Final TANF Rule as published in the Federal Register 4/12/1999

17730 Federal Register / Vol. 64, No. 69 / Monday, April 12, 1999 / Rules and Regulations
want to alter a State’s ranking on this
basis. For example, suppose the State
with the highest percentage of
placements in long-term jobs for its
TANF cases achieved its placement rate
and ranking by shifting all of its hardto-serve
cases from TANF to separate
State programs. Obviously, this State
would not merit a ranking as one of the
five most successful States. We will
consider if a State’s separate State
program had the effect of avoiding work
requirements as one factor in
determining the annual ranking of
successful State programs.
We will incorporate a full analysis of
the information that we have gathered
on what has been happening with
separate State programs in our annual
report to Congress. For example, we
intend to address issues such as: (1)
What is the basic nature of these
programs; (2) have there been changes
in their size or scope; (3) who do these
programs serve; (4) how do they differ
from TANF recipients; (5) what types of
benefits do they provide; (6) to what
extent do work participation rates
apply; (7) what participation rates are
being achieved; and (8) is there any
evidence of the diversion of Federal
child support collections. By looking at
this range of issues, we will be better
able to assess whether States have
diverted individuals from TANF with
the apparent purpose of avoiding TANF
program requirements.
In the High Performance Bonus
guidance that we issued on March 17,
1998 (TANF–ACF–PI–98–01), we noted
that a State’s success in meeting TANF
performance goals could be affected by
its decision to fund a separate State
program with its maintenance-of-effort
(MOE) dollars and that such actions
might advantage one State over another.
For example, if a State had a separate
State program similar to TANF in which
it put recipients who were more
difficult to employ, its TANF
performance results could be unfairly
inflated. In such cases, we would need
to consider including outcomes for the
caseload in separate State programs in
the performance measures. We said we
would analyze separate State program
data, as well as other information we
receive on the characteristics of the
caseload and the nature of benefits
provided in separate State programs, in
assessing how and whether to adjust a
State’s TANF performance data.
On the issue of child support
collections more specifically, while
States have new flexibility in the way
that they administer their TANF
programs, they must continue to share
a portion of child support collections
with the Federal government. The need
to share TANF-related collections could
serve as a possible disincentive for
States to pass through the full amount
of child support to families and could
create an incentive for States to serve
needy families through separate State
programs. State spending in these
separate State programs continues to
count under the basic MOE
requirements, but States do not need to
share the child support collected on
behalf of families served by these
programs.
At this point, we have no evidence
that States are diverting child support
collections. For example, we are not
seeing dramatic decreases in the Federal
share of collections or changes in the
average collection per case. In the
meantime, the Administration is
engaged in a dialogue with stakeholders
on child support program financing
issues to look at ways to address these
and other related concerns. We will
work with these stakeholders and with
Congress to develop any necessary
legislation.
As a number of commenters
suggested, under these final rules, we
have adopted a strategy that includes
gathering information, monitoring
developments, and keeping our options
open regarding future actions. Through
our data collection, we will obtain
substantial information on the
characteristics of separate State
programs, the families they serve, and
the benefits they provide. This
information will help us assess their
potential impact on the achievement of
TANF goals. We will consider
proposing appropriate legislative or
regulatory remedies, consistent with our
legal authority, if we find that States are
using the flexibility available under
these rules to avoid work requirements,
divert child support collections, or
otherwise undermine the goals of
TANF. However, we will not put any
significant policy change into effect
without appropriate prior consultation
with States, Congress, and other
interested parties.
Separate State Program Reporting
Comment: Commenters also argued
that the stringent reporting requirements
and the potential loss of caseload
reduction credits, eligibility for high
performance bonuses, and certain
penalty relief for States that failed to
comply with the reporting requirements
also discouraged States from
implementing innovative separate State
programs.
Response: As we discuss in the
preamble for § 260.31, we have made
significant changes to the proposed
definition of assistance. These changes
have a significant effect on the scope of
the disaggregated and aggregate
reporting for both TANF and separate
State programs. Like the TANF Data
Report, the SSP–MOE Data Report only
captures information on families
receiving ‘‘assistance.’’ Therefore, States
do not have to provide detailed program
and family characteristics data for
families receiving other kinds of
benefits and work supports. Thus, the
data collection in the final rules
responds to the commenters’ concerns
about the problems that would be
inherent in requiring detailed reporting
of case-record information from
programs that bore little or no
relationship, in substance or
administration, to those providing
traditional welfare benefits.
However, information on separate
State programs is still very important
under the final rule. Thus, we still
expect States to submit SSP–MOE Data
Reports containing data on separate
State programs that are similar to the
TANF program data as a condition of
receiving caseload reduction credits or
high performance bonuses. Also, we
have strengthened the information we
will collect on SSP–MOE spending by
expanding reporting under the TANF
Financial Report and expanding
information on all MOE programs in the
annual report (as discussed in § 265.9
and presented in Appendix I). Taken in
combination, these data will help us
ensure that each State has met its basic
MOE requirement, properly evaluate
State reports on caseload reduction
credits, assess overall State
performance, and report on program
characteristics to the public, to the
Department, and to Congress. We could
also use the information to identify
areas in which regulatory or legislative
changes may be necessary.
Under the final rule, we do not
require that States submit the SSP–MOE
Data Report in order to qualify for
penalty relief because the information in
the report is not germane to the
determination of its penalty amount.
The information in the SSP–MOE
Data Report is germane to determining
if States have achieved creditable
caseload reductions and to assessing a
State’s overall performance under
TANF. Thus, as stated previously, the
final rule does require that a State
submit an SSP–MOE Data Report if it
wants to receive either a High
Performance Bonus or a caseload
reduction credit (though with reduced
data elements).
Failure of a State to submit the MOE
information required in either the TANF
Financial Report or the annual report
could affect a State’s liability for a