Food stamp program : regulations pertinent to authorized firms.

              l
UNITED STATES DEPARTMENT OF AGRICULTURE
FOOD AND NUTRITION SERVICE
PROPERTY Oi- THE
- I IRQilR'/
.MA'{ 17 1935
FOOD STAMP PROGRAM mversity of . orth Caroli a
' i· Gr n_ iO
Regulations Pertinent to Authorized Firms D.eposito1 1
Current as of September 30, 1984
-PART 271-GENERAL INFORMATION which will pennit low-income households to
AND DEFINITIONS obtain a more nutritious diet through
nonnal channels of trade by increasing food
Sec.
271.1
271.2
271.3
271.4
271.5
271.6
General purpose and scope.
Definitions.
Delegations to FNS for administration.
·Delegations to States for administra­tion.
Coupons as obligations of the United
States. crimes, and offenses.
Complaint procedures.
§ 271.1 General purpose and scope.
<a> Purpose of the food stamp pro­gram.
The food stamp program is de­signed
to promote the general welfare
and to safeguard the health and well
being of the Nation's population by
raising the levels of nutrition among
low-income households. Section 2 of
the Food Stamp Act of 19'1'1 states, in
part:
Congress hereby finds that the limited
food purchasing power of low-income house­holds
contributes to hunger and malnutri­t
ion among members of such households. ·
Congress further finds that increased utili­zation
of food Ill establishing and maintain­ing
adequate national levels of nutrition will
promote the distribution in a beneficial
manner of the Nation's agricultural abun­dance
and will strengthen the Nation's agri­cultural
economy, as well as result in more
orderly marketing and distribution of foods.
To alleviate such hunger and malnutrition,
a food stamp program is herein authorized
purchasing power for all eligible households
who apply for participation.
(b) Scope of the regulations. Part 2'11
contains general information, defini­tions,
and other material applicable to
all parts of this subchapter. Part 2'12
sets forth policies and procedures gov­erning
State agencies which partici­pate
in the program. Part 2'13 de­scribes
the eligibility criteria to be ap­plied
by State agencies and related
processing requirements and stand­ards.
Part 2'14 provides requirements
for the issuance of coupons to eligible
households and establishes related is­suance
responsibilities. Part 2'15 sets
forth guidelines for monitoring the
food stamp program, analyzing the re­sults
and formulating corrective
action. Part 2'16 establishes State
agency liability and certain Federal
sanctions. Part 2'1'1 outlines proce­dures
for payment of administrative
costs of State agencies. Part 2'18 delin­eates
the terms and conditions for the
participation of retail food stores,
wholesale food concerns, meal services,
and insured financial institutions. Part
2'19 establishes the procedures for ad­ministrative
and judicial reviews re­quested
by food retailers, food whole­salers,
and meal services. Part 280 ex-
plains pracedures for issuing emergen­cy
coupon allotments to certain vic­tims
of disasters unable to purchase
adequate amounts of food. Part 281
sets forth guidelines for designating
Indian tribes as State agencies. Part
282 provides guidelines for initiation,
selection, and operation of demonstra­tion,
research, and evaluation proJects.
Part 285 describes the general terms
and conditions under which grant
funds are provided to the Common­wealth
of Puerto Rico.
1271.2 Definitions.
"Authorization to participate card
<A TP>" means a document which is
Issued by the State agency to a certi·
fled household to show the allotment
the household 1s authorized to receive
on presentation of such document.
"Communal dining facility" means a
public or nonprofit private establish­ment,
approved by FNS, which pre­pares
and serves meals for elderly per­sons,
or for supplemental security
income <SSI> recipients, and their
spouses, a public or private nonprofit
establishment <eating or otherwise>
that feeds elderly persons or SSI re­cipients,
and their spouses, and feder­ally
subsidized housing for the elderly
at which meals are prepared for and
served to the residents. It also includes
private establishments that contract
with an appropriate State or local
agency to offer meals at concessional
prices to elderly persons or SSI recipi­ents,
and their spouses. ·
"Coupon" means any coupon, stamp
or type of certification provided pursu­ant
to the provisions of this sub­chapter
for the purchase · of eligible
food.
-2-
"Coupon Issuer" means any pffice of
the State agency or any person, part­nership,
corporation, organization, po­Utical
subdivision, or other entity with
which a State agency has contracted
for, or to which it has assigned respon­sibutty
for, the Issuance of coupons to
households.
"Department" means the U .$. De­partment
of Alriculture.
"Drug addiction or alcoholic treat­ment
and rehabilitation program"
means any drug addiction or alcoholtc
treatment and rehabilitation program
conducted by a private nonprofit orga­nization
or institution which is certi­fied
by the State agency or agencies
designated by the Governor as respon­sible
for the administration of the
State's programs for alcoholics and
drug addicts pursuant to Pub. L. 91-
616. Comprehensive Alcohol Abuse
and Alcoholism Prevention Treatment
and Rehabilltation Act of 1970 and
Pub. L. 92-255, Drug Abuse Office and
Treatment Act of 1972 as providing
treatment that can lead to the reha­bilitation
of drug addicts or alcoholics.
It an alcoholic treatment and rehabill­tation
program is located on an Indian
reservation and the State does not cer­t1ty
or license reservation-based cen­ters,
approval to participate may be
granted if the program either is
funded by the National Institute on
Alcohol Abuse and Alcoholism
<NIAAA> pursuant to Pub. L. 91-616 or
was so funded and has subsequently
been transferred to Indian Health
Service < IHS > funding.
"Elderly or disabled member" means
a member of a household who: < 1 > Is
60 years of age or older; < 2 > receives
supplemental security income benefits
under title XVI of the Social Security
"'Act or disability or blindness pay­ments
under titles I, II. XIV. or XVI
of the Social Security Act; <3> is a vet­eran
with a serVice-connected disabU-
#
ity rated or paid as total under title 38
of the United States Code or is consid­ered
in need or regular aid and attend­ance
or permanently housebound
under such title of· the Code; < 4 > is a
surviving spouse of a veteran and con­sidered
in need of aid and attendance
or permanently housebound or a sur­viving
child of a veteran and consid­ered
to be permanently incapable of
. self-support under title 38 of the
United States Codes; or <5> is a surviv­ing
spouse or child of a veteran and
entitled to compensation for a service­connected
death or pension benefits
for a nonservice-connected death
under title 38 of the United States
Code and has a disability considered
permanently under section 221<i> of
the Social Security Act. "Entitled" as
usef! in this definition refers to those
veterans' surviving spouses and chil­dren
who are receiving the compensa­tion
or benefits stated or have been ap­proved
for such payments, but are not
receiving them.
"Eligible foods" means < 1 > any food
or food product intended for human
consumption except alcoholic bever­ages,
tobacco, and hot foods and hot
food products prepared for immediate
consumption; <2> seeds and plants to
grow foods for the personal consump­tion
of eligible households; <3 > meals
prepared and delivered by an author­ized
meal delivery service to house­holds
eligible to use coupons to pur­chase
delivered meals; or meals served
by an authorized communal dininc fa­cility
for the elderly, for SSI h'ouse­holds
or both, to households elilible
to use coupons for communal di.n1nl':
<4> meals prepared and served by a
drug addict or alcoholic treatment and
rehabilitation center to eligible house­_
holds; <5> meals prepared and served
by a group living arrangement facility
to residents who are blind or disabled
recipients of benefits under Title II or
-3-
Title XVI of the Social Security Act;
<6> meals prepared by and served by a
shelter for battered women and chil·
dren to its eligible residents; and <7> in
the case of certain eligible households
living in areas of Alaska where access .
to food stores is extremely difficult
and the households rely on hunting
and fishing for subsistence, equipment
for the purpose of procuring food for
eligible households, including ' nets,
lines, hooks, fishing rods, harpoons,
knives, and other equipment necessary
for subsistence hunting and fishing
but not equipment for the purpose of
transportation, clothing or shelter, nor
firearms, ammunition or other explo­sives.
"Federal fiscal year" means a period
of 12 calendar months beginning with
each October 1 and ending with Sep­tember
30 of the following calendar
year.
"Firm's practice" means the usual
manner in which personnel of a firm
or store accept food coupons as shown
by the actions of the personnel at the
time of the investigation.
"FNS" means the Food and Nutri­tion
Service of the U.S. Department of
Acriculture.
"Food Stamp Act" means the Food
Stamp Act of 1977 <Pub. L. 95-113>. in­cluding
a.py subsequent amendments
the~to. ·•oroup llvtnc arrangement" means
a public or private nonprofit residen­tial
setting that serves no more than
sixteen residents that is certified by
the appropriate agency or agencies of
the State under regulations issued
un~er section 1616<e> of the Social Se­curlty
Act. To be eligible for food
stamp benefits, a resident of such a
group living arrangement must be
blind or disabled and receiving bene­fits
under Title II or Title XVI of the
Social Security Act.
"House-to-bouse trade route:• means
any retail food business operated from a
truck. bus, pushcart. or other mobile
vehicle.
"Identification <ID> card" means a
card which identifies the bearer as eU­cible
to receive and use food coupons.
"Immigration and Naturalizat~on
Service emS>" means the. Immigra.tton
and Naturalization Servtce, U.S. De­.
partment of Justice.
"Indian tribe" means: <1> Any In~ian
tribe, Band, Nation, or othe~ organlZed
Indian group on a reservat1on for ex­ample,
a Rancheria, Pueblo or ~olony,
and including any Alaska Nattve yn­lage
or regional or village corporatton.
<established pursuant to the Alaska
Native Claims Settlement A~t <85 Stat.
688 >> that is on a reservat1on and is
recoioized as eligible f~r Federal pro­grams
and services provtded to ~ndi.ans
because of their status as Indtans, or
<2> any Indian tribe or Band on a res­ervation
holding a treaty with a State
government. TO ..
"Indian tribal organization <I >
means: < 1 > The reco5tnized Roverning
body of any Indian tribe on a reserva­tion:
or <2> the tribally recognized in·
tertribal organization which the recog­nized
governing bodies of two or more
Indian tribes on a reservation author­izes
to operate the Food Stamp Pro­gram
or a Food Distribution Program
on their behalf.
''Insured financial institution"
means a financial insti.tution insured
by the Federal Deposit Insurance Cor­poration
<FDIC> or the Federal Sav­Ings
and Loan Insurance Corporation
<FSLIC>.
"Meal delivery service" means a po­litical
subdivision, a private nonprofit
organization, or a private establish·
ment with which a State or local
aaency has contracted for the prepara­tion
and delivery of meals at conces-
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slonal prices to elderly persons, and
their spouses, and to the physically or
mentally handicapped and persons
otherwise disabled, and their spouses.
such that they are unable to adequate­ly
prepare all of their meals.
