[Federal Register Volume 84, Number 234 (Thursday, December 5, 2019)]
[Rules and Regulations]
[Pages 66782-66812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26044]
[[Page 66781]]
Vol. 84
Thursday,
No. 234
December 5, 2019
Part III
Department of Agriculture
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Food and Nutrition Service
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7 CFR Part 273
Supplemental Nutrition Assistance Program: Requirements for Able-Bodied
Adults Without Dependents; Final Rule
Federal Register / Vol. 84 , No. 234 / Thursday, December 5, 2019 /
Rules and Regulations
[[Page 66782]]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 273
[FNS-2018-0004]
RIN 0584-AE57
Supplemental Nutrition Assistance Program: Requirements for Able-
Bodied Adults Without Dependents
AGENCY: Food and Nutrition Service (FNS), USDA.
ACTION: Final rule.
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SUMMARY: USDA is finalizing its rulemaking proposed February 1, 2019.
The rule revises the conditions under which USDA would waive, when
requested by States, the able-bodied adult without dependents (ABAWD)
time limit in areas that have an unemployment rate of over 10 percent
or a lack of sufficient jobs. In addition, the rule limits carryover of
ABAWD discretionary exemptions.
DATES: This rule is effective April 1, 2020, except for the amendment
to 7 CFR 273.24(h), which is effective October 1, 2020.
ADDRESSES: SNAP Program Development Division, Food and Nutrition
Service, USDA, 3101 Park Center Drive, Room 812, Alexandria, Virginia
22302.
FOR FURTHER INFORMATION CONTACT: Certification Policy Branch, Program
Development Division, FNS, 3101 Park Center Drive, Alexandria, Virginia
22302. [email protected].
SUPPLEMENTARY INFORMATION:
Acronyms or Abbreviations
Able-Bodied Adults without Dependents, ABAWDs
Advanced Notice of Public Rulemaking, ANPRM
Agriculture Improvement Act of 2018 (Pub. L. 115-334), the 2018 Farm
Bill
Bureau of Labor Statistics, BLS
Census Bureau's American Community Survey, ACS
Code of Federal Regulations, CFR
Department of Labor, DOL
Employment and Training Administration, ETA
Employment and Training, E&T
Food and Nutrition Act of 2008, Act
Food and Nutrition Service, FNS
Labor Market Area(s), LMA(s)
Labor Surplus Area(s), LSA(s)
Office of Management and Budget, OMB
Notice of Proposed Rulemaking, NPRM
Supplemental Nutrition Assistance Program, SNAP
The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, PRWORA
U.S. Department of Agriculture, the Department or USDA
References
The following references may be helpful background.
(1) Section 6(d) and section 6(o) of the Food and Nutrition Act of
2008, as amended
(2) Title 7 of the Code of Federal Regulations, parts 273.7 and
273.24
(3) Food Stamp Program: Personal Responsibility Provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of
1996, Proposed Rule, 64 FR 70920 (December 17, 1999). Available at:
https://www.federalregister.gov/documents/1999/12/17/99-32527/food-stamp-program-personalresponsibility-provisions-of-the-personalresponsibility-and-work.
(4) Food Stamp Program: Personal Responsibility Provisions of the
Personal Responsibility and Work Opportunity Reconciliation Act of
1996, Final Rule, 66 FR 4437 (January 17, 2001). Available at:
https://www.federalregister.gov/documents/2001/01/17/01-1025/foodstamp-program-personal-responsibilityprovisions-of-the-personal-responsibilityand-work
(5) Guide to Serving ABAWDs Subject to Time-limited Participation,
2015. Available at: https://fns-prod.azureedge.net/sites/default/files/Guide_to_Serving_ABAWDs_Subject_to_Time_Limit.pdf
(6) Guide to Supporting Requests to Waive the Time Limit for Able-
Bodied Adults without Dependents, 2016. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Guide-to-Supporting-Requests-to-Waive-the-Time-Limit-for-ABAWDs.pdf
(7) Expiration of Statewide ABAWD Time Limit Waivers, 2015.
Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Expiration-of-Statewide-ABAWD-Time-Limit-Waivers.pdf
(8) ABAWD Time Limit Policy and Program Access, 2015. Available at:
https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Time-Limit-Policy-and-Program-Access-Memo-Nov2015.pdf
(9) ABAWD Questions and Answers, 2015. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-June%202015.pdf
(10) ABAWD Questions and Answers, 2013. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/ABAWD-Questions-and-Answers-December-2013.pdf
(11) Historical Policy Document: Waivers of Work Requirement Time
Limits Based on Insufficient Jobs, March 1997. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/HistoricalPolicyDocument_FSPWaiversofWorkRequirementTimeLimitsBasedonInsufficientJobs_Mar1997_0.pdf
(12) Historical Policy Document: Guidance for States Seeking Waivers
for Food Stamp Limits, December 1996. Available at: https://fns-prod.azureedge.net/sites/default/files/media/file/HistoricalPolicyDocument_GuidanceforStatesSeekingWaiversforFoodStampLimits_December1996.pdf
(13) Overuse of the 15 Percent Able-Bodied Adults Without Dependents
(ABAWD) Exemptions by States Agencies, November 2007. Available at:
https://fns-prod.azureedge.net/sites/default/files/media/file/Overuse%20of%20the%2015%20Percent%20ABAWD%20Exemptions%20by%20States%20Agencies%20Nov%202007.pdf
(14) BLS Local Area Unemployment Statistics. Available at: https://
www.bls.gov/lau/
(15) DOL Labor Surplus Area. Available at: https://www.doleta.gov/programs/lsa.cfm
(16) Executive Order 13828: Reducing Poverty in America by Promoting
Opportunity and Economic Mobility. Available at: https://www.federalregister.gov/documents/2018/04/13/2018-07874/reducing-poverty-in-america-by-promoting-opportunity-and-economic-mobility
Background on This Rulemaking
Section 6(o) of the Food and Nutrition Act of 2008, as amended (the
Act) generally limits the amount of time an able-bodied adult without
dependents (ABAWD) can receive Supplemental Nutrition Assistance
Program (SNAP) benefits to 3 months in a 36-month period (the time
limit), unless the individual meets certain work requirements. On the
request of a State SNAP agency, the Act also gives the U.S. Department
of Agriculture (the Department) the authority to temporarily waive the
time limit in areas that have an unemployment rate of over 10 percent
or a lack of sufficient jobs. The Act also provides State agencies with
a limited number of discretionary exemptions that can be used by States
to extend SNAP eligibility for ABAWDs subject to the time limit.
The ABAWD time limit and work requirement were initially enacted as
part of the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (PRWORA), which was signed into law on August 22, 1996.
According to the Conference Report accompanying PRWORA, the main
purpose of PRWORA was to ``[promote] work over welfare and self-
reliance over dependency, thereby showing true compassion for those in
America who need a helping hand, not a handout'' (H. Rept. 104-725, p.
261). Congress also explained that the legislation ``reforms welfare to
make it more consistent with fundamental American values--by rewarding
work and self-reliance, encouraging personal responsibility, and
restoring a sense of hope in the future'' (H. Rept. 104-725, p. 263).
By
[[Page 66783]]
adding the time limit and work requirement to the Food Stamp Act of
1977 (now the Food and Nutrition Act of 2008, as amended) at section
6(o), Congress highlighted the importance of work and self-sufficiency
for the ABAWD population. Specifically, Congress noted that: ``It
[PRWORA] makes substantial reforms in the Food Stamp Program, cracking
down on fraud and abuse and applying tough work standards'' (H. Rept.
104-725, p. 261). The time limit and work requirement for ABAWDs
enacted by PRWORA has been maintained by Congress through several
reauthorizations of the Federal law governing SNAP, most recently
through the Agriculture Improvement Act of 2018, indicating that
Congress remains committed to promoting work, self-reliance, and
personal accountability among the ABAWD population.
On April 2, 2018, the President signed Executive Order (E.O.)
13828, on ``Reducing Poverty in America by Promoting Opportunity and
Economic Mobility.'' E.O. 13828 sets forth the Administration's policy
that, with regard to social welfare, the Federal Government's role is
to clear paths to self-sufficiency and to invest in Federal programs
that are effective at moving people into the workforce and out of
poverty. Federal programs should empower individuals to seek employment
and achieve economic independence, while reserving public assistance
programs for those who are truly in need. Government must examine
Federal policies and programs to ensure that they are consistent with
principles that are central to the American spirit--work, free
enterprise, and safeguarding human and economic resources.
E.O. 13828 also provided a list of ``Principles of Economic
Mobility'' that should inform and guide program administration in the
context of applicable law. One such principle, relevant to this
rulemaking, is to ``improve employment outcomes and economic
independence.'' To advance this principle, the E.O. calls for Federal
agencies to ``first enforce work requirements that are required by law
[and to] also strengthen requirements that promote obtaining and
maintaining employment in order to move people to independence.''
Moreover, E.O. 13828 directed Federal agencies to review regulations
and guidance documents to advance these objectives consistent with the
principles of increasing self-sufficiency, well-being, and economic
mobility.
In accordance with E.O.13828 and other Administration priorities,
the Department undertook a review of its regulations and policies
associated with ABAWDs. The time limit and work requirement for ABAWDs
in SNAP clearly align with E.O. 13828 and the Department's shared
principle that those who can work--adults who are able-bodied and do
not have dependent care responsibilities--should work or participate in
a work program, as a condition of receiving their benefits.
The Department's review of these rules, along with its more than 20
years of operational experience overseeing the States' administration
of the ABAWD time limit, has led the Department to identify key
weaknesses in the current regulations on ABAWD time limit waivers. Over
the years, States have taken advantage of these weaknesses to request
and qualify for waivers of the ABAWD time limit in areas where it is
questionable as to whether the statutory conditions for approval as
outlined in section 6(o)(4) of the Act, an unemployment rate over 10
percent or a lack of sufficient jobs, are present. This manipulation is
demonstrated by the fact that currently about half of the ABAWDs on
SNAP live in waived areas, despite low unemployment levels across the
majority of the country.
Similarly, the current regulations' interpretation of section
6(o)(6)(G) of the Act, which requires the Department to increase or
decrease the number of exemptions available to the State during the
fiscal year based on the prior year's usage, allows States to carryover
and accumulate unused ABAWD discretionary exemptions indefinitely. As a
result, States have accumulated extremely high amounts of unused
discretionary exemptions that well exceed the number allotted to each
State for the fiscal year. The Department views the accumulation of
such significant amounts of unused exemptions to be an unintended
outcome of the current regulations. In the Department's view, the
indefinite carryover and accumulation of unused exemptions is
inconsistent with Congress' decision to limit the number of exemptions
available to States in a given fiscal year, as expressed by sections
6(o)(6)(C), (D), and (E) of the Act.
The Department is committed to providing SNAP benefits to those who
truly need them, but it must also encourage participants to take
proactive steps toward long-term self-sufficiency. In order to ensure
these goals are met, the Department believes that waivers of the time
limit should only be permitted when the circumstances clearly warrant
that action and meet the statutory conditions for approval.
Therefore, the Department is amending its regulations to address
these policy issues by setting clear limitations and introducing new
safeguards. In particular, the Department is codifying a strict
definition of an ``area in which the individuals reside'' for purposes
of a geographic area covered by a waiver; and redefining what
demonstrates that such an area ``has an unemployment rate of over 10
percent'' or ``does not have a sufficient number of jobs to provide
employment for the individuals'' for purposes of such an area
qualifying for a waiver. In addition, the Department is setting a
reasonable limit on the carryover of unused discretionary exemptions.
The Department is making these changes in order to encourage broader
application of the time limit, to more appropriately target waivers and
limit discretionary exemptions, and to incentivize ABAWDs to
proactively pursue any and all work and/or work training opportunities
within commuting distance of their residences.
Proposed Rule and Comments
On February 1, 2019 (84 FR 980), the Department published a
proposed rule, Supplemental Nutrition Assistance Program: Requirements
for Able-Bodied Adults Without Dependents, proposing to amend the
regulatory standards by which the Department evaluates State agency
requests to waive the time limit for ABAWDs and to limit the carryover
of ABAWD discretionary exemptions. The 60-day comment period ended on
April 2, 2019. The comment period was reopened on April 8, 2019, for a
period of 3 days ending April 10, 2019, due to problems with the
Federal Register website on April 1 and 2, 2019, which contributed to
commenters facing challenges when trying to submit comments.
The Department received more than 100,000 comments. The comments
came from a broad range of stakeholders, including Members of Congress,
State agencies, State elected officials, local governments, advocacy
groups, religious organizations, food banks, legal services
organizations, private citizens, and others. The Department greatly
appreciates the comments received on the proposed rule as they have
been essential in developing the final rule.
The Department reviewed and considered all comments received. Based
on the Department's review of all the comments received, about one
quarter were unique and/or substantive, with the remaining three
quarters consisting of form letters, duplicates, or non-germane
submissions. Generally
[[Page 66784]]
speaking, the Department viewed a comment as substantive if it provided
an opinion or recommendation on a specific policy and included detailed
reasoning. In the sections that follow, the Department's discussion
focuses on those comments that provided substantive and specific
feedback on particular proposed provisions and those comments that have
most influenced the Department's decisions on whether to revise the
proposed rule. The provisions are presented and discussed in a section-
by-section format for consistency with the proposed rule and the
amendatory text to the extent possible. The majority of comments that
were submitted generally opposed the proposed rule but did not comment
on specific provisions or provide recommendations on how to address the
policy issues identified by the Department. In general, the preamble
does not address in detail these comments. Similarly, the preamble does
not address in detail those comments that generally supported the
proposed provisions.
The Department also received comments that were outside the scope
of the proposed rulemaking. By outside the scope, the Department means
that commenters provided substantive feedback on policies that were not
proposed to be changed as part of this rulemaking. Though the
Department appreciates the feedback on those policies, comments that
are clearly out of scope are not discussed in detail in this final
rule.
To view public comments on the proposed rule, go to
www.regulations.gov and search for public submissions under docket
number FNS-2018-0004.
For a full understanding of the background of the provisions in
this rule, see the proposed rulemaking, which was published in the
Federal Register February 1, 2019, at 84 FR 980.
Establishing Core Standards for Approval
The Department proposed the establishment of core standards for
waivers in Sec. 273.24(f)(2). The proposed core standards would
provide States with a set of consistent criteria for approval. Any
supporting unemployment data provided by the State would need to rely
on standard Bureau of Labor Statistics (BLS) data or methods, or data
from BLS-cooperating agencies. BLS is the principal federal agency
responsible for measuring labor market activity, working conditions,
and price changes in the economy. BLS produces unemployment data that
is accurate, objective, relevant, timely, and accessible, and that is
generally considered by experts to be reliable and robust evidence for
evaluating labor market conditions. For areas which BLS does not
produce data, such as Indian Reservations and some U.S. Territories,
the core standards would not apply.
The Department did not receive any substantive comments on the
general concept of establishing core standards; however, many comments
were received on each specific core standard. These comments and the
Department's responses are detailed in the following sections.
Core Standards: Retaining Waivers Based on a 12-Month Unemployment Rate
Over 10 Percent
The Department proposed to maintain the criterion allowing an area
to qualify for a waiver when it has a recent 12-month average
unemployment rate over 10 percent, and to include that criterion as a
core standard.
The comments provided on this particular proposal were generally
supportive. Some comments suggested that this proposal was inadequate
and that other time periods should be allowed to demonstrate an
unemployment rate over 10 percent. The Department addresses these
viewpoints in the Other Data and Evidence in Exceptional Circumstances
and Other Changes to Waivers sections of the final rule.
The final rule adopts this provision of the proposed rule at Sec.
273.24(f)(2)(i) as written.
Core Standards: Establishing a Floor for Waivers Based on the 20
Percent Standard
Current regulations at Sec. 273.24(f)(2) and (3) provide for a
waiver approval for a requested area that has been designated as a
Labor Surplus Area (LSA) by the Department of Labor (DOL) for the
current fiscal year. Prior to the final rule in 2001 that established
Sec. 273.24(f), the Department introduced the use of LSAs for waivers
in its December 1996 memorandum, Guidance for States Seeking Waivers of
Food Stamp Limits. DOL designates LSAs based on specific unemployment
rate criteria. In order to be designated as an LSA for the fiscal year,
the area must have had an unemployment rate 20 percent or more above
the national unemployment rate for the previous 2 calendar years. In
addition, the area must have had an unemployment rate of 6 percent or
higher for the same 24-month period, which DOL refers to as the
``floor'' unemployment rate for LSAs. So, together, an area must have
an average unemployment rate at least 20 percent above the national
average and at least 6 percent for the previous 2 calendar years in
order to be designated as an LSA.
Current regulations at Sec. 273.24(f)(2) and (3) also provide for
ABAWD time limit waiver approvals for requested areas with an average
unemployment rate at least 20 percent above the national average for a
recent 24-month period, beginning no earlier than the same 24-month
period that DOL uses to determine LSAs for the current fiscal year
(otherwise known as the ``20 percent standard''). The Department
introduced the 20 percent standard in its March 1997 memorandum FSP--
Waivers of Work Requirement Time Limits Based on Insufficient Jobs. The
Department explained in that memo that its reason for introducing the
20 percent standard was to give States a method to demonstrate a lack
of sufficient jobs for areas that are not considered by DOL for LSA
designation. In the current regulations, the Department adopted the 20
percent standard as a standalone criterion beyond the LSA designation,
to provide States with the flexibility to support waivers of areas that
are not considered by DOL for LSA designation, and to allow States to
use a more flexible 24-month reference period. Importantly, while the
20 percent standard was modeled after and is similar to the calculation
of an LSA, the 20 percent standard does not include an unemployment
rate floor, as the LSA criteria does. Because the 20 percent standard
lacks an unemployment rate floor, areas that do not clearly lack
sufficient jobs qualify for waivers solely because they are 20 percent
above the national unemployment rate. For example, the national average
unemployment rate for the 24-month period of May 2017 through June 2019
was 3.9 percent.\1\ Given this national average, a State could request
and qualify for a waiver in areas with an unemployment rate as low as
4.7 percent for the same 24-month period. Not including a floor has had
the effect of allowing areas with low rates of unemployment to qualify
for waivers.
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\1\ Calculations based on BLS unemployment data, not seasonally
adjusted, pulled from https://www.bls.gov/data/#unemployment on
August 15, 2019.
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In the February 1, 2019, proposed rule, the Department proposed to
include a 7 percent unemployment rate floor within the 20 percent
standard, meaning that an area would need to have an average
unemployment rate at least 20 percent above the national average and of
at least 7 percent for the 24-month period. In so doing, the
[[Page 66785]]
Department also requested evidence-based and data-driven feedback on
the appropriate threshold for the floor, specifically whether a 6
percent, 7 percent, or 10 percent floor would be most effective and
consistent with the Act's requirement that waivers be determined based
on a lack of sufficient jobs. In addition, the Department proposed to
eliminate the LSA designation as a basis of waiver approval because the
LSA unemployment rate floor of 6 percent was inconsistent with the 7
percent unemployment rate the Department proposed for the similar 20
percent standard.
The vast majority of those who commented on the unemployment rate
floor opposed setting any unemployment rate floor within the 20 percent
standard. However, the Department did receive several other important
comments with respect to the unemployment rate floor options described
in the proposed rule. The comments regarding the 6 percent, 7 percent,
and 10 percent options are addressed below, along with the comments of
those who opposed any floor and comments recommending alternatives.
Comments on a 6 Percent Unemployment Rate Floor for the 20 Percent
Standard
Several commenters argued that, if the Department is to set an
unemployment rate floor, then 6 percent is the best option. These
commenters provided evidence-based support that the 20 percent standard
with a 6 percent floor would demonstrate that an area lacks sufficient
jobs better than 7 percent or other potential options. Some of these
commenters stated that a 6 percent floor would align with DOL's LSA
designation criteria. These commenters pointed out that LSA designation
is a longstanding Federal standard for job insufficiency relied upon by
Federal and State governments and other workforce development partners.
Some commenters suggested that in the context of the 20 percent
standard, setting the floor at 6 percent makes sense in that it could
be viewed as 20 percent above the natural rate of unemployment,\2\
which has historically hovered around 5 percent and is one way to
define a ``normal'' level of unemployment. These commenters indicated
that it would be logical and appropriate to only allow areas at least
20 percent above the natural rate of unemployment to be considered for
waivers under this standard.
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\2\ For more information on the natural rate of unemployment,
see https://fred.stlouisfed.org/series/NROU.
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A few commenters compared the proposed 7 percent floor to the 6
percent floor, and provided data and evidence to show that including a
6 percent floor would more appropriately target areas qualifying under
the 20 percent standard to areas demonstrating a ``lack of sufficient
jobs'' than would a 7 percent floor. In particular, a commenter
provided analysis showing that, when looking at economic metrics other
than unemployment rates, such as a county's poverty rates, education
levels, and other demographics associated with poverty, counties with 6
to 7 percent unemployment more closely resemble areas above 7 percent
unemployment than areas below 6 percent unemployment, indicating that 6
percent was a meaningful threshold for economic distress.
