[Federal Register Volume 81, Number 3 (Wednesday, January 6, 2016)]
[Proposed Rules]
[Pages 398-410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-33053]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / 
Proposed Rules

[[Page 398]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271, 272, 273, 274, and 278

RIN 0584-AE45


Supplemental Nutrition Assistance Program (SNAP) Photo Electronic 
Benefit Transfer (EBT) Card Implementation Requirements

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

ACTION: Proposed rule.

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

SUMMARY: Under Section 7(h)(9) of the Food and Nutrition Act of 2008, 
as amended (the Act), States have the option to require that a 
Supplemental Nutrition Assistance Program (SNAP) Electronic Benefit 
Transfer (EBT) card contains a photo of one or more household members. 
The Act and existing program regulations further provide that a State 
that implements a photo on the EBT card shall establish procedures to 
ensure that any other appropriate member of the household or any 
authorized representative of the household may use the card. This 
proposed rule would provide clear parameters on these requirements. In 
addition, this rule proposes to amend program regulations to codify 
guidance that was issued December 29, 2014, requiring States that 
intend to implement the photo EBT card option to submit a comprehensive 
Implementation Plan that addresses certain operational issues to ensure 
State implementation is consistent with all Federal requirements and 
that program access is protected for participating households. In this 
proposed rule, the United States Department of Agriculture (the 
Department or USDA) would clarify that the State option to place a 
photo on an EBT card is a function of issuance. Pursuant to this, State 
agencies would be prohibited from having photo EBT card requirements 
affect the eligibility process. This includes ensuring that the option 
is appropriately implemented in a manner that does not impose 
additional conditions of eligibility or adversely impact the ability of 
appropriate household members to access the nutrition assistance they 
need. Failure to cooperate may result in penalties, including loss of 
federal financial participation. The proposed rule would also codify 
other program updates to reflect the current operations of the program.

DATES: Written comments must be received on or before March 7, 2016 to 
be assured of consideration.

ADDRESSES: The Food and Nutrition Service, USDA, invites interested 
persons to submit written comments on this proposed rule. Comments may 
be submitted in writing by one of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Send comments to Vicky T. Robinson, Chief, Retailer 
Management and Issuance Branch, Rm. 426, Food and Nutrition Service, 
3101 Park Center Drive, Alexandria, Virginia 22302.
     All written comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the substance of the comments and 
the identity of the individuals or entities submitting the comments 
will be subject to public disclosure. FNS will make the written 
comments publicly available on the Internet via http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Vicky T. Robinson, Chief, Retailer 
Management and Issuance Branch, Rm. 426, Food and Nutrition Service, 
3101 Park Center Drive, Alexandria, Virginia 22302, 703-305-2476.

SUPPLEMENTARY INFORMATION: 

Background

Acronyms or Abbreviations

    In the discussion of this proposed rule, we use the following 
acronyms or other abbreviations to stand in for certain words or 
phrases:

------------------------------------------------------------------------
                                            Acronym,  abbreviation,  or
                 Phrase                               symbol
------------------------------------------------------------------------
Code of Federal Regulations.............  CFR.
Electronic Benefit Transfer.............  EBT.
Food and Nutrition Act of 2008, as        Act.
 amended.
Food and Nutrition Service..............  FNS.
Personal Identification Number..........  PIN.
Point of Sale...........................  POS.
Supplemental Nutrition Assistance         SNAP.
 Program.
United States Code......................  U.S.C.
U.S. Department of Agriculture..........  the Department or USDA.
------------------------------------------------------------------------

    Under Section 7(h)(9) of the Act, 7 U.S.C. 2016(h)(9), States have 
the option to require that a SNAP EBT card contain a photo of one or 
more household members. The statute also stipulates that if a State 
agency chooses to place photographs on EBT cards, the State must 
establish procedures to ensure that any appropriate member of the 
household or any authorized representative of the household may utilize 
the card.
    Pursuant to this statutory provision, existing regulations in 7 CFR 
274.8(b)(5)(iv) provide that should a State agency require a photo on 
EBT cards, it must also establish procedures to ensure this same 
participant access is maintained. However, recent State implementation 
of the photo EBT card option revealed significant legal and operational 
complexities and challenges associated with having a photo on the card 
that, in the Department's view, calls for more regulatory guidance in 
this area. As a result, the Department is proposing to amend 
regulations in several areas to more explicitly define participant 
protections that must be maintained as well as implementation 
requirements if the State agency elects to implement a photo EBT card. 
In particular, this proposed regulation would clarify that the State 
option to place a photograph on an EBT card is a function of issuance. 
Pursuant to this, State agencies would be prohibited from having photo 
EBT card requirements affect the household eligibility or the 
certification process. Moreover, this rule would clarify the right of 
all household members and their authorized representatives to use the 
EBT card, regardless of whether their photo is on the card, and further 
define the responsibility of State agencies to ensure that retailers 
understand photo EBT requirements when processing transactions 
involving SNAP.

[[Page 399]]

Implications of Photo EBT Card Option

    While the photo EBT card option was provided to States through the 
Personal Responsibility and Work Opportunity Reconciliation Act 
(PRWORA) of 1996, few States have implemented the option to date. 
However, recent efforts have shown that implementation of the photo EBT 
card option involves complex legal, operational, and civil rights 
issues that, if not well planned and implemented, can adversely affect 
access for program participants. Recent photo EBT card rollouts have 
had major implementation issues, raising concerns about program access, 
and leading to confusion in the retailer community.
    These issues in turn prompted the Department to issue guidance on 
the subject on December 29, 2014. This proposed rule would expand on 
and codify this guidance to help ensure clients' access to benefits is 
maintained in practice and that sufficient measures are taken to ensure 
access before the photo EBT option is rolled out.
    There has been some question as to whether adding the photo to an 
EBT card adds value to the integrity of SNAP. Statute requires that any 
household member or any authorized representative must be able to use 
the EBT card, regardless of whether their photo is on the card. For 
this reason, and because trafficking often involves a willing retailer, 
placing a photo on the EBT card will have limited impact in addressing 
fraud. In fact, some State agencies have investigated the possible 
benefits of adding the photo and, upon further analysis, decided it was 
not worth the cost to do so. Nevertheless, the Act provides States with 
the option to implement the photo on the EBT card and these proposed 
regulations are intended to fill the existing policy gaps in this area 
for the reasons cited above.

Discussion of the Rule's Provisions

State Agency Requirements for Photo EBT Card Implementation

    This proposed rule provides that State agencies would be required 
to meet certain requirements in order to implement a photo EBT card 
policy. The implementation requirements firmly establish SNAP policy 
that the photo EBT card option is a function of issuance and not a 
condition of eligibility; certification policy may not be impacted by 
the implementation of the option; all appropriate household members and 
authorized representatives, as defined in 7 CFR 273.2(n)(3), shall 
continue to be able to use the EBT card; program access is not 
inhibited at retail stores; and program access and program integrity 
are ensured through all stages of the process. A State considering a 
photo EBT card policy will need to lay out how it will operationalize 
the policy and develop and implement an Implementation Plan and photo 
EBT option that upholds all SNAP requirements.
    To establish the requirements for the photo EBT card provisions, a 
new section would be codified in 7 CFR 274.8(f), addressing all the 
requirements associated with implementing a photo EBT card policy. 
Changes are also proposed to paragraphs within 7 CFR part 273 to 
further clarify that photo EBT card processes do not impact the 
certification of eligible households.

Minimum Requirements

    Implementation of the photo EBT card option takes substantial 
resources and requires substantial changes to State systems and 
procedures. Due to these challenges, States that have recently 
implemented photo EBT card implementations have had significant issues 
with providing timely, accurate, and fair service to SNAP applicants 
and participants and with meeting other statutory and regulatory 
requirements. For this reason, the Department would require that States 
demonstrate to FNS successful administration of SNAP based on SNAP 
performance standards to be eligible to implement the photo EBT card 
option. Successful program administration would be based on an 
evaluation of metrics related to program access, the State's payment 
error rate, the State's Case and Procedural Error Rate, application 
processing timeliness, including 7-day expedited service and the 30-day 
processing standards, timeliness of recertification actions, and other 
metrics, as determined by the Secretary, that may be relevant to the 
implementation of a State's photo EBT card option. States would need to 
document in the Implementation Plan that they are meeting FNS 
performance expectations. The Department is interested in comments from 
the public about other metrics that FNS should consider in the context 
of determining successful program administration including metrics 
related to access to benefits. These performance standards will allow 
FNS to evaluate whether clients are receiving timely, accurate, and 
fair service before the State may be eligible to implement a photo EBT 
card option. This provision would be codified in 7 CFR 274.8(f)(1).

