[Federal Register Volume 71, Number 236 (Friday, December 8, 2006)]
[Proposed Rules]
[Pages 71075-71084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-20765]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 71, No. 236 / Friday, December 8, 2006 / 
Proposed Rules  

[[Page 71075]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

[Amendment No. 399]
RIN 0584-AB51


Food Stamp Program: Disqualified Recipient Reporting and Computer 
Matching Requirements That Affect the Food Stamp Program

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: In this rule the Food and Nutrition Service proposes to codify 
prisoner verification and death matching procedures mandated by 
legislation and previously implemented through agency directive. The 
proposed rule will require that State food stamp agencies use 
disqualified recipient data to screen all program applicants prior to 
certification to assure that they are not currently disqualified from 
the program and thus ineligible to participate. The proposed rule also 
addresses requirements that State food stamp agencies participate in a 
computer matching program using a system of records that adhere to 
provisions of the Computer Matching and Privacy Protection Act of 1988, 
as amended. Finally, publication of this proposed rule responds to 
findings of General Accounting Office and USDA Office of Inspector 
General audits that found, among other things, that the disqualified 
reporting subsystem process could be improved to enhance State agency 
ability to identify currently disqualified food stamp recipients.

DATES: Comments must be received on or before February 6, 2007.

ADDRESSES: The Food and Nutrition Service (FNS) invites interested 
persons to submit comments on this proposed rule by any of the 
following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: Comments may be e-mailed to 
[email protected]. Include ``DRS Proposed Rule'' in the subject 
line of the message.
     Fax: Comments may be faxed to the attention of Edward 
Speshock at (703) 605-0795.
     Mail: Comments may be submitted to the Food and Nutrition 
Service, Food Stamp Program, Program Accountability Division, State 
Administration Branch, USDA, 3101 Park Center Drive, Alexandria, 
Virginia 22302.
    All comments will be available for public inspection at the above 
address between the hours of 9:30 a.m. and 3:30 p.m. Monday through 
Friday. You may also download an electronic version of this proposed 
rule at http://www.fns.usda.gov/fsp/rules/Regulations/default.htm.

FOR FURTHER INFORMATION CONTACT: For questions about this proposed 
rule, contact Mr. Edward Speshock at (703) 305-2383.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be significant and was 
reviewed by the Office of Management and Budget under Executive Order 
12866.

Regulatory Impact Analysis

Need for Action

    This action is proposed to codify changes in procedures regarding 
prisoner verification mandated by the Balanced Budget Act of 1997 (Pub. 
L. 105-33) and amendments to the Food Stamp Act enacted in Public Law 
105-379 (Food Stamp Fraud Prevention) regarding death matching. The 
Balanced Budget Act amendment requires each State to establish a system 
to ensure that persons under court ordered detention are not counted as 
members of food stamp households. The Public Law 105-379 amendment 
requires State agencies to ensure deceased individuals are not counted 
as household members. The proposed rule also includes requirements that 
State food stamp agencies participating in computer matching programs 
using a system of records adhere to provisions of the Computer Matching 
and Privacy Protection Act of 1988 (Pub. L. 100-503), as amended. In 
addition, this action proposes to revise Food Stamp Program (Program) 
regulations to enforce penalties for intentional Program violations 
(IPV) on disqualified food stamp recipients identified by the 
disqualified reporting system process.

Costs/Benefits

    Prisoner verification and death match procedures were mandated by 
legislation and implemented by agency directive some years ago. 
Currently all States perform data matches of prisoner and death records 
at certification. However, with regard to matches with client 
disqualification information, currently States are only required to do 
periodic matches and only a few States perform routine matches at 
initial certification. The resultant annual Program savings from these 
ongoing matches at certification are estimated to be $100 million for 
the five-year period 2006-2010. Further, no State performs routine 
matches at recertification against prisoner records, death records, or 
records of client disqualification. Requiring all States to match 
against disqualification records at initial certification and to match 
against prisoner, death, and disqualification records at 
recertification will yield an estimated $51 million in Program savings 
during the five-year period 2006-2010, including $15 million in one-
time savings from performing matches on long-term participants who 
never were matched at initial certification. Total Program savings for 
initial certification and recertification will total an estimated $30 
million the first full year of implementation and $151 million for the 
period 2006-2010.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). Nancy Montanez Johner, 
Under Secretary for Food, Nutrition, and Consumer Services, has 
certified that this rule will not have a significant economic impact on 
a substantial number of small entities. State and local welfare 
agencies will be the most affected to the extent that they administer 
the Program. Applicants and participants may be affected to the extent 
that matching client information with Disqualified Recipient Subsystem 
(DRS) records may identify a current finding of an IPV and therefore 
prevent Program participation.

[[Page 71076]]

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 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 202 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. This rule, therefore, is not subject to the requirements 
of Sections 202 and 205 of the UMRA.

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 codified 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.

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's consideration in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132.

Prior Consultation with State Officials

    Prior to drafting this proposed rule, FNS consulted with State and 
local agencies at various times. Because the Food Stamp Program is a 
State administered, Federally funded program, FNS regional offices have 
formal and informal discussions with State and local officials on an 
ongoing basis regarding program implementation and policy issues. This 
arrangement allows State and local agencies to provide comments that 
form the basis for many discretionary decisions in this and other food 
stamp rules. FNS has responded to numerous written requests for policy 
guidance on IPV disqualification data reporting. Also, guidance for the 
prisoner verification and deceased data matching programs were 
implemented by agency directive with the consultation and input from 
State and local food stamp agencies.

Nature of Concerns and the Need to Issue This Rule

    State and local food stamp agencies generally want greater 
flexibility in the implementation of Program administrative 
responsibilities. This proposed rule, in our opinion, will provide 
flexibility in this area and also address another major State concern, 
which is the need to conform FSP rules to the rules of other means-
tested Federal programs. Specific policy questions submitted by State 
agencies helped FNS identify issues that needed to be addressed in the 
proposed rule.

