[Code of Federal Regulations]
[Title 7 Volume 4]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR273.16]

[Page 733-743]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS--Table of Contents
 
Sec. 273.16  Disqualification for intentional Program violation.

    (a) Administrative responsibility. (1) The State agency shall be 
responsible for investigating any case of alleged intentional Program 
violation, and ensuring that appropriate cases are acted upon either 
through administrative disqualification hearings or referral to a court 
of appropriate jurisdiction in accordance with the procedures outlined 
in this section. Administrative disqualification procedures or referral 
for prosecution action should be initiated by the State agency in cases 
in which the State agency has sufficient documentary evidence to 
substantiate that an individual has intentionally made one or more acts 
of intentional Program violation as defined in paragraph (c) of this 
section. If the State agency does not initiate administrative 
disqualification procedures or refer for prosecution a case involving an 
overissuance caused by a suspected act of intentional Program violation, 
the State agency shall take action to collect the overissuance by 
establishing an inadvertent household error claim against the household 
in accordance with the procedures in Sec. 273.18. The State agency 
should conduct administrative disqualification hearings in cases in 
which the State agency believes the facts of the individual case do not 
warrant civil or criminal prosecution through the appropriate court 
system, in cases previously referred for prosecution that were declined 
by the appropriate legal authority, and in previously referred cases 
where no action was taken within a reasonable period of time and the 
referral was formally withdrawn by the State agency. The State agency 
shall not initiate an administrative disqualification hearing against an 
accused individual whose case is currently being referred for 
prosecution or subsequent to any action taken against the accused 
individual by the prosecutor or court of appropriate jurisdiction, if 
the factual issues of the case arise out of the same, or related, 
circumstances. The State agency may initiate administrative 
disqualification procedures or refer a case for prosecution regardless 
of the current eligibility of the individual. For those persons not 
currently certified to participate in the Program at the time of the 
administrative disqualification or court decision, the disqualification 
period shall take effect immediately after the individual applies for 
and is determined eligible for Program benefits.
    (2) Each State agency shall establish a system for conducting 
administrative disqualifications for intentional Program violation which 
conforms with the procedures outlined in paragraph (e) of this section. 
FNS shall exempt any State agency from the requirement to establish an 
administrative disqualification system if the State agency has already 
entered into an agreement, pursuant to paragraph (g)(1) of this section, 
with the State's Attorney General's Office or, where necessary, with

[[Page 734]]