"Nonprofit cooperative food pur­chasing
venture" means any private
nonprofit association of consumers
whose members pool their resources to
buy food.
"Overissuarice" means the amount
by which coupons issued to a house­hold
exceeds the amount It was eUct­ble
to receive.
"Pa~ent error rate" means the aum
of ibe a otmenta illued to eligible
households to which they were not
entitled and the allotments issued to
ineligible households, expressed as a
percentage of all allotments issued to
complete active sample cases excludina
those casea proce11ed by SSA personnel
or participating in certain demonstration
project• desigtlated by FNS.
"Program" means the !ood stamp
program conducted under the Food
Stamp Act and regulations.
"Regulations" means the provisions
of this subchapter. Regulatory cita­tions
refer to provisions of this sub­chapter
unless otherwise specified.
"Reservation" means the geographi·
cally defined area or areas over which
an ITO exercises governmental Juris­diction
so long as such area or areas
are legally recognized by the Federal
or a State government as being set
aside for the use of Indians.
"Retail food store" means < 1 > an es­tablishment
or recognized department
of an establishment, or a house-to­house
trade route. who~"'! eligible food
sales volume is more than 50 percent
staple food items for home prepara­tion
and consumption; < 2 > public or
private communal dining facilities and
meal delivery services; private non­profit
drug addict or alcoholic treat­ment
and rehabilitation programs:
public or private nonprofit group
living arran~rements: or public or Pri·
vate nonprofit shelters for battered
women and children: < 3 > any stores
selling equipment for procurin~r food
by hunting and fishing to eligible
households in Alaska, as specified ln
the definition of eligible food; < 4 > any
private nonprofit cooperative food
purchasing venture, including those
whose members pay for food prior to
receipt of the food; and <5> a farmers'
market.
"Secretary" means the Secretary of
the U.S. Department of Agriculture.
"Shelter for battered women and
ehlld.ren" means a public or private
nonprofit residential facility that
serves battered women and their chil·
dren. It such a facility serves other in­dividuals,
a portion of the facility
must be set aside on a long-term basis
to serve only battered women and chil·
dren.
"Small project area" means those
project areas/management units with
a monthly active caseload of less than
250 households based on the most cur­rent
information available at the time
the small proJect area review schedule
is developed.
"Spouse" refers to either of two indi·
viduals:
< 1 > Who would be defined as married
to each other under applicable State
law: or
<2> Who are living together and are
holding themselves out to the commu­nity
as husband and wife by represent­ing
themselves as such to relatives.
friends, neighbors, or tradespeople.
"Staple food" means those food
items intended for home preparation
and consumption, which include meat,
poultry, fish, bread and breadstuffs.
cereals, vegetables, friiits, fruit and
vegetable juices, and dairy products.
Accessory food items, such as coffee,
tea, cocoa. carbonated and uncarbon­ated
drinks. candy, condiments, and
spices are not staple foods for the pur­pose
of qualifying a firm to participate
in the program as a retail food store or
as a wholesale food concern.
-5-
••state" means any one of the fifty
States, the District of Columbia, Guam.
the Northem Mariana Islands, the Virgin
laliUlda of the United States, and the
reservation of an Indian tribe whose
rro meets the requirements of the Food
Stamp Act of 1977 for participation aa a
State agency.,
.. State agency" means: < 1 > The
aaency of State government, including
the local offices thereof. which is re­sponsible
for the administration of the
federally aided public assistance pro­lr&
DlS within the State. and in those
States where such assistance programs
are operated on a decentralized basis.
it includes the counterpart local agen­cies
which administer such assistance
programs for the State agency, and <2>
the Indian tribal organization of any
Indian tribe determined by the De·
partment to be capable of effectively
administering a Food Stamp Proltl'Bm
or a Food Distribution Program in ac­cordance
with provisions of the Food
Stamp Act of 1977.
"Supplemental security income
<SSI>" means monthly cash payments
made under the authority of Title
XVI of the Social Security Act. as
amended. to the aged. blind, and dis·
abled .
.. Trafficking" means the buying or
selling of coupons or A TP cards for
cash. •.
.. Wholesale food concern means an
establishment which sells eligible food
to retail food stores or to meal services
for resale to households.
I 271.3 Deleptiona to FNS Cor adminis­tration.
<a> Delegation. Within the Depart­ment,
FNS acts on behalf of the De­partment
in the administration of the
Food Stamp Program with the excep­tion
of those functions, which may be
delegated to other agencies within the
Department. The right is reserved at
any time to withdraw, modify, or
amend any delegation of authority.
· When authority is delegated to FNS,
the responsibilities may be carried out
by the Administrator or by another ~f­flcial
of FNS, or by State agencies
with respect to claims against house­holds,
as designated.
<b> Claims settlement. FNS shall
have the power to determine the
amount of and to settle and adjust any
claim arising under the provisions of
the Act or this subchapter, and to
compromise or deny all or part of any
claim.
<c> Demonstration authority. FNS is
authorized to undertake demonstra­tion
projects which test new methods
designed to improve program adminis­tration
and benefit delivery. FNS is
authorized to initiate program re­search
and evaluation efforts for the
purposes of improving and assessin~
program administration and effective­ness.
The procedure for initiating and
conducting these projects is estab­lished
in Part 282.
1271.4 Delep.tiona to State agencies Cor
administration.
<a> General delegation. The State
a~ency shall be responsible for the ad·
ministration of the program within
the State, including, but not limited
to:
(1) Certification of applicant houae­holds;
<2> Issuance, control, and account­ability
of coupons;
-6-
<3> Developinr and mainta.inJnr com­plaint
procedures;
<4> Developing, conducting, and eval­uating
training;
<5> Conducting performance report­ing
reviews;
< 6 > Keepinr records necessary to de­termine
whether the program is betnr
conducted in compliance with these
regulations; and
<7> Submitting accurate and timely
financial and program reports.
(b > Claims .delegation. FNS dele­gates
to the State agency, subject to
the standards in § 273.18, the authori­ty
to determine the amount of, and
settle, adjust, compromise or deny all
or part of any claim which results
from fraudulent or nonfraudulent
overtssuances to participating house·
holds.
§ 271.5 Coupons as obligations of the
United States, crimes and offenses.
<a> Coupons as obligations. Pursuant
to section 15<d> of- the Food Stamp
Act. coupons are an obligation ~f the
United States within the meanmg of
18 United States Code <U.S.C.> 8. The
provisions of Title 18 of the United
States Code, "Crimes and Cr~al
Procedure," relative to counter~e1tmg,
misuse &r)d alteration of obligations of
the United States are applicable to
coupons.
(b) Penalties. Any unauthorized issu­ance.
use, transfer, ·acquisition,. alter­ation
possession, or presentation of
coup~ns or ATP's may subject~ indi­vidual,
partnership, corporation, or
other legal entity to prosecution under
sections 15<b> and <c> of the Food
Stamp Act or under any other applica­ble
Federal, State or lot;dl law. regula­tion
or ordinance. $ections 15<b> and
<c> of the Food Stamp Act read as fol-lows:
·
<b ><1) Subject to the provisions of para­II'&
Ph <b><2> of thia section, whoever know­inal:
Y uses, trana!ers, acquires, alters, or poa­aesses
coupons or authorization cards in any
manner not authorized by this Act or the
rel\llationa issued. pursuant to this Act
shall, 1! such coupons or authorization cards
are of a value of $100 or more, be ruUt:y of a
felony and shall, upon the first conviction
thereof. be fined not more than $10,000 or
imprisoned. for not more than five :years. or
both, and upon the second and any subse­quent
conviction thereof, ahall be tmpril­oned
for not less than six months nor more
than five :years and may also be fined not
more than $10,000 or, 1! such coupons or au­thorization
cards are of a value of less than
$100. ahall·be ruilt:Y of a misdemeanor. and.
upon the first conviction thereof, shall be
fined. not more than $1,000 or Imprisoned
for not more than one :year, or both, and
upon the second and any subsequent convic­tion
thereof, shall be imprisoned. for not
more than one :year and may also be fined
not more than $1,000. In addition to such
penalties, any persona convicted of a felony
or misdemeanor violation under thia subaec·
tion may be suspended by the court from
participation in the food stamp proiTIJil for
an additional period of up to el1hteen
months consecutive to that period of sua­pension
mandated by section 6<bX1) of thia
Act.
. <b><2> In the case of any individual con­victed
of an offense under parasraph <bX1>
of this section, the court may permit such
individual to perform work approved by the
court· for the purpose of providinl restitu­tion
for losses incurred. by the United States
and the State acenc:y as a result of the of­fense
for which such individual was convict­ed..
If the court permits such individual to
perform such work and such individual
acrees thereto, the court shall withhold the
imposition of the sentence on the condition
that such individual perform the aasicned
work. Upon the successful completion of the
assicned. work the court may suspend such
sentence.
<c) Whoever presents, or causes to be pre­sented.
coupons for payment or redemption
of the value of $100 or more, knowinl the
same to have been received. transferred. or
used in any manner in violation of the pro­visions
of this Act or the rerulationa issued
pursuant to this Act. shall be ruUt:y of a
-7-
felony and. upon the first conviction there­of,
shall be fined not more than $10,000 or
imprisoned for not more than five years. or
both, and. upon the second and any subse­quent
conviction thereof, shltll be Impris­oned
for not less than one :year nor more
than five :years and may also be fined not
more than $10,000, or 1! such coupons are of
a value of less than $100, shall be ruilt:y of a
misdemeanor and, upon the first conviction
thereof. shall be fined not more than $1,000
or Imprisoned for not more than one :year.
or both. and. upon the second and any sub­aequent
conviction thereof. shall be Impris­oned
for not more than one :year and may
also be fined not more than $1,000. In addi·
tion to such penalties, any persons convict­ed
of a felony or misdemeanor violation
under this subsection may be suspended by
the court from participation in the food
lt&mp procram for an additional period of
up to et1hteen months consecutive to that
period of suspension mandated by section
S<bX1> of thia Act.
<c> Securtty /or coupom and ATP'1.
All individuals, partnerships, corpora­tions,
or other lepl entities including
State aaencies a.nd their delegatees
<referred to in this para.sraph a.s "per­sons">
having custody, ca.re a.nd con­trol
of coupons a.nd A TP's shall, at all
times, take all precautions necessary
to avoid a.cceptance, transfer, negotia·
tion. or use of spurious, altered, or
counterfeit coupons and ATP's and to
avoid any unauthorized use transfer,
acquisition. alteration or possession of
coupons and A TP's. These personi
shall safeguard coupons a.nd ATP's
from theft, embezzlement, loss,
damage, or destruction.