Function of Issuance

    The proposed rule clarifies that the photo EBT card option is a 
function of issuance and not a condition of certification. Any 
implementation of the photo EBT card option must not impact 
certification of households. State agencies shall not deny or terminate 
a household based solely on whether one or more household members 
comply with the requirement to have a photo on the EBT card.
    The State agency's photo EBT card policy must not affect the 
certification process for purposes of determining eligibility 
regardless of whether an individual has his/her photo placed on the EBT 
card. For example, an application would be considered complete and be 
subject to 7 and 30-day processing timelines regardless of the status 
of the photo. Application processing timeliness requirements would not 
be different for photo EBT cards. This provision would be codified in 7 
CFR 274.8(f)(2).

Voluntary vs Mandatory

    The proposed rule would allow for State agencies to implement the 
SNAP photo EBT card on a mandatory or voluntary basis. Regardless of 
whether the photo is mandatory or voluntary, clients must be informed 
that their household's certification will not be impacted by whether 
they agree to the photo. If the policy is mandatory, State agencies 
must establish which member(s) of the household would be required to be 
photographed and must establish procedures that allow eligible 
nonexempt household members who do not agree to the photo to come into 
compliance at a later time. The photo may be of the head of household 
and/or other participating nonexempt household member(s). State 
agencies must issue benefits to compliant or exempt household members 
and, as noted earlier, non-compliance with a photo requirement by 
household members who choose not to be photographed must not negatively 
impact the household's eligibility determination.
    If the policy is voluntary, clients would be able to elect to have 
their photo on the household EBT card but would not be required to do 
so and would not have to be in an exempted category to opt out of the 
photo option. State agencies implementing a voluntary photo EBT card 
policy would be required to make clients aware of the voluntary nature 
of the photo and the fact that benefit issuance would not be impacted 
by their decision to have or not have a photo on their card. In 
voluntary implementations, households would opt in to have a photo on 
their cards rather than opt out of the option. Therefore, EBT cards 
with photos would not be the default.

[[Page 400]]

    FNS has concerns that States implementing voluntary photo EBT card 
policies to date have been unsuccessful in communicating the nature of 
the program to clients and remains concerned about how such lack of 
information could affect SNAP households, especially those with non-
applicant heads of household. The Department is seeking comment about 
suggestions for how to strengthen the requirements on States to provide 
clear and effective information that ensures clients understand the 
State's photo EBT policies. Additionally, to ensure States' 
implementation of the photo EBT option does not create disparate 
impacts on members of any protected class, as proposed, States would 
not be allowed to photograph non-applicants or put their photo on an 
EBT card, regardless of whether the State's program is voluntary or 
mandatory. As proposed, States could not offer non-applicant heads of 
households the option to opt in to have their photos taken to ensure 
that clients would not be pressured by States, intentionally or 
inadvertently, to have a photo taken. Nevertheless, FNS would like to 
better understand if there is any potential benefit of allowing non-
applicants to have their photograph taken under a voluntary 
implementation and whether such benefits outweigh potential problems.
    These provisions would be codified in 7 CFR 274.8(f)(3) and 7 CFR 
27.8(f)(4).

Exemptions

    Because recent implementation by States showed inconsistency and 
confusion in the application of State-defined exemption criteria, the 
Department is making clear in this proposed rule who must be exempted 
from photo EBT card requirements. State implementation showed there 
were circumstances where even exempt clients as defined by those 
States, such as the elderly, disabled, or domestic violence victims, 
were not actually exempted from the photo EBT requirement. In addition, 
many clients were not clearly informed that they were exempt under the 
State's exemption criteria and were under the impression that they had 
to comply with the State's photo EBT card policy in order to receive 
program benefits.
    To ensure that a State's photo EBT card requirement will not place 
undue burden on vulnerable clients, the proposed rule requires States 
implementing a mandatory implementation to exempt, at a minimum, the 
elderly, the disabled, children under 18, homeless households, and 
victims of domestic violence. FNS proposes that victims of domestic 
violence would be able to self-attest and States would not be permitted 
to require clients to submit documentation to verify that they have 
been victims of domestic violence. The ability to self-attest must be 
applied equally regardless of whether the victim is a female or male. A 
State agency may establish additional exempted categories, including, 
but not limited to, categories described in hardship criteria as 
specified in 7 CFR 273.2(e)(2).
    As noted in the previous section, as proposed, non-applicants shall 
not be required nor permitted to have their photographs taken or put on 
EBT cards. This provision would be codified in 7 CFR 274.8(f)(4).

Serving Clients With Hardship

    The proposed rule requires that State agencies have sufficient 
capacity and a process to issue photo EBT cards, taking into account 
households that face hardship situations as determined by the State 
agency and that would receive non photo EBT cards. These hardship 
conditions include, but are not limited to: Illness, transportation 
difficulties, care of a household member, hardships due to residency in 
a rural area, prolonged severe weather, or work or training hours which 
prevent the household from having photos taken in-office.

Issuance of Photo EBT Card

    There are a variety of SNAP policy and operational questions that 
States must consider in developing their issuance process for photo EBT 
cards, including the technical aspects relating to software, hardware, 
and the taking, storage, and security of photos.
    The proposed rule would require that States demonstrate sufficient 
capacity to issue photo EBT cards before they may receive an 
authorization from FNS to implement the option. As noted in the 
previous section on hardship, any State implementing a photo EBT card 
option would have to establish a process to issue cards to households 
that may not be able to reach a local office due to a hardship 
condition. Furthermore, the process for issuing and activating photo 
EBT cards must not inhibit or delay access to benefits nor cause a gap 
in access to benefits for any eligible households. Any card issued as 
part of the implementation of the photo EBT card option may not count 
against the household as part of the maximum threshold of replacement 
cards as specified in 7 CFR 274.6(b)(5) and 7 CFR 274.6(b)(6). Most 
importantly, as noted earlier, non-compliance with a photo requirement 
cannot impact the eligibility determination of the household as the 
photo EBT card option is an issuance function, not a condition of 
eligibility.
    States that have recently implemented a photo EBT policy have 
struggled with operational challenges during the transition from 
regular EBT cards to photo EBT cards. In one State, some clients lost 
access to their benefits during the period between the deactivation of 
their previous EBT card and activation of the new EBT photo card. This 
proposed rule would require that States implementing the photo EBT card 
option establish a process to ensure that the replacement of cards does 
not disrupt households' access to benefits, consistent with the 
requirements of 7 U.S.C. 2016(h)(9). Additionally, State card issuance 
procedures developed for new SNAP households would need to ensure 
adherence to the application processing standards of 7 days in the case 
of expedited households and 30 days for all other households, as 
required by 7 CFR 273.2(g) and 7 CFR 273.2(i).
    As proposed, if a household meets expedited criteria in 7 CFR 
273.2(i), the State must issue benefits and issue the EBT card to the 
entire household without delay. Regardless of whether the State's photo 
EBT policy is voluntary or mandatory, the State could not delay, hold 
in abeyance, or prorate benefits for any household that meets expedited 
criteria in order to obtain a photo on the EBT card. Under a mandatory 
implementation, a non-exempt household member could be required to 
comply at the next recertification after expedited benefits have been 
issued to the household. If the non-exempt household member is not in 
compliance by the time the household is recertified, then the State 
could determine whether that member's share of benefits must be held in 
abeyance prospectively. Under the proposed rule, State agencies 
implementing a photo EBT card option must also meet the card 
replacement issuance card requirements stipulated in 7 CFR 274.6, 
which, among other things require States to issue replacement EBT cards 
within 2 business days following notice by the household that the card 
has been lost, stolen, or damaged.
    This provision would be codified in 7 CFR 274.8(f)(6).

