Food Stamp Program, Reauthorization: Electronic Benefit Transfer (EBT) and Retail Food Stores Provisions of the Food Stamp Reauthorization Act of 2002, 72350-72355 [05-23619]
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Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations
reasons set forth in the final rule in 7
CFR part 3015, subpart V and related
Notice (48 FR 29115), this Program is
excluded from the scope of Executive
Order 12372, which requires
intergovernmental consultation with
State and local officials.
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 272, 274, 276, 278, 279,
and 280
[Amendment No. 397]
RIN 0584–AD28
Food Stamp Program, Reauthorization:
Electronic Benefit Transfer (EBT) and
Retail Food Stores Provisions of the
Food Stamp Reauthorization Act of
2002
Food and Nutrition Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: This action provides final
rulemaking for a proposed rule
published May 6, 2003. It revises Food
Stamp Program regulations pertaining to
the standards for approval of Electronic
Benefits Transfer (EBT) systems, the
participation of retail food stores and
wholesale food concerns, and the State
agency liabilities and Federal sanctions.
These changes to the Food Stamp
Program’s regulations are put forth to
implement sections 4108, 4110, 4113
and 4117 of the Food Stamp
Reauthorization Act of 2002. These
changes will allow the U.S. Department
of Agriculture (Department) to use
delivery methods other than certified
mail when notifying retailers or State
agencies of adverse action; permit the
Department to approve alternate
methods of issuing food stamp benefits
during disasters; eliminate the
requirement that Federal costs for EBT
systems cannot exceed the costs of the
paper systems they replace; and allow
group homes and institutions to redeem
EBT benefits directly through banks
rather than going through authorized
wholesalers or other retailers.
DATES: This rule is effective January 4,
2006.
FOR FURTHER INFORMATION CONTACT:
Mandy Briggs, Chief, EBT Branch,
Benefit Redemption Division, Food and
Nutrition Service, USDA, 3101 Park
Center Drive, Alexandria, Virginia
22302, or telephone (703) 305–2523.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be
significant and was reviewed by the
Office of Management and Budget under
Executive Order 12866.
Executive Order 12372
The Food Stamp Program is listed in
the Catalog of Federal Domestic
Assistance under No. 10.551. For the
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Executive Order 13132, Federalism
Executive Order 13132 requires
Federal agencies to consider the impact
of their regulatory actions on State and
local governments. Where such actions
have federalism implications, agencies
are directed to provide a statement for
inclusion in the preamble to the
regulations describing the agency’s
considerations in terms of the three
categories called for under section
(6)(b)(2)(B) of Executive Order 13132.
The Department has considered the
impact of this rule on State and local
governments and has determined that
this rule does not have federalism
implications. This rule does not impose
substantial or direct compliance costs
on State and local governments.
Therefore, under Section 6(b) of the
Executive order, a federalism summary
impact statement is not required.
Regulatory Flexibility Act
This rule has been reviewed with
regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C.
601–612). Eric Bost, Under Secretary for
Food, Nutrition, and Consumer
Services, has certified that this rule will
not have a significant economic impact
on a substantial number of small
entities. Departmental Field Offices,
retailers participating or applying to
participate in the Food Stamp Program,
State agencies that distribute food stamp
benefits and group living homes are the
entities affected by this change.
However, the number of those affected
is not large enough to be considered
significant.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. Chapter 35; see 5 CFR 1320)
requires that the Office of Management
and Budget (OMB) approve all
collections of information by a Federal
agency from the public before they can
be implemented. Respondents are not
required to respond to any collection of
information unless it displays a valid
OMB control number. Information
collections in this final rule have been
previously approved by OMB under
OMB number 0584–0083 (Operating
Guidelines, Forms and Waivers).
The Food and Nutrition Service (FNS)
published a proposed rule on May 6,
2003, which solicited comments on the
proposed revisions to reduce the
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number of burden hours. No comments
on the proposed burden were received;
however, comments related to proposed
changes to the regulations were received
and are addressed in the Background
section of this rule.
Government Paperwork Elimination
Act
FNS is committed to compliance with
the Government Paperwork Elimination
Act (GPEA), which requires Government
agencies to provide the public the
option of submitting information or
transacting business electronically to
the maximum extent possible. This rule
accomplishes the intent of GPEA by
facilitating EBT system procedures for
the FSP, and thereby eliminating the
need to print, distribute, and handle
paper food stamp coupons in operation
of the FSP.
Executive Order 12988
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This rule is intended to have
preemptive effect with respect to any
State or local laws, regulations or
policies which conflict with its
provisions or which would otherwise
impede its full implementation. This
rule is not intended to have retroactive
effect unless specified in the DATES
section of this preamble. Prior to any
judicial challenge to the provisions of
this rule or the application of its
provisions, all applicable administrative
procedures must be exhausted.
Public Law 104–4
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public
Law 104–4, establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and tribal governments and the private
sector. Under section 202 of the UMRA,
the Department generally must prepare
a written statement, including a costbenefit analysis, for proposed and final
rules with ‘‘Federal mandates’’ that may
result in expenditures to State, local, or
tribal governments in the aggregate, or
to the private sector, of $100 million or
more in any one year. When such a
statement is needed for a rule, section
205 of the UMRA generally requires the
Department to identify and consider a
reasonable number of regulatory
alternatives and adopt the least costly,
more cost-effective or least burdensome
alternative that achieves the objectives
of the rule.
This rule contains no Federal
mandates (under the regulatory
provisions of Title II of the UMRA) for
State, local, and tribal governments or
the private sector of $100 million or
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more in any one year. This rule is,
therefore, not subject to the
requirements of sections 202 and 205 of
the UMRA.
Regulatory Impact Analysis
1. Need for Action
This action is needed to formalize
implementation of provisions of the
Food Stamp Reauthorization Act of
2002 related to EBT and retailer
operations. These changes will allow
the Department to: (1) Use delivery
methods other than certified mail when
notifying retailers or State agencies of
adverse action; (2) approve alternate
methods of issuing food stamp benefits
during disasters; (3) eliminate the
requirement that Federal costs for EBT
systems cannot exceed the costs of the
paper systems they replace; and (4)
permit group homes and institutions to
redeem EBT benefits directly through
banks rather than being restricted to
authorized wholesalers or other
retailers.
2. Benefits
Federal and State agencies will
benefit from the provisions of this rule
because they will streamline the
administrative procedures that are
already in place and codify current
practice.
3. Costs
There will be minimal costs
associated with outfitting group homes
with point of sale (POS) devices. In
Fiscal Year (FY) 2003, only 1,544 group
homes existed in the United States, and
the monthly average leasing cost of $26
would be equally shared between the
Department and the State agencies if all
group homes requested POS devices.
Since many States have already been
operating group homes in this way
through demonstration waivers, most of
these homes already have POS devices,
minimizing the impact of any new costs.
We estimate that eliminating the cost
neutrality requirement on EBT systems
cost less than $1 million per year during
the first five years of enactment (FY
2002–FY 2006). There are no costs from
the other two sections of the final rule.
Civil Rights Impact Analysis
FNS has reviewed this final rule in
accordance with the Department
Regulation 4300–4, ‘‘Civil Rights Impact
Analysis,’’ to identify and address any
major civil rights impacts the rule might
have on minorities, women, and persons
with disabilities. After a careful review
of the rule’s intent and provisions, and
the characteristics of food stamp
households and individual participants,
FNS has determined that there is no
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way to soften their effect on any of the
protected classes. FNS has no discretion
in implementing many of these changes.
