Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA); Interpretation of ``Federal Public Benefit''

SUMMARY: This notice with comment period interprets the term ``Federal

public benefit'' as used in Title IV of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (PRWORA), Pub. L. 104-193,

and identifies the HHS programs that provide such benefits under this

interpretation. According to section 401 of PRWORA, aliens who are not

``qualified aliens'' are not eligible for any ``Federal public

benefit,'' unless the ``Federal public benefit'' falls within a

specified exception. A ``Federal public benefit'' includes ``any grant,

contract, loan, professional license, or commercial license'' provided

to an individual, and also ``any retirement, welfare, health,

disability, public or assisted housing, postsecondary education, food

assistance, unemployment benefit, or any other similar benefit for

which payments or assistance are provided to an individual, household,

or family eligibility unit.'' Under section 432, providers of a non-

exempt ``Federal public benefit'' must verify that a person applying

for the benefit is a qualified alien and is eligible to receive the

benefit.

The HHS programs that provide ``Federal public benefits'' and are

not otherwise excluded from the definition by the exceptions provided

in section 401(b) are:

Adoption Assistance

Administration on Developmental Disabilities (ADD)--State

Developmental Disabilities Councils (direct services only)

ADD--Special Projects (direct services only)

ADD--University Affiliated Programs (clinical disability assessment

services only)

Adult Programs/Payments to Territories

Agency for Health Care Policy and Research Dissertation Grants

Child Care and Development Fund

Clinical Training Grant for Faculty Development in Alcohol & Drug

Abuse

Foster Care

Health Profession Education and Training Assistance

Independent Living Program

Job Opportunities for Low Income Individuals (JOLI)

Low Income Home Energy Assistance Program (LIHEAP)

Medicare

Medicaid (except assistance for an emergency medical condition)

Mental Health Clinical Training Grants

Native Hawaiian Loan Program

Refugee Cash Assistance

Refugee Medical Assistance

Refugee Preventive Health Services Program

Refugee Social Services Formula Program

Refugee Social Services Discretionary Program

Refugee Targeted Assistance Formula Program

Refugee Targeted Assistance Discretionary Program

Refugee Unaccompanied Minors Program

Refugee Voluntary Agency Matching Grant Program

Repatriation Program

Residential Energy Assistance Challenge Option (REACH)

Social Services Block Grant (SSBG)

State Child Health Insurance Program (CHIP)

Temporary Assistance for Needy Families (TANF)

While all of these programs provide ``Federal public benefits''

this does not mean that all benefits or services provided under these

programs are ``Federal public benefits.'' As discussed in sections II

and III below, some benefits or services under these programs may not

be provided to an ``individual, household, or family eligibility unit''

and, therefore, do not constitute ``Federal public benefits'' as

defined by PRWORA.

DATES: Effective Date: This notice is effective on August 4, 1998.

COMMENT PERIOD: Written comments will be considered if we receive them

at the appropriate address, as provided in the ADDRESSES section below,

no later than 5 p.m. on October 5, 1998.

ADDRESSES: Mail comments (1 original and 3 copies) to the following

address: Division of Economic Support for Families, Office of the

Assistant Secretary for Planning and Evaluation, Department of Health

and Human Services, Room 404E, 200 Independence Ave., SW, Washington,

DC 20201, Attention: Colleen Curtin Rathgeb.

FOR FURTHER INFORMATION CONTACT: Colleen Curtin Rathgeb, (202) 401-

6639.

Copies of comments may be inspected at the above address. Inquiries

regarding how a particular program is affected by this notice should be

submitted to DHHS program staff responsible for managing the program at

either the appropriate Regional Office, or Headquarters in Washington,

D.C. The above contact should be used only to submit general comments

regarding the policy interpretation contained in this notice.

SUPPLEMENTARY INFORMATION:

I. Background

Section 401 of PRWORA provides that an alien who is not a qualified

alien, as defined in section 431 of PRWORA, is not eligible, with

certain specified exceptions, for any ``Federal public benefit.''

