and processing ABAWD waiver requests, it believes that many areas have remained under waivers for longer than appropriate due to, in particular, States' strategic use of grouping to maximize the geographic coverage of waived areas rather than to demonstrate high unemployment or a lack of sufficient jobs for ABAWDs, as outlined in the Act. In the Department's view, States' strategic use of grouping to maximize the geographic coverage of waived areas subverts the Act's condition that waivers apply where unemployment exceeds 10 percent or there is a lack of sufficient jobs. Some commenters suggested the Department used too narrow of a definition of the terms “economically tied” and “labor market area.” They suggested that LMAs are not the only appropriate areas for grouping because LMAs are based on commuting patterns of the general workforce and are not specific to low-income, low-skilled ABAWDs who lack affordable transportation options. Commenters argued that LMAs are not always an accurate indication of which communities interact economically or are accessible for the purposes of employment. Commenters stated that the LMA designation does not take into account variations by industry or socioeconomic characteristics. Commenters provided research showing that a given county may belong to multiple commuting areas depending on the industry or type of occupation. Commenters also stated that job losses in some LMAs can have significant ripple effects in other neighboring LMAs. Commenters gave examples in which some LMAs are too big to properly define commuting patterns for ABAWDs because it could take more than two hours without traffic to commute one way from one end of an LMA to the other by car and provided examples where it is impossible to access most of the communities within an LMA using public transportation. Commenters argued that the LMA methodology misses the fact that, in some counties, workers may have to travel in all directions and often beyond a contiguous county for their job, and, therefore, LMAs are too small in some cases. Commenters provided research indicating that the change in proximity to jobs in recent years varies by socioeconomic characteristics, with poor, minority residents seeing the biggest decline in jobs within a reasonable commuting distance. The Department is not compelled by the commenters' suggestions described in the preceding paragraphs, which generally argue that LMAs do not account for specific ABAWD commuting patterns and other factors specific to ABAWDs. While commenters suggested alternatives that the Department considered, as discussed below, LMAs remain the best available and most appropriate delineation to address the issue of grouping, as there are no Federally-designated areas that specifically assess commuting patterns and other related economic factors for ABAWDs. According to DOL, an LMA is an economically integrated area within which individuals can reside and find employment within a reasonable distance or can readily change jobs without changing their place of residence; therefore the Department maintains that they are the best available and most appropriate area delineation at this time. However, the Department notes that if in the future a more robust delineation becomes available from a Federal source, the Department may consider its appropriateness in the context of future rulemaking. Other commenters argued that States have the best understanding of the regional patterns in their labor markets, local commuting burdens, and other local nuances specific to ABAWDs, and should retain flexibility in combining data to group areas. A State agency commented that each State has the contextual knowledge and experience to identify the most appropriate grouping areas for a waiver. Commenters suggested that the proposal to impose restrictions on grouping substate areas is inconsistent with the philosophy that the government closest to the people governs best. Commenters stated that an erosion of State autonomy in forming these substate groupings could result in SNAP participants being removed from the program despite a demonstrable lack of sufficient jobs in their labor market. Commenters argued that in its original rulemaking the Department recognized that it did not have sufficient expertise to evaluate whether local labor markets could offer “a sufficient number of jobs to provide employment for the individuals” because the Department was not in a position to know where new jobs were located or the feasibility of commuting to them given driving times and public transportation. Commenters argued that in its original rulemaking the Department found that county unemployment rates were the most available measure of the vitality of local labor markets, and the Department specifically allowed States to determine which areas would be grouped together to receive waivers because the patterns of employment and mobility for the low-skilled employment market can be quite different from those for the overall employment market. Commenters argued that the Department concluded that States were best-equipped to determine whether high unemployment in some areas adversely affected employment prospects in others. Commenters suggested that there are numerous reasons that a State would choose to group towns other than by LMA, such as cost of living, lack of access to or availability of transportation, lack of employers with a certain job field, or other demographic considerations. Commenters argued that the proposed change to State flexibility in grouping areas is contrary to years of FNS guidance and departs from USDA's longstanding position without reasoned support. They pointed out that in regulations and guidance over the past two decades, the Department has given States broad discretion to define areas and has never expressed that commuting patterns be the primary or only basis for whether or not substate