`[Federal Register Volume 70, Number 232 (Monday, December 5, 2005)]
[Rules and Regulations]
[Pages 72350-72355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23619]



[[Page 72350]]

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

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 
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 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

[[Page 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 non-protected 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

[[Page 72352]]

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

[[Page 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 over-
issuance 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 re-issuance 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.


0
Accordingly, 7 CFR parts 272, 274, 276, 278, 279, and 280 are amended 
as follows:
0
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

0
2. In Sec.  272.1, paragraph (g)(171) is added to read as follows:

[[Page 72354]]

Sec.  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

0
3. In Sec.  274.10, paragraphs (f)(1), (f)(2) and (f)(3) are revised to 
read as follows:


Sec.  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 Sec.  278.1 and Sec.  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 Sec.  278.1 and Sec.  278.2(g) of this 
chapter.
    (3) Residents of shelters for battered women and children as 
defined in Sec.  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 Sec.  
278.1 and Sec.  278.2(g) of this chapter.
* * * * *


Sec.  274.12  [Amended]

0
4. In Sec.  274.12:
0
a. Paragraph (e) is removed, and paragraphs (f) through (o) are 
redesignated as paragraphs (e) through (n), respectively;
0
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''.
0
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

0
5. In Sec.  276.7, paragraph (b) is revised to read as follows:


Sec.  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

0
6. In Sec.  278.1:
0
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'';
0
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'';
0
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'';
0
d. The second sentence in paragraph (k)(7) is revised; and
0
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:


Sec.  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.
* * * * *

0
7. In Sec.  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:


Sec.  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.
* * * * *


Sec.  278.6  [Amended]

0
8. In Sec.  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''.


Sec.  278.7  [Amended]

0
9. In Sec.  278.7:
0
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'';
0
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


Sec.  279.7  [Amended]

0
10. In Sec.  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

0
11. Sec.  280.1 is amended by adding a sentence to the end of the 
section to read as follows:


Sec.  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.


[[Page 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`