Prorating Household Benefits When Photo EBT Card Is Mandatory

    State agencies would not be able to deny benefits to an entire 
household because a nonexempt household member(s), required by the 
State to be photographed, refuses to be photographed. Unless the 
household

[[Page 401]]

meets expedited criteria, this proposed rule would require the State to 
issue a prorated share of benefits to the remaining household members, 
so they can use their share of the benefits that they are entitled to 
receive.
    As proposed, for multi-person households, that would be a straight 
pro-ration of benefits. The State would divide the household's benefit 
allotment by the household size and multiply that number by the number 
of household members to be issued benefits. To illustrate, if a four-
person household's monthly benefit allotment is $200 and one nonexempt 
household member does not comply with the requirement to have a photo 
placed on the EBT card, the $200 would be divided by 4 to equal $50, 
and then multiplied by 3 to equal $150. The $150 amount would be posted 
and available for use by the household. Any decision that impacts 
benefits under this provision would be subject to fair hearings in 
accordance with 7 CFR 273.15. For a single person household, the State 
agency would hold the entire benefit in abeyance until the household 
complies. This proposed provision is addressed in 7 CFR 274.8(f)(7) of 
the regulation.

Benefits Held for Noncompliance

    FNS proposes that the pro-rated benefit amounts held for 
noncompliance with a State's photo EBT card requirement would be 
tracked and retained for future issuance by the State agency if and 
when any noncompliant household member(s) that previously chose not to 
be photographed comes into compliance. The pro-rated benefits withheld 
for that individual or individuals must promptly be issued within two 
business days of the time the individual(s) comes into compliance. 
Benefits withheld for non-compliance would not remain authorized for 
perpetuity and States must treat such benefits in accordance with the 
same timeframe used for handling expungements under 7 CFR 274.2(h)(2). 
This would allow States to better manage benefits that have not been 
issued.
    This proposed provision is addressed in 7 CFR 274.8(f)(8) of the 
regulation.

Household and Authorized Representatives Card Usage

    The Food and Nutrition Act requires States implementing photo EBT 
to ``establish procedures to ensure that any other appropriate member 
of the household or any authorized representative of the household may 
utilize the card.'' All household members, authorized representatives 
as defined in 7 CFR 273.2(n)(3), and non-applicants applying on behalf 
of others have a right to access SNAP benefits by using the household 
EBT card with a valid PIN even if their picture is not on the card or 
there is no picture on the card. The State agency must take steps to 
ensure that individuals who are not pictured on the card can continue 
to access SNAP benefits in accordance with the Section 7(h)(9)(B) of 
the Act.
    The ability for authorized representatives to use the card is 
particularly critical to ensure food access for the elderly, disabled, 
or other homebound recipients who may have difficulty getting to 
grocery stores and require assistance in obtaining food.
    This provision would be codified in 7 CFR 274.8(f)(9).

Client and Staff Training

    This proposed rule would require that States ensure all staff and 
clients are trained on photo EBT card requirements. At a minimum, this 
training would include information about whether the photo EBT card is 
voluntary or mandatory, that all appropriate household members and 
authorized representatives are able to use the card, and with regards 
to mandatory implementation, which household members (if any) must 
comply with the photo requirement, which household members and/or 
household applicant categories are exempt. This proposed rule would 
also require that all retailer and client notices pertaining to the 
photo EBT card must also clearly describe the following statutory and 
regulatory requirement: All household members and any authorized 
representative of the household regardless of whether they are pictured 
on the card, may utilize the card without having to submit additional 
verification of identity as long as the transaction is secured by the 
use of the PIN. This proposed rule would also stipulate that State 
agencies may not specifically reference groups exempt from the photo 
requirement in any materials designed for retailers, as providing the 
categories of exempt groups may encourage speculation as to the age or 
circumstances of cardholders. External stakeholder materials should 
simply note that EBT cards without a photo are also valid. This 
provision would be codified in 7 CFR 274.8(f)(10).

Retailer Education and Responsibilities

    Although retailer participation in SNAP is authorized and managed 
by USDA, this rule, as proposed, recognizes State agencies opting to 
implement a photo EBT card would impact SNAP transactions at the point 
of sale. Per the statutory requirement, State agencies are required to 
ensure access to benefits by household members other than the member(s) 
whose photo is on the card, as well as authorized representatives. 
Therefore, in paragraph 7 CFR 274.8(f)(10), this proposed rule would 
require State agencies to provide information to all retailers about 
the State agencies' implementation and operational plans so retailers 
are prepared for the changes, as well as to convey the Federal rules 
stipulating that all household members and authorized representatives 
must be allowed to use the EBT card regardless of the picture on the 
card. Furthermore, Federal rules prohibit retailers from treating SNAP 
participants differently from other customers at the point of sale. 
According to the equal treatment regulation in 7 CFR 278.2(b), SNAP 
customers cannot be singled out for special treatment in any way.
    A State agency would need to provide documentary evidence that all 
retailers in the State and contiguous areas, including smaller 
independent retailers, have received notices from the State that 
explain the statutory and regulatory requirements related to photos on 
EBT cards described above and have a full understanding of those 
requirements. State agencies would be required to describe in the 
Implementation Plan when they will provide FNS with this documentary 
evidence in advance of implementation. This provision would be codified 
in 7 CFR 274.8(f)(11).

Interoperability

    Section 7(j) of the Act requires that EBT cards be interoperable, 
which means that they can be used in any State regardless of where the 
benefits were issued. Without sufficient education for clients and 
retailers in both the implementing State and neighboring States, the 
implementation of the photo EBT card option could inhibit this required 
access to benefits. For example, a SNAP recipient who lives in a State 
with a photo EBT card may find it more convenient or cost effective to 
shop in another bordering State that does not have photo EBT cards. 
Likewise, a SNAP recipient may live in a State without a photo EBT card 
requirement, but shop in a State with such a card requirement. To 
ensure interoperability, clients, and retailers must be fully informed 
that the photo EBT cards remain interoperable and that authorized 
retailers must accept EBT cards from all States as long as the 
household member or authorized representative presents the valid PIN. 
Before introducing the new photo EBT cards, this proposed rule would 
require State agencies to conduct sufficient

[[Page 402]]

outreach to clients and retailers, including those in contiguous areas, 
to ensure access to benefits is not inhibited and all parties 
understand their rights and responsibilities.
    This provision would be codified in 7 CFR 274.8(f)(12).

Advance Planning Document

    As the Act allows for photo EBT cards, appropriate implementation 
and administration of this option is an allowable State administrative 
cost which FNS would reimburse at approximately 50 percent. To ensure 
that FNS does not exceed the SNAP budget authority for State 
administration, States should be aware that any EBT contract 
modifications that increase costs must be approved by FNS before they 
may be signed. Increased EBT costs, whether contractual or resulting 
from other sources, also require an Implementation Advance Planning 
Document Update. This provision would be codified in 7 CFR 
274.8(f)(13).