<d> Coupon t.s&uen. <1> Any coupon
issuer or any officer, · employee or
agent. thereof convicted of falling to
provide the monthly reports required
in 1 27 4.5 or convicted of violating
Part 274 shall be subject to a fine of
not more than $1,000, or imprisoned
for not more than 1 year, or both.
<2> Any coupon issuer or a.ny officer,
employee or agent, thereof convicted
of knowingly providing false lnfonna·
tion in the reports required under
1 27 4.5 shall be· subJect to a fine of not
more than $10,000, or imprisoned not
more Ulan 5 years, or both.
I 271.6 Complaint procedure.
<a> State agency respomibility-<l>
General scope. The State agency shall
maintain a system of its choosing for
handling program complaints filed by
participants, potential participants, or
other concerned individuals or groups.
This shall not include complaints al­leging
discrimination on the basis of
race, sex, age, religious creed, national
origin, political beliefs or handicap;
such complaints shall be handled in
accordance with § 272.6. This proce­dure
also need not include complaints
that can be pursued through a fair
hearing. Complaints regarding such
areas as processing standards and serv­ice
to participants and potential par­ticipants
would generally be handled
under this complaint procedure.
<2> Minimum requirements. The
State agency shall follow up on com­plaints,
resolve complaints and take
corrective action where warranted,
and respond to the complainant on
the State agency's disposition of the
complaint. The State agency shall
make information on the complaint
system and how to file a complaint
available to participants, potential
participants and other interested per­sons.
The State agency may make the
information available through written
materials or posters at certification of­fices
or other appropriate means.
<3> Complaint analym. The State
agency shall maintain records of com­plaints
received and their disposition,
and shall review records at least annu­ally
to assess whether patterns of
problems may be present in local of­fices,
project areas, or throughout the
State. The results of this review shall
be provlded to the Performance Re­porting
System coordinator for appro­priate
action, and for inclusion, if ap­propriate;
in the State Corrective
Action Plan in accordance with
I 275.16 of this chapter. The informa-tion
provided to the Performance Re­porting
System Coordinator shall in·
elude the identification, if any, of po­tential
or actual patterns of deficien­cies
in local offices, projeet areas, or
throughout· the State, and any identi­fication
of causes of these problems.
(4) Monitoring. FNS shall monitor
State compliance with these require­ments
through the Performance Re- ·
porting System.
<b> Regional of/ice ruponsibility. <1>
Persons or agencies desiring program
information or wishing to file a com­plaint
may contact the appropriate
FNS Regional Office.
<1> ·For Delaware, the District of Co­lumbia,
Maryland, New Jersey, Penn­sylvania,
Puerto Rico, Virginia, the
Virgin Islands of the United States.
and. West Virginia: Mid-Atlantic Re­lional
Office. U.S. Department of Ag­riculture.
Food and Nutrition Service
CN 02150, Trenton, New Jersey '
08650.
<H> For Alabama, Florida, Georgia,
Kentucky, Mississippi, North Carollna,
South Carolina, and Tennessee:
Southeast Regional Office, U.S. De­partment
of Agriculture, Food and Nu­trition
Service, 1100 Spring. Street
NW., Room 200, Atlanta, Ga. 30367.
<111> For Illinois, Indiana, Michigan,
Minnesota, Ohio· and Wisconsin: Mid·
west Regional Office; .. U.S .. Department
of AgricUlture, Food and Nutrition
Service, ~0 East Washington Street,
Chicago, Illinoi~, 60602.
<tv> For Arkansas, Louisiana, New
Mexico, Oklahoma, and. Texas: South­west
Regional Office, U.S. Department
of Agriculture, Food and Nutrition
Service, 1100 Commerce Street, Suite
5-C-30, Dallas, Tex. 75242.
<v> For Alaska, Ariz.ona, California,
Gqam, Hawaii, Idaho, Nevada, Oregon
and Washington: Western Regional
Office, U.S. Department of Agricul­ture,
Food and Nutrition Service, 550
Kearny Street, Room 400, San Fran­cisco,
Calif. 94108.
-8-
<vi> For Connecticut. Maine. Massa­chusetts,
New Hampshire. New York,
Rhode Island, and Vennont: New Eng­land
Regional Office. U.S. Department
of Agriculture. Food and Nutrition
Service, 33 North Avenue, Burlington.
Mass. 01803.
<vii> For Colorado, Iowa. Kansas.
Missouri, Montana, Nebraska. North
Dakota. South Dakota, Utah, and Wy­oming:
Mountain Plains Regional
Office. U.S. Department of Agricul­ture.
Food and Nutrition Service, 2420
West 26th Avenue, Suite 430-D,
Denver, Colo. 80211.
<2> Complainants shall be advised of
the appropriate State complaint han·
dling and fair hearing procedures.
Upon household request, other com­plaints
shall be pursued by the De­partment
rather than the State
agency, unless the complaint is one
upon which the complainant wishes to
request a fair hearing.
PART 278-PARTICIPATION OF
RETAIL FOOD STORES, WHOLESALE
FOOD CONCERNS AND INSURED
FINANCIAL INSTITUTIONS
Sec.
278.1 Approval of retail food stores and
wholesale food concerns.
278.2 Participation of retail food stores.
278.3 Participation of wholesale food con·
cerns.
· 278.4 Procedure for redeemlnr coupons.
278.5 Participation of Insured financial in·
stltutlons.
278.6 Dlsquallflcatlon of retail food stores
and wholesale food concerns, and lmpo·
sitlon of civil money penalties In Ueu of
dlsq uallflcatlons.
278.7 Determination and dlsposttlon of
claims-retail food stores and wholesale
food concerns.
278.8 Administrative review-retail food
stores and wholesale food concerns.
278.9 Implementation of amendments
relating to the participation of retail food
stores, wholesale food concerns and
insured financial institutions.
I 278.1 Approval of retail food stores and
wholesale food concerns.
<a> Appltcatton. Any firm desiring to
participate In the program shall file
an application as prescribed by FNS.
The FNS officer In charge shall deny
or approve authorization, or request
more information, within 30 days of
receipt of the application.
<b> Determtnatton of authortzatton.
An applicant shall provide sufficient
data on the nature and scope of the
firm's business for the FNS officer In
charge to determine whether the ap­plicant's
participation wm further the
purposes of the program. In making
this determination the FNS offlcer tn
charge shall consider all of the follow­ing:
<1> The nature and extent of the food
bu.ttneu conducted b11 the appltcant.
<1> Retail food stores which sell pri·
marily food for home preparation and
consumption and in which one or
more staple food Items, as defined in
1271.2, make up more than 50 percent
of. eligible food sales shall normally be
considered to have food business of a
nature and extent which will further
the purposes of the program. These
stores shall include: Full-lfne grocery
stores; convenience stores; stores
which sell meat, poultry, or, fish;
stands which sell agricultural com­modities;
farmers markets; milk
routes; bread routes; day-old bread
stores; bakeries which sell bread; and
nonprofit cooperative food-purchasing
ventures which are properly licensed
to sell food in the state and localfty in
which they are operating.
CU> Firms whose primary business is
not the sale of food for home prepara­tion
and consumption, but who have
recognized grocery departments tn
which staple foods make up more than
50 percent of eligible food sales, shall
normally be considered to have food
business of a nature and extent which
will qualify the store for participation
tn the program. In determining wheth·
era store's staple food business is suf·
ficient for the store to qualify for par-
·ttcipatlon ln the program, the FNS of·
fleer in charge shall also consider:
CA> The volume of staple food · busi­ness
the store does;
<B> The amount of sales of staple
foods compared to other business con­ducted
by the firm; and
<C> The avaUabfUty of other author­ized
food stores in the area.
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..
<til> Wholesale food concerns whoae
primary business is the sale of eligible
food at wholesale, and in which one or
more staple food items, as defined in
t 271.2, make up more than 50 percent
of eligible food sales, shall normally be
considered to have adequate food bust­ness
for the purposes of the program.
(iv) A firm whose primary bus;ness JS
the sale of food at the wholesale level
may not be authorized as a retail firm
unlesa it has a significant volume of
retail food sales. In addition to criteria
applicable to all retan firms. the FNS
officer in charge shall consider all of the
following facton in determining whether
a wholesaler qualifies to be authorizt>d u a retailer. the volume of the firm's
retail food business in relation to the
volume of its wholesale food business,
whether the fmn holds itself out to the
public as a food retailer. and wht>ther
the fll"IIl actively seeks retail food trade.
The absence or presence of any one of
the factors listed in this paragraph will
not necessarily determine whether a
wholesale firm qualifies for
authorization as a retail food store. In
determining whether a wholesale finn
quaJifies for authorization as a l"etailer.
~S shall consider each unit of a muW·
unit firm separately. A firm authorized
under this paragraph may not accept
coupons as a wholesale food concern.
<2> The volume of coupon busine.t.t
which FNS mall rea3onabl11 expect the
finn to do. The FNS officer in charse
may consider such factors as the loca-tion
of a store and previous food sales
volumes in evaluating the ability of an
applicant firm to attract food stamP
business.
<3> The bwine.ts tntegrit11 and repu­tation
of the applicant. The FNS offi­cer
in charge may consider:
<1> Criminal conviction records re­flecting
on the honesty or integrity of
officers or managers of the applicant
firm:
<U> Official records of removal from
other Federal, State, or local pro­grams:
<iii> Judicial determinations in civil
litigation adversely reflecting on the
integrity of officers or managers of
the applicant firm;
<lv> Evidence of an attempt to cir·
cumvent a period of disqualification
from the food stamp program or a civil
money penalty imposed for violations
of the Food Stamp Act and this part:
<v> Evidence of prior fraudulent be­havior
of officers, managers or em­ployees
of the applicant firm: and
<v1> Any other evidence reflecting on
the business integrity and reputation
of t~e applicant.
(4) Bondin1 for /il'lll6 with pl'flvious
•anction•. (i) U the applicant firm hu
been aanctioned for viola tiona of thia
Part. by withdrawal or disqualification
~m prosram participation. or by a civil
money penalty, the FNS omcer-in­c:
harge shalL u a condition of future
authorization. require the applicant to
present a collateral bond which:
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(A) II iaiUed by a bonding agent
recognized under the law of the State ln.
which the applicant ia conducting
business, and which ia represented by a
negotiable certificate only.
