[Federal Register Volume 81, Number 189 (Thursday, September 29, 2016)]
[Proposed Rules]
[Pages 66866-66872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22860]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 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.
 
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 

  Federal Register / Vol. 81, No. 189 / Thursday, September 29, 2016 / 
Proposed Rules  

[[Page 66866]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271 and 274

RIN 0584-AE02


Supplemental Nutrition Assistance Program: 2008 Farm Bill 
Provisions on Clarification of Split Issuance; Accrual of Benefits and 
Definition Changes

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Food and Nutrition Service (FNS) is proposing changes to 
the Supplemental Nutrition Assistance Program (SNAP) issuance 
regulations in accordance with the Food, Conservation and Energy Act of 
2008, Public Law 110-234 (``the 2008 Farm Bill''). The proposal would 
implement several provisions of the 2008 Farm Bill to: Clarify that 
monthly SNAP benefits must be issued in one lump sum; require SNAP 
accounts to be inactive for a minimum of 6 months before taking 
benefits off-line; require benefits taken off-line to be restored 
within 48 hours of the recipient's request; and require permanent 
expungement of unused benefits after 12 months of account inactivity. 
This proposal also addresses the requirement to notify households when 
benefits are taken off-line. Finally, FNS is updating SNAP definitions 
in 7 CFR part 271, to reflect the Program's new name and the issuance 
of benefits through Electronic Benefit Transfer (EBT) systems.

DATES: Written comments must be received on or before November 28, 2016 
to be assured of consideration.

ADDRESSES: The Food and Nutrition Service, USDA, invites interested 
persons to submit comments on this proposed rule. Comments may be 
submitted by one of the following methods:
     Federal e-Rulemaking Portal: Go to http://www.regulations.gov. Preferred method; follow the on-line instructions 
for submitting comments.
     Mail: Comments should be addressed to Vicky T. Robinson, 
Chief, Retailer Management and Issuance Branch, Retailer Policy and 
Management Division, Rm. 418, 3101 Park Center Drive, Alexandria, 
Virginia 22302.
    This proposed rule would codify and clarify certain technical, 
operational aspects to States related to benefit issuance. It also 
requests comment about proposed interpretation of taking benefits off 
line and expunging benefits. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the substance of the comments and 
the identity of the individuals or entities submitting the comments 
will be subject to public disclosure. FNS will make the comments 
publicly available on the Internet via http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Vicky Robinson, Chief, Retailer 
Management and Issuance Branch, Retailer Policy and Management, Rm. 
418, 3101 Park Center Drive, Alexandria, Virginia 22302, or by phone at 
703-305-2476.

SUPPLEMENTARY INFORMATION:

Background

    Sections 4113 (Clarification of Split Issuance) and 4114 (Accrual 
of Benefits) of the 2008 Farm Bill amended section 7 of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2016) (``the Food and Nutrition Act''), 
which pertains to SNAP benefit issuance. In addition, section 4001 
updated the language in the Food and Nutrition Act to reflect the 
Program's name change from the Food Stamp Program to the Supplemental 
Nutrition Assistance Program (SNAP), and section 4115 de-obligated 
coupons as of June 18, 2009, and made EBT cards the sole method of 
benefit delivery.
    This rulemaking proposes to implement the 2008 Farm Bill amendments 
to the Food and Nutrition Act, and to update the general information 
and definitions of 7 CFR part 271 to reflect the Program's new name and 
issuance of benefits through EBT systems. The elimination of all other 
benefit delivery options was addressed in the ``Regulation 
Restructuring: Issuance Regulation Update and Reorganization to Reflect 
the End of Coupon Issuance Systems'' rule published in final at 75 FR 
18377 on April 12, 2010, which became effective on June 11, 2010. The 
2008 Farm Bill provisions addressed in this Proposed Rule were 
implemented through FNS implementing memo on October 1, 2008.

7 CFR Part 271--General Information and Definitions

    FNS is proposing to add new definitions associated with the current 
EBT issuance system and to update the terminology in 7 CFR part 271, to 
reflect the program's new name and the elimination of coupons. 
Furthermore, FNS proposes to change the definition of ``Drug addiction 
or alcoholic treatment and rehabilitation program'' to be consistent 
with current policy, which does not require programs to be eligible to 
receive funding under Part B of title XIX of the Public Health Service 
Act (42 U.S.C. 300x et seq.) in order to redeem SNAP benefits. Programs 
that receive funding under part B of title XIX, programs that are 
eligible to receive funding but do not actually receive funding under 
part B of title XIX, and programs that are not eligible to receive 
funding but operate to further the purposes of part B of title XIX to 
provide treatment to drug addicts and or alcoholics, are all eligible. 
None of the changes to part 271 would have any policy implications.