Extent to Which We Meet Those Concerns

    FNS has considered the impact of this proposed rule on State and 
local agencies. This rule proposes changes that are required by law, 
such as the prisoner verification and deceased person data match 
programs. These changes were implemented by agency directives in 
response to implementation time frames required in legislation. The 
proposed changes to Food Stamp Program rules describing State agency 
responsibility for reporting IPV disqualification information will 
clarify information access and follow-up procedures, and provide 
greater flexibility to State agencies for processing, retaining and 
sharing disqualification information. FNS is not aware of any case 
where the discretionary provisions of the rule would preempt State law. 
In addition, FNS invites State agencies to submit requests for waiver 
consideration of any discretionary provisions of this rule where a 
State agency can demonstrate that its own procedures would be more 
effective and efficient; such a waiver would not result in a material 
impairment of any statutory or regulatory rights of participants; and, 
such a waiver would otherwise be consistent with the waiver authority 
set out at Sec. Sec.  272.3(c).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State and 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 Dates paragraph of the final rule. Prior to 
any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted.
    In the Food Stamp Program, the State administrative procedures for 
Program benefit recipients are issued pursuant to 7 U.S.C. 2020(e)(1) 
and set forth at Sec.  273.15; the administrative procedures for State 
agencies are issued pursuant to 7 U.S.C. 2023 and are set out at Sec.  
276.7 (for rules related to non-QC liabilities) or 7 CFR Part 283 (for 
rules related to QC liabilities); and the administrative procedures for 
retailers and wholesalers are issued pursuant to 7 U.S.C. 2023 and set 
out at Sec.  278.8 and 7 CFR Part 279.

Civil Rights Impact Analysis

    FNS has reviewed this rule in accordance with the Department 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and 
address any major civil rights impact the rule might have on protected 
classes, including minorities, women, and persons with disabilities. 
After a careful review of the rule's intent and provisions, and the 
characteristics of food stamp households and individual participants, 
FNS has determined that there is no way to soften the effect on any of 
the protected classes. All data available to FNS indicate that 
protected individuals have the same opportunity to participate in the 
Food Stamp Program as non-protected individuals. FNS specifically 
prohibits State and local government agencies that administer the 
Program from engaging in actions that discriminate based on race, 
color, gender, age, disability, marital status or family status. (FSP 
nondiscrimination policy can be found at Sec.  272.6(a)). Where State 
agencies have options, and they chose to implement a certain provision, 
they must implement it in such a way that it complies with the 
regulations at Sec.  272.6.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35; see 5 
CFR 1320), requires that the Office of Management and Budget (OMB) 
approve all collections of information by a Federal agency from the 
public before they can be implemented. Respondents are not required to 
respond to any collection of information unless it displays a current

[[Page 71077]]

valid OMB control number. This proposed rule contains information 
collections that are subject to review and approval by OMB; therefore, 
FNS is submitting for public comment the changes in the information 
collection burden that would result from the adoption of the proposals 
in this rule.
    Comments on the collection of information in this proposed rule 
must be received by February 6, 2007.
    Send comments to Office of Information and Regulatory Affairs, OMB, 
Attention: Desk Officer for FNS, Washington, DC, 20503. Please also 
send a copy of your comments to Edward Speshock, State Administration 
Branch, Program Accountability Division, Food and Nutrition Service, 
U.S. Department of Agriculture, 3101 Park Center Drive, Alexandria, VA, 
22302. For further information, or for copies of the information 
collection, please contact Mr. Speshock at the above address. Comments 
are invited on: (a) Whether the proposed collection of information is 
necessary for the performance of the functions of the agency, including 
whether the information will have practical utility; (b) the accuracy 
of the agency's estimates of the burden of the proposed collection of 
information including the validity of the methodology and the 
assumptions used; (c) ways to enhance the equality, utility and clarity 
of the information to be collected; and (d) ways to minimize the burden 
of the collection of information on those who are to respond, including 
through the use of appropriate collection techniques or other forms of 
information technology.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.
    Title: Repayment Demand and Program Disqualification.
    OMB Number: 0584-0492.
    Expiration Date: April 30, 2008.
    Type of Request: Revision of a currently approved collection.
    Abstract: Under Sec. Sec.  273.2(f)(11) and 273.16 State agencies 
are required to report and verify information on disqualified 
individuals to FNS. This is not a new requirement. Previously, State 
agencies have been required to report such information via paper report 
form to FNS regional offices to be entered into a disqualified 
recipient database. Printouts or computer tapes were then provided to 
the States for their use in meeting intentional Program violation 
requirements. This reporting is now handled electronically from the 
States to the FNS disqualified recipient database.
    With the provisions in this rule, we are proposing to amend the 
data requirements and the frequency with which state agencies access 
the disqualified reporting subsystem. Other burden requirements remain 
unchanged.
    Respondents: State Agencies.
    Estimated Number of Respondents: 53.
    Estimated Burden:

                                          Disqualification Reporting *
----------------------------------------------------------------------------------------------------------------
                                                                                     Time per
              Component                   Number of     Total  annual  responses   response  in   Annual  burden
                                         respondents                                   hours           hours
----------------------------------------------------------------------------------------------------------------
Applicant/Recipient Screening........              53  10.1 million.............         .041667         423,333
Disqualified Penalty Screening.......              53  60,000...................         .041667           2,500
----------------------------------------------------------------------------------------------------------------
* Note: The burden for DRS applicant/recipient screening and penalty screening is in addition to the total
  currently approved of 166,329 hours. The revised total annual Burden is therefore 589,662 (166,329 plus
  423,333).


                                  Repayment Demand and Program Disqualification
----------------------------------------------------------------------------------------------------------------
                                                                                     Time per
                    Component                        Number of     Total  annual   response  in   Annual  burden
                                                    respondents      responses         hours           hours
----------------------------------------------------------------------------------------------------------------
Estimated Burden for Repayment Demand and                     53       1,600,981         0.10389         166,326
 Program Disqualification.......................
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: Currently approved burden is 166,329 hours. 
This submission would increase total burden by 423,333 hours.

E-Government Act Compliance

    The Food and Nutrition Service is committed to complying with the 
E-Government Act, to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes. 
As described above, the information collection associated with this 
regulation is available for electronic submission.

