Supplemental Nutrition Assistance Program: Requirements for Able-Bodied Adults Without Dependents
| Published date | 01 February 2019 |
| Citation | 84 FR 980 |
| Record Number | 2018-28059 |
| Section | Proposed rules |
| Court | Agriculture Department,Food And Nutrition Service |
Federal Register, Volume 84 Issue 22 (Friday, February 1, 2019)
[Federal Register Volume 84, Number 22 (Friday, February 1, 2019)]
[Proposed Rules]
[Pages 980-993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28059]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 84, No. 22 / Friday, February 1, 2019 /
Proposed Rules
[[Page 980]]
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 273
[FNS-2018-0004]
RIN 0584-AE57
Supplemental Nutrition Assistance Program: Requirements for Able-
Bodied Adults Without Dependents
AGENCY: Food and Nutrition Service (FNS), USDA.
ACTION: Proposed rule.
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SUMMARY: Federal law generally limits the amount of time an able-bodied
adult without dependents (ABAWD) can receive Supplemental Nutrition
Assistance Program (SNAP) benefits to 3 months in a 36-month period,
unless the individual meets certain work requirements. On the request
of a State SNAP agency, the law also gives the Department of
Agriculture (the Department) the authority to temporarily waive the
time limit in areas that have an unemployment rate of over 10 percent
or a lack of sufficient jobs. The law also provides State agencies with
a limited number of percentage exemptions that can be used by States to
extend SNAP eligibility for ABAWDs subject to the time limit. The
Department proposes to amend the regulatory standards by which the
Department evaluates State SNAP agency requests to waive the time limit
and to end the unlimited carryover of ABAWD percentage exemptions. The
proposed rule would encourage broader application of the statutory
ABAWD work requirement, consistent with the Administration's focus on
fostering self-sufficiency. The Department seeks comments from the
public on the proposed regulations.
DATES: Written comments must be received on or before April 2, 2019 to
be assured of consideration.
ADDRESSES: The Food and Nutrition Service, USDA, invites interested
persons to submit written comments on this proposed rule. Comments may
be submitted in writing by one of the following methods:
Preferred Method: Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Mail: Send comments to Certification Policy Branch,
Program Development Division, FNS, 3101 Park Center Drive, Alexandria,
Virginia 22302.
All written comments submitted in response to this
proposed rule will be included in the record and will be made available
to the public. Please be advised that the substance of the comments and
the identity of the individuals or entities submitting the comments
will be subject to public disclosure. FNS will make the written
comments publicly available on the internet via http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Certification Policy Branch, Program
Development Division, FNS, 3101 Park Center Drive, Alexandria, Virginia
22302. SNAPCPBRules@fns.usda.gov.
SUPPLEMENTARY INFORMATION:
Background
Acronyms or Abbreviations
[Phrase, Acronym or Abbreviation]
Able-Bodied Adult without Dependent(s), ABAWD(s)
Advanced Notice of Public Rulemaking, ANPRM
Bureau of Labor Statistics, BLS
Census Bureau's American Community Survey, ACS
Code of Federal Regulations, CFR
Department of Labor, DOL
Employment and Training Administration, ETA
Employment and Training, E&T
Food and Nutrition Act of 2008, Act
Food and Nutrition Service, FNS
Labor Market Area(s), LMA(s)
Labor Surplus Area(s), LSA(s)
Supplemental Nutrition Assistance Program, SNAP
The Personal Responsibility and Work Opportunity Reconciliation Act of
1996, PRWORA
U.S. Department of Agriculture, the Department or USDA
References
The following references may be useful to help inform those wishing
to provide comments.
(1) Section 6(d) and section 6(o) of the Food and Nutrition Act of
2008, as amended
(2) Title 7 of the Code of Federal Regulations, parts 273.7 and
273.24
(3) Food Stamp Program: Personal Responsibility Provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of
1996, Proposed Rule, 64 FR 70920 (December 17, 1999). Available at:
https://www.federalregister.gov/documents/1999/12/17/99-32527/food-stamp-program-personalresponsibility-provisions-of-the-personalresponsibility-and-work
(4) Food Stamp Program: Personal Responsibility Provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of
1996, Final Rule, 66 FR 4437 (January 17, 2001). Available at:
https://www.federalregister.gov/documents/2001/01/17/01-1025/foodstamp-program-personal-responsibilityprovisions-of-the-personal-responsibilityand-work
(5) Guide to Serving ABAWDs Subject to Time-limited Participation,
2015. Available at: https://fns-prod.azureedge.net/sites/default/files/Guide_to_Serving_ABAWDs_Subject_to_Time_Limit.pdf
(6) Guide to Supporting Requests to Waive the Time Limit for Able-
Bodied Adults without Dependents, 2016. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Guide-to-Supporting-Requests-to-Waive-the-Time-Limit-for-ABAWDs.pdf
(7) Expiration of Statewide ABAWD Time Limit Waivers, 2015.
Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Expiration-of-Statewide-ABAWD-Time-Limit-Waivers.pdf
(8) ABAWD Time Limit Policy and Program Access, 2015. Available at:
https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Time-Limit-Policy-and-Program-Access-Memo-Nov2015.pdf
(9) ABAWD Questions and Answers, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-June%202015.pdf
(10) ABAWD Questions and Answers, 2013. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-December-2013.pdf
(11) BLS Local Area Unemployment Statistics. Available at: https://www.bls.gov/lau/
(12) BLS Labor Surplus Area. Available at: https://www.doleta.gov/programs/lsa.cfm
The Rationale for Modifying Waiver Standards
The President's Executive Order on Reducing Poverty in America by
[[Page 981]]
Promoting Opportunity and Economic Mobility (April 10, 2018) provided
guiding principles for public assistance programs, one of which was to
improve employment outcomes and economic independence by strengthening
existing work requirements for work-capable individuals. The Executive
Order directed Federal agencies to review regulations and guidance
documents to determine whether such documents are consistent with the
principles of increasing self-sufficiency, well-being, and economic
mobility. Consistent with the Executive Order and the Administration's
focus on fostering self-sufficiency, as well as the Department's
extensive operational experience with ABAWD waivers, the Department has
determined that the standards for waivers must be strengthened so that
the ABAWD work requirement is applied to ABAWDs more broadly. The
Department is confident that these changes would encourage more ABAWDs
to engage in work or work activities if they wish to continue to
receive SNAP benefits.
The Department believes that the proposed changes reinforce the
Act's intent to require these individuals to work or participate in
work activities in order to receive SNAP benefits for more than 3
months in a 36 month period. Section 6(o) of the Act, entitled, ``Work
Requirements,'' allows these individuals to meet the ABAWD work
requirement by working and/or participating in a qualifying work
program at least 20 hours per week (averaged monthly to 80 hours per
month) or by participating in and complying with workfare. For the
purposes of meeting the ABAWD work requirement, working includes unpaid
or volunteer work that is verified by the State agency. The Act
specifically exempts individuals from the ABAWD time limit and
corresponding work requirement for several reasons, including, but not
limited to, age, unfitness for work, having a dependent child, or being
pregnant.
The Act authorizes waivers of the ABAWD time limit and work
requirement in areas in which the unemployment rate is above 10
percent, or where there is a lack of sufficient jobs. The Department
believes waivers of the ABAWD time limit are meant to be used in a
limited manner in situations in which jobs are truly unavailable to
ensure enforcement of the ABAWD work requirements as much as possible
to promote greater engagement in work or work activities.
Immediately following the Great Recession, the vast majority of the
States, including the District of Columbia, Guam, and the Virgin
Islands, qualified for and implemented statewide ABAWD time limit
waivers in response to a depressed labor market. In the years since the
Great Recession, the national unemployment rate has dramatically
declined. Despite the national unemployment rate's decline from 9.9
percent in April 2010 to 3.9 percent in April 2018, a significant
number of States continue to qualify for and use ABAWD waivers under
the current waiver standards. Right now, nearly half of ABAWDs live in
areas that are covered by waivers despite a strong economy. The
Department believes waiver criteria need to be strengthened to better
align with economic reality. These changes would ensure that such a
large percentage of the country can no longer be waived when the
economy is booming and unemployment is low.
The Department is committed to enforcing the work requirements
established by Congress and is concerned about the current level of
waiver use in light of the current economy. The regulations afforded
States broad flexibility to develop approvable waiver requests. The
Department's operational experience has shown that some States have
used this flexibility to waive areas in such a way that was likely not
foreseen by the Department.
