72350 Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Food and Nutrition Service 

7 CFR Parts 272, 274, 276, 278, 279, 

and 280 

[Amendment No. 397] 

RIN 0584–AD28 

Food Stamp Program, Reauthorization: 

Electronic Benefit Transfer (EBT) and 

Retail Food Stores Provisions of the 

Food Stamp Reauthorization Act of 

2002 

AGENCY: Food and Nutrition Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This action provides final 

rulemaking for a proposed rule 

published May 6, 2003. It revises Food 

Stamp Program regulations pertaining to 

the standards for approval of Electronic 

Benefits Transfer (EBT) systems, the 

participation of retail food stores and 

wholesale food concerns, and the State 

agency liabilities and Federal sanctions. 

These changes to the Food Stamp 

Program’s regulations are put forth to 

implement sections 4108, 4110, 4113 

and 4117 of the Food Stamp 

Reauthorization Act of 2002. These 

changes will allow the U.S. Department 

of Agriculture (Department) to use 

delivery methods other than certified 

mail when notifying retailers or State 

agencies of adverse action; permit the 

Department to approve alternate 

methods of issuing food stamp benefits 

during disasters; eliminate the 

requirement that Federal costs for EBT 

systems cannot exceed the costs of the 

paper systems they replace; and allow 

group homes and institutions to redeem 

EBT benefits directly through banks 

rather than going through authorized 

wholesalers or other retailers. 

DATES: This rule is effective January 4, 

2006. 

FOR FURTHER INFORMATION CONTACT: 

Mandy Briggs, Chief, EBT Branch, 

Benefit Redemption Division, Food and 

Nutrition Service, USDA, 3101 Park 

Center Drive, Alexandria, Virginia 

22302, or telephone (703) 305–2523. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

This rule has been determined to be 

significant and was reviewed by the 

Office of Management and Budget under 

Executive Order 12866. 

Executive Order 12372 

The Food Stamp Program is listed in 

the Catalog of Federal Domestic 

Assistance under No. 10.551. For the 

reasons set forth in the final rule in 7 

CFR part 3015, subpart V and related 

Notice (48 FR 29115), this Program is 

excluded from the scope of Executive 

Order 12372, which requires 

intergovernmental consultation with 

State and local officials. 

Executive Order 13132, Federalism 

Executive Order 13132 requires 

Federal agencies to consider the impact 

of their regulatory actions on State and 

local governments. 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. This 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. 

Regulatory Flexibility Act 

This rule has been reviewed with 

regard to the requirements of the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). Eric Bost, Under Secretary for 

Food, Nutrition, and Consumer 

Services, has certified that this rule will 

not have a significant economic impact 

on a substantial number of small 

entities. Departmental Field Offices, 

retailers participating or applying to 

participate in the Food Stamp Program, 

State agencies that distribute food stamp 

benefits and group living homes are the 

entities affected by this change. 

However, the number of those affected 

is not large enough to be considered 

significant. 

Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. Chapter 35; see 5 CFR 1320) 

requires that the Office of Management 

and Budget (OMB) approve all 

collections of information by a Federal 

agency from the public before they can 

be implemented. Respondents are not 

required to respond to any collection of 

information unless it displays a valid 

OMB control number. Information 

collections in this final rule have been 

previously approved by OMB under 

OMB number 0584–0083 (Operating 

Guidelines, Forms and Waivers). 

The Food and Nutrition Service (FNS) 

published a proposed rule on May 6, 

2003, which solicited comments on the 

proposed revisions to reduce the 

number of burden hours. No comments 

on the proposed burden were received; 

however, comments related to proposed 

changes to the regulations were received 

and are addressed in the Background 

section of this rule. 

Government Paperwork Elimination 

Act 

FNS is committed to compliance with 

the Government Paperwork Elimination 

Act (GPEA), which requires Government 

agencies to provide the public the 

option of submitting information or 

transacting business electronically to 

the maximum extent possible. This rule 

accomplishes the intent of GPEA by 

facilitating EBT system procedures for 

the FSP, and thereby eliminating the 

need to print, distribute, and handle 

paper food stamp coupons in operation 

of the FSP. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule is intended to have 

preemptive effect with respect to any 

State or local laws, regulations or 

policies which conflict with its 

provisions or which would otherwise 

impede its full implementation. This 

rule is not intended to have retroactive 

effect unless specified in the DATES

section of this preamble. Prior to any 

judicial challenge to the provisions of 

this rule or the application of its 

provisions, all applicable administrative 

procedures must be exhausted. 

