Commodity Supplemental Food Program-Plain Language, Program Accountability, and Program Flexibility, 47052-47076 [05-15778]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food and Nutrition Service

[Federal Register Volume 70, Number 154 (Thursday, August 11, 2005)]
[Rules and Regulations]
[Pages 47052-47076]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-15778]



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Part IV





Department of Agriculture





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Food and Nutrition Service



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7 CFR Part 247



Commodity Supplemental Food Program--Plain Language, Program 
Accountability, and Program Flexibility; Final Rule

Federal Register / Vol. 70, No. 154 / Thursday, August 11, 2005 / 
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 247

RIN 0584-AC84


Commodity Supplemental Food Program--Plain Language, Program 
Accountability, and Program Flexibility

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule rewrites the regulations for the Commodity 
Supplemental Food Program (CSFP) in ``plain language'' to help program 
operators and the general public better understand program 
requirements. It also reduces the time and paperwork burden for State 
and local agencies, increases their flexibility in program operations, 
and strengthens program accountability. Other changes have been made to 
incorporate legislative provisions and improve program service and 
caseload management. This final rule makes the CSFP easier to 
understand and administer, and more effective and efficient in 
providing benefits to eligible persons.

EFFECTIVE DATE: This final rule is effective September 12, 2005.

FOR FURTHER INFORMATION CONTACT: Lillie F. Ragan, Assistant Branch 
Chief, Household Programs Branch, Food Distribution Division, Food and 
Nutrition Service, U.S. Department of Agriculture, Room 500, 3101 Park 
Center Drive, Alexandria, Virginia 22303-1594, or telephone (703) 305-
2662.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Regulatory Impact Analysis

Need for Action

    This action is needed in order to rewrite the regulations for the 
CSFP in a plain language format, while reflecting current program 
conditions. Furthermore, this action is needed in order to improve 
program accountability, increase flexibility in program administration, 
and reduce the paperwork burden on State and local agencies.

Benefits

    Rewriting the regulations in plain language helps program operators 
and the general public better understand program requirements. The 
plain language format includes a question-and-answer structure under 
each section, and removal of the legalistic style that is currently 
reflected in the regulations. The regulatory amendments set forth in 
this rule, such as the amendment making the State Plan permanent 
instead of annual, with amendments submitted as needed, will benefit 
State and local agencies by reducing the paperwork burden and 
increasing flexibility in program administration. The establishment of 
more rigorous performance measures will have a positive impact on the 
program as whole, facilitating the assignment of caseload slots to 
those State agencies most likely to use them. Changes that increase 
flexibility in program administration include the establishment of 
income eligibility guidelines, the consideration of average income over 
the previous year, and, for a pregnant woman, the counting of each 
fetus or embryo in utero as a household member when considering income 
eligibility. Other changes improve program accountability by increasing 
the penalties for program violations and requiring the initiation and 
pursuit of claims against participants who fraudulently obtain program 
benefits.

Costs

    The changes in this final rule will not result in appreciable 
adjustments in program participation or costs. Most of the changes in 
this final rule offer burden relief to State agencies and local program 
operators, and are generally insignificant to the costs of the overall 
operations of the program.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). The Under Secretary of 
Food, Nutrition, and Consumer Services, Eric M. Bost, has certified 
that this action will not have a significant impact on a substantial 
number of small entities. While program participants, State agencies 
and Indian Tribal Organizations that administer the program will be 
affected by this rulemaking, the economic effect will not be 
significant.

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 
Food and Nutrition Service (FNS) generally must prepare a written 
statement, including a cost-benefit analysis, for proposed and final 
rules with ``Federal mandates'' that may result in expenditures to 
State, local, or tribal governments, in the aggregate, or to the 
private sector, of $100 million or more in any one year. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires FNS to identify and consider a reasonable number of regulatory 
alternatives and adopt the least costly, more cost-effective or least 
burdensome alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local and tribal 
governments or the private sector of $100 million or more in any one 
year. Thus, this rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

Executive Order 12372

    The CSFP is listed in the Catalog of Federal Domestic Assistance 
under No. 10.565. For the reasons set forth in the final rule in 7 CFR 
part 3015, Subpart V and related Notice (48 FR 29115, June 24, 1983), 
this program is included in the scope of Executive Order 12372, which 
requires intergovernmental consultation with State and local officials.

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132. FNS has 
considered the impact of this rule on State and local governments and 
has determined that this rule does not have Federalism implications. 
This rule does not impose substantial or direct compliance costs on 
State and local governments. Therefore, under Section 6(b) of the 
Executive Order, a federalism summary impact statement is not required.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The rule is intended to have preemptive effect with 
respect to any

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State or local laws, regulations, or policies which conflict with its 
provisions or which would otherwise impede its full implementation. 
This rule is not intended to have retroactive effect. Prior to any 
judicial action challenging the provisions of this rule or the 
application of its provisions, all applicable administrative remedies, 
as set out in Sec.  247.33 of this final rule, must be exhausted. 
Unless otherwise indicated, all regulation citations set out in this 
preamble and final rule may be found, or will be codified, in Title 7, 
Part 247 of the Code of Federal Regulations.

Civil Rights Impact Analysis

    FNS has reviewed this rule in accordance with the Department 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and 
address any major civil rights impacts the rule might have on 
minorities, women, and persons with disabilities. After a careful 
review of the rule's intent and provisions, FNS has determined that it 
will not in any way limit or reduce the ability of participants to 
receive program benefits on the basis of an individual's race, color, 
national origin, age, gender, or disability. The rule applies equally 
to all participants in the CSFP who are eligible to receive program 
benefits. All data available to FNS indicates that protected 
individuals have the same opportunity to participate in the CSFP as 
non-protected individuals, subject to the program eligibility 
requirements. Program civil rights requirements are detailed in Sec.  
247.37 of this final rule.
    Discrimination by State and local agencies in any aspect of program 
administration is prohibited by this final rule, Title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.), Title IX of the Education 
Amendments of 1972 (20 U.S.C. 1681 et seq.), Section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794 et seq.), the Age 
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), and Titles II and 
III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 
seq.). State and local agencies must also comply with 7 CFR Parts 15, 
15a, and 15b of this title, and with the provisions of FNS Instruction 
113-2. Enforcement action may be brought under any applicable Federal 
law.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
1320) requires that the Office of Management and Budget (OMB) approve 
all collections of information by a Federal agency from the public 
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. Implementation of the data collection elements of the 
rule is contingent upon OMB approval under the Paperwork Reduction Act. 
Information collections in this final rule have been previously 
approved under OMB 0584-0293. Although FNS sought public 
comments specific to the estimated reporting and recordkeeping burden 
detailed in the proposed rule, no comments were received. Thus, the 
provisions contained in this final rule do not differ with regard to 
information collection burden requirements from those set forth in the 
proposed rule.