(B) Ia payable to the Food and
Nutrition Service, U.S. Department of
Agriculture;
(C) Cannot be canceled by the
bonding agent for non-payment of the
premium by the applicant;
(D) Has a face value of $1,000 or an
amount equal to ten percent of the
average monthly coupon redemption
volume of the applicant for the
immediate twelve months prior to the
effective date of the most recent
sanction which necessitated the bond.
whichever amount is greater;
(E) Is valid at all times during which
the firm is authorized to participate in
the program; and
(F) Remains in the custody of the
officer-in-charge unless released to the
applicant as a result of the withdrawal
of the applicant's authorization. without
a fiscal claim established aga!nst the
applicant by FNS.
(ii) Furnishing a collateral bond shall
not eliminate or reduce a firm'a
oblisation to pay in full any civil money
penalty or previously determined fiscal
cl-.im which may have been asaessed
against the firm by FNS prior to the time
the bond was required by FNS, and
furnished by the firm. A rmn which has
been assessed a civil muney penalty
shall pay FNS as required,· any
aubaequent fiscal claim asserted by
FNS.ID such cases a collateral bond
shall be furnished to FNS with the
payment. or a schedule or intended
payments, of the ci_!il money penalty.
(5) Other /actors. Any other factors
which the FNS officer in charge con­siders
pertinent to the application
under consideration.
<c> WhQlesalers. A wholesale food
concern may be authorized to accept
coupons only from a specified custom-er
or customers if it meets the require­ments
of paragraphs <a> and <b> of this
section, and FNS determines it is re­quired
as a redemption outlet: <1> For
one or more specified authorized drug
addict or alcoholic treatment pro­lt'ams,
<2> for one or more specified
authorized group living arrangements,
<3> for one or more specified author­ized
shelters for battered women and
children, <4> for one or more specified
authorized nonprofit cooperative food­purchasing
ventures, or <5> for one or
more specified authorized retail food
stores which are without access to an
insured financial institution which will
redeem their coupons. No firm may be
authorized tO accept and redeem cou­pons
concurrently as both a retail food
store and a wholesale food concern.
Authorizations of wholesale food con·
cems lt'&nted prior to January 28,
1982 shall expire on May 31, 1982.
Wholesale food concerns desiring to
participate in the program after that
date must reapply for authorization in
accordance with the provisions of this
paragraph.
<d> Meal services. A meal delivery
service or communal dining facility de·
siring to prepare and serve meals to
households eligible to use coupons for.
those meals in addition to meeting the
requirements of paragraphs <a> and
<b> of this section, must establish that:
<1 > It is recognized as a tax exempt
organization by the Internal Revenue
Service: or
<2> It is a senior citizens' center or
apartment building occupied primarily
by elderly persons and SSI recipients,
and their spouses; or
-<3> It is a private estai...!ishment op­erating
under a contract with a State
or local agency to prepare and serve
<or deliver> low-cost meals to elderly
persons and SSI recipients <and, in the
case of meal delivery services, to elder­ly
persons or handicapped persons>
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and their spouses. The contracts of
private establishments must specify
the approximate prices which will be
charged.
<e> Treatment program3. Drug addict
or alcoholic treatment and rehabilita·
tion programs wishing to redeem
through wholesalers food stamps re·
ceived from or on behalf of their par·
ticipants shall in addition to meetina
. the requirements of paragraphs <a>.
<b> and <d><l> of this section, be certi­fied
by the agency or agencies of the
State designated by the Governor as
responsible for the State's programs
for alcoholics and drug addicts under
Pub. L. 91-616, "Comprehensive Alco·
hoi Abuse and Alcoholism Prevention.
Treatment, and Rehabllitation Act of
1970," and Pub. L. 92-255, "Drug
Abuse Office and Treatment Act of
1972," as providing treatment that can
lead to the rehabllitation of drug ad­dicts
or alcoholics. If an alcoholic
treatment and rehabllitatlon program
is located on an Indian reservation and
the State does not certify or license
reservation-based centers, approval to
participate may be granted if the re­quirements
of paragraphs <a>. (b), and
<d><l> of this section are met and the
program either is funded by the Na­tional
Institute on Alcohol Abuse and
Alcoholism <NIAAA> pursuant to Pub.
L. 91-616, or was so funded and has
subsequently been transferred to
Indian Health Service <IHS> funding.
In addition, the certification must
show that the treatment program
meets the standards required of treat­ment
programs under the supervision
of the agency or agencies of the State
designated by the Governor as respon·
sible for the State's programs for alco­holics
and drug addicts. Approval to
participate is automatically cancelled
at any time that a program loses its
certification from the responsible
agency or agencies of the State.
(f) Group living arrangements. FNS
shall authorize as retail food stores
those group living. arrangements wish·
ing to redeem coupons directly
through wholesalers. The group living
arrangement must, in addition to
meeting requirements of paragraphs
<a>• <b>. and <d><l> of this section, · be
certified by the appropriate agency or
agencies of the State under regula­tions
issued under section 1616<e> of
the Social Security Act. Approval to
participate is automatically cancelled
at any time that a program loses its
certification from the State agency or
agencies.
(g) Shelten/or battered women and
children. FNS shall authorize as retail
food stores those shelters for battered
women and children wishing to
redeem coupons directly through
wholesalers. The shelter must be
public or private nonprofit, as defined
in paragraph <d><l> of this section, and
meet the requirements of paragraphs
<a> and <b> of this section. Shelters
which also serve other groups of indi­viduals
must have a portion of the fa­cility
set aside on a long-term basis to
shelter battered women and children.
Also required is that the shelter be a
·residence which serves meals or pro­vides
food to its residents.
(h) HollBe-(D..bouse-tradelDuts& FNS
ahaU..Jn~oniUIJ.a.tnm wi.th the
Department's. Office of Inspector .
General. ~ermine those localiona
where- the operation of trade routes ..
damag~ the program.'t integrity.FNS
may limit the. authorization of houae.-to­houae
trada routes to those trade rou.tea
whose services are requb:ed by . .
participating household& in such. area•
in order to· obtain food. The FNS Officer
In Charge. in deciding. whether . .
households in such area• require a trade
route' a services. shall consider the ·
volume of food busineai the trade route
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does and the availability of alternate
aources of comparable food. An FNS
official ahaU lnapect.any appliant trade
route's vehicle lo llllure that the trade
route is a retail fooclatore before
authorizing It to accept coupons. An
FNS official may require, as a condition
of continuing authorization, that the
trade route vehicle be reinspected
aemiannually to ensure that it continues
to be a retail food store.
<0 Authorization card. Upon approv­al,
FNS shall issue a nontransferable
authorization card to the finn. The
authorization card shall be retained by
the firm until superseded, surren­dered,
or revoked as provided in this
part.
<J> Denying authorization. FNS shall
deny the application of any finn 1! it
determines that:
< 1 > The finn does not qualify for
participation In the program as speci­fied
in paragraphs (b), <c>. <d), and <e>
of this section; or
<2> The finn has failed to pay in full
any fiscal claim assessed against the
firm under § 278.7. The FNS officer in
charge shall issue a notice to the firm
by certified mall or personal service of
any authorization denial and shall
advise the firm that It may request
review of that determination.
<k> Withdrawing authorization. FNS
shall withdraw the authorization of
any firm authorized to participate in
the program If it determines that the
finn's continued participation will not
further the purposes of the program,
or the firm falls to meet the specifica­tions
of paragraph <b>. <c>, (d), or <e>
of this section, or that the finn has
been found to be circumventing a
period of disqualification or a civil
money penalty through a purported
transfer of ownership. The FNS offi­cer.
In charge shall issue a notice to the
-14-
firm by certified mall or penonal aerv­lce
to inform the finn of the detenni­natfon
and of the review procedure.
FNS shall remove the finn from the
pro&Tam If the finn does not request
review within the period specltted In
1279.5.
(I) Refusal to accept correspondencl!
or to respond to inquiries. FNS may
withdraw the authorization or any finn
which:
(1) Refuses to accept correspondence
from FNS:
(2) Faila to respond to inquiries from
FNS within a reasonable time: or
(3) Cannot be located by FNS with
reasonable effort.
(m). Updating in/ormation. FNS may
require, from time to time, but not
more than once each Federal fiscal
year, a firm to update any or all of the
Information on the finn's application
fonn. Failure to provide this Informa­tion
may result In the withdrawal of
the finn's approval to participate In
the program .
. (n). Applications containing laue in­formation.
The filing of any applica­tion
containing false or misleading In­formation
may result In the denial or
withdrawal of approval to participate
In the program and may subject the
firm and persons responsible to civil or
criminal action.
(o) Administrative review. Any with­drawal
or denial of authorization to
participate in the program shall be
subject to administrative review under
1278.8.
(p) Safeguarding privacy. The con­tents
of applications or other informa·
tion furnished by firm=. including in­formation
on their gross sales and
food sales volumes and their redemp­tions
of coupons, may not be used or
disclosed to anyone except for pur·
poses directly connected with the ad­ministration
and enforcement of the
Food Stamp Act and these regulations.
Such purposes shall not exclude the
audit and examination of such infor­mation
by the Comptroller General of
the United States authorized by any
other provision of law.
(q} Each authorized retail food atore
ahall poat in a suitable and conspic...aua
location in the store a sign designed and
provided by FNS which provides
information on bow persons may report
abuses they have observed in the
operation of the program. Refusal or
repeated failure to display such a sip
by an authorized retail food store may
result in the withdrawal of the firm'•
approval to participate in the proRfam.
I 278.2 Participation or retail food storet.
(a) Use of coupon!. Coupona may be
accepted by an authorized retail food
atore only from eligible households or
the bouaeholda' authorized
representative. and only in exchange for
eligible food. Coupons may not be
accepted in exchange for cash. except
when caah is returned as change ln a
transaction in which coupons were
accepted in payment for eligible food
under pargraph (d) of this section.
Coupona may not be accepted in
payment of interest on \oana or for any
other nonfood use. An authorized retail
food atore may not accept coupon• from
another retail food atore.
<b> Equal treatment /or coupon cu.t·
tomers. Coupons shall be accepted for
eligible foods at the same prices and
on the same terms and conditions ap­plicable
to cash purchases of the same
foods at the same store. However,
nothing in this part may be construed
as authorizing FNS to specify the
prices at. which retail food stores may
sell food. No retail food store may
single out coupon users for special
treatment ln any way.
<c> Accepting coupons. No author­ized
retall food store may accept cou­pons
marked "paid," "canceled" or
"specimen." Nor may a retail 'food
store accept coupons bearing any can­cellation
or endorsement, or coupons
of other than the 1-dollar denomina­tion
which have been detached from
the coupon books prior to the time of
purchase or delivery of eliiible food
unless the detached coupons are ac­companied
by the coupon books which
bear the same serial numbers that
appear on the detached coupons. It ls
the risht of the household member or
the authorized representative to
detach the coupons from the book.