Public Law 104–4 

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 costbenefit 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 rule contains no Federal 

mandates (under the regulatory 

provisions of Title II of the UMRA) for 

State, local, and tribal governments or 

the private sector of $100 million or 

Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations 72351 

more in any one year. This rule is, 

therefore, not subject to the 

requirements of sections 202 and 205 of 

the UMRA. 

Regulatory Impact Analysis 

1. Need for Action 

This action is needed to formalize 

implementation of provisions of the 

Food Stamp Reauthorization Act of 

2002 related to EBT and retailer 

operations. These changes will allow 

the Department to: (1) Use delivery 

methods other than certified mail when 

notifying retailers or State agencies of 

adverse action; (2) approve alternate 

methods of issuing food stamp benefits 

during disasters; (3) eliminate the 

requirement that Federal costs for EBT 

systems cannot exceed the costs of the 

paper systems they replace; and (4) 

permit group homes and institutions to 

redeem EBT benefits directly through 

banks rather than being restricted to 

authorized wholesalers or other 

retailers. 

2. Benefits 

Federal and State agencies will 

benefit from the provisions of this rule 

because they will streamline the 

administrative procedures that are 

already in place and codify current 

practice. 

3. Costs 

There will be minimal costs 

associated with outfitting group homes 

with point of sale (POS) devices. In 

Fiscal Year (FY) 2003, only 1,544 group 

homes existed in the United States, and 

the monthly average leasing cost of $26 

would be equally shared between the 

Department and the State agencies if all 

group homes requested POS devices. 

Since many States have already been 

operating group homes in this way 

through demonstration waivers, most of 

these homes already have POS devices, 

minimizing the impact of any new costs. 

We estimate that eliminating the cost 

neutrality requirement on EBT systems 

cost less than $1 million per year during 

the first five years of enactment (FY 

2002–FY 2006). There are no costs from 

the other two sections of the final rule. 

Civil Rights Impact Analysis 

FNS has reviewed this final rule in 

accordance with the Department 

Regulation 4300–4, ‘‘Civil Rights Impact 

Analysis,’’ to identify and address any 

major civil rights impacts the rule might 

have on minorities, women, and persons 

with disabilities. After a careful review 

of the rule’s intent and provisions, and 

the characteristics of food stamp 

households and individual participants, 

FNS has determined that there is no 

way to soften their effect on any of the 

protected classes. FNS has no discretion 

in implementing many of these changes. 

The changes that are required to be 

implemented by law have been 

implemented. All data available to FNS 

indicate that protected individuals have 

the same opportunity to participate in 

the Food Stamp Program as nonprotected individuals. FNS specifically 

prohibits the State and local government 

agencies that administer the Program 

from engaging in actions that 

discriminate based on race, color, 

national origin, gender, age, disability, 

marital or family status. (See 7 CFR 

272.6.) Where State agencies have 

options, and they choose to implement 

a certain provision, they must 

implement it in such a way that it 

complies with the regulations at 7 CFR 

272.6. 

Background 

A proposed rule was published in the 

Federal Register on May 6, 2003 at 68 

FR 23927 to revise Food Stamp Program 

regulations pertaining to the standards 

for approval of Electronic Benefits 

Transfer (EBT) systems, the 

participation of retail food stores and 

wholesale food concerns, and the State 

agency liabilities and Federal sanctions. 

Comments on the proposed rule were 

solicited through July 7, 2003. This final 

action takes the comments received into 

account. 

In this rule, the Department amends 

Food Stamp Program regulations to 

expand the delivery of adverse action 

notices to retailers and State agencies, 

allow alternative issuance systems in 

disasters, eliminate the requirement for 

cost neutrality for EBT systems, and 

permit redemption of EBT benefits 

through group living facilities. 

Thirteen comment letters were 

received in response to the proposed 

rule. Individual comments were 

received from four State agencies and 

nine public interest groups. In general, 

the commenters supported the proposed 

rule’s changes. Readers are referred to 

the proposed regulation for a more 

complete understanding of this final 

action. 