Some of the key concerns have stemmed from the combining of data
from multiple individual areas to waive a larger geographic area (e.g.,
a group of contiguous counties) and the application of waivers in
individual areas with low unemployment rates that do not demonstrate a
lack of sufficient jobs. For example, some States have maximized the
number of areas or people covered by waivers by combining data from
areas with high unemployment with areas with low unemployment. This
grouping has resulted in the combined area qualifying for a waiver when
not all individual sub-areas would have qualified on their own. States
have combined counties with unemployment rates under 5 percent with
counties with significantly higher unemployment rates in order to waive
larger areas. For example, current regulations required the Department
to approve a State request to combine unemployment data for a populous
county with a high unemployment rate of over 10 percent with the
unemployment data of several other less populous counties with very low
unemployment rates that ranged between 3 and 4 percent. Other States
have combined data from multiple areas that may only tenuously be
considered an economic region. In some cases, States have grouped areas
that are contiguous but left out certain low-unemployment areas that
would otherwise logically be considered part of the region. In this
manner, States have created questionable self-defined economic areas
with gaping holes to leverage the flexibility of the regulations.
The Department has also noted that, despite the improving economy,
the lack of a minimum unemployment rate has allowed local areas to
qualify for waivers based solely on having relatively high unemployment
rates as compared to national average, regardless of how low local
areas unemployment rates fall. Since the current waiver criteria have
no floor, a certain percentage of States will continue to qualify for
waivers even if unemployment continues to drop.
It is the Department's understanding that the intent of Congress in
passing the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 was to provide SNAP to unemployed ABAWDs on a temporary
basis (3 months in any 3-year period) with the expectation that they
work and/or engage in a work program at least 20 hours per week, or
participate in workfare, to receive SNAP on an ongoing basis. The
Department is committed to implementing SNAP as Congress intended and
believes that those who can work should work. The widespread use of
waivers has allowed some ABAWDs to continue to receive SNAP benefits
while not meeting the ABAWD work requirement for longer than 3 months.
The proposed rule addresses these areas of concern and places
safeguards to avoid approving waivers that were not foreseen by
Congress and the Department, and to restrict States from receiving
waivers in areas that do not clearly demonstrate a lack of sufficient
jobs.
As stated above, given the widespread use of ABAWD waivers during a
period of historically low unemployment, the Department believes that
the current regulatory standards should be reevaluated. Based on the
Department's approximately two decades' experience with reviewing ABAWD
waivers, the Department is proposing that the standards for approving
these waivers be updated to ensure the waivers are applied on a more
limited basis. The application of waivers on a more limited basis would
encourage more ABAWDs to take steps towards self-sufficiency.
The Department proposes stricter criteria for ABAWD waiver
approvals that would establish stronger, updated standards for
determining when and where a lack of sufficient jobs justifies
temporarily waiving the ABAWD time
[[Page 982]]
limit. The proposed rule would also ensure the Department only issues
waivers based on representative, accurate, and consistent economic
data, where it is available. Limiting waivers would make more ABAWDs
subject to the time limit and thereby encourage more ABAWDs to engage
in meaningful work activities if they wish to continue to receive SNAP
benefits. The Department recognizes that long-term, stable employment
provides the best path to self-sufficiency for those who are able to
work. The Department believes it is appropriate and necessary to
encourage greater ABAWD engagement with respect to job training and
employment opportunities that would not only benefit ABAWDs, but would
also save taxpayers' money. The Department and the States share a
responsibility to help SNAP participants--especially ABAWDs--find a
path to self-sufficiency. Through the stricter criteria for waiver
approvals, the Department would encourage greater engagement in
meaningful work activities and movement toward self-sufficiency among
ABAWDs, thus reducing the need for nutrition assistance.
Waiver Standards Framework
Current regulations at 7 CFR 273.24(f) set standards and
requirements for the data and evidence that States must provide to FNS
to support a waiver request. States enjoy considerable flexibility to
make these waiver requests pursuant to the current regulations. For
example, these regulatory standards give States broad flexibility to
define the waiver's geographic scope. The discretion for States to
define areas allows waivers based on data for combined areas that are
not necessarily economically tied. An economically tied area is an area
within which individuals can reside and find employment within a
reasonable distance or can readily change employment without changing
their place of residence. In addition, while the current regulations
establish criteria for unemployment data that rely on standard Bureau
of Labor Statistics (BLS) data or methods, the regulations also allow
States to rely on alternative, less robust economic indicators, which
include data other than unemployment data from BLS, to demonstrate a
lack of sufficient jobs. Moreover, the waiver standards allow areas
within States to qualify for waivers as a result of unemployment rates
relative to the national average, without consideration for whether the
national or local area unemployment rate is high or low. Put
differently, under the current regulations, which do not include a
local unemployment rate floor, even if the national unemployment rate
falls, a particular area's unemployment rate may support a waiver if
that area's unemployment rate is low but sufficiently higher than the
national average. As a result of these and other shortcomings, the
current regulations give States an opportunity to qualify for waivers
and avoid the ABAWD time limit when economic conditions do not justify
such relief. For these reasons, the Department believes that the waiver
standards under this proposed rule will better identify areas that do
not have a sufficient number of jobs to provide employment for ABAWDs.
As of September 2018, the national unemployment rate is the lowest
unemployment rate since 1969; however, States continue to request and
qualify for ABAWD waivers based on the current waiver criteria, which
define the lack of sufficient jobs in an area too broadly. In April
2010, the national unemployment rate stood at 9.9 percent. From 2010
through 2013, the vast majority of States qualified for and continued
to implement statewide ABAWD time limit waivers. SNAP participation
peaked at an average of 47.6 million recipients per month in FY 2013
and has gradually declined since then. In July 2013, the national
unemployment rate was 7.3 percent; 45 ABAWD time limit waivers covered
the entire State,\1\ and 6 waivers covered specific areas within the
State. In April 2018, SNAP participation totaled 39.6 million
participants, and the national unemployment rate stood at 3.9 percent.
In April 2018, 8 waivers applied to an entire State, and 28 covered
specific areas within a State. Although the national unemployment rate
has dropped from 9.9 percent in April 2010 to 3.9 percent in April
2018, many States continue to qualify for and use ABAWD time limit
waivers under the current waiver standards, and nearly half of all
ABAWDs live in areas that are covered by waivers.
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\1\ The term ``State'' refers to any of the 50 States, the
District of Columbia, and the U.S. territories
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The Department is concerned that ABAWD time limit waivers continue
to cover significant portions of the country and are out of step with a
national unemployment rate hovering at less than 4 percent. Since the
current waiver criteria have no floor, a certain percentage of States
will continue to qualify for waivers even if unemployment continues to
drop. In other words, regardless of how strong the economy is, the
criteria are written in such a way that areas will continue to qualify
even with objectively low unemployment rates. Many currently-waived
areas qualified based on 24-month local unemployment rates below 6
percent.
The current criteria for waiver approval permit States to qualify
for waivers without a sufficiently robust standard for a lack of
sufficient jobs. The waiver criteria should be updated to ensure States
submit data that is more representative of the economic conditions in
the requested areas. Such reforms would make sure the Department issues
waivers based on representative, accurate, and consistent economic
data.
This proposed rule would set clear, robust, and quantitative
standards for waivers of the ABAWD time limit. The proposal would also:
Eliminate waivers for areas that are not economically tied together;
eliminate the ability of an area to qualify for a waiver based on its
designation as a Labor Surplus Area (LSA) by the Department of Labor;
limit the use of alternative economic indicators to areas for which
standard data is limited or unavailable, such as Indian Reservations
and U.S. Territories; and provide additional clarity for States
regarding the waiver request process. The proposed changes would ensure
the Department issues waivers only to provide targeted relief to areas
that demonstrate a lack of sufficient jobs or have an unemployment rate
above 10 percent and that the ABAWD time limit encourages SNAP
participants to find and keep work if they live in areas that do not
lack sufficient jobs.
Background
Previous Action
On February 23, 2018, the Department published an Advanced Notice
of Public Rulemaking (ANPRM) entitled ``Supplemental Nutrition
Assistance Program: Requirements and Services for Able-Bodied Adults
Without Dependents'' (83 FR 8013) to seek public input to inform
potential policy, program, and regulatory changes that could
consistently encourage ABAWDs to obtain and maintain employment and
thereby decrease food insecurity. The Department specifically asked
whether changes should be made to: (1) The existing process by which
State agencies request waivers of the ABAWD time limit; (2) the
information and data States must provide to support the waiver request;
(3) the Department's implementation of the waiver approval; and (4) the
waiver's duration. The ANPRM generated nearly 39,000 comments from a
range of stakeholders including private citizens, government
[[Page 983]]
agencies and officials, food banks, advocacy organizations, and
professional associations.
The comments addressed the broad scope of topics covered by the
ANPRM. Comments about the ABAWD waiver included diverse perspectives,
ranging from those who supported stricter waiver approval requirements
to those who favored maintaining or expanding the criteria for waiver
approval. Many commenters favored no change or expressed support for
greater flexibility. Other commenters identified a number of areas of
concern with current practices, including the use of waivers by States
to waive the ABAWD work requirement and avoid promoting work, waiving
areas with relatively low unemployment rates, and allowing the use of
certain metrics for waiver approvals.
