[Federal Register Volume 60, Number 92 (Friday, May 12, 1995)]
[Proposed Rules]
[Pages 25625-25628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11785]
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DEPARTMENT OF AGRICULTURE
Food and Consumer Services
7 CFR Part 278
RIN 0584-AC00
Food Stamp Program: Revisions in Use and Disclosure Rules
Involving the Sharing of Information Provided by Retail and Wholesale
Food Concerns With Other Federal and State Agencies
AGENCY: Food and Consumer Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rulemaking proposes to implement certain provisions in
two different laws which expand the authority of the United States
Department of Agriculture's Food and Consumer Service (FCS) to share
information provided by applicants and firms participating as
authorized retail food stores or wholesale food concerns in the Food
Stamp Program (FSP) with other government agencies. The Food Stamp Act
of 1977, as amended, was amended by section 203 of the Food Stamp
Program Improvements Act of 1994, and the Social Security Act and the
Internal Revenue Code were amended by section 316 of the Social
Security Independence and Program Improvements Act of 1994. This
proposed rule also includes one technical change to correct an error in
regulatory reference that does not change the substance of the affected
provision.
The proposed rule would implement the authority for FCS to share
such information, excluding employer identification numbers (EINs) and
Social Security numbers (SSNs), with Federal and State law enforcement
and investigative agencies for purposes of administering and enforcing
the Food Stamp Act of 1977, as amended, or any other Federal or State
law and regulations issued under this Act or any other Federal or State
law. It also would provide new criteria to govern the sharing of such
information and criminal penalties for unauthorized use. Finally, this
rule would implement the Secretary of Agriculture's new authority to
share EIN and SSN information of applicants and firms participating in
the FSP with other Federal agencies.
DATES: Comments on the provisions of this rule must be received no
later than June 12, 1995, to be assured of consideration.
ADDRESSES: Comments should be addressed to Suzanne Fecteau, Food and
Consumer Service, Chief, Coupon and Retailer Branch, 3101 Park Center
Drive, Alexandria Virginia 22302-1594. All written comments will be
open to public inspection at the office of the Food and Consumer
Service during regular business hours (8:30 a.m. to 5 p.m., Monday
through Friday) in room 706, 3101 Park Center Drive, Alexandria,
Virginia.
FOR FURTHER INFORMATION CONTACT: Questions regarding this rulemaking
should be addressed to Suzanne Fecteau at the above address or by
telephone at (703) 305-2418.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This 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 and related Notice to 7 CFR part 3015 subpart V (48 FR 29115, June
24, 1983), this Program is excluded from the scope of the Executive
Order 12372 which requires inter-governmental consultation with State
and local officials.
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). William E.
Ludwig, the Administrator of the Food and Consumer Service, has
certified that this proposed rule will not have a significant economic
impact on a substantial number of small entities. This action may have
a significant effect on a limited number of small entities found to be
in violation of State or Federal laws. [[Page 25626]]
Paperwork Reduction Act
This rule does not contain reporting or recordkeeping requirements
subject to approval by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1980 (44 U.S.C. 3507).
Executive Order 12778
This 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 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. In the Food Stamp Program the administrative
procedures are as follows: (1) For Program benefit recipients--State
administrative procedures issued pursuant to 7 U.S.C. 2020(e)(10) and 7
CFR 273.15; (2) for State agencies--administrative procedures issued
pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for rules related to
non-quality control (QC) liabilities) or Part 283 (for rules related to
QC liabilities); (3) for Program retailers and wholesalers--
administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7
CFR 278.8.
Background
This rule would expand the use and disclosure of information
provided by applicants and firms participating as authorized retail
food stores or wholesale food concerns in the FSP. The provisions of
this rule will be effective retroactively to August 15, 1994, when Pub.
L. 103-296 was enacted, and will be implemented 30 days after the final
rulemaking is published.
Current regulations restrict FCS' ability to share information
provided by retailers and wholesalers participating in the Food Stamp
Program. EINs and SSNs may only be shared with Federal employees whose
duties or responsibilities require access to those numbers for the
administration and enforcement of the Food Stamp Act of 1977, as
amended. The use of EINs and SSNs is only allowed for the maintenance
of a list of specific individuals and firms that have been sanctioned
or convicted of Food Stamp Program violations under sections 12 (Civil
Money Penalties and Disqualification) and 15 (Violations and
Enforcement) of the Food Stamp Act. Other information provided by
retailers (e.g. application information, sales and redemption data) can
be shared with other Federal or State agencies only for the purposes of
administration or enforcement of the Food Stamp Program, the Special
Supplemental Food Program for Women, Infants and Children (WIC), and
for audits by the General Accounting Office.
