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Statement of Need: The rule is needed to implement several food stamp quality control provisions of Public Law 107-171 the Farm Security and Rural Investment Act of 2002. Elimination of enhanced funding is required by the Act. The Act also requires the Department to propose rules for adjusting liability determinations following appeals decisions. The remaining changes are either conforming changes resulting from the required changes or policy changes already in effect but not updated in the regulations.

Summary of the Legal Basis: The legal basis for this rule is Public Law 107-171 the Farm Security and Rural Investment Act of 2002.

Alternatives: This rule deals in part with changes required by title IV of Public Law 107-171 the Farm Security and Rural Investment Act of 2002. The Department has no discretion in eliminating enhanced funding for fiscal years 2003 and beyond. The provision addressing results of appeals is required to be regulated by Public Law 107-171. The remaining changes amend existing regulations and are required to make technical changes resulting from these changes or to update policy consistent with current requirements.

Anticipated Costs and Benefits: The provisions of this rule are not anticipated to have any impact on benefit levels. The provisions of this rule are anticipated to reduce administrative costs.

Risks: The FSP provides nutrition assistance to millions of Americans nationwide. The quality control system measures the accuracy of States providing food stamp benefits to the program recipients. This rule is intended to implement some of the quality control provisions of title IV of Public Law 107-171 the Farm Security and Rural Investment Act of 2002. The provisions of this rule will eliminate enhanced funding for low payment error rates. It will revise the system for determining State agency liabilities and sanctions for high payment error rates following appeal decisions.