The Department received more than 3,500 comments regarding
potential reforms to the ABAWD time limit and waivers of the time limit
through the Department's request for information (RFI) entitled,
``Identifying Regulatory Reform Initiatives'' published July 17, 2017
(82 FR 32649). This RFI requested ideas on how the Department can
provide better customer service and remove unintended barriers to
participation in the Department's programs in ways that least interfere
with the Department's customers and allow the Department to accomplish
its mission. The Department specifically requested ideas on
regulations, guidance documents, or any other policy documents that
require reform. While commenters disagreed with certain SNAP provisions
outlined previously, specific changes to regulations and policies were
not provided. The Department received a range of comments to the RFI in
addition to the comments listed above that are not relevant to this
proposed rule.
Summary of Proposed Changes
The Department believes current regulations at 7 CFR 273.24(c) and
7 CFR 273.24(f) should be updated and strengthened. The proposed rule
focuses on updating the standards for ABAWD waivers. Current
regulations at 7 CFR 273.24(f) set standards and requirements for the
data and evidence that States must provide to FNS to support an ABAWD
waiver request. States enjoy considerable flexibility to make these
waiver requests pursuant to the current regulations. This flexibility
has resulted in the widespread use of waivers during a period of low
unemployment, which reduces the application of the work requirement.
The Department proposes several changes. First, the proposed rule
would limit the ability of areas to qualify for waivers as local
economies and the overall national economy improve. Second, the
proposed rule would no longer allow State agencies to combine
unemployment data from areas with high unemployment with areas with
lower unemployment and more plentiful employment opportunities in order
to maximize the area waived. Instead, the proposed rule would ensure
the Department issues waivers only to economically tied areas that meet
the new criteria defining what is meant by a lack of sufficient jobs.
The proposed rule would also limit the duration of waivers to one year,
and curtail the use of less robust data to approve waivers. The
subsequent sections provide details about the changes proposed in this
rule.
Discussion of Proposed Changes
General
The Department proposes that the rule, once finalized, would go
into effect on October 1, 2019, which is the beginning of federal
fiscal year 2020. All waivers in effect on October 1, 2019, or
thereafter, would need to be approvable according to the new rule at
that time. Any approved waiver that does not meet the criteria
established in the new rule would be terminated on October 1, 2019.
States would be able to request new waivers if the State's waiver is
expected to be terminated. The Department requests feedback from States
regarding the implementation date. In addition, the Department proposes
clarifying that any State agency's waiver request must have the
Governor's endorsement to ensure that such a critical request is
supported at the highest levels of State government.
Establishing Core Standards for Approval
The Department proposes updating criteria for ABAWD time limit
waivers to improve consistency across States and only allow approvals
in areas where waivers are truly necessary. These revisions would
include the establishment of core standards that would allow a State to
reasonably anticipate whether it would receive approval from the
Department. These core standards would serve as the basis for approval
for the vast majority of waiver requests, save for areas with
exceptional circumstances or areas with limited data or evidence, such
as Indian Reservations and U.S. Territories. The proposed rule would
continue to allow approvals for waivers based on data from BLS or a
BLS-cooperating agency that show an area has a recent, 12-month average
unemployment rate over 10 percent.
The proposed rule emphasizes that the basis for approval of waivers
would be sound data and evidence that primarily relies on data from BLS
or BLS-cooperating agencies. Any supporting unemployment data provided
by the State would need to rely on standard BLS data or methods. BLS
unemployment data is generally considered to be reliable and robust
evidence for evaluating labor market conditions. BLS is an independent
Federal statistical agency that is required to provide accurate and
objective statistical information and is the principal fact-finding
agency for the Federal government in the broad field of labor economics
and statistics. It collects, processes, analyzes, and disseminates
essential statistical data for the public and Federal agencies.
The proposed core standards for waiver approval would be codified
in 7 CFR 273.24(f)(2).
Core Standards: Retaining Waivers Based on an Unemployment Rate Over 10
Percent
The Department does not propose changes to the regulations for
waivers when an area has an unemployment rate over 10 percent. The
proposed rule would continue to allow approvals for waivers based on
data from BLS or a BLS-cooperating agency that show an area has a
recent, 12-month average unemployment rate over 10 percent.
Core Standards: Establishing a Floor for Waivers Based on the 20
Percent Standard
Current regulations at 7 CFR 273.24(f)(2) and (3) provide for
waiver approvals for requested areas with an average unemployment rate
at least 20 percent above the national average for a recent 24-month
period, beginning no earlier than the same 24-month period that DOL
uses to determine LSAs for the current fiscal year (otherwise known as
the ``20 percent standard''). Under the current regulations, the
Department adopted the 20 percent standard, in addition to LSA
designation, to provide States with the flexibility to support waivers
for areas in the country that are not considered by DOL for LSA
designation and to allow States to use a more flexible 24-month
reference period.
There are key differences between the two standards. DOL's criteria
for LSAs require an average unemployment rate that is at least 20
percent above the national average and at least 6 percent for the
preceding two calendar years (a
[[Page 984]]
24-month period). DOL's local unemployment rate floor of 6 percent
prevents areas with unemployment rates below that threshold from
qualifying as LSAs. The 20 percent standard is the same, except that it
allows for a flexible 24-month data reference period (no earlier than
that which is used for LSAs) and it does not include any unemployment
rate floor.
Based upon operational experience, the Department has observed
that, without an unemployment rate floor, local areas will continue to
qualify for waivers under the Department's 20 percent standard based on
high unemployment relative to the national average even as local
unemployment rates fall to levels as low as 5 to 6 percent (depending
upon the national rate). The Department believes that amending the
waiver regulations to include an unemployment floor is a critical step
in achieving more targeted criteria. While the 20 percent standard is
similar to the calculation of an LSA, the Department believes it is
appropriate to request public comment to explore a floor that is
designed specifically for ABAWD waivers.
The Department believes a floor should be set for the 20 percent
standard so that areas do not qualify for waivers when their
unemployment rates are generally considered to be normal or low. The
``natural rate of unemployment'' is the rate of unemployment expected
given normal churn in the labor market, with unemployment rates lower
than the natural rate tending to result in inflationary pressure on
prices. Thus, unemployment rates near or below the ``natural rate of
unemployment'' are more indicative of the normal delay in unemployed
workers filling the best existing job opening for them than a ``lack of
sufficient jobs'' in an area. Generally, the ``natural rate of
unemployment'' hovers around 5 percent. The Department believes that
only areas with unemployment rates above the ``natural rate of
unemployment'' should be considered for waivers. The Department seeks
to establish a floor that is in line with the Administration's effort
to encourage greater engagement in work and work activities. The
Department believes that the 7 percent floor for the 20 percent
standard would strengthen the standards for waivers so that the ABAWD
work requirement would be applied more broadly and fully consider the
``lack of sufficient jobs'' criteria in the statute. Furthermore, this
aligns with the proposal in the Agriculture and Nutrition Act of 2018,
H.R. 2, 115th Cong. Sec. 4015 (as passed by House, June 21, 2018). As
stated previously, the Department seeks to make the work requirements
the norm rather than the exception to the rule because of excessive use
of ABAWD time limit waivers to date. Using the proposed rule's 7
percent floor for this criterion and eliminating waiver approvals based
on an LSA designation (as well as utilizing the proposed limit on
combining areas discussed below), an estimated 11 percent of ABAWDs
would live in areas subject to a waiver. Currently, approximately 44
percent of ABAWDs live in a waived area. The Department views the
proposal as more suitable for achieving a more comprehensive
application of work requirements so that ABAWDs in areas that have
sufficient number of jobs have a greater level of engagement in work
and work activities, including job training. In sum, the proposed rule
modifies the current waiver criterion so that an area must have an
average unemployment rate at least 20 percent above the national
average and at least 7 percent for a recent 24-month period, beginning
no earlier than the same 24-month period that DOL uses to determine
LSAs for the current fiscal year, to qualify for a waiver. The 7
percent floor prevents a requested area with an unemployment rate 20
percent above the national average, but below 7 percent, from
qualifying for a waiver.
Although the Department believes the local unemployment floor
should be set at 7 percent to best meet its goals of promoting self-
sufficiency and ensuring areas with unemployment rates generally
considered normal are not waived, it is requesting evidence-based and
data-driven feedback on the appropriate threshold for the floor.
Specifically, the Department requests feedback on which unemployment
rate floor--6 percent, 7 percent, or 10 percent--would be most
effective at limiting waivers consistent with the Act's requirement
that waivers be determined based on a lack of sufficient jobs.