The only changes between the 

proposed and final rules are due to two 

oversights in the proposed rule. First, 

we are not finalizing the proposed 

portion of 7 CFR 274.12 that specifically 

provides that the cost of administering 

statewide benefit issuance after 

implementation of the EBT system 

should be funded at the regular Federal 

financial participation rate, up to the 

level of the current coupon issuance 

costs. This proposed portion of the 

sentence contains outdated information 

since coupon issuance is no longer a 

reality in the EBT system. Second, 7 

CFR 278.2(g)(2) incorrectly proposed as 

mandatory the requirement that 

authorized drug addict and alcoholic 

treatment and rehabilitation programs, 

group living arrangements, shelters for 

battered women and children, and 

public or private nonprofit homeless 

meal providers for homeless food stamp 

households redeem EBT benefits 

directly through an insured financial 

institution, although the requirement 

was correctly proposed as optional in 

the preamble. Therefore, we are now 

clarifying in this final rule that the 

requirement contained in 7 CFR 

278.2(g)(2) of this final rule contains the 

word ‘‘may’’ instead of the word ‘‘shall’’

to indicate that this requirement is 

optional and not mandatory per 

interpretation of the Food Stamp 

Reauthorization Act of 2002 (FSRA). 

Mailing to Retailers and State Agencies 

The Department revises regulations at 

7 CFR 276.7(b), 278.1(k)(7), 278.1(l)(2), 

278.6(o), 278.7(b)(2), 278.7(f), and 

279.7(b) to eliminate the requirement 

that the Department send notices of 

adverse actions to retailers and State 

agencies using certified mail. Effective 

May 13, 2002, section 4117 of the FSRA 

amended section 14(a)(2) of the Food 

Stamp Act of 1977 (Food Stamp Act) (7 

U.S.C. 2023(a)(2)) to authorize the 

delivery of such notices in any form the 

Secretary determines will provide 

evidence of the delivery. 

The Department received two 

comments on this provision. One 

commenter supported the revision, but 

felt that the State should be notified in 

advance of notices to retailers. FNS 

believes that this is not necessary since 

we have a direct relationship with 

retailers as part of retailer oversight 

responsibilities for the Food Stamp 

Program. Currently, any State interested 

in retailer notification consults with the 

FNS Regional Office. Some States do 

receive copies of letters to the retailer 

based on what is negotiated at the 

regional level. Therefore, no additional 

requirements are necessary at this time 

and the provision is finalized as 

proposed. 

Alternative Issuance Systems in 

Disasters 

This final rule revises Food Stamp 

Program regulations at 7 CFR 280.1 for 

emergency food assistance for victims of 

disasters. By terms of section 4108 of 

the FSRA, which amended section 

5(h)(3)(B) of the Food Stamp Act (7 

U.S.C. 2014(h)(3)(B)), the Department 

received authority to approve alternate 

methods for issuing food stamp benefits 

72352 Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations 

during disasters when reliance on EBT 

systems is impracticable. This final rule 

amends the regulation to reflect this 

new authority. 

Four comments were received on this 

issue. Two commenters fully supported 

this revision. Another commenter felt 

that the regulation should acknowledge 

that States should re-examine existing 

disaster plans in light of the new 

provision enabling a ‘‘cash-out’’ option 

in the event of catastrophic disaster. 

Congress, however, was clear in its 

intent that cash-out would not be 

implemented unless specific disaster 

circumstances made EBT unworkable. 

Consistent with the intent of the 

statutory amendment, as expressed by 

the Conference Committee, H.R. Conf. 

Rep. No. 107–424, at 264 (2002), the 

Department would only approve 

alternate issuance, such as cash, as a last 

resort, depending on the specific 

circumstances of the disaster. 

Another commenter stated that cash is 

not always a viable alternate method of 

issuance, but suggested we extend the 

benefit and card issuance time frame to 

10 days, from the current guideline of 3 

days. The Department does not agree 

that this would be sensible in a disaster 

situation when there is an urgent need 

to assist people who are victims of a 

disaster and to get benefits to them as 

quickly as possible. Additionally, since 

each disaster situation is unique, we 

would only approve the specifics of a 

disaster plan on a case-by-case basis. 

Cost Neutrality for EBT Systems 

This provision eliminates the 

requirement at 7 CFR 274.12(e) that 

Federal costs of EBT systems not exceed 

the costs of the paper systems they 

replace as a condition of approval of 

State EBT systems, in accordance with 

section 4110 of the FSRA. 

The elimination of the cost neutrality 

requirement does not remove the 

requirement for State agencies to submit 

Implementation Advanced Planning 

Documents (IAPDs) to the Department 

for approval prior to conversion to a 

new system or to making upgrades or 

changes to their existing EBT systems. 

We received one comment fully 

supporting this revision and none 

opposing it. 

