[Federal Register Volume 60, Number 162 (Tuesday, August 22, 1995)]
[Rules and Regulations]
[Pages 43513-43517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20687]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 60, No. 162 / Tuesday, August 22, 1995 /
Rules and Regulations
[[Page 43513]]
DEPARTMENT OF AGRICULTURE
Food and Consumer Service
7 CFR Parts 272 and 273
[Amdt. No. 357]
RIN 0584-AB91
Food Stamp Program: Disqualification Penalties for Intentional
Program Violations
AGENCY: Food and Consumer Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule finalizes a proposed rulemaking published on August
29, 1994. It amends Food Stamp Program regulations to implement section
13942 of the Mickey Leland Hunger Relief Act, which increases the
disqualification penalties for individuals who are found guilty in a
Federal, State or local court of trading or receiving food stamp
coupons for firearms, ammunition, explosives or controlled substances.
This rule also implements a change which makes it easier for a State
agency to conduct an administrative disqualification hearing by
eliminating the proof of receipt requirement. In addition, this rule
clarifies the Department's policy on the imposition of disqualification
periods for intentional Program violations. Finally, this rule
eliminates two model forms used in administrative disqualification
hearings.
DATES: This rule is effective October 23, 1995, except that 7 CFR
273.16(b) is effective retroactive to September 1, 1994.
FOR FURTHER INFORMATION CONTACT: James I. Porter, Supervisor, Issuance
and Accountability Section, State Administration Branch, Program
Accountability Division, Food Stamp Program, Food and Consumer Service,
USDA, 3101 Park Center Drive, Alexandria, Virginia 22302, (703) 305-
2385.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule has been determined to be not significant for
purposes of Executive Order 12866, and therefore has not been reviewed
by the Office of Management and Budget.
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 at 7 CFR part 3015, subpart V and related Notice (48 FR 29115,
June 24, 1983), this Program is excluded from the scope of Executive
Order 12372 which requires intergovernmental consultation with State
and local officials.
Executive Order 12778
This final rule has been reviewed under Executive Order 12778,
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 so specified in the ``Implementation'' section of this preamble.
Prior to any judicial challenge to the provisions of this final rule or
the application of its provisions, all applicable administrative
procedures must be exhausted.
Regulatory Flexibility Act
This final rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act of 1980 (Pub. L. 96-354, 94 Stat.
1164, September 19, 1980). William E. Ludwig, Administrator of the Food
and Consumer Service, has certified that this rule does not have a
significant economic impact on a substantial number of small entities.
The requirements will affect State and local agencies that administer
the Food Stamp Program by simplifying the requirements for giving
advance notice of hearing to food stamp recipients. It will also modify
the penalties applicable to individuals who engage in Program
misconduct.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
3507), the reporting and recordkeeping burden associated with this
final rule has been approved by the Office of Management and Budget
(OMB) under OMB number 0584-0064. The provisions of this rule do not
contain any additional reporting and/or recordkeeping requirements
subject to OMB approval.
Background
On August 29, 1994, the Department published a proposed rule at 59
FR 44343 to implement section 13942 of the Mickey Leland Childhood
Hunger Relief Act (Pub. L. 103-66) (Leland Act). Section 13942 of the
Leland Act amended the Food Stamp Act of 1977 (7 U.S.C. 2011-2032) (the
Act) to increase the disqualification penalties for certain types of
intentional Program violations. In addition, the proposed rule included
regulatory changes with regard to the delivery of administrative
disqualification hearing notices and the initiation of disqualification
periods for intentional Program violations. The proposed rule also
included regulatory changes to eliminate two model forms used in
administrative disqualification hearings.
The Department received nine comment letters which addressed
provisions of the proposed rule. All of the commenters were State
agencies. The Food and Consumer Service has given careful consideration
to all comments received. The major concerns of the commenters are
discussed below. For additional information on the provisions discussed
in this rule, the reader should refer to the preamble of the proposed
rule at 59 FR 44343-46.
Increased Disqualification Penalties for Intentional Program
Violations
Section 13942 of the Leland Act requires that an individual be
disqualified for 12 months for a first finding by a court, and
permanently for a second finding by a court that the person has either
traded or received controlled substances using food stamp coupons. This
section of the Leland Act also requires that an individual be
permanently disqualified for the first finding by a court that the
individual has either traded or received firearms, ammunition, or
explosives using food stamp coupons. Of the nine comment
[[Page 43514]]
letters received, two commenters specifically supported this provision
of the proposed rule. However, some commenters had concerns on the
applicability of the increased penalties.