The Department is interested in public comments on establishing an
unemployment floor of 6 percent, which would be consistent with DOL
standards for LSAs. A 6 percent floor would require that an area
demonstrate an unemployment rate of at least 20 percent above the
national average for a recent 24-month period and at least a 6 percent
unemployment rate for that same time period in order to receive waiver
approval. The 6-percent floor also bears a relationship to the
``natural rate of unemployment.'' in that it is approximately 20
percent higher. As previously noted, the ``natural rate of
unemployment'' generally hovers around 5 percent, meaning that 20
percent above that rate is 6.0 percent. In combination with other
changes in the proposed rule, the Department estimates that a 6-percent
floor would reduce waivers to the extent that approximately 24 percent
of ABAWDs would live in waived areas. The Department is concerned that
too many areas would qualify for a waiver of the ABAWD time limit with
a 6 percent floor and that too few individuals would be subject to the
ABAWD work requirements, which can be met through working or
participating in a work program or workfare program, thereby moving
fewer individuals towards self-sufficiency.
The Department would also like to receive comments on establishing
a floor of 10 percent for the 20 percent standard. A 10-percent floor
would allow for even fewer waivers than the other options and would
result in the work requirements being applied in almost all areas of
the country. In combination with other changes in the proposed rule,
the Department estimates that a 10-percent floor would reduce waivers
to the extent that approximately 2 percent of ABAWDs would live in
waived areas.
It is important to note that a 10-percent floor would be distinct
from the criteria for approval of an area with an unemployment rate of
over 10 percent. The 10-percent unemployment floor would be attached to
the 20 percent standard, which would mean an area would require an
average unemployment rate 20 percent above the national average for a
recent 24-month period and at least 10 percent for the same period; the
other similar, but separate standard requires an area to have an
average unemployment rate of over 10 percent for a 12-month period.
Based on the Department's analysis, nearly 90 percent of ABAWDs
would live in areas without waivers and would be encouraged to take
steps towards self-sufficiency if a floor of 7 percent was established.
In comparison, a 6 percent floor would mean that 76 percent of ABAWDs
would live in areas without waivers and a 10 percent floor would mean
that 98 percent of ABAWDs would live in areas without waivers. A higher
floor allows for the broader application of the time limit to encourage
self-sufficiency.
The Department is thus requesting comments on the various proposed
options for setting a floor for the 20 percent standard. This will
ensure that the Department fully considers the range of evidence
available to establish a floor that meets the need of evaluating
waivers.
[[Page 985]]
Core Standards: Retaining the Extended Unemployment Benefits
Qualification Standard
Under the proposed rule, the Department would continue to approve a
State's waiver request that is based upon the requesting State's
qualification for extended unemployment benefits, as determined by
DOL's Unemployment Insurance Service. Extended unemployment benefits
are available to workers who have exhausted regular unemployment
insurance benefits during periods when certain economic conditions
exist within the State. The extended benefit program is triggered when
the State's unemployment rate reaches certain levels. Qualifying for
extended benefits is an indicator, based on DOL data, that a state
lacks sufficient jobs. Current regulations include this criterion as
evidence of lack of sufficient jobs. The Department has consistently
approved waivers based on qualification for extended unemployment
benefits because it has been a clear indicator of lack of sufficient
jobs and an especially responsive indicator of sudden economic
downturns, such as the Great Recession. Therefore, the Department
proposes to continue to include this criterion, reframed as a core
standard for approval in this proposed regulation.
The three provisions described above (the unemployment rate over 10
percent standard, the 20 percent standard, and the qualification for
extended unemployment benefits standard), would be considered the core
standards for approval and, thus, the basis for most conventional
waiver requests and approvals. The core standards would be codified in
7 CFR 273.24(f)(2).
Criteria Excluded From Core Standards
The proposed core standards would not include some of the current
ABAWD time limit waiver criteria that are rarely used, sometimes
subjective, and not appropriate when other more specific and robust
data is available, such as unemployment rates from BLS. These excluded
criteria include a low and declining employment-to-population ratio, a
lack of jobs in declining occupations or industries, or an academic
study or other publication(s) that describes an area's lack of jobs.
These standards would no longer suffice for a waiver's approval if BLS
data is available. These proposed changes would ensure that ABAWD time
limit waiver requests are only approved in areas where waivers are
truly necessary.
The proposed rule would emphasize sound data and evidence that
primarily relies on BLS and other DOL data for waiver approvals. Any
supporting unemployment data that a State provides must, under the core
standards, rely on standard data from BLS or a BLS-cooperating agency.
Other Data and Evidence in Exceptional Circumstances
The proposed core standards would form the primary basis for
determining waiver approval. However, the rule also proposes that the
Department can approve waiver requests in exceptional circumstances
based on other data and evidence. The Department proposes that other
data and evidence still primarily rely on BLS unemployment data. Such
alternative data would only be considered in exceptional circumstances
or if BLS data is limited, unavailable, or if BLS develops a new method
or data that may be applicable to the waiver review process. Given that
economic conditions can change quickly, the Department believes it is
appropriate to maintain a level of flexibility to approve waivers as
needed in extreme, dynamic circumstances. Such waiver requests must
demonstrate that an area faces an exceptional circumstance and provide
data or evidence that the exceptional circumstance gives rise to an
area not having a sufficient number of jobs to provide employment for
the individuals in the area. For example, an exceptional circumstance
may arise from the rapid disintegration of an economically and
regionally important industry or the prolonged impact of a natural
disaster. A short-term aberration, such as a temporary closure of a
plant, would not fall within the scope of exceptional circumstances.
For waiver requests in exceptional circumstances, the State agency may
use additional data or evidence other than those listed in the core
standards to support its need for a waiver under exceptional
circumstances. In these instances, the State may provide data from the
BLS or a BLS-cooperating agency showing an area has a most recent
three-month average unemployment rate over 10 percent. This provision
to strengthen the standards for waivers would be codified in 7 CFR
273.24(f)(3).
Restricting Statewide Waivers
Current regulations at 7 CFR 273.24(f)(6) and the Department's
policy guidance provide States with the discretion to define the areas
to be covered by waivers. A State may request that a waiver apply to
the entire State (statewide) or only to certain areas within the State
(e.g., individual counties, cities, or towns), as long as the State
provides data that corresponds to each requested area showing that the
area meets one of the qualifying standards for approval.
The proposed rule would eliminate statewide waiver approvals when
substate data is available through BLS, except for those waivers based
upon a State's qualification for extended unemployment benefits as
determined by DOL's Unemployment Insurance Service. The Department
proposes this change so that waivers of the ABAWD time limit are more
appropriately targeted to those particular areas in which unemployment
rates are high. Since statewide unemployment figures may include areas
in which unemployment rates are relatively low, the Department believes
that a more targeted approach would ensure that waivers exist only in
areas that do not have a sufficient number of jobs to provide
employment for the individuals living in that specific area. This
proposed change further supports the Department's goal that more
individuals are subject to the ABAWD time limit and work requirement,
which can be met through working or participating in a work program or
workfare program, consistent with the intent of the Act.
The Department requests public comment specific to the proposed
restriction on statewide waivers, especially with consideration to how
the change may affect different States in different ways based upon
geographic size, population, and other factors.
These changes would be codified in 7 CFR 273.24(f)(4).
Restricting the Combining of Data to Group Substate Areas
Current regulations at 7 CFR 273.24(f)(6) and the Department's
policy guidance provide States considerable flexibility to define areas
covered by ABAWD waivers. This flexibility allows States to combine
data to group two or more substate areas, such as counties, together
(otherwise referred to as ``grouped'' areas or ``grouping''). In order
to meet the requirement for qualifying data or evidence that
corresponds to the requested area, States use the unemployment and
labor force data from the individual areas in the group to calculate an
unemployment rate representative of the whole group. States can only
group areas and support approval based on qualifying unemployment data.
Under current regulations, States must demonstrate that the areas
within any such group are contiguous and/or share the same Federal- or
State-recognized economic region. For example, two or more contiguous
counties could be grouped together, and the group's average
unemployment rate could be calculated,
[[Page 986]]
by combining the unemployment and labor force data from each individual
county.
The Department's existing general conditions for the grouping of
areas--that the areas must be either contiguous and/or share the same
economic region--were intended to ensure that the areas grouped
together are economically tied. However, in practice, the Department
has learned that its standards for combining areas provide too much
flexibility for State agencies and are often ineffective at ensuring
that States are only grouping areas that are economically tied. For
example, some States have grouped nearly all contiguous counties in the
State together while omitting a few counties with relatively low
unemployment in order to maximize the waived areas in the State. In
other cases, States have grouped certain towns together that share the
same economic region while omitting others with relatively low
unemployment from the group, thereby maximizing the waived areas in the
State.
