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Rule2022-21011

Supplemental Nutrition Assistance Program: Requirement for Interstate Data Matching To Prevent Duplicate Issuances

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Published

October 3, 2022

Effective

December 2, 2022

Issuing agencies

Agriculture DepartmentFood and Nutrition Service

Abstract

The Agriculture Improvement Act of 2018 requires the Secretary of Agriculture to establish an interstate data system called the National Accuracy Clearinghouse (NAC) to prevent issuance of Supplemental Nutrition Assistance Program (SNAP) benefits to an individual by more than one State agency simultaneously (also known as interstate duplicate participation). This interim final rule requires SNAP State agencies to provide information to the NAC regarding individuals receiving SNAP benefits in their States in order to ensure they are not already receiving benefits in another State. It also requires State agencies to take appropriate action with respect to each indication from the NAC that an individual may already be receiving SNAP benefits from another State agency. This rule aims to enhance Program integrity by reducing the risk of improper payments and improve customer service by incorporating best practices and lessons learned from the NAC pilot to require that State agencies take appropriate and timely action to resolve NAC matches. This rule also establishes safeguards to ensure households receive benefits for which they are eligible and are not incorrectly removed from the Program.

Full Text

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<title>Federal Register, Volume 87 Issue 190 (Monday, October 3, 2022)</title>
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[Federal Register Volume 87, Number 190 (Monday, October 3, 2022)]
[Rules and Regulations]
[Pages 59633-59660]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-21011]

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Rules and Regulations
Federal Register
________________________________________________________________________

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.

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Federal Register / Vol. 87, No. 190 / Monday, October 3, 2022 / Rules
and Regulations

[[Page 59633]]

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

[FNS-2019-0055]
RIN 0584-AE75

Supplemental Nutrition Assistance Program: Requirement for
Interstate Data Matching To Prevent Duplicate Issuances

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

ACTION: Interim final rule.

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SUMMARY: The Agriculture Improvement Act of 2018 requires the Secretary
of Agriculture to establish an interstate data system called the
National Accuracy Clearinghouse (NAC) to prevent issuance of
Supplemental Nutrition Assistance Program (SNAP) benefits to an
individual by more than one State agency simultaneously (also known as
interstate duplicate participation). This interim final rule requires
SNAP State agencies to provide information to the NAC regarding
individuals receiving SNAP benefits in their States in order to ensure
they are not already receiving benefits in another State. It also
requires State agencies to take appropriate action with respect to each
indication from the NAC that an individual may already be receiving
SNAP benefits from another State agency. This rule aims to enhance
Program integrity by reducing the risk of improper payments and improve
customer service by incorporating best practices and lessons learned
from the NAC pilot to require that State agencies take appropriate and
timely action to resolve NAC matches. This rule also establishes
safeguards to ensure households receive benefits for which they are
eligible and are not incorrectly removed from the Program.

DATES:
Effective date: This rule is effective December 2, 2022.
Implementation date: The USDA (or Department) intends to implement
this nationwide NAC matching solution using a phased approach that will
allow all State agencies to onboard over a period of 5 years. State
agencies must comply with the provisions of this interim final rule no
later than October 4, 2027.
Comment date: To be considered, written comments on this interim
final rule must be received on or before December 2, 2022.

ADDRESSES: Comments may be submitted in writing by one of the following
methods:
<bullet> Federal eRulemaking Portal: Go to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the online instructions for submitting
comments.
<bullet> Mail: Send written comments to State Administration
Branch, Program Accountability and Administration Division,
Supplemental Nutrition Assistance Program, Food and Nutrition Service,
USDA, 1320 Braddock Place, 5th floor, Alexandria, VA, 22314.
<bullet> All written comments submitted in response to this interim
final rule will be included in the record and will be made available to
the public. Please be advised that the substance of the comments and
the identity of the individuals or entities submitting the comments
will be subject to public disclosure. FNS will make the written
comments publicly available on the internet via <a href="https://www.regulations.gov">https://www.regulations.gov</a>.

FOR FURTHER INFORMATION CONTACT: Maribelle Balbes, Chief, State
Administration Branch, Program Accountability and Administration
Division, Supplemental Nutrition Assistance Program, Food and Nutrition
Service, USDA, 1320 Braddock Place, 5th floor, Alexandria, VA 22314, by
phone at (703) 605-4271 or via email at <a href="/cdn-cgi/l/email-protection#fdaeb0d3bbb3d3aeb3bcadaebcbfbd888e999cd39a928b"><span class="__cf_email__" data-cfemail="1447593a525a3a475a554447555654616770753a737b62">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Background

A. Statutory Authority

Section 4011 of the Agriculture Improvement Act of 2018 (Pub. L.
115-334, the ``Farm Bill'') amended Section 11 of the Food and
Nutrition Act of 2008 (``the Act'') (7 U.S.C. 2020) by creating a new
subsection (x). Section 11(x) of the Act requires that ``[t]he
Secretary . . . establish an interstate data system, to be known as the
`National Accuracy Clearinghouse,' to prevent multiple issuances of
supplemental nutrition assistance program benefits to an individual by
more than 1 State agency simultaneously.'' The Act further requires the
Secretary to promulgate regulations to prevent multiple issuances of
SNAP benefits, including specific mandates to ``incorporate best
practices and lessons learned from the pilot program under Section
4032(c) of the Agricultural Act of 2014'' and to ``require a State
agency to take appropriate action, as determined by the Secretary, with
respect to each indication of multiple issuance of supplemental
nutrition assistance program benefits, or each indication that an
individual receiving such benefits in 1 State has applied to receive
such benefits in another State.''
Section 4009 of the Farm Bill amended Section 11 of the Act. As
amended, Section 11(e) of the Act states ``that for a household
participating in the supplemental nutrition assistance program, the
State agency shall pursue clarification and verification, if
applicable, of information relating to the circumstances of the
household received from data matches for the purpose of ensuring an
accurate eligibility and benefit determination, only if the information
. . . is obtained from data matches carried out under subsection (q),
(r), or (x).''

B. Authority for Interim Final Regulation

The Department is issuing this interim final rule at the direction
of Congress. The Act, in a sub-section entitled ``Issuance of Interim
Final Regulations'' provides that ``not later than 18 months after the
date of enactment of the Agriculture Improvement Act of 2018, the
Secretary shall promulgate regulations (which shall include interim
final regulations) to carry out this subsection . . .'' 7 U.S.C.
2020(x)(3). The Department will issue a final rule after considering
public comments and obtaining additional information during the initial
implementation.

[[Page 59634]]

C. Existing Requirements for Residency, Duplicate Participation,
Recipient Claims, and Intentional Program Violations

Residency Requirement
Under existing Program rules, an individual may not receive SNAP
benefits from more than one State agency that administers the Program
(henceforth referred to as State or State agency) for the same benefit
month. Regulations at Sec. 273.3 require that a household live in the
State where it files a SNAP application and stipulate that no
individual may participate as a member of more than one household or in
more than one project area (i.e., a State) in any month, unless an
individual is a resident of a shelter for battered women and children
as defined at Sec. 271.2. Program regulations at Sec. 273.2(f)(1)(vi)
also require that State agencies verify applicants' residency before
certifying a household initially applying.
Duplicate Participation
Current SNAP regulations at Sec. 272.4(e) also require State
agencies to establish systems to prevent individuals from participating
in more than one household within one State (duplicate participation).
The regulation stipulates that State agencies match against names and
Social Security numbers at a minimum, and other identifiers such as
birth dates or addresses as appropriate.
Recipient Claims
Per Sec. 272.2(d)(1)(x), State agencies must submit a claims
management plan as part of their State plan of operations, for
informational purposes only, that describes their procedures for
establishing and collecting overpayment claims. If duplicate
participation is identified, State agencies follow the regulations at
Sec. 273.18 to establish and collect claims for the amount of benefits
overpaid. These claim regulations provide State agencies with
flexibility to compromise or terminate claims under certain conditions
and provide States with collection options. SNAP also participates in
the Treasury Offset Program and provides assistance to help State
agencies collect unpaid balances.
Intentional Program Violation
An intentional Program violation, defined at Sec. 273.16(c),
occurs when an individual intentionally makes a false or misleading
statement or withholds facts; or an individual commits any act that
constitutes a violation of the regulations for the purpose of
trafficking SNAP benefits, which is the exchange of benefits for cash
or other considerations. The regulations at Sec. 273.16(a) provide
that State agencies shall be responsible for investigating any case of
alleged intentional Program violation and ensuring that cases are acted
upon, as appropriate, either through administrative disqualification
hearings or referral to a court of appropriate jurisdiction.
Furthermore, Section 6(j) of the Act states that members of a household
who make a fraudulent statement or representation about their residence
so as to receive multiple benefits simultaneously must be disqualified
for a period of 10 years.
However, an instance of duplicate participation does not
necessarily indicate an intentional Program violation or fraud. For
example, an individual may have recently moved between States and
inadvertently failed to close their case, or a State agency failed to
timely close a case for an individual that it knew had moved. The
timeframe for when an individual must report a move depends on the
reporting system to which the State agency has assigned the individual.
However, prior to receiving benefits in a new State, the individual's
existing case must either be closed or the individual must be removed
from the previous household's existing case as an individual cannot
participate in more than one project area in any given month. When a
State agency receives a report of an out of State move, it must take
action to close the case or remove the individual from a case in a
timely manner. Failure by an individual to report a move, or a State
agency to take prompt action to remove an individual from SNAP when
reported, may lead to instances of duplicate participation but would
not be considered an intentional Program violation or fraud. In these
instances, the individual is not intentionally receiving benefits from
more than one State agency simultaneously. Comments from the
Congressional record regarding the Farm Bill \1\ state, ``We know that
duplicate participation, when it does occur, is rarely intentional
fraud, but rather is a result of a household or household member simply
moving from one State to another and not successfully disenrolling in
their previous home State. This could be caused by households not being
able to get through to a call center to report the move or a State not
taking the proper action to close the case or remove the household
member [after a move is reported].''
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\1\ <a href="https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf">https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf</a>, paragraph 7.
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Therefore, in order to determine whether fraud has occurred, a
State agency is responsible for investigating and either: (1)
determining through an administrative disqualification hearing if an
individual committed an intentional Program violation or (2) referring
a case for prosecution for fraud. Additional comments from the
Congressional record on the Farm Bill further state that ``without
evidence of a client's intent to defraud the program, State agencies
should assume that dual enrollment discovered through the NAC is
unintentional''.\2\ Given that the regulatory definition of an
intentional Program violation at Sec. 273.16(c) requires that acts be
committed intentionally, this is in keeping with the current Program
operations. These Congressional Record comments also align with Section
6(j) of the Farm Bill and Sec. 273.16(b)(5), both of which focus on an
individual making fraudulent statements or representations concerning
their residency. Thus, a State agency may only determine an individual
has done this when there is evidence that the applicant knowingly
engaged in duplicate participation with the intent to collect SNAP
benefits in more than one State simultaneously. This is opposed to
instances of administrative oversight, such as an applicant reporting a
move and the State agency failing to close the case, which do not arise
as a result of an individual's fraudulent statements or
representations.
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\2\ <a href="https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf">https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf</a>, paragraph 7.
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D. The Current State of Interstate Duplicate Participation

Individuals are prohibited from participating in SNAP as a member
of more than one household or in more than one project area, except for
residents of a shelter for battered women and children. Per Sec.
272.4(e), State agencies already use existing processes to prevent
duplicate participation within their States including, but not limited
to validation of Social Security numbers, verification of identity and
residency, and matching personal identifiers against its caseload.
Additionally, many State agencies rely on a question on the SNAP
application about receiving benefits in another State in order to
prevent duplicate participation. An applicant's affirmative response to
this question starts a manual process that can involve emailing or
calling another State agency to inquire about the applicant, which may
result in delays in the application process and prevent the applicant
from receiving their benefits in a timely manner. A lack of
comprehensive and automated data

[[Page 59635]]

sharing between State agencies can result in duplicate participation,
as State agencies will have to determine eligibility within the
application processing timeframe before verification from the previous
project area is received. A manual process of resolving instances of
duplicate participation also requires waiting to issue benefits because
another State agency failed to take action to close a case, which can
result in a delay of benefit determination. These challenges highlight
the need for enhanced and required communication and data sharing
between State agencies which are discussed later in this rule.
Although SNAP regulations do not mandate it, most State agencies
use the Department of Health and Human Services' Public Assistance
Reporting Information System (PARIS) to identify individuals who may be
current SNAP participants in more than one State. State agencies submit
data to PARIS on varying schedules; some provide information once per
quarter while others submit less often. PARIS checks for matches on a
quarterly basis. Due to its quarterly matching frequency, PARIS can
only help State agencies identify duplicate participation after-the-
fact and does not enable State agencies to prevent it from occurring.
For example, there could be up to three months of duplicate
participation before the State agency receives a match, resulting in
the establishment of larger claims for the individual to repay than if
the match had been detected immediately. Additionally, because PARIS
conducts data matches on State-submitted data at a frequency of once
per quarter or less, a match merely indicates that an individual was
active in two States during the months being matched, but this does not
necessarily indicate benefit receipt occurred simultaneously in a
single month. For example, if duplicate participation is identified
during the match of October, November, and December data, it's possible
that the individual was participating in one State in October and
another State in November and December. Determining any overlap in
benefit issuance in such an instance typically involves a manual
process and can be burdensome to State agencies to resolve.
These existing processes that identify overpaid benefits after-the-
fact may have unintended consequences for households, oftentimes
including unnecessary household burden, and can result in poor or
inconsistent customer service. Because of the delays associated with
after-the-fact matches and manual processes, there is an increased
likelihood that an applicant who reported a move could still be flagged
for duplicate participation and must navigate the claims recovery
process even though they complied with Program rules.

E. The National Accuracy Clearinghouse Pilot

The following paragraphs provide context surrounding the
establishment of the National Accuracy Clearinghouse (NAC) pilot, its
independent evaluation, lessons learned, final points, and Department's
expectations for the NAC moving forward. The business process and
system discussion in this section references how the NAC pilot
operates, which is separate and different from the nationwide NAC being
established by this rule. The nationwide NAC will be discussed in
Section II.
Beginning in 2013, the State of Mississippi established a pilot
that was funded by the Office of Management and Budget's (OMB)
Partnership Fund for Program Integrity Innovation.\3\ The pilot was
designed to test the feasibility of improving upon existing processes
by establishing a real-time interstate data matching system to prevent
duplicate participation, this system is called the NAC pilot. The NAC
pilot data matching operations began in June 2014 and consisted of five
participating State agencies: Alabama, Florida, Georgia, Louisiana, and
Mississippi. The NAC pilot is still in operation under administrative
waivers. However, there are only four State agencies still operating
the pilot under administrative waivers: Alabama, Florida, Georgia, and
Mississippi.
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\3\ https://obamawhitehouse./<a href="http://archives.gov/sites/default/files/omb/memoranda/2011/m11-01.pdf">archives.gov/sites/default/files/omb/memoranda/2011/m11-01.pdf</a>.
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As part of the pilot, each participating State agency submits a
daily file of its entire SNAP participant caseload, which is then
integrated into a list of all SNAP participants receiving benefits in
the participating States. State agencies query the system when they
receive SNAP applications or add new members to an existing household.
The NAC pilot checks these individuals against the list of active SNAP
participants in the other pilot States. When a State agency identifies
that an applicant is receiving benefits in another State, the SNAP
State agency staff in the applicant State contact the State agency
where the applicant is already receiving benefits to close the
individual's case or remove the individual from the household. Once the
applicant's out-of-State case is closed or the individual is removed
from the household, the State agency receiving the application can move
forward with the certification process. If the applicant is checked
against the NAC pilot's list of active SNAP participants in other
States and the applicant is not identified as receiving SNAP benefits
elsewhere, then the State agency proceeds with the certification
process as usual.
The NAC pilot allowed for estimation on the prevalence of
interstate duplicate participation in the five participating States.
Analysis of data from before the NAC pilot began operations suggested
that between 0.09 percent and 0.17 percent of the individual SNAP
participants active in each pilot State's caseload in May 2014 were
also receiving benefits in another one of the pilot States in May 2014.
The Department notes, however, that this data only represent instances
of interstate duplicate participation where both States issuing
benefits were participating in the pilot. Accordingly, the NAC pilot
could not discover any potential matches between a State participating
in the NAC pilot and a State that was not participating in the NAC
pilot. This limited ability to detect matches suggests that the
nationwide NAC will only increase positive match frequency when new
State agencies are added to the system. The positive match frequency is
also expected to decrease gradually as State agencies adopt the
nationwide NAC and NAC business processes implemented by this rule.
Independent Evaluation of the NAC Pilot \4\
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\4\ <a href="https://risk.lexisnexis.com/-/media/files/government/report/b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf">https://risk.lexisnexis.com/-/media/files/government/report/b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf</a>.
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[[Page 59636]]