The Department is persuaded and agrees with these commenters that 6
percent is the best option for an unemployment rate floor within the 20
percent standard. The Department finds 6 percent to be particularly
justified, relative to the other options, in that it aligns with DOL's
LSA standard. Including the 6 percent floor within the 20 percent
standard would further align the 20 percent standard with the
longstanding LSA criteria on which the 20 percent standard was
originally based. The Department is also influenced by the data and
analysis provided by commenters that demonstrated 6 percent as a
relatively meaningful threshold for economic distress and for targeting
waivers to areas with a ``lack of sufficient jobs''. Moreover, the
Department has determined that as a practical outcome, a 6 percent
floor will ensure that the 20 percent standard appropriately
demonstrates a lack of sufficient jobs and acts as an effective
safeguard against any future waiver misuse. For these reasons, the
Department has decided that a 6 percent floor represents areas that
demonstrate a lack of sufficient jobs better than the proposed rule's 7
percent floor. As explained earlier in this section, a 20 percent
standard without an unemployment rate floor can be misused because
areas that do not clearly lack sufficient jobs will continue to qualify
for waivers solely because they are 20 percent above the national
unemployment rate.
The Department also agrees with the comments suggesting that a 6
percent floor could be viewed as sensible in that it is about 20
percent above where the natural rate of unemployment has hovered.
However, as discussed in detail in later sections, the Department
acknowledges that the natural rate of unemployment is a theoretical
concept that is not fixed at 5 percent, but fluctuates over time and
has a large range of estimates, making it an impractical basis by which
to set a floor for the 20 percent standard. As a result, the Department
did not view the natural rate of unemployment as a deciding factor in
its decision to set the floor at 6 percent. Rather, as explained in the
preceding paragraphs, the Department's decision to set the floor at 6
percent is primarily driven by the fact that it aligns with DOL's LSA
standard and that it represents the most justified option relative to
the proposed rule's 7 percent floor or other potential unemployment
rate floors. While the comments received on the proposed rule included
strong arguments, data, and evidence to support a 6 percent floor, they
also exposed the relative weakness of the 7 percent proposal and the 10
percent option.
The Department is therefore adopting a 6 percent unemployment rate
floor within the 20 percent standard at Sec. 273.24(f)(2)(ii). As
explained later in this rule in the section entitled Restricting the
Combining of Data to Group Substate Areas and Redefining ``Area'' and
the section entitled Other Changes to Waivers, the Department is not
including LSA designation as a criterion for waiver approval under the
core standards because the Department is redefining ``area'' in such a
way that will exclude civil jurisdictions used by DOL when designating
LSAs.
The following subsections will focus on the comments made regarding
the proposed 7 percent floor, the 10 percent floor, and other options
suggested by commenters. While the Department's decision not to adopt
any of these other options is based, in part, on its belief that a 6
percent floor has a stronger rationale for determining which areas
demonstrate a lack of sufficient jobs than do these other options, the
following subsections will not repeat the rationale for adopting the 6
percent floor, as that has already been discussed.
Comments on a 7 Percent Unemployment Rate Floor for the 20 Percent
Standard
Many commenters opposed the proposed 7 percent unemployment rate
floor to the 20 percent standard. A number of commenters stated that
the 7 percent floor lacks justification and is arbitrary, as the
proposed rule did not clearly tie the 7 percent floor to evidence for
lack of sufficient jobs. Some commenters pointed to the justification
provided in the proposed
[[Page 66786]]
rule that a 7 percent floor aligns with a proposal in the Agriculture
and Nutrition Act of 2018, H.R. 2, 115th Cong. section 4015 (as passed
by House, June 21, 2018). These commenters argued that this rationale
is invalid because Congress ultimately did not include that provision
when it enacted the Agriculture Improvement Act of 2018 (Pub. L. 115-
334) (the 2018 Farm Bill).
Several commenters argued that setting a floor at 7 percent
unemployment is too high. Some commenters asserted that jobs are not
widely available to all who may seek them when unemployment is below 7
percent. Commenters also suggested that ABAWDs face barriers to
employment that the general population does not. These commenters noted
that unemployment rates for ABAWDs, as a distinct group, would
generally be higher than the official unemployment rate because many
ABAWDs share demographic characteristics with subpopulations that have
relatively high unemployment rates. One commenter pointed out that
areas with unemployment rates just below the 7 percent floor would
share many of the same characteristics as those above the 7 percent
floor, for example: Unemployment higher than at any point nationally
during the 2001-2002 recession; hidden unemployment due to cyclically
low labor force participation; and, very limited employer demand for
the ``hardest to employ'' groups, such as those with criminal records,
lengthy periods of unemployment, or other barriers to work. Another
commenter argued that the proposed 7 percent floor is too high because
it is well above 4 percent, which is the statutory definition of full
employment set by the Full Employment and Balanced Growth Act of 1978.
Commenters also suggested that the proposed 7 percent floor would
not adequately provide States with waiver coverage during times of
rising unemployment because the combination of an unemployment rate
floor with the lengthy 24-month data reference period would prevent
many areas with rising unemployment from qualifying for waivers.
One commenter provided data analysis showing that many areas
considered ``distressed communities'' according to a series of economic
metrics would not have met the 7 percent unemployment rate threshold.
This commenter argued that the 7 percent floor fails to capture the
economic realities of regions, and that this divergence highlights the
shortcomings of a 7 percent unemployment rate floor.
Many commenters provided specific examples that the proposed 7
percent floor would harm their State or locality, with some citing
specific poor, food insecure, or economically distressed areas in their
State, that would not currently meet the 7 percent floor.
Several commenters suggested that the Department did not properly
apply the concept of the natural rate of unemployment in choosing a 7
percent floor. Some commenters suggested that the proposed rule did not
provide adequate justification to explain the relationship between the
7 percent floor and the natural rate of unemployment.
The detailed comments in opposition to the 7 percent floor
described in the preceding paragraphs provided the Department with
helpful perspective, in particular those that provided data and
analysis to illustrate that some areas with unemployment rates below 7
percent may be considered economically distressed or in recession. The
Department took these comments into consideration in its decision to
adopt DOL's 6 percent floor, instead of a 7 percent floor.
A few commenters expressed support for the 7 percent unemployment
rate floor. While these comments did not provide evidence or data to
support that a 7 percent floor within the 20 percent standard would
better demonstrate a lack of sufficient jobs, they did suggest that a 7
percent floor represented a reasonable middle ground between a 10
percent floor and a 6 percent floor. The Department appreciates that
when considering among several options, it is sometimes prudent to
select that option which best represents a reasonable middle ground,
especially when there is a lack of data or evidence to distinguish one
option as more or less justified as another. However, in this situation
there is clear justification supporting a 6 percent floor versus the
other options, as explained in the immediately preceding section.
Comments on a 10 Percent Unemployment Rate Floor for the 20 Percent
Standard
Many commenters opposed a 10 percent unemployment rate floor for
the 20 percent standard. Some commenters argued that this proposal
conflicts with Congressional intent. In particular, these commenters
argued that Congress designated a 10 percent unemployment rate as one
way for a State to qualify for a waiver, and a second criterion of
``insufficient jobs'' as an alternative to demonstrating a 10 percent
unemployment rate. These commenters stated that adopting a 10 percent
unemployment rate floor would make the lack of sufficient jobs
criterion too similar to the 10 percent unemployment rate criterion in
the statute. Commenters also suggested that this proposal would be
largely duplicative of existing criteria allowing waiver approval for
areas with over 10 percent unemployment during a recent 12-month
period.
A few commenters supported setting an unemployment rate floor at 10
percent. These commenters argued that this high floor would most
effectively reduce the number of ABAWDs living in waived areas. One
commenter used data to argue that a 10 percent floor would more often
act to reduce the number of areas that would qualify than would a 7
percent floor. Another commenter suggested that a 10 percent
unemployment rate floor is appropriate because the current economic
conditions in the United States are favorable for ABAWDs finding jobs.
The Department has not been persuaded to adopt the 10 percent floor
option presented in the proposed rule, in part, because the Department
found the comments expressing concern over Congressional intent and
duplication with other waiver standards to be valid, and in part
because sufficient evidence-based and data-driven support was not
provided to go in this direction.
Opposition to any Unemployment Rate Floor Within the 20 Percent
Standard
As previously mentioned, the vast majority of those who commented
on the unemployment rate floor opposed setting any unemployment rate
floor within the 20 percent standard. Commenters argued that the
statutory language requires the Department to base the waiver standards
on whether there are a lack of sufficient jobs for the specific ABAWD
population, not the broader population. Many commenters opposed setting
an unemployment floor because they argued unemployment rates fail to
accurately capture the availability of jobs specifically for ABAWDs who
face particular barriers to employment. They argued that the proposed
rule represents an overreliance on unemployment data, especially with
regard to an unemployment rate floor in the 20 percent standard. Many
suggested that while the standard unemployment rate available in local
areas does provide essential data, it does not accurately reflect labor
market prospects for ABAWDs, and it does not fully account for the
ability of ABAWDs to find and keep jobs due to lack of skills,
training, or other barriers. Commenters argued that ABAWDs should not
be subject to
[[Page 66787]]
the unemployment rate floor used in designating LSAs because ABAWDs
face labor market disadvantages that the general public does not.
Commenters also provided analysis, based on the 2017 USDA Household
Characteristics data,\3\ that non-disabled individuals aged 18 through
49 in households without children in SNAP report lower than average
educational attainment. Commenters pointed to research indicating that,
on average, unemployment rates for people with low-education attainment
are much higher than what BLS unemployment rates for the general public
indicate. Commenters provided research indicating that lower
unemployment rates are less indicative of strong labor markets in
recent years than in the past, and particularly for those with lower
levels of education. Commenters also provided research indicating that
employment rates for workers with low levels of education still have
not recovered from the recession and pointed to evidence that workers
with less education may be hit harder by recessions. In addition,
commenters suggested that ABAWDs are more likely to have part-time
work, irregular hours, seasonal work, underemployment, high turnover,
and low job security within low-skill professions. Commenters pointed
to analysis commissioned by the Department that indicates that those
subject to SNAP work requirements face substantial barriers to
employment. Commenters provided research indicating that involuntary
part-time work is increasing at dramatically higher rates than other
types of work. These commenters argued that this impacts the ability of
ABAWDs to be able to meet the work requirement. Commenters provided
data indicating that individuals who were projected to lose their
benefits due to the time limit also faced other barriers to work. One
State provided data indicating that ABAWDs have higher levels of
homelessness than other SNAP participants. Commenters asserted that
formerly incarcerated persons encounter obstacles attaching to
employment quickly and provided data showing that unemployment rates
among this population was significantly higher than the unemployment
rate of the general public. Other commenters provided recent studies
finding significant racial discrimination in the labor market and
hiring in particular. These commenters asked the Department to consider
racial discrimination and other reasons that result in significant
racial and ethnic employment disparities, and these commenters argued
that evidence of discrimination and employment disparities indicates
that general unemployment rates are not a good predictor of job
availability for people of color. Commenters also asked the Department
to consider access to transportation, housing stability, and forced
moves among the ABAWD population that lead to particular problems
maintaining stable employment.
---------------------------------------------------------------------------
\3\ The Department publishes a characteristics report and
corresponding SNAP Quality Control data annually, which provide
information about the demographic and economic circumstances of SNAP
households.
---------------------------------------------------------------------------
Commenters argued that the Department has previously acknowledged
that time limit waivers were intended by Congress to recognize the
challenges that the ABAWD population faces when finding permanent
employment. Commenters pointed to the Department's December 1996
guidance in which it offered several reflections on its understanding
of Congressional intent at the time. In this guidance, the Department
stated, ``USDA believes that the law provided authority to waive these
provisions in recognition of the challenges that low-skilled workers
may face in finding and keeping permanent employment. In some areas,
including parts of rural America, the number of employed persons and
the number of job seekers may be far larger than the number of vacant
jobs. This may be especially so for person with limited skills and
minimal work history.'' Commenters also argued that in its original
rulemaking the Department realized that ABAWDs were a more diverse
population than had originally been anticipated and that many faced
barriers to employment. In response to these comments, the Department
recognizes that ABAWDs may face barriers to employment and have more
limited employment prospects than the general public due to low
educational attainment or other factors discussed above. The Department
also recognizes that there is no measure available for determining the
number of available jobs specifically for ABAWDs participating in SNAP
in any given area. However, notwithstanding the issues raised by these
comments, the Department is resolute that establishing an unemployment
rate floor within the 20 percent standard is necessary to ensure that
the standard is designed to accurately reflect a lack of sufficient
jobs in a given area. The Department's position is based on its
operational experience, during which it has recognized that, without an
unemployment rate floor, areas that do not clearly lack sufficient jobs
will continue to qualify for waivers solely because they are 20 percent
above the national unemployment rate. For example, the national average
unemployment rate for the 24-month period of May 2017 through June 2019
was 3.9 percent.\4\ Given this national average, a State could request
and qualify for a waiver in areas with an unemployment rate as low as
4.7 percent for the same 24-month period. Not including a floor has had
the effect of allowing areas with low rates of unemployment to qualify
for waivers.
---------------------------------------------------------------------------
\4\ Calculations based on BLS unemployment data, not seasonally
adjusted, pulled from https://www.bls.gov/data/#unemployment on
August 15, 2019.
---------------------------------------------------------------------------
As discussed in the previous section, the Department finds the 20
percent standard with a 6 percent floor to be one of the most objective
and defensible ways of determining a lack of sufficient jobs, as it
aligns with a longstanding DOL measure of job insufficiency. The LSA
designation criteria developed by DOL was used by the Department when
originally developing the 20 percent standard. Including a 6 percent
floor within the 20 percent standard would further align the 20 percent
standard with the longstanding LSA standard on which it was originally
based. This will improve the 20 percent standard and make it a better
measure of job insufficiency.
Some commenters argued that the proposed rule's justification for
applying an unemployment rate floor is not in line with Congressional
intent. One commenter pointed to the House Committee on Budget's report
(H. Rept. 104-651) on its original version of The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA), which stated that waivers would be based on ``high
unemployment . . . or other specified circumstances'' limiting the
availability of jobs. The commenter argued that the ``other specified
circumstances'' language means that Congress did not intend for
unemployment rates alone to govern waiver decisions. Commenters argued
that unemployment rates measure the proportion of the workforce who are
employed or unemployed, but they do not measure how many jobs are
available. Commenters also suggested that, if Congress intended to
include an unemployment rate threshold for the ``sufficient number of
jobs'' criteria, Congress would have done so. Commenters stated that
Congress did not intend for lack of sufficient jobs criteria to be
based on whether there are
[[Page 66788]]
too many or too few waivers that result from the criteria--Congress did
not establish a desired level of waiver coverage. Another commenter
stated that Congress intended for there to be many different ways to
meet ``insufficient jobs,'' and that the Department acknowledged this
when first implementing the policy in the late 1990s and early 2000s.
While the Department appreciates these commenters' references to
the legislative history, the Department does not find setting an
unemployment rate floor to be in conflict with Congressional intent.
The Department is limiting the number of ways that a State may
demonstrate a lack of jobs in order to prevent the misapplication of
waivers in areas in which the lack of jobs is questionable. These
changes are well within the authority under section 6(o)(4)(A) of the
Act, which provides the Secretary with broad discretion on how to
define what does and does not constitute a lack of sufficient jobs. By
introducing a 6 percent unemployment rate floor, the Department aims to
prevent the misapplication of waivers to areas with unemployment rates
that do not demonstrate a lack of sufficient jobs.
One commenter argued that the proposed rule's assertion that the
current rate of waivers was unforeseen is inconsistent with the
historical record. This commenter provided evidence that USDA's
original estimate of the extent of waiver coverage under its rules is
in line with current actual waiver coverage. This commenter pointed to
a document sent from Department staff to Office of Management and
Budget (OMB) staff in 1997 that stated, ``Thirty percent to 45 percent
of the able-bodied caseload may be waived. However, USDA's best
estimate is that the areas that have been waived represent
approximately 35 percent of the able-bodied caseload in the nation as a
whole.''
In response to this comment, the Department sees fit to reiterate
that its concern over the current number of waivers is based on the
number of areas that continue to qualify when their unemployment rates
are relatively low and the areas do not clearly demonstrate a lack of
sufficient jobs. Over the past 20 years, the Department has identified
the lack of a floor in the 20 percent standard as a particular weakness
in the current regulations. The Department did not foresee the extent
to which States would take advantage of this weakness to request and
qualify for waivers in areas with unemployment rates not generally
considered to indicate a lack of jobs, such as the 4.7 percent
unemployment rate used as an example previously. The Department aims to
address this and other weaknesses with reasonable policy changes, based
on objective data and evidence. In the case of the 20 percent standard,
the introduction of a 6 percent unemployment rate floor will ensure
that the waiver standards appropriately account for fluctuations in the
national unemployment rate without allowing areas in which unemployment
is objectively low to qualify for waivers.
Commenters also pointed to research asserting that there is no one
way to identify conditions that make it difficult to secure employment,
but there are several measures of labor market weakness that can
indicate a lack of sufficient jobs. In stating their opposition to the
floor, some commenters noted that unemployment relative to the national
average is an important signal that the economic conditions warrant
waiving work requirements. Commenters stated that, by generally tying
waiver eligibility to a ratio threshold of the overall U.S.
unemployment rate, as the Department currently does with the 20 percent
standard, States are able to target their waivers to jurisdictions that
are lagging behind in comparison to the state and national economy.
Commenters provided data showing that these areas with higher relative
unemployment share significant overlap with the areas that have the
greatest rates of poverty and food insecurity. These commenters argued
that adding an unemployment rate floor to the 20 percent standard
provides less flexibility for States to capture insufficient jobs for
the ABAWD population.
The Department appreciates this information provided by commenters,
but disagrees that a relative unemployment rate is a sufficient
indicator of a lack of sufficient jobs in and of itself. As explained
in several other sections of this rule, the Department is adding a 6
percent floor to the 20 percent standard based on its operational
experience, during which it has recognized that, without an
unemployment rate floor, areas that do not clearly lack sufficient jobs
will continue to qualify for waivers solely because they are 20 percent
above the national unemployment rate.
Some commenters argued that the natural rate of unemployment is an
impractical measure by which to set a floor. They argued that it has a
very wide range of estimates, is a macroeconomic concept that is not a
fixed or precisely identifiable unemployment rate, has not been a
useful tool for setting policy or for predicting inflation, and is the
subject of disagreement among economists.
As described previously, though substate unemployment data for the
general population is available, the Department recognizes there is no
measure available for determining the number of available jobs
specifically for ABAWDs on SNAP in any given area. The Department also
acknowledges that the natural rate of unemployment is a theoretical
concept that is not fixed at 5 percent, but fluctuates over time and
has a wide range of estimates, making it an impractical basis by which
to set a floor for the 20 percent standard. As a result, the Department
did not view the natural rate of unemployment as a deciding factor in
its decision to set the floor at 6 percent. The Department is also not
persuaded by the arguments for no unemployment rate floor. Rather, the
Department is adopting a 6 percent floor within the 20 percent standard
because it aligns with DOL's LSA standard and it represents the most
meaningful, justified option relative to the proposed rule's 7 percent
floor or other potential unemployment rate floors.
Alternative Measures of Unemployment Rates
Several commenters argued that using the standard unemployment rate
\5\--the U-3 rate, which is defined by BLS as the number of people
unemployed as a percent of the civilian labor force--as a floor does
not adequately capture job availability for ABAWDs and suggested that
some alternative measures better represent labor market conditions for
this population. Some commenters provided evidence that an alternative
measure of unemployment published by BLS, known as the U-6 unemployment
rate, indicates that job prospects for
[[Page 66789]]
some disadvantaged groups have not improved as much as the unemployment
rate for the general population. The U-6 unemployment rate is defined
by BLS as the total number of people unemployed, plus all marginally
attached workers, plus the total number of people employed part time
for economic reasons, as a percent of the civilian labor force and all
persons marginally attached to the labor force. Put more generally, the
U-6 measure is the percent of people unemployed, people underemployed,
and people who want a job but are not looking because they are unable
to find jobs or are discouraged. These commenters point out that the
standard U-3 rate includes the employed and unemployed people who have
searched for a job in the past 4 weeks. The commenter argued that the
U-6 rate, which includes people who want full-time work but had to
settle for part-time work and unemployed people who have looked for a
job in the last 12 months, more accurately captures the condition of
the labor market for ABAWDs. Commenters provided evidence showing that
the U-6 unemployment rate recovered more slowly during the recovery
from the Great Recession than did the U-3 rate. Additionally, one State
suggested that the U-3 unemployment rate fails to include working-age
people who are not in the labor force, and this group includes many so-
called ``discouraged workers'' who have given up on searching for
employment. The State argued that because these individuals are not
included in the BLS unemployment calculation, the BLS will
underestimate the true joblessness rate in areas with proportionately
larger populations of these individuals. Another State provided data
showing that the Labor Force Participation Rate had increased by only
0.1 percent between September 2014 and November 2018, even though the
U-3 unemployment rate had fallen significantly over that time period.