Two commenters were concerned about the applicability of the
increased penalties to deferred adjudications. The proposed rule would
have applied the increased penalties in cases with deferred
adjudication if a finding of culpability has been made. The first
commenter felt that some deferred adjudications should not be subjected
to the increased penalties and that specific criteria should be
established for having deferred adjudications result in the same
increased penalties as would apply to an adjudication by a court. The
second commenter felt that the finding of culpability clause would
require State agencies to conduct a difficult and costly analysis of
the court order or terms of the deferred adjudication. The Department
recognizes that there are complexities involved in making the proper
determination of whether a finding of culpability exists. However,
given the fact that the standard penalties are applied in instances of
deferred adjudication, the Department believes the increased penalties
should also be imposed when applicable in cases of deferred
adjudication. Therefore, the Department has retained 7 CFR 273.16(b)(4)
of the final rule, as proposed.
One commenter requested clarification as to whether the penalties
applied to non-recipients as well as recipients. Section 6(b)(1) of the
Act refers to any ``person'' and not ``recipient'' in its discussion of
applying disqualification penalties. The Act also provides that
penalties apply to ``further participation in the Program.'' The
language in the proposed rule at Sec. 273.16(b)(1), which discusses the
application of the penalties, is consistent with the Act in that it
uses ``individual'' and not ``recipient'' or ``household member.'' The
disqualification penalties apply to any individual found to have
committed an intentional Program violation regardless of whether he/she
is a recipient. The provision in Sec. 273.16(a)(1) states that the
disqualification shall take effect in such cases immediately after the
individual applies and is found eligible to participate in the Program.
One commenter recommended a revision to the proposed rule at
Sec. 273.16(b)(5) to clarify the Department's intent. The commenter
suggested using the phrase `` * * * fails to impose a disqualification
or a disqualification period * * * '' instead of `` * * * fails to
impose a disqualification period * * * '' as proposed in
Sec. 273.16(b)(5). The reason for the suggested change, according to
the commenter, is because questions have arisen regarding the
Department's intent on whether a disqualification period should be
imposed if the court finds that the intentional Program violation was
committed but does not specify in the court order whether there should
be a disqualification. The Department's longstanding position on this
issue is to have the appropriate disqualification period imposed by the
State agency unless it is expressly forbidden by the court or a
different disqualification period is specified in the court order.
Therefore, the Department is including in the final rule the
clarification to 7 CFR 273.16(b)(5) suggested by the commenter.
In addition to changes reflected in the final rule because of the
comments received regarding this provision, the Department is revising
a paragraph in the regulations for clarification purposes. This
paragraph discusses the treatment of disqualifications which occurred
prior to the implementation of the disqualification periods set forth
in a February 15, 1983 rulemaking (48 FR 6836). The final rule provides
clarification in 7 CFR 273.16(b)(6) and 7 CFR 273.16(i)(5) by referring
to the actual implementation date (April 1, 1983) of the provision
contained in the February 15, 1983 rulemaking instead of making
reference to the paragraph containing the penalties. The change has no
substantive effect and is for purposes of clarification only.
Advance Notice of Administrative Disqualification Hearings
The Department proposed giving State agencies the option to deliver
advance notices of administrative disqualification hearings via first
class mail. The current regulations at 7 CFR 273.16(e)(3)(i) require
that, if notices are mailed, they must be sent via certified mail--
return receipt requested, and proof of receipt must be obtained. The
proposed rule essentially eliminates the proof of receipt requirement.
Of the nine comment letters received, six commenters specifically
supported this provision of the proposed rule. However, some commenters
had concerns regarding its applicability.
One commenter supported this proposal as a State agency option,
rather than a requirement, citing that flexibility is necessary because
of differences between State agencies in Program administration. The
proposed rule would, in fact, make it an option by stating that, if
mailed, the notice would be sent either via first class or certified
mail-return receipt requested. The Department is keeping this as an
option in the final rule.
One commenter suggested that the Department add a qualifier to
specify that returned first class mail constitutes failure to provide
advance notice of an administrative disqualification hearing. In this
manner, the commenter felt that the rule would be clear that the
hearing would be canceled in such an event. The current regulations at
7 CFR 273.16(e)(4) state that if the affected individual ``* * * cannot
be located * * * the hearing shall be conducted without the household
member being represented.'' This is not being changed in the final
rule.
