Food Stamp Program; Anticipating Income and Reporting Changes

DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Part 273

[Amendment No. 376]

RIN 0584-AB57

Food Stamp Program; Anticipating Income and Reporting Changes

AGENCY: Food and Consumer Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes revisions in Food Stamp Program procedures

for reporting and acting on changes in earned income. The changes are

designed to increase State agency flexibility and improve procedures

for determining the eligibility and benefits of households whose income

fluctuates unpredictably. Under this proposal, State agencies would

choose from three different reporting requirements for households with

earned income. The reporting requirement a State agency selects would

replace the current requirement that households report a change of more

than $25 in earned income. In addition to reporting a change in source

of income, households would be required to report one of the following:

A change in wage rate or salary and a change in part-time or full-time

status, provided the household is certified for no more than 3 months;

a change in wage rate or salary and a change of more than 5 hours a

week that is expected to continue for more than a month; or a change in

the amount earned of more than $80 a month.

DATES: Comments must be received on or before February 18, 1997 to be

assured of consideration.

ADDRESSES: Comments should be submitted to Margaret Werts Batko

Assistant Branch Chief, Certification Policy Branch, Program

Development Division, Food and Consumer Service, USDA, 3101 Park Center

Drive, Alexandria, Virginia, 22302, (703) 305-2516. Comments may also

be datafaxed to the attention of Ms. Batko at (703) 305-2486. The

internet address is: [email protected]. All written comments

will be open for public inspection at the office of the Food and

Consumer Service during regular business hours (8:30 a.m. to 5 p.m.,

Monday through Friday) at 3101 Park Center Drive, Alexandria, Virginia,

Room 720.

FOR FURTHER INFORMATION CONTACT: Questions regarding the proposed

rulemaking should be addressed to Ms.

[[Page 66234]]

Batko at the above address or by telephone at (703) 305-2516.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This proposed rule has been determined to be significant and was

reviewed by the Office of Management and Budget in conformance with

Executive Order 12866.

Executive Order 12372

The Food Stamp Program (Program) is listed in the Catalog of

Federal Domestic Assistance under No. 10.551. For the reasons set forth

in the final rule in 7 CFR part 3015, Subpart V and related Notice (48

FR 29115), this Program is excluded from the scope of Executive Order

12372 which requires intergovernmental consultation with State and

local officials.

Regulatory Flexibility Act

This rule has been reviewed with regard to the requirements of the

Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Ellen Haas,

Under Secretary for Food, Nutrition, and Consumer Services, has

certified that this rule will not have a significant economic impact on

a substantial number of small entities. State and local welfare

agencies will be the most affected to the extent that they administer

the Program.

Paperwork Reduction Act

This proposed rule contains information collections which are

subject to review by the Office of Management and Budget (OMB) under

the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The reporting and

recordkeeping burden associated with the eligibility, certification,

and continued eligibility of food stamp recipients is approved under

OMB No. 0584-0064. Current burden estimates for OMB No. 0584-0064

include burden associated with collecting and verifying information

reported on the application to determine initial household eligibility

and also on a form given to households for reporting changes in their

circumstances during the certification period. Some households are

required to submit a report every month; other households (change

reporting households) are required to report changes within 10 days of

the date they become aware of the change. State agencies provide

households with a form for reporting these changes (change report form)

at every certification and whenever a change is reported. This rule

would amend 7 CFR 273.12(a)(1)(i) to provide State agencies with three

options for earned income changes households would be required to

report. The options are (1) a change in wage rate or salary and a

change in part-time or full-time status, provided that the household is

certified for no more than 3 months; (2) a change in wage rate and a

change of more than 5 hours a week that is expected to continue for

more than a month; or (3) a change in the amount earned of more than

$80 a month. State agencies would select one of these options to

include on the change report form. The provisions in 7 CFR

273.12(a)(1)(i) of this proposed rulemaking do not alter burden

estimates already approved under OMB No. 0584-0064 for change reporting

households. The methodologies used to determine the burden estimates

assume that all change reporting households will submit at least one

change report form annually. The number of change reporting households

is estimated to be 9,324,000. Although the proposed changes would

remove the need for change reporting households to report small changes

in the amount of earned income, households would still be required to

report other changes, and the assumption of at least one report a year

remains valid. The public reporting burden for the change report form

is estimated to average .1617 hours per report form for a total burden

of 1,507,691 hours annually.