Implementation Plan

    In 7 CFR 274.8(f)(14), this proposed rule would require State 
agencies to submit an Implementation Plan prior to photo EBT 
implementation that delineates how the State will operationalize this 
option. Upon receipt of the State's Implementation Plan, FNS would 
review the plan and either issue an approval, request modifications 
before an approval could be granted, or issue an approval subject to 
conditions. In cases where the Department finds that the steps outlined 
in the Implementation Plan are not sufficient for a successful 
implementation, the Department might issue an approval subject to 
conditions, such as requiring the State agency to demonstrate a rollout 
in a pilot in a selected region of the State before the State may be 
approved to implement statewide or, FNS might approve the 
Implementation Plan for a statewide implementation upon the completion 
of an appropriate successful pilot project that establishes the State 
agency's ability to implement a full statewide rollout. Should a State 
be required to implement a pilot before statewide implementation, that 
requirement would be documented as a condition of the State's 
Implementation Plan approval, along with any information that the State 
must report to FNS before the State may be granted approval to 
implement statewide.
    FNS expects that the process for FNS review and approval of photo 
EBT Implementation Plans will take at least 120 days. Obtaining FNS 
approval of the Implementation Plan is the first step States must take. 
However, a State may not actually issue EBT cards with photos until FNS 
has given the State an authorization to do so as described below. The 
multi-step approval process ensures that the State carries out the 
steps detailed in the Implementation Plan and has the opportunity to 
make any adjustments needed prior to issuing EBT cards with photos. 
Similarly if FNS has approved an Implementation Plan subject to 
conditions, such as requiring the State agency to conduct a pilot prior 
to statewide implementation, the State may not issue EBT cards with 
photos in the context of the pilot until FNS has given the State an 
authorization to do so. Approval from FNS would also be necessary for a 
State to proceed from pilot to statewide implementation. Any movement 
to implement without prior approval would be viewed as a violation of 
program requirements and could result in additional penalties including 
a loss of Federal financial participation.
    FNS would not consider a State eligible or authorize a State to 
proceed with a photo EBT card option unless that State meets 
performance requirements noted earlier and established in 7 CFR 
274.8(f)(1). States would need to demonstrate in the Implementation 
Plan that they are meeting FNS performance expectations. The 
Implementation Plan would also be required to include a description of 
the State's card issuance procedures, a detailed description of how 
client protections such as processing timelines and benefit access will 
be preserved, specific information about exempted recipients, a 
description of how the State will obtain photographs for the EBT card, 
training materials and training plans for State staff, examples of 
letters and other materials communicating the policy to recipients and 
to retailers, a proposed timeline for implementation, and any other 
information as required by the Secretary. If a State agency plans to 
disclose SNAP applicant or client data in accordance with 7 CFR 
272.1(c) for purposes of implementing photo EBT cards, such as to 
obtain photos from another source like the State's Department of Motor 
Vehicles the proposed rule requires the State to also include any 
necessary memoranda of understanding as part of its Implementation 
Plan. Any information collected for the purpose of SNAP must be 
securely stored and can only be shared in accordance with 7 CFR 
272.1(c).
    State Implementation Plans would also be required to describe: The 
specific action steps that the State agency and its EBT contractor must 
take in order to implement the photo EBT card option as planned, 
together with the anticipated timetable for each step; the State's 
capacity to issue photo EBT cards; and the submission of the 
documentation that all retailers, including small and independent 
retailers, would receive notice from the State about the photo EBT card 
policy. The plan would also need to describe how the State will ensure 
that the photo EBT cards are provided to clients and activated at the 
same time or before the active non-photo cards are deactivated. With 
regard to the State's capacity to issue photo EBT cards, the plan would 
include the description of the capacity at the facility where photo EBT 
cards will be produced, both for transitional and ongoing production, 
and assurance that the State and its EBT contractor will continue to 
meet regulatory timeliness requirements for all EBT card issuances. The 
Implementation Plan should also describe measures against which the 
photo EBT card implementation will be evaluated for the post-
implementation evaluation required by 7 CFR 274.8(f)(16), and how the 
requisite data will be collected.
    The State would also be required to include in its plan for FNS 
review all applicable written policy changes necessary to implement the 
photo EBT card option, as well as copies of all materials that will be 
used to inform clients, retailers and other stakeholders regarding 
photo EBT card implementation. Along with these materials, the States 
would need to provide a detailed description of how the notifications, 
communication, policies, and procedures regarding the implementation of 
the photo EBT card option will comply with all applicable civil rights 
laws.
    Finally, the State would need to provide a description of the 
mechanisms in place to handle complaint calls and questions from 
clients, retailers, and external stakeholders and address any other 
issues related to the photo EBT card option, as well as detail how 
substantive information about those complaints will be tracked and 
reported. A State would not be authorized to issue EBT cards with 
photos until FNS grants the State an authorization to implement as 
specified by 7 CFR 274.8(f)(15).
    Upon approval of the Implementation Plan, the State would be 
allowed to proceed with tasks described in the Implementation Plan, as 
modified by the approval, but not proceed to issuing actual cards until 
FNS provides authorization to implement.
    An approved Implementation Plan would be considered public and 
would

[[Page 403]]

be posted on the FNS Web site. The Department is interested in 
receiving comments on any benefits and concerns of posting the approved 
Implementation Plan.

Authorization To Issue Photo EBT Cards

    The authorization to implement would allow the State agency to 
begin issuing EBT cards with photos. After the Implementation Plan is 
approved, FNS will review State actions at an appropriate time interval 
to ensure that the process and steps outlined by the State agency in 
the Implementation Plan have in fact been carried out in a satisfactory 
manner. For example, prior to obtaining authorization to implement, a 
State would need to confirm and/or demonstrate that robust client and 
retailer outreach, as detailed in its Implementation Plan, has been 
completed.
    If FNS finds that the State agency has not acted in accordance with 
the steps outlined in the State's photo EBT Implementation Plan, FNS 
could deny authorization for the State to issue EBT cards with photos 
until the State has done so in a satisfactory manner. FNS could also 
require the State to implement in a phased manner, which may include 
criteria as determined by the Secretary. This provision would be 
codified in 7 CFR 274.8(f)(15).

Post-Implementation Assessment and Evaluation

    As already noted, 7 CFR 274.8(f)(16) would require States to submit 
to FNS a post-implementation evaluation conducted by from an 
independent evaluator, which describes the State's implementation to 
date, including any issues that arose and how they were addressed, the 
degree to which State staff, clients and retailers properly understood 
and implemented the relevant policies and procedures, and in the case 
of a mandatory implementation, the number of clients that complied with 
adding the photo or did not comply, and the number that had their share 
of the benefits withheld from issuance and for how long. The evaluation 
must include, at a minimum, a survey of retailers and clients to 
measure their understanding of the State's photo EBT policy, and a 
report which includes the number of households and percent of 
households with photo EBT cards in the State and the number and scope 
of complaints related to photo EBT implementation, including a detailed 
summary of the types of complaints, the SNAP performance metrics as 
established in section 7 CFR 274.8(f)(1) and other information as 
determined by the Secretary.
    For States implementing a mandatory implementation, the report must 
also detail the amounts and percent of benefits withheld for non-
compliance, the number of households affected by the withholding of 
benefits due to noncompliance, the number and percent of persons exempt 
from the photo EBT card requirement, and the number and percent of 
exempted households and persons who opted to have the photo on the EBT 
card.
    State agencies would be required to deliver this report to FNS 
within 120 days of implementation. This report would cover the first 90 
days of implementation. The Department reserves the right to conduct 
its own review of the State's implementation.

Ongoing Monitoring

    Based on observed implementation to date, there is cause for 
concern about possible impacts of photo EBT implementations, both as 
they are first implemented and over time. There is a need for 
additional assurance on an ongoing basis that state implementation of 
photo EBT cards is carried out in a manner consistent with all relevant 
laws and regulations, including Federal civil rights laws, that protect 
households' ability to access or utilize SNAP benefits for which they 
are eligible, and in a manner that does not adversely impact program 
participation.
    As set forth in the proposed rule, in addition to the post-
implementation report, a State agency that has implemented a photo EBT 
policy would be required to provide to FNS, on an ongoing basis, data 
on established metrics to monitor the impact of the photo EBT policy. 
The reporting requirements might require State agencies to conduct 
additional surveys, evaluations, or reviews of their operations, as 
determined by the Secretary. These ongoing reporting requirements would 
include information on the amounts and percent of benefits withheld for 
non-compliance, the number of households affected by the withholding of 
benefits due to non-compliance, the number and percent of household 
exempt from the photo EBT card requirement, benefit redemption rates, 
participation rates, the number and percent of households exempt from 
photo EBT cards who opted out of the photo requirement, the number and 
percent of exempted households who opted to have the photo on the EBT 
card, and any other information as requested by the Secretary. We are 
interested in receiving comments on other data that should be required 
from States on an ongoing basis, how frequently States should be 
required to report, or any other feedback relevant to the ongoing 
monitoring of this policy. As with other Program information and plans, 
this information would be available to the public upon request, subject 
to the Freedom of Information Act provisions.
    While staff, client, and retailer education is a critical 
component, it is not always a perfect indicator of whether actual 
barriers to access exist in practice. In the context of housing 
discrimination, ``testers'' have been utilized to proactively determine 
whether fair housing laws are being upheld consistently. One question 
is whether a similar mechanism should be used to ensure that, in 
practice, SNAP participants and their authorized representatives are 
able to use their benefits to purchase food at authorized retailers, 
regardless of whether they are pictured on the EBT card. We invite 
comment on this question as well as on the topic of how to verify 
appropriate implementation on an ongoing basis, particularly on ongoing 
mechanisms for identifying access issues resulting from photo EBT 
cards.

