Food Stamp Program, Regulatory Review: Alaska, the Commonwealth of the Northern Mariana Islands, PR, and Demonstration Projects

SUMMARY: This action proposes to amend Food Stamp Program rules

affecting Alaska, the Commonwealth of the Northern Mariana Islands,

Puerto Rico, and demonstration projects. This action is a result of a

comprehensive, page-by-page review, of all existing Food Stamp Program

regulations which was conducted in response to the President's efforts

to reform the Federal regulatory system. The changes will eliminate

prescriptive detailed processes and empower States to set their own

procedures for case management and customer service; eliminate outdated

and redundant regulatory requirements; and emphasize recipient

responsibility for applying and reporting their circumstances properly.

DATES: Comments must be received on or before March 25, 1996 to be

assured of consideration.

ADDRESSES: Comments should be submitted to Judith M. Seymour, Chief,

Certification Policy Branch, Program Development Division, Food and

Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia

22302. Comments may also be datafaxed to the attention of Ms. Seymour

at (703) 305-2454. 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 this rulemaking

should be addressed to Ms. Seymour at the above address or by telephone

at (703) 305-2496.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant for the

purposes of Executive Order 12866 and therefore was not reviewed by the

Office of Management and Budget.

Executive Order 12372

The Food Stamp 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, the

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

certified that this proposed 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 rule does not contain reporting or recordkeeping requirements

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

the Paperwork Reduction Act of 1980 (44 U.S.C. 3507).

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. In the Food Stamp Program the administrative

procedures are as follows: (1) for Program benefit recipients--State

administrative procedures issued pursuant to 7 U.S.C. 2020(e)(1) and 7

CFR 273.15; (2) for State agencies--administrative procedures issued

pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for rules related to

non-quality control (QC) liabilities) or Part 283 (for rules related to

QC liabilities); (3) for Program retailers and wholesalers--

administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7

CFR 278.8.

Background

As part of his Regulatory Reform Initiative, the President

instructed the heads of Executive departments and agencies in a March

4, 1995 memorandum to, among other things, complete a page by page

review of all agency regulations now in force and eliminate or revise

those that are outdated or otherwise in need of reform. The review

carefully considered the following issues:

Is this regulation obsolete?

Could its intended goal be achieved in more efficient, less

intrusive ways?

Are there better private sector alternatives, such as market

mechanisms, that can better achieve the public good envisioned by the

regulation?

Could private business, setting its own standards and being subject

to public accountability, do the job as well?

Could the States or local governments do the job, making Federal

regulation unnecessary?

The Food and Consumer Service (FCS) has completed its review of all

regulations governing the administration of the Food Stamp Program.

Based on the findings of the review, FCS will be issuing several

proposed rules designed to eliminate or substantially revise the

regulations contained in 7 CFR Parts 271 through 285.

In this rule, FCS is proposing to revise food stamp regulations

affecting Alaska, Puerto Rico, the Commonwealth of the Northern Mariana

Islands, and demonstration projects. The revisions will streamline

administration of the program, offer greater flexibility to State

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agencies in enacting policy, and improve customer service.

Alaska--7 CFR 272.7

On November 4, 1980, the Department issued a final rule (45 FR

73003) establishing regulations for operation of the Food Stamp Program

in rural Alaska. Those regulations provided for exceptions to normal

program regulations designed to accommodate the unique demographic and

climatic characteristics found in rural Alaska and, at the same time,

to ensure the efficiency and effectiveness of program operations. Those

regulations, though amended in parts during the past 15 years, have

remained essentially the same since their original implementation.

As part of the President's Regulatory Review Initiative, the

Department has reviewed the regulations for rural Alaska at 7 CFR 272.7

and has determined that consistent with the requirements of the Food

Stamp Act of 1977, 7 U.S.C. 2011, et seq., they can be revised to grant

the State of Alaska greater flexibility in administering the program.

The Department is proposing to combine and reorganize some paragraphs

in 7 CFR 272.7, and delete others. The major revisions are discussed

below.

Current regulations at 7 CFR 272.7(a) explain the need for a

separate section of regulations designed to accommodate the unique

characteristics in rural Alaska. Current regulations at 7 CFR 272.7(b)

explain that the regulations contained in 7 CFR 272.7, with the

exception of the section dealing with treatment of resources, apply

only to areas of Alaska designated as rural. Section 272.7(b) also

lists the procedures the State agency must follow when designating

areas in Alaska as rural.

Current regulations at 7 CFR 272.7(c) define some of the terms that

appear in the regulations for rural Alaska. The regulations define

``fee agent'', ``Rural I Alaska'', ``Rural II Alaska'', ``Urban

Alaska'', and ``State agency.''

