Title IV:
Nutrition Programs

Highlights

Title IV
Nutrition Programs

Food Stamp Program and commodity distribution programs are reauthorized for 5 years. Reinstates food stamp eligibility for legal immigrants residing in the U.S. for at least 5 years, and for all legal immigrant children and disabled individuals. Includes provisions to simplify and streamline the Food Stamp Program. Increases funding for the Emergency Food Assistance Program. Modifies commodity distribution programs and encourages expanded use of fresh fruits and vegetables.

Provisions

Food Stamp Program benefits

The Food Stamp Program (FSP) aids qualified low-income households with food purchases.

The 1996 Farm Act reauthorized the FSP for 2 years, adding criteria for disqualification of food stores and wholesale food concerns for program violations.

The program was modified and reauthorized through fiscal year (FY) 2002 as a part of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). This welfare reform legislation reduced the level of the maximum food stamp benefit, limited income deductions, restricted eligibility for many legal immigrants, and imposed time limits for able-bodied adults without dependents.

The FSP and related programs under the Food Stamp Act (including the Food Distribution Program on Indian Reservations) are reauthorized through FY 2007.

Benefits for legal immigrants

PRWORA disqualified most permanent resident aliens from receipt of food stamps unless they had been employed in the U.S. for the past 10 years. The Agricultural Research, Extension and Education Reform Act of 1998 restored eligibility to immigrant children, disabled, and elderly who were in the U.S. when welfare reform took effect in August 1996.

Beginning in October 2002, eligibility for FSP benefits is restored to legal immigrants receiving other disability benefits. In April 2003, all legal immigrants who have been in the U.S. continuously for 5 years will become eligible to apply for food stamps. All legal immigrant children, regardless of date of entry to the U.S., will become eligible to apply in October 2003.

Welfare reform and immigration reform legislation in 1996 instituted requirements to take sponsors' income into account when immigrants were means tested for Federal benefits.

Eligibility guidelines for legal immigrants will continue to take into account the income and assets of sponsors, except in applications made for children after October 2003.

Standard deduction for income determination

PRWORA froze the standard deduction at $134 per household, regardless of size.

Standard deduction is modified to allow a greater deduction (and higher benefits) for many larger households. The deduction is set at 8.31% of inflation-indexed poverty guidelines for most households. Since the poverty income cutoff increases with household size, larger FSP households are generally entitled to bigger standard deductions. Households with more than 6 persons will qualify for the same deduction as a 6-person household. No household will have a deduction less than $134.

Transitional food stamp benefits for households exiting welfare

In creating a new cash welfare program—Temporary Assistance to Needy Families (TANF)—PRWORA imposed a 5-year limit on receipt of cash benefits. In many States, implementation of TANF involved new policies and practices that were not easily integrated with food stamp administrative practice. Regulatory changes in 2000 allowed States to certify 3 months of transitional food stamp benefits for households losing cash assistance from TANF, without additional paperwork requirements.

Families leaving TANF can be certified to receive transitional food stamp benefits for 5 months. The transitional benefit amount is set equal to the amount of benefits received 1 month prior to exiting TANF, with adjustments for loss of cash aid and, at State option, for other changes in household circumstances. Households may recertify during the transitional period. For transitional cases, States are allowed to extend the certification period beyond 12 months. Households are not eligible for transitional benefits if they lose TANF benefits because of a sanction, are disqualified from the Food Stamp Program, or belong to a category designated by the State as ineligible.

Provisions

Food Stamp Program simplification and administrative reforms.
The Food Stamp Program (as amended) established uniform national eligibility standards and defines the basic FSP unit as the "household." Eligibility criteria include gross and net income limits and an asset limit. The food stamp allotment depends on the number of people in the household and the household's net income.

Eligibility and benefit determination

Income requirements continued to restrict eligibility to households with gross income less than 130% of poverty guidelines and net income less than 100%. Asset requirement limiting eligible households to no more than $2,000 in countable assets ($3,000 if a member is age 60 or older) is also continued.

To simplify eligibility determination, State administrators may exclude certain types of income and resources not counted under the State's TANF cash assistance or Medicaid programs. Asset requirements are changed to increase the resource limit from $2,000 to $3,000 for households with a disabled member.