county prosecutors. FNS shall also exempt any State agency from the 
requirement to establish an administrative disqualification system if 
there is a State law that requires the referral of such cases for 
prosecution and if the State agency demonstrates to FNS that it is 
actually referring cases for prosecution and that prosecutors are 
following up on the State agency's referrals. FNS may require a State 
agency to establish an administrative disqualification system if it 
determines that the State agency is not promptly or actively pursuing 
suspected intentional Program violation claims through the courts.
    (3) The State agency shall base administrative disqualifications for 
intentional Program violations on the determinations of hearing 
authorities arrived at through administrative disqualification hearings 
in accordance with paragraph (e) of this section or on determinations 
reached by courts of appropriate jurisdiction in accordance with 
paragraph (g) of this section. However, any State agency has the option 
of allowing accused individuals either to waive their rights to 
administrative disqualification hearings in accordance with paragraph 
(f) of this section or to sign disqualification consent agreements for 
cases of deferred adjudication in accordance with paragraph (h) of this 
section. Any State agency which chooses either of these options may base 
administrative disqualifications for intentional Program violation on 
the waived right to an administrative disqualification hearing or on the 
signed disqualification consent agreement in cases of deferred 
adjudication.
    (b) Disqualification penalties. (1) Individuals found to have 
committed an intentional Program violation either through an 
administrative disqualification hearing or by a Federal, State or local 
court, or who have signed either a waiver of right to an administrative 
disqualification hearing or a disqualification consent agreement in 
cases referred for prosecution, shall be ineligible to participate in 
the Program:
    (i) For a period of six months for the first intentional Program 
violation, except as provided under paragraphs (b)(2) and (b)(3) of this 
section;
    (ii) For a period of twelve months upon the second occasion of any 
intentional Program violation, except as provided in paragraphs (b)(2) 
and (b)(3) of this section; and
    (iii) Permanently for the third occasion of any intentional Program 
violation.
    (2) Individuals found by a Federal, State or local court to have 
used or received coupons in a transaction involving the sale of a 
controlled substance (as defined in section 102 of the Controlled 
Substances Act (21 U.S.C. 802)) shall be ineligible to participate in 
the Program:
    (i) For a period of twelve months upon the first occasion of such 
violation; and
    (ii) Permanently upon the second occasion of such violation.
    (3) Individuals found by a Federal, State or local court to have 
used or received coupons in a transaction involving the sale of 
firearms, ammunition or explosives shall be permanently ineligible to 
participate in the Program upon the first occasion of such violation.
    (4) The penalties in paragraphs (b)(2) and (b)(3) of this section 
shall also apply in cases of deferred adjudication as described in 
paragraph (h) of this section, where the court makes a finding that the 
individual engaged in the conduct described in paragraph (b)(2) or 
(b)(3) of this section.
    (5) If a court fails to impose a disqualification or a 
disqualification period for any intentional Program violation, the State 
agency shall impose the appropriate disqualification penalty specified 
in paragraphs (b)(1), (b)(2) or (b)(3) of this section unless it is 
contrary to the court order.
    (6) One or more intentional Program violations which occurred prior 
to April 1, 1983 shall be considered as only one previous 
disqualification when determining the appropriate penalty to impose in a 
case under consideration.
    (7) Regardless of when an action taken by an individual which caused 
an intentional Program violation occurred, the disqualification periods 
specified in paragraphs (b)(2) and (b)(3) of this section shall apply to 
any case in which the court makes the requisite finding on or after 
September 1, 1994.

[[Page 735]]

    (8) State agencies shall disqualify only the individual found to 
have committed the intentional Program violation, or who signed the 
waiver of the right to an administrative disqualification hearing or 
disqualification consent agreement in cases referred for prosecution, 
and not the entire household.
    (9) Even though only the individual is disqualified, the household, 
as defined in Sec. 273.1, is responsible for making restitution for the 
amount of any overpayment. All intentional Program violation claims 
shall be established and collected in accordance with the procedures set 
forth in Sec. 273.18.
    (c) Definition of intentional Program violation. For purposes of 
determining through administrative disqualification hearings whether or 
not a person has committed an intentional Program violation, intentional 
Program violations shall consist of having intentionally: (1) Made a 
false or misleading statement, or misrepresented, concealed or withheld 
facts, or (2) committed any act that constitutes a violation of the Food 
Stamp Act, the Food Stamp Program Regulations, or any State statute 
relating to the use, presentation, transfer, acquisition, receipt, or 
possession of food stamp coupons or ATP's.
    (d) Notification to applicant households. The State agency shall 
inform the household in writing of the disqualification penalties for 
intentional Program violation each time it applies for Program benefits. 
The penalties shall be in clear, prominent, and boldface lettering on 
the application form.
    (e) Disqualification hearings. The State agency shall conduct 
administrative disqualification hearings for individuals accused of 
intentional Program violation in accordance with the requirements 
outlined in this section.
    (1) Consolidation of administrative disqualification hearing with 
fair hearing. The State agency may combine a fair hearing and an 
administrative disqualification hearing into a single hearing if the 
factual issues arise out of the same, or related, circumstances and the 
household receives prior notice that hearings will be combined. If the 
disqualification hearing and fair hearing are combined, the State agency 
shall follow the timeframes for conducting disqualification hearings. If 
the hearings are combined for the purpose of settling the amount of the 
claim at the same time as determining whether or not intentional Program 
violation has occurred, the household shall lose its right to a 
subsequent fair hearing on the amount of the claim. However, the State 
agency shall, upon household request, allow the household to waive the 
30-day advance notice period required by paragraph (e)(3)(i) of this 
section when the disqualification hearing and fair hearing are combined.
    (2) Disqualification hearing procedures. (i) State agencies have the 
option of using the same hearing officials for disqualification hearings 
and fair hearings or designating hearing officials to conduct only 
disqualification hearings.
    (ii) The provisions of Sec. 273.15 (m), (n), (o), (p), and (q)(1) 
are also applicable for disqualification hearings.
    (iii) At the disqualification hearing, the hearing official shall 
advise the household member or representative that they may refuse to 
answer questions during the hearing.
    (iv) Within 90 days of the date the household member is notified in 
writing that a State or local hearing initiated by the State agency has 
been scheduled, the State agency shall conduct the hearing, arrive at a 
decision and notify the household member and local agency of the 
decision. The household member or representative is entitled to a 
postponement of the scheduled hearing, provided that the request for 
postponement is made at least 10 days in advance of the date of the 
scheduled hearing. However, the hearing shall not be postponed for more 
than a total of 30 days and the State agency may limit the number of 
postponements to one. If the hearing is postponed, the above time limits 
shall be extended for as many days as the hearing is postponed.
    (v) The State agency shall publish clearly written rules of 
procedure for disqualification hearings, and shall make these procedures 
available to any interested party.

