[Federal Register Volume 64, Number 140 (Thursday, July 22, 1999)]
[Proposed Rules]
[Pages 39432-39442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18621]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 253 and 254
RIN 0584-AC65
Food Distribution Program on Indian Reservations:
Disqualification Penalties for Intentional Program Violations
AGENCY: Food and Nutrition Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Food and Nutrition Service is proposing amendments to the
Food Distribution Program on Indian Reservations (FDPIR) regulations at
7 CFR Parts 253 and 254 in response to an audit recommendation by the
Department of Agriculture's Office of Inspector General (OIG). The
proposed changes are intended to improve program integrity and promote
consistency with the Food Stamp Program. The rule would define
intentional program violations, establish penalties for them, and
require Indian Tribal Organizations and State agencies that administer
FDPIR to take appropriate action on suspected cases of intentional
program violations. It would also address the establishment and
collection of claims against households for overissuances under FDPIR,
and make technical changes to Part 253 to correct erroneous regulatory
references.
DATES: Send your comments to reach us on or before September 20, 1999.
Comments received after the above date will not be considered in making
our decision on the proposed rule.
ADDRESSES: You can mail or hand-deliver comments to Lillie F. Ragan,
[[Page 39433]]
Assistant Branch Chief, Household Programs Branch, Food Distribution
Division, Food and Nutrition Service, U.S. Department of Agriculture,
Room 510, 3101 Park Center Drive, Alexandria, Virginia 22302-1594.
FOR FURTHER INFORMATION CONTACT: Lillie F. Ragan at the above address
or telephone (703) 305-2662.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Procedural Matters
III. Background and Discussion of Proposed Rule
I. Public Comment Procedures
Your written comments on the proposed rule should be specific,
should be confined to issues pertinent to the proposed rule, and should
explain the reason for any change you recommend. Where possible, you
should reference the specific section or paragraph of the proposal you
are addressing. Comments receive after the close of the comment period
(see DATES) will not be considered or included in the Administrative
Record for the final rule.
Comments, including names, street addressees, and other contact
information of respondents, will be available for public review at the
address above during regular business hours (8:30 a.m. to 5 p.m.),
Mondays through Fridays, except Federal holidays.
II. Procedural Matters
Clarity of the Regulations
Executive Order 12866 requires each agency to write regulations
that are simple and easy to understand. President Clinton's
Presidential memorandum of June 1, 1998, requires us to write new
regulations in plain language. We invite your comments on how to make
these proposed regulations easier to understand, including answers to
questions such as the following:
(1) Are the requirements in the proposed regulations clearly
stated?
(2) Do the proposed regulations contain technical language or
jargon that interferes with their clarity?
(3) Does the format of the proposed regulations (grouping and order
of sections, use of heading, paragraphing, etc.) aid or reduce their
clarity?
(4) Would the regulations be easier to understand if they were
divided into more (but shorter) sections?
(5) Is the description of the proposed regulation in the preamble
section entitled ``Background and Discussion of the Proposed Rule''
helpful in understanding the proposed regulations? How could this
description be more helpful in making the proposed regulations easier
to understand?
Executive Order 12866
This rule has been determined to be not significant for purposes of
Executive Order 12866. Therefore, it has not been reviewed by the
Office of Management and Budget.
Public Law 104-4
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 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
Food and Nutrition Service generally must prepare a written statement,
including a cost-benefit analysis, for proposed and final rules with
``Federal mandates'' that may result in expenditures by State, local,
or tribal governments, in the aggregate, or by 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 Food and
Nutrition Service to identify and consider a reasonable number of
regulatory alternatives and adopt the least costly, most 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 more in any one
year. Therefore, this rule is not subject to the requirements of
Sections 202 and 205 of the UMRA.
Executive Order 12372
The programs addressed in this action are listed in the Catalog of
Federal Domestic Assistance under Nos. 10.550 and 10.570, and for the
reasons set forth in the final rule in 7 CFR 3015, Subpart V, and
related Notice (48 FR 29115), are included in 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 (5 U.S.C. 601-612). The
Administrator of the Food and Nutrition Service has certified that this
action will not have a significant impact on a substantial number of
small entities. Indian Tribal Organizations and State agencies that
administer FDPIR, and program participants will be affected by this
rulemaking, but the economic effect will not be significant.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. The 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.
Paperwork Reduction Act
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 (44 U.S.C. 3507).
II. Background and Discussion of the Proposed Rule
The Food and Nutrition Service (FNS) is proposing amendments to the
regulations for the Food Distribution Program on Indian Reservations
(FDPIR). These changes would define intentional program violations
(IPV), establish penalties for them, and require Indian Tribal
Organizations (ITOs) and State agencies that administer FDPIR to take
appropriate action on suspected cases of IPV. This proposed rule was
prompted, in part, by an audit recommendation by the Department of
Agriculture's Office of Inspector General (OIG). In its audit of FDPIR,
OIG randomly sampled participating households on 30 reservations and
found that a number of the sample households had income that exceeded
the eligibility guidelines. In many cases, the households failed to
report earned income at certification, or changes in income during the
certification period. OIG also found that a number of households were
participating in FDPIR and the Food Stamp Program (FSP) at the same
time, which is prohibited by FDPIR and FSP regulations. OIG's findings
and recommendations are found in Audit Report No. 27601-6-KC, which was
released on June 18, 1997.