Background

Prisoner Verification System (PVS) Matching Program

    Section 1003 of the Balanced Budget Act of 1997 (Pub. L. 105-33) 
amended Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)) 
to require States to establish systems and take periodic action to 
ensure that an individual who is detained in a Federal, State, or local 
penal, correctional, or other detention facility for more than 30 days 
shall not be eligible to be counted as household members participating 
in the Food Stamp Program. The mandated requirements of the Balanced 
Budget Act of 1997 became effective on August 5, 1998. For the purpose 
of this rule the term ``Federal, State, or local penal, correctional or 
other detention facility'' includes, but is not limited to, city, 
county and multi-jurisdictional jails, work and boot camps, residential 
halfway houses (e.g., in conjunction with work release or community 
service programs), detention centers (including juvenile detention 
centers), and mental health and medical facilities housing prisoners on 
behalf of correctional institutions. Individuals who are detained in 
residential halfway houses or who are detained under house detention, 
should not be denied eligibility unless the State agency has determined 
that the individual's meals are provided by the institution. This 
requirement strengthens current regulations at Sec.  273.1(a), which 
prohibit the inclusion of an individual who is currently in an 
institution described above as a member of a food stamp household. 
States should continue to follow the procedures at Sec.  273.1(a) in

[[Page 71078]]

establishing household composition at certification and periodically 
thereafter. The required verification system should be used to verify 
that no household member is under detention in a prison facility, in 
conjunction with established verification rules at Sec.  273.2(f). The 
law further provides that a State opting to obtain and use prisoner 
information collected by the Social Security Administration (SSA) under 
Section 1611(e)(1)(I)(i)(I) of the Social Security Act (42 U.S.C. 
1382(e)(1)(I)(i)(I)) pursuant to Section 1611(e)(1)(I)(ii)(II) (42 
U.S.C. 1382(e)(1)(I)(ii)(II)) of that Act, shall be considered in 
compliance with this provision. Finally, the law provides that such 
verification be performed ``periodically.'' However, it does not 
specify when verification must take place. FNS believes it is good 
administrative practice to prevent errors before they happen. 
Therefore, we are proposing to amend current regulations by adding a 
new Sec.  272.13(c) to require States to conduct PVS checks at 
application and re-certification.

Matching Death Records

    This proposed rule implements requirements to match death records 
enacted by Public Law 105-379 on November 12, 1998. Public Law 105-379, 
which amended Section 11 of the Food Stamp Act (7 U.S.C 2020), requires 
all State agencies to enter into a cooperative arrangement with the 
Social Security Administration (SSA) to obtain information on 
individuals who are deceased and use the information to verify and 
otherwise ensure that benefits are not issued to such individuals. The 
law was effective on June 1, 2000. The mandated requirements were 
implemented by FNS directive to all food stamp State agencies on 
February 14, 2000. State agencies are responsible for entering into a 
matching agreement with the SSA in order to access information on 
deceased individuals. This rule proposes to add a new Sec.  272.14 to 
codify this requirement in regulation and to describe requirements for 
accessing the SSA death master file.
    Under current rules at Sec.  273.12(a) and Sec.  273.21, it is the 
food stamp household's responsibility to report changes in household 
composition, such as the addition or loss of a household member. 
Households must report household composition changes within 10 days of 
becoming aware of the change or, if subject to periodic reporting, by 
the appropriate date. Thus, the accuracy of program benefits issued to 
a household relies on the accuracy of reported and verified 
information.
    The SSA death master file database contains over 60 million 
records. SSA receives death reports from numerous sources, including 
the Centers for Medicare and Medicaid Services, Department of Veterans 
Affairs, postal authorities, and other internal and external sources. A 
small percentage of deaths reported to SSA are from family members and 
funeral homes.
    FNS proposes in new Sec.  272.14 that State agencies independently 
verify the records before taking adverse action against a household 
with an unreported deceased household member. This is consistent with 
amendments to the Computer Matching Act requiring that computer match 
information be verified before it can be used to take action against an 
individual.
    State food stamp agencies are encouraged to use the SSA State 
Verification and Exchange System (SVES) for accessing deceased 
information. Use of SVES would be the most cost-effective method since 
State agencies already have agreements with SSA to access information 
through SVES.
    In this rule, FNS is proposing standards for how often State 
agencies must conduct matches to be reasonably certain that food stamp 
benefits are not being issued to deceased individuals. Thus, consistent 
with other matches described in this rule, we are proposing that State 
agencies conduct a match for deceased household members at 
certification and recertification. This minimum standard for how often 
a match must be conducted is specified in the rule under newly proposed 
Sec.  272.14.

Disqualified Recipient Matching

    FNS participates in a computer matching program in which it serves 
as both a source and a recipient agency. This required Federal matching 
program known as the Disqualified Recipient Subsystem (DRS) uses a 
Computer Matching and Privacy Protection Act system of records and 
contains information about individuals who have been disqualified from 
the Food Stamp Program for an IPV (See 5 U.S.C. 552a (o), (p) and (q)). 
The database can be accessed by State agencies to assign the legally 
required penalty period for intentional Program violations. State 
agencies also use information from the system to screen new applicants 
and current food stamp recipients to determine if they should be 
serving a disqualification penalty imposed by another State. The 
Computer Matching and Privacy Protection Act provides that the Office 
of Management and Budget shall be responsible for computer matching 
guidance. Final guidance was published in the Federal Register on June 
19, 1989, at 54 FR 25818, and is incorporated by reference in this 
proposed rule. FNS proposes to amend Sec.  273.2(f) to address the 
verification requirements for the disqualified recipient matching 
program. Current regulations at Sec.  273.16(i)(4) provide that, at a 
minimum, the disqualification data submitted to FNS by State agencies 
shall be used to determine the appropriate disqualification penalty to 
impose, based on past disqualifications, and the eligibility of 
individual Program applicants prior to certification in cases where the 
State agency has reason to believe a household member is subject to 
disqualification in another State. Under this proposed rule State food 
stamp agencies must also begin to use disqualified recipient data to 
screen all program applicants prior to certification. State agencies 
may also periodically match the entire database of disqualified 
individuals against their current recipient caseload to determine if 
the applicant or recipient should be serving a disqualification.
    FNS proposes in new Sec.  273.2(f)(11)(iii), that a State agency 
may not take any adverse action to terminate, deny, suspend, or reduce 
benefits to an applicant or food stamp recipient based on information 
produced by a disqualified recipient match unless the match information 
has been independently verified. This is consistent with the Computer 
Matching Act that ensures client due process protection by requiring 
the matching agency to provide applicants and/or recipients a notice 
and opportunity to contest when a specific match result may lead to an 
adverse action. FNS also proposes in new Sec.  273.2(f)(11)(iv) that 
the State agency initiating the disqualified recipient search contact 
the State agency locality contact that originated the disqualification 
or the applicant or recipient household for verification prior to 
taking an adverse action. The disqualified recipient match information 
would be verified by obtaining a copy of the original document, or 
copies of documentation of an individual's disqualification history 
(past and current disqualifications) or confirmation of the existence 
of specific relevant documents that substantiate the disqualification 
record. Under the proposal, documentation would include, but not be 
limited to, court determinations, signed declarations by individuals 
waiving the right to an administrative disqualification hearing, signed 
disqualification consent agreements by individuals, a hearing 
authority's

