[Federal Register Volume 73, Number 154 (Friday, August 8, 2008)]
[Proposed Rules]
[Pages 46230-46232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18208]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Part 261
RIN 0970-AC38
Temporary Assistance for Needy Families (TANF) Program,
Elimination of Enhanced Caseload Reduction Credit for Excess
Maintenance-of-Effort Expenditures
AGENCY: Administration for Children and Families (ACF), Department of
Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Administration for Children and Families proposes to
revise the TANF regulations to eliminate the provision that allows a
State to receive additional caseload reduction credit for maintenance-
of-effort (MOE) expenditures in excess of its required MOE spending.
This provision is no longer necessary and not consistent with
Congressional direction in the Deficit Reduction Act of 2005.
DATES: We will consider all comments received on or before October 7,
2008.
ADDRESSES: You may submit your comments in writing to the Office of
Family Assistance (OFA), Administration for Children and Families, 5th
Floor East, 370 L'Enfant Promenade, SW., Washington, DC 20447, or hand
deliver to OFA/ACF, 5th Floor East, 901 D Street, SW., Washington, DC
20447. You may download an electronic copy of the proposed rule at the
Federal Rulemaking Portal: http://www.regulations.gov and may download
a copy and transmit electronic comments at the agency Web site: http://www.regulations.acf.hhs.gov.
FOR FURTHER INFORMATION CONTACT: Robert Shelbourne, Director, Division
of State TANF Policy, Office of Family Assistance, ACF, at (202) 401-
5150.
SUPPLEMENTARY INFORMATION:
I. Public Inspection of Comments
All comments received, including any personal information provided,
will be available for public inspection Monday through Friday 8:30 a.m.
to 5 p.m. at 901 D St., SW., 5th Floor, Washington, DC.
II. Statutory Authority
We are issuing this proposed regulation under the authority granted
to the Secretary of HHS by Section 1102(a) of the Social Security Act,
42 U.S.C. 1302(a). Section 1102(a) authorizes the Secretary to make and
publish such rules as may be necessary for the efficient administration
of functions with which he is charged under the Social Security Act.
The statute at 42 U.S.C. 617 limits the authority of the Federal
government to regulate State conduct or enforce the TANF provisions of
the Social Security Act, except as expressly provided. We have
interpreted this provision to allow us to regulate where Congress has
charged HHS with enforcing certain TANF provisions by assessing
penalties. Because the caseload reduction credit directly relates to
the work participation requirements to which States and the Territories
are subject and the failure to meet those requirements can result in a
financial penalty pursuant to 42 U.S.C. 609(a)(3), we have the
authority to regulate in this instance.
III. Background
Under the TANF program, States must engage certain percentages of
their caseloads in work activities or face financial penalties for
failing to meet the work participation requirements. These required
participation rates are 50 percent overall and 90 percent for two-
parent families; however, the rates a State must actually meet for a
fiscal year (FY) are reduced by the amount of a State's caseload
reduction credit. Generally, the caseload reduction credit equals the
number of percentage points that a State reduces its overall caseload
in the prior fiscal year (the comparison year) compared to its overall
caseload in the base year. For caseload reduction credits that apply to
the two-parent work participation rate, States have the option of using
the overall calculation or using a calculation based on the reduction
in the two-parent caseload. Because of sharp State caseload declines
since FY 1995, the caseload reduction credit had virtually eliminated
participation requirements for most States. The Deficit Reduction Act
of 2005 (DRA) updated the base year from FY 1995 to FY 2005,
effectively raising the target work participation rates and
[[Page 46231]]
encouraging States to help families become independent.
The original TANF rule published in 1999 (64 FR 17720, April 12,
1999) included a provision at Sec. 261.43(a)(2) (now Sec. 261.43(b))
that allowed a State to exclude from the caseload reduction credit
calculation cases on which the State had spent what has been termed
``excess MOE.'' Excess MOE refers to State maintenance-of-effort (MOE)
or cost-sharing expenditures in excess of the amount the State needs to
meet its required MOE expenditure requirement. If a State chose to use
this provision, we factored out cases funded with excess MOE from the
comparison-year caseload in calculating the State's credit.
