Federal Register / Vol. 60, No. 92 / Friday, May 12, 1995 / Proposed Rules 25625

Justice Reform. This action is not

intended to have retroactive effect. This

proposed rule will not preempt any

State or local laws, regulations, or

policies, unless they present an

irreconcilable conflict with this rule.

There are no administrative procedures

which must be exhausted prior to any

judicial challenge to the provisions of

this rule.

Additionally, in conformance with

the provisions of the Regulatory

Flexibility Act (5 U.S.C. 601 et. seq.) full

consideration has been given to the

potential economic impact upon small

business. Most of the firms which

would be affected by the rule are small

businesses. Small agricultural producers

have been defined by the Small

Business Administration (13 CFR

121.601) as those having gross annual

receipts of less than $500,000, and small

agricultural service firms are defined as

those whose annual receipts are less

than $5,000,000. The Administrator,

Agricultural Marketing Service, has

determined that this action would not

have a significant economic impact on

a substantial number of small entities.

This proposed rule would not

substantially affect the normal

movement of the commodity in the

marketplace. Compliance with this

proposed rule would not impose

substantial direct economic costs,

recordkeeping, or personnel workload

changes on small entities, and would

not alter the market share or competitive

positions of small entities relative to the

large entities and would in no way

affect normal competition in the

marketplace. Furthermore, the

Department is required by law to fix and

collect fees and charges to cover the

Department’s cost in operating the

tobacco inspection program.

All persons who desire to submit

written data, views, or arguments for

consideration in connection with this

proposal may file them with the

Director, Tobacco Division, AMS,

USDA, Room 502, Annex Building, P.O.

Box 96456, Washington, DC 20090–

6456, not later than June 12, 1995.

List of Subjects in 7 CFR Part 29

Administrative practice and

procedure, Advisory committees,

Government publications, Imports,

Pesticides and pests, Reporting and

recordkeeping requirements, Tobacco.

Accordingly, the Department is

proposing to amend the regulations

under the Tobacco Inspection Act

contained in 7 CFR Part 29 as follows:

PART 29—TOBACCO INSPECTION

1. The authority citation for Part 29,

subpart B continues to read as follows:

Authority: 7 U.S.C. 511m and 511r.

§ 29.123 [Amended]

2. In § 29.123, paragraph (a) is

amended by removing the words

‘‘$.0070 per pound’’ and adding in its

place ‘‘$.0083 per pound’’.

Dated: May 5, 1995.

Lon Hatamiya,

Administrator.

[FR Doc. 95–11743 Filed 5–11–95; 8:45 am]

BILLING CODE 3410–02–P

Food and Consumer Services

7 CFR Part 278

RIN 0584–AC00

Food Stamp Program: Revisions in

Use and Disclosure Rules Involving

the Sharing of Information Provided by

Retail and Wholesale Food Concerns

With Other Federal and State Agencies

AGENCY: Food and Consumer Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This rulemaking proposes to

implement certain provisions in two

different laws which expand the

authority of the United States

Department of Agriculture’s Food and

Consumer Service (FCS) to share

information provided by applicants and

firms participating as authorized retail

food stores or wholesale food concerns

in the Food Stamp Program (FSP) with

other government agencies. The Food

Stamp Act of 1977, as amended, was

amended by section 203 of the Food

Stamp Program Improvements Act of

1994, and the Social Security Act and

the Internal Revenue Code were

amended by section 316 of the Social

Security Independence and Program

Improvements Act of 1994. This

proposed rule also includes one

technical change to correct an error in

regulatory reference that does not

change the substance of the affected

provision.

The proposed rule would implement

the authority for FCS to share such

information, excluding employer

identification numbers (EINs) and

Social Security numbers (SSNs), with

Federal and State law enforcement and

investigative agencies for purposes of

administering and enforcing the Food

Stamp Act of 1977, as amended, or any

other Federal or State law and

regulations issued under this Act or any

other Federal or State law. It also would

provide new criteria to govern the

sharing of such information and

criminal penalties for unauthorized use.

Finally, this rule would implement the

Secretary of Agriculture’s new authority

to share EIN and SSN information of

applicants and firms participating in the

FSP with other Federal agencies.