areas could be grouped together. The Department appreciates and has considered the comments described in the preceding paragraphs, which broadly argue that States should maintain their current flexibility to group substate areas. However, the Department disagrees. The Department has learned through its extensive operational experience that this flexibility allows States to strategically group substate areas to maximize the geographic coverage of waived areas rather than to demonstrate high unemployment or a lack of sufficient jobs for ABAWDs, as outlined in the Act. The Department has determined that this problem is one of the primary reasons why about half of the ABAWDs participating in SNAP live in waived areas, despite current low unemployment levels across the majority of the country. Therefore, the need to address this problem outweighs the arguments received in support of States' need to maintain current flexibility. The Department is within its authority to revise its regulations as the statute does not define what constitutes an “area”, and the Department's operational experience has shown that current regulations provide States with too much flexibility. As previously stated, States are grouping areas in such a way to maximize waived areas rather than demonstrate high unemployment or lack of sufficient jobs for ABAWDs. As noted in the proposed rule, the Department has learned that its standards for combining areas provide too much flexibility for State agencies. While the Department has attempted to clarify its intention that areas be economically tied through policy guidance, 8 this has not prevented States from strategically using grouping to maximize waived areas. For example, some States have grouped nearly all contiguous counties in the State together while omitting a few counties with relatively low unemployment in order to maximize the waived areas in the State. In other cases, States have grouped certain towns together that share the same economic region while omitting others with relatively low unemployment from the group, thereby maximizing the waived areas in the State. 8 Guide to Supporting Requests to Waive the Time Limit for Able-Bodied Adults without Dependents, 2016. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Guide-to-Supporting-Requests-to-Waive-the-Time-Limit-for-ABAWDs.pdf. A few commenters stated that the proposed rule's restriction on grouping contradicts the statutory language permitting waivers for “any group of individuals in the State if the Secretary makes a determination that the area in which the individuals reside” has an unemployment rate above 10 percent or lacks sufficient jobs. Commenters suggested that Congress intended to allow States to use their discretion in how to group regions together for the purposes of obtaining a waiver. Commenters argued that States are not using waivers in ways that were “not foreseen by Congress” as described in the proposed rule. Commenters noted that Congress specifically considered language in the House-passed version of the 2018 Farm Bill that would have limited grouping and then rejected this provision in the final enacted 2018 Farm Bill. Commenters also pointed to the Conference Report that accompanied the 2018 Farm Bill, which states, in particular, “[t]he Managers intend to maintain the practice that bestows authority on the State agency responsible for administering SNAP to determine when and how waiver requests for ABAWDs are submitted.” These commenters argued that to add new geographic restrictions through this rulemaking would contradict the intent of Congress. In response to these comments, the Department points out that Congress has been silent on the specific issue of combining data to group substate areas. Nothing in the statute or legislative history clearly states how the Department should handle this issue. The Department believes the Conference Report that accompanied the 2018 Farm Bill is referring broadly to maintaining the States' ability to choose which areas it wishes to request when submitting a request to the Department, not referring to maintaining the discretion of States to combine data from substate areas to form an economic region. Other commenters argued that the LMA standard is reliant on outdated data. They pointed out that the current list of LMAs are based on population data from the 2010 Census and commuting data from the American Community Survey five-year dataset for 2006-2010. These commenters argued that LMAs are not updated frequently enough to capture recent labor market trends. Commenters also stated that OMB has cautioned that LMA delineations (specifically Metropolitan Statistical Area and Micropolitan Statistical Area delineations) should not be used to develop and implement Federal, State, and local non-statistical programs and policies without full consideration of the effects of using these delineations for such purposes. The Department appreciates the concerns described in the preceding paragraph regarding the age of the data used for LMAs and using caution when applying LMAs to implementing Federal policies. However, after assessing alternative options, the Department has not identified any other labor market definition that uses more recent data and would equally address the problem of States' manipulative usage of grouping substate areas to maximize waived areas. The Department is resolute that it must address this problem, and that LMAs represent the best available and most practical solution. Commenters also stated that the proposed rule ignores that a variety of other factors that can account for areas having “economic ties,” such as employer recruiting practices, regional workforce development strategies, regional economic development and investment patterns, service delivery models, and migration patterns. Commenters asserted that States consider multiple factors when grouping areas to align