Current regulations at 7 CFR 272.7(d) provide an exception to the

merit personnel requirement at 7 CFR 272.4(a)(2) to permit fee agents

to conduct the certification interviews required by 7 CFR 273.2(e).

In order to simplify the regulations, the Department is proposing

to revise 7 CFR 272.7 (a), (b), (c) and (d) as follows. The

requirements currently contained in 7 CFR 272.7 (a) and (b) will be

combined into one section, designated 7 CFR 272.7(a). Revised 7 CFR

272.2(b) will be retitled ``Area Designations'', and will contain the

definitions of ``Rural I Alaska'', ``Rural II Alaska'', and ``Urban

Alaska.'' It will also include the procedures for designating areas as

rural that were formerly contained in 7 CFR 272.7(b). Those procedures,

however, will be greatly modified. The current provisions at 7 CFR

272.7(b) require the State agency to establish criteria for designating

areas of the State as ``rural'', determine the areas that meet the

rural criteria, and include both the criteria for designating rural

areas and the designated areas in the Alaska State Plan of Operation as

an addendum to the Program and Budget Summary Statement. As the

regulations, however, already designate all areas in Alaska as either

urban, rural I or rural II, the revised procedures will provide that

the State agency, in consultation with FCS, may change the designation

of any Alaska subdivision. In lieu of specific detailed criteria, the

Department is proposing to allow the Alaska State agency to change the

designation of subdivisions to reflect changes in demographics and the

cost of food. Changes would be reflected in the State Plan of Operation

and would also be published in the Federal Register, pursuant to the

Administrative Procedure Act, 5 U.S.C. 553.

The proposed regulations at 7 CFR 272.7(c) will address fee agents.

The revised section would contain the definition of fee agent currently

contained in 7 CFR 272.7(c).

The Department is proposing to delete from the regulations the

special definition of ``State agency'' currently provided at 7 CFR

272.7(c). That definition was included in the regulations to highlight

a distinction between the State agency and fee agents. However, the

Department believes that the definition of fee agent as provided in 7

CFR 272.7(c) already clearly implies that fee agents, although employed

by the State agency, are not representatives of the State agency for

application processing purposes.

The Department is also proposing to delete the merit personnel

requirement currently contained at 7 CFR 272.7(d). As provided in 7 CFR

272.7(c), the definition of fee agent clearly provides that fee agents

may conduct required certification interviews, and the Department does

not believe that the statement needs to be restated. The Department is

proposing, however, to amend the merit personnel requirements at 7 CFR

272.4(a)(2) to provide for an exception to the use of State merit

system personnel in the interview and certification process for

households residing in rural Alaska.

The Department is also proposing to delete the current provisions

of 7 CFR 272.7(e), which require the State agency to institute a

continuing training program for fee agents. It is in the State agency's

own interest, for program accountability reasons, to ensure that all

fee agents are adequately trained in program requirements and

procedures. Therefore, the Department believes it is unnecessary to

include a training requirement in the regulations.

The Department is proposing a major revision to the regulations

currently at 7 CFR 272.7(f), which address application processing

requirements. The current regulations go into minute detail as to how

applications are to be processed, depending on whether they are

submitted to a fee agent, in person to the State agency, or by mail to

the State agency. It also addresses expedited service processing

requirements and Supplemental Security Income (SSI) joint processing

requirements. The Department is proposing to remove all prescriptive

requirements from the section and allow the State agency to modify the

regular application processing requirements contained at 7 CFR 273.2 as

needed to ensure prompt delivery of services to applicant households.

The proposed regulations will retain, however, those requirements which

the State agency cannot modify when processing an application because

of Food Stamp Act requirements. Those requirements are: (1) that if the

application is submitted to a fee agent, the fee agent shall mail the

application to the State agency within 5 days of receipt of the

application; (2) that an application is considered filed when it is

received by an office of the State agency; (3) that eligible households

shall be provided an opportunity to participate as soon as possible but

no later than 30 days after the application is received by an office of

the State agency; (4) that households eligible for expedited service

who submit their application to a fee agent shall be issued benefits

within two working days following the date the application is received

by an office of the State agency, and that households eligible for

expedited service who submit their completed applications to the State

agency in person or by mail will be processed in accordance with

standard expedited service timeframes contained in 7 CFR 273.2(i); and

(5) that Social Security Administration (SSA) workers shall mail all

jointly processed applications to the appropriate State agency office

within 5 days of receipt of the application, and that the household, if

determined eligible, shall receive benefits retroactive to the first

day of the month in which the jointly processed

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application was received by the SSA worker. The proposed revised

regulations would be contained at 7 CFR 272.7(d).

