# Food Stamp Program: Work Provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996

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URL: https://www.frixlaw.com/law-library/documents/fr%3A99-33131

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** December 23, 1999
- **Citation:** 64 FR 72196

## Text

SUMMARY: The Food and Nutrition Service (FNS) proposes to amend its
regulations to implement several work-related provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA). This proposed rule makes significant changes to current work
rules, including requirements for the Food Stamp Employment and
Training Program and the optional workfare program. These changes
streamline Food Stamp Program work requirements, simplify the
disqualification requirements for failure to comply with work rules,
and provide greater flexibility for States to operate their employment
and training programs.

DATES: Send your comments to reach us by February 22, 2000.

ADDRESSES: You may mail comments to Food Stamp Program, Food and
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia
22302, attention Program Design Branch. You may FAX comments to us at
(703) 305-2486, attention Program Design Branch. You may also hand-
deliver comments to us on the 7th floor at the above address. For
information about filing comments electronically, see the SUPPLEMENTARY
INFORMATION section under Electronic access and filing address.

FOR FURTHER INFORMATION CONTACT: John Knaus, Chief, Program Design
Branch, Program Development Division, Food Stamp Program, FNS, at (703)
305-2519. Individuals who use a telecommunications device for the deaf
(TDD) may call the Federal Information Relay Service at 1-800-877-8339
between 8:00 a.m. and 4:00 p.m. Eastern time, Monday through Friday,
excluding Federal holidays.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures

Electronic Access and Filing Address

You may view and download an electronic version of this proposed
rule at http://www.fns.usda.gov/fsp/. You may also comment via the
Internet at the same address. Please include ``Attention: RIN 0584-
AC45'' and your name and return address in your Internet message. If
you do not receive a confirmation from the system that we have received
your message, contact us directly at (703) 305-2519.

Written Comments

Written comments on the proposed rule should be specific, should be
confined to issues pertinent to the proposed rule, and should explain
the reason for any change you recommend. Where possible, you should
reference the specific section of paragraph of the proposed rule you
are addressing. We may not consider or include in the Administrative
Record for the final rule comments that we receive after the close of
the comment period or comments delivered to an address other than those
listed above. We will make all comments, including names, street
addresses, and other contact information of respondents, available for
public inspection on the 7th floor, 3101 Park Center Drive, Alexandria,
Virginia 22302 between 8:30 a.m. and 5:00 p.m. Eastern time, Monday
through Friday, excluding Federal holidays. We will also post all
comments on the Internet at http://www.usda.gov/fsp at the end of the
comment period. Individual respondents may request confidentiality. If
you wish to request that we consider withholding your name, street
address, or other contact information from public review or from
disclosure under the Freedom of Information Act, you must state this
prominently at the beginning of your comment. We will honor requests
for confidentiality on a case-by-case basis to the extent allowed by
law. We will make available for public inspection in their entirety all
submissions from organizations or businesses, and from individuals
identifying themselves as representatives or officials of organizations
or businesses.

II. Background

Since 1971, able-bodied food stamp recipients have been required to
register for work and accept suitable jobs as a condition for receiving
benefits. In 1982 Congress passed legislation creating workfare, a food
stamp work-for-benefits program. States and local jurisdictions were
afforded the option of requiring most able-bodied recipients to work in
public service jobs in exchange for their food stamps. In 1987 States
implemented the Food Stamp Employment and Training (E&T) Program,
designed to improve food stamp recipients' ability to gain employment,
increase earnings, and reduce their dependency on public assistance.
In August 1996, President Clinton signed into law ``The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996,'' or
PRWORA (Pub. L. 104-193). PRWORA--popularly known as ``welfare
reform''--contained several Food Stamp Program (FSP) work-related
provisions that strengthen work requirements, promote personal
responsibility, streamline E&T requirements, and greatly increase State
flexibility.
Section 815 of PRWORA revised FSP work requirements by amending
section 6(d)(1) of the Food Stamp Act of 1977 (the Act) (7 U.S.C.
2015(d)(1)). It dealt with disqualification for noncompliance with FSP
work requirements. It added to the list of ineligible individuals at
section 6(d)(1)(A) those who: (1) refuse without good cause to provide
sufficient information to allow a determination of their employment
status or job availability; (2) voluntarily and without good cause quit
their job (previously limited to heads of households); (3) voluntarily
and without good cause reduce their work effort and, after the
reduction, work less than 30 hours a week; and (4) fail to comply with
the workfare rules in section 20 of the Act (7 U.S.C. 2029). Section
815 deleted, as an explicit good cause for refusal to accept an offer
of employment, the lack of adequate child care for children above age
five and under age 12. The provision removed the requirement that the
entire food stamp household be disqualified if the head of the
household is disqualified. Instead, it provided States the option to
disqualify the entire household if the head of the household is
disqualified. Section 815 established new mandatory minimum
disqualification periods for individuals who fail to comply with work
requirements. It required the Secretary of Agriculture (the Secretary)
to determine the meanings of good cause, voluntary quit, and reduction
of work effort. It required States to determine: (1) the meaning of
other terms related to FSP work requirements; (2) the procedures for
determining compliance with work requirements; and (3) whether an
individual is actually complying with work requirements. Lastly,
Section 815 specified that States may not use meanings, procedures, or
determinations that are less restrictive on food stamp recipients than
comparable meanings, procedures, or determinations are on recipients of
assistance under State programs funded

[[Page 72197]]

under part A of title IV of the Social Security Act (title IV-A), 42
U.S.C. 601 et seq.
Section 817 of PRWORA amended Act language at section 6(d)(4)
relating to the E&T Program. It streamlined administrative requirements
for States by: (1) requiring E&T components to be delivered through a
statewide workforce development system, if available; (2) expanding the
existing State option to apply E&T requirements to applicants
(previously limited to job search); (3) eliminating the requirement
that job search components be comparable with those operated under
title IV-A; (4) removing requirements for work experience components
that mandated they serve a useful public service and that they use a
participant's prior training, experience, and skills; (5) removing
specific Federal rules as to States' authority to exempt categories of
individuals and individuals from E&T requirements, as well as removing
the requirement that such exemptions be evaluated no less often than at
each certification or recertification of the affected food stamp case;
(6) deleting outdated language concerning applications by States to
provide priority service to volunteer E&T participants; (7) removing
the requirement that States permit, to the greatest practicable extent,
work registrants exempted from E&T, as well as E&T participants who
comply with or are in the process of complying with program
requirements, to participate in E&T, while maintaining the States'
option to permit voluntary participation; (8) removing the requirement
for conciliation procedures to resolve disputes involving participation
in E&T; (9) removing the requirement that States' limits for payments
or reimbursements of dependent care expenses to E&T participants must
be at least as high as the FSP dependent care deduction cap; (10)
removing the requirements for E&T performance standards; (11) adding
the provision that the amount of funds States use to provide E&T
services to participants receiving benefits under a State program
funded under title IV-A cannot exceed the amount of funds, if any,
States used in fiscal year 1995 to provide E&T services to participants
who were receiving benefits under title IV-A; and (12) removing the
Secretary's authority to withhold funds from States for failure to
comply without good cause with E&T requirements.
PRWORA also contained major changes in the requirements for Federal
financial participation in the E&T program. Subsequently, the Balanced
Budget Act of 1997 (Pub. L. 105-33) further amended those requirements.
Federal financial participation is addressed in a separate rulemaking.
Three other PRWORA provisions added new language to the Act.
Section 816 permitted certain States to lower the age at which a child
exempts a parent/caretaker from food stamp work rules. Section 849
provided States the option of using a household's food stamp benefits
to subsidize a job for a household member participating in a work
supplementation program. Section 852 permitted qualifying States to
provide certain households with cash in lieu of food stamps.
Additionally, PRWORA made significant changes to the workfare
provisions at section 20 of the Act. It removed the States' ability to
comply with section 20 by operating a workfare program under title IV-
A. It removed the provision that permitted States to combine the value
of a household's food stamp allotment with the value of assistance
received by the household from a program under title IV-A in order to
determine the number of monthly hours of participation required of
those households in a title IV-A community work experience program.
Lastly, it eliminated disqualification provisions specific to the
optional workfare program and incorporated noncompliance with workfare
into the disqualification provisions governing noncompliance with FSP
work requirements.
Lastly, as part of the Department's ongoing regulation streamlining
and reform initiative, this rule proposes to consolidate the workfare
regulations at 7 CFR 273.22 with FSP work requirements contained in 7
CFR 273.7.

III. Discussion of Proposed Rule

Program Work Requirements

Current regulations at 7 CFR 273.7 require that all physically and
mentally fit food stamp recipients over the age of 15 and under the age
of 60 who are not otherwise exempted be registered for work by the
State agency at the time of application and once every 12 months
thereafter. Work registrants are required to participate in an E&T
program if assigned by the State agency, provide information regarding
employment status and availability for work, report to an employer if
referred, and accept a bona fide offer of suitable employment at a wage
no less than the applicable State or Federal minimum wage, whichever is
highest.
Failure to meet these requirements without good cause results in a
two-month disqualification. If the noncompliant individual is the head
of the household, the entire household is disqualified for two months.
Otherwise, only the individual is disqualified.
Additionally, if the head of the household voluntarily quits a job
of 20 or more hours a week without good cause 60 days or less prior to
applying for food stamps, or at any time thereafter, the entire
household is disqualified for 90 days.
Eligibility may be reestablished by the household during a
disqualification period if the head of the household becomes exempt
from the work registration requirement, is no longer a member of the
household, or complies with the requirement in question. Disqualified
individuals may reestablish eligibility by becoming exempt from the
work registration requirement or by complying with the requirement in
question.
Certain food stamp recipients are exempt from work registration
requirements. Among these exempt individuals are those currently
subject to and complying with a work registration requirement under
title IV-A or the Federal-State unemployment compensation system. If
these individuals fail to comply with any work requirement to which
they are subject that is comparable to a FSP work requirement, they are
subject to disqualification.
In accordance with section 815 of PRWORA, which contains amendments
to section 6(d)(1) of the Act, this rulemaking proposes the following
changes to current regulations.
Work Registrant Requirements
The current regulation at 7 CFR 273.7(a) contains the work
registration requirement for nonexempt food stamp household members.
Current regulations at 7 CFR 273.7(e) list the responsibilities and
requirements for work registrants.
Section 815 of PRWORA amended section 6(d)(1) of the Act by adding
to the list of reasons for disqualification the refusal without good
cause by an individual to provide a State agency with sufficient
information to determine his or her employment status or job
availability. Note, however, that 7 CFR 273.7(e) already contains the
requirement that a work registrant respond to a request from the State
agency or its designee for supplemental information regarding
employment status or availability for work. Therefore, no action is
required to amend current regulations in this regard.
Current regulations at 7 CFR 273.22 contain FSP workfare
participation requirements for households. 7 CFR

[[Page 72198]]