resources, administrative capacity, and service delivery, and may also consider the location of SNAP E&T services, Workforce Innovation and Opportunity Act (WIOA) services, and other work programs or grant programs. In particular, commenters stated that the proposed restriction on grouping would reduce States' ability to allocate and coordinate E&T resources effectively. One commenter provided examples of States that coordinated E&T programs with unwaived areas when the State could not provide or guarantee SNAP E&T slots in all counties. Commenters argued that the proposed rule would make State planning more difficult given the inability to group areas consistent with Workforce Development Boards. Commenters suggested that the Department consider other alternative frameworks for grouping areas, such as areas covered by Workforce Development Boards. They noted that, under WIOA, states have discretion to define regions and are encouraged to take an integrated approach to account for a range of different factors, starting with LMAs, but then also considering funding streams and service delivery. While the Department appreciates that States consider administrative needs, the availability of work programs and employment and training services, and other factors in considering when and where to request a waiver, the Department interprets the Act to plainly mean that the Department's authority to grant waivers is limited to areas with unemployment rates of over 10 percent or areas that demonstrate lack of sufficient jobs. The Department is not compelled by arguments that E&T services or other work program availability should be factored in when defining which areas have high unemployment or lack sufficient jobs. However, the Department also notes that States still maintain the ability to choose which areas to request. If the State wants to choose areas to request, among those that qualify, based on E&T services or other work programs, the State is free to do so. Commenters also suggested that the Department allow grouping consistent with Bureau of Economic Analysis (BEA) economic areas. Commenters pointed out that these areas were listed as an example of an area for grouping in past Department guidance. The Department appreciates these suggestions but has evaluated BEA economic areas and determined that they are no longer appropriate for grouping areas for ABAWD waiver requests, as BEA is no longer producing or publishing this data. Commuting Zones Some commenters urged the Department to consider using Commuting Zones (CZs) as another, possibly more accurate, metric for evaluating labor market conditions within a local area and grouping substate areas for waivers. Some commenters pointed out that, while many LMAs encompass a single county, very few CZs do. Other commenters asserted that the USDA Economic Research Service (ERS) created CZs to better reflect commuting patterns in rural areas. One commenter pointed to research by ERS examining the relationship between labor market area conditions and length of SNAP participation spell, which found that using the CZ definition had the largest estimated effects among several labor market definitions. Other commenters argued that the Department should consider replacing LMAs with CZs because it would result in the application of the work requirement in more areas. One commenter stated that limiting grouping to either LMAs or CZs would be a vast improvement over current rules. Another commenter argued that CZs face the same limitation as LMAs in that they are based on commuting patterns of the general public and do not account for other factors specific to ABAWDs. While the Department appreciates the suggestions to consider using CZs, the Department is not adopting this alternative proposal. While CZs were originally developed by USDA ERS, the list of CZs is no longer published by a government agency. This is in contrast to the LMA list, which is still published by DOL. Though university researchers published data similar to USDA ERS's CZs following the 2010 Census, the Department believes the basis for approval of waivers must be sound data and evidence that primarily relies on data from BLS or BLS-cooperating agencies. For these reasons, the Department views the use of LMAs for ABAWD waivers as vastly superior to CZs, and does not think it prudent to include CZs as a substitute for LMAs nor as an additional means by which to group substate areas. Establishing Strict Definition of Waiver “Area” The Act states that “the Secretary may waive the applicability of [the time limit] to any group of individuals in the State if the Secretary makes a determination that the area in which the individuals reside . . . has an unemployment rate of over 10 percent; or . . . does not have a sufficient number of jobs to provide employment for the individuals.” Current regulations generally allow States to define “the area in which the individuals reside.” That is, the current regulation at § 273.24(f)(6) provides the following: “States may define areas to be covered by waivers. We encourage State agencies to submit data and analyses that correspond to the defined area. If corresponding data does not exist, State agencies should submit data that corresponds as closely to the area as possible.” In response to the proposed rule's restriction on the combining of data to group substate areas, one commenter suggested that the Department should instead define “area” as a jurisdiction, such as a county, and then adopt a two-step approach to approving waivers. During this two-step process, the Department would first determine whether the requested jurisdiction would meet any of the waiver criteria, and, if it does, the Department should also determine whether the commuting zone surrounding the jurisdiction would also meet the waiver criteria. Unless the waiver criteria is met in both steps, both for the jurisdiction in which the individual