household with an existing case. As presented in Table 19 of the
evaluation report, an average of 47 percent of duplicate participation
instances found were from individuals residing in households where all
members are not duplicate participants. The Department interprets these
occurrences of duplicate participation as instances where
administrative processes need to be improved and better customer
service provided, particularly for individuals or households that move
between States. It is likely that these individuals either failed to
report their move or were not promptly disenrolled by the State agency.
Table 21 further emphasizes the need for greater customer service by
evaluating claims data on cases including duplicate participants
identified at initial matching of the NAC pilot. Out of the claims data
reported, more than 27 percent of claims were due to State agency error
or inadvertent client error. Based on this information, the Department
determines that there is a greater need for enhanced customer service
for applicants and participants who move between States or households,
as well as better training for eligibility workers to identify these
individuals and prevent inadvertent household errors and State agency
errors that may result in the establishment of a claim and added
burden.
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\5\ <a href="https://risk.lexisnexis.com/-/media/files/government/report/b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf">https://risk.lexisnexis.com/-/media/files/government/report/b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf</a>,
page 10.
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Although the evaluation found that the rate of duplication
participation is infrequent, the report found a 46 percent reduction in
the number of SNAP participants receiving benefits in more than one
pilot State after one year of NAC pilot operation. Each of the five
States experienced a reduction in duplicate participation, but the
scale of the reductions varied. Two of the five States had 81 percent
fewer instances of SNAP participants receiving benefits in another
State compared to pre-NAC pilot levels (for example, from a monthly
average of 882 instances down to 166 in Mississippi), while another two
saw reductions of less than 30 percent (for example, from a monthly
average of 3,383 to 2,446 instances in Florida). The Department
believes that improving administrative processes will further diminish
households' inadvertent duplicate participation.
The NAC pilot evaluation also measured each State agency's
effectiveness in using the NAC pilot to prevent duplicate
participation, comparing positive matches generated by queries
regarding SNAP applicants or new household members to subsequent
positive indications of active duplicate participation. Matches on SNAP
applicants or new household members that subsequently became active
duplicate participants indicate that the information from the NAC pilot
failed to prevent an individual from receiving benefits from more than
one State agency simultaneously due to participant State agencies not
taking appropriate actions when notified of a match and/or a lack of
communication between State agencies. Again, there was significant
variation in how effectively the five pilot State agencies used the NAC
pilot to prevent duplicate participation. In two of the five States,
less than 10 percent of individuals identified in NAC pilot matches
resulted in subsequent duplicate participation. Other pilot State
agencies were not as effective. The least effective State agency
consistently saw about 40 percent of instances of individuals
identified in matches resulting in duplicate participation.
NAC Pilot Lessons Learned
The overall findings from the evaluation indicate that the rate of
duplicate participation is low; that when it does occur, it is
sometimes inadvertent, such as a State agency failing to promptly
disenroll an individual that had moved between States and/or
households, and not fraud; and that use of the NAC can effectively
reduce duplicate participation if State agencies apply lessons learned
from the pilot as they implement the nationwide NAC data match. The
pilot State agencies with larger reductions in duplicate participation
were the same State agencies with better rates of preventing duplicate
participation. The NAC pilot evaluation found that these State agencies
were more successful largely due to the extent that they automated NAC
processes. They used web services to link their State systems with the
NAC pilot. This enabled real-time querying of the NAC pilot in a manner
similar to a manual portal query, where eligibility workers checked for
NAC matches by manually inputting data, with the added advantage of
limiting eligibility worker intervention to only those instances in
which a match is generated. For example, if a State agency eligibility
worker needs to process an application on the same day the application
is received, the web services approach allows for sending and receiving
information from the NAC pilot that same day. Pilot States that were
less effective in terms of preventing and reducing duplicate
participation used a batch process model where information is not
returned until the following day. This sometimes led to the
certification of an application before the caseworker became aware that
there was a positive match from the NAC pilot indicating an active case
in another State.
The more successful States in the NAC pilot also integrated the
pilot with their SNAP eligibility systems and into existing workflows.
State agency eligibility workers received flags to take additional
steps only in the event of a positive match, rather than having to
check the NAC pilot portal for every application they processed and
every person they added to a case.
The differences in business processes and systems integration not
only provide at least a partial explanation for the varied outcomes
achieved by State agencies, but also support a set of practices that
may be adopted to improve upon and maximize the effectiveness of the
NAC pilot. Additionally, the evaluation report recommended that State
agencies conduct comprehensive front-line training. This includes
dedicating resources to delivering hands-on training for eligibility
workers using real-world examples for the approach the State agency
will use to operationalize the tool and communicate with other State
agencies. These best practices from the NAC pilot combined with
feedback from State agencies inform the design and implementation of
the nationwide NAC solution created by this rule.
NAC Pilot Final Results
The NAC pilot evaluation estimated the total benefit overpayments
averted by the NAC pilot and the potential benefit overpayments that
could be saved if the NAC were implemented nationwide. The evaluation
compared the decay rate (the decline in the percentage of clients who
remain duplicate participants in the five months following program
entry) of duplicate participation by comparing entries from December
2013 (pre-pilot) and December 2014 (during pilot), and following the
same individuals for five months between January and May. The
difference represents the effectiveness of using the NAC pilot to
prevent and timely resolve duplicate participation. In each State, the
entries of duplicate participation fell from December 2013 to December
2014. However, anywhere from 25.8 percent to 41.45 percent of instances
of duplicate participation identified in December 2013 continued five
months later into May 2014. Once the NAC pilot was implemented, the
total number of duplicate participant instances fell for each State and
the percentage of individuals remaining as duplicate participants after
five months fell from 21 percent to 0 percent in

[[Page 59637]]

Alabama, 51.4 percent to 17.8 percent in Florida, 49.6 percent to 17.1
percent in Georgia, 41.4 percent to 6.5 percent in Louisiana, and 34.9
percent to 3.2 percent in Mississippi. In each case, the NAC pilot was
effective as reducing the rate of duplicate participation.
The NAC evaluation also calculated savings resulting from the pilot
by estimating the savings per month per instance of duplicate
participation prevention in each of the pilot States and multiplying
those savings by the median months of duplicate participation avoided.
To establish the median length of duplicate participation for an
individual, the NAC evaluation identified the eligibility date in each
State, selected the latest of the two dates to establish when
overlapping eligibility began, identified the next recertification date
for the individual's case in each State, and selected the soonest of
the two recertification months. The number of months between the start
of overlapping eligibility and the next recertification month
establishes the median expected length of duplicate participation per
State, which ranged from 6 to 11 months. The evaluation avoided double
counting the prevention of duplicate participation in both States by
assuming the individual was eligible to participate in one of the
States. The estimated State agency costs of NAC participation were then
subtracted from these savings to yield a total estimated net impact for
the NAC pilot of more than $5.6 million per year in the five NAC pilot
States.
The evaluation estimated the potential impact of a nationwide NAC
from the results of the NAC pilot, including the potential cost savings
associated with its implementation. These savings estimates of the
pilot States were converted to percentages of total fiscal year (FY)
2014 SNAP benefit issuance in each pilot State, then averaged and
applied to the Program-wide total FY 2014 benefit issuance. The
evaluation estimated that nationwide implementation of the NAC would
have saved more than $114 million in SNAP benefit overpayments in FY
2014, or 0.16 percent of total SNAP issuance. As a result of this
successful pilot, as evidenced by the evaluation report findings,
Congress passed legislation to expand the NAC nationwide and mandated
State agency participation.
Nationwide NAC
The Department finds, based in part on the NAC pilot discussed
above and feedback from State agencies and FNS Regional offices, that
an automated and real-time nationwide NAC will help State agencies more
effectively prevent duplicate participation and facilitate
communication among State agencies, which can improve application
processing timeliness and Program access. The NAC will prevent and
detect interstate duplicate participation by ensuring that State
agencies are accurately issuing benefits to individuals in the State in
which they are eligible to receive them. State agencies will verify
residency and identity prior to checking the NAC using existing
verification requirements at Sec. 273.2(f). If State agencies receive
a positive match from the NAC for an individual, the State agency will
work to quickly resolve the match and communicate with the other State
agency identified in the match to ensure the individual's timely access
to benefits. The State where the household previously resided will
promptly respond to the other State agency identified in the match and
work with the other State agency and the household to ensure proper and
timely disenrollment as applicable. The NAC also requires and improves
State-to-State communication and collaboration through automation and
improved tracking. State agencies must take appropriate actions to
resolve match results and provide adequate notice to individuals who
are identified as potential duplicate participants to ensure the timely
processing of applications. SNAP applicants and participants will be
relieved of the burden they previously had to resolve a positive match,
as these new requirements place the burden on State agencies to resolve
a match and communicate with one another once notified of a match.
Through the use of the NAC, State agencies will be able to more
effectively and timely disenroll and enroll individuals in the
appropriate States. Clients are less likely to be adversely impacted by
inaccurate flags that could result in burdensome or costly claims
collections processes with an automated NAC process. Senator Stabenow,
chairwoman of the Committee on Agriculture, Nutrition, and Forestry,
reiterated the importance of timely processing of applications by
stating ``the conference committee expects that USDA's Food and
Nutrition Service, FNS, and States will establish procedures for the
NAC that will not interfere with current application and enrollment
procedures, particularly, the speedy processing of applications.'' \6\
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\6\ <a href="https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf">https://www.congress.gov/115/crec/2018/12/19/CREC-2018-12-19-pt1-PgS7918.pdf</a>, paragraph 8.
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This rule does not change the existing requirements for household
member residency, monitoring of intrastate duplicate participation, or
claims against households. Additionally, it does not change existing
requirements and procedures for investigating and disqualifying
violators.
The Department intends to implement a nationwide NAC using a phased
approach that will onboard all State agencies over a period of 5 years,
depending on their readiness, emphasizing training and proper
implementation to minimize undue burden on the State agencies, Program
participants, and applicants. The nationwide NAC will incorporate best
practices and lessons learned from the NAC pilot in order to implement
a system that prevents and detects duplicate participation efficiently
and effectively, in a manner that does not delay the certification
process. The NAC will allow FNS and State agencies to meet the
statutory and regulatory requirements for NAC matches. The Department
will provide technical assistance to State agencies to assist with NAC
implementation and ensure State agencies take appropriate actions in
response to NAC matches. The improved data sharing between State
agencies is expected to reduce duplicate participation, reduce claims
issued against individuals found to be duplicate participants, and help
streamline the application process all while ensuring there is no delay
in benefit determination.

II. Discussion of the Interim Final Rule

State Agency Stakeholder Sessions

The Department conducted 28, hour-long stakeholder sessions with 20
State agencies to better shape this rule, develop the system, and apply
lessons learned from the NAC pilot. These sessions were held from
December 2020 through August 2021 and included State agencies from
Texas, Louisiana, Massachusetts, Montana, Iowa, Missouri, New Jersey,
Illinois, Idaho, Utah, Maryland, Arizona, South Dakota, Nebraska,
Connecticut, Kentucky, South Carolina, Washington, Nevada, and Alabama.
These sessions informed the Department about State agency eligibility
systems, existing State agency workflows, how State agencies currently
process duplicate enrollment, capabilities and limitations of State
agency technology, and how existing required data matches currently
work from a front- and back-end perspective. FNS followed these
sessions with technical email inquiries to the States to gather
additional details needed to create a user-friendly system.

[[Page 59638]]

State Agency Requirements
Section 11(x)(2) of the Act requires the Secretary to ``establish
an interstate data system, to be known as the `National Accuracy
Clearinghouse,' to prevent multiple issuances of [SNAP] benefits to an
individual by more than 1 State agency simultaneously.'' Therefore, to
establish a system that is truly interstate, the Department is adding
Sec. 272.18(a)(1) and (2) through this interim final rule that
establish the NAC and require each State agency to participate in the
NAC matching program and use information from it to achieve the purpose
set forth in Section11(x)(2) of the Act. The NAC will, in real or near-
real time, receive information from State agencies about all
individuals receiving SNAP benefits in each State and notify State
agencies when an individual is receiving SNAP benefits in another
State.
The Department is committed to ensuring all statutory and
regulatory requirements for the system and its documentation will be
met and all required information will be provided in the Computer
Matching Agreement (CMA), but many details that must be provided are
dependent on the final System design. Therefore, this interim final
rule includes several requirements for State agencies for which the
exact procedures for completing them through the system will be
provided in the CMA and related documents. State agencies are required
to provide information to the NAC on all individuals participating in
SNAP, except as provided in newly created Sec. 272.18(b)(3). The
Department has determined that the elements that are necessary to
determine a match and that must be reported to the NAC are an
individual's name, Social Security number, and date of birth. However,
since these data elements are personally identifiable information
(PII), the Department is establishing secure procedures for submitting
this information to the NAC and requiring State agencies to abide by
them. In order to protect participant information, State agencies will
not submit the names, Social Security numbers, and dates of birth to
the NAC. Rather, State agencies will use a privacy-preserving record
linkage (PPRL) process to convert these data elements to a secure
cryptographic hash before sharing the information to the NAC. The PPRL
process allows the NAC to accurately match individuals, while
preventing the collection and storage of the names, Social Security
numbers, and dates of birth in the NAC system. A positive match is
identified by the NAC when two or more hashes match. State agencies are
also required to provide a participant ID to the NAC to allow the State
agency to connect the match in the NAC to an individual in the State
agency's system. In other words, the participant ID is used to help the
State agency resolve a match. When a match is found, the NAC will
create a match record with a unique match ID and notify the affected
State agencies of the match. State agencies will use the participant ID
they provided previously, now included in the match record, to find the
matched individual in the State agency's eligibility system. This
approach enhances security and privacy protections of applicant and
participant information by ensuring the NAC does not store names,
Social Security numbers and dates of birth. Additional security
measures employed by the NAC include encryption of information in
transit between State agencies and the NAC and within the NAC, as well
as controlled access through e-authentication and role-based
permissions.
Currently, under Sec. 272.4(e)(1), each State agency must
establish a process to prevent duplicate participation, while also
ensuring that applications are processed timely and participants only
receive benefits in the State in which they reside and are otherwise
eligible, in accordance with regulations Sec. Sec. 273.2(a)(2) and
273.3, respectively. Now that the Department is establishing the NAC
and associated procedures through this interim final rule, the process
provided for under Sec. 273.4(e)(1) must include compliance with the
NAC data matching regulations and other related requirements including
the Privacy Act at 5 U.S.C. 552a, a signed Computer Matching Agreement
(CMA) and Interconnection Security Agreement (ISA), and the NAC System
of Record Notice that will be published in the Federal Register after
publication of this interim final rule. FNS will provide technical
assistance for State agency integration with the NAC system.
Section 11(x)(2)(B) of the Act specifically authorizes the
Department ``to require that State agencies make available to the
National Accuracy Clearinghouse only such information as is necessary
for the purpose . . .'' of preventing duplicate participation. Through
this interim final rule, the Department is adding Sec. 272.18(b) to
require State agencies to provide such information to the NAC. Section
272.18(b)(1) requires that each State agency provide information on all
active SNAP participants to the NAC. This paragraph also defines, for
the purpose of the NAC, an ``active participant'' as an individual who
is approved to receive benefits for the month in which the State agency
is uploading the data. The Department is adding Sec. 272.18(b)(2),
which indicates that all State agencies will use the information
provided to the NAC to identify duplicate participation via NAC matches
and that each State agency shall provide information on all active SNAP
participants once per working day in accordance with the procedures
provided by FNS in the CMA. It is important that information in the NAC
be as current as possible to prevent a ``false positive'' match,
indicating duplicate participation, that could generate unnecessary
work for another State agency or the household. Conversely, any delay
in adding an individual who has become part of a State agency's active
caseload would limit the NAC's ability to prevent or curtail duplicate
participation, potentially resulting in false positives and months of
undetected duplicate participation, as has been the case when using the
quarterly PARIS match to detect duplicate participation in SNAP.
To discover if an individual is already receiving SNAP benefits,
information on that individual must be compared to the information
previously provided by all other State agencies, as described later in
this rule. The Department has identified three data elements that are
essential for a positive match and that must be submitted to the NAC.
These NAC data matching elements are: name, date of birth, and Social
Security number. However, in order to prevent this information from
being stored in the NAC, the Department is establishing secure
procedures to protect this information and is requiring State agencies
to abide by them. These requirements and procedures are described in
the Computer Matching and Interconnection Security Agreement package.
The Department is adding Sec. 272.18(c)(1) to outline the NAC matching
process. State agencies must report the NAC data matching elements
using the secure procedures established by FNS. The use of these data
elements is necessary to implement a critical finding of the NAC pilot
evaluation, which found that, with virtually no exceptions, matches
using these combined data elements were valid. By comparison, Social
Security number-only matches were often the result of data entry
errors. Therefore, to avoid false positives and the burdens they place
on State agencies and households to resolve, all three data elements
must match to be deemed a positive match by the NAC.
A Social Security number is required as a NAC data matching element
because a Social Security number is a