273.22(f)(6) provides for penalties for failure to comply with workfare
requirements.
Section 815 aligned workfare penalties with other work penalties.
It amended section 20 of the Act by removing workfare disqualification
provisions, and further amended section 6(d)(1) by including refusal
without good cause to comply with section 20 of the Act as a reason for
disqualification.
Therefore, this rule proposes to amend 7 CFR 273.22(f) by removing
paragraph (6), Failure to Comply, and to amend 7 CFR 273.7(e) by adding
as a work registrant requirement participation in a workfare program if
assigned.
This rule further proposes to incorporate the work registrant
requirements listed in 7 CFR 273.7(e) into 7 CFR 273.7(a), which will
be redesignated 7 CFR 273.7(a)(1) and renamed work requirements.
This rule also proposes to incorporate the participation
requirements for strikers listed in 7 CFR 273.7(j); the requirements
for registration of certain PA, GA, and refugee households listed in 7
CFR 273.7(k); and the provisions for applicants applying for SSI and
food stamps under Sec. 273.2(k)(1)(i), listed in 7 CFR 273.7(l), into 7
CFR 273.7(a). They will be redesignated 7 CFR 273.7(a)(4), (a)(5), and
(a)(6) respectively.
Lastly, this rule proposes to make the following changes to 7 CFR
273.7: (1) the current provisions at 7 CFR 273.7(f), (g), (h), (i),
(m), and (n) will be redesignated 7 CFR 273.7(e), (f), (g), (h), (i),
and (j) respectively; (2) the current provisions at 7 CFR 273.7(o) and
(p) will be deleted and new provisions, designated 7 CFR 273.7(k) and
(l) will be added; (3) the provisions for the optional workfare program
at 273.22 will be redesignated 7 CFR 273.7(m); and (4) 7 CFR 273.22
will be removed.
Administrative Responsibilities
Current regulations at 7 CFR 273.7(m) assign to State agencies the
responsibility for determining the existence of good cause in instances
when an individual fails or refuses to comply with FSP work
requirements. 7 CFR 273.7(n) assigns to State agencies the
responsibility for determining whether or not a voluntary quit
occurred.
Section 815 of PRWORA amended the Act by adding a new provision,
section 6(d)(1)(D), Administration. While assigning to the Secretary
responsibility for determining the meanings of good cause, voluntary
quit, and reduction of work effort, section 6(d)(1)(D) assigns to State
agencies the responsibility for determining: (1) the meaning of all
other terms relating to work requirements; (2) the procedures for
determining whether an individual is in compliance with work
requirements; and (3) whether an individual is actually in compliance
with work requirements.
However, section 6(d)(1)(D) prohibits State agencies from assigning
a meaning, procedure, or determination that is less restrictive on food
stamp recipients than a comparable meaning, procedure, or determination
under a State program funded under title IV-A.
This rule proposes to amend 7 CFR 273.7(a) by assigning to the
State agency responsibility for determining the meaning of all terms
related to FSP work requirements (other than good cause, voluntary
quitting, and reducing work effort); for establishing the procedures
for determining whether an individual is in compliance with FSP work
requirements; and for determining whether an individual is in actual
compliance with FSP work requirements. The State agency may not use a
meaning, procedure, or determination that is less restrictive on food
stamp recipients than a comparable meaning, procedure, or determination
is on recipients of a State program funded under title IV-A. These
provisions will be incorporated in a new paragraph, 7 CFR 273.7(a)(2).
Household Ineligibility
Current regulations at 7 CFR 273.7(g)(1) require that an
individual, other than the head of household, who fails or refuses
without good cause to comply with FSP work requirements be disqualified
from FSP participation. However, if the head of household fails or
refuses without good cause to comply, the entire household must be
disqualified.
Section 815 of PRWORA amended section 6(d)(1)(B) of the Act by
removing the requirement that the entire household be disqualified if
the head of the household fails or refuses without good cause to
comply. Instead, section 815 provided State agencies the option to
disqualify the entire household if the head of household fails or
refuses without good cause to comply with FSP work requirements. It
limited the length of such an optional household disqualification to
the duration of the disqualification period applied to the individual
or 180 days, whichever is shorter.
This rule proposes to amend redesignated 7 CFR 273.7(f) by
eliminating the requirement in paragraph (1) that the entire household
be disqualified if the head of the household fails to comply, and by
adding a new paragraph (4), Household Ineligibility. 7 CFR 273.7(f)(4)
will provide that a State agency has the option to disqualify the
entire household if the head of the household becomes ineligible to
participate in the FSP for failure to comply with work requirements. If
the State agency chooses this option, it may disqualify the household
for the duration of ineligibility of the head of the household, or for
180 days, whichever is less.
Disqualification Periods
Current regulations at 7 CFR 273.7(g)(1) establish a two-month
disqualification period to be imposed for failure or refusal without
good cause to comply with FSP work requirements.
Section 815 of PRWORA amended sections 6(d)(1) (a) and (b) of the
Act to establish mandatory disqualification periods--based on the
frequency of the violation--for individuals who fail to comply with FSP
work requirements. For the first violation, the individual is
disqualified until he or she complies with the requirement, one month,
or, at State agency option, up to three months, whichever is later. For
the second violation, until the later of the date the individual
complies, two months, or a period--determined by the State agency--not
to exceed six months. For the third or subsequent violation, until the
later of the date the individual complies with the requirement; six
months; a date determined by the State agency; or, at the option of the
State agency, permanently.
This rule proposes to amend redesignated 7 CFR 273.7(f) by deleting
reference to a 2-month disqualification period and by inserting a new
paragraph, 7 CFR 273.7(f)(2), Disqualification Periods. The new
paragraph (2) will provide for minimum mandatory disqualification
periods for individuals who fail or refuse without good cause to comply
with FSP work requirements. State agencies are free to elect which
disqualification period they institute for each level of noncompliance.
However, each State agency must apply its disqualification policy
uniformly, statewide.
We further propose to add a new paragraph (d)(xiii) under 7 CFR
272.2, Plan of operation. Paragraph (d)(xiii) will contain the
requirement for each State agency's disqualification policies.
Ending Disqualification
Current regulations at 7 CFR 273.7(h) provide that, at the end of
the 2-month disqualification period, participation may resume if the
disqualified individual or household reapplies for benefits and is
determined eligible.

[[Page 72199]]

Eligibility may be reestablished by a household during the
disqualification period if the head of household becomes exempt from
the work registration requirement, is no longer a member of the
household, or complies with the appropriate work requirement. A
disqualified individual may resume participation during the
disqualification period by becoming exempt from work registration or by
complying with the appropriate requirement.
As discussed previously, section 815 of PRWORA assigned to State
agencies responsibility for establishing the procedures for determining
whether an individual is in compliance with work requirements, as well
as the actual determination of compliance.
The Department believes that Congress intended for State agencies
to have maximum flexibility in implementing and administering their
disqualification policies. Thus, when determining whether a
disqualified individual or household has complied with the FSP work
requirement in question, a State agency may use its established
procedures, as long as these procedures are no less restrictive than
the State agency's title IV-A process.
Since section 815 of PRWORA called for mandatory disqualification
periods (the later of the date of compliance or end of
disqualification), a disqualified individual will no longer be able to
comply with the requirement during the disqualification period and end
or ``cure'' the disqualification early.
Congress clearly intended to end this practice of curing of a
disqualification. Section 815 amended section 6(d)(1)(B)(ii) of the Act
by deleting the following provision: ``Any period of ineligibility for
violations under this paragraph shall end when the household member who
committed the violation complies with the requirement that has been
violated.''
Thus, PRWORA removed a policy that provoked criticism in the past:
the possibility of reestablishing eligibility during a disqualification
by complying with a work requirement. This ability to cure a
disqualification was viewed as providing a ``revolving door'' through
which noncompliant participants could continuously reenter the FSP to
avoid serious penalty.
In light of this prohibition against curing a disqualification,
several State agencies have asked whether PRWORA also changed the
previous policy of ending a disqualification when, during the
disqualification period, a disqualified individual became exempt from
FSP work requirements. This policy is unchanged.
Section 6(d)(2) of the Act provides that a person who must
otherwise comply with the FSP work requirements in section 6(d)(1), and
who is subject to the penalties for noncompliance, is exempt from those
requirements if he or she is: (1) subject to and complying with a title
IV-A or Federal-State unemployment compensation work requirement; (2) a
parent or other household member caring for a dependent child under age
six or an incapacitated person; (3) a student; (4) a regular
participant in a drug addiction or alcoholic treatment and
rehabilitation program; (5) working 30 hours a week or earning the
minimum wage equivalent; or (6) between the age of 16 and 18 and not
head of a household, or between 16 and 18 and attending school or
training on a half-time basis. Also exempt are those under 16 or 60 and
over and those who are physically or mentally unfit.
In the Department's view, the language of section 6(d)(2) must be
interpreted to include disqualified individuals who meet one of the
exemption criteria. In such cases, that individual is no longer subject
to the work requirements or to the attendant penalties for
noncompliance. For instance, if a disqualified individual gains
responsibility for the care of a dependent child under six during his
or her disqualification period, that individual is no longer subject to
FSP work requirements. The disqualification must terminate and the
individual, if otherwise eligible, must be allowed to resume
participation.
Therefore, this rule proposes to amend redesignated 7 CFR 273.7(g)
by deleting reference to a 2-month disqualification period and by
providing that, at the end of the applicable minimum mandatory
disqualification period (except in cases of permanent
disqualification), participation may resume if the disqualified
individual reapplies for food stamps and is determined by the State
agency to be in compliance with work requirements. This rule proposes
to further amend redesignated 7 CFR 273.7(g) by removing the provision
for curing a disqualification.
Good Cause
The current regulations at 7 CFR 273.7(m) assign to State agencies
responsibility for determining good cause when an individual fails to
comply with FSP work registration, E&T, and voluntary quit
requirements. The regulations include as good cause circumstances
beyond the individual's control. One example cited is the lack of
adequate child care for children ages 6 to 12.
The current regulations at 7 CFR 273.7(n)(3) contain the good cause
requirements specifically concerning voluntary quit, as well as the
procedures for verifying questionable information concerning voluntary
quit.
Section 815 of PRWORA amended section 6(d)(1) of the Act by
deleting language that included the lack of adequate child care for
children between 6 and 12 as good cause for refusing to accept an offer
of employment, and by assigning to the Secretary specific authority to
define the meaning of good cause. We believe that Congress did not
intend to eliminate lack of adequate child care as a valid good cause
reason, thereby forcing parents to choose between the well-being of
their children and the demands of FSP work requirements. Instead, by
deleting this reference to a very specific, single instance of
noncompliance, we believe Congress intended to eliminate any confusion
about applying good cause criteria equitably across-the-board to all
FSP work requirements. Therefore, lack of adequate child care remains
as a good cause reason for noncompliance.
Although current good cause regulations remain basically unchanged,
we propose to take this opportunity to amend redesignated 7 CFR
273.7(i) and redesignated 7 CFR 273.7(j) by combining the provisions
under the specific heading ``Good Cause'' at redesignated 7 CFR
273.7(i). We also propose to add language to redesignated 7 CFR
273.7(i) reminding State agencies that it is not possible for the
Department to enumerate each individual circumstance that should or
should not be considered good cause. State agencies must consider all
facts and circumstances in each individual case concerning the
determination of good cause.
Voluntary Quit
Current regulations at 7 CFR 273.7(n) contain the procedures for
disqualifying a household whose head voluntarily quits a job without
good cause 60 days or less before applying for food stamps, or at any
time thereafter. For purposes of establishing voluntary quit, a ``job''
is considered employment of 20 or more hours per week, or employment
that provides weekly earnings at least equivalent to the Federal
minimum wage multiplied by 20 hours. A Federal, State or local
government employee dismissed from employment because of participation
in a strike is considered to have voluntarily quit without good cause.