The Department is also proposing a major revision to the

regulations currently contained at 7 CFR 272.7(g), which address

interview requirements. Current regulations require that the State

agency or fee agent conduct a face-to-face interview with applicant

households. If a face-to-face interview cannot be conducted for

hardship reasons, then the State agency may interview the household by

telephone or radiophone. If the household rejects, on privacy grounds,

being interviewed by telephone or radiophone, the State agency may

conduct the interview through private means of correspondence, such as

written correspondence. The State agency also has the option of

postponing the interview until after the household is certified in

certain exceptional circumstances.

In order to maximize State agency flexibility in administering the

program, the Department is proposing to delete current interview

requirements at 7 CFR 272.7(g) and instead simply require the State

agency to interview applicant households in the most efficient manner

possible, either by face-to-face contact, telephone, radiophone, or

other means of correspondence including written correspondence. In

instances in which an interview cannot be conducted before

certification, the regulations will continue to grant the State agency

the option to postpone the interview until after the household is

certified. Since completing the interview is an integral part of

application processing, the interview requirement will be included as

paragraph (6) in the new application processing section at 7 CFR

272.7(d) and not in its own section.

In light of the proposals discussed above, current regulations at 7

CFR 272.7(h), which address the determination of household eligibility

and benefit levels, would be redesignated as 7 CFR 272.7(e), but would

otherwise remain unchanged.

Current regulations at 7 CFR 272.(i), which address resource

requirements, will be redesignated as 7 CFR 272.2(f), but will

otherwise remain unchanged.

Current regulations at 7 CFR 272.7(j) address the household's

responsibility for reporting changes. The regulations provide the

household the option of reporting changes either directly to the State

agency or to the fee agent, and then go on to describe in detail how

fee agents are to process changes reported to them. The Department

believes that it is unnecessary for Program regulations to delineate

fee agent actions relating to handling reported changes and is

therefore proposing to eliminate those provisions from the regulations.

The revised regulations will retain, however, all the timeframes for

processing changes currently contained in 7 CFR 272.7(j). The revised

section will be redesignated as 7 CFR 272.7(g).

The Department is proposing to delete the current regulations at 7

CFR 272.7(k), which address timeframes for recertification. The

regulations at 7 CFR 272.7(k) repeat the normal recertification

timeframes contained at 7 CFR 273.14, and do not provide for any

special exceptions for households residing in rural Alaska.

Current regulations at 7 CFR 272.7(l) provide that if the State

agency cannot conduct a personal conference with a household which

wishes to contest its denial of expedited service within the two day

timeframe specified in 7 CFR 273.15(d), it may conduct the conference

by telephone or through other means of communication. Current

regulations at 7 CFR 272.7(m) provide that the State agency may conduct

fair hearings and administrative fraud hearings by telephone or other

means of communication if the time standards contained at 7 CFR 273.15

and 273.16 cannot be met through normal administrative procedures due

to impediments such as weather conditions or distance.

In order to maximize State agency flexibility in conducting

required hearings and conferences, the Department is proposing to

delete the current requirements at 7 CFR 272.7 (l) and (m). The

Department will replace both sections with a single section that will

apply to fair hearings, administrative fraud hearings, and agency

conferences with households that wish to contest denial of expedited

service. The new section, which will be designated 7 CFR 272.7(h), will

require the State agency to conduct fair hearings, administrative fraud

hearings, and agency conferences in the manner it deems most efficient,

either by face-to-face contact, telephone, radiophone, or other means

of correspondence including written correspondence, in order to meet

the respective time standards contained in 7 CFR 273.15 and 273.16.

Finally, the Department is proposing to revise current regulations

at 7 CFR 272.7(n), which address issuance requirements. The Department

is proposing to redesignate paragraph (n)(1) as 7 CFR 272.7(i), but

otherwise leave the paragraph unchanged. The Department is also

proposing to delete the current requirements contained at 7 CFR

272.7(n) (2) and (3). Section 272.7(n)(2) allows the State agency to

choose from a wide variety of issuance methods to fulfill the issuance

service needs of the low income people in the State. Section

272.7(n)(3) requires that the State agency assist households comprised

of elderly or disabled members which have difficulty reaching an

issuance office to obtain their monthly allotments. Neither provision

represents a change from normal program operations as described in 7

CFR 274.1 and 274.2. Therefore, the Department is proposing to delete

both provisions.

Demonstration, Research, and Evaluation Projects--Part 282

Current regulations at 7 CFR Part 282 cite the legislative

authority for conducting demonstration, research, and evaluation

projects, establish Federal financial participation requirements, and

set forth various conditions under which the projects operate. Part 282

also contains regulations published to establish the procedures for the

operation of some previous demonstration projects.