The proposed rule would prohibit States from grouping areas, except
for areas that are designated a Labor Market Area (LMA) by the Federal
government.\2\ This change would ensure that only areas that are
economically tied are grouped together. Moreover, the proposed rule
would require States to include the unemployment data representative of
all areas in the LMA in the State. As a result, States would be unable
to omit certain areas within the LMA in the State for the purposes of
achieving a qualifying unemployment rate for part of an LMA. These
changes would be codified in 7 CFR 273.24(f)(5).
---------------------------------------------------------------------------
\2\ An LMA is an economically integrated geographic area within
which individuals can reside and find employment within a reasonable
distance or can readily change employment without changing their
place of residence. LMAs include Federally-designated statistical
areas such as metropolitan statistical areas, micropolitan
statistical areas, and other combined statistical areas. A
nationwide list of every LMA is maintained by BLS.
---------------------------------------------------------------------------
The Department requests public comments on whether it should
include Labor Market Areas (LMAs) defined by the Federal government as
the basis for grouping areas or whether it should prohibit grouping
entirely. If grouping were prohibited entirely, waived areas would be
limited to individually qualifying jurisdictions with corresponding
data (for example, counties and their equivalents, cities, and towns).
The Department requests comments on the potential impacts of either
policy. The Department believes that only allowing the use of Federally
designated LMAs will limit the combination of areas that are not
contiguous and economically integrated. The Department is interested in
feedback on whether the LMA definition will target waivers to
jurisdictions with a demonstrable lack of sufficient jobs without
including jurisdictions that do not lack sufficient jobs.
Duration of Waiver Approvals and Timeliness of Data
The proposed approach would limit the duration of waiver approvals.
Under the current regulations, the Department typically approves
waivers for one year. However, the current regulations allow the
Department to approve shorter or longer waivers in certain
circumstances. The Department proposes limiting a waiver's duration to
one year, but continuing to allow a waiver for a shorter period at a
State's request. The Department believes that a one year waiver term
allows sufficient predictability for States to plan and implement the
waiver; at the same time, a one-year waiver term ensures that the
waiver request reflects current economic conditions.
The proposed rule would also prioritize recent data by preventing
States from requesting to implement waivers late in the Federal fiscal
year, which broadens the available data reference period. Through
operational experience, the Department has observed that several States
that have historically requested 12-month waivers on a fiscal year
basis (i.e., October 1 of one year through September 30 of the
following year), have shifted their waiver request and implementation
dates to later in the fiscal year (e.g., September 1 through August
31). The States that have made this shift have supported their waivers
based on the 20 percent standard. In the current regulations, the 24-
month data reference period for this waiver is tied to the fiscal year
and only updates each year on October 1. The Department has noticed
that as the unemployment rates have improved, States that shift the
waiver operational period to later in the fiscal year have been able to
capitalize on older data and qualify for waivers of the ABAWD time
limit for additional time. States are able to take advantage of this
loophole if their unemployment rates for the requested areas have been
improving relative to the national average. As a result, these States
are able to obtain a waiver and maximize the areas waived into the next
fiscal year, using data that is no longer appropriate as of the October
1 update.
To curtail this practice, the Department proposes that waivers
based on the 20 percent standard would not be approved beyond the
fiscal year in which the waiver is implemented. In addition, these
waivers must utilize data from a 24-month period no less recent than
that DOL used in its current fiscal year LSA designation. Such an
approach ensures waivers rely on sufficiently recent data for the
current fiscal year and prevents States from using older data, which
may not accurately reflect current economic conditions.
This provision would streamline the implementation of the program
and would be codified in 7 CFR 273.24(f)(6).
Areas With Limited Data or Evidence
Current practices provide flexibility to State agencies to rely on
alternative data sources regardless of whether the area has
corresponding BLS unemployment data available. Currently, the
Department may approve requests supported by an estimated unemployment
rate of an area based on available data from BLS and Census Bureau's
American Community Survey (ACS), a low and declining employment-to-
population ratio, a lack of jobs as a consequence of declining
occupations or industries, or an academic study or other publication
describing the area's lack of a sufficient number of jobs. At times,
State agencies will use these alternative data sources to justify a
waiver request even when the corresponding BLS data shows that the
unemployment rate in the area is relatively low. As stated previously,
the Department believes that waivers of the ABAWD time limit should be
limited to only circumstances in which the area clearly does not have a
sufficient number of jobs to provide employment for the individuals. By
not restricting the use of these alternative to areas with limited data
or evidence, the Department has permitted States to take advantage of
these alternative data sources, when BLS employment data is readily
available.
Under the proposed rule, all of these criteria would only be
applicable to areas for which BLS or a BLS-cooperating agency data is
limited or unavailable, such as a reservation area or U.S. Territory.
In these areas, the Department could approve requests supported by an
estimated unemployment rate of an area based on available data from BLS
and ACS, a low and declining employment-to-population ratio, a lack of
jobs as a consequence of declining occupations or industries, or an
academic study or other publication describing the area's lack of a
sufficient number of jobs. Waiver requests for an area for which
standard data from BLS or a BLS-
[[Page 987]]
cooperating agency is limited or unavailable would not be required to
conform to the criteria for approval proposed under paragraphs (f)(2),
(f)(3), (f)(4), (f)(5), and (f)(6). Additionally, the Department would
consider other data in line with BLS methods or considered reliable.
This allows for flexibility if new methods or data are developed for
Indian Reservation or U.S. Territory regions currently with limited or
no data.
Using an estimated unemployment rate based on available data from
BLS and ACS is part of current practice. The Department proposes
codifying this criteria in the regulations only for areas with limited
data or evidence, such as a reservation area or U.S. Territory.
Currently, States often estimate unemployment rates for reservation
areas by applying data from ACS to available BLS data. In addition,
some tribal governments generate their own labor force and/or
unemployment data, which would remain acceptable to support a waiver.
These changes would be codified in 7 CFR 273.24(f)(7).
Other Changes to Waivers
The proposed rule would eliminate three provisions in current
regulations: The designation as an LSA as a criterion for approval; the
implementation of waivers before approval; and the historical seasonal
unemployment as a criterion for approval. These provisions are
eliminated to ensure that the ABAWD work requirement is applied in
accordance with the Department's goal to strengthen work requirements.
The proposed rule would no longer allow an area to qualify for a
waiver based on DOL's Employment and Training Administration (ETA)
designation of the area as an LSA for the current fiscal year. This
change is central to the Department's efforts to raise the standards by
which it determines whether an area is lacking a sufficient number of
jobs to provide employment for ABAWDs in order to require more ABAWDs
to engage in work, work training, or workfare if they wish to receive
SNAP. As explained in a previous section, DOL's criteria for LSAs
require an average unemployment rate that is at least 20 percent above
the national average and at least 6 percent for the preceding two
calendar years (a 24-month period). The Department is eliminating LSA
designation as a basis for waiver approval because LSAs are determined
using a minimum unemployment rate floor of 6 percent, whereas the
Department proposes using a minimum unemployment rate of 7 percent for
its similar, but more flexible, 20 percent standard. Continuing to
allow LSA designation as a basis for waiver approval would be
inconsistent. Moreover, LSAs are not designated for all different types
of areas across the country, and having an LSA criteria separate from
the 20 percent criteria could be seen as unnecessary moving forward.
The proposed rule would bar States from implementing a waiver prior
to its approval. Though rarely used, current regulations allow a State
to implement an ABAWD waiver as soon as the State submits the waiver
request based on certain criteria.\3\ By removing the current pertinent
text in 273.24(f)(4), the proposed rule would require States to request
and receive approval before implementing a waiver. This would allow the
Department to have a more accurate understanding of the status of
existing waivers and would provide better oversight in the waiver
process. It would also prevent waivers from being implemented until the
Department explicitly reviewed and approved the waiver.
---------------------------------------------------------------------------
\3\ Under current regulations, the State must certify that data
from the BLS or the BLS-cooperating agency show a most recent 12-
month average unemployment rate over 10 percent or that ETA
designated the area as an LSA for the current fiscal year.
---------------------------------------------------------------------------
The proposed rule would also remove the criterion of a historical
seasonal unemployment rate over 10 percent as a basis for approval.
Historical seasonal unemployment does not demonstrate a prolonged lack
of sufficient number of jobs to provide employment for the individuals.
Historical seasonal unemployment rates, by definition, are limited to a
relatively short period of time each year. Nor does a historical
seasonal unemployment rate indicate early signs of a declining labor
market. Historical seasonal unemployment rates are cyclical rather than
indicative of declining conditions. Based on operational experience,
the Department has not typically seen the use of this criterion by
States. The Department has not approved a waiver under this criterion
in more than two decades. For these reasons, the Department proposes
removing a historical seasonal average unemployment rate as a way to
qualify for a waiver.