[[Page 71079]]

decision, and the notification of disqualification. Any confirmation as 
to the existence of the above documentation shall be made by the 
originating State's locality contact or another designated State 
official. Written confirmation shall be documented in the case record 
with a copy of one of the documents described above. This is consistent 
with current verification procedures at Sec.  273.2(f)(4) that 
documentary evidence shall be the primary source of verification.
    To ensure interstate cooperation, FNS further proposes to require 
that disqualification documentation be transmitted to a requesting 
State agency in a timely fashion. To encourage cooperation in the 
exchange of documentation, FNS proposes to provide State agencies the 
flexibility to decide how the information can be exchanged. FNS will 
permit alternatives including, but not limited to, reviewing original 
documents related to prior disqualifications; written confirmation of 
having seen the documents; obtaining copies of original documents from 
each State that played a role in the determination and implementation 
of the prior disqualifications; and, obtaining copies of supporting 
documentation for all disqualifications from the last State agency to 
take a disqualification action against an individual. FNS intends by 
this proposed rule that requests and responses to requests for 
verification must be transmitted in a manner that protects the privacy 
of the individual household.
    FNS does not intend to require a specific timeframe for State 
agencies to respond to various types of requests for verification. 
Prompt responses to verification requests, however, can help to 
expedite the delivery of benefits and avoid or reduce any overissuance 
to the household containing the individual in question. FNS believes it 
is in each State agency's interest to expedite requests for 
verification since all State agencies may find themselves in the 
position of a requesting agency at some point. Prudent management would 
suggest that a State agency that receives a request for documentation 
supporting disqualification information must be able to respond to the 
request within a reasonable amount of time from the date it receives 
the request. For this purpose the proposed rule will define a 
``reasonable amount of time'' to be 20 working days or less from the 
postmarked date of request. FNS requests comments that support this 
definition or provide reasoned arguments suggesting a more workable 
definition of a ``reasonable amount of time''.
    State agencies must act promptly to request verification to ensure 
that documentation can be made available to them in sufficient time to 
avoid the possibility of delays in the processing of applications 
pursuant to Sec.  273.2(h). The State agency making the request should 
document in the case record the period of elapsed time taken by the 
State agency locality contact for verification to be provided.
    In the event a State agency is not able to provide independent 
verification of a disqualified recipient match because of a lack of 
supporting documentation, the State agency would be required to advise 
the requesting State agency, or FNS (in the case of resolving a dispute 
about the accuracy of a disqualification record), as appropriate, and 
take immediate action to remove the unsupported disqualified record 
from the disqualification database. Procedures for reporting such 
disqualification records are proposed in Sec.  273.16(i) of this rule. 
In such instances, the requesting State agency would be prohibited from 
taking any adverse action against the household based on the unverified 
disqualification information.
    FNS proposes, in new Sec.  273.2(f)(11)(vi), that the requesting 
State agency would enter the received information into the household's 
case record immediately upon receipt. The documentation should be 
reviewed to insure that the information pertains to the individual and 
disqualification in question. Once satisfied about the validity of the 
information, the requesting State shall provide the household notice of 
the IPV match result (along with the intended action to be taken based 
on the computer match) and an opportunity to contest by sending the 
appropriate notice to the household.
    States are prohibited from denying benefits to an applicant 
household without first verifying the accuracy of the disqualification 
information. State agencies shall not deny an application if the 
independent verification is not available in time to satisfy the 
application processing standard. This policy is consistent with 
procedures at Sec.  273.2(f). Also, the 30-day application processing 
standard at Sec.  273.2(f) applies if a State agency is matching 
applicant information using the optional IVES and SAVE verification 
systems. FNS believes the policy pertaining to IPV matches should be 
consistent in order to provide the State agency a uniform procedure for 
reviewing and verifying all independently verified information. If the 
information under verification indicates that an individual is 
currently disqualified, then the individual would not be eligible to 
receive benefits and certifying eligibility would result in an 
overissuance. A State certifying the ineligible individual would, once 
corroboration is received, issue a notice of adverse action to remove 
the individual from the program, adjust the household's allotment, and 
possibly establish a recipient claim against the household for the 
overissued benefits. The proposed rule is intended to reduce the 
incidence of ineligibility determination and unnecessary administrative 
burden.

Application Screening To Determine Status of Eligibility

    Current regulations at Sec.  273.11(c) are silent regarding a 
disqualified individual who moves from one jurisdiction or State to 
another while disqualified and, either as a single household or as a 
member of another food stamp household, applies for benefits. 
Accordingly, FNS proposes to amend Sec.  273.11(c)(4)(i) to require 
that the disqualified individual and, if applicable, the household, be 
informed of their eligibility status and the effect of the 
disqualification on the eligibility and benefits of the remaining 
household members. FNS intends that the State agency follow the 
procedures in Sec.  273.11(c) for determining if the household is still 
eligible for benefits and what the new benefit amount will be.

Disqualified Recipient Data Requirements

    Current food stamp regulations at Sec.  273.16(i) provide that 
State agencies shall report individuals to FNS who have been 
disqualified due to an intentional Program violation. FNS proposes to 
amend Sec.  273.16(i) to update the format used by State agencies to 
report and access intentional Program violation disqualification 
information. The new data elements to be included in the revised format 
are Decision Date; Gender; Type of Offense; and, Locality Contact 
Information. In addition, FNS proposes to include new language in Sec.  
273.16(i) that describes the ``electronic transmittal from the State 
agency'' to FNS of IPV information. State agencies have been provided 
extensive information and consultation by FNS to evaluate the options 
for submitting data including documentation, training and user manuals. 
FNS has worked with States to ensure the options are varied and 
flexible enough to make it technically feasible for all State agencies 
to electronically submit the information

