[Federal Register Volume 67, Number 227 (Monday, November 25, 2002)]
[Proposed Rules]
[Pages 70561-70564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29889]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 278 and 279

RIN 0584-AD23


Food Stamp Program: Administrative Review Requirements--Food 
Retailers and Wholesalers

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This action will revise Food Stamp Program regulations 
affecting the administrative review process available to retail and 
wholesale firms participating in the Food Stamp Program. It proposes to 
streamline and make technical corrections to this process by amending 
portions of current regulations. The changes will eliminate 
repetitious, outdated and unnecessary provisions without taking away a 
firm's right to an administrative review. This rule also proposes to 
make technical corrections.

DATES: Comments must be received on or before January 24, 2003 to be 
assured of consideration.

ADDRESSES: Comments should be submitted to Karen Walker, Chief, 
Retailer Management Branch, Benefit Redemption Division, Food and 
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia, 
22302. Comments may also be datafaxed to the attention of Ms. Walker at 
(703) 305-1863, or by e-mail to [email protected]. All written 
comments will be open for public inspection at the office of the Food 
and Nutrition Service during regular business hours (8:30 a.m. to 5 
p.m., Monday through Friday) at 3101 Park Center Drive, Alexandria, 
Virginia, Room 408.

FOR FURTHER INFORMATION CONTACT: Questions regarding this rulemaking 
should be addressed to Ms. Walker 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 and therefore, 
was not reviewed by the Office of Management and Budget 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 in 7 CFR part 3015, subpart V and related Notice (48 FR 29115), 
this Program is excluded from the scope of Executive Order 12372, which 
requires intergovernmental consultation with State and local officials.

Executive Order 13132, Federalism

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments and 
consult with them as they develop and carry out those policy actions. 
The Food and Nutrition Service (FNS) has considered the impact of this 
rule that proposes streamlining and making technical changes to FNS' 
administrative review process available to retail food stores and 
wholesale concerns participating in the Food Stamp Program. This 
proposed rule has no Federalism implications in that procedural changes 
set forth do not affect State and local governments. This proposed rule 
does not impose any substantial or direct compliance costs on State and 
local governments. Therefore, under section 6(b) of the Executive 
Order, a federalism summary impact statement is not required.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. Sec. Sec.  601-612). Eric 
M. Bost, Under Secretary for Food, Nutrition, and Consumer Services, 
has certified that this proposed rule will not have a significant 
economic impact on a substantial number of small entities. It proposes 
to eliminate repetitious, outdated and unnecessary provisions; 
aggrieved businesses will continue to have the right to administrative 
reviews under this rule.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, this notice 
invites the general public and other public agencies to comment on 
proposed information collections.
    Written comments must be submitted on or before January 24, 2003.
    Comments are invited on (a) whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information has practical utility; 
(b) the accuracy of the agency's estimate of the burden of the proposed 
collection of information, including the validity of the methodology 
and assumptions used; (c) ways to enhance the quality, utility, and 
clarity of the information to be collected; (d) ways to minimize the 
burden of the collection of information on those who are to respond, 
including the use of appropriate automated electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology. Comments may be sent to: Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, DC 
20203. Comments may also be submitted to Karen Walker, Chief, 
Redemption Management Branch, Benefit Redemption Division, Food and 
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia, 
22302. Comments may also be faxed to the attention of Ms. Walker at 
(703) 305-1863, or e-mailed to [email protected].
    All responses to this notice will be summarized and included in the 
request