OIG recommended to FNS that it change FDPIR regulations to require
ITOs and State agencies to take appropriate action on suspected cases
of IPV. OIG further recommended that FNS pattern this requirement on
FSP regulations at 7 CFR 273.16.
FNS agrees with OIG's recommendation. The FDPIR operations
[[Page 39434]]
manual currently used by ITOs and State agencies, FNS Handbook 501,
requires the disqualification of individuals or households for specific
violations. Section 5662 of the handbook requires the disqualification
of households that have willfully misrepresented their circumstances to
obtain more benefits than they were eligible to receive, while Section
5663 requires the disqualification of individuals or households that
have been convicted of fraud by a court. However, these
disqualification provisions are not found in the FDPIR regulations.
Therefore, FNS is proposing changes to the FDPIR regulations that would
incorporate these provisions, with some modification to promote
conformance with FSP. As proposed, the definition of ``intentional
program violation'' would incorporate the basic concept of ``willful
misrepresentation of household circumstances'' contained in Section
5662. The definition, which is discussed in more detail below, also
borrows a FSP provision that would include as an IPV any violation of a
Federal statute or regulation relating to the acquisition or use of
commodities.
In regard to Section 5663 of the handbook, the proposed rule
instructs State agencies to apply the disqualification penalties
imposed by a court of appropriate jurisdiction instead of the penalties
specified in the proposed rule. This requirement is discussed below in
the section of the preamble entitled ``Disqualification Penalties.''
Upon finalization of this rulemaking, FNS Handbook 501 will be revised
to be consistent with regulatory provisions.
In addition to defining IPV, the proposed rule would require ITOs/
State agencies to take action on suspected cases of IPV, impose
standardized disqualification penalties, conduct appeal hearings, and
issue claims against households, as appropriate. The specific
provisions are discussed in detail below. To make these changes, we are
proposing the redesignation of 7 CFR 253.8 and 253.9 as Sections 253.10
and 253.11, respectively, and the addition of two new sections--Section
253.8, Administrative disqualification procedures for intentional
program violation, and Section 253.9, Claims against households.
In response to OIG's recommendation, we developed the provisions of
this proposed rule to be generally consistent with FSP IPV provisions
at 7 CFR 273.16. However, FDPIR and FSP differ significantly in regard
to program size, administrative complexity, and both administrative and
benefit cost. This rulemaking reflects these differences. The proposed
amendments would create an administrative disqualification system under
FDPIR that is less complex and labor-intensive than the system used
under FSP. For additional information on FSP provisions, please refer
to the preambles of the following rulemakings: proposed rule of June
22, 1982 (47 FR 27038), final rule of February 15, 1983 (48 FR 6836),
proposed rule of August 29, 1994 (59 FR 44343), and final rule of
August 22, 1995 (60 FR 43513).
In the discussion and regulatory text below, we have used the term
``State agency,'' as defined at 7 CFR 253.2, to include ITOs authorized
to administer FDPIR.
1. Treatment of Disqualified Household Members
Current FDPIR regulations at 7 CFR 253.7(e)(3) specify that
individuals who are disqualified from participation in FSP for fraud
are ineligible to participate in FDPIR until the period of
disqualification expires. This section also addresses the treatment of
their resources and income and how benefits are determined for the
remaining members of their household. To be consistent with FSP
regulations, FNS is proposing a revision to Section 253.7(e)(3)(i) to
change ``fraud'' to ``IPV.''
FNS is also proposing to redesignate Section 253.7(e)(3) as Section
253.7(f) and add a provision specifying that individuals who are
determined by the State agency to have committed an IPV under FDPIR are
also ineligible to participate in FDPIR until the period of
disqualification expires. This section will also incorporate a
provision from FNS Handbook 501 that allows ITOs to disqualify
households, under certain circumstances, for failure to pay an
overissuance claim. Section 5660 of the handbook specifies the
circumstances under which a disqualification may be imposed for this
reason.
The proposed rule would also redesignate Section 253.7(e)(3)(ii) as
Section 253.7(f)(2). This provision, which concerns the treatment of
income and resources of the disqualified household member, would also
apply to individuals disqualified for an IPV under FDPIR.
2. Definition of Intentional Program Violation
FNS is proposing to establish a definition of ``intentional program
violation'' at newly added Section 253.8(a). This definition is
consistent with the definition used under FSP. As proposed, an
intentional program violation occurs whenever an individual
intentionally makes a false or misleading statement, or misrepresents,
conceals, or withholds facts in order to obtain commodities under FDPIR
which the households is not entitled to receive. An intentional program
violation is also any act that violates any Federal statute or
regulation relating to the acquisition or use of commodities. A program
violation is considered ``intentional'' if the individual committed the
act knowingly, willfully, and with deceitful intent.
3. Initiating Administrative Disqualification Procedures
We are proposing at newly added Section 253.8(e)(3) that the State
agency must attempt to substantiate all suspected cases of IPV. An IPV
is considered to be substantiated when the State agency has clear and
convincing evidence that demonstrates that an individual has
intentionally committed one or more acts of IPV, as defined above. The
State agency would be required to initiate the administrative
disqualification procedures (i.e., issue a notice of disqualification)
within 10 days of substantiating that an IPV had occurred, even if the
individual is not currently participating in, or eligible for, FDPIR
(newly added Section 253.8(e)(4)). The disqualification must begin with
the next scheduled distribution of commodities that allows an advance
notice period of at least 10 days, unless the individual requests a
fair hearing (newly added Section 253.8(f)(1)).