Comments. Comments are invited on: (a) Whether the proposed

collection of information is necessary for the proper performance of

the functions of the agency, including whether the information will

have practical utility; (b) the accuracy of the agency's estimate of

the burden of the proposed collection of information, including the

validity of the methodology and assumptions used; (c) ways to enhance

the quality, utility and clarity of the information to be collected;

and (d) ways to minimize the burden of the collection of information on

those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology. Comments may be

sent to Wendy Taylor, OIRM, Room 404-W, Office of Management and

Budget, Paperwork Reduction Project (OMB No. 0584-0064), Washington,

D.C. 20503 and Department of Agriculture, Clearance Officer, OIRM, AG

Box 7630, Washington, DC 20250. Comments and recommendations on the

proposed information collection must be received by February 18, 1997.

Executive Order 12778

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. This rule is intended to have preemptive effect with

respect to any State or local laws, regulations or policies which

conflict with its provisions or which would otherwise impede its full

implementation. This rule is not intended to have retroactive effect

unless so specified in the EFFECTIVE DATE paragraph of this preamble.

Prior to any judicial challenge to the provisions of this rule or the

application of its provisions, all applicable administrative procedures

must be exhausted.

Regulatory Impact Analysis

Need for Action

This action is needed to respond to requests from State agencies

for revision of the requirements for reporting changes in earned

income, to clarify procedures for averaging income, and to assist

households in meeting their responsibility to comply with Program

requirements.

Benefits

State agencies will benefit from this rule because households will

better understand which changes in earnings they are required to

report. Recipients who work will benefit because they will have to

report only significant changes in their employment status rather than

frequent and temporary changes in the amount of monthly income.

Costs

The changes in requirements for reporting changes in earnings and

acting on reported changes are not expected to have a significant

impact on Program costs.

Background

There are two systems in the Food Stamp Program for determining the

amount of benefits a household should receive: Prospective budgeting

and retrospective budgeting. Section 5(f)(3)(A) of the Food Stamp Act

of 1977, as amended (the Act), 7 U.S.C. 2014(f)(3)(A), provides that

calculation of household income on a prospective basis should be based

on the income the household reasonably anticipates receiving during the

period for which eligibility and benefits are being determined. The law

requires the calculation to be made in accordance with regulations

which provide for taking into account both the income reasonably

anticipated to be received by the household during the period for which

eligibility or benefits are being determined and the income received by

the household during the preceding 30 days. Section 5(f)(3)(B) of the

Act, 7 U.S.C. 2014(f)(3)(B), provides that

[[Page 66235]]

calculation of household income on a retrospective basis is the

calculation of income for the period for which eligibility or benefits

are being determined on the basis of income received in a previous

period. 7 CFR 273.10(c) of the food stamp regulations provides

requirements for prospective budgeting; retrospective budgeting is

addressed in 7 CFR 273.21.

Certified households are required to report certain changes in

circumstances that occur during the certification period. State

agencies have the option under section 6(c)(1)(A) of the Act, 7 U.S.C.

2015(c)(1)(A), to require some categories of households to report on a

periodic basis; however, State agencies are prohibited from including

certain households in a monthly reporting system or budgeting the

households retrospectively as provided at 7 CFR 273.21(b).

Section 6(c)(1)(B) of the Act, 7 U.S.C. 2015(c)(1)(B), provides

that households not required to file a periodic report on a monthly

basis shall be required to report changes in income or household

circumstances as provided in regulations. State agencies are required

to determine the benefits of monthly reporting households by

retrospective budgeting. However, change reporting households, i.e,

those households not subject to monthly reporting, may be budgeted

prospectively or retrospectively. Regulations for monthly reporting

households are at 7 CFR 273.21; those for change reporters are at 7 CFR

273.12.