Modifying Implementation of Photo EBT Option

    As part of FNS's management and oversight responsibilities, FNS 
regularly conducts management evaluation reviews of State agencies' 
administration and operation of SNAP to determine compliance with 
program requirements. FNS will conduct management evaluation reviews, 
as appropriate, to monitor State implementation of photo EBT cards.
    If FNS identifies deficiencies in a State's implementation or 
operations, FNS may require a corrective action plan consistent with 7 
CFR 275.16 to reduce or eliminate deficiencies. If a State does not 
take appropriate actions to address the deficiencies, FNS would 
consider possible actions such as requiring an updated photo EBT 
Implementation Plan, suspension of implementation and/or withholding 
funds in accordance with 7 CFR 276.4. Along these lines the Department 
is seeking comments on whether a State should be required to stop or 
suspend issuing photos on EBT cards if the State agency fails to 
establish procedures to ensure that all members of the household or any 
authorized representatives of the household are able to utilize the 
card, and what requirements, if any, should apply to that process.

[[Page 404]]

Provisions Beyond 7 CFR 274.8(f)

    Beyond Part 7 CFR 274.8(f), changes are proposed to 7 CFR parts 
271, 272, 273, and other paragraphs within Parts 274 and 278. While 
some of these changes are related to photo EBT card requirements, 
others involve updating SNAP regulations or enhancing integrity 
provisions.

7 CFR Part 271

    The Department proposes to amend the definition of Identification 
(ID) card in 7 CFR 271.2. ID card in this definition refers to a card 
that was issued when program benefits were issued in the form of food 
stamp coupons. This ID card, which was used to establish the recipient 
as eligible to receive food stamp coupons, such as when picking up 
coupons at the State office or other central location is no longer 
widely used in the program. Today, program benefits are automatically 
deposited into the household's EBT account each month and are redeemed 
through EBT cards. The PIN on the EBT card establishes whether a 
household recipient or authorized representative can redeem program 
benefits. However, this ID is still used in Alaska to identify 
households that are dependent upon hunting and fishing for subsistence. 
The definition for Identification (ID) would be amended to reflect only 
cases in which ID cards are currently used in the Program.

7 CFR Part 272

    The Department proposes changes to 7 CFR part 272 to ensure that 
regulatory language is in line with current program operations. In 
alignment with the change to 7 CFR 271.2, FNS proposes removing all 
references to ``ID card'' associated with the obsolete paper coupons. 
It would result in the removal of 7 CFR 272.1(g)(30) and 7 CFR 
272.1(g)(47).

7 CFR Part 273

    FNS proposes several changes to 7 CFR part 273. The Department 
proposes adding language in 7 CFR 273.2(a)(1) to clarify that the 
implementation of the photo EBT card option cannot be treated as a 
condition of eligibility as it is a function of issuance. Further, this 
paragraph would be amended to ensure that, for the purpose of 
certification, States shall not treat households subject to a photo EBT 
card policy differently from households not subject to a photo EBT card 
policy. To ensure that expedited and standard application processing 
requirements are still met in photo EBT card situations, 7 CFR 
273.2(a)(2) would be revised by adding that State agencies shall ensure 
that processing times are not delayed by implementation of the photo 
EBT card option. Third, the Department proposes to clarify the rules 
governing interviews in 7 CFR 273.2(e). State agencies may not require 
an in person interview solely for the purpose of taking a photo. Since 
this option is a function of issuance and not a condition of 
eligibility, households must be treated equally with regards to 
certification activities regardless of whether they are subject to or 
choose to comply with a photo requirement. However, households may be 
called in for a photo to be taken as a matter of issuance, not 
eligibility. In 7 CFR 273.2(n)(2), the reference to the ID card would 
be removed as it is obsolete. In 7 CFR 273.2(n)(3), the proposed 
language would change the word ID to EBT card. The proposal would 
change ``its ID card and benefits'' to ``the EBT card.''

7 CFR Part 274

    The Department proposes changes to 7 CFR 274.8(b)(5)(ii) to modify 
EBT cards in States implementing the photo EBT card option, in 
accordance with 7 CFR 274.8(f). States would be required to add text to 
all EBT cards to ensure retailers are aware that all household members 
and authorized representatives must be allowed to use the EBT card even 
if their photo is not on the card or no photo is on the card. 
Experience has shown that, when a photo is included on the EBT card, 
some retailers believe the card may only be used by the person 
pictured. In concert with other required measures to ensure that 
retailers understand the State's photo EBT implementation, adding a 
statement on photo EBT cards would help alleviate confusion at retailer 
checkout and ensure compliance with the Federal statute that requires 
all household members and authorized members be able to access program 
benefits. This rule would propose that the States print the text: ``Any 
user with valid PIN can use SNAP benefits on card and need not be 
pictured.'' or alternative text approved by FNS. The Department is 
willing to consider alternative language suggested by States as long as 
it achieves the same goal of clearly informing retailers and clients as 
to the correct policy in this area.

7 CFR Part 278

    The Department is proposing changes in Part 278 to remove language 
that is no longer in line with program operations and update language 
to enhance program integrity. The Department has recently become aware 
of instances in which SNAP authorized retailers, unauthorized 
retailers, and other individuals have purchased multiple EBT cards 
illegally. Generally, these individuals are not SNAP recipients. 
Frequently they use three or more EBT cards at a time and use the cards 
to purchase a large amount of eligible foods that are then used to 
replenish store inventory or sold as inventory to other retailers or 
restaurants. To address this area of potential fraud in which 
individuals use multiple cards they have procured illegally, the 
Department is proposing new language to require retailers to ask for 
identification of anyone who presents three or more EBT cards at 
checkout. Specifically, this proposed rule would require SNAP 
authorized retailers to ask these individuals for photo identification, 
such as a driver's license, and an explanation as to why multiple cards 
are being used. Furthermore, should the store believe there is a 
potential for fraud, retailers would be allowed to record information 
from the individual's identification, EBT card number, and reason for 
using three or more EBT cards. The retailers would be required to 
report this information to the USDA OIG Fraud Hotline. If the retailer 
suspects fraud is being committed and the individual refuses to show 
identification, the retailer has the option to deny a sale when three 
or more EBT cards are being used during a transaction. The Department 
understands that occasionally an individual or an individual shopping 
for an elderly client working for an authorized group home or other 
authorized facility may use multiple cards in order to purchase food 
legally for clients. Given these concerns regarding program access and 
program integrity, the Department is interested in comments from the 
public on whether there are other possible approaches to preventing 
individuals from using multiple EBT cards that they have obtained 
illegally, such as establishing a dollar threshold for individuals 
using three or more cards. These changes are proposed in 7 CFR 
278.2(h).
    The Department also proposes the removal of two paragraphs, (i) and 
(k) in 7 CFR 278.2. The paragraphs refer to an outdated method of 
establishing identity and operations based on paper coupons. These 
paragraphs currently represent a redundancy and could cause confusion 
as they refer to an ID card that is only used in Alaska. This process 
has been replaced by the EBT system. Furthermore, the proof of 
eligibility is established through EBT and other systems implemented by 
State agencies.

[[Page 405]]

    7 CFR 274.7(i) already addresses this procedure by establishing 
that State agencies shall implement a method to ensure that access to 
prepared meals and hunting fishing equipment is limited to eligible 
households. Eligible households are defined in 7 CFR 274.7(g) and (h).

Procedural Matters

Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    This proposed rule has been determined to be significant and was 
reviewed by the Office of Management and Budget (OMB) in conformance 
with Executive Order 12866.