The Department proposed to make non-receipt of an advance notice a
good cause criterion under 7 CFR 273.16(e)(4). Under the proposal, if
the household member shows non-receipt of the notice in a timely
fashion, any previous decision determined in absentia would no longer
remain valid and the State agency would conduct a new hearing. The
Department received a comment concerning the issue of what constituted
a ``showing of non- receipt'' of the hearing notice in order to request
a new hearing. The Department has determined that the circumstances in
which non-receipt constitutes a good cause should be left up to each
State agency to decide. This is being done to increase the degree of
State agency flexibility in this area. However, each State agency's
policy regarding the required circumstances shall be consistently
applied within the State agency. This is reflected in 7 CFR
273.16(e)(3)(ii) in the final rule.
The Department also received three comments concerning the issue of
what is considered ``timely fashion'' for individuals to show non-
receipt of an advance notice. Two commenters stated that ``timely
fashion'' needs to be defined. One commenter was concerned about the
relevance to the current regulations at 7 CFR 273.16(e)(4) which state
that the household has 10 days from the date of the scheduled hearing
to present reasons indicating good cause for failure to appear at the
hearing. The commenter suggested that the existing 10-day limit for
presenting good cause be eliminated. The Department feels that the
existing 10- day limit should remain intact for circumstances in which
the individual is claiming good cause based upon circumstances other
than non-receipt of the notice of the hearing. However, because mailing
the hearing decision acts as a notice to the recipient of what
occurred, the Department has determined that it is more meaningful to
define ``timely
[[Page 43515]]
fashion'' for a good cause claim of non-receipt of the notice of
hearing as being within 30 days after the date of the written notice of
the hearing decision. This is reflected in 7 CFR 273.16(e)(4) in the
final rule.
Imposition of Disqualification Penalties
The proposed rule clarifies existing regulations at 7 CFR
273.16(a), (e), (f) (g) and (h) by stating that an individual
disqualified while not currently participating in the Food Stamp
Program would have his/her disqualification period begin immediately
after applying for and becoming eligible to receive benefits. This
clarification became necessary because the use of the word
``postponed'' in the current regulations, when compared to
``immediately'' in the Act, became a cause of confusion which led to
some court suits.
Of the nine comments received for this proposed rule, two
commenters specifically supported this proposal. However, two other
commenters had concerns regarding its applicability.
The first commenter stated that ``immediately'' should be
interpreted to signify that the disqualification period begins once the
appropriate State agency staff becomes aware that the individual to be
disqualified has returned to the Program. The commenter further stated
that this is a problem if the State agency is not promptly notified by
the court of the decision. While the Department recognizes that
disqualifying individuals may require coordination among various
agencies within the State, the Department feels that allowing the
disqualification to be delayed simply because the appropriate
individuals within the State agencies are unaware of its existence is
unfair to the individual being disqualified.
The second commenter suggested a wording change in
Sec. 273.16(a)(1) of the proposed rule. The commenter recommended
changing ``nonparticipants,'' in the last sentence of this section, to
``persons not eligible to participate in the Program.'' The reason for
the suggestion, according to the commenter, is for consistency
purposes. The Department concurs that a wording change is necessary for
clarification purposes. However, the Department feels that the change
suggested by the commenter needs to be expanded. The basis for this is
that the commenter's wording may suggest that the decision on the
timing of the disqualification when the intentional Program violation
determination is made is based on whether the individual is eligible to
participate. This implies that an eligibility determination must be
completed at the time the intentional Program violation determination
is rendered. This is not the Department's intent. The wording used in 7
CFR 273.16(a)(1) in the final rule, ``* * * persons not currently
certified to participate in the Program * * *,'' accurately describes
the Department's intent because there is no implication of a test of
eligibility.
Model Forms
The proposed rule would eliminate reference to the Food and
Consumer Service providing two model forms currently used in the
administrative disqualification hearing process. Most State agencies
have designed their own State-specific forms based on regulatory
requirements, thus reducing the effectiveness of and need for these
models. No comments were received regarding this proposal. As part of
an ongoing effort to do away with unnecessary Federal forms while
affording State agencies maximum flexibility, the Department will no
longer be providing these model forms.
Implementation
No comments were received on the implementation dates. The
provision relating to the increased penalties at 7 CFR 273.16(b) is
effective and was to be implemented no later than September 1, 1994.
Current regulations at 7 CFR 273.2(b)(ii) and 7 CFR 273.16(d) require
that the notice of disqualification penalties be included on the Food
Stamp application form. Therefore, the Department, on March 16, 1994,
issued an implementation memorandum requiring notice of the enhanced
intentional Program violation disqualification penalties to be included
on the Food Stamp application form by September 1, 1994.
The remaining provisions are effective and must be implemented
October 23, 1995.
