Letter to State Commissioners on Implementing Welfare Reform in the Food Stamp Program
This letter describes the new statutory requirements for state agency implementation of the Food Stamp Program (FSP) provisions of PL 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, signed by the President on Aug. 22, 1996. We are also providing information regarding proposed and interim rules the Food and Consumer Service (FCS) will publish and guidance relating to the Simplified Program option, FCS waiver authority, and quality control. Additional information regarding implementation of the provisions affecting noncitizens will be provided separately.
Provisions and Implementation Dates
The enclosed charts indicate the method by which FCS is implementing each provision of the legislation and the timeframe for state agency implementation. Within each chart, provisions are grouped by program area, such as certification, disqualification, claims, work requirements, and state flexibility. As indicated in the FCS implementation column, we plan to publish an interim regulation to implement the provisions of the law concerning changes in allotments, deductions, household composition, and the fair market value of vehicles. These provisions require no interpretation or discretion. The rule will, however, have a brief comment period. Proposed rules will be published addressing the other provisions.
Part A of the enclosure lists the provisions that are effective on the date of enactment. We understand the burden that immediate implementation places on state agencies; however, in the absence of specific implementation language in the legislation for these provisions, state agencies are required by Federal law to implement these provisions as of the date of enactment. Specific implementation procedures are provided on the enclosure.
Part B lists provisions for which Congress provided specific implementation requirements. These provisions have a variety of required implementation dates. Changes in allotments and deductions must be implemented as mass changes.
Part C lists options available to state agencies. State agencies need to submit amendments to the state plan indicating the options that have been selected. One of the options addresses the homeless shelter allowance. Prior to the PRWORA, section 11(e)(3) of the Food Stamp Act required state agencies to establish standard estimates of the shelter expenses of homeless households. This estimate was used determining the household's excess shelter expense unless the household verified higher expenses. Section 809 of the PRWORA changed the required standard estimate to an optional homeless shelter allowance and added it to section 5(e)(5) of the Food Stamp Act as a separate deduction between the child support and medical deductions. Although the legislative history indicates that the allowance was to be used in calculating an excess shelter expense deduction, the statutory language does not reflect that intent. Therefore, state agencies must discontinue use of the homeless expense estimate and may opt to use a homeless expense deduction as provided by the PRWORA.
Part D lists provisions which remove current requirements and have no mandatory implementation action. State agencies will be able to modify current procedures in accordance with their own schedules.
The legislation provides states agencies the option of operating a Simplified Food Stamp Program (SFSP) in a political subdivision of a state or statewide. The SFSP is restricted to public assistance households who receive cash assistance under the Temporary Assistance to Needy Families (TANF) programs operated under Title IV-A of the Social Security Act. However, states may request inclusion of mixed nonpublic assistance (NPA) and TANF households. The Simplified Program allows a state to substitute many TANF rules for food stamp rules in an effort to streamline administration. NPA households cannot be included in the SFSP.
The operation of any SFSP must be approved by USDA. Additionally, SFSP cannot increase Federal costs for any fiscal year and must comply with certain statutory FSP requirements. If USDA withdraws approval of a state's SFSP due to noncompliance, the state is ineligible to operate a SFSP in the future. Optional provisions are also available to the state under SFSP. The specifics of the requirements and options will be included in subsequent guidance.
FCS Waiver Authority
The legislation amends Section 17(b) of the Food Stamp Act to significantly expand USDA's waiver authority to conduct pilot or experimental projects that improve program administration, increase self-sufficiency, allow greater conformity with the rules of other programs, and that are consistent with the goal of providing food assistance to raise levels of nutrition among low-income individuals.
Projects have restrictions relative to the percentage of benefit reduction and affected households and duration. In addition, USDA is prohibited from approving projects that include certain components. As with the SFSP, the specifics of the statutory parameters will be provided in subsequent guidance.
Provisions effective upon enactment:
Changes affecting currently participating households are to be implemented upon recertification, at the household's request, or when it is necessary to implement other changes affecting the household. The following procedures will be used for all cases with review dates after enactment of the law.
Beginning 30 days after enactment, there will be a 120-day variance exclusion period for any states that have implemented the provisions of the PRWORA. During this period, reviewers will exclude all variances that resulted from any misapplication of the new provisions. If a state has not implemented the required changes within 30 days after enactment for the required households, reviews will be conducted against the new provisions and errors will be cited as appropriate. If a state implements later than 30 days following enactment, but before the 120 days expire, the subject variances will be excluded for the number of days remaining in the 120-day period.
Reviews will be conducted against states' preimplementation policies (1) during the 30 days following enactment for all cases that have not yet been converted to the new provisions and (2) after the 30 days for all cases that were not required to have been converted to the new provisions. The 120-day variance exclusion period will be administered in accordance with 7 CFR 275.12(d)(2)(vii) as modified by the Mickey Leland Childhood Hunger Relief Act (PL 103-66).
Provisions effective October 1, 1996 and January 1, 1997:
Mass change provisions - Quality control reviews will be conducted based upon the new provisions for all cases with review dates on or after the effective date of the provisions. The 120-day variance exclusion period will not apply to these mass changes.
Fair Market Value provision - Quality control reviews will be conducted based upon the new provisions for all cases certified, recertified or otherwise requiring conversion after October 1, 1996. The 120-day variance exclusion period will begin October 1, 1996 for this provision for all states that have implemented.
Work requirement provision of Section 824:
States must implement this provision by notifying applicants and recipients of the application of the work requirement no later than November 22, 1996. This provision is not effective until the earlier of:
(1) the date the state notifies the applicable households or
(2) three months following enactment. Three months following the effective date, individuals that do not meet the requirements of this provision will become ineligible. Therefore, for this provision, the 120-day variance exclusion period will begin three months following the state's effective date.
We hope the enclosed information will be helpful to you in implementing the provisions of the law. Please contact your Regional Office if you have any questions.
Yvette S. Jackson
Food Stamp Program