[[Page 70562]]

for OMB approval. All comments will also become a matter of public 
record.
    OMB Number: To be assigned.
    Expiration Date: 3 years from date of approval.
    Type of Request: New collection.
    Abstract: The Food and Nutrition Service (FNS) of the U.S. 
Department of Agriculture is the Federal agency responsible for the 
Food Stamp Program. The Food Stamp Act of 1977, as amended, (7 U.S.C. 
2011-2036) requires that the Agency determine the eligibility of firms 
and certain food service organizations to participate in the Food Stamp 
Program. If a retail food store is found to be ineligible by FNS, that 
store has the right to request an administrative review of the 
decision. Such requests must be made in writing. This is not a new 
collection requirement, but the Food Stamp Program has never accounted 
for the burden associated with this activity.
    Affected Public: Retail food stores and wholesale concerns.
    Estimated Number of Respondents: 1,140
    Number of Responses per Respondent: 1.2
    Estimated Total Annual Responses: 1,368
    Hours per Response: .17.
    Total Annual Reporting Hours: 232.56.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not 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 the preamble 
of the final rule. In the Food Stamp Program, the administrative 
procedures for retailers and wholesalers are as follows: for Program 
retailers and wholesalers--administrative procedures are issued 
pursuant to section 14 of the FSA (7 U.S.C. 2023) and 7 CFR 279.

Public Law 104-4

    Title II of the Unfunded Mandate 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, FNS 
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 FNS 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 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. Thus, this rule is not economically significant, nor subject to 
the requirements of sections 202 and 205 of the UMRA.

Background

    In this rule, FNS is proposing to revise food stamp regulations 
affecting the administrative review process for retail food stores and 
wholesale food concerns participating in the Food Stamp Program. The 
revisions will streamline the administrative review process by 
eliminating repetitive and unnecessary provisions and consolidating 
other provisions in current regulations found in 7 CFR 278 and 279. 
These revisions will not change the rights of aggrieved food retailers 
and wholesale food concerns to request and obtain an administrative 
review from FNS. Also, this rule proposes to make technical corrections 
involving regulatory cites listed in section 278.1.

7 CFR 278.1--Approval of Retail Food Stores and Wholesale Food Concerns

    This section provides information regarding the authorization 
withdrawals and denials of firms participating or seeking to 
participate in the Food Stamp Program. References included in 
paragraphs (k)(1) and (2) and (l)(1)(ii) and (iii) are not correct and 
this rule proposes to correct them.

7 CFR 278.8--Administrative Review--Retail Food Stores and Wholesale 
Food Concerns

    This section in current regulations provides information regarding 
how food retailers or wholesale food concerns aggrieved by an 
administrative action can file a request for an administrative review. 
It references sections that deal with specific administrative actions 
that are subject to review and provides the address where requests for 
reviews must be sent. This same information in more detail is provided 
in 7 CFR 279, and the Department believes including that same or 
similar information in two places is repetitive. Therefore, this rule 
proposes to remove the language from 7 CFR 278.8. Reference changes 
reflecting this removal have been made throughout in Sec. Sec.  278.1, 
278.6 and 278.7.

7 CFR 279 Subpart A--Administrative Review--General; Subpart B--Rules 
of Procedure; and, Subpart C--Judicial Review

    Under Current regulations, 7 CFR 279 is divided into three 
subparts. Subparts A and B pertain to the administrative review 
process, while subpart C pertains to the judicial review process. The 
Department believes having two different subparts for the 
administrative review process may be confusing to readers and should be 
clarified. Therefore, the rule proposes to collapse subpart B into 
subpart A and re-designate subpart C as subpart B. This change will 
provide a clear distinction between the two different review processes. 
Under the proposed change, subpart A will cover the administrative 
review process and subpart B will cover the judicial review process. In 
addition, throughout part 279 of the proposed rule, the term 
``administrative review officer'' is changed to ``designated 
reviewer'', which conforms to section 14(a)(5) of the Food Stamp Act of 
1977 (7 U.S.C. Sec.  2023(a)(5))), which gives the Secretary the 
authority to designate such reviewers. The responsibilities of the 
designated reviewer will be the same as the administrative review 
officer under current rules.

Scope and purpose--7 CFR 279.1

    Scope and purpose: The introductory paragraph at 7 CFR 279.1 
clarifies the scope of purpose of each of the subparts mentioned above. 
Since the proposed rule would collapse subpart B into subpart A, such 
clarification is unnecessary. Therefore, under the proposed regulation, 
the introductory paragraph at 7 CFR 279.1 is removed and replaced with 
amended language from 7 CFR 279.3 in current rules which explains the 
jurisdiction and authority of the administrative review process.