In this rule we are proposing to simplify the regulations for

reporting changes in earned income when a household is not required to

report monthly. The proposed revisions are designed to address problems

State agencies have reported in determining the benefits of households

with income that fluctuates monthly.

Prospective Budgeting and Change Reporting

Prior to passage of the Hunger Prevention Act of 1988 (HPA) (Pub.

L. 100-435, September 19, 1988), monthly reporting and retrospective

budgeting (MRRB) were mandatory for households with earnings or a

recent work history. The HPA made monthly reporting a State agency

option.

Since then, some State agencies have abandoned monthly reporting

while others have retained MRRB for all or part of the caseload. There

are several advantages to retaining MRRB for households with earnings.

Households with earnings report their income each month, and benefits

are adjusted accordingly for a subsequent issuance month. Since the

actual amount of income earned in the budget month is used to determine

the allotment for the issuance month, the allotment corresponds exactly

to the reported income rather than to an estimate of anticipated

income. The requirement that a household submit a monthly report also

helps eligibility workers keep in contact with households on a regular

basis without the need for frequent recertification.

However, a monthly reporting system requires the State agency to

determine each month whether or not a monthly reporting household has

filed a report and to act on any reported changes. When caseloads

increase, it is sometimes difficult for eligibility workers to process

the reports within the required time frames. A monthly reporting system

is also expensive because of the number of reports and notices that

have to be printed and mailed out. Monthly reporting is burdensome for

participants and less responsive to changes in household circumstances

than change reporting because benefits are based on circumstances that

existed in a prior month.

Because of the costs associated with monthly reports, many State

agencies converted their entire caseload from MRRB to change reporting

and prospective budgeting. Prospective budgeting requires State

agencies to use information available at initial certification and

subsequent recertifications to predict what a household's circumstances

will be during the period of eligibility--the certification period.

Change reporting provisions at 7 CFR 273.12(a) require households to

report certain changes in household circumstances within 10 days of the

date the change becomes known to the household. Each time the State

agency learns of a change in the household's circumstances during the

certification period, the State agency must determine the effect of the

change on eligibility and benefits.

One of the difficulties encountered by State agencies using

prospective budgeting and change reporting is the problem of

determining the eligibility and benefits of households with income that

changes unpredictably in amount or frequency from month to month

(fluctuating income).

Under prospective budgeting, State agencies must anticipate income

that will be received. Regulations at 7 CFR 273.10(c) for anticipating

income were published on October 17, 1978, and have not been amended

since that time. The regulations include the following requirements:

1. If the amount of income anticipated to be received and the date

of receipt are uncertain, the income shall not be counted.

2. Income received during the past 30 days shall be used as an

indicator of future income, but past income shall not be used if a

change has occurred or is anticipated. If income fluctuates to the

extent that income from the past 30 days is not an accurate predictor

of future income, the State agency and the household may use a longer

period of past time to provide a more accurate figure.

3. If the receipt of income is reasonably certain but the monthly

amount may fluctuate, the household may elect to have its income

averaged. To average income, the State agency shall use the household's

anticipation of income fluctuations over the certification period.

4. Income shall be counted only in the month in which it is

expected to be received, unless it is averaged.

5. If income is received on a weekly or biweekly basis (every 2

weeks), the State agency shall convert the income to a monthly amount

by multiplying weekly amounts by 4.3 and biweekly amounts by 2.15, use

the State agency's public assistance (PA) conversion standard, or use

the exact monthly figure if it can be anticipated for each month of the

certification period.

If the income fluctuates and there is an income history, the usual

practice is to anticipate future fluctuations in income by projecting

an average of income received in recent past months. However,

regulations at 7 CFR 273.12(a) require households to report changes of

more than $25 in gross monthly income. If income is averaged, the

figure used to determine the allotment will differ from the income a

household actually received in any one month. To address this and other

problems, FCS has proposed changes in the $25 reporting requirement on

several occasions.