Government Paperwork Elimination Act

    FNS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies to provide 
the public the option of submitting information or transacting business 
electronically to the maximum extent possible. The FNS-153, Monthly 
Report of the Commodity Supplemental Food Program and Quarterly 
Administrative Financial Status Report, is available online at the FNS 
Web site and may be downloaded electronically by State and local 
agencies. The SF-269A, Financial Status Report, is currently available 
online at the OMB Web site and may be downloaded electronically as 
well. FNS is willing to provide electronic copies of this form to State 
agencies upon request. FNS is also exploring the possible development 
and use of an automated inventory system that would positively impact 
the efficiency of FNS-153 reporting by streamlining this process at the 
State and local levels. Finally, FNS will replace the current reporting 
system, the Special Nutrition Programs Integrated Information System, 
or SNPIIS, with the Web-based Food Programs Reporting System, or FPRS. 
FPRS should offer increased program efficiency.

Background

    On October 31, 2003, the Department published a proposed rule in 
the Federal Register (68 FR 62164) that would have rewritten the 
regulations for the CSFP in ``plain language'' to help program 
operators and the general public better understand program 
requirements. The rule also proposed changes that would have reduced 
the time and paperwork burden for State and local agencies, increased 
their flexibility in program operations, established more rigorous 
performance measures for State agencies, and strengthened program 
accountability. Other proposed changes would have incorporated current 
legislative provisions and improved program service and caseload 
management. The specific changes made by this final rule were discussed 
in detail in the preamble to the proposed rule, which provided a 60-day 
comment period.

Analysis of Comments Received

    The Department received a total of eleven comment letters. However, 
two of the comment letters were not received within the specified 
comment period and, therefore, were not considered in the comment 
analysis. Four State CSFP agencies, two CSFP local agencies, the 
National CSFP Association, one State association, and one non-CSFP 
State government organization submitted comment letters. Of those nine 
commenters, five were generally supportive of the proposed rule in its 
entirety, with a limited number of suggested revisions. The generally 
supportive comments from those five commenters are not included in the 
discussion of specific provisions contained in the preamble to this 
final rule. Most of the proposed rule provisions proved to be non-
controversial, either receiving few or no comments, or receiving very 
few comments in opposition. Provisions contained in the proposed rule 
that are being amended in this final rule in response to these comments 
are discussed in detail below. For a complete understanding of the 
provisions contained in this final rule, the reader should refer to the 
preamble of the proposed rule, as well as the preamble to this final 
rule.

Definitions, Section 247.1

    Section 247.1, as proposed, would have addressed definitions 
associated with the administration of the program. As discussed in the 
proposed rule, definitions of ``certification period,'' 
``commodities,'' ``CSFP,'' ``7 CFR Part 250,'' ``7 CFR Part 3016,'' ``7 
CFR Part 3019,'' and ``7 CFR Part 3052'' are not found in current 
regulations. As no comments were received referencing the additions of 
these definitions, these seven definitions have been retained in Sec.  
247.1 of this final rule as proposed. In addition to these seven 
definitions, it has been brought to our attention that the inclusion of 
definitions of ``applicant,'' ``disqualification,'' and ``proxy'' would 
serve to help readers and program administrators better understand the 
administration of the program. Therefore, definitions of these terms 
have been included in Sec.  247.1 of this final rule.

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    While the meaning of ``applicant'' is self-explanatory, it has been 
included for the sake of clarity. The term ``disqualification'' is 
defined to ensure that readers are better aware of the penalties for 
certain program violations. The definition of ``proxy'' makes clear to 
the reader those individuals who are qualified to obtain food packages 
for eligible participants. These added definitions do not in any way 
alter regulatory requirements.

The Purpose and Scope of CSFP, Section 247.2

    As discussed in Sec.  247.2 of the proposed rule, the purpose of 
CSFP is to distribute nutritious foods, and provide nutrition education 
to low-income pregnant, postpartum, and breastfeeding women, infants, 
children ages 1 through 5, and the elderly. One commenter suggested 
that instead of referring to children as those individuals ``ages 1 
through 5,'' that we refer to this applicant or participant group as 
``children ages 1 up to the 6th birthday.'' For the sake of clarity, we 
have amended the language in Sec.  247.2 to read ``children who are at 
least one year of age but have not reached their sixth birthday.'' 
Furthermore, in order to clarify the difference between ``infants'' and 
``children'' for the purposes of the CSFP, we have amended language 
pertaining to infants in Sec.  247.2 to read ``infants under one year 
of age.'' Since no other comments were received relative to the 
provisions contained in Sec.  247.2, all other provisions are retained 
in this final rule as proposed.

Administering Agencies, Section 247.3

    A description of responsible administering agencies and the Federal 
requirements that apply to administration of the program was included 
in Sec.  247.3 of the proposed rule.
    Since no comments were received relative to the proposed provisions 
contained in Sec.  247.3, they are retained in this final rule as 
proposed.