It is the Department's belief that, aside from 7 CFR 282.1 and

282.6, which deal with statutory authority and financial participation

and 282.5(a) which provides for public notice procedures for

demonstration projects, the regulations contained in this section are

duplicative, superfluous, or obsolete.

Sections 282.2, 3, 4, and 5(c) contain general information and

procedures which are repeated in much greater detail in the Notices of

Intent published by the Department when it undertakes demonstration,

research or evaluation projects.

Sections 282.10 through 14 and sections 282.16 through 19 comprise

the regulations published concerning past demonstrations (sections

282.7, 8, 9, and 15 were reserved). Each of the demonstrations have

been terminated or are permanent operational programs.

The Department, therefore, is proposing to revise Part 282 by (1)

combining the requirements currently contained at 7 CFR 282.1, 282.5

(a) and (b) and 282.6 into one new section 7 CFR 282.1, which will

address the Secretary's legislative authority to conduct demonstration,

research, and evaluation projects and Federal financial participation

in such projects, and (2) deleting the remainder of Part 282.

The Commonwealth of the Northern Mariana Islands--Part 284

This rule proposes to remove and reserve Part 284 of the Food Stamp

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Program regulations--Provision of a Nutrition Assistance Program for

the Commonwealth of the Northern Mariana Islands (CNMI)--and to remove

the Northern Mariana Islands from the definition of ``State'' in 7 CFR

271.2 of the regulations. The Nutrition Assistance Program which has

been operating in the CNMI since 1982 is governed by a Memorandum of

Understanding (MOU), the terms of which are renegotiated annually by

the Department and the CNMI. The regulations in Part 284 are

unnecessary for the continued operation of CNMI Nutrition Assistance

Program. For example, a similar program operates in American Samoa

without regulations; it is simply governed by an MOU. The Department's

proposal to eliminate Part 284 should not be construed as an intent to

modify the current CNMI Nutrition Assistance Program.

Puerto Rico--Part 285

On July 27, 1982, the Department published a final rule at 47 FR

32409 to implement Title I, Section 116(a) of the 1981 Omnibus Budget

Reconciliation Act (Pub. L. 97-35, 95 Stat. 357), 7 U.S.C. Sec. 2028.

This section converted the Federal Food Stamp Program in the

Commonwealth of Puerto Rico to a capped nutrition assistance block

grant effective July 1, 1982. The original implementing regulations set

forth in Part 285 at that time have been amended four times during

their existence. On April 19, 1983 a rule was published at 48 FR 16831

pertaining to the termination of the Food Stamp Program in Puerto Rico.

On May 27, 1983 a rule was published at 48 FR 23804 which prohibited

the Commonwealth from using a cash benefit delivery system and

restricted the amount of cash change which could be returned to a

nutrition assistance recipient in the Commonwealth to 99 cents under

any non-cash benefit delivery system Puerto Rico would implement. On

December 21, 1984 a rule was published at 49 FR 49581 which permitted

the Commonwealth to operate a cash rather than a coupon benefit

delivery system for use in its block grant program. Finally, on May 21,

1986 a rule was published at 51 FR 18744 which permitted Puerto Rico to

designate more than one agency to administer or supervise the

administration of the food assistance program in the Commonwealth. Some

of these amendments, together with portions of the original

implementing regulations, are no longer applicable to the program as it

currently operates in the Commonwealth. Other portions of Part 285, as

currently written, are superfluous and no longer required for the

efficient administration and operation of the block grant program in

Puerto Rico. As a result, the Department proposes to amend Part 285 to

effect the following changes.

Plan of Operation--7 CFR 285.3

The second sentence of paragraph (a) specifies that the submittal

date for the initial plan of operation for fiscal years 1982 and 1983

is to be no later than April 1, 1982. Additionally, subparagraph

(b)(3)(iii) permits Puerto Rico to provide recipients with cash change

in amounts of 99 cents or less if change in an amount of less than $1

is required. Since the 1982 and 1983 plans of operation were submitted

many years ago, and Puerto Rico no longer operates a coupon delivery

system to distribute its block grant benefits, both of these provisions

are no longer applicable to the Commonwealth's nutrition assistance

program and the Department proposes to delete them from this section.

The Department also proposes to incorporate the provisions of

section 285.4 into this section. Both sections deal with Puerto Rico's

state plan of operation and the Department believes that both sections

should be consolidated into one for ease of reference.

