Rule Impact Statement
To: Programs Administrator
Legal Services - Policy
From: Sondra Shelby, Adult and Family Services (AFS) Director
Adult and Family Services
Date: May 9, 2025
Re: Chapter 65. Public Assistance Procedures
Subchapter 3. Eligibility for Benefits
340:65-3-4 [AMENDED]
340:65-3-5 [AMENDED]
340:65-3-6.1 [REVOKED]
(Reference WF 26-65)
Contact: Caleb Turner, Programs Manager V, 405-982-3685
A. Brief description of the purpose of the proposed rule:
(i) Purpose.
The proposed amendments to Chapter 65, Subchapter 3 amend the rules to: (1) prepare for National Accuracy Clearinghouse (NAC) implementation; (2) update the processing time for a Diversion Assistance (DA) applications from "7-business days" to "10-calendar days"; (3) remove the Soonercare (Medicaid) eligibility determination for Temporary Assistance for Needy Family (TANF) participants from Oklahoma Human Services (OKDHS) rules; and (4) revoke unnecessary rules.
(I) Rule classification
The proposed amendments are classified as non-major rules as they will not exceed one million dollars over the initial five-year period following the promulgation of the proposed rule.
(II) A determination whether the proposed rule is mandated by federal law, or as a requirement for participation in or implementation of a federally subsidized or assisted program.
Federal law mandates the proposed substantive amendments as a condition of Oklahoma's participation in the Supplemental Nutrition Assistance Program (SNAP). Per Section 272.18(a)(2) of Title 7 of the Code of Federal Regulations [7 C.F.R. § 272.18(a)(2)], OKDHS must participate in the NAC as a condition of operating SNAP. Ordinarily, the NAC requires a state to send a Notice of Match Results (NOMR), but there is a state option that allows a verbal notice when OKDHS can resolve the match using information known to the agency and there is no adverse action. OKDHS has decided to send the NOMR every time there is a NAC match and decline this state option. Per 7 C.F.R. § 272.18(c)(9), federal regulations require OKDHS to protect the identity and location of a "vulnerable individual" as a part of the NAC process. The regulations at 7 C.F.R. § 272.18(c)(9) adopt an expansive definition for a "vulnerable individual": a "vulnerable individual . . . includes but is not limited to, those who would be endangered by the dissemination of their information." OKDHS has concluded that participants of the Oklahoma Attorney General’s Address Confidentiality Program, per Section 60.14 of Title 22 of the Oklahoma Statutes [22 O.S. § 60.14], meet this definition.
Federal law requires Oklahoma to adopt the modified adjusted gross income (MAGI) for eligibility populations not specifically excluded per 42 C.F.R. § 435.603(a) and (j). The Oklahoma Health Care Authority (OHCA) has shared that it received a federal finding that indicates that Temporary Assistance for Needy Families (TANF) participants must have their Medicaid eligibility determined according to the MAGI criteria. Per 42 C.F.R. § 435.907(b), the application for the MAGI population must be a "single, streamlined application . . . developed by the Secretary" or "an alternative . . . approved by the Secretary." OHCA MAGI eligibility system has already been approved, so OKDHS has decided to transfer the eligibility determination of Medicaid for TANF participants to OHCA.
Federal law at Section 604 of Title 42 of the United States Code [42 U.S.C. § 604] allows Oklahoma the latitude to use TANF funds in a way that is "reasonably calculated" to accomplish the TANF purposes in 42 U.S.C. § 601. Federal law permits the issuance of DA but does not establish a processing time for these benefits. OKDHS is exercising its state-granted rulemaking authority at 56 O.S. § 230.50 to modify this rule.
(III) A determination whether the proposed rule exceeds the requirements of the applicable federal law.
The proposed amendments are not fully required by federal law, but OKDHS has not exceeded its legal authority. OKDHS is complying with 7 C.F.R. § 272.18(a)(2), 42 C.F.R. § 435.603(a) and (j), and 42 C.F.R. § 435.907(b). OKDHS is declining a state option at 7 C.F.R. § 272.18(c)(3)(ii), extending the logic of 7 C.F.R. § 272.18(c)(9) to apply to 22 O.S. § 60.14, and employing its existing rulemaking authority to modify the TANF program.
Federal law requires Oklahoma to adopt the MAGI process for eligibility populations not specifically excluded per 42 C.F.R. § 435.603(a) and (j). It also dictates the applications that may be used for MAGI households at 42 C.F.R. § 435.907(b), the application for the MAGI population must be a "single, streamlined application . . . developed by the Secretary" or "an alternative . . . approved by the Secretary."
Federal law at Section 604 of Title 42 of the United States Code [42 U.S.C. § 604] allows Oklahoma the latitude to use TANF funds in a way that is "reasonably calculated" to accomplish the TANF purposes in 42 U.S.C. § 601. The four purposes in Section 601 are:
(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and
(4) encourage the formation and maintenance of two-parent families.