Commenters also suggested that an unemployment rate floor based on the
U-3 rate could disadvantage rural areas or other areas that primarily
rely on declining industries because ABAWDs living in these areas may
ultimately be unable to secure employment even if it is not reflected
in a sustained high U-3 unemployment rate. Other commenters said that,
in addition to facing higher unemployment rates, racial minorities are
more likely to be marginally attached to the workforce, and thus
ignored by the U-3 unemployment rates.
---------------------------------------------------------------------------
\5\ BLS publishes 6 measures of labor underutilization (U-1
through U-6). U-3 is the official unemployment rate, and it is equal
to the total number of unemployed persons, as a percent of the
civilian labor force. The number of unemployed persons includes all
jobless persons who are available to take a job and have actively
sought work in the past four weeks. U-6 is an alternative measure
defined as total unemployed persons, plus all marginally attached
workers, plus total employed part time for economic reasons, as a
percent of the civilian labor force plus all marginally attached
workers. ``Marginally attached workers'' include ``discouraged
workers'' who are persons who are not in the labor force, want and
are available for work, and had looked for a job sometime in the
prior 12 months. They are not counted as unemployed because they had
not searched for work in the prior 4 weeks. Persons employed part
time for economic reasons are those working less than 35 hours per
week who want to work full time, are available to do so, and gave an
economic reason (their hours had been cut back or they were unable
to find a full-time job) for working part time. These individuals
are sometimes referred to as involuntary part-time workers. U-6 data
is not published by BLS on the substate level.
---------------------------------------------------------------------------
While these comments about alternative unemployment measures are
appreciated, the Department also recognizes that there is no measure
available for precisely determining the number of available jobs
specifically for SNAP ABAWDs in any given area. For example, while some
commenters argued that the U-6 unemployment rate may better reflect the
unemployment situation for ABAWDs, this measure is deficient for
purposes of time limit waivers because it is not available at the
substate level and therefore cannot be used to support or validate
waiver requests for substate areas. Only U-3 unemployment data is
available at the substate level.
As stated previously, the Department believes that setting a 6
percent floor within the 20 percent standard strengthens the standard
by aligning it more closely with the DOL LSA criteria upon which it was
originally modeled. Section 6(o)(4) of the Act states that the
Secretary may waive the ABAWD time limit if an area has an unemployment
rate of over 10 percent or if an area does not have a sufficient number
of jobs. In this rule, the Department aims to prevent the
misapplication of waivers to areas with unemployment rates that do not
clearly meet the statutory conditions for waivers, and setting an
unemployment rate floor using the BLS U-3 rate for the 20 percent
standard is one of the means by which the Department will do so.
Alternative Unemployment Rate Floors
Some commenters suggested that, if the Department is to set an
unemployment rate floor within the 20 percent standard, the floor
should be set at or closer to the natural rate of unemployment. In
particular, some commenters suggested that the Department set a floor
at the current estimate of the natural rate of unemployment or adopt a
fluctuating floor based on the quarterly estimates of the natural rate
of unemployment from the Congressional Budget Office (CBO).
The Department appreciates these alternative suggestions. However,
as previously discussed the Department believes that setting a
fluctuating floor could be administratively difficult and setting a
floor based solely on the current natural rate of unemployment may not
account for changes to the natural rate of unemployment in the future.
The Department is not persuaded by the arguments for alternative
unemployment rate floors, and, as previously discussed, is adopting a 6
percent floor within the 20 percent standard.
Ceiling for the 20 Percent Standard
A commenter argued that imposing a floor similar to that used in
LSA determinations is inconsistent with the Department's decision not
to apply the LSA unemployment ceiling at 10 percent. The commenter
stated that FNS is picking and choosing elements of LSA determinations
without rationale.
The Department acknowledges that the LSAs have a 10 percent ceiling
and that any civil jurisdiction above 10 percent unemployment for the
appropriate 24-month period qualifies as an LSA regardless of whether
the area is 20 percent above the national average. However, the
Department believes it is unnecessary to include a 10 percent ceiling
in the 20 percent standard, as the Department will continue to approve
waivers for areas that have an unemployment rate over 10 percent during
a recent 12-month period. As this commenter pointed out, areas with an
unemployment rate over 10 percent during a recent 24-month period
typically also have an unemployment rate above 10 percent for a recent
12-month period. For this reason, the Department is not adopting a 10
percent ceiling at Sec. 273.24(f)(2)(ii).
Core Standards: Eliminating the Extended Unemployment Benefits
Qualification Standard
The Department proposed that it would continue to approve any
waiver request that is supported by the requesting State's
qualification for extended unemployment benefits, as determined by
DOL's Unemployment Insurance Service. The Department also proposed to
prohibit statewide waivers when substate data is available, except for
those States qualifying under the extended unemployment benefits
standard.
Although the Department did not receive many comments with regard
to retaining the extended unemployment benefits standard, some
commenters supported the proposal to retain the extended unemployment
benefits standard, arguing that this standard is an appropriate
indicator that a State lacks sufficient jobs. Some of those who
supported the proposal also argued that it is insufficient to have this
as the only remaining criterion for statewide waivers, as this
criterion does not adequately capture all States with a lack of
sufficient jobs. These commenters noted that, under the extended
unemployment benefits criterion, States must have increasing
unemployment, and States that have continuing high unemployment that is
flat and not increasing would not qualify under this
[[Page 66790]]
criterion. Other commenters cited research finding that extended
unemployment triggers are set too high and asserted that Congress has
had to step in too often to establish temporary programs of extended
unemployment insurance benefits. Commenters also argued that States
should not need to wait until statewide labor market conditions become
so dire that the State qualifies for extended unemployment benefits
before they are eligible for a statewide waiver.
Although the Department appreciates these comments in support of
the criterion, the Department has decided not to adopt the rule as
proposed because the Department is concerned that the extended
unemployment benefits criterion would allow States to receive statewide
waivers even when there is not a lack of sufficient jobs within certain
areas of the State. One commenter stated that, while remaining
sensitive to the administrative burden placed on State agencies, the
Department should strive to approve waivers for distinct economic
regions, as State boundaries often encompass multiple labor markets
with significant variation in economic conditions. The Department
agrees that waivers should be targeted to economically-tied areas with
a lack of sufficient jobs, rather than entire states that contain
distinct economic regions. In fact, the Department referenced a similar
concept in the preamble to proposed rule for the current regulations at
Sec. 273.24, noting that statewide unemployment averages may mask
``slack'' job markets (insufficient jobs) in some substate areas.\6\
The Department maintains the validity of this concept, and notes it is
also true that statewide averages may mask tight labor markets in some
substate areas. Additionally, as discussed later in the Restricting the
Combining of Data to Group Substate Areas and Establishing Strict
Definition of Waiver ``Area'' section, the Department is choosing to
provide a strict definition of a waiver area that will also restrict
statewide waivers. Therefore, the Department is removing the extended
unemployment benefits criterion from the core standards, which was
included at Sec. 273.24(f)(2)(iii) in the proposed rule, as
qualification for extended unemployment benefits is designated only at
the state level, not at the LMA level. Accordingly, the Department is
also eliminating the proposed exception to the restriction on statewide
waivers for extended unemployment benefits that was included at Sec.
273.24(f)(4) in the proposed rule. The Department believes this change
will ensure that waivers of the ABAWD time limit are more appropriately
targeted to those particular areas that have unemployment rates over 10
percent or lack sufficient jobs, rather than the larger areas of entire
states. This is discussed further in the later section, Restricting
Statewide Waivers.
---------------------------------------------------------------------------
\6\ Food Stamp Program: Personal Responsibility Provisions of
the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, Proposed Rule, 64 FR 70920 (December 17, 1999).
---------------------------------------------------------------------------
Criteria Excluded From Core Standards
The Department proposed excluding some of the current ABAWD time
limit waiver criteria when standard BLS unemployment data is available.
These excluded criteria include a low and declining employment-to-
population ratio, a lack of jobs in declining occupations or
industries, or an academic study or other publication(s) that describes
an area's lack of jobs.
Many commenters opposed excluding these criteria. Some commenters
argued specifically that a low and declining employment-to-population
ratio should be retained as a criterion for all areas. These commenters
stated that this metric is well-defined and widely-used. Commenters
asserted that data for this metric is readily available from the U.S.
Census Bureau and BLS, and BLS regularly calculates this metric.
Commenters argued that because employment-to-population ratio includes
individuals who are employable but have not looked for a job in more
than a year, during periods of severe and long-term economic
recessions, the number of individuals in this category will grow and
the employment-to-population ratio will paint a clearer picture of the
strength of the labor market than other measures. Commenters argued
that the employment-to-population ratio captures valuable information
about discouraged workers and those classified as ``marginally attached
to the workforce'' who are not actively looking for work, which is
valuable because labor market depressions can discourage some ABAWDs
from even searching for employment. Commenters argued that, compared to
U-3 unemployment rates, the employment-to-population ratio is a more
appropriate measure in some cases for labor market conditions for low-
skill workers who face serious barriers to employment. Commenters
provided evidence that researchers routinely use the employment-to-
population ratio in addition to, or instead of, the unemployment rate
to measure labor market conditions. One commenter asserted that the
employment-to-population ratio provides useful information in assessing
labor market conditions over the business cycle because it takes into
account changes in labor market ``slack'' due to changes in both
unemployment and labor-force participation. This commenter noted that
employment-to-population ratio is a measure that labor economists use
to capture weak labor markets in areas where there is a notable lack of
jobs relative to the size of the working-age population. The commenter
also pointed to previous Department guidance which stated that the
employment-to-population ratio complements measures of unemployment by
taking into account working age persons who may have dropped out of the
labor force altogether, and that a decline in this ratio over a period
of months could indicate an adverse job growth rate for the area. This
commenter provided data indicating that an improved unemployment rate
does not necessarily directly correspond to an improvement of the
employment situation, and only a stable participation rate allows for
unambiguous conclusions from a changing unemployment rate. This
commenter also pointed out that States have used the employment-to-
population criterion sparingly, and the Department requires States to
provide additional evidence showing the requested area's labor market
weakness for approval.
The Department is not adding the low and declining employment-to-
population ratio criterion to the core standards and is maintaining
this criterion only for areas with limited data or evidence, consistent
with the proposed rule. While the employment-to-population ratio metric
is standardized, it is not produced by BLS at the substate level. Just
as importantly, the employment-to-population ratio's meaning in terms
of job-availability can be ambiguous due to shifting demographics at
the local or national level. As one of the commenters pointed out, due
to the potential for ambiguity, the Department currently requires the
few States using the employment-to-population criterion to provide
additional evidence showing the requested area's labor market
weaknesses. Therefore, the Department believes this criterion is not as
robust as standard unemployment data in demonstrating a lack of
sufficient jobs and is not adding the low-and-declining population
ratio criterion.
Commenters also argued that information about declining industries
or occupations should be retained as a criterion, arguing that such
information
[[Page 66791]]
provides appropriate flexibility for local labor conditions. One
commenter argued that, while a population may as a whole remain
employed, a large subset may be significantly affected by declining
occupations. Another commenter argued that this criterion is especially
important for smaller, rural areas in which the loss of a single job
provider, such a major manufacturing plant or mining industry, can have
a major effect on local job availability. The commenter stated that the
impact of a plant closure may not impact a 24-month unemployment rate
until several months, or even a year, have passed. The commenter argued
that the criterion regarding declining industries or occupations allows
waivers to quickly respond to deteriorating labor market conditions.
This commenter pointed out that, although states have rarely used this
criterion to request waivers, the Department has approved them on a
limited case-by-case basis, including cases in which the State agencies
provided evidence of the number of workers affected by layoffs and
rapidly increasing unemployment rates over a short period of time due
to plant closings. A few commenters also stated that academic studies
and publications can often provide a more accurate description of a
region's unemployment or can more accurately describe job availability
among the ABAWD population than unemployment rates.
The Department agrees that information about declining industries
or occupations, and academic studies can be used to help understand
employment changes in an area. However, information about declining
industries or occupations, and academic studies are not as standardized
and reliable as unemployment data, and the Department believes the best
data should be used when it is available.
Commenters broadly argued that excluding a low and declining
employment-to-population ratio, a lack of jobs in declining occupations
or industries, or an academic study or other publication(s), along with
the change to include an unemployment rate floor in the 20 percent
standard, results in an overreliance on unemployment rates. These
commenters assert, as previously noted, that unemployment rates do not
precisely capture job availability for ABAWDs, and States should have
other options to demonstrate a lack of sufficient jobs, through other
evidence and consideration of other economic factors. Commenters stated
that States should retain flexibility to rely on metrics other than
BLS' U-3 unemployment rates in their waiver requests. Commenters
pointed to the fact that labor market participation has not recovered
since the Great Recession, even though unemployment rates have. As
already noted, commenters stated that U-3 unemployment rates do not
capture the underemployed and those who drop out of the labor force
altogether. One commenter stated that the unemployment rate is a
lagging indicator and does not indicate job insufficiency soon enough,
so a one-size fits all approach is ill-advised. Another commenter
asserted that, due to weaknesses in existing data sets and challenges
in defining economic conditions, many researchers use qualitative data
to support an understanding of employment challenges. This commenter
noted that even the National Bureau of Economic Research does not use a
single formula or data set for a definition of a recession. Some
commenters stated that not including these criteria in the core
standards would undercut a more nuanced understanding of local job
markets. Commenters also argued that Congress intended for there to be
many different ways to meet ``insufficient jobs'' and stated that the
Department acknowledged this when implementing in the late 1990s and
early 2000s.
Although the Department believes a low and declining employment-to-
population ratio, a lack of jobs in declining occupations or
industries, or an academic study or other publication(s) can enhance
the understanding of the job market, the arguments made by the
commenters were not sufficiently compelling to justify making changes
to the proposed rule. The core standards established in this final rule
are designed to provide States with a set of consistent criteria for
approval based on reliable and robust available evidence for evaluating
labor market conditions. Through its operational experience, the
Department has recognized that a low and declining employment-to-
population ratio, a lack of jobs in declining occupations or
industries, or an academic study or other publication(s) are less
reliable and consistent than standard unemployment data in
demonstrating a lack of sufficient jobs. Therefore, the Department does
not believe that these criteria should be included as part of the core
standards for waiver approval. The final rule, however, is including
these criteria as available for areas with limited data or evidence as
the Department believes these are appropriate alternative measures when
standard unemployment data is not available for an area. The final rule
is adopting the language for those criteria as proposed. This language
was included within Sec. 273.24(f)(7) in the proposed rule, and is
located within Sec. 273.24(f)(6) in the final rule.
Other Data and Evidence in an Exceptional Circumstance
The Department proposed that waiver requests that are supported by
data or evidence other than the core standards may be approved if the
request demonstrates an exceptional circumstance in an area. Though
requests tied to an exceptional circumstance need not necessarily meet
the core standards, the Department proposed that the requests include
some form of data or evidence showing that the exceptional circumstance
has caused a lack of sufficient jobs in the area. As an example of the
kind of data or evidence that could support a waiver under exceptional
circumstances, the Department cited a most recent three-month average
unemployment rate over 10 percent. Under the proposed rule, any
supporting unemployment data provided by the State under this criterion
must rely on standard BLS data or methods.
Exceptional Circumstances
A few commenters expressed concerns with elements of this
provision. Commenters pointed out that the proposed language in Sec.
273.24(f)(3) would require that the request demonstrate that the
exceptional circumstance has caused a lack of sufficient jobs, but then
provided an example of a State showing that an area has a most recent
3-month average unemployment rate over 10 percent. Commenters noted
that the Act provides for two separate bases for waiver approvals, if
the area ``has an unemployment rate of over 10 percent'' or ``does not
have a sufficient number of jobs to provide employment for the
individuals.'' The Department acknowledges that an example of an
exceptional circumstance causing a 3-month average unemployment rate
over 10 percent is an example of ``an unemployment rate of over 10
percent.'' The Department is, therefore, correcting this language at
Sec. 273.24(f)(3) to include the phrase ``or an unemployment rate over
10 percent'' after the phrase ``has caused a lack of sufficient number
of jobs.'' Some commenters suggested that the term ``exceptional
circumstance'' was unclear. As stated in the preamble to the proposed
rule, given that economic conditions can change dramatically due to
sudden and unforeseen forces, the Department believes it is appropriate
to maintain a
[[Page 66792]]
level of flexibility to approve waivers as needed in extreme, dynamic
circumstances. Therefore, the Department does not believe an exhaustive
list of all circumstances that will be considered exceptional can be
provided. However, the Department can reiterate and further clarify the
examples provided in the proposed rule. An exceptional circumstance may
arise from the rapid disintegration of an economically and regionally
important industry, the prolonged impact of a natural disaster, or a
sharp continuing economic decline. As stated in the proposed rule, a
short-term aberration, such as a temporary closure of a plant, would
not constitute an exceptional circumstance.
One commenter pointed to the closing of an automobile plant earlier
this year. This commenter stated that this plant was major driver of
the economy in the region, and its closing is having an immediate and
massive ripple effect throughout the area. The commenter noted that the
county the plant was located in would have qualified under the current
regulations, but was unsure if the area would qualify under the new
regulations, including the exceptional circumstance criterion. The
Department would like to make it clear that permanent closure of a
large plant (relative to the labor market area) or an ongoing
significant reduction in the plant's workforce would be considered an
exceptional circumstance, as long as it is not a temporary closing. If
the closing were temporary and its impact not ongoing, then it would
not justify a waiver. To provide more clarity regarding this criterion,
the Department is editing the amendatory text at Sec. 273.24(f)(3) to
require that, under the exceptional circumstance criterion, the waiver
request demonstrate that the impact of the exceptional circumstance is
ongoing at the time of the request.
Based on these comments, the Department also sees fit to underscore
that the example provided in the proposed regulatory text, a 3-month
average unemployment rate over 10 percent, is not the only potential
way that States could demonstrate that an area has an unemployment rate
over 10 percent or a lack of sufficient jobs due to an exceptional
circumstance. The Department is editing the amendatory text at Sec.
273.24(f)(3) to more clearly indicate that this is simply one example.
States are free to provide other data and/or evidence and to construct
arguments that there are not enough jobs for individuals in an area due
to an exceptional circumstance. For example, a State might provide
unemployment data or other evidence that is similar to the core
standards except in that it covers a shorter duration because the
area's economy suffered a rapid decline due to the exceptional
circumstance that is not yet demonstrated by a full 12-month or 24-
month data period. The Department will evaluate requests made based on
exceptional circumstances carefully to ensure that that the sudden lack
of jobs or high unemployment in the area is clearly connected to a
recent exceptional circumstance, that the lack of jobs or high
unemployment is ongoing, and that the lack of jobs or high unemployment
is demonstrated by recent data or evidence.
3-Month Unemployment Rate of Over 10 Percent
Commenters argued that restricting the use of a recent 3-month
unemployment rate of over 10 percent to exceptional circumstances,
rather than including it as a core standard, is contrary to the
proposed rule's stated preference that waivers reflect current economic
conditions. The Department points out that, while the current
regulations suggest that States could submit evidence that an area has
a recent 3-month average unemployment rate over 10 percent provide to
support a claim of unemployment over 10 percent, the current
regulations do not categorize this type of waiver as ``readily
approvable.'' In this way, the Department believes that the proposed
rule is relatively similar to the current regulations in excluding a
recent 3-month average unemployment rate over 10 percent from the core
standards. Moreover, the Department believes that requiring a 3-month
average unemployment rate over 10 percent be tied to an exceptional
circumstance will strengthen this criterion so that a 3-month average
would not be used to grant a year-long waiver when that 3-month average
is simply a short-term aberration or reflective of regular seasonal
employment.
Commenters also argued that restricting the use of a recent 3-month
unemployment rate of over 10 percent to only exceptional circumstances,
along with the elimination of the historical seasonal unemployment rate
over 10 percent criterion, is inconsistent with the Act. Commenters
noted that the proposed rule would essentially leave only one
criterion--having a 12-month average unemployment rate over 10
percent--as the basis for approval using an average unemployment rate
over 10 percent. These commenters argued that these changes are
inconsistent with the Act, as the Act does not specify requirements
regarding the duration of time that an area must have an unemployment
rate above 10 percent.
Commenters argued that the Department has previously discussed
shortcomings with requiring a 12-month average unemployment rate to
demonstrate an unemployment rate over 10 percent. Commenters noted that
in guidance issued in December 1996, the Department stated that it
would not require a 12-month average to approve a waiver based on an
unemployment rate over 10 percent. Commenters noted that this guidance
stated, ``A 12-month average will mask portions of the year when the
unemployment rate rises above or falls below 10 percent. In addition,
requiring a 12-month average before a waiver could be approved would
necessitate a sustained period of high unemployment before an area
became eligible for a waiver.'' Commenters argued that to address these
issues, the guidance document stated, ``. . . states have several
options. First, a state might opt to use a shorter moving average. A
moving average of at least three months is preferred. In periods of
rising unemployment, a three-month average provides a reliable and
relatively early signal of a labor market with high unemployment. A
state might also consider using historical unemployment trends to show
that such an increase is not part of a predictable seasonal pattern to
support a waiver for an extended period (up to one year).'' Commenters
argued that this guidance was reinforced in the preamble of the 1999
proposed rule.
