Supplemental Nutrition Assistance Program: Review of Major Changes in Program Design and Management Evaluation Systems, 2725-2741 [2016-00674]

Download as PDF 2725 Rules and Regulations Federal Register Vol. 81, No. 11 Tuesday, January 19, 2016 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. DEPARTMENT OF AGRICULTURE Food and Nutrition Service 7 CFR Parts 271, 272 and 275 [FNS–2011–0035] RIN 0584–AD86 Supplemental Nutrition Assistance Program: Review of Major Changes in Program Design and Management Evaluation Systems Food and Nutrition Service (FNS), USDA. ACTION: Final rule. AGENCY: This rule finalizes provisions of the proposed rule entitled Review of Major Changes in Program Design and Management Evaluation Systems, which was published May 3, 2011. This final rule amends the Supplemental Nutrition Assistance Program (SNAP) (formerly the Food Stamp Program) regulations to implement section 4116 of the Food, Conservation and Energy Act of 2008 (FCEA). Section 4116 of the FCEA, Review of Major Changes in Program Design, requires the United States Department of Agriculture (the Department) to identify standards for major changes in operations of State agencies’ administration of SNAP. The provision also requires State agencies to notify the Department if they implement a major change in operations and to collect and report data that can be used to identify and correct problems relating to integrity and access, particularly for certain vulnerable households. This final rule establishes criteria for changes that would be considered ‘‘major changes’’ in program operations and identifies the data State agencies must report in order to identify problems relating to integrity and access. It also sets forth when and how State agencies must report on the implementation of a major change. This asabaliauskas on DSK5VPTVN1PROD with RULES SUMMARY: VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 rule also amends Management Evaluation (ME) Review regulations by modifying the requirements for State reviews. The rule revises the definitions of large, medium and small project areas. Finally, it removes sections of the regulations pertaining to coupons and coupon storage since they are obsolete. DATES: Effective Date: January 19, 2016. Implementation date: This rule shall be implemented as follows: § 272.15 shall be implemented on March 21, 2016. Implementation of any major change that begins after that day must be reported to FNS. The changes in definitions in Part 271 that impact the requirements for State ME reviews in Part 275, shall be implemented October 1, 2016. FOR FURTHER INFORMATION CONTACT: Mary Rose Conroy, Chief, Program Design Branch, Program Development Division, Food and Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia 22302, (703) 305– 2515; Maryrose.Conroy@fns.usda.gov. Questions regarding this rulemaking should be sent in writing to 3101 Park Center Drive, Alexandria, Virginia 22302, or by telephone at (703) 305– 2803, or via email to Maryrose.Conroy@ fns.usda.gov. SUPPLEMENTARY INFORMATION: This action is needed to implement section 4116 of the FCEA. Section 4116, Review of Major Changes in Program Design, amends section 11 of the Food and Nutrition Act of 2008 (the Act) (7 U.S.C. 2020). Section 4116 requires the Department to develop standards for identifying major changes in the operations of State agencies that administer SNAP; State agencies to notify the Department upon implementing a major change in operations; and State agencies to collect any information required by the Department to identify and correct any adverse effects on program integrity or access, particularly access by vulnerable households. The provision identifies four major changes in operations for which standards for identifying changes must be developed: (1) Large or substantially-increased numbers of lowincome households that do not live in reasonable proximity to a SNAP office; (2) substantial increases in reliance on automated systems for the performance of responsibilities previously performed by merit system personnel; (3) changes that potentially increase the households’ PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 difficulty in reporting information to the State; and (4) changes that may disproportionately increase the burdens on specific vulnerable households. In addition, the provision gives the Department the discretion to identify other major changes that a State agency would be required to report, as well as to identify the types of data the State agencies would have to collect to identify and correct adverse effects on integrity and access. Finally, the Department is modifying requirements for State reviews to allow more efficient use of staff and resources. I. Additional Information on Electronic Access Electronic Access You may view and download an electronic version of this final rule at http://www.fns.usda.gov/snap/. II. 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). This final rule has been determined to be not significant under Executive Order 12866 and was not reviewed by the Office of Management and Budget. Costs The rule will have a minimal cost in fiscal year (FY) 2016 and over the 5 years FY 2016 through FY 2020. To estimate the cost impact, we multiplied the estimated total burden hours, as outlined in the Paperwork Reduction Act section of the preamble, by the hourly mean wage for functions performed by State agency and local education agency staff. The hourly mean wage is based upon the U.S. Department of Labor, Bureau of Labor Statistics, May 2014 National Occupational and Wage Statistics, Occupational Group (for education-related occupations), which is $25.10. FNS estimates a total of 8,460 burden hours to fulfill the reporting requirements. The annual cost is estimated at $212,364 or approximately $1,061,730 over the 5 years FY 2016 through FY 2020. E:\FR\FM\19JAR1.SGM 19JAR1 2726 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations Benefits This rule requires State agencies to report on the impacts of implementing major changes in State agency operations, and to identify and correct problems caused by implementing these changes. This rule will benefit State agencies by requiring them to fully evaluate changes and thereby reduce the potential for these changes to cause hardships for applicants, recipients or compromise the integrity of the program. This rule will benefit applicants, recipients or individuals otherwise eligible for SNAP by requiring State agencies to identify and correct adverse impacts. This rule modifies the requirements for State ME reviews of local office operations. It will benefit State agencies by allowing them more time to conduct higher quality reviews. Executive Order 12372 SNAP is listed in the Catalog of Federal Domestic Assistance under No. 10.551. For the reasons set forth in the final rule in 7 CFR part 3015, subpart V and related Notice (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. asabaliauskas on DSK5VPTVN1PROD with RULES Regulatory Flexibility Act This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601–612). It has been certified that this rule will not have a significant economic impact on a substantial number of small entities. State welfare agencies will be the most affected to the extent that they administer the SNAP. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 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 VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 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. This rule is, therefore, not subject to the requirements of sections 202 and 205 of the UMRA. 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 E.O. 13132. FNS has considered this rule’s impact on State and local agencies and has determined that it does not have federalism implications under E.O. 13132. 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 that 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 this rule has no intended impact on any of the protected classes. FNS specifically prohibits State and local government agencies that administer SNAP from engaging in actions that discriminate against any applicant or participant in any aspect of program administration, including, but not limited to, the certification of households, the issuance of benefits, the conduct of fair hearings, or the conduct of any other program service for reasons of age, race, color, sex, handicap, religious creed, national origin or political beliefs (SNAP nondiscrimination policy can be found at 7 CFR 272.6). Discrimination in any aspect of program administration is prohibited by these regulations, the Food and Nutrition Act of 2008, the Age Discrimination Act of 1975 (Pub. L. 94– 135), the Rehabilitation Act of 1973 (Pub. L. 93–112, section 504) and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d). Enforcement action may be brought under any applicable Federal law. Title VI complaints shall be processed in accordance with 7 CFR part 15. PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 Executive Order 13175 This rule has been reviewed in accordance with the requirements of Executive Order 13175, ‘‘Consultation and Coordination with Indian Tribal Governments.’’ Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a governmentto-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 has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under EO 13175. On February 18, 2015 the agency held a webinar for tribal participation and comments. During the comment period, FNS did not receive any comments on the proposed rule. If a Tribe requests consultation, FNS will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR part 1320), requires that 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. The Notice of Proposed Rulemaking (NPRM) contained new requirements that are subject to review and approval by OMB. FNS sought public comments on the changes in the information collection burden that would result from adoption of the NPRM provisions. Comments were invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments on the information collection pursuant to the proposed rule were minimal, but changes to provisions of the final rule have affected the reporting burden estimated from the NPRM. Title: Review of Major Changes in Program Design. OMB Number: [0584–NEW]. Expiration Date: Not Yet Determined. Type of Request: New Collection. Abstract: As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), FNS is submitting a copy of this section to OMB for its review. Section 4116, Review of Major Changes in Program Design, amends section 11 of the Act (7 U.S.C. 2020). It requires the Department to develop standards for identifying major changes in the operations of State agencies that administer SNAP. Section 272.15, of this final rule requires State agencies to notify the Department when planning to implement a major change in operations and State agencies to collect any information required by the Department to identify and correct any adverse effects on program integrity or access, including access by vulnerable households. Since decisions to make major changes to program operations rest with each individual State agency, the frequency and timing of the changes can only be estimated. The final rule requires State agencies to provide descriptive information regarding the major change together with an analysis of its projected impacts on program operations. The final rule also includes ‘‘automatic’’ reporting requirements for any State reporting a major change and sets out requirements for the State to collect and report additional information. The reports will consist of monthly information, to be provided on a quarterly basis. Reporting would continue for at least a year after the change is completely implemented. It is not uncommon for a State to pilot a change prior to statewide implementation. FNS could require information from the pilot and information regarding the statewide impacts of the change after full implementation. Respondents: The 53 State agencies that administer SNAP. Estimated Number of Responses per Respondent: The rule identifies six categories of major changes; changes to the States automated system, changing the responsibilities of merit system personnel, office closings, reductions in State SNAP merit system personnel, VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 changes that may make it more difficult for households to report and an undefined ‘‘other’’ category. Such changes in operations are made by States based upon a variety of interrelated factors. There is no evidence that the State’s size (population) or regional location predict when or what type of changes States will make. In examining the first of the above criterion in isolation, it would be reasonable to expect one or two States per year to replace automated systems and another four States to make modifications to their systems that would require a major change report. However, with so many States running older systems and the delays caused by budget difficulties, it is likely this will increase to three per year beginning in FY 2017, as States’ budgets improve. It is also likely that we will see more States look into implementing call centers and developing online applications that will be used by a large proportion of SNAP applicants and participants. Since it appears that 45 States will have online applications in place and over 30 States will be using call centers in FY 2016, the number of additional States that might implement these systems in a year is most likely no more than four per year. Therefore we estimate a total of ten States per year would report major changes under this criterion. With regard to the second criterion, one State exploring such a change every two years would be a reasonable estimate. The third criterion, office closings, may become more common with the expanded use of call centers and online applications. We estimate three States per year would report major changes under this criterion. The fourth criterion, staff reductions, tends to fluctuate with States’ budgetary situations, caseloads and other changes States make to their program design. We estimate there would be three significant staff reductions per year. The fifth criterion, changes that may make it more difficult for households to report, would occur in conjunction with or as a result of changes in the States administration of SNAP. This is the most difficult to predict, but as States continue to take advantage of new technology and streamlined processes, changes of this type may become more common. An estimate of five such changes per year would appear to be reasonable. Since, by definition, the ‘‘other’’ category cannot be estimated, one such major change per year is estimated as a place holder. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 Criterion Replacement of automated system ................................. Changing the responsibilities of merit system personnel .. Office closings ........................ Significant reductions in SNAP staff ..................................... Changes that may make it more difficult for households to report ............................... Other ....................................... Total .................................... 2727 Responses per year 10 .5 3 3 5 1 22.5 Once a State has triggered one of the six criteria, the State will be required to report the ‘‘automatic’’ information as required in § 272.15(b)(2)–(4) and FNS must determine what, if any, additional data the State will be required to collect and report as provided for in § 272.15(b)(5). FNS believes that most often, the automatic reporting requirements and its ongoing data collection tools it employs will be sufficient to provide the needed information on a major change. Additional data will occasionally need to be generated from States’ automated eligibility systems or gathered by conducting additional case review surveys. Estimated Total Annual Burden on Respondents: Section 272.15(a)(3), requires States provide both descriptive and analytic information regarding the major change. FNS believes States will have completed the majority of the analysis in the normal course of their own planning and decision making. The descriptive information should also be readily available and require minimal data gathering since it is the State’s decision to make the major change. We estimate it will take 8 hours to describe the change and 32 hours to repackage and complete the required analysis for a total of 40 hours per response. Thus, with 22.5 States reporting one major change per year, the initial reporting and analysis aspect of the rulemaking would be 22.5 annual responses × 40 hours per State = an estimated 900 burden hours per year (22.5 States × 1 response per respondent = 22.5 annual responses × 40 hours per respondent to respond = 900 annual burden hours). FNS believes that for about seventy percent of the major changes States report, no additional reporting will be necessary beyond the automatic reporting requirements. Additional data collection will only be required for the remaining 30 percent of the reported major changes. Therefore, for about 15.75 of the major changes expected E:\FR\FM\19JAR1.SGM 19JAR1 2728 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations 1080 hours per year (22.5 × 48). The reports themselves would be estimated to require 12 hours each. each year there would be no additional reporting burden. All 22.5 of the major changes expected each year will require some automated system reprogramming to generate the required automatic data reporting. At 48 hours per reprogramming effort, this would be Respondents Estimated annual responses Responses per year Hours per response Total hours per year 22.5 States quarterly ....................................................................................... 4 90 12 1080 The total for the 22.5 States would be 900 + 1,080 hours = 1,980 total hours for reporting (divided by the 22.5 states = 88 hours per State per year). For the 6.75 States expected to require additional data collection, this requirement would be in addition to the 1,980 hours from above. Such data will generally be collected through a sample of case reviews. While the required sample sizes may vary based on the type of major change and the proportion of the State’s SNAP caseload it may affect, 200 cases per quarter would likely be an upper limit on what FNS could ask of a State. At an estimated one hour to review and report on a case, this would require 800 hours per year per State. The 6.75 States times 800 hours yields 5,400 hours (6.75 State respondents × 1 response per respondent = 6.75 annual responses × 800 hours per respondent to States responding per year Responses per respondent respond = 5,400 annual burden hours). When the 1,980 hours are added for the automatic information, the total for these 6.75 States is 7,380 hours (1,093 hours per State per year). With all 22.5 States reporting quarterly, there would be 90 responses annually. Twenty-seven of the 90 reports would contain additional information from sample data. Number of responses Hours per response Total burden hours Section Requirement 272.15(a)(3) .................... Initial analysis of Major Change. Reports required without additional data collection. Reports required with additional data collection. 22.5 1 ....................... 22.5 40 ..................... 900 15.75 4 ....................... 63 22 ..................... 1,386 6.75 4 ....................... 27 273.25 .............. 7,377.75 ......................................... 22.5 5 (average) ....... 112.5 85.9 (average) .. 9,663.75 272.15(b)(2)–(4) .............. 272.15(b)(5) .................... Totals ....................... E-Government Act Compliance FNS is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. asabaliauskas on DSK5VPTVN1PROD with RULES Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies that conflict with its provisions or that would otherwise impede its full implementation. This rule is not intended to have retroactive effect unless so specified in the ‘‘Effective Date’’ paragraph of the final rule. Prior to any judicial challenge to the provisions of this rule or to the application of its provisions, all applicable administrative procedures must be exhausted. In SNAP the administrative procedures are as follows: (1) For Program benefit recipients—State administrative procedures issued pursuant to 7 U.S.C. VerDate Sep<11>2014 17:57 Jan 15, 2016 Jkt 238001 2020(e)(10) and § 273.15; (2) for State agencies—administrative procedures issued pursuant to 7 U.S.C. 2023 set out at § 276.7 or Part 283; (3) for retailers and wholesalers—administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR part 279. What acronyms or abbreviations are used in this supplementary discussion of the proposed provisions? In the discussion of the provisions in this rule, the following acronyms or other abbreviations are used to stand in for certain words or phrases: Acronym, Abbreviation, or Symbol Phrase Code of Federal Regulations. Federal Register ............... Federal Fiscal Year .......... Food and Nutrition Act of 2008. Food and Nutrition Service Food, Conservation, and Energy Act of 2008. Management Evaluation ... Notice of Proposed Rulemaking. Supplemental Nutrition Assistance Program. PO 00000 Frm 00004 Fmt 4700 CFR FR FY the Act FNS FCEA ME NPRM SNAP Sfmt 4700 Phrase U.S. Department of Agriculture. Acronym, Abbreviation, or Symbol the Department III. Background Section 4116 of the FCEA amended section 11 of the Act to require the Department to define ‘‘major changes’’ in SNAP operations, State agencies to notify the Department when they implement a major change in SNAP operations, and to collect data for use in identifying and correcting problems with SNAP integrity and access, particularly among vulnerable populations. Many State agencies have changed or are in the process of changing the way they operate SNAP. Some of these changes have been small and have predominately impacted internal State agency operations. However, some of the changes have also included major overhauls of State agency operations that affect how the State interacts with applicants and participants. While the goal of such changes is to improve the efficiency and the effectiveness of the States’ operations, some of these changes have E:\FR\FM\19JAR1.SGM 19JAR1 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations adversely impacted the States’ payment accuracy rates, and, critically, have impeded access to SNAP benefits. In recent years, States have faced rising caseloads and cut backs which in part have led many States to make use of new technologies that could help streamline their SNAP operations. Section 4116 of the FCEA anticipates this and provides the Department the authority to better provide States with technical assistance and to monitor implementation of major changes in their operation of SNAP. The proposed rule published May 3, 2011, at 76 FR 24820, provided a 60-day comment period. This final rule defines what changes to States’ operations will be considered ‘‘major,’’ establishes the requirements for States to notify FNS of such changes and establishes reporting requirements for major changes. States’ ME requirements have also been updated to allow States time to conduct more effective reviews. The changes will allow States to streamline operations while maintaining the integrity of SNAP. asabaliauskas on DSK5VPTVN1PROD with RULES Public Comments The Department received 120 comments on the NPRM from various entities including: 95 individuals (many of whom are union members); 4 unions; 10 advocate organizations; 10 States; and an organization representing States. Following are the issues raised by commenters, paraphrased excerpts from the most illustrative comments, and recommendations they made for changes to this final rule. (Note: The May 3, 2011 NPRM proposed to add the Major Change provisions to a new § 272.12. However, this section now deals with Computer Matching Requirements. The provisions of this final rule are added in a new § 272.15. References in this preamble to provisions of the proposed rule have been converted from § 272.12 to § 272.15 to reduce confusion between the proposed and final rules.) General comments on the NPRM include: General Comments • We commend FNS for including application processing timelines at recertification (proposed § 272.15(b)(1)(iii)) as one of the measures it will examine in the event of a major change. • SNAP is an entitlement program. Therefore, the processes related to SNAP eligibility determinations are inherently governmental functions and must be performed by public employees. The proposed rule also includes changes to the performance reporting system, including elimination VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 of the Federal biennial review of the State ME system. The proposed changes weaken Federal oversight of SNAP, and we recommend that the current requirements be maintained. • The proposed language creates the impression that States may be able to secure waivers or approval for the use of non-merit system personnel. We urge FNS to re-affirm its conclusions that it strongly disfavors the use of non-merit system personnel and not to change its position. The experience of our office and many other advocates is that all too often non-merit system personnel lack the training, supervision, experience and exposure to agency culture necessary to ensure maximum program access. • The Preamble states that ‘‘FNS has determined that the use of non-merit system personnel in these functions can have a detrimental impact on the efficient and effective operation of the program,’’ but then proceeds to explain that FNS must approve the use of nonmerit system personnel. It is contrary to good sense and effective public policy for the Department to authorize this model when the Department itself acknowledges that all available evidence to date documents costly failures. • Section 4116 of the FCEA gives FNS the authority to identify ‘‘major changes’’ and to collect information on those changes, but it does not allow FNS to prevent or impair States’ ability to implement administrative changes that otherwise meet legal and regulatory requirements. With this proposed regulation, FNS appears to go beyond its mandate under the law. FNS should take a proactive approach to assist States to quickly implement successful reengineering changes and to use existing SNAP performance data to measure outcomes rather than impose additional burdensome reporting requirements. • If implemented as written, we believe this regulation could prevent, weaken or at the very least delay many administrative improvements that would otherwise quickly bring a new level of efficiency, integrity and customer service to SNAP. • By not imposing any on-going data collection obligations under this provision, the proposed rule denies the Department a baseline. If data collection begins only after a problem has arisen, the Department will be ill-equipped to assess the severity of the problem and may be misled into believing that the problem has abated when measures of State performance rise even as the State’s performance remains far below what it had been. At the same time, the PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 2729 proposed rule’s failure to require all States to gather and submit basic data on application processing, case closures, and the like—and its failure to establish common definitions and formats for the collection and submission of that data to facilitate inter-state comparison— prevents meaningful cross-sectional comparison. • We request that the Department reconsider the scope of the proposed regulation to more closely mirror the Federal law, and to minimize duplicative and unnecessary reporting requirements when existing performance measures can be used. • While many of the regulatory changes were proposed to address legitimate issues, we are concerned that some of the proposed changes would negatively impact the ability for States to administer SNAP and the recipients that they serve. Many of the regulatory changes also appear to exceed the language and intent of the FCEA, and appear to run counter to recent Federal efforts to reduce, simplify and streamline regulations. • The final regulation must be changed to ensure that nationally consistent and straightforward data collection from any state that makes a major change in their service delivery model is publically available. As these general concerns indicate, commenters were divided with several believing that the proposed rule went too far, even beyond the FCEA provisions, in terms of its requirements and others suggesting that the final rule should impose additional requirements on States. The Department understands and appreciates these differing viewpoints, and seeks to provide proper balance in this final rule by allowing for effective oversight of SNAP operations while recognizing States’ resource constraints. States are charged with the administration of SNAP and have broad discretion in deciding how they operate the program. This rule does not restrict States’ discretion at all; it simply requires States to inform FNS of significant changes and provide information on their impact. In FY 2014, SNAP issued over $69 billion in benefits to a monthly average of 46.5 million individuals in need. The Federal share of administrative costs for States to operate SNAP totaled another $4.13 billion in FY 2014. Given the importance of SNAP in helping struggling families and the level of Federal funding, the Department believes this provision of the Act is critical to FNS’ meeting its oversight responsibilities. E:\FR\FM\19JAR1.SGM 19JAR1 2730 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations asabaliauskas on DSK5VPTVN1PROD with RULES There have been several situations in recent years where States made major changes to staffing, automated systems or business processes that had unintentional, adverse impacts on the accessibility and integrity of the program. FNS worked with these States to correct the problems, but these efforts were costly to the States in terms of time, additional administrative costs, business process modifications, and, in some cases, payments to the Department for benefits issued in error. If FNS had been aware of these changes earlier and had more detailed data, it is likely that some of the difficulties could have been minimized or even avoided. Implementation of this final rule is intended to provide FNS with the information it needs to fulfill its responsibilities to act as a steward of taxpayer funds, protect access to SNAP benefits for eligible individuals, and to provide States with technical assistance as necessary. Many of the comments received from individuals, unions and advocacy organizations focused on what appears to be a misunderstanding of the intent of the provision of the proposed rule dealing with use of non-merit system personnel in the administration of SNAP. While this provision is discussed in more detail later in this preamble, it is important to note that the proposed rule included the use of non-merit system personnel as a major change to ensure that the Department is aware of States’ plans in this area prior to implementation. There was no intent to identify the use of non-merit system personnel in the administration of SNAP as a State option that the Department would support. On the contrary, the Department opposes and has actively sought to limit use of such staff in the administration of SNAP due to the negative impacts this has had on SNAP households and State agencies. The Department also agrees with the comment that States’ reports on the implementation of major changes should be made available to the public. Discussion of Comments Grouped by Provision and Issue Provision/Issues—§ 272.15(a)(1): State agencies shall notify FNS when they make major changes in their operation of SNAP. State agencies shall notify FNS when the plans for the change are approved by State leadership, but no less than 120 days prior to beginning implementation of the change. Public Comments and Recommendations—Ten commenters addressed this provision of the proposed rule and their comments included the following: VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 • The lengthy timeframes by which FNS intends to manage change is unreasonable. A 120-day advance alert of a change and a 90-day response time for FNS chokes the State’s ability to respond quickly and effectively to its customer’s needs and changes in the political, financial and technological environments. • The regulation allows FNS 90 days to respond to reports of major changes. Added to 120 days, this is over 7 months before a State could implement a change. This is unrealistic; FNS response time should be no more than 30 days from the date the report was submitted. The regulation also doesn’t state what should happen if the FNS response is not received within 90 days. The regulation should state that implementation could proceed if that occurs. • Because of the potential for additional significant reporting requirements (which State systems may not have been programmed to provide), and the apparent potential to disapprove of a ‘‘major change’’ or require a change in one or more aspects of implementation, States must have sufficient time to include such requirements in their implementation and be aware of FNS objections well before implementation. Otherwise, the proposed process can significantly delay or derail implementation. • Under standard accounting and budget practices, this 120-day requirement would effectively reduce the State and counties’ ability to implement major changes in the second half of the State’s fiscal year, and would cause delays beyond the initial 120 days. For example, an online application may support new applications initially, and then later add additional client reporting functions, which are modified due to lessons learned. • It appears that these proposed regulations greatly exceed what was originally specified in the bill. The regulations speak of notifying FNS 120 days before a major change, while the FCEA merely states that if a State implements a major change they must notify FNS and provide information as required. Having to submit information prior to implementation as opposed to at the point of implementation would be a major workload and barrier. There is a big distinction between notification and approval, and these regulations tread dangerously into having the Federal government require States to seek approval prior to making major changes. • The level of detail that must be included in the initial report will PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 potentially add 120 days of lead time to initiatives. Although States do conduct much of the analysis in the normal course of any policy change, the specific nature and the depth of the analysis requirements of the proposed regulations is overly burdensome. We recommend that FNS re-evaluate the proposed 120-day timeframe and create an evaluation system that is more flexible. • The 120-day minimum notice requirement is a timeframe that the majority of States would be unable to meet. Twenty-six States enact new State legislation within 90 days of passage unless otherwise declared in the specific legislation. The proposed rule’s assumption that, ‘‘any properly planned major change would be approved by State leadership well in advance of implementation’’ is inconsistent with the fast-paced, budget-driven environment that exists in today’s economy. The advance notice requirement also presumes that FNS has authority to approve or deny a specific plan of operation beyond the limits of the act. The provision requires that States mitigate adverse impacts, but does not give FNS approval authority over State agency operations. • The notification requirement is not sufficient. The final regulations should require not only that States notify FNS 120 days prior to implementation but also at least 120 days prior to entering into legal obligations to implement any proposed major changes. • Both the requirement that States submit an initial report and the 120-day timeframe should be maintained in the final rule. • Allow States to submit an annual report on major changes that were not previously identified thru an Advance Planning Document (APD) (e.g., reductions in staffing levels or office closures). FNS will still be able to negotiate with States on the additional reporting requirements after they have received the annual report. • FNS response time should be no more than 30 days from the date the report was submitted. The longer the time to implement, the less chance the change will be implemented. Final Rule—To clarify, the provisions of this rule do not give FNS authority to approve or deny a reported major change. However, it is important to note that existing provisions of the SNAP regulations require FNS approval or waivers for a variety of operational and policy changes that may constitute or be related to a major change. Significant changes to States’ automated systems require submission of an APD for development and E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations procurement. For any major change that does not require waiver authority or approval outside of this rule, States need not wait for FNS approval of their major change notification or a response to their major change notification. In response to comments that States sometimes are not aware of a major change 120 days in advance of implementation, the Department has modified the language in the final rule to account for these situations. However, by definition, major changes are significant and the Department generally believes that to be well planned and thought through, such changes require at least 120 days lead time. Therefore, the final rule maintains the 120-day reporting timeframe, but allows for rare instances when States cannot report with this amount of lead time. In such instances, States will be required to explain the lack of lead time. Provision/Issues—§ 272.15(a)(2): Major changes shall include the following criteria (comments on individual criteria discussed below): Public Comments and Recommendations—While almost all commenters offered their thoughts and recommendations on some aspect of the major change criteria in this section (as discussed below), a few comments were more general. General comments on this section include the following: • The final rules should include a residual category for any other major changes in State administration that the Department or a State agency identifies as having the potential to adversely affect program integrity or access. Even the best program administrators would not likely have anticipated all of the challenges the program faces today had they attempted to compile a list like this one a decade or two ago. • FNS should categorize major changes as being significant, medium or small, and require different reporting based on the scope of the change that the State is planning to make. FNS would retain discretion to require more reports in unusual circumstances, but this change would make the reporting requirements more predictable for States and for FNS. For significant changes, we recommend that FNS require States to report statewide information that will allow FNS and the State to assess whether the State’s process is adequately providing access to eligible households, with enough detail on substate areas and sub-populations within the State that problems can be identified and corrected. • FNS should offer States the option to report certain new measures on an ongoing, statewide basis as an alternative to reporting each separate VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 major change with an initial report and the subsequent negotiated data reports. FNS should retain discretion to require additional reports if the need arises. Final rule—The Department has included in the final rule the ability for the Department to define additional criterion under which States must report major changes at § 272.15(a)(2)(vi), to cover as yet unknown developments in State SNAP operations. The addition of this ‘‘other’’ criteria is based upon advocates’ concerns that as time passes States could make innovative changes that are not enumerated in the regulations, and thus would not be required to be reported. The Department has not adopted the suggestion that major changes be categorized by ‘‘size.’’ After careful consideration, the Department believes that this approach would unnecessarily complicate the final rule by requiring the development of additional definitions and explanation with minor impacts on its implementation. The Department has not adopted the recommendation that an option be provided that would allow States to begin reporting certain new measures on an ongoing, statewide basis as an alternative to reporting on each separate major change. Such an option would seem to offer States little incentive since they would incur the additional cost of ongoing data reporting that may not be needed. In addition, if a few States were to adopt this option, it is not clear what FNS would do on an ongoing basis with data reported by a limited number of States. On the other hand, States can always submit additional information to FNS even without a formal option to do so. Additional information might also be required, depending on the nature of the major change. Provision/Issues—§ 272.15(a)(2)(i): Closure of one or more local offices that perform major functions for 500 or more SNAP households, and there is not another office available to serve the affected households within 25 miles or that can be reached via public transportation. Public Comments and Recommendations—Twelve commenters addressed this provision of the proposed rule and their comments included the following: • We agree that office closings are major changes. However, even if there is another office within 25 miles or that can be reached by public transportation, the change is unquestionably major if the nearest office takes more than an hour to get to or costs more than $10 round trip to reach by public transportation. The final regulation PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 2731 should provide a limit on the travel time by public transportation of one-hour one-way. • The final rule should make clear that households are at risk of hardship if the nearest office is either at least twenty-five miles away or not accessible via public transit. Of course, offices in some rural areas inevitably will not be on public transit lines because none exist. This rule does not prohibit such situations; it merely calls for monitoring of their impacts. The final rule should make clear that the closure of any office that takes applications requires scrutiny; of course, if another nearby office remains available nearby, the closure would not be a major systems change. • The proposed triggers are unrealistic in many States, including a closure that would require clients to travel more than 25 miles; there are many areas where households already do not live within 25 miles of a local office. • We recommend that this section be rewritten to require States to report when an office is closed that serves five percent of their caseload. • The opportunity for face-to-face contact for all clients in a conveniently located physical setting might be desirable, but it is not realistic in today’s highly constrained fiscal environment. Services for clients will not necessarily suffer if staff is reduced or offices are closed. Interactions through electronic and automated means allow clients to choose a contact time that is best for them and allows them to do so from their home or other location with computer access (as is the case with numerous community organizations). Accompanied by the appropriate alternative methods and technology, not only can office closures be done without negative effects, but they can be done while improving program access and integrity. The proposed standards of 25 miles and 500 households are ridiculously low, and do not even remotely reflect the realities of the way business currently is being done by the States. • This definition may inadvertently include certain part-time or temporary eligibility worker locations, such as mobile vans or out-stationed workers and a change in schedule or termination of these placements should not be included as a major change. These types of temporary office locations are developed as a result of caseload or administrative funding decisions that may vary from year to year, and should not be considered a major change. • The harsh financial realities that States are facing may leave no choice other than to consolidate their offices. E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES 2732 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations However, given the opportunities that clients will have for telephonic contact with State agencies, we do not believe that such consolidations will result in negative effects, but will likely improve access and integrity. In our opinion, office consolidation should not be considered a major change. • Rural States have many areas with more than 25 miles between towns. The miles should be increased to 100 or more. Also the number of households served should be increased from 500 to 1000. • In general, the office closure standard should be retained in the final rule. The regulation’s standard of office closures that affect 500 households or more is reasonable and allows States to consolidate very small offices where they can achieve administrative efficiencies, while still protecting households’ ability to appear in person to apply and get assistance. The final regulation should be revised to clarify that an office closure would count toward the State meeting the criterion only if there is another office within 25 miles or that can be reached easily via public transportation. • The final regulation should provide that, to qualify as an office that ‘‘performs major functions’’, the office must be a place where households can file an application and receive assistance in filling out the application from a State employee. Final Rule—It is important to clarify that the Department does not assume that local office closures are always negative, but they do reduce program access for some households. As some commenters point out, the actions States take to offset such closure may benefit many other households. While keeping office closures as a major change criterion is necessary to provide FNS with information regarding the impact of the closures and what a State is doing to offset the impact of the closure, the Department modified this criterion in the final rule in response to commenter’s concerns. The Department has increased the number of SNAP households affected by a local office closure from 500 to 750 households and changed the distance to another office available to serve the affected households from 25 to 35 miles. To balance these changes, the Department has also modified the final rule by setting the threshold that an office closing that represent the lower of 750 households or at least 5 percent of a State’s caseload will be considered a major change. Thus, for example, if a State had a caseload of 14,000 and an office with 701 households is being closed, this would require a report VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 because it would be more than 5 percent of the State’s caseload. The reference to public transportation has been eliminated to simplify the criteria and because the cost of public transportation beyond 35 miles is generally prohibitive for SNAP households. The Department has also specified that an ‘‘office performing major function’’ is an office where households can file an application for SNAP in person and receive assistance from merit system personnel. Closing a ‘‘temporary’’ office or changing the location of a mobile unit would not be considered a major change. Provision/Issues—§ 272.15(a)(2)(ii): Substantial increased reliance on automated systems for the performance of responsibilities previously performed by State merit personnel (as described in section 11(e)(6)(B) of the Act) or changes in the way that applicants and participants interact with the State’s SNAP agency. Establishment of an online application process through the Internet or the use of call centers to accept applications would not be a major change unless one of these methods is expected to account for five percent or more of the State’s SNAP application. Reporting a major change as required in this section does not relieve States of meeting the requirements for new system approvals in § 277.18. Public Comments and Recommendations—Twelve commenters addressed this provision of the proposed rule and their comments included the following: • State systems are regulated under § 277.18. This section requires States to obtain prior approval from FNS for automated data processing equipment used in the administration of SNAP. Requiring States to complete another detailed document to notify FNS of change is duplicative, inefficient and unnecessary. The information in the APD could be expanded to include the analysis that would have been required with the 120-day advance notice. • Business rules of eligibility determination and benefit calculation are already built into the systems that workers use. The business rules, design and function of these systems are tested and approved by merit system employees. • Discussion under this criterion again reveals an assumption that changes such as call centers will almost by definition jeopardize customer service and access. This contradicts the experience of many State systems that have dramatically improved client service and access by the use of call centers. PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 • The final rule should make all new or expanded online application systems and call center arrangements subject to review as major systems changes. • Document imaging systems should be included as a major change. In our experience, the introduction of a document imaging system is in fact a major change in office operations which has the potential to greatly enhance or undermine program administration and client access to benefits. • The proposed rule identifies the ‘‘replacement’’ of the State’s certification system as an example of a systems change. Recommend that the final rule be changed to include significant changes to automated systems that fall short of ‘‘replacement,’’ such as adding major new functions or a web-based tool that feeds into an older system. • The proposed regulation makes clear that the reporting requirements for major changes under the proposed rule do not remove the separate APD approval requirements under § 277.18. This is an important clarification and should be retained in the final rule. • Recommend the final regulation provide that online and telephone applications will be considered a major change unless a State can demonstrate to FNS’ satisfaction that such applications will not account for more than five percent of applications once the new application is fully implemented. Final Rule—The Department has made several changes to clarify this provision based upon the above comments and recommendations. The Department has clarified that a State must report the replacement of an automated system, adding functionality to an existing automated system and changes that impact the way applicants and participants interact with SNAP unless the State documents that less than five percent of the caseload will be affected by the change. Examples of changes that increased reliance on automation that would likely affect five percent or more of a State’s caseload include, linking a portal (a computer Web site that allows greater access and functionality) to the State’s SNAP eligibility system, introducing online applications, call centers, and finger imaging. The Department recognizes that technologies are evolving and the major changes that will be reported under this criterion may evolve as States find new practices that will improve efficiency and customer service. Provision/Issues—§ 272.15(a)(2)(iii): Changes in operations that potentially increase the difficulty of households reporting required information. This E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations includes implementation of a call center for change reporting, a major modification to any forms that households use to report changes, or the discontinuation of an existing avenue for reporting changes, (e.g., households can no longer call the local office to report a change). Modifying selected change reporting policy options or the implementation of policy waivers would not be major changes. Public Comments and Recommendations—Nine commenters addressed this provision of the proposed rule and their comments included the following: • To ensure that changes in reporting practices and technologies do not harm households, it is important that this criterion be retained in the final regulation. There are two places where the proposed regulation needs to be changed in light of the other proposed rule that was published in the Federal Register on the same day regarding change reporting rules. First, this proposed regulation at § 272.15(a)(2)(iii) uses the example that States might ‘‘[discontinue] an existing avenue for reporting changes, e.g., households [could] no longer call the local office to report a change.’’ This example should be removed or refined. In addition, FNS should remove the clause that suggests that policy waivers could be needed to implement a change reporting policy option. • The final rule should treat as a major systems change any change in the systems that households must use for reporting changes except a simple switch between the reporting options allowed under section 6(c) of the Act. • Discussion under this criterion appears to assume that changes such as call centers will almost by definition jeopardize customer service and access. This contradicts the experience of many State systems that have dramatically improved client service and access by the use of call centers. • This section should be rewritten so that States are required to report only when reducing reporting options or requiring one specific process. Likewise, changing a form does not rise to the level of change intended by the Act. • Considering a modification to, or even a complete redesign of, a form for reporting to be a ‘‘major’’ change represents an unwarranted and unnecessary level of intrusion into the States’ administration of the program. • This seems to presuppose that portals built by States for change reporting will automatically derive a negative impact. Today, customers can contact the agency in a wide variety of ways, e.g., via the telephone at multiple VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 locations, through Web sites and in person at community partners and service locations. Final Rule—Based upon comments, the Department has revised the final rule to: (1) Add as a major change the adoption of internet portals to report changes in household circumstances; (2) clarify the example from the proposed rule to focus attention on a change that would limit participants’ reporting avenues; and (3) clarify that States selecting reporting options allowed under the rules or obtaining a waiver from FNS are separate actions, but that neither would be considered a major change. Provision/Issues—§ 272.15(a)(2)(iv): Use of non-merit pay staff to perform functions previously performed by merit personnel. While the interview and the eligibility decision functions must be performed by merit personnel (unless FNS approves a waiver request under Section 17 of the Act), other functions including obtaining verification of household circumstances, accepting reports of changes in household circumstances, accepting applications and screening households for expedited service may be performed by non-merit personnel (although FNS must approve a State’s use of non-merit pay staff before matching funds will be provided for the performance of these functions). Functions such as data entry and document imaging do not involve interaction with households, and consequently, the use of non-merit pay staff in activities of this type would not constitute a major change. Public Comments and Recommendations—This proposed provision received attention from 105 commenters (10 advocacy/legal aid groups, the American Public Human Services Association (APHSA), 5 States, 4 unions, and 85 individuals, many, who appeared to be case workers/union members that submitted form letters). Except for APHSA and the States, the commenters overwhelmingly opposed inclusion of this criterion as a major change. The reason most often cited is that including use of non-merit system personnel in the definition of a major change gave the appearance that the Department accepted such a change as an allowable State choice. Many commenters acknowledged that the preamble to the proposed rule expressed the Department’s opposition to using non-merit system personnel, outlined the limitations in the Act on the functions such staff may perform, and explained that, without approval, FNS may not match funding for non-merit system personnel working in SNAP operations. However, several PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 2733 commenters felt that any use of nonmerit system personnel should be prohibited in the rule. There was also a recommendation that any significant increase in reliance on other agencies, including ‘‘community partners’’ and other non-profit or local government entities, should be considered a major systems change. The primary recommendation from commenters is to remove this criterion from the definition of a major change. Some commenters suggested that information on use of non-merit system personnel could be obtained by amending § 272.15(a)(2)(v) on decreases in staffing levels to accomplish the same goal. If that criterion were amended to say that cuts in merit systems staff triggered the report, then any State that tried to replace merit systems personnel with private employees would meet the trigger criterion. APHSA and the States that commented on this provision generally objected to the Department’s position that use of non-merit system personnel will result in poor program administration. They felt that the Department’s position reduces States’ ability to be innovative in improving program operations and respond to reduced budgets and increased caseloads. They felt it is inappropriate to prejudge based upon the experience in a couple of States. Specific comments included the following: • The final rule should explicitly identify all functions that may require discretion or professional judgment as ‘‘eligibility decision functions’’ that may not be privatized. • Further clarification is requested on the issue of the specific functions that non-merit system personnel may perform. Any significant increase in reliance on other agencies, including ‘‘community partners’’ and other nonprofit or local government entities, should be considered a major systems change. • While the statute names this criterion as one that FNS can examine, it does not allow the agency to prejudge the impact of using non-merit system personnel. • The final regulation must be changed to ensure privatization is not codified and legitimized in Federal regulations as an allowable option. • The preamble to the proposed rule acknowledges that privatization of work currently performed by public employees constitutes a major change and that States would be required to report this change to FNS. The Department acknowledges that nonmerit system personnel interacting directly with households has the potential of increasing the burden on E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES 2734 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations households applying for and participating in SNAP. It is contrary to good sense and effective public policy for the Department to authorize this model when the Department itself acknowledges that all available evidence to date documents costly failures. • We are very much opposed to the apparent legitimization of the use of non-merit system personnel to perform critical SNAP functions. In our experience, private entities do a poor job of executing traditional State functions. Even well-meaning nonprofit organizations are unable to maintain timeliness, statewide uniformity and accuracy when they take over activities that have traditionally been done by merit system personnel. For-profit entities have even greater incentive to cut corners, regardless of the consequences for households. We urge FNS to strike proposed § 272.15(a)(2)(iv). • Many States have instituted fundamental delivery system changes hastily, such as closing offices and opening call centers. Privatized call center operations in two States proved to be disastrous for SNAP beneficiaries and applicants. • There is no reason to codify a practice that the Administration opposes and would not allow in the future. • The proposed language creates the impression that States may be able to secure waivers or approval for the use of non-merit system personnel. If FNS’s position remains that it is not likely to grant a waiver to use non-merit system personnel for interviews and certification, and that it has determined that Federal financial participation (FFP) is not appropriate for use of nonmerit system personnel in other client contacts, we recommend that the final regulation specify this policy so as not to encourage States to go down this path. • We strongly oppose the provisions in the proposed regulation that would allow the privatization of the SNAP certification process and the waiver of the merit system requirements. The Department previously advised States that it did not support privatization of portions of the SNAP certification process. The preamble to the proposed regulation notes these same concerns. Final Rule—Many comments on this provision of the proposed rule reflected a lack of clarity regarding the Department’s intent. It is important to clarify that it was never the Department’s intent to condone the use of non-merit system personnel in SNAP. On the contrary, the intent was to VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 require States to report to FNS if they planned to begin using such staff in the administration of the program. The preamble to the proposed rule stated that, ‘‘In addition, FNS has determined that use of non-merit system personnel in these functions can have a detrimental impact on the efficient and effective operation of the program and, as a consequence, must approve States’ use of such staff before sharing in the costs of non-merit staff in the performance of the above functions.’’ The Department continues to believe that the use of non-merit system personnel can be detrimental to program performance and service to participants and in April 2013, reiterated its concerns and policy regarding outsourcing in a letter to all States’ Governors. In response to the significant number of comments, the Department has modified this provision in the final rule. The final rule requires States to report on any reduction or change of the functions or responsibilities currently assigned to SNAP merit system personnel staff. This will include, but not be limited to, relieving or supplementing merit system personnel’s duties performed in the SNAP certification process, handling reported changes, responding to inquiries, handling complaints, collecting claims, investigating program violations or conducting SNAP related reviews. With this change in the final rule, a State will be required to notify FNS if it intends to change the role of its merit system personnel in any way that could impact SNAP operations, including the increased reliance on automated systems. Provision/Issues—§ 272.15(a)(2)(v): Any decrease in staffing levels from one year to the next of more than five percent in the number of State or local staff involved in the certification of SNAP households. This would include decreases resulting from State budget cuts or hiring freezes, but not include loss of staff through resignation, retirement or release when the State is seeking to replace the staff. Public Comments and Recommendations—Fourteen commenters addressed this provision of the proposed rule and their comments included the following: • Delete the language requiring States to notify FNS of office closures or reductions in staffing levels as it goes beyond the authority of the statute. • We strongly support including large decreases in staffing levels as one of the types of State changes that would trigger a State to report to FNS. This criterion should be retained in the final regulation. Also recommend that FNS: PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 Add a staff cut of more than ten percent over three years as another measure of a decrease in staffing levels that would need to be reported; clarify that a decrease in merit system personnel would need to be reported; provide that cuts in State staff would not count ‘‘losses of staff that occur through resignation, retirement or release when the State is seeking to replace the staff’’; and strengthen the final rule to clarify that the State must be seeking to replace the staff within the year to not warrant a report. • We suggest that FNS identify an additional baseline for staffing that would also trigger the application of this regulation. For example, a measure of cases per certification worker might be appropriate, so that States that have relatively few workers for the size of their caseload would be subject to this regulation in the event of staffing reductions, even if the five percent threshold were not met. • Support the recognition that adequate staffing is critical if States are to provide adequate service. However, the proposed regulations should be modified to recognize that ‘‘staffing levels’’ are not a measure of the absolute number of full-time equivalents, but rather a measure of the ratio of staff to the number of cases. If the ratio of staff to SNAP cases decreases either because of staff reductions or because of an increase in the caseload, the staffing level has declined even if the number of staff is constant. • The final rule should make clear that it refers to full-time equivalent (FTE) staff working on SNAP. The final rule should require States to report, on a county or regional basis, the FTE staff administering the program each month. • This proposal ignores scenarios in which staff reductions could be accompanied by well-known efficiency measures such as adoption of broader categorical eligibility rules, the sixmonth reporting option, or the implementation of an efficient new method of using electronic tools for verification of income. The proposed rule could also have an unusually severe impact on locally administered offices; if the five percent trigger is applied to them as well, some are so small that they might have to report the elimination of a single employee or even reductions in one employee’s hours. • A prescribed reduction reporting threshold of five percent would be difficult for States to track. This is true especially if States must include loss of staff to budget cuts and temporary hiring freezes. This requirement should be removed from the proposed rule. E:\FR\FM\19JAR1.SGM 19JAR1 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations asabaliauskas on DSK5VPTVN1PROD with RULES • As written, it is unclear how the proposed rule would be applied to those States that are State-supervised but locally-administered. We urge FNS to consider only requiring the States to report aggregate, statewide reductions in State and local staffing, not reductions at each local office. • Reductions in staffing levels or the imposition of hiring freezes are budget actions that may not be known to or determined by the State or local agencies until after a budget action has occurred, and it may be impossible to notify FNS 120 days in advance. This definition of a five percent decrease in staff is not explicitly identified in the FCEA, and imposition of this requirement goes beyond the intent of the legislation. • This will be difficult to administer. Staff reductions are controlled by the Governor and the Legislature, not State agencies. Also, five percent is unreasonable. The five percent should be increased to at least ten percent at a minimum. This rule should be changed to state that if staff reductions of greater than ten percent are mandated, FNS should be notified of the change and how the State is handling the change. • The final rule should require States to report, on a county/regional basis, the FTE staff administering the program by month. Final Rule The final rule retains the basic requirement that a decrease of more than five percent in the number of State or local merit system personnel involved in the certification process of SNAP households from one year to the next will be considered a major change. In addition, the Department agreed with commenters that cumulative decreases beyond a single year can have a significant impact. Consequently, the final provision has been modified to also make a decrease of more than eight percent in the number of State or local merit system personnel involved in the certification process of SNAP households over a two year period a major change. Also in response to commenters’ suggestions, the language of this provision has been clarified and strengthened. A reference to decreases across the State was added since this criterion is intended to apply to the total number of merit personnel in States rather than in each individual local office or county within a State. Major changes include decreases resulting from State budget cuts or hiring freezes, but do not include loss of staff through resignation, retirement or release when the State is seeking to replace the staff VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 within a 6-month timeframe. Evidence of the intent to replace staff includes advertising to fill positions and having sufficient funding in the personnel budget for the new hires. It is important to note that this criterion defines when States are to report to FNS. The notification and accompanying analysis will allow FNS to determine whether there is a need for additional information. Provision/Issues—§ 272.15(a)(3): When a State initially reports a major change to FNS, as required in § 272.15(a)(1), an analysis of the expected impact of the major change shall accompany the report. The initial report to FNS that the State is making one of the major changes identified in § 272.15(a)(2) shall include a description of the change and an analysis of its anticipated impacts on program performance. Public Comments and Recommendations—Seven commenters addressed this provision of the proposed rule and their comments included the following: • FNS is correct to require States in the initial report to describe the features and timing of the planned major change, what it is intended to accomplish, how it will be tested, piloted, and monitored and the expected effects on eligibility workers and recipients. All of these elements should be maintained in the final rule. • The word disproportionately should be deleted from proposed § 272.15(a)(3)(ii)(E). Also, the two ‘‘ands’’ in the paragraph should be changed to ‘‘ors’’. Not all of these types of households need to be affected or features of the certification process need to be more difficult. If one is true, then the clause should apply. • FNS should add one additional item to the list of items in the initial report: A discussion of the budgetary effects of the change. This item should include the estimated cost of any systems change, as well as the expected overall budgetary impact of the change for State and Federal SNAP costs, including benefit costs and administrative costs. • The five general analysis requirements are well-rounded, pulled from existing data, and should be sufficient to meet the intentions of the Act. • The final rule should require States to explain any stages in implementation, either as the change is fully implemented in one area or as it rolls out across multiple areas (whether or not it eventually becomes statewide). • The final rule should require the State to disclose what testing it has PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 2735 undertaken prior to implementing the change. • Several of the factors listed in proposed § 272.15(a)(3)(ii) are not so much measures as they are aspects of program performance. It should also include: The State’s participation rate; share of households leaving the program at the conclusion of their certification periods; and the percentage of applications (divided by expedited initial applications, non-expedited initial applications, and applications for recertification) that are approved, are denied for substantive ineligibility (or eligibility for zero benefits), and are denied for procedural reasons. • We support proposed § 272.15(a)(3), which details the type of information that States must provide to FNS in connection with a planned major change. However, we suggest the regulation require States to analyze the impact of the change on timely processing of recertifications. The final rule should also require States to have a meaningful process for consulting with stakeholders (including program beneficiaries, advocates, community organizations and anti-hunger groups). • The regulations should require States intending to implement major changes to submit to FNS copies of procedures and other documents demonstrating that the State has taken steps to minimize the potential negative impact of the proposed change on individuals with disabilities. • FNS has quite sensibly acknowledged that the data collection requirements mandated by section 4116 of FCEA, as far as possible, should use data and reports already provided or available to meet these requirements. • Much of the data in question will be a normal part of any APD request in any event. The potential requirement for county-level impact data will be particularly difficult to implement, and that caseload sizes in many counties are low enough that the validity of data will be highly questionable. • The data collection mandates in this regulation would largely duplicate existing information that FNS has, and create increasingly burdensome data collection and report preparation. • FNS does an excellent job summing up what the Act requires in the opening paragraph. The remaining information is overly detailed, rigid and so burdensome to States that it will stall innovations, and prevent access and program integrity improvements in the SNAP program. • States do not have the time or resources to address every issue required to be reported. E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES 2736 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations Final Rule The final rule retains the basic requirement that States’ reports of major changes include a description of the change to be implemented and an analysis of its expected impacts on SNAP. In addition, the Department agreed with commenters that additional data items are necessary. Consequently, the final provision has been modified to add the following: • The projected administrative cost of the major change in the year it is implemented and the subsequent year; • A description of any consultation with stakeholders/advocacy groups or public comment obtained regarding the planned changes; and • Procedures the State will put in place to minimize the burdens on people with disabilities and other populations relative to the change. Also, in response to commenters’ suggestions, the language of § 272.15(a)(3)(ii)(E) as amended by the final rule has been clarified to replace the use of the word ‘‘and’’ in two places with the word ‘‘or’’. While seemingly minor, this change is important in examining the potential effect of major changes in SNAP on vulnerable populations. Some suggestions made for additional data to be reported were not adopted because the Department could not determine how the data would be used in making its determination or what, if any, data would be needed from the State beyond the automatic reporting requirements discussed below. Provision/Issues—§ 272.15(b)(1)–(5): § 272.15(b)(1) FNS will evaluate the initial report provided by a State to determine if it agrees that the change is, in fact, major and, if so, will propose what information it will require from the State. While FNS reserves the right to require the information it needs to determine the impact of a major change on integrity and access in SNAP, FNS will work with States to determine what information is practicable, and require only the data that is necessary and not otherwise available from ongoing reporting mechanisms. Depending upon the nature of the major change, FNS will require more specific or timely information concerning the impact of the major change (Please see the NPRM for full text of the proposed provision). § 272.15(b)(2): Additional data that States could be required to provide, depending upon the type of major change being implemented. (The rule goes on to give specific examples of the types of data that may be required relative to different types of major changes. Please see the NPRM for full text of the proposed provision). VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 § 272.15(b)(3): Depending on the type of major change, its implementation schedule and negotiations with FNS, States shall submit reports on their major changes either monthly or quarterly. § 272.15(b)(4): States shall submit reports for one year after the major change is fully in place. FNS may extend this timeframe as it deems necessary. § 272.15(b)(5): If FNS becomes aware that a State appeared to be implementing a major change that had not been formally reported, FNS would work with the State to determine if it is a major change, and if so proceed as required by this section. These provisions are closely related and commenters’ thoughts and recommendations are best examined together. Public Comments and Recommendations—Fifteen commenters addressed these provisions of the proposed rule and their comments included the following: • Collecting detailed data with case reviews is particularly burdensome for State and local staff during transition periods, and could negatively impact