[[Page 72200]]

In the case of applicant households, if the State agency determines
that a voluntary quit by the head of household was without good cause,
the household's application for benefits will be denied and it will not
be eligible for benefits for 90 days, starting with the date of the
quit.
In the case of participating households, if the State agency
determines that a head of household voluntarily quit a job while
participating in the FSP, or discovers that a quit occurred within 60
days prior to application or between application and certification, the
household will be disqualified from participation for 90 days,
beginning with the first of the month after all normal adverse action
procedures are completed.
Following the end of a voluntary quit disqualification, a household
may reapply and, if otherwise eligible, begin participation in the FSP.
Eligibility may be reestablished during a disqualification period and
the household may, if otherwise eligible, resume participation if the
head of household secures new employment comparable to the job that was
quit, or leaves the household. Eligibility may also be reestablished if
the head of household becomes exempt from work registration. If the
disqualified household splits, the disqualification follows the head of
household. If that individual becomes head of a new household, that
household must serve out the balance of the disqualification period.
If a disqualified household applies for participation in the third
month of its disqualification, it does not have to reapply in the next
month. The State agency must use the same application to deny benefits
in the remaining month of disqualification and to certify the household
for any subsequent month(s) if it is otherwise eligible.
Section 815 of PRWORA amended section 6(d)(1) of the Act by
removing the requirement that only the head of household is subject to
voluntary quit. As with all the other sanctionable actions listed in
section 6(d)(1)(A), each individual household member was made subject
to disqualification for a voluntary quit. The State agency was afforded
the option of disqualifying the entire household if the quitter is the
head of household.
Section 6(d)(1) was further amended by eliminating the 90-day
disqualification period for voluntary quit. Penalties for voluntary
quit are based on the minimum mandatory disqualification provisions
contained in PRWORA.
Lastly, section 815 of PRWORA amended section 6(d)(1) by adding the
provision that an individual who voluntarily and without good cause
reduces work effort and, after the reduction, works less than 30 hours
per week, must be disqualified.
We propose to retain the 60-day pre-application period for
establishing voluntary quit and to apply the same standard when
determining reduction of work effort for applicants. The voluntary quit
and reduction in work effort provisions aim to deter individuals with
reasonable income from intentionally ending or reducing that income to
qualify for food stamps or to increase coupon allotments. We believe
that 60 days is a reasonable time span to use to gauge intent.
We also propose to increase the 20 hour/equivalent Federal minimum
wage figure used in defining voluntary quit to 30 hours. Increasing the
number of hours to 30 provides a logical connection between voluntary
quit and the reduction of work effort threshold mandated by Congress.
The 30 hour figure also conforms to the number of hours of work
required to exempt an employed recipient from Program work
requirements. The Department welcomes comments on this issue.
Lastly, Congress clearly stated that any reduction in hours of
employment to less than 30 hours a week without good cause must be
penalized. We do not believe Congress intended that a minimum wage
equivalent of 30 hours be considered when establishing voluntary
reduction in work hours. The Department proposes to make this clear in
the rule. We also propose to incorporate good cause for reduction of
work effort into the good cause provision at redesignated 7 CFR
273.7(i).
Accordingly, the following amendments to redesignated 7 CFR
273.7(j) are proposed. Any individual who, 60 days or less before
applying for food stamps, or at any time after application, without
good cause quits a job of 30 hours or more a week or a job that
provides weekly earnings at least equivalent to the Federal minimum
wage multiplied by 30 hours, or who is employed 30 or more hours per
week but without good cause reduces his or her work effort to less than
30 hours, must be disqualified for a period specified by the State
agency's minimum mandatory disqualification provisions. The
disqualified individual must be considered an ineligible household
member. The individual's income and resources must continue to be
counted to determine eligibility and level of benefits for the
remaining household members. If the individual who voluntarily quit his
or her job, or who reduced his or her work effort without good cause,
is the head of household the State agency may, at its option,
disqualify the entire household. Because the ability to cure a
disqualification was eliminated, the provision for reestablishing
eligibility during a disqualification if the individual secures new,
comparable employment is removed.
Failure To Comply With a Title IV-A or Unemployment Compensation Work
Requirement
Current regulations at 7 CFR 273.7(g)(2) provide that an individual
who is exempt from FSP work requirements because he or she is
registered for work under title IV-A or unemployment compensation but
fails to comply with a title IV-A or unemployment compensation
requirement comparable to a food stamp work requirement must be treated
as though the individual failed to comply with the corresponding food
stamp requirement. Comparability exists if the title IV-A or
unemployment compensation requirement places responsibilities on the
individual similar to food stamp work requirements.
In the past, this comparability issue created controversy and
confusion among State agencies. How can a requirement in one program be
``comparable'' to one in another program with different rules,
different caseloads, and different operating procedures? The ``similar
responsibilities'' explanation only added to the confusion. If a title
IV-A work program contained a training component not available to food
stamp work registrants, did this mean that participation in that
component placed a greater responsibility on the title IV-A household
than on the food stamp household, even if the food stamp household had
another component available; one that, while not the same, provided
opportunities for training?
A conforming amendment to section 819 of PRWORA deleted the
comparability language in section 6(d)(2)(A) of the Act relating to
failure to comply with a title IV-A or unemployment compensation work
requirement.
With the striking of the comparability requirement, State agencies
are now able to impose FSP disqualifications on individuals (and-
optionally-households) who fail to comply with title IV-A or
unemployment compensation work requirements, without regard to the
existence of ``similar responsibilities'' among programs.

[[Page 72201]]

The regulation continues to make it clear that the noncomplying
individual will not be subject to FSP disqualification if he or she
meets one of the other exemption criteria listed at 7 CFR 273.7(b)
(excluding participation in title IV-A work activities or receipt of
unemployment compensation). For example, an individual responsible for
the care of a child under six who is disqualified under a title IV-A
program for failure to comply with its work requirements would not be
subject to a FSP disqualification because that individual remains
exempt under another FSP criteria.

Note: Section 819 of PRWORA, titled ``Comparable Treatment for
Disqualification,'' added a new paragraph (i) to section 6 of the
Act. Section 6(i) provided that, if a food stamp recipient is
disqualified for failure to comply with a requirement of a Federal,
State, or local means-tested public assistance program, the State
agency may opt to impose the same disqualification on the recipient
under the FSP. Thus, in the example above, the State agency could,
under the comparable disqualification provision of section 6(i),
disqualify the individual who is responsible for the care of a child
under six, using title IV-A rules and procedures. It is important to
note that the language of section 6(i) specifically limits this
option to individuals. Therefore, State agencies may not impose
comparable treatment for disqualification on the entire household.

The Department is proposing to amend redesignated 7 CFR 273.7(f)(6)
accordingly by deleting the comparability requirement for imposing FSP
disqualifications on individuals who are not otherwise exempt FSP work
requirements and who fail to comply with the work registration
requirements of title IV-A or of the Federal-State unemployment
compensation system. The Department further proposes to add the option
of allowing State agencies to disqualify individuals who meet other FSP
exemption criteria by using the same rules and procedures that apply
under title IV-A for failure to comply with a title IV-A work
requirement. Such a disqualification must be in accordance with the
comparable disqualification provisions at 7 CFR 273.11(l).

Caretaker Exemption

Current regulations at 7 CFR 273.7(b)(iv), pursuant to section
6(d)(2)(B) of the Act, exempt from FSP work requirements a parent or
other household member who is responsible for the care of a dependent
child under six. Prior to the enactment of PRWORA, Eight State agencies
had submitted requests to waive this regulation to require caretakers
of children less than six years old to participate in their proposed
welfare reform demonstration projects. The purpose of these waivers was
to conform FSP and title IV-A work requirements in order to provide the
State agencies maximum flexibility in the operation of their
demonstrations. The Department believed that the States' requests
violated section 17(b) of the Act, which prohibited the approval of a
waiver that would lower or further restrict the benefit levels of food
stamp recipients. The Department concluded that the approval of these
waivers would subject food stamp recipients to work requirements and
possible sanctions that they would not be subject to under regular
program rules. Therefore, the waivers were denied.
Section 816 of PRWORA amended section 6(d)(2) of the Act by adding
an option to allow State agencies that previously requested a waiver to
lower the age of the qualifying dependent child to less than six. Under
this option, State agencies that had requested such a waiver, but were
denied before August 1, 1996, may lower the age of a qualifying
dependent child to between one and six years. This option may be
exercised for a period of not more than three years.
This rule proposes to amend 7 CFR 273.7(b)(iv) to include a
provision offering this option to the State agencies of Alabama,
Kansas, Maryland, Michigan, North Dakota, Virginia, Wisconsin, and
Wyoming. According to FNS records, these were the State agencies that
were denied the exemption waivers before August 1, 1996. These State
agencies, upon submission of written notification to the Department,
may, for a maximum of three years, lower the age of a dependent child
that qualifies a parent or other household member for an exemption to
between one and six.

Employment and Training Program

Since April 1987 State agencies have been required to operate a
Food Stamp Employment and Training Program. The E&T program seeks to
improve food stamp recipients' ability to obtain regular employment,
increase earnings, and reduce their dependency on public assistance.
State agencies may choose to operate one or more of a variety of
E&T components. The components may vary from State to State, and may
include job search, job search training, workfare, work experience,
self-employment activities, and vocational and basic education
components. Job search has by far been the most prevalent activity,
because of its relatively low cost.
The Department funds the E&T Program in three categories. An annual
100% Federal grant is allocated to State agencies to operate their
programs. The Department matches allowable operational E&T costs that
exceed the 100% Federal grant. USDA also matches 50% of the costs
incurred by participants in fulfilling their E&T obligations by
contributing half of the costs for dependent care (within certain
limits), and half of up to $25 per month for transportation and other
costs. All funding passes from USDA directly to State agencies.
Prior to the enactment of PRWORA, the Department allocated an
annual 100% Federal grant of $75 million to State agencies. In
accordance with section 16(h) of the Act, $60 million was distributed
according to each State's proportion of work registrants nationwide,
and the remaining $15 million was distributed based on State agency
performance in placing people into E&T activities.
The Food Security Act of 1985 (Pub. L. 99-198), which created the
E&T Program, mandated that the Department establish performance
standards requiring State agencies to place at least 50 percent of
their mandatory participants into E&T programs. Mandatory participants
are work registrants not exempted from E&T by a State agency. Congress
lowered the 50 percent performance requirement to 10 percent, effective
FY 1992, to encourage State agencies to begin utilizing more
substantive interventions or to target service to certain groups.
Each State agency must have in place conciliation procedures for
the resolution of disputes involving the participation of individuals
in the E&T Program.
In accordance with section 817 of PRWORA, which contains amendments
to section 6(d)(4) of the Act, this rulemaking proposes the following
changes to current regulations.
Statewide Workforce Development System
Section 817 of PRWORA amended section 6(d)(4) of the Act to require
that each component of a State agency's E&T program be delivered
through a statewide workforce development system, unless the component
is not available locally through such a system.
A statewide workforce development system is an interconnected
strategy for providing comprehensive labor market and occupational
information to jobseekers, employers, providers of one-stop delivery of
core services, providers of other workforce employment activities, and
providers of workforce education activities.