Section 5(f)(3)(A) of the Act, 7 U.S.C. 2014(f)(3)(A), gives the

Secretary of Agriculture broad discretion in the area of Food Stamp

Program reporting requirements. Regulations published July 15, 1974 (39

FR 25996-26008) required households to report changes of $25 or more in

income or deductions. The preamble to a proposed rule issued May 2,

1978 (43 FR 18874-96) discussed problems with the income reporting

requirement and solicited comments on the proposed change and two

alternatives. The proposed change was to require households to report

all changes in income, except changes in the PA grant. The two

alternatives were:

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1. The household would be required to report all income changes but

the State agency would not have to act on monthly changes of $10 or

less.

2. The household would be required to report only changes of $20 or

more, but the $20 would apply separately to each income source.

The preamble to final rules dated October 17, 1978 (43 FR 47846,

47872-74) indicates that the largest number of commenters preferred the

second alternative and the next largest group preferred the current

procedures. Based on the comments citing the administrative

difficulties of the three reporting procedures offered in the proposed

rule and the number of comments supporting the $25 requirement, we

chose to continue the then existing and still current policy.

In a rulemaking published January 16, 1981 (46 FR 4642), we

proposed to change the income reporting requirement to address problems

in handling changes for households with fluctuating income. The

proposed change would have required households with fluctuating income

to report changes in wage rate, full-time or part-time status, and

source of income. The $25 minimum reporting requirement would not have

applied to these households. No change was proposed in the reporting

requirement for households with stable earnings or unearned income.

Some commenters opposed the proposal, calling it burdensome, an

example of overregulation, and too confusing. Other commenters believed

that the omission of a requirement to report changes in the number of

hours worked would result in lack of action on possibly significant

changes. Because of the adverse comments and the imminent

implementation of monthly reporting requirements, a final rule was not

published on the subject.

As part of a rule proposed September 29, 1987 (52 FR 36546), we

again proposed to change requirements for reporting changes in

fluctuating income. In addition to problems with the $25 threshold

cited in previous rules, the preamble of these regulations indicated

that the current requirement makes it difficult to develop quality

control (QC) review procedures. The proposal was also designed to be

consistent with provisions of the Aid to Families with Dependent

Children (AFDC) QC manual which defined a change as any employment

status change which results in either increased or decreased income

such as a change in part-time or full-time status, the loss of a job,

or a change in hourly rate. The proposal retained the $25 threshold for

reporting changes but added the requirement to report changes in full-

time or part-time status, source, or hourly rate. The proposed

requirement applied only to households with fluctuating income, which

was defined as income that varies unpredictably from month to month.

Under the proposal, households with fluctuating income would report

permanent changes in the source of income and ongoing changes in the

number of hours worked. The proposal was based on assumptions that the

$25 minimum reporting requirement does not lend itself to changes in

fluctuating income and that errors in household income are more

frequently attributable to changes in employment status, such as

converting from unemployed to employed or from part-time to full-time

work.

A majority of commenters opposed this proposal. They were concerned

that the rule would add another reporting requirement and that it would

be difficult to define permanent and non-permanent status changes and

fluctuating income. In addition, the proposed changes would not have

resulted in complete conformity between the Food Stamp and AFDC

Programs. For these reasons, the provision was not adopted as final.

The implementation of monthly reporting also reduced the immediate need

for a change in change reporting requirements.

In addition to the problems of anticipating income that fluctuates

and determining which changes should be reported during the

certification period, there is also the difficulty in deciding under

what circumstances a reported change in fluctuating income should be

reflected in a changed allotment. Introductory paragraph 7 CFR

273.12(c) requires State agencies to take prompt action on all changes

to determine if the change affects the household's eligibility or

allotment. Even if the allotment is not changed, the State agency must

document the reported change in the case file and send the household

another change report form. Regulations at 7 CFR 273.12(c)(1) and (2)

provide specific requirements for changes that result in an increase or

decrease in the allotment.