DATES: Comments on the provisions of

this rule must be received no later than

June 12, 1995, to be assured of

consideration.

ADDRESSES: Comments should be

addressed to Suzanne Fecteau, Food

and Consumer Service, Chief, Coupon

and Retailer Branch, 3101 Park Center

Drive, Alexandria Virginia 22302–1594.

All written comments will be open to

public inspection at the office of the

Food and Consumer Service during

regular business hours (8:30 a.m. to 5

p.m., Monday through Friday) in room

706, 3101 Park Center Drive,

Alexandria, Virginia.

FOR FURTHER INFORMATION CONTACT:

Questions regarding this rulemaking

should be addressed to Suzanne Fecteau

at the above address or by telephone at

(703) 305–2418.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be

not significant for purposes of Executive

Order 12866 and therefore has not been

reviewed by the Office of Management

and Budget.

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 and

related Notice to 7 CFR part 3015

subpart V (48 FR 29115, June 24, 1983),

this Program is excluded from the scope

of the Executive Order 12372 which

requires inter-governmental

consultation with State and local

officials.

Regulatory Flexibility Act

This rule has been reviewed with

regard to the requirements of the

Regulatory Flexibility Act of 1980 (5

U.S.C. 601–612). William E. Ludwig, the

Administrator of the Food and

Consumer Service, has certified that this

proposed rule will not have a significant

economic impact on a substantial

number of small entities. This action

may have a significant effect on a

limited number of small entities found

to be in violation of State or Federal

laws.
25626 Federal Register / Vol. 60, No. 92 / Friday, May 12, 1995 / Proposed Rules

Paperwork Reduction Act

This rule does not contain reporting

or recordkeeping requirements subject

to approval by the Office of

Management and Budget (OMB) under

the Paperwork Reduction Act of 1980

(44 U.S.C. 3507).

Executive Order 12778

This rule has been reviewed under

Executive Order 12778, 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 implementation. This

rule is intended to have retroactive

effect. 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 administrative procedures

are as follows: (1) For Program benefit

recipients—State administrative

procedures issued pursuant to 7 U.S.C.

2020(e)(10) and 7 CFR 273.15; (2) for

State agencies—administrative

procedures issued pursuant to 7 U.S.C.

2023 set out at 7 CFR 276.7 (for rules

related to non-quality control (QC)

liabilities) or Part 283 (for rules related

to QC liabilities); (3) for Program

retailers and wholesalers—

administrative procedures issued

pursuant to 7 U.S.C. 2023 set out at 7

CFR 278.8.

Background

This rule would expand the use and

disclosure of information provided by

applicants and firms participating as

authorized retail food stores or

wholesale food concerns in the FSP.

The provisions of this rule will be

effective retroactively to August 15,

1994, when Pub. L. 103–296 was

enacted, and will be implemented 30

days after the final rulemaking is

published.

Current regulations restrict FCS’

ability to share information provided by

retailers and wholesalers participating

in the Food Stamp Program. EINs and

SSNs may only be shared with Federal

employees whose duties or

responsibilities require access to those

numbers for the administration and

enforcement of the Food Stamp Act of

1977, as amended. The use of EINs and

SSNs is only allowed for the

maintenance of a list of specific

individuals and firms that have been

sanctioned or convicted of Food Stamp

Program violations under sections 12

(Civil Money Penalties and

Disqualification) and 15 (Violations and

Enforcement) of the Food Stamp Act.

Other information provided by retailers

(e.g. application information, sales and

redemption data) can be shared with

other Federal or State agencies only for

the purposes of administration or

enforcement of the Food Stamp

Program, the Special Supplemental

Food Program for Women, Infants and

Children (WIC), and for audits by the

General Accounting Office.

Use and Disclosure of Information

Provided by Retail Food Stores and

Wholesale Food Concerns

Section 9(c) of the Food Stamp Act of

1977, as amended (the Act) (7 U.S.C.

2018(c)) governs the authorization of

retailers and wholesalers to participate

in the Food Stamp Program, based on

information those retailers and

wholesalers provide FCS. Section 203 of

the Food Stamp Program Improvements

Act of 1994, Pub. L. 103–225 (108 Stat.