The proposed rule, at newly added Section 253.8(e)(6), would also
require State agencies to refer substantiated cases of IPV to Federal,
State, or local authorities for prosecution under applicable statutes.
We recognize that prosecutors may reject certain cases for prosecution,
e.g., cases in which the dollar value of the overissuance resulting
from the IPV is below a specific amount. Therefore, we propose to allow
State agencies to refer only those IPV cases that meet the prosecutors'
criteria, when the State agencies have conferred with their legal
counsel and prosecutors and determined the criteria for acceptance for
possible prosecution.
4. Disqualification Penalties
FNS is proposing the following disqualification penalties at newly
added Section 253.8(b):
12 months for the first violation;
24 months for the second violation; and
Permanent disqualification for the third violation.
[[Page 39435]]
These penalties are consistent with those imposed by Section 6(b)
of the Food Stamp Act of 1977, 7 U.S.C. 2015(b), as amended by Section
813 of the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (PRWORA) (Pub. L. 104-193). In addition, we are proposing
the adoption of FSP policy whereby only the individual found to have
committed the IPV, and not the entire household, is disqualified (newly
added Section 253.8(c)).
In instances where an IPV case is prosecuted and a court of
appropriate jurisdiction imposes a disqualification period, we are
proposing that the State agency must apply the court-ordered penalty
instead of the proposed penalties above (newly added Section
253.8(h)(5)).
5. Notification Requirements
The State agency must take several actions simultaneously when it
discovers that a household willfully misrepresented its circumstances
or intentionally failed to report a change, as required by 7 CFR
253.7(c), and, as is often the case, an overissuance occurred. It must
begin the adverse action process to decrease or terminate benefits so
that the benefit level accurately reflects the household's current
circumstances. It must also issue a demand letter for repayment of the
overissuance. Finally, the State agency must initiate the
administrative disqualification process. To assist the reader in
understanding the required time frames for these actions, we have
included the following chart.
BILLING CODE 3410-30-P
[[Page 39436]]
[GRAPHIC] [TIFF OMITTED] TP22JY99.019
BILLING CODE 3410-30-C
[[Page 39437]]
Where possible, the State agency may combine the various notices
addressed above. Theses notices often may be addressed to different
household members since the notice of disqualification is addressed to
an individual, while the notice of adverse action and the demand letter
for repayment of the overissuance is addressed to the household.
However, in some cases the addressee may be the same. This is the case
when the individual to be disqualified is the head of household--the
same addressee for the notice of adverse action and the demand letter
for the repayment of the overissuance.
FNS is proposing, at newly added Section 253.8(e)(2), that the
State agency must inform the household in writing of the
disqualification penalties for IPV each time it applies for benefits,
including recertifications.
Newly added Section 253.8(e)(4) would also require the State agency
to provide a notice of disqualification to an individual determined to
have committed an IPV. The State agency must provide this notice within
10 days of substantiating the IPV, as indicated above in Section 3 of
this preamble. The requirements for the notice are specified at newly
added Section 253.8(f). The notification must be mailed, or otherwise
provided to the individual, so as to allow an advance notice period of
at least 10 days before the date the disqualification is to take
effect. The notice must conform to the requirements at Section
253.7(b)(3)(iii)(C) for notices of adverse action, including a
statement advising the individual of his right to appeal the
disqualification through a fair hearing and to continue to receive
commodities during the appeal process.
The notice of disqualification only addresses the action to
disqualify the individual for the substantiated IPV. It is still
necessary for the State agency to issue a notice of adverse action, in
accordance with Section 253.7(b)(3)(iii), prior to any action to reduce
or terminate a household's benefits so that the benefit level
accurately reflects the household's current circumstances.
FNS is proposing several changes to the provisions for notices of
adverse action at Section 253.7(b)(3)(iii). These changes would conform
the adverse action requirements to those proposed for the notice of
disqualification. The first change, at Section 253.7(b)(3)(iii)(A),
would require that the State agency issue a notice of adverse action
within 10 days of determining that the adverse action is warranted. We
believe that State agencies should act timely in instances where it is
determined that a household is ineligible or receiving an incorrect
level of commodities. The requirement to issue an adverse action notice
within 10 days will ensure that adverse action determinations are acted
upon in a timely manner. The proposed rule would also require that the
adverse action take effect with the next scheduled distribution of
commodities that follows the expiration of the advance notice period,
unless the household requests a fair hearing. This provision is
consistent with the handling of disqualifications and would ensure that
adverse actions are implemented in a timely manner.
Section 253.7(b)(3)(iii)(B) addresses the required time frames for
the advance notice period for the notice of adverse action. It
specifies the requirements for cases that involve joint applications,
as well as regular application processing cases. Section 253.7(f)
discusses the State agency option to jointly process applications for
FDPIR and public assistance or general assistance. The provisions under
Section 253.7(b)(3)(iii)(B) for the advance notice period for joint
application processing cases would not change. However, we are
proposing a revision to the advance notice period for regular
application processing cases. Currently, the notice for these cases
must include an advance notice period that allows at least 10 and no
more than 20 days to elapse before the adverse action takes effect. The
proposed rule would require a minimum advance notice period of 10 days,
but no maximum time frames would be imposed. An advance notice period
of at least 10 days affords the individual sufficient time to respond
to the adverse action notice and conforms to the advance notice period
time frames used under the Food Stamp Program. Upon the expiration of
the 10-day advance notice period, the adverse action will take effect
unless an appeal is requested. The proposed rule would also substitute
the word ``issued'' for the word ``mailed,'' since State agencies are
not limited to using the mail system for the issuance of notices.