<d> Ma.king change. An authorized
retall food store shall use, for the pur­pose
of makinl chanse. uncanceled
and unmarked 1-dollar coupons which
were previously accepted for ellllble
foods. If change ln an amount of less
than 1-dollar ls required, the ellllble
household shall receive the change ln
cash. At no time may cash chanse ln
excess of 99 cents be returned ln a
coupon transaction. An authorized
retall food store may not ensase ln a
series of coupon transactions the
purpose of which .Ia to provide the
same food stamP cus·tomer an amount
of cash change creater than the
maximum 99 cents cash change allowed
ln one transac· tlon.
<e> Accepting coupon.t be/ore deliv·
e111. Food retallers may not accept cou­pons
before delivering the food. retain
custody of any unspent coupons, or ln
any way prevent an eligible household
from using coupons ln makinr pur­chases
from other authorized firms.
However, a nonprofit cooperative food
purchaslnl venture may accept cou­pons
from a member of the coopera­tive
at the time the member places a
food order. The food ordered must be
made available to the member within
14 days from the day the cooperative
receives the member's coupons.
<f> PaVing credit accounts. Coupons
may not be accepted by an authorized
retail food store in payment for any
ellglble food sold to a household on
credit.
(g) Redeeming coupons. Authorized
retail food stores may exchange cou­pons
in accordance with this part for
face value upon presentation through
the banking system or through a
wholesale food concern authorized to
accept coupons from that retailer. Au­thorized
drug addict or alcoholic treat­ment
and rehabilitation programs.
group· living arrangements, and shel­ters
for battered women and children
may present coupons for redemption
through authorized wholesale food
concerns. A drug addict or alcoholic
treatment center, group living ar­rangement.
or shelter for battered
women and children may purchase
food in authorized retail food stores as
the authorized representative of its
participating households. Authorized
drug addict and alcoholic treatment
and rehabilitation programs, group
living arrangements, and shelters for
battered women and children shall not
present coupons directly to an insured
financial institution for redemption . .
<h> Identifying coupon users. Cou­pons
may not knowingly be accepted
from persons who have no right to
possession of coupons. If a food retaU­er
has any cause to believe that a
person presenting coupons has no
right to use the coupons. the food re­tailer
should request the person to
show the ID card of the household to
establish the right of that person to
use the coupons. Where photo m
cards are in use, the person presentinr
the ID card need not be pictured on
the card.
<1> Checking meal deliveT'JI service re­cipients.
A nonprofit meal delivery
service shall require the recipient of a
delivered meal to show the marked m
card establishing the recipient's rlrht
to use coupons for that service the
first time that the recipient offers cou­pons
in payment for the service, and
shall request the marked ID card ai.t
any time the nonprofit meal delivery
service has cause to question the con­tinued
eligibility of the recipient to
use coupons for delivered meals.
<J> Checking hunting and fishing
equipment users. Authorized Alaskan
retailers shall require coupon custom­ers
wanting to purchase hunting and
fishing equipment with coupons to
show their ID cards to determine that
they live In an area designated by FNS
as one in which persons are dependent
upon hunting and fishing for subsist­ence.
<k> Checking participants in restau­rants.
A restaurant operating under a
State contract shall require a house­hold
purchasing meals to show the
marked ID card establishing the
household•s right to purchase meals
with coupons unless the personnel of
the restaurant know that the program
participant tendering coupons is eligi­ble
to use coupons to purchase meals.
I 278.3 Partlelpation of wholesale food
c:oneems.
<a> Accepting coupons. An author­ized
wholesale food concern may
accept endorsed coupons from one or
more specified authorized retail food
stores. from one or more specified au­thorized
nonprofit cooperative food­purchasing
ventures. from one or more
specltled authorized group living ar­rangements,
from one or more speci­fied
authorized drug addict or alcohol­ic
treatment programs. or from one or
more specified authorized shelters for
battered women and chlldren lf the
coupons. are accompanf~<i by a proper­ly
filled-out and signed redemption
certificate, and are not marked "paid, ..
"canceled:' or "specimen." A wholesal­er
authorized to accept coupons from
an authorized drug addict or alcoholic
treatment proaram. or fro~ an au-
-16-
thorized IJ"OUP llvini a.rrangment, or
from an authorized shelter for bat·
tered women and children, may accept
coupons from that treatment program,
or if'OUP llvini arrangement, or shel·
ter for battered women and children,
only in exchange for food.
<b> Accepting legally obtained cou­pons.
No authorized wholesale food
concern may accept coupons if the
wholesaler knows or has reasonable
cause to believe that the coupons were.
not legally obtained for eligible food.
<c> Redeeming coupons. An author·
ized wholesale food concern may
redeem coupons, properly accepted
from retailers, through the banking
system, upon presentation of the cou­pons
with:
< 1 > The authorized retail food store's
properly filled-out and signed redemp­tion
certificate for the coupons; and
<2> The authorized . wholesale food
concern's properly filled-out and
signed redemption certificate.
<d> Handling retailer redemption
certificates. No authorized wholesale
food concern may alter, prepare, or
complete an authorized retail food
store's redemption certificate.
§ 278.4 Procedure for red.e eming coupons.
<a> Coupons accepted without au­thorization.
Coupons accepted by a
retail food store or a wholesale food
concern before the receipt by the firm
of an authorization card from FNS
may not be presented for redemption
unless the FNS officer in charge has
approved the redemption under
1278.7<b>. Burned or mutilated cou·
pons shall be presented for redemp·
tion to the FNS officer in charge as
provided in§ 278.7<c>. ·
<b> Endorsing coupons. Each author­ized
retail food store or authorized
wholesale food concern shall mark its
authorization number or name on
each coupon before it presents the
coupons for redemption.
<c> Using redemption cert1/f,ca.tu.
FNS will provide all authorized firms
with redemption certificates. Whole­sale
food concerns and retail food
stores, except for drug addict and alco·
holic treatment and rehabUitation
programs, shall use the redemption
certificates to present coupons to In­sured
financial institutions for credit
or for cash. All retaU food stores
which wish to redeem coupons at
wholesale food concerns shall use the
redemption certificates for that pur­pose.
An authorized retail firm using
redemption certificates to redeem cou­pons
shall fill out the redemption cer­tificate
to show the value of the cou­pons
redeemed, the name of the in·
sured financial institution or wholesal·
er, the date, and the signature and
title of the official of the firm redeem­ing
coupons.
I 278.5 Participation of ln1ured financial
institutions. ·
(a) Accepting coupons. {1) Financial
Institutions that are inlured by the
Federal Deposit Insurance Corporatioo
(FDIC) or the Federal Sa\ings and Loan
lnsurance Corporation (FSUC) may
redeem coupons only from authoriZed
retail food stores. meal aenicea. and
wholesale food concerns in accordance
with the rules contained in tAia Part and
instructions of the Federal Reserve
Banka. Coupons tubmitted to insured
financial institutions for credit or cash
must be properly endorsed in
accordance with I .278.f of this part and
shall be accompanied by a properly
completed and aign.ed redemption
certificate.
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{2) An insured fmanciaJ institution
thall verify the amount of the coupona
being redeemed by recording its count
on .the redemption certificate. The count
may either be encoded to permit
Magnetic Ink Olaracter Recognition
(MlCR} or handwritten. However.
fmancial institutions are encouraged to
MJCR encode the count-Redemption
certificates accepted by insured
finandal institutions shall be forwarded,
with the corresponding coupon deposita,
to the Federal Reserve Bank along with
the transmitting Food Coupon Deposit
Document {Form FNS-5%1).
(3) Redeemed coupons must be
indelibly cancelled on the lace o! the
coupoo by the fim insured financial
institution receiving them. U the
cancellaUon on the coupon face does
not show·the depositing institution's
name or lla routing symbol transit
number. thla identifying Information
must appear on the straps affixed to
each bundle of coupons of like
denomina lion. Deposit~ not meeting
these cancellation requirements may be
returned to the depositing institution for
reprocessing. A portion of a coupon
consisting of less than three-fifths of a
whole coupon may not be redeemed.
(4) Insured fmanclal institutions which
are members of the Federal Reserve
System. Insured nonmember clearing
institutions. and insured nonmember
institutions which have BlTm,ed with a
Federal Reserve Bank to deposit
coupon~ for credit to the account of a
member institution-on the boob of a
Federal Reserve Bank may forward
coupons directly to the Federal Reserve
Bank. Other insured financial
irutitutions may forward cancelled
coupons through ordinary collection
channels.
<b> Role o/ FeiUral Reseroe Ba.nkl.
Federal Reserve Banks, acting as fiscal
aaents of the United States, wlll re­ceive
canceled cQupons for collection
as cash Items from armed forces In­stallations.
member Insured financial
Institutions of the Federal Reserve
System, nonmember clearing Insured
financial Institutions, and nonmember
Insured financial Institutions which
have arranged with a Federal Reserve
Bank to deposit coupons for credit to
the account of a member Insured fi­nancial
Institution on the books of the
Federal Reserve Bank, and will charge
those items to the general account of
the Treasurer of the United States.
(c) FNS liDbUity for Joaes. FNS ahaU
not be liable for the value of any
coupona loat. atolen. or destroyed while
Ia the cuatody of an inllll'ed financial
wtitutioa or for the value of coapona
lost. stolen. or destroyed while in tranait
from an iuured financial iDstitution to a
Federal Reaerve Bank.
(d) FNS we o/ coupon.t to iUtect vio­la.
tton.t. Regardless of any other provi­sion
In these regulations, coupons may
be Issued to, purchased by. or re­deemed
by persons authorized by FNS
to use those coupons In examtnlna and
Inspecting program operations, and for
other purposes determined by FNS to
be reQuired for proper administration
of the program. Coupons which have
been so Issued and used, as well as any
coupons which have been Issued under
paragraph (g) of this section, or which
FNS believes may have been Issued,
transferred, neaotiated, used, or re-ceived
In violation of this subchapter
or of any applicable statute, shall at
the reQuest of FNS and on Issuance of
a receipt for them be turned over to
FNS by the Insured financial Institu­tion
receiving the coupons, or by any
other person to whom the reQuest Is
addressed, toaether with any
-18-
certificate<s> of redemption accompa·
nying the coupons. Any coupons so re·
quested shall not be eligible for re·
demption through Federal Reserve
Banks or other collection channels.
