[Federal Register Volume 84, Number 33 (Tuesday, February 19, 2019)]
[Proposed Rules]
[Pages 4739-4741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02577]


 ========================================================================
 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.
 
 ========================================================================
 

  Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / 
Proposed Rules  

[[Page 4739]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 278 and 279

[FNS-2018-0021]
RIN 0584-AE63


Taking Administrative Actions Pending Freedom of Information Act 
(FOIA) Processing

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Proposed rule.

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

SUMMARY: The Food and Nutrition Service (FNS) seeks to prevent firms 
authorized to participate in the Supplemental Nutrition Assistance 
Program (SNAP or the Program) from delaying administrative actions, 
such as disqualification or civil money penalties, through submission 
of Freedom of Information Act (FOIA) requests or appeals. As such, FNS 
is proposing that FOIA requests and FOIA appeals be processed 
separately from administrative actions FNS takes against retail food 
stores. This proposed rule would ensure that retail food stores can no 
longer use the FOIA process to delay FNS' administrative actions to 
sanction a retail food store for SNAP violations.

DATES: Written comments must be received on or before April 22, 2019 to 
be assured of consideration.

ADDRESSES: The Food and Nutrition Service, USDA, invites interested 
persons to submit written comments on this proposed rule. Comments may 
be submitted in writing by one of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online 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.
    All written 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 written 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, 4th 
Floor, 3101 Park Center Drive, Alexandria, Virginia 22302, by phone at 
703-305-2476, or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    FNS disqualifies firms that violate Program rules from SNAP 
participation by issuing a charge letter, examining the firm's response 
to the charges, determining based on the evidence whether the firm 
violated Program rules, and, if appropriate, informing the firm of any 
sanctions imposed. The regulations at 7 CFR 278.6 require that the 
charge letter specify the violations or actions which constitute the 
basis for disqualification from SNAP or imposition of a civil money 
penalty. The basis of evidence may include facts established through 
on-site investigations, inconsistent SNAP redemptions, or transaction 
data obtained through the electronic benefit transfer (EBT) system. A 
firm charged with SNAP violations has 10 days to respond to the charge 
letter. FNS reviews and considers the firm's response to the charge 
letter before determining whether the firm violated any provisions of 
the Food and Nutrition Act (the Act) or regulations. If FNS determines 
that the firm has violated any provision of the Act or regulations, FNS 
will issue a notice of determination to the firm. In accordance with 
section 14(a)(18) of the Act, for firms that have been disqualified for 
trafficking, one of the most serious offenses in the SNAP program, the 
disqualification becomes effective immediately upon the date of receipt 
of the notice of determination.
    Firms charged with SNAP violations receive extensive procedural 
protections through administrative and judicial review. Section 14 of 
the Act and the regulations at 7 CFR part 279 provide retail food 
stores disqualified from the Program an opportunity to file a request 
for administrative review within 10 days of the date of delivery of the 
notice of determination. The request for administrative review allows a 
firm to submit additional information in support of its position to 
FNS. If the Agency determination is upheld in administrative review, 
the determination is final. Unless the firm had been disqualified for 
trafficking, the disqualification takes effect 30 days after the date 
of delivery of the final determination.
    For retail food stores who feel aggrieved by the final 
determination, the Act and regulations allow such retail food stores to 
file a complaint against the United States to obtain judicial review of 
the final determination within the 30 days of the date of delivery of 
the final determination. The firm's suit against in the United States 
is trial de novo and the firm may submit new information to the 
reviewing court, which determines the validity of the questioned 
administrative action.
    The opportunity to present information in response to a charge 
letter or during the administrative review process is not an 
opportunity for discovery; however, the Agency currently holds possible 
sanctions until a FOIA request is processed. Under 5 U.S.C. 552, any 
person has the right to obtain access to Federal agency records, except 
to the extent that such records are protected from release by a FOIA 
exemption or exclusion. There are no FOIA-specific regulations for 
SNAP-authorized retail food stores. If a firm files a FOIA request or 
appeal after the firm is charged with violations, but before FNS issues 
a notice of determination, FNS currently holds in abeyance 
administrative action against the firm while the FOIA request and 
appeal is being processed, allowing the firm to continue redeeming SNAP 
benefits. Attorneys for some firms submit extensive and complex FOIA 
requests and appeals, and repeatedly ask for information that has been 
consistently denied when requested in prior cases, seemingly with the 
intention of delaying FNS' final determination to disqualify or impose 
a civil money penalty against the firm. Information the firm may seek 
though