However, it is not clear how the State agency should react to a

temporary change in income reported by a household whose income has

been averaged. The regulations do not specifically require the State

agency to compute a new average based on a temporary change. One

eligibility worker might reaverage the income based on the new

information and adjust the household's allotment. Another eligibility

worker might document the reported change in accordance with 7 CFR

273.12(c), but make no change in the allotment unless it was

anticipated that the change would continue.

In this rule, we are proposing to modify the requirements for

averaging income, reporting changes in income, and acting on reported

changes. We believe these modifications will assist State agencies in

determining the eligibility and benefits of households with fluctuating

income over the months of the certification period. When income is

averaged, the amount of income received each month does not correspond

directly to the issuance for any given month. However, if the average

used corresponds closely to the household's average income received

during the certification period, the household's benefits over the

certification period will correctly reflect the increases and decreases

in income that normally occur.

The changes proposed in this rule are designed to simplify the

reporting requirements and assist State agencies in managing cases with

fluctuating income. We are seeking comments on the following proposed

changes and suggestions for alternatives.

a. Averaging Income--7 CFR 273.10(c)(3)(i)

Current regulations at 7 CFR 273.10(c)(3)(i) provide that

households (except destitute households and public assistance (PA)

households subject to monthly reporting) may elect to have their income

averaged over the certification period. Some State agencies have

requested that food stamp regulations be revised to allow averaging at

the State agency's option. Others have requested that averaging be

mandatory for fluctuating income.

We are proposing to retain the provision of 7 CFR 273.10(c)(3)(i)

allowing households to choose whether income shall be counted in the

month received or averaged. We believe households should continue to

have the opportunity to select the method used to determine their

benefits when fluctuations in income are anticipated. There may be

situations in which the household would prefer to have income counted

in the month received rather than having it averaged. However, we would

like to solicit comments on this provision. We are proposing to amend 7

CFR 273.10(c)(3) to remove the reference to PA households subject to

monthly reporting. This section was written before the use of monthly

reporting in the Food Stamp Program. Section 273.21 now provides

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requirements for monthly reporting and retrospectively budgeted

households; therefore, there is no need to mention these households at

7 CFR 273.10(c)(3).

We have received questions concerning the steps to be followed in

averaging and converting weekly or biweekly income amounts. For the

purposes of 7 CFR 273.10(c)(3), income (whether earned or unearned) is

averaged by adding together income amounts received or expected to be

received over two or more months. The total is then divided by the

number of months used in the calculation to arrive at an average.

Conversion as authorized in 7 CFR 273.10(c)(2)(i) is the process of

taking into account months in the year in which an extra weekly or

biweekly payment will be received by using a conversion factor instead

of adjusting the allotment for the months in which the extra check is

received. The amounts used in anticipating income must be

representative of income the household expects to receive. If the

household member has just started a job and has no income history, the

eligibility worker would anticipate income in accordance with the

requirements at 7 CFR 273.10(c)(1). If the same amount of income is

received or expected to be received every week, anticipated income from

one payment may be converted to a monthly amount by using a conversion

factor. However, converting a single weekly amount to a monthly amount

does not constitute averaging for the purposes of the provisions in 7

CFR 273.10(c)(3). State agencies that elect not to use a conversion

factor would have to anticipate receipt of an extra pay check and

adjust the allotment for the month in which it will be received.

We are proposing to revise 7 CFR 273.10(c)(3)(i) to eliminate the

reference to PA monthly reporting households and to add a reference to

Sec. 273.12(c), which we propose to amend as indicated below. We would

also clarify that monthly amounts are used in averaging and eliminate

unnecessary language, including the example.

b. Income Reporting Requirements--7 CFR 273.12(a)(1)

The heading of regulations at 7 CFR 273.12 currently reads

``Reporting changes.'' The section includes requirements for reporting

and acting on changes for households not required to report monthly.

Requirements for monthly reporting households have been added to the

regulations at 7 CFR 273.21 since 7 CFR 273.12 was originally written.