Redemption of Benefits Through Group 

Living Facilities 

This final rule revises food stamp 

regulations regarding participation of 

group living facilities. By terms of 

section 4113 of the FSRA, a center, 

organization, institution, shelter, group 

living arrangement and establishment 

that are among those defined as retail 

food stores under section 3(k)(2) of the 

Food Stamp Act (7 U.S.C. 2012(k)(2)), 

may now be authorized to redeem 

benefits directly through financial 

institutions in areas where EBT has 

been implemented. The four types of 

entities affected by this change are drug 

addict and alcoholic treatment and 

rehabilitation programs; group living 

arrangements; shelters for battered 

women and children; and public or 

private nonprofit homeless meal 

providers. These group home facilities 

represent 1.64 percent of all firms in the 

program, while 98.4 percent are 

classified as traditional grocery stores. 

In these situations, the facility 

functions like most authorized retailers, 

conducting EBT transactions with its 

residents, deducting benefits from their 

cards and depositing them into the 

facility’s account. The facility can then 

purchase eligible foods at any 

authorized retailer or wholesaler with 

funds drawn directly from its own 

account. This makes it easier for those 

recipients residing in the authorized 

facilities to use their benefits in an EBT 

environment. Therefore, the Department 

is providing that group home facilities 

may be equipped with POS devices in 

a manner that meets the requirements 

established for retailers. These facilities 

would redeem benefits using the POS 

device, and then purchase eligible food 

items. 

The Department did not receive any 

comments on the variety of ways that 

group homes operate. However, we are 

providing clarification that not all group 

homes must have the same EBT 

procedures in place. Some States have 

group homes that are not using POS 

devices, but instead assign an 

authorized representative from each 

group home to shop with one EBT card 

for everyone at authorized wholesalers. 

In this rule, the Department does not 

intend to preclude any States from 

redeeming EBT benefits in group homes 

that operate in a different manner. 

The Department received 13 

comments on the group home provision 

which is limited to the statutory 

provision allowing the facilities to 

deposit directly into financial 

institutions which allow them to use a 

POS device. One commenter fully 

supported this revision. Eleven 

commenters provided a variety of 

similar feedback on the operations or 

management process for these facilities, 

some of which were outside the narrow 

scope of this final rule. All comments 

are encompassed in the paragraphs that 

follow. We believe that current rules in 

CFR 273.11 provide adequate safeguards 

and address the most important of the 

commenters’ concerns about fraud. 

Additionally, as fraud risks vary for 

each type of group home facility, they 

still remain much lower than when 

coupons were issued since EBT 

transactions can be tracked and 

monitored more easily than the old 

paper system. 

Specifically, several commenters 

thought the rule should be limited to 

residential facilities, which is not 

allowable under the statute. The law 

specifies the four types of facilities that 

may be authorized to redeem benefits. 

The only entity that is not residential is 

the homeless meal providers; moreover, 

FNS feels it is good policy to provide 

services to homeless meal providers that 

cover a transient population. 

Several commenters also thought the 

rule should be limited to group homes 

that actually provide meals for stays 

exceeding a month. Another comment 

relates to charging for actual meals 

served or only accessing a portion of the 

benefits for each meal served (no greater 

than 1/90th of the thrifty food plan). 

Both types of comments shared the 

same concern that the centers would 

take all of the recipient benefits on the 

first day they became available and put 

them in the centers’ own account, 

leaving nothing for the household when 

it leaves the center. The comment to 

charge on a per meal basis or only a 

portion of the meal benefits represents 

a significant operational change that 

does not seem practical for these small 

facilities. In addition to the 

administrative burden placed on States 

and centers to charge on a per meal 

basis, it would be extremely difficult to 

track that the meals account for the 

correct portion of the benefits available. 

Current rules at 7 CFR 273.11(e)(5) 

address State agency and center actions 

when the household leaves prior to the 

16th of the month. Specifically, the 

rules prohibit drug and alcohol 

treatment centers and group living 

arrangements from obtaining more than 

half of the household’s allotment prior 

to the 16th of the month when benefits 

are issued through an EBT system. 

These rules also require centers to 

return to households that leave before 

the 16th of the month one-half of their 

benefits. It specifically also states that 

after the household leaves the center, 

the center can no longer act as the 

household’s authorized representative 

for certification purposes or for 

obtaining or using benefits. The center 

must also provide the departing 

households with their EBT cards at any 

time during the month. 

Other commenters wanted to limit the 

use of POS devices to certain staff, 

require facilities to maintain records of 

meals charged to clients, and not allow 

Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations 72353 

staff to collect personal identification 

numbers or cards. 