customer service. • Support the proposed regulation’s detailed discussion of the types of information that FNS will require from the State as to the impact of the change. We commend FNS for its careful identification of the types of information needed to assess the effects of major changes, especially as they pertain to the effects on beneficiaries. • The proposed regulation at § 272.15(b)(2)(iii)(B) through (b)(2)(iii)(D) on call centers requires information on ‘‘hold time,’’ ‘‘wait time’’ and ‘‘abandoned calls’’. The final rule should be amended to also include instances when a caller cannot get through (e.g., busy signals or dropped calls). • Particularly troubling is the emphasis of the proposed rules on potentially requiring county level impact data for changes deemed to be ‘‘major’’. Again, such a requirement does not reflect the reality of the way many States operate. Even in those States that have county project areas, caseload size and case activity volumes in a given county often can make the gathering of the representative samples necessary to evaluate the effect of a change on that county difficult, and the confidence level of short term evaluations questionable. • FNS should categorize major changes as being small, medium or significant and require different reporting based on the scope of the PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 change that the State is planning to make. FNS would retain discretion to require more reports in unusual circumstances, but this change would make the reporting requirements more predictable for States and for FNS. • FNS should offer States the option to report certain new measures on an ongoing, statewide basis as an alternative to reporting each separate major change with an initial report and the subsequent negotiated data reports. • The final rule should sort major systems changes into categories based on their likely risk. More data should be required for riskier changes. • We recommend that the exact measures be made more explicit in the final regulation and that FNS’ discretion to introduce new measures and enter into negotiations with States be narrowed. These measures include substate information or case reviews to gather more detailed information on measures FNS already has at the State level, such as payment accuracy, negative error rates and timeliness. • States should have an ongoing data collection system for monitoring their monthly performance in processing of applications and recertifications. FNS should require all States to have such a data collection system, regardless of whether the State is embarking on a major system change. • To the extent that the final rule continues to rely upon case-by-case negotiated data requests rather than a stronger baseline of data provided on an on-going basis by all States, it also should specify in greater detail the data that the Department is likely to desire and indicate that the Department will attempt to avoid seeking more data than those elements except for the riskier categories of changes. • FNS should use the extensive data already collected in SNAP except in the most unusual situations. • The level of detailed data reporting that is being proposed may not be appropriate for all major changes, unless the scope of major changes is significantly narrowed. While the proposed Federal regulations specify that FNS will negotiate with the States on the reporting requirements and that FNS will utilize available data (e.g., quality control data), the amount of information that is required would be administratively onerous and costly given the potentially high degree of frequency that such changes could occur, conflicts with the Paperwork Reduction Act, and neither the counties nor the States have the additional staff resources. • A State implementing a major change should submit data regarding E:\FR\FM\19JAR1.SGM 19JAR1 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations asabaliauskas on DSK5VPTVN1PROD with RULES individuals with disabilities including the numbers of individuals who requested and received accommodations in the application, interview, or recertification process for disabilities, and the types of accommodations requested and provided (some State benefit agencies already have policies requiring the agency to track this information). • The final rule should provide for careful evaluation of the sufficiency of the State agency’s fallback plan, including the availability of the resources necessary to carry it out. The final rule should provide that returning to the prior method of administration should presumptively be one of the elements of the State agency’s fallback plan unless the State agency presents compelling reasons why it should not be. • The break-out of negative errors is important, but needs to be augmented. It also should include break-outs of denials between substantive and procedural. Moreover, it should be broken-out to identify problems affecting specific types of households, such as elderly persons who may have less comfort with technology or limited English proficient households who may have difficulties with online systems not in their language. • The proposed regulations reflect a common sense approach to analyzing the effects of a major change. States with effective administration should already be collecting and analyzing the types of data specified in § 272.15(b)(3) regardless of Federal regulations. • Nowhere in the Act is FNS given the authority to approve or deny a change a State intends to make, and yet throughout the proposed rule this authority is not only implied, but is assumed. • One commenter recommended that States be required to submit the data for each month on a quarterly basis for two years after the change is implemented (unless States have adopted the recommended ongoing reporting option). Final Rule The final rule retains the requirement that States will be required to report on the impact of major changes. However, the most significant modification to this final rule is the adoption of the suggestion from commenters that key ‘‘automatic’’ reporting requirements be established for all major changes. This is in response to commenters’ suggestions that the regulations prescribe basic data that FNS will require for all major changes, as certain data elements would be useful in VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 examining the impact of any major change in a State’s operation. While the final rule retains FNS’ ability to require additional information on a case-by-case basis (§ 272.15(b)(5)), the final rule establishes minimum data reporting requirements for all major changes, which will also enable States to build these requirements into their plans and systems when making major changes. This change has required some reorganization of the provisions as they appeared in the proposed rule. § 272.15(b)(1), (2) and (3) identify the data elements that shall be reported for all major changes, as well as those that must be broken out specifically for households with elderly and disabled members and those that are to be reported at the sub-State level (e.g., counties or local offices). Reporting this information for the most vulnerable SNAP households is consistent with the Act and the need to identify and address adverse impacts on program access for households that may struggle with change more than others. The Department agrees with the comments regarding local level reporting that substate information is generally necessary for States and FNS to understand, monitor, and address adverse impacts of a major change. The impacts can be uneven across urban and rural areas, for example, and can vary based upon the how and when a major change is rolled out in different jurisdictions. This is particularly true in county administered/state supervised situations. Since States generally collect sub-state information for their own management purposes, the Department expects the required inclusion of this information in reports to FNS should require minimal additional effort for most States. Therefore, § 272.15(b)(3) as amended by this final rule requires the majority of the key ‘‘automatic’’ reporting requirements be disaggregated to provide sub-state information. Because States utilize different units of analysis for management and other purposes, the regulation allows substate data to be provided by individual districts, counties, project areas, or local offices, subject to consultation with and approval by FNS. Section 272.15(b)(4) as amended by this final rule retains the provisions from the proposed rule that FNS will evaluate the major change to determine what reporting requirements will be necessary. In light of the ‘‘automatic’’ requirements for all major changes discussed above, this determination will focus on what, if any, additional reporting requirements will be necessary. The recommendation that reporting requirements be applied to all PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 2737 certification activities that are carried out using other telephonic methods has not been adopted since States have been using telephones in their operation of SNAP for decades. However, using telephonic technology to accept applications or relying upon an interactive voice response system to provide case status information to participants would be a major change under § 275.15(a)(2)(ii) as amended by this final rule. Some comments reflected misunderstandings of the proposed rule. As noted earlier, this final rule does not provide FNS with approval authority over States’ plans to make a major change. Nor does the Act give the Department the authority to require additional ongoing reporting on State performance and operations beyond the context of major changes. Some comments suggested that requiring additional reporting indicates an assumption that major changes are detrimental to SNAP participants. On the contrary, FNS has long supported States’ efforts to modernize and agrees that many State innovations have improved operations. Nevertheless, there have been times when wellintentioned changes have had adverse impacts on program access or integrity and FNS, not fully informed of States’ plans, was unable to work with the State and help mitigate these impacts. Furthermore, certain changes have a greater inherent potential to adversely affect SNAP operations if they are not compensated for appropriately, e.g., office closings or staff reductions. With regard to the suggestion that the final rule categorize major changes as being small, medium or significant, and require different reporting based on the scope, the Department has not adopted this suggestion because it would complicate the rule and limit FNS’ discretion without significantly streamlining the process for States or FNS. This rule is intended to provide FNS with the ability to examine major changes individually and require additional information beyond the automatic reporting requirements. For all major changes, FNS will also look to the data it already collects on an ongoing basis, i.e., quality control data. While FNS is interested in knowing what contingency plans a State may have, the suggestion that FNS should require States to have specific fall back plans is beyond the scope of the Act. The recommendation that the provisions of the final rule be applied to major changes made prior to its effective date has not been adopted for several reasons. First, States would have to obtain historical data on the impact of E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES 2738 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations the change and such data is typically more difficult to obtain. Secondly, States’ reports received on the impact of these older changes would be out of date and therefore less useful to FNS in monitoring their impact. Finally, the Department only requires retroactive implementation of final rules when it is both practical and there is a compelling need; neither of which apply to this rule. The recommendation for two years of monthly reports would exceed the Departments needs and place an unnecessary burden upon States. The suggestion that States be required to submit the monthly data on a quarterly basis has been adopted in the restructured final rule in § 272.15(b)(5). While the one year requirement is retained from the NPRM in this final rule at § 272.15(b)(6), FNS may extend this timeframe if necessary. The provision from § 272.15(b)(5) in the NPRM is retained in this final rule at § 272.15(b)(7). Provision/Issues—§ 272.15(b)(6): If the data a State submits regarding its major change or other information FNS obtains indicates an adverse impact on SNAP access or integrity, FNS would work with the State to correct the cause of the problem and provide whatever technical assistance it can. Depending upon the severity of the problem, FNS may require a formal corrective action plan as identified in § 275.16 and § 275.17. Public Comments and Recommendations—Three commenters addressed these provisions of the proposed rule and their comments included the following: • Strongly recommend that the final regulation be strengthened to identify the full range of action that FNS is authorized to initiate in response to information from the State about planned major systems changes. • Although requiring correction of problems that have arisen is sensible and appropriate, it puts the Department and the State agency in the all-toofamiliar position of playing catch-up after a problem has occurred. The final rule should restructure this paragraph to focus on the implementation of the State agency’s fallback plan or plans. • ‘‘Adverse impact’’ is not defined, which could lead to subjective and inconsistent results among regions regarding when a corrective action plan is imposed. Existing performance measures already have standards that States must meet, and corrective action plans can be required for failure to meet those standards. At best, the new process is duplicative; at worst, it opens up an avenue for corrective action plans VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 for anything that FNS may decide has an ‘‘adverse impact.’’ Final Rule As explained earlier, the Department has neither the authority to approve or deny (unless a State’s plans violate a provision of the Act or SNAP regulations) a State’s plans, nor can it require that States develop fallback plans. With regard to when a State would be required to submit a corrective action plan due to an adverse impact, the Department agrees that the provisions of this rule could open another avenue for identification and correction of deficiencies in a State’s operation; this is the intent of the Act. Therefore, the provision (now at § 272.15(b)(8)) as amended by this final rule remains unchanged from the NPRM. Provision/Issues—§ 275.3(a): FNS shall conduct management evaluation reviews of certain functions performed at the State agency level in the administration/operation of the program. FNS will designate specific areas required to be reviewed each fiscal year. Public Comments and Recommendations—Thirteen commenters addressed these provisions of the proposed rule and their comments included the following: • FNS and States should be engaging in additional monitoring activities of local service delivery, not fewer. The changes FNS proposes to ME reviews have no basis in statute -the 2008 FCEA made no changes to reduce FNS’s oversight role. ME reviews are also the primary way that FNS monitors civil rights compliance. The final rule must not back away from FNS’s commitment in these areas. • Caseloads have increased dramatically in recent years while, at the same time, the number of staff to process cases has not kept pace. This development points to the need for more, not less frequent, reviews because of the risk of access barriers. We recommend that the final rule reject these changes to the ME regulations and keep the current requirements. • The proposed regulation will weaken the longstanding requirement for ME reviews of State certification operations, and fails to require straightforward, publically available and nationally consistent data collection from States making major changes in their service delivery model. The proposal eviscerates a decades-old requirement that States and FNS conduct ME reviews of State certification operations. Such ME reviews are the cornerstone of FNS PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 oversight of client access and program integrity. • The solution to staffing shortages is to prioritize. Reducing oversight of the largest program in the Department is not a sensible means of prioritizing. If the problem is an insufficient Federal Program Administration appropriation, the Department should realign staffing of the various food assistance programs to be more proportional to the taxpayers’ dollars at stake in each. • Oppose the proposed changes that eliminate the requirement for an annual review of certain functions performed at the State agency level and the elimination of the requirement for a biennial review of the State’s ME system. The proposed regulation, which lacks any specified frequency for reviews, could lead to FNS’s abdication of these reviews for all practical purposes, now or in the future. The requirement that FNS designate specific areas for review each year does not necessarily mean that FNS must in fact conduct such reviews. • FNS should define what qualifies as ‘‘at-risk’’ to provide for consistency in the different regions. Providing the data for these ‘‘off-site’’ activities is more time-consuming for the States unless Federal reviewers are given total access to State systems. • We agree with the increased flexibility given to FNS in the conduct of MEs under the proposed rule and encourage that similar flexibility and ability to target reviews be given to the States in the conduct of their annual MEs. • We appreciate FNS’ targeted approach and suggest that the reviews be less targeted by frequency and size, but more by performance and need. • We disagree with FNS removing its own burdens in the ME process while keeping the States’ current requirements basically unchanged. • The term ‘‘at-risk’’ is vague. Recommend keeping the current requirement of a biennial review of the State’s ME system. Having scheduled Federal reviews on a biennial basis would allow States to plan accordingly. • State and Federal ME requirements should not be changed. Proposals to weaken them should not be included in the final rule. Final Rule Based upon comments received, the Department is withdrawing the changes to this provision from the final rule. The Department agrees that monitoring SNAP is a high priority responsibility for FNS and supports the goal of maintaining sufficient resources to E:\FR\FM\19JAR1.SGM 19JAR1 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations enable proper oversight of SNAP operations. Provision/Issues—§ 271.2: Amend the definitions of Large, Medium, and Small project areas for ME review purposes. Public Comments and Recommendations—Five commenters addressed these provisions of the proposed rule and their comments included the following: • These changes in the definitions of project areas are likely to have significant negative impacts on civil rights compliance within SNAP. Reducing the frequency or intensity of ME reviews will have the effect of reducing efforts to identify and correct civil rights violations. • We recommend that the final rule reject these changes to the ME regulations and keep the current requirements. • We agree with the need for a modification to the definitions of large and medium project areas but contend that the revised definitions do not reflect the reality of the larger States. We recommend further review of these proposed standards and even higher caseload thresholds in order to reflect the project areas of the large States. • These were the definitions that were in effect for California until FY 2011. Given the limitation of staff and resources, this new definition would create a workload issue in California. We recommend redefine project areas as follows: Æ Large—those with an average monthly caseload of more than 50,000 cases. Æ Medium—those with an average monthly caseload of between 25,000 and 50,000 cases. Æ Small—those with an average monthly caseload up to 24,999 cases. asabaliauskas on DSK5VPTVN1PROD with RULES Final Rule List of Subjects 7 CFR Part 271 Food stamps, Grant programs-social program, Reporting and recordkeeping. 7 CFR Part 272 Alaska, Civil rights, SNAP, Grant programs-social programs, Penalties, Reporting and recordkeeping requirements, Unemployment compensation, Wages. 7 CFR Part 275 Administrative practice and procedure, SNAP, Reporting, and recordkeeping requirements. Accordingly, 7 CFR parts 271, 272 and 275 are amended as follows: PART 271—GENERAL INFORMATION AND DEFINITIONS 1. The authority citation for Part 271 continues to read as follows: ■ Authority: 7 U.S.C. 2011–2036. § 271.2 [Amended] 2. In § 271.2: a. Amend the definition of Large project area by removing the number ‘‘15,000’’ and adding in its place the number ‘‘25,000’’. ■ b. Amend the definition of Medium project area by removing the numbers ‘‘2,001 to 15,000’’ and adding in their place the numbers ‘‘5,000 to 25,000’’. ■ c. Amend the definition of Small project area by removing the number ‘‘2,000’’ and adding in its place the number ‘‘4,999’’. ■ ■ PART 272—REQUIREMENTS FOR PARTICIPATING STATE AGENCIES 3. The authority citation for Part 272 continues to read as follows: ■ Comments on this provision of the rule were mixed with some commenters believing that the provision of the proposed rule did not go far enough in reducing the frequency with which States are required to review their project areas. The Department acknowledges that while more monitoring of SNAP is generally more desirable than less monitoring, the quality of the monitoring must also be a factor. Reductions in States’ budgets have put pressure on staffing for SNAP and this provision allows States to do a better job in the ME reviews that are conducted. Furthermore, the project area sizes in the current rules were set when the program was less than half its current size in terms of participation. Therefore, this provision of the final VerDate Sep<11>2014 rule remains unchanged from the proposed rule. 15:52 Jan 15, 2016 Jkt 238001 Authority: 7 U.S.C. 2011–2036. ■ 4. Add § 272.15 to read as follows: § 272.15 design. Major changes in program (a) States’ reporting of major changes. (1) State agencies shall notify FNS when they make major changes in their operation of SNAP. State agencies shall notify FNS when the plans for the change are approved by State leadership, but no less than 120 days prior to beginning implementation of the change or entering into contractual obligations to implement any proposed major changes. If it is not possible for a State to provide notification 120 days in advance, the State shall provide notification as soon as it is aware of the PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 2739 major change and explain why it could not meet the 120-day requirement. No approval from FNS is necessary for a State to proceed with implementation of the major change. (2) Major changes shall include the following: (i) Closure of any local office that performs major functions for 750 or more SNAP households or 5 percent of the State’s total SNAP monthly caseload, whichever is less, and there is not another office available to serve the affected households within 35 miles. An office performing major functions is an office where households can file an application for SNAP in person and receive assistance from merit system personnel staff. (ii) Substantial increased reliance on automated systems for the performance of responsibilities previously performed by State merit system personnel (as described in section 11(e)(6)(B) of the Act) or changes in the way that applicants and participants interact with the State’s SNAP agency. This includes the replacement of the State’s automated systems used in the certification process, adding functionality to the existing automated systems used in the certification process, or changes in the way applicants and participants interact with SNAP. For example, adding an overlay on an existing legacy automated system used by eligibility workers, adding online portals to an existing automated system for use by SNAP applicants, participants or community partners, establishment of an online application, use of telephonic technology to accept applications, relying upon an interactive voice response system to provide case status information to participants or implementation of finger imaging shall be considered major changes. Under this criterion, if the State documents that the change is expected to impact less than five percent of the State’s SNAP applicants or participants, it will not be considered a major change. Reporting a major change as required in this section does not relieve States of meeting the requirements for new system approvals in § 277.18 of this chapter. (iii) Changes in operations that potentially increase the difficulty of households reporting required information. This could include implementation of a call center or internet web portal for change reporting, a major modification to forms that households use to report changes or the discontinuation of an existing avenue for reporting changes (e.g., households can no longer contact the local office because all changes must be reported to E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES 2740 Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations a unit that handles change reports). Selecting a different change reporting policy option as allowed in § 273.12 of this chapter, or the implementation of a policy waiver related to change reporting would not be a major change. (iv) Any reduction or change of the functions or responsibilities currently assigned to SNAP merit system personnel. (v) A decrease of more than 5 percent in the total number of merit system personnel involved in the SNAP certification process in the State from one year to the next. In addition, a decrease of more than eight percent in the total number of merit system personnel involved in the SNAP certification process in the State over a two year period would be a major change. These decreases would include those resulting from State budget cuts or hiring freezes, but not include loss of personnel through resignation, retirement or release when the State is seeking to replace the personnel within 6 months. Evidence of the intent to replace personnel shall include advertising to fill positions and having sufficient funding in the personnel budget for the new hires. (vi) Other major changes identified by FNS. (3) When a State initially reports a major change to FNS as required in paragraph (a)(1) of this section, an analysis of the expected impact of the major change shall accompany the report. The initial report to FNS that the State is making one of the major changes identified in paragraph (a)(2) of this section, shall include a description of the change and an analysis of its anticipated impacts on program performance. (i) The description of the change shall include the following: (A) Identification of the major change the State is implementing; (B) An explanation of what the change is intended to accomplish; (C) The schedule for implementation; (D) How the change will be tested and whether it will be piloted; (E) Whether the change is statewide or identification of the jurisdictions it will encompass; (F) How the major change is expected to affect applicants and/or participants and how they will be informed; (G) How the change will affect caseworkers and, as applicable, how they will be trained; (H) The projected administrative cost of the major change in the year it is implemented and the subsequent year; (I) How the impact of the major change will be monitored; VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 (J) How the major change will affect operation of the State automated system; (K) The State’s backup plans if the major change creates significant problems in one or more of the program measures in paragraph (a)(3)(ii) of this section; (L) A description of any consultation with stakeholders/advocacy groups or public comment obtained regarding the planned changes; and (M) Procedures the State will put in place to minimize the burdens on people with disabilities and other populations (as identified in paragraph (a)(3)(ii)(E) of this section) relative to the change. (ii) The analysis portion of the State’s initial report shall include the projected impact of the major change on: (A) The State’s payment error rate; (B) Program access, including the impact on applicants filing initial applications and recertification applications; (C) The State’s negative error rate; (D) Application processing timeliness including both the households entitled to 7-day expedited service and those subject to the 30-day processing standards; (E) Whether the major change will increase the difficulty elderly households, households living in rural areas, households containing a disabled member, homeless households, nonEnglish speaking households, or households living on a reservation will have obtaining SNAP information, filing an initial application, providing verification, being interviewed, reporting changes or reapplying for benefits; (F) Customer service including the time it takes for a household to contact the State, be interviewed, report changes and any other parameter defined by the State agency; and (G) Timeliness of recertification actions. (b) FNS and State action on reports. (1) FNS will evaluate the initial report provided by a State to determine if the change is, in fact, a major change as described in paragraph (a)(2) of this section and notify the State of its determination. States implementing a major change shall report the following monthly State-level information to FNS on a quarterly basis beginning with the quarter prior to implementation of the major change: (i) The number of initial applications received; (ii) Of the number of initial applications received in paragraph (b)(1)(i) of this section, the number subject to expedited service; PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 (iii) Of the number of initial applications received in paragraph (b)(1)(i) of this section, the number broken out by method of application (i.e., in-person, online, telephone, mail, fax); (iv) The number of initial applications that are approved timely; (v) Of the number of initial applications approved timely in paragraph (b)(1)(iv) of this section, the number subject to expedited service processed within the 7-day processing requirement; (vi) The number of initial applications that are approved untimely; (vii) Of the number of initial applications approved untimely in paragraph (b)(1)(vi) of this section, the number subject to expedited service processed outside the 7-day processing requirement; (viii) The number of initial applications that are denied; (ix) Of the number of initial applications that were denied in paragraph (b)(1)(viii) of this section, the number broken out by those denied due to ineligibility and those denied because the State agency was unable to determine eligibility; (x) The total number of households due for recertification; (xi) The number of recertification applications received; (xii) Of the number of recertification applications received in paragraph (b)(1)(xi) of this section, the number broken out by method of application (i.e., in-person, online, telephone, mail, fax); (xiii) The number of households that were recertified without a delay or break in benefits; (xiv) The number of households that the State recertifies with a delay or break in benefits of less than one month; (xv) Of the total number of households due for recertification in paragraph (b)(1)(x) of this section, the number of households that fail to reapply for recertification by the required deadline; (xvi) The number of recertification applications that are denied; and (xvii) Of the number of recertification applications that were denied in paragraph (b)(1)(xvi) of this section, the number broken out by those denied due to ineligibility and those denied because the State agency was unable to determine eligibility. (2) The information required by paragraph (b)(1)(1) of this section shall be reported separately for households with elderly members and households with members that have a disability. (3) At a minimum, the information required by paragraphs (b)(1)(i), (iv), E:\FR\FM\19JAR1.SGM 19JAR1 asabaliauskas on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / Rules and Regulations (vi), (viii), (x), (xi), (xiii), (xiv), (xv), and (xvi) of this section shall be disaggregated to provide sub-state information. FNS will require the State to disaggregate all the information in paragraph (b)(2) if FNS determines that such data are necessary to evaluate the impact of the change. FNS will consult with States on a case-by-case basis to determine if this information shall be reported by: Local offices, call centers, county, project areas, or by other administrative structures within the State. FNS’ determination will be based upon the type of major change and the State’s SNAP organization. (4) In addition the information required in paragraphs (b)(1), (2) and (3) of this section, FNS may require additional information to be included in a State’s quarterly report. FNS reserves the right to require the information it needs to determine the impact of a major change on integrity and access in SNAP. FNS will work with States to determine what additional information is practicable and require only the data that is necessary and not otherwise available from ongoing reporting mechanisms. While the data elements outlined in paragraph (b)(2) of this section will generally be required to be reported on a statewide basis and at a sub-state level, major changes that are limited to localized areas, such as a county or project area, may only require localized reporting. Depending upon the nature of the major change, States will be required to report more specific or timely information concerning the impact of the major change within the following areas: (i) Payment accuracy. FNS will use Quality Control (QC) data when possible, but may require data from case reviews focused on households with specific characteristics, to obtain greater local reliability, or to provide more timely data. (ii) Negative error rates. FNS will use QC data when possible, but may require data from case reviews focused on households with specific characteristics, to obtain greater local reliability or to provide more timely data on the causes of incorrect denials. (iii) Impact on households with specific characteristics. In addition to the information required by paragraph (b)(2) of this section, a major change that could disproportionately impact the households identified at paragraph (a)(3)(ii)(E) of this section may require additional information on the impact of the change on the participation of these households. The nature of the change and its potential impact would dictate how this information would need to be reported. VerDate Sep<11>2014 15:52 Jan 15, 2016 Jkt 238001 (iv) Impact of certain major changes on customer service. Some major changes may require specific information that is not typically available from a States automated SNAP system. For example, if a State implements a major change that allowed (or required) households to report changes in their individual circumstances through a change center or allows applicants to apply or reapply for SNAP through the use of call center, the following data may be required: (A) The total number of calls made to the center; (B) The average time a caller has to wait to talk to a SNAP worker (includes hold time for transfers); (C) Based upon the call centers standards and negotiation with FNS, the percentage of calls with excessive wait times; (D) The percentage of calls abandoned by callers prior to and after being answered by the call center; (E) The total number of calls dropped by the call center system and the number of callers that received a busy signal; and (F) Customer satisfaction (based upon survey results). (5) States shall submit reports containing monthly data on a quarterly basis. As practicable, and based upon consultation with the State, FNS may require any additional information under paragraph (b)(4) of this section regarding the State’s operation to be reported for the quarter just prior to implementation of the major change. (6) States shall submit reports for one year after the major change is fully in place. FNS may extend this timeframe as it deems necessary. (7) If FNS becomes aware that a State appeared to be implementing a major change that had not been formally reported, FNS would work with the State to determine if it is a major change, and if so proceed as required by this section. (8) If the data a State submits regarding its major change or other information FNS obtains indicates an adverse impact on SNAP access or integrity, FNS would work with the State to correct the cause of the problem and provide relevant technical assistance, and will require the State to provide additional information as it deems appropriate. Depending upon the severity of the problem, FNS may also require a formal corrective action plan as identified in § 275.16 and § 275.17 of this chapter. States agencies that fail to comply with reporting requirements may be subject to the suspension or disallowance of Federal Financial PO 00000 Frm 00017 Fmt 4700 Sfmt 9990 2741 Participation administrative funds per § 276.4 of this chapter. PART 275—PERFORMANCE REPORTING SYSTEM 5. The authority citation for Part 275 continues to read as follows: ■ Authority: 7 U.S.C. 2011–2036. 6. In § 275.7: a. Revise paragraph (a) to read as set forth below. ■ c. Remove paragraphs (b), (c) and (d). ■ d. Redesignate paragraph (e) as paragraph (b). ■ e. Amend newly redesignated paragraph (b) by removing the word ‘‘on-site’’. ■ ■ § 275.7 Selection of sub-units for review. (a) Definition of sub-units. Sub-units are the physical locations of organizational entities within project areas responsible for operating various aspects of SNAP and include but are not limited to certification offices, call centers, and employment and training offices. * * * * * 7. In § 275.9: a. Revise paragraph (b)(1)(iii) to read as set forth below. ■ b. Amend paragraph (b)(1)(iv) by removing the first sentence. ■ ■ § 275.9 Review process. * * * * * (b) * * * (1) * * * (iii) Identification of the sub-units selected for review and the techniques used to select them; * * * * * 8. In § 275.16 revise paragraph (b)(3) to read as follows: ■ § 275.16 Corrective action planning. * * * * * (b) * * * (3) Are identified by FNS reviews, GAO audits, contract audits, reports to FNS regarding the implementation of major changes (as discussed in § 272.15) or USDA audits or investigations at the State agency or project area level (except deficiencies in isolated cases as indicated by FNS); and, * * * * * Dated: December 10, 2015. Audrey Rowe, Administrator, Food and Nutrition Service. [FR Doc. 2016–00674 Filed 1–15–16; 8:45 am] BILLING CODE 3410–30–P E:\FR\FM\19JAR1.SGM 19JAR1