[[Page 71080]]

required under this proposed rule. FNS therefore proposes to amend 
Sec.  273.16 to include these four new elements to provide data 
clarification and to promote conformity with other Federal databases, 
such as those from the Social Security Administration, which includes 
this information as data fields in computer matches.
    This proposed rule would also define ``disqualification decision 
date'' as the date a disqualification decision was rendered as a result 
of either an administrative or judicial hearing, or the date an 
individual signs either a waiver of his/her right to an administrative 
disqualification hearing or a disqualification consent agreement 
waiving his/her right to a court hearing. By signing a waiver or 
disqualification consent agreement, an individual agrees to accept a 
disqualification penalty in lieu of a hearing. Addition of the 
disqualification decision date makes it easier for State agencies to 
track and verify information about individual disqualifications. The 
above definition is included in Sec.  273.16(i)(3)(i) of this proposed 
rule. In addition, proposed section Sec.  273.16 (i)(3)(iii) defines a 
``locality contact'' as a person, position or entity designated by the 
State agency as the point of contact for other State agencies to verify 
information in a disqualification record supplied by the locality 
contact's State.
    FNS is proposing to include a field to record the type of offense--
the action an individual took or failed to take which resulted in an 
intentional Program violation as defined in Sec.  273.16(c)--in order 
to identify violations applicable to the increased penalties for 
illegally exchanging coupons for firearms, ammunition, explosives or 
controlled substances. In addition to providing statistical data on the 
number of violations affected by the new penalties, this field would 
make it easier for State agencies to track and assign the appropriate 
penalty. FNS also believes that valuable information can be obtained 
from the reporting of various types of violations that will be made 
available to States. Reporting of these violations could assist FNS in 
determining, for example, where stiffer penalties could be enforced for 
certain violations. FNS intends to produce a list of offenses by 
category for reporting purposes. Each category will be assigned its own 
code. State agencies would be required to report the type of offense by 
recording the appropriate code.
    Current regulations at Sec.  273.16(i)(4) describe the uses of the 
data. FNS intends to retain present mandatory uses of the data. FNS is 
proposing to amend this Section to require that State food stamp 
agencies use disqualification data in the determination of the 
eligibility of all applicants or current recipients of program 
benefits. FNS believes Congressional intent in requiring a database of 
disqualified recipient information is to give State agencies the 
ability to determine and assign the appropriate period of 
disqualification for persons who commit intentional Program violations 
and to ensure that the appropriate penalty is enforced. In order to 
ensure that individuals who are not entitled to benefits due to a 
disqualified recipient disqualification are prevented from 
participating, FNS believes States must screen applicants at 
certification and current recipient caseload periodically. FNS believes 
this requirement will strengthen the effectiveness of State agencies in 
reducing the potential for overissuance of program benefits.
    Accordingly, the requirements at Sec.  273.16(i)(4) are being 
expanded to describe the need to screen disqualified recipient data at 
certification and included under the proposed new Sec.  273.2(f)(11) as 
paragraphs (f)(11)(i)(A), (f)(11)(i)(B), (f)(11)(iii)(A), and 
(f)(11)(iii)(B).

Disqualification Record Retention

    The current regulations at Sec.  272.1(f) require that program 
records be retained for a period of 3 years from the month of origin 
and that fiscal records such as those relating to claims and restored 
benefits and accountable documents be retained for 3 years from the 
date of fiscal or administrative closure. The current regulations at 
Sec.  273.16(b) provide that an individual can be disqualified from 
participating in the program permanently. ``Permanent'' in this rule is 
defined as the remainder of the individual's lifetime or another 
shorter period established by FNS as administratively appropriate. Due 
to the nature of the disqualification penalties, FNS believes it is 
appropriate that case records relating to intentional Program violation 
disqualifications, associated client notices, and records generated as 
a result of using disqualification information be retained 
indefinitely, until the State agency receives reliable information that 
the person has died, or until advised by FNS that the individual is 80 
years old and the State should remove the record from the database. 
Retaining such records indefinitely or until the disqualified 
individual reaches his/her 80th birthday will assure that accurate 
information is retained and available consistent with Congressional 
intent.
    Accordingly, in addition to proposed requirements in Sec.  
273.16(i) of this proposed rule to update or delete disqualification 
records under certain circumstances, FNS proposes, in Sec.  
272.1(f)(3), that disqualification records provided to State agencies 
be maintained by the State agencies for as long as such records are 
accurate, timely, relevant, and complete. Each State shall be 
responsible for the destruction of disqualified recipient records in 
their possession when they are no longer accurate, timely, relevant, 
and complete. FNS expects that this records destruction will take place 
automatically each time a State food stamp agency receives a new or 
updated database from FNS or in accordance with a formal process of 
periodic review and purging of these records. State food stamp agencies 
would be permitted to follow prescribed records management programs to 
meet this requirement. Information about the State's records management 
program is included with the State agency plan as described in Sec.  
272.10(b)(3) of Program regulations.

Computer Match Benefit Adjustments

    Food stamp households receiving benefits under Federal benefit 
programs may periodically receive cost-of-living adjustments (COLAs). 
State agencies are required under Sec.  273.12(e)(3) to establish 
procedures for making changes to food stamp benefits to reflect these 
COLAs and to provide a notice of change to affected households. Current 
COLA adjustment procedures take two forms. Under the first method, a 
State agency may calculate the expected increase by applying the 
appropriate percentage adjustment to the household's current income. 
Under the second method, a State agency may use results of a computer 
match of the updated income information to adjust household income. The 
recalculated, or updated, income information then provides the basis 
for recalculating the household's food stamp benefit.
    The second method for making benefit adjustments constitute a 
computer match covered by the Computer Matching Act. It compares 
information provided by a Federal source to a State record, using a 
computer to perform the comparison; and it affects eligibility or the 
amount of benefits for a Federal benefit program. Therefore, the 
information must be independently verified and the food stamp household 
must be provided notice and an opportunity to contest the adverse 
action if the adjustment would change the level of benefits or 
eligibility status of the household.

[[Page 71081]]

    Accordingly, the Department is proposing to amend Sec.  
273.12(e)(3) to specify that there will be two procedures for states to 
apply in determining COLA adjustments. A new Sec.  273.12(e)(3)(i) is 
proposed to allow the use of calculated percentage increases to present 
COLAs. A new Sec.  273.12(e)(3)(ii) would allow the use of computer 
information from a Federal agency database to make the adjustment and 
require independent verification and notice in accordance with Sec.  
273.2(f)(9). The Department is also proposing to amend Sec.  
273.13(b)(1) to require that a notice of adverse action be sent when 
computer generated adjustments result in increased income and a change 
of food stamp benefits.