Agreements, Section 247.4

    Section 247.4, as proposed, addressed the requirements associated 
with the duration and contents of agreements between agencies 
administering the program. Section 247.4(b), as proposed, would have 
required that all agreements, with the exception of the Federal-State 
agreement (which is a standard form), contain a statement that the 
agreement may be terminated by either party upon 30 days' written 
notice.
    Two commenters expressed concerns over the proposed requirement. 
The commenters questioned whether a 30-day timeframe is adequate notice 
for termination, particularly for the distributing agency. The 
commenters cited the challenges associated with locating and procuring 
alternate providers within the service area, the potential difficulties 
in shifting commodity inventories to other sites within the 30-day 
timeframe, and, finally, the difficulties in notifying participants of 
schedule and food package pick-up location changes within the 30-day 
timeframe. Both commenters recommended that agreements establish the 
30-day notice as a regulatory minimum, with State agencies authorized 
to extend this minimum if circumstances warrant. We agree with the 
commenters' suggestion, and have amended Sec.  247.4(b)(6) to specify 
that the 30-day notice requirement is a regulatory minimum.
    In addition to requiring those elements listed in Sec.  
247.4(b)(6), Sec.  247.4(c) of the proposed rule would have required 
agreements between State and local agencies to include certain 
assurances and information. No comments were received relative to the 
provisions contained in Sec.  247.4(c) of the proposed rule. However, 
in order to make clear the civil rights requirements of the Department, 
a nondiscrimination assurance has been added to the required contents 
of agreements between State and local agencies. Section 247.4(d) of the 
proposed rule would have established the duration requirements for 
agreements between administering agencies. One commenter supported the 
proposed provision that would have made agreements between FNS and 
State agencies permanent. No other comments were received relative to 
this section of the proposed rule. However, in order to make clear to 
the reader the duration of other types of agreements, such as 
agreements with storage facilities, we have amended Sec.  247.4(d) of 
this final rule to include reference to 7 CFR 250.12(c).
    Since no comments were received relative to the other provisions 
contained in Sec.  247.4 of the proposed rule, they are retained in 
this final rule as proposed.

State and Local Agency Responsibilities, Section 247.5

    Section 247.5, as proposed, would have outlined the major 
responsibilities of State and local agencies in administering the 
program. No comments were received relative to the provisions contained 
in Sec.  247.5 of the proposed rule. Those provisions are retained in 
this final rule with the clarification in Sec.  247.5(b)(15) that 
States must ensure that program participation does not exceed the State 
agency's caseload allocation on an average monthly basis.

State Plan, Section 247.6

    Section 247.6, as proposed, would have addressed those requirements 
associated with the State Plan. One commenter concurred with Sec.  
247.6(c) of the proposed rule, which would have required that the State 
CSFP agency collaborate with the State WIC agency in developing plans 
to prevent and detect dual participation. To review, ``dual 
participation'' is the simultaneous participation by an individual in 
CSFP and the WIC Program, or in CSFP at more than one distribution 
site. Another commenter, although in support of the requirement for 
collaboration in the area of dual participation, requested that we 
require collaboration of the State CSFP agency with the State WIC 
agency in the development of multiple elements of the State Plans for 
the respective programs. We believe this requirement would create an 
undue burden on State agencies, since most States have already 
implemented the most efficient, cost effective systems for 
collaboration between programs in this regard. Thus, the requirements 
in this final rule will not be extended to include additional mandatory 
elements of collaboration.
    One commenter requested that we require CSFP State agencies to 
maintain updated Memoranda of Understanding with WIC State agencies, 
since State Plans would be permanent. We do not consider this change 
necessary since Sec.  247.6(d) requires the State agency to submit 
amendments to FNS to reflect any changes in aspects of program 
operations or administration that are addressed in the State Plan. This 
includes any changes to any elements of the State plan listed in Sec.  
247.6(c).
    Since no other comments were received relative to the provisions 
contained in Sec.  247.6 of the proposed rule, they are retained in 
this final rule as proposed.

Selection of Local Agencies, Section 247.7

    The provisions contained in Sec.  247.7 of the proposed rule would 
have addressed requirements associated with the submission of local 
agency applications for participation in the program, criteria that the 
State agency must consider in approving or denying such applications, 
and the amount of time the State agency has to act on a local agency's 
application.
    Section 247.7(b) of the proposed rule would have set forth the 
basic guidelines a State agency must consider in making a decision on a 
local agency's

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application for participation in the program. Two commenters 
recommended that the proposed local agency selection criteria be 
regulatory minimums, and that the State agency be permitted to specify 
additional criteria in the State Plan. The commenters cited differences 
between State agencies in the administration of the program, and the 
need for additional State-specified criteria as warranted. We agree 
that varied administration of the program from State to State may 
warrant additional local agency selection criteria. Therefore, this 
final rule amends Sec.  247.7(b) to permit State agencies to consider 
additional criteria in approving or denying a local agency's 
application to participate in the program.
    Section 247.7 of the proposed rule would have removed the 
requirement that the State justify the need for approval of a local 
agency in an area already served by the WIC Program. One commenter 
opposed the proposed removal of this requirement due to the possibility 
of dual participation. In relation to the dual participation issue, 
another commenter recommended that the Memorandum of Understanding 
between the State CSFP agency and the State WIC agency require the 
State CSFP agency to inform the State WIC agency when a new CSFP 
program application has been received in order to prevent occurrences 
of dual participation. However, we believe the provision contained in 
Sec.  247.6 of this final rule, which encourages State agencies to 
coordinate with the WIC State agency in formulating plans to serve 
women, infants, and children in common areas of service, is sufficient 
in this regard. In addition, a recent guidance memorandum issued by FNS 
on May 6, 2004, entitled ``Dual Participation in the Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC) 
and the Commodity Supplemental Food Program (CSFP)'' makes clear the 
discretion that CSFP and WIC State agencies have in establishing the 
most efficient and effective procedures for use in addressing the issue 
of dual participation.
    Since no other comments were received relative to the other 
provisions contained in Sec.  247.7, they are retained in this final 
rule as proposed.