(IV) A summary and preliminary comparison of any existing or proposed federal regulations that are intended to address the activities to be regulated by the proposed rule.
SNAP federal regulations at 7 C.F.R. § 273.2 already prohibited households from participating in more than one state in any month. The creation of the NAC at 7 C.F.R. § 272.18 requires OKDHS to adopt the NAC and its accompanying procedures as a means of identifying and removing households participating in multiple states. There is a state option at 7 C.F.R. § 272.18(c)(3)(ii) that allows states to avoid sending the NOMR when OKDHS can resolve the match using information known to the agency and there is no adverse action. 7 C.F.R. § 272.18(c)(9) requires OKDHS to protect the identity and location of a "vulnerable individual" as a part of the NAC process and employs an expansive definition for a "vulnerable individual."
Federal law requires Oklahoma to adopt the MAGI for eligibility populations not specifically excluded per 42 C.F.R. § 435.603(a) and (j). It also dictates the applications that may be used for MAGI households at 42 C.F.R. § 435.907(b), the application for the MAGI population must be a "single, streamlined application . . . developed by the Secretary" or "an alternative . . . approved by the Secretary."
Federal law at 42 U.S.C. § 604 allows Oklahoma the latitude to use TANF funds in a way that is "reasonably calculated" to accomplish the TANF purposes in 42 U.S.C. § 601. The four purposes in Section 601 are:
(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and
(4) encourage the formation and maintenance of two-parent families.
(ii). Strategic Plan Impact.
The proposed amendments achieve OKDHS goals by communicating updated eligibility information to applicants, recipients, OKDHS staff, and contracted partners; ensuring effective and efficient program administration; complying with federal law; exercising available state options to achieve better SNAP performance; and ensuring TANF eligibility staff have adequate time to request any necessary verification for DA.
(iii). Substantive changes.
Subchapter 3. Eligibility for Benefits
Oklahoma Administrative Code (OAC) 340:65-3-4 is amended to: (1) update language; (2) add procedures for the NAC, per 7 C.F.R. § 272.18; (3) define a "vulnerable person," per 7 C.F.R. § 272.18(c)(9) and 22 O.S. § 60.14; and (4) indicate OKDHS will send a NOMR every time there is an NAC match.
OAC 340:65-3-5 is amended to: (1) update language; (2) correct a citation; (3) update the processing time for a DA application from "7-business days" to "10-calendar days"; and (4) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF.
OAC 340:65-3-6.1 is revoked.
(iv). Reasons.
OKDHS SNAP requests permanent rulemaking to prepare for NAC implementation in Oklahoma. Per 7 C.F.R. § 272.18, the NAC is "an interstate data system . . . to prevent individuals from receiving SNAP benefits in more than one State in a given month." Oklahoma's participation is mandatory. OKDHS SNAP plans to join the NAC in September 2026.
To prepare for this change and comply with its legal obligations, OKDHS SNAP has proposed a "vulnerable individual" definition. The definition specifically ensures a resident of a domestic violence shelter or a shelter for battered women and children, per 7 C.F.R. § 271.2 and 273.11(g) and OAC 340:50-5-28, and a participant in the Oklahoma Attorney General's Address Confidentiality Program, per 22 O.S. § 60.14, are identified as a "vulnerable person."
Per 7 C.F.R. § 272.18(c)(3)(ii), OKDHS is declining the state option to provide "a verbal notification of a match, which must be documented in the case file," per 7 C.F.R. § 272.18(c)(3)(iii)(B). The verbal notice may provide inconsistent notice to SNAP applicants and recipients. OKDHS SNAP believes it will be more effective to meet the NAC notification requirements by sending the NOMR whenever there is a match.
OKDHS TANF seeks to comply with federal law. Federal regulations at 42 C.F.R. § 435.603(a) and (j) require Oklahoma to use the MAGI criteria for TANF recipients. Since the OHCA already handles the Medicaid eligibility for the MAGI populations, OKDHS is transferring the eligibility determination for the Soonercare (Medicaid) eligibility determination for TANF recipients to OHCA and removing references to Soonercare (Medicaid) eligibility in its TANF rules.
OKDHS TANF is also updating the processing timeframe for DA applications. TANF eligibility staff needs additional time to request any necessary verification for these applications, so OKDHS TANF is changing the processing time to 10-calendar days of when OKDHS receives all necessary verification.
(v). Repercussions.