7 CFR Part 274--Issuance and Use of Program Benefits

    The general provisions proposed in part 274 are statutorily 
required by the Food and Nutrition Act. These provisions were 
administratively implemented on October 1, 2008, via an FNS 
implementation memo, but would be codified with this proposed rule. The 
discussion below and the subsequent regulatory language for this part 
provide additional details to address operational processes and/or 
clarify current policy. Where FNS is also proposing changes to current 
processes, it is so noted.

Split Issuance

    Prior to the 2008 Farm Bill, some State agencies had received 
strong interest from stakeholders to divide each individual household's 
monthly allotment into two or more issuances over the month. Up to that 
point, no State had ever split households' benefit allotments. While 
not explicitly

[[Page 66867]]

prohibiting splitting the issuance of monthly allotments, the current 
SNAP regulations are based on a one-time issuance per month for ongoing 
benefits with 7 CFR 274.2(d) stating that ``all households shall be 
placed on an issuance schedule so that they receive their benefits on 
or about the same date each month.''
    The purpose of splitting benefit allotments, according to retail 
industry proponents, would be to help authorized SNAP stores better 
manage their food stock, employee hours and traffic flow. Proponents 
have also suggested that it would ensure that SNAP participants spread 
their benefit spending over the course of the month instead of 
depleting the entire allotment early on and not having sufficient funds 
to meet their nutritional needs as the end of the month approaches. 
However, section 4113 of the 2008 Farm Bill now requires that State 
agencies issue a household's ongoing monthly benefit allotment in one 
lump sum. Proponents of the one issuance per month limitation have 
argued that requiring the entire monthly benefit allotment to be issued 
at one time allows households to make large buying trips and to 
purchase large, economy-size containers of staple foods. It also allows 
households with small benefit amounts--such as seniors or those with 
limited transportation options--to make one shopping trip during the 
month.
    To address retailer concerns regarding monthly spikes in traffic 
flow, State agencies have the option to stagger the issuance of 
benefits to individual households over multiple days of the month in 
accordance with 7 CFR 274.2(d)(1). Staggered issuance, in this context, 
means issuing benefits to a group of SNAP recipients on one date of a 
month, and issuing benefits to another group of recipients on a 
different date of the month, and so on, so that all SNAP recipients in 
the State are not receiving their monthly allotment and shopping on the 
same day. Staggered issuance allows authorized SNAP stores to manage 
better their food stock, employee hours and traffic flow, while still 
allowing recipients to make bulk purchases and/or limit their shopping 
trips to once per month. When a State agency changes its issuance 
schedule to institute or expand a staggered issuance schedule, State 
agencies would continue to have the option to divide the issuances into 
two parts during the transition month to meet the requirement that no 
more than 40 days elapses between the issuance of any two allotments 
provided to a household participating longer than two consecutive, 
complete months. In general, the prohibition against splitting ongoing 
monthly issuances is not intended to change policy or practice with 
respect to the issuance of benefits in any other area, including 
expedited benefits, the proration of benefits for partial months, the 
issuance of supplemental benefits in the event a benefit correction is 
necessary, or the option to issue benefits semimonthly to residents of 
drug or alcohol addiction treatment facilities.
    This provision would be codified at 7 CFR 274.2(c).

