Special Supplemental Nutrition Program for Women, Infants and Children (WIC): Miscellaneous Vendor-Related Provisions, 21807-21811 [E8-8767]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food and Nutrition Service

[Federal Register Volume 73, Number 79 (Wednesday, April 23, 2008)]
[Rules and Regulations]
[Pages 21807-21811]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-8767]



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Federal Register / Vol. 73, No. 79 / Wednesday, April 23, 2008 / 
Rules and Regulations

[[Page 21807]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 246

[FNS-2007-0041]
RIN 0584-AD36


Special Supplemental Nutrition Program for Women, Infants and 
Children (WIC): Miscellaneous Vendor-Related Provisions

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule amends the regulations governing the WIC 
Program to clarify issues that have arisen subsequent to the 
publication of the WIC Food Delivery Systems Final Rule on December 29, 
2000, and to strengthen further the requirements for State vendor 
management and infant formula cost-containment systems. This rule 
contains provisions that would prohibit a State agency from requiring 
an infant formula manufacturer to provide free infant formula or other 
items in its infant formula rebate bid solicitation and contract; 
require that a State agency provide an abbreviated administrative 
review when a vendor receives a WIC civil money penalty (CMP) as a 
result of a Food Stamp Program (FSP) disqualification; and expand the 
types of vendor information that a State agency may release for general 
program purposes. Technical changes were also made to 7 CFR 246.16a due 
to revisions made to the WIC Food Packages, published in the Federal 
Register December 6, 2007. This rule updates regulatory citations 
contained in 7 CFR 246.16a that refer to 7 CFR 246.10.

DATES: Effective Date: This rule is effective June 23, 2008.
    Implementation Date: State agencies must implement the provisions 
of this rule no later than October 23, 2008.

FOR FURTHER INFORMATION CONTACT: Debra R. Whitford, Chief, Policy and 
Program Development Branch, Supplemental Food Programs Division, Food 
and Nutrition Service, 3101 Park Center Drive, Room 522, Alexandria, 
Virginia 22302, (703) 305-2746.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be non-significant and was not 
reviewed by the Office of Management and Budget in conformance with 
Executive Order 12866.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The 
Administrator, Food and Nutrition Service, has certified that this rule 
will not have a significant impact on a substantial number of small 
entities. This rule modifies language used in WIC infant formula rebate 
solicitations and contracts, as well as in vendor agreements. The 
effect of these changes would fall primarily on State agencies. Vendors 
authorized by the WIC Program to provide supplemental foods, some of 
which are small entities, could also be affected. However, the impact 
on small entities is expected to be minimal.

Unfunded Mandates Reform Act

    Title II of the 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) that impose costs on State, local, 
or tribal governments or to the private sector of $100 million or more 
in any one year. This rule is, therefore, not subject to the 
requirements of sections 202 and 205 of the UMRA.

Executive Order 12372

    The Special Supplemental Nutrition Program for Women, Infants and 
Children (WIC) is listed in the Catalog of Federal Domestic Assistance 
Programs under No. 10.557. For reasons set forth in the final rule in 7 
CFR Part 3015, Subpart V, and related Notice (48 FR 29114), this 
program is included in the scope of Executive Order 12372 that requires 
intergovernmental consultation with State and local officials.

Federalism Summary Impact Statement

    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 13121.

Prior Consultation With State Officials

    Prior to drafting the final rule, a comment period was provided to 
permit State and local agencies and the general public the opportunity 
to comment on the proposed changes. Further, because the WIC Program is 
a State-administered, federally funded program, FNS regional offices 
have formal and informal discussions with State and local officials on 
an ongoing basis regarding program and policy issues. This arrangement 
allows State and local agencies to provide comments that form the basis 
for many discretionary decisions in this and other WIC Program rules. 
We have also received oral and written requests for policy guidance on 
the implications of the Food Delivery Systems Final Rule from State 
agencies that deliver WIC services.