As for limiting the use of POS devices 

to certain staff, this restriction would be 

extremely difficult to monitor or 

enforce. Additionally, FNS does not 

monitor who specifically uses POS 

devices in other firms (grocery stores) 

that participate in the program. Some 

commenters expressed concern about 

possible fraudulent abuse by employees 

of these centers; however, the 

regulations at 7 CFR 273.11 already 

contain significant protections against 

such abuse. Under current rules, centers 

are responsible for any over-payment or 

misuse, regardless of who does it. 

Additionally, the rules require centers 

to provide State agencies with monthly 

or semi-monthly lists of participating 

residents. In addition, States must 

conduct periodic random on-site visits 

to the center to assure the accuracy of 

records. The rules also describe how 

States must establish a claim for overissuance of benefits and outline the 

steps that they would take prior to FNS 

disqualification of an authorized center. 

Commenters also wanted centers to 

maintain records establishing that food 

purchases attributable to recipients at 

least equal the value of the benefits 

taken from those recipients. This 

suggestion has merit now that group 

homes can place benefits into their 

checking accounts. There would be 

some additional recording keeping 

requirements imposed on the facilities. 

7 CFR 273.11 requires States to do 

random checks on the facilities anyway, 

and looking at the amount of food 

expenditures versus the benefits 

redeemed would not be unduly 

burdensome. This issue will be 

addressed in a future rulemaking and 

will be taken under consideration. 

On the comment to not allow centers 

to collect PIN numbers or cards, it is 

important to emphasize that group 

homes operate in a variety of ways and 

this rule does not preclude centers from 

operating in different ways. Specifically, 

some centers act as the authorized 

representative for clients and must have 

access to PIN numbers and cards in 

order to redeem the food stamp benefits. 

One commenter wanted facilities to 

be exempt from the minimum Food 

Stamp redemption activity per month to 

obtain State-provided POS terminals. It 

is important to emphasize that States 

already have this option. Current rules 

require that all authorized retailers be 

provided with POS devices regardless of 

its size. In some cases, at the State’s 

request, they are issued retailer 

participation waivers so that POS 

deployment is not required for retailers 

with redemption levels less than $100 

per month. 

Another commenter said that monthly 

EBT statements should be provided to 

all recipients detailing the transactions. 

The Department does not agree that this 

is necessary. Current rules in 7 CFR 

274.12 already require that clients be 

provided printed receipts at the time of 

transaction and be able to check their 

balance anytime without making a 

purchase or standing in a checkout line. 

Current rules also require State agencies 

to ensure that the EBT system is capable 

of providing a transaction history for a 

period of up to two calendar months to 

households upon request. 

The same commenter provided 

comments on battered women and 

children’s rights that included making 

benefits available to all battered women 

and not just women who leave an 

abusive household and reside in official 

shelters. The same commenter said FNS 

should implement procedures similar to 

the Family Violence Option of the 

Temporary Assistance for Needy 

Families (TANF) program and to waive 

regulations that make escaping from 

domestic violence more difficult, places 

individuals at risk of further violence, or 

penalizes individuals because of 

violence. The comments on battered 

women and children’s rights are outside 

the scope of this rule. 

The issue of extending the re-issuance 

provision to women who fled to the 

residences of friends or relatives was 

addressed in the comments of the final 

rule, Food Stamp Program: Certifying 

Residents of Shelters for Battered 

Women and Children, published at 46 

FR 60160 on December 8, 1981. The reissuance provision is detailed in 7 CFR 

273.11(g)(3). Normally State data 

systems will prevent issuance of 

benefits to individuals who are already 

participating in another household. 

However, in the case of a mother and 

children who leave the household 

which contains the abuser, and apply as 

shelter residents, the State agency must 

override the normal system edit to allow 

the mother and children to be certified. 

The household with the abuser will 

potentially receive excess benefits until 

the benefit amount is reduced through 

the adverse action process. 

The December 8, 1981 rule 

established the exception to the 

residents of institution ban for residents 

of shelters for battered women and 

children. At the time, the Department 

took the position that Congress intended 

the special provisions relative to 

shelters for battered women and 

children to apply only to residents of 

such shelters. We believe the suggestion 

would place a burden on State agencies 

to investigate or verify that domestic 

violence was an issue in the move, and 

not simply a move motivated by other 

reasons. 

Equipping of these facilities would be 

in accordance with the EBT regulations 

at 7 CFR 274.12. State agencies 

approved to operate a demonstration 

project for this function may continue 

operations without further action and 

are no longer bound by the survey 

requirements of a demonstration project. 

This rulemaking does not affect current 

State operations. 

Implementation 

The provisions of this rule are 

effective January 4, 2006. 