Agencies

[Federal Register Volume 81, Number 11 (Tuesday, January 19, 2016)]
[Rules and Regulations]
[Pages 2725-2741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00674]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 81, No. 11 / Tuesday, January 19, 2016 / 
Rules and Regulations

[[Page 2725]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271, 272 and 275

[FNS-2011-0035]
RIN 0584-AD86


Supplemental Nutrition Assistance Program: Review of Major 
Changes in Program Design and Management Evaluation Systems

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule finalizes provisions of the proposed rule entitled 
Review of Major Changes in Program Design and Management Evaluation 
Systems, which was published May 3, 2011. This final rule amends the 
Supplemental Nutrition Assistance Program (SNAP) (formerly the Food 
Stamp Program) regulations to implement section 4116 of the Food, 
Conservation and Energy Act of 2008 (FCEA). Section 4116 of the FCEA, 
Review of Major Changes in Program Design, requires the United States 
Department of Agriculture (the Department) to identify standards for 
major changes in operations of State agencies' administration of SNAP. 
The provision also requires State agencies to notify the Department if 
they implement a major change in operations and to collect and report 
data that can be used to identify and correct problems relating to 
integrity and access, particularly for certain vulnerable households.
    This final rule establishes criteria for changes that would be 
considered ``major changes'' in program operations and identifies the 
data State agencies must report in order to identify problems relating 
to integrity and access. It also sets forth when and how State agencies 
must report on the implementation of a major change. This rule also 
amends Management Evaluation (ME) Review regulations by modifying the 
requirements for State reviews. The rule revises the definitions of 
large, medium and small project areas. Finally, it removes sections of 
the regulations pertaining to coupons and coupon storage since they are 
obsolete.

DATES: Effective Date: January 19, 2016.
    Implementation date: This rule shall be implemented as follows: 
Sec.  272.15 shall be implemented on March 21, 2016. Implementation of 
any major change that begins after that day must be reported to FNS. 
The changes in definitions in Part 271 that impact the requirements for 
State ME reviews in Part 275, shall be implemented October 1, 2016.

FOR FURTHER INFORMATION CONTACT: Mary Rose Conroy, Chief, Program 
Design Branch, Program Development Division, Food and Nutrition 
Service, USDA, 3101 Park Center Drive, Alexandria, Virginia 22302, 
(703) 305-2515; Maryrose.Conroy@fns.usda.gov. Questions regarding this 
rulemaking should be sent in writing to 3101 Park Center Drive, 
Alexandria, Virginia 22302, or by telephone at (703) 305-2803, or via 
email to Maryrose.Conroy@fns.usda.gov.

SUPPLEMENTARY INFORMATION: This action is needed to implement section 
4116 of the FCEA. Section 4116, Review of Major Changes in Program 
Design, amends section 11 of the Food and Nutrition Act of 2008 (the 
Act) (7 U.S.C. 2020). Section 4116 requires the Department to develop 
standards for identifying major changes in the operations of State 
agencies that administer SNAP; State agencies to notify the Department 
upon implementing a major change in operations; and State agencies to 
collect any information required by the Department to identify and 
correct any adverse effects on program integrity or access, 
particularly access by vulnerable households. The provision identifies 
four major changes in operations for which standards for identifying 
changes must be developed: (1) Large or substantially-increased numbers 
of low-income households that do not live in reasonable proximity to a 
SNAP office; (2) substantial increases in reliance on automated systems 
for the performance of responsibilities previously performed by merit 
system personnel; (3) changes that potentially increase the households' 
difficulty in reporting information to the State; and (4) changes that 
may disproportionately increase the burdens on specific vulnerable 
households. In addition, the provision gives the Department the 
discretion to identify other major changes that a State agency would be 
required to report, as well as to identify the types of data the State 
agencies would have to collect to identify and correct adverse effects 
on integrity and access. Finally, the Department is modifying 
requirements for State reviews to allow more efficient use of staff and 
resources.

