Rule-making#: / 08-8-12-1
Program: Food Assistance / Rule Author: Sue McGinn / Phone: 303-866-2535
(as amended)
STATEMENT OF BASIS AND PURPOSE
Summary of the basis and purpose for the rule or rule change. (State what the rule says or does, explain why the rule or rule change is necessary and what the program hopes to accomplish through this rule.)
These proposed rules implement mandatory changes required by the recent passage of the Food and Nutrition Act of 2008 as amended through Public Law No. 110-246, effective October 1, 2008. Under 7 U.S.C. 2013, Section 4 (c), “The Secretary shall issue such regulations consistent with this Act as the Secretary deems necessary or appropriate for the effective and efficient administration of the supplemental nutrition assistance program and shall promulgate all such regulations in accordance with the procedures set forth in section 553 of title 5 of the United States Code.”
The proposed State rule changes are based on changes made to the Food and Nutrition Act Section 5 (d), (e) and (g) - Eligible Households; Section 6 (c) (1)(A) – Eligibility Disqualifications; and Section 8 (a) – Value of Allotment. These changes will increase Food Assistance benefits for those households with the applicable circumstances, and will primarily affect households with young children, the elderly and disabled. The changes include:
A) Excluding combat-related military pay from countable income for the duration of a deployment. Congress enacted this proposal as part of the appropriation process in each of the last several years to ensure that special military pay was excluded from food stamp income calculations. The Food and Nutrition Act of 2008 made this income exclusion permanent.
B) Increasing the minimum standard deduction from $134 to $144. Similar to income tax rules, food stamp rules allow households to subtract a standard deduction from their income to reflect the cost of non-food essential items such as housing and transportation. This provision raises the standard deduction for households of three or fewer members to $144 and indexes it to inflation in future years.
C) Removing the current cap on dependent care deductions. Lifting the cap on the dependent care deduction will reduce the strain on food budgets for those families with significant out-of-pocket childcare or other dependent care costs.
D) Excluding all tax-preferred retirement accounts and tax-preferred education savings accounts from countable assets. Asset development is important to helping low-income families transition out of poverty.
E) Expanding simplified reporting rules to include migrant and seasonal farm workers, the homeless, and elderly and disabled households. This provision lessens the paperwork burden on participating households, eases the workload for staff, and reduces payment errors.
F) Setting the food assistance minimum benefit amount, currently fixed at $10 a month, to $14 a month. The value of the maximum benefit will be adjusted annually for inflation.
Initial Review / 09/05/2008 / Final Adoption / 10/03/2008Proposed Effective Date / 10/01/2008 / EMERGENCY Adoption / 09/05/2008
DOCUMENT 3
STATEMENT OF BASIS AND PURPOSE (continued)
In addition to the changes above, the U.S. Department of Agriculture, Food and Nutrition Service (FNS) adjusts the Food Stamp Program maximum allotments, deductions, and income eligibility standards at the beginning of each Federal fiscal year. The changes are based on changes in the cost of living (COLA). COLAs take effect on October 1st each year. Maximum allotments are calculated from the cost of a market basket based on the Thrifty Food Plan for a family of four, priced in June that year. The maximum allotments for households larger and smaller than four persons are determined using formulas that account for economies of scale. Smaller households get slightly more per person than the four-person household. Larger households get slightly less. Income eligibility standards are set by law. Gross monthly income limits are set at 130 percent of the poverty level for the household size. Net monthly income limits are set at 100 percent of poverty.
Included in the attached rule changes, are the annual mandatory adjustments to the benefit allotment levels, income eligibility standards, and the shelter expense cap based on the annual cost of living increase. These changes are effective October 1, 2008.
The standard utility allowance (SUA), is granted to households that incur or anticipate incurring heating or cooling costs separate and apart from their rent or mortgage or that have received assistance from the Low Income Energy Assistance Program (LEAP). USDA FNS requires that States review and adjust this allowance annually to reflect increased costs in utilities (7 CFR 273.9). Colorado received approval from FNS to implement a four-tiered utility allowance deduction. This proposed rule change allows households to receive a standard utility allowance based on the categories of utility costs and simplifies the application of this rule for county workers. Currently, the misapplication of this rule in Colorado is the second highest cause for payment errors. It is necessary to implement this change as excessive errors could cause a federal sanction against the State of Colorado.
