95-635. Food Stamp Program: Simplification of Program Rules  

  • [Federal Register Volume 60, Number 7 (Wednesday, January 11, 1995)]
    [Proposed Rules]
    [Pages 2703-2716]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-635]
    
    
    ========================================================================
    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.
    
    ========================================================================
    
    
    Federal Register / Vol. 60, No. 7 / Wednesday, January 11, 1995 / 
    Proposed Rules
    
    [[Page 2703]]
    
    
    
    DEPARTMENT OF AGRICULTURE
    
    Food and Consumer Service
    
    7 CFR Parts 273 and 274
    
    [Amendment No. 364]
    RIN 0584-AB60
    
    
    Food Stamp Program: Simplification of Program Rules
    
    AGENCY: Food and Consumer Service, USDA.
    
    ACTION: Proposed rule.
    
    -----------------------------------------------------------------------
    
    SUMMARY: This action proposes several changes in Food Stamp Program 
    rules relating to social security numbers, combined allotments, 
    residency, excluded resources, contract income, self-employment 
    expenses, certification periods, the notice of adverse action, 
    recertification, and suspension under retrospective budgeting. The 
    changes are being proposed as means to simplify regulatory requirements 
    and to increase consistency with requirements of the Aid to Families 
    with Dependent Children Program.
    
    DATES: Comments must be received on or before March 13, 1995 to be 
    assured of consideration.
    
    ADDRESSES: Comments should be submitted to Judith M. Seymour, 
    Eligibility and Certification Regulation Section, Certification Policy 
    Branch, Program Development Division, Food and Consumer Service, USDA, 
    3101 Park Center Drive, Alexandria, Virginia 22302. Comments may also 
    be datafaxed to the attention of Ms. Seymour at (703) 305-2454. All 
    written comments will be open for public inspection at the office of 
    the Food and Consumer Service during regular business hours (8:30 a.m. 
    to 5 p.m., Monday through Friday) at 3101 Park Center Drive, 
    Alexandria, Virginia, Room 720.
    
    FOR FURTHER INFORMATION CONTACT: Questions regarding the proposed 
    rulemaking should be addressed to Ms. Seymour at the above address or 
    by telephone at (703) 305-2496.
    
    SUPPLEMENTARY INFORMATION:
    
    Executive Order 12866
    
        This rule has been determined to be significant and was reviewed by 
    the Office of Management and Budget under Executive order 12866.
    
    Executive Order 12372
    
        The Food Stamp Program is listed in the Catalog of Federal Domestic 
    Assistance under No. 10.551. For the reasons set forth in the final 
    rule in 7 CFR 3015, Subpart V and related Notice (48 FR 29115), this 
    Program is excluded from the scope of Executive Order 12372 which 
    requires intergovernmental consultation with State and local officials.
    
    Regulatory Flexibility Act
    
        This rule has been reviewed with regard to the requirements of the 
    Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Ellen Haas, 
    Under Secretary for Food, Nutrition, and Consumer Services, has 
    certified that this proposed rule does not have a significant economic 
    impact on a substantial number of small entities. State and local 
    welfare agencies will be the most affected to the extent that they 
    administer the Program.
    
    Paperwork Reduction Act
    
        Pursuant to 7 CFR 273.14, State welfare agencies must recertify 
    eligible households whose certification periods have expired. 
    Households are required to submit a recertification form. This rule 
    authorizes State agencies to use a shortened or modified form of the 
    application used for initial certification. The reporting and 
    recordkeeping burden associated with the application, certification and 
    continued eligibility of food stamp applicants is approved by the 
    Office of Management and Budget under OMB No. 0584-0064. OMB approval 
    of the recertification procedures contained in Sec. 273.14 of this 
    proposed action is not necessary because the procedures do not add new 
    or additional requirements on State agencies. In fact, the proposal 
    gives State agencies more flexibility in recertifying households.
        The public reporting burden for the collection of information 
    associated with the application, certification and continued 
    eligibility of food stamp applicants is estimated to average .1561 
    hours per response, including the time for reviewing instructions, 
    searching existing data sources, gathering and maintaining the data 
    needed, and completing and reviewing the collection of information. 
    Send comments regarding this burden estimate or any aspect of the 
    information collection requirements, including suggestions for reducing 
    the burden, to the Certification Policy Branch, Program Development 
    Division (address above) and to the Office of Information and 
    Regulatory Affairs, OMB, Room 3208, New Executive Office Building, 
    Washington, DC 20503, Attn: Laura Oliven, Desk Officer for FCS.
    
    Executive Order 12778
    
        This rule has been reviewed under Executive Order 12778, Civil 
    Justice Reform. This rule is intended to have preemptive effect with 
    respect to any State or local laws, regulations or policies which 
    conflict with its provisions or which would otherwise impede its full 
    implementation. This rule is not intended to have retroactive effect 
    unless so specified in the ``Effective Date'' paragraph of this 
    preamble. Prior to any judicial challenge to the provisions of this 
    rule or the application of its provisions, all applicable 
    administrative procedures must be exhausted. In the Food Stamp Program 
    the administrative procedures are as follows: (1) for Program benefit 
    recipients--State administrative procedures issued pursuant to 7 U.S.C. 
    2020(e)(1) and 7 CFR 273.15; (2) for State agencies--administrative 
    procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for 
    rules related to non-quality control (QC) liabilities) or Part 284 (for 
    rules related to QC liabilities); (3) for Program retailers and 
    wholesalers--administrative procedures issued pursuant to 7 U.S.C. 2023 
    set out at 7 CFR 278.8.
    
    Background
    
        In this rule, the Department proposes to revise Food Stamp Program 
    regulations in response to State agency requests for waivers of Program 
    requirements and suggestions for simplification of rules. In some 
    cases, we are proposing to amend the regulations to incorporate 
    guidance we have already provided to State agencies. In other 
    instances, we are proposing to modify Program rules to provide more
    
    [[Page 2704]]
    
    consistency with requirements in the Aid to Families with Dependent 
    Children (AFDC) program. Each proposal is discussed in detail below.
    
    Social Security Numbers for Newborns--7 CFR 273.2(f)(1)(v), 7 CFR 
    273.6(b)
    
        Current regulations at 7 CFR 273.6(a) require an applicant 
    household to provide the State agency with the social security number 
    (SSN) of each household member. A household member who does not have an 
    SSN must apply for one before he or she can be certified, unless there 
    is good cause for such failure as provided in 7 CFR 273.6(d). If a 
    household member refuses or fails without good cause to apply for an 
    SSN, the individual is ineligible to participate.
        Under a program instituted by the Social Security Administration 
    (SSA) called ``Enumeration at Birth (EAB),'' 45 CFR 205.52, parents of 
    a newborn child may apply for an SSN for the child when the child is 
    born if this service is available at the hospital. When providing 
    information for the child's birth certificate, the parent may request 
    that the child be assigned an SSN and issued an SSN card as part of the 
    birth registration process. The State records that information and 
    subsequently provides enumeration data to SSA in Baltimore via magnetic 
    tape. The time it takes for States to transmit data to SSA varies. 
    However, SSA generally prints and mails cards within 3 days of receipt 
    of the required data.
        Most hospitals give parents Form SSA-2853, ``Message From Social 
    Security.'' This receipt form, which describes the EAB process and how 
    long it will take to receive a card, contains the child's name and is 
    signed and dated by a hospital official. It is accepted by State 
    agencies for welfare or other public assistance purposes.
        Current program regulations do not address the EAB system. Food and 
    Consumer Service (FCS) regional offices were informed in a memorandum 
    dated July 28, 1989, to instruct State agencies that the Form SSA-2853 
    (OP4) could be used as verification of application for an SSN if the 
    State agency has other documentation connecting the baby named on the 
    form to the household. We are proposing an amendment to 7 CFR 
    273.2(f)(1)(v) to reflect that a completed Form SSA-2853 is acceptable 
    as proof of SSN application for an infant. However, the proposed 
    amendment would give State agencies and households more flexibility in 
    this area than the 1989 policy memo granted.
        In cases in which a household is unable to provide or apply for an 
    SSN for a newborn baby immediately after the baby's birth, Section 
    273.6(d) currently allows for good cause exceptions to the SSN 
    requirement. The regulations allow the member without an SSN to 
    participate for one month in addition to the month of application. 
    However, good cause does not include delays due to illness, lack of 
    transportation or temporary absences of that household member from the 
    household, and good cause must be shown monthly in order for the 
    household member to continue to participate.
        Several State agencies have requested and been granted waivers to 
    allow households up to four months following the month in which a baby 
    is born to apply for an SSN for a newborn. In justifying the need for a 
    waiver, the State agencies cited the difficulty some households 
    experience in obtaining a certified copy of the birth certificate 
    needed to apply for an SSN.
        To avoid a delay in adding a new member to the household, we 
    propose to amend 7 CFR 273.6(b) to provide that, in cases in which a 
    household is unable to provide or apply for an SSN for a newborn baby 
    immediately after the baby's birth, a household may provide proof of 
    application for an SSN for a newborn infant at its next 
    recertification. If the household is unable to provide an SSN or proof 
    of application at its next recertification, the State agency shall 
    determine if the good cause provisions of 7 CFR 273.6(d) are 
    applicable.
    