[[Page 736]]

    (3) Advance notice of hearing. (i) The State agency shall provide 
written notice to the individual suspected of committing an intentional 
Program violation at least 30 days in advance of the date a 
disqualification hearing initiated by the State agency has been 
scheduled. If mailed, the notice shall be sent either first class mail 
or certified mail-return receipt requested. The notice may also be 
provided by any other reliable method. If the notice is sent using first 
class mail and is returned as undeliverable, the hearing may still be 
held.
    (ii) If no proof of receipt is obtained, a timely (as defined in 
paragraph (e)(4) of this section) showing of nonreceipt by the 
individual due to circumstances specified by the State agency shall be 
considered good cause for not appearing at the hearing. Each State 
agency shall establish the circumstances in which non-receipt 
constitutes good cause for failure to appear. Such circumstances shall 
be consistent throughout the State agency.
    (iii) The notice shall contain at a minimum:
    (A) The date, time, and place of the hearing;
    (B) The charge(s) against the individual;
    (C) A summary of the evidence, and how and where the evidence can be 
examined;
    (D) A warning that the decision will be based solely on information 
provided by the State agency if the individual fails to appear at the 
hearing;
    (E) A statement that the individual or representative will, upon 
receipt of the notice, have 10 days from the date of the scheduled 
hearing to present good cause for failure to appear in order to receive 
a new hearing;
    (F) A warning that a determination of intentional Program violation 
will result in disqualification periods as determined by paragraph (b) 
of this section, and a statement of which penalty the State agency 
believes is applicable to the case scheduled for a hearing;
    (G) A listing of the individual's rights as contained in 
Sec. 273.15(p);
    (H) A statement that the hearing does not preclude the State or 
Federal Government from prosecuting the individual for the intentional 
Program violation in a civil or criminal court action, or from 
collecting any overissuance(s); and
    (I) If there is an individual or organization available that 
provides free legal representation, the notice shall advise the affected 
individual of the availability of the service.
    (iv) A copy of the State agency's published hearing procedures shall 
be attached to the 30-day advance notice or the advance notice shall 
inform the individual of his/her right to obtain a copy of the State 
agency's published hearing procedures upon request.
    (v) Each State agency shall develop an advance notice form which 
contains the information required by this section.
    (4) Scheduling of hearing. The time and place of the hearing shall 
be arranged so that the hearing is accessible to the household member 
suspected of intentional Program violation. If the household member or 
its representative cannot be located or fails to appear at a hearing 
initiated by the State agency without good cause, the hearing shall be 
conducted without the household member being represented. Even though 
the household member is not represented, the hearing official is 
required to carefully consider the evidence and determine if intentional 
Program violation was committed based on clear and convincing evidence. 
If the household member is found to have committed an intentional 
Program violation but a hearing official later determines that the 
household member or representative had good cause for not appearing, the 
previous decision shall no longer remain valid and the State agency 
shall conduct a new hearing. The hearing official who originally ruled 
on the case may conduct the new hearing. In instances where good cause 
for failure to appear is based upon a showing of nonreceipt of the 
hearing notice as specified in paragraph (e)(3)(ii) of this section, the 
household member has 30 days after the date of the written notice of the 
hearing decision to claim good cause for failure to appear. In all other 
instances, the household member has 10 days from the date of the 
scheduled hearing to present reasons indicating a good cause for failure 
to appear. A hearing official