Benefit Expungement

    Under the previous food stamp coupon issuance system, paper coupons 
did not have an expiration date. Households could accumulate an 
unlimited amount of benefits in the form of paper coupons and spend 
them at any time in the future, until the 2008 Farm Bill de-obligated 
all food stamp coupons as of June 2009. Currently under EBT, consistent 
with section 4115 of the 2008 Farm Bill, benefits are expunged 
(permanently removed) from inactive accounts if the account has been 
inactive for one year. Current policy considers an account active if 
the household initiates an action that affects the balance of the 
account, such as a purchase or refund, at least once every 12 months. 
As long as the account is active, States are not allowed to expunge any 
benefits even if there are benefits in the account that were issued 
more than 12 months ago. Only when the account has been inactive for 12 
months, may State agencies begin to permanently remove benefits from a 
household's account at the benefit allotment level. This policy and 
approach to expungement was in place through regulations prior to the 
2008 Farm Bill.
    The 2008 Farm Bill requires State agencies to establish a procedure 
for recovering electronic benefits from a household's account due to 
inactivity and to expunge benefits that have not been accessed by a 
household after a period of 12 months. Because expungement has been a 
regulatory requirement since the beginning of EBT implementation, all 
State agencies already have a process in place for expunging benefits 
from a household's EBT account due to inactivity. Furthermore, the 2008 
Farm Bill implementation memo issued on July 3, 2008, maintained the 
current expungement process outlined in the previous paragraph. 
However, after further review of the statutory language, FNS has 
determined that there is sufficient ambiguity in the language to allow 
for two different interpretations.
    Section 7(h)(12)(C) of the Food and Nutrition Act reads, ``A State 
agency shall expunge benefits that have not been accessed by a 
household after a period of 12 months.'' This language could be 
interpreted to support SNAP's current expungement policy 
(interpretation #1) of only expunging benefits from EBT accounts that 
have not been accessed in 12 months (i.e., inactive accounts). This 
interpretation focuses on the account referenced in section 7(h)(12)(A) 
of the statute, which requires State agencies to establish a procedure 
for recovering electronic benefits from the account of a household due 
to inactivity. Another interpretation (interpretation #2) could be that 
benefits that have not been used after 12 months must be expunged 
regardless of whether the household has accessed the account (i.e., 
regardless of account activity).
    Since the 2008 Farm Bill passed, FNS has received feedback from 
some States in support of the second interpretation. This support 
emphasizes that SNAP households should be prevented from accumulating 
excessively high balances in their SNAP EBT accounts. High balances, 
some States have indicated, do not align with the true intent of the 
program, and hold taxpayer money inactive that could otherwise be spent 
in a beneficial way. As a result, FNS is requesting comments through 
this proposed rulemaking to obtain further feedback from State agencies 
as well as other stakeholders, such as advocates and EBT processors, 
regarding the possibility of changing the current expungement process 
to reflect a process in line with interpretation #2.
    Under interpretation #2, FNS is particularly interested in 
receiving comments on how to address a scenario in which a household 
receives restored benefits for multiple months in one lump sum as a 
result of a fair hearing finding. This is one possible reason a 
household might have a large SNAP balance. FNS understands that, in 
these types of situations, a household would have a shorter period of 
time overall to spend the restored benefits they were entitled to 
receive for previous months than would have been the case if the 
benefits were provided monthly as originally required. The restored 
benefits would be in addition to any ongoing benefits the household is 
receiving, which must also be spent within 12 months. However, FNS is 
also sensitive to the automated system processes that would be impacted 
if it instituted exceptions to a requirement that State agencies 
expunge unused benefits 12 months after they were issued.

[[Page 66868]]

    In addition to comments on each of the two expungement policy 
interpretations, FNS is also interested in receiving comments on 
whether every State agency should be given the option to choose one of 
the two expungement processes discussed here. Therefore, both 
expungement processes (i.e. expunging unused benefits after one year of 
account inactivity or expunging unused benefits one year after each 
allotment is issued) would be allowed, giving each State agency the 
flexibility to choose which process to implement.
    Respondents who support the second alternative (i.e. expunging 
unused benefits one year after each allotment is issued), either as 
mandatory or as an option, should also provide comments regarding 
household notification of the new expungement policy and suggested 
effective dates. For example, would an effective date of one year after 
the final rule's publication date be a suitable timeframe for providing 
notice to clients that unused benefits over 12 months old will be 
permanently expunged or should the timeframe be longer or shorter and 
why?
    To summarize: Under interpretation #1, SNAP benefits would only be 
expunged if the account has been inactive for 12 months. As long as the 
account is active, no benefits would be expunged regardless of when the 
benefits were issued, and benefits could continue to accumulate as long 
as the household remains eligible for benefits. Under interpretation 
#2, households would have 12 months from the date of issuance to spend 
each benefit allotment they receive even if the household is accessing 
the account and using benefits.
    In this proposed rule, the proposed regulatory language is in line 
with the 2008 Farm Bill Implementation Memo, which mirrored current 
policy of expunging benefits only from inactive EBT accounts. Final 
language will take into consideration the comments received regarding 
both possible expungement interpretations discussed above.
    This rulemaking also proposes to codify the current policy of 
requiring State agencies to expunge benefits at the benefit allotment 
level. In other words, the entire balance of a SNAP EBT account could 
not be permanently removed due to inactivity if there are benefit 
allotments that have not been available to the household for at least 
12 months. Instead, the State would need to wait 12 months from the 
date when each benefit allotment was issued to the household or from 
the last date of account activity, whichever date is later, before 
expunging those particular funds.
    Furthermore, to ensure that benefits are not available to the 
household longer than allowed by statute, FNS is proposing to require 
State agencies to expunge benefits from the EBT system or, if offline, 
from the State records on a daily basis.
    This proposed rule also clarifies that the expungement timeframe 
requirement would not apply to cases that have been closed due to the 
death of all household members. In most cases, this provision would 
apply to one-person households. Once the State agency has confirmed a 
death match and closed the case in accordance with 7 CFR 272.14, there 
is no one left in the household who is entitled to the benefits. In 
such cases, State agencies would be required to permanently expunge all 
SNAP benefits in the household's account regardless of when the 
benefits were issued or last used. This provision would prevent 
unauthorized persons from accessing and using benefits that remain in a 
deceased household's account. For all other SNAP cases, benefits would 
continue to remain in the SNAP account even after the SNAP case is 
closed (unless taken off-line due to inactivity as discussed below) 
until the benefits have aged off in accordance with expungement 
requirements.
    This provision would be codified at 7 CFR 274.2(h)(2).