[[Page 4740]]

FOIA is generally the same information requested through the discovery 
process at the judicial review level.
    Retail food store case-specific FOIA requests appear to have become 
a tool used by retail food stores and their attorneys to delay FNS 
action on retail food stores violating Program rules. In Fiscal Year 
(FY) 2017, 437 SNAP retail food stores submitted FOIA requests to FNS 
after being charged with a SNAP violation. Holding SNAP administrative 
actions in abeyance during the processing of a firm's FOIA request or 
appeal has had a serious impact on SNAP integrity as violating firms 
have continued to participate in SNAP through the FOIA processing 
period.
    As described earlier, in addition to the ten days from receipt of a 
charge letter that a retail food store has to respond, the statute 
provides the retail food store another ten days from receipt of a 
notice of determination to request administrative review and submit 
further information in support of its position before the determination 
is made final. However, by statute, permanent disqualification for 
trafficking in SNAP benefits goes into effect upon receipt of the FNS 
notice of determination, regardless of whether the firm makes a timely 
request for administrative review of that determination.
    Based on these statutory provisions, it is clear that congressional 
intent is to remove violating firms from the program in a timely and 
expeditious manner. By ensuring that the FOIA process is separate from 
the administrative determination process, this proposed rulemaking 
would align FNS procedures with congressional intent.
    To ensure that any request for records through FOIA does not delay 
the effective date of the administrative determination, FNS proposes to 
amend language at 7 CFR 278.6(p), 279.4(c), and 279.6(b) to provide 
that any filed or pending FOIA request or appeal will not affect when 
the Agency takes administrative action against a firm determined to 
have violated SNAP statute or regulations. The proposed rule will have 
a prospective effect, meaning the Agency would continue processing 
existing FOIA requests or appeals but would not delay SNAP 
administrative determinations in any cases.
    Regardless of whether the retail food store submits a FOIA request 
or appeal during the FNS administrative process, in accordance with 
existing statute and regulations, the action to permanently disqualify 
a retail food store for trafficking would take effect immediately upon 
the date the store receives the notice of determination. Determinations 
to temporarily disqualify or impose a civil money penalty in lieu of 
disqualification will take effect 10 days after the firm receives the 
FNS notice of determination, unless the firm makes a timely request for 
administrative review. For cases other than those involving 
trafficking, the final agency determination made after the 
administrative review has been completed would take effect 30 days 
after the date of delivery of the determination to the firm. Except for 
firms disqualified from SNAP due to being disqualified from the Special 
Supplemental Nutrition Program for Women, Infants and Children (WIC), 
firms will retain their right to administrative and judicial review of 
the determination made, in accordance with 7 CFR part 279. However, 
through this proposed action, any FOIA request or appeal filed or 
pending during the administrative or judicial review process would have 
no impact on when the agency can take administrative action.
    Removing retail food stores from the Program at the point that FNS 
has determined, based on the evidence, that a store violated SNAP 
rules, will help ensure that the Program is conducted with integrity 
and that taxpayer dollars are being used as intended.

Procedural Matters

Executive Order 12866 and 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.