We are also proposing several changes at Section
253.7(b)(3)(iii)(C) relating to the requirements of the notice of
adverse action. First, this rule would require that the notices include
a statement advising the household that it will be liable for any
overissuances received while awaiting a fair hearing, if the hearing
official's decision is adverse to the household. We believe households
should be aware that, although they have a right to continue to receive
benefits pending the fair hearing, they will be held responsible for
repaying those benefits if the fair hearing decision is not in their
favor. Another requirement is a statement specifying the expiration
date of the advance notice period. This date must allow at least 10
days from the issuance date of the notice of adverse action notice to
the date upon which the action becomes effective. Households need to
clearly understand the specific date by which they must act in order to
appeal an adverse action. We have also revised Section
253.7(b)(3)(iii)(C) to conform to the concepts of plain language by
creating a codified list of the notice requirements.
FNS is also proposing that State agencies must provide households
with a demand letter for repayment of overissuances, including those
that resulted from an IPV. The demand letter must be issued at the same
time the notice of adverse action is issued to the household (newly
added Section 253.7(b)(3)(iii)(E)). It may be combined with the notice
of adverse action.
6. Appeal of the Disqualification
The proposed rule would require, at newly added Section
253.8(g)(1), that an individual subject to a disqualification must be
given the opportunity to appeal the disqualification through a fair
hearing. The fair hearing provisions at 7 CFR 253.7(g) (to be
redesignated as Section 253.7(h)) would be revised to include appeals
of disqualifications, but the basic provisions of this section would
not change. FNS believes that these fair hearing provisions provide
adequate protection to the individual in regard to time frames for
action by the State agency, the household's request for a delay of the
hearing, requirements for requesting and denying a hearing,
requirements for hearing officials, and the household's rights prior to
and during the hearing.
To ensure that the individual fully understands the implications of
the fair hearing, FNS is proposing that specific information be added
to the notification of time and place of the hearing required under 7
CFR 253.7(g)(7) (to be redesignated as Section 253.7(h)(7)). The
additional notice requirements, which can be found at newly added
Section 253.8(g)(2), are: 1) a warning that if the individual fails to
appear at the hearing, the hearing decision will be based solely on the
information provided by the State agency; and 2) a statement that the
hearing does not prevent the Tribal, State, or Federal Government from
prosecuting the individual in a civil or criminal court action, or from
collecting any overissuance(s).
[[Page 39438]]
FNS is also proposing a change to the provisions at 7 CFR
253.7(g)(11) (to be redesignated as Section 253.7(h)(11)) to improve
the notice requirements for fair hearing decisions. First, the rule
would establish a time frame for issuing the decision notice. State
agencies would be required to inform the individual in writing of the
decision within 10 days of the date the fair hearing decision is
issued. The rule would also specify the requirements for hearing
decision notices that relate to disqualifications. The notice must
include the reason for the decision, the date the disqualification will
take effect, and the length of the disqualification (i.e., 12 months;
24 months; or permanent). Finally, if the individual is no longer
participating, the notice must inform the individual that the period of
disqualification will be delayed until the individual reapplies for and
is determined eligible for FDPIR benefits.
The State agency would also be required to notify (in writing) the
remaining household members if the household was no longer eligible or
the household's benefits changed as a result of the disqualification.
Procedures for the treatment of income and resources of the
disqualified member are discussed at 7 CFR 253.7(e)(3)(ii) (to be
redesignated as Section 253.7(f)(2)).
As proposed at newly added Section 253.8(h)(2), the State agency
would be required to follow the decision of the fair hearing official.
No additional appeal procedure exists within FDPIR if a
disqualification is upheld by the fair hearing official. The
individual, however, has the right to appeal to a court having
appropriate jurisdiction. The court of appropriate jurisdiction could
stay the period of disqualification or provide other injunctive remedy.
As discussed earlier, the household is liable for the value of any
overissued commodities received while awaiting the outcome of the fair
hearing. Therefore, following the issuance of the fair hearing
decision, the State agency must revise the demand letter to include the
amount of overissued commodities provided to the household during the
appeal process, unless the fair hearing decision specifically requires
the cancellation of the claim (new paragraph (11)(iv) at redesignated
Section 253.7(h)). The State agency must also advise the household that
collection action on the claim will continue, in accordance with FNS
Handbook 501, unless suspension is warranted.
7. Applying the Disqualification Penalty
FNS is proposing at newly added Section 253.8(h)(1) that, if the
individual does not request a fair hearing, the disqualification period
must begin with the next scheduled distribution of commodities which
follows the expiration of the advance notice period of the notice of
adverse action. If the commodities are normally made available to the
household within a specific period of time, e.g., from the first day of
the month through the tenth day of the month, the effective date of the
disqualification will be the first day of that period. The effective
date for the disqualification must be specified in the notice of
disqualification (newly added Section 253.8(f)(2)).
In instances where the individual requested a fair hearing and the
hearing official upheld the disqualification, newly added Section
253.8(h)(2) of the proposed rule would require that the
disqualification period begin the next scheduled distribution which
follows the date the hearing decision is issued. If the commodities are
normally made available to the household within a specific period of
time, e.g., from the first day of the month through the tenth day of
the month, the effective date of the disqualification will be the first
day of that period.