Moving Benefits Off-Line

    Prior to the 2008 Farm Bill, EBT regulations allowed State agencies 
to move all benefits in an inactive SNAP account off-line if the 
account had not been accessed over a three-month period. Once benefits 
are taken off-line, they are no longer immediately accessible to the 
household, but must be reinstated if the household reapplies for the 
program or requests that the remaining benefits be moved back on-line 
prior to expungement. However, some households, especially seniors who 
qualify for a small amount of benefits, have been known to save up 
those smaller amounts and use several months' worth in one shopping 
trip. For these households, three months may have been too short a 
period before moving benefits off-line. As a result, section 4114 of 
the 2008 Farm Bill stipulated 6 months as the time period that an EBT 
account must be inactive before a State agency may move benefits off-
line. State agencies are not required to take inactive benefits off-
line at all prior to expungement, but if a State agency wishes to 
exercise the option to do so, it must wait until an EBT account has 
been inactive for at least 6 months. In accordance with the July 3, 
2008, implementing memo, this provision was implemented on October 1, 
2008.
    Because ``off-line'' was not previously defined in regulations, FNS 
is taking this opportunity to propose such a definition. The off-line 
definition would not impact a client's ability to get benefits 
reinstated, or the timeframes. The definition serves only to provide 
State agencies and EBT processors the parameters for operationalizing 
the off-line provision. FNS welcomes comments regarding the impact this 
definition would have on State agencies' EBT issuance systems.
    Going forward, taking benefits ``off-line'' would mean that the 
benefits are being removed from the EBT account and the EBT system. 
Moreover, this regulation proposes that, when taking benefits off-line, 
from a financial management perspective, the EBT contractor treat these 
benefits like expungements by removing benefits from the Account 
Management Agent (AMA). The AMA is an accounting system that interfaces 
with the U.S. Department of Treasury to keep track of benefit 
authorizations, returned benefits such as expungements, and benefit 
redemptions. However, unlike a permanent expungement, information about 
the benefits (amount, availability date, last used date, etc.) would be 
stored elsewhere so that the benefits can be reissued upon timely 
contact by the household.
    The law does not allow State agencies to make SNAP benefits in an 
inactive EBT account inaccessible to a client prior to expungement, 
unless they exercise the option to store benefits off-line within the 
permitted timeframes. Therefore, under the proposed definition of 
``off-line'', State agencies would no longer be able to flag an account 
as ``dormant'' or otherwise deactivate the account to make benefits 
inaccessible to the client, and yet keep the benefits on-line. FNS is 
proposing this limitation because such a practice would defeat the 
logic of the original regulation that permitted benefits to be moved 
off-line. When the original regulation to allow State agencies to take 
benefits off-line was implemented, the increased computer system 
capacity needed to maintain all EBT accounts on-line was more expensive 
than it is now. By taking inactive EBT accounts off-line, the goal was 
to reduce the overall cost of EBT services. The incremental cost of 
additional system capacity, however, is now considerably less 
expensive. Therefore, the financial motives for moving benefits off-
line are no longer a significant factor. Nevertheless, some State 
agencies are choosing to make benefits inaccessible