resides and for the larger CZ, the waiver would not be granted. The Department does not believe that defining “area” in this way and adding this two-step process would be consistent with section 6(o)(4) of the Act. The Act gives the Secretary authority to waive an “area in which the individuals reside,” if the area “has an unemployment rate of over 10 percent” or “does not have a sufficient number of jobs to provide employment for the individuals.” Including the two step process suggested by the commenter would actually result in many individual jurisdictions, defined as “areas,” being denied waivers even if the area demonstrates an unemployment rate of over 10 percent or a lack of sufficient jobs based on robust, reliable BLS data. This is because an additional area ( e.g., the commuting zone) would also need to demonstrate an unemployment rate of over 10 percent or a lack of sufficient jobs. In other words, two areas (the jurisdiction and the commuting zone) would need to meet the criteria in the Act for a waiver to be approved, which the Department believes is inconsistent with the Act. In response to the proposed rule's restriction on the combining of data to group substate areas, some commenters also argued that States should not have the option to request varying levels of jurisdictions within the same waiver and that States should not be able to choose when to apply for a combined area using the LMA definition and when to apply for a single-jurisdiction waiver. Commenters argued that areas should not qualify for waivers if there are available jobs within a reasonable commuting distance. Commenters also argued that ABAWD time limit waiver policy should not stifle geographic mobility by reinforcing perverse incentives for working-age individuals to remain in an economically depressed area to receive SNAP benefits for an unlimited period of time without working or engaging in work training. In addition, commenters asserted that “area” should be defined to ensure the maximum number of people possible are moved off of SNAP and into the workforce, where they can improve their lives, families, and communities. Commenters provided data indicating that not allowing States to waive the ABAWD time limit unless the LMA qualifies for the waiver would result in a broader application of the time limit. The Department agrees with the comments described in the preceding paragraph. Therefore, the Department is expanding upon the proposed rule's restriction on the combining of data to group substate areas to explicitly define the statutory phrase “an area in which the individuals reside” to mean an area considered to be an LMA, as defined by OMB/DOL. The Department is also including the intrastate part of an interstate LMA, an Indian reservation area, and a U.S. Territory in this new waiver area definition, as explained later in this section. In general, this means that the final rule will only allow for waivers covering LMAs; not individual jurisdictions within LMAs, such as counties or county equivalents, and not for any State-defined groupings of substate areas. Thus, this change effectively replaces the proposed amendatory text of § 273.24(f)(4) and (5) of the proposed rule, which had proposed restricting Statewide waivers and the combining of data to group substate areas (grouping). The Department is making this change in the final rule because it is concerned about the potential for misuse by States if States have the choice to obtain waivers for LMAs or individual jurisdictions, such as counties and county equivalents. For example, if a State has the choice to obtain waivers for LMAs or for individual counties, and a given LMA does not qualify but a county within it does qualify, the State could waive the county without consideration for the job availability in its surrounding LMA. Consistent with the aforementioned comments, the Department does not think providing this type of choice is appropriate in the context of ABAWD time limit waivers. The Department is therefore establishing a strict definition of waiver area because it believes that individual jurisdictions, such as counties or county equivalents, should not receive waivers if there are jobs available in a nearby jurisdiction, within a reasonable commuting distance. LMAs, as listed by DOL, represent the best available government definition of an area for defining a reasonable commuting distance. The Department also believes that generally restricting waivers to qualifying LMAs will result in a broader application of the time limit, encourage geographic mobility among ABAWDs, and reduce dependence on government benefits. In other words, the Department is implementing a clear regulatory definition of “area” for waiver purposes because it expects unemployed ABAWDs to proactively pursue any and all work and/or work training opportunities within reasonable commuting distance of their homes. In that same vein, the Department expects States to support ABAWDs in their efforts to find work and meet the work requirement by expanding access to work programs and other supportive services for ABAWDs. Some commenters pointed out that many LMAs cross State lines, while individual States are responsible for requesting waivers for areas within each State. Commenters noted that the proposed rule did not explain what would happen in these circumstances. In the final rule, the Department is choosing to require that waiver approval be based on data from the entire interstate LMA, not data from the part of the LMA within the State. In other words, a State with an interstate LMA may request and be approved for the portion of the LMA that falls within its jurisdiction as long as the entire interstate LMA qualifies. The Department believes this requirement is consistent with the rationale that areas should not qualify for waivers if there are available jobs within a reasonable commuting distance, and is