Regulatory Impact Analysis

    As required for all rules that have been designated as Significant 
by the Office of Management and Budget, a Regulatory Impact Analysis 
(RIA) was developed for this proposed rule. The full RIA is included in 
the supporting documents of the rule docket at www.regulations.gov. The 
following summarizes the conclusions of the regulatory impact analysis.
    Need for Action: This proposed rule would incorporate into 
regulation and expand on guidance that was issued December 29, 2014 to 
certain State agencies. Based on observed implementation to date, there 
is cause for concern about possible impacts of photo EBT programs, both 
as they are first implemented and over time. This guidance requires 
States that intend to implement the photo EBT card option to submit a 
comprehensive Implementation Plan for FNS approval that addresses key 
operational issues to ensure State implementation complies with all 
Federal requirements and that program access is protected for 
participating households.
    In this proposed rule, the Department would clarify that the State 
option to place a photo on an EBT card is a function of issuance. 
Pursuant to this, State agencies would be prohibited from having photo 
EBT requirements affect the eligibility process. This includes ensuring 
that the photo EBT option is implemented in a manner that does not 
impose additional conditions of eligibility or adversely impact the 
ability of eligible Americans to access the nutrition assistance they 
need.
    Benefits: The Department anticipates that this proposed rule will 
provide qualitative benefits to State Agencies, SNAP participants, and 
authorized retailers. The Act and existing program regulations provide 
that States that implement a photo on the EBT card must establish 
procedures to ensure that any other appropriate member of the household 
or any authorized representative of the household may use the card. 
This proposed rule will provide clear parameters for States wishing to 
implement photo EBT to ensure that State implementation is consistent 
with all Federal requirements and that program access is protected for 
participating households, which will safeguard the rights of clients, 
provide training to staff, clients, and retailers, and improve program 
administration.
    Costs: States choosing the photo EBT option may incur additional 
administrative costs, which may vary based on the size and scope of the 
State's operations and whether implementation of the photo EBT card 
option is mandatory or voluntary. Regardless of whether the option is 
mandatory or voluntary, all States that implement photo EBT cards will 
incur certain implementation costs to include: Preparing an 
implementation plan, communications and training for program staff, 
clients, and retailers, ongoing training costs to maintain an 
understanding of Photo EBT policies, programming costs for mandatory 
policies, and costs for the post-implementation assessment, evaluation 
and on-going monitoring. States with mandatory photo EBT will also 
incur costs associated with prorating and storing benefits for 
noncompliant household members that choose not to be photographed. The 
Department estimates the total cost to be approximately $9.8 million 
over five years, assuming six States choose to implement a mandatory 
Photo EBT policy. Costs would be lower if some or all of these States 
choose to implement voluntary, rather than mandatory, Photo EBT 
policies. The estimate of six States is based on information from State 
legislatures that are either currently considering or discussing the 
possibility of considering such a policy. Given the projected timelines 
for these legislative actions, the Department assumes that the costs of 
implementing a Photo EBT system will be phased in over a five year 
period, as all six States are unlikely to approve and implement the 
policy in the same year. The two States that have already implemented 
photo EBT as a State option will not be required to retroactively 
submit Implementation Plans, but may continue to incur minimal costs 
associated with ongoing training and monitoring required for program 
staff, clients, and retailers.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires agencies 
to analyze the impact of rulemaking on small entities and consider 
alternatives that would minimize any significant impacts on a 
substantial number of small entities. Pursuant to that review, it has 
been certified that this proposed rule would not have a significant 
impact on a substantial number of small entities. This proposed rule 
primarily impacts State agencies. As part of the requirements, State 
agencies would have to educate retailers about the photo EBT card. 
There will not be a substantial impact on small entities such as small 
retailers since the treatment of clients with EBT cards and photo EBT 
cards do not vary. Minimal changes will be required of retailers. 
Retailers will need to be aware that some clients may present photo EBT 
cards but clients shall not be treated any differently. In addition, 
retailers will be required to request identification of individuals 
using three or more EBT cards. This is not expected to create a burden 
on retailers.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and Tribal 
governments and the private sector. Under section 202 of the UMRA, the 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local or Tribal 
governments, in the aggregate, or the private sector, of $100 million 
or more in any one year. When such a statement is needed for a rule, 
Section 205 of the UMRA generally requires the Department to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the most cost effective or least burdensome alternative that achieves 
the objectives of the rule.
    This proposed rule does not contain Federal mandates (under the 
regulatory provisions of Title II of the UMRA) for State, local and 
Tribal governments or the private sector of $100 million or more in any 
one year. Thus, the proposed rule is not subject to the

[[Page 406]]

requirements of sections 202 and 205 of the UMRA.

Executive Order 12372

    The Supplemental Nutrition Assistance Program is listed in the 
Catalog of Federal Domestic Assistance Programs under 10.551. For the 
reasons set forth in the final rule in 7 CFR part 3015, subpart V, and 
related Notice (48 FR 29115, June 24, 1983), this program is included 
in the scope of Executive Order 12372 which requires intergovernmental 
consultation with State and local officials.

Executive Order 13132

    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 13121.
    The Department has determined that this proposed 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.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is intended to have preemptive 
effect with respect to any State or local laws, regulations or policies 
which conflict with its provisions or which would otherwise impede its 
full and timely implementation. This proposed rule is intended to have 
retroactive effect unless so specified in the Effective Dates section 
of the final rule. State agencies that have already implemented a photo 
EBT card must meet all requirements of regulations except the 
requirement to submit an Implementation Plan prior to State's planned 
implementation date. Prior to any judicial challenge to the provisions 
of the final rule, all applicable administrative procedures must be 
exhausted.

Executive Order 13175

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes. On February 18, 2015, the 
agency held a consultation. During the consultation, no comments were 
received on the proposal. We are unaware of any current Tribal laws 
that could be in conflict with the proposed rule.

Civil Rights Impact Analysis

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

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR 
1320) requires the Office of Management and Budget (OMB) to approve all 
collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number.
    In accordance with the Paperwork Reduction Act of 1995, this 
proposed rule does not contain information collections that are subject 
to review and approval by the Office of Management and Budget.
    This rule proposes reporting requirements for States to submit to 
FNS an Implementation Plan, a post-implementation evaluation of the 
photo EBT implementation, and related on-going measures. As the PRA 
requirements are applicable to collection of information from ten or 
more respondents, there are no information collection requirements that 
are subject to OMB review at this time. Should the number of estimated 
respondents reach ten or more, FNS will publish a notice for comment 
and submit the applicable requirements to OMB for review and approval.

E-Government Act Compliance

    The Department is committed to complying with the E-Government Act, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

List of Subjects

7 CFR Part 271

    Food stamps, Grant programs-Social programs, Reporting and 
recordkeeping requirements.

7 CFR Part 273

    Administrative practice and procedure, Aliens, Claims, Employment, 
Food stamps, Fraud, Government employees, Grant programs-social 
programs, Income taxes, Reporting and recordkeeping requirements, 
Students, Supplemental Security Income (SSI), Wages.

7 CFR Part 274

    Food stamps, Grant programs-social programs, Reporting and 
recordkeeping requirements.

7 CFR 278

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

    Accordingly, 7 CFR parts 271, 273, 274, 278 are proposed to be 
amended as follows:

0
1. The authority citation for parts 271, 273, 274 and 278 is revised to 
read as follows:

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

PART 271--GENERAL INFORMATION AND DEFINITIONS

0
2. In Sec.  271.2, revise the definition of Identification (ID) card to 
read as follows


Sec.  271.2  Definitions.

* * * * *
    ``Identification (ID) card means a card for the purposes of 7 CFR 
278.2(j).''
* * * * *

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES


Sec.  272.1  [Amended]

0
3. In Sec.  272.1, remove and reserve paragraphs (g)(30) and (47).

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOULD

0
4. In Sec.  273.2:
0
a. Amend paragraph (a)(1) by adding to the end of the third sentence 
the

[[Page 407]]

words ``, including in the implementation of a photo EBT card policy''
0
b. Amend paragraph (a)(2) by adding a new fourth sentence before the 
last sentence the words `` ''
0
c. Amend paragraph (e)(1) by adding a new fourth sentence after the 
third sentence.
0
d. Amend paragraph (n)(2) by removing in the third sentence the words 
``and on the food stamp identification (ID) card, as provided in 7 CFR 
274.10(a)(1) of this chapter'' and by removing the last sentence.
0
e. Amend paragraph (n)(3) by removing the word ``ID card and benefits'' 
and adding it its place adding the word ``EBT card.''
    The additions read as follows:


Sec.  273.2  Office operations and application processing.

    (a) * * *
    (1) * * * The State agency's photo EBT card policy must not affect 
the certification process for purposes of determining eligibility 
regardless whether an individual has his/her photo placed on the EBT 
card. * * *
    (2) * * * States must meet application processing timelines, 
regardless of whether a State agency implements a photo EBT card 
policy. * * *
* * * * *
    (e) * * * State agencies may not require an in person interview 
solely to take a photo. * * *
* * * * *

PART 274--ISSUANCE AND USE OF PROGRAM BENEFITS

0
5. In Sec.  274.8:
0
a. Redesignate paragraphs (b)(5)(ii) through (iv) as paragraphs 
(b)(5)(iii) through (v), respectively, and adding a new paragraph 
(b)(5)(ii).
0
b. Add paragraph (f).
    The additions read as follows:


Sec.  274.8  Functional and technical EBT system requirements.