PRWORA, as amended by section 501 of the Illegal Immigration Reform and

Immigrant Responsibility Act of 1996 (IIRIRA), Pub. L 104-208, and by

sections 5302 and 5571 of the Balanced Budget Act of 1997, Pub. L 105-

33, defines ``qualified alien'' as an alien who, at the time the alien

applies for, receives or attempts to receive a public benefit, is (1)

an alien lawfully admitted for permanent residence under the

Immigration and Nationality Act (the ``Act''); (2) an alien granted

asylum under Section 208 of the Act; (3) a refugee admitted to the

United States under Section 207 of the Act; (4) an alien paroled into

the United States under Section 212(d)(5) of the Act for a period of at

least one year; (5) an alien whose deportation is being withheld under

Section 243(h) of the Act as in effect prior to April 1, 1997, or whose

removal is being withheld under Section 241(b)(3) of the Act; (6) an

alien granted conditional entry under Section 203(a)(7) of the Act as

in effect prior to April 1, 1980; (7) an alien who is a Cuban Haitian

entrant as defined in Section 501(e) of the Refugee Education

Assistance Act of 1980; or (8) an alien who (or whose child or parent)

has been battered or subjected to extreme cruelty in the United States

and otherwise satisfies the requirements of 8 U.S.C. 1641(c).

Section 401(c) of PRWORA defines ``Federal public benefit'' as:

``(A) any grant, contract, loan, professional license or commercial

license provided by an agency of the United States or by appropriated

funds of the United States; and (B) any retirement, welfare, health,

disability, public or assisted housing, postsecondary education, food

assistance, unemployment benefit, or any other similar benefit for

which payments or assistance are provided to an individual, household,

or family eligibility unit by an agency of the United States or by

appropriated funds of the United States.'' Section 432 of PRWORA as

amended by section 504 of IIRIRA and section 5572 of the Balanced

Budget Act of 1997, further requires that certain providers of

``Federal public benefits'' verify the citizenship or immigration

status of an individual applying for a ``Federal public benefit'' for

purposes of establishing eligibility unless the benefit falls within a

specific exemption.

[[Page 41659]]

Although section 401(b) of PRWORA identifies specific types of

benefits and services that are explicitly exempted from these new

requirements, PRWORA does not identify the specific benefits that are

``Federal public benefits,'' and the definition in section 401(c),

standing alone, does not provide sufficient guidance for benefit

providers to make that determination. In order to facilitate compliance

with the verification requirement in Section 432, the Department and

other Federal agencies should interpret the term. (See the Department

of Justice's ``Proposed Rule on Verification of Eligibility for Public

Benefits'' published elsewhere in this issue of the Federal Register

and ``Interim Guidance on Verification of Citizenship, Qualified Alien

Status and Eligibility Under Title IV of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996'' 62 FR (November 17,

1997) pp. 61344-61416.)

II. Interpretation

``Federal public benefits'' that fall within Part A of the

definition (i.e., ``any grant, contract, loan, professional license, or

commercial license provided by an agency of the United States or by

appropriated funds of the United States'') generally include agreements

or arrangements between Federally funded programs and individuals, such

as research grants, student loans, or patent licenses. For example, the

Native Hawaiian Loan Program and the Repatriation Program are ``Federal

public benefits'' because, as loan programs, they meet the statutory

definition's criteria under Part A. Similarly, the term ``grant'' in

Part A refers to financial awards to individuals; it does not include

so-called ``block grants'' which are provided to states or localities,

since that would give the word an entirely different meaning than the

other terms in that Part. (This interpretation follows the traditional

canon of statutory construction, noscitur a sociis, that provides that

``words grouped in a list should be given related meaning.'' Dole v.

United Steelworkers of America, 494 U.S. 26, 36 (1989) (citing

Massachusetts v. Morash, 490 U.S. 107, 114-15 (1989) (quoting Schreiber

v. Burlington, 472 U.S. 1, 8 (1985).)

If a benefit does not fall within Part A of the definition, it must

be determined whether the benefit is a ``Federal public benefit'' under

Part B: ``any retirement, welfare, health, disability, public or

assisted housing, postsecondary education, food assistance,

unemployment benefit, or any other similar benefit for which payments

or assistance are provided to an individual, household, or family

eligibility unit by an agency of the United States or by appropriated

funds of the United States.''