consistent with the restriction on waiving individual jurisdictions within LMAs. Therefore, the Department is specifically including the intrastate part of an interstate LMA in its strict definition of an area. The Department sees fit to point out that if an entire State is encompassed by one larger interstate LMA, then the State may request and be approved for a statewide waiver if the entire interstate LMA qualifies. Currently, the only example of this situation would be the District of Columbia, which is encompassed by one larger interstate LMA. Based on the Department's decision to strictly define waiver area as an LMA (or the intrastate part of an interstate LMA, a reservation area, or a U.S. Territory), the Department also sees fit to clarify a few potential points of confusion about LMA data availability. In the proposed rule, the Department proposed that the practice of grouping be restricted to only LMAs by amending 273.24(f)(5) to stipulate that the State agency “may only combine data from individual areas that are collectively considered to be Labor Market Area by DOL.” However, in the proposed rule the Department did not reference the fact that BLS publishes directly corresponding, representative unemployment data for all LMAs, just as it does for counties, county equivalents, and a limited number of other areas. 9 To clarify, because corresponding LMA data is available, States would not need to use unemployment data and labor force data from individual areas within an LMA ( e.g., for multi-county LMAs) to calculate an unemployment rate representative of the LMA. In other words, under the final rule's strict definition of waiver area, States requesting waivers for an LMA would not be required to combine data. Therefore, the Department has revised the amendatory text in the final rule to better reflect that directly corresponding, representative BLS unemployment data is currently available for LMAs. If such corresponding data were to become unavailable in the future, States may combine the data of the individual areas within the LMA ( e.g., for multi-county LMAs) to calculate an unemployment rate representative of the LMA. The Department is addressing the potential scenario in the amendatory text so that if corresponding data were to become temporarily or permanently unavailable in the future for any LMA, that States would continue to be able to exercise their option to request and support waivers for any LMA. 9 For more information on the available BLS data, please visit https://www.bls.gov/lau/laugeo.htm. As noted in a preceding paragraph, the final rule also includes Indian reservation areas and U.S. Territories in the strict definition of waiver area. This means that though other individual jurisdictions ( e.g., counties or county-equivalents within a larger LMA) are not allowable waiver areas, reservation areas and U.S. Territories are allowable waiver areas, consistent with longstanding policy. The U.S. Government has a unique legal relationship with Indian tribal governments that differentiates reservation areas from other areas within the United States. Agencies have been instructed by Executive Order 13175 to respect Indian tribal self-government and sovereignty, honor tribal treaty and other rights, and strive to meet the responsibilities that arise from the unique legal relationship between the Federal Government and Indian tribal governments. As such, the Department recognizes that reservation areas have unique circumstances and do not fit neatly within the LMA definition. In addition, U.S. Territories participating in SNAP, including Guam and the U.S. Virgin Islands, do not have Labor Market Areas and would therefore have no basis for qualifying for a waiver if they were not explicitly included in the strict definition of an area. Therefore, the Department is recognizing these areas as potential waiver areas in the amendatory text. The Department sees fit, however, to also explain that while reservation areas could be waived independently, they may be also be waived as part of one or more LMAs that they are geographically located within, without the need for the State to request to waive that reservation area independently. The Department is adopting these changes to establish a strict definition of waiver area, to include an LMA, the intrastate part of an interstate LMA, a reservation area, or a U.S. Territory, at § 273.24(f)(4). Restricting Statewide Waivers The Department proposed eliminating statewide waiver approvals requested on the basis of statewide data averages when substate data averages are available through BLS, except for those waivers based upon a State's qualification for extended unemployment benefits, as determined by DOL's Unemployment Insurance Service. A few commenters supported this proposal. One commenter, in particular, stated that while remaining sensitive to the administrative burden placed on State agencies, the Department should strive to approve waivers for distinct economic regions, as State boundaries often encompass multiple labor markets with significant variation in economic conditions. As discussed previously in the Core Standards: Eliminating the Extended Unemployment Qualification Standard section, the Department agrees with this comment and notes that statewide data may mask tight labor markets in some substate areas. Additionally, as discussed in the immediately preceding section, Restricting the Combining of Data to Group Substate Areas and Establishing a Strict Definition of Waiver “Area”, the Department is choosing to codify a strict definition of waiver “area” that will also effectively restrict statewide waivers. In addition, as discussed in the Core Standards: Eliminating the Extended Unemployment Benefits Qualification Standard section, the Department is modifying its proposals to remove the extended unemployment benefits criterion from the core standards that was