Individuals Applying to Participate in CSFP, Section 247.8

    Section 247.8 of the proposed rule would have described specific 
requirements associated with individuals applying for participation in 
the program. One commenter expressed support for the requirement in 
Sec.  247.8(a) of the proposed rule that individuals applying to 
participate in the CSFP show some form of identification. No other 
comments were received relative to the provisions contained in Sec.  
247.8(a). However, we have amended Sec.  247.8(a) of this final rule to 
clarify that those individuals determined by the local agency to be 
automatically eligible under Sec.  247.9(b)(1)(i) and (b)(1)(ii) are 
not required to provide household size or income information. These 
individuals are eligible to participate in the program based on their 
participation in other Federal means-tested programs and are, 
therefore, not required to provide this information. In addition, Sec.  
247.8(a) of this final rule has been amended to clarify that household 
size must be ascertained for all households, except those determined to 
be automatically eligible, in order to establish an applicant's income 
limit under the Federal Poverty Income Guidelines published annually by 
the Department of Health and Human Services (HHS).
    One commenter requested that Sec.  247.8(b) be amended to require 
that a statement specifically referencing dual participation as a 
program violation be added to the application form that is signed by 
the applicant, adult parent, or caretaker. We agree that, in order to 
deter program participants from committing dual participation, a 
statement should be included on the application form. Therefore, this 
final rule amends Sec.  247.8(b) to require that the application form 
include reference to the prohibition of simultaneously receiving CSFP 
and WIC benefits, or CSFP benefits at more than one CSFP site. As the 
application form is modified to reflect this information, Sec.  
247.12(b)(1) of the proposed rule, which would have required local 
agencies to provide this information separately to the applicant, is 
not included in this final rule.
    In addition, in order to make clear the applicant's civil rights, 
this final rule amends Sec.  247.8(b) to require inclusion of the 
Department's nondiscrimination statement on all application forms. FNS 
Instruction 113-2 provides an approved example of a program 
nondiscrimination statement for the State agency's reference.
    Since no other comments were received relative to other provisions 
contained in Sec.  247.8, they are retained in this final rule as 
proposed.

Eligibility Requirements, Section 247.9

    Section 247.9 of the proposed rule would have addressed the 
requirements that must be used in determining an individual's 
eligibility to participate in the program. One commenter 
enthusiastically supported the proposed provision in Sec.  247.9(b)(3), 
which would have required that, for a pregnant woman, each embryo or 
fetus in utero be counted as a household member in determining if the 
household meets the income eligibility standards for the program.
    Section 247.9(d) of the proposed rule would have included reference 
to the notification, by memorandum, of the annual adjustment of the 
income guidelines by household size, and the effective date of the 
adjustments. The notification provides the adjusted guidelines for 185 
percent, 130 percent, and 100 percent of the poverty guidelines.
    Section 247.9(d) of the proposed rule would have further required 
that the State agency implement the adjusted guidelines for the elderly 
immediately upon receipt of the memorandum, in order to minimize the 
time gap between the adjustment of the guidelines and the cost-of-
living adjustment in Social Security benefits, which is made in 
January. This requirement would have decreased the likelihood that 
elderly persons receiving Social Security benefits would become 
temporarily ineligible for CSFP. Finally, Sec.  247.9(d) of the 
proposed rule would have required that the adjusted guidelines be 
implemented for women, infants, and children at the same time that the 
State WIC agency implements the adjusted guidelines for WIC eligibility 
in order to reflect current practices.
    One commenter specifically supported the proposed requirements for 
implementation of the adjusted income guidelines for participants. The 
same commenter requested that the Department specifically issue 
separate CSFP and WIC Program adjusted income guidelines for women, 
infants, and children. We agree that the Department should separately 
issue adjusted income guidelines for the CSFP and WIC Programs. As the 
WIC Program currently issues adjusted income guidelines for women, 
infants, and children on an annual basis, we plan to issue separate 
adjusted income guidelines for women, infants, and children 
participating in the CSFP. Since Sec.  247.9(d) of the proposed rule 
would have permitted such action, no change in this regard is 
necessary.
    Two commenters expressed support for the provision contained in 
Sec.  247.9(e) of the proposed rule, which would have permitted State 
agencies to allow local agencies to consider the household's average 
income during the previous 12 months and current household income

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to determine which more accurately reflects the household's status.
    Based on the comments received, the provisions contained in Sec.  
247.9 of the proposed rule are retained in this final rule as proposed.

Distribution and Use of CSFP Commodities, Section 247.10

    Section 247.10, as proposed, would have described the requirements 
associated with the distribution and use of commodities donated by the 
Department for use in the program. One commenter concurred with the 
proposed removal of the current requirement that the local agency 
choosing to distribute foods every other month provide the participant 
the option to continue to receive foods on a monthly basis. The 
commenter agreed that, as stated in the preamble to the proposed rule, 
although the local agency may provide this option, the requirement to 
do so may place an undue burden on the local agency. In addition, the 
commenter suggested that a tri-monthly commodity issuance be offered 
for those households with participants in both the CSFP and WIC 
Program. We appreciate the commenter's request to add a third commodity 
issuance option. However, there is no evidence that there would be 
broad interest in such an issuance option with the potential to benefit 
only a small portion of the CSFP population. In addition, the weight of 
the food packages renders it impractical for many CSFP participants to 
transport three months' worth of supplemental food packages to their 
homes. Finally, allowing the issuance of three month's worth of 
commodities, some of which require refrigeration, increases the risk of 
commodities going out of condition which, in turn, could negatively 
affect needy participants. Therefore, the proposed provision is 
retained without change in the final rule. Since no other comments were 
received relative to the provisions contained in Sec.  247.10 of the 
proposed rule, they are retained in this final rule as proposed.

Applicants Exceed Caseload Levels, Section 247.11

    Section 247.11 of the proposed rule would have described the order 
of priority in serving the various population groups, and the 
requirements associated with assigning applicants to a waiting list. 
Section 247.11(b), as proposed, would have listed the order of priority 
in service, and would have required that women, infants, and children 
receive priority of service over the elderly, per the requirements of 
the Agriculture and Consumer Protection Act of 1973, Public Law 93-86.
    One commenter requested that the Department reorder its priorities 
in service to make service to the elderly the first priority. The 
commenter cited the limited availability of nutrition assistance 
programs for elderly individuals in her area and observed that women, 
infants, and children have access to many programs, including the WIC 
Program, which adequately meet the needs of that population group. 
However, since legislation requires that priority in service be given 
to women, infants, and children, the Department does not have authority 
to adopt this recommendation.
    No other comments were received relative to the provisions 
contained in this section of the proposed rule. Those provisions are 
retained in this final rule with a cross-reference in Sec.  247.11(a) 
that clarifies notification policy to the reader. Section 247.11(a) of 
the final rule cross-references Sec.  247.15, since Sec.  247.15 
requires that applicants be notified of their placement on a waiting 
list, or their ineligibility or eligibility for benefits, within 10 
days from the date of application.