    Combined Allotments--7 CFR 273.2(i) and 274.2(b)
    
        Current regulations at 7 CFR 274.2(b)(3) provide for the issuance 
    of a combined allotment (prorated benefits for the application month 
    and full benefits for the subsequent month) for eligible households 
    applying after the 15th of the month that qualify for expedited 
    service. The regulations require that to receive the combined 
    allotment, a household must supply all required verification within the 
    5-day expedited service timeframe. If the household does not supply all 
    required verification within the expedited service timeframe, the 
    household receives a prorated amount for the initial month issued 
    within 5 days of application (with waived verification, if necessary, 
    to meet the expedited timeframe) and a second allotment for the 
    subsequent month issued after all necessary verification has been 
    obtained.
        On March 31, 1992, the U.S. District Court for the Northern 
    District of Georgia ruled against USDA in Johnson v. USDA and Madigan. 
    This case concerned combined allotments for expedited service. The 
    Court agreed with the plaintiffs that Section 8(c)(3)(B) of the Food 
    Stamp Act, 7 U.S.C. 2017(c)(3)(B), requires that if an eligible 
    household applies for food stamps after the fifteenth of the month and 
    is entitled to expedited service, it must receive the prorated initial 
    month's allotment and the full allotment for the second month within 
    the expedited timeframe. In such a case, any additional requirements 
    would be postponed until the end of the second month.
        In light of the District Court's decision, the Department chose to 
    alter national food stamp policy regarding combined allotments. On June 
    16, 1993, the Department issued a policy memorandum to its regional 
    Food Stamp Program directors informing them of the change in policy. 
    The regional directors were instructed to inform the State agencies in 
    their regions of the change. The Department is proposing in this rule 
    to incorporate the provisions of the policy memorandum into the Food 
    Stamp Program's regulations.
        Currently, the regulations regarding combined allotments are 
    contained at 7 CFR 274.2(b) (2), (3), and (4). In order to simplify 
    these regulations, the Department is proposing to move the combined 
    allotments requirements out of 7 CFR 274.2(b) and into 7 CFR 273.2(i). 
    In 7 CFR 274.2, the Department is proposing to delete paragraphs (b) 
    (2), (3), and (4), and redesignate paragraphs (b)(1), (c), (d), and (e) 
    as paragraphs (b), (d), (e), and (f), respectively. The Department is 
    proposing to add two sentences to the end of redesignated paragraph (b) 
    which will contain the requirements for issuing benefits to expedited 
    service households. The Department is also proposing to add a new 
    paragraph (c) which will reference the combined allotment regulations 
    at 7 CFR 273.2(i). In 7 CFR 273.2(i)(4)(iii), the Department is 
    proposing to revise paragraph (C), and to add two new paragraphs, (D) 
    and (E). 7 CFR 273.2(i)(4)(iii)(C) will include the requirements 
    currently contained at 7 CFR 274.2(b)(2), which concern combined 
    issuance for households certified under normal processing timeframes. 7 
    CFR 273.2(i)(4)(iii)(D) shall contain the new requirement that a 
    household which applies after the 15th of the month and is processed 
    under expedited service procedures shall be issued a combined allotment 
    consisting of prorated benefits for the initial month of application 
    and benefits for the first full month of participation.
    
    [[Page 2705]]
    
    In these cases, any unsatisfied verification requirement would be 
    postponed until the end of the second month. 7 CFR 273.2(i)(4)(iii)(E) 
    shall include the requirements currently contained at 7 CFR 
    274.2(b)(4), which concern households not entitled to combined 
    allotments.
        The regulations at 7 CFR 273.2(i)(4)(iii)(B) currently require that 
    households which apply after the fifteenth of the month and are 
    assigned certification periods of longer than one month, must have all 
    postponed verification completed before it can be issued its second 
    month's benefits. Migrant households which apply after the fifteenth of 
    the month and are assigned certification periods of longer than one 
    month must provide all postponed verification from within-State sources 
    before the second month's benefits can be issued, and must provide all 
    postponed verification from out-of-State sources before the third 
    month's benefits are issued. Because of the change in policy regarding 
    combined allotments, eligible households that are entitled to expedited 
    service and apply after the 15th of the month must now receive a 
    combined allotment which includes their first and second month's 
    benefits. Since these households will have already received their 
    second month's benefits, postponed verification must now be completed 
    prior to the third month of benefits. As noted above, this is current 
    policy for migrants in regard to completing out-of-State verification, 
    and the Department is proposing to broaden the requirement to make it 
    mandatory for all households which apply after the fifteenth of the 
    month and are assigned certification periods of longer than one month. 
    Therefore, the Department is proposing to amend 7 CFR 
    273.2(i)(4)(iii)(B) accordingly. The Department is also proposing to 
    make a conforming amendment to 7 CFR 273.10(a)(1)(iv), which contains a 
    similar verification requirement to that currently contained in 7 CFR 
    273.2(i)(4)(iii)(B).
        Current regulations at 7 CFR 273.2(i)(4)(iii)(B) require that when 
    households which apply for benefits after the 15th of the month provide 
    the required postponed verification, the State agency shall issue the 
    second month's benefits within five working days from receipt of the 
    verification or the first day of the second calendar month, whichever 
    is later. The Department is proposing to remove this requirement.
        Current regulations at 7 CFR 273.2(i)(4)(iii)(C) require that 
    households which are eligible for expedited service and that apply 
    after the fifteenth of the month must be issued their second month's 
    benefits on the first working day of the second calendar month, not the 
    day benefits would normally be issued in a State using staggered 
    issuance. Because of the potentially lengthy period of time between 
    issuance of the combined allotment for the month of expedited service 
    and the first full month of participation and issuance of a second 
    allotment for the third month of participation if benefits are issued 
    to the household in a State using staggered issuance, the Department 
    has decided to retain the issuance requirement of 7 CFR 
    273.2(i)(4)(iii)(C) for the third month of benefits. Therefore, the 
    Department is proposing to add a new paragraph 7 CFR 
    273.2(i)(4)(iii)(F) which will require that in States with staggered 
    issuance, households be issued their third allotment by the first 
    working day of the third calendar month. For allotments in subsequent 
    months, State agencies will employ their normal issuance mechanisms.
        Current regulations at 7 CFR 273.2(i)(4)(i)(B) require that 
    households entitled to expedited service furnish a social security 
    number (SSN) for each household member before the first full month of 
    participation. Households that are unable to provide the required SSNs 
    or who do not have one prior to the first full month of participation 
    can only participate if they satisfy the good cause requirements with 
    respect to SSNs specified in 7 CFR 273.6(d).
        Because of the change in combined allotment policy, eligible 
    households that apply after the fifteenth of the month and are entitled 
    to expedited service can receive their second month's benefits without 
    having to furnish an SSN. The Department is proposing to revise the 
    regulations at 7 CFR 273.2(i)(4)(i)(B) to require that households 
    entitled to expedited service that apply after the fifteenth of the 
    month furnish an SSN for each person prior to the third month of 
    participation.
        Current regulations at 7 CFR 273.2(i)(4)(iii) provide that 
    households that are certified for expedited service and have postponed 
    verification requirements may be certified for either the month of 
    application or for longer periods, at the State agency's option. 7 CFR 
    273.2(i)(4)(iii)(A) currently addresses verification requirements for 
    households that are certified only for the month of application, and 7 
    CFR 273.2(i)(4)(iii)(B) currently addresses verification requirements 
    for households that are certified for longer than the month of 
    application. Neither section of the regulations addresses verification 
    requirements for households that apply before the 15th of the month. 
    The Department is proposing to eliminate this deficiency by amending 7 
    CFR 273.2(i)(4)(iii)(A) to address verification requirements for 
    households that apply on or before the 15th of the month and to amend 7 
    CFR 273.2(i)(4)(iii)(B) to address verification requirements for 
    households that apply after the 15th of the month.
        Current regulations at 7 CFR 273.2(i)(4)(iii) give State agencies 
    the option of requesting any household eligible for expedited service 
    which applies after the 15th of the month to submit a second 
    application (at the time of initial certification) if the household's 
    verification requirements have been postponed. Under current policy, 
    that second application would be denied for the first month and acted 
    on for the second month. However, now that expedited service households 
    will be receiving a combined allotment of their first and second 
    month's benefits, under our proposal, the second application would be 
    denied for both the first and second months and acted on for the third 
    month. The Department believes that current regulations do not allow 
    for this procedure and is, therefore, proposing to amend the 
    regulations at 7 CFR 273.10(a)(2)(i) to require that if a household 
    files an application for recertification in any month in which it is 
    receiving food stamp benefits, the State agency shall act on that 
    application for eligibility and benefit purposes starting with the 
    first month after the current certification period expires.
    
    Residency--7 CFR 273.3
    
        Current rules at 7 CFR 273.3 require food stamp households to live 
    in the project area in which they apply unless the State agency has 
    made arrangements for particular households to apply in nearby 
    specified project areas. A proposed rule on Consistency for Food Stamp 
    Program, Aid to Families with Dependent Children, and Adult Assistance 
    Programs (the Consistency rule), published September 29, 1987, at 52 FR 
    36549, would have permitted State agencies to allow Statewide 
    residency. The change was proposed to increase consistency with 
    requirements of the AFDC and the Adult Assistance programs under Titles 
    I, X, XIV, and XVI of the Social Security Act, which require that 
    applicants reside in the State, but have no project area requirement. 
    Under that proposed rule, State agencies would still have been able to 
    designate limited project areas and restrict where a given household 
    could apply. That proposed rule was not
    
    [[Page 2706]]
    
    published as a final rulemaking because of the initiation of a broader 
    AFDC/food stamp consistency effort. However, in the interest of Program 
    simplification, the Department has decided to repropose the provision. 
    We are proposing, therefore, to amend 7 CFR 273.3 to give State 
    agencies the option of permitting households to live anywhere in the 
    State rather than in the project area in which they apply for benefits.
        Comments received on this provision of the proposed Consistency 
    rule were favorable. One commenter did ask, however, that State 
    agencies which continue to require an applicant to apply in a 
    particular project area office be required to forward the application 
    from an ``incorrect'' office to a ``correct'' receiving office. The 
    regulations at 7 CFR 273.2(c)(2)(ii) provide that if a household files 
    an application at the incorrect office within a project area, the State 
    agency shall forward the application to the correct office the same 
    day. The application processing timeframes begin when the correct 
    office receives the application. This provision of 273.2(c)(2)(ii) 
    would continue to apply to State agencies which require applicants to 
    apply in a particular project area. We are proposing, however, to add a 
    new paragraph (iii) to 7 CFR 273.2(c)(2) to address application 
    processing timeframes in States which opt to allow Statewide residency. 
    If a State agency does not require that households apply in specified 
    project areas, the application processing timeframes would begin the 
    day the application is received by any office.
        The Department is also proposing to make a second amendment to 7 
    CFR 273.3 to clarify the requirements for transferring food stamp cases 
    between project areas. Several commenters on the Consistency rule 
    requested this clarification. The Department is proposing to amend 7 
    CFR 273.3 to state that when a household moves within a State, the 
    State agency may either require the household to reapply in the new 
    project area or transfer the case from the previous project area to the 
    new one and continue the household's certification without requiring a 
    new application. If the State agency chooses to transfer the case, it 
    must act on changes in the household circumstances resulting from the 
    move in accordance with 7 CFR 273.12(c) or 7 CFR 273.21. The State 
    agency must also ensure that potential client abuse of case transfers 
    from project area to project area is identifiable through the State 
    agency's system of duplicate participation checks required by 7 CFR 
    272.4(f). Finally, the State agency must develop transfer procedures to 
    guarantee that the transfer of a case from one project area to another 
    does not affect the household adversely. These proposed requirements 
    are consistent with the requirements for transferring cases between 
    project areas stated in Policy Interpretation Response System (PIRS) 
    Category 3 Policy Memo 3-91-03 issued December 17, 1990.
    