Approval--7 CFR 285.4

The first sentence of paragraph (a) states that FCS shall approve

or disapprove the initial plan of operation for fiscal year 1982 and

1983 no later than 30 days from the date the Commonwealth of Puerto

Rico submits such plan. This approval process was completed many years

ago and the sentence is no longer applicable to program operations. The

Department, therefore, proposes to delete this provision and combine

the remainder of the section with section 285.3 as both of these

sections deal in various ways with the submission and approval of the

Commonwealth's plan of operation for its nutrition assistance program.

Records and Reports--7 CFR 285.5

This section provides that the Commonwealth of Puerto Rico shall

follow procedures, and maintain and submit to FCS such records and

reports, as agreed upon by the Commonwealth of Puerto Rico and FCS for

the nutrition assistance program as outlined in the plan of operation.

Procedures for the submission of required reports and their content as

well as for the retention of program records have been in place since

inception of the block grant and are generally outlined in annual state

plans of operation submitted by the Commonwealth. The Department,

therefore, believes that this section is no longer necessary for

efficient program operations and proposes to delete it in its entirety.

Review--7 CFR 285.8

This section provides that FCS shall provide for the review of the

programs for provision of nutrition assistance under the block grant.

FCS has been reviewing Puerto Rico's nutrition assistance program on an

agreed upon and periodic basis since its inception in 1982. Since this

procedure is a well established one to which both parties agree, the

Department believes this section is no longer required and should be

deleted in its entirety.

Technical Assistance--7 CFR 285.9

This section provides that FCS may provide technical assistance to

the Commonwealth of Puerto Rico to assist in various aspects of the

implementation and operation of its nutrition assistance program. This

assistance has been an integral part of FCS's efforts to cooperate with

the Commonwealth in ensuring the success of its block grant program

since its inception in 1982. Since this assistance is an ongoing and

well recognized facet of the relationship between Puerto Rico and FCS,

the Department believes that this section is no longer required and

should be deleted in its entirety.

Termination of the Food Stamp Program in the Commonwealth of Puerto

Rico--7 CFR 285.10

This section contains a number of provisions pertaining to the

cessation of Food Stamp Program operations in the Commonwealth. Since

the Food Stamp Program ceased operation in Puerto Rico as of July 1,

1982 and the block grant nutrition assistance program was implemented

in its place at that time, this section is no longer applicable to

current program operations. The Department is, therefore, proposing

that the section be deleted in its entirety.

Implementation

The Department is proposing that the provisions of this rulemaking

be effective no later than 30 days after publication of the final rule.

State agencies may implement the provisions any time after that date.

List of Subjects

7 CFR Part 271

Administrative practice and procedure, Food stamps, Grant programs-

social programs.

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7 CFR Part 272

Alaska, Civil Rights, Food stamps, Grant programs--social programs,

Reporting and recordkeeping requirements.

7 CFR Part 282

Food stamps, Governmental contracts, Grant programs--social

programs, Research.

7 CFR Part 284

Administrative practice and procedure, Food assistance programs,

Grant programs--social programs, Health, Nutrition.

7 CFR Part 285

Accounting, Food assistance programs, Grant programs--agricultural,

Grant programs--social programs, Intergovernmental relations, Puerto

Rico, Technical assistance, Reporting and recordkeeping requirements.

Accordingly, 7 CFR parts 271, 272, 282, 284, and 285 are proposed

to be amended as follows:

PART 271--GENERAL INFORMATION AND DEFINITIONS

1. The authority citations for 7 CFR parts 271, 272, 282, 284, and

285 continue to read as follows:

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

Sec. 271.2 [Amended]

2. In Sec. 271.2, the definition of ``State'' is amended by

removing the words ``the Northern Mariana Islands,''.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

Sec. 272.4 [Amended]

3. In Sec. 272.4, the third sentence of paragraph (a)(2) is amended

by adding the words, ``, Sec. 272.7(d) for households residing in rural

Alaska,'' before the words ``and Part 280 for disaster victims.''

4. Sec. 272.7 is revised to read as follows:

Sec. 272.7 Procedures for program administration in Alaska.

(a) Purpose. To achieve the efficient and effective administration

of the Food Stamp Program in rural areas of Alaska, FCS has determined

that it is necessary to develop additional regulations which are

specifically designed to accommodate the unique demographic and

climatic characteristics which exist in these rural areas. The

regulations established in this section, except for paragraph (f) of

this section, shall apply only in those areas of Alaska designated as

``rural'' in paragraph (b) of this section. All regulations not

specifically modified by this section shall remain in effect.