Rights and Responsibilities, Section 247.12

    Section 247.12 of the proposed rule would have included the most 
basic rights and responsibilities of program applicants. Section 
247.12(a) of the proposed rule would have included the right of 
applicants to receive benefits without discrimination based on race, 
color, national origin, age, sex, or disability. One commenter 
suggested that program standards do in fact discriminate by age. The 
commenter cited difficulties in providing services to senior housing 
sites where some residents are under sixty years of age, the minimum 
age required for seniors to qualify for participation in the program. 
By law, participation in the program is limited to those individuals 
who are ``categorically'' eligible. Therefore, the regulatory age 
limitations are not discriminatory. Section 247.12(a) of the proposed 
rule is, however, amended in this final rule to remove the requirement 
to inform applicants of the right to participate without 
discrimination, since Sec.  247.8(b) of this final rule requires that 
an approved nondiscrimination statement to be printed on all 
application forms.
    Section 247.12(b) of the proposed rule would have required that 
applicants be informed of the prohibition on dual participation, and 
the possibility of a claim against an individual who receives benefits 
improperly as a result of dual participation or other program 
violations, in accordance with the provisions contained in Sec.  
247.30, which addresses claims. However, Sec.  247.8(b) of the proposed 
rule has been amended in this final rule to require that information 
regarding the prohibition on dual participation be included on the 
application form. Therefore, the requirement that this information be 
provided to applicants separately is not included in Sec.  247.12(b) of 
this final rule.
    One commenter suggested that the concept of dual participation is 
not well understood by participants and that local agency staff should 
be required to explain the concept to applicants and participants. It 
has been determined that the provisions set forth in Sec.  247.12(b) 
and Sec.  247.8 of this final rule are sufficient to ensure that 
program applicants are made aware of what constitutes dual 
participation, the prohibition against dual participation, and the 
possible consequences of such action. Therefore, this requirement has 
not been included in Sec.  247.12(b) of this final rule.

Provisions for Non-English or Limited-English Speakers, Section 247.13

    Section 247.13, as proposed, would have described the provisions 
associated with providing non-English or limited-English speaking 
persons program information in an appropriate language. Section 
247.13(b) of the proposed rule would have required that, in areas where 
a significant proportion of the population speak little or no English 
but have a language in common, the State agency ensure that local 
agencies provide applicants with program information in an appropriate 
language, not including application materials. One commenter 
recommended that all application materials be required in appropriate 
languages, as several different languages may be prevalent in a given 
area. Section 247.13(a) of the proposed rule would have required State 
and local agencies to provide bilingual staff members and interpreters 
in areas where a significant proportion of the population is comprised 
of non-English or limited-English speaking persons with a common 
language. Since this requirement adequately accommodates the needs of 
the most diverse range of population groups without significantly 
increasing program costs at the local level, the provisions contained 
in Sec.  247.13(b) of the proposed rule are retained in this final rule 
as proposed. However, the phrase ``to such persons in an appropriate 
language'' in proposed rule Sec.  247.13(b) has been amended in this 
final rule to read ``to such persons

[[Page 47057]]

in their appropriate language'' for clarification purposes.
    Since no other comments were received relative to the remaining 
provisions contained in Sec.  247.13 of the proposed rule, they are 
retained in this final rule as proposed. It is important to note that 
the Department plans to clarify its policy in the future regarding the 
provisions for non-English or limited-English speaking persons. FNS 
will implement this policy once received.

Other Public Assistance Programs, Section 247.14

    Section 247.14 of the proposed rule would have described the 
requirements associated with the provision of information to program 
applicants. Section 247.14(a) of the proposed rule would have required 
that the local agency provide applicants with written information on 
the specific, locally available programs that may affect their health, 
nutrition, or general welfare, including the WIC Program. This would 
allow individuals eligible for both CSFP and WIC to choose the program 
in which they wish to participate.
    Local agencies would also be required to make referrals to these 
programs, as appropriate. One commenter recommended that we take the 
referral process one step further, and require local agencies to forego 
CSFP certification of applicants eligible for the WIC Program, and 
refer those applicants to the WIC Program instead. The Agriculture and 
Consumer Protection Act of 1973 requires that eligible women, infants, 
and children be given priority in access to the CSFP. Therefore, the 
Department does not have the authority to deny participation to those 
women, infants, and children that choose to participate in CSFP rather 
than WIC.
    Another commenter recommended that, in addition to providing 
general WIC Program information to individuals, the CSFP local agency 
should also be required to provide the individual with information 
about the WIC Program's assistance with gaining access to health care, 
the addresses and phone number of one or more nearby WIC offices, and 
specific details about how individuals can apply for participation in 
the WIC Program. We believe that imposing additional, more specific 
requirements in this regard would create an undue burden on CSFP State 
and local agencies. In addition, administration of the program varies 
significantly among State and local agencies. Therefore, State agencies 
are better able to determine the type of information that should be 
provided when referring applicants to other programs, including WIC.
    Since no other comments were received in reference to the 
provisions contained in Sec.  247.14 of the proposed rule, they are 
retained in this final rule as proposed.

Notification of an Applicant's Eligibility or Ineligibility, or 
Placement on a Waiting List, Section 247.15

    Section 247.15 of the proposed rule would have required that the 
local agency notify applicants in writing of their eligibility or 
ineligibility, or placement on a waiting list within 10 days from the 
date of the application. One commenter recommended that 20 days is a 
more adequate timeframe for notifying applicants. We believe that 10 
days is a reasonable amount of time for a decision to be made on 
eligibility for food assistance, and to allow ineligible applicants to 
receive the information they need to seek other forms of assistance. No 
other comments were received relative to the provisions contained in 
Sec.  247.15 of the proposed rule. The provisions contained in Sec.  
247.15 of the proposed rule are retained in this final rule with the 
clarification that, in order to make clear the applicant's civil 
rights, an approved Department nondiscrimination statement must be 
included on all written notifications of an individual's eligibility, 
ineligibility, or placement on a waiting list.