Nature of Concerns and the Need To Issue This Rule

    This rule addresses the need to assure the soundness of infant 
formula rebate solicitations and contracts. With limited

[[Page 21808]]

exceptions, as provided for at 42 U.S.C. 1786(h)(8) and WIC regulations 
at 7 CFR 246.16a(a), all State agencies must continuously operate a 
cost containment system for infant formula. Some also have rebates for 
other supplemental foods, such as infant juice and cereal. As a result, 
in Fiscal Year 2006, State agencies received approximately $1.7 billion 
in rebates on infant formula and other supplemental foods purchased by 
WIC participants. The rebates that State agencies receive allow the WIC 
Program to serve an estimated 2 million additional participants 
annually.
    Infant formula manufacturers have questioned the inclusion of 
requirements to provide free infant formula and other items in infant 
formula rebate bid solicitations. Receipt of free infant formula 
reduces the amount of formula that the State agency potentially could 
purchase under rebate contracts and may lower the level of rebate bids 
received. A lower rebate could lead to a reduction in the number of 
eligible persons that the WIC Program is able to serve. This rule 
modifies the requirements for rebate solicitations and contracts to 
address this issue and thereby helps to maintain sound infant formula 
cost containment systems.
    Technical changes were made to 7 CFR 246.16a due to revisions made 
to the WIC Food Packages, published in the Federal Register December 6, 
2007. This rule updates regulatory citations contained in 7 CFR 246.16a 
that refer to 7 CFR 246.10.
    The rule also addresses two issues affecting WIC vendors. First, 
State agencies have questioned the need to offer a full administrative 
review to vendors who receive a WIC civil money penalty as a result of 
FSP disqualification. State agencies are required to impose a civil 
money penalty when they determine that an authorized vendor that has 
been disqualified from the FSP is needed to ensure participant access 
to supplemental foods. In responding to this issue, the rule seeks to 
assure a vendor's right to due process while encouraging the most cost-
effective use of State agency resources.
    In addition, while implementing the WIC Food Delivery Systems Final 
Rule, State agencies have sought approval to release basic vendor 
information that the rule designates as confidential. This rule seeks 
to accommodate State agency requests to release such information, while 
preserving the overall confidentiality of vendor information.

Extent To Which Those Concerns Have Been Met

    The rule would substantially resolve the vendor management problems 
State agencies have identified. It increases a State agency's 
flexibility in conducting appeals of a civil money penalty imposed in 
lieu of reciprocal disqualification from the WIC Program, and in 
disclosing vendor information as part of sound program management. It 
also supports the integrity of State agency infant formula rebate 
systems by prohibiting gratis provision requirements in infant formula 
rebate solicitations and contracts.

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. 
Prior to any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this final rule in accordance with Departmental 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and 
address any major civil rights impacts this rule might have on 
minorities, women, and persons with disabilities. All data available to 
FNS indicate that protected individuals have the same opportunity to 
participate in the WIC Program as non-protected individuals. FNS 
specifically prohibits State and local government agencies that 
administer the WIC Program from engaging in actions that discriminate 
against any individual in any of the protected classes; see 7 CFR 
246.8(a) for the non-discrimination policy of the WIC Program. 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 246.8.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
1320) requires that the Office of Management and Budget (OMB) approve 
all collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number. 
This rule does not contain information collection requirements subject 
to approval by the Office of Management and Budget under the Paperwork 
Reduction Act of 1995.

E-Government Act Compliance

    FNS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

Background

    On July 27, 2005, the Department published a proposed rule at 70 FR 
43332, concerning revisions of miscellaneous vendor-related provisions 
of the WIC Program regulations. The comment period ended on November 
25, 2005. Thirteen comment documents were submitted to the Department 
to provide comments on the proposed revisions. We greatly appreciate 
these comments, all of which were carefully considered in the 
development of this final rule. Following is a discussion of each 
provision as proposed, the comments received, and an explanation of the 
provisions set forth in this final rule.