106) amends section 9(c) of the Act, to

expand the use and disclosure of

information provided by applicant and

participating retail and wholesale food

concerns, such as food stamp

redemption data, as well as information

about ownership (excluding EINs and

SSNs) and sales data included on the

initial application, in addition to

information required to be submitted for

purposes of determining whether a firm

continues to qualify. As authorized by

the amendment to section 9(c), this rule

would allow disclosure of this

information to other Federal and State

law enforcement and investigative

agencies for the purposes of

administering and enforcing the Food

Stamp Act, as well as the enforcement

of any other Federal or State laws and

the regulations issued under this Act

and such laws.

This rule proposes other safeguards in

addition to new penalties for

unauthorized use and disclosure of

information. It would limit the use and

disclosure of this information to the

purpose of effectively administering and

enforcing the Food Stamp Act or for

investigating violations of other State or

Federal laws, or enforcement of such

laws and regulations. Federal and State

agencies authorized to have access to

this information would be required to

submit a request in writing. The request

must set forth specifically which law is

being enforced and must also

demonstrate how the requested

information is relevant to the

enforcement of that law. The

Department will base its determination

whether or not to disclose the requested

information upon such a showing by the

requesting agency. The Department

expects such information to be

requested most frequently by taxation

authorities such as the Internal Revenue

Service and State income and sales tax

agencies. The information may also be

useful to law enforcement and

investigative agencies which seek to

verify the income and sources of income

of a retailer.

In addition to responding to specific

requests from other Federal and State

agencies, FCS would periodically

initiate cross matches of retailer data

against other agencies’ files. The

purpose of these matches is to allow the

verification of information reported by

applicants and participating firms, and

to assist in the administration and

enforcement of the Food Stamp Act and

other Federal and State laws.

The Food Stamp Improvements Act of

1994 also amends section 9(c) of the

Food Stamp Act to provide criminal

penalties for the misuse of any

information obtained from retail food

stores and wholesale food concerns.

This would apply to any person who

publishes, divulges, discloses, or makes

this information known in any manner

or to any extent not authorized by

Federal law or regulations. A penalty

which includes a fine of not more than

$1,000, or imprisonment of not more

than one year, or both, is established by

law and is reflected in this proposed

rulemaking.

Cross-Matching of Social Security

Account Number Information and

Employer Identification Number

Information Maintained by the

Department of Agriculture

Section 1735 of the Food, Agriculture,

Conservation, and Trade Act of 1990

(Pub. L. No. 101–624, 104 Stat. 3359)

amended section 205(c)(2)(C) of the

Social Security Act (42 U.S.C.

405(c)(2)(C)) and added section 6109(f)

to the Internal Revenue Code of 1986

(26 U.S.C. 6109(f)) to permit the

Secretary of Agriculture to collect the

Social Security numbers of individual

retailers who apply for FSP

authorization and those of the officers of

corporate applicants, as well as

employer identification numbers

assigned by the Internal Revenue

Service. Section 316 of the Social

Security Independence and Program

Improvements Act of 1994 (Pub. L. No.

103–296, 108 Stat. 1464) expands FCS’

authority to share the EINs and SSNs of

food stamp retailers and wholesalers

with other agencies or instrumentalities

of the United States for verification

purposes to more effectively administer

and enforce the Food Stamp Program, as

well as other Federal laws.
Federal Register / Vol. 60, No. 92 / Friday, May 12, 1995 / Proposed Rules 25627

This rulemaking proposes to permit

the Department to share the list of

names and identifying numbers of food

concerns with other Federal agency

personnel who otherwise have access to

EINs and SSNs, for the purpose of

effectively administering and enforcing

the Food Stamp Act or for investigating

violations of other Federal laws, or

enforcement of such laws. The use of

such lists would be limited to crossmatching employer identification

number information and Social Security

account number information maintained

by the Department of Agriculture for the

purpose of verifying information

provided by applicants and firms

participating in the Food Stamp

Program.