It is also necessary to expand the hardship criteria to include additional reasons for waiving face-to-face interviews for households applying for food assistance. This change not only increases program access for potential applicants by allowing workers to conduct interviews by telephone when a hardship condition exists, but this practice has also proven effective in improving the timely processing of Food Assistance applications in other states. Colorado risks being sanctioned by FNS for failure to process 95% of all applications timely, as required.
An emergency rule-making (which waives the initial APA noticing requirements) is necessary:
X / to comply with state/federal law and/orX / to preserve of the public health, safety and welfare
Explain: In order to implementing the federal Food and Nutrition Act of 2008, the annual Cost of Living Adjustment (COLA), and to prevent Food Assistance sanctions, emergency adoption of these rules is imperatively necessary to comply with the federal Food and Nutrition Act of 2008, as amended through Public Law No. 110-246, to be effective October 1, 2008.
Authority for Rule:
State Board Authority: 26-1-107, C.R.S. (2007) - State Board to promulgate rules; 26-1-109, C.R.S. (2007) - State Board rules to coordinate with federal programs; 26-1-111, C.R.S. (2007)- State Board to promulgate rules for public assistance and welfare activities.
STATEMENT OF BASIS AND PURPOSE (continued)
Program Authority: (give federal and/or state cite and a summary of the language authorizing the rule-making)
26-2-304, C.R.S. (2007) – food stamps/benefits; 26-2-128 and 26-2-304, C.R.S. (2007) – eligibility for food assistance; 26-2-302, C.R.S. (2007) – federal aid
7 U.S.C. 2014 Section 5 – dependent care, minimum food assistance benefit, simplified reporting, retirement and education accounts, combat military pay, Thrifty Food Plan, standard deduction, gross/net income levels.
X / Yes / NoYes / X / No
Does the rule incorporate material by reference?
Does this rule repeat language found in statute?
If yes, please explain.
Section B-4010 incorporates a federal citation of 7 CFR 271-274.
State Board Administration will send this rule-making package to CCI, OSPB and the JBC. The program has sent this rule-packet to which stakeholders?
County departments of social/human services staff
CDHS Colorado Works Division and Aging and Adult Services
Attachments:
Regulatory Analysis
Overview of Proposed Rule
Stakeholder Comment Summary
Rule-making Form SBA-3a (9/05)
Title of Proposed Rule: / Implementing Changes Required by the Food and Nutrition Act of 2008, Annual Cost of Living Increase, and Revisions to Utility Standards and Hardship CriteriaRule-making#: / 08-8-12-1
Program: Food Assistance / Rule Author: Sue McGinn / Phone: 303-866-2535
REGULATORY ANALYSIS
(complete each question; answers may take more than the space provided)
1. List of groups impacted by this rule:
Which groups of persons will benefit, bear the burdens or be adversely impacted by this rule?
Groups that will benefit from the changes imposed by the Food and Nutrition Act of 2008 include current Food Assistance recipients and future applicants, especially those with income, children, and elderly and disabled households. All households benefit from the annual cost of living adjustment. All households that pay utility costs will benefit from the new four-tiered standard utility allowance, unless their utility expenses are excessive as compared with all Food Assistance households paying utility costs. In expanding hardship criteria to waive face-to-face interviews, the State is expecting to increase program participation for those individuals for whom there is great difficulty in traveling to the local county office to be interviewed or to apply for benefits. Lastly, Colorado taxpayers will benefit as less errors will occur under these new rules and the Department will not be at risk of federal sanctions.
2. Describe the qualitative and quantitative impact:
How will this rule-making impact those groups listed above? How many people will be impacted? What are the short-term and long-term consequences of this rule?
The provisions of the Food and Nutrition Act of 2008, the annual COLA, and the four-tiered standard utility allowance will result in slightly higher monthly benefits for Food Assistance households. Approximately 2,400 households, or two percent of all households, in Colorado claimed the dependent care deduction in federal year 2006. Approximately 30% of households have elderly members that will receive higher minimum benefits. The State is anticipating that approximately 20% of households being interviewed for benefits will be interviewed by telephone instead of being required to present at the local office in person. This will save both the local office and the household time, resulting in benefits being processed timely. Also, implementing these new rules will prevent federal sanctions.