[[Page 737]]

must enter the good cause decision into the record.
    (5) Participation while awaiting a hearing. A pending 
disqualification hearing shall not affect the individual's or the 
household's right to be certified and participate in the Program. Since 
the State agency cannot disqualify a household member for intentional 
Program violation until the hearing official finds that the individual 
has committed intentional Program violation, the State agency shall 
determine the eligibility and benefit level of the household in the same 
manner it would be determined for any other household. For example, if 
the misstatement or action for which the household member is suspected 
of intentional Program violation does not affect the household's current 
circumstances, the household would continue to receive its allotment 
based on the latest certification action or be recertified based on a 
new application and its current circumstances. However, the household's 
benefits shall be terminated if the certification period has expired and 
the household, after receiving its notice of expiration, fails to 
reapply. The State agency shall also reduce or terminate the household's 
benefits if the State agency has documentation which substantiates that 
the household is ineligible or eligible for fewer benefits (even if 
these facts led to the suspicion of intentional Program violation and 
the resulting disqualification hearing) and the household fails to 
request a fair hearing and continuation of benefits pending the hearing. 
For example, the State agency may have facts which substantiate that a 
household failed to report a change in its circumstances even though the 
State agency has not yet demonstrated that the failure to report 
involved an intentional act of Program violation.
    (6) Criteria for determining intentional Program violation. The 
hearing authority shall base the determination of intentional Program 
violation on clear and convincing evidence which demonstrates that the 
household member(s) committed, and intended to commit, intentional 
Program violation as defined in paragraph (c) of this section.
    (7) Decision format. The hearing authority's decision shall specify 
the reasons for the decision, identify the supporting evidence, identify 
the pertinent FNS regulation, and respond to reasoned arguments made by 
the household member or representative.
    (8) Imposition of disqualification penalties. (i) If the hearing 
authority rules that the household member has committed intentional 
Program violation, the household member shall be disqualified in 
accordance with the disqualification periods specified in paragraph (b) 
on this section beginning with the first month which follows the date 
the household member receives written notification of the hearing 
decision. However, if the act of intentional Program violation which led 
to the disqualification occurred prior to notification of the 
disqualification periods specified in paragraph (b) of this section, the 
household member shall be disqualified in accordance with the 
disqualification periods in effect at the time of the offense. The same 
act of intentional Program violation repeated over a period of time 
shall not be separated so that separate penalties can be imposed.
    (ii) No further administrative appeal procedure exists after an 
adverse State level hearing. The determinaton of intentional Program 
violation made by a disqualification hearing official cannot be reversed 
by a subsequent fair hearing decision. The household member, however, is 
entitled to seek relief in a court having appropriate jurisdiction. The 
period of disqualification may be subject to stay by a court of 
appropriate jurisdiction or other injunctive remedy.
    (iii) If the individual is not certified to participate in the 
Program at the time the disqualification period is to begin, the period 
shall take effect immediately after the individual applies for and is 
determined eligible for benefits.
    (iv) Once a disqualification penalty has been imposed against a 
currently participating household member, the period of disqualification 
shall continue uninterrupted until completed regardless of the 
eligibility of the disqualifed member's household. However, the 
disqualified member's household shall continue to be responsible for 
repayment of the overissuance