I. Additional Information on Electronic Access

Electronic Access

    You may view and download an electronic version of this final rule 
at http://www.fns.usda.gov/snap/.

II. 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). This 
final rule has been determined to be not significant under Executive 
Order 12866 and was not reviewed by the Office of Management and 
Budget.
Costs
    The rule will have a minimal cost in fiscal year (FY) 2016 and over 
the 5 years FY 2016 through FY 2020. To estimate the cost impact, we 
multiplied the estimated total burden hours, as outlined in the 
Paperwork Reduction Act section of the preamble, by the hourly mean 
wage for functions performed by State agency and local education agency 
staff. The hourly mean wage is based upon the U.S. Department of Labor, 
Bureau of Labor Statistics, May 2014 National Occupational and Wage 
Statistics, Occupational Group (for education-related occupations), 
which is $25.10. FNS estimates a total of 8,460 burden hours to fulfill 
the reporting requirements. The annual cost is estimated at $212,364 or 
approximately $1,061,730 over the 5 years FY 2016 through FY 2020.

[[Page 2726]]

Benefits
    This rule requires State agencies to report on the impacts of 
implementing major changes in State agency operations, and to identify 
and correct problems caused by implementing these changes. This rule 
will benefit State agencies by requiring them to fully evaluate changes 
and thereby reduce the potential for these changes to cause hardships 
for applicants, recipients or compromise the integrity of the program. 
This rule will benefit applicants, recipients or individuals otherwise 
eligible for SNAP by requiring State agencies to identify and correct 
adverse impacts. This rule modifies the requirements for State ME 
reviews of local office operations. It will benefit State agencies by 
allowing them more time to conduct higher quality reviews.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
No. 10.551. For the reasons set forth in the final rule in 7 CFR part 
3015, subpart V and related Notice (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.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). It has been certified 
that this rule will not have a significant economic impact on a 
substantial number of small entities. State welfare agencies will be 
the most affected to the extent that they administer the SNAP.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
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. This rule is, therefore, not subject 
to the requirements of sections 202 and 205 of the UMRA.

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 E.O. 13132. FNS has considered 
this rule's impact on State and local agencies and has determined that 
it does not have federalism implications under E.O. 13132.

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 that 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 this rule 
has no intended impact on any of the protected classes. FNS 
specifically prohibits State and local government agencies that 
administer SNAP from engaging in actions that discriminate against any 
applicant or participant in any aspect of program administration, 
including, but not limited to, the certification of households, the 
issuance of benefits, the conduct of fair hearings, or the conduct of 
any other program service for reasons of age, race, color, sex, 
handicap, religious creed, national origin or political beliefs (SNAP 
nondiscrimination policy can be found at 7 CFR 272.6). Discrimination 
in any aspect of program administration is prohibited by these 
regulations, the Food and Nutrition Act of 2008, the Age Discrimination 
Act of 1975 (Pub. L. 94-135), the Rehabilitation Act of 1973 (Pub. L. 
93-112, section 504) and Title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d). Enforcement action may be brought under any applicable 
Federal law. Title VI complaints shall be processed in accordance with 
7 CFR part 15.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    FNS has assessed the impact of this rule on Indian tribes and 
determined that this rule does not, to our knowledge, have tribal 
implications that require tribal consultation under EO 13175. On 
February 18, 2015 the agency held a webinar for tribal participation 
and comments. During the comment period, FNS did not receive any 
comments on the proposed rule. If a Tribe requests consultation, FNS 
will work with the Office of Tribal Relations to ensure meaningful 
consultation is provided where changes, additions and modifications 
identified herein are not expressly mandated by Congress.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
part 1320), requires that 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. The 
Notice of Proposed Rulemaking (NPRM) contained new requirements that 
are subject to review and approval by OMB. FNS sought public comments 
on the changes in the information collection burden that would result 
from adoption of the NPRM provisions.
    Comments were invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on those who are 
to respond, including

[[Page 2727]]

use of appropriate automated, electronic, mechanical, or other 
technological collection techniques or other forms of information 
technology.
    Comments on the information collection pursuant to the proposed 
rule were minimal, but changes to provisions of the final rule have 
affected the reporting burden estimated from the NPRM.
    Title: Review of Major Changes in Program Design.
    OMB Number: [0584-NEW].
    Expiration Date: Not Yet Determined.
    Type of Request: New Collection.
    Abstract: As required by the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)), FNS is submitting a copy of this section to OMB for 
its review. Section 4116, Review of Major Changes in Program Design, 
amends section 11 of the Act (7 U.S.C. 2020). It requires the 
Department to develop standards for identifying major changes in the 
operations of State agencies that administer SNAP. Section 272.15, of 
this final rule requires State agencies to notify the Department when 
planning to implement a major change in operations and State agencies 
to collect any information required by the Department to identify and 
correct any adverse effects on program integrity or access, including 
access by vulnerable households. Since decisions to make major changes 
to program operations rest with each individual State agency, the 
frequency and timing of the changes can only be estimated. The final 
rule requires State agencies to provide descriptive information 
regarding the major change together with an analysis of its projected 
impacts on program operations. The final rule also includes 
``automatic'' reporting requirements for any State reporting a major 
change and sets out requirements for the State to collect and report 
additional information. The reports will consist of monthly 
information, to be provided on a quarterly basis. Reporting would 
continue for at least a year after the change is completely 
implemented. It is not uncommon for a State to pilot a change prior to 
statewide implementation. FNS could require information from the pilot 
and information regarding the statewide impacts of the change after 
full implementation.
    Respondents: The 53 State agencies that administer SNAP.
    Estimated Number of Responses per Respondent: The rule identifies 
six categories of major changes; changes to the States automated 
system, changing the responsibilities of merit system personnel, office 
closings, reductions in State SNAP merit system personnel, changes that 
may make it more difficult for households to report and an undefined 
``other'' category. Such changes in operations are made by States based 
upon a variety of interrelated factors. There is no evidence that the 
State's size (population) or regional location predict when or what 
type of changes States will make.
    In examining the first of the above criterion in isolation, it 
would be reasonable to expect one or two States per year to replace 
automated systems and another four States to make modifications to 
their systems that would require a major change report. However, with 
so many States running older systems and the delays caused by budget 
difficulties, it is likely this will increase to three per year 
beginning in FY 2017, as States' budgets improve. It is also likely 
that we will see more States look into implementing call centers and 
developing online applications that will be used by a large proportion 
of SNAP applicants and participants. Since it appears that 45 States 
will have online applications in place and over 30 States will be using 
call centers in FY 2016, the number of additional States that might 
implement these systems in a year is most likely no more than four per 
year. Therefore we estimate a total of ten States per year would report 
major changes under this criterion.
    With regard to the second criterion, one State exploring such a 
change every two years would be a reasonable estimate.
    The third criterion, office closings, may become more common with 
the expanded use of call centers and online applications. We estimate 
three States per year would report major changes under this criterion.
    The fourth criterion, staff reductions, tends to fluctuate with 
States' budgetary situations, caseloads and other changes States make 
to their program design. We estimate there would be three significant 
staff reductions per year.
    The fifth criterion, changes that may make it more difficult for 
households to report, would occur in conjunction with or as a result of 
changes in the States administration of SNAP. This is the most 
difficult to predict, but as States continue to take advantage of new 
technology and streamlined processes, changes of this type may become 
more common. An estimate of five such changes per year would appear to 
be reasonable.
    Since, by definition, the ``other'' category cannot be estimated, 
one such major change per year is estimated as a place holder.

------------------------------------------------------------------------
                                                              Responses
                         Criterion                            per year
------------------------------------------------------------------------
Replacement of automated system...........................          10
Changing the responsibilities of merit system personnel...            .5
Office closings...........................................           3
Significant reductions in SNAP staff......................           3
Changes that may make it more difficult for households to            5
 report...................................................
Other.....................................................           1
                                                           -------------
  Total...................................................          22.5
------------------------------------------------------------------------

    Once a State has triggered one of the six criteria, the State will 
be required to report the ``automatic'' information as required in 
Sec.  272.15(b)(2)-(4) and FNS must determine what, if any, additional 
data the State will be required to collect and report as provided for 
in Sec.  272.15(b)(5). FNS believes that most often, the automatic 
reporting requirements and its ongoing data collection tools it employs 
will be sufficient to provide the needed information on a major change. 
Additional data will occasionally need to be generated from States' 
automated eligibility systems or gathered by conducting additional case 
review surveys.
    Estimated Total Annual Burden on Respondents:
    Section 272.15(a)(3), requires States provide both descriptive and 
analytic information regarding the major change. FNS believes States 
will have completed the majority of the analysis in the normal course 
of their own planning and decision making. The descriptive information 
should also be readily available and require minimal data gathering 
since it is the State's decision to make the major change. We estimate 
it will take 8 hours to describe the change and 32 hours to repackage 
and complete the required analysis for a total of 40 hours per 
response. Thus, with 22.5 States reporting one major change per year, 
the initial reporting and analysis aspect of the rulemaking would be 
22.5 annual responses x 40 hours per State = an estimated 900 burden 
hours per year (22.5 States x 1 response per respondent = 22.5 annual 
responses x 40 hours per respondent to respond = 900 annual burden 
hours).
    FNS believes that for about seventy percent of the major changes 
States report, no additional reporting will be necessary beyond the 
automatic reporting requirements. Additional data collection will only 
be required for the remaining 30 percent of the reported major changes. 
Therefore, for about 15.75 of the major changes expected

[[Page 2728]]

each year there would be no additional reporting burden.
    All 22.5 of the major changes expected each year will require some 
automated system reprogramming to generate the required automatic data 
reporting. At 48 hours per reprogramming effort, this would be 1080 
hours per year (22.5 x 48). The reports themselves would be estimated 
to require 12 hours each.

----------------------------------------------------------------------------------------------------------------
                                                 Estimated
                 Respondents                       annual       Responses per      Hours per     Total hours per
                                                 responses           year           response           year
----------------------------------------------------------------------------------------------------------------
22.5 States quarterly.......................               4               90               12             1080
----------------------------------------------------------------------------------------------------------------

    The total for the 22.5 States would be 900 + 1,080 hours = 1,980 
total hours for reporting (divided by the 22.5 states = 88 hours per 
State per year).
    For the 6.75 States expected to require additional data collection, 
this requirement would be in addition to the 1,980 hours from above. 
Such data will generally be collected through a sample of case reviews. 
While the required sample sizes may vary based on the type of major 
change and the proportion of the State's SNAP caseload it may affect, 
200 cases per quarter would likely be an upper limit on what FNS could 
ask of a State. At an estimated one hour to review and report on a 
case, this would require 800 hours per year per State. The 6.75 States 
times 800 hours yields 5,400 hours (6.75 State respondents x 1 response 
per respondent = 6.75 annual responses x 800 hours per respondent to 
respond = 5,400 annual burden hours). When the 1,980 hours are added 
for the automatic information, the total for these 6.75 States is 7,380 
hours (1,093 hours per State per year).
    With all 22.5 States reporting quarterly, there would be 90 
responses annually. Twenty-seven of the 90 reports would contain 
additional information from sample data.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           States
             Section                  Requirement      responding per  Responses per respondent     Number of      Hours per  response     Total burden
                                                            year                                    responses                                  hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
272.15(a)(3)....................  Initial analysis of           22.5   1.......................            22.5  40.....................             900
                                   Major Change.
272.15(b)(2)-(4)................  Reports required              15.75  4.......................              63  22.....................           1,386
                                   without additional
                                   data collection.
272.15(b)(5)....................  Reports required               6.75  4.......................              27  273.25.................        7,377.75
                                   with additional
                                   data collection.
                                                      --------------------------------------------------------------------------------------------------
    Totals......................  ...................           22.5   5 (average).............           112.5  85.9 (average).........        9,663.75
--------------------------------------------------------------------------------------------------------------------------------------------------------

E-Government Act Compliance

    FNS is committed to complying with the E-Government Act of 2002, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State or local laws, regulations or policies that 
conflict with its provisions or that would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the ``Effective Date'' paragraph of the final 
rule. Prior to any judicial challenge to the provisions of this rule or 
to the application of its provisions, all applicable administrative 
procedures must be exhausted. In SNAP the administrative procedures are 
as follows: (1) For Program benefit recipients--State administrative 
procedures issued pursuant to 7 U.S.C. 2020(e)(10) and Sec.  273.15; 
(2) for State agencies--administrative procedures issued pursuant to 7 
U.S.C. 2023 set out at Sec.  276.7 or Part 283; (3) for retailers and 
wholesalers--administrative procedures issued pursuant to 7 U.S.C. 2023 
set out at 7 CFR part 279.
    What acronyms or abbreviations are used in this supplementary 
discussion of the proposed provisions? In the discussion of the 
provisions in this rule, the following acronyms or other abbreviations 
are used to stand in for certain words or phrases:

------------------------------------------------------------------------
                                             Acronym,  Abbreviation, or
                  Phrase                               Symbol
------------------------------------------------------------------------
Code of Federal Regulations...............   CFR
Federal Register..........................  FR
Federal Fiscal Year.......................   FY
Food and Nutrition Act of 2008............  the Act
Food and Nutrition Service................  FNS
Food, Conservation, and Energy Act of 2008   FCEA
Management Evaluation.....................  ME
Notice of Proposed Rulemaking.............  NPRM
Supplemental Nutrition Assistance Program.  SNAP
U.S. Department of Agriculture............  the Department
------------------------------------------------------------------------

III. Background

    Section 4116 of the FCEA amended section 11 of the Act to require 
the Department to define ``major changes'' in SNAP operations, State 
agencies to notify the Department when they implement a major change in 
SNAP operations, and to collect data for use in identifying and 
correcting problems with SNAP integrity and access, particularly among 
vulnerable populations. Many State agencies have changed or are in the 
process of changing the way they operate SNAP. Some of these changes 
have been small and have predominately impacted internal State agency 
operations. However, some of the changes have also included major 
overhauls of State agency operations that affect how the State 
interacts with applicants and participants. While the goal of such 
changes is to improve the efficiency and the effectiveness of the 
States' operations, some of these changes have

[[Page 2729]]

adversely impacted the States' payment accuracy rates, and, critically, 
have impeded access to SNAP benefits. In recent years, States have 
faced rising caseloads and cut backs which in part have led many States 
to make use of new technologies that could help streamline their SNAP 
operations. Section 4116 of the FCEA anticipates this and provides the 
Department the authority to better provide States with technical 
assistance and to monitor implementation of major changes in their 
operation of SNAP. The proposed rule published May 3, 2011, at 76 FR 
24820, provided a 60-day comment period. This final rule defines what 
changes to States' operations will be considered ``major,'' establishes 
the requirements for States to notify FNS of such changes and 
establishes reporting requirements for major changes. States' ME 
requirements have also been updated to allow States time to conduct 
more effective reviews. The changes will allow States to streamline 
operations while maintaining the integrity of SNAP.

Public Comments

    The Department received 120 comments on the NPRM from various 
entities including: 95 individuals (many of whom are union members); 4 
unions; 10 advocate organizations; 10 States; and an organization 
representing States. Following are the issues raised by commenters, 
paraphrased excerpts from the most illustrative comments, and 
recommendations they made for changes to this final rule. (Note: The 
May 3, 2011 NPRM proposed to add the Major Change provisions to a new 
Sec.  272.12. However, this section now deals with Computer Matching 
Requirements. The provisions of this final rule are added in a new 
Sec.  272.15. References in this preamble to provisions of the proposed 
rule have been converted from Sec.  272.12 to Sec.  272.15 to reduce 
confusion between the proposed and final rules.) General comments on 
the NPRM include:

General Comments

     We commend FNS for including application processing 
timelines at recertification (proposed Sec.  272.15(b)(1)(iii)) as one 
of the measures it will examine in the event of a major change.
     SNAP is an entitlement program. Therefore, the processes 
related to SNAP eligibility determinations are inherently governmental 
functions and must be performed by public employees. The proposed rule 
also includes changes to the performance reporting system, including 
elimination of the Federal biennial review of the State ME system. The 
proposed changes weaken Federal oversight of SNAP, and we recommend 
that the current requirements be maintained.
     The proposed language creates the impression that States 
may be able to secure waivers or approval for the use of non-merit 
system personnel. We urge FNS to re-affirm its conclusions that it 
strongly disfavors the use of non-merit system personnel and not to 
change its position. The experience of our office and many other 
advocates is that all too often non-merit system personnel lack the 
training, supervision, experience and exposure to agency culture 
necessary to ensure maximum program access.
     The Preamble states that ``FNS has determined that the use 
of non-merit system personnel in these functions can have a detrimental 
impact on the efficient and effective operation of the program,'' but 
then proceeds to explain that FNS must approve the use of non-merit 
system personnel. It is contrary to good sense and effective public 
policy for the Department to authorize this model when the Department 
itself acknowledges that all available evidence to date documents 
costly failures.
     Section 4116 of the FCEA gives FNS the authority to 
identify ``major changes'' and to collect information on those changes, 
but it does not allow FNS to prevent or impair States' ability to 
implement administrative changes that otherwise meet legal and 
regulatory requirements. With this proposed regulation, FNS appears to 
go beyond its mandate under the law. FNS should take a proactive 
approach to assist States to quickly implement successful reengineering 
changes and to use existing SNAP performance data to measure outcomes 
rather than impose additional burdensome reporting requirements.
     If implemented as written, we believe this regulation 
could prevent, weaken or at the very least delay many administrative 
improvements that would otherwise quickly bring a new level of 
efficiency, integrity and customer service to SNAP.
     By not imposing any on-going data collection obligations 
under this provision, the proposed rule denies the Department a 
baseline. If data collection begins only after a problem has arisen, 
the Department will be ill-equipped to assess the severity of the 
problem and may be misled into believing that the problem has abated 
when measures of State performance rise even as the State's performance 
remains far below what it had been. At the same time, the proposed 
rule's failure to require all States to gather and submit basic data on 
application processing, case closures, and the like--and its failure to 
establish common definitions and formats for the collection and 
submission of that data to facilitate inter-state comparison--prevents 
meaningful cross-sectional comparison.
     We request that the Department reconsider the scope of the 
proposed regulation to more closely mirror the Federal law, and to 
minimize duplicative and unnecessary reporting requirements when 
existing performance measures can be used.
     While many of the regulatory changes were proposed to 
address legitimate issues, we are concerned that some of the proposed 
changes would negatively impact the ability for States to administer 
SNAP and the recipients that they serve. Many of the regulatory changes 
also appear to exceed the language and intent of the FCEA, and appear 
to run counter to recent Federal efforts to reduce, simplify and 
streamline regulations.
     The final regulation must be changed to ensure that 
nationally consistent and straightforward data collection from any 
state that makes a major change in their service delivery model is 
publically available.
    As these general concerns indicate, commenters were divided with 
several believing that the proposed rule went too far, even beyond the 
FCEA provisions, in terms of its requirements and others suggesting 
that the final rule should impose additional requirements on States. 
The Department understands and appreciates these differing viewpoints, 
and seeks to provide proper balance in this final rule by allowing for 
effective oversight of SNAP operations while recognizing States' 
resource constraints.
    States are charged with the administration of SNAP and have broad 
discretion in deciding how they operate the program. This rule does not 
restrict States' discretion at all; it simply requires States to inform 
FNS of significant changes and provide information on their impact. In 
FY 2014, SNAP issued over $69 billion in benefits to a monthly average 
of 46.5 million individuals in need. The Federal share of 
administrative costs for States to operate SNAP totaled another $4.13 
billion in FY 2014. Given the importance of SNAP in helping struggling 
families and the level of Federal funding, the Department believes this 
provision of the Act is critical to FNS' meeting its oversight 
responsibilities.

[[Page 2730]]

    There have been several situations in recent years where States 
made major changes to staffing, automated systems or business processes 
that had unintentional, adverse impacts on the accessibility and 
integrity of the program. FNS worked with these States to correct the 
problems, but these efforts were costly to the States in terms of time, 
additional administrative costs, business process modifications, and, 
in some cases, payments to the Department for benefits issued in error. 
If FNS had been aware of these changes earlier and had more detailed 
data, it is likely that some of the difficulties could have been 
minimized or even avoided. Implementation of this final rule is 
intended to provide FNS with the information it needs to fulfill its 
responsibilities to act as a steward of taxpayer funds, protect access 
to SNAP benefits for eligible individuals, and to provide States with 
technical assistance as necessary.
    Many of the comments received from individuals, unions and advocacy 
organizations focused on what appears to be a misunderstanding of the 
intent of the provision of the proposed rule dealing with use of non-
merit system personnel in the administration of SNAP. While this 
provision is discussed in more detail later in this preamble, it is 
important to note that the proposed rule included the use of non-merit 
system personnel as a major change to ensure that the Department is 
aware of States' plans in this area prior to implementation. There was 
no intent to identify the use of non-merit system personnel in the 
administration of SNAP as a State option that the Department would 
support. On the contrary, the Department opposes and has actively 
sought to limit use of such staff in the administration of SNAP due to 
the negative impacts this has had on SNAP households and State 
agencies. The Department also agrees with the comment that States' 
reports on the implementation of major changes should be made available 
to the public.

