Final

Issued by: Administration for Children and Families (ACF)

Issue Date: December 21, 1998

To:

State Agencies Administering the Temporary Assistance for Needy Families (TANF) Program and Other Interested Parties

Subject:

Effect of the Agriculture Research, Extension, and Education Reform Act of 1998 (Pub. L. 105-185) on a State's Ability to Cover Costs of an Optional Food Stamp Program.

References:

TANF-ACF-PA-97-3, dated October 2, 1997; section 502 of the Agriculture Research, Extension, and Education Reform Act of 1998 (Pub.L. 105-185); and the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (Pub. L. 104-193).

Background:

TANF Policy Announcement 97-3 responds to questions related to the option States have to issue food stamp benefits to certain individuals who are ineligible for the Federal Food Stamp program due to the provisions of welfare reform legislation.  It provides that States are permitted to purchase food stamps from the Federal government for use in a State-funded optional food stamp program, but they must cover the actual cost of the food stamps and the entire amount of the related administrative costs.  PA-97-3 discusses whether the expenditures of State funds under the optional food stamp program count toward the State's maintenance-of-effort (MOE) requirements and whether Federal TANF funds may be used for these purposes.

After PA-97-3 was issued, Congress enacted changes to the Food Stamp legislation. Section 502 of the Agriculture Research, Extension, and Education Reform Act of 1998 amended the statute for the Federal Food Stamp program at section 16 of the Food Stamp Act of 1977, by reducing the Food Stamp administrative reimbursements to States by the amount of Food Stamp administrative costs assumed in each State's TANF block grant.  Section 502 also restricts States from using Federal TANF funds, maintenance-of-effort spending under TANF and certain other State funds to replace the reductions that are made by the Secretary of Agriculture.  As a result, questions have arisen about the impact of these statutory changes on States as they operate an optional food stamp program.

Policy:

The provisions of section 502 of the Agriculture, Research, Extension, and Education Reform Act of 1998 apply only to the Federal Food Stamp program and have no impact on the optional food stamp program. Accordingly, the guidance in TANF-ACF-PA-97-3 remains accurate.

TANF-ACF-PA-97-3 states that the expenditures of State funds for optional food stamp benefits count as MOE under the TANF program if the benefits are provided to an eligible family or to a family that would be an eligible family if it had not reached the applicable State or Federal time limit.  An eligible family may include a qualified alien who is ineligible for TANF or a noncustodial parent or other adult relative living in the home, such s an able-bodied adult without dependent children (ABAWD).  Expenditures of State funds to cover administrative costs associated with the provision of such benefits also count as MOE.

The policy Announcement also provides that a State is permitted to use Federal TANF funds to provide optional food stamp benefits to qualified aliens or certain ABAWDs who are already receiving TANF but are ineligible to receive benefits under the Federal Food Stamp program because of the provisions of PRWORA.

Inquiries:

Inquiries should be directed to the appropriate Administration for Children and Families (ACF) Regional Administrator.

/s/

Alvin C. Collins
Director
Office of Family Assistance

DISCLAIMER: The contents of this database lack the force and effect of law, except as authorized by law (including Medicare Advantage Rate Announcements and Advance Notices) or as specifically incorporated into a contract. The Department may not cite, use, or rely on any guidance that is not posted on the guidance repository, except to establish historical facts.