Commenters also argued that eliminating the 3-month average
unemployment rate over 10 percent as the basis for waiver approval is
contrary to the Department's preference that waivers reflect current
economic conditions, as stated in the 2019 proposed rule. These
commenters asserted that a most recent three-month average unemployment
rate over 10 percent is the criterion that most closely aligns with
current economic conditions and signals deteriorating labor market
conditions in an area.
The Department believes the changes being made are consistent with
the Act. In fact, the current regulations also include duration
requirements to demonstrate an area has an unemployment rate above 10
percent, and only guarantee approval of waivers based on unemployment
over 10 percent for a 12-month period. For example, an area with a 1-
month unemployment rate of over 10 percent cannot qualify for a waiver
based on that evidence alone. Similarly, in order for a State to
demonstrate an area has an unemployment rate above 10 percent,
[[Page 66793]]
the core standards in the final regulations only guarantee approval of
waivers based on unemployment over 10 percent for a 12-month period. As
the Act does not specify duration requirements, the Department is
within its authority to define how 10 percent unemployment is to be
measured through the rulemaking process, as it did when it originally
promulgated regulations regarding the ABAWD time limit.
One commenter also argued that requiring that the 3-month
unemployment rate be above 10 percent is too high and provided data
from recent economic downturns to argue that a 10 percent unemployment
rate is not always reached, even in times that are considered times of
severe economic distress. The commenter argued that the waiver
standards need to be more responsive to economic declines in order to
serve as an automatic stabilizer and help mitigate the negative
economic impacts of the decline. As explained in the preceding section,
in the event of an exceptional circumstance a recent 3-month
unemployment rate is only one example of evidence that can be provided
to support a waiver.
Restricting the Combining of Data to Group Substate Areas and
Establishing a Strict Definition of Waiver ``Area''
Comments on Restricting the Combining of Data to Group Substate Areas
The Department proposed to prohibit States from combining
unemployment data from individual substate areas to calculate an
unemployment rate for the combined area (otherwise referred to as
``grouped'' areas or ``grouping''), unless the combined area is
designated as a Labor Market Area (LMA) by the Federal government.
According to DOL, an LMA is an economically integrated area within
which individuals can reside and find employment within a reasonable
distance or can readily change jobs without changing their place of
residence. LMAs are an exhaustive level of substate geography
delineated in partnership by DOL and OMB, then published by the DOL BLS
Local Area Unemployment Statistics program.\7\ The Department also
proposed that States would not be able to omit certain areas within the
LMA in the State from the area covered by the waiver. In addition, the
Department specifically asked for comment on whether grouping should be
limited to LMAs or whether grouping should be prohibited entirely.
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\7\ For more information on LMAs, please visit https://www.bls.gov/lau/laugeo.htm.
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Some commenters generally supported the restriction on States'
ability to group areas, stating that using LMAs would limit grouping to
regions with demonstrable economic ties and prevent manipulative
grouping practices by States. Commenters noted that LMAs are a relevant
and reliable tool for evaluating labor market conditions within a local
area. Commenters stated that States should not be able to combine areas
on the basis of their own judgment, as they will seek to maximize any
discretion in order to receive and use as much Federal money as
possible. One commenter noted that allowing States to combine areas has
led to combining low unemployment counties with high unemployment
counties as a means to waive the work requirement for as many ABAWDs as
possible, which this commenter considered abuse.
Many commenters opposed the proposed restriction on grouping to
only LMAs. Some commenters argued that the current discretion given to
States works and that this is shown by evidence that States are
gradually phasing out waivers in the areas with the lowest rates of
unemployment as the economy improves. The Department does not share
this view. Based on the Department's extensive experience reviewing and
processing ABAWD waiver requests, it believes that many areas have
remained under waivers for longer than appropriate due to, in
particular, States' strategic use of grouping to maximize the
geographic coverage of waived areas rather than to demonstrate high
unemployment or a lack of sufficient jobs for ABAWDs, as outlined in
the Act. In the Department's view, States' strategic use of grouping to
maximize the geographic coverage of waived areas subverts the Act's
condition that waivers apply where unemployment exceeds 10 percent or
there is a lack of sufficient jobs.
Some commenters suggested the Department used too narrow of a
definition of the terms ``economically tied'' and ``labor market
area.'' They suggested that LMAs are not the only appropriate areas for
grouping because LMAs are based on commuting patterns of the general
workforce and are not specific to low-income, low-skilled ABAWDs who
lack affordable transportation options. Commenters argued that LMAs are
not always an accurate indication of which communities interact
economically or are accessible for the purposes of employment.
Commenters stated that the LMA designation does not take into account
variations by industry or socioeconomic characteristics. Commenters
provided research showing that a given county may belong to multiple
commuting areas depending on the industry or type of occupation.
Commenters also stated that job losses in some LMAs can have
significant ripple effects in other neighboring LMAs. Commenters gave
examples in which some LMAs are too big to properly define commuting
patterns for ABAWDs because it could take more than two hours without
traffic to commute one way from one end of an LMA to the other by car
and provided examples where it is impossible to access most of the
communities within an LMA using public transportation. Commenters
argued that the LMA methodology misses the fact that, in some counties,
workers may have to travel in all directions and often beyond a
contiguous county for their job, and, therefore, LMAs are too small in
some cases. Commenters provided research indicating that the change in
proximity to jobs in recent years varies by socioeconomic
characteristics, with poor, minority residents seeing the biggest
decline in jobs within a reasonable commuting distance.
The Department is not compelled by the commenters' suggestions
described in the preceding paragraphs, which generally argue that LMAs
do not account for specific ABAWD commuting patterns and other factors
specific to ABAWDs. While commenters suggested alternatives that the
Department considered, as discussed below, LMAs remain the best
available and most appropriate delineation to address the issue of
grouping, as there are no Federally-designated areas that specifically
assess commuting patterns and other related economic factors for
ABAWDs. According to DOL, an LMA is an economically integrated area
within which individuals can reside and find employment within a
reasonable distance or can readily change jobs without changing their
place of residence; therefore the Department maintains that they are
the best available and most appropriate area delineation at this time.
However, the Department notes that if in the future a more robust
delineation becomes available from a Federal source, the Department may
consider its appropriateness in the context of future rulemaking.
Other commenters argued that States have the best understanding of
the regional patterns in their labor markets, local commuting burdens,
and other local nuances specific to ABAWDs, and should retain
flexibility in combining data to group areas. A State agency commented
that each State has the
[[Page 66794]]
contextual knowledge and experience to identify the most appropriate
grouping areas for a waiver. Commenters suggested that the proposal to
impose restrictions on grouping substate areas is inconsistent with the
philosophy that the government closest to the people governs best.
Commenters stated that an erosion of State autonomy in forming these
substate groupings could result in SNAP participants being removed from
the program despite a demonstrable lack of sufficient jobs in their
labor market.
Commenters argued that in its original rulemaking the Department
recognized that it did not have sufficient expertise to evaluate
whether local labor markets could offer ``a sufficient number of jobs
to provide employment for the individuals'' because the Department was
not in a position to know where new jobs were located or the
feasibility of commuting to them given driving times and public
transportation. Commenters argued that in its original rulemaking the
Department found that county unemployment rates were the most available
measure of the vitality of local labor markets, and the Department
specifically allowed States to determine which areas would be grouped
together to receive waivers because the patterns of employment and
mobility for the low-skilled employment market can be quite different
from those for the overall employment market. Commenters argued that
the Department concluded that States were best-equipped to determine
whether high unemployment in some areas adversely affected employment
prospects in others.
Commenters suggested that there are numerous reasons that a State
would choose to group towns other than by LMA, such as cost of living,
lack of access to or availability of transportation, lack of employers
with a certain job field, or other demographic considerations.
Commenters argued that the proposed change to State flexibility in
grouping areas is contrary to years of FNS guidance and departs from
USDA's longstanding position without reasoned support. They pointed out
that in regulations and guidance over the past two decades, the
Department has given States broad discretion to define areas and has
never expressed that commuting patterns be the primary or only basis
for whether or not substate areas could be grouped together.
The Department appreciates and has considered the comments
described in the preceding paragraphs, which broadly argue that States
should maintain their current flexibility to group substate areas.
However, the Department disagrees. The Department has learned through
its extensive operational experience that this flexibility allows
States to strategically group substate areas to maximize the geographic
coverage of waived areas rather than to demonstrate high unemployment
or a lack of sufficient jobs for ABAWDs, as outlined in the Act. The
Department has determined that this problem is one of the primary
reasons why about half of the ABAWDs participating in SNAP live in
waived areas, despite current low unemployment levels across the
majority of the country. Therefore, the need to address this problem
outweighs the arguments received in support of States' need to maintain
current flexibility.
The Department is within its authority to revise its regulations as
the statute does not define what constitutes an ``area'', and the
Department's operational experience has shown that current regulations
provide States with too much flexibility. As previously stated, States
are grouping areas in such a way to maximize waived areas rather than
demonstrate high unemployment or lack of sufficient jobs for ABAWDs. As
noted in the proposed rule, the Department has learned that its
standards for combining areas provide too much flexibility for State
agencies. While the Department has attempted to clarify its intention
that areas be economically tied through policy guidance,\8\ this has
not prevented States from strategically using grouping to maximize
waived areas. For example, some States have grouped nearly all
contiguous counties in the State together while omitting a few counties
with relatively low unemployment in order to maximize the waived areas
in the State. In other cases, States have grouped certain towns
together that share the same economic region while omitting others with
relatively low unemployment from the group, thereby maximizing the
waived areas in the State.
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\8\ Guide to Supporting Requests to Waive the Time Limit for
Able-Bodied Adults without Dependents, 2016. Available at: https://fns-prod.azureedge.net/sites/default/files/snap/SNAP-Guide-to-Supporting-Requests-to-Waive-the-Time-Limit-for-ABAWDs.pdf.
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A few commenters stated that the proposed rule's restriction on
grouping contradicts the statutory language permitting waivers for
``any group of individuals in the State if the Secretary makes a
determination that the area in which the individuals reside'' has an
unemployment rate above 10 percent or lacks sufficient jobs. Commenters
suggested that Congress intended to allow States to use their
discretion in how to group regions together for the purposes of
obtaining a waiver. Commenters argued that States are not using waivers
in ways that were ``not foreseen by Congress'' as described in the
proposed rule. Commenters noted that Congress specifically considered
language in the House-passed version of the 2018 Farm Bill that would
have limited grouping and then rejected this provision in the final
enacted 2018 Farm Bill. Commenters also pointed to the Conference
Report that accompanied the 2018 Farm Bill, which states, in
particular, ``[t]he Managers intend to maintain the practice that
bestows authority on the State agency responsible for administering
SNAP to determine when and how waiver requests for ABAWDs are
submitted.'' These commenters argued that to add new geographic
restrictions through this rulemaking would contradict the intent of
Congress.
In response to these comments, the Department points out that
Congress has been silent on the specific issue of combining data to
group substate areas. Nothing in the statute or legislative history
clearly states how the Department should handle this issue. The
Department believes the Conference Report that accompanied the 2018
Farm Bill is referring broadly to maintaining the States' ability to
choose which areas it wishes to request when submitting a request to
the Department, not referring to maintaining the discretion of States
to combine data from substate areas to form an economic region.
Other commenters argued that the LMA standard is reliant on
outdated data. They pointed out that the current list of LMAs are based
on population data from the 2010 Census and commuting data from the
American Community Survey five-year dataset for 2006-2010. These
commenters argued that LMAs are not updated frequently enough to
capture recent labor market trends. Commenters also stated that OMB has
cautioned that LMA delineations (specifically Metropolitan Statistical
Area and Micropolitan Statistical Area delineations) should not be used
to develop and implement Federal, State, and local non-statistical
programs and policies without full consideration of the effects of
using these delineations for such purposes.
The Department appreciates the concerns described in the preceding
paragraph regarding the age of the data used for LMAs and using caution
when applying LMAs to implementing Federal policies. However, after
assessing alternative options, the Department has not identified any
other labor market definition that uses more
[[Page 66795]]
recent data and would equally address the problem of States'
manipulative usage of grouping substate areas to maximize waived areas.
The Department is resolute that it must address this problem, and that
LMAs represent the best available and most practical solution.
Commenters also stated that the proposed rule ignores that a
variety of other factors that can account for areas having ``economic
ties,'' such as employer recruiting practices, regional workforce
development strategies, regional economic development and investment
patterns, service delivery models, and migration patterns. Commenters
asserted that States consider multiple factors when grouping areas to
align resources, administrative capacity, and service delivery, and may
also consider the location of SNAP E&T services, Workforce Innovation
and Opportunity Act (WIOA) services, and other work programs or grant
programs. In particular, commenters stated that the proposed
restriction on grouping would reduce States' ability to allocate and
coordinate E&T resources effectively. One commenter provided examples
of States that coordinated E&T programs with unwaived areas when the
State could not provide or guarantee SNAP E&T slots in all counties.
Commenters argued that the proposed rule would make State planning more
difficult given the inability to group areas consistent with Workforce
Development Boards. Commenters suggested that the Department consider
other alternative frameworks for grouping areas, such as areas covered
by Workforce Development Boards. They noted that, under WIOA, states
have discretion to define regions and are encouraged to take an
integrated approach to account for a range of different factors,
starting with LMAs, but then also considering funding streams and
service delivery.
While the Department appreciates that States consider
administrative needs, the availability of work programs and employment
and training services, and other factors in considering when and where
to request a waiver, the Department interprets the Act to plainly mean
that the Department's authority to grant waivers is limited to areas
with unemployment rates of over 10 percent or areas that demonstrate
lack of sufficient jobs. The Department is not compelled by arguments
that E&T services or other work program availability should be factored
in when defining which areas have high unemployment or lack sufficient
jobs. However, the Department also notes that States still maintain the
ability to choose which areas to request. If the State wants to choose
areas to request, among those that qualify, based on E&T services or
other work programs, the State is free to do so.
Commenters also suggested that the Department allow grouping
consistent with Bureau of Economic Analysis (BEA) economic areas.
Commenters pointed out that these areas were listed as an example of an
area for grouping in past Department guidance. The Department
appreciates these suggestions but has evaluated BEA economic areas and
determined that they are no longer appropriate for grouping areas for
ABAWD waiver requests, as BEA is no longer producing or publishing this
data.
Commuting Zones
Some commenters urged the Department to consider using Commuting
Zones (CZs) as another, possibly more accurate, metric for evaluating
labor market conditions within a local area and grouping substate areas
for waivers. Some commenters pointed out that, while many LMAs
encompass a single county, very few CZs do. Other commenters asserted
that the USDA Economic Research Service (ERS) created CZs to better
reflect commuting patterns in rural areas. One commenter pointed to
research by ERS examining the relationship between labor market area
conditions and length of SNAP participation spell, which found that
using the CZ definition had the largest estimated effects among several
labor market definitions. Other commenters argued that the Department
should consider replacing LMAs with CZs because it would result in the
application of the work requirement in more areas. One commenter stated
that limiting grouping to either LMAs or CZs would be a vast
improvement over current rules. Another commenter argued that CZs face
the same limitation as LMAs in that they are based on commuting
patterns of the general public and do not account for other factors
specific to ABAWDs.
While the Department appreciates the suggestions to consider using
CZs, the Department is not adopting this alternative proposal. While
CZs were originally developed by USDA ERS, the list of CZs is no longer
published by a government agency. This is in contrast to the LMA list,
which is still published by DOL. Though university researchers
published data similar to USDA ERS's CZs following the 2010 Census, the
Department believes the basis for approval of waivers must be sound
data and evidence that primarily relies on data from BLS or BLS-
cooperating agencies. For these reasons, the Department views the use
of LMAs for ABAWD waivers as vastly superior to CZs, and does not think
it prudent to include CZs as a substitute for LMAs nor as an additional
means by which to group substate areas.
Establishing Strict Definition of Waiver ``Area''
The Act states that ``the Secretary may waive the applicability of
[the time limit] to any group of individuals in the State if the
Secretary makes a determination that the area in which the individuals
reside . . . has an unemployment rate of over 10 percent; or . . . does
not have a sufficient number of jobs to provide employment for the
individuals.'' Current regulations generally allow States to define
``the area in which the individuals reside.'' That is, the current
regulation at Sec. 273.24(f)(6) provides the following: ``States may
define areas to be covered by waivers. We encourage State agencies to
submit data and analyses that correspond to the defined area. If
corresponding data does not exist, State agencies should submit data
that corresponds as closely to the area as possible.''
In response to the proposed rule's restriction on the combining of
data to group substate areas, one commenter suggested that the
Department should instead define ``area'' as a jurisdiction, such as a
county, and then adopt a two-step approach to approving waivers. During
this two-step process, the Department would first determine whether the
requested jurisdiction would meet any of the waiver criteria, and, if
it does, the Department should also determine whether the commuting
zone surrounding the jurisdiction would also meet the waiver criteria.
Unless the waiver criteria is met in both steps, both for the
jurisdiction in which the individual resides and for the larger CZ, the
waiver would not be granted.
The Department does not believe that defining ``area'' in this way
and adding this two-step process would be consistent with section
6(o)(4) of the Act. The Act gives the Secretary authority to waive an
``area in which the individuals reside,'' if the area ``has an
unemployment rate of over 10 percent'' or ``does not have a sufficient
number of jobs to provide employment for the individuals.'' Including
the two step process suggested by the commenter would actually result
in many individual jurisdictions, defined as ``areas,'' being denied
waivers even if the area demonstrates an unemployment rate of over 10
percent or a lack of
[[Page 66796]]
sufficient jobs based on robust, reliable BLS data. This is because an
additional area (e.g., the commuting zone) would also need to
demonstrate an unemployment rate of over 10 percent or a lack of
sufficient jobs. In other words, two areas (the jurisdiction and the
commuting zone) would need to meet the criteria in the Act for a waiver
to be approved, which the Department believes is inconsistent with the
Act.
In response to the proposed rule's restriction on the combining of
data to group substate areas, some commenters also argued that States
should not have the option to request varying levels of jurisdictions
within the same waiver and that States should not be able to choose
when to apply for a combined area using the LMA definition and when to
apply for a single-jurisdiction waiver. Commenters argued that areas
should not qualify for waivers if there are available jobs within a
reasonable commuting distance. Commenters also argued that ABAWD time
limit waiver policy should not stifle geographic mobility by
reinforcing perverse incentives for working-age individuals to remain
in an economically depressed area to receive SNAP benefits for an
unlimited period of time without working or engaging in work training.
In addition, commenters asserted that ``area'' should be defined to
ensure the maximum number of people possible are moved off of SNAP and
into the workforce, where they can improve their lives, families, and
communities. Commenters provided data indicating that not allowing
States to waive the ABAWD time limit unless the LMA qualifies for the
waiver would result in a broader application of the time limit.
The Department agrees with the comments described in the preceding
paragraph. Therefore, the Department is expanding upon the proposed
rule's restriction on the combining of data to group substate areas to
explicitly define the statutory phrase ``an area in which the
individuals reside'' to mean an area considered to be an LMA, as
defined by OMB/DOL. The Department is also including the intrastate
part of an interstate LMA, an Indian reservation area, and a U.S.
Territory in this new waiver area definition, as explained later in
this section. In general, this means that the final rule will only
allow for waivers covering LMAs; not individual jurisdictions within
LMAs, such as counties or county equivalents, and not for any State-
defined groupings of substate areas. Thus, this change effectively
replaces the proposed amendatory text of Sec. 273.24(f)(4) and (5) of
the proposed rule, which had proposed restricting Statewide waivers and
the combining of data to group substate areas (grouping).
The Department is making this change in the final rule because it
is concerned about the potential for misuse by States if States have
the choice to obtain waivers for LMAs or individual jurisdictions, such
as counties and county equivalents. For example, if a State has the
choice to obtain waivers for LMAs or for individual counties, and a
given LMA does not qualify but a county within it does qualify, the
State could waive the county without consideration for the job
availability in its surrounding LMA. Consistent with the aforementioned
comments, the Department does not think providing this type of choice
is appropriate in the context of ABAWD time limit waivers. The
Department is therefore establishing a strict definition of waiver area
because it believes that individual jurisdictions, such as counties or
county equivalents, should not receive waivers if there are jobs
available in a nearby jurisdiction, within a reasonable commuting
distance. LMAs, as listed by DOL, represent the best available
government definition of an area for defining a reasonable commuting
distance.