[[Page 72202]]

This rule proposes to add, at 7 CFR 273.7(c), a new paragraph (5),
which will contain the requirement that each component of a State
agency's E&T program be delivered through its statewide workforce
development system. If the component is not available locally through
such a system, the State agency may use another source.
Acceptable Level of Effort of E&T Components
Current regulations at 7 CFR 273.7(f)(1) require that any E&T
component offered by a State agency entail a certain level of effort on
the part of participants. The Department established a minimum level of
effort that is comparable to spending 12 hours a month for two months
(or less in workfare or work experience components) making job
contacts. The Department based this level on the pre-E&T food stamp job
search requirement that a participant contact 24 employers in an eight-
week period in an effort to locate suitable employment. The Department
intends to maintain this level as the acceptable level of component
effort.
Section 824 of PRWORA established a new work requirement under
which nonexempt ABAWDs become ineligible if, during a 36-month period,
they receive benefits for three months in which they do not meet
specific conditions. One such condition is participation for 20 or more
hours a week in a work program, such as E&T--excluding job search or
job search training activities. The 20-hour requirement does not apply
to workfare or work experience components of E&T programs.
Participation in those components is limited to the number of monthly
hours equal to the result obtained by dividing a household's food stamp
allotment by the higher of the applicable Federal or State minimum
wage.
The Department urges State agencies to plan their E&T component
participation requirements with the ABAWD provisions in mind. By
establishing sufficient levels of effort for their non-work, non-job
search/job search training E&T program components, or by judicious
scheduling of simultaneous participation in a combination of components
to meet the ABAWD provisions, State agencies can contribute
significant--and valuable--resources to permit ABAWDs to maintain their
food stamp eligibility. State agencies must keep in mind, however, the
maximum individual or household participation requirements specified in
section 6(d)(4)(F) of the Act. The total monthly work hours in an E&T
program required of a household, together with the hours of work in a
optional workfare program, may not exceed the number of hours equal to
the household's food stamp allotment divided by the higher of the
applicable Federal or State minimum wage. The total hours of individual
participation in E&T, together with any hours worked for compensation
in cash or in kind (including workfare), cannot exceed 120 hours per
month.
Applicant Work Requirements
Current regulations at 7 CFR 273.7(f)(1) allow a State agency to
require an individual to conduct a job search from the time an
application is filed for an initial period of up to eight consecutive
weeks. This State agency option was provided to conform FSP policy with
title IV-A applicant job search requirements.
Section 817 of PRWORA amended section 6(d)(4) of the Act by
expanding this existing State agency option. In addition to job search,
a State agency may require non-exempt food stamp applicants to
participate in any of its E&T program components as a condition of
eligibility.
This rulemaking proposes to amend redesignated 7 CFR 273.7(e)(1) to
authorize a State agency to require FSP applicants, at its option, to
participate in and comply with any component it offers in its E&T
program for an initial period beginning at the time of application. In
order to assure the maximum success of applicant participation, the
Department further proposes to remove the eight-week time limit for
this initial period of applicant participation. Thus, a State agency
may require applicant participation for any initial period it
determines to be adequate to meet program goals. However it was not the
intent of Congress to permit State agencies to delay the determination
of an individual's eligibility for benefits or the issuing of benefits
to an otherwise eligible household until initial participation is
completed. Therefore, the Department proposes to maintain the
requirement at redesignated 7 CFR 273.7(e)(1)(i) that, as long as the
applicant is complying with the E&T requirement, the State agency not
delay the determination of the individual's eligibility for benefits or
the issuance of benefits to an otherwise eligible household pending
completion of an applicant E&T requirement.
Job Search
Current regulations at 7 CFR 273.7(f)(1)(i) authorize a State
agency to offer a job search component comparable to that required of a
program under title IV-A. Aside from the initial applicant job search
period, discussed above, the work registrant can be required to conduct
a job search of up to eight weeks (or an equivalent period) in any
consecutive 12-month period. The first such 12-month period begins at
any time following the close of the initial period.
Section 817 of PRWORA amended section 6(d)(4)(B) of the Act by
deleting the title IV-A comparability requirement for job search.
Therefore, we propose to amend redesignated 7 CFR 273.7(e)(1)(i) by
deleting the requirement that a State agency's E&T job search component
must be comparable to its title IV-A job search component.
The legislative history of the Act indicates that, while Congress
did not place a minimum or maximum limit on job search, it did expect
the Department to develop and implement reasonable requirements. The
only limitation Congress placed on the Department was that it not
initiate a mandatory continual job search. Congress did not intend that
work registrants actively engage in a systematic and sustained effort
to obtain work every month and provide tangible evidence to the State
agency of such effort. It feared that such a system would create
administratively complex and cumbersome reporting systems that would
flood State agency offices with paperwork, but would not produce jobs.
At the time of the publication of the original job search rule in
January 1981, the Department chose the eight-week job search period to
conform with the requirements of the Aid to Families with Dependent
Children (AFDC) Program. Job search under AFDC's Work Incentive Program
(WIN) was mandated to be no more than eight weeks a year.
In keeping with the State agency flexibility offered under PRWORA,
the Department further proposes to amend redesignated 7 CFR
273.7(e)(1)(i) by removing the annual eight week job search limitation.
Each State agency will be free to conform its E&T job search to that of
its title IV-A work program, or to establish job search requirements
that, in the State agency's estimation, will provide participants a
reasonable opportunity to find suitable employment. However, the
Department believes that Congress' initial concern about the length of
job search still applies. If a reasonable period of job search does not
result in employment, placing the individual in a training or education
component to improve job skills will likely be more productive.

[[Page 72203]]

The Department welcomes comments on this issue.
Lastly, the Department proposes to amend redesignated 7 CFR
273.7(e)(1)(i) by adding that, in accordance with section 6(o)(1)(A) of
the Act and 7 CFR 273.24 of the regulations, a job search program
operated as a component of a State's E&T program does not meet the
definition of work program relating to the participation requirements
necessary to maintain food stamp eligibility for able-bodied adults.
This same notice will be added at redesignated 7 CFR 273.7(e)(1)(ii),
which describes job search training programs. These additions will also
specify that the prohibitions against E&T job search and job search
training do not apply to such programs operated under title I of the
Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.) (the WIA), or
under section 236 of the Trade Act of 1974 (19 U.S.C. 2296) (the Trade
Act). Further, we propose to amend redesignated 7 CFR 273.7(e)(1) to
add that job search or job search training activities, when offered as
part of other E&T program components, are acceptable as long as those
activities comprise less than half the required time spent in the other
components.
Workfare
Current regulations at 7 CFR 273.7(f)(1)(iii) authorize assignment
to workfare components operated in accordance with section 20 of the
Act and 7 CFR 273.22. As part of a workfare program, the Act permits
operating agencies to establish a job search period of up to 30 days
following certification prior to making a workfare assignment. During
this period, the participant is expected to look for a job. The job
search period may only be conducted at certification, not at
recertification. This job search activity is part of the workfare
assignment and not a job search ``program.'' Therefore, participants
are to be considered as participating in and complying with the
requirements of workfare, thereby satisfying the ABAWD work
requirement.
We propose to amend redesignated 7 CFR 273.7(e)(1)(iii) to include
a statement that makes clear that the job search period authorized by
State agencies for workfare components does meet the work requirement
for able-bodied adults.
Work Experience Programs
Current regulations at 7 CFR 273.7(f)(1)(iv) authorize assignment
to a work experience component to improve the employability of
participants through training and/or actual work experience. In
accordance with sections 6(d)(4)(B)(i)(I) and (II) of the Act,
assignments are limited to ones that serve a useful public purpose in
fields such as health, social service, environmental protection, urban
and rural development and redevelopment, welfare, recreation, public
facilities, public safety, and day care. Additionally, assignments are
to use, to the greatest extent possible, a participant's prior
training, experience, and skills.
Section 817 of PRWORA amended section 6(d)(4) by deleting the above
limitations imposed on work experience assignments. In taking this
action, the Department believes that Congress meant to expand State
agency flexibility to place individuals not only in public or private
non-profit assignments, but also in work experience positions with
private sector, for-profit employers. However, the Act and other
Federal laws--including the Fair Labor Standards Act of 1938, as
amended (29 U.S.C. 201, et seq.)--govern the rights of participants
assigned to positions with for-profit employers as well as those in
non-profit positions. State agencies must exercise great caution to
comply with those laws and to ensure those rights when establishing and
operating private sector work experience components.
This flexibility does not extend to workfare assignments, in which
participants are required to work off the value of their household's
monthly food stamp allotment. Workfare assignments may only be in
public or private non-profit agencies.
We propose to amend redesignated 7 CFR 273.7(e)(1)(iv) by deleting
the requirements that work experience assignments serve a useful public
purpose, and that they use, to the greatest extent possible, a
participant's prior training, experience, and skills. Thus, assignments
can be made to any available public or private non-profit project, as
well as with any private, for-profit employer, regardless of prior
training, experience, or skills, as long as such assignments, pursuant
to section 6(d)(4)(B)(iv), do not serve to replace a worker not
participating in the program; and as long as they provide the same
benefits and working conditions to E&T participants as those provided
to regular employees performing comparable work for comparable hours.
``Other Programs, Projects, and Experiments''
In accordance with section 16(h)(4) of the Act, the Federal 100
percent E&T grant may only be used by State agencies to operate an E&T
program under section 6(d)(4). Section 6(d)(4)(B)(vii) of the Act
includes as an allowable component of an E&T program other employment,
educational and training programs, projects, and experiments aimed at
accomplishing the purpose of the E&T program. Such components must be
approved by the Secretary, or by the State under regulations issued by
the Secretary. These components include work programs under section 824
of PRWORA that allow ABAWDs to maintain eligibility for food stamps.
These work programs are defined as (1) a program under the WIA; (2) a
program under section 236 of the Trade Act; and (3) a program of
employment and training operated or supervised by a State or political
subdivision of a State that meets standards approved by the Governor of
the State, including a program under subsection (d)(4), other than a
job search program or a job search training program. Therefore, in
order to qualify for Federal financial participation, all WIA, Trade
Act and State/local employment and training programs must be fully
described in the State E&T plan; must guarantee all the rights and meet
all the requirements of regular E&T program components; and must be
approved by the Secretary.
Exemptions
Current regulations at 7 CFR 273.7(f)(2) permit State agencies,
subject to approval by the Department, to exempt from E&T certain
individual work registrants or categories of work registrants for which
participation is impracticable. Factors listed which may lead to the
impracticability of participation in some geographic areas, for some
groups of work registrants, include availability of job opportunities
and the cost-effectiveness of participation. For individuals, personal
circumstance such as lack of job readiness, the remote location of work
opportunities, physical condition, and the unavailability of dependent
care are listed. Additionally, with approval from the Secretary,
persons who have participated in the FSP for 30 days or less may be
exempted from participation.
Although State agencies are afforded a certain amount of
flexibility in determining who will or will not participate in E&T,
they are required to justify proposed exemptions in their E&T State
plans. The Department can accept or reject the proposed exemptions,
based on the validity of the State agency's claim.
Individual exemptions must be reevaluated at each recertification.