[[Page 66869]]

after a period of inactivity in order to establish contact with the 
household and verify continued eligibility. FNS believes this is 
contrary to the intent of the law. Therefore, as noted above, this rule 
would no longer permit the practice of simply making benefits 
inaccessible without actually moving them off-line. Furthermore, by 
taking the benefits out of the EBT system, this provision would provide 
additional system security by preventing unauthorized persons from 
accessing and using accumulated benefits that remain dormant in a 
household's account. State agencies would still be able to flag a 
household's EBT account at various stages of inactivity for monitoring 
purposes, but the benefits would need to remain accessible to the 
household unless moved off-line or permanently expunged.
    Section 4114 of the 2008 Farm Bill also requires State agencies to 
send a notice to the household when the household's benefits are taken 
off-line and to make the benefits available again within 48 hours of 
the household's request. The Congressional intent, as stipulated in the 
Congressional record, was that notification be closely tied to the date 
benefits would move off-line. Therefore, this rule proposes in 
273.2(h)(1) to allow States to choose when to provide notification as 
long as it is within 10 days prior to or concurrent with moving 
benefits off-line. Although not required, some State agencies may want 
to give clients sufficient notice to access the account to prevent 
benefits from being taken off-line altogether. Because individual off-
line notification is now a statutory requirement, State agencies may no 
longer receive a waiver to provide general off-line notification as 
part of initial training or recertification. Inactive accounts with a 
zero balance that are taken off-line do not require a notice because no 
actual benefits are made inaccessible to the household.
    As already required at 7 CFR 274.2(h)(1), the notice must describe 
the steps necessary to bring the recovered benefits back on-line. State 
agencies should make the process for reinstating off-line benefits 
simple for households. A general request for assistance from a 
household that has had benefits moved off-line should be considered a 
request for reinstatement of benefits. In other words, households 
should not have to follow a complicated reinstatement option in order 
to get benefits restored to their accounts. Rather, eligibility workers 
and local office or call center employees should assist households in 
initiating the process for reinstating benefits. Once the benefits are 
reinstated, the benefit aging process must start over so that the 
household has another six months to access the account before the 
reinstated benefits are taken off-line again, and another 12 months to 
access the account before those benefits are expunged due to 
inactivity.
    This provision would be codified at 7 CFR 274.2(h)(1).

Procedural Matters

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563, direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules and of promoting 
flexibility. This proposed rule has been determined to be not 
significant and was not reviewed by the Office of Management and Budget 
(OMB) in conformance with Executive Order 12866.

Regulatory Impact Analysis

    This proposed rule has been designated as not significant by the 
Office of Management and Budget, therefore, no Regulatory Impact 
Analysis is required.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies 
to analyze the impact of rulemaking on small entities and consider 
alternatives that would minimize any significant impacts on a 
substantial number of small entities. Pursuant to that review, this 
rule is certified not to have a significant impact on a substantial 
number of small entities.

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, the 
Department generally must prepare a written statement, including a 
cost/benefit analysis, for proposed and final rules with Federal 
mandates that may result in expenditures to State, local, or Tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the Department to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule.
    This proposed rule does not contain Federal mandates (under the 
regulatory provisions of Title II of the UMRA) that impose costs on 
State, local, or tribal governments or to the private sector of $100 
million or more in any one year. This proposed rule is, therefore, not 
subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12372

    SNAP is listed in the Catalog of Federal Domestic Assistance under 
No. 10.551. For the reasons set forth in 2 CFR chapter IV, this Program 
is excluded from the scope of Executive Order 12372, which requires 
intergovernmental consultation with state and local officials.

Executive Order 13132

    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 considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132. FNS has 
considered the impact of this proposed rule on State and local 
governments and has determined that this rulemaking does not have 
federalism implications. This proposed rule does not impose 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.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is 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 proposed rule is not intended to have 
retroactive effect unless specified in the DATES section 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.

[[Page 66870]]

Executive Order 13175

    Executive Order 13175, requires Federal agencies to consult and 
coordinate with tribes on a government-to-government basis on policies 
that have tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes. In late 2010 and early 2011, 
USDA engaged in a series of consultative sessions to obtain input by 
tribal officials or their designees concerning the impact of this 
rulemaking on the tribe or Indian tribal governments, or whether this 
rulemaking may preempt tribal law. USDA did not receive any comments 
specific to this proposed rule during the sessions. Reports from the 
consultative sessions were made part of the USDA annual reporting on 
Tribal Consultation and Collaboration. USDA offers consultation 
opportunities, such as webinars and teleconferences, for collaborative 
conversations with tribal leaders and their representatives concerning 
ways to improve rules with regard to their effect on Indian country on 
a quarterly basis as part of its yearly tribal consultation schedule.
    We are unaware of any current tribal laws that could be in conflict 
with the proposed rule. We request that commenters address any concerns 
in this regard in their responses.