The individual's current eligibility status for FDPIR is not a
factor in imposing the disqualification penalty. The State agency must
proceed with imposition of the disqualification penalty even if the
individual is not certified to participate in FDPIR at the time the
disqualification penalty is to begin. Once a disqualification penalty
has begun, it continues without interruption for the duration of the
penalty period, i.e., 12 months, 24 months, or permanent (newly added
Section 253.8(h)(3)). The disqualification period cannot be interrupted
or shortened by a change in the eligibility of the disqualified
member's household.
As proposed at newly added Section 253.8(h)(4), the same act of
intentional program violation continued over a period of time cannot be
separated so that more than one penalty can be imposed. For example, a
household intentionally fails to report that a household member left
the household, resulting in an overissuance of benefits for 5 months.
Although the violation occurred over a period of 5 months, only one
penalty will apply to this single act of intentional program violation.
8. Claims Against Households
The regulations at Parts 253 and 254 do not address the
establishment of claims against households for overissuances. However,
claims procedures are addressed in FNS Handbook 501 in Chapter V,
Certification Procedures, Section 6, State Agency Claims Procedure
Against Households. FNS is proposing the addition of new Section 253.9,
Claims against households, which would require State agencies to
establish and collect claims against households as specified in FNS
Handbook 501. FNS Handbook 501 includes the criteria for establishing
claims, the method for calculating claims, procedures for collecting
claims, and provisions for the disqualification of households for
failure to pay a claim.
Newly added Section 253.9 would also stipulate that all adult
household members are jointly and separately liable for any
overissuance of program benefits to the household, even if they are not
currently eligible for, or participating in, FDPIR. Therefore, in the
case of an IPV disqualification, the disqualified member's household
would remain responsible for repayment of the amount of the
overissuance resulting from the IPV.
The proposed rulemaking would also add the definition of
``overissuance'' to Sections 253.2 and 254.2, respectively.
``Overissuance'' would mean the dollar value of commodities issued to a
household that exceeds the dollar value it was eligible to receive.
9. Technical Changes
FNS is also proposing technical changes to Part 253 to correct
erroneous regulatory references. On April 2, 1982, the Department
published a final rule (47 FR 14135) that redesignated the contents of
Part 283, Subchapter C (Food Stamp Program), in its entirety, as
Subchapter B (Food Distribution Program) and renumbered it as Part 253.
Some of the regulatory references to Part 283 that were contained in
the newly designated Part 253 were never changed. This rulemaking would
amend Part 253 to revise these and other incorrect regulatory
references wherever they appear.
List of Subjects
7 CFR Part 253
Administrative practice and procedure, Food assistance programs,
Grant programs, Social programs, Indians, Reporting and recordkeeping
requirements, Surplus agricultural commodities.
7 CFR Part 254
Administrative practice and procedure, Food assistance programs,
Grant programs, Social programs, Indians, Reporting and recordkeeping
[[Page 39439]]
requirements, Surplus agricultural commodities.
Accordingly, 7 CFR Parts 253 and 254 are proposed to be amended as
follows:
PART 253--ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR
HOUSEHOLDS ON INDIAN RESERVATIONS
1. The authority citation for Part 253 is revised to read as
follows:
Authority: 91 Stat. 958 (7 U.S.C. 2011-2032).
2. In Sec. 253.2, redesignate paragraphs (f) through (i) as
paragraphs (g) through (j), respectively, and add new paragraph (f) as
follows:
Sec. 253.2 Definitions.
* * * * *
(f) Overissuance means the dollar value of commodities issued to a
household that exceeds the dollar value of commodities it was eligible
to receive.
* * * * *
Sec. 253.5 [Amended]
3. In Sec. 253.5:
a. Amend paragraph (a)(1) by removing the reference ``Sec. 253.9''
and adding, in its place, the reference ``part 250 of this chapter'';
b. Amend paragraph (a)(2)(vii) by removing the reference ``part 283
of this subchapter'' and adding, in its place, the words ``this part'';
c. Amend paragraph (d)(1) by removing the references
``Sec. 283.7(a)(2) and (b)(3)'' and adding, in its place, the
references ``Sec. 253.7(a)(2) and (b)(3)'', and by removing the
reference ``Sec. 283.7(c)'' and adding, in its place, the reference
``Sec. 253.7(c)'';
d. Amend paragraph (k)(1) by removing the reference ``Sec. 283.9(g)
of this part'' and adding, in its place, the reference
``Sec. 253.11(g)'';
e. Amend paragraph (k)(2) by removing the reference ``Sec. 283.4''
and adding, in its place, the reference ``Sec. 253.4'';
f. Amend paragraph (l)(1)(iii) by removing the reference
``Sec. 283.5(k) or Sec. 283.9(g)'' and adding, in its place, the
reference ``paragraph (k) of this section or Sec. 253.11(g)''; and
g. Amend paragraph (l)(3)(i) by removing the reference
``Sec. 283.4(d)(2)'' and adding, in its place, the reference
``paragraph (m) of this section'', and removing the reference
``Sec. 283.5'' and adding, in its place, the reference
``Sec. 253.4(e)(2)''.