States may deem child support payments as an income exclusion rather than a deduction. The Secretary is directed to establish simplified procedures for States in establishing the amount of child support paid by a household.

States are given new options on use of standardized deductions. A new standard deduction of $143 per month for homeless households is allowed. The standard utility allowance (SUA) option is simplified for States electing to use the SUA (rather than actual utility costs) for all households.

FSP reporting and recertification procedures

Regulatory and policy changes gave States new opportunities to reduce the burden on FSP certified households by expanding quarterly reporting options (1999) and allowing semi-annual reporting for households with earnings (2000).

States are allowed to extend the semi-annual reporting option to almost all types of cases, permitting the State agency to freeze benefits for 6 months. Households are required to report changes in income and circumstances only at 6-month intervals (unless their income goes above 130% of the poverty level.)

FSP quality control system

The Food Stamp Act (as amended) required USDA to maintain a system that enhances payment accuracy and improves program administration by establishing fiscal incentives that require State agencies with high payment error rates to share in the cost of payment error.

Substantial changes are made to the fiscal sanctions and incentives available to the Secretary to oversee State performance in administering the FSP. Only those States with persistently high error rates will face liabilities. Beginning with State performance in October 2003, States will not be penalized unless the probability is 95% that their error rate exceeds 105% of the national average for 2 consecutive years.

USDA had provided enhanced administrative funds to States with error rates below 6%.

The enhanced funding system is replaced with a performance system that will award $48 million in bonuses each year and that emphasizes positive steps rather than avoidance of error. States will be rewarded for improvements or high levels of performance related to actions taken to correct errors, reduce the rates of error, improve eligibility determinations, or other activities that demonstrate effective administration.

Use of Food Stamp Employment and Training (FSE&T) Program funds.
Under the Food Stamp Act (as amended) USDA is required to provide Federal funding to States for employment and training programs for food stamp recipients.

The Balanced Budget Act of 1997 more than doubled funding available to States for the FSE&T Program. The following 3 stipulations applied:
• States had to spend at least 80% of employment and training (E&T) funds on services for able-bodied adults without dependents (ABAWDs);
• States had to maintain at least their 1996 E&T funding levels in order to access additional funds; and
• amounts that USDA would reimburse per case for qualifying E&T activities were limited.

State flexibility in spending FSE&T program funds is increased by repealing the 3 stipulations imposed on States. Also eliminated is the $25-per-month cap on Federal reimbursements for transportation and other work costs incurred by participants in E&T programs.

Federal FSE&T funds made available to States were in excess of $200 million from FY 1998-2001.

For FY 2002-07, unrestricted FSE&T funds are reduced to $90 million. An additional $20 million in funding is available for States that pledge to offer work slots to ABAWD facing the 3-month time limit for food stamps.

FSP access grants

The Food Stamp Act (as amended) authorized USDA to spend up to $5 million for FY 2002-07 on competitively awarded grants with public or private nonprofit organizations for outreach projects aimed at increasing FSP participation by eligible low-income households.

Reaffirms funding authorized in the Food Stamp Act. Up to $5 million in annual funds for FY 2003-07 is specifically authorized to award competitive outreach grants to improve access to the FSP. Projects may include efforts to:
• Coordinate food stamp applications with those of other assistance programs;
• Facilitate application through telephone, Internet, or other system improvements; and
• Develop outreach materials and/or improved methods for informing eligible households about the program.

Electronic benefits transfer (EBT) system

PRWORA mandated that all States switch from paper coupons to EBT issuance by October 2002 and that all State EBT systems be integrated with other State systems.

Eliminates requirement that EBT systems not cost the Federal Government more than the prior paper coupon systems. Alternate methods for issuing food stamp benefits are authorized during disasters when reliance on EBT systems is impracticable.

The Secretary is required to submit a report by October 1, 2003, to Congress, describing the status of EBT systems in each State and national implementation issues.

Puerto Rico and American Samoa

Puerto Rico and American Samoa continued to receive Federal food assistance through separate block grant programs.

Funding structure for nutrition assistance in Puerto Rico and American Samoa is consolidated into a single block grant funded at $1.401 billion for FY 2003 with annual adjustments, based on the Thrifty Food Plan.