    Funeral Agreements--7 CFR 273.8(e)(2)
    
        Regulations at 7 CFR 273.8(e)(2) exclude the value of one burial 
    plot per household member from resource consideration. Questions have 
    arisen concerning the treatment of pre-paid funeral agreements. In the 
    Consistency rule, we proposed to adopt a funeral agreement policy 
    similar to that of the AFDC program. AFDC regulations at 45 CFR 
    233.20(a)(3)(i)(4) exclude from resource consideration ``bona fide 
    funeral agreements (as defined and within limits specified in the State 
    plan) of up to a total of $1,500 of equity value or a lower limit 
    specified in the State plan for each member of the assistance unit.'' 
    We proposed in the Consistency rule to amend 7 CFR 273.8(e) to allow 
    for an exemption from resource consideration of up to $1,500 for bona 
    fide, pre-paid funeral agreements that are accessible to the household. 
    Funeral agreements that are inaccessible to a household were not 
    affected by the proposed rule, as they are excluded from resource 
    consideration under the provisions of 7 CFR 273.8(e)(8).
        There were 26 comments on the funeral agreement provision in the 
    proposed rule. Many commenters mistakenly thought that the proposed 
    provision would limit the exclusion of inaccessible funeral agreements 
    to a maximum of $1,500. Others believed the $1,500 limit on the 
    exclusion of funds in accessible funeral agreements should be either 
    raised or removed.
        In this rule, the Department is again proposing the funeral 
    agreement exclusion. We are retaining the $1,500 limit on the exclusion 
    in order to remain consistent with AFDC and to lessen the likelihood of 
    abuse of the exemption. Therefore, the Department is proposing to amend 
    7 CFR 273.8(e)(2) to exclude as a resource the value of one bona fide 
    funeral agreement up to $1,500 in equity value per household member.
    
    Determining Income--7 CFR 273.10(c)(2)
    
        Current regulations at 7 CFR 273.10(c)(2)(iii) provide that 
    households receiving Federal assistance payments (PA) or State general 
    assistance (GA), Supplemental Security Income (SSI), or Old-Age, 
    Survivors, and Disability Insurance (OASDI) benefits on a recurring 
    monthly basis shall not have their monthly income from these sources 
    varied merely because mailing cycles may cause two payments to be 
    received in one month and none in the next month.
        There are other instances in which a household may receive a 
    disproportionate share of a regular stream of income in a particular 
    month. For example, an employer may issue checks early because the 
    normal payday falls on a weekend or holiday. We have granted waivers to 
    several State agencies to allow income such as State employment checks 
    received monthly or twice a month to be counted in the month the income 
    is intended to cover rather than the month in which it is received.
        We are proposing to amend 7 CFR 273.10(c)(2)(iii) to specify that 
    income received monthly or semimonthly (twice a month, not every two 
    weeks) shall be counted in the month it is intended to cover rather 
    than the month in which it is received when an extra check is received 
    in one month because of changes in pay dates for reasons such as 
    weekends or holidays.
    
    Contract Income--7 CFR 273.10(c)(3)(ii)
    
        Section 5(f)(1)(A) of the Food Stamp Act, 7 U.S.C. 2014(f)(1)(A), 
    provides that households which derive their annual income (income 
    intended to meet the household's needs for the whole year) from 
    contract or self-employment shall have the income averaged over 12 
    months. Current regulations at 273.10(c)(3)(ii) implement this 
    provision of the Act, stating that ``[h]ouseholds which, by contract or 
    self-employment, derive their annual income in a period of time shorter 
    than 1 year shall have that income averaged over a 12-month period, 
    provided the income from the contract is not received on an hourly or 
    piecework basis.'' The regulations at 7 CFR 273.11(a)(1)(iii) address 
    how self-employment income which is not a household's annual income and 
    is intended to meet the household's needs for only part of the year 
    should be handled. 7 CFR 273.11(a)(1)(iii) provides that ``[s]elf-
    employment income which is intended to meet the household's needs for 
    only part of the year shall be averaged over the period of time the 
    income is intended to cover.'' The regulations, however, fail to 
    specify how contract income which is not a household's annual income 
    and is intended to meet the household's needs for only part of the year 
    should be handled. This omission in the regulations has been
    
    [[Page 2707]]
    
    brought to our attention in several waiver requests from State 
    agencies. We are taking action to rectify this deficiency in the 
    regulations by proposing to amend 7 CFR 273.10(c)(3)(ii) to clarify 
    that contract income which is not the household's annual income and is 
    not paid on an hourly or piecework basis shall be averaged over the 
    period the income is intended to cover.
    
    Certification Periods--7 CFR 273.10(f)
    
        In October 1991, the Department solicited suggestions from State 
    agencies for simplifying the recertification process. Several State 
    agencies recommended changes in the requirements for certification 
    periods to allow more flexibility in aligning the food stamp 
    recertification and the PA/GA redetermination in joint cases. We have 
    granted waivers to State agencies to facilitate matching the PA/GA and 
    food stamp periods, including extension of food stamp certification 
    periods for up to 16 months.
        Alignment of the food stamp recertification with the PA/GA 
    redetermination has long been a problem for State agencies. Section 
    3(c) of the Food Stamp Act, 7 U.S.C. 2012(c), requires that the food 
    stamp certification period of a GA or PA household coincide with the 
    period for which the household is certified for GA or PA. However, 
    because PA/GA and Food Stamp Program processing standards and the 
    period for which benefits must be provided are not the same, it is 
    often difficult to get the certification periods for the programs to 
    coincide.
        Some State agencies have requested that the Food Stamp Program 
    return to the policy of open-ended certification periods which existed 
    prior to the Food Stamp Act of 1977 so that the food stamp portion of 
    the case may be recertified at the same time as the PA/GA 
    redetermination. Section 11(e)(4) of the Act, 7 U.S.C. 2020(e)(4), 
    however, requires that households be assigned definite certification 
    periods and thus precludes the use of open-ended certification periods. 
    It is also clear in the legislative history of the Act that Congress 
    intended for households participating in the Food Stamp Program to be 
    subject to distinct certification periods. The House of Representatives 
    Report No. 464, 95th Cong., 1st Sess. (August 10, 1977), states on page 
    277 that ``* * * in no event should [the mandate that the food stamp 
    certification period be identical to the PA eligibility period] lead to 
    food stamp eligibility for public assistance recipients being a 
    perpetual entitlement as their assistance might be instead of being 
    subject to distinct entitlements marked off by certification period[s] 
    * * *'' We feel, therefore, that the intent of the Act clearly 
    prohibits us from returning to open-ended certification periods.
        We are proposing, however, three alternative means of assisting 
    State agencies in aligning PA/GA and food stamp certification periods. 
    First, we are proposing to amend 7 CFR 273.10(f)(3) to allow the 
    following procedure: When a household is certified for food stamp 
    eligibility prior to an initial determination of eligibility for PA/GA, 
    the State agency shall assign the household a food stamp certification 
    period consistent with the household's circumstances. When the PA/GA is 
    approved, the State agency shall reevaluate the household's food stamp 
    eligibility. The household will not be required to submit a new 
    application or undergo another face-to-face interview. If eligibility 
    factors remain the same, the food stamp certification period can be 
    extended up to an additional 12 months to align the household's food 
    stamp recertification with its PA/GA redetermination. The State agency 
    would be required to send a notice informing a household of any such 
    changes in its certification period. At the end of the extended 
    certification period the household must be sent a Notice of Expiration 
    and must be recertified before being determined eligible for further 
    food stamp assistance, even if the PA/GA redetermination has not been 
    completed. In the event that a household's PA/GA redetermination is not 
    completed at the end of the food stamp certification period and, as a 
    result, the household's food stamp and PA/GA certification periods are 
    no longer aligned, the State agency may employ the procedure described 
    above to once again align those certification periods.
        Our second proposal for aiding State agencies in aligning PA/GA and 
    food stamp certification periods is to allow State agencies to 
    recertify a household currently receiving food stamps when the 
    household comes into a State office to report a change in circumstances 
    for PA/GA purposes. At that time, the State agency would require the 
    household to fill out an application for food stamps and to undergo a 
    face-to-face interview. If the household is determined eligible to 
    continue receiving food stamps, its current certification period would 
    end and a new one would be assigned.
        Our third proposal for aiding State agencies in aligning PA/GA and 
    food stamp certification periods would allow State agencies to assign 
    indeterminate certification periods to households certified for both 
    food stamps and PA/GA. Under this proposal, a household's food stamp 
    certification period would be set to expire one month after the 
    household's scheduled PA/GA redetermination, so long as the period of 
    food stamp certification did not exceed 12 months. Therefore, if a food 
    stamp certification were set to expire in seven months, that being the 
    month after the month the PA redetermination was due, but the PA 
    redetermination was not done on time, the food stamp certification 
    period could be postponed up to an additional five months to align food 
    stamp recertification and PA/GA redetermination. In the twelfth month, 
    the household would have to be recertified for food stamp purposes, 
    even if the PA redetermination had not yet been completed.
        The Department is proposing to amend 7 CFR 273.10(f)(3) to permit 
    State agencies to implement the three above-described procedures.
    
    Calculating Boarder Income--7 CFR 273.11(b)
    
        Current rules at 7 CFR 273.11(b) provide that State agencies must 
    use the maximum food stamp allotment as a basis of establishing the 
    cost of doing business for income received from boarders when the 
    household does not own a commercial boardinghouse. Boarders are not 
    included as members of the household to which they are paying room and 
    board. The households receiving the room and board payments must 
    include those payments as self-employment income, but can exclude that 
    portion of the payments equal to the cost of doing business. The rules 
    provide that the cost of doing business is either (1) the maximum food 
    stamp allotment for a household size equal to the number of boarders; 
    or (2) the actual documented cost of providing room and meals, if that 
    cost exceeds the maximum allotment. The Department is proposing to 
    revise current regulations to provide State agencies with an additional 
    option for calculating border income.
        The Consistency rule included a provision that would have required 
    State agencies to use, in place of the maximum allotment method, a flat 
    percentage equal to 75 percent of the boarder-generated income as the 
    means of establishing the cost of doing business for income received 
    from boarders. The proposal allowed the household to use actual 
    expenses if it could verify that its actual expenses were higher than 
    the flat percentage. This is currently the policy of the AFDC
    
    [[Page 2708]]
    
    program as indicated in 45 CFR 233.20(a)(6)(v)(B).
        There were only a few comments received on this proposal in the 
    Consistency rule. The majority opposed the proposal, arguing that use 
    of the fixed percentage would further burden households by requiring 
    them to document all their actual expenses or face the possibility of 
    overstating the income they receive from boarders.
        Several State agencies have obtained waivers to allow use of a flat 
    percentage to calculate allowable costs of doing business for 
    households with boarders. It is our understanding that other State 
    agencies prefer the maximum allotment method.
        In this rule, we are proposing to add a new paragraph, 7 CFR 
    273.11(b)(1)(ii)(C), to give State agencies the option of using actual 
    costs, the maximum allotment for a household size equal to the number 
    of boarders, a flat amount, or a percentage of income from boarders to 
    determine the cost of doing business of households with boarders. 
    Households must be given the opportunity to claim actual costs. We are 
    not proposing a percentage limit at this time. Current waivers specify 
    75 percent, 60 percent, or the limit used in the State's AFDC program. 
    We are seeking comments concerning an appropriate percentage.
    