List of Subjects 

7 CFR Part 272 

Alaska, Civil Rights, Food Stamps, 

Grant Program—social programs, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 274 

Administrative practice and 

procedure, Food stamps, Fraud, Grant 

programs—social programs, Reporting 

and recordkeeping requirements, State 

liabilities. 

7 CFR Part 276 

Administrative practice and 

procedure, Food stamps, Fraud, State 

agency liabilities and federal sanctions. 

7 CFR Part 278 

Administrative practice and 

procedure, Banks, Banking, Claims, 

Food stamps, General line—

wholesalers, Groceries, Groceries—

retail, Penalties. 

7 CFR Part 279 

Administrative practice and 

procedure, Food stamps, General line—

wholesalers, Groceries, Groceries—

retail. 

7 CFR Part 280 

Disaster assistance, Food stamps, 

Grant programs—social programs. 

■ Accordingly, 7 CFR parts 272, 274, 

276, 278, 279, and 280 are amended as 

follows: 

■ 1. The authority citation for 7 CFR 

parts 272, 274, 276, 278, 279, and 280 

continues to read as follows: 

Authority: 7 U.S.C. 2011–2036. 

PART 272—REQUIREMENTS FOR 

PARTICIPATING STATE AGENCIES 

■ 2. In § 272.1, paragraph (g)(171) is 

added to read as follows: 

72354 Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations 

§ 272.1 General terms and conditions. 

* * * * * 

(g) Implementation. * * * 

(171) Amendment No. 397. The 

provisions of Amendment No. 397 are 

effective January 4, 2006. State agencies 

may implement the provisions anytime 

after the rule is published but no later 

than June 5, 2006. 

PART 274—ISSUANCE AND USE OF 

COUPONS 

■ 3. In § 274.10, paragraphs (f)(1), (f)(2) 

and (f)(3) are revised to read as follows: 

§ 274.10 Use of identification cards and 

redemption of coupons by eligible 

households. 

* * * * * 

(f) * * * 

(1) Members of eligible households 

who are narcotics addicts or alcoholics 

and who regularly participate in a drug 

or alcoholic treatment rehabilitation 

program may use food stamp benefits to 

purchase food prepared for them during 

the course of such program by a private 

nonprofit organization or institution or 

publicly operated community mental 

health center which is authorized by 

FNS to redeem benefits in accordance 

with § 278.1 and § 278.2(g) of this 

chapter. 

(2) Eligible residents of a group living 

arrangement may use food stamp 

benefits issued to them to purchase 

meals prepared especially for them at a 

group living arrangement which is 

authorized by FNS to redeem benefits in 

accordance with § 278.1 and § 278.2(g) 

of this chapter. 

(3) Residents of shelters for battered 

women and children as defined in 

§ 278.1(g) of this chapter may use their 

food stamp benefits to purchase meals 

prepared especially for them at a shelter 

which is authorized by FNS to redeem 

benefits in accordance with § 278.1 and 

§ 278.2(g) of this chapter. 

* * * * * 

§ 274.12 [Amended] 

■ 4. In § 274.12: 

■ a. Paragraph (e) is removed, and 

paragraphs (f) through (o) are 

redesignated as paragraphs (e) through 

(n), respectively; 

■ b. Newly redesignated paragraph (k) 

(1) is amended by removing the words 

‘‘up to the level of the current coupon 

issuance costs, as prescribed in 

paragraph (c)(3) of this section’’. 

■ c. Newly redesignated paragraph 

(k)(4) is removed and newly 

redesignated paragraph (k)(5) is further 

redesignated as paragraph(k)(4). 

PART 276—STATE AGENCY 

LIABILITIES AND FEDERAL 

SANCTIONS 

■ 5. In § 276.7, paragraph (b) is revised 

to read as follows: 

§ 276.7 Administrative review process. 

* * * * * 

(b) Notice of claim. When asserting a 

claim against a State agency, FNS shall 

provide the notice to the State agency 

using any delivery method as long as 

the method provides evidence of the 

delivery. 

* * * * * 

PART 278—PARTICIPATION OF 

RETAIL FOOD STORES, WHOLESALE 

FOOD CONCERNS AND INSURED 

FINANCIAL INSTITUTIONS 

■ 6. In § 278.1: 

■ a. The first sentence in paragraph (e) 

is amended by removing the words 

‘‘through wholesalers food stamps 

received from or on behalf of their 

participants’’; and adding in their place 

the word ‘‘benefits’’; 

■ b. The first sentence in paragraph (f) 

is amended by removing the words 

‘‘coupons directly through wholesalers’’

and adding in their place the word 

‘‘benefits’’; 

■ c. The first sentence in paragraph (g) 

is amended by removing the words 

‘‘coupons directly through wholesalers’’

and adding in their place the word 

‘‘benefits’’; 

■ d. The second sentence in paragraph 

(k)(7) is revised; and 

■ e. The first sentence in paragraph 

(l)(2) is amended by removing the words 

‘‘certified mail or personal service’’ and 

adding in their place the words ‘‘using 

any delivery method as long as the 

method provides evidence of delivery’’. 