[[Page 59639]]

requirement for SNAP participation. Regulations at Sec. 273.6 require
that a household participating or applying for participation in SNAP
provide the State agency with the Social Security number of each
household member or apply for one before certification. If the
individual does not yet have a Social Security number but can provide
proof that a Social Security number has been applied for, the State
agency will continue with the eligibility determination process as
appropriate. Once the individual receives a Social Security number and
reports it to the State agency, it shall be added to the daily active
participant upload using procedures established by FNS and any
potential match will be indicated during the monthly bulk match.
The new regulation at Sec. 272.18(b)(4) will require State
agencies to submit additional data elements to help them resolve
matches and to better protect those who may be considered vulnerable
individuals. These additional required data elements include a
vulnerable individual flag if applicable, and a participant ID, as
previously mentioned. The NAC will share these additional data elements
with State agencies as part of the notification of a NAC match to
provide useful context about the SNAP case in the other State and aid
in the match resolution process. The additional data elements will have
no impact on what is considered a positive match and is information
that can be obtained by the State agency during the certification
process.
While the NAC protects the information of all individuals
throughout the matching process, this rule adds additional protection
for those who are considered vulnerable individuals. The Department is
requiring that a vulnerable individual flag be provided to the NAC,
when applicable, because Section 11(x)(2)(C)(iv) specifies that
information made available to the NAC be used in a manner that protects
the identity and location of SNAP applicants and participants who are
vulnerable. (Vulnerable individuals, defined by the newly created Sec.
272.18(c)(9), are discussed later in this rule.) Automatically
including a vulnerable individual flag at the time of the match, rather
than relying on manual sharing of this information, ensures each State
agency is immediately aware of the individual's vulnerable status and
the need to take extra precautions to protect the identity and location
of that person as they verify information and take action on the
related SNAP case. The Department requires extra precautions to include
removing the location of vulnerable individuals when issuing a notice
of match results or a combined notice. States must also exclude
location information from any written or verbal communications that
happen as a result of a NAC match. For example, absent this
requirement, an abusive spouse who received a notice of match results
could attempt to bypass protections by contacting a toll-free State
hotline and asking a call center employee to identify the source State
of the NAC data match. Thus, the Department expects that State agencies
take preventive measures to ensure the privacy and protection of
vulnerable individuals, including those required by this rule, and that
these practices are established in State agency business processes,
documented in writing, and that State agency employees are trained
regarding how to implement these protections.
The Department requires State agencies to provide a participant ID
that identifies an individual within the State agencies' own system to
allow them to identify those individuals for whom they have received a
notification of a NAC match. When a match is found, the NAC will create
a match record with a unique match ID and notify the affected State
agencies of the match. State agencies will then use the participant ID
they provided previously, which is included in the match record in the
NAC, to find the matched individual in the State agency system. The
participant ID shall not use any sensitive PII.
The Department is aware that there are other data elements that,
while not necessary for the match, could help a State agency resolve a
match, such as a case number, a case closure date, or the date of last
issuance. However, not all States have these data elements available,
and of those that do, not all States have the same understating of what
data is meant by these terms. While the Department can define such
elements in regulation, making the terms uniform throughout the States,
the impact a new definition and the immediacy of the implementation of
this interim rule would have on the various State systems is not clear.
Additionally, there may also be other data elements that the Department
is unaware of that would help State agencies resolve a match.
Therefore, in this interim final rule, the Department is not requiring
State agencies to report additional data elements to the NAC but is
signaling its intent to require in the final rule that State agencies
report additional data elements if available, including a case number,
a case closure data, and the date of last issuance. The Department is
soliciting comments regarding these data elements, additional data
elements State agencies have the ability to report, which data elements
would be most helpful, and how they would be most helpful.
The Department is adding Sec. 272.18(c)(2) requiring that State
agencies follow existing verification procedures outlined at Sec.
273.2(f)(1)(v), (vi), and (vii) for verifying Social Security numbers,
residency, and identity prior to checking the NAC. This will ensure
that State agencies have reliable information prior to checking the
NAC. This requirement is based on existing regulations that require
other data matches to verify match data at the time of application,
including the prisoner verification system required at Sec. 272.13(c),
the deceased matching system required at Sec. 272.14(c)(1), and the
disqualified recipient database required at Sec. 273.2(f)(11)(i)(B).
These existing regulations require data matches ``prior to
certification'' or ``at the time of application'' but do not further
specify the timing of the required match. The State agency must follow
Social Security number, residency, and verification requirements for a
household as described at Sec. 273.2(f)(1)(v), (vi), and (vii) before
checking the NAC to ensure that they are potentially eligible to
receive benefits in the State in which they are applying. This step is
being added to minimize the likelihood of inaccurate data matches. Once
the State agency completes these verification requirements, it may
continue with the application process and the State agency may check
the NAC for a match. The Department will assist the State agency in
providing training to eligibility workers on their State agency's
processes for using the NAC, which may include information on how and
when to conduct matches, how to respond in the event of a match,
verifying information, ensuring timely application processing, and
providing necessary notices. The Department further recommends that
State agencies automate NAC processes to the greatest extent possible.
This is a significant recommendation from the NAC pilot evaluation that
suggests integrating the NAC with existing eligibility systems, real
time queries of the NAC, and the automation of match notification
emails as options for further automation.
It is important that new individuals who join existing SNAP
households are checked against the NAC's database of active
participants in other States. The NAC pilot evaluation found that 47
percent of individuals receiving SNAP benefits from multiple State
agencies were part of households where all other

[[Page 59640]]

household members were not receiving benefits from multiple State
agencies. These data suggest that a significant percentage of
interstate duplicate participation occurs when a new member is added to
an existing case. For example, if an individual is a member of a
household receiving benefits in one State, but then moves to another
State and applies for benefits, a NAC match will indicate that that
individual is already participating in another State as a part of a
household. The previous household that the individual has moved away
from will receive a notice from the State agency indicating that a NAC
match was received and that they will need to either contest the
findings or update their household composition to indicate the
individual separated from them so that the individual can begin
receiving benefits in the new State without causing duplicate
participation. This follows the existing process for data matches in
notifying the previous address of the match, providing them with an
opportunity to contest, prior to taking adverse action. In this
example, the previous household was not attempting to receive duplicate
benefits from multiple States, and they were entitled to receive
benefits in the State in which they reside. In a scenario where a State
agency receives a positive match for a child moving between households
due to a custody arrangement the State agency must resolve the match in
order to determine what actions must be taken on the case. The State
agency may be able to resolve the match based on existing information
known to the State agency or it may need to pursue additional
information or verify questionable information.
There is flexibility on exact timing when the State agency must
submit new household member information to the NAC, but it must do so
before adjusting household benefits to account for the new member as
described in Sec. 273.12(c)(1)(ii). Depending on a household's
reporting system, it is not always required to immediately report
changes in household composition. Therefore, a household may report a
new member before the prior household reports losing the individual
without either household committing a violation of Program rules.
The Department is adding Sec. 272.18(c)(6) requiring State
agencies to note instances where there is a match in the participant's
casefile. This requirement is necessary to ensure proper case
documentation for the purposes of oversight as described in part 275,
regarding performance reporting systems.
Bulk Data Matching Requirements
The NAC will automatically conduct bulk matches on a monthly basis
(``monthly bulk matches'') of the NAC data matching elements provided
by all participating State agencies. The monthly bulk match compares
the secure hash of all active participants included in the most current
daily upload from each participating State agency to discover all
instances of duplicate participation that exist at the time the match
is conducted. The NAC will create a match record for each instance of
duplicate participation found and will notify State agencies when
duplicate participation is discovered for participants in their State.
The Department is adding Sec. 272.18(c)(4) to reflect this. The
Department considers information that is received by State agencies as
a result of a monthly bulk match unclear information because it is a
match received during the certification period for an individual
currently participating in SNAP. State agencies must pursue
clarification and verification of this information by following the
unclear information procedures provided in Sec. 273.12(c)(3)(iv)
(discussed in the next section) to provide notice and an opportunity to
contest the information received before taking any adverse action. The
NAC pilot evaluation indicated that bulk matches alone were
insufficient in identifying and preventing duplicate participation;
however, when implemented with other matches, bulk matching better
identified matches that were missed or not acted upon. The Department
will provide ongoing technical assistance to State agencies emphasizing
the importance of States approaching the resolution of these matches
consistently as well as maintaining Program access for SNAP applicants
and recipients to State agencies.
Procedures and Requirements for Acting on NAC Data Matches
State agencies using matching information from the NAC must comply
with the requirements set forth at 5 U.S.C. 552a(p) and Sec.
272.12(c). Pursuant to these requirements, State agencies may not take
any adverse action to terminate, deny, suspend, or reduce benefits to
an applicant or SNAP participant based on information produced by the
NAC until the information has been independently verified by the State
agency and the applicant or participant receives a notice from the
State agency containing a statement of its findings, informing the
individual of the opportunity to contest such findings, and the
allowable timeframe to do so. State agency action upon receiving a NAC
match varies depending on when the match is received; for example,
during the certification period versus at the time of application.
Therefore, the Department is adding Sec. 272.18(c)(3) to describe the
actions a State agency must take in response to a positive NAC match
received at application, recertification, and addition of a new
household member. When a State receives a positive NAC match on an
individual at initial application, recertification, or when a new
household member is added, the State agency must independently verify
the information if there is a potential for adverse action in
accordance with Sec. 272.12(c)(1). Action only needs to be taken on
positive matches. If there is no positive match, benefit determination
continues following existing regulations.
The Department also establishes at Sec. 272.18(c)(3) a 10-day
timeframe for State agencies to initiate action to resolve a positive
match at application, recertification, and addition of a new household
member; as well as a requirement to promptly inform the other State
agency indicated in the match of the initiated action. The 10-day
timeframe is consistent with existing timeframes for other
certification and recertification matches at Sec. 273.2(f) and will
help prevent delays in eligibility determination.
While State agencies have 10 days to initiate action to resolve a
match and report that action to the other State agency, they are
encouraged to resolve matches as quickly as possible. State agencies
are also encouraged to maintain contact with one another throughout the
match resolution process to quickly resolve a match and keep the
applicant informed of progress. After State agencies have determined
the appropriate disposition on the case, they must also notify each
other of the final resolution of the match. If there is no match
indicated during a NAC query, then the State agency must continue with
the eligibility determination process. The requirement for State agency
communication addresses a key finding of the NAC pilot evaluation where
pilot States identified examples of SNAP cases not being closed due to
another State not communicating or taking timely action. Greater
communication also ensures that State agencies are assisting the
applicant in the event of the match by being required to issue notices
to the client to verify information obtained through a NAC match as
well as providing an opportunity to contest. Applicants are

[[Page 59641]]

also aided through State-to-State communication as State agencies are
required to communicate with one another within 10 days of a match and
communicate case disposition to the other State to ensure the
individual is receiving benefits in the State in which they are
eligible.
If there has been no contact from the other State agency within the
established timeframe, and all other eligibility and verification
requirements are met, the State agency must continue processing the
application and issue benefits to the applicant. A NAC data match shall
not delay processing of the application and provision of benefits
beyond the normal processing standards in Sec. Sec. 273.2(g) and
273.14(d), or expedited service standards in Sec. 273.2(i), whichever
applies to the applicant household. If a State agency is not notified
of initial action from the other State agency indicated in the match
within 10 days, then the application can continue to be processed.
Delays in processing caused by a positive NAC match where household
verification is otherwise incomplete shall be handled in accordance
with Sec. 273.2(h). However, delays in communication or action between
State agencies regarding verification of information associated with a
positive NAC match must not prevent the eligibility determination of an
applicant, recertifying participant, or newly added household member
per the added regulation at Sec. 272.18(c)(3)(v).
The Act provides that an applicant's right to an eligibility
determination is triggered by the filing of an application and not by
State action. Section 11(e)(2)(B)(iv) of the Act requires that State
agencies consider an application that contains the name, address, and
signature of the applicant to be filed on the date the applicant
submits the application. Additionally, Section 11(e)(2)(B)(i) requires
timely, accurate, and fair service to applicants for, and participants
in, SNAP. As a result, the Department expects State agencies to be
responsive in resolving NAC data matches to ensure applications are
processed timely, in accordance with the Act, and to assist households
to resolve residency issues due to a NAC data match.
A State agency that is notified of a NAC match during the
certification period is required to take initial action to resolve a
match as well as issue a combined notice. The State agency is also
encouraged to assist the individual with closing their case, when
applicable. For example, if an individual indicated in the match
contacts a State agency and verbally requests it to expedite the
closure of their case, that State agency must take prompt action to do
so and provide a letter confirming voluntary withdrawal to the address
on file, or the new one as specified by the individual making the
request, consistent with regulations at Sec. 273.13(b)(12) to ensure
the individual has proof of closure so that they can apply for benefits
in the new State. Per newly established regulations at Sec.
272.18(b)(5), State agencies are required to maintain accurate and up
to date daily uploads of NAC data elements regarding the status of
individuals participating in SNAP to prevent the possibility of false
positives and any delays in benefit issuance. This would include
maintaining appropriate security and privacy standards per the NAC CMA
and ISA. If the NAC system is not operational due to unforeseen
circumstances, as will be outlined in the CMA and technical guidance,
State agencies will continue the eligibility determination process
without the initial NAC query. Any instances of duplicate participation
will be discovered during the monthly bulk match once the system is
again operational. For disaster situations, State agencies should
follow their Disaster SNAP (D-SNAP) procedures for data entry and
certification per FNS guidance.\7\ This guidance explains that State
agencies are required to screen for duplicate participation in disaster
situations. State agencies must either check for duplicate
participation utilizing the NAC in the State's D-SNAP system, or the
State agency must accept applications and inform applicants that
eligibility is contingent upon a subsequent check for duplicate
participation. Any check for duplicate participation must be done using
the NAC.
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\7\ <a href="https://www.fns.usda.gov/snap/dsnap/state-agencies-partners-resources">https://www.fns.usda.gov/snap/dsnap/state-agencies-partners-resources</a>.
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Section 11(e)(26) of the Act requires States to ``pursue
clarification and verification, if applicable, of information relating
to the circumstances of the household'' when that information is
received from data matches related to prisoners, deceased individuals,
and the NAC. The Department considers match information that is
received from the NAC during the certification period to be unclear
information. This is consistent with how information from other Federal
systems such as the Prisoner Verification system and Deceased matching
system, is treated by the Department. The procedures for pursuing
clarification and verification of unclear information received from
prisoner and deceased individual data matches during the certification
period are described in existing regulations at Sec. 273.12(c)(3).
Therefore, the Department is adding Sec. 273.12(c)(3)(iv) to describe
what actions a State agency must take when it receives unclear
information during the certification period from a NAC match. Those
actions are described below.
This interim final rule amends Sec. 273.12(c)(3)(i) to add
information received from NAC matches to the types of unclear
information for which State agencies must pursue clarification and
verification when received during a certification period. Unclear
information is defined per Sec. 273.12(c)(3) as information that is
not verified or information that is verified but additional information
is needed to act on the change. The Department is adding Sec.
272.18(c)(5) to describe procedures to be followed for matches
containing unclear information related to a NAC match during the
certification period and further describes those procedures in Sec.
273.12(c)(3)(iv). These procedures are different from procedures
related to information received from a NAC match at application,
recertification, or for a newly added household member as further
discussed earlier in this rule. These procedures for unclear
information are different from existing procedure for Deceased Matching
and Prisoner Match as the added regulations at Sec. 273.12(c)(3)(iv)
implements the requirement to initiate action to resolve the match and
to communicate with the other State agency within 10 days of receipt of
the match notification. Additionally, the added regulation Sec.
273.12(c)(3)(iv)(A) implements the combined notice of match result and
notice of adverse action.
To maintain consistency with timeframes established during
application and recertification, the newly established regulations at
Sec. 272.18(c)(3)(i) establishes that State agencies will have 10 days
from the time a match is received to initiate action to resolve a match
and to notify the other State agency of that initiating action. State
agencies must also provide resolution of the match to the other State
agency, similar to regulations at Sec. 272.18(c)(3).
NAC Data Match Notice Requirements
This interim final rule requires that State agencies send a notice
of match results to households that received a positive match at
application, at recertification, or for a newly added household member
if the information indicated in the match could lead to a

[[Page 59642]]

denial of benefits or other adverse action on the case. The Department
is adding this requirement for a notice of match results at Sec.
272.18(c)(3)(iii)(A) to provide the individual with an opportunity to
contest findings in a data match prior to adverse action or denial of
benefits. The notice of match results must clearly explain what
information is needed from the household, and that failing to respond
within 10 days, could result in a denial of benefits or adverse action,
as appropriate.
To aid the NAC resolution process for applicants, recertifying
participants, and newly added household members and ensure they are
receiving their benefits in a timely manner, this interim final rule
clarifies that if State agencies have enough information to resolve the
match, and there is no potential for adverse action, State agencies are
not required to send a notice of match results. The Department is
adding Sec. 272.18(c)(3)(iii)(B) to clarify the NAC match resolution
process for the individual if there is no potential of adverse action.
For example, if a positive match is identified for an individual during
the interview process and the individual can immediately verify the
information from the match, and there is no potential of adverse
action, no notice of match results is required. In situations like
this, the State agency must provide a verbal notification of a match
and must document that verbal notification in the case file before
continuing with the eligibility determination process.
This interim final rule requires that State agencies send a
combined notice of match results and notice of adverse action to
households that received a positive NAC match during the certification
period. The Department is adding this requirement for a combined notice
for action on NAC matches at Sec. 273.12(c)(3)(iv)(A) to streamline
the notice process for State agencies, reduce the likelihood of
duplicate participation and the need to establish claims, while still
providing the household with an opportunity to contest per 5 U.S.C.
552a(p). To maintain compliance with the notice of adverse action
requirements at Sec. 273.13, the Department is also amending Sec.
273.13(a)(2) to add language stating that a notice of match results and
notice of adverse action may be combined to meet the requirements in
Sec. 273.12(c)(3)(iv). This change is consistent with similar
allowances provided for Income Eligibility Verification System (IEVS)
and Systematic Alien Verification for Entitlements (SAVE) computer
matches at Sec. 273.2(f).
The consequences for failing to respond to the combined notice
depend on the reporting system to which the household has been assigned
as explained at Sec. 273.12(c)(3)(iii)(A) and (B). If the household is
subject to change reporting and fails to respond to the combined
notice, which clearly explains what information is needed from the
household and the consequences of failing to respond, the State agency
must terminate the case. If the household is assigned to any other
reporting system besides change reporting and the household fails to
respond sufficiently to the combined notice, then the State agency must
remove the subject individual and the individual's income from the
household and adjust the benefits accordingly.