Administrative Review Officer--7 CFR 279.2.

    Administrative review officer: Current regulations include a 
section describing how review officers are designated and are assigned 
cases to review. The Department believes this is internal guidance for 
FNS and does not belong in regulations. Therefore, the proposed rule 
would remove this section entirely.

[[Page 70563]]

Authority and Jurisdiction--7 CFR 279.3

    Authority and jurisdiction: Current regulations describe the 
authority and jurisdiction of the administrative review process at 7 
CFR 279.3. The proposed regulation would include that section at 7 CFR 
279.1. It also proposes to amend that section for clarification 
purposes by adding a separate paragraph for disqualifications. Current 
regulations include that with a paragraph on the imposition of fines.

Rules of Procedure--7 CFR 279.4

    Rules of procedures: Current regulations at 7 CFR 279.4 separate 
the administrative review process into two subparts, A and B. These 
regulations include an introductory paragraph clarifying what 
information is included under subpart A and subpart B, which is not 
included in the proposed rule. Under the proposed rule, all information 
involving the administrative review process is included under a single 
subpart (subpart A); therefore, there is no longer a need for an 
introductory paragraph clarifying two subparts.

Content of Request--7 CFR 279.6

    Content of request for review: Current regulations at 7 CFR 279.6 
include language regarding requests for in person meetings with 
administrative review officers. Currently there are only three 
locations where such meetings take place, so most firms that wish to 
have meetings must travel long distances to participate in them. The 
review is based on the facts of the case which can be presented in 
writing or orally by phone. Firms can and do talk with reviewers by 
phone. Even though very few firms request in-person meetings, the 
Department believes that offering in-person meetings gives the 
impression that stores which cannot avail themselves of the meeting are 
disadvantaged. Therefore, the rule proposes to eliminate these 
meetings. Aggrieved retailers can participate in conference calls with 
administrative review staff if requested.

Action Upon Receipt of a Request for Review--7 CFR 279.7

    Failure to meet with review officer: Current regulations at 7 CFR 
279.7(c), include a paragraph dealing with the in-person meetings. This 
provision would no longer be relevant if these meetings no longer take 
place; therefore, the proposed rule would remove this paragraph.

Determination of the Administrative Review Officer--7 CFR 279.8

    Determination notification: Current regulations at 7 CFR 279.8(e) 
and (f) include information about the determination notification 
process. This proposed rule would combine paragraphs (e) and (f) into 
paragraph (e) and redesignate paragraph (g) as paragraph (f). In 
addition, technical corrections are proposed for paragraph (b) to 
reflect changes made by a prior regulation.

Implementation

    The Department is proposing that the provisions of this rulemaking 
be implemented 60 days after publication of the final rule.

List of Subjects

7 CFR Part 278

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

7 CFR Part 279

    Administrative practice and procedure, Food stamps, General line-
wholesalers, Groceries, Groceries-retail.

    Accordingly, 7 CFR parts 278 and 279, are proposed to be amended as 
follows:
    1. The authority citation for parts 278 and 279 continue to read as 
follows:

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

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


Sec.  278.1  [Amended]

    2. In Sec.  278.1:
    a. Paragraph (k)(1) is amended by removing the reference ``(g) or 
(h)'' and adding in its place the reference ``(g), (h) or (i)'';
    b. Paragraph (k)(2) is amended by removing in the first sentence 
the words ``the Food Stamp Act of 1977, as amended;'' and adding in its 
place the words ``paragraph (b)(1)(i) of this section;'' and by 
removing the reference ``(b)(1)(iv)'' and adding in its place the 
reference (b)(1)(vi)'';
    c. Paragraph (l)(1)(ii) is amended by removing the reference ``(g), 
or (h)'' and adding in its place the reference ``(g), (h) or (i)'';
    d. Paragraph (l)(1)(iii) is amended by removing the words ``the 
Food Stamp Act of 1977, as amended,'' and adding in its place the words 
``paragraph (b)(1)(i) of this section;'' and by removing the reference 
``(b)(1)(iv)'' and adding in its place the reference ``(b)(1)(vi)''.
    e. The regulatory reference ``Sec.  279.5'' is removed in paragraph 
(l)(2) and the regulatory reference ``part 279'' is added in its place; 
and
    f. The regulatory reference ``Sec.  278.8,'' is removed in 
paragraph (p) and the regulatory reference ``part 279'' is added in its 
place.