[[Page 72204]]

Categorical exemptions should be reviewed no less frequently than
annually to determine whether they remain valid.
Current regulations at 7 CFR 273.7(c)(4) detail the State agency's
responsibilities for preparing and submitting an E&T plan. Paragraph
(c)(4)(iii) requires the State agency to list the categories and types
of individuals it seeks to exempt from E&T participation, the basis
used to determine these exemptions, including any cost information, and
the estimated percentages of work registrants the State plans to
exempt.
Section 817 of PRWORA amended section 6(d)(4)(D) of the Act to
remove the requirements that: (1) individual and categorical exemptions
from E&T be based on impracticability; (2) State agencies require the
approval of the Secretary to exempt household members that have
participated in the FSP for 30 days or less; and (3) individual
exemptions be reevaluated no less often than at each certification or
recertification.
Accordingly, the Department proposes to amend redesignated 7 CFR
273.7(e)(2) by removing restrictions on State agency flexibility in
determining E&T exemptions. The State agency may, at its discretion,
exempt individual work registrants and categories of work registrants.
Although the validity of exemptions must be periodically reevaluated,
each State agency may establish the frequency of its evaluation.
The Department also proposes to amend 7 CFR 273.7(c)(6)(iii) by
removing the requirement that the State agency list the basis,
including cost information, it uses to determine its exemptions; and by
adding the requirement that it include the frequency with which it
plans to reevaluate the validity of its exemptions.
Voluntary Participation
Current regulations at 7 CFR 273.7(f)(4) contain two provisions for
volunteers. First, that a State agency ``may operate program components
in which individuals elect to participate.'' Second, a State agency
``shall permit, to the extent it deems practicable, persons exempt from
the work registration or employment and training requirements,'' as
well as those who have complied or are in the process of complying with
E&T requirements, to participate in any E&T component it offers.
While the purpose of the two provisions appears to be similar but
contradictory--one is an option, the other a mandate--they were based
on Congressional intent to provide for two different circumstances.
The term volunteer must first be defined. A volunteer is an
individual who is exempt from FSP work requirements or who is a work
registrant exempted by the State agency from participation who elects
to participate in E&T. A mandatory participant who elects to
participate in an E&T component while or after completing a required
component is considered a volunteer in the subsequent component.
In the first instance, Congress, recognizing its potential
effectiveness, permitted State agencies to allow any individual food
stamp recipient who elected to participate to volunteer. For example,
persons with a child under 6--and therefore exempt from work
registration--who wished to receive training and assistance in finding
a full-time job would benefit, and long term Federal costs might be
lowered.
In the second instance, Congress required State agencies to allow,
to the greatest practicable extent, work registrants exempted from E&T,
as well as E&T participants who had complied with or were in the
process of complying with program requirements, access to any E&T
program component available.
Section 817 of PRWORA amended section 6(d)(4)(G) by removing the
requirement that State agencies shall--to the extent deemed
practicable--permit both exempt and nonexempt work registrants to
participate in any E&T component offered. State agencies retain,
however, the option to operate E&T components in which individuals
volunteer to participate.
This rule proposes to amend redesignated 7 CFR 273.7(e)(4) by
removing the requirement placed on State agencies to permit exempt work
registrants and participants to take part in any component offered.
While the Department encourages and supports such participation in E&T
activities, it believes State agencies should be afforded maximum
flexibility in determining who may participate in their programs and to
what degree. State agencies continue to have the option to offer E&T
components in which volunteers may participate. We do not believe,
however, that volunteers should be subjected to the same penalties for
noncompliance as mandatory participants. We also do not believe that a
distinction should be drawn between volunteer and regular E&T
participants concerning maximum hour restrictions on participation.
Accordingly, the Department proposes that the current regulatory
requirements concerning disqualification and hours of work or
participation for volunteers continue to apply.
Conciliation
Current regulations at 7 CFR 273.7(g)(ii) contain requirements for
a State agency to establish conciliation procedures to be used when an
individual fails to comply with an E&T Program requirement. The purpose
of the conciliation effort is to determine the reason(s) the work
registrant did not comply with the E&T requirement and provide him or
her with an opportunity to comply prior to issuing a notice of adverse
action. The conciliation period begins the day after the State agency
learns of the noncompliance and continues for at least 30 days. In this
time the State agency is expected to contact the noncompliant
individual to determine the reason for the noncompliance, establish
whether good cause exists, and advise the individual on what actions
need to be taken to avoid disqualification. The noncompliant individual
must perform a verifiable act of compliance within the 30-day period to
avoid receiving a notice of adverse action.
Current regulations at 7 CFR 273.7(g)(iv) and (v) detail the
adverse action procedures that a State agency must follow as soon as it
learns about an act of noncompliance with a FSP work requirement other
than an E&T Program requirement. First, the State agency must establish
if good cause for the noncompliance exists. Then, within 10 days of
establishing that good cause does not exist, the State agency must
issue the noncompliant individual a notice of adverse action.
The notice of adverse action details the particular act of
noncompliance committed and the proposed period of disqualification.
The notice must also specify that the individual may reapply at the end
of the disqualification period. Information must be included on or with
the notice describing the action that can be taken to avoid the
sanction. The disqualification period begins the first month following
the expiration of the 10-day adverse notice period, unless a fair
hearing is requested.
Section 817 of PRWORA amended section 6(d)(4)(H) of the Act by
deleting the conciliation requirement.
Accordingly, we propose to amend redesignated 7 CFR 273.7(f) by
removing the requirements imposed on State agencies to establish and
operate a conciliation procedure for the resolution of disputes
involving the participation of an individual in E&T. However, a State
agency may opt to incorporate an informal conciliation process into its
E&T program. In such cases the State

[[Page 72205]]

agency must comply with the adverse action procedures at the end of the
conciliation period.
Performance Standards and State Compliance With Employment and Training
Requirements
Current regulations at 7 CFR 273.7(o) set forth the requirements
for State agencies to meet an annual performance standard for the
minimum number of participants that a State agency must place in its
E&T program. Since FY 1992 the performance standard has been set at 10
percent of a State agency's mandatory E&T participants plus volunteers.
In order to calculate its performance standard at the end of the
fiscal year, a State agency is required to collect information on its
total work registrants, the number of work registrants it exempts from
E&T, and the number of non-exempt work registrants (mandatory
participants) and volunteers it places in E&T components during the
fiscal year.
The current regulation at 7 CFR 273.7(p)(2) provides that if a
State agency fails to meet the required performance standard without
good cause, the Department may disallow administrative funding for the
State agency's E&T program, as well as withholding the State agency's
performance-based allocation. Further, the current regulation at 7 CFR
273.7(p)(1) applies the provisions of Sec. 276.1(a)(4) to State
agencies that fail to efficiently and effectively administer their E&T
programs. That regulation authorizes FNS to seek injunctive relief and/
or suspension or disallowance of the Federal share of a State agency's
administrative funds if the State agency fails to efficiently and
effectively administer any part of the Food Stamp Program, including
E&T.
Section 817 of PRWORA amended section 6(d) of the Act by removing
paragraph (K), which directed the Secretary to establish performance
standards to measure the extent of State implementation of E&T. Section
817 further amended section 6(d) by removing paragraph (L)(ii), which
authorized the Secretary--in cases where a State agency fails, without
good cause, to comply with E&T requirements, including failing to meet
performance standards--to withhold administrative funding, including
the 100 percent Federal E&T grant.
Accordingly, we propose to amend 7 CFR 273.7 by removing paragraph
(o), Performance Standards. It is possible that Congress will, in the
future, mandate some type of performance measurement system--either
process or outcome based--for the E&T Program. In the interim, State
agencies are free to use the resources of their E&T programs to serve
their at-risk populations in the most effective manner possible.
We also propose to amend 7 CFR 273.7 by deleting paragraph (p),
State noncompliance with Employment and Training requirements. The
former paragraph (p)(1), which, as explained above, details the
consequences of States not complying with E&T requirements, will be
redesignated as paragraph (c)(14).
Federal Financial Participation
Current regulations at 7 CFR 273.7(d) require the Department to
allocate an annual 100 percent Federal E&T grant to States, based in
part on the number of work registrants in each State compared to the
number of work registrants nationwide; and in part on each State
agency's program performance. Each State agency must receive at least
$50,000 in unmatched Federal funds. The State agency is required to use
the E&T grant to fund the administrative costs of planning,
implementing and operating its E&T program. The Department will pay 50
percent of all other administrative costs above those covered by the
100 percent Federal grant that the State agency incurs in operating its
E&T program.
The Department matches half the amount State agencies spend to
reimburse E&T participants for the actual costs of transportation and
other costs (excluding dependent care) that are determined by the State
agency to be necessary and directly related to E&T participation, up to
$25 per month. Thus, the Department will pay up to $12.50 a month of
each participant's costs. The State agency may supplement this amount,
but without Federal matching funds.
State agencies must also provide payments or reimbursements to E&T
participants for dependent care expenditures, up to a statewide limit
set by the State agency. This statewide limit may not be less than the
limit set for the dependent care deduction at 7 CFR 273.9(d)(4), that
is, $200 per month for each dependent under age 2 and $175 per month
for each other dependent. However, the reimbursement may not exceed the
applicable local market rate as determined by procedures consistent
with the JOBS Program. Thus, the State agency must reimburse actual
costs of dependent care up to either the local market rate or the
statewide limit set by the State agency, whichever is lower. The
Department matches State agency expenditures for reimbursements at the
50 percent level.
Section 817 of PRWORA amended sections 6(d)(4) and 16(h) of the Act
concerning the funding of, and Federal financial participation in, the
E&T Program. Subsequently, the Balanced Budget Act of 1997 (Pub. L.
105-33) substantially amended those requirements. Therefore, the
majority of amendments dealing with funding are addressed in a separate
rule. However, section 817 amended section 6(d)(4) of the Act in two
significant areas that will be addressed in this proposed rule.
Section 817 of PRWORA amended section 6(d)(4) of the Act by
removing the requirement that reimbursements for dependent care
expenses incurred due to participation in E&T must equal at least the
amount of the dependent care deduction established for determining
household eligibility and benefit amounts. We propose to amend 7 CFR
273.7(c), State agency responsibilities, by removing the provision that
requires State agencies, in their State plans, to include a statewide
limit for dependent care reimbursements established by the State agency
that must not be less than the dependent care deduction amounts
specified under Sec. 273.9(d)(4).
Section 817 of PRWORA further amended section 6(d) of the Act by
adding the provision that limits the amount of money State agencies may
spend to provide E&T program services to food stamp recipients who also
receive benefits under a State program funded under title IV-A. The
limit is the amount of Federal E&T funds the State agency spent on E&T
services for the same category of recipients in fiscal year 1995. This
rule proposes, therefore, to add, at 7 CFR 273.7(d)(1)(i)(F), the
provision that, notwithstanding any other provision of the paragraph,
the amount of E&T funds, including participant and dependent care
reimbursements, a State agency uses to serve participants who are
receiving benefits under a State program funded under title IV-A may
not exceed the amount of funds the State agency used in FY 1995 to
serve participants who were receiving benefits under a State program
funded under title IV-A.
Based on information provided by each State agency, the Department
established claimed Federal E&T expenditures on this category of
recipients in fiscal year 1995 for the State agencies of Colorado
($318,613), Utah ($10,200), Vermont ($1,484,913), and Wisconsin
($10,999,773). These State agencies may spend a like amount each fiscal
year to serve food stamp recipients who also receive title IV-A
assistance, if they choose. Other State agencies are prohibited from
expending

[[Page 72206]]

any Federal E&T funds on title IV-A recipients.