III. Discussion of Limited Use of NAC, Use and Disclosure, Protecting
Vulnerable Individuals, and Privacy Act Implications

Limited Use of NAC
Section 11(x)(2)(C) of the Act explicitly limits the use of the NAC
to preventing duplicate participation--it may be not used for other
Federal, State, or local programs or other purposes. In compliance with
both this requirement and Section 11(x)(3)(D) of the Act, which
requires the establishment of safeguards for information submitted to
or retained by the NAC, the NAC will not retain SNAP applicant or
participant information longer than needed to accomplish the purpose of
preventing duplicate participation. To comply with this requirement,
only NAC data matching elements on active participant information will
be uploaded to the system once each working day. This information will
not be stored in the NAC. Upon match, only the match record is stored
in the system. Additionally, the NAC data elements will be submitted
using the secure procedures established by FNS. Once an individual is
no longer an active SNAP participant, that individual's information
will no longer be included in the daily upload, and their information
can no longer be matched against. The Department is codifying these
procedures to safeguard information submitted or retained to the NAC at
Sec. 272.18(b)(5).
Use and Disclosure
Current disclosure requirements at Section 11(e)(8)(A) of the Act,
and regulations at Sec. 272.1(c) permit the disclosure of SNAP
applicant or participant information to persons directly administering
assistance programs. Section 11(x)(2)(B) and (C) of the Act only allow
the Department to require State agencies to submit to the NAC
information needed to prevent interstate duplicate participation and
prohibits the use of information from the NAC beyond preventing
interstate duplicate participation. This restricts the use and
disclosure of information from the NAC beyond the disclosure
requirements in current regulations at Sec. 272.1(c). The Department
acknowledges the blanket authorities for data sharing provided by other
Federal laws; however, sharing of NAC data beyond its original intent
is currently prohibited by Section 11(x)(2)(C) of the Act.
Congressional action to amend the Act would be required to allow data
sharing beyond the purpose of preventing duplicate participation in
SNAP.
Accordingly, the Department is adding Sec. 272.1(c)(4) through
this interim final rule to limit the disclosure of NAC data ``to only
persons directly connected with the administration or enforcement of
the provisions of the Food and Nutrition Act of 2008 or regulations.''
The regulation also requires that NAC data may only be used for the
purpose of preventing multiple issuances of SNAP benefits.
Protecting Vulnerable Individuals
Section 11(x)(2)(C)(iv) of the Act requires that information made
available to the NAC be used in a manner that protects the identity and
location of SNAP applicants and participants who are vulnerable
individuals. Also, Section 3(m)(5)(C) of the Act and existing
regulations at Sec. 273.3(a) exempt certain residents of shelters for
battered women and children from the requirement that SNAP participants
not participate as a member of more than one household or in more than
one project area, in any month. Effectively, duplicate participation is
permitted temporarily among this vulnerable portion of SNAP
participants. Consistent with these existing requirements and
reflecting the Congressional mandate in the Act to protect such
individuals, a process to protect the identity and whereabouts of
vulnerable individuals will be established in the NAC system, including
location protection of individuals in verbal and written communication
with any household associated with a vulnerable individual match.
Therefore, the Department is adding Sec. 272.18(c)(9) which
establishes a definition for vulnerable individuals specific to the
NAC. This definition covers those who would be endangered by the
dissemination of their information, including but not limited

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to, residents of shelters for battered women and children as defined in
Sec. 272.1, residents of domestic violence shelters, or a person who
self-identifies as fleeing domestic violence at any point during
application, recertification, during the certification period, or when
there is a newly added household member, regardless of the individual's
age or gender.
Additionally, current regulations at Sec. 273.11(g) require the
State agency to take prompt action to ensure the former household's
eligibility or allotment reflects the change in the household's
composition by issuing a notice of adverse action in accordance with
Sec. 273.13. However, any communication with a household as a result
of a NAC match, whether written via a notice or verbal, cannot contain
the location of the individual indicated in the match per the newly
added Sec. 272.18(c)(3)(iii). To ensure consistency across notices,
the new regulations at Sec. 272.18(c)(9) also describes that when a
vulnerable individual is indicated in a positive match, State agencies
must take steps to ensure that any information resulting from a NAC
match, including identity and location, is protected during
verification and resolution. The State's determination of the
individual's status as a vulnerable individual could come from
information reported by the household on its application or voluntarily
disclosed during its interview, or from knowledge of the individual's
residence at a domestic violence shelter or shelter for battered women
and children; however, the Department does not require or expect the
State agency to solicit this information as a part of the certification
process. Furthermore, the Department expects State agencies to include
processes for protecting vulnerable individuals and ensure all
applicable staff, including front line eligibility workers, call center
operators, fraud investigators, and claims staff--receive hands-on
training using real-world examples of how to protect vulnerable
individuals.
Privacy Act Implications
The Privacy Act of 1974 (Privacy Act), as amended by the Computer
Matching and Privacy Protection Act of 1988 and the Computer Matching
and Privacy Protection Amendments of 1990, set the requirements for
matching programs at 5 U.S.C. 552a(o). As a Federal system of records
being used in a matching program, the NAC is subject to these
requirements. The Department will ensure all requirements of the
Privacy Act, Federal Information Security Management Act of 2002
(FISMA), and National Institute of Standards and Technology (NIST) are
met within the system development process, including the development of
all documentation required for approval of the matching program by the
Department's Data Integrity Board. Documentation will include a System
of Records Notice (SORN), a Computer Matching Agreement (CMA), and
multiple system-specific documents that provide details about system
design and data security and privacy protocols. Agencies participating
in a matching program are required to enter into a written agreement,
referred to here as a CMA. This interim final rule includes this
requirement in Sec. 272.18(a)(3).

IV. 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). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
This interim final rule has been determined to be economically
significant and has been reviewed by the Office of Management and
Budget (OMB) in conformance with Executive Order 12866.

Regulatory Impact Analysis

As required by Executive Order 12866, a Regulatory Impact Analysis
(RIA) was developed for this interim final rule. It follows this rule
as an appendix. The following summarizes the conclusions of the
regulatory impact analysis:
The Department estimates the net reduction in Federal SNAP spending
associated with the interim final rule to be nearly $463 million over
the five years 2022-2026. This reduction in spending represents a
decrease in Federal transfers (SNAP benefit payments) of approximately
$498 million over five years due to prevention of duplicate
participation, partially offset by increases in Federal systems costs
related to implementing, operating, and maintaining the system ($18.3
million) and in the Federal share of State administrative costs (nearly
$16 million). In addition, the Department estimates an increase in the
State share of administrative costs (nearly $16 million over five
years) for start-up costs and costs associated with submitting data and
following up on matches. This rule will also increase administrative
burden on SNAP households by nearly $1.2 million over five years.
Households identified as potential duplicate participants through NAC
matches will need to provide verification and respond to notices and
requests for information from State Agencies.

Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies
to analyze the impact of rulemaking on small entities and consider
alternatives that would minimize any significant impacts on a
substantial number of small entities. Pursuant to that review, the
Secretary certifies that this rule will not have a significant impact
on a substantial number of small entities. This interim final rule will
not have an impact on small entities because the rule primarily impacts
SNAP State agencies. As part of the requirements, State agencies will
have to develop procedures for submitting data and following up on
matches when they occur. Small entities, such as smaller retailers,
will not be subject to any new requirements.

Congressional Review Act

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Management and Budget Office of Information and
Regulatory Affairs has designated this as a major rule, as defined by 5
U.S.C. 804(2).

Unfunded Mandate Reform Act

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA)
established 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 UMRA, the Department 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 UMRA
generally requires the Department 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 interim final rule contains no Federal mandates (under the
regulatory provisions of Title II of UMRA) for

[[Page 59644]]

State, local and tribal governments, or the private sector, of $100
million or more in any one year. Therefore, this rule is not subject to
the requirements of Sections 202 and 205 of UMRA.

Executive Order 12372

SNAP is listed in the Catalog of Federal Domestic Assistance under
No. 10.551. For the reasons set forth in the Federal Register notice,
published June 24, 1983 (48 FR 29115), this program is excluded from
the scope of Executive Order 12372, which requires intergovernmental
consultation with State and local officials.

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 Executive Order 13132.
The Department has considered the impact of the NAC and determined
that this rule has federalism impacts. However, this rule is required
by statute, so under Section (6)(b) of the Executive order, a
federalism summary is not required. The Department requests comments
from State and local officials as to the need for the NAC and any
alternatives to the regulations proposed.

Executive Order 12988, Civil Justice Reform

This interim final 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 which conflict with its provisions or which would otherwise
impede its full and timely implementation. This rule is not intended to
have retroactive effect unless so specified in the DATES section of the
final rule. Prior to any judicial challenge to the provisions of the
final rule, all applicable administrative procedures must be exhausted.

Civil Rights Impact Analysis

FNS has reviewed the interim final rule, in accordance with
Department Regulation 4300-004, Civil Rights Impact Analysis, to
identify and address any major civil rights impacts the rule might have
on minorities, women, and persons with disabilities. A comprehensive
Civil Rights Impact Analysis (CRIA) was conducted on the interim final
rule, including an analysis of participant data and provisions
contained in the interim final rule. The CRIA outlines outreach,
mitigation, and monitoring strategies to lessen any possible civil
rights impacts. The CRIA concludes by stating FNS believes that the
promulgation of this interim final rule will impact State Agencies and
the way they process applications for SNAP benefits. Additionally, the
rule may impact SNAP applicants and participants if identified by the
NAC for duplicate participation. However, FNS finds that the
implementation of the outreach, mitigation, and monitoring strategies
may lessen these impacts. Outreach initiatives will include making the
publication of the interim final rule available in alternative formats,
including 508 compliant and in other language for persons with limited
English proficiency, upon request. Additionally, the Department will
work with the Office of Tribal Relations to ensure meaningful
consultation is provided. To lessen any possible impact of the interim
final rule, the program will implement a phased approach over a period
of 5 years from the date of publication. If deemed necessary, FNS will
propose further mitigation and outreach strategies to alleviate impacts
that may result from the implementation of the final rule.

Executive Order 13175

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. Additionally, other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, the relationship between the Federal Government and
Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes also require
consultation.
This regulation does not appear to have significant tribal
implications, so consultation is not required. Additionally, FNS
discussed this rule at a listening session on February 12, 2020, and no
issues with the rule were identified. No tribes have requested
consultation to this point, but if consultation is requested, the USDA
Office of Tribal Relations (OTR) will work with FNS to ensure quality
consultation is provided.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR part
1320) requires the Office of Management and Budget (OMB) to approve all
collections of information by a Federal agency 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.
In accordance with the Paperwork Reduction Act of 1995, this
interim final rule contains information collections that are subject to
review and approval by the Office of Management and Budget; therefore,
FNS is requesting a new OMB Control Number 0584-NEW. Upon approval, FNS
intends to merge a portion of these burden estimates into OMB Control
Number: 0584-0064, Expiration Date: 2/29/2024. These burden estimates
are contingent upon OMB approval under the Paperwork Reduction Act of
1995. When the final rulemaking information collection request is
approved, the Department FNS will publish a separate notice in the
Federal Register announcing OMB's approval.
Comments on this interim final rule must be received by December 2,
2022. Send comments to Office of Information and Regulatory Affairs,
OMB, Attention: Desk Officer for FNS, Washington, DC 20403, Fax: 202-
395-7285, or email to <a href="/cdn-cgi/l/email-protection#8ae5e3f8ebd5f9ffe8e7e3f9f9e3e5e4cae5e7e8a4efe5faa4ede5fc"><span class="__cf_email__" data-cfemail="fe91978c9fa18d8b9c93978d8d979190be91939cd09b918ed0999188">[email&#160;protected]</span></a>. Please also send a
copy of your comments to Evan Sieradzki at the Food and Nutrition
Service, U.S. Department of Agriculture, 1320 Braddock Place, 5th
floor, Alexandria, VA 22314. For further information please contact the
State Administration Branch Chief, Maribelle Balbes, at the above
address. Comments are 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 use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology.
All responses to this notification will be summarized and included
in the request for OMB approval. All comments will also become a matter
of public record.
Title: Supplemental Nutrition Assistance Program: Requirement for