Under the amendments, the

Department must restrict access to

officers and employees of the United

States government whose duties or

responsibilities require access to EINs

and SSNs. To obtain such information,

a Federal agency must already have

access to EINs and SSNs, and must

submit a written request that

demonstrates the need for such

information. The applicable law shall be

clearly identified as the relevant basis

for a request to assist FCS in

determining whether retailer data can be

released to the requesting agency. The

Department anticipates such

information to be requested most

frequently by the Internal Revenue

Service. The information may also be

useful to other Federal agencies which

seek to verify the income and sources of

income for a given retailer, in

conjunction with an EIN or SSN.

In addition to responding to specific

requests from other Federal agencies

under this proposed rule, FCS would

periodically initiate cross matches of

retailer data against other Federal

agencies’ files. The purpose of these

matches is to allow the verification of

information reported by applicant and

participating firms, and to assist in the

administration and enforcement of other

Federal laws.

The provisions of this rule do not

extend to private actions against the

authorized entities, either contemplated

or ongoing, as private litigants are not

law enforcement agencies.

Technical Correction

This rule proposes to implement a

technical change to correct a regulatory

reference error in § 278.1 (q)(iv),

whereby a paragraph dealing with

privacy that should have been

referenced as ‘‘278.1 (q)’’ was

mistakenly referenced as ‘‘278.1 (s)’’.

This correction does not change the

intent of this provision.

Finally, it is anticipated that changes

to Department of Treasury references

used in this proposed rule will be made

in the final rule to reflect changes made

by the Department of Treasury in a

proposed rule dealing with information

sharing that was printed in the Federal

Register on May 10, 1995.

List of Subjects

7 CFR Part 278

Administrative practice and

procedure, Banks, Banking, Claims,

Food stamps, Groceries—retail,

Groceries, General line—wholesaler,

Penalties.

Accordingly, 7 CFR part 278 is

proposed to be amended as follows:

1. The authority citation for 7 CFR

part 278 continues to read as follows:

Authority: 7 U.S.C. 2011–2032.

PART 278—PARTICIPATION OF

RETAIL FOOD STORES, WHOLESALE

FOOD CONCERNS AND INSURED

FINANCIAL INSTITUTIONS

2. In § 278.1:

a. The introductory text of paragraph

(q) is revised;

b. Paragraphs (q)(1) and (q)(2) are

redesignated as paragraphs (q)(2) and

(q)(3), respectively, and a new

paragraph (q)(1) is added;

c. Newly redesignated paragraphs

(q)(2)(i), (q)(2)(ii), (q)(3)(i), and (q)(3)(ii)

are revised;

d. Newly redesignated paragraph

(q)(2)(iii) is amended by adding after the

word ‘‘Department’’ in the first sentence

the words ‘‘or any agency or

instrumentality of the United States’’

and by removing the designation

‘‘(c)(2)’’ following the references to

‘‘§ 301.6109–2’’ and ‘‘(26 CFR

§ 301.6109–2)’’;

e. Newly redesignated paragraph

(q)(2)(iv) is amended by adding after the

word ‘‘Department’’ the words ‘‘or

maintained by any agency or

instrumentality of the United States’’, by

removing the references to

‘‘§ 278.1(s)(1)(ii)’’ and ‘‘§ 278.1

(q)(1)(iv)’’ and adding in their place

references to ‘‘paragraph (q)(2)(ii) of this

section’’ and ‘‘paragraph (q)(2)(iv) of

this section’’, and by removing the

designation ‘‘(d)’’ following the

references to ‘‘§ 301.6109–2’’ and ‘‘(26

CFR 301.6109)’’;

f. Newly redesignated paragraph

(q)(2)(v) is amended by removing the

designation ‘‘(e)’’ after the references to

‘‘§ 301.6109–2’’ and ‘‘(26 CFR 301.6109–

2)’’;

g. Newly redesignated paragraph

(q)(3)(iv) is amended by removing the

reference ‘‘§ 278.1(q)(2)(iv)’’ and adding

in its place the reference ‘‘paragraph

(q)(3)(iv) of this section’’; and

h. A new paragraph (q)(4) is added.

The revisions and additions read as

follows:

§ 278.1 Approval of retail food stores and

wholesale food concerns.