    Day Care Providers--Sec. 273.11(b)(2)
    
        The Department is also proposing to allow households who are day 
    care providers to use a standard per individual amount as a cost of 
    doing business. Under current regulations, at 7 CFR 273.11(a)(4)(i), 
    households which provide in-home day care can claim the cost of meals 
    fed to individuals in their care as a cost of doing business, provided 
    they can document the cost of each meal. Several State agencies have 
    obtained waivers to use a flat dollar amount, such as $5 a day, or to 
    use the FCS Child and Adult Care Food Program reimbursement rates, 
    which are updated annually to reflect the cost of meals as specified in 
    7 CFR 26.4(g).
        We believe use of a standard reimbursement rate for the cost of 
    providing day care would eliminate the burden on day care providers to 
    document itemized costs incurred for producing the income and would 
    increase the benefits for households that fail to adequately document 
    business costs. Use of a standard would also decrease the amount of 
    time needed to process these self-employment cases and reduce payment 
    errors. Therefore, we are proposing to amend 7 CFR 273.11(b) to add a 
    new paragraph, (2), to allow use of a standard amount for determining 
    the self-employment expenses of households providing day care. State 
    agencies would be required to inform households of their opportunity to 
    verify actual meal expenses and use actual costs if higher than the 
    fixed amount. When establishing a standard amount, State agencies 
    should take into account the differences in cost for full-day and part-
    day care. Households that are reimbursed for the cost of meals fed to 
    individuals in their care, for example through the FCS Child and Adult 
    Care Food Program, cannot claim the standard but may claim actual 
    expenses that exceed the amount of their reimbursement.
    
    Exemption From Providing a Notice of Adverse Action--7 CFR 273.13(b)
    
        Current regulations at 7 CFR 273.13(a) require State agencies to 
    send a notice of adverse action (NOAA) to a household prior to any 
    action to reduce or terminate the household's benefits, except as 
    provided in 7 CFR 273.13(b). That section does not include an exception 
    to the NOAA requirements when mail sent to a household is returned with 
    no known forwarding address. The AFDC regulations at 45 CFR 
    205.10(a)(4)(ii) do not require a notice of adverse action in this 
    situation. In the Consistency rule, the Department proposed to add an 
    exemption from sending an NOAA if agency mail is returned with no known 
    forwarding address. Since it is unlikely that the Postal Service can 
    deliver a NOAA mailed to an address which is no longer correct, it is 
    reasonable to specify in regulations that no notice is required if 
    delivery cannot be reasonably expected.
        Few comments were received on this proposal and most were 
    favorable. Therefore, the Department is reproposing the amendment to 7 
    CFR 273.13(b) to provide that no NOAA is required if the household's 
    mail has been returned with no known forwarding address.
    
    Recertification--7 CFR 273.14
    
        Background. Over the years, the Department has become aware, 
    through State agency waiver requests and other means, of the need to 
    simplify the food stamp recertification process. The need for 
    simplification has become especially important in this time of tight 
    budgetary constraints and of increased demand on the time of State 
    eligibility workers. In this rule, the Department is proposing to 
    simplify recertification procedures in several areas.
        State agencies have requested more flexibility in developing 
    recertification procedures. We understand the need of State agencies to 
    be able to adopt procedures that are consistent with those of other 
    programs and which can be administered in conjunction with computerized 
    systems. However, the Department is limited in the extent to which it 
    can give State agencies more flexibility because of the provisions of 
    the Food Stamp Act. There are two main provisions in the Act that 
    govern the timeframes for recertification. Section 11(e)(4), 7 U.S.C. 
    2020(e)(4), provides that each participating household must receive a 
    notice of expiration of its certification prior to the start of the 
    last month of its certification period. That section of the Act also 
    provides that a household which files an application no later than 15 
    days prior to the end of the certification period shall, if found to be 
    still eligible, receive its allotment no later than one month after the 
    receipt of the last allotment. Section 11(e)(4) allows modification of 
    the timeframes for monthly reporting households.
        We are proposing changes to the recertification process that will 
    provide State agencies with more flexibility and at the same time 
    retain the right of a household to receive uninterrupted benefits if it 
    applies by the filing deadline and meets interview and verification 
    requirements within the required timeframes. In exchange for the 
    increased flexibility, State agencies would be responsible for 
    providing households sufficient notice and time to comply with 
    application, interview, and verification requirements. The proposed 
    changes are discussed below.
        In accordance with Sec. 273.14(a) of the current regulations, 
    households that meet all eligibility requirements must have their 
    recertifications approved or denied by the end of their current 
    certification period and, if recertified, be provided uninterrupted 
    benefits. The regulations give State agencies two options for handling 
    the cases of households who do not provide verification or attend an 
    interview as required for recertification. The State agency may either 
    deny the household's application at the end of the current 
    certification period or within 30 days after the date the application 
    was filed. State agencies also have the option of establishing 
    verification timeframes. A household which does not meet all the 
    verification requirements within required timeframes loses its right to 
    uninterrupted benefits but can receive benefits within 30 days after 
    the date the application was filed. These requirements are stated in 7 
    CFR 273.14 (c) and (d). State agencies have found these procedures 
    confusing and have requested that they be simplified.
    
    [[Page 2709]]
    
        In this rulemaking we are proposing to reorganize the 
    recertification section in an attempt to provide a clearer expression 
    of the requirements. The proposed revision of 7 CFR 273.14(a) contains 
    general introductory statements regarding actions the household and the 
    State agency must take to ensure that eligible households receive 
    uninterrupted benefits. We propose to include in revised 7 CFR 
    273.14(b) requirements for the notice of expiration, the 
    recertification form, the interview and verification. In revised 7 CFR 
    273.14(c), we propose to include the filing deadlines for timely 
    applications for recertification. These and other revisions are 
    discussed below.
    1. Recertification Process
        a. Notice of expiration (NOE). Several State agencies have 
    requested that we reduce the mandated content of the NOE. Under current 
    regulations at 7 CFR 273.14(b)(3), the following information is 
    required in the NOE:
    
        (1) The date the current certification period ends;
        (2) The date by which the household must file an application for 
    recertification to receive uninterrupted benefits;
        (3) Notice that the household must appear for an interview, 
    which will be scheduled on or after the date the application is 
    timely filed in order to receive uninterrupted benefits;
        (4) Notice that the household is responsible for rescheduling a 
    missed interview;
        (5) Notice that the household must complete the interview and 
    provide all required verification in order to receive uninterrupted 
    benefits;
        (6) Notice of the number of days the household has for 
    submitting missing verification;
        (7) Notice of the household's right to request an application 
    and have the State agency accept an application as long as it is 
    signed and contains a legible name and address;
        (8) The address of the office where the application must be 
    filed;
        (9) Notice of the consequences of failure to comply with the 
    notice of expiration;
        (10) Notice of the household's right to file the application by 
    mail or through an authorized representative;
        (11) Notice of the household's right to request a fair hearing; 
    and
        (12) Notice of the fact that any household consisting only of 
    Supplemental Security Income (SSI) applicants or recipients is 
    entitled to apply for food stamp recertification at an office of the 
    Social Security Administration.
    
        We have reviewed the requirements for the NOE and have determined 
    that none of the requirements in the current rule can be eliminated 
    because they are required either by the provisions of the Act or 
    judicial orders. Therefore, we have retained all of the current 
    recertification requirements in the proposed revised section 
    273.14(b)(1).
        b. Recertification form. In response to our request for ideas for 
    simplifying the recertification process, several State agencies 
    suggested that we develop a short recertification form to be used in 
    conjunction with current case file information. Several State agencies 
    have requested and been granted waivers to allow use of a modified 
    application form for recertification. The forms developed by the State 
    agencies do not require households to provide information which is 
    already available in the case file.
        This rule proposes to revise 7 CFR 273.14(b)(2) to allow State 
    agencies to use a modified application form for recertifying 
    households. This form could only be used for those households which 
    apply for recertification before the end of their current certification 
    period. FCS does not plan to develop a model recertification form, so 
    individual State agencies must devise this form themselves. However, 
    because Section 11(e)(2) of the Act, 7 U.S.C. 2020(e)(2), requires that 
    the Department approve all deviations from the uniform national food 
    stamp application, all State agency-designed recertification 
    applications must be approved by FCS before the forms can be used.
        To allow State agencies as much flexibility as possible in the 
    design of their modified recertification forms, we are not specifying 
    the exact questions that must be asked. The State agency should design 
    an application that suits its own needs, whether it be a short form on 
    which the household notes changes since its last certification, or a 
    computer printout of household circumstances annotated by the 
    caseworker, or some other type of form. Whichever type of form the 
    State agency chooses to use, it must be able to obtain from that form, 
    or have available in the case record, all information concerning 
    household composition, income and resources needed to redetermine 
    eligibility and the correct benefit amount for the first month of the 
    new certification period. However, while we are not specifying 
    questions that must be on the forms, we would require that all 
    recertification forms include the information required by 7 CFR 
    273.2(b)(1) (i), (ii), (iii), (iv) and (v). This information is 
    required by Section 11(e)(2) of the Act, 7 U.S.C. 2020(e)(2), and 
    apprises applicants of their rights and responsibilities under the 
    Program. The information regarding the Income and Eligibility 
    Verification System in 7 CFR 273.2(b)(2) may be provided on a separate 
    form.
        c. Interviews. Under current regulations, State agencies are 
    required to conduct face-to-face interviews with households applying 
    for recertification. Several State agencies suggested that we modify 
    the requirement that all households have face-to-face interviews. Some 
    State agencies suggested eliminating the face-to-face interview 
    entirely or reserve the office interview for those households that do 
    not have telephones. Other State agencies indicated that case workers 
    should be allowed to decide on a case-by-case basis which households 
    should be interviewed. Other suggestions included eliminating the 
    interview requirement entirely for households that are not error-prone, 
    eliminating recertification interviews unless there is questionable 
    information that cannot be resolved in any other manner, and giving 
    State agencies the option of not interviewing households receiving AFDC 
    if they are not due for an AFDC redetermination.
        We consider the face-to-face interview to be an important source of 
    information about household circumstances. However, we have granted 
    waivers on a State-by-State basis to substitute a telephone interview 
    for the face-to-face interview for households with very stable 
    circumstances, such as households in which all members are elderly or 
    disabled and have no earned income. In an effort to be responsive to 
    State agency requests for simplification and flexibility, we are 
    proposing to revise 7 CFR 273.14(b)(3) to allow telephone interviews in 
    place of face-to-face interviews at recertification for some categories 
    of households. We are not allowing State agencies to substitute 
    telephone interviews for face-to-face interviews on a case-by-case 
    basis. Section 11(e)(2), 7 U.S.C. 2020(e)(2), currently provides for 
    the waiver of the face-to-face interview on a case-by-case basis for 
    those households for whom a visit to the food stamp office would be a 
    hardship. We feel, however, that to allow caseworkers the option of 
    waiving a face-to-face interview for any household based only on that 
    caseworker's personal determination that a face-to-face interview is 
    not needed may compromise the right to equal treatment guaranteed all 
    food stamp recipients under Section 11(c) of the Act, 7 U.S.C. 2020(c).
        We are proposing to revise 7 CFR 273.14(b)(3) to allow State 
    agencies to interview by telephone any household that has no earned 
    income and whose members are all elderly or disabled. We are also 
    proposing to give State agencies the option of conducting a face-to-
    face interview only once a year with a food stamp household that 
    receives PA or
    
