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

Federal Register / Vol. 64, No. 69 / Monday, April 12, 1999 / Rules and Regulations
forms would expand public access to
this information and make it easier to
comment on our data collection and
reporting plans.
We believe that we succeeded in
accomplishing these goals. Commenters
responded in large numbers and specific
detail to both the Paperwork Reduction
Notice and the Proposed Rule. The
changes to the final rule and to the
companion appendices reflect our
consolidated response to both sets of
comments.
E. Scope of This Rulemaking
The NPRM and final rule reflect our
decision to incorporate the work, data
collection, and penalty provisions in a
single regulatory package. While this
decision resulted in a large rule, we
think it enabled us to develop a more
coherent regulatory framework and
provided readers an opportunity to look
at, and comment on, the many
interconnected pieces at one time.
One downside of this decision was
that the concentration of all these
accountability provisions in one rule
could have contributed to the
perception among some commenters
that the tone was punitive and the rule
too penalty-focused. It is important to
keep our broader regulatory and
program agenda in mind as you assess
the impact and meaning of this package.
The total agenda includes rewards, as
well as penalties, and tracks State
performance along a variety of different
measures, including job entries, success
in the workplace, reductions in out-ofwedlock
childbearing, and child poverty
rates. It also includes annual reports to
Congress on State program
characteristics, recipient characteristics,
and performance.
Our agenda also includes extensive
research, evaluation, and technical
assistance efforts. Throughout this
preamble, you will find examples of
how our efforts in these areas respond,
in a nonregulatory fashion, to
commenter concerns. It would be
impractical and inappropriate to use
this rulemaking as the vehicle for
informing the public about the full
agenda, but the ‘‘Promising Practices
National Conferences’’ held in
September 1998 and in Fiscal Year 1999
provide a good example. These
meetings, which have the financial
support of the Department of Health and
Human Services (including both the
Administration for Children and
Families and the Substance Abuse and
Mental Health Services Administration)
and the Department of Labor, will
provide State and local staff and other
practitioners with practical ideas on a
range of topics, such as preparing for the
difficult task of moving clients with
multiple barriers into work, creating
jobs in isolated and high-risk
communities, increasing support from
noncustodial parents, promoting
collaboration and achieving seamless
delivery of services, changing welfare
offices to job centers, promoting success
in the workplace, and maintaining the
investments in needy families.
F. Applicability of the Rules
As we indicated in policy guidance to
the States and the NPRM, a State could
operate its program under a reasonable
interpretation of the statute prior to our
issuance of final rules. Thus, in
determining whether a State is subject
to a penalty, we would not apply
regulatory interpretations retroactively.
We retained this basic policy, but
modified it to clarify that the
‘‘reasonable interpretation’’ standard
applies until the effective date of these
final rules. You can find additional
discussion of this policy at § 260.40 of
the preamble.
III. Principles Governing Regulatory
Development
A. Restrictions on Our Regulatory
Authority
Under the new section 417 of the Act,
the Federal government may not
regulate State conduct or enforce any
TANF provision except to the extent
expressly provided by law. This
limitation on Federal authority is
consistent with the principle of State
flexibility and the general State and
congressional interest in shifting more
responsibility for program policy and
procedures to the States.
We interpreted this provision to allow
us to regulate in two different kinds of
situations: (1) Where Congress has
explicitly directed the Secretary to
regulate (for example, under the
caseload reduction provisions,
described below); and (2) where
Congress has charged the Department of
Health and Human Services (HHS) with
enforcing penalties, even if there is no
explicit mention of regulation. In this
latter case, we believe we have an
obligation to States to set out, in
regulations, the criteria we will use in
carrying out our express authority to
enforce certain TANF provisions by
assessing penalties.
In the preamble to the proposed rule,
we indicated that we endeavored to
regulate in a manner that did not
impinge on a State’s ability to design an
effective and responsive program. A
large number of commenters felt that
our regulations would in fact have such
a negative effect. In the subsequent
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discussion, you will note that we have
revised provisions in key program areas
that respond to these concerns.
At the same time, however, we remain
committed to ensuring that States
remain accountable for meeting TANF
requirements. Thus, we will continue to
monitor program developments so that
we can make appropriate adjustments if
programs fail to remain focused on
TANF’s statutory objectives.
B. State Flexibility
In the Conference Report to PRWORA,
Congress stated that the best welfare
solutions come from those closest to the
problems, not from the Federal
government. Thus, the legislation
creates a broad block grant for each
State to reform welfare in ways that
work best. It gives States the flexibility
to design their own programs, define
who will be eligible, establish what
benefits and services will be available,
and develop their own strategies for
achieving program goals, including how
to help recipients move into the work
force.
Under the law and the proposed rules,
we indicated that States could
implement innovative and creative
strategies for supporting the critical
goals of work and responsibility. For
example, they could choose to expend
funds on refundable earned income tax
credits or transportation assistance that
would help low-wage workers keep
their jobs. They could also extend
employment services to noncustodial
parents, by including them within the
definition of ‘‘eligible families.’’
To ensure that our rules supported the
legislative goals of PRWORA, we
indicated our commitment to gather
information on how States were
responding to the new opportunities
available to them. We said that we
reserved the right to revisit some issues,
either through legislative or regulatory
proposals, if we identified situations
where State actions were not furthering
the objectives of the Act.
A large number of commenters felt we
had unduly limited State flexibility to
design their programs, particularly with
respect to expending funds in separate
State programs, providing assistance to
child-only cases, and continuing
waivers, but also in areas like the
definition of administrative costs,
restrictions on domestic violence
waivers that affected reasonable cause,
and the definition of assistance.
We included some restrictions on
State flexibility in the NPRM to protect
against possible State policies that
might undermine TANF goals or divert
the Federal share of child support
collections. However, in response to