E7-20963. Emergency Food Assistance Program; Allocation Formula

AGENCY:

Food and Nutrition Service, USDA.

ACTION:

Notice.

SUMMARY:

This notice invites State and local agencies involved in the administration of The Emergency Food Assistance Program (TEFAP) and the general public to comment on the intent of the Department to modify the data sources used to calculate the formula for allocating TEFAP commodities and administrative funds among State agencies. Data sources currently used to allocate these resources have been used for a number of years. However, more accurate, reliable, and up-to-date data sources for gauging poverty and unemployment and, ultimately, each State's need for TEFAP commodities and administrative funds, are now available. Therefore, unless comments reveal a significant disadvantage to implementing these changes, the Department intends to allocate TEFAP commodities and administrative funds for fiscal year 2008 using these new data sources.

DATES:

To be assured of consideration, comments must be received on or before November 23, 2007.

ADDRESSES:

The Food and Nutrition Service (FNS) invites interested persons to submit comments on this Notice. You may submit comments by any of the following methods:

• Fax: Submit comments by facsimile transmission to [phone].
• Disk or CD-ROM: Submit comments on disk to Lillie F. Ragan, Assistant Branch Chief, Policy Branch, Food Distribution Division, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 506, Alexandria, Virginia 22302-1594.
• Mail: Send comment to Lillie F. Ragan at the above address.
• Hand Delivery or Courier: Deliver comments to the above address.
• Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting comments.

Comments submitted in response to this Notice will be included in the record and will be made available to the public. Please be advised that the substance of the comments and the identity of the individuals or entities submitting the comments will be subject to public disclosure. All written submissions will be available for public inspection at the address above during regular business hours (8:30 a.m. to 5:30 p.m.), Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Lillie Ragan at [phone].

SUPPLEMENTARY INFORMATION:

The purpose of TEFAP is to provide nutrition assistance to those with the greatest and most immediate need. To accomplish this purpose, the Emergency Food Assistance Act of 1983 (7 U.S.C. 7501, et seq. (the Act)) requires that TEFAP commodities and administrative funds be allocated among States according to a formula that accounts for poverty and unemployment levels within each State. Section 214(a)(1) of the Act (7 U.S.C. 7515(a)(1)) requires that 60 percent of each State's allocation be equal to the percentage of the nation's persons in poverty within that State; and Section 214(a)(2) (7 U.S.C. 7515(a)(2)) requires that the remaining 40 percent be equal to the percentage of the nation's unemployed persons within that State.

The Act also requires that data from the Census Bureau be used to determine the poverty line (7 U.S.C. 7501(7) citing 42 U.S.C. 9902(2)); data from the Bureau of Labor Statistics (BLS) be used to determine the number of unemployed persons; that the number of unemployed persons be calculated as a monthly average; and that the data used to calculate that average originate from the most recent fiscal year for which information is available (7 U.S.C. 7501(2)). Aside from these requirements, the Act places no restrictions on the data sources or methodology used to calculate the formula.

The Department intends to use data sources that are more accurate, reliable, and up-to-date than our current sources to calculate the TEFAP allocation formula. This will provide a more accurate gauge of poverty and unemployment levels within the States, thus targeting program resources to those States most in need.

The poverty portion of the formula is currently updated annually, using data from the Annual Social and Economic Supplement to the Current Population Survey (CPS), an annual survey administered by the Census Bureau to approximately 100,000 households. This data is provided as a 3-year rolling average, and is comprised of data collected during the three calendar years preceding a given fiscal year. Thus, the poverty portion of the formula is actually calculated from data obtained from 300,000 households over a period of three years. The unemployment portion of the formula is updated annually, using data provided to the Bureau of Labor Statistics (BLS) by the States. Currently, a 3-month average based on the number of unemployed persons in each State during May, June, and July is used.

These data sources are deficient because they are not the most accurate, timely, and reliable sources available, and therefore limit the Department's ability to fulfill the purpose of the Act.