* * * * *

(q) Safeguarding privacy. With the

exception of EINs and SSNs, the use and

disclosure of the contents of an initial

application or other information

required to be submitted to determine

whether an applicant continues to

qualify, including ownership

information and sales and redemption

data provided by retail food stores and

wholesale concerns by Federal and State

law enforcement and investigative

agencies, is limited to the purposes of

administering or enforcing the Food

Stamp Act or any other Federal or State

law, and the regulations issued under

the Food Stamp Act or such other law.

Such information may also be disclosed

to and used by State agencies that

administer the Special Supplemental

Food Program for Women, Infants and

Children (WIC). Such purposes shall not

exclude the audit and examination of

such information by the Comptroller

General of the United States authorized

by any other provision of law. Any

person who publishes, divulges,

discloses, or makes known in any

manner or to any extent not authorized

by Federal law or regulations any

information obtained under this

paragraph shall be fined not more than

$1,000 or imprisoned not more than 1

year, or both. Additional safeguards

with respect to employee identification

numbers (EINs) are contained in

paragraph (q)(2) of this section.

Additional safeguards with respect to

Social Security numbers (SSNs) are

contained in paragraph (q)(3) of this

section.

(1) Criteria for requesting information.

Except for EINs and SSNs, information

provided by firms participating in the

Food Stamp Program may be requested

by Federal or State law enforcement or

investigative agencies for purposes of

administering or enforcing specified

Federal or State laws, or regulations

issued under those laws. Release of

information under this paragraph shall

be limited to information relevant to the

administration or enforcement of the

specified laws and regulations, as

determined by FCS. The request must be

submitted in writing and must clearly

indicate the specific provision of law or

regulations which would be

administered or enforced by access to

requested information and the relevance

of the information to those purposes.
25628 Federal Register / Vol. 60, No. 92 / Friday, May 12, 1995 / Proposed Rules

FCS may require additional information,

if needed to clarify a request. Requests

under this paragraph are limited to

authorized entities authorized on and

after August 15, 1994. However,

unauthorized firms redeeming food

stamps in violation of the Food Stamp

Act, as amended, on and after August

15, 1994 shall be subject to provisions

of this Section.

(2) Employer identification numbers.

(i) The Department may have access to

the EINs obtained pursuant to paragraph

(b)(5) of this section for the purpose of

establishing and maintaining a list of

the names and EINs of the stores and

concerns for use in determining those

applicants who previously have been

sanctioned or convicted under sections

9 and 12 of the Food Stamp Act of 1977,

as amended, (7 U.S.C. 2018, 2021). The

Department may share EINs with other

Federal agencies and instrumentalities if

the Department determines that such

sharing would assist in verifying and

matching such information against

information maintained by such other

agency or instrumentality. Any such

information shared pursuant to this

paragraph may be used by such other

agency or instrumentality for the

purpose of effective administration and

enforcement of the Food Stamp Act of

1977, as amended, or for the purpose of

investigation of violations of other

Federal laws or enforcement of such

laws. See Treas. Reg. § 301.6109–2 (26

CFR 301.6109–2).

(ii) The only persons permitted access

to EINs obtained pursuant to paragraph

(b) of this section are officers and

employees of the United States who

otherwise have access and whose duties

or responsibilities require access to the

EINs for the administration or

enforcement of the Food Stamp Act of

1977, as amended, or for the purpose of

investigation of violations of other

Federal laws or enforcement of such

laws. See Treas. Reg. § 301.6109–2 (26

CFR 301.6109–2).

* * * * *

(3) Social Security numbers. (i) The

Department may have access to SSNs

obtained pursuant to paragraph (b)(5) of

this section for the purpose of

establishing and maintaining a list of

names and SSNs for use in determining

those applicants who previously have

been sanctioned or convicted under

section 12 and 15 of the Food Stamp Act

of 1977, as amended, (7 U.S.C. 2021 or

2024). The Department may use this

determination of sanctions and

convictions in administering sections 9

and 12 of the Food Stamp Act of 1977

(7 U.S.C. 2018, 2021). The Department

may share SSNs with other Federal

agencies and instrumentalities if the

Department determines that such

sharing would assist in verifying and

matching such information against

information maintained by such other

agency or instrumentality. Any such

information shared pursuant to this

paragraph may be used for the purpose

of effective administration and

enforcement of the Food Stamp Act of

1977, as amended, or for the purpose of

investigation of violations of other

Federal laws or enforcement of such

laws.