Implementation

    State agencies have been instructed through FNS directive to 
implement the provisions of the prisoner verification (Pub. L. 105-33) 
and Death File matches (Pub. L. 105-379) as required in the applicable 
legislation and without waiting for formal regulations. Implementing 
requirements of the Computer Matching and Privacy Act (Pub. L. 100-503) 
as they may pertain to IPV matching agreements and procedures for 
denial of benefits resulting from these computer matches are 
incorporated by reference in this proposed rule. FNS proposes that the 
changes in this rule be effective and must be implemented the first day 
of the month 60 days from date of publication of the final rule. FNS 
intends to require that the provisions of the final rule which reformat 
database information elements would be implemented by requiring State 
food stamp agencies to begin identifying the new data elements for IPV 
reporting purposes described in Sec.  273.16--locality contact, 
disqualification decision date, type of offense and gender--not later 
than 90 days from the effective date of the final rulemaking. State 
food stamp agencies shall have up to 180 days after the effective date 
of the final rule to implement one of the optional uses of disqualified 
reporting system identified at Sec.  273.16(i). Finally, FNS proposes 
that State food stamp agencies would be required to comply with all 
remaining provisions of the final rulemaking not later than 180 days 
from the publication date of the final rulemaking.

List of Subjects

7 CFR Part 272

    Civil rights, Food stamps, Grant programs-social programs, 
Reporting and recordkeeping requirements.

7 CFR Part 273

    Administrative practice and procedure, Claims, Food stamps, Fraud, 
Grant programs-social programs, Penalties, Reporting and recordkeeping 
requirements, Social Security.
    For the reasons set out in the preamble, 7 CFR Parts 272 and 273 
are proposed to be amended as follows:
    1. The authority citation for Parts 272 and 273 continues to read 
as follows:

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

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

    2. In Sec.  272.1, paragraph (f) is revised to read as follows:


Sec.  272.1  General terms and conditions.

* * * * *
    (f) Retention of records. Each State agency shall retain all 
program records in an orderly fashion, for audit and review purposes, 
for a period not less than 3 years from the month of origin of each 
record. In addition:
    (1) The State agency shall retain fiscal records and accountable 
documents for 3 years from the date of fiscal or administrative 
closure. Fiscal closure means that obligations for or against the 
Federal Government have been liquidated. Administrative closure means 
that the State agency has determined and documented that no further 
action to liquidate the obligation is appropriate. Fiscal records and 
accountable documents include but are not limited to claims and 
documentation of lost benefits.
    (2) Case records relating to intentional Program violation 
disqualifications and related notices to the household shall be 
retained indefinitely, until the State agency obtains reliable 
information that the record subject has died, or until FNS advises via 
the edit report that records for a particular individual should be 
permanently removed from the database because of the individual's 80th 
birthday.
    (3) Disqualification records in a State agency's possession must be 
periodically purged when they are no longer accurate, relevant, timely, 
or complete. The State agency shall follow a prescribed records 
management program to meet this requirement. Information about this 
program shall be available for FNS review.
    (4) Retention methods for Authorization to Participate cards are 
provided in Part 274 of this chapter.
* * * * *
    3. New Sec. Sec.  272.12, 272.13, and 272.14 are added to read as 
follows:


Sec.  272.12  Computer matching requirements.

    (a) General purpose. The Computer Matching and Privacy Protection 
Act (CMA), as amended, addresses the use of information from computer 
matching programs that involve a Federal System of Records subject to 
the Privacy Act of 1974, as amended. Each State agency participating in 
a computer matching program shall adhere to the provisions of the CMA 
if it uses an FNS system of records for the following purposes:
    (1) Establishing or verifying initial or continuing eligibility for 
Federal benefit programs;
    (2) Verifying compliance with either statutory or regulatory 
requirements of the Federal benefit programs; or
    (3) Recouping payments or delinquent debts under such Federal 
benefit programs.
    (b) Matching agreements. State agencies must enter into written 
agreements with USDA/FNS, consistent with 5 U.S.C. 552a(o) of the CMA, 
in order to participate in a matching program involving a USDA/FNS 
Federal system of records.
    (c) Use of computer matching information.
    (1) A State agency shall not take any adverse action to terminate, 
deny, suspend, or reduce benefits to an applicant or recipient based on 
information produced by a Federal computer matching program that is 
subject to the requirements of the CMA, unless:
    (i) The information has been independently verified by the State 
agency (in accordance with the independent verification requirements 
set out in the State agency's written agreement as required by 
paragraph (b) of this section) and a Notice of Adverse Action or Notice 
of Denial has been sent to the household, in accordance with Sec.  
273.2(f); or
    (ii) The Federal agency's Data Integrity Board has waived the two-
step independent verification and notice requirement and notice of 
adverse action has been sent to the household, in accordance with Sec.  
273.2(f).
    (2) A State agency which receives a request for verification from 
another State agency, or from FNS pursuant to the provisions of Sec.  
273.16(i) shall, within 20 working days of receipt, respond to the 
request by providing necessary verification (including copies of 
appropriate documentation and any statement that an individual has 
asked to be included in their file), as provided in Sec.  273.16(i)(4).

[[Page 71082]]

Sec.  272.13  Prisoner verification system (PVS).

    (a) General. Each State agency shall establish a system to monitor 
and prevent individuals who are under detention in any Federal, State, 
and/or local detention or correctional institutions for more than 30 
days from being included in a food stamp household.
    (b) Use of match data. State prisoner verification systems shall 
provide for:
    (1) The comparison of identifying information about each household 
member against identifying information about inmates of institutions at 
Federal, State and local levels;
    (2) The reporting of instances where there is a match;
    (3) The independent verification of match hits to determine their 
accuracy;
    (4) Notice to the household of match results;
    (5) An opportunity for the household to respond to the match prior 
to an adverse action to deny, reduce, or terminate benefits; and,
    (6) The establishment and collections of claims as appropriate.
    (c) Match agreement. States shall make a comparison of match data 
(at a minimum) at the time of application, at each recertification, and 
whenever a new member is added to a household. However, States that opt 
to obtain and use prisoner information collected under Section 
1611(e)(1)(I)(i)(I) of the Social Security Act (42 U.S.C. 
1382(e)(1)(I)(i)(I)) shall be considered in compliance with this 
section. Such States shall enter into a computer matching agreement 
with the SSA under authority contained in 42 U.S.C. 405(r)(3).


