[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13055]

Federal Register / Vol. 59, No. 102 / Friday, May 27, 1994 /

[[Page Unknown]]

[Federal Register: May 27, 1994]

                                                   VOL. 59, NO. 102

                                               Friday, May 27, 1994


Food and Nutrition Service

7 CFR Parts 271 and 278

[Amendment No. 354]


Food Stamp Program: Modifying the Limit on Civil Money Penalties 
for Trafficking in Benefit Redemption Instruments

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.


SUMMARY: The Omnibus Budget Reconciliation Act of 1993 includes several 
provisions which amend the Food Stamp Act of 1977, as amended (the 
Act). This final rule implements those nondiscretionary provisions 
pertaining to increased limits for civil money penalties for 
trafficking in benefit redemption instruments and for selling firearms, 
ammunition, explosives, or controlled substances for benefit redemption 
instruments. The intended effect of this rule is to raise the amounts 
of civil money penalties paid by authorized firms for the types of 
violations specified.

DATES: The provisions of this final rule are effective on October 1, 

FOR FURTHER INFORMATION CONTACT: Suzanne Fecteau, Coupon and Retailer 
Branch, Benefit Redemption Division, Food and Nutrition Service, 
Alexandria, Virginia, 22302, (703) 305-2419.



Executive Order 12866

    This final rule has been determined to be not significant for 
purpose of Executive Order 12866 and therefore has not been reviewed by 

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(s) to 7 CFR part 3015, subpart V (48 FR 29115, 
June 24, 1983, or 48 FR 54317, December 1, 1983, as appropriate, and 
any subsequent notices that may apply), this program is excluded from 
the scope of Executive Order 12372 which requires intergovernmental 
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 (Pub. L. No. 96-354). The 
Administrator of the Food and Nutrition Service has certified that this 
action does not have a significant economic impact on a substantial 
number of small entities. The rule would have almost no impact on the 
vast majority of authorized firms, most of which follow the program 
rules carefully.

Paperwork Reduction Act

    This rule does not contain recordkeeping or reporting requirements 
subject to review by the Office of Management and Budget under the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3507).

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 ``Effective Date'' paragraph 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. 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.
Public Participation and Justification for Less than a Thirty-day 
Effective Date
    This action is being finalized without prior notice or public 
comment under authority of 5 U.S.C. 553(b)(3)(A) and (B). The matters 
addressed by this rulemaking are nondiscretionary. The provisions in 
this rule have already been implemented and were effective on October 
1, 1993. Therefore, the Department has determined in accordance with 5 
U.S.C. 553(b) that Notice of Proposed Rulemaking and Opportunity for 
Public Comments is unnecessary and contrary to the public interest and, 
in accordance with 5 U.S.C. 553(d), finds that good cause exists for 
making this action effective prior to the date of publication.


    Section 344 of the Hunger Prevention Act of 1988, Pub. L. No. 100-
435, provided the Secretary with authority to impose a civil money 
penalty (CMP) of up to $20,000 per violation in lieu of a permanent 
disqualification of a firm for trafficking in food stamps or other 
program benefit instruments, if the Secretary determines that there is 
substantial evidence that the firm had an effective policy and program 
in effect to prevent trafficking violations. Section 1743 of the Food, 
Agriculture and Trade Act of 1990, Pub. L. No. 101-624, limited the CMP 
authority to $40,000 over a two-year period, and extended the same 
authority to firms which exchange firearms, ammunition, explosives or 
controlled substances for coupons. Current regulations at 7 CFR 
278.6(j) specify, in accordance with the Act, that such CMP's shall not 
exceed $20,000 for each violation, and shall not exceed $40,000 during 
a two-year period.
    Section 13943 of the Omnibus Budget Reconciliation Act of 1993 
(Pub. L. No. 103-66) further amends Section 12(b)(3)(B) of the Act 7 
U.S.C. 2021(b)(3)(B) to modify the monetary cap on CMPs by applying the 
$40,000 cap to each single investigation, rather than to a two-year 
period of time. Further, Section 13944 of Pub. L. No. 103-66 amends 
Section 12(b)(3)(C) of the Act to make the same modification to the 
$40,000 cap on CMPs for the sale of firearms, ammunition, explosives, 
or controlled substances for food stamps (or other benefit redemption 
    Accordingly, this rulemaking provides at 7 CFR 278.6 that a CMP in 
lieu of permanent disqualification for trafficking may not exceed 
$40,000 for all violations occurring during a single investigation. The 
$20,000 limit per trafficking violation in a single investigation 
remains unchanged. This rulemaking also makes a conforming change in 
the definition of trafficking at 7 CFR 271.2. by eliminating 
unnecessary wording.

List of Subjects

7 CFR Part 271

    Administrative practice and procedure, Food Stamps, Grant 
programs--social programs.

7 CFR Part 278

    Administrative practice and procedure, Banks, Banking, Claims, Food 
stamps, Groceries--retail, Groceries, General line--wholesalers, 
    Accordingly, 7 CFR Parts 271 and 278 are amended as follows:
    1. The authority citation for Parts 271 and 278 continues to read 
as follows:

    Authority: 7 U.S.C. 2011-2032

Sec. 271.2  [Amended]

    2. In Sec. 271.2, the definition of ``Trafficking'' is amended by 
removing the words ``the term is.''


    3. In Sec. 278.6, the first sentence of the introductory text of 
paragraph (j) is revised to read as follows:

Sec. 278.6  Disqualification of retail food stores and wholesale food 
concerns, and imposition of civil money penalties in lieu of 

* * * * *
    (j) Amount of civil money penalty in lieu of permanent 
disqualification for trafficking. A civil money penalty assessed in 
accordance with Sec. 278.6(i) shall not exceed $20,000 for each 
violation and shall not exceed $40,000 for all violations occurring 
during a single investigation. * * *
* * * * *
    4. In Sec. 278.9, a new paragraph (j) is added to read as follows:

Sec. 278.9  Implementation of amendments relating to the participation 
of retail food stores, wholesale food concerns and insured financial 

* * * * *
    (j) Amendment No. 354. The program changes made to Sec. 271.2 and 
Sec. 278.6 by this amendment are effective October 1, 1993.

    Dated: May 23, 1994.
William E. Ludwig,
Administrator Food and Nutrition Service.
[FR Doc. 94-13055 Filed 5-26-94; 8:45 am]