However. FNS may redeem coupons
from any insured financial institution
or person by payment of the face
amount of the coupons upon determi·
nation by FNS that this direct re·
demption of coupons is warranted.
FNS shall determine the proper dispo­sition
of any coupons held by FNS on
completion of the examination or in·
spectlon in which the coupons were
used. Claims or demands for unre­deemed
coupons surrendered to FNS
may be mailed to the local FNS field
office for the project area involved.
(e) Selling coupons to 1tores for tn·
ternal checks. FNS may sell coupons at
face value to any authorized retall
food store which wishes to use cou­pons
to conduct internal checks of
coupon transactions. The retail food
store must submit a written request to
FNS which shall include a certifica· ·
tion that the store recognizes that its
use of coupons will not affect FNS
action to enforce program regulations
and that the requested coupons wlll be
used only for internal checks of the
store's employees and only to uncover
sales of items other than eligible
foods. The request shall also include
the name of the city or county in
which the stores to be checked
through the use of the requested cou­pons
are located and the name and ad­dress
of any outside agency with
which the retail food store has or ~111
have a contract to conduct checks 'of
the store's employees using coupons.
The request shall be directed to the
Coupon Issuance and Redemption Unit,
FNS, U.S. Department of Agriculture,
3101 Park Center Drive, Alexandria,
Virginia, 22302, and shall be
accompanied by a check or money
order made payable to the Food &nd
Nutrition Service to cover the face
value cost of the coupons requested.
Coupons bought by retall food stores
for use in internal checks may be later
redeemed for full value in accordance
with 1 278.4. and in redeeming those
coupons. retail food stores are author­ized
to make the certi!lcatlon required
for redemption.
ct> Continued parttcipation of
howeholds under investtgation. Upon
the written request of Federal, State.
or local government agencies which
have authority to investigate. and are
Investigating. suspected violations of
Federal or State statutes concer.nlng
the enforcement of the Food Stamp
Act or the regulations, the State
agency may allow ineligible house­holds
to continue program participa­tion.
The State agency may allow the
households to continue participation
In the program until the earlier of < 1 >
expiration of the period of 90 days
after the request is received or any
longer period which FNS, upon re·
quest of the State agency. may ap­prove
in a particular case. or <2> re­ceipt
of notification from the investi·
gative agency that participation may
be terminated or that the investiga­tion
has been completed. Regardless of
any other provision of these regula­tions.
FNS may not hold the State
agency liable for the value of any cou­pons
issued to households under this
paragraph.
1278.6 DiAqualification of retail food
stores and wholesale food concerns,
and imposition of civil money penalties
ln lieu of disqualifications.
(a) Aulliority to disquall1y oz •ubjea
to a civil money penalty. FNS may
disqualify any authorized retail food
store or authorized wholesale food
-19-
.concern from further participatron tn the
.program if the firm fails to compfy with
:the Food Stamp Act or this pad.
·Disqualification shall be for from 6
months to S·yeats.for the firm'a.first
.sanction; for from 12 month• to-tO years
·for a fii'Dl;~a second sanction; and:
disqualification shall be perman~tfol"a
finn' a third sanction or a
disqualification based on trafficJdng in.
couponl o.r ATP. rstrds. Anv fum . which
has been disqualified and which wishes
to be reinstated at the end of the period
of disqualification or at any later time
shall file a new application under
Section 278.1 of this part so that FNS
may determine whether reauthorization
is appropriate.
The application may be filed no
earlier than 10 days before the end of
the period of disqualification. Except in
the case of a permanent disqualification.
FNS may, in lieu of a disqualification.
subject the firm to a civil money penalty
of up to $10,000 for each violation if FNS
determines that a disqualification would
cause hardship to participatill8
households.
<b> Charge letter. Any firm consid­ered
for disqualification or Imposition
of a civil money penalty under para­graph
<a> of this section shall have
full opportunity to submit to FNS in­formation.
explanation, or evidence
concerning any Instances of noncom­pliance
before FNS makes a final ad­ministrative
determination. The FNS
regional office shall send the firm a
letter of charges before the determina­tion.
The letter shall specify the viola­tions
or actions which FNS believes
constitute a basis for disqualification
or Imposition of a civil money penalty.
The letter shall ·inform the firm that
it may respond either orally or in writ-ina'
to the charges contained in the
letter within 10 days of receiving the
letter. The firm's response shall Jet
forth a statement of evidence, infor­mation,
or explanation concerning the
specified violations or acts. The firm
shall make its response, if any, to the
officer in charre of the FNS fleld
office which has responsibWty for the
proJect area in which the firm fa locat­ed.
<c> Revf.ew of evidence. The letter of
charges, the response, and any other
information available to FNS shall be
reviewed and considered by the appro­priate
FNS regional office, which shall
then issue the determination.
<d> Ba..si& /or detenn'ina.Uon. The
FNS rertonal office making a dfsquall­ficatlon
or penalty determination shall
consider: < 1 > The nature and scope of
the violations committed by personnel
of the firm, <2> any prior action taken
by FNS to warn the firm about the
possibfUty that violations are occur·
ring, and <3> any other evidence that
shows the firm's intent to violate the
regulations.
<e> Penaltiu. FNS shall take action
as follows against any firm determined
to have violated the Act or regula­tions.
For the purposes of assigninr a
period of disqualification, a warninr
letter shall not be considered to be a
sanction. A civil money penalty and a
disqualification shall be considered a
sanction for such purposes. The FNS
regions.l office shall:
< 1 > Disqualify the linn permanently
if:
(i) Personnel of the firm have
trafficked in coupons or A TP cards: or
<11> Violations such as, but not limit­ed
to, the sale of ineligible items oc­curred
and the firm had twice before
been sanctioned.
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•
<2> Disqualify the firm for 5 years lf
it is to be the firm's first sanction, the
firm had been previously advised 'Of
the possibUlty that violations were oc­curring
and of the possible conse­quences
of violating the regulations,
and the evidence shows that:
<1> It is the firm's practice to sell ex­pensive
or conspicuous nonfood items,
cartons of cirarettes, or alcoholic bev­erages
in exo~ange for food coupons:
or
(ll) The firm's coupon redemptions
for a speclfied period of time exceed
its food sales for the same period of
time; or
(111> A wholesale food concern's re­demptions
of coupons for a speclfied
period of time exceed the redemptions
of all the specified authorized retail
food stores, nonprofit cooperative
food-purchasinr ventures, group livinr
arrangements, drur addict and alco­holic
treatment programs, and shel­ters
for battered women and children
which the wholesale food concern was
authorized to serve durinr that time;
or
Civ> A wholesale food concern's
stated redemptions of coupons for a
particular retail food store, nonprofit
cooperative food-purchasinr venture,
group Uvtnr arranrement. drur addict
and alcoholic treatment program, or
shelteJS for battered women and chil­dren
exceeded the actual amount of
co.upons which that firm or organiza­tion
redeemed through the wholesaler;
or .
<v> Personnel of the firm knowinrlY
accepted coupons from an unauthor­ized
firm or an individual known not
to be legally entitled to possess cou­pons.
C3> Disquallfy the firm for 3 years lf
it is to be the ·first sanction for the
firm and the evidence shows that:
<1> It is the firm's practice to commit
violations such as the sale of common
nonfood items in amounts normally
found in a shopping basket and the
firm was previously advised of the pos­sibility
that violations were occurring
and of the possible consequences of
violating the regulations; or
<U> Any of the situations described
in paragraph <e><2> of this section oc­curred
and FNS has not previously ad­vised
the firm of the possibUlty that
violations were occurring and of the
possible consequences of violating the
regulations: or
<Ui> The firm is an authorized com­munal
dining facUlty, drug addiction
or alcoholic treatment and rehablllta­tion
program, group living arranie­ment,
meal delivery service, or shelter
for battered women and children and
it is the firm's practice to sell meals in
exchange for food coupons to persons
not ellrible to purchase meals with
food coupons and the firm had been
previously advised of the possiblllty
that violations were occurring and of
the possible consequences of violating
the regulations: or
<tv> A wholesale food concern accept­ed
coupons from an authorized firm
which it was not authorized to serve
and the wholesale food concern had
been previously advised of the possibil­ity
that violations were occurring and
of the possible consequences of violat­inr
the regulations: or
<v> The firm is an authorized retail
food store and personnel of the firm
have engaged in food coupon transac­tions
with other authorized retail
stores, not including treatment pro­grams,
group livinr arranrements or
shelters for battered women and chil­dren,
and the firm had been previous­ly
advised of the possiblllty that viola-
-21-
tlorus were occurrln& &nd of the possi­ble
consequences of violating the regu­lations.
<4> Disqualify the firm for 1 year lf
It Is to be the first sanction for the
firm and the ownership or manage­ment
personnel of the firm have com­mitted
violations such as the sale of
common nonfood items in amounts
normally found in a shopping basket,
and FNS has not previously advised
the firm of the possiblllty that viola­tions
were occurring and of the possi­ble
consequences of violating the regu­lations.
<5> Disqualify the firm for 6 months
If it is to be the first sanction for the
firm and the evidence shows that per­sonnel
of the firm have committed vio­lations
such as but not limited to the
sale of common nonfood items due to
carelessness or poor supervision by the
firm's ownership or management.
<6> Double the appropriate period of
disqualification prescribed in para­graphs
<e> <2> through <5> of this sec­tion
as warranted by the evidence of
violations if the same firm has once
before been assigned a sanction.
<7> Send the firm a warning letter if
violations are too limited to warrant a
disqualification.
<f> Criteria for civil money penalty.
FNS may impose a civil money penalty
as a sanction in lieu of disqualification
only when the firm subject to a dis- ·
qualification is selllng a substantial va­riety
of staple food items, and the
firm's disqualification would cause
hardship to food stamp households be­cause
there Is no other authorized
retail food store in the area selling as
large a variety of staple food items at
comparable prices. FNS may disquali­fy
a store which meets the criteria for
a civil money penalty if the store had
previously been assigned a sanction. A
civil money penalty may not be im­posed
in lieu of a permanent disquali­fication.
<g> Amount of civil money penaltv.
FNS shall determine the amount of
the civil money penalty as follows:
< 1 > Determine the firm's averare
monthly redemptions of couporus tor
the 12-month period ending with the
month immediately preceding that
month durini which the firm was
charied with violations.
<2> Multiply the average monthly re·
demptfon figure by 10 percent.
(3) Multiply the product arrived at
in paragraph <g><2> by the number
of months for which tlle firm would
have been disqualified qnder oaragraph
<e>of this section. The civil money penalty
may not exceed $10,000.for each
violation.