The poverty portion of the formula is deficient because it is calculated using a 3-year rolling average. This means that 60% of each State's annual TEFAP allocation is based primarily on data that is two or three years old, which provides an untimely and potentially inaccurate reflection of current poverty levels within each State. For example, if State A has historically had a small number of people in poverty, but suffers a disaster—such as a flood or hurricane—that casts a large number of people into poverty during a given calendar year, continued use of the 3-year rolling poverty average would require the Department to use two- and three-year old data, which would not adequately recognize the current need for nutrition assistance in the State, to calculate the poverty portion of State A's TEFAP allocation.

The 3-month unemployment average is deficient because each month represents one-third of the data used to calculate the unemployment portion of its annual TEFAP allocation. Thus, a 3-month average is highly susceptible to variations caused by reporting errors or anomalous economic conditions which may occur in any given month, but which are not necessarily representative of employment conditions within a State. For example, State B has historically had high levels of unemployment, but reports unusually low unemployment levels for May, perhaps due to a reporting error, a failure of many persons to report their unemployment status for extraneous reasons (such as a natural disaster), or a one-time employment increase (such as hosting a major convention or sporting event). As a result, one-third of the data used to calculate the unemployment portion of State B's TEFAP allocation would be based on data that does not reflect actual employment conditions in that State during most of the year.

To redress these deficiencies, the Department intends, consistent with the Act, to use data from the Census Bureau's American Community Survey (ACS) rather than CPS data to calculate the poverty portion of the formula, and a 10-month average rather than a 3-month average to calculate the unemployment portion.

ACS, which became fully operational in calendar year 2005, produces data that is superior to CPS data in several respects. Among these is the fact that ACS has a much larger sample size. While ACS is administered to approximately 2.5 percent of American households, or (currently) 3,000,000 households, per year, CPS is administered to only 100,000 households per year. ACS poverty statistics are also timelier. Unlike CPS statistics, which are based on data collected during the three calendar years preceding a given fiscal year, ACS statistics are based on data collected during the single calendar year preceding a given fiscal year. Lastly, unlike participation in CPS, participation in ACS is mandatory, which will result in higher response rates. Individuals over the age of 18 who decline to participate are subject to penalties.

As to the unemployment portion of the formula, a 10-month unemployment average is more accurate than a 3-month average because it dampens the effect that atypical employment conditions and reporting errors in any month can have on a State's average. While a 12-month average would be the most ideal, BLS' reporting schedule is such that only 10 months of data are available at the time that TEFAP allocations would have to be calculated.

Because ACS poverty-data is single year data, the poverty portion of a State's allocation index may be more likely to vary from year-to-year. However, because the intent of TEFAP is to address the most immediate and current need, such variations actually serve the purpose of the program. Moreover, it is worth noting that year-to-year allocations have also varied widely using the current data sources. For example, of the 55 States and territories (i.e., States) operating TEFAP in fiscal year 2006, 5 had increases in their allocations of 10 percent or greater, 22 had increases of 0 to 9.9 percent, 27 had decreases of 0 to 9.9 percent, and 1 had a decrease greater than 10 percent from fiscal year 2005 to 2006. In fiscal year 2007, 5 States had increases of 10 percent or greater, 25 States had increases of 0 to 9.9 percent, 23 States had decreases of 0 to 9.9 percent, and 2 States had decreases greater than 10 percent. In contrast, if the proposed changes had been implemented prior to allocating 2007 resources, the number and size of increases and decreases that would have resulted are very similar to those that actually occurred. Specifically, 8 States would have received increases of 10 percent or greater, 18 States would have received increases of 0 to 9.9 percent, 27 States would have decreases of 0 to 9.9 percent, and 2 States would have had decreases greater than 10 percent. Therefore, unless comments reveal a significant disadvantage to implementing these changes, the Department intends to allocate TEFAP commodities and administrative funds for fiscal year 2008 using these new data sources without further notification.

Dated: October 18, 2007.

Gloria Gutierrez,

Acting Administrator.