List of Subjects
7 CFR Part 272
Alaska, Civil rights, Food stamps, Grant programs--social programs,
Penalties, Reporting and recordkeeping requirements, Social security,
Students.
7 CFR Part 273
Administrative practice and procedure, Aliens, Claims, Food Stamps,
Fraud, Grant programs--social programs, Penalties, Reporting and
recordkeeping requirements, Social security, Students.
Accordingly, 7 CFR parts 272 and 273 are amended as follows:
1. The authority citation of Parts 272 and 273 continues to read as
follows:
Authority: 7 U.S.C. 2011-2032.
PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES
2. In Sec. 272.1, a new paragraph(g)(142) is added to read as
follows:
Sec. 272.1 General terms and conditions.
* * * * *
(g) Implementation. * * *
(142) Amendment No. 357. The provisions of Amendment No. 357 are
effective and must be implemented as follows:
(i) The provision relating to the increased penalties at 7 CFR
273.16(b) is effective and must be implemented retroactive to September
1, 1994. This includes providing notification of the increased
penalties on the application form.
(ii) The remaining provisions are effective and must be implemented
October 23, 1995.
PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
3. In Sec. 273.16:
a. The last sentence of paragraph (a)(1) is revised;
b. Paragraph (b) is revised;
c. Paragraph (e)(3) is revised;
d. The next to last sentence of paragraph (e)(4) is removed, and
two sentences are added in its place;
e. Paragraph (e)(8)(iii) is revised;
f. The last sentence of paragraph (e)(9)(iii) is removed;
g. Paragraph (f)(2)(iii) is revised;
h. Paragraph (g)(2)(ii) is revised;
i. Paragraph (h)(1)(ii)(C) is revised;
j. Paragraph (h)(2)(ii) is revised; and
k. The second sentence of paragraph (i)(5) is revised.
The revisions and additions read as follows:
Sec. 273.16 Disqualification for intentional Program violation.
(a) Administrative responsibility. (1) * * * For those persons not
currently certified to participate in the Program at the time of the
administrative disqualification or court decision, the disqualification
period shall take effect immediately after the individual applies for
and is determined eligible for Program benefits.
* * * * *
(b) Disqualification penalties. (1) Individuals found to have
committed an intentional Program violation either through an
administrative disqualification hearing or by a Federal, State or local
court, or who have signed either a waiver of right to an
[[Page 43516]]
administrative disqualification hearing or a disqualification consent
agreement in cases referred for prosecution, shall be ineligible to
participate in the Program:
(i) For a period of six months for the first intentional Program
violation, except as provided under paragraphs (b)(2) and (b)(3) of
this section;
(ii) For a period of twelve months upon the second occasion of any
intentional Program violation, except as provided in paragraphs (b)(2)
and (b)(3) of this section; and
(iii) Permanently for the third occasion of any intentional Program
violation.
(2) Individuals found by a Federal, State or local court to have
used or received coupons in a transaction involving the sale of a
controlled substance (as defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802)) shall be ineligible to participate in
the Program:
(i) For a period of twelve months upon the first occasion of such
violation; and
(ii) Permanently upon the second occasion of such violation.
(3) Individuals found by a Federal, State or local court to have
used or received coupons in a transaction involving the sale of
firearms, ammunition or explosives shall be permanently ineligible to
participate in the Program upon the first occasion of such violation.
(4) The penalties in paragraphs (b)(2) and (b)(3) of this section
shall also apply in cases of deferred adjudication as described in
paragraph (h) of this section, where the court makes a finding that the
individual engaged in the conduct described in paragraph (b)(2) or
(b)(3) of this section.
(5) If a court fails to impose a disqualification or a
disqualification period for any intentional Program violation, the
State agency shall impose the appropriate disqualification penalty
specified in paragraphs (b)(1), (b)(2) or (b)(3) of this section unless
it is contrary to the court order.
(6) One or more intentional Program violations which occurred prior
to April 1, 1983 shall be considered as only one previous
disqualification when determining the appropriate penalty to impose in
a case under consideration.
(7) Regardless of when an action taken by an individual which
caused an intentional Program violation occurred, the disqualification
periods specified in paragraphs (b)(2) and (b)(3) of this section shall
apply to any case in which the court makes the requisite finding on or
after September 1, 1994.
(8) State agencies shall disqualify only the individual found to
have committed the intentional Program violation, or who signed the
waiver of the right to an administrative disqualification hearing or
disqualification consent agreement in cases referred for prosecution,
and not the entire household.