Employment Initiatives Program

Section 852 of PRWORA amended section 17 of the Act (7 U.S.C. 2026)
to add provisions for an employment initiatives program under which an
eligible household in a qualifying State may elect to receive the cash
equivalent of its food stamp coupon allotment.
This rule proposes to add, at 7 CFR 273.7, a new paragraph (k),
containing the following requirements for the employment initiatives
program.
A State agency qualifies to operate an employment initiatives
program if, during the summer of 1993, at least half of its food stamp
households also received benefits from a State program funded under
title IV-A. Qualified State agencies are Alaska, California,
Connecticut, the District of Columbia, Massachusetts, Michigan,
Minnesota, New Jersey, West Virginia, and Wisconsin.
A food stamp household in one of the 10 qualified State agencies
may receive cash benefits if it elects to participate and an adult
member of the household (1) has worked in regular (i.e., unsubsidized)
employment for the last 90 days, earning a minimum of $350 per month;
(2) is receiving cash benefits under a State program funded under title
IV-A; or (3) was receiving cash benefits from the State program but,
while participating in the employment initiatives program, became
ineligible because of earnings and continues to earn at least $350 a
month from unsubsidized employment.
As required by section 852, A qualifying State agency operating an
employment initiatives program must agree to pay for an increase in
cash benefits to compensate participating households for any State or
local sales taxes on food purchases.
Also as required by section 852, a State agency that operates an
employment initiatives program for two years must evaluate the impact
of providing cash assistance in lieu of a food stamp coupon allotment
to participating households. The State agency must provide the
Department with a written report of its evaluation findings. The State
agency, with the concurrence of the Department, will determine the
content of the evaluation. The Department expects the evaluation to
address, at a minimum, questions concerning the effects of providing
cash assistance on household food expenditures, food use, and nutrient
availability. Additionally, related issues such as households'
experiences in running out of food and expenditure shifts from food to
other goods and services should be addressed.

Work Supplementation Program

Section 849 of PRWORA amended section 16(b) of the Act (7 U.S.C.
2025(b)) to give State agencies the option to implement work
supplementation (or support) programs. In these programs the cash value
of public assistance benefits, plus FSP benefits, is provided to an
employer as a wage subsidy to be used for hiring and employing public
assistance recipients. The goal of work supplementation is to promote
self-sufficiency by providing public assistance recipients with work
experience to help them move into non-subsidized jobs.
Prior to the enactment of PRWORA, about a dozen States were
approved to operate demonstration projects in local jurisdictions that
included a work supplementation component. In July 1997, FNS sent a
letter to all States about the work supplementation program including a
set of questions and answers. These guidelines were provided to
facilitate the implementation of these programs under PRWORA. These
guidelines placed no requirements on States beyond those of federal law
and other federal regulations governing reporting on and accounting for
financial and participation data. Because of the limited experience
with the work supplementation programs, the Department does not intend
to propose additional requirements or restrictions. The Department
hopes that this flexibility encourages more States to develop
partnerships with private employers in an environment that supports
innovation and experimentation within the limits of the law.
This rule proposes to add, at 7 CFR 273.7, a new paragraph (l),
containing the following requirements for the work supplementation or
support program.
We further propose to add a new paragraph (d)(1)(xiv) under 7 CFR
272.2, Plan of operation. Paragraph (d)(1)(xiv) will contain the
requirement for a planning document from each State agency that
operates a work supplementation program.
A State agency that proposes to implement a work supplementation
program must submit its plan for FNS approval. This plan must address
the requirements for a work supplementation or support program listed
this proposed rule. Once its plan is approved, FNS will provide the
State agency with the cash value of recipients' food stamp benefits to
be used as wage subsidies for work supplementation programs and to
reimburse the State for related administrative costs.
PRWORA established the following parameters for work
supplementation programs:
The individual must be receiving public assistance, but
must not be employed by the employer at the time the individual enters
the work supplementation program.
The wage subsidy received under the work supplementation
program must be excluded from household income and resources during the
time the individual is participating in work supplementation.
The household must not receive a separate food stamp
allotment while participating in the work supplementation program.
An individual participating in a work supplementation
program must be excused from meeting any other work requirements.
The work supplementation program must not displace any
persons currently employed who are not supplemented or supported.
The wage subsidy must not be considered income or
resources under any Federal, State, or local laws, including, but not
limited to, laws relating to taxation, welfare, or public assistance
programs, and the household's food stamp allotment must not be
effectively decreased due to taxation or any other reason because of
its use as a wage subsidy.
The earned income deduction must not be applied to the
subsidized portion of wages earned in a work supplementation program.
State agencies must specify how public assistance
recipients in the proposed work supplementation and support program
will, within a specified period of time, be moved from supplemented or
supported employment to employment that is not supplemented or
supported.
The Department solicits comments in the following areas that are
not mandated by PRWORA but are necessary to comply with other laws or
for accounting and reporting purposes.
States must ensure that work supplemented or supported
employees are treated the same as other non-subsidized employees and
that all subsidized positions comply with the Fair Labor Standards Act.
States must outline State agency, employer and recipient
obligations and responsibilities in the proposed work supplementation
program. They must also describe procedures for providing wage
subsidies to participating employers and for monitoring the use of the
funds.

[[Page 72207]]

At the same time the plan is submitted for approval, the
State must also submit an operating budget for the proposed program.
Additionally, before the plan is approved, the State must agree to
comply with certain reporting and monitoring requirements. State
agencies operating work supplementation and support programs are
required to comply with all FNS reporting requirements, including
reporting the amount of benefits contributed to all employers as a wage
subsidy on the FNS 388. State Issuance and Participation Estimates;
FNS-388A, Participation and Issuance Project Area; FNS-46. Issuance
Reconciliation Report; and SF-269, Addendum Financial Status Report.
State agencies are also required to report administrative costs
associated with work supplementation programs on the FNS-366A, Budget
Projection and SF-269, Financial Status Report. Special codes for work
supplementation programs will be assigned for reporting purposes.
The proposed rule asks States to include in their plan
amendments whether food stamp allotments and public assistance grants
will be frozen at the time a recipient begins a subsidized job. The
Department is particularly interested in public comments on the
desirability of a Federal standard for issuing supplemental allotments
when earnings unexpectedly fall and, secondly, whether there should be
a time limit on freezing benefit levels (i.e., not counting any
unsubsidized wages from the employer).
Once the work supplementation program plan is approved,
the State agency must incorporate it into the State Plan of Operation
and include its operating budget in the State agency budget. After
approval, the Department will pay the cash value of a recipient's food
stamp benefits to the State agency so they may be paid directly to an
employer as a wage subsidy. The State agency will also be reimbursed
for administrative costs related to the operation of the work
supplementation program as provided by Section 16 of the Food Stamp
Act.
For Quality Control purposes, cases in which a household
member is participating in a work supplementation program will be coded
as not subject to review.

Workfare

Since 1982 the Department has afforded State agencies and political
subdivisions the option to establish a workfare program. In Workfare,
nonexempt food stamp household members are required to accept public
service job offers and work in return for the household's food stamp
allotment. The number of hours of work required of household member is
calculated by dividing the household's monthly benefit by the higher of
the applicable Federal or State minimum wage. Workfare helps ensure
that only those who are willing to work receive benefits; it provides
useful public services; and it provides valuable work experience.
Under current rules, household members subject to the work
registration requirements of 7 CFR 273.7(a) are also subject to
workfare. Additionally, recipients of benefits under title IV-A are
subject to workfare if they are currently involved less than 20 hours a
week in title IV-A work activities and are not otherwise exempt.
Applicants for, or recipients of, unemployment compensation are also
subject to workfare.
Workfare is a household responsibility. Legislative history
(Conference Report No. 97-290 on the Agriculture & Food Act of 1981,
December 10, 1981, page 226) established Congressional intent that the
household's workfare responsibility be shared by all nonexempt members:
``Upon a household member's failure to comply with workfare
requirements, the household would be ineligible for food stamps * * *,
unless someone in the household satisfies all outstanding workfare
obligations. * * *'' Failure of a household to comply with workfare
requirements without good cause results in the disqualification of the
entire household until the workfare obligation is met, or for two
months, whichever is less.
The workfare provisions of section 20 (7 U.S.C. 2029) of the Act
entitle a political subdivision operating a workfare program to share
in the benefit reductions that occur when a workfare participant begins
employment while engaged in workfare for the first time, or within 30
days of ending the first participation in workfare. This provision is
available only for workfare programs operated under section 20.
Workfare may also be offered as a component of a State agency's E&T
program. However, workfare savings are not available for E&T workfare
components.
State agencies and political subdivisions may also operate workfare
programs in which participation by food stamp recipients is voluntary.
In a voluntary program, disqualification for failure to comply does not
apply. The number of hours of work will be negotiated between the
volunteer household and the agency operating the workfare program.
Section 815 of PRWORA amended section 20 of the Act to: (1)
eliminate the requirement for conformance with workfare programs under
title IV-A ; (2) eliminate the provision for combining the food stamp
and title IV-A assistance grants to determine the number of hours a
title IV-A food stamp household can be required to participate in a
community work experience program established under section 409 of the
Social Security Act (42 U.S.C. 609); and (3) conform disqualification
penalties for failure to comply with workfare requirements with those
under section 6(d)(1) of the Act. Thus, while still a household
responsibility, State agencies have the option of disqualifying the
individual or, if the individual is a head of household, the entire
household.
This rulemaking proposes to amend 7 CFR 273.22 to incorporate
PRWORA changes as well as making other technical corrections. Lastly,
in keeping with the Department's ongoing regulation streamlining and
reform initiative, and to create a more logical union of food stamp
work requirements and the optional workfare program, we propose to move
the amended 7 CFR 273.22 to 7 CFR 273.7, Work provisions, and to
designate it paragraph (m), Optional workfare program.

Comparable Workfare

Section 824 of PRWORA established the provision that non-exempt
individuals will become ineligible if, in the preceding 36-month
period, they receive food stamps for three months during which they do
not meet a required work or training obligation. One of the qualifying
activities is to ``participate in and comply with the requirements of a
[workfare] program under section 20 or a comparable program established
by a State or political subdivision of a State * * *''
Several State agencies are operating--or have expressed an interest
in operating--programs that, while comparable to workfare in that they
require the participant to work for his or her household's food stamp
allotment, vary greatly from the requirements of workfare under section
20 of the Act. The purpose of these comparable programs is to assist
ABAWDs in fulfilling their work requirement and maintaining eligibility
for benefits. Although there are variations, these comparable programs,
for the most part, provide that the ABAWDs voluntarily participate and
find their own public service placements. They are also responsible for
arranging to have their participation reported to their

[[Page 72208]]

caseworkers and for verifying their workfare hours. Participation
requirements range from three hours a week to 25 hours per month.
Additionally, these ``self-inititated'' programs may or may not offer
reimbursement for transportation or other costs of participation. The
work site is responsible for providing work benefits and/or
protections.
The Department initially determined that, since self-initiated
programs do not meet the requirements of section 20 of the Act, they
are not eligible for Federal financial participation. However, the
Balanced Budget Act of 1997 contained a ``use of funds'' requirement
for 100 percent Federal E&T grant allocations. State agencies must use
at least 80 percent of their E&T grants to serve nonexempt ABAWDs who
are placed in and comply with the requirements of an approved work
program, a workfare program under section 20 or a comparable workfare
program established by a State or political subdivision. Thus
comparable self-initiated workfare programs are now eligible for
Federal financial participation.
This rule proposes to add a new paragraph (10) to the newly
designated paragraph 273.7(m). The new paragraph, (m)(10), will contain
the provisions relating to comparable workfare programs.

IV. Procedural Matters

Executive Order 12866

This proposed rule has been determined to be economically
significant and was reviewed by the Office of Management and Budget in
conformance with Executive Order 12866.

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 3105, subpart V and related Notice to (48 FR 29115),
this Program is excluded from the scope of Executive Order 12372 which
requires intergovernmental consultation with State and local officials.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is intended to have preemptive effect with
respect to any State or local laws, regulations, or policies that
conflict with its provisions or that would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the ``Effective Date'' paragraph of the final
rule. 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 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). Shirley Watkins,
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. The changes will affect food
stamp applicants and recipients who are subject to FSP work
requirements. The rulemaking also affects State and local welfare
agencies that administer the Food Stamp Program.