(b) Notifying th~ firm of civil mont'y
fH!nally. A finn ha1 15 days from the
date the FNS regional office notifies the
rltlll in writing in which to pay the civil
money penalty, or to notify the regional
office in writing of ita intent to pay in
installments as specified by the regional
office. The finn must present to FNS a
collateral bond as specified in
I 218.t(b)(4), within the same 15-day
period. The civil money penalty must be
paid in full by the end of the period for
which the finn would have been
disqualified. FNS ahall:
(1) Disqualify the tll'lll for the period
detei'DUned to be appropriate under
paragraph (e) of this section if the firm
refuaes to pay any of the civil mcney
penalty:
(2) Diaqualify the rmn !or a period
corresponding to the unpaid part of the
civil money penalty if the firm does not
. pay the civil money penalty in full or in
installment• as specified by the FNS
regional office: or
(3) Disqualify the tll'lll for the
prescribed period if the firm does not
present a coliDteral bond within the
retfuired 15 days. Any payment on a
civil money penalty which have been
received by FNS shall be returned to the
firm. If the firm presents the required
bond during the disqualification period.
the civil money penalty may be
reinstated for the duration of the
disqualification period.
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•
<l> Revie1D of determination. The de·
tennlnation of the FNS regional office
shall be final and not subject to fur·
ther administrative or judicial review
unless a written request for review is
filed within the period stated in
I 279.5. <J> Delivery of notice. The delivery
by certified mall or personal service of
· any notice required of FNS by this
part will constitute notice to the ad·
dressee of its contents.
1%78.7 Determination and disposition of
claims-retail food atore1 and whole­sale
food eoncema.
(a) Claims against violators. FNS may
establish and pursue claims against
rums or other entities which have
accepted or redeemed coupons in
violation of the Food Stamp Act or this
Part regardless of whether the firma or
entities are authorized to accept food
stamps. If a firm fails to pay a claim.
FNS may collect the claim by offsetting
against am,ounts due the firm oR
redemption of other coupons or by
deducting the amounts due from bonds
posted by firms in compliance with the
provisions of I 278.1(b){4). FN~ sh~ll
deny an application for auth~nzation or
reauthorization by a firm wh1ch has
failed to pay a claim.
{b) Forfeiture of a collateral bond. U
FNS establishes a claim apinst an
authorized firm which haa previously
been sanctioned. collection of the daim
may be through total or partial forfeiture
of the collateral bond. U FNS determines
that forfeiture is required for collection
of the claim. FNS shall take one or more
of the followtna ~ctiona. as appropriate.
(1) Determine the amoUJ:lt of the bond
to be forfeited on the basis of the loss to
the Government through vlolationt of
the act. and this Part. u detailed in a
letter of charges to the finn:
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(2) Send written taotlllcation by
c:ertifted mall-return receipt requested to
the ftnD and the bonc:Una asent. of FNS'
determination resardina forfeiture of all
or a specified part of the collateral bond.
and the reaaona for the forfeiture:
(3) Advise the f1rm and the bondina
asent of the ftrm•s rlaht to .
adminiatrative rwvtew of the claim
determinatioa:
(4) AdviH the firm and the bondlna
aaent that II payment of the current
claim II not received dlrectly from the
ftrm. FNS shall obtain full pa)'IDnt
throuab forfeitun of the band:
(S) Proceed with collection on the
bond for the amount forfeited II a
nrquest for review il DOt flied by the
firm within the period ntablished in
I 218.5. or linch review il ~ucceasful:
ud
(8) Upon the expiration of time
permitted for the fllina of i request for
administratve and/or judicial review,
deposit the bond tn a Federal Reserve
Bank account or in the Treasury
Account. General. U FNS requires only a
portion of the face value of the bond t'o
eatisfy a daim. the entire bondz·
negotiated. and the remaining amo t
returned to the firm.
(C) Coupons accepted thout au·
thorization. . < 1 > The FNS officer in
eharie may approve the redemption ·
under 1 278.4 of coupons accepted by
firms before the receipt of an author!·
zation card from FNS if the followinc
conditions exist:
<U The coupons were received in ac­cordance
with the requirements of
this part governing acceptance of cou­pons
except the requirement that the
firm be authorized before acceptance:
<li> The coupons were accepted by
the finn ln iOOd faith. and without
intent to circumvent this part: and
<111> The firm receives authorization
to participate in the program.
<2> Firms seekinc approval to
redeem coupons accepted without au·
thorization shall present a written ap-
plication for approval to the local FNS
field office. This application shall be
accompanied by a written statement
signed by the firm of all the facts
about the acceptance of the coupons.
The statement shall also include a cer­tlfication
that the coupons were ac­cepted
in good faith, and without any
intent to circumvent this part.
<d> Burned or mutilated coupon&.
FNS may redeem burned or mutilated
coupons only to the extent that the
Bureau of Engravin2 a.nd Printing of
the United States Treasury Depart­ment
can determine the value of the
coupons. The firm presenting burned
or mutilated coupons for redemption
shall submit the coupons to the local
. FNS field office with a properly filled­out
redemption certificate. In the sec­tion
of the redemption certificate for
entering the amount of coupons to be
redeemed, an estimate of the value of
the burned or mutUated coupons sub­mitted
for redemption shall be entered
if the exact value of the coupons 1s un­known.
The phrase .. Deputy Adminis­trator
for Fiscal Management, FNS,
USDA," should be entered in the sec­tion
of the redemption certificate for
entering the name and address of the
Insured financial Institution
or wholesaler.
<e> Old 1eriu coupon&. FNS may
redeem the old series food coupons
Issued in 50-cent, 2-dollar, and 5-dollar
denominations when they are present­ed
for redemption. Firms presenting
the coupons for redemption shall
submit the coupons to the local F'NS
field office with a properly completed
redemption certificate and a written
statement, signed by a representative
of the firm, detailing the circum­stances
of the acceptance of the cou­pons.
<f> Denials of claim1 brousht by .
authori_ztldfirms asafnst FNS. u·a.claim.
brousht hy a rarm against FNS wr~er. ~is
aection la denied in whole or in part,
notification of this action shan be aenf
to the.flnn by certified mail or personal
aefvice. Jl .the rum Ia agrieved by this
action. it may seek administrative
review as provided .in· I 278.8.
<r> Lost or stolen coupons. FNS may
not be held liable for claims from
retail food stores, meal services, or
wholesale food concerns for lost or
stolen coupons.
1271.1 Admlnlatratlve revlew...,.etall food
atorea and wholesale food concema.
(a) Requesting review. A food retailer
or wholesaler aggrieve~ by
administrative action under II 278.1,
278:6 or 278.7 may. within the p~riod
stated in 1279.5, file a written request
for review of the administrative action
with 'the revidw 1 offi~er. On receipt of the
request for review, the questioned
administrative action shall be stayed
pending disposition of the request for
review by the review officer. A .
disqualific'ation for failure to pay a Civil
money penaltY shall not be subject to an
administrative review.
(b) Addressing the request. The
request for review shall be filed with tht
Director, Administrative Review
Division, U.S. Department of .
Agriculture,· Food 8i1.ti .Nu.trition. Service.
Room 304,. 3101 Park Center Diive,
Alexandria, Virginia 22302.
(c) Review proceaure. The proced~
for food stamp-reviews is published in
Part 279 and is available upon request
from the Director, Administrative ·
Review Division.
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...
•
t 278.1 Implementation of amendments
relating to the participation of retail food
atore1, wholesale food concem• and
Insured flnanclallnaUtutlona.
(a) Amendment No. 224. Retail food
stores shall have signs posted as
required by this amendment no later
than 30 days after distribution of the
signs by FNS .
(b) Amendment No. 257. With the
exception of the provisions in I 278.5
requiring redeeming fmancial
institutions to verify that coupons are
supported by redemption certificates,
the revisions to Part 278 shall be
effective September 14. 1984. Re~eeming
fi~ancial institutions shall ;begin
verifying coupon deposits as required by
I 278.5 in accordance with the schedule
determined by the Federal Reserve
Board. Insured financial institutions
shall adhere to preexisting requirements
for handling redemption certificates (at 1
CFR 278.5{a)) until their Federal Reserve
District implements the procedures
contained in this final rule. FNS shall
not be llable for any losses of coupons
in transit' to Federal Reserve Banks or as
a result of a burglary or robbery of an
insured financial institution which occur
after September 14. 1984.
PART 279-ADMINISTRATIVE AND
JUDICIAL REVIEW-FOOD RETAIL­ERS
AND FOOD WHOLESALERS
Subpart A-Admlnlatratlve Review-General
Sec.
2'79.1 Scope and purpose.
2'79.2 Food stamp review officer.
279.3 Authority and Jurisdiction.
· 279.4. Rules of procedure.
Subpart 1-Rulea of Procedure
279.5 Manner of filing requests for review.
279.6 Content of request for review.
279.7 Action upon receipt of a request for
review.
279.8 Determination of the food stamp
review officer.
279.9 Legal advice and extensions of tlme.
Subpart C-Judlclal Review
279.10 Judicial Review.
279.11 Implementation of amendments
relating to administrative and
judicial review.
Subpart A-Administrative Review­General
I 279.1 Scope add purpose.
Subpart A sets forth the procedure
for the designation of the food stamp
review officers and the authority and
Jurisdiction of those officers. Subpart
B states the rules of procedure to be
followed in the fllinr and disposition
of the requests for review provided for
in I 278.8. Subpart C concerns the
rirhts of food retallers and food
wholesalers to Judicial review of the
final determinations of the food stamp
review officer.
I 219.2 Food atamp review officer.
<a> Duigna.tion of review o//ieen.
The Administrator, FNS, shall desig­nate
one or more persons to act as
food stamp review officers.
<b> .A&Signing ccuu to review officer&.
The officers shall serve for periods
which the Administrator. FNS. shall
determine. Chanres .ln designations
and additional designations may be
made from time to time at the discre­tion
of the Administrator, FNS. When
more than one food stamp review offi­cer
has been designated, requests for
review will be assigned for handling tp
Individual food stamp review officers
by a person designated by the Admin­istrator,
FNS. The names of the food
stamp review officers shall be on flle
ln the Office of the Administrator,
FNS.
I 279.3 Authority and jurisdiction.