    [[Page 2710]]
    
    GA. The interview could be conducted at the same time the household is 
    scheduled for its PA or GA face-to-face interview. At any other 
    recertification during that time period, the State agency may choose to 
    interview the household by telephone. However, the State agency would 
    be required to grant a face-to-face interview to any household that 
    requests one.
        Several State agencies suggested that group interviews or 
    videotapes be used whenever possible to cover areas of the 
    recertification process common to all recipients. Current regulations 
    do not prohibit the use of group interviews for informing households 
    about the Program and Program rights and responsibilities. However, a 
    certification worker must obtain information about specific household 
    circumstances in a setting which guarantees confidentiality and 
    privacy, as required by 7 CFR 273.2(e)(1).
        d. Verification. Current regulations at 7 CFR 273.14(c)(3) give 
    State agencies the option of establishing timeframes for submission of 
    verification information. To increase consistency with procedures for 
    initial applications and provide sufficient time for households to 
    obtain the required verification information, we are proposing to 
    revise 7 CFR 273.14(b) to add a new paragraph (4) to require State 
    agencies to allow households a minimum of 10 days in which to satisfy 
    verification requirements.
        Current regulations at 7 CFR 273.2(f)(8)(i) require State agencies 
    to verify at recertification a change in income or actual utility 
    expenses if the source has changed or the amount has changed by more 
    than $25, and previously unreported medical expenses and total 
    recurring medical expenses which have changed by $25 or more. 7 CFR 
    273.2(f)(8)(i) also requires that State agencies not verify income, 
    total medical expenses, or actual utility expenses which are unchanged 
    or have changed by $25 or less, unless the information is ``incomplete, 
    inaccurate, inconsistent, or outdated.'' Several State agencies have 
    requested that we simplify verification requirements at recertification 
    by requiring them to only reverify information that is questionable, 
    rather than information that is ``incomplete, inaccurate, inconsistent 
    or outdated.'' The Department does not see that there is any 
    substantive difference between the terms ``incomplete, inaccurate, 
    inconsistent or outdated'' and the term ``questionable.'' Presumably, 
    State agency caseworkers would consider questionable any information 
    that is incomplete, inaccurate, inconsistent, or outdated. Therefore, 
    if replacing the words ``incomplete, inaccurate, inconsistent, or 
    outdated'' with the word ``questionable'' will simplify Program 
    administration for State agencies, we see no objection to doing so. We 
    are proposing, therefore, to amend 7 CFR 273.2(f)(8)(i)(A) and (C), and 
    (ii) to replace the terms ``incomplete, inaccurate, inconsistent or 
    outdated'' with the term ``questionable.''
        e. Filing deadline. Currently, 7 CFR 273.14(c)(1) provides that for 
    monthly reporting households the deadline for filing an application for 
    recertification is the normal date for filing a monthly report. Several 
    State agencies have requested that, for the purpose of administrative 
    efficiency and flexibility, the Department make the filing deadline for 
    monthly reporters the 15th of the last month of the household's 
    certification period (recertification month), the same as it is for 
    nonmonthly reporting households.
        We are proposing to revise 7 CFR 273.14(c) to give State agencies 
    the option of making the filing deadline for monthly reporters either 
    the 15th of the recertification month or the household's normal date 
    for filing a monthly report.
    2. Timely Processing
        Current regulations at 7 CFR 273.14(d) provide that the State 
    agency shall act to provide uninterrupted benefits to any household 
    determined eligible after the household timely filed an application, 
    attended an interview, and submitted all necessary verification 
    information. Action to approve or deny a recertification application 
    must be taken by the end of the certification period if the household 
    has met all required application procedures. Households which are 
    certified for one month or are in the second month of a two-month 
    certification period must receive benefits within 30 days of their last 
    issuance. Other households must receive benefits in their normal 
    issuance cycle if they have met all processing requirements. If 
    verification requirements are unsatisfied at the end of the 
    recertification month, the State agency must provide benefits within 
    five working days after the household supplies the missing verification 
    information. If the State agency is at fault for delaying the 
    household's benefits, it must provide benefits as soon as the household 
    is determined eligible. Current regulations at 7 CFR 273.14(e) provide 
    that eligible households which have complied with all requirements are 
    entitled to restored benefits if the State agency does not provide 
    benefits in the first month of the new certification period.
        7 CFR 273.14(f)(1) currently addresses failure of the household to 
    appear for an interview or provide verification information as 
    required. 7 CFR 273.14(f)(2) provides requirements for households that 
    do not file a timely application.
        To clarify recertification requirements that address a variety of 
    situations that may occur in application processing, we are proposing 
    to reorganize sections 7 CFR 273.14(d), (e), and (f) into two new 
    sections 7 CFR 273.14(d) and (e). New section 7 CFR 273.14(d) would 
    combine all of the provisions of the previous sections relating to 
    timeframes for providing benefits when all processing deadlines are 
    met. New section 7 CFR 273.14(e) would address situations in which the 
    household or the State agency fail to meet processing deadlines.
    3. Delayed Processing
        We are proposing to include in new section 273.14(e) requirements 
    for providing benefits when delays in application processing occur. 
    Section 273.14(e)(1) will address delays caused by the State agency, 
    and section 273.14(e)(2) will address delays caused by the household.
        We are also proposing a change in provisions for handling the 
    recertification of households which do not comply with the requirements 
    for interviews or verification. Under current regulations at 7 CFR 
    273.14(a)(3), a State agency may deny a household's application for 
    recertification at the time a household's certification period expires 
    or within 30 days after the date the application was filed as long as 
    the household has had adequate time to satisfy verification 
    requirements. Under current regulations at 7 CFR 273.14(a)(2), a 
    household that fails to attend a scheduled interview or to provide 
    required verification information within required timeframes loses its 
    right to uninterrupted benefits but cannot be denied eligibility at 
    that time, unless the household fails to cooperate or the household's 
    certification period has elapsed.
        To increase consistency with AFDC procedures and provide maximum 
    flexibility to State agencies, we are proposing to include in revised 
    section 7 CFR 273.14(e) a provision to allow State agencies the option 
    of denying eligibility to households as soon as a failure to comply 
    with the interview or verification requirement occurs. The State agency 
    would be required to send the household a denial notice informing it 
    that its application for recertification has been denied. The notice 
    would have to contain the reason for the denial, the action required to 
    continue
    
    [[Page 2711]]
    
