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4184-01

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Parts 260, 261, 262, 263, 264, and 265

Temporary Assistance for Needy Families (TANF) Program

AGENCY: Administration for Children and Families, Office of Family Assistance, HHS.

ACTION: Technical and correcting amendments.

SUMMARY: This document contains technical correcting amendments to the Temporary Assistance for Needy Families final rule published on April 12, 1999 (64 FR 17720). The final rule implements key statutory provisions related to work, penalties, and data collection.

DATES: Effective October 1, 1999.

FOR FURTHER INFORMATION CONTACT: Ann Burek, Office of Family Assistance, 202-401-4528.

SUPPLEMENTARY INFORMATION:

I. Background

We published the final rule on the Temporary Assistance for Needy Families (TANF) program on April 12, 1999 in the Federal Register (64 FR 17720). The purpose of the final rule is to implement key provisions of the new welfare block grant program, which was enacted as part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The effective date of the rule is October 1, 1999.

II. Need for Technical and Correcting Amendments in 45 CFR Parts 260, 261, 262, 263, 264, and 265

This document corrects technical errors and omissions in the preamble and text of the final regulations and refines certain provisions to make them clearer.

A. Regulatory Text

We have made the following changes in the regulatory text:

In §260.30, we defined noncustodial parent primarily for the purpose of specifying who must be included under certain reporting provisions in part 265. In fact, although the preamble uses the term in a number of places, part 265 is the only place in the regulation that the term is used. But some readers were assuming that the definition restricted the benefits and services that noncustodial parents might receive. Similarly, the definition created confusion about exactly what needed to be reported if a noncustodial parent was involved. We have refined the definition at §260.30 to eliminate the confusion and revised the regulatory text at §265.3 to clearly address the circumstances under which States must report information on noncustodial parents.
The changes to the heading of §260.59 correct errors in format.
In §261.56, we have inserted a missing quotation mark.
In §262.5, we intended to give States that could not meet the reporting deadline for the first two quarters of FY 2000 data, due to Y2K compliance activities, additional time to submit the data and avoid a penalty. While the June 30, 2000, date in the rules gave States an additional 90 days to submit the first quarter’s data, it did not give States the intended additional time for the second quarter’s data. States that submitted the second quarter’s data by June 30 would not have been subject to a reporting penalty under the normal TANF reporting rules and therefore received no additional time for that quarter. This result was inadvertent. In order to provide the additional time that we intended, we should have specified a September 30, 2000, date as the final deadline for States wishing to claim reasonable cause for failing to meet the reporting requirements on a timely basis. Thus, we are making that change as a technical amendment. Corresponding changes should also be made to the preamble references to July 1, 2000, on pages 17804 (column 3) and 17866 (column 1) and the reference to June 30, 2000, on page 17858 (column 3).
In §263.2(b)(1)(iii), we have added some statutory language that we had inadvertently omitted from the final rule. It is clear from the statute at section 409(a)(7)(B)(i)(IV) and the preamble discussion on page 17822 (i.e., in the first comment) that the third category of "eligible families," for MOE purposes, includes only "families of aliens lawfully present in the United States" that would be eligible for TANF, but for the alien provisions in PRWORA. We have corrected the regulatory text to reflect this limitation.
We are also refining §263.2(d). The regulation at §260.31(c) provides that the definition of assistance does not apply to the use of the term "assistance" in subpart A of part 263 -- the subpart that addresses allowable MOE expenditures. The MOE regulation at §263.2(d) included a similar provision. However, this latter provision referenced only paragraph (a) of §263.2. Since paragraph (b)(1)(i) also included the term "assistance," readers were unsure whether the definition of assistance applied in paragraph (b)(1)(i). The effect of applying the definition of assistance in paragraph (b)(1)(i) would have been to substantially narrow the number and type of families for whom benefits and services that were not "assistance" would count as MOE.