Sec.  278.6  [Amended]

    3. In 278.6, the regulatory reference ``Sec.  279.5'' is removed 
wherever it appears in paragraphs (b), (c) and (n), and the regulatory 
reference ``part 279'' is added in its place.


Sec.  278.7  [Amended]

    4. In Sec.  278.7, the regulatory reference ``Sec.  278.8'' is 
removed in paragraph (f) and the regulatory reference ``part 279'' is 
added in its place.


Sec.  278.8  [Removed and Reserved]

    5. Sec.  278.8 is removed and reserved.

PART 279--ADMINISTRATIVE AND JUDICIAL REVIEW--FOOD RETAILERS AND 
FOOD WHOLESALERS

    6. In part 279:
    a. The words ``administrative review officer'' are removed wherever 
they appear and the words ``designated reviewer'' are added in their 
place; and
    b. The words ``review officer'' are removed wherever they appear 
and the words ``designated reviewer'' are added in their place.
    7. Subpart A is further amended by removing the word ``--General'' 
in the Subpart heading.
    8. Revise Sec.  279.1 to read as follows:


Sec.  279.1  Jurisdiction and authority.

    A food retailer or wholesale food concern aggrieved by 
administrative action under Sec.  278.1, Sec.  278.6 or Sec.  278.7 of 
this chapter may, within a period stated in this part, file a written 
request for review of the administrative action with FNS. On receipt of 
the request for review, the questioned administrative action shall be 
stayed pending disposition of the request for review, except in the 
case of a permanent disqualification as specified in Sec.  278.6(e)(1) 
of this chapter.
    (a) Jurisdiction. Reviewers designated by the Secretary shall act 
for the Department on requests for review filed by food retailers or 
wholesale food concerns aggrieved by any of the following actions:
    (1) Denial of an application or withdrawal of authorization to 
participate in the program under Sec.  278.1 of this chapter;
    (2) Disqualification under Sec.  278.6 of this chapter, except that 
a disqualification for failure to pay a civil

[[Page 70564]]

money penalty shall not be subject to administrative review and a 
disqualification imposed under Sec.  278.6(e)(8) of this chapter shall 
not be subject to administrative or judicial review;
    (3) Imposition of a fine under Sec.  278.6 of this chapter;
    (4) Denial of all or part of any claim asserted by a firm against 
FNS under Sec.  278.7(c), (d), or (e) of this chapter;
    (5) Assertion of a claim under Sec.  278.7(a) of this chapter; or
    (6) Forfeiture of part or all of a collateral bond under Sec.  
278.1 of this chapter, if the request for review is made by the 
authorized firm. FNS shall not accept requests for review made by a 
bonding company or agent.
    (b) Authority. The determination of the designated reviewer shall 
be the final administrative determination of the Department, subject, 
however, to judicial review under section 14 of the Food Stamp Act and 
subpart B of this part.


Sec. Sec.  279.2 through 279.4  [Removed]

    9. Remove Sec. Sec.  279.2 through 279.4.


Sec. Sec.  279.5 through 279.11  [Redesignated and Transferred]

    10. Subpart B is further amended by redesignating Sec. Sec.  279.5 
through 279.9 as Sec. Sec.  279.2 through 279.6, respectively, and 
transferring them to Subpart A.


Sec.  279.2  [Amended]

    11. Amend newly redesignated Sec.  279.2 as follows:
    a. The heading of paragraph (a) is amended by removing the word 
``Addressing'' and adding in its place the word ``Submitting''.
    b. Paragraph (a) is further amended by removing the words ``Room 
304''.
    c. Paragraph (c) introductory text is amended by removing the words 
``with the Director, Administrative Review Division,''.