(b) Area designations. (1) Rural I Alaska TFP refers to a Thrifty

Food Plan (TFP) that is the higher of the TFP that was in effect in

each area on October 1, 1985, or 28.52 percent higher than the

Anchorage TFP, as calculated by FCS, with rounding and other reductions

that are appropriate. It is to be used in the following areas: In all

places in Kodiak Island Borough with the exception of Kodiak; in all

places in the Kenai Peninsula Borough that are west of Cook Inlet

(including Tyonek, Kustatan, Kalgin Island, Iliamna, Chenik, and

Augustine Island) and Chugach Island, English Bay, Port Graham,

Portlock, Pt. Gore, Pye Island, and Seldovia. In the Yukon-Koyukuk

Census Area, the city of Nenana; and Skwentna in the Matanuska-Susitna

Borough. In the Valdez-Cordova Census Area, all places except Dayville

and Valdez; and in the Southeast Fairbanks Census Area all places

except Big Delta, Delta Junction, and Fort Greely. In the Skagway-

Yakutat-Angoon Census Area, all places except Skagway; in Sitka Borough

all places except Sitka; in the Wrangell-Petersburg Census Area, all

places except Wrangell and Petersburg; in the Ketchikan Gateway

Borough, all places except Ketchikan, Saxman, and Ward Cove; in the

Prince of Wales-Outer Ketchikan Census Area, all places except Craig,

Hyder, and Metlakatla.

(2) Rural II Alaska TFP refers to a TFP that is 56.42 percent

higher than the Anchorage TFP, as calculated by FCS, with rounding and

other reductions that are appropriate. It is to be used in the

following areas: North Slope Borough; Kobuk Census Area; Nome Census

Area; Yukon-Koyukuk Census Area except for the city of Nenana; Wade

Hampton Census Area; Bethel Census Area; Denali in the Matanuska-

Susitna Borough; Dillingham-Bristol Bay Borough; and in all places in

the Aleutian Islands except for Cold Bay and Adak.

(3) Urban Alaska TFP refers to a TFP that is the higher of the TFP

that was in effect in each area on October 1, 1985, or .79 percent

higher than the Anchorage TFP, as calculated by FCS, with rounding and

other reductions that are appropriate. It is to be used in the

following areas: Cold Bay and Adak in the Aleutian Islands; Kodiak in

Kodiak Island Borough; Valdez and Dayville in the Valdez-Cordova Census

Area; all places in Kenai Peninsula Borough that are on the Kenai

Peninsula except for those specifically designated as Rural I; the

entire Anchorage Borough; the entire Matanuska-Susitna Borough except

for Denali and Skwentna; the entire Fairbanks-North Star Borough; the

entire Juneau Borough; the entire Haines Borough; Sitka in the Sitka

Borough; Skagway in the Skagway-Yakutat-Angoon Census Area; Wrangell

and Petersburg in the Wrangell-Petersburg Census Area; Ketchikan,

Saxman, and Ward Cove in the Ketchikan-Gateway Borough; Craig, Hyder,

and Metlakatla in the Prince of Wales-Outer Ketchikan Census Area; and

Big Delta, Delta Junction, and Fort Greely in the Southeast-Fairbanks

Census Area.

(4) The State agency may, in consultation with FCS, change the

designation of any Alaska subdivision to reflect changes in

demographics or the cost of food within the subdivision.

(c) Fee agents. ``Fee agent'' means a paid agent who, on behalf of

the State, is authorized to make applications available to low-income

households, assist in the completion of applications, conduct required

interviews, secure required verification, forward completed

applications and supporting documentation to the State agency, and

provide other services as required by the State agency. Such services

shall not include making final decisions on household eligibility or

benefit levels.

(d) Application processing. The State agency may modify the

application processing requirements in Sec. 273.2 of this chapter as

necessary to insure prompt delivery of services to eligible households.

The following restrictions apply:

(1) Fee agent processing. If the signed application is first

submitted by a household to a fee agent, the fee agent shall mail the

application to the State agency within 5 days of receipt. The fee agent

shall give the household the maximum amount of time to provide needed

verification as long as the five-day processing period is met.

(2) Application filing date. An application is considered filed for

purposes of timely processing when it is received by an office of the

State agency.

(3) Application processing timeframes. Eligible households must be

provided an opportunity to participate as soon as possible but no later

than 30 days after the application is received by an office of the

State agency.

(4) Expedited service.

(i) If the signed application is first submitted by a household to

a fee agent, the fee agent shall mail the application to the State

agency within 5 days of receipt. If the household is eligible for

expedited service, the State agency will mail the coupons no later than

the close of business of the second working day following the date the

application was received by the State agency.

[[Page 1854]]

(ii) If the signed application is submitted directly to the State

agency in person by a rural resident or its authorized representative

or by mail, the State agency shall process the application and issue

coupons to households eligible for expedited service in accordance with

the time standards contained in Sec. 273.2(i)(3) of this chapter.