The language at §260.31(c) broadly addressed the issue of the applicability of the definition of assistance under that section to the MOE provisions of the rule. Under that provision, the definition of assistance does not limit what is considered assistance in paragraph (b)(1)(i) of §263.2. However, because readers found the language at §263.2(d) confusing, we have refined it to reaffirm that the definition of assistance does not limit paragraph (b)(1)(i). The change is a conforming amendment.

In §264.3(b), we had omitted the word "because" from the original regulatory text.
In §264.10(b), the original regulatory text included a reference to a regulatory section – §260.52 -- that had been repealed. Thus, we corrected the citation for the Income Eligibility and Verification Systems (IEVS) regulations (by replacing this reference with a reference to §205.60). Corresponding changes should also be made to the references to §205.62 on page 17849 in both the last paragraph in column one and the first response in column two.
As already explained, in §265.3(f), we clarify the circumstances under which States must report information on noncustodial parents.

B. Preamble Language

In addition to the regulatory text changes described above, we note the following correction to the preamble language in the final rule:

In the preamble to §260.30, we inadvertently omitted some language explaining the new definition of "expenditures" in §260.30. We are removing the first paragraph at the beginning of the third column on page 17752 of the Federal Register notice (i.e., immediately following the heading "(c) Significant Fiscal Terms") and adding the following:

In the final rule, we have added a definition for the term expenditure and added a new §260.33 to explain the circumstances under which refundable Earned Income Tax Credits and other refundable tax credits would count as expenditures. We felt it was necessary to include a basic definition of expenditure and add this additional regulatory text because, under the statute, Federal TANF funds and State MOE funds must both be used for "expenditures."

We have received many questions from States and other interested parties about whether the costs of State EITC programs and other tax provisions could count as expenditures. The new definition and regulatory text are designed to address these questions.

This subpart also incorporates a number of definitions that have substantial policy significance, which we included for clarification purposes.

For example, it incorporates terms that distinguish among several types of expenditures. These distinctions are critical because the applicability of the TANF requirements varies depending on the source of funds for the expenditures. In particular, it distinguishes between expenditures from the Federal TANF grant and from the State funds expended to meet MOE requirements (either within the TANF program or in separate State programs).

Following is a brief summary of the key fiscal terms:

Expenditure. This term refers to the spending or disbursement of funds. It does not include costs avoided or revenue losses.

Omission of this language had no substantive effect on the policy in the final rule. However, the language is helpful in explaining why we added a definition of expenditure, and the omitted language was referenced in the preamble discussion at §260.33.

Waiver of Notice and Comment Procedures

The Administrative Procedure Act (5 U.S.C. 55(b)(B)) requires that the Department publish a notice of proposed rulemaking unless the Department finds, for good cause, that such notice is impracticable, unnecessary, or contrary to the public interest. In this instance, the notice affects only technical changes, clarifications, and corrections of text not properly included in the regulations. Accordingly, the Department has determined that it would be unnecessary and contrary to the public interest to use notice and comment procedures in issuing these amendments.

Impact Analysis

No impact analysis is needed for the technical amendments. The impact of the necessary corrections falls within the analysis of the TANF final rule published in the Federal Register on April 12, 1999 (64 FR 17873).

List of subjects in 45 CFR Parts 260, 261, 262, 263, 264, and 265

Administrative practice and procedure, Day care, Employment, Grant programs--social programs, Loan programs--social programs, Manpower training programs, Penalties, Public assistance programs, Reporting and recordkeeping requirements, Vocational education.