Sec.  272.14  Deceased matching system.

    (a) General. Each State agency shall establish a system to verify 
and ensure that benefits are not issued to individuals who are 
deceased.
    (b) Data source. States shall use the death master file data 
provided by the Social Security Administration (SSA). State agencies 
electing to obtain the data through the SSA State Verification and 
Exchange System (SVES) shall enter into a computer matching agreement 
with SSA pursuant to authority to share data contained in 42 U.S.C. 
405(r)(3).
    (c) Use of match data. States shall provide a system for:
    (1) The comparison of identifying information about each household 
member against identifying information about deceased individuals. 
States shall make the comparison of match data at the time of 
application and periodically thereafter;
    (2) The reporting of instances where there is a match;
    (3) The independent verification of match hits to determine their 
accuracy;
    (4) Notice to the household of match results;
    (5) An opportunity for the household to respond to the match prior 
to an adverse action to deny, reduce, or terminate benefits; and,
    (6) The establishment and collection of claims as appropriate.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    4. In Sec.  273.2, a new paragraph (f)(11) is added to read as 
follows:


Sec.  273.2  Application processing.

* * * * *
    (f) * * *
    (11) Use of disqualification data.
    (i) Pursuant to Sec.  273.16(i), information in the disqualified 
recipient database will be available for use by any State agency that 
executes a computer matching agreement with FNS. The State agency shall 
use the disqualified recipient database for the following purposes:
    (A) Ascertain the appropriate penalty to impose based on past 
disqualifications in a case under consideration;
    (B) Conduct matches on:
    (1) Program application information prior to certification; and
    (2) The current active and inactive disqualified individuals 
database against the current recipient caseload periodically but no 
less than a bi-monthly schedule.
    (ii) State agencies shall not take any adverse action to terminate, 
deny, suspend, or reduce benefits to an applicant or food stamp 
recipient based on disqualified recipient match results unless the 
match information has been independently verified. The State agency 
shall provide to an applicant or recipient an opportunity to contest 
any adverse disqualified recipient match result pursuant to the 
provisions of Sec.  273.13.
    (iii) Independent verification shall take place separate from and 
prior to issuing a notice of adverse action--a two-step process. 
Independent verification for disqualification purposes means contacting 
the applicant or recipient household or the State agency that 
originated the disqualification record immediately to obtain 
corroborating information or documentation to support the reported 
disqualification information in the IPV database.
    (A) Documentation may be in any form deemed appropriate and legally 
sufficient by the State agency. Such documentation may include but 
shall not be limited to, electronic or hard copies of court 
determinations, signed declarations by individuals waiving the right to 
an administrative disqualification hearing or consenting to a 
disqualification, a hearing authority's decision, and the notification 
of disqualification.
    (B) A State may accept a verbal or written statement from another 
State agency attesting to the existence of the documentation listed in 
paragraph (f)(11)(iii)(A) of this section.
    (C) A State may accept a verbal or written statement from the 
household affirming the accuracy of the disqualification information, 
provided such statement is properly documented and included in the case 
record.
    (D) If a State agency is not able to provide independent 
verification because of a lack of supporting documentation, the State 
agency shall so advise the requesting State agency or FNS, as 
appropriate, and shall take immediate action to remove the unsupported 
information from the disqualified recipient database in accordance with 
Sec.  273.16(i)(6).
    (iv) Once received, the requesting State agency shall review and 
immediately enter the information into the case record and send the 
appropriate notice(s) to the record subject and any remaining members 
of the record subject's food stamp household.
    (v) Information from the disqualified recipient database is subject 
to the disclosure provisions in Sec.  272.1(c) and the routine uses 
described in the most recent ``Notice of Revision of Privacy Act System 
of Records'' published in the Federal Register.
* * * * *
    5. In Sec.  273.11, paragraph (c)(4)(i) is amended by adding a new 
sentence to the end of the paragraph to read as follows:


Sec.  273.11  Action on households with special circumstances.

* * * * *
    (c) * * *
    (4) * * *
    (i) * * * However, a participating household is entitled to a 
notice of adverse action prior to any action to reduce, suspend or 
terminate its benefits, if a State agency determines that it contains 
an individual who was disqualified in another State and is still within 
the period of disqualification.
* * * * *
    6. In Sec.  273.12:
    a. paragraph (e)(3) is amended by removing the last six sentences 
and adding four new sentences in their place

[[Page 71083]]

and by adding new paragraphs (e)(3)(i) and (e)(3)(ii); and
    b. the introductory text of paragraph (e)(4) is revised.
    The additions and revision read as follows:


Sec.  273.12  Reporting changes.

* * * * *
    (e) * * *
    (3) * * * A State agency may require monthly reporting households 
to report the change on the appropriate monthly report or may handle 
the change using the mass change procedures in this section. If the 
State agency requires the household to report the information on the 
monthly report, the State agency shall handle such information in 
accordance with its normal procedures. Households not required to 
report the change on the monthly report and households not subject to 
monthly reporting shall not be responsible for reporting these changes. 
The State agency shall be responsible for automatically adjusting these 
households' food stamp benefit levels in accordance with either 
paragraph (e)(3)(i) or (e)(3)(ii) of this section.
    (i) The State agency may make mass changes by applying percentage 
increases communicated by the source agency to represent cost-of-living 
increases provided in other benefit programs. These changes shall be 
reflected no later than the second allotment issued after the month in 
which the change becomes effective.
    (ii) The State agency may update household income information based 
on cost-of-living increase information supplied by a data source 
covered under the Computer Matching and Privacy Protection Act of 1988 
(CMA) in accordance with Sec.  272.13. The State agency shall take 
action, including proper notices to households, to terminate, deny or 
reduce benefits based on this information if it is considered verified 
upon receipt under Sec.  273.2(f)(9). If the information is not 
considered verified upon receipt, the State agency shall initiate 
appropriate action and notice in accordance with Sec.  273.2(f)(9).
    (4) Notice for mass change. When the State agency makes a mass 
change in food stamp eligibility or benefits by simultaneously 
converting the caseload or that portion of the caseload that is 
affected using the percentage increase calculation provided for in 
Sec.  273.12(e)(3)(i), or by conducting individual desk reviews using 
information not covered under the Computer Matching and Privacy 
Protection Act (CMA) in place of a mass change, it shall notify all 
households whose benefits are reduced or terminated in accordance with 
the requirements of this paragraph, except for mass changes made under 
Sec.  273.12(e)(1); and
* * * * *
    7. In Sec.  273.13:
    a. paragraph (a)(2) is amended by adding two new sentences to the 
end of the paragraph;
    b. paragraph (b)(1) is revised; and
    c. paragraph (b)(7) is amended by removing the first sentence of 
the paragraph and replacing it with three new sentences.
    The additions and revision read as follows:


Sec.  273.13  Notice of adverse action.