(iii) If an incomplete application is submitted directly to the

State agency by mail, the State agency shall conduct the interview by

the first working day following the date the application was received

if the fee agent can contact the household or the household can be

reached by telephone or radio-phone and does not object to this method

of interviewing on grounds of privacy. Based on information obtained

during the interview, the State agency shall complete the application

and process the case. Because of the mailing time in rural areas, the

State agency shall not return the completed application to the

household for signature. The processing standard shall be calculated

from the date the application was filed.

(5) SSI joint processing. SSA workers shall mail all jointly

processed applications to the appropriate State agency office within 5

days of receipt of the application. A jointly processed application

shall be considered filed for purposes of timely processing when it is

received by an office of the State agency. The household, if determined

eligible, shall receive benefits retroactive to the first day of the

month in which the jointly processed application was received by the

SSA worker.

(6) Interviews. The State agency shall interview applicant

households in the most efficient manner possible, either by face-to-

face contact, telephone, radiophone, or other means of correspondence

including written correspondence. In instances in which an interview

cannot be conducted, the State agency may postpone the interview until

after the household is certified.

(e) Determining household eligibility and benefit level. If a

household submits its application to a fee agent, it shall, if

eligible, receive benefits retroactive to the date the application is

received by the fee agent. If a household submits its application

directly to a State agency office, it shall, if determined eligible,

receive benefits retroactive to the date the application is received by

the State agency.

(f) Resources. In areas of the State where there are no licensing

requirements, snowmobiles and boats used by the household for basic

transportation shall be evaluated in accordance with Sec. 273.8(h) of

this chapter even though they are unlicensed. Vehicles necessary for

subsistence hunting and fishing shall not be counted as a household

resource.

(g) Reporting changes. The State agency shall allow the household

to choose to report changes either directly to the State agency or to

the fee agent. If the household reports the change to the fee agent,

the fee agent will mail the change report to the State agency office

within two working days of the date of receipt. The household's

obligation to report the change will have been met if it submits the

change to the fee agent within 10 days of the date the change becomes

known to the household. However, for purposes of State agency action

for increasing or decreasing benefits, the change will be considered to

have been reported when it is received by a State agency office.

(h) Fair hearings, fraud hearings, and agency conferences. The

State agency shall conduct fair hearings, administrative fraud

hearings, and agency conferences with households that wish to contest

denial of expedited service in the most efficient manner possible,

either by face-to-face contact, telephone, radiophone, or other means

of correspondence including written correspondence, in order to meet

the respective time standards contained in Sec. 273.15 and Sec. 273.16

of this chapter.

(i) Issuance services. With the approval of FCS, coupons may be

mailed on a quarterly or semiannual basis to certain rural areas of

Alaska when provisions are not available on a monthly basis. The

decision to allow the distribution of coupons in this manner will be

made on an annual basis. These areas shall be listed in the State's

Plan of Operation. The State agency shall advise households that live

in rural areas where quarterly or semiannual allotments are authorized.

If, as the result of the issuance of quarterly or semiannual

allotments, food coupons are overissued or underissued, the State

agency shall process claim determinations and restore lost benefits.

PART 282--DEMONSTRATION, RESEARCH, AND EVALUATION PROJECTS

5. Sec. 282.1 is revised to read as follows:

Sec. 282.1 Legislative authority and notice requirements.

(a) Legislative Authority. Section 17 of the Act authorizes the

Secretary to conduct demonstration, research, and evaluation projects.

In conducting such projects, the Secretary may waive all or part of the

requirements of the Act and implementing regulations necessary to

conduct such projects, except that no project, other than a project

involving the payment of the average value of allotments by household

size in the form of cash to eligible households or a project conducted

to test improved consistency or coordination between the food stamp

employment and training program and the Job Opportunities and Basic

Skills program under Title IV of the Social Security Act, may be

undertaken which would lower or further restrict the established income

and resource standards or benefit levels.

(b) Notices. At least 30 days prior to the initiation of a

demonstration project, FCS shall publish a General Notice in the

Federal Register if the demonstration project will likely have a

significant impact on the public. The notice shall set forth the

specific operational procedures and shall explain the basis and purpose

of the demonstration project. If significant comments are received in

response to this General Notice, the Department will take such action

as may be appropriate prior to implementing the project. If the

operational procedures contained in the General Notice described above

are significantly changed because of comments, an amended General

Notice will be published in the Federal Register at least 30 days prior

to the initiation of the demonstration project, except where good cause

exists supporting a shorter effective date. The explanation for the

determination of good cause will be published with the amended General

Notice. The amended General notice will also explain the basis and

purpose of the change.