* * * * *
    (b) * * *
    (5) * * *
    (ii) State agencies that implement the photo EBT card option in 
accordance with paragraph (f) of this section must print on the EBT 
cards the text ``Any user with valid PIN can use SNAP benefits on card 
and need not be pictured.'' or similar alternative text approved by 
FNS.
* * * * *
    (f) State agency requirements for photo EBT card implementation--
(1) Minimum requirements. Prior to implementation, State agencies must 
be performing sufficiently well in program administration to be 
eligible to implement the photo EBT card option. Prior to 
implementation, State agencies must demonstrate to FNS successful 
administration of SNAP based on SNAP performance standards. Successful 
program administration will take into account at a minimum the metrics 
related to program access, the State's payment error rate, the State's 
Case and Procedural Error Rate, application processing timeliness, 
including both the 7-day expedited processing and the 30-day processing 
standards, timeliness of recertification actions, and other metrics, as 
determined by the Secretary, that may be relevant to the State agency's 
implementation of photo EBT cards.
    (2) Function of issuance. The photo EBT card option is a function 
of issuance and not a condition of eligibility. Any implementation of 
the option to place a photo on the EBT card must not impact the 
certification of households. An application will be considered complete 
with or without a photo and a case shall be certified regardless of the 
status of a photo in accordance with timeframes established under 7 CFR 
273.2. If a State agency chooses to implement a voluntary photo EBT 
card policy, issuance shall not be impacted. If a State agency chooses 
to implement a mandatory photo EBT card policy, a State agency may not 
deny or terminate a household because a household member who is 
exempted by paragraph (f)(4) of this section does not comply with the 
requirement to place a photo on the EBT card.
    (3) Voluntary vs mandatory. (i) State agencies shall have the 
option to implement a photo on EBT cards on a mandatory or voluntary 
basis. Regardless of whether the photo is mandatory or voluntary, the 
certification process must not be altered in order to facilitate 
photos, and clients must be informed that certification will not be 
impacted by whether or not a photo is on the card.
    (ii) Under mandatory implementation, State agencies must exempt 
certain clients, as stated in paragraph (f)(4) of this section. State 
agencies must establish which member(s) of the household would be 
required to be photographed and the procedures that allow eligible 
nonexempt household members who do not agree to the photo to come into 
compliance at a later time.
    (iii) Under voluntary implementation, clients must be clearly 
informed of the voluntary nature of the option. Applicant members of 
households are not required to be in an exempted category to opt out of 
the photo requirement. States shall not require a photo be taken during 
a voluntary implementation and clients must opt in to have a photo on 
their card.
    (4) Exemptions. Under a mandatory implementation, the State agency 
must exempt, at a minimum, the elderly, the disabled, children under 
18, homeless households, and victims of domestic violence. A victim of 
domestic violence shall be able to self-attest and cannot be required 
to submit documentation to prove domestic violence. The ability to 
self-attest must be applied equally regardless of if the victim is a 
female or male. Non-applicants cannot have a photo taken for an EBT 
card whether or not they desire to have their photo taken. A State 
agency may establish additional exempted categories.
    (5) Serving clients with hardship. State agencies must have 
sufficient capacity and a process to issue photo EBT cards, taking into 
account households that meet hardship conditions and who would receive 
non photo EBT card. Examples of hardship conditions include, but are 
not limited to: Illness, transportation difficulties, care of a 
household member, hardships due to residency in a rural area, prolonged 
severe weather, or work or training hours which prevent the household 
from being available during having photos taken in-office.
    (6) Issuance of photo EBT card. (i) States can require households 
to come in to be photographed, but cannot do so for the purposes of 
certification. The amount of time provided to households to come in and 
be photographed needs to be sufficient and reasonable and be documented 
in the Implementation Plan as required in paragraph (f)(14) of this 
section. If a household meets expedited criteria, the State must issue 
the benefits to the entire household without delay. Regardless of 
whether the State's photo EBT policy is voluntary or mandatory, the 
State may not delay, hold in abeyance, or prorate benefits for any 
household that meets expedited criteria in order to obtain a photo on 
the EBT card. Card issuance procedures for new SNAP households must 
ensure adherence to application processing standards as required in 7 
CFR 273.2(g) and (i). Additionally, State agencies shall not store 
photos that are collected in conjunction with its photo EBT card policy 
but are not placed on an EBT card.
    (ii) The process for issuing and activating photo EBT cards must 
not disrupt, inhibit or delay access to benefits nor cause a gap in 
access for ongoing benefits for eligible households.

[[Page 408]]

    (iii) Any card issued as part of the implementation of the photo 
EBT card option may not count against the household as part of the card 
replacement threshold defined in 7 CFR 274.6(b)(5).
    (7) Prorating household benefits when photo EBT cards are 
mandatory. For multi-person households, State agencies shall not 
withhold benefits for an entire household because nonexempt household 
members do not comply with the photo EBT card policy. If benefits of 
the nonexempt household member(s) are to be withheld, a prorated share 
of benefits shall be issued to the household member(s) that are in 
compliance with or are exempt from the photo requirement. Benefits that 
are not issued as a result of individual(s) not being in compliance 
with the photo requirement must be held and promptly issued once 
individual(s) comply with the requirement to have their photo placed on 
the card. For example, if there are four household members and one 
household member is not in compliance with the photo requirement, \3/4\ 
of the household's monthly benefit allotment must be issued, and \1/4\ 
of the benefit allotment must be held in abeyance and allowed to accrue 
until the household member complies. For a single person household, the 
State agency would hold all the benefits in abeyance until the 
household complies.
    (8) Benefits held for noncompliance. Benefits held for 
noncompliance with the photo EBT card requirement must be withheld from 
issuance in accordance with paragraph (f)(6) of this section. Benefits 
withheld for non-compliance shall not remain authorized for perpetuity 
and States must treat such benefits in accordance with the same 
timeframe used for handling expungements under 7 CFR 274.2(h)(2). If 
the noncompliant member comes into compliance, the non-expired benefits 
must be issued within two business days of when the client has their 
photo taken by the State agency. Any action to withhold benefits from 
issuance is subject to fair hearings in accordance with 7 CFR 273.15.
    (9) Household and authorized representatives card usage. The State 
agency must establish procedures to ensure that all appropriate 
household members and any authorized representatives, as defined in 7 
CFR 273.2(n)(3), can access SNAP benefits for the household regardless 
of who is pictured on the card or if there is no picture.
    (10) Client and staff training. State agencies must ensure staff 
and clients are properly trained on photo EBT card requirements. At a 
minimum, this training shall include: Whether the State option is 
voluntary or mandatory, who must comply with the photo requirement, 
which household members are exempt, and that all appropriate household 
members and authorized representatives are able to use the card 
regardless of who is pictured on the card or if there is no picture.
    (i) All staff and client training materials must clearly describe 
the following statutory and regulatory requirements:
    (A) Retailers must allow all appropriate household members and any 
authorized representative of the household, regardless of whether they 
are pictured on the card, to utilize the card without having to submit 
additional verification of identity as long as the transaction is 
secured by the use of the PIN;
    (B) EBT cards with or without a photo are valid in any State; and
    (C) Retailers must treat all SNAP clients in the same manner as 
non-SNAP clients;
    (ii) State agencies may not specifically reference which categories 
of individuals are exempt from the photo EBT requirement in any 
materials to retailers.
    (11) Retailer education and responsibility. State agencies must 
conduct sufficient education of retailers if photos are used on cards. 
The State agency must clearly inform all retailers in the State and 
contiguous areas of implementation. State agency communications with 
retailers must clearly state:
    (i) All household members, authorized representatives, and 
individuals authorized by the household are entitled to use the EBT 
card regardless of the picture on the card if the EBT card is presented 
with the valid PIN;
    (ii) Retailers must treat all SNAP clients in the same manner as 
non-SNAP clients in accordance with 7 CFR 278.2(b);
    (iii) Retailers must not prohibit appropriate household members or 
authorized representatives from using an EBT card because they are not 
pictured on the card or there is no picture on the card;
    (iv) EBT cards from any State are valid with or without a photo.
    (12) Interoperability. Interoperability of EBT cards will remain 
the same regardless of whether or not there is a photo and regardless 
of which State issued the card. State agencies must conduct sufficient 
education of clients and retailers, including retailers in contiguous 
areas, to inform them that the photo EBT cards remain interoperable and 
authorized retailers must accept EBT cards from all States as long as 
the household member or authorized representative uses a valid PIN.
    (13) Advance Planning Document. Appropriate implementation and 
administration of the photo EBT card consistent with all applicable 
requirements is an allowable State administrative cost that FNS shall 
reimburse at 50 percent in accordance with 7 CFR 277.9. Increased costs 
related to placing photos on the EBT card, whether contractual or 
produced from other sources, require an Implementation Advance Planning 
Document Update.
    (14) Implementation Plan. (i) State agencies must submit an 
Implementation Plan for approval prior to implementation that 
delineates how the State agency will operationalize the photo EBT 
option. FNS shall review the plan and issue an approval, request 
modifications prior to granting approval, or issue an approval subject 
to conditions. In cases where FNS finds that the steps outlined in the 
Implementation Plan are not sufficient for a successful implementation, 
FNS may issue an approval subject to conditions, such as requiring the 
State agency to implement a successful pilot in a selected region of 
the State before a statewide implementation. Should a State be required 
to implement a pilot before statewide implementation, that requirement 
would be documented in the State's Implementation Plan approval, along 
with any information the State must report to FNS before expansion 
approval would be provided by FNS.
    (ii) State agencies must demonstrate successful administration of 
SNAP based on SNAP performance standards as established in paragraph 
(f)(1) of this section. State agencies shall not issue EBT cards with 
photos before the State's Implementation Plan is approved and the State 
agency has also received FNS authorization to proceed to issue photo 
EBT cards.
    (iii) The Implementation Plan shall include but not be limited to a 
description of card issuance procedures, a detailed description of how 
client protections and ability to use SNAP benefits will be preserved, 
specific information about exempted recipients and the State agency's 
exemption criteria, a description of how the State agency will obtain 
photographs for the EBT card, training materials and training plans for 
State agency staff, examples of letters and other materials 
communicating the policy to clients and retailers, and a timeline for 
the