Use and Disclosure of Information Provided by Retail Food Stores and
Wholesale Food Concerns
Section 9(c) of the Food Stamp Act of 1977, as amended (the Act) (7
U.S.C. 2018(c)) governs the authorization of retailers and wholesalers
to participate in the Food Stamp Program, based on information those
retailers and wholesalers provide FCS. Section 203 of the Food Stamp
Program Improvements Act of 1994, Pub. L. 103-225 (108 Stat. 106)
amends section 9(c) of the Act, to expand the use and disclosure of
information provided by applicant and participating retail and
wholesale food concerns, such as food stamp redemption data, as well as
information about ownership (excluding EINs and SSNs) and sales data
included on the initial application, in addition to information
required to be submitted for purposes of determining whether a firm
continues to qualify. As authorized by the amendment to section 9(c),
this rule would allow disclosure of this information to other Federal
and State law enforcement and investigative agencies for the purposes
of administering and enforcing the Food Stamp Act, as well as the
enforcement of any other Federal or State laws and the regulations
issued under this Act and such laws.
This rule proposes other safeguards in addition to new penalties
for unauthorized use and disclosure of information. It would limit the
use and disclosure of this information to the purpose of effectively
administering and enforcing the Food Stamp Act or for investigating
violations of other State or Federal laws, or enforcement of such laws
and regulations. Federal and State agencies authorized to have access
to this information would be required to submit a request in writing.
The request must set forth specifically which law is being enforced and
must also demonstrate how the requested information is relevant to the
enforcement of that law. The Department will base its determination
whether or not to disclose the requested information upon such a
showing by the requesting agency. The Department expects such
information to be requested most frequently by taxation authorities
such as the Internal Revenue Service and State income and sales tax
agencies. The information may also be useful to law enforcement and
investigative agencies which seek to verify the income and sources of
income of a retailer.
In addition to responding to specific requests from other Federal
and State agencies, FCS would periodically initiate cross matches of
retailer data against other agencies' files. The purpose of these
matches is to allow the verification of information reported by
applicants and participating firms, and to assist in the administration
and enforcement of the Food Stamp Act and other Federal and State laws.
The Food Stamp Improvements Act of 1994 also amends section 9(c) of
the Food Stamp Act to provide criminal penalties for the misuse of any
information obtained from retail food stores and wholesale food
concerns. This would apply to any person who publishes, divulges,
discloses, or makes this information known in any manner or to any
extent not authorized by Federal law or regulations. A penalty which
includes a fine of not more than $1,000, or imprisonment of not more
than one year, or both, is established by law and is reflected in this
proposed rulemaking.
Cross-Matching of Social Security Account Number Information and
Employer Identification Number Information Maintained by the Department
of Agriculture
Section 1735 of the Food, Agriculture, Conservation, and Trade Act
of 1990 (Pub. L. No. 101-624, 104 Stat. 3359) amended section
205(c)(2)(C) of the Social Security Act (42 U.S.C. 405(c)(2)(C)) and
added section 6109(f) to the Internal Revenue Code of 1986 (26 U.S.C.
6109(f)) to permit the Secretary of Agriculture to collect the Social
Security numbers of individual retailers who apply for FSP
authorization and those of the officers of corporate applicants, as
well as employer identification numbers assigned by the Internal
Revenue Service. Section 316 of the Social Security Independence and
Program Improvements Act of 1994 (Pub. L. No. 103-296, 108 Stat. 1464)
expands FCS' authority to share the EINs and SSNs of food stamp
retailers and wholesalers with other agencies or instrumentalities of
the United States for verification purposes to more effectively
administer and enforce the Food Stamp Program, as well as other Federal
laws. [[Page 25627]]
This rulemaking proposes to permit the Department to share the list
of names and identifying numbers of food concerns with other Federal
agency personnel who otherwise have access to EINs and SSNs, for the
purpose of effectively administering and enforcing the Food Stamp Act
or for investigating violations of other Federal laws, or enforcement
of such laws. The use of such lists would be limited to cross-matching
employer identification number information and Social Security account
number information maintained by the Department of Agriculture for the
purpose of verifying information provided by applicants and firms
participating in the Food Stamp Program.