(Catalogue of Federal Domestic Assistance Programs: 93.558

TANF programs–State Family Assistance Grants, Assistance grants to Territories, Matching grants to Territories, Supplemental Grants for Population Increases and Contingency Fund; 93.559--Loan Fund; 93.595--Welfare Reform Research, Evaluations and National Studies)

Dated:

Neil J. Stillman

Deputy Assistant Secretary for Information Resources Management

For the reasons set forth in the preamble, 45 CFR parts 260, 261, 262, 263, 264, and 265, published in the Federal Register (64 FR 17720) on April 12, 1999, are corrected by making the following technical and correcting amendments:

PART 260–GENERAL TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF ) PROVISIONS

1. The authority citation for part 260 continues to read as follows:

Authority: 42 U.S.C. 601, 601 note, 603, 604, 606, 607, 608, 609, 610, 611, 619, and 1308.

§ 260.30 [corrected]

2. In §260.30, correct the definition of "noncustodial parent" to read as follows:

Noncustodial parent means a parent of a minor child who:

(1) Lives in the State; and

(2) Does not live in the same household as the minor child.

§ 260.59 [corrected]

3. Correct the heading to §260.59 to read as follows:

§ 260.59 What penalty relief is available to a State that failed to comply with the five-year limit on Federal assistance because it provided federally recognized good cause domestic violence waivers?

PART 261–ENSURING THAT RECIPIENTS WORK

4. The authority citation for part 261 continues to read as follows:

Authority: 42 U.S.C. 601, 602, 607, and 609.

§ 261.56 [corrected]

5. Correct §261.56 (b)(2)(ii) by adding a quotation mark in front of the words "reasonable distance."

PART 262–ACCOUNTABILITY PROVISIONS–GENERAL

6. The authority citation for part 262 continues to read as follows:

Authority: 31 U.S.C. 7501 et seq.; 42 U.S.C. 606, 609, and 610.

§ 262.5 [corrected]

7. Correct §262.5(b)(1)(ii) by removing "June 30, 2000" and adding "September 30, 2000" in its place.

PART 263–EXPENDITURES OF STATE AND FEDERAL TANF FUNDS

8. The authority citation for part 263 continues to read as follows:

Authority: 42 U.S.C. 604, 607, 609, and 862a.

§ 263.2 [corrected]

9. Correct §263.2(b)(1)(iii) by revising it to read as follows:

Are lawfully present in the United States and would be eligible for assistance, but for the application of title IV of PRWORA;

10. Correct §263.2(d) by adding the following sentence to the end of the paragraph:

Further, families that meet the criteria in paragraphs (b)(2) and (b)(3) of this section are considered to be eligible for TANF assistance for the purposes of paragraph (b)(1)(i) of this section.

PART 264–OTHER ACCOUNTABILITY PROVISIONS

11. The authority citation for part 264 continues to read as follows:

Authority: 31 U.S.C. 7501 et. seq.; 42 U.S.C. 609, 654, 1302, 1308, and 1337.

§ 264.3 [corrected]

12. Correct §264.3(b) to read as follows:

In addition, we will determine a State has reasonable cause if it demonstrates that it failed to comply with the five-year limit on Federal assistance because of federally recognized good cause domestic violence waivers provided to victims of domestic violence in accordance with provisions of subpart B of part 260.

§ 264.10 [corrected]

13. Correct §264.10(b) by removing "205.62" and inserting "205.60" in its place.

PART 265--DATA COLLECTION AND REPORTING REQUIREMENTS

14. The authority citation for part 265 continues to read as follows:

Authority: 42 U.S.C. 603, 605, 607, 609, 611, and 613.

§ 265.3 [corrected]

15. Correct §265.3(f) by inserting (1) after "Noncustodial parents"; redesignating paragraphs (1), (2), and (3) as (i), (ii), and (iii), respectively; and adding the following paragraph:

(2) Reporting conditions.

(i) If the noncustodial parent is the only member of the family receiving assistance, the State must report the disaggregated and aggregated information on the entire family under paragraphs (b) and (d) of this section, as applicable.

(ii) If the noncustodial parent is only participating in work activities that do not constitute assistance (as defined in §260.31 of this chapter) and the other members of the family are not receiving assistance, the State must report only the aggregated information under paragraph (b)(3) of this section on the noncustodial parent.

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