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Interstate Data Matching to Prevent Multiple Issuances.
OMB Control Number: 0584-NEW.
Expiration Date: Not yet determined.
Type of Request: NEW.
Abstract: The Agriculture Improvement Act of 2018 requires the
Secretary of Agriculture to establish an interstate data system called
the National Accuracy Clearinghouse (NAC) to prevent multiple issuances
of Supplemental Nutrition Assistance Program (SNAP) benefits to an
individual by more than one State agency simultaneously in the same
month (also known as interstate duplicate participation). FNS is
requesting a new OMB Control Number for the requirements in this
interim final rule. The majority of the burden requirements established
in this rule are consistent with estimates currently approved under OMB
Control Number 0584-0064; Expiration Date: 2/29/2024. This rule will
modify current regulations resulting in an increase in the reporting
burden for State agencies and Individuals/Households. Upon approval of
the new OMB control number the Department will merge the change in
burden hours associated with this rule with OMB Control Number 0584-
0064. Any new requirements not consistent with currently approved
activities under OMB Control Number 0584-0064 are denoted as such. This
interim final rule incorporates best practices and lessons learned from
the NAC pilot. The NAC pilot is a shared data clearinghouse that allows
States to check whether a SNAP applicant is receiving SNAP benefits in
another pilot State in real or near-real time. Five States participate
in the NAC pilot: Alabama, Florida, Georgia, Louisiana, and
Mississippi. The NAC pilot program began exploring the prevalence of
duplicate participation and the feasibility of a system to prevent it
in July 2013. NAC pilot data matching operations began in June 2014 and
continue today in Alabama, Florida, Georgia, and Mississippi.
In the NAC pilot, the State agencies of Alabama, Florida, Georgia,
Louisiana, and Mississippi each submit a file daily of its entire SNAP
caseload, which is integrated into a list of all SNAP participants
receiving benefits in the participating States. State agencies query
the system when they receive SNAP applications or add new members to a
household. State agencies then check the new individuals against the
NAC pilot's list of active SNAP participants in other States. If an
applicant is identified as receiving benefits in another NAC pilot
State, that State is contacted by the matching State agency responsible
for administering SNAP benefits to close the individual's case. Once
the applicant's out-of-State case is closed, the State receiving the
application can move forward with the certification process. If the
applicant is checked against the NAC pilot's list of active SNAP
participants in other States and the applicant is not identified as
receiving SNAP benefits elsewhere, then the State proceeds with the
certification process.
In addition to screening applicants, the NAC pilot also notifies
State agencies when an active member of its caseload is simultaneously
active in another State. Upon receiving this information, NAC pilot
States issue a Request for Contact to the individual's household,
informing the household of the match and requesting proof of residency
and proof of closure of the out-of-state case identified by the match.
Regulations at Sec. 273.12(c)(9) describe how State agencies must
respond to information like a NAC pilot data match received during the
certification period. The existing regulations prevent States from
acting on NAC data matches before their next scheduled contact with the
household, so States participating in the NAC pilot operate under an
administrative waiver (Sec. 272.3(c); 17(b)(1) of the Food and
Nutrition Act of 2008). The waiver allows the State to issue a Request
for Contact to the household upon receiving a pilot NAC data match
regarding an active member of its caseload. In lieu of a Request for
Contact, the interim final rule will instead use a notice of match
results or, if there is no possibility of adverse action, verbally
request verification of information in the State with the new
household, recertifying household, or when there is a newly added
household member, and note that communication in the casefile; the
notice of match results will serve the same purpose as a Request for
Contact. If an individual is indicated in a positive match during the
certification period, the State agency will instead issue a combined
notice of match results and notice of adverse action. Each of these
activities serve similar purposes and only vary depending on when the
match is discovered. For example, a combined notice of match results
and notice of adverse action could not be issued to an individual
during the application or recertifying process, because there is not
yet an active case for the State to take adverse action upon.
Therefore, when a notice is sent for a match discovered during
application, recertification, or for a newly added household member the
activity will be known as notice of match results. When a notice is
sent for a match discovered during the certification period, the
activity will be known as a combined notice of match results and notice
of adverse action.
This interim final rule requires SNAP State agencies to provide
information to the NAC regarding individuals or households receiving
SNAP benefits in their States at Sec. 272.18(b)(1) and to screen all
Individuals/Households known as SNAP Program applicants using Social
Security numbers, date of birth, and name at Sec. 272.18(b)(3), to
ensure they are not already receiving benefits in another State. Per
Sec. 272.18(b)(4) State agencies are also required to submit to the
NAC participant ID, and indicate if the individual is considered a
vulnerable individual using the vulnerable individual flag if the State
becomes aware of the status during the certification process and the
information is available in the State's SNAP eligibility system. Under
Sec. Sec. 272.18(c)(3) and (c)(5), 273.13(a), 273.2(f)(1) and (2), and
273.12(c)(3)(iv) State agencies are required to take appropriate action
with respect to each indication from the NAC that an individual is
receiving SNAP benefits from more than one State agency simultaneously.
This appropriate action includes either a notice of match results or,
verbal indication (if there is no possibility of adverse action), or a
combined notice of match results and notice of adverse action to verify
information after a match, as appropriate. Following OMB approval of
this NEW information collection under the Paperwork Reduction Act, the
burden hours described below will be merged with the existing OMB
control number 0584-0064, expiration date 2/29/2024. While the agency
anticipates roughly 32 State agency respondents to be covered in this
collection due to the phased approach for system operation, we are
requesting 53 total respondents to cover full implementation.
First Year (One-Time Burden)
State Agencies
The one-time burden for this interim final rule includes an
increase of 208,555 hours and 10,706 responses for State agency
activities associated with set up, training, and computer matching
agreements for the 53 State agencies participating in the NAC. Under
Sec. 272.18(b)(1), 53 State agencies must set-up a new system to
report their caseloads to the NAC. FNS estimates this will produce
approximately 1 response per State agency for a total of 53 responses
total. FNS also estimates it

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will take each State agency approximately 1,920 hours for a total of
101,760 annual burden hours. This program change reflects new one-time
burden of 1,920 hours for each State Agency to reflect the time
associated with the set-up of a new system. This burden is informed by
the evaluation report of the NAC pilot outlining State start up time
and costs. The Department assumes the set-up of a new system will
require four full-time staff for approximately twelve weeks. Depending
on system design, set-up can include arranging an automated daily
export of active participants to send to the NAC and updating software
that manages workflows for certification, recertification, as well as
the addition of new household members to query the NAC before
certifying benefits.
Under Sec. 272.18(b)(1), approximately 200 eligibility workers
from each of the 53 State agencies that participate in the NAC will
receive one time training on how to properly incorporate the system
into existing certification and recertification processes. FNS
estimates this will produce approximately 200 workers per State agency
for a total of 10,600 workers. FNS also estimates it will take each
State agency approximately 10 hours to train an eligibility worker for
a total of 106,600 new one-time burden hours. This includes general
training on business practices for the NAC as well as the NAC system,
testing and troubleshooting, and authentication for eligibility workers
to access the system.
Under Sec. 272.12(b), 53 State agencies will enter into a State
agency computer matching agreement with FNS in order to participate in
the NAC. FNS estimates this will produce approximately 1 response per
State agency for a total of 53 responses. FNS estimates it will take
approximately 15 hours for each State agency to review, complete any
necessary draft changes, and submit a computer matching agreement to
FNS for a total of 795 burden hours. The total combined new one-time
burden hours for State agencies is 208,555 hours.
Ongoing Burden
Following approval of OMB control 0584-NEW, burden in the State
Agencies and Individual/Households sections below will be merged with
OMB Control Number 0584-0064. Burden that will remain with OMB control
number 0584-NEW will be denoted as such.
State Agencies
The establishment of the NAC includes State agencies uploading
their SNAP caseload data to the NAC. Under Sec. 272.18(b)(1) and (2)
and (c)(4), 53 out of 53 State agencies will submit their SNAP
caseloads to the NAC once per working day. Due to the establishment of
this system, State agencies have never uploaded their caseload to the
NAC. As there are approximately 261 working days in a year, FNS
estimates 261 annual responses per State agencies for estimated 13,833
total annual responses. The upload of this information is to ensure
that State agencies can check their caseloads against the caseloads of
other State agencies in real or close to real time. FNS estimates 1
hours for each State agency to reflect the time associated with
uploading their caseloads to the NAC for the first time. This
represents an additional annual burden of 13,833 hours for State
agencies collectively. This burden will be recorded under OMB control
number 0584-NEW.
Upon implementation of the NAC, State agencies will be required to
query individual case files of those who are applying, recertifying, or
are a newly added household member against the NAC. Under Sec.
272.18(c)(2), all 53 State agencies will query applicants against the
NAC. FNS estimates approximately 340,435.55 total annual responses per
State agency will be screened for a total of 18,043,084.00 estimated
total annual responses. It will take approximately 0.0167 hours (1
minute per State agency) for a total annual burden estimate of
300,718.07 ongoing burden hours. This burden will remain under OMB
control number 0584-NEW.
Under Sec. Sec. 272.18(c)(3) and (5), 273.12(c)(3)(iv), and
273.2(f)(1) and (2), 53 State agencies will be required to verify
information following a positive NAC match. FNS estimates this will
produce approximately 4,611.57 responses per State agency for a total
annual number of 244,413.10 NAC matches for State agencies to
communicate and initiate action upon. This estimate is based on the NAC
pilot evaluation estimates of 1.355% of initial applications for that
year resulting in a positive match. FNS also estimates it will take
each State agency approximately 0.1002 hours (6 minutes per State
agency) for a total of 24,490.19 on-going annual burden hours. While
State agencies that rely primarily on manual processes may result in a
greater burden, this estimate is informed by the fact that the
Department is strongly recommending the use of automated processes,
including automated emails to resolve actions among States, as a lesson
learned from the NAC pilot evaluation. Verification of information
includes the use of documentation or contact with applicant or other
State agency to confirm the accuracy of statements or additional
information as needed. It can also include communicating action to
resolve a match, final resolution, and additional communication with
the household as needed. The previously approved burden for this
activity is 29,302 burden hours approved under OMB control number 0584-
0064 expiration 2/29/2024. This program change reflects an increase of
24,490.19 hours to reflect the time associated with verification of
information and communication between State agencies and individuals/
households. While this is an increase in burden for State agencies, the
Department believes that there were components of the manual process
for the monitoring of duplicate participation that was not fully
accounted for in previous estimates. This increase in burden is a
combination of more accurate estimation and increased burden. While
components of this interim final rule, such as the daily upload of
active SNAP participants, does require more effort on the part of State
agencies, it is also reducing the previously manual process of checking
for duplicate participation and reallocating the burden from households
to State agencies to follow up on matches and resolve instances of
duplicate participation.
Under Sec. 272.18(c)(3)(iii), 53 State agencies will be required
to issue a notice of match results to an individual/household following
a positive NAC match on an applicant, recertifying individual, or a
newly added household member. These estimates are based on data
outlined in the NAC Pilot Evaluation. FNS estimates that a notice of
match results-will produce approximately 7,731 responses per State
agency for a total annual number of 409,709.52 notice of match results.
FNS also estimates it will take each State agency approximately .0501
hours (3 minutes per State agency) for a total of 20,526.45 ongoing
annual burden hours. The previously approved burden for this activity
is 24,015.13 burden hours approved under OMB 0584-0064 expiration 2/29/
2024. This program change reflects an increase of 20,526.45 hours to
reflect the time associated with issuing a Notice of Match Results.
Under Sec. Sec. 272.18(c)(5), 273.12(c)(3)(iv)(A), and
273.13(a)(2), 53 State agencies will be notified of a positive match
for an individual during the certification period and will be required
to issue a combined notice of match results and notice of adverse
action. All 53 State agencies will be required to issue this combined
notice for a match on an individual during the

[[Page 59647]]

certification period prior to a change in SNAP benefit allotment to a
participant as a result of a match found through the NAC. These
estimates are based on data outlined in the NAC Pilot Evaluation. FNS
estimates this will produce approximately 7,730.37 responses per State
agency for a total annual number of 409,709.52 combined notice of match
results and notice of adverse action. FNS also estimates it will take
each State agency approximately .0501 hours (3 minutes per State
agency) for a total of 20,526.45 ongoing annual burden hours to send
this notice. The previously approved burden for this activity is
72,773.21 burden hours approved under OMB control number 0584-0064
expiration 2/29/2024. This program change reflects an increase of
20,526.45 hours to reflect the time associated with issuing a notice of
adverse action.
Individuals/Households Burden
Under Sec. Sec. 272.18(c)(3) and (5), 273.12(c)(3)(iv), and
273.2(f)(1) and (2) approximately 244,413.1 Individuals/Households will
aid in verification of information following a positive NAC match. FNS
estimates this will produce approximately 1 response per individual/
household for an annual total of 244,413.1 responses. FNS also
estimates it will take each Individual/Household approximately .0668
hours (4 minutes) for a total of 16,326.79 ongoing annual burden hours.
This is based on the assumption from the NAC pilot that the Individual/
Household assistance in verification occurred within existing State
business processes, such as the interview, and did not require an
entirely new process. The previously approved burden for this activity
is 34,289.58 burden hours approved under OMB control number 0584-0064
expiration 2/29/2024. This program change reflects an increase of
16,326.79 burden hours for this activity.
Under Sec. 272.18(c)(3)(ii), 409,709.52 Individuals/Households
will be required to respond to a notice of match results issued by the
State agency following a positive NAC match. FNS estimates this will
produce approximately 1 response per household for a total of 409,710
responses annually. FNS also estimates it will take each Individual/
Household approximately .0835 hours (5 minutes) for a total of
34,210.75 ongoing annual burden hours. The previously approved burden
for this activity is 32,020.16 burden hours approved under OMB control
number 0584-0064 expiration 2/29/2024. This program change reflects an
increase of 34,210.75 burden hours for this activity.
Under Sec. Sec. 272.18(c)(5), 273.12(c)(3)(iv)(A), and
273.13(a)(2), 409,709.52 Individuals/Households will be required to
respond to a combined notice of match results and notice of adverse
action following a positive NAC match on an active participant. FNS
estimates this will produce approximately 1 response per household for
a total of 409,70 responses annually. FNS also estimates it will take
each Individual/Household approximately .0853 hours (5 minutes) for a
total of 34,210.75 ongoing annual burden hours. The previously approved
burden for this activity is 97,030.92 burden hours approved under OMB
control number 0584-0064 expiration 2/29/2024. This program change
reflects an increase of 34,210.75 burden hours for this activity.
Reporting
Affected public: State, Local or Tribal agencies, Individuals/
Households.
Estimated Number of Respondents: 53 State Agencies, 5 State
agencies, 1,000 eligibility workers for NAC pilot training, 10,600
eligibility workers for NAC training, and 1,148,087.62 individuals/
households.
Regulation Section: 7 CFR 272.18, 273.13.
Estimated Total annual responses: Ongoing 20,205,993.28.
Estimated Total Annual Burden Hours: Ongoing 881,952.44.
Estimated Number of Responses per Respondent: 17.43.

[[Page 59648]]

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PRA
violation
current
Estimated Estimated Estimated total Estimated Estimated Hourly cost Fringe burden in Previously Difference Difference
Regulation Burden activity number of responses annual hours per total to Estimated cost benefits (x With fully use approved due to due to
respondents per responses response annual respondent to respondent 0.33) loaded wages without under 0584- program adjustment
respondent hours OMB 0064 changes
control
No.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
REPORTING
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency Burden
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Startup:
72.18(b)(1).............. Set-up for 53.00 1.00 53.00 1,920.00 101,760.00 $11.33 $1,152,940.80 $380,470.46 $1,533,411.26 .......... ........... 101,760.00 ...........
system to
report caseload
to NAC.
272.18(b)(1)............. Training 10,600.00 1.00 10,600.00 10.00 106,000.00 11.33 1,200,980.00 396,323.40 1,597,303.40 .......... ........... 106,000.00 ...........
Eligibility
workers across
53 States to
use NAC System.
272.12(b)................ State Agency 53.00 1.00 53.00 15.00 795.00 11.33 9,007.35 2,972.43 11,979.78 .......... ........... 795.00 ...........
matching system
agreements.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Startup Subtotal..... ................ 10,653.00 1.00 10,706.00 19.48 208,555.00 11.33 2,362,928.15 779,766.29 3,142,694.44 .......... ........... ........... ...........
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing:
272.18(b)(1), NAC--Data Upload 53.00 261.00 13,833.00 1.00 13,833.00 11.33 156,727.89 51,720.20 208,448.09 .......... ........... 13,833.00 ...........
272.18(b)(4), 272.18(c
)(3).
272.18(c)(2)............. NAC--NAC Query.. 53.00 340,435.55 18,043,084.00 0.0167 300,718.07 11.33 3,407,135.70 1,124,354.78 4,531,490.47 .......... ........... 300,718.07 ...........
272.18(c)(3), NAC--Verificatio 53.00 4,611.57 244,413.10 0.1002 24,490.19 11.33 277,473.88 91,566.38 369,040.26 .......... 29,302.00 24,490.19 ...........
273.2(f)(1)(2), n of
272.18(c)(5), questionable/
273.12(c)(3)(iv). unclear
information
following a
positive NAC
match.
272.18(c)(3)(iii)........ NAC--Notice of 53.00 7,730.37 409,709.52 0.0501 20,526.45 11.33 232,564.65 76,746.33 309,310.98 .......... 24,015.13 20,526.45 ...........
Match Results.
272.18(c)(5), NAC--Combined 53.00 7,730.37 409,709.52 0.0501 20,526.45 11.33 232,564.65 76,746.33 309,310.98 .......... 72,773.21 20,526.45 ...........
273.12(c)(3)(iv)(A), Notice of Match
273.13(a)(2). Results and
Notice of
Adverse Action.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing Subtotal..... ................ 53.00 360,768.85 19,120,749.14 0.0199 380,094.15 11.33 4,306,466.75 1,421,134.03 5,727,600.78 .......... ........... ........... ...........
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency ................ 53.00 360,970.85 19,131,455.14 0.0308 588,649.15 11.33 6,669,394.90 2,200,900.32 8,870,295.22 .......... ........... ........... ...........
Grand Total.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Household burden
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing:
272.18(c)(3), Verification of 244,413.10 1.00 244,413.10 0.0668 16,326.79 7.25 118,369.26 39,061.86 157,431.12 .......... 34,289.58 16,326.79 ...........
273.2(f)(1)(2), questionable/
272.18(c)(5), unclear
273.12(c)(3)(iv). information
following
positive NAC
match.
272.18(c)(5), NAC--Notice of 409,709.52 1.00 409,709.52 0.0835 34,210.75 7.25 248,027.90 81,849.21 329,877.11 .......... 32,020.16 34,210.75 ...........
273.12(c)(3)(iii). Match Results.

[[Page 59649]]

272.18(c)(5), 273.13(a).. NAC--Combined 409,709.52 1.00 409,709.52 0.0835 34,210.75 7.25 248,027.90 81,849.21 329,877.11 .......... 97,030.92 34,210.75 ...........
Notice of Match
Results and
Notice of
Adverse Action.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Household Ongoing ................ 1,063,832.14 1.00 1,063,832.14 0.0797 84,748.29 7.25 614,425.07 202,760.27 817,185.34 .......... ........... ........... ...........
Subtotal.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting Grand ................ 1,074,485.14 18.81 20,205,993.28 0.04364806 881,952.44 ........... 9,646,748.12 3,183,426.88 12,830,175.00 .......... 289,431.00 673,397.44 ...........
Total.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 59650]]

E-Government Act Compliance

The Department is committed to complying with the E-Government Act,
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. A Privacy
Impact Assessment was completed by the FNS program office and privacy
and information security teams concurrent with systems Authorization to
Operate collaboration.