1. Gratis Provisions in Infant Formula Rebate Solicitations and 
Contracts (7 CFR 246.16a(j)(4))

    The Department proposed prohibiting the requirement of gratis 
infant formula or other items in infant formula rebate solicitations 
and contracts. The receipt of free infant formula or other items by the 
State agency from the manufacturer may lower the level of rebate bids 
received. Therefore, the Department proposed to amend 7 CFR 246.16a(j), 
by adding to a list of provisions that are prohibited to be included in 
cost containment contracts the requirement for gratis infant formula 
and other items.
    All but one of the comment letters received supported this 
proposal. Some of the comment letters supporting the provision also 
recommended allowing: (1) Exceptions from the gratis prohibition for 
labels and other inexpensive educational materials that are germane to 
the contract; (2) gratis provisions only for new brands of infant 
formula introduced to participants as a result of the bid process; (3) 
State agencies that choose to provide sample infant formula to pay for 
it at the net contract price; (4) capping the purchase amount of infant 
formula samples to no more than one percent of the previous year's 
volume of infant formula; and (5) gratis provisions as voluntary 
components of bids which would not be

[[Page 21809]]

used in evaluating the bidder's qualifications, or economics of the 
bid.
    One commenter opposing the provision agreed that the elimination of 
sample or gratis formula would result in lower cost to the 
manufacturer, more favorable bids, and ultimately lower WIC food costs. 
However, the commenter stated that formula is needed by clinics for 
formula challenges and substitutions for a different type of formula 
when an infant cannot tolerate the formula initially issued. This 
commenter requested that the Department require State agencies to 
evaluate the levels and uses of gratis infant formulas to ensure cost 
effectiveness and to ensure the needs of infant participants are 
addressed. The Department has considered these recommendations and 
discuses them below.
    One commenter requested State agencies be allowed to purchase 
limited quantities of sample infant formula. Currently, WIC State 
agencies are allowed to pay for sample infant formula for clinics to 
use for formula challenges and substitutions. Contracts can include a 
provision to allow a State agency to purchase sample formulas at the 
same net cost as other contract infant formulas. WIC Program funds may 
not be used to purchase formula for applicants or other individuals who 
are not WIC participants (7 CFR 246.14(b)(1)(i)). Therefore, State 
agencies that choose to purchase sample infant formula would be 
expected to ensure that such formula is issued to a WIC participant 
only.
    Commenters also suggested State agencies be given the authority to 
request the manufacturer provide labels and mixing instructions for 
safe handling and safe storage of its products. It is not the intent of 
this regulation to prohibit such practices by State agencies; however, 
such items may not be included as a required provision in an infant 
formula rebate solicitation and contract.
    Several commenters suggested State agencies be required to limit 
the purchase amount of infant formula samples. If a State agency 
purchases infant formula to be distributed as samples, or receives 
sample infant formula voluntarily from an infant formula manufacturer, 
State agencies may want, as a prudent business decision, to consider 
capping the amount of sample infant formula that is issued, or to 
establish other procedures for the control and issuance of sample 
infant formula. However, no changes will be added to this rule 
requiring such a cap.
    FNS continues to believe that contract solicitations should not 
require any gratis infant formulas, even if these gratis formulas are 
not included as part of the bid evaluation. Such provisions are 
considered inappropriate and could have the effect of reducing rebate 
savings not only to individual State agencies, but also to the WIC 
Program nationally.
    Accordingly, after careful consideration of the comments received, 
7 CFR 246.16a(j)(4) in this final rule remains as proposed.