Discussion of Comments Grouped by Provision and Issue

    Provision/Issues--Sec.  272.15(a)(1): State agencies shall notify 
FNS when they make major changes in their operation of SNAP. State 
agencies shall notify FNS when the plans for the change are approved by 
State leadership, but no less than 120 days prior to beginning 
implementation of the change.
    Public Comments and Recommendations--Ten commenters addressed this 
provision of the proposed rule and their comments included the 
following:
     The lengthy timeframes by which FNS intends to manage 
change is unreasonable. A 120-day advance alert of a change and a 90-
day response time for FNS chokes the State's ability to respond quickly 
and effectively to its customer's needs and changes in the political, 
financial and technological environments.
     The regulation allows FNS 90 days to respond to reports of 
major changes. Added to 120 days, this is over 7 months before a State 
could implement a change. This is unrealistic; FNS response time should 
be no more than 30 days from the date the report was submitted. The 
regulation also doesn't state what should happen if the FNS response is 
not received within 90 days. The regulation should state that 
implementation could proceed if that occurs.
     Because of the potential for additional significant 
reporting requirements (which State systems may not have been 
programmed to provide), and the apparent potential to disapprove of a 
``major change'' or require a change in one or more aspects of 
implementation, States must have sufficient time to include such 
requirements in their implementation and be aware of FNS objections 
well before implementation. Otherwise, the proposed process can 
significantly delay or derail implementation.
     Under standard accounting and budget practices, this 120-
day requirement would effectively reduce the State and counties' 
ability to implement major changes in the second half of the State's 
fiscal year, and would cause delays beyond the initial 120 days. For 
example, an online application may support new applications initially, 
and then later add additional client reporting functions, which are 
modified due to lessons learned.
     It appears that these proposed regulations greatly exceed 
what was originally specified in the bill. The regulations speak of 
notifying FNS 120 days before a major change, while the FCEA merely 
states that if a State implements a major change they must notify FNS 
and provide information as required. Having to submit information prior 
to implementation as opposed to at the point of implementation would be 
a major workload and barrier. There is a big distinction between 
notification and approval, and these regulations tread dangerously into 
having the Federal government require States to seek approval prior to 
making major changes.
     The level of detail that must be included in the initial 
report will potentially add 120 days of lead time to initiatives. 
Although States do conduct much of the analysis in the normal course of 
any policy change, the specific nature and the depth of the analysis 
requirements of the proposed regulations is overly burdensome. We 
recommend that FNS re-evaluate the proposed 120-day timeframe and 
create an evaluation system that is more flexible.
     The 120-day minimum notice requirement is a timeframe that 
the majority of States would be unable to meet. Twenty-six States enact 
new State legislation within 90 days of passage unless otherwise 
declared in the specific legislation. The proposed rule's assumption 
that, ``any properly planned major change would be approved by State 
leadership well in advance of implementation'' is inconsistent with the 
fast-paced, budget-driven environment that exists in today's economy. 
The advance notice requirement also presumes that FNS has authority to 
approve or deny a specific plan of operation beyond the limits of the 
act. The provision requires that States mitigate adverse impacts, but 
does not give FNS approval authority over State agency operations.
     The notification requirement is not sufficient. The final 
regulations should require not only that States notify FNS 120 days 
prior to implementation but also at least 120 days prior to entering 
into legal obligations to implement any proposed major changes.
     Both the requirement that States submit an initial report 
and the 120-day timeframe should be maintained in the final rule.
     Allow States to submit an annual report on major changes 
that were not previously identified thru an Advance Planning Document 
(APD) (e.g., reductions in staffing levels or office closures). FNS 
will still be able to negotiate with States on the additional reporting 
requirements after they have received the annual report.
     FNS response time should be no more than 30 days from the 
date the report was submitted. The longer the time to implement, the 
less chance the change will be implemented.
    Final Rule--To clarify, the provisions of this rule do not give FNS 
authority to approve or deny a reported major change. However, it is 
important to note that existing provisions of the SNAP regulations 
require FNS approval or waivers for a variety of operational and policy 
changes that may constitute or be related to a major change.
    Significant changes to States' automated systems require submission 
of an APD for development and

[[Page 2731]]

procurement. For any major change that does not require waiver 
authority or approval outside of this rule, States need not wait for 
FNS approval of their major change notification or a response to their 
major change notification.
    In response to comments that States sometimes are not aware of a 
major change 120 days in advance of implementation, the Department has 
modified the language in the final rule to account for these 
situations. However, by definition, major changes are significant and 
the Department generally believes that to be well planned and thought 
through, such changes require at least 120 days lead time. Therefore, 
the final rule maintains the 120-day reporting timeframe, but allows 
for rare instances when States cannot report with this amount of lead 
time. In such instances, States will be required to explain the lack of 
lead time.
    Provision/Issues--Sec.  272.15(a)(2): Major changes shall include 
the following criteria (comments on individual criteria discussed 
below):
    Public Comments and Recommendations--While almost all commenters 
offered their thoughts and recommendations on some aspect of the major 
change criteria in this section (as discussed below), a few comments 
were more general. General comments on this section include the 
following:
     The final rules should include a residual category for any 
other major changes in State administration that the Department or a 
State agency identifies as having the potential to adversely affect 
program integrity or access. Even the best program administrators would 
not likely have anticipated all of the challenges the program faces 
today had they attempted to compile a list like this one a decade or 
two ago.
     FNS should categorize major changes as being significant, 
medium or small, and require different reporting based on the scope of 
the change that the State is planning to make. FNS would retain 
discretion to require more reports in unusual circumstances, but this 
change would make the reporting requirements more predictable for 
States and for FNS. For significant changes, we recommend that FNS 
require States to report statewide information that will allow FNS and 
the State to assess whether the State's process is adequately providing 
access to eligible households, with enough detail on sub-state areas 
and sub-populations within the State that problems can be identified 
and corrected.
     FNS should offer States the option to report certain new 
measures on an ongoing, statewide basis as an alternative to reporting 
each separate major change with an initial report and the subsequent 
negotiated data reports. FNS should retain discretion to require 
additional reports if the need arises.
    Final rule--The Department has included in the final rule the 
ability for the Department to define additional criterion under which 
States must report major changes at Sec.  272.15(a)(2)(vi), to cover as 
yet unknown developments in State SNAP operations. The addition of this 
``other'' criteria is based upon advocates' concerns that as time 
passes States could make innovative changes that are not enumerated in 
the regulations, and thus would not be required to be reported. The 
Department has not adopted the suggestion that major changes be 
categorized by ``size.'' After careful consideration, the Department 
believes that this approach would unnecessarily complicate the final 
rule by requiring the development of additional definitions and 
explanation with minor impacts on its implementation.
    The Department has not adopted the recommendation that an option be 
provided that would allow States to begin reporting certain new 
measures on an ongoing, statewide basis as an alternative to reporting 
on each separate major change. Such an option would seem to offer 
States little incentive since they would incur the additional cost of 
ongoing data reporting that may not be needed. In addition, if a few 
States were to adopt this option, it is not clear what FNS would do on 
an ongoing basis with data reported by a limited number of States. On 
the other hand, States can always submit additional information to FNS 
even without a formal option to do so. Additional information might 
also be required, depending on the nature of the major change.
    Provision/Issues--Sec.  272.15(a)(2)(i): Closure of one or more 
local offices that perform major functions for 500 or more SNAP 
households, and there is not another office available to serve the 
affected households within 25 miles or that can be reached via public 
transportation.
    Public Comments and Recommendations--Twelve commenters addressed 
this provision of the proposed rule and their comments included the 
following:
     We agree that office closings are major changes. However, 
even if there is another office within 25 miles or that can be reached 
by public transportation, the change is unquestionably major if the 
nearest office takes more than an hour to get to or costs more than $10 
round trip to reach by public transportation. The final regulation 
should provide a limit on the travel time by public transportation of 
one-hour one-way.
     The final rule should make clear that households are at 
risk of hardship if the nearest office is either at least twenty-five 
miles away or not accessible via public transit. Of course, offices in 
some rural areas inevitably will not be on public transit lines because 
none exist. This rule does not prohibit such situations; it merely 
calls for monitoring of their impacts. The final rule should make clear 
that the closure of any office that takes applications requires 
scrutiny; of course, if another nearby office remains available nearby, 
the closure would not be a major systems change.
     The proposed triggers are unrealistic in many States, 
including a closure that would require clients to travel more than 25 
miles; there are many areas where households already do not live within 
25 miles of a local office.
     We recommend that this section be rewritten to require 
States to report when an office is closed that serves five percent of 
their caseload.
     The opportunity for face-to-face contact for all clients 
in a conveniently located physical setting might be desirable, but it 
is not realistic in today's highly constrained fiscal environment. 
Services for clients will not necessarily suffer if staff is reduced or 
offices are closed. Interactions through electronic and automated means 
allow clients to choose a contact time that is best for them and allows 
them to do so from their home or other location with computer access 
(as is the case with numerous community organizations). Accompanied by 
the appropriate alternative methods and technology, not only can office 
closures be done without negative effects, but they can be done while 
improving program access and integrity. The proposed standards of 25 
miles and 500 households are ridiculously low, and do not even remotely 
reflect the realities of the way business currently is being done by 
the States.
     This definition may inadvertently include certain part-
time or temporary eligibility worker locations, such as mobile vans or 
out-stationed workers and a change in schedule or termination of these 
placements should not be included as a major change. These types of 
temporary office locations are developed as a result of caseload or 
administrative funding decisions that may vary from year to year, and 
should not be considered a major change.
     The harsh financial realities that States are facing may 
leave no choice other than to consolidate their offices.

[[Page 2732]]

However, given the opportunities that clients will have for telephonic 
contact with State agencies, we do not believe that such consolidations 
will result in negative effects, but will likely improve access and 
integrity. In our opinion, office consolidation should not be 
considered a major change.
     Rural States have many areas with more than 25 miles 
between towns. The miles should be increased to 100 or more. Also the 
number of households served should be increased from 500 to 1000.
     In general, the office closure standard should be retained 
in the final rule. The regulation's standard of office closures that 
affect 500 households or more is reasonable and allows States to 
consolidate very small offices where they can achieve administrative 
efficiencies, while still protecting households' ability to appear in 
person to apply and get assistance. The final regulation should be 
revised to clarify that an office closure would count toward the State 
meeting the criterion only if there is another office within 25 miles 
or that can be reached easily via public transportation.
     The final regulation should provide that, to qualify as an 
office that ``performs major functions'', the office must be a place 
where households can file an application and receive assistance in 
filling out the application from a State employee.
    Final Rule--It is important to clarify that the Department does not 
assume that local office closures are always negative, but they do 
reduce program access for some households. As some commenters point 
out, the actions States take to offset such closure may benefit many 
other households. While keeping office closures as a major change 
criterion is necessary to provide FNS with information regarding the 
impact of the closures and what a State is doing to offset the impact 
of the closure, the Department modified this criterion in the final 
rule in response to commenter's concerns. The Department has increased 
the number of SNAP households affected by a local office closure from 
500 to 750 households and changed the distance to another office 
available to serve the affected households from 25 to 35 miles. To 
balance these changes, the Department has also modified the final rule 
by setting the threshold that an office closing that represent the 
lower of 750 households or at least 5 percent of a State's caseload 
will be considered a major change. Thus, for example, if a State had a 
caseload of 14,000 and an office with 701 households is being closed, 
this would require a report because it would be more than 5 percent of 
the State's caseload.
    The reference to public transportation has been eliminated to 
simplify the criteria and because the cost of public transportation 
beyond 35 miles is generally prohibitive for SNAP households. The 
Department has also specified that an ``office performing major 
function'' is an office where households can file an application for 
SNAP in person and receive assistance from merit system personnel. 
Closing a ``temporary'' office or changing the location of a mobile 
unit would not be considered a major change.
    Provision/Issues--Sec.  272.15(a)(2)(ii): Substantial increased 
reliance on automated systems for the performance of responsibilities 
previously performed by State merit personnel (as described in section 
11(e)(6)(B) of the Act) or changes in the way that applicants and 
participants interact with the State's SNAP agency. Establishment of an 
online application process through the Internet or the use of call 
centers to accept applications would not be a major change unless one 
of these methods is expected to account for five percent or more of the 
State's SNAP application. Reporting a major change as required in this 
section does not relieve States of meeting the requirements for new 
system approvals in Sec.  277.18.
    Public Comments and Recommendations--Twelve commenters addressed 
this provision of the proposed rule and their comments included the 
following:
     State systems are regulated under Sec.  277.18. This 
section requires States to obtain prior approval from FNS for automated 
data processing equipment used in the administration of SNAP. Requiring 
States to complete another detailed document to notify FNS of change is 
duplicative, inefficient and unnecessary. The information in the APD 
could be expanded to include the analysis that would have been required 
with the 120-day advance notice.
     Business rules of eligibility determination and benefit 
calculation are already built into the systems that workers use. The 
business rules, design and function of these systems are tested and 
approved by merit system employees.
     Discussion under this criterion again reveals an 
assumption that changes such as call centers will almost by definition 
jeopardize customer service and access. This contradicts the experience 
of many State systems that have dramatically improved client service 
and access by the use of call centers.
     The final rule should make all new or expanded online 
application systems and call center arrangements subject to review as 
major systems changes.
     Document imaging systems should be included as a major 
change. In our experience, the introduction of a document imaging 
system is in fact a major change in office operations which has the 
potential to greatly enhance or undermine program administration and 
client access to benefits.
     The proposed rule identifies the ``replacement'' of the 
State's certification system as an example of a systems change. 
Recommend that the final rule be changed to include significant changes 
to automated systems that fall short of ``replacement,'' such as adding 
major new functions or a web-based tool that feeds into an older 
system.
     The proposed regulation makes clear that the reporting 
requirements for major changes under the proposed rule do not remove 
the separate APD approval requirements under Sec.  277.18. This is an 
important clarification and should be retained in the final rule.
     Recommend the final regulation provide that online and 
telephone applications will be considered a major change unless a State 
can demonstrate to FNS' satisfaction that such applications will not 
account for more than five percent of applications once the new 
application is fully implemented.
    Final Rule--The Department has made several changes to clarify this 
provision based upon the above comments and recommendations. The 
Department has clarified that a State must report the replacement of an 
automated system, adding functionality to an existing automated system 
and changes that impact the way applicants and participants interact 
with SNAP unless the State documents that less than five percent of the 
caseload will be affected by the change. Examples of changes that 
increased reliance on automation that would likely affect five percent 
or more of a State's caseload include, linking a portal (a computer Web 
site that allows greater access and functionality) to the State's SNAP 
eligibility system, introducing online applications, call centers, and 
finger imaging. The Department recognizes that technologies are 
evolving and the major changes that will be reported under this 
criterion may evolve as States find new practices that will improve 
efficiency and customer service.
    Provision/Issues--Sec.  272.15(a)(2)(iii): Changes in operations 
that potentially increase the difficulty of households reporting 
required information. This

[[Page 2733]]

includes implementation of a call center for change reporting, a major 
modification to any forms that households use to report changes, or the 
discontinuation of an existing avenue for reporting changes, (e.g., 
households can no longer call the local office to report a change). 
Modifying selected change reporting policy options or the 
implementation of policy waivers would not be major changes.
    Public Comments and Recommendations--Nine commenters addressed this 
provision of the proposed rule and their comments included the 
following:
     To ensure that changes in reporting practices and 
technologies do not harm households, it is important that this 
criterion be retained in the final regulation. There are two places 
where the proposed regulation needs to be changed in light of the other 
proposed rule that was published in the Federal Register on the same 
day regarding change reporting rules. First, this proposed regulation 
at Sec.  272.15(a)(2)(iii) uses the example that States might 
``[discontinue] an existing avenue for reporting changes, e.g., 
households [could] no longer call the local office to report a 
change.'' This example should be removed or refined. In addition, FNS 
should remove the clause that suggests that policy waivers could be 
needed to implement a change reporting policy option.
     The final rule should treat as a major systems change any 
change in the systems that households must use for reporting changes 
except a simple switch between the reporting options allowed under 
section 6(c) of the Act.
     Discussion under this criterion appears to assume that 
changes such as call centers will almost by definition jeopardize 
customer service and access. This contradicts the experience of many 
State systems that have dramatically improved client service and access 
by the use of call centers.
     This section should be rewritten so that States are 
required to report only when reducing reporting options or requiring 
one specific process. Likewise, changing a form does not rise to the 
level of change intended by the Act.
     Considering a modification to, or even a complete redesign 
of, a form for reporting to be a ``major'' change represents an 
unwarranted and unnecessary level of intrusion into the States' 
administration of the program.
     This seems to presuppose that portals built by States for 
change reporting will automatically derive a negative impact. Today, 
customers can contact the agency in a wide variety of ways, e.g., via 
the telephone at multiple locations, through Web sites and in person at 
community partners and service locations.
    Final Rule--Based upon comments, the Department has revised the 
final rule to: (1) Add as a major change the adoption of internet 
portals to report changes in household circumstances; (2) clarify the 
example from the proposed rule to focus attention on a change that 
would limit participants' reporting avenues; and (3) clarify that 
States selecting reporting options allowed under the rules or obtaining 
a waiver from FNS are separate actions, but that neither would be 
considered a major change.
    Provision/Issues--Sec.  272.15(a)(2)(iv): Use of non-merit pay 
staff to perform functions previously performed by merit personnel. 
While the interview and the eligibility decision functions must be 
performed by merit personnel (unless FNS approves a waiver request 
under Section 17 of the Act), other functions including obtaining 
verification of household circumstances, accepting reports of changes 
in household circumstances, accepting applications and screening 
households for expedited service may be performed by non-merit 
personnel (although FNS must approve a State's use of non-merit pay 
staff before matching funds will be provided for the performance of 
these functions). Functions such as data entry and document imaging do 
not involve interaction with households, and consequently, the use of 
non-merit pay staff in activities of this type would not constitute a 
major change.
    Public Comments and Recommendations--This proposed provision 
received attention from 105 commenters (10 advocacy/legal aid groups, 
the American Public Human Services Association (APHSA), 5 States, 4 
unions, and 85 individuals, many, who appeared to be case workers/union 
members that submitted form letters). Except for APHSA and the States, 
the commenters overwhelmingly opposed inclusion of this criterion as a 
major change. The reason most often cited is that including use of non-
merit system personnel in the definition of a major change gave the 
appearance that the Department accepted such a change as an allowable 
State choice. Many commenters acknowledged that the preamble to the 
proposed rule expressed the Department's opposition to using non-merit 
system personnel, outlined the limitations in the Act on the functions 
such staff may perform, and explained that, without approval, FNS may 
not match funding for non-merit system personnel working in SNAP 
operations. However, several commenters felt that any use of non-merit 
system personnel should be prohibited in the rule. There was also a 
recommendation that any significant increase in reliance on other 
agencies, including ``community partners'' and other non-profit or 
local government entities, should be considered a major systems change. 
The primary recommendation from commenters is to remove this criterion 
from the definition of a major change. Some commenters suggested that 
information on use of non-merit system personnel could be obtained by 
amending Sec.  272.15(a)(2)(v) on decreases in staffing levels to 
accomplish the same goal. If that criterion were amended to say that 
cuts in merit systems staff triggered the report, then any State that 
tried to replace merit systems personnel with private employees would 
meet the trigger criterion. APHSA and the States that commented on this 
provision generally objected to the Department's position that use of 
non-merit system personnel will result in poor program administration. 
They felt that the Department's position reduces States' ability to be 
innovative in improving program operations and respond to reduced 
budgets and increased caseloads. They felt it is inappropriate to 
prejudge based upon the experience in a couple of States. Specific 
comments included the following:
     The final rule should explicitly identify all functions 
that may require discretion or professional judgment as ``eligibility 
decision functions'' that may not be privatized.
     Further clarification is requested on the issue of the 
specific functions that non-merit system personnel may perform. Any 
significant increase in reliance on other agencies, including 
``community partners'' and other non-profit or local government 
entities, should be considered a major systems change.
     While the statute names this criterion as one that FNS can 
examine, it does not allow the agency to prejudge the impact of using 
non-merit system personnel.
     The final regulation must be changed to ensure 
privatization is not codified and legitimized in Federal regulations as 
an allowable option.
     The preamble to the proposed rule acknowledges that 
privatization of work currently performed by public employees 
constitutes a major change and that States would be required to report 
this change to FNS. The Department acknowledges that non-merit system 
personnel interacting directly with households has the potential of 
increasing the burden on