Under the amendments, the Department must restrict access to
officers and employees of the United States government whose duties or
responsibilities require access to EINs and SSNs. To obtain such
information, a Federal agency must already have access to EINs and
SSNs, and must submit a written request that demonstrates the need for
such information. The applicable law shall be clearly identified as the
relevant basis for a request to assist FCS in determining whether
retailer data can be released to the requesting agency. The Department
anticipates such information to be requested most frequently by the
Internal Revenue Service. The information may also be useful to other
Federal agencies which seek to verify the income and sources of income
for a given retailer, in conjunction with an EIN or SSN.
In addition to responding to specific requests from other Federal
agencies under this proposed rule, FCS would periodically initiate
cross matches of retailer data against other Federal agencies' files.
The purpose of these matches is to allow the verification of
information reported by applicant and participating firms, and to
assist in the administration and enforcement of other Federal laws.
The provisions of this rule do not extend to private actions
against the authorized entities, either contemplated or ongoing, as
private litigants are not law enforcement agencies.
Technical Correction
This rule proposes to implement a technical change to correct a
regulatory reference error in Sec. 278.1 (q)(iv), whereby a paragraph
dealing with privacy that should have been referenced as ``278.1 (q)''
was mistakenly referenced as ``278.1 (s)''. This correction does not
change the intent of this provision.
Finally, it is anticipated that changes to Department of Treasury
references used in this proposed rule will be made in the final rule to
reflect changes made by the Department of Treasury in a proposed rule
dealing with information sharing that was printed in the Federal
Register on May 10, 1995.
List of Subjects
7 CFR Part 278
Administrative practice and procedure, Banks, Banking, Claims, Food
stamps, Groceries--retail, Groceries, General line--wholesaler,
Penalties.
Accordingly, 7 CFR part 278 is proposed to be amended as follows:
1. The authority citation for 7 CFR part 278 continues to read as
follows:
Authority: 7 U.S.C. 2011-2032.
PART 278--PARTICIPATION OF RETAIL FOOD STORES, WHOLESALE FOOD
CONCERNS AND INSURED FINANCIAL INSTITUTIONS
2. In Sec. 278.1:
a. The introductory text of paragraph (q) is revised;
b. Paragraphs (q)(1) and (q)(2) are redesignated as paragraphs
(q)(2) and (q)(3), respectively, and a new paragraph (q)(1) is added;
c. Newly redesignated paragraphs (q)(2)(i), (q)(2)(ii), (q)(3)(i),
and (q)(3)(ii) are revised;
d. Newly redesignated paragraph (q)(2)(iii) is amended by adding
after the word ``Department'' in the first sentence the words ``or any
agency or instrumentality of the United States'' and by removing the
designation ``(c)(2)'' following the references to ``Sec. 301.6109-2''
and ``(26 CFR Sec. 301.6109-2)'';
e. Newly redesignated paragraph (q)(2)(iv) is amended by adding
after the word ``Department'' the words ``or maintained by any agency
or instrumentality of the United States'', by removing the references
to ``Sec. 278.1(s)(1)(ii)'' and ``Sec. 278.1 (q)(1)(iv)'' and adding in
their place references to ``paragraph (q)(2)(ii) of this section'' and
``paragraph (q)(2)(iv) of this section'', and by removing the
designation ``(d)'' following the references to ``Sec. 301.6109-2'' and
``(26 CFR 301.6109)'';
f. Newly redesignated paragraph (q)(2)(v) is amended by removing
the designation ``(e)'' after the references to ``Sec. 301.6109-2'' and
``(26 CFR 301.6109-2)'';
g. Newly redesignated paragraph (q)(3)(iv) is amended by removing
the reference ``Sec. 278.1(q)(2)(iv)'' and adding in its place the
reference ``paragraph (q)(3)(iv) of this section''; and
h. A new paragraph (q)(4) is added. The revisions and additions
read as follows:
Sec. 278.1 Approval of retail food stores and wholesale food concerns.
* * * * *
(q) Safeguarding privacy. With the exception of EINs and SSNs, the
use and disclosure of the contents of an initial application or other
information required to be submitted to determine whether an applicant
continues to qualify, including ownership information and sales and
redemption data provided by retail food stores and wholesale concerns
by Federal and State law enforcement and investigative agencies, is
limited to the purposes of administering or enforcing the Food Stamp
Act or any other Federal or State law, and the regulations issued under
the Food Stamp Act or such other law. Such information may also be
disclosed to and used by State agencies that administer the Special
Supplemental Food Program for Women, Infants and Children (WIC). Such
purposes shall not exclude the audit and examination of such
information by the Comptroller General of the United States authorized
by any other provision of law. Any person who publishes, divulges,
discloses, or makes known in any manner or to any extent not authorized
by Federal law or regulations any information obtained under this
paragraph shall be fined not more than $1,000 or imprisoned not more
than 1 year, or both. Additional safeguards with respect to employee
identification numbers (EINs) are contained in paragraph (q)(2) of this
section. Additional safeguards with respect to Social Security numbers
(SSNs) are contained in paragraph (q)(3) of this section.