2. Abbreviated Administrative Reviews (7 CFR 246.18(a)(1)(ii))

    The Department proposed to require a State agency to offer an 
abbreviated administrative review when a vendor appeals a WIC CMP 
imposed in lieu of a disqualification that stems from an FSP 
disqualification unless, as in the case of all adverse actions subject 
to abbreviated administrative review, the State agency decides to 
provide a full administrative review. As a result of the WIC/FSP Vendor 
Disqualification Rule, 64 FR 13311, March 18, 1999, a reciprocal 
disqualification imposed by a WIC State agency, i.e., a 
disqualification based on an FSP disqualification, is not currently 
subject to administrative or judicial review under the WIC Program. 
However, if the State agency determines that the vendor is needed to 
ensure participant access to supplemental foods, the State agency must 
impose a CMP in lieu of a disqualification as provided in 7 CFR 
246.12(l)(1)(ix); under 7 CFR 246.18(a)(1)(i), the imposition of a CMP 
in lieu of disqualification is subject to a full administrative review.
    The Department took the position that a CMP imposed in lieu of a 
reciprocal disqualification does not warrant a full administrative 
review, and instead should be subject to an abbreviated administrative 
review, because at issue are two factual questions only, namely, 
whether the vendor has been disqualified from FSP and whether the State 
agency correctly calculated the amount of the CMP. Answers to these 
questions can easily be established within the context of an 
abbreviated review; an abbreviated review would be the more cost-
effective means of honoring the vendor's due process protections. This 
would be consistent with the adverse actions for which WIC Program 
regulations currently allow abbreviated reviews.
    All commenters supported the proposal, although one commenter 
recommended that adverse actions for two other reasons also be made 
subject to abbreviated administrative review, including denial of 
authorization based on an absence of FSP authorization and 
disqualification resulting from failure to pay a CMP.
    The Department agrees that denial of authorization based on an 
absence of FSP authorization should also be subject to an abbreviated 
administrative review. Like termination based on change of location, or 
denial of an application submitted outside of the timeframe for 
submitting applications, which are subject to abbreviated 
administrative review under the current regulations, determination of 
whether an applicant vendor is currently FSP-authorized is also a 
narrow factual determination. Many WIC State agencies require FSP 
authorization as a selection criterion for WIC authorization. Although 
not a mandatory selection criterion, requiring FSP authorization as a 
selection criterion for WIC authorization helps the WIC State agency to 
screen vendor applicants regarding common requirements of the two 
programs such as business integrity and valid documentation of 
ownership.
    However, unlike the absence of FSP authorization, failure to pay a 
CMP may involve issues that are beyond a narrow factual determination. 
Therefore, the Department will consider seeking public comment on 
whether an abbreviated administrative review rather than a full 
administrative review should be provided for failure to pay a CMP in a 
future rulemaking.
    Accordingly, 7 CFR 246.18(a)(1)(ii) in this final rule remains as 
proposed except that denial of authorization based on an absence of FSP 
authorization will be included as an additional adverse action which is 
subject to an abbreviated administrative review.

3. Confidentiality of Vendor Information (7 CFR 246.26(e))

    The current 7 CFR 246.26(e) restricts the use or disclosure of 
information that individually identifies a vendor, except for the 
vendor's name, address and authorization status, to persons directly 
connected with the administration or enforcement of WIC or FSP; persons 
directly connected with the administration or enforcement of any 
Federal or State law; or vendors who are subject to an adverse action.
    The Department proposed to amend 7 CFR 246.26(e) to expand the 
types of vendor information allowed for general release and thus not be 
subject to confidentiality restrictions, including the vendor's 
telephone number, Web site and e-mail address, WIC identification 
number, and store type. The term ``store type'' refers to ordinary

[[Page 21810]]