[[Page 409]]

implementation. If the State agency plans to share SNAP client data in 
accordance with 7 CFR 272.1(c) for purposes of implementing its photo 
EBT card option, the State agency must also include any draft memoranda 
of understanding as part of its Implementation Plan. Any information 
collected must be securely stored and can only be shared for the 
purpose of SNAP in accordance with 7 CFR 272.1(c).
    (iv) The Implementation Plan shall also address the anticipated 
timetable with specific action steps for the State agency and 
contractors, if any, that may be involved regarding implementation of 
the photo EBT card option, the State agency's capacity to issue photo 
EBT cards, and the logistics that shall allow for activation of the 
photo EBT card simultaneously or followed by deactivation of the active 
non-photo EBT card. This shall also include the description of the 
capacity at the facility where the photo EBT cards will be produced, 
both for transition and ongoing production, and confirmation that the 
State agency and any contractor will continue to meet regulatory time 
requirements for all EBT card issuances and replacements, including for 
expedited households. The Implementation Plan must also include 
indicators related to the photo EBT card implementation that will be 
collected and analyzed for the post implementation evaluation required 
by paragraph (f)(16) of this section.
    (v) The State agency shall provide all applicable proposed written 
policy for staff to implement the photo EBT card option to FNS for 
review. State agencies shall include copies of all materials that will 
be used to inform clients, retailers and other stakeholders regarding 
photo EBT card implementation. In addition, the State agencies shall 
provide a detailed description of how the notifications, communication, 
policies, and procedures regarding the implementation of any new photo 
EBT card option will comply with applicable civil rights laws.
    (vi) The State agency's Implementation Plan shall also include:
    (A) An education component for retailers and clients to ensure all 
eligible household members and authorized representatives are able to 
use the EBT card and understand the timeframes associated with the 
implementation and rollout,
    (B) A description of the resources that will be in place to handle 
complaint calls from clients, retailers, and external stakeholders, and
    (C) A description of procedures to address unexpected events 
related to the photo EBT card option,
    (D) Upon approval of the Implementation Plan by FNS, the State may 
proceed with tasks described in the Implementation Plan, as modified by 
the approval, but may not proceed to issuing actual cards until it 
receives FNS authorization to do so. FNS may also require the State to 
implement in a phased manner, which may include criteria as determined 
by the Secretary.
    (15) Authorization to issue photo EBT cards. States agencies shall 
not be permitted to issue EBT cards with photos until FNS provides an 
explicit authorization to issue photo EBT cards. After an 
Implementation Plan is approved, FNS will review the State agency's 
actions at an appropriate time interval to ensure that the process and 
steps outlined by the State agency in the Implementation Plan are 
fulfilled. In cases where the State agency has not acted consistently 
with the process and steps outlined in its photo EBT card 
Implementation Plan, FNS may deny authorization for the State agency to 
issue EBT cards with photos until the State agency has done so 
successfully.
    (16) Post implementation assessment and evaluation. State agencies 
must submit to FNS a post-implementation assessment that provides FNS 
with a report of the results of its implementation, including any 
issues that arose and how they were resolved, the degree to which State 
agency staff, clients and retailers properly understood and implemented 
the new provisions.
    (i) This report shall be delivered to FNS within 120 days of 
implementation. This report shall cover the first 90 days of 
implementation. The Department also reserves the right to conduct its 
own review of the State agency's implementation. The State agency's 
post-implementation report shall include at a minimum:
    (A) A survey of clients conducted by an independent evaluator to 
demonstrate their clear understanding of the State agency's photo EBT 
policy;
    (B) A survey of retailers conducted by an independent evaluator 
that demonstrates evidence that at least 80% of retailers, including 
smaller independent retailers, demonstrate a full understanding of the 
policies related to the photo EBT card;
    (C) The amount and percent of benefits held for noncompliance if 
mandatory;
    (D) The number and percent of households with photo EBT cards;
    (E) The number of households affected by withholding for 
noncompliance, if mandatory;
    (F) The number and percent of households exempt from the photo EBT 
card requirement if mandatory;
    (G) ????????????
    (H) The number and percent of exempted households who opted for 
photo EBT cards if mandatory;
    (I) The number and scope of complaints related to the 
implementation of the policy;
    (J) The State agency's Case and Procedural Error Rate; and
    (K) SNAP performance metrics as established in section 7 CFR 
274.8(f)(1) and other SNAP performance metrics that may have been 
adversely affected by the implementation of the State agency's photo 
EBT card option, as determined by the Secretary.
    (ii) Reserved.
    (17) Ongoing monitoring. FNS will continue to monitor and evaluate 
the operation of the option and may require additional information from 
the State on an ongoing basis.
    (18) Modifying implementation of photo EBT option If any review or 
evaluation of a State's operations, including photo EBT operation 
implementation, finds deficiencies, FNS may require a corrective action 
plan consistent with 7 CFR 275.16 to reduce or eliminate deficiencies. 
If a State does not take appropriate actions to address the 
deficiencies, FNS would consider possible actions such as requiring an 
updated photo EBT Implementation Plan, suspension of implementation 
and/or withholding funds in accordance with 7 CFR 276.4.

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

0
6. In Sec.  278.2, revise paragraph (h) and remove and reserve 
paragraphs (i) and (k).
    The revision reads as follows:


Sec.  278.2  Participation of retail food stores.

* * * * *
    (h) Identifying benefit users. Retailers must accept payment from 
EBT cardholders who have proper PIN regardless of which State the card 
is from or whether the individual is pictured on the card. However, 
benefits may not knowingly be accepted from persons who have no right 
to possession of benefits. Where photo EBT cards are in use, the person 
presenting the photo EBT card need not be pictured on the card, nor 
does the individual's name need to match the one on the card if

[[Page 410]]

States includes names on the card. Retailers shall ask for 
identification from any individual using three or more EBT cards and an 
explanation as to why multiple cards are being used. The identified 
individual's name does not need not match the name on the EBT cards, 
but rather is to be used for the limited purposes of reporting 
suspected fraud. Should a retailer believe that fraud is occurring the 
retailer may record the individual's information, such as a driver's 
license information, as well as the EBT card number, and the reason for 
using 3 or more cards. If a retailer collects such information due to 
suspected fraud, the retailer shall be required to report the 
individual to the USDA OIG Fraud Hotline. If an individual presents 3 
or more EBT cards and does not show identification when requested by 
the retailer, the retailer has the option to deny the sale if fraud is 
suspected.
* * * * *

    Dated: December 22, 2015.
Kevin Concannon,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 2015-33053 Filed 1-5-16; 8:45 am]
BILLING CODE 3410-30-P