[[Page 2734]]

households applying for and participating in SNAP. It is contrary to 
good sense and effective public policy for the Department to authorize 
this model when the Department itself acknowledges that all available 
evidence to date documents costly failures.
     We are very much opposed to the apparent legitimization of 
the use of non-merit system personnel to perform critical SNAP 
functions. In our experience, private entities do a poor job of 
executing traditional State functions. Even well-meaning nonprofit 
organizations are unable to maintain timeliness, statewide uniformity 
and accuracy when they take over activities that have traditionally 
been done by merit system personnel. For-profit entities have even 
greater incentive to cut corners, regardless of the consequences for 
households. We urge FNS to strike proposed Sec.  272.15(a)(2)(iv).
     Many States have instituted fundamental delivery system 
changes hastily, such as closing offices and opening call centers. 
Privatized call center operations in two States proved to be disastrous 
for SNAP beneficiaries and applicants.
     There is no reason to codify a practice that the 
Administration opposes and would not allow in the future.
     The proposed language creates the impression that States 
may be able to secure waivers or approval for the use of non-merit 
system personnel. If FNS's position remains that it is not likely to 
grant a waiver to use non-merit system personnel for interviews and 
certification, and that it has determined that Federal financial 
participation (FFP) is not appropriate for use of non-merit system 
personnel in other client contacts, we recommend that the final 
regulation specify this policy so as not to encourage States to go down 
this path.
     We strongly oppose the provisions in the proposed 
regulation that would allow the privatization of the SNAP certification 
process and the waiver of the merit system requirements. The Department 
previously advised States that it did not support privatization of 
portions of the SNAP certification process. The preamble to the 
proposed regulation notes these same concerns.
    Final Rule--Many comments on this provision of the proposed rule 
reflected a lack of clarity regarding the Department's intent. It is 
important to clarify that it was never the Department's intent to 
condone the use of non-merit system personnel in SNAP. On the contrary, 
the intent was to require States to report to FNS if they planned to 
begin using such staff in the administration of the program. The 
preamble to the proposed rule stated that, ``In addition, FNS has 
determined that use of non-merit system personnel in these functions 
can have a detrimental impact on the efficient and effective operation 
of the program and, as a consequence, must approve States' use of such 
staff before sharing in the costs of non-merit staff in the performance 
of the above functions.'' The Department continues to believe that the 
use of non-merit system personnel can be detrimental to program 
performance and service to participants and in April 2013, reiterated 
its concerns and policy regarding outsourcing in a letter to all 
States' Governors. In response to the significant number of comments, 
the Department has modified this provision in the final rule. The final 
rule requires States to report on any reduction or change of the 
functions or responsibilities currently assigned to SNAP merit system 
personnel staff. This will include, but not be limited to, relieving or 
supplementing merit system personnel's duties performed in the SNAP 
certification process, handling reported changes, responding to 
inquiries, handling complaints, collecting claims, investigating 
program violations or conducting SNAP related reviews. With this change 
in the final rule, a State will be required to notify FNS if it intends 
to change the role of its merit system personnel in any way that could 
impact SNAP operations, including the increased reliance on automated 
systems.
    Provision/Issues--Sec.  272.15(a)(2)(v): Any decrease in staffing 
levels from one year to the next of more than five percent in the 
number of State or local staff involved in the certification of SNAP 
households. This would include decreases resulting from State budget 
cuts or hiring freezes, but not include loss of staff through 
resignation, retirement or release when the State is seeking to replace 
the staff.
    Public Comments and Recommendations--Fourteen commenters addressed 
this provision of the proposed rule and their comments included the 
following:
     Delete the language requiring States to notify FNS of 
office closures or reductions in staffing levels as it goes beyond the 
authority of the statute.
     We strongly support including large decreases in staffing 
levels as one of the types of State changes that would trigger a State 
to report to FNS. This criterion should be retained in the final 
regulation. Also recommend that FNS: Add a staff cut of more than ten 
percent over three years as another measure of a decrease in staffing 
levels that would need to be reported; clarify that a decrease in merit 
system personnel would need to be reported; provide that cuts in State 
staff would not count ``losses of staff that occur through resignation, 
retirement or release when the State is seeking to replace the staff''; 
and strengthen the final rule to clarify that the State must be seeking 
to replace the staff within the year to not warrant a report.
     We suggest that FNS identify an additional baseline for 
staffing that would also trigger the application of this regulation. 
For example, a measure of cases per certification worker might be 
appropriate, so that States that have relatively few workers for the 
size of their caseload would be subject to this regulation in the event 
of staffing reductions, even if the five percent threshold were not 
met.
     Support the recognition that adequate staffing is critical 
if States are to provide adequate service. However, the proposed 
regulations should be modified to recognize that ``staffing levels'' 
are not a measure of the absolute number of full-time equivalents, but 
rather a measure of the ratio of staff to the number of cases. If the 
ratio of staff to SNAP cases decreases either because of staff 
reductions or because of an increase in the caseload, the staffing 
level has declined even if the number of staff is constant.
     The final rule should make clear that it refers to full-
time equivalent (FTE) staff working on SNAP. The final rule should 
require States to report, on a county or regional basis, the FTE staff 
administering the program each month.
     This proposal ignores scenarios in which staff reductions 
could be accompanied by well-known efficiency measures such as adoption 
of broader categorical eligibility rules, the six-month reporting 
option, or the implementation of an efficient new method of using 
electronic tools for verification of income. The proposed rule could 
also have an unusually severe impact on locally administered offices; 
if the five percent trigger is applied to them as well, some are so 
small that they might have to report the elimination of a single 
employee or even reductions in one employee's hours.
     A prescribed reduction reporting threshold of five percent 
would be difficult for States to track. This is true especially if 
States must include loss of staff to budget cuts and temporary hiring 
freezes. This requirement should be removed from the proposed rule.

[[Page 2735]]

     As written, it is unclear how the proposed rule would be 
applied to those States that are State-supervised but locally-
administered. We urge FNS to consider only requiring the States to 
report aggregate, statewide reductions in State and local staffing, not 
reductions at each local office.
     Reductions in staffing levels or the imposition of hiring 
freezes are budget actions that may not be known to or determined by 
the State or local agencies until after a budget action has occurred, 
and it may be impossible to notify FNS 120 days in advance. This 
definition of a five percent decrease in staff is not explicitly 
identified in the FCEA, and imposition of this requirement goes beyond 
the intent of the legislation.
     This will be difficult to administer. Staff reductions are 
controlled by the Governor and the Legislature, not State agencies. 
Also, five percent is unreasonable. The five percent should be 
increased to at least ten percent at a minimum. This rule should be 
changed to state that if staff reductions of greater than ten percent 
are mandated, FNS should be notified of the change and how the State is 
handling the change.
     The final rule should require States to report, on a 
county/regional basis, the FTE staff administering the program by 
month.

Final Rule

    The final rule retains the basic requirement that a decrease of 
more than five percent in the number of State or local merit system 
personnel involved in the certification process of SNAP households from 
one year to the next will be considered a major change. In addition, 
the Department agreed with commenters that cumulative decreases beyond 
a single year can have a significant impact. Consequently, the final 
provision has been modified to also make a decrease of more than eight 
percent in the number of State or local merit system personnel involved 
in the certification process of SNAP households over a two year period 
a major change.
    Also in response to commenters' suggestions, the language of this 
provision has been clarified and strengthened. A reference to decreases 
across the State was added since this criterion is intended to apply to 
the total number of merit personnel in States rather than in each 
individual local office or county within a State. Major changes include 
decreases resulting from State budget cuts or hiring freezes, but do 
not include loss of staff through resignation, retirement or release 
when the State is seeking to replace the staff within a 6-month 
timeframe. Evidence of the intent to replace staff includes advertising 
to fill positions and having sufficient funding in the personnel budget 
for the new hires.
    It is important to note that this criterion defines when States are 
to report to FNS. The notification and accompanying analysis will allow 
FNS to determine whether there is a need for additional information.
    Provision/Issues--Sec.  272.15(a)(3): When a State initially 
reports a major change to FNS, as required in Sec.  272.15(a)(1), an 
analysis of the expected impact of the major change shall accompany the 
report. The initial report to FNS that the State is making one of the 
major changes identified in Sec.  272.15(a)(2) shall include a 
description of the change and an analysis of its anticipated impacts on 
program performance.
    Public Comments and Recommendations--Seven commenters addressed 
this provision of the proposed rule and their comments included the 
following:
     FNS is correct to require States in the initial report to 
describe the features and timing of the planned major change, what it 
is intended to accomplish, how it will be tested, piloted, and 
monitored and the expected effects on eligibility workers and 
recipients. All of these elements should be maintained in the final 
rule.
     The word disproportionately should be deleted from 
proposed Sec.  272.15(a)(3)(ii)(E). Also, the two ``ands'' in the 
paragraph should be changed to ``ors''. Not all of these types of 
households need to be affected or features of the certification process 
need to be more difficult. If one is true, then the clause should 
apply.
     FNS should add one additional item to the list of items in 
the initial report: A discussion of the budgetary effects of the 
change. This item should include the estimated cost of any systems 
change, as well as the expected overall budgetary impact of the change 
for State and Federal SNAP costs, including benefit costs and 
administrative costs.
     The five general analysis requirements are well-rounded, 
pulled from existing data, and should be sufficient to meet the 
intentions of the Act.
     The final rule should require States to explain any stages 
in implementation, either as the change is fully implemented in one 
area or as it rolls out across multiple areas (whether or not it 
eventually becomes statewide).
     The final rule should require the State to disclose what 
testing it has undertaken prior to implementing the change.
     Several of the factors listed in proposed Sec.  
272.15(a)(3)(ii) are not so much measures as they are aspects of 
program performance. It should also include: The State's participation 
rate; share of households leaving the program at the conclusion of 
their certification periods; and the percentage of applications 
(divided by expedited initial applications, non-expedited initial 
applications, and applications for recertification) that are approved, 
are denied for substantive ineligibility (or eligibility for zero 
benefits), and are denied for procedural reasons.
     We support proposed Sec.  272.15(a)(3), which details the 
type of information that States must provide to FNS in connection with 
a planned major change. However, we suggest the regulation require 
States to analyze the impact of the change on timely processing of 
recertifications. The final rule should also require States to have a 
meaningful process for consulting with stakeholders (including program 
beneficiaries, advocates, community organizations and anti-hunger 
groups).
     The regulations should require States intending to 
implement major changes to submit to FNS copies of procedures and other 
documents demonstrating that the State has taken steps to minimize the 
potential negative impact of the proposed change on individuals with 
disabilities.
     FNS has quite sensibly acknowledged that the data 
collection requirements mandated by section 4116 of FCEA, as far as 
possible, should use data and reports already provided or available to 
meet these requirements.
     Much of the data in question will be a normal part of any 
APD request in any event. The potential requirement for county-level 
impact data will be particularly difficult to implement, and that 
caseload sizes in many counties are low enough that the validity of 
data will be highly questionable.
     The data collection mandates in this regulation would 
largely duplicate existing information that FNS has, and create 
increasingly burdensome data collection and report preparation.
     FNS does an excellent job summing up what the Act requires 
in the opening paragraph. The remaining information is overly detailed, 
rigid and so burdensome to States that it will stall innovations, and 
prevent access and program integrity improvements in the SNAP program.
     States do not have the time or resources to address every 
issue required to be reported.

[[Page 2736]]

Final Rule

    The final rule retains the basic requirement that States' reports 
of major changes include a description of the change to be implemented 
and an analysis of its expected impacts on SNAP. In addition, the 
Department agreed with commenters that additional data items are 
necessary. Consequently, the final provision has been modified to add 
the following:
     The projected administrative cost of the major change in 
the year it is implemented and the subsequent year;
     A description of any consultation with stakeholders/
advocacy groups or public comment obtained regarding the planned 
changes; and
     Procedures the State will put in place to minimize the 
burdens on people with disabilities and other populations relative to 
the change.
    Also, in response to commenters' suggestions, the language of Sec.  
272.15(a)(3)(ii)(E) as amended by the final rule has been clarified to 
replace the use of the word ``and'' in two places with the word ``or''. 
While seemingly minor, this change is important in examining the 
potential effect of major changes in SNAP on vulnerable populations.
    Some suggestions made for additional data to be reported were not 
adopted because the Department could not determine how the data would 
be used in making its determination or what, if any, data would be 
needed from the State beyond the automatic reporting requirements 
discussed below.
    Provision/Issues--Sec.  272.15(b)(1)-(5): Sec.  272.15(b)(1) FNS 
will evaluate the initial report provided by a State to determine if it 
agrees that the change is, in fact, major and, if so, will propose what 
information it will require from the State. While FNS reserves the 
right to require the information it needs to determine the impact of a 
major change on integrity and access in SNAP, FNS will work with States 
to determine what information is practicable, and require only the data 
that is necessary and not otherwise available from ongoing reporting 
mechanisms. Depending upon the nature of the major change, FNS will 
require more specific or timely information concerning the impact of 
the major change (Please see the NPRM for full text of the proposed 
provision).
    Sec.  272.15(b)(2): Additional data that States could be required 
to provide, depending upon the type of major change being implemented. 
(The rule goes on to give specific examples of the types of data that 
may be required relative to different types of major changes. Please 
see the NPRM for full text of the proposed provision).
    Sec.  272.15(b)(3): Depending on the type of major change, its 
implementation schedule and negotiations with FNS, States shall submit 
reports on their major changes either monthly or quarterly.
    Sec.  272.15(b)(4): States shall submit reports for one year after 
the major change is fully in place. FNS may extend this timeframe as it 
deems necessary.
    Sec.  272.15(b)(5): If FNS becomes aware that a State appeared to 
be implementing a major change that had not been formally reported, FNS 
would work with the State to determine if it is a major change, and if 
so proceed as required by this section.
    These provisions are closely related and commenters' thoughts and 
recommendations are best examined together.
    Public Comments and Recommendations--Fifteen commenters addressed 
these provisions of the proposed rule and their comments included the 
following:
     Collecting detailed data with case reviews is particularly 
burdensome for State and local staff during transition periods, and 
could negatively impact customer service.
     Support the proposed regulation's detailed discussion of 
the types of information that FNS will require from the State as to the 
impact of the change. We commend FNS for its careful identification of 
the types of information needed to assess the effects of major changes, 
especially as they pertain to the effects on beneficiaries.
     The proposed regulation at Sec.  272.15(b)(2)(iii)(B) 
through (b)(2)(iii)(D) on call centers requires information on ``hold 
time,'' ``wait time'' and ``abandoned calls''. The final rule should be 
amended to also include instances when a caller cannot get through 
(e.g., busy signals or dropped calls).
     Particularly troubling is the emphasis of the proposed 
rules on potentially requiring county level impact data for changes 
deemed to be ``major''. Again, such a requirement does not reflect the 
reality of the way many States operate. Even in those States that have 
county project areas, caseload size and case activity volumes in a 
given county often can make the gathering of the representative samples 
necessary to evaluate the effect of a change on that county difficult, 
and the confidence level of short term evaluations questionable.
     FNS should categorize major changes as being small, medium 
or significant and require different reporting based on the scope of 
the change that the State is planning to make. FNS would retain 
discretion to require more reports in unusual circumstances, but this 
change would make the reporting requirements more predictable for 
States and for FNS.
     FNS should offer States the option to report certain new 
measures on an ongoing, statewide basis as an alternative to reporting 
each separate major change with an initial report and the subsequent 
negotiated data reports.
     The final rule should sort major systems changes into 
categories based on their likely risk. More data should be required for 
riskier changes.
     We recommend that the exact measures be made more explicit 
in the final regulation and that FNS' discretion to introduce new 
measures and enter into negotiations with States be narrowed. These 
measures include sub-state information or case reviews to gather more 
detailed information on measures FNS already has at the State level, 
such as payment accuracy, negative error rates and timeliness.
     States should have an ongoing data collection system for 
monitoring their monthly performance in processing of applications and 
recertifications. FNS should require all States to have such a data 
collection system, regardless of whether the State is embarking on a 
major system change.
     To the extent that the final rule continues to rely upon 
case-by-case negotiated data requests rather than a stronger baseline 
of data provided on an on-going basis by all States, it also should 
specify in greater detail the data that the Department is likely to 
desire and indicate that the Department will attempt to avoid seeking 
more data than those elements except for the riskier categories of 
changes.
     FNS should use the extensive data already collected in 
SNAP except in the most unusual situations.
     The level of detailed data reporting that is being 
proposed may not be appropriate for all major changes, unless the scope 
of major changes is significantly narrowed. While the proposed Federal 
regulations specify that FNS will negotiate with the States on the 
reporting requirements and that FNS will utilize available data (e.g., 
quality control data), the amount of information that is required would 
be administratively onerous and costly given the potentially high 
degree of frequency that such changes could occur, conflicts with the 
Paperwork Reduction Act, and neither the counties nor the States have 
the additional staff resources.
     A State implementing a major change should submit data 
regarding

[[Page 2737]]

individuals with disabilities including the numbers of individuals who 
requested and received accommodations in the application, interview, or 
recertification process for disabilities, and the types of 
accommodations requested and provided (some State benefit agencies 
already have policies requiring the agency to track this information).
     The final rule should provide for careful evaluation of 
the sufficiency of the State agency's fallback plan, including the 
availability of the resources necessary to carry it out. The final rule 
should provide that returning to the prior method of administration 
should presumptively be one of the elements of the State agency's 
fallback plan unless the State agency presents compelling reasons why 
it should not be.
     The break-out of negative errors is important, but needs 
to be augmented. It also should include break-outs of denials between 
substantive and procedural. Moreover, it should be broken-out to 
identify problems affecting specific types of households, such as 
elderly persons who may have less comfort with technology or limited 
English proficient households who may have difficulties with online 
systems not in their language.
     The proposed regulations reflect a common sense approach 
to analyzing the effects of a major change. States with effective 
administration should already be collecting and analyzing the types of 
data specified in Sec.  272.15(b)(3) regardless of Federal regulations.
     Nowhere in the Act is FNS given the authority to approve 
or deny a change a State intends to make, and yet throughout the 
proposed rule this authority is not only implied, but is assumed.
     One commenter recommended that States be required to 
submit the data for each month on a quarterly basis for two years after 
the change is implemented (unless States have adopted the recommended 
ongoing reporting option).

Final Rule

    The final rule retains the requirement that States will be required 
to report on the impact of major changes. However, the most significant 
modification to this final rule is the adoption of the suggestion from 
commenters that key ``automatic'' reporting requirements be established 
for all major changes. This is in response to commenters' suggestions 
that the regulations prescribe basic data that FNS will require for all 
major changes, as certain data elements would be useful in examining 
the impact of any major change in a State's operation. While the final 
rule retains FNS' ability to require additional information on a case-
by-case basis (Sec.  272.15(b)(5)), the final rule establishes minimum 
data reporting requirements for all major changes, which will also 
enable States to build these requirements into their plans and systems 
when making major changes.
    This change has required some reorganization of the provisions as 
they appeared in the proposed rule. Sec.  272.15(b)(1), (2) and (3) 
identify the data elements that shall be reported for all major 
changes, as well as those that must be broken out specifically for 
households with elderly and disabled members and those that are to be 
reported at the sub-State level (e.g., counties or local offices). 
Reporting this information for the most vulnerable SNAP households is 
consistent with the Act and the need to identify and address adverse 
impacts on program access for households that may struggle with change 
more than others. The Department agrees with the comments regarding 
local level reporting that sub-state information is generally necessary 
for States and FNS to understand, monitor, and address adverse impacts 
of a major change. The impacts can be uneven across urban and rural 
areas, for example, and can vary based upon the how and when a major 
change is rolled out in different jurisdictions. This is particularly 
true in county administered/state supervised situations. Since States 
generally collect sub-state information for their own management 
purposes, the Department expects the required inclusion of this 
information in reports to FNS should require minimal additional effort 
for most States. Therefore, Sec.  272.15(b)(3) as amended by this final 
rule requires the majority of the key ``automatic'' reporting 
requirements be disaggregated to provide sub-state information. Because 
States utilize different units of analysis for management and other 
purposes, the regulation allows sub-state data to be provided by 
individual districts, counties, project areas, or local offices, 
subject to consultation with and approval by FNS. Section 272.15(b)(4) 
as amended by this final rule retains the provisions from the proposed 
rule that FNS will evaluate the major change to determine what 
reporting requirements will be necessary. In light of the ``automatic'' 
requirements for all major changes discussed above, this determination 
will focus on what, if any, additional reporting requirements will be 
necessary.
    The recommendation that reporting requirements be applied to all 
certification activities that are carried out using other telephonic 
methods has not been adopted since States have been using telephones in 
their operation of SNAP for decades. However, using telephonic 
technology to accept applications or relying upon an interactive voice 
response system to provide case status information to participants 
would be a major change under Sec.  275.15(a)(2)(ii) as amended by this 
final rule.
    Some comments reflected misunderstandings of the proposed rule. As 
noted earlier, this final rule does not provide FNS with approval 
authority over States' plans to make a major change. Nor does the Act 
give the Department the authority to require additional ongoing 
reporting on State performance and operations beyond the context of 
major changes.
    Some comments suggested that requiring additional reporting 
indicates an assumption that major changes are detrimental to SNAP 
participants. On the contrary, FNS has long supported States' efforts 
to modernize and agrees that many State innovations have improved 
operations. Nevertheless, there have been times when well-intentioned 
changes have had adverse impacts on program access or integrity and 
FNS, not fully informed of States' plans, was unable to work with the 
State and help mitigate these impacts. Furthermore, certain changes 
have a greater inherent potential to adversely affect SNAP operations 
if they are not compensated for appropriately, e.g., office closings or 
staff reductions.
    With regard to the suggestion that the final rule categorize major 
changes as being small, medium or significant, and require different 
reporting based on the scope, the Department has not adopted this 
suggestion because it would complicate the rule and limit FNS' 
discretion without significantly streamlining the process for States or 
FNS. This rule is intended to provide FNS with the ability to examine 
major changes individually and require additional information beyond 
the automatic reporting requirements. For all major changes, FNS will 
also look to the data it already collects on an ongoing basis, i.e., 
quality control data. While FNS is interested in knowing what 
contingency plans a State may have, the suggestion that FNS should 
require States to have specific fall back plans is beyond the scope of 
the Act.
    The recommendation that the provisions of the final rule be applied 
to major changes made prior to its effective date has not been adopted 
for several reasons. First, States would have to obtain historical data 
on the impact of

[[Page 2738]]

the change and such data is typically more difficult to obtain. 
Secondly, States' reports received on the impact of these older changes 
would be out of date and therefore less useful to FNS in monitoring 
their impact. Finally, the Department only requires retroactive 
implementation of final rules when it is both practical and there is a 
compelling need; neither of which apply to this rule. The 
recommendation for two years of monthly reports would exceed the 
Departments needs and place an unnecessary burden upon States. The 
suggestion that States be required to submit the monthly data on a 
quarterly basis has been adopted in the restructured final rule in 
Sec.  272.15(b)(5). While the one year requirement is retained from the 
NPRM in this final rule at Sec.  272.15(b)(6), FNS may extend this 
timeframe if necessary. The provision from Sec.  272.15(b)(5) in the 
NPRM is retained in this final rule at Sec.  272.15(b)(7).
    Provision/Issues--Sec.  272.15(b)(6): If the data a State submits 
regarding its major change or other information FNS obtains indicates 
an adverse impact on SNAP access or integrity, FNS would work with the 
State to correct the cause of the problem and provide whatever 
technical assistance it can. Depending upon the severity of the 
problem, FNS may require a formal corrective action plan as identified 
in Sec.  275.16 and Sec.  275.17.
    Public Comments and Recommendations--Three commenters addressed 
these provisions of the proposed rule and their comments included the 
following:
     Strongly recommend that the final regulation be 
strengthened to identify the full range of action that FNS is 
authorized to initiate in response to information from the State about 
planned major systems changes.
     Although requiring correction of problems that have arisen 
is sensible and appropriate, it puts the Department and the State 
agency in the all-too-familiar position of playing catch-up after a 
problem has occurred. The final rule should restructure this paragraph 
to focus on the implementation of the State agency's fallback plan or 
plans.
     ``Adverse impact'' is not defined, which could lead to 
subjective and inconsistent results among regions regarding when a 
corrective action plan is imposed. Existing performance measures 
already have standards that States must meet, and corrective action 
plans can be required for failure to meet those standards. At best, the 
new process is duplicative; at worst, it opens up an avenue for 
corrective action plans for anything that FNS may decide has an 
``adverse impact.''