Provisions

Commodity distribution programs provide needy persons with access to a more nutritious diet.

The Emergency Food Assistance Program (TEFAP) provides for the purchase and distribution of commodities to the needy, primarily through food banks and soup kitchens.

The 1996 Farm Act required the Secretary to use $100 million annually to purchase commodities for TEFAP, and authorized up to $50 million to be used in administration of the program and distribution of commodities. Funding was authorized through FY 2002.

Mandatory funding for TEFAP commodity purchases under the Food Stamp Act is increased to $140 million each year beginning in FY 2002. In addition, authorizations for direct and indirect costs related to processing, storing, transporting, and distributing commodities (including commodities contributed by farmers through gleaning programs) are increased to $60 million.

Commodity Supplemental Food Program (CSFP)

The 1996 Farm Act reauthorized various discretionary food distribution programs, including the Commodity Supplemental Food Program (CSFP).

CSFP is reauthorized through FY 2007. The administrative funding formula is modified to provide a specific reimbursement per caseload slot, subject to annual adjustment.

The Secretary cannot prohibit use of any food safety technology approved or allowed by USDA or the Department of Health and Human Services when acquiring commodities for commodity distribution programs and other domestic feeding programs.

Provisions

Community food security provisions

Community food security grants

The 1996 Farm Act established new authority for Federal grants to support development of Community Food Projects. Funding of $2.5 million per year was authorized through FY 2002. Grants have been awarded annually to projects designed to:
• Increase access of low-income households to fresher, more nutritious food supplies;
• Increase self-reliance of communities in providing for their own food needs; and
• Promote comprehensive responses to local food, farm, and nutrition issues.

Annual funds of up to $5 million are authorized for Community Food Projects for FY 2002-07. The definition of qualifying projects is expanded to include those that meet specific local needs through infrastructure development, long-term planning, and/or innovative marketing activities. Up to $200,000 annually of the authorized funding can be used to contract with a nongovernment organization to develop and recommend programs for addressing common community issues such as loss of farms and ranches, rural poverty, welfare dependency, hunger, job training, and promotion of self-sufficiency for individuals and communities.

Farmers' Market Nutrition Programs

The WIC Farmers' Market Nutrition Act of 1992 mandated USDA to help participants in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to obtain fresh fruits and vegetables from farmers' markets. Legislation in 1994 authorized $10.5 million for the program in FY 1995 and "such sums as necessary" for FY 1996-98. Legislation in 1998 reauthorized the program through FY 2003. The 2002 Agricultural Appropriations Act allocated $10 million for the program in FY 2002, with provision for an additional $15 million at the Secretary's discretion.

The additional funding for the WIC Farmers' Market Nutrition Program shall be available through the Commodity Credit Corporation (CCC) in the amount of $15 million until expended.

USDA instituted the Senior Farmers' Market Nutrition Program in January 2001, targeted at low-income seniors, using funding under CCC authorities.

Funding levels of $5 million in FY 2002 and $15 million a year through FY 2007 are made available to implement and expand the Senior Farmers' Market Nutrition Program.

Locally produced foods

No similar provisions.

The Secretary is directed to encourage schools participating in the National School Lunch and School Breakfast Programs to purchase locally produced foods. Annual funding of $400,000 for FY 2003-07 is authorized to provide startup grants for up to 200 institutions.

Provisions

Miscellaneous nutrition program provisions

Use of commodities for domestic feeding programs

No similar provisions.

The Secretary is given authority to distribute excess commodities acquired in the conduct of CCC operations under Section 32 to any USDA program involving acquisition of commodities for a domestic feeding program.
The Secretary is required to use a minimum of $200 million per year from Section 32 funds to purchase additional fruits, vegetables, and other specialty food crops. A minimum of $50 million per year is to be used exclusively for purchases of fresh fruits and vegetables through the Department of Defense Fresh Program for use by schools and institutions participating in school lunch and other child nutrition programs.

Pilot programs

No similar provisions.

Several pilot programs are authorized, including:
• A pilot program to make free fruits and vegetables available in 25 schools in 4 States and on 1 Indian reservation; and
• A pilot program in 5 States, not to exceed 4 years per State, to increase fruit and vegetable consumption and publicize related health promotion messages.

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