Sec. 253.6 [Amended]
4. In Sec. 253.6:
a. Amend paragraph (a)(3) by removing the reference
``Sec. 283.7(a)(10)(i) and Sec. 283.7(a)(10)(ii)'' and adding, in its
place, the reference ``Sec. 253.7(a)(10)(i) and
Sec. 253.7(a)(10)(ii)'';
b. Amend paragraph (b)(2) by removing the reference
``Sec. 283.6(a)(3)(iv)'' and adding, in its place, the reference
``paragraph (a)(2)(iv) of this section'';
c. Amend paragraph (c)(1) by removing the reference
``Sec. 283.6(a)(2)(ii)'' and adding, in its place, the reference
``paragraph (a)(2)(ii) of this section'';
d. Amend paragraph (d)(2)(iii) by removing the reference
``Sec. 283.7(b)(1)(iii)'' and adding, in its place, the reference
``Sec. 253.7(b)(1)(iii)'';
e. Amend paragraph (e)(1)(i) by removing the reference
``Sec. 283.6(a)(2)(ii)'' and adding, in its place, the reference
``paragraph (a)(2)(ii) of this section'', and removing the reference
``Sec. 283.6(c)'' and adding, in its place, the reference ``paragraph
(c) of this section'';
f. Amend paragraph (e)(2)(ii)(F) by removing the reference
``Sec. 283.7'' and adding, in its place, the reference ``Sec. 253.7'';
and
g. Amend paragraph (e)(3)(ix) by removing the reference
``Sec. 283.7(b)(1)(iii)'' and adding, in its place, the reference
``Sec. 253.7(b)(1)(iii)''.
5. In Sec. 253.7:
a. Amend paragraph (a)(2) by removing the reference
``Sec. 283.7(f)'' and adding, in its place, the words ``paragraph (g)
of this section'';
b. Amend paragraph (a)(5) by removing the reference
``Sec. 283.7(a)(7) or Sec. 283.7(a)(9)'' and adding, in its place, the
reference ``paragraphs (a)(7) and (a)(9) of this section'';
c. Add two new sentences to the end of paragraph (b)(3)(iii)(A);
d. Amend the second sentence of paragraph (b)(3)(iii)(B) by
removing the words ``and no more than 20'', and by removing the word
``mailed'' and adding, in its place, the word ``issued'';
e. Revise paragraph (b)(3)(iii)(C);
f. Add new paragraph (b)(3)(iii)(E);
g. Amend paragraph (c)(1) by removing the reference
``Sec. 283.6(e)(1)'' and adding, in its place, the reference
``Sec. 253.6(e)(1)'';
h. Remove paragraph (e)(3);
i. Redesignate paragraphs (f) and (g) as paragraphs (g) and (h),
respectively, and add a new paragraph (f);
j. Amend newly redesignated paragraph (g)(1) by removing the
reference ``Sec. 283.6(c)(2)'' and adding, in its place, the reference
``Sec. 253.6(c)(2)'';
k. Amend newly redesignated paragraph (g)(2) by removing the
reference ``Sec. 283.7(a)(7) and Sec. 283.7(a)(9)'' and adding, in its
place, the reference ``paragraphs (a)(7) and (a)(9) of this section'';
l. Revise newly redesignated paragraph (h)(2)(i);
m. Revise newly redesignated paragraph (h)(11)(iii); and
n. Add new paragraph (h)(11)(iv).
The revisions and additions read as follows:
Sec. 253.7 Certification of households.
* * * * *
(b) Eligibility determinations. * * *
(3) Certification notices. * * *
(iii) Notice of adverse action.
(A) * * * The notice must be issued within 10 days of determining
that an adverse action is warranted. The adverse action must take
effect with the next scheduled distribution of commodities that follows
the expiration of the advance notice period, unless the household
requests a fair hearing.
* * * * *
(C) The notice of adverse action must include the following in
easily understandable language:
(1) The reason for the adverse action;
(2) The date the adverse action will take effect;
(3) The household's right to request a fair hearing and continue to
receive benefits pending the outcome of the fair hearing;
(4) The date by which the household must request the fair hearing;
(5) The liability of the household for any overissuances received
while awaiting the outcome of the fair hearing, if the fair hearing
official's decision is adverse to the household;
(6) The telephone number and address of someone to contact for
additional information; and
(7) The telephone number and address of an individual or
organization that provides free legal representation, if available.
* * * * *
(E) If the State agency determines that a household received more
USDA commodities than it was entitled to receive, it must establish a
claim against the household in accordance with Sec. 253.9. The initial
demand letter for repayment must be provided to the household at the
same time the notice of adverse action is issued. It may be combined
with the notice of adverse action.
* * * * *
(f) Treatment of disqualified household members.
(1) The following are not eligible to participate in the Food
Distribution Program:
(i) Individuals disqualified from the Food Distribution Program for
an intentional program violation under Sec. 253.8. These individuals
may
[[Page 39440]]
participate, if otherwise eligible, in the Food Distribution Program
once the period of disqualification has ended.
(ii) Individuals disqualified from the Food Stamp Program for an
intentional program violation under Sec. 273.16 of this chapter. These
individuals may participate, if otherwise eligible, in the Food
Distribution Program once the period of disqualification under the Food
Stamp Program has ended. The State agency must, in cooperation with the
appropriate food stamp agency, develop a procedure which ensures that
these individuals are identified.
(iii) Households disqualified from the Food Distribution Program
for failure to pay an overissuance claim. The circumstances under which
a disqualification is allowed for such failure are specified in FNS
Handbook 501.