included at § 273.24(f)(2)(iii) in the proposed rule and to eliminate the proposed exception for extended unemployment benefits from the restriction on statewide waivers that was included at § 273.24(f)(4) in the proposed rule. These changes will effectively eliminate all statewide waivers based on statewide data, except for U.S. Territories, as explained in preceding sections. Consistent with the general rationale for restricting statewide waivers, the Department believes this change will ensure that waivers of the ABAWD time limit are more appropriately targeted to those particular areas that have unemployment rates over 10 percent or lack sufficient jobs. However, the Department sees fit to point out a particular nuance on the restriction of statewide waivers. That is, while this change generally eliminates statewide waivers based on statewide data, it would be possible for all LMAs in a State to qualify for waivers provided that each requested LMA separately meets the standards for approval. Similarly, it would be possible for a single LMA's boundaries to match or encompass a State's boundaries, in which case a waiver for the LMA would effectively waive the entire State. The Department does not see the potential for such scenarios to be problematic because they would not contradict the strict definition of waiver area in that the waiver area would still consist of one or more individually qualifying LMAs. Many commenters expressed opposition to the proposed restriction of statewide waivers. A few of these commenters argued that this proposal is arbitrary and capricious because it departs from USDA's longstanding position without reasoned support. In particular, these commenters argued that the Department fails to identify data or evidence that justifies a restriction on statewide waivers. A commenter also provided text from the House Committee on Budget report (H. Rept. 104-651) from June 1996, when it reported out its original version of PRWORA, which stated, “The committee understands that there may be instances in which high unemployment rates in all or part of a State or other specified circumstances may limit the jobs available for able-bodied food stamp participants between 18 and 50 years with no dependents.” Another commenter provided text from the House Committee on Agriculture materials when it marked up the Food Stamp Reform and Commodity Distribution Act in March 1995, which eventually was incorporated into PRWORA and was the basis for what is now section 6(o) of the Act. These materials stated, “The new work requirement could be waived by the Secretary, for some or all individuals within a State or part of a State, if, on a State's request, the Secretary finds that the area has an unemployment rate of over 10 percent, or the area does not have a sufficient number of jobs to provide employment to those subject to the new requirement (but, the Secretary must report to Congress on the basis on which the waiver decision was made).” Commenters also challenged the Department's rationale that statewide unemployment figures may include areas in which unemployment rates are relatively low and that eliminating statewide waivers will help target areas in which unemployment rates are high. These commenters asserted that this proposal is arbitrary because variation in unemployment rates exists at all geographic levels. One commenter also asserted that the proposed rule's stated rationale ignores the statistical principle of weighted averages. This commenter said that, in order for an entire State to qualify under current rules, unemployment rates in the State must be generally high across the State, particularly in the most populous areas of the state. Commenters said that statewide waivers are appropriate when the areas being impacted by economic forces are fluid and the State can demonstrate an overall lack of sufficient jobs. The Department is not compelled by commenters' suggestions that the elimination of statewide waivers is arbitrary. The Department believes this change will ensure that waivers of the ABAWD time limit are more appropriately targeted to those particular areas that have unemployment rates over 10 percent or lack sufficient jobs, as required by the Act. Moreover, as pointed out in a preceding paragraph, it would be possible for all LMAs in a State to qualify for waivers provided that each requested LMA meets the standards for approval, or for a single LMA's boundaries to match or encompass a State's boundaries. Some commenters, including a State agency, expressed disagreement with the idea that an entire State should not be treated as a large “economically tied” area. The State agency argued that residents of a State are economically tied together in that they share the same State minimum wage laws, labor regulations, occupational licensing requirements, and income tax rates. Several commenters stated that this proposal would limit State flexibility and would increase administrative complexities and burdens. Another commenter argued that there is no evidence of States abusing statewide waivers. One commenter pointed to data showing that the number of statewide waivers has been decreasing as the economy has improved, indicating that there is no need for this provision. The Department has observed that statewide waivers have resulted in the waiving of substate areas that do not have unemployment rates over 10 percent nor lack sufficient jobs. In these cases, the statewide averages mask tight labor markets in some substate areas, just as they may mask slack labor markets in other substate areas. For example, two recent statewide waiver requests included multiple substate areas with individual unemployment rates of under 4 percent. Under current regulations, these statewide waiver requests qualify because they are based on [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2019-26044. Public record. Not legal advice.