List of Subjects

7 CFR Part 272

Civil rights, Grant programs-social programs, Reporting and
recordkeeping requirements, Supplemental Nutrition Assistance Program.

7 CFR Part 273

Administrative practice and procedure, Grant programs-social
programs, Reporting and recordkeeping requirements, Supplemental
Nutrition Assistance Program.

For the reasons set out in the preamble, 7 CFR parts 272 and 273
are amended as follows:

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

0
1. The authority citation for 7 CFR part 272 continues to read as
follows:

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

0
2. In Sec. 272.1, add paragraph (c)(4) to read as follows:

Sec. 272.1 General terms and conditions.

* * * * *
(c) * * *
(4) Disclosure of information obtained from the National Accuracy
Clearinghouse (NAC), as described in Sec. 272.18, shall be restricted
to persons directly connected with the administration or enforcement of
the provisions of the Food and Nutrition Act of 2008, as amended, or
SNAP regulations in this subchapter. Information obtained from the NAC
may only be used for the purpose of preventing multiple issuances of
SNAP benefits to an individual by more than one State agency in a given
month. Recipients of information from the NAC must adequately protect
the information against disclosure to unauthorized persons and use for
purposes not specified in this paragraph (c)(4).
* * * * *

0
3. Add Sec. 272.18 to read as follows:

Sec. 272.18 National Accuracy Clearinghouse.

(a) General. (1) FNS shall establish an interstate data system,
known as the National Accuracy Clearinghouse (NAC) to prevent
individuals from receiving SNAP benefits in more than one State in a
given month and shall institute processes and procedures for
interacting with the system to prevent duplicate participation and
assist households with disenrollment.
(2) Each State agency that administers SNAP shall participate in
the NAC data matching system. State agencies shall take action on
matches from the NAC to ensure participants are only receiving benefits
in the State in which they reside and are otherwise eligible to receive
them. State agencies are encouraged to integrate and automate NAC
processes into SNAP eligibility systems and existing workflows to the
fullest extent possible.
(3) Each participating State agency shall enter into a written
computer matching agreement with FNS consistent with the requirements
for matching programs in the Privacy Act of 1974, as amended by the
Computer Matching and Privacy Protection Act of 1988 and the Computer
Matching and Privacy Protection Amendments of 1990 (5 U.S.C. 552a(o)),
prior to participating in the NAC.
(b) States' reporting requirements. (1) State agencies shall
provide information for each active SNAP participant to the NAC
according to procedures and formats established by FNS. For the
purposes of the NAC, an active SNAP participant is defined as an
individual who is approved to receive benefits for the benefit month in
which the State agency is uploading the data. State agencies shall
establish procedures to ensure the information provided is accurate and
only includes active participants.
(2) Information provided to the NAC will be used for matching by
other State agencies also matching with the NAC. Each State agency
shall provide, once per working day in accordance with FNS procedures,
the NAC data matching elements and other information as noted in
paragraphs (b)(3) and (4) of this section for each active SNAP
household member.
(3) For each individual, State agencies must report the following
identifying information, referred to as NAC data matching elements, to
the NAC: name, Social Security number, and date of birth. State
agencies must transmit the NAC data matching elements to the system per
the process specified by FNS. The NAC data matching elements are used
by the NAC to determine the existence of positive matches.
(4) State agencies shall also report the following information:
participant ID and, when applicable, a vulnerable individual flag. All
information shall be reported in accordance with procedures provided by
FNS. State agencies must comply with 7 CFR 273.6 in instances where a
Social Security number is not available.
(i) A vulnerable individual flag is used to identify when
precautions must be taken to protect the individual's information in
the event of a match. A vulnerable individual can self-identify during
the application or recertification process. State agencies also have
the discretion to determine whether an individual meets the vulnerable
individual definition in paragraph (a)(9) of this section if the
individual does not self-identify.
(ii) A participant ID is the State agency's unique identifier for a
participant or applicant.
(5) State agencies shall maintain the security, privacy, and
accuracy of information submitted to the NAC, including ensuring that
information provided to the NAC follows the standards and procedures
provided by FNS and only includes active SNAP participants.
(c) Use of match data. (1) NAC queries are conducted by the State
agency by submitting the NAC data matching elements described in
paragraph (b)(3) of this section for an individual, per the process
specified by FNS. The system will compare the query against the daily
upload of active SNAP participants provided to the NAC by the State
agencies to determine if an individual is currently receiving SNAP
benefits in another State. The NAC will indicate a positive match when
the NAC data matching elements submitted for comparison are the same as
those in one or more records in the NAC.
(2) Prior to conducting a NAC query at application,
recertification, or the addition of a household member, the State
agency shall follow verification procedures described in 7 CFR
273.2(f)(1)(v) for Social Security numbers, (f)(1)(vi) for residency,
and (f)(1)(vii) for identity. After following these verification
procedures, State agencies shall conduct a NAC query on the individual
applying, recertifying, or being added to a household.
(3) When a State agency receives a positive match from a NAC query
at application, recertification, or when adding a household member:
(i) The State agency shall have 10 days from the date the match is
received to initiate action to resolve the match as described in
paragraph (c)(3)(ii) of this section and notify the other State agency
of the initiated action.
(ii) The State agency must resolve the match to determine the
appropriate

[[Page 59651]]

actions to take on the case. To resolve a match, State agencies may use
information known to the State agency, must verify any questionable
information in accordance with 7 CFR 273.2(f)(2), and must notify the
individual of the match. States may not take any action to deny,
terminate, suspend, or reduce SNAP benefits based on information
received from the NAC until the information has been verified by the
State agency and the individual has been provided notice of the match
and an opportunity to respond to the notice, in accordance with Sec.
272.12(c)(1).
(iii) Any communication or notice resulting from a NAC match must
not include the location of the individual(s) identified in the match
to protect vulnerable individuals.
(A) If the State agency needs more information to resolve the match
or if the information it has could lead to a denial of benefits or
other adverse action on the case, the State agency shall provide a
written notice of match results that clearly explains what information
is needed from the household and the consequences of failing to respond
within the timeline provided in the notice. The notice must comply with
this paragraph (c)(3)(iii) and Sec. 272.4(b) bilingual requirements
and must afford at least 10 days from the date the notice is mailed for
a response.
(B) If the State agency is able to resolve the match and there is
no potential for adverse action, a written notice of match results is
not required. However, the State agency must provide a verbal
notification of a match, which must be documented in the case file.
(iv) After the State agency has determined the appropriate
disposition of the case, it shall promptly share the resolution
information with the other State agency.
(v) The State agency must follow timeliness standards set forth in
7 CFR 273.2(g) and 273.14(d) for normal processing, and 7 CFR 273.2(i)
for expedited service, as applicable. A lack of timely action or
communication required by paragraph (c)(3)(i) of this section between
the State agencies must not delay the determination of benefits for an
individual.
(4) The NAC shall automatically conduct bulk matches on a monthly
basis (``monthly bulk matches'') of the NAC data matching elements
provided by all participating State agencies from the daily upload of
active SNAP participants to discover existing duplicate participation
and shall provide notifications to State agencies when matches are
found for participants in their State.
(5) If a State agency receives information related to a NAC data
match during the certification period for an individual currently
participating in SNAP in the State, it must pursue clarification and
verification by following the unclear information procedures provided
in 7 CFR 273.12(c)(3)(iv) to provide notice and an opportunity to
contest the information received before taking any adverse action.
Information related to a NAC data match that may be received during the
certification period includes:
(i) Notification of data matches directly from the NAC indicating
that an active SNAP participant is receiving benefits in another State;
and
(ii) Communication from another State agency based on a NAC data
match indicating that an active SNAP participant is part of an
applicant household or was added to an active household in another
State.
(6) State agencies shall report and document instances in the
household's case file where there is a match and the actions taken to
resolve it per existing State operations.
(7) State agencies shall provide for the establishment and
collection of claims as appropriate. The State agency that fails to
meet the requirements in paragraph (c)(3) of this section or
requirements at 7 CFR 273.12(c)(3)(iv) will be considered responsible
for any duplicate participation that occurs. That State agency shall be
responsible for the establishment and collection of the claim in
accordance with regulations at 7 CFR 273.18.
(8) Information obtained from the NAC is subject to the disclosure
provisions in Sec. 272.1(c)(4). State agencies shall not use
information obtained from the NAC for any purpose other than to prevent
duplicate participation.
(9) State agencies shall establish a process to prevent the
disclosure of any location information received from the NAC about any
SNAP applicant or participant who is considered a vulnerable
individual. A vulnerable individual, for the purpose of the NAC,
includes but is not limited to, those who would be endangered by the
dissemination of their information, regardless of their age or gender,
such as a resident of a shelter for battered women and children as
described in 7 CFR 271.2, a resident of a domestic violence shelter, or
a person who self-identifies as fleeing domestic violence at any point
during application, recertification, certification, or addition of a
new household member. State agencies shall take steps to ensure that
any information resulting from a NAC match, including identity and
location, is protected during verification or resolution when a
vulnerable individual is indicated in a positive match. The change in
the household composition resulting from the move of the vulnerable
individual must be communicated to the former household via a notice of
adverse action per 7 CFR 273.11(g).

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

0
4. The authority citation for 7 CFR part 273 continues to read as
follows:

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

0
5. In Sec. 273.12:
0
a. Revise the last sentence of paragraph (c)(3)(i) introductory text.
0
b. Add a sentence before the last sentence of paragraph (c)(3)(iii)
introductory text.
0
c. Add paragraph (c)(3)(iv).
The revision and additions read as follows:

Sec. 273.12 Reporting requirements.

* * * * *
(c) * * *
(3) * * *
(i) * * * The procedures for unclear information regarding matches
described in Sec. 272.18 of this chapter are found in paragraph
(c)(3)(iv) of this section.
* * * * *
(iii) * * * If a State receives information from a match described
in Sec. 272.18 of this chapter, the State shall follow up with a
combined notice of match results and adverse action as described in
paragraph (a)(2) of this section. * * *
(iv) If a State agency receives unclear information during the
certification period from a match described in Sec. 272.18 of this
chapter, the State agency shall initiate action to resolve the match
and communicate with the other State agency within 10 days of receipt
of the match notification, in accordance with paragraphs (c)(3)(iv)(A)
and (B) of this section.
(A) The State agency that receives a NAC data match shall provide
to the household a notice of match results and notice of adverse action
as described at Sec. 273.13. The notice must clearly explain what
information is needed from the household and the consequences of not
responding in a timely manner as described at paragraphs (c)(3)(iii)(A)
and (B) of this section. Any communication with the household,
including a written notice, must not include the location of the

[[Page 59652]]

individual(s) identified in a match and must follow bilingual
requirements at Sec. 272.4(b) of this chapter. State agencies must
also follow regulations at Sec. 272.18(c)(9) of this chapter for those
who are considered vulnerable individual. Consistent with verification
standards in Sec. 273.2(f), the State agency must give the household
at least 10 days to provide required verification.
(B) The State agency shall communicate with the other State agency
to inform them they have initiated action to resolve the match. After
the State agency has determined the appropriate disposition of the
case, they shall promptly share the resolution information with the
other State agency.
* * * * *

0
6. In Sec. 273.13, add a sentence to the end of paragraph (a)(2) to
read as follows:

Sec. 273.13 Notice of adverse action.

(a) * * *
(2) * * * A notice of adverse action that combines a notice of
match results received through a National Accuracy Clearinghouse (NAC)
computer match shall meet the requirements in Sec. 273.12(c)(3)(iv)
and Sec. 272.18(c)(5) of this chapter.
* * * * *

Cynthia Long,
Administrator, Food and Nutrition Service.

Note: The following appendix will not appear in the Code of
Regulations.

Appendix A--Supplemental Nutrition Assistance Program: Requirement for
Interstate Data Matching To Prevent Multiple Issuances

I. Summary of Impacts

The Department estimates the net reduction in Federal
Supplemental Nutrition Assistance Program (SNAP) spending associated
with the interim final rule establishing a nationwide National
Accuracy Clearinghouse (NAC) to be approximately $463 million over
the five years 2022-2026. This reduction in spending represents a
decrease in Federal transfers (SNAP benefit payments) of
approximately $498 million over five years due to prevention of
duplicate participation, partially offset by increases in Federal
systems costs related to implementing, operating, and maintaining
the system ($18.3 million) and in the Federal share of State
administrative costs (nearly $16 million). In addition, the
Department estimates an increase in the State share of
administrative costs (nearly $16 million over five years) for start-
up costs and costs associated with submitting data and following up
on matches. This rule will also increase administrative burden on
SNAP households by $1.2 million over five years. Households
identified as potential duplicate participants through NAC matches
will need to provide verification and respond to notices and
requests for information from State agencies.
The impacts of the interim final rule are summarized in Table 1,
below; SNAP benefit payments are categorized as transfers in the
accounting statement that follows.

Table 1--Summary of Impacts
[In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Total *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers--SNAP benefit spending:
Reduction in SNAP benefit payments **............... $0.00 $43.35 $106.60 $161.43 $186.12 $497.50
Discounted Transfer Stream:
7 percent....................................... 0.00 37.86 87.02 123.15 132.70 380.74
3 percent....................................... 0.00 40.86 97.55 143.43 160.55 442.39
Costs--Federal and State Administrative Costs and
Household Burden:
State Administrative Costs--Implementation.......... 1.68 2.24 2.24 1.26 0.00 7.42
State Administrative Costs--Ongoing................. 0.00 1.60 4.80 8.00 10.15 24.55
Federal Systems Costs........................... 4.36 3.46 3.46 3.56 3.46 18.31
Household Burden................................ 0.00 0.14 0.27 0.38 0.41 1.20
Total....................................... 6.04 7.44 10.77 13.20 14.02 51.48
Discounted Cost Stream:.............................
7 percent....................................... 5.64 6.50 8.79 10.07 10.00 41.01
3 percent....................................... 5.86 7.01 9.86 11.73 12.10 46.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Sums may not total due to rounding.
** Reduction in SNAP benefit payments are prorated for States during their first year of implementation to reflect anticipated staggered implementation
throughout each fiscal year.

As required by OMB Circular A-4, in Table 2 below, the
Department has prepared an accounting statement showing the
annualized estimates of benefits, costs, and transfers associated
with the provisions of this interim final rule.

Table 2--Accounting Statement
----------------------------------------------------------------------------------------------------------------
Primary estimate ($) Year dollar Discount rate (%) Period covered
----------------------------------------------------------------------------------------------------------------
Benefits:
Annualized................... N/A................. 2022 7 FY 2022-2026
Monetized ($millions/year)... N/A................. 2022 3
----------------------------------------------------------------------------------------------------------------
Qualitative--This rule will result in the identification and prevention of actual and potential duplicate
participation in SNAP nationally, thereby improving program integrity..
----------------------------------------------------------------------------------------------------------------
Costs:
Annualized................... 10.00............... 2022 7 FY 2022-2026.
Monetized ($millions/year)...

[[Page 59653]]

10.17............................ 2022................ 3
----------------------------------------------------------------------------------------------------------------
Federal costs of implementing and maintaining NAC; State administrative expense for implementing NAC matches,
staff training on new procedures, notices, and verification of circumstances for identified potential matches;
household administrative burden..
----------------------------------------------------------------------------------------------------------------
Transfers:
Annualized................... -92.86.............. 2022 7 FY2022-2026.
Monetized ($millions/year)... -$96.60............. 2022 3
----------------------------------------------------------------------------------------------------------------
Reduced SNAP benefit payments due to the prevention of duplicate participation..................................
----------------------------------------------------------------------------------------------------------------

II. Section-by-Section Analysis

Background

SNAP is a key component of the social safety net in the United
States. Ensuring that SNAP participants do not receive benefits in
more than one State in the same month is essential to safeguarding
program integrity. Under existing SNAP rules, an individual may not
receive SNAP benefits from more than one State agency for the same
benefit month (except certain victims of domestic violence).
Regulations require that a household live in the State where it
files a SNAP application and stipulate that no individual may
participate as a member of more than one household or in more than
one project area (e.g., a State) in any month. Program regulations
also require State agencies verify applicants' residency before
approving their applications.
Current SNAP rules also require State agencies to match new
applicants against the existing SNAP caseload within the State at
the time of certification to prevent dual participation, but do not
require State agencies to check for dual participation across State
lines. This rule requires State SNAP agencies to expand the check
for dual participation to all States' SNAP caseloads.