Certification Period, Section 247.16

    Section 247.16 of the proposed rule would have addressed the 
requirements associated with the establishment of certification 
periods, the right of individuals to receive benefits under a transfer 
of certification when they move to a new area, and notification of 
individuals of the expiration of their certification period. To reduce 
the burden on local agencies, Sec.  247.16(a) of the proposed rule 
would have permitted State agencies to authorize local agencies to 
extend the certification period of elderly persons without a review of 
eligibility criteria for additional six-month periods (and not just for 
one six-month period) if, at each six-month interval, certain 
conditions are met. One commenter specifically supported this proposed 
provision. However, another commenter argued that, as elderly 
participants do not experience any major income adjustments, they 
should be permanently certified. We agree that elderly participants do 
not experience as many income adjustments as women, infants, and 
children in the program. However, we believe that changes in household 
composition and income do occur, regardless of participant age, and 
periodic checks of this information yield increased program efficiency 
and effectiveness.
    Section 247.16(a) of the proposed rule would have also required 
that the State agency establish certification periods for infants that 
do not exceed six months in length. Two commenters requested that 
certification requirements for infants be modified to allow infants to 
be certified up to their first birthday, or for a period of six months, 
whichever is longer. We appreciate the comments received in reference 
to this issue. However, we believe that fluctuations in household 
income are more commonplace for this population group in comparison to 
the elderly, and that the proposed rule provision regarding the length 
of infant certification periods is not unduly burdensome. Therefore, 
the proposed provision regarding infant certification periods is 
retained in this final rule.
    Section 247.16(c) of the proposed rule would have included the 
right of transfer of certification for individuals certified to 
participate in the programs who move to another area. The proposed rule 
would have removed the requirement that the State (or local) agency 
issue a verification of certification (VOC) form to the participant to 
facilitate this transfer. Instead, the proposed rule would have 
required that the local agency provide verification of the 
certification period to the participant upon request. One commenter did 
not agree with the proposal to eliminate the requirement that a VOC 
form be provided to all program participants moving to another area. 
Requiring the issuance of a VOC form to all such participants creates 
an undue burden on State and local agencies; transfer of participation 
can be more efficiently facilitated through communication between the 
local agency and the participant.
    No other comments were received relative to the provisions proposed 
in Sec.  247.16. For the reasons stated above, the provisions contained 
in Sec.  247.16 of the proposed rule are retained in this final rule, 
with the clarification that the local agency which determined the 
participant's eligibility must, upon request, provide to the 
participant verification of the expiration date of the certification 
period, instead of the extent of the certification period. This 
provides the participant with the most relevant information necessary 
to effect an efficient transfer of certification. In addition, in order 
to make clear the participant's civil rights, the requirement that an 
approved Department nondiscrimination

[[Page 47058]]

statement be included in the notice advising individuals that their 
certification period is about to expire has been included in Sec.  
247.16(d) of this final rule.

Notification of Discontinuance of Participant, Section 247.17

    Requirements associated with notifying participants that their 
participation in the program is discontinued would have been addressed 
in Sec.  247.17 of the proposed rule. While no specific comments were 
received relative to the provisions contained in Sec.  247.17 of the 
proposed rule, Sec.  247.17 of the proposed rule has been amended in 
this final rule to clarify that local agencies must provide the 
participant with prior written notification of discontinuance in 
instances where a participant's participation in the program must be 
discontinued prior to the end of the certification period, due to the 
lack of resources necessary to continue providing benefits to the 
participant. In addition, in order to make clear the participant's 
civil rights, the requirement that an approved Department 
nondiscrimination statement must be included in the notice of 
discontinuance has been included in Sec.  247.17(c) of this final rule.
    Since no other comments were received in reference to the remaining 
provisions contained in Sec.  247.17 of the proposed rule, they are 
retained in this final rule as proposed.

Nutrition Education, Section 247.18

    Section 247.18, as proposed, would have described nutrition 
education requirements. Section 247.18(a) of the proposed rule would 
have required that the State agency establish an evaluation procedure 
to ensure that the nutrition education provided is effective. The 
evaluation procedure would have included participant input and would 
have been directed by a nutritionist or other qualified professional. 
The evaluation would have been performed by the State or local agency 
or by another agency under agreement with the State or local agency. 
Two commenters, although strong supporters of nutrition education, 
asserted that the proposed requirement that the State agency establish 
a nutrition evaluation procedure under the direction of a nutritionist 
may be difficult to achieve, as many State agencies may not have 
immediate access to a nutritionist. We appreciate the commenters' 
concerns. However, Sec.  247.18(a), as proposed, would have permitted 
State agencies to use other qualified professionals, and would have 
provided State agencies adequate flexibility in developing evaluation 
procedures. The above provisions of Sec.  247.18(a) of the proposed 
rule are retained in this final rule, with the clarification that State 
agencies may allow local agencies to share personnel and educational 
resources with other programs in order to provide the best nutrition 
education possible to program participants. The remaining nutrition 
education evaluation procedure requirements detailed in Sec.  247.18(a) 
of the proposed rule are retained without change in this final rule.
    Section 247.18(b) of the proposed rule would have required that the 
local agency provide the participant with nutrition education 
information on certain specified subjects. Two commenters asserted that 
most local agency staff are not qualified to provide nutritional 
education to participants, especially in terms of special nutritional 
needs and how these needs may be met. While we appreciate the 
commenters' concerns, local agencies have discretion with regard to the 
manner in which the information is provided. In instances in which a 
qualified professional is not available to provide such information, 
the information can be provided in the form of printed materials. 
Therefore, Sec.  247.18(b) of the proposed rule is retained in this 
final rule without change.
    Since no other comments were received relative to the other 
provisions contained in Sec.  247.18 of the proposed rule, they are 
retained in this final rule as proposed.