Sec.  279.3  [Amended]

    12. Remove the last two sentences of paragraph (b) in newly 
redesignated Sec.  279.3.
    13. Amend newly redesignated Sec.  279.4 as follows:
    a. Paragraph (a) is amended by revising the first two sentences and 
by removing the last sentence;
    b. Paragraph (c) is revised; and
    c. Paragraph (d) is removed.
    The revisions read as follows:


Sec.  279.4  Action upon receipt of a request for review.

    (a) Upon receipt of a request for review of administrative action, 
the administrative action shall be held in abeyance until the 
designated reviewer has made a determination. However, permanent 
disqualifications for trafficking shall not be held in abeyance and 
shall be effective immediately as specified in Sec.  278.6(b)(2) of 
this chapter. * * *
* * * * *
    (c) Extensions of time. Upon timely written request to FNS by the 
firm requesting the review, FNS may grant extensions of time if, in 
FNS' discretion, additional time is required for the firm to fully 
present information in support of its position. However, no extension 
may be made in the time allowed for the filing of a request for review.
    14. Amend newly redesignated Sec.  279.5 as follows:
    a. The heading of this section is revised and the heading of 
paragraph (a) is amended by removing the word ``officer'',
    b. Paragraph (b), (c) and (e) are revised; and
    c. Paragraph (f) is removed and paragraph (g) is redesignated as 
paragraph (f).
    The revisions read as follows:


Sec.  279.5  Determination of the designated reviewer.

* * * * *
    (b) Review of denial or withdrawal of authorization. When the 
action under review is the denial of an application for authorization 
or the withdrawal of an existing authorization, the designated reviewer 
shall sustain the action under review; sustain the action under review, 
but specify a shorter period of time the action will remain in effect; 
or direct that the action under review be reversed.
    (c) Review of disqualification or civil money penalty or fine. When 
the action under review is disqualifying a firm from program 
participation or assessing a civil money penalty or fine against a 
firm, the designated reviewer shall: sustain the action under review; 
specify a shorter period of disqualification; specify a reduced money 
penalty or fine; direct that an official warning letter be issued to 
the firm in lieu of a disqualification, civil money penalty or fine; 
or, direct that the action under review be reversed. The designated 
reviewer may change a disqualification of a firm to a civil money 
penalty if the disqualification would cause a hardship to participating 
households (except in the case of a permanent disqualification). The 
designated reviewer, working with the appropriate FNS office, shall 
determine if circumstances warrant a civil money penalty in accordance 
with Sec.  278.6 of this chapter.
* * * * *
    (e) Determination notifications. FNS shall notify the firm of the 
determination. Such notification will be sent to the representative of 
the firm who filed the request for review.
* * * * *
    15. In newly redesignated Sec.  279.6, revise paragraph (a) to read 
as follows:


Sec.  279.6  Legal advice and extensions of time.

    (a) Advice from Office of the General Counsel. If any request for 
review involves any doubtful questions of law, the Benefit Redemption 
Division shall obtain the advice of the Department's Office of the 
General Counsel.
* * * * *

Subpart B--[Removed]

    16. Subpart B is removed.

Subpart C--[Redesignated as Subpart B]

    17. Subpart C is redesignated as Subpart B.


Sec. Sec.  279.10 and 279.11  [Redesignated as Sec. Sec.  279.7 and 
279.8]

    18. Redesignate Sec. Sec.  279.10 and 279.11 as Sec. Sec.  279.7 
and 279.8.


Sec.  279.7  [Amended]

    19. Amend newly redesignated Sec.  279.7 as follows:
    a. Paragraph (a) is amended by removing the regulatory reference 
``Sec.  279.8(e)'' and adding in its place the regulatory reference 
``Sec.  279.5(e)''.
    b. Paragraph (b) is amended by removing the words the ``officer 
or''.

    Dated: November 14, 2002.
Roberto Salazar,
Administrator, Food and Nutrition Service.
[FR Doc. 02-29889 Filed 11-22-02; 8:45 am]
BILLING CODE 3410-30-P