    (a) * * *
    (2) * * * A notice of adverse action that combines the request for 
verification of information received through an IEVS computer match 
shall meet the requirements in Sec.  273.2(f)(9). A notice of adverse 
action that combines the request for verification of information 
received through a SAVE computer match shall meet the requirements in 
Sec.  273.2(f)(10).
* * * * *
    (b) * * *
    (1) The State initiates a mass change through means other than 
computer matches as described in Sec.  273.12(e)(1), (e)(2), or 
(e)(3)(ii).
* * * * *
    (7) A household member is disqualified for an intentional Program 
violation, in accordance with Sec.  273.16, or the benefits of the 
remaining household members are reduced or terminated to reflect the 
disqualification of that household member, except as provided in Sec.  
273.11(c)(3)(i). A notice of adverse action must be sent to a currently 
participating household prior to the reduction or termination of 
benefits if a household member is found, through a disqualified 
recipient match, to be within the period of disqualification for an 
intentional Program violation penalty determined in another State. In 
the case of applicant households, State agencies shall follow the 
procedures in Sec.  273.2(f)(11) for issuing notices to the 
disqualified individual and the remaining household members. * * *
* * * * *
    8. In Sec.  273.16, paragraph (i) is revised to read as follows:


Sec.  273.16  Disqualification for intentional program violation.

* * * * *
    (i) Reporting requirements.
    (1) Each State agency shall report to FNS information concerning 
individuals disqualified for an intentional Program violation, 
including those individuals disqualified based on the determination of 
an administrative disqualification hearing official or a court of 
appropriate jurisdiction and those individuals disqualified as a result 
of signing either a waiver of right to a disqualification hearing or a 
disqualification consent agreement in cases referred for prosecution. 
This information shall be submitted to FNS so that it is received in 
the month which is no more than 30 days after the date the 
disqualification took effect.
    (2) State agencies shall report information concerning each 
individual disqualified for an intentional Program violation to FNS. 
FNS will maintain this information and establish the format for its 
use.
    (i) State agencies shall report information to the disqualified 
recipient database in accordance with procedures specified by FNS.
    (ii) State agencies shall access disqualified recipient information 
from the database that allows users to check for prior 
disqualifications.
    (3) The elements to be reported to FNS are name, social security 
number, date of birth, gender, disqualification number, 
disqualification decision date, disqualification start date, length of 
disqualification period (in months), type of offense, locality code, 
and the title, location and telephone number of the locality contact. 
These elements shall be reported in accordance with procedures 
prescribed by FNS.
    (i) The disqualification decision date is the date that a 
disqualification decision was made at either an administrative or 
judicial hearing, or the date an individual signed a waiver to forego 
an administrative or judicial hearing and accept a disqualification 
penalty.
    (ii) The disqualification start date is the date the 
disqualification penalty was imposed by any of the means identified in 
Sec.  273.16(c).
    (iii) The locality contact is a person, position or entity 
designated by a State agency as the point of contact for other State 
agencies to verify information in a DRS disqualification record 
supplied by the locality contact's State.
    (4) All data submitted by State agencies will be available for use 
by any State agency that is currently under a valid signed Matching 
Agreement with FNS.
    (i) State agencies shall, at a minimum, use the data to determine 
the eligibility of individual Program applicants prior to certification 
in cases where the State agency has reason to believe a household 
member is subject to

[[Page 71084]]

disqualification in another jurisdiction; and
    (ii) State agencies shall also use the disqualified recipient 
database for the following purposes:
    (A) To screen all Program applicants prior to certification and at 
recertification; and
    (B) To match the entire database of disqualified individuals 
against their current recipient caseload at application, and 
periodically thereafter.
    (5) The disqualification of an individual for an intentional 
Program violation in one political jurisdiction shall be valid in 
another. However, one or more disqualifications for intentional Program 
violations which occurred prior to April 1, 1983 shall be considered as 
only one previous disqualification when determining the appropriate 
penalty to impose in a case under consideration, regardless of where 
the disqualification(s) took place. State agencies are encouraged to 
identify and report to FNS any individuals disqualified for an 
intentional Program violation prior to April 1, 1983. A State agency 
submitting such historical information should take steps to ensure the 
availability of appropriate documentation to support the 
disqualifications in the event it is contacted for independent 
verification.
    (6) If a State determines that supporting documentation for a 
disqualification record that it has entered is inadequate or 
nonexistent, the State agency shall act to remove the record from the 
database.
    (7) If a court of appropriate jurisdiction reverses a 
disqualification for an intentional Program violation, the State agency 
shall take action to delete the record in the database that contains 
information related to the disqualification that was reversed in 
accordance with instructions provided by FNS.
    (8) If an individual disputes the accuracy of the disqualification 
record pertaining to him/her self, the State agency submitting such 
record(s) shall be responsible for providing FNS with prompt 
verification of the accuracy of the record.
    (i) If a State agency is unable to demonstrate to the satisfaction 
of FNS that the information in question is correct, the State agency 
shall immediately, upon direction from FNS, take action to delete the 
information from the IPV database.
    (ii) In those instances where the State agency is able to 
demonstrate to the satisfaction of FNS that the information in question 
is correct, the individual shall have an opportunity to submit a brief 
statement representing his or her position for the record. The State 
agency shall make the individual's statement a permanent part of the 
case record documentation on the disqualification record in question, 
and shall make the statement available to each State agency requesting 
an independent verification of that disqualification.
* * * * *

    Dated: December 1, 2006.
Nancy Montanez Johner,
Under Secretary, Food, Nutrition and Consumer Services.
[FR Doc. E6-20765 Filed 12-7-06; 8:45 am]
BILLING CODE 3410-30-P