If the proposed amendments are not implemented: (1) OKDHS rules will continue to include errors; (2) OKDHS staff will not have procedures to implement the NAC; (2) OKDHS staff may be confused about who to consider a "vulnerable person"; (3) OKDHS SNAP may have to rely on an ineffectual NAC notice process; (4) OKDHS SNAP will not be able to modify operations to take advantage of beneficial state options; and (5) applicants, recipients, and OKDHS staff may be confused by contradictory rules in the OAC
(vi). Legal authority. Director of Human Services; Section 162 of Title 56 of the Oklahoma Statutes [56 O.S. § 162]; 22 O.S. § 60.14; 56 O.S. § 230.50; 42 U.S.C. 601 and 604; 7 C.F.R. §§ 271.2, 272.12, 272.18, 273.2, 273.11, and 273.12; and 42 C.F.R. §§ 435.603 and 435.907.
(vii). Permanent rulemaking approval is requested.
B. A comprehensive analysis of the rule's economic impact on the Agency, including but not limited to, full-time employee count and any costs or benefits. The analysis includes a detailed explanation of the methodology and assumptions used to determine the economic impact, including, whenever possible, the dollar amounts calculated. The proposed amendments are not expected to have an economic impact on OKDHS, so no comprehensive analysis of impact is needed at this time.
C. A comprehensive analysis of the rule's economic impact outside the Agency, including a detailed quantification of implementation and compliance costs on the affected businesses, business sectors, public utility ratepayers, individuals, state or local government units, and on the state economy. The analysis includes a detailed explanation of the methodology and assumptions used to determine the economic impact, including, whenever possible, the dollar amounts calculated, as well as a list of fee changes with a separate justification for each fee change: OKDHS does not anticipate a negative impact on SNAP beneficiaries for NAC implementation. Federal law does not permit SNAP households to participate in multiple states at the same time, and OKDHS verifies this as a part of its current eligibility process at application and certification renewal. The NAC may better identify when a household is enrolled in multiple SNAP benefits, which may help reduce dual participation.
TANF recipients should continue to receive medical assistance through OHCA. OKDHS staff enter eligibility information into the OHCA eligibility system to help reduce the burden on TANF households, but there will be times when TANF households must apply for TANF and medical assistance separately.
D. A description of the classes of persons who most likely will be affected by the proposed rule, including classes that will bear the costs of the proposed rule, and any information on cost impacts received by the Agency from any private or public entities: The class of persons most likely to be affected by the proposed amendments are OKDHS staff, contracted provider staff, SNAP and TANF applicants, and SNAP and TANF recipients.
E. A description of the classes of persons who will benefit from the proposed rule: The classes of persons who will benefit are OKDHS staff, contracted provider staff, SNAP and TANF applicants, and SNAP and TANF recipients.
F. A description of the probable economic impact of the proposed rule upon the affected classes of persons or political subdivisions, including a listing of all fee changes and, whenever possible, a separate justification for each fee change: There are no fees associated with this rulemaking. There is no impact on the state's economy because this rulemaking does not expand or reduce SNAP or TANF eligibility.
G. A determination whether implementation of the proposed rule will have an impact on any political subdivisions or require their cooperation in implementing or enforcing the rule: The proposed amendments neither have an economic impact on any political subdivision nor require the cooperation of any political subdivisions in implementation or enforcement of the rules.
H. A determination whether implementation of the proposed rule will have an adverse economic effect on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act: There are no anticipated adverse effects on small businesses as provided by the Oklahoma Small Business Regulatory Flexibility Act.
I. A description of any measure taken by the Agency to minimize the cost and impact of the proposed rule on business and economic development in this state, local government units of this state, and individuals: The agency has determined that sending a NOMR every time there is a NAC match will guarantee OKDHS meets the notice requirements. OKDHS must develop the NOMR regardless of this state option and send it when it is unable to avoid taking an adverse action or when there is no adequate verification in its records. OKDHS does not currently capture data that will permit us to estimate how much this option may save in postage costs. OKDHS does believe automating this process will ensure there are fewer quality control issues.
J. A determination of the effect of the proposed rule on the public health, safety, and environment and, if the proposed rule is designed to reduce significant risks to the public health, safety, and environment, an explanation of the nature of the risk and to what extent the proposed rule will reduce the risk: OKDHS does not anticipate the rules to reduce significant risks to the public health, safety, and environment.
K. A determination of any detrimental effect on the public health, safety, and environment if the proposed rule is not implemented: If the proposed amendments are not implemented, there are no expected detrimental effects on public health, safety, and environment.
L. An analysis of alternatives to adopting the rule: There are no alternatives to adopting a rule that will accomplish the purposes of the rulemaking.
M. Estimates of the amount of time that would be spent by state employees to develop the rule and of the amount of other resources that would be utilized to develop the rule: Following final adoption of the rule, OKDHS anticipates OKDHS anticipates 32 hours will be spent to develop the rule.
N. The date the rule impact statement was prepared and, if modified, the date modified: Prepared May 9, 2025; modified August 25, 2025.