<a> Jurisdiction. A food stamp
review officer shall act for the Depart­ment
on requests for review filed by
firms aggrieved by any of the follow­ing
actions:
<1) Denial of an application or with­drawal
of authorization to participate
ln the program under 1 278.1;
(2) Diaqualification from participation
in the program or impoaition of a civil
money penalty under I 218.6;
(3) Denial of alJ or part of any claim
asserted by a t1m1 against FNS under
I %78.7 (c), (d) , or (e);
(4) Assertion of a claim under
I 278.7(a): or
(5) Forfeiture of part or all of a
collateral bond under I 278.1, if the
request for review it made uy the
authorized firm. The food atamp review
officer shall nnt accept requests for
review made by a bonding company or
tgenL
<b> Authorit)f. The determJnatlon of
the food stamp review officer shall be
the fm&l administrative determination
of the Department. subJect, however,
to Judlci&l review under section If cf
the Food Stamp Act and Subpart C of
thJa part.
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•
'
1279.4 Rules of procedure.
Rules of procedure for the orderly
fUing and disposition of requests for
review of firms submitted in a.ccord·
ance with 1 279.5 a.re issued in Subpart
B of this pa.rt. The Administrator,
FNS, may later issue amendments to
any rules of procedure which a.re ap­propriate.
Subpart 8-Rules of Procedure
I 279.5 · Manner of fillnr requeata for
review.
(a) Ac!dressing requests for review.
Requests for. review submitted by firms
shall be mailed to or filed with Director.
Administrative Review Division, 'U.S.
Department of-Agriculture, Food and
Nutrition Service~ Room 3Q4, 3101 Park
Center Drive, Alexandria, Virginia
22302.
(b) Content of requutl. Requests for
review shall be in writing and shall
state the name and business address of
the firm involved, and the name, ad·
dress and position with the firm of the
person who signed the request. The re­quest
shall be signed by the owner of
the firm, an officer or partner of the
firm, or by counsel, and need not be
under oath.
(c) Time limit {o'r reques_tlng review,. A.
request for review shall be filed with th·
Director, Administrati've Review
Division, within 10.days tif. the' date of
delivery of the notice of the action for
which review is requested. For purpose
of determining whether' a filing date is
timely:
( 1) The filing date shall be the post­mark
date of the request, or equiva­lent
if the written request is filed by a
means other than mail:
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(2) In computing the 10 day period,
the day of delivery of the notice of the
action for which review is requested
may not be included. The last day of
the period so computed shall be in-cludea,
uruess It is a Saturday, a
Sunday, or a legal holiday. In that
case, the period runs until the end of
the next day which is not a Saturday,
a Sunday, or a legal holiday. As used
in this paragraph, "legal holiday" in­cludes
New Year's Day, Washington's
Birthday, Memorial Day, Independ­ence
Day, Labor Day, Columbus Day,
Veterans Day,. Thanksgiving Day,
Christmas Day, and any other day des­tenated
as a holiday by the President
or the Congress of the United States.
I 279.6 Content of request for review.
<a> IdentiJJJing the requut. Requests
for review shall clearly identify the ad­ministrative
action from which the
review is requested. This identification
shall include the date of the letter or
other written communication notify­ing
the firm of the administrative
action. the name and title of the
person who signed the letter or other
communication. and whether the
action under appeal concerns a denial
of an application or a withdrawal of
authorization to participate, a dis­qualification
from further participa­tion,
a civil money penalty, or a denial
of all or any pa.rt of a claim.
<b> Supporttng ~ requut. The re­quest
shall include in.formation in sup­port
of the request showing the
grounds on which review is being
sought, or shall state that supporting
in.formation will be filed in writing at
a later · date. In the latter case, the
review officer shall notify the firm of
the date by which the in.formation
must be filed. The finn. requesting
review may ask for an opportunity to
appear before the review officer in
person. However, any information sub­mitted
in person shall, if directed by
the review officer, be put in writing by
the finn and filed with the review offi­cer
within a period which the review
officer shall specify.
§ 279.7 Action upon receipt of a request
for. r eview.
(a) Holding action. Upon receipt of a
request for review of administrative
action, the review of{icer shall notify the
ap~';Opriate FNS·regional office, in
wr1hng, of the action under review and
shall direct that the administrative'
act~on be held in abeyance \lntil. the
rev1ew Qfficer has made a,
determination. U the
?dministrative action in question
mvolves a denial of approval of an
application to participate in the
program. ~ denial of a claim brought by
a firm a8amst FNS, or the forfeiture of a
collateral bond. the review officer ahi.n
direct that the firm not be approved for
participation. not be paid any part of the
disputed claim. or not be reimbursed for
any bond forfeiture, until the review
officer baa made a detennination.
. liu~~yc~tse, notice to the
appropnate FNS regional 'Office shall be
•_ccompanied. by a copy of, the· request
ftled by the firm. .
(b) FUtng IUpporttng ttV'onn4tton. U
the request tued by the finn includes
a request for an opportunity to tue
written intonnatlon 1n support of Its
position at a later date. the food stamp
review officer shall promptly notUy
the finn of the date by which the in­formation
shall be tued. U the firm
falls to tue any intormatlon 1n support
of Its position by the deslenated date,
the intormatlon submitted with the
ori~al request shall be considered to
be the only ln!ormatlon submitted by
the firm. In that case, It no lntorma­t1on
1n support of the firm's position
wu submitted with the orilln&l re­quest.
the action of the appropriate
JI'NS rqfonal office ahall be flnal.
<c> Failure to meet with review o/fi·
cer. If the firm filing the request for
review asks to appear before the food
stamp review officer in person, the
review officer shall promptly notify
the firm of the date, time and place
set for the appearance. If the firm
fails to appear before the food stamp
review officer as specified, any written
information timely submitted in ac­cordance
with this section shall be
considered to be the only information
submitted by the firm.
<d> Ba3is for regional office determi­nation.
The food stamp review officer
shall require the appropriate FNS re­gional
office to promptly submit, 1n
writing, all information which was the
basis for the admlnf.strative action for
which the review has been requested.
§ 279.8 Determination of the food stamp
review officer.
<a> Ba3is for review officer determi·
nation. The food stamp review officer
shall make a determination based
upon:
C 1 > The information submitted by
the FNS regional office:
<2> Information submitted by the
firm in support of its position: and
<3> Any additional information, 1n
writing, obtained by the review officer
from any other person having relevant
information.
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(b) Revie1D oJ denial of application
or 1Dithdra.wal of approvaL In the case
of a request for review of a denial of
an application or withdrawal of ap­proval
to participate in· the program,
the determination of the food stamp
review officer shall sustain the action
under review or shall direct that the
firm be approved for participation.
(c) Review of disqualification or
civil money penalty. In the case of a
request for review of action disqualify­ing
a firm from participation in the
program or assessing a civil money
penalty against the firm, the determi­nation
of the food stamp review offi­cer
shall sustain the action under
review or specify a shorter period of
disqualification or a reduced civil
money penalty, direct that an official
warning letter be issued to the firm ln
lieu of any period of disqualification
or civil money penalty, or direct that
no administrative action be taken. The
food stamp review officer may change
a disqualification of a firm selling a
substantial variety of staple foods to a
civil money penalty if the review offi­cer
receives information that the dis­qualification
would cause a hardship
to participating households because
there are no other firms in the area
selllrig as large a variety of staple food
items at comparable prices, and this
information was not available to the
regional office when the regional
office made its determination to dis­qualify
the firm. In such a case, the
food stamp review officer, before he/
she makes a determination, shall pro­vide
the information to the regional
office, which shall report to the food
stamp review officer whether the new
information warrants a civil money
penalty ln lieu of disqualification. U
the food stamp review officer deter­mines
that a civil money penalty In
lieu of a disqualification is warranted,
the review officer shall determine the
amount of the penalty In accordance
with I 278.6.
(d) Review of denial of claim. In the
case of a request for review of a denial
of all or part of a claim of a firm, the
determination of the food stamp
review officer shall sustain the action
under . review or shall specify the ·
amount of the claim to be paid by
FNS.
(e) Notice of review officer determi­nation.
The food stamp review officer
shall notify the firm of the determina­tion
by certified mall. The notification
shall be sent to the representative of
the firm who filed the request for
review.
(f) Notifying the regional of/ice. The
food stamp review officer shall send a
copy of the notification to the firm to
the appropriate FNS regional office,
which shall take any action which
may be necessary to comply with the
determination of the review officer.
<g> El/ective date. The determina­tion
of the food stamp review officer
shall take effect 30 days after the date
of delivery of the determination to the
firm.
1 279.9 Legal advice and extensions of
time.
<a> Advice /rom 0//ice of the General
CoumeL If any request for review In­volves
any doubtful questions of law,
the food stamp review officer shall
obtain the advice of the Department's
Office of the General Counsel.
<b> Extemiom of time. Upon timely
written request to the food stamp
review officer by the firm requesting
the review, the food stamp review offi­cer
may grant extensions of time U, In
the review officer's discretion, addi­tional
time is required for the firm to
fully present information In support
of its position. However, no extensions
may be made In the time allowed for
the fillng of a request for review •
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Subpart C-Judlclal Review
I 279.10 Judicial review.
<a> Filing /or Judicial review. A firm
aggrieved by the determination of the
food stamp review officer may obtain
Judicial review of the determination
by !Ding a complaint against the
United States in the U.S. district court
for the district in which the owner re­sides
or Is engaged in business. or In
any court of record of the State
having competent Jurisdiction. The
complaint must be flled within 30 days
alter the date of delivery or service
upon the firm of the notice of deter­mination
of the food stamp review of­fleer
1n accordance with §279.8Ce>:
otherwise the determination shall be
final.
<b> Summons and complaint. Service
of the summons and complaint in any
such action shall be made in accord­ance
with the rules of civil procedure
tor the U.S. district courts. The copy
of the summons and complaint re­quired
by the rules to be served on the
officer or agency whose order Is being
attacked shall be sent by registered or
certified mail to the person in charge
of the applicable regional office of
FNS.
<c> · Trial de novo. The suit In the
U.S. district court or in the State
court. as the case may be. shall be a
trial de novo by the court in which the
court shall determine the validity of
the questioned administrative action.
U the court determines that the ad­ministrative
action Is Invalid. it shall
enter a Judgment or order which it de-.
tennines Is in accordance with the law
and the evidence.
<d> Sta11 o/ action. Pending the Judi­cial
review. or any appeal from the Ju­dicial
review. the administrative action
under review shall remain In force.
unless the firm makes application to
the court and. after a hearing on the
action showing irreparable injury. the
court temporarily stays the admlnls­trative
action under review pending
disposition of the de novo trial or an
appeal from the trial.
Subpart D-lmp&ementatJon
I 279.11 Implementation of amendmenta
relating to admlnlatraUve and judlclcal
review.
Amendment No. 257. The program
change to I 279.3(a)(4) shaJJ be effective
September 14, 1984.
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