    participation, the date by which it must be accomplished, the 
    consequences of failure to comply, notification that the household's 
    participation will be reinstated if it complies within 30 days after 
    its application for recertification was filed and is found eligible, 
    and that the household has a right to a fair hearing. If the household 
    subsequently requests an interview or provides the required 
    verification information within 30 days of the date of its 
    recertification application and is found eligible, the State agency 
    must reinstate the household. Under this option, benefits must be 
    provided within 30 days after the application for recertification was 
    filed or within 10 days of the date the household provided the required 
    verification information or completed the interview, whichever is 
    later.
        Current regulations at 273.14(f)(2) provide that any application 
    not submitted in a timely manner shall be treated as an application for 
    initial certification, except for verification requirements. If the 
    household does not submit a recertification form before its 
    certification period expires, the household's benefits for the first 
    month of the new certification period are prorated in accordance with 7 
    CFR 273.10(a)(2). However, Section 13916 of the 1993 Leland Act amended 
    Section 8(c)(2)(B) of the Act, 7 U.S.C. 2017(c)(2)(B), to eliminate 
    proration of first month's benefits if a household is recertified for 
    food stamps after a break in participation of less than one month. 
    Therefore, if a household submits an application for recertification 
    after its certification period has expired, but before the end of the 
    month after expiration, the application is not considered an initial 
    application and the household's benefits for that first month are not 
    prorated. We are proposing to include this new provision in revised 
    section 7 CFR 273.14(e)(2)(ii).
    4. Expedited Service
        Section 11(e)(2) of the Act, 7 U.S.C. 2020(e)(2), states that when 
    a household contacts a food stamp office to make a request for food 
    stamp assistance, it shall be permitted to file an application form. 
    There is no distinction made in the law between an application for 
    initial certification and an application for recertification. Section 
    11(e)(9) of the Act, 7 U.S.C. 2020(e)(9), requires State agencies to 
    provide coupons within five days after the date of application to 
    destitute migrant or seasonal farmworkers, households with gross 
    incomes less than $150 a month and liquid resources that do not exceed 
    $100; homeless households; and households whose combined gross income 
    and liquid resources are less than their monthly rent, mortgage and 
    utilities. Since implementation of the expedited service provision of 
    the Act, questions have arisen concerning whether expedited service 
    requirements apply at recertification.
        Nothing in the legislative history of the Act gives any indication 
    as to whether Congress intended households eligible for expedited 
    service to receive such service every time they are certified for the 
    Program, only at initial certification, or when there has been a break 
    in benefits. We originally interpreted the Act and regulations to 
    require that expedited service screening requirements apply only at 
    initial certification. Since the law makes no distinction between 
    applications for initial certification and recertification, we have 
    concluded that expedited service provisions should apply to all 
    households at recertification. This policy was prompted by the 
    realization that some households that move between the last time they 
    were certified and the date of their required recertification might not 
    receive uninterrupted benefits. We believe it was the intent of 
    Congress to provide expedited service when a household would not 
    receive its next allotment by its next normal issuance cycle.
        Many State agencies have argued that expedited service at 
    recertification is detrimental to recipient households because it 
    interferes with their normal issuance cycle. Instead of receiving their 
    benefits at the usual time each month, households recertified for 
    expedited service often receive their benefits for the first month of 
    the new certification period much earlier than normal. The next month 
    they have to wait longer to receive benefits. In addition, to obtain 
    expedited benefits, some households have to pick up their coupons at 
    their local assistance office instead of having them mailed, which is 
    an inconvenience to the household. We have determined that because of 
    the requirements of Section 11(e)(2) of the Act, households may not be 
    asked to waive their right to expedited service. Therefore, State 
    agencies are not allowed to mail expedited issuance coupons, even at 
    the household's request if such action would result in failure to meet 
    the five-day requirement for delivery of benefits.
        State agencies have also argued that expediting issuance for 
    households at recertification leads to an increased administrative 
    burden. In some States, more than 50 percent of participating 
    households now meet the criteria for expedited service. This has placed 
    a tremendous burden on State agencies experiencing severe budgetary 
    constraints, making it difficult for them to meet the 30-day and 5-day 
    requirements for initial applications. State agencies argue that 
    applying expedited screening requirements at recertification only 
    increases the application processing problem without providing a 
    substantial benefit to most households.
        In light of the issues discussed above, we have again reexamined 
    our policy and have concluded that not all households must receive 
    expedited service at recertification. Section 11(e)(4) of the Act, 7 
    U.S.C. 2020(e)(4), states that households that apply in a timely 
    fashion must receive their benefits no later than one month after the 
    receipt of their last allotment. We believe that this provision of the 
    law, which ensures that a household that punctually applies for 
    recertification will continue to receive its benefits in its normal 
    issuance cycle, should take precedence over the requirement for 
    expedited service.
        We are proposing, therefore, to amend the regulations by including 
    a new section, 7 CFR 273.14(f), which will clarify that households 
    which punctually apply for recertification, or who apply late but 
    within the certification period, are not entitled to expedited service. 
    However, households which do not apply for recertification until the 
    month after their certification period ends are entitled to expedited 
    service if they are otherwise eligible for such service. A conforming 
    amendment to 7 CFR 273.2(i)(4)(iv) is also proposed.
    
    Retrospective Suspension--7 CFR 273.21(n)
    
        Current regulations at 7 CFR 273.21(n) allow State agencies the 
    option of suspending issuance of benefits to a household that becomes 
    ineligible for one month. State agencies that do not choose suspension 
    must terminate a household's certification when it becomes ineligible, 
    and the household must reapply to reestablish its eligibility for the 
    Program. Current regulations at 7 CFR 273.21(o) provide that when a 
    household is suspended based on prospective ineligibility, the State 
    agency shall not count any noncontinuing circumstances which caused the 
    prospective ineligibility when calculating the household's benefits 
    retrospectively in a subsequent month.
        The need for suspension typically occurs when a household paid 
    weekly (or biweekly) receives an extra check in a month with five (or 
    three) paydays. Under current policy, State agencies which opt to 
    suspend rather than terminate a household's participation
    
    [[Page 2712]]
    
    must anticipate prospectively which month the household will be 
    ineligible and suspend the household's participation for that month. 
    Many State agencies have received waivers that allow them to suspend 
    the household for the issuance month corresponding to the budget month 
    in which the household receives the extra check. This is the method 
    used for suspension in the AFDC program. In an effort to achieve 
    consistency between the AFDC and Food Stamp Programs, we are proposing 
    to amend 7 CFR 273.21(n) to allow State agencies the option of 
    prospective or retrospective suspension. The option to suspend and the 
    method of suspending must be applied Statewide.
    
    Implementation
    
        The Department is proposing that the provisions of this rulemaking 
    must be implemented no later than 180 days after publication of the 
    final rule. The Department also proposes to allow variances resulting 
    from implementation of the provisions of the final rule to be excluded 
    from error analysis for 90 days from the required implementation date, 
    in accordance with 7 CFR 275.12(d)(2)(vii).
    
    List of Subjects
    
    7 CFR Part 273
    
        Administrative practice and procedure, Aliens, Claims, Food Stamps, 
    Fraud, Grant programs--social programs, Penalties, Records, Reporting 
    and recordkeeping requirements, Social Security.
    
    7 CFR Part 274
    
        Administrative practice and procedure, Food Stamps, Fraud, Grant 
    programs--social programs, Reporting and recordkeeping requirements, 
    State liabilities.
    
        Accordingly, 7 CFR parts 273 and 274 are proposed to be amended as 
    follows:
        1. The authority citation of parts 273 and 274 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 2011-2032.
    
    PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
    
        2. In Sec. 273.2:
        a. A new paragraph (c)(2)(iii) is added.
        b. A new sentence is added to the end of paragraph (f)(1)(v).
        c. The last sentence of paragraph (f)(8)(i)(A) is amended by 
    removing the words ``incomplete, inaccurate, inconsistent, or 
    outdated'' and adding in their place the word ``questionable''.
        d. The second sentence of paragraph (f)(8)(i)(C) is amended by 
    removing the words ``incomplete, inaccurate, inconsistent, or 
    outdated'' and adding in their place the word ``questionable''.
        e. Paragraph (f)(8)(ii) is amended by removing the words 
    ``incomplete, inaccurate, inconsistent, or outdated'' and adding in 
    their place the word ``questionable''.
        f. Paragraphs (i)(4)(iii)(A), (i)(4)(iii)(B), and (i)(4)(iii)(C) 
    are revised.
        g. New paragraphs (i)(4)(iii)(D), (i)(4)(iii)(E), and 
    (i)(4)(iii)(F) are added.
        h. A new sentence is added at the end of paragraph (i)(4)(iv).
        The additions and revisions read as follows:
    
    
    Sec. 273.2.   Application processing.
    
    * * * * *
        (c) Filing an application. * * *
        (2) Contacting the food stamp office. * * *
        (iii) In State agencies that elect to have Statewide residency, as 
    provided in Sec. 273.3, the application processing timeframes begin 
    when the application is filed in any food stamp office in the State.
    * * * * *
        (f) Verification. * * *
        (1) Mandatory verification. * * *
        (v) Social security numbers. * * * A completed SSA Form 2853 shall 
    be considered proof of application for an SSN for a newborn infant.
    * * * * *
        (i) Expedited Service. * * *
        (4) Special procedures for expediting service. * * *
        (iii) * * *
        (A) For households applying on or before the 15th of the month, the 
    State agency may assign a one-month certification period or assign a 
    normal certification period. Satisfaction of the verification 
    requirements may be postponed until the second month of participation. 
    If a one-month certification period is assigned, the notice of 
    eligibility may be combined with the notice of expiration or a separate 
    notice may be sent. The notice of eligibility must explain that the 
    household has to satisfy any verification requirements that were 
    postponed. For subsequent months, the household must reapply and 
    satisfy any verification requirements which were postponed or be 
    certified under normal processing standards. During the interview, the 
    State agency should give the household a recertification form and 
    schedule an appointment for a recertification interview. If the 
    household does not satisfy the postponed verification requirements and 
    does not appear for the interview, the State agency does not need to 
    contact the household again.
        (B) For households applying after the 15th of the month, the State 
    agency may assign a 2-month certification period or a normal 
    certification period of no more than 12 months. Verification may be 
    postponed until the third month of participation, if necessary, to meet 
    the expedited timeframe. If a two-month certification period is 
    assigned, the notice of eligibility may be combined with the notice of 
    expiration or a separate notice may be sent. The notice of eligibility 
    must explain that the household is obligated to satisfy the 
    verification requirements that were postponed. For subsequent months, 
    the household must reapply and satisfy the verification requirements 
    which were postponed or be certified under normal processing standards. 
    During the interview, the State agency should give the household a 
    recertification form and schedule an appointment for a recertification 
    interview. If the household does not satisfy the postponed verification 
    requirements and does not attend the interview, the State agency does 
    not need to contact the household again. When a certification period of 
    longer than 2 months is assigned and verification is postponed, 
    households must be sent a notice of eligibility advising that no 
    benefits for the third month will be issued until the postponed 
    verification requirements are satisfied. The notice must also advise 
    the household that if the verification process results in changes in 
    the household's eligibility or level of benefits, the State agency will 
    act on those changes without advance notice of adverse action. If the 
    State agency chooses to exercise the option to require a second 
    application in accordance with the introductory text of paragraph 
    (i)(4)(iii) of this section, it shall act on that application starting 
    with the first month after the current certification period expires. If 
    the household is eligible, the State agency shall issue benefits within 
    five working days of the receipt of the necessary verification. When 
    the postponed verification requirements are not completed within 30 
    days after the end of the household's last certification period, the 
    State agency shall terminate the household's participation and shall 
    issue no further benefits.
        (C) Households which apply for initial month benefits (as described 
    in Sec. 273.10(a)) after the 15th of the month, are processed under 
    standard processing timeframes, have completed the application and have 
    satisfied all verification requirements within 30 days of the date of 
    application, and have been determined eligible to receive
    