Dual Participation, Section 247.19

    Section 247.19(a) of the proposed rule would have included the 
requirements for the prevention and detection of dual participation, 
including the requirement that the State agency agree on a plan with 
the State WIC agency to detect and prevent dual participation. For 
clarification purposes, we have included in this final rule reference 
to Sec.  247.8(a)(1), which requires local agencies to check the 
identification of all applicants when they are certified or 
recertified. In addition, we have included reference to Sec.  247.8(b) 
of this final rule, which requires that the local agency ensure that 
the applicant, or the adult parent or caretaker of the applicant, signs 
an application form which includes a statement advising the applicant 
that he or she may not receive both CSFP and WIC benefits 
simultaneously, or CSFP benefits at more than one CSFP site at the same 
time. Because the provision that references informing the applicant of 
the prohibition on dual participation contained in proposed rule Sec.  
247.12(b)(1) is not included in this final rule, and since this 
information is now required on the application form per Sec.  247.8(b) 
of this final rule, reference to Sec.  247.12(b)(1) has not been 
included in Sec.  247.19(a) of this final rule.
    One commenter suggested that the administrative burden for 
detecting and preventing dual participation be equally shared between 
CSFP and WIC State agencies. We appreciate the commenter's input in 
reference to this issue. However, as provided in the recent WIC/CSFP 
Dual Participation Guidance Memorandum issued by FNS on May 6, 2004, we 
recommend that WIC State agencies take the lead role in the detection 
of dual participation. WIC has a much larger database of women, 
infants, and children, and individuals eligible for both programs 
increasingly participate in WIC rather than CSFP. As provided in that 
guidance memorandum, we realize that in a number of States, CSFP State 
agencies take the lead role in the detection of dual participation. If 
such a system is already in place and both CSFP and WIC State agencies 
are satisfied with it, then we do not expect the State agencies to 
change their policies. To prescribe equal detection and prevention 
efforts by both State agencies would create an undue burden on many 
CSFP and/or WIC State agencies. Consistent with the recent guidance 
memorandum, discretion is given to CSFP and WIC State agencies to 
determine the best policy for the detection of dual participation. 
Therefore, the remaining provisions contained in Sec.  247.19(a) of the 
proposed rule are retained in this final rule as proposed.
    Two commenters requested that a specific process be included in the 
regulations that would establish clear parameters for dual 
participation enforcement. Section 247.19(b) of the proposed rule would 
have required, consistent with the dual participation guidance 
memorandum, that a participant found to be committing dual 
participation be disqualified from one of the programs (WIC or CSFP). 
In addition, Sec.  247.19(b) of the proposed rule would have required 
the local agency to initiate a claim against the participant to recover 
the value of CSFP benefits improperly received in accordance with Sec.  
247.30(c) of the proposed rule. If applied in conjunction with the 
guidelines set forth in the dual participation guidance memorandum, we 
believe that the provisions of Sec.  247.19(b) of the proposed rule 
would have adequately addressed dual participation enforcement 
measures. Therefore, the provisions contained in

[[Page 47059]]

Sec.  247.19(b) are retained in this final rule as proposed.

Program Violations, Section 247.20

    Section 247.20, as proposed, would have described the conditions 
under which applicants and participants may be disqualified from the 
program, the disqualification penalties, and the requirements for 
notifying individuals of their disqualification. In reference to Sec.  
247.20(b) of the proposed rule, one commenter specifically supported 
the proposal to extend the maximum disqualification period from three 
months to one year, as well as the proposal requiring local agencies to 
permanently disqualify participants who commit three program violations 
that involve fraud. Since no other comments were received relative to 
the provisions contained in Sec.  247.20 of the proposed rule, they are 
retained in this final rule as proposed.

Caseload Assignment, Section 247.21

    Section 247.21 of the proposed rule would have described provisions 
associated with the assignment of caseload. To ensure that additional 
caseload slots are allocated to States that are most likely to use 
them, Sec.  247.21(a) of the proposed rule would have established more 
realistic, rigorous performance measures. The revised performance 
measures would have included an increase in the caseload utilization 
requirement to establish eligibility for additional caseload from 90 
percent to 95 percent, and the removal of participation data during the 
month of September as an independent time period used to determine base 
caseload and a State's eligibility for additional caseload.
    Prior to proposing these more rigorous performance measures, we 
analyzed the performance of State agencies over a period of three 
fiscal years, beginning with fiscal year 2000 program performance data. 
Based on this analysis, and the availability of a specific enhanced 
level of administrative funds, it has been determined that State 
agencies can reasonably be expected to meet these more demanding 
measures. While these measures may negatively impact a small number of 
States in any given year, they will have a positive impact on the 
program as a whole by facilitating assignment of caseload slots to 
State agencies most likely to utilize them based on past performance. 
The allocation of caseload slots to such State agencies will ensure 
that the nutritional needs of low-income women, infants, children, and 
elderly persons are more fully met.
    We specifically requested comments on the removal of the month of 
September as an independent consideration. Of the comments received, 
two commenters expressed support for the proposed provision with 
changes, and one commenter did not support the removal of the month of 
September.
    One of the commenters expressed support for the removal of the 
month of September only if the highest quarter's participation is 
included as a time period used to determine a State's base caseload and 
eligibility for additional caseload. The goal of the provisions 
contained in Sec.  247.21(a) of the proposed rule was to establish 
performance standards that would result in the allocation of caseload 
to State agencies that are most likely to utilize it. We do not believe 
that using a State's highest quarter of participation will be helpful 
in achieving that goal. This approach is not appropriate because it 
undervalues current participation data relative to performance during a 
single past quarter after which significant decreases in participation 
may have occurred.
    One of the commenters argued that removal of the month of September 
as an independent consideration either in establishing base caseload or 
in determining eligibility for additional caseload would be misguided 
and shows a lack of understanding for how caseloads are managed at the 
State level. Our analysis indicates that many State agencies' highest 
participation period over the past few years has been the month of 
September, and that their participation often decreases significantly 
in the immediately following months. Eliminating the month of September 
as an independent measure should decrease the spiking in caseload 
utilization that frequently takes place in September and strengthen the 
incentive for States to fill available caseload slots sooner. Ensuring 
a more accurate and precise appraisal of States' performance should 
facilitate allocation of caseload to States that are most likely to 
utilize it. This will increase overall program efficiency and ensure 
that the nutritional needs of more low-income women, infants, children, 
and elderly persons are met during that caseload cycle.
    One of the commenters argued that when appropriations are not 
enacted by December 31, the month of September should be restored as an 
allowable stand-alone performance measure. The commenter asserted that 
the removal of September would discourage State agencies from making 
extraordinary efforts to serve clients in unserved areas, especially in 
years when caseload is assigned late. We agree that September 
participation should be included as an independent consideration, but 
only in circumstances that could reasonably lead to participation 
growth in that month. Even in a year of delayed appropriations, a State 
agency that has participated in two or more caseload cycles that 
receives only base caseload would be expected to maintain participation 
within a relatively narrow range throughout the year rather than peak 
in September. In contrast, a State agency entering its second year of 
program participation that is working to fully establish its program 
may exhibit a lower caseload utilization level at the beginning of its 
first year than other, more established States. Thus, participation 
growth through September can reasonably be expected for States entering 
their second year. Furthermore, when appropriations are unduly delayed 
and a State receives considerable expansion caseload, participation 
growth through September can reasonably be expected as well. Finally, 
the same factors that contribute to participation increases in 
September should serve to sustain that higher participation level at 
least through the following month.
    Therefore, for each State that has participated in two or more 
caseload cycles, Sec.  247.21(a) of this final rule includes September 
as an independent performance measure for determining a State's base 
caseload and eligibility for additional caseload only when, as of 
February 15 of the previous fiscal year, full-year appropriations were 
not enacted (thus delaying caseload assignment until after that date), 
the State received additional caseload in the previous caseload cycle 
that increased the State's total caseload by 10 percent or more over 
and above its assigned base caseload, and the State achieved an October 
participation total in the current fiscal year which was equal to or 
greater than 95 percent of the State's September participation total in 
the previous fiscal year. For example, State A was entering its third 
caseload cycle in 2004. Full-fiscal-year 2003 appropriations were not 
enacted until February 20, 2003. For the 2003 caseload cycle, 25 
caseload slots were allocated to State A in addition to its base 
caseload of 100, giving the State a total caseload of 125. State A's 
program participation for the month of September, fiscal year 2003, was 
120 persons, and the State's October participation in fiscal year 2004 
was 122 persons. When allocating caseload for the 2004 caseload cycle, 
September would be used as an independent