To qualify as a ``Federal public benefit'' under Part B, a benefit

must satisfy two conditions. First, the benefit must be one of those

enumerated in section 401(c)(1)(B), that is, a ``retirement, welfare,

health, disability, public or assisted housing, postsecondary

education, food assistance, [or] unemployment benefit,'' or be a

``similar benefit.'' Second, a program's benefits or assistance must be

provided to an ``individual, household or family eligibility unit by an

agency of the United States or by appropriated funds of the United

States.''

Although the litany of categories in 401(c)(1)(B) is broad, it is

not comprehensive and clearly excludes certain categories from the

definition. For example, by explicitly identifying ``postsecondary

education'' the statute excludes non-postsecondary education programs,

such as Head Start and elementary and secondary education.

With respect to the second condition, the phrase ``individual,

household, or family eligibility unit'' is particularly ambiguous and

requires clarification. At the outset we interpret the phrase to narrow

the set of benefits that fall within Part B of the definition. This

point is best illustrated by comparing ``Federal public benefits'' in

PRWORA to the term ``Federal benefit'' in IIRIRA. Section 561 of IIRIRA

contained a provision that increased criminal penalties for forging

Federal documents in order to prevent the fraudulent receipt of

``Federal benefits.''

``Federal benefit'' is defined in IIRIRA as: ``(A) the issuance of

any grant, contract, loan, professional license, or commercial license

provided by an agency of the United States or by appropriated funds of

the United States; and (B) any retirement, welfare, Social Security,

health (including treatment of an emergency medical condition in

accordance with section 1903(v) of the Social Security Act (19 USC

1396b(v)), disability, veterans, public housing, education, food

stamps, or unemployment benefit, or any similar benefit for which

payments or assistance are provided by an agency of the United States

or by appropriated funds of the United States.'' IIRIRA's definition of

``Federal benefit'' is nearly the same as PRWORA's definition of

``Federal public benefit'' but with some significant differences.

First, the definition of ``Federal benefit'' contained a more

comprehensive list of benefits than that found in PRWORA's definition

of ``Federal public benefit.'' Second, the ``Federal benefit''

definition did not include the phrase ``individual, household, or

family eligibility unit.'' The term ``Federal public benefit,''

therefore, should be construed more narrowly than ``Federal benefit.''

In addition, the PRWORA Conference Report contains language confirming

the limiting effect of the phrase ``individual, household, or family

eligibility unit.'' In describing the application of the ``Federal

public benefit'' definition to one particular program--Title I, Part A

of the Elementary and Secondary Education Act (ESEA)--the conference

report stated that it was ``[t]he intent of the conferees'' that it

``not be affected by section 401 because the benefit is not provided to

an individual, household, or family eligibility unit.'' [H.R.

Conference Report No. 104-725 at 380 (1996) (emphasis added)]. Given

Congress' assessment that the benefits conferred under the ESEA are not

provided to ``individual, household, or family eligibility units,''

ESEA benefits are not ``federal public benefits.'' In sum, these points

confirm that Congress included the phrase ``individual, household, or

family eligibility unit'' in the definition in order to limit those

benefits that would not be available to non-qualified aliens.

We interpret the phrase ``individual, household, or family

eligibility unit'' to refer to benefits that are (1) provided to an

individual, household, or family, and (2) the individual, household, or

family must, as a condition of receipt, meet specified criteria (e.g.,

a specified income level or residency) in order to be conferred the

benefit, that is, they must be an ``eligibility unit.'' Such benefits

do not include benefits that are generally targeted to communities or

specified sectors of the population (e.g., people with particular

physical conditions, such as a disability or disease; gender; general

age groups, such as youth or elderly). For example, in order for a

program to be determined to provide benefits to ``eligibility units''

the authorizing statute must be interpreted to mandate ineligibility

for individuals, households, or families that do not meet certain

criteria, such as a specified income level or a specified age.

Many HHS programs are targeted to meet the needs of certain

populations such as children or pregnant women. But unless the

authorizing statutes require that the characteristics of these groups

form the basis for denial of services or benefits, these are not

benefits that go to ``eligibility units.'' The authorizing statutes of

these programs identify populations with specific characteristics to

clarify the types of services that should be

[[Page 41660]]

provided; they do not contemplate that providers use variations in

individual characteristics as a basis for determining eligibility, on a

case by case basis. Therefore a benefit targeted to certain populations

based on their characteristics, such as a benefit provided under the

Maternal and Child Health program, which provides health services to

women and children, is not a ``Federal public benefit.''

Some programs may provide a mixture of services, some of which are

provided to ``individual, household, or family eligibility units,'' and

others that are provided to communities or specified sectors of the

population. Programs that are primarily designed to target and provide

services to communities should not be burdened with new verification

procedures merely because they may include some services that flow more

directly to the individual, household or family. Therefore, we have

determined that a preponderance of a program's services must be

provided to individual, household, or family eligibility units in order

to be considered a ``Federal public benefit'' program under this

Notice.

III. HHS Programs

After a review of HHS programs, we have determined that the

following programs provide ``Federal public benefits,'' are not

otherwise excepted from the eligibility restrictions imposed by 401(a)

of PRWORA:

Adoption Assistance

Administration on Developmental Disabilities (ADD)--State

Developmental

Disabilities Councils (direct services only)

ADD--Special Projects (direct services only)

ADD--University Affiliated Programs (clinical disability assessment

services only)

Adult Programs/Payments to Territories

Agency for Health Care Policy and Research Dissertation Grants

Child Care and Development Fund

Clinical Training Grant for Faculty Development in Alcohol & Drug

Abuse

Foster Care

Health Profession Education and Training Assistance

Independent Living Program

Job Opportunities for Low Income Individuals (JOLI)

Low Income Home Energy Assistance Program (LIHEAP)

Medicare

Medicaid (except assistance for an emergency medical condition)

Mental Health Clinical Training Grants

Native Hawaiian Loan Program

Refugee Cash Assistance

Refugee Medical Assistance

Refugee Preventive Health Services Program

Refugee Social Services Formula Program

Refugee Social Services Discretionary Program

Refugee Targeted Assistance Formula Program

Refugee Targeted Assistance Discretionary Program

Refugee Unaccompanied Minors Program

Refugee Voluntary Agency Matching Grant Program

Repatriation Program

Residential Energy Assistance Challenge Option (REACH)

Social Services Block Grant (SSBG)

State Child Health Insurance Program (CHIP)

Temporary Assistance for Needy Families (TANF)

This does not mean, however, that all benefits or services provided

by these programs are ``Federal public benefits'' and require

verification. For example, some states may provide LIHEAP funds for

weatherization of multi-unit buildings. These funds would not be

considered a ``Federal public benefit'' since the eligibility of

individuals, households, or family units is not considered in

determining whether such funds will be used to improve the building.

Other programs that have been determined to provide ``Federal public

benefits'' under this Notice should consult their Federal program

administrators if it is believed that some of the program's services do

not constitute ``Federal public benefits.''

Although SSBG does not have statutorily mandated eligibility

criteria and therefore would not be included in our definition of

``Federal public benefits'' as explained in section III above, its

inclusion in section 402 as a ``federally designated program'' for

which States can determine the eligibility of qualified aliens suggests

that the SSBG program be classified as providing ``Federal public

benefits.'' Otherwise, we would leave open the possibility of a state

denying qualified aliens SSBG benefits or services while maintaining

access to such benefits or services to non-qualified aliens.

Services or benefits that are wholly funded by state or local

governments may be ``state or local public benefit(s)'' as defined in

section 411(c) of PRWORA. However, services or benefits that are wholly

or partially funded with HHS resources must comply with the

interpretation provided in this Notice.

The Department of Justice issued a Notice, dated November 17, 1997,

entitled ``Interim Guidance on Verification of Citizenship, Qualified

Alien Status and Eligibility Under Title IV of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996'', at 62

Fed Reg 61344 (the ``Interim Guidance'') to assist affected providers

in performing the verification procedures necessary to determine which

aliens are ``qualified aliens''. Providers are encouraged to review

that guidance in order to understand the several important exemptions

detailed there. These exemptions include those for: nonprofit

charitable organizations; the provision of emergency medical care and

certain other immunizations and treatments; the protection of certain

battered aliens, and the provision of in-kind, community based services

that are not contingent on income or resources and are necessary for

the protection of life and safety. Further information regarding these

exemptions is included below (section IV).