Civil Rights Impact Analysis

    FNS has reviewed this rule in accordance with Departmental 
Regulations 4300-4, ``Civil Rights Impact Analysis,'' and 1512-1, 
``Regulatory Decision Making Requirements.'' After a careful review of 
the rule's intent and provisions, FNS has determined that this proposed 
rule will not in any way limit or reduce the ability of protected 
classes of individuals to receive SNAP benefits on the basis of their 
race, color, national origin, sex, age, disability, religion or 
political belief nor will it have a differential impact on minority 
owned or operated business establishments, and woman owned or operated 
business establishments that participate in SNAP.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. chap. 35; see 5 CFR 
1320) requires the Office of Management and Budget (OMB) approve all 
collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number. 
This proposed rule does not contain information collection requirements 
subject to approval by OMB under the Paperwork Reduction Act of 1995.

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.

List of Subjects in 7 Parts 271 and 274

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

    For reason set forth in the preamble, 7 CFR parts 271 and 274 are 
proposed to be amended as follows:

SUBCHAPTER C--[AMENDED]

0
1. In the heading of subchapter C of chapter II, remove the words 
``Food Stamp'' and add in their place the words ``Supplemental 
Nutrition Assistance''.
0
2. The authority citation for 7 CFR parts 271 and 274 continues to read 
as follows:

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

PART 271--GENERAL INFORMATION AND DEFINITIONS


Sec.  271.1   General purpose and scope.

0
3. In Sec.  271.1:
0
a. Revise paragraph (a);
0
b. Remove the word ``coupons'' from the fourth sentence of paragraph 
(b) and add in its place ``SNAP benefits''; and
0
c. Remove the word ``coupon'' from the tenth sentence of paragraph (b) 
and add in its place ``benefit''.
    The revision reads as follows:


Sec.  271.1   General purpose and scope.

    (a) Purpose of SNAP. In accordance with section 2 of the Food and 
Nutrition Act of 2008, SNAP is designed to promote the general welfare 
and to safeguard the health and well being of the Nation's population 
by raising the levels of nutrition among low-income households.
* * * * *
0
4. In Sec.  271.2:
0
a. Amend the definition of Allotment by removing the word ``coupons'' 
and adding in its place the word ``benefits'';
0
b. Remove the definition of Authorization to participate card (ATP);
0
c. Add definitions for Benefit and Benefit issuer in alphabetical 
order;
0
d. Remove the definition of Bulk storage point;
0
e. Add a definition for Contractor (or Contracted vendor) in 
alphabetical order;
0
f. Remove the definitions of Coupon issuer and Direct access system;
0
g. Revise the definition of Drug addiction or alcoholic treatment and 
rehabilitation program;
0
h. Add definitions for Electronic Benefit Transfer (EBT) account, 
Electronic Benefit Transfer (EBT) card, and Electronic Benefit Transfer 
(EBT) system in alphabetical order;
0
i. Amend the definition of Eligible foods by removing the word 
``coupons'' where it appears twice in paragraph (3) of the definition, 
and adding in its place the words ``SNAP benefits'';
0
j. Amend the definition of Employment and training (E&T) component by 
removing ``6(d)(4)(B)(iv)'' and adding in its place ``6(d)(4)(B)'' and 
by removing ``(7 U.S.C. 2014(2)(4)(B))'' and adding in its place ``(7 
U.S.C. 2015(d)(4)(B))'';
0
k. Amend the definition of Employment and training (E&T) mandatory 
participant by removing ``7 U.S.C. 2014(d)(1)'' and adding in its place 
``7 U.S.C. 2015(d)(1)'';
0
l. Amend the definition of Firm's practice by removing the words ``food 
coupons'' and adding in their place the words ``SNAP benefits'';
0
m. Add a definition for Food and Nutrition Act of 2008 (Food and 
Nutrition Act) in alphabetical order;
0
n. Revise the definition of Food Stamp Act;
0
o. Amend the definition of Identification (ID) card by removing the 
words ``food coupons'' and adding in its place the words ``SNAP 
benefits'';
0
p. Add definitions for Interoperability, Manual transaction, and Manual 
voucher in alphabetical order;
0
q. Amend the definition of Overissuance by removing the word 
``coupons'' and adding in its place the word ``benefits'';
0
r. Add definitions for Personal identification number (PIN), Point-of-
sale (POS) terminal, and Primary account number (PAN) in alphabetical 
order;
0
s. Remove the definition of Program;
0
t. Add definitions for Retailer EBT Data Exchange (REDE) system and 
Supplemental Nutrition Assistance Program (SNAP or Program) in 
alphabetical order.
    The additions and revisions read as follows:


Sec.  271.2   Definitions.