Unfunded Mandate Analysis

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA) (Pub. L.
104-4) establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of UMRA, the
Department generally must prepare a written statement, including a cost
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, or tribal
governments, in the aggregate, or to the private sector, of $100
million or more in any one year. When such a statement is needed for a
rule, section 205 of the UMRA generally requires the Department to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, more cost-effective or least burdensome
alternative that achieves the objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) which impose costs on State, local,
or tribal governments or to the private sector of $100 million or more
in any one year. Thus this rule is not subject to the requirements of
section 202 and 205 of the UMRA.

Regulatory Impact Analysis

Need for Action
This action is needed to implement the work provisions of Pub. L.
104-193, the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (PRWORA). These provisions would: (1)
establish new disqualification penalties for noncompliance with Food
Stamp Program work requirements; (2) permit certain States to lower the
age at which a child exempts a parent or caretaker from food stamp work
rules; (3) revise and streamline the Food Stamp Employment and Training
(E&T) Program; (4) provide States the option of using a household's
food stamp benefits to subsidize a job for a household member
participating in a work supplementation or support program; and (5)
permit qualifying States to provide certain households with cash in
lieu of food stamps.
Benefits
State agencies will benefit from the provisions of this rule
because they streamline Food Stamp Program work requirements, simplify
the disqualification requirements for failure to comply with work
rules, and provide greater flexibility for State agencies to operate
their employment and training programs.
Costs
Changes brought about by this rule will reduce Program costs for
the five-year period FY 99 through FY 03 by approximately $101.7
million. The savings are realized from section 815, disqualification.
They are the result of new disqualification penalties for noncompliance
with Food Stamp Program work requirements. For FY 1999-2003, the
estimated yearly dollar savings (in millions) are $30.9, $25.9, $19.5,
$13.3, and $12.1 respectively. The costs/savings of the other four
provisions cannot be determined because they either do not affect
eligibility for food stamps or their effect on eligibility cannot be
determined. They will not be discussed in this analysis.
Section 815--Disqualification. This provision deals with
disqualification for noncompliance with Food Stamp Program work
requirements. It adds to the list of ineligible individuals those who
refuse without good cause to provide sufficient information to allow a
determination of their employment status or job availability;
voluntarily and without good cause quit their job (previously limited
to heads of households); voluntarily and without good cause reduce
their work effort to less than 30 hours a week; and fail to comply with
the workfare rules in section 20 of the Food Stamp Act.
The disqualification provision deletes the lack of adequate child
care for children above age five and under age 12 as an explicit good
cause for refusal to accept a job offer and removes the requirement
that the entire food stamp household be disqualified if the head of

[[Page 72209]]

the household is disqualified. Instead, if the head of the household is
disqualified, States have the option of disqualifying the entire
household for the duration of the head of the household's
disqualification, or for 180 days, whichever is less.
The provision establishes new mandatory minimum disqualification
periods for individuals who fail to comply with work requirements. The
length of the disqualification is based on the frequency of the
occurrence. The State agency has the option to choose the length for
each occurrence: (1) for the first violation, one to three months; (2)
for the second violation, two to six months; and (3) for the third or
subsequent violation, six months, a date determined by the State
agency, or--at State agency option--permanently. In each instance, the
individual must complete the disqualification period before he or she
is allowed to comply with the work requirement and establish
eligibility.
The disqualification provision requires the Secretary to determine
the meaning of: (1) good cause; (2) voluntarily quitting; and (3)
reducing work effort; requires States to determine: (1) The meaning of
other terms; (2) the procedures for establishing compliance; and (3)
whether individuals are complying; and requires that none of such
determinations be less restrictive than comparable determinations under
title IV-A of the Social Security Act.
This provision affects participants who fail to comply with Program
work requirements by requiring minimum disqualification periods, with
no provision to ``cure'' or end the disqualification by complying. It
affects households whose heads fail to comply, if the State agency opts
to disqualify the entire household. It also affects households in which
a member is disqualified because the disqualified individual's income
is considered available to the household in calculating household
benefits.
We estimate FY 99 savings to be $30.9 million and the five-year
savings for FY 99 through FY 03 to be $101.7 million. The provisions in
this section vary only slightly from the work requirements that PRWORA
imposed on ABAWDs (for example, age ranges varied only slightly--from
16-60 as opposed to the 18-50 year old range specified for ABAWDs). We
derived our estimates using a percentage of FSP participants (mostly
ABAWDs) who may be required to meet PRWORA work requirements but who
would turn down qualifying work or training opportunities and be
sanctioned. We estimate that 22,000 persons will be sanctioned in FY 99
for refusing a work opportunity of some sort. We multiplied this number
by the average monthly food stamp benefit level for this group
(estimated to be $118.68 in 1999) times 12.

Paperwork Reduction Act

Sections 272.2 and 273.7 contain information collection
requirements. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), the Food and Nutrition Service is submitting a copy of
this section to the Office of Management and Budget (OMB) for its
review.
Collection of Information: Operating Guidelines, Forms, and
Waivers.
The regulations at 7 CFR 272.2 require that State agencies plan and
budget program operations and establish objectives for each year.
Section 273.7 contains requirements for the State Employment and
Training (E&T) Plan, one of the required planning documents. In the
interest of State flexibility, the PRWORA provisions addressed in this
rule deleted State E&T planning requirements for describing the
intensity of E&T services, conciliation procedures, and Statewide
limits for dependent care reimbursements, while adding the requirement
that State agencies provide a description of their mandatory
disqualification procedures and periods for noncompliance with Food
Stamp Program work requirements.
The respondents are 53 State agencies and they are required to
respond once a year. It is estimated that the total annual reporting
burden is 3,768 hours.
The PRWORA provisions addressed in this rule deleted reporting
burdens in the interest of State flexibility, while adding a new burden
associated with each State agency's mandatory disqualification
procedures. Thus, the overall reporting and recordkeeping burden for
this proposed information collection is unchanged.
PRWORA provided State agencies the option of implementing work
supplementation or support programs. In these programs the cash value
of public assistance benefits, plus food stamps, is provided to an
employer as a wage subsidy to be used for hiring and employing public
assistance recipients. This rule proposes to add the work
supplementation or support plan, as required at Sec. 273.7(l)(1), to
the planning requirements at 7 CFR 272.2.
The potential respondents are any of the 53 State agencies that may
opt to initiate a work supplementation or support program. The one-time
burden associated with a State agency creating a plan for a work
supplementation or support program is estimated to be 100 hours.
However, since no State agency has opted to initiate a work
supplementation or support program since the enactment of PRWORA, it is
anticipated that this provision will not change the burden associated
with this information collection.
Organizations and individuals desiring to submit comments on the
information collection requirements should direct them to the Office of
Information and Regulatory Affairs, OMB, Room 10235, New Executive
Office Building, Washington, D.C. 20503; Attention Desk Officer for the
Food and Nutrition Service.
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 the information to be collected; (c) ways to enhance
the quality, usefulness, 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.
OMB is required to make a decision concerning the collection of
information contained in these proposed regulations between 30 and 60
days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. This does not affect
the deadline for the public to comment to the Department on the
proposed regulations.

List of Subjects

7 CFR Part 271

Administrative practice and procedures, Food stamps, Grant
programs-social programs.

7 CFR Part 272

Administrative practice and procedures, Food stamps, Grant
programs-social programs.

7 CFR Part 273

Administrative practice and procedures, Food stamps, Grant
programs-social programs, Penalties, Reporting and recordkeeping.
Accordingly, 7 CFR Parts 271, 272, and 273 are proposed to be
amended as follows:

[[Page 72210]]

1. The authority citation for parts 271, 272, and 273 continues to
read as follows:

Authority: 7 U.S.C. 2011-2036.

PART 271--GENERAL INFORMATION AND DEFINITIONS

2. In Sec. 271.2:
a. Remove the definition of ``Base of eligibles''.
b. Amend the definition of ``Exempted'' by removing the reference
to ``Sec. 273.7(f)'' and adding in its place a reference to
``Sec. 273.7(e)''.
c. Revise the definition of ``Placed in an employment and training
(E&T) program'' to read as follows:

Sec. 271.2 Definitions.

* * * * *
Placed in an employment and training (E&T) program means a State
agency may count a person as ``placed'' in an E&T program when the
individual commences a component.
* * * * *

PART 272-REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

3. In Sec. 272.2, new paragraphs (d)(1)(xiii) and (d)(1)(xiv) are
added to read as follows:

Sec. 272.2 Plan of operation.

* * * * *
(d) Planning documents. * * *
(1) * * *
(xiii) The State agency's disqualification plan, in accordance with
Sec. 273.7(f)(3) of this chapter.
(xiv) If the State agency chooses to implement the provisions for a
work supplementation or support program, the work supplementation or
support program plan, in accordance with Sec. 273.7(l)(1) of this
chapter.
* * * * *

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

4. Revise Sec. 273.7 to read as follows:

Sec. 273.7 Work Provisions.

(a) Work requirements. (1) As a condition of eligibility for food
stamps, each household member not exempt under paragraph (b)(1) of this
section must comply with the following Food Stamp Program work
requirements:
(i) Register for work or be registered by the State agency at the
time of application and every 12 months after initial registration. The
registration form need not be completed by the member required to
register.
(ii) Participate in an employment and training (E&T) program if
assigned by the State agency, to the extent required by the State
agency;
(iii) Participate in a workfare program if assigned by the State
agency, to the extent required by the State agency;
(iv) Provide the State agency or its designee with sufficient
information regarding employment status or availability for work;
(v) Report to an employer to whom referred by the State agency or
its designee if the potential employment meets the suitability
requirements described in paragraph (h) of this section;
(vi) Accept a bona fide offer of suitable employment, as defined in
paragraph (h) of this section, at a site or plant not subject to a
strike or lockout, at a wage equal to the higher of the Federal or
State minimum wage or 80 percent of the wage that would have governed
had the minimum hourly rate under section 6(a)(1) of the Fair Labor
Standards Act of 1938 (U.S.C. 206(a)(1)) been applicable to the offer
of employment.
(vii) Do not voluntarily and without good cause quit a job of 30 or
more hours a week or reduce work effort to less than 30 hours a week.
(2) The Food and Nutrition Service (FNS) will determine the meaning
of ``good cause,'' ``voluntary quit,'' and ``reduction of work effort''
as used in paragraph (a)(1) of this section.
(3) Each State agency will determine the meaning of any other terms
used in paragraph (a)(1) of this section; the procedures for
establishing compliance with Food Stamp Program work requirements; and
whether an individual is complying with Food Stamp Program work
requirements. A State agency must not use a meaning, procedure, or
determination that is less restrictive on food stamp recipients than is
a comparable meaning, procedure required to comply with, or
determination under the State agency's program funded under title IV-A
of the Social Security Act.
(4) Strikers whose households are eligible under the criteria in
Sec. 273.1(g) are subject to Food Stamp Program work requirements
unless they are exempt under paragraph (b)(1) of this section at the
time of application.
(5) State agencies may request approval from FNS to substitute
State or local procedures for work registration for PA households not
subject to the work requirements under title IV of the Social Security
Act or for GA households. However, the failure of a household member to
comply with State or local work requirements that exceed the
requirements listed in this section must not be considered grounds for
disqualification. Work requirements imposed on refugees participating
in refugee resettlement programs may also be substituted, with FNS
approval.
(6) Household members who are applying for SSI and for food stamps
under Sec. 273.2(k)(1)(i) will have Food Stamp Program work
requirements waived until they are determined eligible for SSI and
become exempt from Food Stamp Program work requirements, or until they
are determined ineligible for SSI, at which time their exemptions from
Food Stamp Program work requirements will be reevaluated.
(b) Exemptions from work requirements. (1) The following persons
are exempt from Food Stamp Program work requirements:
(i) A person younger than 16 years of age or a person 60 years of
age or older. A person age 16 or 17 who is not the head of a household
or who is attending school, or is enrolled in an employment training
program, on at least a half-time-basis, is exempt. If the person turns
16 (or 18 under the preceding sentence) during a certification period,
the State agency must register the person as part of the next scheduled
recertification process, unless the person qualifies for another
exemption.
(ii) A person physically or mentally unfit for employment. For the
purposes of this paragraph (b), a State agency will define physical and
mental fitness; establish procedures for verifying; and will verify
claimed physical or mental unfitness when necessary. However, the State
agency must not use a definition, procedure for verification, or
verification that is less restrictive on food stamp recipients than a
comparable meaning, procedure, or determination under the State
agency's program funded under title IV-A of the Social Security Act.
(iii) A person subject to and complying with any work requirement
under title IV of the Social Security Act. If the exemption claimed is
questionable, the State agency is responsible for verifying the
exemption.
(iv) (A) A parent or other household member responsible for the
care of a dependent child under 6 or an incapacitated person. If the
child has its 6th birthday during a certification period, the State
agency must work register the individual responsible for the care of
the child as part of the next scheduled recertification process, unless
the individual qualifies for another exemption.
(B) The State agencies of Alabama, Kansas, Maryland, Michigan,
North Dakota, Virginia, Wisconsin, and Wyoming may opt to lower the age
of

