[Federal Register Volume 67, Number 247 (Tuesday, December 24, 2002)]
[Notices]
[Pages 78411-78412]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32434]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


Report on Electronic Benefits Transfer Systems

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice of request for public comment.

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SUMMARY: The Food and Nutrition Service, Benefit Redemption Division, 
would like to obtain public comments on specific topics related to 
initiatives and advances in electronic benefit delivery for the 
issuance of food stamp benefits. The purpose of obtaining public input 
on electronic benefits transfer (EBT) systems is to offer State 
agencies, advocacy groups, food retailers, EBT-system vendors, and 
other interested parties the opportunity to provide input on EBT issues 
and initiatives prior to the submission of a report on EBT systems to 
Congress.

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

ADDRESSES: Comments should be submitted to Lizbeth Silbermann, Chief, 
Electronic Benefit Transfer 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. 
Silbermann at (703) 305-1863, or by e-mail to 
[email protected]. All 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 403.

SUPPLEMENTARY INFORMATION: The Farm Security and Rural Investment Act 
of 2002, Pub. L. 107-171, requires the Secretary of Agriculture to 
submit a report on EBT systems to the Committee on Agriculture of the 
House of Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate by October 1, 2003. In an effort to 
supplement the information that will be provided to Congress with the 
views of all parties involved with EBT, the Food and Nutrition Service 
(FNS) is seeking public input through this notice on two general areas 
of EBT: (1) food stamp EBT initiatives being developed or considered by 
interested parties, and (2) potential advances in electronic benefit 
delivery in the next 5 to 10 years, particularly with respect to 
farmers' markets, fraud identification, and fostering of increased 
competition among EBT-system vendors.

EBT Initiatives

    FNS is seeking information and comments on initiatives and 
advancements being developed, considered or taken by State agencies, 
food retailers, EBT-system vendors, client advocates, and other 
interested parties to address any outstanding issues with respect to 
EBT systems. Of particular interest are potential advances in 
electronic benefit delivery in the next 5 to 10 years with respect to 
the following areas:
    1. Farmers' markets--Because farmers' markets and produce stands do 
not have ready access to phone lines and electricity, the 
infrastructure for EBT does not exist. Although all farmers have the 
option to use manual vouchers, it is not the ideal solution because the 
process is not conducive to the way business is handled at these 
markets. FNS has been exploring alternatives to manual vouchers to 
improve operations for these vendors. One option is a scrip system; 
food stamp clients would use their EBT cards at a central Point of Sale 
(POS) location in exchange for scrip and then exchange the scrip with 
individual vendors at the market for food. The second alternative 
utilizes wireless equipment to authorize food stamp purchases in a 
market setting. Several States have operated scrip and/or wireless 
pilots that have been tested. FNS is interested in receiving comments 
on the pilots and other possible improvements to the way farmers and 
farmers' markets participate in EBT.
    2. Fraud identification--FNS' Anti-fraud Locator of EBT Retailer 
Transactions (ALERT) Subsystem. ALERT utilizes a file of retailer EBT 
transactions provided by the States' contracted EBT processors to 
identify suspicious transaction activity. It assesses and analyzes over 
67 million, individual EBT transactions per month. ALERT makes 
available, on line, a series of reports and queries, as well as the 
actual transaction data, to assigned Departmental and Agency staff with 
retailer and compliance monitoring responsibilities. This data triggers 
further analysis and investigations, which may result in on-site 
reports, investigations, prosecutions and administrative sanctions. It 
also enables investigators to track the stores at which a given 
recipient redeems benefits. Transactions and locations can be further 
analyzed in terms of overall shopping patterns in all stores. This 
information is then used to better target investigations or to act on 
program violators through administrative sanction procedures. FNS is 
interested in gathering input on possible advances in the increased use 
of transaction data from EBT systems to identify and prosecute fraud.
    3. Fostering increased competition--Due to concern over pricing 
increases, FNS commissioned a report, the ``Electronic Benefits 
Transfer Alternatives Analysis,'' to explore ways to increase 
competition in the EBT marketplace and keep EBT costs

[[Page 78412]]

affordable for all State agencies. The report highlights various 
procurement and pricing strategies as a way to leverage pricing and 
obtain economies of scale. FNS is interested in obtaining comments on 
these and other strategies to further foster increased competition 
among EBT-system vendors that would ensure cost containment and optimal 
service.

FOR FURTHER INFORMATION CONTACT: Lizbeth Silbermann, Chief, EBT Branch, 
Benefit Redemption Division, Food and Nutrition Service, USDA, 3101 
Park Center Drive, Room 403, Alexandria, Virginia 22302, telephone 
(703) 305-2517.

    Dated: December 13, 2002.
Eric M. Bost,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 02-32434 Filed 12-23-02; 8:45 am]
BILLING CODE 3410-30-P