In addition, as stated previously, the proposed rule would no
longer provide for statewide waivers except for those waivers approved
based upon a state's qualification for extended unemployment benefits.
Ending the ``Carryover'' of ABAWD Exemptions
The proposed rule would end the unlimited carryover and
accumulation of ABAWD percentage exemptions, previously referred to as
15 percent exemptions before the enactment of the Agriculture
Improvement Act of 2018. Upon enactment, Section 6(o)(6) of the Act
provides that each State agency be allotted exemptions equal to an
estimated 12 percent of ``covered individuals,'' which are the ABAWDs
who are subject to the ABAWD time limit in the State in Fiscal Year
2020 and each subsequent Fiscal Year. States can use these exemptions
available to them to extend SNAP eligibility for a limited number of
ABAWDs subject to the time limit. When one of these exemptions is
provided to an ABAWD, that one ABAWD is able to receive one additional
month of SNAP benefits. The Act and current regulations give States
discretion whether to use these exemptions, and, as a result, some
States use the exemptions that are available to them and others do not.
Each fiscal year, the Act requires the Department to estimate the
number of exemptions that each State be allotted and to adjust the
number of exemptions available to each State. Based on the Act's
instructions, the regulations provide the specific formulas that the
Department must use to estimate the number of exemptions, which are
referred to as ``earned'' exemptions, and to adjust the exemptions
available to the State each year. The proposed rule would not change
any part of the calculation that the Department follows to estimate
earned exemptions, or any other part of 273.24(g). The proposed rule
would only change the calculation that the Department uses to adjust
the number of exemptions available for each fiscal year at 7 CFR
273.24(h).
The regulation's current interpretation of Section 6(o)(6)(G) of
the Act, which requires the adjustment of exemptions, causes unused
exemptions to carry over and accumulate from one year to the next,
unless the State uses all of its available exemptions in a given year.
For FY 2018, States earned approximately 1.2 million exemptions, but
had about an additional 7.4 million exemptions available for use due to
the carryover of unused exemptions from previous fiscal years. The
Department views the carryover of significant amounts of unused
exemptions to be an unintended outcome of the current regulations. The
Department is concerned that such an outcome is inconsistent with
Congressional intent to limit the number of exemptions
[[Page 988]]
available to States each year. Concerns about the carryover of
exemptions were also expressed by the September 2016, USDA Office of
the Inspector General (OIG) audit report ``FNS Controls Over SNAP
Benefits for Able-Bodied Adults Without Dependents.'' Therefore, the
Department proposes revising 7 CFR 273.24(h) to end the unlimited
carryover of unused percentage exemptions. The Department proposes this
change to implement the Act more effectively and to advance further the
Department's goal to promote self-sufficiency.
In order to address the carryover issue, the proposed rule would
change the adjustment calculation that the Department uses to increase
or decrease the number of exemptions available to each State for the
fiscal year based on usage during the preceding fiscal year. The
proposed rule would no longer allow for unlimited carryover from all
preceding years. Instead, each State agency's adjustment would be based
on the number of exemptions earned in the preceding fiscal year minus
the number of exemptions used in the preceding fiscal year. The
resulting difference would be used to adjust (by increasing or
decreasing) the earned exemption amount. In addition, the adjustment
will apply only to the fiscal year in which the adjustment is made.
The three examples below show how the proposed rule's adjustment
calculation would work in practice based on no exemption use, varied
exemption use, and exemption overuse. These examples assume that a
State earns five new exemptions every year over a 4-year period.
Example 1, No Exemption Use
Example 1 shows how the proposed adjustment calculation would work
for a State that uses zero exemptions, and how it would end the
carryover and accumulation of unused exemptions. The State earned five
exemptions for the current fiscal year (FY) of 2021 in this example
(row A). The State's adjustment for FY 2021 is based on the number of
exemptions earned in the previous year (FY 2020) minus the number of
exemptions used for the previous year (FY 2020). In this example, we
assume the State earned five exemptions in FY 2020 and used no
exemptions in FY 2020, so the adjustment for FY 2021 is five (row B).
The adjustment of five (row B) is then added to the five earned for FY
2021 (row A) to obtain the State's total of 10 exemptions after
adjustment for FY 2021 (row C). In FY 2021, the State uses zero
exemptions (row D), so it does not have any overuse liability for that
year because row E results in a positive number. In FY 2022, FY 2023,
and FY 2024, the calculation is the same and results are the same each
year. The number of exemptions available to the State is increased
based on the number earned for and used in the preceding fiscal year,
but the State does not carryover accumulated exemptions indefinitely.
Whereas the State would have 25 total exemptions after adjustment for
FY 2024 under the current regulations, the State would have 10 total
exemptions after adjustment for FY 2024 under the proposed regulation.
Example 1
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Earned for 5 5 5 5
current FY.
B............................. (+) Adjustment 5 5 5 5
for current FY
(earned minus
used for
previous FY).
C............................. (=) Total after 10 10 10 10
adjustment for
current FY.
D............................. (-) Used in 0 0 0 0
current FY.
E............................. (=) Liability 10 (No) 10 (No) 10 (No) 10 (No)
for overuse?
(Yes or No).
----------------------------------------------------------------------------------------------------------------
Example 2, Varied Exemption Use
Example 2 shows how the proposed adjustment calculation would work
for a State that uses different amounts of exemptions each fiscal year
and therefore receives an increase or decrease in the exemptions
available to it each subsequent fiscal year. In other words, the number
of exemptions available to the State is adjusted for an increased total
exemptions one year, then a decreased total exemptions the next. The
State earned five exemptions for the current FY of 2021 (row A). The
State's adjustment for FY 2021 is based on the number of exemptions
earned in the previous year (FY 2020) minus the number of exemptions
used for the previous year (FY 2020). We assume the State earned five
exemptions in FY 2020 but used zero exemptions in FY 2020, so the
State's total after adjustment for FY 2021 is 10 (row C). In FY 2021,
the State uses eight exemptions (row D), so it does not have any over-
usage liability for that year (row E). That is, though the State only
earned 5 exemptions for FY 2021, the adjustment allowed the State to
avoid any over usage liability for FY 2021. However, for the purposes
of adjustment in FY 2022, the 8 used exemptions are subtracted from the
5 earned exemptions for FY 2021, not from the 10 adjusted exemption
amount available in FY 2021. Therefore, the adjustment amount for FY
2022 is negative three. In FY 2022, the State again earns five
exemptions but the adjustment is negative three (the result of
subtracting row D, FY 2021 from row A, FY 2022). The State then has a
total of two exemptions for FY 2022. The State chooses to use two
exemptions for FY 2022, therefore it has no overuse in FY 2022. This
example shows how the proposed regulation increases or decreases the
number of exemptions available to States while also limiting the
average number of exemptions in effect to 12 percent over time. As
shown in row D, the State can use no more than 10 exemptions over the
course of any 2-year period, which is equal to the 10 exemptions earned
over every 2-year period.
Example 2
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Earned for 5 5 5 5
current FY.
B............................. (+) Adjustment 5 -3 3 -3
for current FY
(earned minus
used for
previous FY).
C............................. (=) Total after 10 2 8 2
adjustment for
current FY.
D............................. (-) Used in 8 2 8 2
current FY.
[[Page 989]]
E............................. (=) Liability 2 (No) 0 (No) 0 (No) 0 (No)
for overuse?
(Yes or No).
----------------------------------------------------------------------------------------------------------------
Example 3, Exemption Overuse
Example 3 shows how the proposed adjustment calculation would work
for a State that overuses exemptions. In this example, we again assume
the State earned five exemptions in FY 2020 but used zero exemptions in
FY 2020, so the State's total after adjustment for FY 2021 is 10 (row
C). In FY 2021, the State uses six exemptions (row D); once again, it
does not have any over-usage liability for that year (row E), but the
adjustment for FY 2022 will be negative one (the result of subtracting
row D, FY 2021 from row A, FY 2022). Put differently, the five
exemptions earned for FY 2022 offset the adjustment of negative one.
The State then has a total of four exemptions for FY 2022 (row C).
However, the State uses six exemptions in FY 2022. Because the State
used more exemptions in FY 2022 than its total after adjustment for FY
2022, it has an overuse liability of two for FY 2022. The Department
would consider the exemption overuse an overissuance and would hold the
State liable for the total dollar value of the exemptions, as estimated
by the Department.
Example 3
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Earned for 5 5 5 5
current FY.
B............................. (+) Adjustment 5 -1 -1 1
for current FY
(earned minus
used for
previous FY).
C............................. (=) Total after 10 4 4 6
adjustment for
current FY.
D............................. (-) Used for 6 6 4 4
current FY.