The NAC Pilot

Beginning in 2013, the State of Mississippi established the NAC
pilot that was funded by the Office of Management and Budget's (OMB)
Partnership Fund for Program Integrity Innovation.\1\ The pilot was
designed to test the feasibility of improving upon existing
processes by establishing a real-time interstate data matching
system to prevent duplicate participation. NAC pilot data matching
operations began in June 2014 and consisted of five participating
States: Alabama, Florida, Georgia, Louisiana, and Mississippi. The
NAC pilot is still in operation at the time of this interim final
rule under administrative waivers. However, there are only four
States still operating the NAC pilot under administrative waivers:
Alabama, Florida, Georgia, and Mississippi.
---------------------------------------------------------------------------

\1\ https://obamawhitehouse./<a href="http://archives.gov/sites/default/files/omb/memoranda/2011/m11-01.pdf">archives.gov/sites/default/files/omb/memoranda/2011/m11-01.pdf</a>.
---------------------------------------------------------------------------

As part of the pilot, each participating State submits a daily
file of its entire SNAP participant caseload, which is integrated
into a list of all SNAP participants receiving benefits in the
participating pilot States. State agencies query the system when
they receive SNAP applications or add new members to an existing
household during recertification. The NAC pilot checks these
individuals against the list of active SNAP participants in the
other pilot States. When a State identifies that an applicant is
receiving benefits in another State, the State agency staff
responsible for administering SNAP in the applicant State contacts
the State where the applicant is already receiving benefits to close
the individual's case or remove the individual from the household.
Once the applicant's out-of-State case is closed or the individual
is removed from the household, the State receiving the application
can move forward with the certification process. If the applicant is
checked against the NAC pilot's list of active SNAP participants in
other pilot States and the applicant is not identified as receiving
SNAP benefits elsewhere, then the State proceeds with the
certification process as usual.
The NAC pilot allowed for estimation of the prevalence of
interstate duplicate participation in the participating States.
Analysis of data from before the NAC pilot began operations
suggested that between 0.09 percent and 0.17 percent of the
individual SNAP participants active in each pilot State's caseload
in May 2014 were also receiving benefits in another one of the pilot
States in May 2014. The Department notes, however, that these data
only represent instances of interstate duplicate participation where
both States issuing benefits were participating in the pilot.
Accordingly, the NAC pilot could not discover any potential matches
between a State participating in the NAC pilot and a State that was
not participating in the NAC pilot. This limit in ability to detect
matches suggests that the nationwide NAC will only increase positive
match frequency when new States are added to the system. The
positive match frequency is also expected to decrease gradually as
States adopt the nationwide NAC and NAC business processes
implemented by this rule.

Independent Evaluation of the NAC Pilot \2\
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\2\ <a href="https://risk.lexisnexis.com/-/media/files/government/report//b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf">https://risk.lexisnexis.com/-/media/files/government/report//b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf</a>.

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Pursuant to Section 4032(c) of the Agricultural Act of 2014, an
independent evaluation assessed the NAC pilot's detection and
prevention of duplicate participation between May 2013 and August
2015 and reported on variations in implementation between the five
States. As the NAC pilot focused exclusively on interstate duplicate
participation, intrastate duplicate participation was not assessed
as a part of the NAC pilot evaluation. Overall, the evaluation found
a relatively low occurrence of dual participation--ranging from less
than one-tenth of one percent of Louisiana's eligible individuals in
May 2014 to just below two-tenths of one percent of Georgia's.\3\
The evaluation report indicated that a significant percentage of
duplicate participation occurs when a new member is being added to
an existing household with an existing case. In Table 19 of the
evaluation report, an average of almost half, 47 percent, of
duplicate participation found was from individuals residing in
households where all members are not duplicate participants. The
Department interprets these occurrences of duplicate participation
as instances where administrative processes need to be improved and
better customer service provided, particularly for individuals or
households that move between States. It is likely that these
individuals either failed to report their move or were not promptly
disenrolled by the State agency. Table 21 further emphasizes the
need for greater customer service by evaluating claims data on cases
including dual participants identified at initial matching of the
NAC pilot. Out of the claims data reported as initial match agency
error, inadvertent client error, and intentional Program violation,
nearly 28 percent of claims were due to something other than
intentional Program violation. Based on this information, the
Department determines that there is a greater need for enhanced
customer service for applicants and participants who move between
States or households, as well as better training for eligibility
workers to identify these individuals and prevent inadvertent
household errors and agency errors that may result in the
establishment of a claim and added burden.
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\3\ <a href="https://risk.lexisnexis.com/-/media/files/government/report//b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf">https://risk.lexisnexis.com/-/media/files/government/report//b7de1d11976a4bdd82a039a8f272265busdareportonnac2016117614%20pdf.pdf</a>,
page 10.
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[[Page 59654]]

receiving benefits in another State compared to pre-NAC pilot levels
(for example, from a monthly average of 882 instances down to 166 in
Mississippi), while another two saw reductions of less than 30
percent (for example, from a monthly average of 3,383 to 2,446
instances in Florida). The Department believes that improving
administrative processes will further diminish households'
inadvertent duplicate participation.
The NAC pilot evaluation also measured each State's
effectiveness in using the NAC pilot to prevent duplicate
participation, comparing positive matches generated by queries
regarding SNAP applicants or new household members to subsequent
positive indications of active duplicate participation. Matches on
SNAP applicants or new household members that subsequently became
active duplicate participants indicate that the information from the
NAC pilot failed to prevent an individual from receiving benefits
from more than one State agency simultaneously due to participant
States not taking appropriate actions when notified of a match and/
or a lack of communication between State agencies. Again, there was
significant variation in how effectively the five pilot States used
the NAC pilot to prevent duplicate participation. In two of the five
States, less than 10 percent of instances of individuals in NAC
pilot matches resulted in duplicate participation. Other pilot
States were not as effective. The least effective State consistently
saw about 40 percent of instances of individuals identified in
matches resulting in duplicate participation.

NAC Pilot Lessons Learned

The overall findings from the evaluation indicate that the rate
of duplicate participation is low; that when it does occur, it is
more commonly the result of administrative reasons, such as data
entry errors or a State failing to promptly disenroll an individual
that had moved between States and/or households, and not fraud; and
that NAC can effectively reduce duplicate participation if State
agencies apply lessons learned from the pilot as they implement the
nationwide NAC data match. The pilot States with larger reductions
in duplicate participation were the same States with better
statistics when it came to preventing duplicate participation. The
NAC pilot evaluation found that these States were more successful
largely due to the extent that they automated NAC processes. They
used web services to link their State systems with the NAC pilot.
This enabled real-time querying of the NAC pilot database in a
manner similar to a manual portal query, with the added advantage of
limiting caseworker intervention to only those instances in which a
match is generated. For example, if a State agency eligibility
caseworker needs to process an application on the same day the
application is received, the web services approach allows for
sending and receiving information from the NAC that same day. NAC
pilot States that were less effective in terms of preventing and
reducing duplicate participation used a batch process model where
information is not returned until the following day. This sometimes
led to the certification of an application before the caseworker
became aware that there was a positive match from the NAC pilot
indicating an active case in another State.
The more successful States in the NAC pilot also integrated the
NAC with their SNAP eligibility systems and into existing workflows.
State agency eligibility caseworkers received flags to take
additional steps only in the event of a positive match, rather than
having to check the NAC pilot portal for every application they
processed and every person they added to a case.
The differences in business processes and systems integration
not only provide at least a partial explanation for the varied
outcomes achieved by States, but also support a set of practices
that may be adopted to improve upon and maximize the effectiveness
of the NAC pilot. Additionally, the evaluation report also
recommended that State agencies conduct comprehensive front-line
training. This includes dedicating resources to delivering hands-on
training for eligibility workers using real-world examples for the
approach the state will use to operationalize the tool and
communicate with other states. These best practices from the NAC
pilot combined with feedback from State agencies inform the design
and implementation of the nationwide NAC solution implemented by
this rule.

NAC Pilot Final Results

The NAC pilot evaluation estimated the total benefit
overpayments averted by the NAC pilot and the potential benefit
overpayments that could be saved if the NAC were implemented
nationwide. The evaluation compared the decay rate of dual
participation over the course of five months starting from both
before the NAC pilot began in December of 2013 and during the course
of the pilot in December of 2014. The difference represents the
effectiveness of using the NAC pilot to prevent and timely resolve
duplicate participation. In each State, the entries of duplicate
participation fell from December 2013 to December 2014. However,
anywhere from 25.8 percent to 41.45 percent of instances of dual
participation identified in December 2013 continued five months
later into May 2014. Once the NAC pilot was implemented, the total
number of duplicate participant entries fell for each State and the
percentage of individuals remaining as duplicate participants after
five months fell from 21 percent to 0 percent in Alabama, 51.4
percent to 17.8 percent in Florida, 49.6 percent to 17.1 percent in
Georgia, 41.4 percent to 6.5 percent in Louisiana, and 34.9 percent
to 3.2 percent in Mississippi. In each case, the NAC pilot was
effective as reducing the rate of duplicate participation.
The NAC evaluation also calculated actual savings by estimating
the savings per month per instance of duplicate participation
prevention in each of the pilot States and multiplying those savings
by the median months of duplicate participation avoided. To
establish the median length of duplicate participation for an
individual, the NAC evaluation identified the eligibility date in
each State, selected the latest of the two dates to establish when
overlapping eligibility began, identified the next recertification
date for the individual's case in each State, and selected the
soonest of the two recertification months. The number of months
between the start of overlapping eligibility and the next
recertification month establishes the median expected length of dual
participation per State, which ranged from 6 to 11 months. The
evaluation avoided double counting the prevention of duplicate
participation in both States by assuming the individual was eligible
to participate in one of the States. The estimated State agency
costs of NAC participation were then subtracted from these savings
to yield a total estimated net impact for the NAC pilot of more than
$5.6 million per year in the five NAC pilot States.
The evaluation estimated the potential impact of a nationwide
NAC from the results of the NAC Pilot, including the potential cost
savings associated with its implementation. These estimated savings
for the pilot States were converted to percentages of total fiscal
year (FY) 2014 SNAP benefit issuance in each pilot State, then
averaged and applied to the program-wide total FY 2014 benefit
issuance. The evaluation estimated that nationwide implementation of
the NAC would have saved more than $114 million in FY 2014, or 0.16
percent of total SNAP issuance. As a result of this successful
pilot, as evidenced by the evaluation report findings, Congress
passed legislation to expand the NAC nationwide and mandated State
participation.

Establishment of the Nationwide NAC

The nationwide NAC will help States enforce existing SNAP
residency requirements by conducting data matches on SNAP caseloads
across States and notifying State agencies when there is evidence of
an applicant participating in another State for the same benefit
month. The mechanics of the NAC are simple--States contribute daily
files of their active SNAP participants in a common format to a
centralized database. States also submit information requests to the
database on new program applicants, at recertification, and when a
new household member is added to an existing SNAP case. Then, the
NAC looks for overlapping information on a range of data points,
including Social Security number, name, and date of birth (DOB), to
determine if the household or individual is already a SNAP
participant in another state.
The interim final rule requires every State SNAP agency to
participate in the NAC within five years. On at least a daily basis,
States must provide, at a minimum: full name, Social Security number
(SSN), and date of birth for each active SNAP household member. When
available, State agencies must also provide additional data elements
that are intended to increase accuracy of matches, including: a flag
to identify vulnerable individuals,\4\ participant ID, case number,
participant closing date, and recent benefit

[[Page 59655]]

issuance dates. The NAC will compare required data elements (name,
SSN, and date of birth) for active SNAP recipients, SNAP applicants,
and newly added household members among States. The NAC will also
conduct monthly bulk matches of the NAC data elements provided by
all participating State agencies to discover existing duplicate
participation.
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\4\ The interim final rule establishes a definition for
vulnerable individuals specific to the NAC at Sec. 272.18(c)(9).
This definition includes, but is not limited to, those who would be
endangered by the dissemination of their information, such as
residents of shelters for battered women and children as defined in
7 CFR 272.1, or a person fleeing domestic violence.
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Prior to certification or to the addition of a new household
member, States will be required to submit information about each
member of a SNAP applicant household and each new household member
for comparison with information about active SNAP recipients in
other States. Upon receiving a data match from the NAC indicating
that a member of the applicant household or a newly added household
member is already an active SNAP recipient, the State agency shall
follow a 10-day timeframe established at 7 CFR 272.18(c)(3) to
resolve the match and report that action to the other State agency.
States are prohibited from contacting any third parties or otherwise
disclosing any information regarding a positive NAC data match
involving an individual who the State agency determines would be
endangered by dissemination of their identity or location, because
they are a resident of a shelter for battered women and children or
they are fleeing domestic violence. Therefore, the interim final
regulation allows for a vulnerable individual flag to be used to
identify when precautions must be taken to protect the individual's
information in the event of a match.
When a NAC match is received at application, recertification or
for a newly added household member, States are required to follow
existing SNAP procedures governing the receipt of unclear
information about a household and to clarify whether the individual
is, in fact, participating in another State by sending the household
a Notice of Match Results (NMR) that clearly explains what
information is needed from the household and the consequences of
failing to respond to the notice.
The interim final rule establishes procedures to be followed for
NAC matches containing unclear information during the certification
period at 7 CFR 272.18(c)(5). If the household is currently
certified in the State that received the NAC match, the State agency
will combine the NMR with a Notice of Adverse Action (NOAA). The
Department is adding this combined notice for action on NAC matches
only to expedite the notice process for State agencies, reduce the
likelihood of duplicate participation and thus establishment of a
claim against a household, while providing the household with an
opportunity to contest.

Effect on State Agencies

State agencies will upload data that is de-identified to the
NAC. State agencies will upload this data at least once each working
day. State agencies must act on the matches by contacting the
individual, sending a notice, contacting the other State agency
indicated in the match, or through other methods of further
verifying the match before taking adverse action. Specific actions
will depend on when the match takes place, whether it be for a new
applicant, newly added household member, recertifying participant,
or during certification. State agencies will also be required to
complete and sign a Computer Matching Agreement (CMA) which will
outline requirements for State agencies to join the NAC. However,
there is the potential for States to have to follow up on a large
number of cases at initial implementation of their and other States'
participation in NAC.
Estimates of the administrative costs to implement and
participate in the NAC are based on the NAC pilot evaluation,
discussed in detail above. The evaluation found that the total
monthly administrative cost to operate the NAC for the five pilot
states was about $82,000 and ranged from $5,499-$21,763 for the five
pilot States. The total annual cost was nearly $1 million ($984,000
per year), or an average of about $200,000 per State, per year.
Based on this annual average, the Department projects that the
annual operating cost of participating in the NAC would be
approximately $10.6 million if the NAC were implemented nationwide.
The pilot evaluation also found that States spent on average about
$140,000 on planning, programming, and staff training when
implementing NAC.
The Department expects 12 States will implement the NAC in FY
2023, an additional 16 States will conduct the match in FY 2024 (28
States, total, including the 12 States that implement in FY 2023),
16 more States will implement in FY 2025 (44 States, total), and in
FY 2026 the remaining 9 States will implement (53 States, total).
These estimates are based on States' expressed interest in
participating in the NAC and the Department's ability to provide
infrastructure and technical assistance to the States. The costs in
the following table reflect this phase-in rate. As indicated in
Table 3, implementation costs are not expected to continue beyond FY
2025, while ongoing annual operating costs will continue into future
years.

Table 3--Calculation of State Administrative Expense for Implementation NAC Data Matching
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Dollars in millions 2022 2023 2024 2025 2026
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Per State Implementation Cost
$0.14
Per State Annual Cost $0.20
States Conducting NAC Matching.. 0 12 28 44 53
Implementation Costs *.......... $1.68 $2.24 $2.24 $1.26 $0.00
Annual Operating Costs **....... $0.00 $1.60 $4.80 $8.00 $10.15
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Total State Administrative $1.68 $3.84 $7.04 $9.26 $10.15
Costs (Federal + State)....
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* States face implementation costs in the year prior to implementation only.
** Annual operating costs are prorated for States during their first year of implementation to reflect staggered
implementation throughout the fiscal year.

State Administrative Expense (SAE) is split evenly between
Federal and State governments. Thus, the State share of increased
SAE is expected to be $0.84 million in FY 2022 and $15.98 million
over five years. These costs will only accrue to those States that
have implemented NAC data sharing. Costs may be somewhat higher at
implementation due to detection of existing duplicate participation.

Effect on Federal Spending

As SAE is shared between Federal and State governments, Federal
spending for SAE is expected to increase by $0.84 million in FY 2022
and $15.98 million over five years. In addition, the Federal
Government will face costs associated with developing and
maintaining the NAC. The Department estimates that it will cost $4.4
million to develop, implement, maintain, and provide support
services for the nationwide NAC in FY 2022, and $18.3 million over
five years. This estimate is based on contractual costs for system
design, development, and operations and for Help Desk support. Thus,
the Federal costs for administering the NAC are expected to be $5.2
million in FY 2022 and $34.3 million over five years (Table 4). The
Department also expects to provide technical assistance and other
support to States as they join the NAC.