terms for retail food stores, such as ``grocery store,'' ``chain 
store,'' and ``convenience store,'' but not to specialized regulatory 
terms such as ``above-50-percent vendor'' or ``WIC-only store''. 
``Store type'' was included in the preamble of the proposed rule, but 
inadvertently omitted from the proposed rule itself. The Department 
believed that this increased information would allow WIC State agencies 
to provide participants with vendors' telephone numbers and Web sites 
and/or e-mail addresses to assist them with locating authorized vendors 
in their neighborhood or local service area, and that knowing a 
vendor's store type also would help participants to determine where to 
transact their food instruments. Further, the Department proposed to 
allow WIC State agencies to issue public notices of vendor 
disqualifications (including the length of disqualification and the 
reason for the disqualification) and to provide this information to 
authorized vendors and program participants; the Department believed 
that issuing public notices of WIC vendor disqualifications would deter 
vendor fraud and abuse in the WIC Program.
    The comments were generally supportive, but requested several 
clarifications and revisions. Many of the commenters objected to 
release of the vendor identification number, contending that this would 
not assist the participants or public, and may lead to fraud, e.g., 
creation of a counterfeit vendor stamp. Also, one of the commenters 
asserted that knowing the store type of a vendor would not help 
participants to choose where to shop. Finally, one of the commenters 
stated that the name of the owner should be released, since this would 
assist the State health licensing process. The Department agrees that 
the vendor identification number would be of little value, and that 
making WIC vendor identification numbers public could lead to fraud.
    However, the Department cannot consider making the name of the 
owner available to the general public in this final rule, since the 
name of the owner was not specified in 7 CFR 246.26(e) of the proposed 
rule. Removing the confidentiality of such personal information should 
not be undertaken without an opportunity for comment. Also, the 
Department disagrees that the store type should not be made available 
to the general public, since, unlike the name of the owner, there is no 
privacy issued involved. Accordingly, the vendor identification number 
and the name of the owner are not included in 7 CFR 246.26(e) of this 
final rule, while the store type of the vendor is included in 7 CFR 
246.26(e).
    One of the commenters recommended that 7 CFR 246.26(e)(2) should be 
revised to include local ordinances as well as Federal and State laws 
regarding the persons directly connected with administration or 
enforcement, because a city may be responsible for licensing grocery 
stores, and also because the WIC State agency could benefit by having 
another source of information on ownership. Another commenter asserted 
that FNS should clarify that infant formula manufacturers participating 
in the cost containment process are persons directly connected with the 
administration or enforcement of the WIC Program in 7 CFR 246.26(e)(1). 
This commenter pointed out that these companies play a unique and 
important role regarding WIC, and thus need to know how the retail 
presence of their products will be impacted by the acceptance of a bid 
in order to reduce uncertainties which might impede aggressive bidding, 
and also need to ensure that participants have access to infant formula 
when a State agency transitions to a new contractor or during periods 
of inventory shortages. The information of interest includes only the 
names of the top 20 retailers and their associated percentage of WIC 
volume.
    The Department agrees that the State agency should be able to share 
confidential vendor information with persons who are directly connected 
with the administration or enforcement of local laws or ordinances on 
such matters as licensing grocery stores, under agreement with the 
State agency restricting third party disclosure. Accordingly, 7 CFR 
246.26(e)(2) of this final rule includes the reference to local laws 
and ordinances as well as Federal and State laws. However, the 
Department does not agree that infant formula manufacturers are persons 
directly connected with the administration or enforcement of the WIC 
Program within the meaning of 7 CFR 246.26(e)(1). Although infant 
formula manufacturers have a unique and important role regarding the 
WIC Program, these manufacturers do not administer or enforce the 
Federal, State, or local laws, rules, regulations, or ordinances which 
govern the WIC Program. Their contracts with WIC State agencies do not 
include responsibilities for such programmatic activities as the 
certification of participants, the authorization of vendors, the 
operation of State agency Management Information Systems, the 
conducting of audits or investigations on behalf of State agencies, or 
any other activities applying the Federal WIC-related laws, rules, and 
regulations, or for such responsibilities related to State or local 
laws or ordinances. The redemption volume of individual WIC vendors is 
confidential vendor information under 7 CFR 246.26(e), and thus may not 
be disclosed by WIC State agencies to infant formula manufacturers 
under 7 CFR 246.26(e)(1) because infant formula manufacturers are not 
persons directly connected with the administration or enforcement of 
the WIC Program.
    Finally, several commenters expressed reservations or recommended 
restrictions regarding State agencies issuing public notices of WIC 
vendor disqualifications. One of the commenters objected to release of 
the disqualification information because the proposed provision is so 
broad that it could compromise investigative techniques and lead to 
release of investigative reports, and that release of derogatory 
information could unfairly damage the reputation of a vendor who later 
prevails on appeal. One commenter objected to release of the 
disqualification information because this may be used to justify an 
expansive discovery process in legal proceedings regarding information 
on vendors other than the vendor seeking discovery, recommending that 
the proposed provision needs to be more specific and should cover CMPs 
as well as disqualifications. Another commenter asserted that there 
should be equal treatment for participants and program officials, i.e., 
public notification of participants and program officials found guilty 
of fraud; this commenter also asserted that such notification should 
only occur after due process has been exhausted.
    The Department agrees with many of these concerns. To accommodate 
all of these issues, disqualification information is addressed by a new 
7 CFR 246.26(e)(4) in this final rule. This new provision explicitly 
provides that a State agency may release such information at its 
discretion, that the imposition of CMPs may be included as well as 
disqualifications, and that State agencies are only permitted to 
release the vendor's name, address, length of the disqualification or 
amount of the CMP, and a summary of the reason(s) for such sanction 
provided in the notice of adverse action. Further, the new provision 
provides that such information may not be disclosed unless the vendor's 
right to appeal through the judicial as well as administrative review 
procedures has been exhausted. Finally, under this new provision, this 
information may only be disclosed to other authorized vendors or vendor 
applicants, since such disclosure is

[[Page 21811]]

intended to deter vendor violations, not the violations of participants 
or program officials. If a State agency does not view this revised 
language as meeting all of its concerns, then the State agency may 
exercise its discretion to not issue such notices.