The changes that are required to be
implemented by law have been
implemented. All data available to FNS
indicate that protected individuals have
the same opportunity to participate in
the Food Stamp Program as nonprotected individuals. FNS specifically
prohibits the State and local government
agencies that administer the Program
from engaging in actions that
discriminate based on race, color,
national origin, gender, age, disability,
marital or family status. (See 7 CFR
272.6.) Where State agencies have
options, and they choose to implement
a certain provision, they must
implement it in such a way that it
complies with the regulations at 7 CFR
272.6.
Background
A proposed rule was published in the
Federal Register on May 6, 2003 at 68
FR 23927 to revise Food Stamp Program
regulations pertaining to the standards
for approval of Electronic Benefits
Transfer (EBT) systems, the
participation of retail food stores and
wholesale food concerns, and the State
agency liabilities and Federal sanctions.
Comments on the proposed rule were
solicited through July 7, 2003. This final
action takes the comments received into
account.
In this rule, the Department amends
Food Stamp Program regulations to
expand the delivery of adverse action
notices to retailers and State agencies,
allow alternative issuance systems in
disasters, eliminate the requirement for
cost neutrality for EBT systems, and
permit redemption of EBT benefits
through group living facilities.
Thirteen comment letters were
received in response to the proposed
rule. Individual comments were
received from four State agencies and
nine public interest groups. In general,
the commenters supported the proposed
rule’s changes. Readers are referred to
the proposed regulation for a more
complete understanding of this final
action.
The only changes between the
proposed and final rules are due to two
oversights in the proposed rule. First,
we are not finalizing the proposed
portion of 7 CFR 274.12 that specifically
provides that the cost of administering
statewide benefit issuance after
implementation of the EBT system
should be funded at the regular Federal
financial participation rate, up to the
level of the current coupon issuance
costs. This proposed portion of the
sentence contains outdated information
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since coupon issuance is no longer a
reality in the EBT system. Second, 7
CFR 278.2(g)(2) incorrectly proposed as
mandatory the requirement that
authorized drug addict and alcoholic
treatment and rehabilitation programs,
group living arrangements, shelters for
battered women and children, and
public or private nonprofit homeless
meal providers for homeless food stamp
households redeem EBT benefits
directly through an insured financial
institution, although the requirement
was correctly proposed as optional in
the preamble. Therefore, we are now
clarifying in this final rule that the
requirement contained in 7 CFR
278.2(g)(2) of this final rule contains the
word ‘‘may’’ instead of the word ‘‘shall’’
to indicate that this requirement is
optional and not mandatory per
interpretation of the Food Stamp
Reauthorization Act of 2002 (FSRA).
Mailing to Retailers and State Agencies
The Department revises regulations at
7 CFR 276.7(b), 278.1(k)(7), 278.1(l)(2),
278.6(o), 278.7(b)(2), 278.7(f), and
279.7(b) to eliminate the requirement
that the Department send notices of
adverse actions to retailers and State
agencies using certified mail. Effective
May 13, 2002, section 4117 of the FSRA
amended section 14(a)(2) of the Food
Stamp Act of 1977 (Food Stamp Act) (7
U.S.C. 2023(a)(2)) to authorize the
delivery of such notices in any form the
Secretary determines will provide
evidence of the delivery.
The Department received two
comments on this provision. One
commenter supported the revision, but
felt that the State should be notified in
advance of notices to retailers. FNS
believes that this is not necessary since
we have a direct relationship with
retailers as part of retailer oversight
responsibilities for the Food Stamp
Program. Currently, any State interested
in retailer notification consults with the
FNS Regional Office. Some States do
receive copies of letters to the retailer
based on what is negotiated at the
regional level. Therefore, no additional
requirements are necessary at this time
and the provision is finalized as
proposed.
Alternative Issuance Systems in
Disasters
This final rule revises Food Stamp
Program regulations at 7 CFR 280.1 for
emergency food assistance for victims of
disasters. By terms of section 4108 of
the FSRA, which amended section
5(h)(3)(B) of the Food Stamp Act (7
U.S.C. 2014(h)(3)(B)), the Department
received authority to approve alternate
methods for issuing food stamp benefits
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during disasters when reliance on EBT
systems is impracticable. This final rule
amends the regulation to reflect this
new authority.
Four comments were received on this
issue. Two commenters fully supported
this revision. Another commenter felt
that the regulation should acknowledge
that States should re-examine existing
disaster plans in light of the new
provision enabling a ‘‘cash-out’’ option
in the event of catastrophic disaster.
Congress, however, was clear in its
intent that cash-out would not be
implemented unless specific disaster
circumstances made EBT unworkable.
Consistent with the intent of the
statutory amendment, as expressed by
the Conference Committee, H.R. Conf.
Rep. No. 107–424, at 264 (2002), the
Department would only approve
alternate issuance, such as cash, as a last
resort, depending on the specific
circumstances of the disaster.
Another commenter stated that cash is
not always a viable alternate method of
issuance, but suggested we extend the
benefit and card issuance time frame to
10 days, from the current guideline of 3
days. The Department does not agree
that this would be sensible in a disaster
situation when there is an urgent need
to assist people who are victims of a
disaster and to get benefits to them as
quickly as possible. Additionally, since
each disaster situation is unique, we
would only approve the specifics of a
disaster plan on a case-by-case basis.
Cost Neutrality for EBT Systems
This provision eliminates the
requirement at 7 CFR 274.12(e) that
Federal costs of EBT systems not exceed
the costs of the paper systems they
replace as a condition of approval of
State EBT systems, in accordance with
section 4110 of the FSRA.
The elimination of the cost neutrality
requirement does not remove the
requirement for State agencies to submit
Implementation Advanced Planning
Documents (IAPDs) to the Department
for approval prior to conversion to a
new system or to making upgrades or
changes to their existing EBT systems.
We received one comment fully
supporting this revision and none
opposing it.
Redemption of Benefits Through Group
Living Facilities
This final rule revises food stamp
regulations regarding participation of
group living facilities. By terms of
section 4113 of the FSRA, a center,
organization, institution, shelter, group
living arrangement and establishment
that are among those defined as retail
food stores under section 3(k)(2) of the
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Food Stamp Act (7 U.S.C. 2012(k)(2)),
may now be authorized to redeem
benefits directly through financial
institutions in areas where EBT has
been implemented. The four types of
entities affected by this change are drug
addict and alcoholic treatment and
rehabilitation programs; group living
arrangements; shelters for battered
women and children; and public or
private nonprofit homeless meal
providers. These group home facilities
represent 1.64 percent of all firms in the
program, while 98.4 percent are
classified as traditional grocery stores.
In these situations, the facility
functions like most authorized retailers,
conducting EBT transactions with its
residents, deducting benefits from their
cards and depositing them into the
facility’s account. The facility can then
purchase eligible foods at any
authorized retailer or wholesaler with
funds drawn directly from its own
account. This makes it easier for those
recipients residing in the authorized
facilities to use their benefits in an EBT
environment. Therefore, the Department
is providing that group home facilities
may be equipped with POS devices in
a manner that meets the requirements
established for retailers. These facilities
would redeem benefits using the POS
device, and then purchase eligible food
items.
The Department did not receive any
comments on the variety of ways that
group homes operate. However, we are
providing clarification that not all group
homes must have the same EBT
procedures in place. Some States have
group homes that are not using POS
devices, but instead assign an
authorized representative from each
group home to shop with one EBT card
for everyone at authorized wholesalers.
In this rule, the Department does not
intend to preclude any States from
redeeming EBT benefits in group homes
that operate in a different manner.
The Department received 13
comments on the group home provision
which is limited to the statutory
provision allowing the facilities to
deposit directly into financial
institutions which allow them to use a
POS device. One commenter fully
supported this revision. Eleven
commenters provided a variety of
similar feedback on the operations or
management process for these facilities,
some of which were outside the narrow
scope of this final rule. All comments
are encompassed in the paragraphs that
follow. We believe that current rules in
CFR 273.11 provide adequate safeguards
and address the most important of the
commenters’ concerns about fraud.
Additionally, as fraud risks vary for
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each type of group home facility, they
still remain much lower than when
coupons were issued since EBT
transactions can be tracked and
monitored more easily than the old
paper system.
Specifically, several commenters
thought the rule should be limited to
residential facilities, which is not
allowable under the statute. The law
specifies the four types of facilities that
may be authorized to redeem benefits.
The only entity that is not residential is
the homeless meal providers; moreover,
FNS feels it is good policy to provide
services to homeless meal providers that
cover a transient population.
Several commenters also thought the
rule should be limited to group homes
that actually provide meals for stays
exceeding a month. Another comment
relates to charging for actual meals
served or only accessing a portion of the
benefits for each meal served (no greater
than 1/90th of the thrifty food plan).
Both types of comments shared the
same concern that the centers would
take all of the recipient benefits on the
first day they became available and put
them in the centers’ own account,
leaving nothing for the household when
it leaves the center. The comment to
charge on a per meal basis or only a
portion of the meal benefits represents
a significant operational change that
does not seem practical for these small
facilities. In addition to the
administrative burden placed on States
and centers to charge on a per meal
basis, it would be extremely difficult to
track that the meals account for the
correct portion of the benefits available.
Current rules at 7 CFR 273.11(e)(5)
address State agency and center actions
when the household leaves prior to the
16th of the month. Specifically, the
rules prohibit drug and alcohol
treatment centers and group living
arrangements from obtaining more than
half of the household’s allotment prior
to the 16th of the month when benefits
are issued through an EBT system.
These rules also require centers to
return to households that leave before
the 16th of the month one-half of their
benefits. It specifically also states that
after the household leaves the center,
the center can no longer act as the
household’s authorized representative
for certification purposes or for
obtaining or using benefits. The center
must also provide the departing
households with their EBT cards at any
time during the month.
Other commenters wanted to limit the
use of POS devices to certain staff,
require facilities to maintain records of
meals charged to clients, and not allow
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staff to collect personal identification
numbers or cards.
As for limiting the use of POS devices
to certain staff, this restriction would be
extremely difficult to monitor or
enforce. Additionally, FNS does not
monitor who specifically uses POS
devices in other firms (grocery stores)
that participate in the program. Some
commenters expressed concern about
possible fraudulent abuse by employees
of these centers; however, the
regulations at 7 CFR 273.11 already
contain significant protections against
such abuse. Under current rules, centers
are responsible for any over-payment or
misuse, regardless of who does it.
Additionally, the rules require centers
to provide State agencies with monthly
or semi-monthly lists of participating
residents. In addition, States must
conduct periodic random on-site visits
to the center to assure the accuracy of
records. The rules also describe how
States must establish a claim for overissuance of benefits and outline the
steps that they would take prior to FNS
disqualification of an authorized center.
Commenters also wanted centers to
maintain records establishing that food
purchases attributable to recipients at
least equal the value of the benefits
taken from those recipients. This
suggestion has merit now that group
homes can place benefits into their
checking accounts. There would be
some additional recording keeping
requirements imposed on the facilities.
7 CFR 273.11 requires States to do
random checks on the facilities anyway,
and looking at the amount of food
expenditures versus the benefits
redeemed would not be unduly
burdensome. This issue will be
addressed in a future rulemaking and
will be taken under consideration.
On the comment to not allow centers
to collect PIN numbers or cards, it is
important to emphasize that group
homes operate in a variety of ways and
this rule does not preclude centers from
operating in different ways. Specifically,
some centers act as the authorized
representative for clients and must have
access to PIN numbers and cards in
order to redeem the food stamp benefits.
One commenter wanted facilities to
be exempt from the minimum Food
Stamp redemption activity per month to
obtain State-provided POS terminals. It
is important to emphasize that States
already have this option. Current rules
require that all authorized retailers be
provided with POS devices regardless of
its size. In some cases, at the State’s
request, they are issued retailer
participation waivers so that POS
deployment is not required for retailers
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with redemption levels less than $100
per month.
Another commenter said that monthly
EBT statements should be provided to
all recipients detailing the transactions.
The Department does not agree that this
is necessary. Current rules in 7 CFR
274.12 already require that clients be
provided printed receipts at the time of
transaction and be able to check their
balance anytime without making a
purchase or standing in a checkout line.
Current rules also require State agencies
to ensure that the EBT system is capable
of providing a transaction history for a
period of up to two calendar months to
households upon request.
The same commenter provided
comments on battered women and
children’s rights that included making
benefits available to all battered women
and not just women who leave an
abusive household and reside in official
shelters. The same commenter said FNS
should implement procedures similar to
the Family Violence Option of the
Temporary Assistance for Needy
Families (TANF) program and to waive
regulations that make escaping from
domestic violence more difficult, places
individuals at risk of further violence, or
penalizes individuals because of
violence. The comments on battered
women and children’s rights are outside
the scope of this rule.
The issue of extending the re-issuance
provision to women who fled to the
residences of friends or relatives was
addressed in the comments of the final
rule, Food Stamp Program: Certifying
Residents of Shelters for Battered
Women and Children, published at 46
FR 60160 on December 8, 1981. The reissuance provision is detailed in 7 CFR
273.11(g)(3). Normally State data
systems will prevent issuance of
benefits to individuals who are already
participating in another household.
However, in the case of a mother and
children who leave the household
which contains the abuser, and apply as
shelter residents, the State agency must
override the normal system edit to allow
the mother and children to be certified.
The household with the abuser will
potentially receive excess benefits until
the benefit amount is reduced through
the adverse action process.
The December 8, 1981 rule
established the exception to the
residents of institution ban for residents
of shelters for battered women and
children. At the time, the Department
took the position that Congress intended
the special provisions relative to
shelters for battered women and
children to apply only to residents of
such shelters. We believe the suggestion
would place a burden on State agencies
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to investigate or verify that domestic
violence was an issue in the move, and
not simply a move motivated by other
reasons.
Equipping of these facilities would be
in accordance with the EBT regulations
at 7 CFR 274.12. State agencies
approved to operate a demonstration
project for this function may continue
operations without further action and
are no longer bound by the survey
requirements of a demonstration project.
This rulemaking does not affect current
State operations.
Implementation
The provisions of this rule are
effective January 4, 2006.
List of Subjects
7 CFR Part 272
Alaska, Civil Rights, Food Stamps,
Grant Program—social programs,
Reporting and recordkeeping
requirements.
7 CFR Part 274
Administrative practice and
procedure, Food stamps, Fraud, Grant
programs—social programs, Reporting
and recordkeeping requirements, State
liabilities.
7 CFR Part 276
Administrative practice and
procedure, Food stamps, Fraud, State
agency liabilities and federal sanctions.
7 CFR Part 278
Administrative practice and
procedure, Banks, Banking, Claims,
Food stamps, General line—
wholesalers, Groceries, Groceries—
retail, Penalties.
7 CFR Part 279
Administrative practice and
procedure, Food stamps, General line—
wholesalers, Groceries, Groceries—
retail.
7 CFR Part 280
Disaster assistance, Food stamps,
Grant programs—social programs.
Accordingly, 7 CFR parts 272, 274,
276, 278, 279, and 280 are amended as
follows:
I 1. The authority citation for 7 CFR
parts 272, 274, 276, 278, 279, and 280
continues to read as follows:
I
Authority: 7 U.S.C. 2011–2036.
PART 272—REQUIREMENTS FOR
PARTICIPATING STATE AGENCIES
2. In § 272.1, paragraph (g)(171) is
added to read as follows:
I
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General terms and conditions.
*
*
*
*
*
(g) Implementation. * * *
(171) Amendment No. 397. The
provisions of Amendment No. 397 are
effective January 4, 2006. State agencies
may implement the provisions anytime
after the rule is published but no later
than June 5, 2006.
PART 274—ISSUANCE AND USE OF
COUPONS
3. In § 274.10, paragraphs (f)(1), (f)(2)
and (f)(3) are revised to read as follows:
I
§ 274.10 Use of identification cards and
redemption of coupons by eligible
households.
*
*
*
*
*
(f) * * *
(1) Members of eligible households
who are narcotics addicts or alcoholics
and who regularly participate in a drug
or alcoholic treatment rehabilitation
program may use food stamp benefits to
purchase food prepared for them during
the course of such program by a private
nonprofit organization or institution or
publicly operated community mental
health center which is authorized by
FNS to redeem benefits in accordance
with § 278.1 and § 278.2(g) of this
chapter.
(2) Eligible residents of a group living
arrangement may use food stamp
benefits issued to them to purchase
meals prepared especially for them at a
group living arrangement which is
authorized by FNS to redeem benefits in
accordance with § 278.1 and § 278.2(g)
of this chapter.
(3) Residents of shelters for battered
women and children as defined in
§ 278.1(g) of this chapter may use their
food stamp benefits to purchase meals
prepared especially for them at a shelter
which is authorized by FNS to redeem
benefits in accordance with § 278.1 and
§ 278.2(g) of this chapter.
*
*
*
*
*
§ 274.12
[Amended]
4. In § 274.12:
I a. Paragraph (e) is removed, and
paragraphs (f) through (o) are
redesignated as paragraphs (e) through
(n), respectively;
I b. Newly redesignated paragraph (k)
(1) is amended by removing the words
‘‘up to the level of the current coupon
issuance costs, as prescribed in
paragraph (c)(3) of this section’’.
I c. Newly redesignated paragraph
(k)(4) is removed and newly
redesignated paragraph (k)(5) is further
redesignated as paragraph(k)(4).
I
VerDate Aug<31>2005
18:02 Dec 02, 2005
Jkt 208001
PART 276—STATE AGENCY
LIABILITIES AND FEDERAL
SANCTIONS
5. In § 276.7, paragraph (b) is revised
to read as follows:
I
§ 276.7
Administrative review process.
*
*
*
*
*
(b) Notice of claim. When asserting a
claim against a State agency, FNS shall
provide the notice to the State agency
using any delivery method as long as
the method provides evidence of the
delivery.
*
*
*
*
*
PART 278—PARTICIPATION OF
RETAIL FOOD STORES, WHOLESALE
FOOD CONCERNS AND INSURED
FINANCIAL INSTITUTIONS
6. In § 278.1:
a. The first sentence in paragraph (e)
is amended by removing the words
‘‘through wholesalers food stamps
received from or on behalf of their
participants’’; and adding in their place
the word ‘‘benefits’’;
I b. The first sentence in paragraph (f)
is amended by removing the words
‘‘coupons directly through wholesalers’’
and adding in their place the word
‘‘benefits’’;
I c. The first sentence in paragraph (g)
is amended by removing the words
‘‘coupons directly through wholesalers’’
and adding in their place the word
‘‘benefits’’;
I d. The second sentence in paragraph
(k)(7) is revised; and
I e. The first sentence in paragraph
(l)(2) is amended by removing the words
‘‘certified mail or personal service’’ and
adding in their place the words ‘‘using
any delivery method as long as the
method provides evidence of delivery’’.
The revision reads as follows:
I
I
§ 278.1 Approval of retail food stores and
wholesale food concerns.
*
*
*
*
*
(k) * * *
(7) * * * The FNS officer in charge
shall issue a notice to the firm (using
any delivery method that provides
evidence of delivery) to inform the firm
of any authorization denial and advise
the firm that it may request review of
that determination.
*
*
*
*
*
I 7. In § 278.2, the text of paragraph (g)
is redesignated as paragraph (g)(1), and
a new paragraph (g)(2) is added to read
as follows:
§ 278.2
*
Participation of retail food stores.
*
*
(g) * * *
PO 00000
Frm 00006
*
Fmt 4700
*
Sfmt 4700
(2) Notwithstanding paragraph (g)(1)
of this section, authorized drug addict
and alcoholic treatment and
rehabilitation programs, group living
arrangements, shelters for battered
women and children, and public or
private nonprofit homeless meal
providers for homeless food stamp
households may be authorized to
redeem EBT benefits directly through an
insured financial institution in areas
where an Electronic Benefit Transfer
(EBT) system has been implemented.
*
*
*
*
*
§ 278.6
[Amended]
8. In § 278.6, the first sentence in
paragraph (o) is amended by removing
the words ‘‘certified mail or personal
service’’ and adding in their place the
words ‘‘any method that provides
evidence of delivery’’.
I
§ 278.7
[Amended]
9. In § 278.7:
a. The first sentence in paragraph
(b)(2) is amended by removing the
words ‘‘certified mail-return receipt
requested’’ and adding in their place the
words ‘‘using any delivery method as
long as the method provides evidence of
delivery’’;
I b. The first sentence in paragraph (f)
is amended by removing the words
‘‘certified mail or personal service’’ and
adding in their place the words ‘‘using
any delivery method as long as the
method provides evidence of delivery’’.
I
I
PART 279—ADMINISTRATIVE AND
JUDICIAL REVIEW—FOOD RETAILERS
AND FOOD WHOLESALERS
§ 279.7
[Amended]
10. In § 279.7, the last sentence in
paragraph (b) is amended by removing
the words ‘‘registered or certified mail’’
and adding in their place the words
‘‘using any delivery method as long as
the method provides evidence of
delivery’’.
I
PART 280—EMERGENCY FOOD
ASSISTANCE FOR VICTIMS OF
DISASTERS
11. § 280.1 is amended by adding a
sentence to the end of the section to
read as follows:
I
§ 280.1
Interim disaster procedures.
* * * The Secretary may also
approve alternate methods for issuing
food stamp benefits during a disaster
when reliance on Electronic Benefits
Transfer (EBT) systems is impracticable.
E:\FR\FM\05DER1.SGM
05DER1
Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations
Dated: November 23, 2005.
Eric M. Bost,
Under Secretary for Food, Nutrition and
Consumer Services.
[FR Doc. 05–23619 Filed 12–2–05; 8:45 am]
BILLING CODE 3410–30–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket No. FV05–985–2 IFR A]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of the Salable
Quantity and Allotment Percentage for
Class 3 (Native) Spearmint Oil for the
2005–2006 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Interim final rule with request
for comments.
AGENCY:
SUMMARY: This rule amends a prior
interim final rule that increased the
quantity of Class 1 (Scotch) and Class 3
(Native) spearmint oil that handlers may
purchase from, or handle for, producers
during the 2005–2006 marketing year.
The prior interim final rule increased
the Scotch spearmint oil salable
quantity from 677,409 pounds to
1,062,898 pounds, and the allotment
percentage from 35 percent to 55
percent. In addition, the prior interim
final rule increased the Native
spearmint oil salable quantity from
867,958 pounds to 1,019,600 pounds,
and the allotment percentage from 40
percent to 47 percent. This action does
not affect the Scotch spearmint oil
salable quantity and allotment
percentage; however, it increases the
Native spearmint oil salable quantity by
an additional 151,855 pounds from
1,019,600 pounds to 1,171,455 pounds,
and the allotment percentage by an
additional 7 percent from 47 percent to
54 percent. The marketing order
regulates the handling of spearmint oil
produced in the Far West and is
administered locally by the Spearmint
Oil Administrative Committee
(Committee). The Committee
recommended this rule for the purpose
of avoiding extreme fluctuations in
supplies and prices and to help
maintain stability in the Far West
spearmint oil market.
DATES: Effective June 1, 2005, through
May 31, 2006; comments received by
February 3, 2006 will be considered
prior to issuance of a final rule.
ADDRESSES: Interested persons are
invited to submit written comments
VerDate Aug<31>2005
18:02 Dec 02, 2005
Jkt 208001
concerning this rule. Comments must be
sent to the Docket Clerk, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237; Fax:
(202) 720–8938; E-mail:
moab.docketclerk@usda.gov; or Internet:
https://www.regulations.gov. All
comments should reference the docket
number and the date and page number
of this issue of the Federal Register and
will be made available for public
inspection in the Office of the Docket
Clerk during regular business hours, or
can be viewed at: https://
www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT:
Susan M. Hiller, Northwest Marketing
Field Office, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA;
Telephone: (503) 326–2724, Fax: (503)
326–7440; or George Kelhart, Technical
Advisor, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237;
Telephone: (202) 720–2491, Fax: (202)
720–8938.
Small businesses may request
information on complying with this
regulation by contacting Jay Guerber,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or E-mail:
Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule
is issued under Marketing Order No.
985 (7 CFR part 985), as amended,
regulating the handling of spearmint oil
produced in the Far West (Washington,
Idaho, Oregon, and designated parts of
Nevada and Utah), hereinafter referred
to as the ‘‘order.’’ The order is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This rule is not intended to
have retroactive effect. This rule will
not preempt any State or local laws,
regulations, or policies, unless they
present an irreconcilable conflict with
this rule.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
72355
section 608c(15)(A) of the Act, any
handler subject to an order may file
with USDA a petition stating that the
order, any provision of the order, or any
obligation imposed in connection with
the order is not in accordance with law
and request a modification of the order
or to be exempted therefrom. A handler
is afforded the opportunity for a hearing
on the petition. After the hearing USDA
would rule on the petition. The Act
provides that the district court of the
United States in any district in which
the handler is an inhabitant, or has his
or her principal place of business, has
jurisdiction to review USDA’s ruling on
the petition, provided an action is filed
not later than 20 days after the date of
the entry of the ruling.
The initial salable quantities and
allotment percentages for Scotch and
Native spearmint oil for the 2005–2006
marketing year were recommended by
the Committee at its October 6, 2004,
meeting. The Committee recommended
salable quantities of 677,409 pounds
and 867,958 pounds, and allotment
percentages of 35 percent and 40
percent, respectively, for Scotch and
Native spearmint oil. A proposed rule
was published in the Federal Register
on January 12, 2005 (70 FR 2027).
Comments on the proposed rule were
solicited from interested persons until
February 11, 2005. No comments were
received. Subsequently, a final rule
establishing the salable quantities and
allotment percentages for Scotch and
Native spearmint oil for the 2005–2006
marketing year was published in the
Federal Register on March 24, 2005 (70
FR 14969).
Pursuant to authority contained in
§§ 985.50, 985.51, and 985.52 of the
order, the Committee has made
recommendations to increase the
quantity of Scotch and Native spearmint
oil that handlers may purchase from, or
handle for, producers during the 2005–
2006 marketing year, which ends on
May 31, 2006. An interim final rule was
published in the Federal Register on
September 23, 2005 (70 FR 55713),
which increased the 2005–2006
marketing year salable quantities and
allotment percentages for Scotch and
Native spearmint oil to 1,062,898
pounds and 55 percent, and 1,019,600
pounds and 47 percent, respectively.
Comments on the interim final rule are
being solicited from interested persons
through November 22, 2005.
This rule amends the interim final
rule that was published in the Federal
Register on September 23, 2005, and is
based on a unanimous Committee
recommendation made at a meeting on
October 5, 2005, to increase the Native
spearmint oil salable quantity by an
E:\FR\FM\05DER1.SGM
05DER1
]]>Agencies
[Federal Register Volume 70, Number 232 (Monday, December 5, 2005)]
[Rules and Regulations]
[Pages 72350-72355]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-23619]
[[Page 72350]]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 272, 274, 276, 278, 279, and 280
[Amendment No. 397]
RIN 0584-AD28
Food Stamp Program, Reauthorization: Electronic Benefit Transfer
(EBT) and Retail Food Stores Provisions of the Food Stamp
Reauthorization Act of 2002
AGENCY: Food and Nutrition Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This action provides final rulemaking for a proposed rule
published May 6, 2003. It revises Food Stamp Program regulations
pertaining to the standards for approval of Electronic Benefits
Transfer (EBT) systems, the participation of retail food stores and
wholesale food concerns, and the State agency liabilities and Federal
sanctions. These changes to the Food Stamp Program's regulations are
put forth to implement sections 4108, 4110, 4113 and 4117 of the Food
Stamp Reauthorization Act of 2002. These changes will allow the U.S.
Department of Agriculture (Department) to use delivery methods other
than certified mail when notifying retailers or State agencies of
adverse action; permit the Department to approve alternate methods of
issuing food stamp benefits during disasters; eliminate the requirement
that Federal costs for EBT systems cannot exceed the costs of the paper
systems they replace; and allow group homes and institutions to redeem
EBT benefits directly through banks rather than going through
authorized wholesalers or other retailers.
DATES: This rule is effective January 4, 2006.
FOR FURTHER INFORMATION CONTACT: Mandy Briggs, Chief, EBT Branch,
Benefit Redemption Division, Food and Nutrition Service, USDA, 3101
Park Center Drive, Alexandria, Virginia 22302, or telephone (703) 305-
2523.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be significant and was reviewed by
the Office of Management and Budget under Executive Order 12866.
Executive Order 12372
The Food Stamp Program is listed in the Catalog of Federal Domestic
Assistance under No. 10.551. For the reasons set forth in the final
rule in 7 CFR part 3015, subpart V and related Notice (48 FR 29115),
this Program is excluded from the scope of Executive Order 12372, which
requires intergovernmental consultation with State and local officials.
Executive Order 13132, Federalism
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under section (6)(b)(2)(B) of Executive Order 13132. The
Department has considered the impact of this rule on State and local
governments and has determined that this rule does not have federalism
implications. This rule does not impose substantial or direct
compliance costs on State and local governments. Therefore, under
Section 6(b) of the Executive order, a federalism summary impact
statement is not required.
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C. 601-612). Eric Bost, Under
Secretary for Food, Nutrition, and Consumer Services, has certified
that this rule will not have a significant economic impact on a
substantial number of small entities. Departmental Field Offices,
retailers participating or applying to participate in the Food Stamp
Program, State agencies that distribute food stamp benefits and group
living homes are the entities affected by this change. However, the
number of those affected is not large enough to be considered
significant.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35; see 5
CFR 1320) requires that the Office of Management and Budget (OMB)
approve all collections of information by a Federal agency from the
public before they can be implemented. Respondents are not required to
respond to any collection of information unless it displays a valid OMB
control number. Information collections in this final rule have been
previously approved by OMB under OMB number 0584-0083 (Operating
Guidelines, Forms and Waivers).
The Food and Nutrition Service (FNS) published a proposed rule on
May 6, 2003, which solicited comments on the proposed revisions to
reduce the number of burden hours. No comments on the proposed burden
were received; however, comments related to proposed changes to the
regulations were received and are addressed in the Background section
of this rule.
Government Paperwork Elimination Act
FNS is committed to compliance with the Government Paperwork
Elimination Act (GPEA), which requires Government agencies to provide
the public the option of submitting information or transacting business
electronically to the maximum extent possible. This rule accomplishes
the intent of GPEA by facilitating EBT system procedures for the FSP,
and thereby eliminating the need to print, distribute, and handle paper
food stamp coupons in operation of the FSP.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is intended to have preemptive effect with
respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless specified in the DATES section of this preamble. Prior to any
judicial challenge to the provisions of this rule or the application of
its provisions, all applicable administrative procedures must be
exhausted.
Public Law 104-4
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, the
Department generally must prepare a written statement, including a
cost-benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, or tribal
governments in the aggregate, or to the private sector, of $100 million
or more in any one year. When such a statement is needed for a rule,
section 205 of the UMRA generally requires the Department to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, more cost-effective or least burdensome alternative
that achieves the objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector of $100 million or
[[Page 72351]]
more in any one year. This rule is, therefore, not subject to the
requirements of sections 202 and 205 of the UMRA.
Regulatory Impact Analysis
1. Need for Action
This action is needed to formalize implementation of provisions of
the Food Stamp Reauthorization Act of 2002 related to EBT and retailer
operations. These changes will allow the Department to: (1) Use
delivery methods other than certified mail when notifying retailers or
State agencies of adverse action; (2) approve alternate methods of
issuing food stamp benefits during disasters; (3) eliminate the
requirement that Federal costs for EBT systems cannot exceed the costs
of the paper systems they replace; and (4) permit group homes and
institutions to redeem EBT benefits directly through banks rather than
being restricted to authorized wholesalers or other retailers.
2. Benefits
Federal and State agencies will benefit from the provisions of this
rule because they will streamline the administrative procedures that
are already in place and codify current practice.
3. Costs
There will be minimal costs associated with outfitting group homes
with point of sale (POS) devices. In Fiscal Year (FY) 2003, only 1,544
group homes existed in the United States, and the monthly average
leasing cost of $26 would be equally shared between the Department and
the State agencies if all group homes requested POS devices. Since many
States have already been operating group homes in this way through
demonstration waivers, most of these homes already have POS devices,
minimizing the impact of any new costs. We estimate that eliminating
the cost neutrality requirement on EBT systems cost less than $1
million per year during the first five years of enactment (FY 2002-FY
2006). There are no costs from the other two sections of the final
rule.
Civil Rights Impact Analysis
FNS has reviewed this final rule in accordance with the Department
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and
address any major civil rights impacts the rule might have on
minorities, women, and persons with disabilities. After a careful
review of the rule's intent and provisions, and the characteristics of
food stamp households and individual participants, FNS has determined
that there is no way to soften their effect on any of the protected
classes. FNS has no discretion in implementing many of these changes.
The changes that are required to be implemented by law have been
implemented. All data available to FNS indicate that protected
individuals have the same opportunity to participate in the Food Stamp
Program as non-protected individuals. FNS specifically prohibits the
State and local government agencies that administer the Program from
engaging in actions that discriminate based on race, color, national
origin, gender, age, disability, marital or family status. (See 7 CFR
272.6.) Where State agencies have options, and they choose to implement
a certain provision, they must implement it in such a way that it
complies with the regulations at 7 CFR 272.6.
Background
A proposed rule was published in the Federal Register on May 6,
2003 at 68 FR 23927 to revise Food Stamp Program regulations pertaining
to the standards for approval of Electronic Benefits Transfer (EBT)
systems, the participation of retail food stores and wholesale food
concerns, and the State agency liabilities and Federal sanctions.
Comments on the proposed rule were solicited through July 7, 2003. This
final action takes the comments received into account.
In this rule, the Department amends Food Stamp Program regulations
to expand the delivery of adverse action notices to retailers and State
agencies, allow alternative issuance systems in disasters, eliminate
the requirement for cost neutrality for EBT systems, and permit
redemption of EBT benefits through group living facilities.
Thirteen comment letters were received in response to the proposed
rule. Individual comments were received from four State agencies and
nine public interest groups. In general, the commenters supported the
proposed rule's changes. Readers are referred to the proposed
regulation for a more complete understanding of this final action.
The only changes between the proposed and final rules are due to
two oversights in the proposed rule. First, we are not finalizing the
proposed portion of 7 CFR 274.12 that specifically provides that the
cost of administering statewide benefit issuance after implementation
of the EBT system should be funded at the regular Federal financial
participation rate, up to the level of the current coupon issuance
costs. This proposed portion of the sentence contains outdated
information since coupon issuance is no longer a reality in the EBT
system. Second, 7 CFR 278.2(g)(2) incorrectly proposed as mandatory the
requirement that authorized drug addict and alcoholic treatment and
rehabilitation programs, group living arrangements, shelters for
battered women and children, and public or private nonprofit homeless
meal providers for homeless food stamp households redeem EBT benefits
directly through an insured financial institution, although the
requirement was correctly proposed as optional in the preamble.
Therefore, we are now clarifying in this final rule that the
requirement contained in 7 CFR 278.2(g)(2) of this final rule contains
the word ``may'' instead of the word ``shall'' to indicate that this
requirement is optional and not mandatory per interpretation of the
Food Stamp Reauthorization Act of 2002 (FSRA).
Mailing to Retailers and State Agencies
The Department revises regulations at 7 CFR 276.7(b), 278.1(k)(7),
278.1(l)(2), 278.6(o), 278.7(b)(2), 278.7(f), and 279.7(b) to eliminate
the requirement that the Department send notices of adverse actions to
retailers and State agencies using certified mail. Effective May 13,
2002, section 4117 of the FSRA amended section 14(a)(2) of the Food
Stamp Act of 1977 (Food Stamp Act) (7 U.S.C. 2023(a)(2)) to authorize
the delivery of such notices in any form the Secretary determines will
provide evidence of the delivery.
The Department received two comments on this provision. One
commenter supported the revision, but felt that the State should be
notified in advance of notices to retailers. FNS believes that this is
not necessary since we have a direct relationship with retailers as
part of retailer oversight responsibilities for the Food Stamp Program.
Currently, any State interested in retailer notification consults with
the FNS Regional Office. Some States do receive copies of letters to
the retailer based on what is negotiated at the regional level.
Therefore, no additional requirements are necessary at this time and
the provision is finalized as proposed.
Alternative Issuance Systems in Disasters
This final rule revises Food Stamp Program regulations at 7 CFR
280.1 for emergency food assistance for victims of disasters. By terms
of section 4108 of the FSRA, which amended section 5(h)(3)(B) of the
Food Stamp Act (7 U.S.C. 2014(h)(3)(B)), the Department received
authority to approve alternate methods for issuing food stamp benefits
[[Page 72352]]
during disasters when reliance on EBT systems is impracticable. This
final rule amends the regulation to reflect this new authority.
Four comments were received on this issue. Two commenters fully
supported this revision. Another commenter felt that the regulation
should acknowledge that States should re-examine existing disaster
plans in light of the new provision enabling a ``cash-out'' option in
the event of catastrophic disaster. Congress, however, was clear in its
intent that cash-out would not be implemented unless specific disaster
circumstances made EBT unworkable. Consistent with the intent of the
statutory amendment, as expressed by the Conference Committee, H.R.
Conf. Rep. No. 107-424, at 264 (2002), the Department would only
approve alternate issuance, such as cash, as a last resort, depending
on the specific circumstances of the disaster.
Another commenter stated that cash is not always a viable alternate
method of issuance, but suggested we extend the benefit and card
issuance time frame to 10 days, from the current guideline of 3 days.
The Department does not agree that this would be sensible in a disaster
situation when there is an urgent need to assist people who are victims
of a disaster and to get benefits to them as quickly as possible.
Additionally, since each disaster situation is unique, we would only
approve the specifics of a disaster plan on a case-by-case basis.
Cost Neutrality for EBT Systems
This provision eliminates the requirement at 7 CFR 274.12(e) that
Federal costs of EBT systems not exceed the costs of the paper systems
they replace as a condition of approval of State EBT systems, in
accordance with section 4110 of the FSRA.
The elimination of the cost neutrality requirement does not remove
the requirement for State agencies to submit Implementation Advanced
Planning Documents (IAPDs) to the Department for approval prior to
conversion to a new system or to making upgrades or changes to their
existing EBT systems. We received one comment fully supporting this
revision and none opposing it.
Redemption of Benefits Through Group Living Facilities
This final rule revises food stamp regulations regarding
participation of group living facilities. By terms of section 4113 of
the FSRA, a center, organization, institution, shelter, group living
arrangement and establishment that are among those defined as retail
food stores under section 3(k)(2) of the Food Stamp Act (7 U.S.C.
2012(k)(2)), may now be authorized to redeem benefits directly through
financial institutions in areas where EBT has been implemented. The
four types of entities affected by this change are drug addict and
alcoholic treatment and rehabilitation programs; group living
arrangements; shelters for battered women and children; and public or
private nonprofit homeless meal providers. These group home facilities
represent 1.64 percent of all firms in the program, while 98.4 percent
are classified as traditional grocery stores.
In these situations, the facility functions like most authorized
retailers, conducting EBT transactions with its residents, deducting
benefits from their cards and depositing them into the facility's
account. The facility can then purchase eligible foods at any
authorized retailer or wholesaler with funds drawn directly from its
own account. This makes it easier for those recipients residing in the
authorized facilities to use their benefits in an EBT environment.
Therefore, the Department is providing that group home facilities may
be equipped with POS devices in a manner that meets the requirements
established for retailers. These facilities would redeem benefits using
the POS device, and then purchase eligible food items.
The Department did not receive any comments on the variety of ways
that group homes operate. However, we are providing clarification that
not all group homes must have the same EBT procedures in place. Some
States have group homes that are not using POS devices, but instead
assign an authorized representative from each group home to shop with
one EBT card for everyone at authorized wholesalers. In this rule, the
Department does not intend to preclude any States from redeeming EBT
benefits in group homes that operate in a different manner.
The Department received 13 comments on the group home provision
which is limited to the statutory provision allowing the facilities to
deposit directly into financial institutions which allow them to use a
POS device. One commenter fully supported this revision. Eleven
commenters provided a variety of similar feedback on the operations or
management process for these facilities, some of which were outside the
narrow scope of this final rule. All comments are encompassed in the
paragraphs that follow. We believe that current rules in CFR 273.11
provide adequate safeguards and address the most important of the
commenters' concerns about fraud. Additionally, as fraud risks vary for
each type of group home facility, they still remain much lower than
when coupons were issued since EBT transactions can be tracked and
monitored more easily than the old paper system.
Specifically, several commenters thought the rule should be limited
to residential facilities, which is not allowable under the statute.
The law specifies the four types of facilities that may be authorized
to redeem benefits. The only entity that is not residential is the
homeless meal providers; moreover, FNS feels it is good policy to
provide services to homeless meal providers that cover a transient
population.
Several commenters also thought the rule should be limited to group
homes that actually provide meals for stays exceeding a month. Another
comment relates to charging for actual meals served or only accessing a
portion of the benefits for each meal served (no greater than 1/90th of
the thrifty food plan). Both types of comments shared the same concern
that the centers would take all of the recipient benefits on the first
day they became available and put them in the centers' own account,
leaving nothing for the household when it leaves the center. The
comment to charge on a per meal basis or only a portion of the meal
benefits represents a significant operational change that does not seem
practical for these small facilities. In addition to the administrative
burden placed on States and centers to charge on a per meal basis, it
would be extremely difficult to track that the meals account for the
correct portion of the benefits available.
Current rules at 7 CFR 273.11(e)(5) address State agency and center
actions when the household leaves prior to the 16th of the month.
Specifically, the rules prohibit drug and alcohol treatment centers and
group living arrangements from obtaining more than half of the
household's allotment prior to the 16th of the month when benefits are
issued through an EBT system. These rules also require centers to
return to households that leave before the 16th of the month one-half
of their benefits. It specifically also states that after the household
leaves the center, the center can no longer act as the household's
authorized representative for certification purposes or for obtaining
or using benefits. The center must also provide the departing
households with their EBT cards at any time during the month.
Other commenters wanted to limit the use of POS devices to certain
staff, require facilities to maintain records of meals charged to
clients, and not allow
[[Page 72353]]
staff to collect personal identification numbers or cards.
As for limiting the use of POS devices to certain staff, this
restriction would be extremely difficult to monitor or enforce.
Additionally, FNS does not monitor who specifically uses POS devices in
other firms (grocery stores) that participate in the program. Some
commenters expressed concern about possible fraudulent abuse by
employees of these centers; however, the regulations at 7 CFR 273.11
already contain significant protections against such abuse. Under
current rules, centers are responsible for any over-payment or misuse,
regardless of who does it. Additionally, the rules require centers to
provide State agencies with monthly or semi-monthly lists of
participating residents. In addition, States must conduct periodic
random on-site visits to the center to assure the accuracy of records.
The rules also describe how States must establish a claim for over-
issuance of benefits and outline the steps that they would take prior
to FNS disqualification of an authorized center.
Commenters also wanted centers to maintain records establishing
that food purchases attributable to recipients at least equal the value
of the benefits taken from those recipients. This suggestion has merit
now that group homes can place benefits into their checking accounts.
There would be some additional recording keeping requirements imposed
on the facilities. 7 CFR 273.11 requires States to do random checks on
the facilities anyway, and looking at the amount of food expenditures
versus the benefits redeemed would not be unduly burdensome. This issue
will be addressed in a future rulemaking and will be taken under
consideration.
On the comment to not allow centers to collect PIN numbers or
cards, it is important to emphasize that group homes operate in a
variety of ways and this rule does not preclude centers from operating
in different ways. Specifically, some centers act as the authorized
representative for clients and must have access to PIN numbers and
cards in order to redeem the food stamp benefits.
One commenter wanted facilities to be exempt from the minimum Food
Stamp redemption activity per month to obtain State-provided POS
terminals. It is important to emphasize that States already have this
option. Current rules require that all authorized retailers be provided
with POS devices regardless of its size. In some cases, at the State's
request, they are issued retailer participation waivers so that POS
deployment is not required for retailers with redemption levels less
than $100 per month.
Another commenter said that monthly EBT statements should be
provided to all recipients detailing the transactions. The Department
does not agree that this is necessary. Current rules in 7 CFR 274.12
already require that clients be provided printed receipts at the time
of transaction and be able to check their balance anytime without
making a purchase or standing in a checkout line. Current rules also
require State agencies to ensure that the EBT system is capable of
providing a transaction history for a period of up to two calendar
months to households upon request.
The same commenter provided comments on battered women and
children's rights that included making benefits available to all
battered women and not just women who leave an abusive household and
reside in official shelters. The same commenter said FNS should
implement procedures similar to the Family Violence Option of the
Temporary Assistance for Needy Families (TANF) program and to waive
regulations that make escaping from domestic violence more difficult,
places individuals at risk of further violence, or penalizes
individuals because of violence. The comments on battered women and
children's rights are outside the scope of this rule.
The issue of extending the re-issuance provision to women who fled
to the residences of friends or relatives was addressed in the comments
of the final rule, Food Stamp Program: Certifying Residents of Shelters
for Battered Women and Children, published at 46 FR 60160 on December
8, 1981. The re-issuance provision is detailed in 7 CFR 273.11(g)(3).
Normally State data systems will prevent issuance of benefits to
individuals who are already participating in another household.
However, in the case of a mother and children who leave the household
which contains the abuser, and apply as shelter residents, the State
agency must override the normal system edit to allow the mother and
children to be certified. The household with the abuser will
potentially receive excess benefits until the benefit amount is reduced
through the adverse action process.
The December 8, 1981 rule established the exception to the
residents of institution ban for residents of shelters for battered
women and children. At the time, the Department took the position that
Congress intended the special provisions relative to shelters for
battered women and children to apply only to residents of such
shelters. We believe the suggestion would place a burden on State
agencies to investigate or verify that domestic violence was an issue
in the move, and not simply a move motivated by other reasons.
Equipping of these facilities would be in accordance with the EBT
regulations at 7 CFR 274.12. State agencies approved to operate a
demonstration project for this function may continue operations without
further action and are no longer bound by the survey requirements of a
demonstration project. This rulemaking does not affect current State
operations.
Implementation
The provisions of this rule are effective January 4, 2006.
List of Subjects
7 CFR Part 272
Alaska, Civil Rights, Food Stamps, Grant Program--social programs,
Reporting and recordkeeping requirements.
7 CFR Part 274
Administrative practice and procedure, Food stamps, Fraud, Grant
programs--social programs, Reporting and recordkeeping requirements,
State liabilities.
7 CFR Part 276
Administrative practice and procedure, Food stamps, Fraud, State
agency liabilities and federal sanctions.
7 CFR Part 278
Administrative practice and procedure, Banks, Banking, Claims, Food
stamps, General line--wholesalers, Groceries, Groceries--retail,
Penalties.
7 CFR Part 279
Administrative practice and procedure, Food stamps, General line--
wholesalers, Groceries, Groceries--retail.
7 CFR Part 280
Disaster assistance, Food stamps, Grant programs--social programs.
0
Accordingly, 7 CFR parts 272, 274, 276, 278, 279, and 280 are amended
as follows:
0
1. The authority citation for 7 CFR parts 272, 274, 276, 278, 279, and
280 continues to read as follows:
Authority: 7 U.S.C. 2011-2036.
PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES
0
2. In Sec. 272.1, paragraph (g)(171) is added to read as follows:
[[Page 72354]]
Sec. 272.1 General terms and conditions.
* * * * *
(g) Implementation. * * *
(171) Amendment No. 397. The provisions of Amendment No. 397 are
effective January 4, 2006. State agencies may implement the provisions
anytime after the rule is published but no later than June 5, 2006.
PART 274--ISSUANCE AND USE OF COUPONS
0
3. In Sec. 274.10, paragraphs (f)(1), (f)(2) and (f)(3) are revised to
read as follows:
Sec. 274.10 Use of identification cards and redemption of coupons by
eligible households.
* * * * *
(f) * * *
(1) Members of eligible households who are narcotics addicts or
alcoholics and who regularly participate in a drug or alcoholic
treatment rehabilitation program may use food stamp benefits to
purchase food prepared for them during the course of such program by a
private nonprofit organization or institution or publicly operated
community mental health center which is authorized by FNS to redeem
benefits in accordance with Sec. 278.1 and Sec. 278.2(g) of this
chapter.
(2) Eligible residents of a group living arrangement may use food
stamp benefits issued to them to purchase meals prepared especially for
them at a group living arrangement which is authorized by FNS to redeem
benefits in accordance with Sec. 278.1 and Sec. 278.2(g) of this
chapter.
(3) Residents of shelters for battered women and children as
defined in Sec. 278.1(g) of this chapter may use their food stamp
benefits to purchase meals prepared especially for them at a shelter
which is authorized by FNS to redeem benefits in accordance with Sec.
278.1 and Sec. 278.2(g) of this chapter.
* * * * *
Sec. 274.12 [Amended]
0
4. In Sec. 274.12:
0
a. Paragraph (e) is removed, and paragraphs (f) through (o) are
redesignated as paragraphs (e) through (n), respectively;
0
b. Newly redesignated paragraph (k) (1) is amended by removing the
words ``up to the level of the current coupon issuance costs, as
prescribed in paragraph (c)(3) of this section''.
0
c. Newly redesignated paragraph (k)(4) is removed and newly
redesignated paragraph (k)(5) is further redesignated as
paragraph(k)(4).
PART 276--STATE AGENCY LIABILITIES AND FEDERAL SANCTIONS
0
5. In Sec. 276.7, paragraph (b) is revised to read as follows:
Sec. 276.7 Administrative review process.
* * * * *
(b) Notice of claim. When asserting a claim against a State agency,
FNS shall provide the notice to the State agency using any delivery
method as long as the method provides evidence of the delivery.
* * * * *
PART 278--PARTICIPATION OF RETAIL FOOD STORES, WHOLESALE FOOD
CONCERNS AND INSURED FINANCIAL INSTITUTIONS
0
6. In Sec. 278.1:
0
a. The first sentence in paragraph (e) is amended by removing the words
``through wholesalers food stamps received from or on behalf of their
participants''; and adding in their place the word ``benefits'';
0
b. The first sentence in paragraph (f) is amended by removing the words
``coupons directly through wholesalers'' and adding in their place the
word ``benefits'';
0
c. The first sentence in paragraph (g) is amended by removing the words
``coupons directly through wholesalers'' and adding in their place the
word ``benefits'';
0
d. The second sentence in paragraph (k)(7) is revised; and
0
e. The first sentence in paragraph (l)(2) is amended by removing the
words ``certified mail or personal service'' and adding in their place
the words ``using any delivery method as long as the method provides
evidence of delivery''.
The revision reads as follows:
Sec. 278.1 Approval of retail food stores and wholesale food
concerns.
* * * * *
(k) * * *
(7) * * * The FNS officer in charge shall issue a notice to the
firm (using any delivery method that provides evidence of delivery) to
inform the firm of any authorization denial and advise the firm that it
may request review of that determination.
* * * * *
0
7. In Sec. 278.2, the text of paragraph (g) is redesignated as
paragraph (g)(1), and a new paragraph (g)(2) is added to read as
follows:
Sec. 278.2 Participation of retail food stores.
* * * * *
(g) * * *
(2) Notwithstanding paragraph (g)(1) of this section, authorized
drug addict and alcoholic treatment and rehabilitation programs, group
living arrangements, shelters for battered women and children, and
public or private nonprofit homeless meal providers for homeless food
stamp households may be authorized to redeem EBT benefits directly
through an insured financial institution in areas where an Electronic
Benefit Transfer (EBT) system has been implemented.
* * * * *
Sec. 278.6 [Amended]
0
8. In Sec. 278.6, the first sentence in paragraph (o) is amended by
removing the words ``certified mail or personal service'' and adding in
their place the words ``any method that provides evidence of
delivery''.
Sec. 278.7 [Amended]
0
9. In Sec. 278.7:
0
a. The first sentence in paragraph (b)(2) is amended by removing the
words ``certified mail-return receipt requested'' and adding in their
place the words ``using any delivery method as long as the method
provides evidence of delivery'';
0
b. The first sentence in paragraph (f) is amended by removing the words
``certified mail or personal service'' and adding in their place the
words ``using any delivery method as long as the method provides
evidence of delivery''.
PART 279--ADMINISTRATIVE AND JUDICIAL REVIEW--FOOD RETAILERS AND
FOOD WHOLESALERS
Sec. 279.7 [Amended]
0
10. In Sec. 279.7, the last sentence in paragraph (b) is amended by
removing the words ``registered or certified mail'' and adding in their
place the words ``using any delivery method as long as the method
provides evidence of delivery''.
PART 280--EMERGENCY FOOD ASSISTANCE FOR VICTIMS OF DISASTERS
0
11. Sec. 280.1 is amended by adding a sentence to the end of the
section to read as follows:
Sec. 280.1 Interim disaster procedures.
* * * The Secretary may also approve alternate methods for issuing
food stamp benefits during a disaster when reliance on Electronic
Benefits Transfer (EBT) systems is impracticable.
[[Page 72355]]
Dated: November 23, 2005.
Eric M. Bost,
Under Secretary for Food, Nutrition and Consumer Services.
[FR Doc. 05-23619 Filed 12-2-05; 8:45 am]
BILLING CODE 3410-30-P