Therefore, we are proposing to change the title of 7 CFR 273.12 to

``Requirements for change reporting households.'' The introductory

sentence of 7 CFR 273.12(a)(1) currently provides that ``Certified

households are required to report the following changes in

circumstances.'' We are proposing to amend the sentence to specify that

households not required to report monthly (change reporting households)

are required to report the specified changes. Proposals for changes in

the reporting requirements are discussed below.

In this rulemaking, we are proposing to modify 7 CFR

273.12(a)(1)(i) by revising the reporting requirements for earned

income. Although the reporting requirement for fluctuating income is of

particular concern, we are proposing that the requirement apply to all

earned income (as defined in 7 CFR 273.9(b)(1)). Under this proposal,

all households would be required to report a change in source of

income, such as starting or losing a job, changing employers, or

gaining or losing a source of unearned income. All households would

also have to report a change of more than $25 in unearned income.

Households with earned income would also be required to report

changes affecting the amount of income earned. As a substitute for the

current requirement to report a change of more than $25 in income, we

propose to offer State agencies three alternative earned income

reporting requirements. The three earned income reporting options are:

(1) A change in wage rate or salary and a change in part-time or

full-time employment status. Because some households could experience a

change in part-time employment that would be less than a change from

part-time to full-time but could involve a significant change in

income, State agencies would be required to certify these households

for no more than 3 months.

(2) A change in wage rate and a change in hours worked of more than

5 hours a week that is expected to continue for more than a month.

(3) A change in the amount earned of more than $80 a month.

Under the first option, households would have to report any change

in wage rate and a change in part-time or full-time employment status.

We believe a change in part-time or full-time status would signal a

significant change in the number of hours a household member would be

expected to work. Regulations at 7 CFR 273.7 provide that a person

working a minimum of 30 hours a week is exempt from work registration,

and we considered using the 30-hour figure as a bench mark for full-

time employment. However, because State agencies may have a definition

of ``part-time'' that is used for PA, we have decided not to define

``part-time.'' To provide State agency flexibility and facilitate

consistency with PA, we are proposing that State agencies may define

``part-time.''

Under the second option, households would be required to report

when a change in wage rate occurred and also when there was a change of

more than 5 hours a week that is expected to continue for more than a

month. Under the third option, households would be required to report

when the amount earned changed by more than $80 a month. We believe the

use of one of these options would eliminate some of the problems with

the current reporting requirement for earned income. Households with

earnings would have a clearer idea of exactly what to report and would

not have to report fluctuations in income resulting from temporary

changes in the number of hours worked. In addition, the proposal would

eliminate some of the problems encountered in quality control reviews

of cases with fluctuating income. Providing three options would

increase the ability of State agencies to conform reporting

requirements for various programs.

In this rule we are proposing to continue the current $25 reporting

requirement threshold for unearned income with the two changes noted

below. However, we are interested in comments on alternative reporting

requirements for unearned income, including the use of computer

matching information in lieu of household reporting.

Some State agencies may have the capability of making information

regarding a household's unearned income available to their eligibility

workers very quickly through data exchange systems that have been

established for the exchange of information between the providers of

various benefits and State agencies. Through these systems, State

agencies match household records with information from the income

sources and determine the amount of Supplemental Security Income (SSI),

Federal Old Age, Survivors, and Disability Insurance (OASDI) benefits,

and unemployment compensation (UC) households receive. It would appear

that information from these data sources, rather than from the

households, could be used to maintain current and accurate information

about the benefits households are receiving. However, this would be

possible only if the information could be obtained and

[[Page 66238]]

used to adjust food stamp benefits in accordance with the timeframes

currently in place for acting on changes.

New systems developed by the Social Security Administration (SSA)

may provide faster access to accurate information about SSI and OASDI

benefits than has previously been the case. SSA has developed the State

Verification and Exchange System (SVES), 42 U.S.C. 1320b-7(a), which

replaces previously separate exchanges for SSI and OASDI data. Using

the new File Transfer Management System (FTMS), State agencies will be

able to obtain daily updates of SSI and OASDI information. SSA will

respond to SVES inquiries submitted via FTMS within 24 hours. Using

these systems, State agencies will be able to obtain current income

information and update records at the State level or provide the

information to local offices electronically.