3. Fiscal Impact:
For each of the categories listed below explain the distribution of dollars; please identify the costs, revenues, matches or any changes in the distribution of funds even if such change has a total zero effect for any entity that falls within the category. If this rule-making requires one of the categories listed below to devote resources without receiving additional funding, please explain why the rule-making is required and what consultation has occurred with those who will need to devote resources.
State Fiscal Impact (Identify all state agencies with a fiscal impact, including any CBMS change request costs required to implement this rule change)
The proposed rule changes will be implemented into CBMS effective for October 1, 2008. These system changes are decision and reference table changes. The system cost is estimated to be less than $20,000 for all changes.
County Fiscal Impact
None
Rule-making Form SBA-3b (6/02)
Title of Proposed Rule: / Implementing Changes Required by the Food and Nutrition Act of 2008, Annual Cost of Living Increase, and Revisions to Utility Standards and Hardship CriteriaRule-making#: / 08-8-12-1
Program: Food Assistance / Rule Author: Sue McGinn / Phone: 303-866-2535
REGULATORY ANALYSIS (continued)
Federal Fiscal Impact
USDA, FNS will pay fifty percent (50%) of the cost of the system changes.
Other Fiscal Impact (such as providers, local governments, etc.)
None
4. Data Description:
List and explain any data, such as studies, federal announcements, or questionnaires, you relied upon when developing this rule?
In addition to the Food and Nutrition Act of 2008, the State relied upon an analysis completed by the Center on Budget and Policy Priorities entitled, “Implementing New Changes to the Food Stamp Program: A Provision by Provision Analysis of The 2008 Farm Bill”.
5. Alternatives to this Rule-making:
Describe any alternatives that were seriously considered. Are there any less costly or less intrusive ways to accomplish the purpose(s) of this rule? Explain why the program chose this rule-making rather than taking no action or using one of the listed alternatives.
None
Rule-making Form SBA-3b (6/02)
Title of Proposed Rule: / Implementing Changes Required by the Food and Nutrition Act of 2008, Annual Cost of Living Increase, and Revisions to Utility Standards and Hardship CriteriaRule-making#: / 08-8-12-1
Program: Food Assistance / Rule Author: Sue McGinn / Phone: 303-866-2535
OVERVIEW OF PROPOSED RULE
Compare and/or contrast the content of the current regulation and the proposed change.
Section Numbers / Current Regulation / Proposed Change /Stakeholder Comment
B-4010.10B-4010.11 / States the Food Assistance Program as expressed In the Food Stamp Act of 1977, P.L. No. 95-113 / Change to Food and Nutrition Act of 2008, P.L. 110-246. Change Minimum benefit from $10 to $14 / __ / Yes / X / No
B-4011.21 / Waiver of Office Interview / Additional hardship criteria added to the rule / __ / Yes / X / No
B-4223
B-4220-111 and 12
B-4100 / Deductions from Income
Gross and Net Income
Food Stamp Applicant Households / Standard Amount Changed
Gross/Net Income Changed
Income Limits Changed / __ / Yes / X / No
B-4223.5 through
B-4223.52 / Excess Shelter and telephone and utility allowance / Change to a Four Tiered Mandatory Standard Utility Allowance / __ / Yes / X / No
B-4222.7 / Do not have combat military pay as an exclusion / Military combat payments when military staff is serving in a combat zone / __ / Yes / X / No
B-4223.4 / Currently Dependent Care has a cap for children under 2 years of age and over 2 years of age / Removes the cap and allows actual dependent care cost /
_
/Yes
/_
/No
_
/Yes
/_
/No
B-4224.1 Liquid Resources Excludes more resources
B-4225.4 Retirement and Educational Excludes more retirement and
Accounts Educational accounts as a resource
B-4230 Thrifty Food Plan Table Thrifty Food Plan Table Changed
B-4242.11 Household required to report Implements Simplified Reporting
Rule-making Form SBA-3c (6/02)
Title of Proposed Rule: / Implementing Changes Required by the Food and Nutrition Act of 2008, Annual Cost of Living Increase, and Revisions to Utility Standards and Hardship CriteriaRule-making#: / 08-8-12-1
Program: Food Assistance / Rule Author: Sue McGinn / Phone: 303-866-2535
STAKEHOLDER COMMENT SUMMARY
The following individuals and/or entities were contacted and informed that this rule-making was proposed: