[Federal Register Volume 68, Number 132 (Thursday, July 10, 2003)]
[Rules and Regulations]
[Pages 41051-41053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17348]



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  Federal Register / Vol. 68, No. 132 / Thursday, July 10, 2003 / Rules 
and Regulations  

[[Page 41051]]



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: Final rule.

-----------------------------------------------------------------------

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 The changes eliminate repetitious, outdated and 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

DATES: Provisions in this rule are effective September 8, 2003.

FOR FURTHER INFORMATION CONTACT: Questions regarding this rulemaking 
should be addressed to Karen Walker, Chief, Retailer Management Branch, 
Benefit Redemption Division, Food and Nutrition Service, USDA, 3101 
Park Center Drive, Alexandria, Virginia, 22302. Questions may also be 
data-faxed to the attention of Ms. Walker at (703) 305-1863, or by e-
mail to [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    This rule has been determined to be not significant by the Office 
of Management and Budget and therefore, was not reviewed by that agency 
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 streamlines and makes technical changes to FNS' 
administrative review process available to retail food stores and 
wholesale concerns participating in the Food Stamp Program. This rule 
has no Federalism implications in that procedural changes set forth do 
not affect State and local governments. This 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. 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 eliminates 
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 rule 
contains information collections that are subject to review and 
approval by the Office of Management and Budget (OMB). These 
information collections are approved under OMB number 0584-0520.
    FNS published a proposed rule on November 25, 2002, which solicited 
comments. No comments directly related to this notice were received; 
however, comments related to the elimination of in-person meetings with 
administrative review staff were received and are addressed in the 
Background section of this rule.

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 part 279.

Public Law 104-4

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public 
Law No. 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

[[Page 41052]]

to the requirements of sections 202 and 205 of the UMRA.

Background

    This rule revises Food Stamp Program regulations affecting the 
administrative review process for retail food stores and wholesale food 
concerns participating in the program. The revisions streamline 
administrative review rules by eliminating repetitive and unnecessary 
provisions and consolidating other provisions in 7 CFR parts 278 and 
279. These revisions do not change the rights of aggrieved food 
retailers and wholesale food concerns to request and obtain an 
administrative review from FNS. This rule also makes technical 
corrections involving regulatory cites listed in Sec.  278.1.
    Only one trade association submitted comments; no other comments 
were received. One of their comments dealt with program compliance that 
is beyond the scope of this rule and another comment expressed support 
for most revisions in the rule as being ``helpful changes that clarify 
the regulations and the program.'' Their remaining comments relate to 
the elimination of in-person meetings between aggrieved retailers and 
administrative review staff.
    The commenter questioned the ``not significant'' designation of the 
rule under Executive Order 12866 in the preamble of the proposed rule 
and questioned the legality of not submitting it to the Office of 
Management and Budget (OMB) for review. The Department submitted a 
workplan with a detailed outline of the proposed rule to OMB for 
review. OMB designated the proposed rule as ``not significant'' based 
on that information, which is standard procedure, and no further review 
of the proposed rule by them was required.
    The commenter also questioned the Department's determination under 
the Regulatory Flexibility Act in the preamble that the rule will not 
have a significant impact on a substantial number of small businesses. 
The commenter suggested that eliminating in-person meetings would 
result in ``more small businesses being barred from the program.'' As 
stated previously, administrative reviews are based on the facts of the 
case, not on in-person meetings, and eliminating them will not affect 
the outcome of reviews; therefore, the Department does not believe this 
rule will have a significant impact on a substantial number of small 
businesses.

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. However, there are only three locations 
where such meetings occur and most firms that request such meetings 
must travel long distances to participate. The Department believes the 
travel cost disparity between those retailers located near review 
offices and those located a long distance away places many retailers at 
a disadvantage.
    The commenter opposed the elimination of in-person meetings feeling 
it will disadvantage retailers who wish to explain their position in 
person. The Department makes administrative review determinations based 
on the documented facts of the case, and whether or not aggrieved 
retailers meet with review staff has no bearing on the outcome. Firms 
can and do talk with reviewers by phone as a follow-up to written 
documentation, but review staff base their determinations on the facts 
of the case, not on a meeting or phone conversation. Even though very 
few firms request in-person meetings, the Department believes that 
offering them gives the impression that stores not able to avail 
themselves of the meetings are disadvantaged. Therefore, the rule 
eliminates these meetings. Aggrieved retailers are still able to 
participate in conference calls with administrative review staff.

Implementation

    Provisions of this rulemaking will be implemented 60 days after 
publication of the 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.


0
Accordingly, 7 CFR parts 278 and 279 are amended as follows:

0
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]

0
2. In Sec.  278.1:
0
a. Paragraph (k)(1) is amended by removing the reference ``(g) or (h)'' 
and adding in its place the reference ``(g), (h) or (i)'';
0
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)'';
0
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)'';

0
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)''.
0
e. The reference ``Sec.  279.5'' is removed in paragraph (l)(2) and the 
reference ``part 279'' is added in its place; and
0
f. The reference ``Sec.  278.8'' is removed in paragraph (p) and the 
reference ``part 279'' is added in its place.


Sec.  278.6  [Amended]

0
3. In Sec.  278.6, the reference ``Sec.  279.5'' is removed wherever it 
appears in paragraphs (b), (c) and (n), and the reference ``part 279'' 
is added in its place.


Sec.  278.7  [Amended]

0
4. In Sec.  278.7, the reference ``Sec.  278.8'' is removed in 
paragraph (f) and the reference ``part 279'' is added in its place.


Sec.  278.8  [Removed and Reserved]

0
5. Sec.  278.8 is removed and reserved.

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

0
6. In part 279:
0
a. The words ``administrative review officer'' are removed wherever 
they appear and the words ``designated reviewer'' are added in their 
place; and
0
b. The words ``review officer'' are removed wherever they appear and 
the words ``designated reviewer'' are added in their place.
0
7. Subpart A is further amended by removing the word ``--General'' in 
the Subpart heading.

0
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

[[Page 41053]]

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 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]

0
9. Remove Sec. Sec.  279.2 through 279.4.


Sec. Sec.  279.5 through 279.11  [Redesignated]

0
10. Subpart B is further amended by redesignating Sec. Sec.  279.5 
through 279.9 as Sec. Sec.  279.2 through 279.6, respectively.


Sec.  279.2  [Amended]

0
11. Amend newly redesignated Sec.  279.2 as follows:
0
a. The heading of paragraph (a) is amended by removing the word 
``Addressing'' and adding in its place the word ``Submitting''.
0
b. Paragraph (a) is further amended by removing the words ``Room 304''.
0
c. Paragraph (c) introductory text is amended by removing the words 
``with the Director, Administrative Review Division,''.


Sec.  279.3  [Amended]

0
12. Remove the last two sentences of paragraph (b) in newly 
redesignated Sec.  279.3.

0
13. Amend newly redesignated Sec.  279.4 as follows:
0
a. Paragraph (a) is amended by revising the first two sentences and by 
removing the last sentence;
0
b. Paragraph (c) is revised; and
0
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 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.

0
14. Amend newly redesignated Sec.  279.5 as follows:
0
a. The heading of paragraph (a) is amended by removing the word 
``officer'',
0
b. Paragraph (b), (c) and (e) are revised; and
0
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.
* * * * *

0
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]

0
16. Subpart B is removed.

Subpart C [Redesignated as Subpart B]

0
17. Subpart C is redesignated as Subpart B.


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

0
18. Redesignate Sec. Sec.  279.10 and 279.11 as Sec. Sec.  279.7 and 
279.8.


Sec.  279.7  [Amended]

0
19. Amend newly redesignated Sec.  279.7 as follows:
0
a. Paragraph (a) is amended by removing the reference ``Sec.  
279.8(e)'' and adding in its place the reference ``Sec.  279.5(e)''.
0
b. Paragraph (b) is amended by removing the words the ``officer or''.

    Dated: July 2, 2003.
Roberto Salazar,
Administrator, Food and Nutrition Service.
[FR Doc. 03-17348 Filed 7-9-03; 8:45 am]
BILLING CODE 3410-30-P