(2) During the time a household member is disqualified, the
eligibility and food distribution benefits of any remaining household
members will be determined as follows:
(i) Resources. The resources of the disqualified member will
continue to count in their entirety to the remaining household members.
(ii) Income. A pro rata share of the income of the disqualified
member will be counted as income to the remaining members. This pro
rata share is calculated by dividing the disqualified member's earned
(less the 20 percent earned income deduction) and unearned income
evenly among all household members, including the disqualified member.
All but the disqualified member's share is counted as income to the
remaining household members.
(iii) Eligibility and benefits. The disqualified member will not be
included when determining the household's size for purposes of
assigning food distribution benefits to the household or for purposes
of comparing the household's net monthly income with the income
eligibility standards.
* * * * *
(h) Fair hearing. * * *
(2) Timely action on hearings.
(i) Time frames for the State agency. The State agency must conduct
the hearing, arrive at a decision, and notify the household of the
decision within 60 days of receipt of a request for a fair hearing. If
a fair hearing decision changes a household's eligibility or the amount
of commodities to be provided, as determined by household size, the
State agency must implement that change so that it is effective for the
next scheduled distribution of commodities following the date of the
fair hearing decision. If the commodities are normally made available
to the household within a specific period of time, e.g., from the first
day of the month through the tenth day of the month, the effective date
of the disqualification will be the first day of that period.
* * * * *
(11) Hearing decisions. * * *
(iii) Within 10 days of the date the fair hearing decision is
issued, the State agency must issue a notice to the household advising
it of the decision.
(A) If the decision upheld the adverse action by the State agency,
the notice must advise the household of the right to pursue judicial
review.
(B) If the decision upheld a disqualification, the notice must also
include the reason for the decision, the date the disqualification will
take effect, and the duration of the disqualification (i.e., 12 months;
24 months; or permanent). The State agency must also advise any
remaining household members, if the household's benefits will change or
if the household is no longer eligible as a result of the
disqualification.
(iv) The State agency must revise the demand letter for repayment
issued previously to the household to include the value of all
overissued commodities provided to the household during the appeal
process, unless the fair hearing decision specifically requires the
cancellation of the claim. The State agency must also advise the
household that collection action on the claim will continue, in
accordance with FNS Handbook 501, unless suspension is warranted.
* * * * *
Sec. 253.8 [Redesignated as Sec. 253.10 and Amended]
6. Sec. 253.8 is redesignated as Sec. 253.10 and amended as
follows:
a. Amend paragraph (c)(12) by removing the reference
``Sec. 283.7(b)(9)'' and adding, in its place, the reference
``Sec. 253.7(a)(9)'';
b. Amend paragraph (e) by removing the words ``the State agency's
agreement with the Department under Sec. 250.6(b) of part 250 of this
chapter and the requirements of Sec. 250.6(l) of this same chapter''
and adding, in its place, the reference ``Sec. 250.13 and Sec. 250.15
of this chapter''; and
c. Amend paragraph (f) by removing the reference ``Sec. 250.7 of
part 250'' and adding, in its place, the reference ``Sec. 250.13(f)''.
7. Add new Sec. 253.8 to read as follows:
Sec. 253.8 Administrative disqualification procedures for intentional
program violation.
(a) What is an intentional program violation? An intentional
program violation is considered to have occurred when an individual
knowingly, willingly, and with deceitful intent:
(1) Makes a false or misleading statement, or misrepresents,
conceals, or withholds facts in order to obtain Food Distribution
Program benefits which the household is not entitled to receive; or
(2) Commits any act that violates a Federal statute or regulation
relating to the acquisition or use of Food Distribution Program
commodities.
(b) What are the disqualification penalties for an intentional
program violation? Individuals determined by the State agency to have
committed an intentional program violation will be ineligible to
participate in the program:
(1) For a period of 12 months for the first violation;
(2) For a period of 24 months for the second violation; and
(3) Permanently for the third violation.
(c) Who can be disqualified? Only the individual determined to have
committed the intentional program violation can be disqualified.
However, the disqualification of a household member may affect the
eligibility of the household as a whole, as addressed under paragraphs
(e)(5) and (h) of this section.
(d) Can the disqualification be appealed? Individuals determined by
the State agency to have committed an intentional program violation may
appeal the disqualification, as provided under Sec. 253.7(h)(1).
(e) What are the State agency's responsibilities?
(1) Each State agency must implement administrative
disqualification procedures for intentional program violations that
conform to this section.
(2) The State agency must inform households in writing of the
disqualification penalties for intentional program violation each time
they apply for benefits, including recertifications.
(3) The State agency must attempt to substantiate all suspected
cases of intentional program violation. An intentional program
violation is considered to be substantiated when the State agency has
clear and convincing evidence that demonstrates that an individual has
committed one or more acts of intentional program violation, as defined
in paragraph (a) of this section.
(4) Within 10 days of substantiating that an individual has
committed an intentional program violation, the State agency must
provide the individual
[[Page 39441]]
with a notice of disqualification, as described in paragraph (f) of
this section. A notice is required even when the individual is
currently neither eligible nor participating in the program.
(5) The State agency must advise any remaining household members if
the household's benefits will change or if the household will no longer
be eligible as a result of the disqualification.
(6) The State agency must provide the individual to be disqualified
with an opportunity to appeal the disqualification through a fair
hearing, as required by Sec. 253.7(h).