The Department also believes that generally restricting waivers to
qualifying LMAs will result in a broader application of the time limit,
encourage geographic mobility among ABAWDs, and reduce dependence on
government benefits. In other words, the Department is implementing a
clear regulatory definition of ``area'' for waiver purposes because it
expects unemployed ABAWDs to proactively pursue any and all work and/or
work training opportunities within reasonable commuting distance of
their homes. In that same vein, the Department expects States to
support ABAWDs in their efforts to find work and meet the work
requirement by expanding access to work programs and other supportive
services for ABAWDs.
Some commenters pointed out that many LMAs cross State lines, while
individual States are responsible for requesting waivers for areas
within each State. Commenters noted that the proposed rule did not
explain what would happen in these circumstances. In the final rule,
the Department is choosing to require that waiver approval be based on
data from the entire interstate LMA, not data from the part of the LMA
within the State. In other words, a State with an interstate LMA may
request and be approved for the portion of the LMA that falls within
its jurisdiction as long as the entire interstate LMA qualifies. The
Department believes this requirement is consistent with the rationale
that areas should not qualify for waivers if there are available jobs
within a reasonable commuting distance, and is consistent with the
restriction on waiving individual jurisdictions within LMAs. Therefore,
the Department is specifically including the intrastate part of an
interstate LMA in its strict definition of an area.
The Department sees fit to point out that if an entire State is
encompassed by one larger interstate LMA, then the State may request
and be approved for a statewide waiver if the entire interstate LMA
qualifies. Currently, the only example of this situation would be the
District of Columbia, which is encompassed by one larger interstate
LMA.
Based on the Department's decision to strictly define waiver area
as an LMA (or the intrastate part of an interstate LMA, a reservation
area, or a U.S. Territory), the Department also sees fit to clarify a
few potential points of confusion about LMA data availability. In the
proposed rule, the Department proposed that the practice of grouping be
restricted to only LMAs by amending 273.24(f)(5) to stipulate that the
State agency ``may only combine data from individual areas that are
collectively considered to be Labor Market Area by DOL.'' However, in
the proposed rule the Department did not reference the fact that BLS
publishes directly corresponding, representative unemployment data for
all LMAs, just as it does for counties, county equivalents, and a
limited number of other areas.\9\ To clarify, because corresponding LMA
data is available, States would not need to use unemployment data and
labor force data from individual areas within an LMA (e.g., for multi-
county LMAs) to calculate an unemployment rate representative of the
LMA. In other words, under the final rule's strict definition of waiver
area, States requesting waivers for an LMA would not be required to
combine data. Therefore, the Department has revised the amendatory text
in the final rule to better reflect that directly corresponding,
representative BLS unemployment data is currently available for LMAs.
If such corresponding data were to become unavailable in the future,
States may combine the data of the individual areas within the LMA
(e.g., for multi-county LMAs) to calculate an unemployment rate
representative of the LMA. The Department is addressing the potential
[[Page 66797]]
scenario in the amendatory text so that if corresponding data were to
become temporarily or permanently unavailable in the future for any
LMA, that States would continue to be able to exercise their option to
request and support waivers for any LMA.
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\9\ For more information on the available BLS data, please visit
https://www.bls.gov/lau/laugeo.htm.
---------------------------------------------------------------------------
As noted in a preceding paragraph, the final rule also includes
Indian reservation areas and U.S. Territories in the strict definition
of waiver area. This means that though other individual jurisdictions
(e.g., counties or county-equivalents within a larger LMA) are not
allowable waiver areas, reservation areas and U.S. Territories are
allowable waiver areas, consistent with longstanding policy. The U.S.
Government has a unique legal relationship with Indian tribal
governments that differentiates reservation areas from other areas
within the United States. Agencies have been instructed by Executive
Order 13175 to respect Indian tribal self-government and sovereignty,
honor tribal treaty and other rights, and strive to meet the
responsibilities that arise from the unique legal relationship between
the Federal Government and Indian tribal governments. As such, the
Department recognizes that reservation areas have unique circumstances
and do not fit neatly within the LMA definition. In addition, U.S.
Territories participating in SNAP, including Guam and the U.S. Virgin
Islands, do not have Labor Market Areas and would therefore have no
basis for qualifying for a waiver if they were not explicitly included
in the strict definition of an area. Therefore, the Department is
recognizing these areas as potential waiver areas in the amendatory
text. The Department sees fit, however, to also explain that while
reservation areas could be waived independently, they may be also be
waived as part of one or more LMAs that they are geographically located
within, without the need for the State to request to waive that
reservation area independently.
The Department is adopting these changes to establish a strict
definition of waiver area, to include an LMA, the intrastate part of an
interstate LMA, a reservation area, or a U.S. Territory, at Sec.
273.24(f)(4).
Restricting Statewide Waivers
The Department proposed eliminating statewide waiver approvals
requested on the basis of statewide data averages when substate data
averages are available through BLS, except for those waivers based upon
a State's qualification for extended unemployment benefits, as
determined by DOL's Unemployment Insurance Service.
A few commenters supported this proposal. One commenter, in
particular, stated that while remaining sensitive to the administrative
burden placed on State agencies, the Department should strive to
approve waivers for distinct economic regions, as State boundaries
often encompass multiple labor markets with significant variation in
economic conditions.
As discussed previously in the Core Standards: Eliminating the
Extended Unemployment Qualification Standard section, the Department
agrees with this comment and notes that statewide data may mask tight
labor markets in some substate areas. Additionally, as discussed in the
immediately preceding section, Restricting the Combining of Data to
Group Substate Areas and Establishing a Strict Definition of Waiver
``Area'', the Department is choosing to codify a strict definition of
waiver ``area'' that will also effectively restrict statewide waivers.
In addition, as discussed in the Core Standards: Eliminating the
Extended Unemployment Benefits Qualification Standard section, the
Department is modifying its proposals to remove the extended
unemployment benefits criterion from the core standards that was
included at Sec. 273.24(f)(2)(iii) in the proposed rule and to
eliminate the proposed exception for extended unemployment benefits
from the restriction on statewide waivers that was included at Sec.
273.24(f)(4) in the proposed rule. These changes will effectively
eliminate all statewide waivers based on statewide data, except for
U.S. Territories, as explained in preceding sections. Consistent with
the general rationale for restricting statewide waivers, the Department
believes this change will ensure that waivers of the ABAWD time limit
are more appropriately targeted to those particular areas that have
unemployment rates over 10 percent or lack sufficient jobs. However,
the Department sees fit to point out a particular nuance on the
restriction of statewide waivers. That is, while this change generally
eliminates statewide waivers based on statewide data, it would be
possible for all LMAs in a State to qualify for waivers provided that
each requested LMA separately meets the standards for approval.
Similarly, it would be possible for a single LMA's boundaries to match
or encompass a State's boundaries, in which case a waiver for the LMA
would effectively waive the entire State. The Department does not see
the potential for such scenarios to be problematic because they would
not contradict the strict definition of waiver area in that the waiver
area would still consist of one or more individually qualifying LMAs.
Many commenters expressed opposition to the proposed restriction of
statewide waivers. A few of these commenters argued that this proposal
is arbitrary and capricious because it departs from USDA's longstanding
position without reasoned support. In particular, these commenters
argued that the Department fails to identify data or evidence that
justifies a restriction on statewide waivers. A commenter also provided
text from the House Committee on Budget report (H. Rept. 104-651) from
June 1996, when it reported out its original version of PRWORA, which
stated, ``The committee understands that there may be instances in
which high unemployment rates in all or part of a State or other
specified circumstances may limit the jobs available for able-bodied
food stamp participants between 18 and 50 years with no dependents.''
Another commenter provided text from the House Committee on Agriculture
materials when it marked up the Food Stamp Reform and Commodity
Distribution Act in March 1995, which eventually was incorporated into
PRWORA and was the basis for what is now section 6(o) of the Act. These
materials stated, ``The new work requirement could be waived by the
Secretary, for some or all individuals within a State or part of a
State, if, on a State's request, the Secretary finds that the area has
an unemployment rate of over 10 percent, or the area does not have a
sufficient number of jobs to provide employment to those subject to the
new requirement (but, the Secretary must report to Congress on the
basis on which the waiver decision was made).''
Commenters also challenged the Department's rationale that
statewide unemployment figures may include areas in which unemployment
rates are relatively low and that eliminating statewide waivers will
help target areas in which unemployment rates are high. These
commenters asserted that this proposal is arbitrary because variation
in unemployment rates exists at all geographic levels. One commenter
also asserted that the proposed rule's stated rationale ignores the
statistical principle of weighted averages. This commenter said that,
in order for an entire State to qualify under current rules,
unemployment rates in the State must be generally high across the
State, particularly in the most populous areas of the state. Commenters
said that statewide waivers are appropriate when
[[Page 66798]]
the areas being impacted by economic forces are fluid and the State can
demonstrate an overall lack of sufficient jobs.
The Department is not compelled by commenters' suggestions that the
elimination of statewide waivers is arbitrary. The Department believes
this change will ensure that waivers of the ABAWD time limit are more
appropriately targeted to those particular areas that have unemployment
rates over 10 percent or lack sufficient jobs, as required by the Act.
Moreover, as pointed out in a preceding paragraph, it would be possible
for all LMAs in a State to qualify for waivers provided that each
requested LMA meets the standards for approval, or for a single LMA's
boundaries to match or encompass a State's boundaries.
Some commenters, including a State agency, expressed disagreement
with the idea that an entire State should not be treated as a large
``economically tied'' area. The State agency argued that residents of a
State are economically tied together in that they share the same State
minimum wage laws, labor regulations, occupational licensing
requirements, and income tax rates.
Several commenters stated that this proposal would limit State
flexibility and would increase administrative complexities and burdens.
Another commenter argued that there is no evidence of States abusing
statewide waivers. One commenter pointed to data showing that the
number of statewide waivers has been decreasing as the economy has
improved, indicating that there is no need for this provision.
The Department has observed that statewide waivers have resulted in
the waiving of substate areas that do not have unemployment rates over
10 percent nor lack sufficient jobs. In these cases, the statewide
averages mask tight labor markets in some substate areas, just as they
may mask slack labor markets in other substate areas. For example, two
recent statewide waiver requests included multiple substate areas with
individual unemployment rates of under 4 percent. Under current
regulations, these statewide waiver requests qualify because they are
based on the statewide averages that meet the current standards for
approval. In the Department's view, informed by over 20 years of
operational experience, it is more appropriate, precise, and accurate
to base ABAWD time limit waiver approvals on robust, reliable substate
BLS data when it is available. Moreover, as explained in the preceding
section Establishing a Strict Definition of Waiver ``Area,'' the
Department is including LMAs, intrastate portions of interstate LMAs,
U.S. Territories, and reservation areas in its strict definition of
waiver area which are generally based on substate (and sometimes
include interstate) data.
The Department is modifying the proposal to restrict statewide
waivers because it is no longer explicitly restricting statewide
waivers, as was included at Sec. 273.24(f)(4) in the proposed rule.
Instead, the Department is effectively restricting statewide waivers by
removing the extended unemployment benefits criterion from the core
standards that was included at Sec. 273.24(f)(2)(iii) in the proposed
rule, and by including a strict definition of waiver area limited to an
LMA, the intrastate part of an interstate LMAs, and a reservation area
or a U.S. Territory at Sec. 273.24(f)(4).
Duration of Waiver Approvals and Timeliness of Data
Limiting a Waiver's Duration to One Year or Less
The Department proposed to limit a waiver's duration to one year
and continue to allow a waiver for a shorter period at a State's
request. This proposal was included in paragraph Sec. 273.24(f)(6) in
the proposed rule. Commenters stated that requiring annual waiver
requests during very poor economic conditions was unnecessary,
burdensome, and wasteful, and that it could cause delays in waiver
implementation. Another commenter stated that two-year waivers had
historically been used in narrow, appropriate circumstances because
two-year waivers already have burdensome data requirements that ensure
that they are not implemented in inappropriate circumstances.
The Department is maintaining this provision as proposed. In the
final rule, this provision is included in paragraph Sec. 273.24(f)(5).
The Department believes that a 1-year waiver term allows sufficient
predictability for States to plan and implement the waiver. At the same
time, a 1-year waiver term ensures that the waiver request reflects
recent economic conditions.
Timeliness of Data
The Department proposed that waivers based on the 20 percent
standard would not be approved beyond the fiscal year in which the
waiver is implemented. This provision was included in paragraph Sec.
273.24(f)(6) in the proposed rule. This proposal is connected to the
existing regulation that these waivers must be supported by data from a
24-month period no less recent than what DOL used in its current fiscal
year Labor Surplus Area (LSA) designation. When these waivers start
late in the fiscal year, the data period used by the State may meet
current regulatory requirements for waivers starting in that fiscal
year, but it also may be relatively outdated support for a full 12-
month approval period that spans into the next fiscal year. This is
because when the waiver approval crosses fiscal years, the data
supporting the waiver may, in fact, be older than the data used by DOL
for LSAs for the more recent fiscal year. By proposing to limit the
duration of these waivers to the current fiscal year, the Department
sought to stop States from using older data to waive more areas than
justified by more recent data used by DOL.
Commenters, including State agencies, suggested that this proposal
would be administratively burdensome. One State agency argued that the
proposed change would be inefficient, as its E&T programs and its own
fiscal year calendar is different than the Federal fiscal year
calendar. A State agency also requested that it retain its right to
request waivers for durations exceeding the current fiscal year if it
has compelling reasons.
Based on these comments, the Department is modifying this provision
to preserve State flexibility and to allow qualifying 20 percent
standard waivers to be implemented for 12-month periods that may cross
fiscal years. At the same time, the modification also addresses the
Department's concerns about the timeliness of data. Instead of limiting
the implementation of 20 percent standard waivers to the fiscal year,
as proposed, the modification will require that States always use data
as recent as DOL uses to determine LSAs for a given fiscal year, no
matter the month in which the waiver would start. States will maintain
the discretion to set their own waiver schedule, but only if they
support their request with qualifying, recent data. The modification is
modeled after DOL's data reference period for LSAs and explained in
detail in the following paragraphs.
In determining which areas qualify as LSAs for each fiscal year,
DOL reviews areas' unemployment rates for the 2 preceding calendar
years (the LSA data reference period). If an area qualifies, it is an
LSA for the 12-month duration of the coming fiscal year, which starts
in October and runs through September of the following year. Put
simply, there are 21 months from the last month of the LSA data
reference period through the last month in which the LSA designation is
effective. For example, for an LSA designation of October 2020 through
September 2021, the data from
[[Page 66799]]
the previous 2 calendar years is from January 2018 through December
2019. The number of months from December 2019 (the last month of the
LSA data reference period) through September 2021 (the last month in
which the LSA designation is effective) is 21 months.
Similarly, for the 20 percent standard data to be considered
recent, the Department is requiring that there be no more than 21
months from the last month of the data reference period through the
last month in which the waiver would be effective. Below are examples
of how the policy will work in practice.
Example 1: The State has requested a 12-month waiver for October
2020 through September 2021. The State provided a 24-month data period
from June 2018 through May 2020 showing that the requested areas meet
the 20 percent standard. The waiver is approvable as requested, since
the number of months from the end of May 2020 through the end of
September 2021 is 16 months and does not exceed 21 months.
Example 2: The State has requested a 12-month waiver for January
2020 through December 2020. The State provided a 24-month data period
from April 2017 through March 2019 showing that the requested areas
meet the 20 percent standard. The waiver is approvable, since the
number of months from the end of March 2019 through the end of December
2020 equals 21 months and does not exceed 21 months.
In modifying this provision to preserve State flexibility, the
Department also sees fit to explain the potential for a State to
request a waiver for less than 1 year and still support that request
using the 20 percent standard data. In this potential scenario, the
Department would follow the same requirement that there be no more than
21 months from the last month of the data reference period through the
last month in which the waiver would be effective--but the waiver would
not be approvable for a 1-year period.
For example, the State requested a 6-month waiver for June 2020
through December 2020. The State provided a 24-month data period from
April 2017 through March 2019 showing that the requested areas meet the
20 percent standard. The waiver is approvable, since the number of
months from the end of March 2019 through the end of December 2020
equals 21 months and does not exceed 21 months. The Department is
adopting this change in the core standards at Sec. 273.24(f)(2)(ii)
and is including the revised provision regarding approval periods for
waivers based on the 20 percent standard in paragraph Sec.
273.24(f)(5).
Areas With Limited Data or Evidence
The Department proposed that waiver requests for areas for which
standard BLS data or a BLS cooperating agency data is limited or
unavailable, such as a reservation area or U.S. Territory, are not
required to conform to the criteria for approval that is required of
other areas. This provision was included in paragraph Sec.
273.24(f)(7) in the proposed rule.
One State agency asked that the U.S. Territories and reservation
areas be specifically exempted from the core standards, rather than
listed as examples of areas in which standard BLS data or data from a
BLS cooperating agency may be limited or unavailable, citing its unique
economic circumstances.
The Department is adopting the provision mostly as proposed with
two exceptions. The first exception is that the Department is not
including the proposed language describing the potential for the
combining of data within this subparagraph of the amendatory text. The
Department has determined that language to be unnecessary. The second
exception that the Department has added is that the data or evidence
provided by the State must be ``recent.'' The Department is making this
change for consistency with the general requirement that the data or
evidence used to support a waiver request be reflective of the current
economic circumstances in the area.
In the final rule, this provision is included in paragraph Sec.
273.24(f)(6). As previously described, the Department is including a
low and declining employment-to-population ratio, a lack of jobs in
declining occupations or industries, or an academic study or other
publication(s) as criteria for areas with limited data or evidence at
Sec. 273.24(f)(6).
Other Changes to Waivers
Eliminating the Labor Surplus Area (LSA) Waiver Criterion
Current regulations at Sec. 273.24(f) include the LSA designation
by DOL as a basis of ABAWD time limit waiver approval. As stated
earlier, the Department proposed to eliminate the LSA designation as a
basis of waiver approval as the LSA unemployment rate floor of 6
percent is inconsistent with the 7 percent unemployment rate that was
proposed for the 20 percent standard.
Commenters, including States, stated opposition to eliminating the
LSA designation as a basis for waiver approval. Some commenters pointed
out that the LSA designation criteria is a long-accepted Federal
standard for job insufficiency, developed by experts at DOL, and relied
upon by Federal and State governments. Commenters also provided
language from the Conference Report that accompanied the 2018 Farm
Bill, in which the managers ``acknowledge that waivers from the ABAWD
time limit are necessary in times of recession and in areas with labor
surpluses or higher rates of unemployment.''
Commenters argued that LSAs target specific areas of job
insufficiency. Commenters pointed to previous guidance provided by the
Department in December 1996, which stated, ``Labor surplus areas are
classified on the basis of civil jurisdictions rather than on a
metropolitan area or labor market area basis. By classifying labor
surplus areas in this way, specific localities with high unemployment
rather than all civil jurisdictions within a metropolitan area, (not
all of which may suffer from the same degree of unemployment) can be
identified. This feature also makes the classification potentially
useful to identify areas for which to seek waivers.''
Commenters argued that eliminating the LSA designation criterion
would increase administrative burden on States and the Department.
Commenters stated that the LSA designation criterion is one of the
least burdensome ways for States to submit a request and for the
Department to evaluate a request, as the list of areas is simply
published by DOL. These commenters argued that increasing the
administrative burden in this way is inconsistent with the fact that
the Department asked for public input in 2018 on how to simplify the
waiver process.
Commenters also argued that eliminating LSA designation as a basis
for waiver approval would hinder the ability of SNAP to respond to
severe setbacks in local economies because the LSA classification
procedures also provide for the designation of LSAs under exceptional
circumstance criteria. These procedures provide for LSA classification
when an area experiences a significant increase in unemployment which
is not temporary or seasonal, and which was not reflected in the data
for the 2-year reference period. The current criteria for an LSA
exceptional circumstance classification are: An area's unemployment
rate is at least the LSA qualifying rate of 20 percent above the
national average and 6 percent for each of the three most recent
months; a projected unemployment rate of at least
[[Page 66800]]
the LSA qualifying rate for each of the next 12 months; and
documentation (a list of the areas with the average unemployment rate
of the three most recent months) that the exceptional circumstance
event has already occurred. In order for an area to be classified as a
LSA under the exceptional circumstance criteria, the State workforce
agency must submit a petition requesting such classification to ETA.
The Department did not receive any comments that specifically
stated support for eliminating LSA designation as a waiver criterion.
While the Department appreciates the comments received in
opposition to eliminating LSA designation as a waiver criterion, the
Department is choosing to eliminate this criterion, as proposed. As
discussed in the preceding sections, the final rule is establishing a
strict definition of waiver ``area'' to include an LMA, the intrastate
part of an interstate LMA, a reservation area, or a U.S. Territory.
LMAs and LSAs are often geographically inconsistent. Therefore,
including LSA designation as a waiver criterion would be inconsistent
with the final rule's definition of an area. The Department believes
that States should not be able to pick and choose when to use the LMA
definition and when to apply for a single-jurisdiction waiver. The
Department also believes that areas should not qualify for waivers if
there are available jobs within a reasonable commuting distance.
