[Federal Register Volume 79, Number 79 (Thursday, April 24, 2014)]
[Rules and Regulations]
[Pages 22766-22767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09334]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 274
[FNS-2012-0028]
RIN 0584-AE26
Supplemental Nutrition Assistance Program: Trafficking Controls
and Fraud Investigations
AGENCY: Food and Nutrition Service (FNS), USDA.
ACTION: Affirmation of interim rule as final rule.
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SUMMARY: The Food and Nutrition Service (FNS) is issuing this
affirmation of a final rule, without change, of an interim rule that
amended Supplemental Nutrition Assistance Program (SNAP) regulations,
to require State agencies to monitor electronic benefit transfer (EBT)
card replacement requests and send notices to those clients who have
requested four cards within a 12-month period. The State agency shall
be exempt from sending this notice if it chooses to exercise the card
withholding option, in accordance with SNAP regulations, and sends the
first warning notice upon the household's fourth card replacement
request.
DATES: Effective Date: On April 24, 2014, the Department is adopting as
a final rule the amendments to 7 CFR 274.6 in the interim rule
published at 78 FR 51649, dated August 21, 2013.
FOR FURTHER INFORMATION CONTACT: Jane Duffield, Chief, State
Administration Branch, Food and Nutrition Service, USDA, 3101 Park
Center Drive, Room 818, Alexandria, Virginia 22302. Ms. Duffield may be
reached by telephone at 703-605-4385 or via email at
[email protected].
SUPPLEMENTARY INFORMATION:
Background
On August 21, 2013, FNS published an interim rule provision at 7
CFR 274.6(b)(6), that requires State agencies to monitor EBT card
replacements and issue excessive replacement card notices to clients
who have requested four card replacements in a 12-month period. FNS'
decision to issue the interim rule was based on a comment received in
response to the proposed rule: Supplemental Nutrition Assistance
Program: Trafficking Controls and Fraud Investigations, published on
May 30, 2012, at 77 FR 31738. The commenter suggested that FNS propose
a method for handling multiple card requests that includes monitoring
EBT card replacements and sending warning notices to those clients
requesting an excessive amount of EBT cards. This process, initiated by
North Carolina and implemented by the majority of States, has proven to
be efficient and cost effective. FNS agreed with the comment and
amended the regulations in the same section, to require that all States
implement this method for handling multiple card requests. Since the
majority of States currently monitor EBT card replacement requests and
subsequently issue warning notices for four or more requests, FNS does
not believe this provision will create a substantial burden for States
overall.
FNS believes that all State agencies should be monitoring card
replacement activity and that the requirement to issue an excessive
replacement card notice provides an important tool for State agencies
to use in monitoring and preventing trafficking of EBT cards. Based on
current data, the number of clients requesting five or more cards has
decreased nationally since many States adopted this practice.
FNS provided the opportunity for comment through the interim rule
process because the provision was not included in the proposed rule.
Comments were solicited for 60 days with an extension, ending November
6, 2013, due to the government shutdown.
FNS received five comments on the interim rule. Two commenters
requested clarification on the starting point for the 12-month
timeframe for calculating the number of requests for replacement EBT
cards and whether clients should receive additional notices for
subsequent 12-month periods. The 12-month timeframe refers to any four
cards replacements that fall within the past 12-month period. State
agencies must monitor card replacement requests, and send warning
notices to clients who request four cards within the past twelve
months. State agencies should continue to monitor and re-notify clients
who request additional EBT cards beyond a 12-month period. If
trafficking is suspected, the State agency must refer cases to the
State's fraud investigation unit. In all cases, if State agency staff
suspects that the client's lack of understanding is the reason for
requesting excessive replacement cards, they must educate the client on
how to manage the card, rather than refer the case for investigation.
FNS believes
[[Page 22767]]
regulatory language for this provision is sufficiently clear and is not
making any modifications.
Two commenters stated that States should be allowed to implement
their own systems for monitoring and managing excessive EBT card
request and set their own standards for calculating excessive requests
for replacement cards.
Motivated by the need to come up with a consistent national policy,
FNS used statistical analysis of SNAP EBT transaction records to arrive
at the decision to send a warning notice after four EBT card requests
within 12 months. EBT card transaction activity indicates that, after
the fourth replacement card, a household's shopping behavior is three
times more likely to be flagged as potential trafficking by FNS' fraud
detection system. States have the flexibility to set their own policies
for EBT card requests beyond this threshold. States may also initiate
the process sooner than the threshold if a household is suspected of
committing fraud.
FNS received one comment indicating that the requirement will
create an additional burden for caseworkers who must conduct further
investigations without clear guidelines on what constitutes compliance.
The commenter further stated that the regulation should specify what
constitutes an appropriate client explanation and whether State
agencies can determine what constitutes an appropriate explanation.
Since 98 percent of SNAP households use three or fewer cards within a
year, with most (79 percent) using only one card, FNS does not expect
the warning notice requirement contained in this regulation to create a
significant burden for State agencies. Additionally, most States
already monitor card replacements and provide warning notices for
excessive replacement requests. This regulation does not require
households to contact the State agency and provide an explanation. FNS
explains in the preamble for the final regulation that contains the
card withholding option, that FNS is not specifying which household
explanations are suspicious and which are satisfactory. FNS believes
that State agencies are in the best position to determine which cases
should be referred for investigation based on a client's explanation,
lack of explanation or suspicious behavior.
FNS adopts the interim rule as a final rule without change because
FNS did not receive any comments that indicate a need for change to the
interim regulation. A summary of comments for the interim regulation
have been provided in this preamble.
List of Subjects in 7 CFR Part 274
Food stamps, Grant programs--social programs, Reporting and
recordkeeping requirements.
PART 274--ISSUANCE AND USE OF PROGRAM BENEFITS
Accordingly, the Department is adopting as a final rule, without
change, the interim rule that amended 7 CFR 274.6(b)(6) and was
published at 78 FR 51649 on August 21, 2013.
Dated: April 18, 2014.
Yvette S. Jackson,
Acting Administrator, Food and Nutrition Service.
[FR Doc. 2014-09334 Filed 4-23-14; 8:45 am]
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