(9) Even though only the individual is disqualified, the household,
as defined in Sec. 273.1, is responsible for making restitution for the
amount of any overpayment. All intentional Program violation claims
shall be established and collected in accordance with the procedures
set forth in Sec. 273.18.
* * * * *
(e) Disqualification hearings. * * *
(3) Advance notice of hearing. (i) The State agency shall provide
written notice to the individual suspected of committing an intentional
Program violation at least 30 days in advance of the date a
disqualification hearing initiated by the State agency has been
scheduled. If mailed, the notice shall be sent either first class mail
or certified mail-return receipt requested. The notice may also be
provided by any other reliable method. If the notice is sent using
first class mail and is returned as undeliverable, the hearing may
still be held.
(ii) If no proof of receipt is obtained, a timely (as defined in
paragraph (e)(4) of this section) showing of nonreceipt by the
individual due to circumstances specified by the State agency shall be
considered good cause for not appearing at the hearing. Each State
agency shall establish the circumstances in which non-receipt
constitutes good cause for failure to appear. Such circumstances shall
be consistent throughout the State agency.
(iii) The notice shall contain at a minimum:
(A) The date, time, and place of the hearing;
(B) The charge(s) against the individual;
(C) A summary of the evidence, and how and where the evidence can
be examined;
(D) A warning that the decision will be based solely on information
provided by the State agency if the individual fails to appear at the
hearing;
(E) A statement that the individual or representative will, upon
receipt of the notice, have 10 days from the date of the scheduled
hearing to present good cause for failure to appear in order to receive
a new hearing;
(F) A warning that a determination of intentional Program violation
will result in disqualification periods as determined by paragraph (b)
of this section, and a statement of which penalty the State agency
believes is applicable to the case scheduled for a hearing;
(G) A listing of the individual's rights as contained in
Sec. 273.15(p);
(H) A statement that the hearing does not preclude the State or
Federal Government from prosecuting the individual for the intentional
Program violation in a civil or criminal court action, or from
collecting any overissuance(s); and
(I) If there is an individual or organization available that
provides free legal representation, the notice shall advise the
affected individual of the availability of the service.
(iv) A copy of the State agency's published hearing procedures
shall be attached to the 30-day advance notice or the advance notice
shall inform the individual of his/her right to obtain a copy of the
State agency's published hearing procedures upon request.
(v) Each State agency shall develop an advance notice form which
contains the information required by this section.
(4) Scheduling of hearing. * * * In instances where good cause for
failure to appear is based upon a showing of nonreceipt of the hearing
notice as specified in paragraph (e)(3)(ii) of this section, the
household member has 30 days after the date of the written notice of
the hearing decision to claim good cause for failure to appear. In all
other instances, the household member has 10 days from the date of the
scheduled hearing to present reasons indicating a good cause for
failure to appear. * * *
* * * * *
(8) Imposition of disqualification penalties. * * *
(iii) If the individual is not certified to participate in the
Program at the time the disqualification period is to begin, the period
shall take effect immediately after the individual applies for and is
determined eligible for benefits.
* * * * *
(f) Waived hearings. * * *
(2) Imposition of disqualification penalties. * * *
(iii) If the individual is not certified to participate in the
Program at the time the disqualification period is to begin, the period
shall take effect immediately after the individual applies for and is
determined eligible for benefits.
* * * * *
(g) Court Referrals. * * *
(2) Imposition of disqualification penalties. * * *
(ii) If the individual is not certified to participate in the
Program at the time the disqualification period is to begin, the period
shall take effect immediately
[[Page 43517]]
after the individual applies for and is determined eligible for
benefits.
* * * * *
(h) Deferred adjudication. * * *
(1) Advance notification. * * *
(ii) * * *
(C) A warning that the disqualification periods for intentional
Program violations under the Food Stamp Program are as specified in
paragraph (b) of this section, and a statement of which penalty will be
imposed as a result of the accused individual having consented to
disqualification.
* * * * *
(2) Imposition of disqualification penalties. * * *
(ii) If the individual is not certified to participate in the
Program at the time the disqualification period is to begin, the period
shall take effect immediately after the individual applies for and is
determined eligible for benefits.
* * * * *
(i) Reporting requirements. * * *
(5) * * * However, one or more intentional Program violations which
occurred prior to April 1, 1983 shall be considered as only one
previous disqualification when determining the appropriate penalty to
impose in a case under consideration, regardless of where the
disqualification(s) took place. * * *
* * * * *
Dated: August 15, 1995.
George A. Braley,
Acting Administrator, Food and Consumer Service.
[FR Doc. 95-20687 Filed 8-21-95; 8:45 am]
BILLING CODE 3410-30-U