[[Page 59656]]

Table 4--Calculation of Federal Costs of Implementing and Operating NAC Data Matching
[Dollars in millions]
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2022 2023 2024 2025 2026
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Federal Share of State $0.84 $1.92 $3.52 $4.63 $5.08
Administrative Expense *.......
System Development, Operation, & 2.7 3.0 3.0 3.0 3.0
Maintenance....................
System Design................... 1.1 0.0 0.0 0.0 0.0
System Help Desk................ 0.5 0.5 0.5 0.6 0.5
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Total Federal Costs......... 5.2 5.4 7.0 8.2 8.5
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* Annual administrative expenses are prorated for States during their first year of implementation to reflect
staggered implementation throughout the fiscal year. The Department received an additional $5 million in
appropriations in FYs 2020 and 2021 for NAC development.

Federal administrative costs would be more than offset by
reduced SNAP benefit spending (transfers) due to prevention of
duplicate participation at application. The NAC pilot evaluation
estimated the potential reduction in SNAP benefit spending and
concluded that if the NAC were used by all State SNAP agencies,
benefit spending net of administrative costs would be reduced by:
<bullet> 0.191 percent by preventing duplicate participation
(avoidance); and
<bullet> 0.069 percent as States identify and act upon existing
(active) cases of duplicate participation across state lines at the
initial implementation of the NAC.
These estimates were calculated as follow:
<bullet> The total number of duplicate cases that could be
prevented was estimated by comparing the percentage of cases that
were duplicate participants prior to NAC pilot implementation to the
percentage of cases that were duplicate participants 4 months after
implementation. By using percentages rather than raw numbers, this
methodology accounts for changes in the overall SNAP caseload over
the course of the pilot.
<bullet> The estimated number of duplicate cases was adjusted to
avoid double-counting matches. Households were assumed to remain
eligible in one State (their actual State of residence), so they
discontinue participation in only one State (rather than two). After
adjustment, the number of duplicate cases prevented per month ranged
from 41 cases to 248 cases across the 5 pilot States. The median
number of months of duplicate participation avoided during the NAC
pilot varied by State from 6 months to 11 months.
<bullet> Monthly benefit savings per case varied from $123 to
$135. Based on analysis of pilot redemption data, total savings per
State were reduced by 12 percent to account for the fact that some
duplicate participants only redeemed benefits from one State. This
resulted in total monthly savings that ranged by State from $40,438
to $176,433.
<bullet> The NAC pilot only detected duplicate participation
that occurred with other NAC pilot States. However, as the NAC is
expanded nationwide, more duplicate participants are likely be
found. Data on Public Assistance Reporting Information System
(PARIS) matches was used to estimate the additional expected number
of matches if the NAC were nationwide.\5\ Among the NAC pilot
States. the percentage of PARIS matches with other NAC pilot States
varied from 18.9 percent to 52.5 percent of all matches; the
remainder of matches were with cases in other States. This
proportion was used to estimate the additional potential savings for
each pilot State if NAC matches were conducted with all States.
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\5\ PARIS is a data matching service used to check whether
recipients of public assistance receive duplicate benefits in two or
more States.
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<bullet> Potential savings per State were then calculated as a
proportion of total SNAP benefit payments in the State. Expected
benefit savings varied by State from a low of 0.12 percent to a high
of 0.30 percent of benefit payments.
<bullet> The 0.191 percent estimate is a weighted average of all
pilot State results (Table 5).

Table 5--Calculation of Potential Benefit Savings From Prevention of Duplicate Participation
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AL FL GA LA MS
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Monthly Savings per State:
Cases prevented monthly \1\.......................... 263 361 378 114 149
Percentage ``owned'' by State........................ 54.8% 68.8% 32.6% 36.0% 46.7%
Adjusted cases (A)................................... 144 248 123 41 70
Median spell length (B).............................. 6 6 11 9 10
Average monthly benefit (C).......................... $123 $135 $134 $124 $127
Savings per duplicate case (B x C)................... $739 $807 $1,475 $1,120 $1,271
Monthly savings (A x B x C).......................... $106,562 $200,493 $181,730 $45,952 $88,426
Share of duplicate benefits ever redeemed............ 88% 88% 88% 88% 88%
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Adjusted monthly savings (D)..................... $93,775 $176,433 $159,923 $40,438 $77,815
Adjustment for Nationwide Expansion:
Share of PARIS matches with other NAC States (E)..... 52.5% 18.9% 38.5% 31.1% 34.6%
Total monthly savings if NAC were nationwide (D/E)... $178,619 $933,510 $415,383 $130,026 $224,899
Monthly Savings as a Percentage of Monthly Issuance:
Average monthly issuance, FY 2014.................... $109,844,464 $456,069,500 $235,654,490 $107,359,689 $76,082,125
Share of benefits to duplicate participants.......... 0.16% 0.21% 0.18% 0.12% 0.30%
Average for NAC pilot States..................... 0.191%
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\1\ Based on Top 5 matches.
Sums may not total due to rounding.

[[Page 59657]]

Using data from the NAC pilot evaluation, the Department also
estimated the potential benefit savings due to earlier detection of
ongoing cases of duplicate participation. The benefit savings were
estimated as follows:
<bullet> As described in the preceding discussion, to estimate
the number of duplicate cases that could be prevented after
implementation, the evaluation compared the percentage of duplicate
cases prior to implementation to the percentage four months after
implementation. The latter figure represented the potential
prevention of new duplicate participants. The remainder represents
the percentage of cases that would be identified as on-going
duplicate participants at the time of implementation.
<bullet> The same assumptions were made regarding the average
monthly benefit, share of duplicate benefits that would not be
redeemed, overlap between NAC States, and impacts of nationwide
expansion.
<bullet> Rather than using the 6-11 month median spell length,
we assumed that on average cases would be closed 2 months earlier
than in the absence of the NAC. This assumption reflects that the
duplicate cases would be detected 1-3 months earlier than they would
through quarterly PARIS matches.
<bullet> As with the prevention estimate, potential savings were
calculated as a weighted average of savings in all States, for an
average of 0.069 percent of benefits per State (Table 6). Because
these savings are the result of earlier detection of ongoing
duplicate participation, the savings only occur in the first year of
operation.

Table 6--Calculation of Potential Benefit Savings From Earlier Identification of Ongoing Duplicate Participation
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AL FL GA LA MS
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Monthly Savings per State:
Cases prevented monthly \1\.......................... 1014 187 160 255 629
Percentage ``owned'' by State........................ 54.8% 68.8% 32.6% 36.0% 46.7%
Adjusted cases (A)............................... 555 129 52 92 294
Median spell length (B).............................. 2 2 2 2 2
Average monthly benefit (C).......................... $123 $135 $134 $124 $127
Savings per duplicate case (B x C)................... $246 $269 $268 $249 $254
Monthly savings (A x B x C).......................... $136,893 $34,589 $13,949 $22,812 $74,640
Share of duplicate benefits ever redeemed............ 88% 88% 88% 88% 88%
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Adjusted monthly savings (D)..................... $120,466 $30,438 $12,275 $20,074 $65,683
Adjustment for Nationwide Expansion:
Share of PARIS matches with other NAC States (E)..... 52.5% 18.9% 38.5% 31.1% 34.6%
Total monthly savings if NAC were nationwide (D/E)... $229,459 $161,048 $31,883 $64,547 $189,836
Monthly Savings as a Percentage of Monthly Issuance:
Average monthly issuance, FY 2014.................... $109,844,464 $456,069,500 $235,654,490 $107,359,689 $76,082,125
Share of benefits to duplicate participants.......... 0.209% 0.035% 0.014% 0.060% 0.250%
Average for NAC pilot States..................... 0.069% ................. ................. ................. .................
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\1\ Based on Top 5 matches.
Sums may not total due to rounding.

Once the NAC is successfully implemented nationwide, the
Department expects that active cases of duplicate participation
across State lines will largely be eliminated. To reflect this,
savings from identification of active duplicate cases are phased out
after all States have implemented. The Department acknowledges a
small number of active duplicate participation cases may still occur
because of imperfect use of the NAC, but anticipates that it would
be a small number of cases.
Because the Department expects NAC participation to be phased in
over time, and because it cannot predict which States will begin
participating in each year after implementation begins, our
estimated reduction in benefits assumes that NAC coverage of the
SNAP caseload phases in at the same rate as State participation. In
other words, if 25 percent of States participate in a given fiscal
year, then 25 percent of the potential benefit reduction will occur,
prorated to reflect expected staggered implementation throughout the
fiscal year. The estimated savings are for prevention and
identification of duplicate participation (Table 7).

Table 7--Calculation of Reduction in SNAP Benefit Spending Due to Earlier Detection of Ongoing and Prevention of
New Duplicate Participation
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026
----------------------------------------------------------------------------------------------------------------
Projected SNAP benefit spending .............. $97,694 $99,364 $97,850 $95,613
*..............................
Estimated from avoidance $0.0 -$28.15 -$85.99 -$141.13 -$174.97
(0.191%) **....................
Estimated savings from $0.0 -$15.20 -$20.61 -$20.30 -$11.16
identifying active duplicate
participation (0.069%).........
Percentage of States 0.0 22.6 52.8 83.0 100.0
participating..................
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Total reduction in SNAP $0.0 -$43.35 -$106.60 -$161.43 -$186.12
benefit spending...........
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* Source: Internal USDA Estimates.
** Savings from avoidance for newly implementing States are prorated to reflect expected staggered
implementation throughout the fiscal year as States join the NAC.

[[Page 59658]]

Effect on SNAP Participants

This rule will not affect the monthly benefit allotments of SNAP
participants, except for those who are participating in more than
one State in the same month or who attempt to do so. The interim
final rule includes provisions to protect participants from being
incorrectly removed from the program due to an inaccurate match, to
protect participants' privacy, and to reduce participants' burden in
responding to a match. The NAC can also protect households/
individuals from claims as a result of inadvertently participating
in more than one State simultaneously. Under the current process,
State agencies rely primarily on manual processes to track and act
upon data matches, which can be error-prone and time-consuming. For
example, a household could report to State A that they moved to
State B and begin receiving SNAP in State B, but State A failed to
close the case in a timely fashion. By preventing duplicate
participation, the NAC can reduce the need to establish claims
against households/individuals who complied with program rules.
Households/individuals that are identified as potential
duplicate participants will face additional administrative burden.
For households/individuals identified by a match during the
certification or recertification process, or when adding a new
household member, this burden includes providing additional
verification of residency when needed (309 hours per State, on
average) and responding to a Notice of Match Results (NMR) (646
hours per State, on average). This would be an ongoing burden in
every year after initial implementation. The NMR will provide
households/individuals incorrectly identified as potential duplicate
participants an opportunity to dispute the match and prevent people
from incorrectly being removed from SNAP as a result of an
inaccurate NAC match. For households/individuals identified as a
possible active duplicate participant during the certification
period, burden includes reading/responding to a combined NMR and
Notice of Adverse Action (NOAA), and providing additional
verification when needed. This combined burden (646 hours per State,
on average) would primarily take place as States newly implement the
NAC, when active duplicate participants are expected to be
identified. Because the Department expects active cases of duplicate
participation to decline as the NAC is implemented nationwide,
household burden related active duplicate participation is phased
out as the NAC is phased in. Altogether, this administrative burden
is expected to cost households $1.2 million over five years (Table
8).

Table 8--Calculation of Household Administrative Burden
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026
----------------------------------------------------------------------------------------------------------------
Total States participating in 0 12 28 44 53
NAC............................
States newly implementing NAC... 0 12 16 16 9
Household burden hours * for:
Verification (309 hours per 0 3,708 8,651 13,595 16,376
State on average) *........
Responding to NMR (646 hours 0 7,746 18,074 28,401 34,211
per State) *...............
Responding to combined NMR 0 7,746 10,328 10,328 5,809
and NOAA (646 hours per
State) *...................
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Total Hours............. 0 19,199 37,053 52,324 56,396
-------------------------------------------------------------------------------
Total Cost.......... $0.00 $0.14 $0.27 $0.38 $0.41
----------------------------------------------------------------------------------------------------------------
* Household burden expressed as an average per State. Verification hours assume an average of 4,612 households
per State spend 4 minutes each (on average) on verification. NMR hours per State assume an average of 7,730
households per State spend 5 minutes each reviewing a NMR. Combined NMR and NOAA hours assume an average of
7,730 households per State spend 5 minutes each.

Some households/individuals identified as potential duplicate
participants may be false positive matches and may face additional
administrative burden associated with verifying their circumstances.
However, as matching against name, Social Security number, and date
of birth will be required, the Department expects to minimize such
false positive matches.\6\ Additionally, States are expected to
ensure they have reliably valid information about the identity of
all members of an applicant household and their intent to receive
SNAP benefits prior to submitting information to the NAC to minimize
the risk of false positive matches.
---------------------------------------------------------------------------

\6\ The NAC pilot evaluation found that, with virtually no
exceptions, matches on all three of these data elements were valid.
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To minimize risks to the privacy of SNAP participants, the
Department will ensure that the NAC maintains strict security
standards to prevent the unauthorized disclosure or modification of
information. The NAC system will not store or retain any personal
identifiable information (PII) and the interim final rule requires
that the NAC use only de-identified personal information for
enhanced security of SNAP participants. Additionally, NAC data
cannot be used for any purpose other than detecting duplicate
participation.

III. Uncertainties

There are several uncertainties regarding the estimated impacts
of the NAC rule.
<bullet> First, while the Department intends to vigorously push
States to implement this rule, experience indicates that States face
a variety of challenges when required to implement program changes
that rely heavily on changes to their automated systems. These
challenges can delay full implementation for years when, for
example, a State is in the process of building and implementing a
new system to replace a legacy system. This results in a high level
of uncertainty regarding how quickly States will begin implementing
the NAC. The estimates in this analysis rely on the Department's
conversations with States to gauge their interest and readiness to
implement the NAC. Table 9 below illustrates how those estimates
might vary if implementation were slower than expected.

Table 9--Impact of Alternative Phase-In Assumptions
[Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026 5-year 10-year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expected Phase In (by 2026):
States Implementing...................................... 0 12 28 44 53 ........... ...........
Reduction in SNAP benefit payments....................... $0.0 -$43 -$107 -$161 -$186 -$497 -$1,493

[[Page 59659]]

Federal/State Administrative Costs (total)............... $6.0 $7.3 $10.5 $12.8 $13.6 $50.3 $121.1
Household Burden......................................... $0.0 $0.14 $0.27 $0.38 $0.41 $1.2 $3.0
Assume Slower Phase In (by 2029)
States Implementing...................................... 0 8 16 24 32 ........... ...........
Reduction in SNAP benefit payments....................... $0.00 -$29 -$60 -$88 -$113 -$290 -$1,216
Federal/State Administrative Costs (total)............... $5.5 $5.6 $7.4 $9.1 $10.6 $38.2 $105.4
Household Burden......................................... $0.00 $0.09 $0.15 $0.20 $0.26 $0.70 $2.54
--------------------------------------------------------------------------------------------------------------------------------------------------------

<bullet> Second, the costs and savings described in this
analysis are based on the five-state NAC pilot, and it is uncertain
whether the pilot results will be replicated nationwide. For
example, the NAC evaluation found that the extent of automation
might affect States' ability to follow up on match results. The NAC
evaluation also found that savings per match and monthly savings due
to prevention of duplicate participation varied widely across the
pilot States. As a percentage of total SNAP allotments in the pilot
States, the reduction in benefit payments due to avoidance of
duplicate participation ranged from 0.12 percent to 0.30 percent
(see Table 5). The reduction in benefit payments due to
identification of active duplicate participants ranged from 0.014
percent to 0.250 percent (see Table 6). In addition, the NAC Pilot
evaluation used data from PARIS matches to extrapolate how NAC
savings might increase were the system to expand to additional
States. The estimates presented in this analysis are based on a
weighted average of the pilot State results (0.191 percent in
avoidance savings and 0.069 percent in savings from identifying
active duplicate participants). Table 10 below illustrates how the
total reduction in SNAP benefits might change if the reduction in
benefit payments were lower or higher.

Table 10--Impact of Alternative Benefit Reduction Assumptions
[Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026 5-year 10-year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction in SNAP benefit payments:
Reduction = weighted average.............................
0.191% avoidance savings and 0.069% active duplicate $0.0 -$43 -$107 -$161 -$186 -$497 -$1,493
participation savings...............................
Reduction = lower bound:.................................
0.121% avoidance savings and 0.014% active duplicate 0.0 -21 -59 -93 -113 -286 -917
participation savings...............................
Reduction = upper bound:.................................
0.296% avoidance savings and 0.250% active duplicate 0.0 -99 -208 -292 -312 -911 -2,452
participation savings...............................
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<bullet> Third, these estimates assume cases that are prevented
from becoming duplicate participants would otherwise have
participated for 6-11 months. Because States regularly conduct
matches through PARIS, it is possible that the actual spell length
could be shorter than the spell length in the pilot States. Table 11
illustrates how the reduction in SNAP benefit payments would vary
based on spell length.

Table 11--Impact of Alternative Spell Length Assumptions
[Dollars in millions]
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2022 2023 2024 2025 2026 5-year 10-year
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.