IV. Exemptions

Congress created specific exemptions to the verification

requirements. Therefore, in addition to the programs identified above,

some HHS programs have eligibility requirements in statute but are

otherwise specifically exempted under the provisions of section 401(b).

Section 401(b)(1)(C), exempts ``public health assistance...for

immunizations with respect to immunizable diseases and for testing and

treatment of symptoms of communicable diseases whether or not such

symptoms are caused by a communicable disease.'' This exemption,

designed to protect public health, excludes some HHS programs from the

definition of ``Federal public benefits.''

Services or assistance specified by the Attorney General that (i)

deliver in-kind services at the community level; (ii) do not condition

the provision of assistance, the amount of assistance provided, or the

cost of assistance provided on the individual recipient's income or

resources; and (iii) are necessary for the protection of life or safety

are also exempted. The Attorney General published general guidance on

August 30th, 1996 regarding which types of services and benefits meet

these criteria at 61 FR 45985. We have reviewed our programs and have

determined that a number of programs meet this criteria.

Section 432(d) of PRWORA (added by Section 508 of IIRIRA) exempts

all providers that are nonprofit charitable organizations from these

verification rules, even if they provide services or benefits funded by

the HHS programs identified in this notice. Refer to the Department of

Justice's Interim Guidance for more information on the applicability of

these exemptions.

V. Comment Period and Effective Date

Although HHS is soliciting public comment on this interpretation,

we believe that it is necessary to apply this interpretation to HHS

programs immediately, prior to receipt and consideration of any

comments.

[[Page 41661]]

PRWORA was enacted in August, 1996, and since that time HHS has

received numerous inquiries regarding the application of the term

``Federal public benefit.'' Additional delay will cause costly,

unnecessary and/or incorrect administrative actions by agencies or

entities that administer our programs. We also believe it is possible

that due to confusion about the application of the term ``Federal

public benefit'' people may have been denied critical benefits and

services for which, under this interpretation, they are eligible.

Without prompt issuance of this interpretation, state and local

governments and other public and private benefit providers will remain

confused over how to implement the requirements of Title IV of PRWORA.

Finally, some states have indicated their intention to define the term

``Federal public benefit'' on their own if Federal guidance is not

forthcoming soon. Independent interpretations by states will only

compound the confusion on this issue since there is no certainty that

each state will arrive at the same definition of the term. In sum,

although we are providing a 60-day period for public comment, this

interpretation is effective immediately.

VI. Economic Impact

The Department has analyzed the costs and benefits of this notice

to determine whether it has a substantial economic effect on the

economy as a whole, on states, or on small entities. The purpose of

this analysis was to identify less burdensome or more beneficial

alternatives and thereby to influence the requirements imposed by the

notice. This interpretation requires verification only for those

activities within programs that have eligibility units defined by

statutory eligibility criteria. Otherwise, a great deal of needless and

costly verification might have been undertaken.

PRWORA creates major economic effects, a large portion of which

results from changes in the law relating to immigrants' eligibility for

Federal benefits. However, these effects are essentially due to other

provisions of PRWORA, such as sections 402, 403 and 421, which alter

the eligibility rules for certain mandatory spending programs and are

largely in effect. This Notice provides clarifying guidance as to which

HHS programs are subject to the existing PRWORA requirements regarding

immigrants' eligibility for ``Federal public benefits,'' thereby

avoiding confusion among administering agencies, grantee agencies,

benefit providers, and the public on the question of which programs

must institute new eligibility and verification procedures. Therefore,

the interpretation does not have an economic impact, and it does not

affect the overall spending levels for any discretionary-funded HHS

program. Nor does this interpretation create burdens or mandates on

states or small entities.

As a result we have determined that this notice is not economically

``significant'' under Executive Order 12866's criterion of an economic

effect of more than $100 million. For the same reason, it is not

classified as a ``major rule'' for purposes of Congressional review

under 5 U.S.C. Sec. 801 et. seq., Subtitle E of the Small Business

Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121).

Dated: July 27, 1998.

Donna E. Shalala,

Secretary.

[FR Doc. 98-20491 Filed 8-3-98; 8:45 am]

BILLING CODE 4140-04-P