[[Page 738]]

which resulted from the disqualified member's intentional Program 
violation regardless of its eligibility for Program benefits.
    (9) Notification of hearing decision. (i) If the hearing official 
finds that the household member did not commit intentional Program 
violation, the State agency shall provide a written notice which informs 
the household member of the decision.
    (ii) If the hearing official finds that the household member 
committed intentional Program violation, the State agency shall provide 
written notice to the household member prior to disqualification. The 
notice shall inform the household member of the decision and the reason 
for the decision. In addition, the notice shall inform the household 
member of the date the disqualification will take effect. If the 
individual is no longer participating, the notice shall inform the 
individual that the period of disqualification will be deferred until 
such time as the individual again applies for and is determined eligible 
for Program benefits. The State agency shall also provide written notice 
to the remaining household members, if any, of either the allotment they 
will receive during the period of disqualification or that they must 
reapply because the certification period has expired. The procedures for 
handling the income and resources of the disqualified member are 
described in Sec. 273.11(c). A written demand letter for restitution, as 
described in Sec. 273.18(d)(3), shall also be provided.
    (iii) Each State agency shall develop a form for notifying 
individuals that they have been found by an administrative 
disqualification hearing to have committed intentional Program 
violation. The form shall contain the information required by this 
section.
    (10) Local level hearings. (i) The State agency may choose to 
provide administrative disqualification hearings at the local level in 
some or all of its project areas with a right to appeal to a State level 
hearing. If a local level disqualification hearing determines that a 
household member committed intentional Program violation, the 
notification of hearing decision described in paragraph (e)(9) of this 
section shall also inform the household member of the right to appeal 
the decision within 15 days after the receipt of the notice, the date 
the disqualification will take effect unless a State level hearing is 
requested, and that benefits will be continued pending a State level 
hearing if the household is otherwise eligible. If the household member 
appeals the local level decision, the advance notice of hearing, as 
described in paragraph (e)(3) of this section, shall be provided at 
least 10 days in advance of the scheduled State level hearing and shall 
also inform the household member that the local hearing decision will be 
upheld if the household or its representative fails to appear for the 
hearing without good cause. When a local level decision is appealed, the 
State agency shall conduct the State level hearing, arrive at a 
decision, and notify the household member and local agency of the 
decision within 60 days of the date the household member appealed its 
case. The prior decision shall not be taken into consideration by the 
State hearing officer in making the final determination. In all other 
respects, local level disqualification hearings shall be handled in 
accordance with the procedures specified in this section for State level 
hearings.
    (ii) The State agency shall develop appropriate forms which contain 
the information required by this section for notification of a local 
level hearing decision and advance notice of a scheduled State level 
hearing for appeal of a local level decision.
    (f) Waived hearings. Each State agency shall have the option of 
establishing procedures to allow accused individuals to waive their 
rights to an administrative disqualification hearing. For State agencies 
which choose the option of allowing individuals to waive their rights to 
an administrative disqualification hearing, the procedures shall conform 
with the requirements outlined in this section.
    (1) Advance notification. (i) The State agency shall provide written 
notification to the household member suspected of intentional Program 
violation that the member can waive his/her right to an administrative 
disqualification hearing. Prior to providing this written notification 
to the household member, the State agency shall ensure

[[Page 739]]