    [[Page 2713]]
    
    benefits for the initial month of application and the next subsequent 
    month, shall be issued a combined allotment which includes prorated 
    benefits for the month of application and benefits for the first full 
    month of participation. The benefits shall be issued in accordance with 
    Sec. 274.2(c) of this chapter.
        (D) Households which apply for initial benefits (as described in 
    Sec. 273.10(a)) after the 15th of the month, are processed under 
    expedited service procedures, have completed the application, and have 
    been determined eligible to receive benefits for the initial month and 
    the next subsequent month, shall receive a combined allotment 
    consisting of prorated benefits for the initial month of application 
    and benefits for the first full month of participation within the 
    expedited service timeframe. If necessary, verification will be 
    postponed to meet the expedited timeframe. The benefits shall be issued 
    in accordance with Sec. 274.2(c) of this chapter.
        (E) The provisions of paragraphs (i)(4)(iii)(C) and (i)(4)(iii)(D) 
    of this section do not apply to households which have been determined 
    ineligible to receive benefits for the month of application or the 
    following month, or to households who have not satisfied the postponed 
    verification requirements. Households eligible for expedited service 
    may, however, receive benefits for the initial month and next 
    subsequent month under the verification standards of paragraph (i)(4) 
    of this section. Benefits of less than ten dollars ($10) shall not be 
    issued to a household under the provisions of paragraphs (i)(4)(iii)(C) 
    and (i)(4)(iii)(D) of this section.
        (F) In a State with staggered issuance, if a household applies 
    after the 15th of the month and is certified for more than two months, 
    it shall be issued its third month's benefits on the first working day 
    of the third calendar month, not the staggered issuance date. If the 
    State agency chooses to exercise the option to require a second 
    application in accordance with paragraph (i)(4)(iii) of this section 
    and receives the application before the third month, it shall not deny 
    the application but hold it pending until the third month. The State 
    agency will issue the third month's benefits within five working days 
    from receipt of the necessary verification information but not before 
    the first day of the month. If the postponed verification requirements 
    are not completed within 45 days of the date of application, the State 
    agency shall terminate the household's participation and shall issue no 
    further benefits.
        (iv) * * * State agencies shall apply the provisions of this 
    section at recertification if a household does not apply for 
    recertification until the month after its certification period ends.
    * * * * *
        3. In Sec. 273.3:
        a. The existing undesignated paragraph is designated as paragraph 
    (a), and is further amended by removing the first sentence and adding 
    two sentences in its place.
        b. Paragraph (b) is added.
        The additions read as follows:
    
    
    Sec. 273.3  Residency.
    
        (a) A household shall live in the State in which it files an 
    application for participation. The State agency may also require a 
    household to file an application for participation in a specified 
    project area (as defined in Sec. 271.2 of this chapter) or office 
    within the State. * * *
        (b) When a household moves within the State, the State agency may 
    require the household to reapply in the new project area or it may 
    transfer the household's casefile to the new project area and continue 
    the household's certification without reapplication. If the State 
    agency chooses to transfer the case, it shall act on changes in 
    household circumstances resulting from the move in accordance with 
    Sec. 273.12(c) or Sec. 273.21. It shall also ensure that duplicate 
    participation does not occur in accordance with Sec. 272.4(f) of this 
    chapter, and that the transfer of a household's case shall not 
    adversely affect the household.
        4. In Sec. 273.6, a new paragraph (b)(4) is added to read as 
    follows:
    
    
    Sec. 273.6  Social security numbers.
    
    * * * * *
        (b) Obtaining SSNs for food stamp household members. * * *
        (4) If the household is unable to provide proof of application for 
    an SSN for a newborn, the household must provide the SSN or proof of 
    application at the next recertification. If the household is unable at 
    the next recertification to provide proof of application, the State 
    agency shall determine if the good cause provisions of paragraph (d) of 
    this section are applicable.
    * * * * *
        5. In Sec. 273.8, the first sentence of paragraph (e)(2) is revised 
    to read as follows:
    
    
    Sec. 273.8  Resource eligibility standards.
    
    * * * * *
        (e) Exclusions from resources. * * *
        (2) Household goods, personal effects, the cash value of life 
    insurance policies, one burial plot per household member, and the value 
    of one bona fide funeral agreement per household member, provided that 
    the agreement does not exceed $1500 in equity value, in which event the 
    value above $1500 is counted. * * *
    * * * * *
        7. In Sec. 273.10:
        a. The second sentence of paragraph (a)(1)(iv) is amended by adding 
    the words ``second full'' after the words ``benefits for the''.
        b. Paragraph (a)(1)(iv) is further amended by removing the third 
    and fourth sentences.
        c. Paragraph (c)(2)(iii) is revised.
        d. A new sentence is added at the end of paragraph (c)(3)(ii);
        e. A new sentence is added to the end of paragraph (f)(3), and four 
    new paragraphs, (f)(3)(i), (f)(3)(ii), (f)(3)(iii), and (f)(3)(iv) are 
    added; and
        f. The first sentence of paragraph (g)(2) is amended by adding the 
    words ``if the household has complied with all recertification 
    requirements'' after ``current certification period.''
        The additions and revision read as follows:
    
    
    Sec. 273.10  Determining household eligibility and benefit levels.
    
    * * * * *
        (c) Determining income. * * *
        (2) Income only in month received. * * *
        (iii) Households receiving income on a recurring monthly or 
    semimonthly basis shall not have their monthly income varied merely 
    because of changes in mailing cycles or pay dates or because weekends 
    or holidays cause additional payments to be received in a month.
        (3) Income averaging. * * *
        (ii) * * * Contract income which is not the household's annual 
    income and is not paid on an hourly or piecework basis shall be 
    prorated over the period the income is intended to cover.
    * * * * *
        (f) Certification periods. * * *
        (3) * * * To align the PA or GA and food stamp recertification, the 
    State agency may do the following:
        (i) When the household's eligibility for PA or GA has been 
    determined, the State agency may review the household's food stamp 
    eligibility. If eligibility factors remain the same, the household's 
    certification period can be extended up to an additional 12 months to 
    align the household's food stamp recertification with its PA/GA 
    redetermination. The State agency would be required to send a notice 
    informing the household of changes in its certification period. At the 
    end of the
    
    [[Page 2714]]
    
    extended certification period the household must be sent a Notice of 
    Expiration and must be recertified before being eligible for further 
    food stamp assistance, even if the PA/GA redetermination is not set to 
    expire. This procedure may also be used to align a household's PA/GA 
    and food stamp certification periods if those certification periods are 
    no longer aligned as a result of the household's failure to comply with 
    the PA/GA redetermination requirements.
        (ii) Except as specified in paragraph (f)(3)(iii) of this section, 
    State agencies may assign households food stamp certification periods 
    that expire the month following the household's required PA/GA 
    redetermination, provided the food stamp certification period does not 
    exceed 1 year. If a PA/GA household has not had its PA/GA 
    redetermination by the end of the 11th month following its initial 
    certification or its last redetermination for food stamps, the State 
    agency shall send the household a notice of expiration of its food 
    stamp certification period and recertify the household in accordance 
    with the provisions of Sec. 274.14 of this chapter.
        (iii) State agencies which have a monthly reporting system and, 
    therefore, allow more than 1 year to elapse before redetermining their 
    PA/GA cases, but which can predict with certainty in which month the 
    PA/GA redetermination will take place, may assign PA/GA food stamp 
    households definite food stamp certification periods that expire at the 
    end of the month following the month in which the PA/GA redetermination 
    is scheduled. If for any reason the PA/GA redetermination is not made 
    by the end of the month for which it was scheduled, the State agency 
    shall send the household a notice of expiration of its food stamp 
    certification period and recertify the household in accordance with the 
    provisions of Sec. 274.14 of this chapter.
        (iv) If a household reports a change in circumstance for PA/GA, the 
    State agency may review the household's food stamp eligibility at the 
    same time. The household will be required to submit a recertification 
    form for food stamps and to undergo a face-to-face interview. If the 
    household is determined eligible, its old certification period shall be 
    terminated and a new period not to exceed 12 months shall be assigned.
    * * * * *
        8. In Sec. 273.11.
        a. The heading of paragraph (b) is revised;
        b. The introductory text of paragraph (b)(1)(ii) is revised.
        c. Paragraph (b)(1)(ii)(B) is amended by removing the period at the 
    end of the paragraph and adding in its place a semicolon and the word 
    ``or''.
        d. A new paragraph (b)(1)(ii)(C) is added;
        e. A new paragraph (b)(2) is added.
        The revisions and additions are as follows:
    
    
    Sec. 273.11  Action on Households with Special Circumstances.
    
    * * * * *
        (b) Households with income from boarders and day care. (1) 
    Household with boarders. * * *
        (ii) Cost of doing business. In determining the income received 
    from boarders, the State agency shall exclude the portion of the 
    boarder payment that is a cost of doing business. Provided that the 
    amount allowed as a cost of doing business shall not exceed the payment 
    the household receives from the boarder for lodging and meals, the cost 
    of doing business shall be equal to one of the following:
    * * * * *
        (C) a flat amount or fixed percentage of the gross income, provided 
    that the method used to determine the flat amount or fixed percentage 
    is objective and justifiable and is stated in the State's food stamp 
    manual. However, if the applicant or recipient requests use of the 
    verified actual amount, the State agency shall use the actual amount.
    * * * * *
        (2) Income from day care. Households deriving income from day care 
    may elect one of the following methods of determining the cost of meals 
    provided to the individuals:
        (i) Actual documented costs of meals;
        (ii) A standard per day amount based on estimated per meal costs; 
    or
        (iii) Current reimbursement amounts used in the Child and Adult 
    Care Food Program.
    * * * * *
        9. In Sec. 273.13, a new paragraph (b)(15) is added to read as 
    follows:
    
    
    Sec. 273.13  Notice of adverse action.
    
