[Federal Register Volume 65, Number 169 (Wednesday, August 30, 2000)]
[Rules and Regulations]
[Pages 52642-52644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21905]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 278

[Amendment No. 383]
RIN 0584-AC05


Food Stamp Program: Retailer Application Processing

AGENCY: Food and Nutrition Service, USDA

ACTION: Final Rule.

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SUMMARY: This final rule implements a revised processing timeframe for 
retail food stores and wholesale food concerns that apply for 
authorization to accept and redeem food stamp benefits and clarifies 
verification requirements. This rule lengthens the application 
processing timeframe from the current period of 30 days to 45 days. In 
addition to lengthening the time allowed for processing applications, 
this rule requires specific documentation from an applicant to verify a 
firm's eligibility.
    This final rule also incorporates two provisions of the Personal 
Responsibility and Work Opportunity Reconciliation Act of (PRWORA) 
1996, related to the collection of tax information from firms applying 
for authorization or from firms being reauthorized in the program and 
the written permission for the Food and Nutrition Service (FNS) to 
verify such information with appropriate agencies.

EFFECTIVE DATE: The amendments in this rule are effective September 29, 
2000.

FOR FURTHER INFORMATION CONTACT: Questions regarding this final rule

[[Page 52643]]

should be addressed to Karen J. Walker, Chief, Redemption Management 
Branch, Benefit Redemption Division, Food Stamp Program, Food and 
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia 
22302, or by telephone at (703) 305-2418.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be non-significant under 
Executive Order 12866.

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), 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 (5 U.S.C. 601-602). Samuel Chambers, 
Jr. the Administrator of the FNS, has certified that this final rule 
will not have a significant economic impact on a substantial number of 
small entities. The rule would have almost no impact on the majority of 
applicant firms, since most applicants are legitimate food stores.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, the 
preamble of the proposed rule published on November 3, 1999 at 64 FR 
59665 included a notice that announced our intent to submit revisions 
to the Office of Management and Budget relative to the information 
collection and associated burden hours imposed on retailers applying 
for participation in the FSP.
    There are currently 3 forms approved under Office of Management and 
Budget No. 0584-0008. Each of these forms are used by retailers, 
wholesalers and meal services, including certain group living 
arrangements, shelters for battered women and treatment and 
rehabilitation programs for drug addicts and alcoholics, to apply to 
the FNS for authorization to accept and redeem food stamp benefits. 
Form FNS-252; Food Stamp Application for Stores, Form 252-2; 
Application to Participate in the FSP for Communal Dining Facility/
Others; and Form FNS-252R; Food Stamp Application for Stores-
Reauthorization. Section 9(c) of the Food Stamp Act of 1977, as 
amended, (7 U.S.C. 2018 (c)) provides the necessary authorization(s) to 
collect the information contained in these forms.
    Comments were solicited for 60 days on the proposed increase in 
burden hours. No comments were received on the information collection 
proposal. The burden estimates as currently approved under OMB No. 
0584-0008 through October 31, 2003 are shown on the following chart:

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                                     Number of     Responses per   Total annual    Burden hours    Total annual
              Title                 respondents     respondents      responses     per response    burden hours
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Form FNS-252....................          20,580               1          20,580           .4583           9,432
Form FNS-252-2..................           1,673               1           1,673           .2000             334
Form FNS-252R...................          40,368               1          40,368           .1250           5,046
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    Totals......................          62,149                          62,149                          14,812
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Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to have a 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. These provisions 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 as 7 CFR 276.7 (for rules related to non-quality 
control liabilities) or part 284 (for rules related to quality control 
liabilities: (3) for Program retailers and wholesalers--administrative 
procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 278.8.

Unfunded Mandate Analysis

    Title II of the Unfunded Mandated Reform Act of 1995 (UMRA) Pub. L. 
104-04, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under Section 202 of the UMRA, the 
Department generally must prepare a written statement, including a 
cost-benefit analysis, for proposed and final rules with ``Federal 
mandates that may result in expenditures to State, local, or tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the Department to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost effective or least burdensome 
alternative that achieves the objectives of the rule.
    This final rule contains no Federal mandates under the regulatory 
provision 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. Thus, this rule is not subject to the requirements of Sections 
202 and 205 of the UMRA.

Executive Order 13132

    FNS has analyzed this final in accordance with the principles set 
forth in Executive Order 13132.
    As such, FNS has determined that the rule does not contain policies 
that have federalism implications as defined in the order and, 
consequently, a federalism impact statement is not required.