Title IV-A of the Social Security Act did not expressly provide for
the concept of an allowance in the caseload reduction credit for excess
MOE. Rather, we included it in the rule in response to a comment on the
proposed TANF rule published in 1997. Our intent was to encourage
States to spend MOE in their TANF programs above the required level. At
the time, we thought it was necessary to give States an incentive to
spend MOE dollars because the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (PRWORA) had shifted the culture
of welfare and States faced new, more challenging work participation
rates. In addition, there was some concern that welfare reform would
reduce the prior level of State funding. Since then, States have been
successful in moving large numbers of families off of the welfare
rolls, and we believe States have adequate resources to devote to their
TANF programs.
In an effort to continue the drive to move individuals into the
workforce and to help ensure that TANF clients with barriers to
employment receive the services they need, the DRA placed a renewed
emphasis on work participation rates, requiring States to meet
effectively higher work participation rates by recalibrating the
caseload reduction credit and imposing new requirements to ensure
consistent and accurate reporting of work participation data. Because
the excess MOE provision allows States to reduce their target work
participation rates artificially without actually moving recipients off
of the rolls and into jobs, this regulatory provision is not consistent
with the DRA.
IV. Discussion of Regulatory Provisions
This proposed rule would delete Sec. 261.43(b), which allows a
State to receive additional caseload reduction credit for MOE
expenditures in excess of its required MOE spending.
We now propose deleting this provision for several reasons. First,
we no longer think the incentive the excess MOE provision attempted to
offer is necessary. While the TANF block grant amount has remained
constant, State TANF caseloads have plummeted. Consequently, the amount
of Federal TANF and minimum required State MOE funding available per
case has grown considerably since that time and State TANF programs are
operating successfully without spending large sums in excess of their
required MOE levels.
Second, the DRA expanded the range of expenditures that a State may
claim as MOE. As a result, a State could feasibly claim as ``excess
MOE'' existing State and third-party spending that is not claimed as
MOE but that would qualify if a State chose to report such
expenditures. This would allow a State to increase the amount of excess
MOE without truly investing new resources in programs to serve needy
families.
Finally, we look again to the intent of the DRA to support
eliminating the excess MOE credit in the caseload reduction credit
calculation. Congress included the new calculation of work
participation rates and program integrity provisions of the DRA in
large part to restore State accountability for the TANF program and to
ensure real progress in moving families from welfare to self-
sufficiency. It did this through recalibration of the caseload
reduction credit, expansion of the universe of families counted in
calculating participation rates, and improved verification and
oversight of work participation activities. Meaningful work
participation rates help ensure effective programs and keep States
accountable for the funds they expend and the programs they operate.
Higher caseload reduction credits that do not reflect families actually
leaving the caseload for work only hurt those goals.
V. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (Pub. L. 104-13) (PRA),
no persons are required to respond to a collection of information
unless it displays a valid OMB control number. As required by this Act,
we have submitted the proposed data collection requirements to OMB for
review and approval. We are concurrently using this NPRM as a vehicle
for seeking comment from the public on this information collection.
This NPRM proposes to delete a provision in the regulation
concerning the TANF caseload reduction credit that permits a State not
to report caseloads funded with ``excess MOE.'' Excess MOE refers to
State maintenance-of-effort (MOE) expenditures in excess of the amount
the State needs to meet its required MOE expenditures. The reporting
burden on States would decrease as a result of this proposed change
because they would no longer have the option to compute how many cases
they funded with excess MOE in submitting the Caseload Reduction
Report, Form ACF-202. We have recomputed the burden of completing the
ACF-202, factoring out the computation of excess MOE.
We estimate that the 50 States, the District of Columbia, Guam,
Puerto Rico, and the United States Virgin Islands will be respondents.