* * * * *

[[Page 66871]]

    Benefit means the value of supplemental nutrition assistance 
provided to a household by means of an EBT system or other means of 
providing assistance, as determined by the Secretary.
    Benefit issuer means any office of the State agency or any person, 
partnership, corporation, organization, political subdivision or other 
entity with which a State agency has contracted for, or to which it has 
delegated functional responsibility, in connection with the issuance of 
benefits to households.
* * * * *
    Contractor (or contracted vendor) means an entity that is selected 
to perform EBT-related services for the State agency.
* * * * *
    Drug addiction or alcoholic treatment and rehabilitation program 
means any drug addiction or alcoholic treatment and rehabilitation 
program conducted by a private, nonprofit organization or institution, 
or a publicly operated community mental health center and certified by 
the requisite State title XIX Agency as:
    (1) Receiving funding under part B of title XIX of the Public 
Health Service Act (42 U.S.C. 300x et seq.);
    (2) Eligible to receive funding under part B of title XIX even if 
it does not actually receive funding; or
    (3) Operating to further the purposes of part B of title XIX, to 
provide treatment to drug addicts and or alcoholics.
    Electronic Benefit Transfer (EBT) account means a set of records 
containing demographic, card, benefit, transaction and balance data for 
an individual household within the EBT system that is maintained and 
managed by a State or its contractor as part of the client case record.
    Electronic Benefit Transfer (EBT) card means an on-line magnetic 
stripe card or off-line smart card issued to a household member or 
authorized representative through the EBT system by a benefit issuer.
* * * * *
    Electronic Benefit Transfer (EBT) system means an electronic 
payments system under which household benefits are issued from and 
stored in a central databank, maintained and managed by a State or its 
contractor, that uses electronic funds transfer and point-of-sale 
technology for the delivery and control of food and other public 
assistance benefits.
* * * * *
    Food and Nutrition Act of 2008 (Food and Nutrition Act) means title 
7 of the United States Code, sections 2011 through 2036 (7 U.S.C. 2011-
2036), including any subsequent amendments thereto.
    Food Stamp Act means the Food Stamp Act of 1977 (Pub. L. 95-113) as 
amended through Public Law 108-269, July 2, 2004.
* * * * *
    Interoperability means a system that enables program benefits 
issued via an EBT card to be redeemed outside the State that issued the 
benefits.
* * * * *
    Manual transaction means an EBT transaction that is processed with 
the use of a paper manual voucher when there is an EBT system outage.
    Manual voucher means a paper document signed by the EBT cardholder 
that allows a retailer to redeem benefits through a manual transaction.
    Personal Identification Number (PIN) means a numeric code selected 
by or assigned to a household and used to verify the identity of an EBT 
cardholder when performing an EBT transaction.
* * * * *
    Point-of-Sale (POS) terminal means a range of devices deployed at 
authorized retail food stores for redeeming benefits through the use of 
an EBT card and PIN to initiate electronic debits and credits of 
household EBT and retailer bank accounts.
    Primary Account Number (PAN) means a number embossed or printed on 
the EBT card and encoded onto the card to identify the State and EBT 
account holder.
* * * * *
    Retailer EBT Data Exchange (REDE) system means the FNS system that 
allows the automated exchange of authorized retailer demographic data 
between FNS and the State and/or EBT contractor for notification of 
changes in retailer Program participation.
* * * * *
    Supplemental Nutrition Assistance Program (SNAP or Program) means 
the program operated pursuant to the Food and Nutrition Act of 2008.
* * * * *


Sec.  271.4   [Amended]

0
5. In Sec.  271.4(a)(2) remove the word ``coupons'' and add in its 
place ``SNAP benefits and EBT cards''.


Sec.  271.5   [Amended]

0
6. In Sec.  271.5:
0
a. Remove ``coupon'' and ``coupons'' wherever they appear and add in 
their place ``benefit'' and ``benefits'', respectively, including the 
section heading;
0
b. Amend paragraph (a) by adding ``and EBT cards'' at the end of the 
last sentence;
0
c. Amend the introductory text of paragraph (b) by removing the word 
``ATP'' and adding in its place the word ``EBT'';
0
d. Remove paragraphs (b)(1) through (3); and
0
e. Amend paragraph (c) by removing the word ``ATP's'' wherever they 
appear and adding in its place the words ``EBT cards''.