Executive Order 13771

    Executive Order 13771 directs agencies to reduce regulation and 
control regulatory costs and provides that for every one new regulation 
issued, at least two prior regulations be identified for elimination, 
and that the cost of planned regulations be prudently managed and 
controlled through a budgeting process. This rule is not an Executive 
Order 13771 regulatory action because this rule is not significant 
under Executive Order 12866.
Regulatory Impact Analysis
    This 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, it has 
been certified that this rule would not have a significant impact on a 
substantial number of small entities.
    While there may be some impact on small retail food stores, the 
impact is not significant. This proposed rule primarily impacts retail 
food stores that have been charged with SNAP trafficking and other 
violations and FOIA officials at the federal level. The retail food 
stores this proposed rule would impact would no longer able to delay an 
FNS determination by submitting FOIA requests. The propose rule would 
prompt the FNS notice of determination to be issued in a timely manner.

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 by State, local or tribal 
governments, in the aggregate, or 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 most 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) for State, local and 
tribal governments or the private sector of $100 million or more in any 
one year. Thus, the rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

[[Page 4741]]

Executive Order 12372

    The Supplemental Nutrition Assistance Program is listed in the 
Catalog of Federal Domestic Assistance under Number 10.551 and is not 
subject to 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 considerations in terms of the three categories 
called for under Section (6)(b)(2)(B) of Executive Order 13132.
    The Department has considered the impact of this rule on State and 
local governments and has determined that this rule does not have 
federalism implications. Therefore, under section 6(b) of the Executive 
Order, a federalism summary is not required.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This 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 
and timely implementation. This rule is not intended to have 
retroactive effect unless so specified in the Effective Dates section 
of the final rule. Prior to any judicial challenge to the provisions of 
the final rule, all applicable administrative procedures must be 
exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with USDA 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex or disability. 
After a careful review of the rule's intent and provisions, FNS has 
determined that this rule is not expected to affect the participation 
of protected individuals in the Supplemental Nutrition Assistance 
Program.

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. We are unaware of any current 
Tribal laws that could be in conflict with this rule.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. chap. 35; 5 CFR part 
1320) requires the Office of Management and Budget (OMB) to 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 rule does not contain information collection requirements 
subject to approval by the Office of Management and Budget under the 
Paperwork Reduction Act of 1994.

E-Government Act Compliance

    The Department 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

7 CFR Part 278

    Banks, banking, Food stamps, Grant programs--social programs, 
Penalties, Reporting and recordkeeping requirements, Surety bonds.

7 CFR Part 279

    Administrative practice and procedure, Food stamps, Grant programs-
social programs.

    Accordingly, 7 CFR parts 278 and 279 are proposed to be amended as 
follows:

0
1. The authority citation for 7 CFR parts 278 and 279 continues to read 
as follows:

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

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

0
2. In Sec.  278.6, add paragraph (p) to read as follows:


Sec.  278.6  Disqualification of retail food stores and wholesale food 
concerns, and imposition of civil money penalties in lieu of 
disqualifications.

* * * * *
    (p) Freedom of Information Act (FOIA) requests. A FOIA request for 
records or FOIA appeal shall not delay or prohibit FNS from taking 
administrative action against a firm under this part, or delay the 
effective date of the FNS administrative action.

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

0
3. Revise Sec.  279.4 by adding a new sentence before the last sentence 
of paragraph (c) to read as follows:


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

* * * * *
    (c) * * * FNS may not grant extensions of time or hold the 
administrative review process in abeyance solely on the basis of a 
pending FOIA request for records or FOIA appeal. * * *
0
4. Revise Sec.  279.6 by adding a new sentence before the last sentence 
of paragraph (b) to read as follows:


Sec.  279.6  Legal advice and extensions of time.

* * * * *
    (b) * * * The designated reviewer may not grant extensions of time 
or hold the administrative review process in abeyance solely on the 
basis of a pending FOIA request for records or FOIA appeal. * * *

    Dated: February 12, 2019.
Brandon Lipps,
Administrator, Food and Nutrition Service.
[FR Doc. 2019-02577 Filed 2-15-19; 8:45 am]
BILLING CODE 3410-30-P