[[Page 72211]]

a dependent child that qualifies a parent or other household member for
an exemption to between 1 and 6. The age may be lowered for a maximum
three-year period. The eligible State agencies must notify FNS, in
writing, when they decide to initiate their option. Only the State
agencies listed are authorized this option.
(v) A person receiving unemployment compensation. A person who has
applied for, but is not yet receiving, unemployment compensation is
also exempt if that person is complying with work requirements that are
part of the Federal-State unemployment compensation application
process. If the exemption claimed is questionable, the State agency is
be responsible for verifying the exemption with the appropriate office
of the State employment services agency.
(vi) A regular participant in a drug addiction or alcoholic
treatment and rehabilitation program.
(vii) An employed or self-employed person working a minimum of 30
hours weekly or earning weekly wages at least equal to the Federal
minimum wage multiplied by 30 hours. This includes migrant and seasonal
farmworkers under contract or similar agreement with an employer or
crew chief to begin employment within 30 days (although this will not
prevent individuals from seeking additional services from the State
employment services agency). For work registration purposes, a person
residing in areas of Alaska designated in Sec. 274.10(a)(4)(iii) of
this chapter, who subsistence hunts and/or fishes a minimum of 30 hours
weekly (averaged over the certification period) is considered exempt as
self-employed. An employed or self-employed person who voluntarily and
without good cause reduces his or her work effort and, after the
reduction, is working less than 30 hours per week, is ineligible to
participate in the Food Stamp Program under paragraph (j) of this
section.
(viii) A student enrolled at least half time in any recognized
school, training program, or institution of higher education. Students
enrolled at least half time in an institution of higher education must
meet the student eligibility requirements listed in Sec. 273.5. A
student will remain exempt during normal periods of class attendance,
vacation, and recess. If the student graduates, enrolls less than half
time, is suspended or expelled, drops out, or does not intend to
register for the next normal school term (excluding summer), the State
agency must work register the individual, unless the individual
qualifies for another exemption.
(2)(i) Persons losing exemption status due to any changes in
circumstances that are subject to the reporting requirements of
Sec. 273.12 (such as loss of employment that also results in a loss of
income of more than $25 a month, or departure from the household of the
sole dependent child for whom an otherwise nonexempt household member
was caring) must register for employment when the change is reported.
If the State agency does not use a work registration form, it must
annotate the change to the member's exemption status. If a work
registration form is used, the State agency is responsible for
providing the participant with a work registration form when the change
is reported. Participants are responsible for returning the form to the
State agency within 10 calendar days from the date the form was handed
to the household member reporting the change in person, or the date the
State agency mailed the form. If the participant fails to return the
form, the State agency must issue a notice of adverse action stating
that the participant is being terminated and why, but that the
termination can be avoided by returning the form.
(ii) Those persons who lose their exemption due to a change in
circumstances that is not subject to the reporting requirements of
Sec. 273.12 must register for employment at their household's next
recertification.
(c) State agency responsibilities. (1) The State agency must
register for work each household member not exempted by the provisions
of paragraph (b)(1) of this section. As part of the work registration
process, the State agency must explain to the individual the pertinent
work requirements, the rights and responsibilities of work registered
household members, and the consequences of failure to comply. The State
agency must provide a written statement of the above to each individual
in the household who is registered for work. A notice must also be
provided when a previously exempt individual or new household member
becomes subject to a work requirement, and at recertification. The
State agency must permit the applicant to complete a record or form for
each household member required to register for employment in accordance
with paragraph (a)(1)(i) of this section. Household members are
considered to have registered when an identifiable work registration
form is submitted to the State agency or when the registration is
otherwise annotated or recorded by the State agency.
(2) The State agency is responsible for screening each work
registrant to determine whether or not it is appropriate, based on the
State agency's criteria, to refer the individual to an E&T program, and
if appropriate, referring the individual to an E&T program component.
Upon entry into each component, the State agency must inform the
participant, either orally or in writing, of the requirements of the
component, what will constitute noncompliance and the sanctions for
noncompliance. A State agency may, with FNS approval, use intake and
sanction systems that are compatible with its title IV-A work program.
Such systems must be proposed and explained in the State agency's E&T
State Plan.
(3) The State agency must issue a notice of adverse action to an
individual, or to a household if appropriate, within 10 days after
learning of the individual's noncompliance with Food Stamp Program work
requirements. The notice of adverse action must meet the timeliness and
adequacy requirements of Sec. 273.13. If the individual complies before
the end of the advance notice period, the State agency will cancel the
adverse action. If the State agency offers a conciliation process as
part of its E&T program, it must issue the notice of adverse action no
later than the end of the conciliation period.
(4) The State agency must design and operate an E&T program that
may consist of one or more or a combination of employment and/or
training components as described in paragraph (e)(1) of this section.
The State agency must ensure that it is notified by the agency or
agencies operating its E&T components within 10 days if an E&T
mandatory participant fails to comply with E&T requirements.
(5) Each component of a State agency's E&T program must be
delivered through a statewide workforce development system, unless the
component is not available locally through such a system.
(6) In accordance with Sec. 272.2(e)(9) of this chapter, each State
agency must prepare and submit an Employment and Training Plan to its
appropriate FNS Regional Office and to the FNS National Office. The E&T
Plan must be available for public inspection at the State agency
headquarters. In its E&T Plan, the State agency will detail the
following:
(i) The nature of the E&T components the State agency plans to
offer and the reasons for such components, including cost information.
The methodology for State agency reimbursement for education components
must be specifically addressed;

[[Page 72212]]

(ii) An operating budget for the Federal fiscal year with an
estimate of the cost of operation for one full year. Any State agency
that requests 50 percent Federal reimbursement for State agency E&T
administrative costs, other than for participant reimbursements, must
include in its plan, or amendments to its plan, an itemized list of all
activities and costs for which those Federal funds will be claimed,
including the costs for case management and casework to facilitate the
transition from economic dependency to self-sufficiency through work.
Costs in excess of the Federal grant will be allowed only with the
prior approval of FNS and must be adequately documented to assure that
they are necessary, reasonable and properly allocated;
(iii) The categories and types of individuals the State agency
intends to exempt from E&T participation, the estimated percentage of
work registrants the State plans to exempt, and the frequency with
which the State agency plans to reevaluate the validity of its
exemptions;
(iv) The characteristics of the population the State agency intends
to place in E&T;
(v) The estimated number of volunteers the State agency expects to
place in E&T;
(vi) The geographic areas covered and not covered by the E&T Plan
and why, and the type and location of services to be offered;
(vii) The method the State agency uses to count all work
registrants the first month of each fiscal year;
(viii) The method the State agency uses to report work registrant
information on the quarterly Form FNS-583.
(ix) The method the State agency uses to prevent work registrants
from being counted twice within a Federal fiscal year. If the State
agency universally work registers all food stamp applicants, this
method must specify how the State agency excludes those exempt from
work registration under paragraph (b)(1) of this section. If the State
agency work registers nonexempt participants whenever a new application
is submitted, this method must also specify how the State agency
excludes those participants who may have already been registered within
the past 12 months as specified under paragraph (a)(1)(i) of this
section.
(x) The organizational relationship between the units responsible
for certification and the units operating the E&T components, including
units of the Statewide workforce development system, if available. FNS
is specifically concerned that the lines of communication be efficient
and that noncompliance be reported to the certification unit within 10
working days after the noncompliance occurs;
(xi) The relationship between the State agency and other
organizations it plans to coordinate with for the provision of
services, including organizations in the Statewide workforce
development system, if available. Copies of contracts must be available
for inspection;
(xii) The availability, if appropriate, of E&T programs for Indians
living on reservations.
(xiii) If an informal conciliation process is planned, the
procedures that will be used when an individual fails to comply with an
E&T program requirement. Include the length of the conciliation period.
(xiv) The payment rates for child care established in accordance
with the Child Care and Development Block Grant provisions of 45 CFR
98.43, which require the State agency to ensure that eligible children
receive child care services equal to the services provided to children
not funded through Block Grant assistance or through child care
assistance under any other Federal, State, or Tribal programs.
(7) State agencies will submit E&T Plans biennially, at least 45
days before the start of the Federal fiscal year. State agencies must
submit plan revisions to the appropriate FNS regional office for
approval if they plan to alter the nature or location of their
components or the number or characteristics of persons served. The
proposed changes must be submitted for approval at least 30 days prior
to planned implementation.
(8) The State agency will submit quarterly reports to FNS no later
than 45 days after the end of each Federal fiscal quarter containing
monthly figures for the number of:
(i) Participants newly work registered;
(ii) Work registrants exempted by the State agency from
participation in E&T;
(iii) Participants who volunteer for and commence participation in
an approved E&T component;
(iv) E&T mandatory participants who commence an approved E&T
component, including Food Stamp Program applicants if the State agency
chooses to operate a component for applicants.
(9) State agencies will submit annually, on their first quarterly
report, the number of work registered persons in that State in October
of the new fiscal year.
(10) State agencies will submit annually, on their final quarterly
report, the following information:
(i) The number of work registrants exempted from E&T participation
as part of a category of persons during the course of the year
separated by the specific reasons for the exemptions.
(ii) The number of mandatory and volunteer participants placed in
each E&T component offered by the State agency.
(11) Additional information may be required of individual State
agencies on an as needed basis depending on the contents of the State
agency's E&T Plan regarding the type of components offered and the
characteristics of persons served.
(12) State agencies must ensure, to the maximum extent practicable,
that E&T programs are provided for Indians living on reservations.
(13) If a benefit overissuance is discovered for a month or months
in which a mandatory E & T participant has already fulfilled a work
component requirement, the State agency must follow the procedure
specified in paragraph (m)(6)(v) of this section f

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-33131. Public record. Not legal advice.