The revision reads as follows: 

§ 278.1 Approval of retail food stores and 

wholesale food concerns. 

* * * * * 

(k) * * * 

(7) * * * The FNS officer in charge 

shall issue a notice to the firm (using 

any delivery method that provides 

evidence of delivery) to inform the firm 

of any authorization denial and advise 

the firm that it may request review of 

that determination. 

* * * * * 

■ 7. In § 278.2, the text of paragraph (g) 

is redesignated as paragraph (g)(1), and 

a new paragraph (g)(2) is added to read 

as follows: 

§ 278.2 Participation of retail food stores. 

* * * * * 

(g) * * * 

(2) Notwithstanding paragraph (g)(1) 

of this section, authorized drug addict 

and alcoholic treatment and 

rehabilitation programs, group living 

arrangements, shelters for battered 

women and children, and public or 

private nonprofit homeless meal 

providers for homeless food stamp 

households may be authorized to 

redeem EBT benefits directly through an 

insured financial institution in areas 

where an Electronic Benefit Transfer 

(EBT) system has been implemented. 

* * * * * 

§ 278.6 [Amended] 

■ 8. In § 278.6, the first sentence in 

paragraph (o) is amended by removing 

the words ‘‘certified mail or personal 

service’’ and adding in their place the 

words ‘‘any method that provides 

evidence of delivery’’. 

§ 278.7 [Amended] 

■ 9. In § 278.7: 

■ a. The first sentence in paragraph 

(b)(2) is amended by removing the 

words ‘‘certified mail-return receipt 

requested’’ and adding in their place the 

words ‘‘using any delivery method as 

long as the method provides evidence of 

delivery’’; 

■ b. The first sentence in paragraph (f) 

is amended by removing the words 

‘‘certified mail or personal service’’ and 

adding in their place the words ‘‘using 

any delivery method as long as the 

method provides evidence of delivery’’. 

PART 279—ADMINISTRATIVE AND 

JUDICIAL REVIEW—FOOD RETAILERS 

AND FOOD WHOLESALERS 

§ 279.7 [Amended] 

■ 10. In § 279.7, the last sentence in 

paragraph (b) is amended by removing 

the words ‘‘registered or certified mail’’

and adding in their place the words 

‘‘using any delivery method as long as 

the method provides evidence of 

delivery’’. 

PART 280—EMERGENCY FOOD 

ASSISTANCE FOR VICTIMS OF 

DISASTERS 

■ 11. § 280.1 is amended by adding a 

sentence to the end of the section to 

read as follows: 

§ 280.1 Interim disaster procedures. 

* * * The Secretary may also 

approve alternate methods for issuing 

food stamp benefits during a disaster 

when reliance on Electronic Benefits 

Transfer (EBT) systems is impracticable. 

Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Rules and Regulations 72355 

Dated: November 23, 2005. 

Eric M. Bost, 

Under Secretary for Food, Nutrition and 

Consumer Services. 

[FR Doc. 05–23619 Filed 12–2–05; 8:45 am] 

BILLING CODE 3410–30–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 985 

[Docket No. FV05–985–2 IFR A] 

Marketing Order Regulating the 

Handling of Spearmint Oil Produced in 

the Far West; Revision of the Salable 

Quantity and Allotment Percentage for 

Class 3 (Native) Spearmint Oil for the 

2005–2006 Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This rule amends a prior 

interim final rule that increased the 

quantity of Class 1 (Scotch) and Class 3 

(Native) spearmint oil that handlers may 

purchase from, or handle for, producers 

during the 2005–2006 marketing year. 