E............................. (=) Liability 4 (No) -2 (Yes) 0 (No) 2 (No)
for overuse?
(Yes or No).
----------------------------------------------------------------------------------------------------------------
Under the proposed rule, the Department would continue to provide
States with its estimated number of exemptions earned for each upcoming
fiscal year as data becomes available, typically in September. The
Department would also continue to provide States with the exemption
adjustments as soon as updated caseload data is available and states
have provided final data on the number of exemptions used in the
preceding fiscal year, typically in January.
The Department also seeks comments from States on how to treat
State agencies' existing total number of percentage exemptions, which
in some cases have carried over and accumulated over many years, and on
when the proposed change should be implemented. Under the proposed
rule, these accumulated percentage exemptions would not be available to
States once the change is implemented. Additionally, because the
adjusted number of exemptions is based on the preceding fiscal year,
the change in regulatory text will impact State's ability to use
exemptions in the fiscal year preceding the fiscal year that the
provision goes into effect. Therefore, the Department seeks comment on
how to best handle these issues.
The proposed rule would not change or affect the ``caseload
adjustments'' at 273.24(h)(1), which apply to any State that has a
change of over 10 percent in its caseload amount. However, the
Department is taking this opportunity to correct the cross-reference
that this paragraph makes to 273.24(g)(2) for accuracy. The proposed
regulation cross-references 273.24(g)(3), instead of (g)(2). The
Department is making this change because it is more accurate and
precise to cross-reference to 273.24(g)(3), given that the caseload
adjustments apply to the number of exemptions estimated as earned for
each State for each fiscal year.
Procedural Matters
Executive Order 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This proposed rule has been determined to be economically
significant and was reviewed by the Office of Management and Budget
(OMB) in conformance with Executive Order 12866.
Regulatory Impact Analysis
As required for rules that have been designated as economically
significant by the Office of Management and Budget, a Regulatory Impact
Analysis (RIA) was developed for this proposed rule. It follows this
rule as an Appendix. The following summarizes the conclusions of the
regulatory impact analysis:
The Department has estimated the net reduction in federal spending
associated with the proposed transfer rule to be approximately $1.1
billion in fiscal year (FY) 2020 and $7.9 billion over the five years
2020-2024. This is a reduction in federal transfers (SNAP benefit
payments); the reduction in transfers represents a 2.5 percent decrease
in projected SNAP benefit spending over this time period.
Under current authority, the Department estimates that about 60
percent of ABAWDs live in areas that are not subject to a waiver and
thus face the ABAWD time limit. Under the revised waiver criteria the
Department estimates that nearly 90 percent of ABAWDs would live in
such an area. Of those newly subject to the time limit, the Department
estimates that approximately two-thirds (755,000 individuals in FY
2020) would not meet the requirements for failure to engage
meaningfully in work or work training.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies
to analyze the impact of rulemaking on small entities and consider
alternatives that would minimize any significant impacts on a
substantial number of small entities. Pursuant to that review,
[[Page 990]]
it has been certified that this rule would not have a significant
impact on a substantial number of small entities.
This proposed rule would not have an impact on small entities
because the proposed rule primarily impacts State agencies. As part of
the requirements, State agencies would have to update their procedures
to incorporate the new criteria for approval associated with requesting
waivers of ABAWD time limit. Small entities, such as smaller retailers,
would not be subject to any new requirements. However, all retailers
would likely see a drop in the amount of SNAP benefits redeemed at
stores if these provisions were finalized, but impacts on small
retailers are not expected to be disproportionate to impact on large
entities. As of FY 2017, approximately 76 percent of authorized SNAP
retailers (nearly 200,000 retailers) were small groceries, convenience
stores, combination grocery stores, and specialty stores, store types
that are likely to fall under the Small Business Administration gross
sales threshold to qualify as a small business for Federal Government
programs. While these stores make up the majority of authorized
retailers, collectively they redeem less than 15 percent of all SNAP
benefits. The proposed rule is expected to reduce SNAP benefit payments
by about $1.7 billion per year. This would equate to about a $100 loss
of revenue per small store on average per month ($1.7 billion x 15%/
200,000 stores/12 months). In 2017, the average small store redeemed
more than $3,800 in SNAP each month; the potential loss of benefits
represents less than 3 percent of their SNAP redemptions and only a
small portion of their gross sales. Based on 2017 redemption data, a
2.7 percent reduction in SNAP redemptions represented between 0.01 and
0.5 percent of these stores gross sales.
Executive Order 13771
Executive Order 13771 directs agencies to reduce regulation and
control regulatory costs and provides that the cost of planned
regulations be prudently managed and controlled through a budgeting
process.
This proposed rule is expected to be an Executive Order 13771
deregulatory action. The rule does not include any new costs. FNS is
proposing a reduction in burden hours since State agencies are no
longer able to group areas together for waiver approval. The reduction
would result in an estimated collective savings of $12,092 for State
Agencies.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 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 the 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 by State, local or tribal
governments, in the aggregate, or 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 most cost effective or least burdensome alternative that achieves
the objectives of the rule.
This proposed rule does not contain Federal mandates (under the
regulatory provisions of Title II of the UMRA) for State, local and
tribal governments or the private sector of $100 million or more in any
one year. Thus, the rule is not subject to the requirements of sections
202 and 205 of the UMRA.
Executive Order 12372
SNAP is listed in the Catalog of Federal Domestic Assistance under
No. 10.551. For the reasons set forth in the Final Rule codified in 7
CFR part 3015, subpart V and related Notice (48 FR 29115), this Program
is excluded from the scope of Executive Order 12372, which requires
intergovernmental consultation with State and local officials.
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have Federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under Section 6(b)(2)(B) of Executive Order 13132.
The Department has determined that this rule does not have
Federalism implications. Therefore, under Section 6(b) of the Executive
Order, a Federalism summary impact statement is not required.
Executive Order 12988, Civil Justice Reform
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have preemptive
effect with respect to any State or local laws, regulations or policies
which conflict with its provisions or which would otherwise impede its
full and timely implementation. This rule is not intended to have
retroactive effect unless so specified in the Effective Dates section
of the final rule. Prior to any judicial challenge to the provisions of
the final rule, all applicable administrative procedures must be
exhausted.
Civil Rights Impact Analysis
FNS has reviewed the proposed rule, in accordance with the
Department Regulation 4300-4, ``Civil Rights Impact Analysis'' to
identify and address any major civil rights impacts the proposed rule
might have on minorities, women, and persons with disabilities. While
we believe that a reduction in the number of ABAWD waivers granted to
State agencies will adversely affect potential program participants in
all groups who are unable to meet the employment requirements, and have
the potential for disparately impacting certain protected groups due to
factors affecting rates of employment of members of these groups, we
find that the implementation of mitigation strategies and monitoring by
the Civil Rights Division of FNS will lessen these impacts.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with tribes on a government-to-government
basis on policies that have tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian tribes, on the relationship between the Federal Government
and Indian tribes or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
The USDA's Office of Tribal Relations (OTR) has assessed the impact
of this rule on Indian tribes and determined that this rule has tribal
implications that require tribal consultation under E.O. 13175. FNS
invited Tribal leaders to a consultation held on March 14, 2018. Tribal
leaders did not provide any statement or feedback to the Department on
the rule. FNS and OTR will determine if a future consultation is
needed. If a Tribe requests consultation, FNS will work with the Office
of Tribal Relations to ensure meaningful consultation is provided where
changes, additions, and modifications identified herein are not
expressly mandated by Congress.
[[Page 991]]
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR
1320) requires the Office of Management and Budget (OMB) approve all
collections of information by a Federal agency before they can be
implemented. Respondents are not required to respond to any collection
of information unless it displays a current valid OMB control number.
In accordance with the Paperwork Reduction Act of 1995, this proposed
rule will contain information collections that are subject to review
and approval by the Office of Management and Budget; therefore, FNS is
submitting for public comment the changes in the information collection
burden that would result from adoption of the proposals in the rule.
Comments on this proposed rule must be received by April 2, 2019.
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 shall have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on those who
are to respond, including use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology.
All responses to this notice will be summarized and included in the
request for OMB approval. All comments will also become a matter of
public record.
Title: Supplemental Nutrition Assistance Program Waivers of Section
6(o) of the Food and Nutrition Act.
OMB Number: 0584-0479.
Expiration Date: [July 31, 2021].
Type of Request: Revision of a currently approved collection.