    * * * * *
        (b) Exemptions from notice. * * *
        (15) The household's address is unknown and mail directed to it has 
    been returned by the post office indicating no known forwarding 
    address. The household's benefits must, however, be made available to 
    it within five working days if the household contacts the State agency 
    during the payment period covered by a returned benefit.
        10. Sec. 273.14 is revised to read as follows:
    
    
    Sec. 273.14  Recertification
    
        (a) General. No household may participate beyond the expiration of 
    the certification period assigned in accordance with Sec. 273.10(f) 
    without a determination of eligibility for a new period. The State 
    agency must establish procedures for notifying households of expiration 
    dates, providing recertification forms, scheduling interviews, and 
    recertifying eligible households prior to the expiration of 
    certification periods. Households must apply for recertification and 
    comply with interview and verification requirements.
        (b) Recertification process.
        (1) Notice of expiration.
        (i) The State agency shall provide households certified for one 
    month or certified in the second month of a two-month certification 
    period a notice of expiration (NOE) at the time of certification. The 
    State agency shall provide other households the NOE before the first 
    day of the last month of the certification period, but not before the 
    first day of the next- to-the-last month. Jointly processed PA and GA 
    households need not receive a separate food stamp notice if they are 
    recertified for food stamps at the same time as their PA or GA 
    redetermination.
        (ii) Each State agency shall develop a NOE. A model form (Form FCS-
    439) is available from FCS. The NOE must contain the following:
        (A) the date the certification period expires;
        (B) the date by which a household must submit an application for 
    recertification in order to receive uninterrupted benefits;
        (C) the consequences of failure to apply for recertification in a 
    timely manner;
        (D) notice of the right to receive an application form upon request 
    and to have it accepted as long as it contains a signature and a 
    legible name and address;
        (E) information on alternative submission methods available to 
    households which cannot come into the certification office or do not 
    have an authorized representative and how to exercise these options;
        (F) the address of the office where the application must be filed;
        (G) the household's right to request a fair hearing if the 
    recertification is denied or if the household objects to the benefit 
    issuance;
        (H) notice that any household consisting only of Supplemental 
    Security Income (SSI) applicants or recipients is entitled to apply for 
    food stamp recertification at an office of the Social Security 
    Administration;
    
    [[Page 2715]]
    
        (I) notice that failure to attend an interview may result in delay 
    or denial of benefits; and
        (J) notice that the household is responsible for rescheduling a 
    missed interview and for providing required verification information.
        (iii) To expedite the recertification process, State agencies are 
    encouraged to send a recertification form, an interview appointment 
    letter, and a statement of needed verification required by 
    Sec. 273.2(c)(5) with the NOE.
        (2) Recertification form.
        (i) The State agency shall provide each household with a 
    recertification form to obtain all information needed to determine 
    eligibility and benefits for a new certification period. This form can 
    only be used by households which are applying for recertification 
    before the end of their current certification period. Recertification 
    forms must be approved by FCS as required by Sec. 273.2(b)(3). The 
    recertification form must elicit from the household sufficient 
    information regarding household composition, income and resources that, 
    when added to information already contained in the casefile, will 
    ensure an accurate determination of eligibility and benefits. The 
    information required by Sec. 273.2(b)(1) (i), (ii), (iii), (iv) and (v) 
    must be included on the recertification form. The information regarding 
    the Income and Eligibility Verification System in Sec. 273.2(b)(2) may 
    be provided on a separate form. A combined form for PA and GA 
    households may be used in accordance with Sec. 273.2(j). Monthly 
    reporting households shall be recertified as provided in 
    Sec. 273.21(q). State agencies may use the same form for households 
    required to report changes in circumstances and monthly reporting 
    households.
        (ii) The State agency may request that the household bring the 
    recertification form to the interview or return the form by a specified 
    date (not less than 15 days after receipt of the form).
        (3) Interview. (i) As part of the recertification process, the 
    State agency shall conduct a face-to-face interview with a member of 
    each household. The face-to-face interview may be waived in accordance 
    with Sec. 273.2(e). The State agency may also waive the face-to-face 
    interview for a household that has no earned income if all of its 
    members are elderly or disabled. The State agency has the option of 
    conducting a telephone interview or a home visit for those households 
    for whom the office interview is waived. However, a household that 
    requests a face-to-face interview must be granted one.
        (ii) If a household receives PA/GA and will be recertified more 
    than once in a 12-month period, the State agency may choose to conduct 
    a face-to-face interview with that household only once during that 
    period. The face-to-face interview shall be conducted at the same time 
    that the household receives a face-to-face interview for PA/GA 
    purposes. At any other recertification during that year period, the 
    State agency may interview the household by telephone or conduct a home 
    visit. However, a household that requests a face-to-face interview must 
    be granted one.
        (iii) If a household does not appear for an interview scheduled 
    before it has submitted a recertification form, the State agency must 
    reschedule the interview. State agencies shall schedule interviews so 
    that the household has at least 10 days after the interview in which to 
    provide verification before the certification period expires.
        (4) Verification. Information provided by the household shall be 
    verified in accordance with Sec. 273.2(f)(8)(i). The State agency shall 
    provide the household a notice of required verification as provided in 
    273.2(c)(5) and notify the household of the date by which the 
    verification requirements must be satisfied. The household must be 
    allowed a minimum of 10 days to provide required verification 
    information.
        (c) Timely application for recertification.
        (1) Households reporting required changes in circumstances that are 
    certified for one month or certified in the second month of a two-month 
    certification period shall have 15 days from the date the NOE is 
    received to file a timely application for recertification.
        (2) Other households reporting required changes in circumstances 
    that submit applications by the 15th day of the last month of the 
    certification period shall be considered to have made a timely 
    application for recertification.
        (3) For monthly reporting households, the filing deadline shall be 
    either the 15th of the last month of the certification period or the 
    normal date for filing a monthly report, at the State agency's option. 
    The option chosen must be uniformly applied to the State agency's 
    entire monthly reporting caseload.
        (4) For households consisting of applicants or recipients of SSI 
    who apply for food stamp recertification at offices of the SSA in 
    accordance with Sec. 273.2(k)(1), an application shall be considered 
    filed for normal processing purposes when the signed application is 
    received by the SSA.
        (d) Timely processing.
        (1) Households that were certified for one month or certified for 
    two months who are in the second month of the certification period and 
    have met all required application procedures shall be notified of their 
    eligibility or ineligibility. Eligible households shall be provided an 
    opportunity to receive benefits no later than 30 calendar days after 
    the date the household received its last allotment.
        (2) Other households that have met all application requirements 
    shall be notified of their eligibility or ineligibility by the end of 
    their current certification period. In addition, the State agency shall 
    provide households that are determined eligible an opportunity to 
    participate by the household's normal issuance cycle in the month 
    following the end of its current certification period.
        (e) Delayed processing.
        (1) Delays caused by the State agency. Households which have 
    submitted an application for recertification in a timely manner but, 
    due to State agency error, are not determined eligible in sufficient 
    time to provide for issuance of benefits by the household's next normal 
    issuance date shall receive an immediate opportunity to participate 
    upon being determined eligible, and the allotment shall not be 
    prorated. If the household was unable to participate for the month 
    following the expiration of the certification period because of State 
    agency error, the household is entitled to restored benefits.
        (2) Delays caused by the household.
        (i) If a household does not submit a new application by the end of 
    the certification period, the State agency must close the case without 
    further action.
        (ii) If a recertification form is submitted more than one month 
    after the filing deadline, it shall be treated the same as an 
    application for initial certification. In accordance with 
    Sec. 273.10(a)(1)(ii), the household's benefits shall not be prorated 
    unless there has been a break of more than one month in the household's 
    certification.
        (iii) A household which submits an application by the filing 
    deadline but does not appear for an interview scheduled after the 
    application has been filed, or does not submit verification within the 
    required timeframe, loses its right to uninterrupted benefits. The 
    State agency has three options for handling such cases:
        (A) Send the household a denial notice as soon as the household 
    fails to appear for an interview or submit required verification 
    information. If the interview is completed, or the household provides 
    the required
    
    [[Page 2716]]
    
    verification information within 30 days of the date of application and 
    is determined eligible, the household must be reinstated and receive 
    benefits within 30 calendar days after the application was filed or 
    within 10 days of the date the interview is completed or required 
    verification information is provided, whichever is later. In no event 
    shall a subsequent period's benefits be provided before the end of the 
    current certification period.
        (B) Deny the household's recertification application at the end of 
    the last month of the current certification period. The State agency 
    may on a Statewide basis either require households to submit new 
    applications to continue benefits or reinstate the households without 
    requiring new applications if the households have been interviewed and 
    have provided the required verification information within 30 days 
    after the applications have been denied.
        (C) Deny the household's recertification request 30 days after 
    application. The State agency may on a Statewide basis either require 
    households to submit new applications to continue benefits or reinstate 
    households without requiring new applications if such households have 
    been interviewed and have provided the required verification within 30 
    days after the applications have been denied.
        (f) Expedited service. A State agency is not required to apply the 
    expedited service provisions of Sec. 273.2(i) at recertification if the 
    household applies in a timely manner for recertification or applies 
    late but within the certification period.
        11. In Sec. 273.21, paragraph (n)(1) is amended by adding a 
    sentence to the end of the paragraph to read as follows:
    
    
    Sec. 273.21  Monthly Reporting and Retrospective Budgeting (MRRB).
    
    * * * * *
        (n) Suspension. * * *
        (1) * * * The State agency may on a Statewide basis either suspend 
    the household's certification prospectively for the issuance month or 
    retrospectively for the issuance month corresponding to the budget 
    month in which the noncontinuing circumstance occurs.
    * * * * *
    
    PART 274--ISSUANCE AND USE OF COUPONS
    
        12. In Sec. 274.2:
        a. Paragraphs (b)(2), (b)(3), and (b)(4) are removed.
        b. Paragraphs (b)(1), (c), (d), and (e) are redesignated paragraphs 
    (b), (d), (e), and (f), respectively.
        c. Two sentences are added to the end of newly redesignated 
    paragraph (b).
        d. A new paragraph (c) is added.
        The additions read as follows:
    
    
    Sec. 274.2  Providing benefits to participants.
    
    * * * * *
        (b) * * * For households entitled to expedited service, the State 
    agency shall make available to the household coupons or an ATP card, 
    not later than the fifth calendar day following the date the 
    application was filed. Whatever system a State agency uses to ensure 
    meeting this delivery standard shall be designed to allow a reasonable 
    opportunity for redemption of ATPs no later than the fifth calendar day 
    following the day the application was filed.
        (c) Combined allotments. For those households which are to receive 
    a combined allotment, the State agency shall provide the benefits for 
    both months as an aggregate (one) allotment, or as two separate 
    allotments made available at the same time, in accordance with the 
    timeframes specified in S273.2(i) of this chapter.
    * * * * *
        Dated: January 4, 1995.
    Ellen Haas,
    Under Secretary for Food, Nutrition, and Consumer Services.
    [FR Doc. 95-635 Filed 1-10-95; 8:45 am]
    BILLING CODE 3410-30-U
    
    
    

Document Information

Published:
01/11/1995
Department:
Food and Consumer Service
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
95-635
Dates:
Comments must be received on or before March 13, 1995 to be assured of consideration.
Pages:
2703-2716 (14 pages)
Docket Numbers:
Amendment No. 364
RINs:
0584-AB60: Food Stamp Program: Simplification of Program Rules
RIN Links:
https://www.federalregister.gov/regulations/0584-AB60/food-stamp-program-simplification-of-program-rules
PDF File:
95-635.pdf
CFR: (16)
7 CFR 273.10(a))
7 CFR 273.10(a)(1)(ii)
7 CFR 273.2(c)(5)
7 CFR 274.2(c)
7 CFR 273.12(c)
More ...