Eliminating Waiver Implementation Prior to Approval
The Department proposed removing the current provision at Sec.
273.24(f)(4), which allows a State to implement an ABAWD waiver as soon
as the State submits the waiver request, provided the State certifies
that the requested area has a most recent 12-month unemployment rate
over 10 percent; or the area has been designated a Labor Surplus Area
by DOL for the current fiscal year. As a result of the removal of this
provision, States would no longer have the discretion to implement a
waiver prior to requesting and receiving FNS approval.
One commenter stated that the proposed change would hinder States'
ability to respond to sudden economic changes. In response to this
comment, the Department notes that the current regulations at Sec.
273.24(f)(4) require States to provide either 12-months of data
demonstrating the requested area has a most recent unemployment rate
above 10 percent or evidence that the requested area has been
designated an LSA for the current fiscal year, which is generally based
on 24-months of data from the preceding 2 calendar years. Given that
sudden economic changes take time to impact an area's 12-month or 24-
month average, the Department does not find the current regulations at
Sec. 273.24(f)(4) particularly relevant to responding to sudden
economic changes. Moreover, when the Department proposed Sec.
273.24(f)(4) in 1999, it made no mention of this particular provision
in terms of the responding to sudden economic changes, but did so in
detail with regard to other proposed provisions.\10\
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\10\ Food Stamp Program: Personal Responsibility Provisions of
the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, Proposed Rule, 64 FR 70920 (December 17, 1999). Available
at: https://www.federalregister.gov/documents/1999/12/17/99-32527/food-stamp-program-personalresponsibility-provisions-of-the-personalresponsibility-and-work
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Several commenters stated opposition to the proposal on the grounds
that it would increase administrative burden and cause uncertainty for
States. For example, commenters asserted that the Department's
rationale for the proposal is unclear and that the proposal runs
contrary to the proposed rule's stated purpose of improving certainty
and consistency in the waiver process. One commenter recommended
allowing automatic implementation for the proposed core standards and
for the exceptional circumstance standard to encourage efficiency and
reduce unnecessary review processes.
The Department agrees that it is sometimes appropriate to balance
flexibility with accountability in the interest of easing
administrative burden, when doing so is effective and necessary. The
Department also recognizes that, when it proposed Sec. 273.24(f)(4) in
1999, it explained that it did so in the interest of making the waiver
request process ``as simple as possible,'' while also noting that ``FNS
must be able to reexamine the basis for waivers in those areas.''
However, based on the Department's over 20 years of operational
experience, this flexibility has been used on an exceedingly rare basis
and has not proven to be particularly necessary or effective at
simplifying the waiver request process. Because the Department has been
committed to responding to waiver requests prior to the State's
requested implementation date, and has met this commitment
consistently, it does not see a need to allow implementation prior to
approval.
Other commenters stated that the proposal's application process
limitations would harmfully restrict States' ability to implement
waivers, as States need to take several steps to prepare to implement
the time limit, including to identify and notify individuals subject to
the time limit, develop policies and guidance to support
implementation, train workers, ready computer systems, and potentially
develop slots in work programs. In response to these comments, the
Department sees fit to underscore the fact that ABAWD time limit
waivers are temporary (generally 12 months or less) and only waive the
3-month participation time limit for ABAWDs. These waivers do not waive
States' responsibility to identify ABAWDs (screen household members for
the exceptions from the time limit at Sec. 273.24(c)) or to measure
and track the 36-month period. In short, States must maintain their
administrative capacity to implement the 3 in 36-month time limit for
ABAWDs continuously, and waiver implementation prior to approval is
irrelevant to that administrative requirement.
The Department carefully reviews all State waiver requests, which
includes independently obtaining and validating the data and evidence
presented by the State in support of all requested areas to determine
if the areas meet the standards for approval. For example, it is not
uncommon for FNS to identify discrepancies or inaccuracies in the data
presented by the waiver requesting State. In some cases, these issues
result in FNS denying the waiver request or only partially approving
the waiver request because not all areas meet the standards for
approval.
For the reasons noted in the preceding paragraphs, the Department
is maintaining the proposed change to eliminate waiver implementation
prior to approval.
Eliminating the Historical Seasonal Unemployment Waiver Criterion
The Department proposed removing the criterion of a historical
seasonal unemployment rate over 10 percent as a basis for approval. The
Department stated that historical seasonal unemployment is not an
appropriate measure because it does not demonstrate a prolonged lack of
jobs and does not indicate early signs of a declining labor market. The
Department also noted that it has not approved a waiver under this
criterion in more than two decades.
Some commenters stated opposition to this provision. Some of these
commenters argued that seasonal unemployment was an issue that SNAP was
designed to address and that the time limit should be able to be waived
during the time period of high seasonal
[[Page 66801]]
unemployment, so that seasonal workers are not unfairly punished for
not being able to find work in the off-season. Another commenter argued
that the proposed rule improperly considers the duration of the
unavailability of jobs, and argues that this is contrary to the Act.
This commenter stated that the intent of the current historical
seasonal unemployment criteria, according to Departmental guidance, was
to align the period covered by the waiver to the period when
unemployment is high, and that the proposed rule would designate an
arbitrary unemployment duration requirement without proper
justification. Other commenters suggested that the mere fact that the
historical seasonal unemployment criterion has not been utilized is not
sufficient to justify the removal of the provision and that States
would be more likely to use the criterion in the future if other
criteria were removed, as proposed.
Despite these comments, the Department is maintaining the
elimination of the historical seasonal unemployment criterion as
proposed. The Department believes that the historical seasonal
unemployment criterion was not appropriate, as an area could receive a
waiver for up to 12 months, even though it only demonstrated a few
months of high unemployment per year. The Department is also relying on
the fact that States have not utilized this metric in more than 20
years, through many economic changes. The Department believes this
provides important evidence that this is not a necessary metric for
waiver approval.
Requiring That Waiver Requests Be Supported by the Chief Executive
Officer of the State
The Department proposed clarifying that any State agency's waiver
request must ``be endorsed by the State's governor.'' Those who
commented on this provision opposed it. Some commenters argued that the
proposal is inconsistent with the 2018 Farm Bill, which requires that
any State agency's waiver request have only ``the support of the chief
executive officer of the State.'' Other commenters expressed concerns
over the proposed rule's use of the word ``endorsed,'' which they
suggested implies that a signature is required. Commenters opined that
this provision would lengthen the waiver request process and require
unnecessary administrative steps for States and potentially Tribal
governments. Commenters also noted that the House-passed version of the
Farm Bill provided that the waiver request must have the ``approval''
of the chief executive officer of the State. These commenters argued
that the language was changed from ``approval'' in the House-passed
bill to ``support'' in the final enacted law to indicate that the chief
executive officer is not required to personally sign the waiver
request. These commenters also pointed to the Conference Report that
accompanied the 2018 Farm Bill,\11\ which states, in particular, ``nor
should the language result in any additional paperwork or
administrative steps under the waiver process.'' Additionally, while
the proposed rule used the title ``Governor,'' the 2018 Farm Bill used
the title ``chief executive officer.'' Chief executive officer is the
equivalent of a Governor but better captures all States and State
agencies. For example, the chief executive officer in Washington, DC is
the Mayor.
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\11\ The Conference Report states, ``The Managers intend to
maintain the practice that bestows authority on the State agency
responsible for administering SNAP to determine when and how waiver
requests for ABAWDs are submitted. In response to concerns that have
been raised by some Members that State agencies have not fully
communicated to the chief executive their intent to request a waiver
under section 6(o), the Managers have included a provision to
encourage communication between the State agency and the chief
executive officer of the State. The Managers agree that State
agencies should have the support of these officials in their
application for waiver, ensuring maximum State coordination. It is
not the Managers' intent that USDA undertake any new rulemaking in
order to facilitate support for requests from State agencies, nor
should the language result in any additional paperwork or
administrative steps under the waiver process.''
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The Department finds these comments compelling. Based on these
comments, the Department is adjusting the proposed language in Sec.
273.24(f)(1) to state, ``with the support of the chief executive
officer of the State,'' in order to more closely match the language
from the 2018 Farm Bill. The Department also agrees that the language
should refer to the chief executive officer rather than the Governor,
to be inclusive of all the States, Washington, DC, and the U.S.
Territories.
On the other hand, the Conference Report did express ``concerns
that have been raised by some Members that State agencies have not
fully communicated to the chief executive their intent to request a
waiver under section 6(o).'' In order to avoid these concerns in the
future, the Department is requiring State agencies to indicate that the
request has the support of the chief executive officer in whatever
method they see fit.
Commenters also argued that this provision should not be included
in the rulemaking due to the language in the Conference Report that
states, ``It is not the Managers' intent that USDA undertake any new
rulemaking in order to facilitate support for requests from State
agencies.'' Other commenters stated that this provision is unnecessary
because Governors appoint department directors and cabinet members for
the purpose of delegating control over certain areas of government, and
requiring Governors to become involved in something as specific as SNAP
ABAWD time limit waiver requests interferes with the ability of State
governments to function efficiently and productively. However, since
the 2018 Farm Bill requires that ABAWD time limit waiver requests have
the support of the chief executive officer of the State, the Department
does not believe there is discretion to dismiss this statutory
requirement and thinks it appropriate to codify the requirement.
Implementation Date for Waiver Changes
The Department proposed that the changes to the waiver standards,
once finalized, would go into effect on October 1, 2019, and stated
that all waivers in effect on October 1, 2019, or thereafter, would
need to be approvable according to the new rule at that time, and any
approved waiver that does not meet the criteria established in the new
rule would be terminated on October 1, 2019. States would be able to
request new waivers if the State's waiver is expected to be terminated.
Commenters who commented on this provision opposed it. Commenters,
including several States, opposed this implementation date because it
did not provide States with enough time to implement the provision
successfully. Commenters said that this timeline would provide States
with an unrealistic, impractical, and inadequate amount of time to
understand the final rule, send a request to amend their current
waivers, and have that request reviewed by the Department. Commenters
suggested that this implementation date would lead to errors,
confusion, and potential violation of individuals' procedural due
process rights. In addition, commenters argued that implementing the
provisions so quickly would result in significant administrative costs.
Several commenters expressed concern that the Department did not
acknowledge the additional burden it would place on States to devote
resources to quickly analyzing data for new requests and implementing
the time limit in new areas. These commenters argued that the October
1, 2019, implementation date would not provide sufficient time for the
State to coordinate with counties and provide adequate notice so that
[[Page 66802]]
individuals properly understand the ABAWD time limit. Commenters stated
that forcing such a large, complex change so quickly will make it
difficult for States to plan sufficiently and provide appropriate
oversight and training for counties.
In addition, commenters argued that this timeline does not give
adequate time for E&T providers and community based organizations to
prepare for the impacts of the waiver changes. Some commenters asserted
that the proposed implementation date demonstrates that the
Administration does not fully understand the significant barriers that
many people face and the significant investment it would take to engage
every unemployed and underemployed ABAWDs in meaningful work
activities.
Although those who commented on this provision generally agreed
that the proposed implementation date was too soon to ensure successful
implementation of the provisions, commenters offered several
suggestions on how the date could be modified. Some commenters
recommended that the final rule should not be implemented any sooner
than October 1, 2020. Other commenters recommended that, at a minimum,
the Department should honor any currently approved waiver's expiration
date and not end the waiver pre-maturely. In addition, some Tribes
requested that the Department delay implementation for at least one
calendar year, in order to allow the Department enough time to more
properly and accurately address the economic ramifications of the
government shutdown that occurred from December 22, 2018, until January
25, 2019, which particularly impacted Tribes, and conduct meaningful
consultation with Tribal leaders on this rule.
In response to these comments, the Department has modified the
implementation dates for the final rule. Regarding waivers of the ABAWD
time limit, the Department recognizes that States will need some time
after the publication of the final rule to analyze data, request new
waivers, train certain staff, inform ABAWDs of the rules, and otherwise
prepare to implement the ABAWD work requirement in an effective manner.
However, the Department also notes that it has provided ongoing
guidance to States that States must continue to track ABAWDs, even when
a waiver is in place. The Department also believes the changes to ABAWD
waivers should happen as soon as possible to bring to an end current
waiver practices by States.
Therefore, the Department is modifying the implementation date in
the final rule regarding the final rule's changes to Sec. 273.24(f),
which concern the ABAWD waiver approval standards. The implementation
date will be April 1, 2020. Waivers beginning before April 1, 2020,
will be evaluated under the current regulatory standards for waivers,
but these waivers will not be approved beyond March 31, 2020. Waivers
that are currently in place will not be in effect beyond March 31,
2020, or their current expiration date, whichever occurs sooner. If a
State chooses to submit a new waiver request after the publication of
this rule, the new waiver request would need to meet the new standards
in order to be approvable beyond March 31, 2020. As of April 1, 2020,
State agencies must have received a new waiver approval under the new
standards set at Sec. 273.24(f) by this final rule in order to waive
the time limit. Waivers approved under the previous standards will not
be in effect. For areas not waived, the State must administer the ABAWD
time limit as appropriate.
The Department believes that the implementation period will provide
enough time for States to pose questions about the final rule and for
the Department to provide clarifying guidance to the States. During the
implementation period, States with existing waivers will also have the
opportunity to request new waivers based on the approval standards of
the final rule.
The final rule's changes to Sec. 273.24(h), which involve changes
to discretionary exemptions, will be implemented on October 1, 2020, as
described in another section below.
Limiting the ``Carryover'' of ABAWD Discretionary Exemptions
Prior to enactment of the 2018 Farm Bill, section 6(o)(6) of the
Food and Nutrition Act provided that each State agency be allotted
exemptions from the ABAWD time limit equal to 15 percent of covered
individuals. These were generally referred to as 15 percent exemptions
and were codified in the regulations at Sec. 273.24(g) and (h). The
2018 Farm Bill amended section 6(o)(6) of the Act to reduce the amount
of exemptions from 15 percent to 12 percent, starting in fiscal year
2020. (The Department intends to codify this change in the regulations
through a future rulemaking, Employment and Training Opportunities in
the Supplemental Nutrition Assistance Program, RIN: 0584-AE68.) In the
proposed rule, the Department referred to these as ``percentage
exemptions'' as a way to avoid confusion as the calculation
transitioned from 15 percent to 12 percent. In this final rule, the
Department has chosen to refer to these exemptions as ``discretionary''
exemptions. The Department believes this term better describes these
exemptions because States have discretion on whether to use these
exemptions. This is in contrast to the list of ``exceptions'' in
section 6(o)(3) of the Act and Sec. 273.24(c), which are not
discretionary. States must exempt individuals from the ABAWD time limit
if the individual meets at least one of those listed exceptions. The
Department intends to make the regulatory change to replace the name
``15 percent exemptions'' with ``discretionary exemptions'' through the
above referenced future rulemaking (RIN: 0584-AE68).
The Department proposed to end the unlimited carryover and
accumulation of ABAWD discretionary exemptions at Sec. 273.24(h). The
regulation's current interpretation of Section 6(o)(6)(G) of the Act,
which requires the adjustment of exemptions, allows any unused
exemptions to carry over and accumulate from one year to the next,
indefinitely. As a result, States have accumulated extremely high
amounts of unused discretionary exemptions that well exceed the number
allotted to each State for the fiscal year. For example, in FY 2019,
States earned approximately 1.3 million exemptions, but had about 7.4
million exemptions available for use in total due to the carryover of
unused exemptions from previous fiscal years. The Department views the
indefinite carryover and accumulation of such significant amounts of
unused exemptions to be an unintended outcome of the current
regulations. In the Department's view, the indefinite carryover and
accumulation of unused exemptions is inconsistent with Congress'
decision to limit the number of exemptions available to States in a
given fiscal year, as expressed by sections 6(o)(6)(C), (D), and (E) of
the Act.
The Department proposed changing the adjustment calculation to no
longer allow for unlimited carryover from all preceding years. Instead,
each State agency's carryover adjustment would be based on the number
of exemptions earned in the preceding fiscal year minus the number of
exemptions used in the preceding fiscal year. In addition, the
Department proposed that the carryover adjustment would apply only to
the fiscal year in which the adjustment is made.
Many commenters stated their opposition to the proposal to end the
unlimited carryover and accumulation
[[Page 66803]]
of discretionary exemptions. Several commenters argued that this
proposal was out of line with Congressional intent and pointed to the
Conference Committee Report that accompanied the 2018 Farm Bill, which
states that ``States will maintain the ability to exempt up to 12
percent of their SNAP population subject to ABAWD work requirements,
down from 15 percent, and continue to accrue exemptions and retain any
carryover exemptions from previous years, consistent with current
law.''
Commenters also raised concerns over the complexity associated with
the new calculation, the difficulty in planning based on variation from
year to year, the likelihood of increased errors, and the likelihood of
increased overuse resulting in legal liability.
Other commenters asserted that this proposed change would punish
States for being judicious administrators of their exemptions. One
commenter stated that there is no economic rationale for imposing a
``use it or lose it'' provision. The commenter reasoned that, under the
current system, States have the flexibility to target the use of
exemptions to people in the greatest need. Another commenter stated
that implementing a ``use it or lose it'' system in regard to the
carryover of ABAWD exemptions may actually incentivize States to use
exemptions at a higher rate, something which seems inconsistent with
the stipulated goal of reducing waste.
A few commenters stated that the proposal would cause retroactive
harm to States by removing already earned exemptions and penalizing
States for usage of earned exemptions in the fiscal year before the
rule is finalized or implemented.
Some commenters stated that the proposal would negatively impact
the ability of States to respond to unknown, future recessions and
other economic hardships. Commenters, including States, argued that the
rule is too focused on current national economic conditions and that
States often use discretionary exemptions to respond to quickly
deteriorating economic conditions, the deterioration of a major local
industry or employer, or other similar situations where areas do not
yet qualify for waivers.
Several commenters stated that discretionary exemptions are used to
help individuals achieve self-sufficiency and to deal with changing
policies. Some of these commenters, including counties, stated that
some States have structured the use of exemptions so that they can be
used to encourage individuals to engage in employment and training
activities. For example, exemptions could be used for individuals who
are engaged in employment and training but who do not reach 80 hours a
month. Commenters noted that some States also use them for people
participating in ``non-qualifying education or training activities''
when such training is in the best interest of specific clients. One
State agency commented that the proposal would limit a State's ability
to respond to new circumstances and policies, such as E&T vendor
transitions, in addition to also using these exemptions in specific
situations, such as the first month of a certification period if an
ABAWD applies on the first day of the month.
Commenters also argued that discretionary exemptions should not be
restricted because they are used to help people remain food secure when
these individuals have barriers to work that are not listed in the
specific exception list at Sec. 273.24(c). As indicated in the
comments, these individuals include domestic violence victims, youth
leaving foster care, people leaving incarceration, veterans, homeless
individuals, rural residents with no transportation, certain students,
those suffering from addiction in waiting lines for treatment, those
transitioning into the new requirements, those facing employment
discrimination or temporary change in work hours, and those who can
work but lack credentials for white-collar jobs but cannot do physical
labor.
One State recommended modifying the proposal to permanently
grandfather current discretionary exemptions, allow new exemptions to
be carried over for 3 years, and not penalize States when they use the
carried-over exemptions.
In response to these comments, the Department is adopting a
modification to the proposal at Sec. 273.24(h) that will limit
carryover and allow States to carry over only one year's worth of
exemptions from previous years. Specifically, the modification will
limit or cap the amount that could be carried over to 12 percent of the
covered individuals in the State for the preceding fiscal year. The
modification, as described in the following paragraphs, will provide
States with more time to use exemptions but will not allow the States
to indefinitely accumulate discretionary exemptions.
The modification will address several of the concerns expressed by
commenters. It will allow unused exemptions to carry over, but will
still achieve the Department's goal to limit that carryover to 12
percent of covered individuals consistent with the rationale explained
earlier in this section and the proposed rule. In addition, the
modification will be less complex than what was in the proposed rule.
Under the modification, States will face less variation from year to
year, and States will know in advance the number of exemptions they
could use for the fiscal year. Although States will continue to be
liable for overuse of discretionary exemptions, the Department does not
believe that this rule will increase the likelihood of errors or legal
liability, as they will be able to plan in advance. The rule will give
States some flexibility to ``save up'' a limited number of exemptions
and carry them over into a future year in order to deal with potential
unforeseen sharp economic declines or other quickly changing
circumstances. The Department agrees that these comments demonstrate
the importance of discretionary exemptions, but does not believe they
provide compelling evidence that these exemptions should be carried
over indefinitely.
The Department also sought comments on how to best handle the State
agencies' existing accumulated discretionary exemptions, which in some
cases have been carried over and accumulated for many years. As stated
previously, some commenters said that States should retain these
existing exemptions and that removing them would punish States for
demonstrating restraint in the past. The final rule will not allow
States to retain their existing accumulated discretionary exemptions
past the end of FY 2020. As explained earlier, the Department views the
accumulation of unused exemptions over several years to be
inappropriate and inconsistent with the Act.