We are interested in State agency comments on their ability to

access and use these systems to identify and act on changes in SSI and

OASDI benefits within the current timeframes in 7 CFR 273.12(c) for

acting on reported changes. We are also interested in comments on the

ability of State agencies to use the State's UC data systems for acting

on changes in households' UC benefits.

c. Action on Changes in Fluctuating Income--7 CFR 273.12(c)

To address the problem of determining when eligibility workers

should act on a reported change in fluctuating income, we are proposing

to revise the introductory paragraph of 7 CFR 273.12(c) to specify that

if a household reports a change in income, the State agency shall use

the information to compute a new allotment amount if the change is

representative of anticipated future income. Whether it is

representative would be determined on the basis of an expectation that

the new circumstance will continue for at least one month beyond the

month in which the change is reported. The worker would document the

case record to indicate the basis for adjusting or not adjusting the

average. If the change does not affect the allotment, the worker would

document that fact.

Implementation

We are proposing that the changes made by this rule would be

effective and implemented no later than the first day of the month 180

days after publication of the final rule.

List of Subjects in 7 CFR Part 273

Administrative practice and procedure, Aliens, Claims, Food stamps,

Fraud, Grant programs--social programs, Penalties, Records, Reporting

and recordkeeping requirements, Social security, Students.

Accordingly, 7 CFR part 273 is proposed to be amended as follows:

1. The authority citation of part 273 continues to read as follows:

Authority: 7 U.S.C. 2011-2032.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

2. In Sec. 273.10, paragraph (c)(3)(i) is revised to read as

follows:

Sec. 273.10 Determining household eligibility and benefit levels.

* * * * *

(c) Determining income. * * *

(3) Income averaging. (i) Households may elect to have their income

averaged. However, the State agency shall not average the income of

destitute households (as defined in paragraph (e)(3) of this section).

When averaging income, the State agency shall use the household's

anticipation of monthly income fluctuations over the certification

period. An average must be recalculated at recertification and in

response to changes in income, in accordance with Sec. 273.12(c).

* * * * *

5. In Sec. 273.12,

a. The heading of the section, the introductory text of paragraph

(a)(1) and paragraph (a)(1)(i) are revised.

b. The introductory text of paragraph (c) is amended by adding two

sentences after the first sentence.

The revisions and additions read as follows:

Sec. 273.12 Requirements for change reporting households.

(a) Household responsibility to report. (1) Monthly reporting

households are required to report as provided in Sec. 273.21. Certified

change reporting households are required to report the following

changes in circumstances:

(i) (A) A change greater than $25 in the amount of unearned income,

except changes relating to PA or general assistance (GA) in project

areas in which GA and food stamp cases are jointly processed. The State

agency is responsible for identifying changes during the certification

period in the amount of PA or GA in jointly processed cases.

(B) A change in the source of income, including starting or

stopping a job or changing jobs.

(C) One of the following, as determined by the State agency:

(1) A change in the wage rate of earned income and a change in

full-time or part-time employment status (as determined by the employer

or as defined in the State's PA Program), provided that the household

is certified for no more than 3 months;

(2) A change in wage rate and a change in hours worked of more than

5 hours a week that is expected to continue for more than a month; or

(3) A change in the amount earned of more than $80 a month.

* * * * *

(c) State agency action on changes. * * * If a household reports a

change in income, the State agency shall act on the change in

accordance with paragraphs (c)(1) and (c)(2) of this section if the new

circumstance is expected to continue for at least one month beyond the

month in which the change is reported. The time frames in paragraphs

(c)(1) and (c)(2) of this section apply to these actions. * * *

* * * * *

Dated: December 10, 1996.

Ellen Haas,

Under Secretary for Food, Nutrition, and Consumer Services.

[FR Doc. 96-31989 Filed 12-16-96; 8:45 am]

BILLING CODE 3410-30-U