Abstract: Section 6(o) of the Food and Nutrition Act of 2008, (the
Act, as amended through Pub. L. 113-xxx), limits the amount of time an
able-bodied adult without dependents (ABAWD) can receive Supplemental
Nutrition Assistance Program (SNAP) benefits to 3 months in a 36-month
period, unless the individual is working and/or participating in a work
program half-time or more, or participating in workfare. The Act
exempts individuals from the time limit for several reasons, including
age, unfitness for work, or having a dependent child. The ABAWD time
limit and work requirement currently apply to people ages 18 through
49, unless they are already exempt from the general work requirements,
medically certified as physically or mentally unfit for employment,
responsible for a child under 18, or pregnant. ABAWDs are also work
registrants and must meet the general work requirements. In addition,
ABAWDs subject to the time limit must work and/or participate in a work
program 80 hours per month or more, or participate in and comply with
workfare to receive SNAP for more than 3 months in a 36-month period.
Participation in SNAP E&T, which is a type of work program, is one way
a person can meet the 80 hour per month ABAWD work requirement, but
other work programs are acceptable as well.
The Act also provides State agencies with flexibility to request a
waiver of this time limit if unemployment is high or the area does not
have a sufficient number of jobs to provide employment. State agencies
can request to waive the ABAWD time limit if an area has an
unemployment rate of over 10 percent or the State can meet one of the
regulatory options to show it does not have a sufficient number of jobs
to provide employment. If the time limit is waived, individuals are not
required to meet the ABAWD work requirement to receive SNAP for more
than 3 months in a 36-month period. This collection of information is
necessary for FNS to perform its statutory obligation to review waivers
of the SNAP ABAWD time limit.
This is a revision of a currently approved information collection
request associated with this rulemaking. In the previous submission,
the Food and Nutrition Service (FNS) estimated 35 hours for each waiver
request for a total of 1,198 hours. Based on the experience of FNS
during calendar year 2018, FNS projects that 36 out of 53 State
agencies would submit requests for a waiver of the time limit for ABAWD
recipients based on a high unemployment rate or lack of sufficient
number of jobs. FNS estimates a response time of 28 hours for each
waiver request based on labor market data, which require detailed
analysis of labor markets within the State. FNS projects a total of
1,008 hours, which would be a reduction of 190 hours compared to the
1,198 hours estimated provided in the pending approval.
FNS is proposing a reduction in burden hours since State agencies
are no longer able to group areas together for waiver approval. The
reduction will burden hours would result in an estimated collective
savings of $12,092 for State Agencies. This rule does not require any
recordkeeping burden. Reporting detail burden details are provided
below.
Respondents: State agencies.
Estimated Number of Respondents: 36.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 1,008.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Response Total Annual Previous Differences Differences
OMB No. 0584-0479 Requirement (7 CFR 273.24(f) number of annually per annual Hours per burden submission due to program due to
respondents respondent responses response hours total hours changes adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: State Agencies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting burden............................ Submissions of waiver request 36 1 36 28 1,008 1,190 -182 0
based on labor market data.
7 CFR 273.24(f)--Submission of 0 0 0 0 0 8 -8 0
waiver request based on Labor
Surplus Area designation.
-------------------------------------------------------------------------------------------------------------------
Reporting totals............................ .............................. 36 .............. ........... ........... 1,008 ........... -190 ..............
-------------------------------------------------------------------------------------------------------------------
[[Page 992]]
Total Reporting Burden due to Rulemaking.... .............................. .............. .............. ........... ........... 1,008 ........... .............. ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
E-Government Act Compliance
The Department is committed to complying with the E-Government Act
of 2002, to promote the use of the internet and other information
technologies to provide increased opportunities for citizen access to
Government information and services, and for other purposes.
List of Subjects in 7 CFR Part 273
Able-bodied adults without dependents, Administrative practice and
procedures, Employment, Indian reservations, Time limit, U.S.
territories, Waivers, Work requirements.
Accordingly, FNS proposes to amend 7 CFR part 273 to read as
follows:
PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
0
1. The authority citation for part 273 continues to read as follows:
Authority: 7 U.S.C 2011-2036.
0
2. In Sec. 273.24, revise paragraph (f) to read as follows:
Sec. 273.24 Time Limit for able-bodied adults.
* * * * *
(f) Waivers--(1) General. The State agency may request FNS approval
to temporarily waive the time limit for a group of individuals in the
State in the area in which the individuals reside. To be considered for
approval, the request must be endorsed by the State's governor and
supported with corresponding data or evidence demonstrating that the
requested area:
(i) Has an unemployment rate of over 10 percent; or
(ii) Does not have a sufficient number of jobs to provide
employment for the individuals.
(2) Core standards. FNS will approve waiver requests under (1)(i)
and (ii) that are supported by any one of the following:
(i) Data from the Bureau of Labor Statistics (BLS) or a BLS-
cooperating agency that shows an area has a recent 12-month average
unemployment rate over 10 percent;
(ii) Data from the BLS or a BLS-cooperating agency that shows an
area has a 24-month average unemployment rate 20 percent or more above
the national rate for a recent 24-month period, but in no case may the
24-month average unemployment rate of the requested area be less than 7
percent. The 24-month period must be no earlier than the same 24-month
period used by the Department of Labor's Employment and Training
Administration to designate Labor Surplus Areas for the current fiscal
year; or
(iii) Evidence that an area qualifies for extended unemployment
benefits as determined by the Department of Labor (DOL).
(3) Other data and evidence. FNS may approve waiver requests that
are supported by data or evidence other than that listed under
paragraph (f)(2) of this section if the request demonstrates an
exceptional circumstance in an area. In addition, the request must
demonstrate that the exceptional circumstance has caused a lack of
sufficient number of jobs, such as data from the BLS or a BLS-
cooperating agency that shows an area has a most recent three-month
average unemployment rate over 10 percent. Supporting unemployment data
provided by the State must rely on standard BLS data or methods.
(4) Restriction on statewide waivers. FNS will not approve
statewide waiver requests if data for the requesting State at the
substate level is available from BLS, except for waivers under
paragraph (f)(2)(iii) of this section.
(5) Restricting the combining of data to group substate areas. The
State agency may only combine data from individual areas that are
collectively considered to be a Labor Market Area by DOL.
(6) Duration of waiver approvals. In general, FNS will approve
waivers for one year. FNS may approve waivers for a shorter period at
the State agency's request and waivers under paragraph (f)(2)(ii) of
this section will not be approved for a period beyond the fiscal year
in which the waiver is implemented.
(7) Areas with limited data or evidence. Waiver requests for an
area for which standard BLS data or a BLS-cooperating agency data is
limited or unavailable, such as a reservation area or U.S. Territory,
are not required to conform to the criteria for approval under
paragraphs (f)(2), (f)(3), (f)(4), (f)(5) and (f)(6) of this section.
The supporting data or evidence provided by the State must correspond
to the requested area.
(i) FNS may approve waivers for these areas if the requests are
supported by sufficient data or evidence, such as:
(A) Estimated unemployment rate based on available data from BLS
and Census Bureau's American Community Survey;
(B) A low and declining employment-to-population ratio;
(C) A lack of jobs in declining occupations or industries; or
(D) An academic study or other publication describing the area as
lacking a sufficient number of jobs to provide employment for its
residents.
(ii) In areas with limited data or evidence, such as reservation
areas or U.S. Territories, FNS may allow the State agency to combine
data from individual areas to waive a group of areas if the State
agency demonstrates that the areas are economically integrated.
* * * * *
0
3. In Sec. 273.24, revise paragraph (h) to read as follows:
* * * * *
(h) Adjustments. FNS will make adjustments as follows:
(1) Caseload adjustments. FNS will adjust the number of exemptions
estimated for a State agency under paragraph (g)(3) of this section
during a fiscal year if the number of SNAP recipients in the State
varies from the State's caseload by more than 10 percent, as estimated
by FNS.
(2) Exemption adjustments. During each fiscal year, FNS will
increase or decrease the number of exemptions allocated to a State
agency based on the difference between the number of exemptions used by
the State for the preceding fiscal year and the number of exemptions
estimated for the State for the preceding fiscal year under paragraphs
(g)(3) and (h)(1) of this section. The increase or decrease will only
apply for the fiscal year in which the adjustment is made. For example:
(i) If the State agency uses fewer exemptions in the preceding
fiscal year than were estimated for the State agency by FNS for the
preceding fiscal year under paragraphs (g)(3) and (h)(1) of this
section, FNS will increase the number of exemptions allocated to the
State agency for the current fiscal year by the
[[Page 993]]
difference to determine the adjusted exemption amount.
(ii) If the State agency uses more exemptions in the preceding
fiscal year than were estimated for the State agency by FNS for the
preceding fiscal year under paragraphs (g)(3) and (h)(1) of this
section, FNS will decrease the number of exemptions allocated to the
State agency for the current fiscal year by the difference to determine
the adjusted exemption amount.
* * * * *
Dated: December 20, 2018.
Brandon Lipps,
Acting Deputy Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2018-28059 Filed 1-31-19; 8:45 am]
BILLING CODE 3410-30-P