As proposed, the Department is also taking the opportunity to
correct a cross-reference in Sec. 273.24(h)(1). The corrected language
cross-references Sec. 273.24(g)(3), instead of (g)(2). The Department
is making this change because it is more accurate and precise to cross-
reference to Sec. 273.24(g)(3), given that the caseload adjustments
apply to the number of exemptions estimated as earned for each State
for each fiscal year. The Department did not receive any comments on
this proposed action. The Department also notes that it intends to
change the reference to ``15 percent'' in Sec. 273.24(g)(3) through
the previously referenced future rulemaking (RIN: 0584-AE68), in order
to codify the statutory change from 15 percent to 12 percent made in
the 2018 Farm Bill.
The Department did not propose an implementation date with regard
to the provision to restrict the carryover of ABAWD discretionary
exemptions but
[[Page 66804]]
sought comments on when this provision should be implemented. The
Department also noted that, under the proposed rule, the adjusted
number of exemptions was based on the preceding fiscal year, and the
change in regulatory text will, therefore, impact a State's ability to
use exemptions in the fiscal year preceding the fiscal year that the
provision goes into effect.
One State recommended implementing these changes in October 2020.
This State suggested that many States utilize their exemptions over
broad sections of population and that States may need to make
significant changes to ensure they do not overuse exemptions. As
discussed previously, other commenters stated that the Department
should ensure that this provision does not have a retroactive impact.
Based on these comments, the final rule is adopting an
implementation date of October 1, 2020, for this provision. The
Department agrees that it is prudent to implement changes to
discretionary exemptions during the next scheduled adjustment in Fiscal
Year (FY) 2021, rather than to make changes during this fiscal year,
which is already underway. Implementing this change during this fiscal
year could make it difficult for States to properly plan their
exemption use for this fiscal year and avoid liability status, as they
have already begun using exemptions this fiscal year. States will not
be adversely affected for actions taken before the rule is finalized,
as the changes to carryover will not go into effect until FY 2021.
Unlike the proposed rule, which could have sent a State into liability
status based solely on the amount of exemptions earned and used in the
previous year, the modification in the final rule provides States with
one year to offset any overuse, consistent with current policy.
Under the final rule, the Department will continue to provide
States with their estimated number of exemptions earned for each
upcoming fiscal year as data becomes available, typically in September.
The Department will also continue to provide States with the exemption
adjustments as soon as updated caseload data is available and States
have provided final data on exemptions from the preceding fiscal year,
typically in January.
In addition, in the final rule, the Department has decided it
prudent to codify its exemptions overuse policy, which was set by FNS
through its November 8, 2007, policy memorandum Overuse of the 15
Percent Able-Bodied Adults Without Dependents (ABAWD) Exemptions by
States Agencies. As referenced in an earlier paragraph of this section
and in the proposed rule, this policy allows a State one year to
``offset'' a negative exemption balance using the new exemptions
estimated for the State by FNS for the subsequent fiscal year. If the
negative exemption balance is not fully offset, FNS will hold the State
liable for the remaining negative balance. The Department is codifying
this policy at Sec. 273.24(h)(2)(ii).The four examples below show how
the rule's adjustment calculation will work in practice based on no
exemption use, varied exemption use, maximum exemption use, and
exemption overuse.
Example 1, No Exemption Use
Example 1 shows how the adjustment calculation will work for a
State that uses zero exemptions, and how it will limit the carryover of
unused discretionary exemptions. In this example, the State had a
balance of 50 exemptions for FY 2020 (row A). The State used no
exemptions in FY 2020 (row B). The State had a potential carryover of
50 exemptions for FY 2021 (row C), but the State is limited to 12
percent of the covered individuals in the State estimated by FNS for FY
2020 (row D), which is equal to the number of exemptions earned for FY
2020. In this example, we assume the State earned 10 exemptions in FY
2020. The carryover of 10 exemptions (row D) is then added to the 10
earned for FY 2021 (row E) to obtain the State's total balance of 20
exemptions after adjustment for FY 2021 (row F). The State has a
positive balance and does not have any overuse liability for that year.
In FY 2022, FY 2023, and FY 2024, the calculation is the same and
results are the same each year. The number of exemptions available to
the State remains the same every year as it is earning the same amount
and using zero exemptions each year. The State does not accumulate
exemptions indefinitely, even though it is not using exemptions.
Whereas the State would have a balance of 90 total exemptions after
adjustment for FY 2024 under the current regulations, the State will
have a balance of 20 total exemptions after adjustment for FY 2024
under the final rule.
Example 1
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Balance for 50 20 20 20
prior FY.
B............................. (-) Used in 0 0 0 0
prior FY.
C............................. (=) Potential 50 20 20 20
carryover for
current FY.
D............................. (=) Actual 10 10 10 10
carryover cap
for current FY.
E............................. (+) Earned 10 10 10 10
exemptions for
current FY.
F............................. (=) Balance for 20 20 20 20
current FY.
G............................. Liability for No No No No
overuse? (Yes
or No).
----------------------------------------------------------------------------------------------------------------
Example 2, Varied Exemption Use and Earnings
Example 2 shows how the adjustment calculation will work for a
State that uses and earns different amounts of exemptions each fiscal
year. In this example, the State again had a balance of 50 exemptions
for prior fiscal year (FY) of 2020 (row A). However, this time, the
State used 30 exemptions in FY 2020 (row B). The State had a potential
carryover of 20 exemptions for FY 2021 (row C), but the State is
limited to the number of exemptions earned for FY 2020. In this
example, we assume the State earned 10 exemptions in FY 2020. The
carryover of 10 exemptions (row D) is then added to the 30 earned for
FY 2021 (row E) to obtain the State's total balance of 40 exemptions
after adjustment for FY 2021 (row F). The State has a positive balance
and does not have any overuse liability for that year. For FY 2022, the
State has a potential carryover of negative 10 exemptions because it
used 50 exemptions in the prior year (row B) but only had a balance of
40 exemptions to use (row A). The State earned 35 exemptions for FY
2022, so the 35 earned exemptions offset the negative 10 exemptions,
resulting in a balance of 25 exemptions for FY 2022. In FY 2022, the
State uses exactly 25 exemptions, so they have no carryover for FY
2023.
[[Page 66805]]
Example 2
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Balance for 50 40 25 35
prior FY.
B............................. (-) Used in 30 50 25 20
prior FY.
C............................. (=) Potential 20 -10 0 15
carryover for
current FY.
D............................. (=) Actual 10 -10 0 15
carryover cap
for current FY.
E............................. (+) Earned 30 35 35 30
exemptions for
current FY.
F............................. (=) Balance for 40 25 35 45
current FY.
G............................. Liability for No No No No
overuse? (Yes
or No).
----------------------------------------------------------------------------------------------------------------
Example 3, Maximum Exemption Use
Example 3 shows how the adjustment calculation will work for a
State that uses its entire balance of exemptions every year, but does
not overuse. In this example, the State again had a balance of 50
exemptions for prior fiscal year (FY) of 2020 (row A). In this example,
the State used 50 exemptions in FY 2020 (row B). The State had a
potential carryover of 0 exemptions for FY 2021 (row C), and therefore
has no carryover for FY 2021 (row D). The State earned 10 exemptions
for FY 2021 (row E). Since there is no carryover for FY 2021, the
State's total balance is equal to the 10 that they earned for that year
(row F). The State has a positive balance and does not have any overuse
liability for that year. In FY 2022 and FY 2023, the State again uses
all the exemptions it earns and has no carryover for the following
year. For each of these years and FY 2024, the State earns 10
exemptions (row E) and has a balance of 10 exemptions (row F).
Example 3
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Balance for 50 10 10 10
prior FY.
B............................. (-) Used in 50 10 10 10
prior FY.
C............................. (=) Potential 0 0 0 0
carryover for
current FY.
D............................. (=) Actual 0 0 0 0
carryover cap
for current.
E............................. (+) Earned 10 10 10 10
exemptions for
current FY.
F............................. (=) Balance for 10 10 10 10
current FY.
G............................. Liability for No No No No
overuse? (Yes
or No).
----------------------------------------------------------------------------------------------------------------
Example 4, Exemption Overuse
Example 4 shows how the adjustment calculation will work for a
State that overuses exemptions. We again assume the State had a balance
of 50 exemptions for prior fiscal year (FY) of 2020 (row A). In this
example, the State used 60 exemptions in FY 2020 (row B). The State had
a potential carryover of negative 10 exemptions for FY 2021 (row C),
and therefore has negative 10 carryover for FY 2021 (row D). The State
earned 10 exemptions for FY 2021 (row E), which offset the negative 10
carryover, and the State's total balance is zero for that year (row F).
The State does not have any overuse liability for FY 2021 (row G). Even
though the State had a balance of zero for FY 2021 (row F), the State
used 20 exemptions in FY 2021 (row B). As a result, the State had a
potential carryover of negative 20 exemptions for FY 2022 (row C), and
therefore has negative 20 carryover for FY 2022 (row D). The State only
earned 10 exemptions for FY 2022 (row E). The State's overuse results
in a negative balance for FY 2022 (row F). Consistent with current
policy, States will have 1 year to offset any overuse. In this case,
the State will not go into liability status in FY 2022, but it will go
into liability status in FY 2023 because the 10 exemptions earned for
FY 2023 do not fully offset its overuse in FY 2022. Consistent with
longstanding policy, the Department will consider the exemption overuse
an overissuance.
Example 4
----------------------------------------------------------------------------------------------------------------
Fiscal year (FY) 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
A............................. Balance for 50 0 -10 -5
prior FY.
B............................. (-) Used in 60 20 5 0
prior FY.
C............................. (=) Potential -10 -20 -15 -5
carryover for
current FY.
D............................. (=) Actual -10 -20 -15 -5
carryover cap
for current FY.
E............................. (+) Earned 10 10 10 10
exemptions for
current FY.
F............................. (=) Balance for 0 -10 -5 5
current FY.
G............................. Liability for No No Yes No
overuse? (Yes
or No).
----------------------------------------------------------------------------------------------------------------
Comments on the Rationale for the Rule
The Department's overall rationale for the proposed rule was that
reducing the number of waivers and discretionary exemptions would
improve economic outcomes, promote self-sufficiency, and encourage
greater engagement in meaningful work activities among ABAWDs. The
Department believes these goals are consistent with the stated goals of
Congress when enacting PRWORA and with the principles the President
outlined in E.O. 13828. In addition, the Department noted several times
in the proposed rule that, based on its operational experience, the
Department saw several areas of opportunity for the regulations to be
amended to safeguard against the misapplication of waivers.
[[Page 66806]]
Some commenters supported the proposed rule as a way to encourage
people to become self-sufficient. These commenters argued that applying
the ABAWD time limit in more places and to more individuals would be
effective in promoting self-sufficiency and beneficial to unemployed
individuals. These commenters asserted that waivers are trapping people
in poverty and long-term government dependency. Other comments argued
that applying the ABAWD time limit in more places would help foster
stronger communities. Some commenters argued that reducing the number
of waived areas would reduce the number of SNAP beneficiaries, which
the commenters felt is too high during current times of low national
unemployment. Commenters suggested that the current regulations
disincentivize economic independence and waste taxpayer money on people
who should not qualify for waivers. Commenters argued that reducing the
number of waived areas would encourage more people to fill open jobs
and participate in employment and training programs.
Several of these commenters also argued that the current
regulations need to be updated and that the rule as proposed would
address waiver misuse and abuse. Commenters suggested it would address
issues of States manipulating their unemployment data to receive
waivers. Commenters argued that the current regulations go against the
purpose of the waivers, which is to provide extended aid only for
individuals who reside in areas with little economic opportunity.
The majority of commenters disagreed with the overall rationale for
the proposed rule that reducing the number of waivers and discretionary
exemptions would promote self-sufficiency for ABAWDs. These commenters
were very critical of the Department's assertion that a broader
application of time limits on SNAP eligibility would help adults find
work. Commenters cited multiple recent academic studies and analyses
which found that work rates for ABAWDs are generally similar in areas
with and without waivers, supporting the notion that the proposed rule
would not increase work. Commenters referred to studies commissioned by
the Department in four States that found that, while a significant
percentage of ABAWDs who left SNAP after the implementation of the time
limit in the late 1990s were employed, their earnings and incomes were
low and their poverty rates were high. Commenters pointed out that one
of the main conclusions of these studies was that self-sufficiency was
unlikely for many of those who left SNAP. While each of the studies in
the four States was different and did not generally compare employment
outcomes in waived areas against unwaived areas, commenters pointed to
the study in South Carolina, which found that outcomes for ABAWDs who
left SNAP in counties waived from the ABAWD time limit were similar to
outcomes of ABAWDs leaving the program in unwaived counties. Commenters
also cited numerous studies on TANF and Medicaid to support the
assertion that work requirements harm program recipients while
producing few lasting gains in employment. Commenters also cited a
recent study finding that counties that lost waivers saw significant
declines in ABAWD caseloads in SNAP, without any evidence of
improvement in individual economic outcomes or well-being, when
compared to economically similar counties with waivers. Several other
commenters cited a study which found that ABAWD work requirements
increased work participation by only 2 percent while decreasing SNAP
participation by 8-10 percent.
Commenters cited recent research on SNAP work requirements that
found that a majority of individuals exposed to these requirements were
already attached to the labor force and were working part of the year,
but many would be unable to consistently meet the ABAWD work
requirement due to volatility in the low-wage labor market. One
commenter provided research based on SNAP and unemployment insurance
data during the Great Recession suggesting that ABAWDs who access SNAP
are low-income workers who rely on SNAP while working and when they
experience a spell of unemployment but they are not accessing SNAP
while unemployed by some artifact of moral hazard. Other commenters
cited research indicating that one of the most significant barriers
inhibiting SNAP recipients from meeting work requirements is a lack of
long-term employment opportunities that provide stable hours above the
80-hour-per-month threshold. Commenters referred to research finding
that volatile hours and unstable employment are particularly common in
the kind of low-paying jobs that employ the largest numbers of working-
class people who are likely to receive SNAP. Commenters said that work
documentation requirements are unduly burdensome for workers with
unpredictable hours or multiple jobs. Some of these commenters argued
that the proposed rule would lead to more ``churn'' because working
SNAP participants who lose eligibility due to administrative hurdles
would need to reapply, increasing administrative costs for the program.
Commenters argued that, as States began to implement the time limit
after the passage of PRWORA in 1996, concern grew about its impact on
people who are willing to work but could not find work, and that
concern resulted in Congress passing legislation in 1997 to authorize
15 percent exemptions and increase funding for employment and training
programs. Commenters argued that the combination of 15 percent
exemptions, E&T slots, and waivers was seen as a way to mitigate the
impact of the time limit on people who want to work but who could not
find jobs.
Commenters also stressed the importance of SNAP and cited research
indicating that receipt of SNAP improves health outcomes, and that work
requirements harm health and productivity. Commenters cited studies
indicating that access to SNAP benefits helps people find and maintain
work. Commenters pointed to research studies, including those by the
Department, indicating that the increased receipt of SNAP benefits
stimulated local economic activity and increased employment during the
Great Recession. Commenters also argued that the value of SNAP benefits
is too small to disincentivize individual ABAWDs from finding work.
Commenters argued that, even without work requirements, the SNAP
benefit structure is already designed to incentivize work through the
earned income deduction and gradual benefit phase-out as earned income
increases.
In addition, commenters asserted that the proposed rule did nothing
to expand E&T programs for ABAWDs or decrease unemployment barriers for
this population. Commenters expressed concern that the proposed rule
could result in increased poverty and food insecurity for ABAWDs newly
subject to the time limit who are unable to meet work requirements,
which commenters felt contradicts the objectives of the E.O. 13828,
cited by the Department. Commenters noted that there are significant
limitations on SNAP E&T availability and accessibility.
The Department appreciates these comments but believes that, as
explained earlier in the Background on this Rulemaking section of this
final rule, in passing PRWORA, Congress intended to promote work by
requiring ABAWDs to work or participate in a work program as a
condition of eligibility. While the Department appreciates the studies
provided by the
[[Page 66807]]
commenters and the concerns expressed related to the rationale provided
in the proposed rule, this does not change the statutory work
requirements established by Congress. The policy changes made by this
final rule are based on the Department's goal to promote work by
expanding the application of the ABAWD time limit, in line with the
intent of Congress when passing PRWORA. The Department also believes
that, as stated in E.O. 13828, assistance programs, such as SNAP, need
to make reforms to increase self-sufficiency, well-being, and economic
mobility. Many of the changes in the final rule are based on the
Department's more than 20 years of operational experience. Through this
experience, the Department has learned that the current regulations
lack certain important limitations and safeguards to prevent the
misapplication of ABAWD waivers and the accumulation of unused ABAWD
discretionary exemptions, as illustrated by the numerous practical
examples included in the proposed rule and this final rule. Therefore,
the Department is putting limitations and safeguards into regulation
that will address these weaknesses. Moreover, the Department believes
that those who can work should work and that SNAP recipients should be
expected to seek work whenever possible. While the Department
acknowledges that the rule does not in and of itself provide ABAWDs
with additional job opportunities, the Department expects States
agencies to do what they can to increase the employability of ABAWDs,
and help them find and gain work. The Department believes that the
Department, and other partners, share the responsibility to ensure that
SNAP participants can achieve self-sufficiency and better their lives.
Comments Expressing General Opposition to Work Requirements
Many commenters expressed general opposition to work requirements
and the ABAWD time limit. The Department is not responding in detail to
these comments in the final rule as they are considered outside the
scope of the rule because they did not provide feedback on provisions
that were proposed for revisions as part of this rulemaking. Moreover,
the ABAWD time limit and work requirement are statutory provisions and
therefore cannot be removed through the rulemaking process.
Procedural Matters
Executive Order 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
This final rule has been determined to be economically significant
and was reviewed by the Office of Management and Budget (OMB) in
conformance with Executive Order 12866.
Regulatory Impact Analysis
As required by Executive Order 12866, a Regulatory Impact Analysis
(RIA) was developed for this final rule. It follows this rule as an
appendix. The following summarizes the conclusions of the regulatory
impact analysis:
The Department has estimated the net reduction in Federal SNAP
spending associated with the final rule to be approximately $109
million in fiscal year (FY) 2020 and $5.48 billion over the five years
2020-2024. This savings represents a reduction in federal transfers
(SNAP benefit payments), offset by a small increase in the federal
share of State administrative costs; the reduction in transfers
represents a 1.8 percent decrease in projected SNAP benefit spending
over this time period. In addition, the Department estimates a small
increase ($1.4 million) in State costs related to administrative burden
for verifying work hours and exemptions and sending notices. ABAWD
households will also face additional burden associated with verifying
their circumstances and reading notices, at a cost of less than $1
million.
Under current authority, the Department estimates that less than
half of ABAWDs live in areas that are not covered by a waiver and thus
face the ABAWD time limit. Under the revised waiver criteria the
Department estimates that about 88 percent of ABAWDs will live in such
areas. Of those newly subject to the time limit, the Department
estimates that 688,000 individuals (in FY 2021) will not meet the work
requirement or be otherwise exempt.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies
to analyze the impact of rulemaking on small entities and consider
alternatives that would minimize any significant impacts on a
substantial number of small entities. Pursuant to that review, the
Secretary certifies that this rule will not have a significant impact
on a substantial number of small entities.
This final rule will not have an impact on small entities because
the rule primarily impacts State agencies. As part of the requirements,
State agencies will have to update their procedures to incorporate the
new criteria for approval associated with requesting waivers of ABAWD
time limit. Small entities, such as smaller retailers, will not be
subject to any new requirements. However, retailers in geographic areas
that lose the time limit wavier would likely see a drop in the amount
of SNAP benefits redeemed at stores when these provisions are
finalized, although impacts on small retailers are not expected to be
disproportionate compared to impact on large entities. As of FY 2017,
approximately 76 percent of authorized SNAP retailers (about 200,000
retailers) were small groceries, convenience stores, combination
grocery stores, and specialty stores, store types that are likely to
fall under the Small Business Administration gross sales threshold to
qualify as a small business for Federal Government programs. While
these stores make up the majority of authorized retailers, collectively
they redeem less than 15 percent of all SNAP benefits.
The final rule is expected to reduce SNAP benefit payments by an
average of about $1.1 billion per year. The rule is estimated to result
in approximately 77 percent of counties losing their current time limit
waiver. Assuming SNAP-authorized retailers are proportionately
represented in these areas, this would equate to about a $177 loss of
revenue per small store on average per month ($1.1 billion x 15%)/
(77,420 stores/12 months). In 2017, the average small store redeemed
more than $3,300 in SNAP each month; the potential loss of benefits
represents about 5 percent of their SNAP redemptions and only a small
portion of their gross sales. Based on 2017 redemption data, a 1.8
percent reduction in SNAP redemptions represented between 0.01 and 0.7
percent of these stores' gross sales.
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs has designated this as
a major rule, as defined by 5 U.S.C. 804(2).