Currently, American Samoa has not applied to implement the TANF
program.
The estimated burden associated with preparing the Caseload
Reduction Credit Report, Form ACFF-202 is:
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Average
Number of Yearly Average burden reduction in Total burden Reduction in
Instrument or requirement respondents submittals hours per burden hours hours total burden
response per response hours
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Caseload Reduction Documentation Process, ACF-202-- 54 1 115 5 6,210 270
Sec. Sec. 261.41-261.44.......................
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We are submitting this information collection to OMB for approval.
These requirements will not become effective until approved by OMB.
Copies of the proposed collection may be obtained by writing to the
Administration for Children and Families, Office of Administration,
Office of Information Services, 370 L'Enfant Promenade, SW.,
Washington, DC 20447, Attn: ACF Reports Clearance Officer. All requests
should be identified by the title of the information collection. E-mail
address: [email protected]. Written comments to OMB concerning the
proposed
[[Page 46232]]
information collection should be sent directly to: Office of Management
and Budget, Paperwork Reduction Project, 725 17th Street, NW.,
Washington, DC 20503, Attention: Desk Officer for the Administration
for Children and Families. OMB is required to make a decision
concerning the collection of information contained in this regulation
between 30 and 60 days after its publication in the Federal Register.
Therefore, a comment is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not affect the
deadline for the public to comment to the Department on the proposed
regulation.
VI. Regulatory Flexibility Analysis
The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the
Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not
result in a significant impact on a substantial number of small
entities. The primary impact is on State governments. State governments
are not considered small entities under the Regulatory Flexibility Act.
VII. Regulatory Impact Analysis
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
rule is consistent with these priorities and principles.
VIII. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4) requires that a covered agency prepare a budgetary impact
statement before promulgating a rule that includes any Federal mandate
that may result in the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year.
The Department has determined that this rule would not impose a
mandate that will result in the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector, of more than
$100 million in any one year.
The proposed rule has no direct budgetary implications. The TANF
program has been unaffected in budgetary terms by the existing excess
MOE provision.
IX. Congressional Review
This regulation is not a major rule as defined in 5 U.S.C. Chapter
8.
X. Assessment of Federal Regulation and Policies on Families
Section 654 of The Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a proposed
policy or regulation may affect family well-being. If the agency's
determination is affirmative, then the agency must prepare an impact
assessment addressing seven criteria specified in the law. This
regulation will not have an impact on family well-being as defined in
the legislation.
XI. Executive Order 13132
Executive Order 13132 ``Federalism'' requires that Federal agencies
consult with State and local government officials in the development of
regulatory policies with Federalism implications. We solicit and
welcome comments from State and local government officials on this
proposed rule, consistent with Executive Order 13132.
List of Subjects in 45 CFR Part 261
Grant programs--Federal aid programs, Penalties, Public assistance
programs--Welfare programs.
Dated: October 24, 2007.
Daniel C. Schneider,
Acting Assistant Secretary for Children and Families.
Approved: May 6, 2008.
Michael O. Leavitt,
Secretary of Health and Human Services.
Editorial Note: This document was received at the Office of the
Federal Register on August 4, 2008.
For the reasons set forth in the preamble, the Administration for
Children and Families proposes to amend 45 CFR chapter II by amending
part 261 as set forth below:
PART 261--ENSURING THAT RECIPIENTS WORK
1. The authority citation for 45 CFR part 261 continues to read as
follows:
Authority: 42 U.S.C. 601, 602, 607, and 609; Public Law 109-171.
2. Revise Sec. 261.43 to read as follows:
Sec. 261.43 What is the definition of a ``case receiving assistance''
in calculating the caseload reduction credit?
The caseload reduction credit is based on decreases in caseloads
receiving TANF- or SSP-MOE-funded assistance (other than those excluded
pursuant to Sec. 261.42).
[FR Doc. E8-18208 Filed 8-7-08; 8:45 am]
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