(7) The State agency must refer all substantiated cases of
intentional program violations to Federal, State, or local authorities
for prosecution under applicable statutes. However, a State agency that
has conferred with its legal counsel and prosecutors to determine the
criteria for acceptance for possible prosecution is not required to
refer cases that do not meet the prosecutors' criteria.
(8) The State agency must establish claims, and pursue collection
as appropriate, on all substantiated cases of intentional program
violation in accordance with Sec. 253.9.
(f) What are the requirements for the notice of disqualification?
(1) Within 10 days of substantiating the intentional program
violation, the State agency must mail, or otherwise provide, to the
individual a notice of disqualification. The notice must allow an
advance notice period of at least 10 days. The disqualification must
begin with the next scheduled distribution of commodities that follows
the expiration of the advance notice period, unless the individual
requests a fair hearing. A notice is required even when the individual
is currently neither eligible nor participating in the program.
(2) The notice must conform to the requirements of
Sec. 253.7(b)(3)(iii)(C) for notices of adverse action.
(g) What are the appeal procedures for administrative
disqualifications?
(1) Appeal rights. The individual has the right to request a fair
hearing to appeal the disqualification in accordance with the
procedures at Sec. 253.7(h).
(2) Notification of hearing. The State agency must provide the
individual with a notification of the time and place of the fair
hearing as described in Sec. 253.7(h)(7). The notice must also include:
(i) A warning that if the individual fails to appear at the
hearing, the hearing decision will be based solely on the information
provided by the State agency; and
(ii) A statement that the hearing does not prevent the Tribal,
State, or Federal Government from prosecuting the individual in a civil
or criminal court action, or from collecting any overissuance(s).
(h) What are the procedures for applying disqualification
penalties?
(1) If the individual did not request a fair hearing, the
disqualification must begin with the next scheduled distribution of
commodities which follows the expiration of the advance notice period
of the notice of adverse action. If the commodities are normally made
available to the household within a specific period of time (e.g., from
the first day of the month through the tenth day of the month), the
effective date of the disqualification will be the first day of that
period. The State agency must apply the disqualification period (i.e.,
12 months, 24 months, or permanent) specified in the notice of
disqualification. The State agency must advise any remaining household
members if the household's benefits will change or if the household is
no longer eligible as a result of the disqualification.
(2) If the individual requested a fair hearing and the
disqualification was upheld by the fair hearing official, the
disqualification must begin with the next scheduled distribution of
commodities which follows the date the hearing decision is issued. If
the commodities are normally made available to the household within a
specific period of time (e.g., from the first day of the month through
the tenth day of the month), the effective date of the disqualification
will be the first day of that period. The State agency must apply the
disqualification period (i.e., 12 months, 24 months, or permanent)
specified in the notice of disqualification. No further administrative
appeal procedure exists after an adverse fair hearing decision. The
decision by a fair hearing official is binding on the State agency. The
household member, however, may seek relief in a court having
appropriate jurisdiction. As provided under Sec. 253.7(h)(11)(iii)(B),
the State agency must advise any remaining household members, if the
household's benefits will change or if the household is no longer
eligible as a result of the disqualification.
(3) Once a disqualification has begun, it must continue
uninterrupted for the duration of the penalty period (i.e., 12 months;
24 months; or permanent). Changes in the eligibility of the
disqualified individual's household will not interrupt or shorten the
disqualification period.
(4) The same act of intentional program violation continued over a
period of time will not be separated so that more than one penalty can
be imposed. For example, a household intentionally fails to report that
a household member left the household, resulting in an overissuance of
benefits for 5 months. Although the violation occurred over a period of
5 months, only one penalty will apply to this single act of intentional
program violation.
(5) If the case was referred for Federal, State, or local
prosecution and the court of appropriate jurisdiction imposed a
disqualification penalty, the State agency must follow the court order.
Sec. 253.9 [Redesignated as Sec. 253.11]
8. Redesignate Sec. 253.9 as Sec. 253.11.
9. Add new Sec. 253.9 to read as follows:
Sec. 253.9 Claims against households.
(a) What are the procedures for establishing a claim against a
household for an overissuance?
(1) The State agency must establish a claim against any household
that has received more Food Distribution Program commodities than it
was entitled to receive.
(2) The procedures for establishing and collecting claims against
households are specified in FNS Handbook 501, The Food Distribution
Program on Indian Reservations.
(b) Who is responsible for repaying a household overissuance claim?
(1) All adult household members are jointly and separately liable
for the repayment of the value of any overissuance of Food Distribution
Program benefits to the household.
(2) Responsibility for repayment continues even in instances where
the household becomes ineligible or is not participating in the
program.
PART 254--ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR
INDIAN HOUSEHOLDS IN OKLAHOMA
1. The authority citation for Part 254 continues to read as
follows:
Authority: Pub. L. 97-98, sec. 1338; Pub. L. 95-113.
2. In Sec. 254.2, redesignate paragraphs (f) and (g) as paragraphs
(g) and (h), respectively, and add new paragraph (f) to read as
follows:
Sec. 254.2 Definitions.
* * * * *
(f) Overissuance means the dollar value of commodities issued to a
household that exceeds the dollar value of commodities it was eligible
to receive.
* * * * *
[[Page 39442]]
Dated: June 29, 1999.
Samuel Chambers, Jr.,
Administrator, Food and Nutrition Service.
[FR Doc. 99-18621 Filed 7-21-99; 8:45 am]
BILLING CODE 3410-30-P