Food Stamp Program: Modifying the Limit on Civil Money Penalties for Trafficking in Benefit Redemption Instruments

The Omnibus Budget Reconciliation Act of 1993 includes several provisions which amend the Food Stamp Act of 1977, as amended (the Act). This final rule implements those nondiscretionary provisions pertaining to increased limits for civil money penalties for trafficking in benefit redemption instruments and for selling firearms, ammunition, explosives, or controlled substances for benefit redemption instruments. The intended effect of this rule is to raise the amounts of civil money penalties paid by authorized firms for the types of violations specified.

Background

Section 344 of the Hunger Prevention Act of 1988, PL 100-435, provided the Secretary with authority to impose a civil money penalty (CMP) of up to $20,000 per violation in lieu of a permanent disqualification of a firm for trafficking in food stamps or other program benefit instruments, if the Secretary determines that there is substantial evidence that the firm had an effective policy and program in effect to prevent trafficking violations. Section 1743 of the Food, Agriculture and Trade Act of 1990, PL 101-624, limited the CMP authority to $40,000 over a two-year period, and extended the same authority to firms which exchange firearms, ammunition, explosives or controlled substances for coupons. Current regulations at 7 CFR 278.6(j) specify, in accordance with the Act, that such CMP's shall not exceed $20,000 for each violation, and shall not exceed $40,000 during a two-year period.

Section 13943 of the Omnibus Budget Reconciliation Act of 1993 (PL 103-66) further amends Section 12(b)(3)(B) of the Act 7 USC 2021(b)(3)(B) to modify the monetary cap on CMPs by applying the $40,000 cap to each single investigation, rather than to a two-year period of time. Further, Section 13944 of PL 103-66 amends Section 12(b)(3)(C) of the Act to make the same modification to the $40,000 cap on CMPs for the sale of firearms, ammunition, explosives, or controlled substances for food stamps (or other benefit redemption instruments).

Accordingly, this rulemaking provides at 7 CFR 278.6 that a CMP in lieu of permanent disqualification for trafficking may not exceed $40,000 for all violations occurring during a single investigation. The $20,000 limit per trafficking violation in a single investigation remains unchanged. This rulemaking also makes a conforming change in the definition of trafficking at 7 CFR 271.2. by eliminating unnecessary wording.