Secs. 282.2-282.19 [Removed]

6. Secs. 282.2 through 282.19 are removed.

7. A new Sec. 282.2 is added to read as follows:

Sec. 282.2 Funding.

Federal financial participation may be made available to

demonstration, research, and evaluation projects awarded by FCS through

grants and contracts. Funds may not be transferred from one project to

another. FCS will pay all costs incurred during the project, up to the

level established in the grant, or in the terms and conditions of the

contract. FCS may grant time extensions of the project upon approval.

Funding for additional costs is subject to existing Federal grant and

contract procedures.

PART 284--[REMOVED AND RESERVED]

8. Part 284 is removed and reserved.

[[Page 1855]]

PART 285--PROVISION OF A NUTRITION ASSISTANCE GRANT FOR THE

COMMONWEALTH OF PUERTO RICO

Sec. 285.2 [Amended]

9. In Sec. 285.2, the first sentence of paragraph (b) is amended by

removing the citations ``Secs. 285.4 and 285.7 in this part'' and

adding ``Secs. 285.3 and 285.5'' in their place.

10. In Sec. 285.3:

a. The second sentence of paragraph (a) is removed.

b. The third sentence of paragraph (a) is amended by removing the

word ``subsequent''.

c. Paragraph (b)(3)(iii) is removed.

d. New paragraphs (d), (e), (f), (g), and (h) are added.

The additions read as follows:

Sec. 285.3 Plan of operation.

* * * * *

(d) FCS shall approve or disapprove any plan of operation no later

than August 1 of the year of its submission. FCS approval of the plan

of operation shall be based on an assessment that the nutrition

assistance program, as defined in the plan of operation, is:

(1) Sufficient to permit analysis and review;

(2) Reasonably targeted to the most needy persons as defined in the

plan of operation;

(3) Supported by an assessment of the food and nutrition needs of

needy persons;

(4) Reasonable in terms of the funds requested;

(5) Structured to include safeguards to prevent fraud, waste, and

abuse in the use of grant funds; and

(6) Consistent with all applicable Federal laws.

(e) FCS shall approve or disapprove any amendments to those

provisions of the plan of operation specified in paragraph (b) of this

section. If FCS fails either to approve or deny the amendment, or to

request additional information within 30 days, the amendment to the

plan of operation is approved. If additional information is requested,

the Commonwealth of Puerto Rico shall provide this as soon as possible,

and FCS shall approve or deny the amendment to the plan of operation.

Payment schedules and other program operations may not be altered until

an amendment to the plan of operation is approved. The Commonwealth of

Puerto Rico shall, for informational purposes, submit to FCS any

amendments to those provisions of the plan of operation not specified

in paragraph (b) of this section. Such submittal shall be made at least

30 days prior to the effective date of the amendment. If circumstances

warrant a waiver of the 30-day requirement, the Commonwealth of Puerto

Rico shall submit a waiver request to FCS for consideration. Should FCS

determine that such an amendment relates to the provisions of paragraph

(b) of this section, FCS approval as established in this paragraph will

be necessary for the amendment to be implemented.

(f) FCS may approve part of any plan of operation or amendment

submitted by the Commonwealth of Puerto Rico contingent on appropriate

action by the Commonwealth of Puerto Rico with respect to the problem

areas in the plan of operation.

(g) If all or part of the plan of operation is disapproved, FCS

shall notify the appropriate agency in the Commonwealth of Puerto Rico

of the problem area(s) in the plan of operation and the actions

necessary to secure approval.

(h) In accordance with the provisions of Sec. 285.5, funds may be

withheld or denied when all or part of a plan of operation is

disapproved.

Secs. 285.4-285.5 [Removed]

11. Sec. 285.4 and Sec. 285.5 are removed.

Sec. 285.6 [Redesignated as Sec. 285.4]

12. Sec. 285.6 is redesignated Sec. 285.4.

Sec. 285.7 [Amended]

13. In Sec. 285.7:

a. The section is redesignated 285.5.

b. The first sentence of paragraph (a) is amended by removing the

citation ``Sec. 285.6'' and adding ``Sec. 285.4'' in its place.

c. The first sentence of paragraph (b) is amended by removing the

citation ``Sec. 285.6'' and adding ``Sec. 285.4'' in its place.

Secs. 285.8-285.10 [Removed]

14. Sec. 285.8 through Sec. 285.10 are removed.

Dated: January 5, 1996.

Ellen Haas,

Under Secretary for Food, Nutrition, and Consumer Services.

[FR Doc. 96-887 Filed 1-23-96; 8:45 am]

BILLING CODE 3410-30-U