(ii) The only persons permitted access

to SSNs obtained pursuant to paragraph

(b) of this section are officers and

employees of the United States who

otherwise have access and whose duties

or responsibilities require access to the

SSNs for the administration or

enforcement of the Food Stamp Act of

1977, as amended, or for investigations

of violations of other Federal laws or

enforcement of such laws.

* * * * *

(4) FCS initiated matches. Under the

restrictions noted in paragraph (q) of

this section, FCS will periodically

initiate cross matches of retailer data

against other Federal and State agencies’

files for the purpose of verifying

information provided by applicant and

participating firms, and for the purposes

of administering and enforcing other

Federal or State laws.

* * * * *

William E. Ludwig,

Administrator, Food and Consumer Service.

[FR Doc. 95–11785 Filed 5–11–95; 8:45 am]

BILLING CODE 3410–30–U

Agricultural Marketing Service

7 CFR Part 1099

[Docket No. AO–183–A47; DA–92–11]

Milk in the Paducah, Kentucky,

Marketing Area; Referendum Order;

Determination of Representative

Period and Designation of Referendum

Agent

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Referendum order.

SUMMARY: This document orders that a

referendum be conducted to determine

whether producers favor issuance the

order regulating the handling of milk in

the Paducah, Kentucky, marketing area,

as proposed to be amended in the final

decisions issued by the Acting Assistant

Secretary on December 2, 1994 (59 FR

64524) regarding the Class II price and

on January 27, 1995 (60 FR 7290)

regarding the Minnesota-Wisconsin (M–

W) price.

DATES: The referendum is to be

completed on or before May 30, 1995.

FOR FURTHER INFORMATION CONTACT: John

F. Borovies, Branch Chief, USDA/AMS/

Dairy Division, Order Formulation

Branch, Room 2968 South Building,

P.O. Box 96456, Washington, DC 20090–

6456, (202) 690–1366.

SUPPLEMENTARY INFORMATION: Prior

documents in this proceeding:

Notice of Hearing (M–W price): Issued

May 12, 1992; published May 15, 1992

(57 FR 20790).

Notice of Hearing (Class II price):

Issued December 14, 1993; published

December 21, 1993 (58 FR 67380).

Recommended Decision (M–W price):

Issued August 3, 1994; published

August 8, 1994 (59 FR 40418).

Recommended Decision (Class II

price): Issued August 22, 1994;

published August 26, 1994 (59 FR

44074).

Final Decision (Class II price): Issued

December 2, 1994; published December

14, 1994 (59 FR 64524).

Final Rule (Class II price): Issued

January 27, 1995; published February 2,

1995 (60 FR 6606).

Final Decision (M–W price): Issued

January 27, 1995; published February 7,

1995 (60 FR 7290).

Proposed Termination of Order:

Issued March 3, 1995; published March

9, 1995 (60 FR 12907).

Extension of Time for Filing

Comments on Proposed Termination of

Order: Issued March 27, 1995;

published March 31, 1995 (60 FR

16589).

Final Rule (M–W price): Issued April

6, 1995; published April 14, 1995 (60 FR

18952).

On January 27, 1995, the Acting

Assistant Secretary, Marketing and

Regulatory Programs, issued a final

decision on proposed amendments to all

Federal milk orders, including the

Paducah, Kentucky, order. When that

decision concerning replacement of the

Minnesota-Wisconsin price series was

issued, a referendum was not conducted

for the Paducah, Kentucky, order

because a proposed termination of the

order had been published (60 FR 12907)

as a result of the order failing to be

approved by producers in the

referendum conducted on the Class II

price amendments. A sufficient number

of comments were received opposing

the termination of the Paducah,

Kentucky, order to indicate that another

referendum should be conducted

concerning approval of the Class II price

amendments. Thus, this referendum is

being conducted to determine if