PART 274--ISSUANCE AND USE OF BENEFITS

0
7. In Sec.  274.2:
0
a. Revise paragraph (c);
0
b. Amend paragraph (e)(1) by removing the words ``of paragraphs (e) 
through (h)'';
0
c. Amend paragraph (g)(3) by removing the words ``paragraph (h)(3)'' 
and adding the words ``paragraph (i)'';
0
d. Revise paragraph (h);
0
e. Add paragraph (i).
    The revisions and additions read as follows:


Sec.  274.2  Providing benefits to participants.

* * * * *
    (c) Benefit allotments. (1) State agencies shall not issue ongoing 
monthly benefit allotments to a household in more than one issuance 
during a month except with respect to the issuance of benefits to a 
resident of a drug and alcohol treatment and rehabilitation program in 
accordance with Sec.  273.11(e) of this chapter.
    (2) For those households which are to receive a combined allotment, 
the State agency shall provide the benefits for both months as an 
aggregate (combined) allotment, or as two separate allotments, made 
available at the same time in accordance with the timeframes specified 
in Sec.  273.2 of this chapter.
* * * * *
    (h) Inactive EBT accounts. An inactive EBT account means that the 
household has not initiated activity that affects the balance of the 
household's SNAP benefits in the account, such as a purchase or return, 
for a minimum of six months.
    (1) Off-line storage. If a household's EBT account is inactive for 
six months or longer, State agencies may elect to store all benefits in 
that account off-line.
    (i) Off-line benefits are benefits that have been removed from the 
EBT system for storage by the State agency and are no longer accessible 
to the household unless and until the benefits are reinstated upon 
contact by the household.
    (ii) The State agency shall send written notification to the 
household up to 10 days prior to or concurrent with the action to store 
benefits off-line and

[[Page 66872]]

describe the steps necessary to bring the benefits back on-line. If an 
inactive account has a zero balance, a notice to the household is not 
required.
    (iii) Benefits stored off-line that have not reached the 12-month 
timeframe for expungement in accordance with paragraph (h)(2) of this 
section shall be reinstated and made available within 48 hours of 
reapplication or contact by the household.
    (iv) Off-line benefits shall be removed from the Account Management 
Agent system, making them unavailable to the household. Upon 
reinstatement, the benefits shall be reissued and the account shall be 
reactivated or a new account established to resume the benefit aging 
process from the new issuance date.
    (2) Expungement. On a daily basis, the State agency shall expunge 
benefits from accounts that have been inactive for a period of 12 
months in accordance with the following:
    (i) When the oldest benefit allotment has not been accessed by the 
household for 12 months, the State agency shall expunge benefits from 
the EBT account or off-line storage at the monthly benefit allotment 
level as each benefit allotment ages to 12 months since the date of 
issuance or since the last date of account activity, whichever date is 
later.
    (ii) Expunged benefits shall be removed from the Account Management 
Agent unless already removed as provided in paragraph (h)(1) of this 
section, and shall not be reinstated.
    (iii) The State agency shall not expunge any benefits from active 
accounts even if there are benefit allotments older than 12 months. If 
at any time after the expungement process begins, the household 
initiates activity affecting the balance of the account, the State 
shall stop expunging benefits from the account and start the account 
aging process over again for the remaining benefits.
    (iv) Notwithstanding the paragraph (h)(2)(iii) of this section, in 
instances when the State agency verifies a death match for all 
certified members of the household and closes the SNAP case in 
accordance with Sec.  272.14 of this chapter, the State agency shall 
expunge the remaining SNAP balance in the household's EBT account at 
that time.
    (i) Procedures to adjust SNAP accounts. Procedures shall be 
established to permit the appropriate managers to adjust SNAP benefits 
that have already been posted to an EBT account prior to the household 
accessing the account; or to remove benefits from inactive accounts for 
off-line storage or expungement in accordance with paragraph (h) of 
this section.
    (1) Whenever benefits are stored off-line or expunged, the State 
agency shall document the date, amount of the benefits and storage 
location in the household case file.
    (2) Issuance reports shall reflect the adjustment to the State 
agency issuance totals to comply with monthly issuance reporting 
requirements prescribed under Sec.  274.4.

    Dated: September 14, 2016.
Telora T. Dean,
Acting Administrator, Food and Nutrition Service.
[FR Doc. 2016-22860 Filed 9-28-16; 8:45 am]
 BILLING CODE 3410-30-P