List of Subjects in 7 CFR Part 246

    Food assistance programs, Food donations, Grant programs--social 
programs, Indians, Infants and children, Maternal and child health, 
Nutrition, Nutrition education, Public assistance programs, WIC, Women.

    Accordingly, for the reasons set forth in the preamble, 7 CFR part 
246 is amended as follows:

PART 246--SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS 
AND CHILDREN

0
1. The authority citation for part 246 continues to read as follows:

    Authority: 42 U.S.C. 1786.

0
2. In Sec.  246.16a:
0
a. Amend paragraph (c)(3)(i), (c)(3)(ii)(A) and (B) by removing the 
reference ``Sec.  246.10(c)(1)(i)'' wherever it appears and replacing 
it with ``Sec.  246.10(e)(1)(iii) and Sec.  246.10(e)(2)(iii)''.
0
b. Amend paragraph (c)(4)(i) by removing the reference ``Sec.  
246.10(c)(1)(vi)'' and replacing it with ``Sec.  
246.10(e)(9)(Table1))''.
0
c. Amend paragraph (e) by removing the reference ``Sec.  
246.4(a)(14)(xi)'' and replacing it with ``Sec.  246.4(a)(14)(x)''.
0
d. Amend paragraph (j)(2) by removing the reference ``Sec.  246.10(f); 
or'' and replacing it with ``Sec.  246.10(g);''.
0
e. Amend paragraph (j)(3) by removing the period at the end of the 
paragraph and adding in its place a semicolon followed by the word 
``or''; and
0
f. Add paragraph (j)(4) to read as follows:


Sec.  246.16a  Infant formula cost containment.

* * * * *
    (j) * * *

0
(4) Require infant formula manufacturers to provide gratis infant 
formula or other items.
* * * * *
0
3. In Sec.  246.18, add new paragraphs (a)(1)(ii)(I) and (a)(1)(ii)(J) 
to read as follows:


Sec.  246.18  Administrative review of State agency actions.

    (a) * * *
    (1) * * *
    (ii) * * *
    (I) A civil money penalty imposed in lieu of disqualification based 
on a Food Stamp Program disqualification under Sec.  246.12(l)(1)(vii) 
and,
    (J) Denial of an application based on a determination of whether an 
applicant vendor is currently authorized by the Food Stamp Program.
* * * * *

0
4. In Sec.  246.26:
0
a. Amend the first sentence of the introductory text of paragraph (e) 
by removing the words ``and authorization status'' and by adding, in 
their place, the words ``, telephone number, Web site/e-mail address, 
store type, and authorization status'';
0
b. Amend paragraph (e)(2) by adding the words ``or local law or 
ordinance'' at the end of the first sentence; and,
0
c. Add a new paragraph (e)(4) to read as follows:


Sec.  246.26  Other provisions.

* * * * *
    (e) * * *
0
(4) At the discretion of the State agency, all authorized vendors and 
vendor applicants regarding vendor sanctions which have been imposed, 
identifying only the vendor's name, address, length of the 
disqualification or amount of the civil money penalty, and a summary of 
the reason(s) for such sanction provided in the notice of adverse 
action. Such information may be disclosed only following the exhaustion 
of all administrative and judicial review, in which the State agency 
has prevailed, regarding the sanction imposed on the subject vendor, or 
the time period for requesting such review has expired.
* * * * *

    Dated: April 10, 2008.
Roberto Salazar,
Administrator, Food and Nutrition Service.
 [FR Doc. E8-8767 Filed 4-22-08; 8:45 am]
BILLING CODE 3410-30-P