Final Rule

    As explained earlier, the Department has neither the authority to 
approve or deny (unless a State's plans violate a provision of the Act 
or SNAP regulations) a State's plans, nor can it require that States 
develop fallback plans. With regard to when a State would be required 
to submit a corrective action plan due to an adverse impact, the 
Department agrees that the provisions of this rule could open another 
avenue for identification and correction of deficiencies in a State's 
operation; this is the intent of the Act. Therefore, the provision (now 
at Sec.  272.15(b)(8)) as amended by this final rule remains unchanged 
from the NPRM.
    Provision/Issues--Sec.  275.3(a): FNS shall conduct management 
evaluation reviews of certain functions performed at the State agency 
level in the administration/operation of the program. FNS will 
designate specific areas required to be reviewed each fiscal year.
    Public Comments and Recommendations--Thirteen commenters addressed 
these provisions of the proposed rule and their comments included the 
following:
     FNS and States should be engaging in additional monitoring 
activities of local service delivery, not fewer. The changes FNS 
proposes to ME reviews have no basis in statute -the 2008 FCEA made no 
changes to reduce FNS's oversight role. ME reviews are also the primary 
way that FNS monitors civil rights compliance. The final rule must not 
back away from FNS's commitment in these areas.
     Caseloads have increased dramatically in recent years 
while, at the same time, the number of staff to process cases has not 
kept pace. This development points to the need for more, not less 
frequent, reviews because of the risk of access barriers. We recommend 
that the final rule reject these changes to the ME regulations and keep 
the current requirements.
     The proposed regulation will weaken the longstanding 
requirement for ME reviews of State certification operations, and fails 
to require straightforward, publically available and nationally 
consistent data collection from States making major changes in their 
service delivery model. The proposal eviscerates a decades-old 
requirement that States and FNS conduct ME reviews of State 
certification operations. Such ME reviews are the cornerstone of FNS 
oversight of client access and program integrity.
     The solution to staffing shortages is to prioritize. 
Reducing oversight of the largest program in the Department is not a 
sensible means of prioritizing. If the problem is an insufficient 
Federal Program Administration appropriation, the Department should 
realign staffing of the various food assistance programs to be more 
proportional to the taxpayers' dollars at stake in each.
     Oppose the proposed changes that eliminate the requirement 
for an annual review of certain functions performed at the State agency 
level and the elimination of the requirement for a biennial review of 
the State's ME system. The proposed regulation, which lacks any 
specified frequency for reviews, could lead to FNS's abdication of 
these reviews for all practical purposes, now or in the future. The 
requirement that FNS designate specific areas for review each year does 
not necessarily mean that FNS must in fact conduct such reviews.
     FNS should define what qualifies as ``at-risk'' to provide 
for consistency in the different regions. Providing the data for these 
``off-site'' activities is more time-consuming for the States unless 
Federal reviewers are given total access to State systems.
     We agree with the increased flexibility given to FNS in 
the conduct of MEs under the proposed rule and encourage that similar 
flexibility and ability to target reviews be given to the States in the 
conduct of their annual MEs.
     We appreciate FNS' targeted approach and suggest that the 
reviews be less targeted by frequency and size, but more by performance 
and need.
     We disagree with FNS removing its own burdens in the ME 
process while keeping the States' current requirements basically 
unchanged.
     The term ``at-risk'' is vague. Recommend keeping the 
current requirement of a biennial review of the State's ME system. 
Having scheduled Federal reviews on a biennial basis would allow States 
to plan accordingly.
     State and Federal ME requirements should not be changed. 
Proposals to weaken them should not be included in the final rule.

Final Rule

    Based upon comments received, the Department is withdrawing the 
changes to this provision from the final rule. The Department agrees 
that monitoring SNAP is a high priority responsibility for FNS and 
supports the goal of maintaining sufficient resources to

[[Page 2739]]

enable proper oversight of SNAP operations.
    Provision/Issues--Sec.  271.2: Amend the definitions of Large, 
Medium, and Small project areas for ME review purposes.
    Public Comments and Recommendations--Five commenters addressed 
these provisions of the proposed rule and their comments included the 
following:
     These changes in the definitions of project areas are 
likely to have significant negative impacts on civil rights compliance 
within SNAP. Reducing the frequency or intensity of ME reviews will 
have the effect of reducing efforts to identify and correct civil 
rights violations.
     We recommend that the final rule reject these changes to 
the ME regulations and keep the current requirements.
     We agree with the need for a modification to the 
definitions of large and medium project areas but contend that the 
revised definitions do not reflect the reality of the larger States. We 
recommend further review of these proposed standards and even higher 
caseload thresholds in order to reflect the project areas of the large 
States.
     These were the definitions that were in effect for 
California until FY 2011. Given the limitation of staff and resources, 
this new definition would create a workload issue in California. We 
recommend redefine project areas as follows:
    [cir] Large--those with an average monthly caseload of more than 
50,000 cases.
    [cir] Medium--those with an average monthly caseload of between 
25,000 and 50,000 cases.
    [cir] Small--those with an average monthly caseload up to 24,999 
cases.

Final Rule

    Comments on this provision of the rule were mixed with some 
commenters believing that the provision of the proposed rule did not go 
far enough in reducing the frequency with which States are required to 
review their project areas. The Department acknowledges that while more 
monitoring of SNAP is generally more desirable than less monitoring, 
the quality of the monitoring must also be a factor. Reductions in 
States' budgets have put pressure on staffing for SNAP and this 
provision allows States to do a better job in the ME reviews that are 
conducted. Furthermore, the project area sizes in the current rules 
were set when the program was less than half its current size in terms 
of participation. Therefore, this provision of the final rule remains 
unchanged from the proposed rule.

List of Subjects

7 CFR Part 271

    Food stamps, Grant programs-social program, Reporting and 
recordkeeping.

7 CFR Part 272

    Alaska, Civil rights, SNAP, Grant programs-social programs, 
Penalties, Reporting and recordkeeping requirements, Unemployment 
compensation, Wages.

7 CFR Part 275

    Administrative practice and procedure, SNAP, Reporting, and 
recordkeeping requirements.

    Accordingly, 7 CFR parts 271, 272 and 275 are amended as follows:

PART 271--GENERAL INFORMATION AND DEFINITIONS

0
1. The authority citation for Part 271 continues to read as follows:

    Authority:  7 U.S.C. 2011-2036.


Sec.  271.2  [Amended]

0
2. In Sec.  271.2:
0
a. Amend the definition of Large project area by removing the number 
``15,000'' and adding in its place the number ``25,000''.
0
b. Amend the definition of Medium project area by removing the numbers 
``2,001 to 15,000'' and adding in their place the numbers ``5,000 to 
25,000''.
0
c. Amend the definition of Small project area by removing the number 
``2,000'' and adding in its place the number ``4,999''.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

0
3. The authority citation for Part 272 continues to read as follows:

    Authority: 7 U.S.C. 2011-2036.


0
4. Add Sec.  272.15 to read as follows:


Sec.  272.15  Major changes in program design.

    (a) States' reporting of major changes. (1) State agencies shall 
notify FNS when they make major changes in their operation of SNAP. 
State agencies shall notify FNS when the plans for the change are 
approved by State leadership, but no less than 120 days prior to 
beginning implementation of the change or entering into contractual 
obligations to implement any proposed major changes. If it is not 
possible for a State to provide notification 120 days in advance, the 
State shall provide notification as soon as it is aware of the major 
change and explain why it could not meet the 120-day requirement. No 
approval from FNS is necessary for a State to proceed with 
implementation of the major change.
    (2) Major changes shall include the following:
    (i) Closure of any local office that performs major functions for 
750 or more SNAP households or 5 percent of the State's total SNAP 
monthly caseload, whichever is less, and there is not another office 
available to serve the affected households within 35 miles. An office 
performing major functions is an office where households can file an 
application for SNAP in person and receive assistance from merit system 
personnel staff.
    (ii) Substantial increased reliance on automated systems for the 
performance of responsibilities previously performed by State merit 
system personnel (as described in section 11(e)(6)(B) of the Act) or 
changes in the way that applicants and participants interact with the 
State's SNAP agency. This includes the replacement of the State's 
automated systems used in the certification process, adding 
functionality to the existing automated systems used in the 
certification process, or changes in the way applicants and 
participants interact with SNAP. For example, adding an overlay on an 
existing legacy automated system used by eligibility workers, adding 
online portals to an existing automated system for use by SNAP 
applicants, participants or community partners, establishment of an 
online application, use of telephonic technology to accept 
applications, relying upon an interactive voice response system to 
provide case status information to participants or implementation of 
finger imaging shall be considered major changes. Under this criterion, 
if the State documents that the change is expected to impact less than 
five percent of the State's SNAP applicants or participants, it will 
not be considered a major change. Reporting a major change as required 
in this section does not relieve States of meeting the requirements for 
new system approvals in Sec.  277.18 of this chapter.
    (iii) Changes in operations that potentially increase the 
difficulty of households reporting required information. This could 
include implementation of a call center or internet web portal for 
change reporting, a major modification to forms that households use to 
report changes or the discontinuation of an existing avenue for 
reporting changes (e.g., households can no longer contact the local 
office because all changes must be reported to

[[Page 2740]]

a unit that handles change reports). Selecting a different change 
reporting policy option as allowed in Sec.  273.12 of this chapter, or 
the implementation of a policy waiver related to change reporting would 
not be a major change.
    (iv) Any reduction or change of the functions or responsibilities 
currently assigned to SNAP merit system personnel.
    (v) A decrease of more than 5 percent in the total number of merit 
system personnel involved in the SNAP certification process in the 
State from one year to the next. In addition, a decrease of more than 
eight percent in the total number of merit system personnel involved in 
the SNAP certification process in the State over a two year period 
would be a major change. These decreases would include those resulting 
from State budget cuts or hiring freezes, but not include loss of 
personnel through resignation, retirement or release when the State is 
seeking to replace the personnel within 6 months. Evidence of the 
intent to replace personnel shall include advertising to fill positions 
and having sufficient funding in the personnel budget for the new 
hires.
    (vi) Other major changes identified by FNS.
    (3) When a State initially reports a major change to FNS as 
required in paragraph (a)(1) of this section, an analysis of the 
expected impact of the major change shall accompany the report. The 
initial report to FNS that the State is making one of the major changes 
identified in paragraph (a)(2) of this section, shall include a 
description of the change and an analysis of its anticipated impacts on 
program performance.
    (i) The description of the change shall include the following:
    (A) Identification of the major change the State is implementing;
    (B) An explanation of what the change is intended to accomplish;
    (C) The schedule for implementation;
    (D) How the change will be tested and whether it will be piloted;
    (E) Whether the change is statewide or identification of the 
jurisdictions it will encompass;
    (F) How the major change is expected to affect applicants and/or 
participants and how they will be informed;
    (G) How the change will affect caseworkers and, as applicable, how 
they will be trained;
    (H) The projected administrative cost of the major change in the 
year it is implemented and the subsequent year;
    (I) How the impact of the major change will be monitored;
    (J) How the major change will affect operation of the State 
automated system;
    (K) The State's backup plans if the major change creates 
significant problems in one or more of the program measures in 
paragraph (a)(3)(ii) of this section;
    (L) A description of any consultation with stakeholders/advocacy 
groups or public comment obtained regarding the planned changes; and
    (M) Procedures the State will put in place to minimize the burdens 
on people with disabilities and other populations (as identified in 
paragraph (a)(3)(ii)(E) of this section) relative to the change.
    (ii) The analysis portion of the State's initial report shall 
include the projected impact of the major change on:
    (A) The State's payment error rate;
    (B) Program access, including the impact on applicants filing 
initial applications and recertification applications;
    (C) The State's negative error rate;
    (D) Application processing timeliness including both the households 
entitled to 7-day expedited service and those subject to the 30-day 
processing standards;
    (E) Whether the major change will increase the difficulty elderly 
households, households living in rural areas, households containing a 
disabled member, homeless households, non-English speaking households, 
or households living on a reservation will have obtaining SNAP 
information, filing an initial application, providing verification, 
being interviewed, reporting changes or reapplying for benefits;
    (F) Customer service including the time it takes for a household to 
contact the State, be interviewed, report changes and any other 
parameter defined by the State agency; and
    (G) Timeliness of recertification actions.
    (b) FNS and State action on reports. (1) FNS will evaluate the 
initial report provided by a State to determine if the change is, in 
fact, a major change as described in paragraph (a)(2) of this section 
and notify the State of its determination. States implementing a major 
change shall report the following monthly State-level information to 
FNS on a quarterly basis beginning with the quarter prior to 
implementation of the major change:
    (i) The number of initial applications received;
    (ii) Of the number of initial applications received in paragraph 
(b)(1)(i) of this section, the number subject to expedited service;
    (iii) Of the number of initial applications received in paragraph 
(b)(1)(i) of this section, the number broken out by method of 
application (i.e., in-person, online, telephone, mail, fax);
    (iv) The number of initial applications that are approved timely;
    (v) Of the number of initial applications approved timely in 
paragraph (b)(1)(iv) of this section, the number subject to expedited 
service processed within the 7-day processing requirement;
    (vi) The number of initial applications that are approved untimely;
    (vii) Of the number of initial applications approved untimely in 
paragraph (b)(1)(vi) of this section, the number subject to expedited 
service processed outside the 7-day processing requirement;
    (viii) The number of initial applications that are denied;
    (ix) Of the number of initial applications that were denied in 
paragraph (b)(1)(viii) of this section, the number broken out by those 
denied due to ineligibility and those denied because the State agency 
was unable to determine eligibility;
    (x) The total number of households due for recertification;
    (xi) The number of recertification applications received;
    (xii) Of the number of recertification applications received in 
paragraph (b)(1)(xi) of this section, the number broken out by method 
of application (i.e., in-person, online, telephone, mail, fax);
    (xiii) The number of households that were recertified without a 
delay or break in benefits;
    (xiv) The number of households that the State recertifies with a 
delay or break in benefits of less than one month;
    (xv) Of the total number of households due for recertification in 
paragraph (b)(1)(x) of this section, the number of households that fail 
to reapply for recertification by the required deadline;
    (xvi) The number of recertification applications that are denied; 
and
    (xvii) Of the number of recertification applications that were 
denied in paragraph (b)(1)(xvi) of this section, the number broken out 
by those denied due to ineligibility and those denied because the State 
agency was unable to determine eligibility.
    (2) The information required by paragraph (b)(1)(1) of this section 
shall be reported separately for households with elderly members and 
households with members that have a disability.
    (3) At a minimum, the information required by paragraphs (b)(1)(i), 
(iv),

[[Page 2741]]

(vi), (viii), (x), (xi), (xiii), (xiv), (xv), and (xvi) of this section 
shall be disaggregated to provide sub-state information. FNS will 
require the State to disaggregate all the information in paragraph 
(b)(2) if FNS determines that such data are necessary to evaluate the 
impact of the change. FNS will consult with States on a case-by-case 
basis to determine if this information shall be reported by: Local 
offices, call centers, county, project areas, or by other 
administrative structures within the State. FNS' determination will be 
based upon the type of major change and the State's SNAP organization.
    (4) In addition the information required in paragraphs (b)(1), (2) 
and (3) of this section, FNS may require additional information to be 
included in a State's quarterly report. FNS reserves the right to 
require the information it needs to determine the impact of a major 
change on integrity and access in SNAP. FNS will work with States to 
determine what additional information is practicable and require only 
the data that is necessary and not otherwise available from ongoing 
reporting mechanisms. While the data elements outlined in paragraph 
(b)(2) of this section will generally be required to be reported on a 
statewide basis and at a sub-state level, major changes that are 
limited to localized areas, such as a county or project area, may only 
require localized reporting. Depending upon the nature of the major 
change, States will be required to report more specific or timely 
information concerning the impact of the major change within the 
following areas:
    (i) Payment accuracy. FNS will use Quality Control (QC) data when 
possible, but may require data from case reviews focused on households 
with specific characteristics, to obtain greater local reliability, or 
to provide more timely data.
    (ii) Negative error rates. FNS will use QC data when possible, but 
may require data from case reviews focused on households with specific 
characteristics, to obtain greater local reliability or to provide more 
timely data on the causes of incorrect denials.
    (iii) Impact on households with specific characteristics. In 
addition to the information required by paragraph (b)(2) of this 
section, a major change that could disproportionately impact the 
households identified at paragraph (a)(3)(ii)(E) of this section may 
require additional information on the impact of the change on the 
participation of these households. The nature of the change and its 
potential impact would dictate how this information would need to be 
reported.
    (iv) Impact of certain major changes on customer service. Some 
major changes may require specific information that is not typically 
available from a States automated SNAP system. For example, if a State 
implements a major change that allowed (or required) households to 
report changes in their individual circumstances through a change 
center or allows applicants to apply or reapply for SNAP through the 
use of call center, the following data may be required:
    (A) The total number of calls made to the center;
    (B) The average time a caller has to wait to talk to a SNAP worker 
(includes hold time for transfers);
    (C) Based upon the call centers standards and negotiation with FNS, 
the percentage of calls with excessive wait times;
    (D) The percentage of calls abandoned by callers prior to and after 
being answered by the call center;
    (E) The total number of calls dropped by the call center system and 
the number of callers that received a busy signal; and
    (F) Customer satisfaction (based upon survey results).
    (5) States shall submit reports containing monthly data on a 
quarterly basis. As practicable, and based upon consultation with the 
State, FNS may require any additional information under paragraph 
(b)(4) of this section regarding the State's operation to be reported 
for the quarter just prior to implementation of the major change.
    (6) States shall submit reports for one year after the major change 
is fully in place. FNS may extend this timeframe as it deems necessary.
    (7) If FNS becomes aware that a State appeared to be implementing a 
major change that had not been formally reported, FNS would work with 
the State to determine if it is a major change, and if so proceed as 
required by this section.
    (8) If the data a State submits regarding its major change or other 
information FNS obtains indicates an adverse impact on SNAP access or 
integrity, FNS would work with the State to correct the cause of the 
problem and provide relevant technical assistance, and will require the 
State to provide additional information as it deems appropriate. 
Depending upon the severity of the problem, FNS may also require a 
formal corrective action plan as identified in Sec.  275.16 and Sec.  
275.17 of this chapter. States agencies that fail to comply with 
reporting requirements may be subject to the suspension or disallowance 
of Federal Financial Participation administrative funds per Sec.  276.4 
of this chapter.

PART 275--PERFORMANCE REPORTING SYSTEM

0
5. The authority citation for Part 275 continues to read as follows:

    Authority: 7 U.S.C. 2011-2036.


0
6. In Sec.  275.7:
0
a. Revise paragraph (a) to read as set forth below.
0
c. Remove paragraphs (b), (c) and (d).
0
d. Redesignate paragraph (e) as paragraph (b).
0
e. Amend newly redesignated paragraph (b) by removing the word ``on-
site''.


Sec.  275.7  Selection of sub-units for review.

    (a) Definition of sub-units. Sub-units are the physical locations 
of organizational entities within project areas responsible for 
operating various aspects of SNAP and include but are not limited to 
certification offices, call centers, and employment and training 
offices.
* * * * *

0
7. In Sec.  275.9:
0
a. Revise paragraph (b)(1)(iii) to read as set forth below.
0
b. Amend paragraph (b)(1)(iv) by removing the first sentence.


Sec.  275.9  Review process.

* * * * *
    (b) * * *
    (1) * * *
    (iii) Identification of the sub-units selected for review and the 
techniques used to select them;
* * * * *

0
8. In Sec.  275.16 revise paragraph (b)(3) to read as follows:


Sec.  275.16  Corrective action planning.

* * * * *
    (b) * * *
    (3) Are identified by FNS reviews, GAO audits, contract audits, 
reports to FNS regarding the implementation of major changes (as 
discussed in Sec.  272.15) or USDA audits or investigations at the 
State agency or project area level (except deficiencies in isolated 
cases as indicated by FNS); and,
* * * * *

    Dated: December 10, 2015.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2016-00674 Filed 1-15-16; 8:45 am]
BILLING CODE 3410-30-P