[[Page 66808]]
Executive Order 13771
Executive Order 13771 directs agencies to reduce regulation and
control regulatory costs and provides that the cost of planned
regulations be prudently managed and controlled through a budgeting
process. This final rule is considered an E.O. 13771 regulatory action.
The Department estimates that it will impose $0.16 million in
annualized costs at a 7% discount rate, discounted to a 2016
equivalent, over a perpetual time horizon.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local and tribal
governments and the private sector. Under section 202 of the UMRA, the
Department generally must prepare a written statement, including a cost
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures by State, local or tribal
governments, in the aggregate, or the private sector, of $146 million
or more (when adjusted for inflation; GDP deflator source: Table 1.1.9
at http://www.bea.gov/iTable) in any one year. When such a statement is
needed for a rule, Section 205 of the UMRA generally requires the
Department to identify and consider a reasonable number of regulatory
alternatives and adopt the most cost effective or least burdensome
alternative that achieves the objectives of the rule.
This final rule does not contain Federal mandates (under the
regulatory provisions of Title II of the UMRA) for State, local and
tribal governments or the private sector of $146 million or more in any
one year. Thus, the rule is not subject to the requirements of sections
202 and 205 of the UMRA.
Executive Order 12372
SNAP is listed in the Catalog of Federal Domestic Assistance under
Number 10.551. For the reasons set forth in Department of Agriculture
Programs and Activities Excluded from Executive Order 12372 (48 FR
29115, June 24, 1983), this Program is excluded from the scope of
Executive Order 12372, which requires intergovernmental consultation
with State and local officials.
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have federalism implications, imposes substantial
direct compliance costs on State and local government, and is not
required by statute, agencies are directed to provide a statement for
inclusion in the preamble to the regulations describing the agency's
considerations in terms of the three categories called for under
Section (6)(b)(2)(B) of Executive Order 13132.
The Department has considered the impact of this rule on State and
local governments and has determined that this rule has federalism
implications. However, this rule does not impose substantial or direct
compliance costs on State and local governments, nor does it preempt
State or local law. Therefore, under section 6(b) of the Executive
Order, a federalism summary is not required.
Executive Order 12988, Civil Justice Reform
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have preemptive
effect with respect to any State or local laws, regulations or policies
which conflict with its provisions or which would otherwise impede its
full and timely implementation. This rule is not intended to have
retroactive effect unless so specified in the Effective Dates section
of the final rule. Prior to any judicial challenge to the provisions of
the final rule, all applicable administrative procedures must be
exhausted.
Civil Rights Impact Analysis
FNS has reviewed the final rule, in accordance with the Department
Regulation 4300-004, Civil Rights Impact Analysis, to identify and
address any major civil rights impacts the final rule might have on
minorities, women, and persons with disabilities. A comprehensive Civil
Rights Impact Analysis (CRIA) was conducted on the final rule,
including an analysis of participant data and provisions contained in
the final rule. The CRIA outlines outreach and mitigation strategies to
lessen any possible civil rights impacts. The CRIA concludes by stating
while the Department believes that a reduction in the number of ABAWD
waivers granted to States will affect potential SNAP program
participants in all groups who are unable to meet the ABAWD work
requirements, and have the potential for impacting certain protected
groups due to factors affecting rates of employment of members of these
groups, the Department finds that the implementation of mitigation
strategies and monitoring by the FNS Civil Rights Division and FNS SNAP
may lessen these impacts. If deemed necessary, the FNS Civil Rights
Division will propose further rule changes to alleviate impacts that
may result from the implementation of the final rule.
Executive Order 13175
Executive Order 13175 requires Federal agencies to consult and
coordinate with Tribes on a government-to-government basis on policies
that have Tribal implications, including regulations, legislative
comments or proposed legislation, and other policy statements or
actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes. FNS briefed Tribes on this
rule at the February 14th, 2019 listening session; Tribes were
subsequently provided the opportunity for consultation on the issue but
FNS received no feedback. If a tribe requests consultation in the
future, FNS will work with the Office of Tribal Relations to ensure
meaningful consultation is provided.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR
1320) requires the Office of Management and Budget (OMB) approve all
collections of information by a Federal agency before they can be
implemented. Respondents are not required to respond to any collection
of information unless it displays a current valid OMB control number.
In accordance with the Paperwork Reduction Act of 1995, this final
rule contains information collections that are subject to review and
approval by the Office of Management and Budget; therefore, the
Department submitted the proposed rule for public comment regarding
changes in the information collection burden that would result from
adoption of the proposals in this final rule.
These changes are contingent upon OMB approval under the Paperwork
Reduction Act of 1995. When the information collection requirements
have been approved, the Department will publish a separate action in
the Federal Register announcing OMB approval.
Title: Supplemental Nutrition Assistance Program Waiver of Section
6(o) of the Food and Nutrition Act.
Form Number: N/A.
OMB Number: 0584-0479.
Expiration Date: July 31, 2020.
Type of Request: Revision of a currently approved collection.
[[Page 66809]]
Abstract: This rule revises the conditions under which USDA would
waive, when requested by State agencies, the able-bodied adult without
dependents (ABAWD) time limit in areas that have an unemployment rate
of over 10 percent or a lack of sufficient jobs. In addition, the rule
limits carryover of ABAWD discretionary exemptions. In the proposed
rule, the Department proposed to revise the existing information
collection OMB Control #0584-0479 (expiration date July 31, 2021) by
adjusting the burden hours associated with submitting a waiver request.
Commenters to the proposed rule noted that the rulemaking will increase
the administrative burden for State agencies. The Department has
addressed these concerns by including the burden for additional
activities in the burden estimates.
The final rule includes an adjustment to the estimated burden for
the submission of ABAWD waiver requests by State agencies, the burden
created by the requirement to obtain and indicate the support of the
State's chief executive office, and the one-time burden for State
agencies and SNAP households associated with noticing and verification.
There is no new recordkeeping burden required for this new
information collection request. The recordkeeping burden for State
agencies for application processing is currently covered under the
approved information collection burden, OMB Control #0584-0064
(expiration date: 7/31/2020).
First Year (One-Time Burden)
The reduction of areas waived because of this final rule will
subject more individuals to the ABAWD time limit. FNS estimates
implementation of the final rule will create a one-time burden of
170,229 hours for State agencies and SNAP households. The burden is a
result of the requirement to submit a second waiver requests in a 12-
month period, verifying work hours, and issuing notices of adverse
action. The revised burden estimates in the final rule also include the
burden to SNAP households for receiving notices of adverse action and
verifying work hours.
State Agencies
The ABAWD waiver request process includes collection of data,
analysis of data, and preparing and submitting a request. Based on the
experience of FNS during calendar year 2018, FNS projects that 36 out
of 53 State agencies will submit requests for a waiver of the time
limit for ABAWD recipients based on a high unemployment rate or lack of
sufficient number of jobs. State agencies typically only submit one
waiver request in each 12-month period; however, the implementation
timeline for the final rule will require State agencies that wish to
continue waivers for FY 2020 to submit an additional waiver request.
This initial waiver request based on the revised regulations will
require one or more individuals in the State agency to understand the
changes, train individuals who develop waiver requests, and develop the
waiver request. FNS estimates a response time of 28.5 hours for each
waiver request based on labor market data, which require detailed
analysis of labor markets within the State. FNS is adding 120 hours for
each State to reflect the time associated with understanding the new
regulations and preparing the initial waiver based on the revised
regulations. This represents an additional one-time burden of 5,346
hours for State agencies collectively.
The final rule will also newly subject an estimated 1,087,000
ABAWDs to the time limit. The Department estimates the vast majority,
approximately 688,000, will not meet the work requirement. As a result,
it is estimated that State agencies will have to issue Notice of
Adverse Action (NOAAs) to those 688,000 ABAWDs who do not meet the work
requirement. While the issuance of NOAAs is currently approved under
OMB #0584-0064, it is estimated these 688,000 NOAAs will be considered
a one-time activity upon implementation of this final rule. FNS used
existing estimates from the approved OMB #0584-0064 as a basis to
determine it would take each State agency approximately4 minutes to
issue a NOAA. In general FNS used the existing collection as a starting
point but has reestimated in instances where those estimates were not
adequate. Therefore, FNS estimates 45,867 hours for this one-time
activity.
FNS also estimates 399,000 will meet the work requirement or be
exempt from the time limit. As a result, State agencies will have to
verify work hours and exemptions for 399,000 ABAWDs that meet the work
requirement or are exempt. FNS used existing estimates from the
approved OMB #0584-0064 as a basis to determine the verification of
work hours and exemptions. The current burden estimates a 3 minute
burden. FNS increased this estimate to 5 minutes for each verification
because it did not adequately capture the time needed to ensure the
verifications that are provided area sufficient. While the activities
related to verification are currently approved under OMB #0584-0064, it
is estimated these 399,000 verifications will be considered a one-time
activity upon implementation of this final rule. Therefore, FNS
estimates 33,250 one-time burden hours for State agency verification of
work hours and exemptions. These two activities collectively account
for 79,116 hours. The total start up burden for State agencies,
including the additional waiver request submission, will result in
84,463 burden hours.
Households
The 1,087,000 ABAWDs newly subjected to the time limit will face a
one-time burden as well. FNS estimates 688,000 ABAWDS will not meet the
work requirement and receive a NOAA. While the issuance of NOAAs is
currently approved under OMB #0584-0064, it is estimated the reading of
these 688,000 NOAAs will be considered a one-time activity upon
implementation of this final rule. FNS estimates it would take each
household 4 minutes to read a NOAA. Therefore, FNS estimates 45,867
burden hours for SNAP households for this one-time activity.
FNS estimates 399,000 will meet the work requirement. ABAWDs
meeting the work requirement will have to respond to State agency
request for verification of work hours. FNS used existing estimates
from the approved OMB #0584-0064 as a basis to determine the response
to State agency request for verification of work hours and exemptions
will take the SNAP household approximately 6 minutes for each
verification. While the activities related to household response to
request for State agency verification are currently approved under OMB
#0584-0064, it is estimated these 399,000 verifications will be
considered a one-time activity upon implementation of this final rule.
Therefore, FNS estimates 39,900 one-time burden hours for household
verification of work hours and exemptions. These two startup burdens
will result in an increase of 85,767 hours for SNAP households.
[[Page 66810]]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Response Previous Differences
Estimated annually Total Hours per Annual submission due to Differences Hourly wage Estimated cost
OMB No. 0584-0479 Requirement and citation number per annual response burden total program due to rate to respondents
respondents respondent responses hours hours changes adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: State Agencies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Start-Up................... 7 CFR 2(f)(1)&(2)--Additional 36 11,083 399,000 0.08 33,250 0 33,250 0 $32.01 $1,064,332.50
one-time verification of hours
worked and exemptions for
ABAWDs newly subject to the
work requirement.
7 CFR 273.13(a)--One-time 36 19,111 688,000 0.07 45,867 0 45,867 0 32.01 1,468,192.00
Issuance of Notice of Adverse
Action to ABAWDs who do not
meet the work requirement.
7 CFR 273.24(f)--One-time 36 1 36 148.5 5,346 0 5,346 0 32.01/45.45 229,897.97
Submission of waiver request
based on labor market data.
7 CFR 273.24 (f)--One-time 0 0 0 0 0 0 0 0 32.01/45.45 0.00
Submission of waiver request
based on Labor Surplus Area
designation.
Ongoing.................... 7 CFR 273.24(f)--Submission of 36 1 36 28.5 1,026 1190 -164 0 32.01/45.45 33,570.82
waiver request based on labor
market data.
7 CFR 273.24 (f)--Submission of 0 0 0 0 0 8 -8 0 32.01/45.45 0.00
waiver request based on Labor
Surplus Area designation.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting Totals........................................ 36 ........... 1,087,072 0.08 85,489 1198 84,291 0 .............. 2,795,993.30
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: Households
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Start-Up................... 7 CFR 2(f)(1)&(2)--One Time-- 399,000 1 399,000 0.1 39,900 0 39,900 0 7.25 289,275.00
respond to verification of
hours worked.
7 CFR 273.13(a)--One-time 688,000 1 688,000 0.07 45867 0 45,867 0 7.25 332,533.33
Review of Notice of Adverse
Action.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting Totals........................................ 1,087,000 ........... 1,087,000 0.08 85,767 0 85,767 0 .............. 621,808.33
--------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Reporting Burden.............................. 1,087,036 ........... 2,174,072 0.08 171,255 1198 170,057 0 .............. 3,417,801.63
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing Burden
The ABAWD waiver request process includes collection of data,
analysis of data, and preparing and submitting a request. The final
rule establishes clear limitations under which waivers can be approved;
generally, State agencies will only be able to receive waiver approval
for areas defined as Labor Market Areas (LMAs). The final rule
establishes clear core standards and eliminates the ability for States
to group areas. The ability to group areas required States greater
flexibility and resulted in more options for waiver requests. The core
standards provide a simpler basis for requests. As a result, the
Department has estimated a reduction in burden hours for State agencies
to submit waiver requests.
Based on the experience of FNS during calendar year 2018, FNS
projects that 36 out of 53 State agencies would submit requests for a
waiver of the time limit for ABAWD recipients based on a high
unemployment rate or lack of sufficient jobs.
In the currently approved information collection for OMB Control
No.0584-0479, FNS estimates it takes 35 hours for each State agency to
submit a waiver request. FNS assumed 34 States would request waivers
using labor market data and two States would request waivers under the
Labor Surplus Area delineation.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Response Previous Differences
Estimated annually Total Hours per Annual submission due to Differences Hourly wage Estimated cost
OMB No. 0584-0479 Requirement and citation number per annual response burden total program due to rate to respondents
respondents respondent responses hours hours changes adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: State Agencies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting Burden........... 7 CFR 273.24(f)--Submission of 36 1 36 28.5 1,026 1,190 -164 0 $32.01/$45.45 $16,785.41
waiver request based on labor
market data.
7 CFR 273.24 (f)--Submission of 0 0 0 0 0 8 -8 0 0 0
waiver request based on Labor
Surplus Area designation.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency Totals..................................... 36 ........... .......... .......... 1,026 1198 -172 0 .............. 16,785.41
--------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Reporting Burden.............................. ........... ........... .......... .......... .......... .......... -172 ........... .............. 16,785.41
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
FNS now expects 36 States to request waivers using labor market
data since the Labor Surplus Area delineation is no longer a basis for
approval. State agencies that previously used the Labor Surplus Area
delineation as a criterion for waiver requests will face an increased
burden for waiver requests. FNS estimated in the proposed rule the time
for a State agency to submit a waiver request based on labor market
data would be reduced to 28 hours. The
[[Page 66811]]
final rule maintains this reduction and also adds .5 hours per response
to incorporate the requirement to obtain and indicate the support of
the chief executive of the State agency. This results in a total annual
burden of 1,026 hours for State agencies to submit an ABAWD waiver
request. Once merged with OMB Control #0584-0479 upon approval, this
will result in a reduction of 172 annual burden hours, for a total of
1,026 hours.
Affected public: State agencies, SNAP households.
Estimated number of respondents: 36 State Agencies, 1,087,000
individuals.
Regulation Section: 7 CFR 272.24.
Estimated total annual responses: First year 2,174,036; Ongoing 36.
Estimated annual burden hours: First year 170,229 hours; Ongoing
1,026 hours.
E-Government Act Compliance
The Department is committed to complying with the E-Government Act,
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
List of Subjects in 7 CFR Part 273
Able-bodied adults without dependents, Administrative practice and
procedures, Employment, Indian Reservations, Time limit, U.S.
Territories, Waivers, Work requirements.
Accordingly, 7 CFR part 273 is amended as follows:
PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
0
1. The authority citation for part 273 continues to read as follows:
Authority: 7 U.S.C. 2011-2036.
0
2. In Sec. 273.24, revise paragraph (f) to read as follows:
Sec. 273.24 Time Limit for able-bodied adults.
* * * * *
(f) Waivers--(1) General. The State agency, with the support of the
chief executive officer of the State, may request FNS approval to
temporarily waive the time limit for a group of individuals in the
State in the area in which the individuals reside. To be considered for
approval, the request must be supported by corresponding data or
evidence demonstrating that the requested area:
(i) Has an unemployment rate of over 10 percent; or
(ii) Does not have a sufficient number of jobs to provide
employment for the individuals.
(2) Core standards. FNS will approve waiver requests under
paragraphs (f)(1)(i) and (ii) of this section that are supported by any
one of the following:
(i) Data from the Bureau of Labor Statistics (BLS) or a BLS-
cooperating agency that shows an area has a recent 12-month average
unemployment rate over 10 percent; or
(ii) Data from the BLS or a BLS-cooperating agency that shows an
area has a 24-month average unemployment rate 20 percent or more above
the national rate for a recent 24-month period, but in no case may the
24-month average unemployment rate of the requested area be less than 6
percent. In order for the 24-month data period to be considered recent,
the number of months from the end of the last month of the 24-month
data period through the last month that the waiver would be effective
must not exceed 21 months.
(3) Other data and evidence in an exceptional circumstance. FNS may
approve waiver requests that are supported by data or evidence other
than those listed under paragraph (f)(2) of this section if the request
demonstrates an exceptional circumstance in an area. The request must
demonstrate that the exceptional circumstance has caused a lack of
sufficient jobs or an unemployment rate over 10 percent, for example
data from the BLS or a BLS-cooperating agency that shows an area has a
most recent three-month average unemployment rate over 10 percent. In
addition, the request must demonstrate that the impact of the
exceptional circumstance is ongoing at the time of the request.
Supporting unemployment data provided by the State must rely on
standard BLS data or methods.
(4) Definition of area. For the purposes of this paragraph,
``area'' means:
(i) An area considered a Labor Market Area (LMA) by DOL. The State
agency must support a waiver for an LMA using corresponding LMA data
from the BLS. If such corresponding data is unavailable, the State
agency may obtain corresponding data by combining data from sub-LMA
areas that are collectively considered to be a LMA by DOL;
(ii) The intrastate part of an interstate LMA. Intrastate parts of
interstate LMAs may qualify for waivers based on data from the entire
interstate LMA. If the State Agency's geographic boundaries are
entirely within one interstate LMA, such as the District of Columbia,
the entire State may qualify for a waiver based on data from the entire
interstate LMA;
(iii) A reservation area or a U.S. Territory. Each of these is
considered to be an area for the purposes of waivers.
(5) Duration of waiver approvals. In general, FNS will approve
waivers for one year. FNS may approve waivers for a shorter period at
the State agency's request. Waivers under paragraph (f)(2)(ii) of this
section will be approved in accordance with paragraph (f)(2)(ii).
(6) Areas with limited data or evidence. Waiver requests for an
area for which standard BLS data or data from a BLS-cooperating agency
is limited or unavailable, such as a reservation area or U.S.
Territory, are not required to conform to the criteria for approval
under paragraphs (f)(2), (3), and (5) of this section. The supporting
data or evidence provided by the State must be recent and must
correspond to the requested area.
(i) FNS may approve waivers for these areas if the requests are
supported by sufficient data or evidence, such as:
(A) Estimated unemployment rate based on available data from BLS
and the U.S. Census Bureau;
(B) A low and declining employment-to-population ratio;
(C) A lack of jobs in declining occupations or industries; or
(D) An academic study or other publication describing the area as
lacking a sufficient number of jobs to provide employment for its
residents.
(ii) [Reserved]
* * * * *
0
3. Effective October 1, 2020, Sec. 273.24 is further amended by
revising paragraph (h) to read as follows:
Sec. 273.24 Time Limit for able-bodied adults.
* * * * *
(h) Adjustments. FNS will make adjustments as follows:
(1) Caseload adjustments. FNS will adjust the number of exemptions
estimated for a State agency under paragraph (g)(3) of this section
during a fiscal year if the number of SNAP participants in the State
varies from the State's caseload by more than 10 percent, as estimated
by FNS.
(2) Exemption adjustments. During each fiscal year, FNS will adjust
the number of exemptions available to a State agency based on the
number of exemptions in effect in the State for the preceding fiscal
year. In doing so, FNS will determine the State's exemption balance for
the fiscal year (the total number of exemptions available to the State
for the fiscal year).
(i) If the State agency did not use all of its exemption balance
for the
[[Page 66812]]
preceding fiscal year, FNS will add to the State agency's exemption
balance a portion of the unused exemptions not to exceed 12 percent of
the covered individuals in the State estimated by FNS for the preceding
fiscal year.
(ii) If the State agency used more than its exemption balance for
the preceding fiscal year, FNS will decrease the State agency's
exemption balance by the corresponding number. If this decrease results
in a negative exemption balance, the State agency must offset the
negative balance using the new exemptions estimated by FNS for the
subsequent fiscal year. If the negative exemption balance is not fully
offset, FNS will hold the State liable for the remaining negative
balance.
* * * * *
Dated: November 25, 2019.
Stephen L. Censky,
Deputy Secretary, U.S. Department of Agriculture.
[FR Doc. 2019-26044 Filed 12-4-19; 8:45 am]
BILLING CODE 3410-30-P