Background

    On November 3, 1999, the FNS published a proposed rule (64 FR 
59665) to improve the processing of applications from firms desiring to 
become authorized to accept and redeem food stamp benefits. The 
proposed rule sets forth four changes, two discretionary and two 
reflecting additional authorities provided under the Act, PRWORA Pub. 
L. 104-193. The

[[Page 52644]]

discretionary changes increase the timeframe within which FNS must 
approve or reject a firm's application from 30 days to 45 days and 
specify the types of documents firms might be asked to provide. Such 
documentation may include, but is not limited to, State and local 
business licenses, photographic identification cards, bills of sale, 
deeds, leases, sales contracts, State certificates of incorporation and 
invoice records. Section 833 of PRWORA authorized the Department to 
require that applicant firms sign a release form allowing FNS to verify 
the accuracy of information submitted by firms. This section also 
provided that FNS may request the submission of tax records. These 
changes to existing food stamp law were intended to prevent the 
authorization of firms which do not qualify for participation in the 
FSP. Additionally, as provided for in another final rule published on 
April 30, 1999 at 64 FR 23165, FNS has the authority to require that a 
retail food store or wholesale food concern be visited to confirm 
eligibility prior to authorization or reauthorization of such firm. The 
Department wishes to emphasize that applicant firms or firms applying 
for reauthorization must cooperate with the store visit requirements.
    The public was provided a 60-day period to submit comments on the 
proposed provisions. One commentor, a major nonprofit retail trade 
association, submitted comments. The major concerns raised by the 
commentor are discussed below.

Application Processing Timeframes

    The two major comments provided by the commentor relate to the 
subject of application processing. The first comment suggested that, 
when on-site visits are not required, the application process should be 
continued and completed within 30 days instead of the extended period 
of 45 days. Although this rule provides FNS with the authority to use 
the full 45-day time period when it is needed, authorizations of 
qualified firms are completed more quickly whenever possible to avoid 
or minimize delay. Therefore, determinations on stores not requiring an 
on-site visit will likely be completed in less than 45 days.
    The second comment suggested that no on-site visits should be 
necessary for reputable retailers. The commentor defines ``reputable'' 
retailers as those that are well-known and familiar to the Agency. 
Further, the commentor states that authorization of well-known, 
reputable retailers within 30 days will ensure the broadest selection 
of retailers as quickly as possible. The Department expects that most 
applicant retailers are honest, reputable business persons or entities. 
Applications from such individuals (or business entities) applicants 
will continue to be processed in a timely fashion. Visits to stores 
will be made as circumstances require in the best interests of the FSP.

List of Subjects in 7 CFR Part 278

    Administrative practice and procedure, Banks, Banking, Claims, Food 
stamps, Groceries--retail, Groceries, General line-wholesalers, 
Penalties.

    Accordingly, 7 CFR Part 278 is amended as follows:

PART 278--PARTICIPATION OF RETAIL FOOD STORES, WHOLESALE FOOD 
CONCERNS AND INSURED FINANCIAL INSTITUTIONS

    1. The authority citation for Part 278 continues to read as 
follows:

    Authority: 7 U.S.C. 2011-2036.


    2. In Sec. 278.1:
    a. Paragraph (a) is amended by removing the last sentence and 
adding three new sentences in its place; and
    b. The introductory text of paragraph (b) is revised.
    The revisions read as follows:


Sec. 278.1  Approval of retail food stores and wholesale food concerns.

    (a) Application. * * * FNS shall approve or deny the application 
within 45 days of receipt of a completed application. A completed 
application means that all information (other than an on-site visit) 
that FNS deems necessary in order to make a determination on the firm's 
application has been received. This information includes, but is not 
limited to, a completed application form, all information and 
documentation from the applicant, as well as any needed third-party 
verification and documentation.
    (b) Determination of authorization. An applicant shall provide 
sufficient data and information on the nature and scope of the firm's 
business for FNS to determine whether the applicant's participation 
will further the purposes of the program. Upon request, an applicant 
shall provide documentation to FNS to verify information on the 
application. Such information may include, but is not limited to, State 
and local business licenses, Social Security cards, drivers' licenses, 
photographic identification cards, bills of sale, deeds, leases, sales 
contracts, State certificates of incorporation, sales records, invoice 
records and business-related tax records. Retail food stores and 
wholesale food concerns and other entities eligible for authorization 
also shall be required to sign a release form which will authorize FNS 
to verify all relevant business related tax filings with appropriate 
agencies. In addition, they must obtain corroborating documentation 
from other sources as deemed necessary to ensure the legitimacy of 
applicant firms, as well as the accuracy of information provided by the 
stores and concerns. Failure to comply with any request for information 
or failure to sign a written release form shall result in denial of the 
application for authorization or withdrawal of a firm or concern from 
the program. In determining whether a firm qualifies for authorization, 
FNS shall consider all of the following:
* * * * *

    3. In Sec. 278.9, a new paragraph (m) 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 
institutions.

* * * * *
    (m) Amendment No. 383. The program changes made to Sec. 278.1 by 
this amendment are effective September 29, 2000.

    Dated: July 26, 2000.
Samuel Chambers, Jr.,
Administrator, Food and Nutrition Service.
[FR Doc. 00-21905 Filed 8-29-00; 8:45 am]
BILLING CODE 3410-30-U