The prior interim final rule increased 

the Scotch spearmint oil salable 

quantity from 677,409 pounds to 

1,062,898 pounds, and the allotment 

percentage from 35 percent to 55 

percent. In addition, the prior interim 

final rule increased the Native 

spearmint oil salable quantity from 

867,958 pounds to 1,019,600 pounds, 

and the allotment percentage from 40 

percent to 47 percent. This action does 

not affect the Scotch spearmint oil 

salable quantity and allotment 

percentage; however, it increases the 

Native spearmint oil salable quantity by 

an additional 151,855 pounds from 

1,019,600 pounds to 1,171,455 pounds, 

and the allotment percentage by an 

additional 7 percent from 47 percent to 

54 percent. The marketing order 

regulates the handling of spearmint oil 

produced in the Far West and is 

administered locally by the Spearmint 

Oil Administrative Committee 

(Committee). The Committee 

recommended this rule for the purpose 

of avoiding extreme fluctuations in 

supplies and prices and to help 

maintain stability in the Far West 

spearmint oil market. 

DATES: Effective June 1, 2005, through 

May 31, 2006; comments received by 

February 3, 2006 will be considered 

prior to issuance of a final rule. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237; Fax: 

(202) 720–8938; E-mail: 

moab.docketclerk@usda.gov; or Internet: 

http://www.regulations.gov. All 

comments should reference the docket 

number and the date and page number 

of this issue of the Federal Register and 

will be made available for public 

inspection in the Office of the Docket 

Clerk during regular business hours, or 

can be viewed at: http:// 

www.ams.usda.gov/fv/moab.html. 

FOR FURTHER INFORMATION CONTACT: 

Susan M. Hiller, Northwest Marketing 

Field Office, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA; 

Telephone: (503) 326–2724, Fax: (503) 

326–7440; or George Kelhart, Technical 

Advisor, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237; 

Telephone: (202) 720–2491, Fax: (202) 

720–8938. 

Small businesses may request 

information on complying with this 

regulation by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720–

2491, Fax: (202) 720–8938, or E-mail: 

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: This rule 

is issued under Marketing Order No. 

985 (7 CFR part 985), as amended, 

regulating the handling of spearmint oil 

produced in the Far West (Washington, 

Idaho, Oregon, and designated parts of 

Nevada and Utah), hereinafter referred 

to as the ‘‘order.’’ The order is effective 

under the Agricultural Marketing 

Agreement Act of 1937, as amended (7 

U.S.C. 601–674), hereinafter referred to 

as the ‘‘Act.’’

The Department of Agriculture 

(USDA) is issuing this rule in 

conformance with Executive Order 

12866. 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule is not intended to 

have retroactive effect. This rule will 

not preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the Act, any 

handler subject to an order may file 

with USDA a petition stating that the 

order, any provision of the order, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and request a modification of the order 

or to be exempted therefrom. A handler 

is afforded the opportunity for a hearing 

on the petition. After the hearing USDA 

would rule on the petition. The Act 

provides that the district court of the 

United States in any district in which 

the handler is an inhabitant, or has his 

or her principal place of business, has 

jurisdiction to review USDA’s ruling on 

the petition, provided an action is filed 

not later than 20 days after the date of 

the entry of the ruling. 

The initial salable quantities and 

allotment percentages for Scotch and 

Native spearmint oil for the 2005–2006 

marketing year were recommended by 

the Committee at its October 6, 2004, 

meeting. The Committee recommended 

salable quantities of 677,409 pounds 

and 867,958 pounds, and allotment 

percentages of 35 percent and 40 

percent, respectively, for Scotch and 

Native spearmint oil. A proposed rule 

was published in the Federal Register 

on January 12, 2005 (70 FR 2027). 

Comments on the proposed rule were 

solicited from interested persons until 

February 11, 2005. No comments were 

received. Subsequently, a final rule 

establishing the salable quantities and 

allotment percentages for Scotch and 

Native spearmint oil for the 2005–2006 

marketing year was published in the 

Federal Register on March 24, 2005 (70 

FR 14969). 

Pursuant to authority contained in 

§§ 985.50, 985.51, and 985.52 of the 

order, the Committee has made 

recommendations to increase the 

quantity of Scotch and Native spearmint 

oil that handlers may purchase from, or 

handle for, producers during the 2005–

2006 marketing year, which ends on 

May 31, 2006. An interim final rule was 

published in the Federal Register on 

September 23, 2005 (70 FR 55713), 

which increased the 2005–2006 

marketing year salable quantities and 

allotment percentages for Scotch and 

Native spearmint oil to 1,062,898 

pounds and 55 percent, and 1,019,600 

pounds and 47 percent, respectively. 

Comments on the interim final rule are 

being solicited from interested persons 

through November 22, 2005. 

This rule amends the interim final 

rule that was published in the Federal 

Register on September 23, 2005, and is 

based on a unanimous Committee 

recommendation made at a meeting on 

October 5, 2005, to increase the Native 

spearmint oil salable quantity by an