(1) Criteria for requesting information. Except for EINs and SSNs,
information provided by firms participating in the Food Stamp Program
may be requested by Federal or State law enforcement or investigative
agencies for purposes of administering or enforcing specified Federal
or State laws, or regulations issued under those laws. Release of
information under this paragraph shall be limited to information
relevant to the administration or enforcement of the specified laws and
regulations, as determined by FCS. The request must be submitted in
writing and must clearly indicate the specific provision of law or
regulations which would be administered or enforced by access to
requested information and the relevance of the information to those
purposes. [[Page 25628]] FCS may require additional information, if
needed to clarify a request. Requests under this paragraph are limited
to authorized entities authorized on and after August 15, 1994.
However, unauthorized firms redeeming food stamps in violation of the
Food Stamp Act, as amended, on and after August 15, 1994 shall be
subject to provisions of this Section.
(2) Employer identification numbers. (i) The Department may have
access to the EINs obtained pursuant to paragraph (b)(5) of this
section for the purpose of establishing and maintaining a list of the
names and EINs of the stores and concerns for use in determining those
applicants who previously have been sanctioned or convicted under
sections 9 and 12 of the Food Stamp Act of 1977, as amended, (7 U.S.C.
2018, 2021). The Department may share EINs with other Federal agencies
and instrumentalities if the Department determines that such sharing
would assist in verifying and matching such information against
information maintained by such other agency or instrumentality. Any
such information shared pursuant to this paragraph may be used by such
other agency or instrumentality for the purpose of effective
administration and enforcement of the Food Stamp Act of 1977, as
amended, or for the purpose of investigation of violations of other
Federal laws or enforcement of such laws. See Treas. Reg.
Sec. 301.6109-2 (26 CFR 301.6109-2).
(ii) The only persons permitted access to EINs obtained pursuant to
paragraph (b) of this section are officers and employees of the United
States who otherwise have access and whose duties or responsibilities
require access to the EINs for the administration or enforcement of the
Food Stamp Act of 1977, as amended, or for the purpose of investigation
of violations of other Federal laws or enforcement of such laws. See
Treas. Reg. Sec. 301.6109-2 (26 CFR 301.6109-2).
* * * * *
(3) Social Security numbers. (i) The Department may have access to
SSNs obtained pursuant to paragraph (b)(5) of this section for the
purpose of establishing and maintaining a list of names and SSNs for
use in determining those applicants who previously have been sanctioned
or convicted under section 12 and 15 of the Food Stamp Act of 1977, as
amended, (7 U.S.C. 2021 or 2024). The Department may use this
determination of sanctions and convictions in administering sections 9
and 12 of the Food Stamp Act of 1977 (7 U.S.C. 2018, 2021). The
Department may share SSNs with other Federal agencies and
instrumentalities if the Department determines that such sharing would
assist in verifying and matching such information against information
maintained by such other agency or instrumentality. Any such
information shared pursuant to this paragraph may be used for the
purpose of effective administration and enforcement of the Food Stamp
Act of 1977, as amended, or for the purpose of investigation of
violations of other Federal laws or enforcement of such laws.
(ii) The only persons permitted access to SSNs obtained pursuant to
paragraph (b) of this section are officers and employees of the United
States who otherwise have access and whose duties or responsibilities
require access to the SSNs for the administration or enforcement of the
Food Stamp Act of 1977, as amended, or for investigations of violations
of other Federal laws or enforcement of such laws.
* * * * *
(4) FCS initiated matches. Under the restrictions noted in
paragraph (q) of this section, FCS will periodically initiate cross
matches of retailer data against other Federal and State agencies'
files for the purpose of verifying information provided by applicant
and participating firms, and for the purposes of administering and
enforcing other Federal or State laws.
* * * * *
William E. Ludwig,
Administrator, Food and Consumer Service.
[FR Doc. 95-11785 Filed 5-11-95; 8:45 am]
BILLING CODE 3410-30-U