[[Page 47060]]

performance measure for determining base caseload and eligibility for 
additional caseload for State A because the 2003 full-year 
appropriation was not enacted before February 15, the State received 
additional caseload which increased its total caseload allocation by 25 
percent over and above base caseload, and the State achieved an October 
participation level in fiscal year 2004 which represented over 101 
percent of its September participation level in the previous fiscal 
year.
    To provide a contrasting example, State B was entering its fourth 
caseload cycle in 2004. For the previous caseload cycle, State B was 
assigned a base caseload of 90. The State received five additional 
caseload slots in the 2003 caseload cycle to bring its total caseload 
allocation to 95. Regardless of the timing of the full-year 
appropriation or State B's participation level in October, the month of 
September would not be used in determining the State's base caseload or 
eligibility to receive additional caseload for the 2004 caseload cycle, 
because the additional caseload allocation of only five slots in the 
previous caseload cycle increased the State's total caseload allocation 
by less than six percent, which is under than the 10-percent required 
minimum.
    Finally, State C was entering its seventh caseload cycle in 2004. 
For the previous caseload cycle, the State received 50 additional 
caseload slots over and above its base caseload of 25, bringing its 
total caseload to 75. State C's program participation for the month of 
September, fiscal year 2003, was 70 persons, but the State's October 
participation in the following fiscal year dropped to 50 persons. 
Because State C's October fiscal year 2004 participation was 
approximately 71 percent of its September fiscal year 2003 
participation, and well below the required minimum of 95 percent, the 
month of September would not be used in determining the State's base 
caseload or eligibility to receive additional caseload for the 2004 
caseload cycle.
    For each State entering its second caseload cycle, Sec.  247.21(a) 
of this final rule includes September as an independent performance 
measure for determining a State's eligibility for additional caseload 
only when, as of February 15 of the previous fiscal year, full-year 
appropriations were not enacted (thus delaying caseload assignment 
until after that date), and the State achieved an October participation 
total in the current fiscal year which was equal to or greater than 95 
percent of the State's September participation total in the previous 
fiscal year. Because States entering their second year of program 
participation do not receive additional caseload in their first 
caseload cycle, those States cannot be expected to meet the 10-percent 
minimum caseload increase standard that is applied to States that have 
participated in two or more caseload cycles. Thus, the 10-percent 
minimum increase standard does not apply to these States.
    To provide an example, State D was entering its second caseload 
cycle in 2004. To review, full-fiscal-year 2003 appropriations were not 
enacted until February 20, 2003. State D received caseload totaling 50 
slots in the 2003 caseload cycle. The State's participation for 
September of fiscal year 2003 was 49, and its October participation for 
the following fiscal year was 50. When allocating caseload for the 2004 
caseload cycle, September would be used as an independent performance 
measure for determining base caseload and eligibility for additional 
caseload for State D because full-year appropriations were not enacted 
before February 15, and the State achieved an October participation 
total in fiscal year 2004 which was 102 percent of the State's 
September participation total in the previous fiscal year, well above 
the 95-percent minimum requirement.
    To provide a contrasting example, State E was entering its second 
caseload cycle as well in 2004. State E received caseload totaling 200 
slots in the previous caseload cycle. The State's participation for 
September of fiscal year 2003 was 190, but its fiscal year 2004 October 
participation dropped to 150. Because State D's October participation 
was just under 79 percent of its September participation, and well 
below the required minimum of 95 percent, the month of September would 
not be used in determining the State's base caseload or eligibility to 
receive additional caseload for the 2004 caseload cycle.
    Section 247.21(a)(2) of the proposed rule would have required that 
a State agency utilize 95 percent of its assigned caseload, rather than 
the current 90 percent, to be eligible for additional caseload in the 
following caseload cycle. Three commenters did not support the proposed 
increase from 90 to 95 percent. One commenter suggested that the 
combined effect of both the 95 percent caseload utilization requirement 
and t