that the evidence against the household member is reviewed by someone 
other than the eligibility worker assigned to the accused individual's 
household and a decision is obtained that such evidence warrants 
scheduling a disqualification hearing.
    (ii) The written notification provided to the household member which 
informs him/her of the possibility of waiving the administrative 
disqualification hearing shall include, at a minimum:
    (A) The date that the signed waiver must be received by the State 
agency to avoid the holding of a hearing and a signature block for the 
accused individual, along with a statement that the head of household 
must also sign the waiver if the accused individual is not the head of 
household, with an appropriately designated signature block;
    (B) A statement of the accused individual's right to remain silent 
concerning the charge(s), and that anything said or signed by the 
individual concerning the charge(s) can be used against him/her in a 
court of law;
    (C) The fact that a waiver of the disqualification hearing will 
result in disqualification and a reduction in benefits for the period of 
disqualification, even if the accused individual does not admit to the 
facts as presented by the State agency;
    (D) An opportunity for the accused individual to specify whether or 
not he/she admits to the facts as presented by the State agency. This 
opportunity shall consist of the following statements, or statements 
developed by the State agency which have the same effect, and a method 
for the individual to designate his/her choice:
    (1) I admit to the facts as presented, and understand that a 
disqualification penalty will be imposed if I sign this waiver; and
    (2) I do not admit that the facts as presented are correct. However, 
I have chosen to sign this waiver and understand that a disqualification 
penalty will result;
    (E) The telephone number and, if possible, the name of the person to 
contact for additional information; and
    (F) The fact that the remaining household members, if any, will be 
held responsible for repayment of the resulting claim.
    (iii) The State agency shall develop a waiver of right to an 
administrative disqualification hearing form which contains the 
information required by this section as well as the information 
described in paragraph (e)(3) of this section for advance notice of a 
hearing. However, if the household member is notified of the possibility 
of waiving his/her right to an administrative disqualification hearing 
before the State agency has scheduled a hearing, the State agency is not 
required to notify the household member of the date, time and place of 
the hearing at that point as required by paragraph (e)(3)(i)(A) of this 
section.
    (2) Imposition of disqualification penalties. (i) If the household 
member suspected of intentional Program violation signs the waiver of 
right to an administrative disqualification hearing and the signed 
waiver is received within the timeframes specified by the State agency, 
the household member shall be disqualified in accordance with the 
disqualification periods specified in paragraph (b) of this section. The 
period of disqualification shall begin with the first month which 
follows the date the household member receives written notification of 
the disqualification. However, if the act of intentional Program 
violation which led to the disqualification occurred prior to the 
written notification of the disqualification periods specified in 
paragraph (b) of this section, the household member shall be 
disqualified in accordance with the disqualification periods in effect 
at the time of the offense. The same act of intentional Program 
violation repeated over a period of time shall not be separated so that 
separate penalties can be imposed.
    (ii) No further administrative appeal procedure exists after an 
individual waives his/her right to an administrative disqualification 
hearing and a disqualification penalty has been imposed. The 
disqualification penalty cannot be changed by a subsequent fair hearing 
decision. The household member, however is entitled to seek relief in a 
court having appropriate jurisdiction. The period of disqualification 
may be subject to stay by a court of

[[Page 740]]

appropriate jurisdiction or other injunctive remedy.
    (iii) If the individual is not certified to participate in the 
Program at the time the disqualification period is to begin, the period 
shall take effect immediately after the individual applies for and is 
determined eligible for benefits.
    (iv) Once a disqualification penalty has been imposed against a 
currently participating household member, the period of disqualification 
shall continue uninterrupted until completed regardless of the 
eligibility of the disqualified member's household. However, the 
disqualified member's household shall continue to be responsible for 
repayment of the overissuance which resulted from the disqualified 
member's intentional Program violation regardless of its eligibility for 
Program benefits.
    (3) Notification of disqualification. The State agency shall provide 
written notice to the household member prior to disqualification. The 
State agency shall also provide written notice to any remaining 
household members of the allotment they will receive during the period 
of disqualification or that they must reapply because the certification 
period has expired. The notice(s) shall conform to the requirements for 
notification of a hearing decision specified in paragraph (e)(9) of this 
section. A written demand letter for restitution, as described in 
Sec. 273.18(d)(3), shall also be provided.
    (4) Waiver of hearing at local level. Any State agency which has 
adopted the two-tiered approach for administrative disqualification 
hearings may also provide for waiver of the right to disqualification 
hearing procedures outlined in this section.
    (g) Court referrals. Any State agency exempted from the requirement 
to establish an administrative disqualification system in accordance 
with paragraph (a) of this section shall refer appropriate cases for 
prosecution by a court of appropriate jurisdiction in accordance with 
the requirements outlined in this section.
    (1) Appropriate cases. (i) The State agency shall refer cases of 
alleged intentional Program violation for prosecution in accordance with 
an agreement with prosecutors or State law. The agreement shall provide 
for prosecution of intentional Program violation cases and include the 
understanding that prosection will be pursued in cases where 
appropriate. This agreement shall also include information on how, and 
under what circumstances, cases will be accepted for possible 
prosecution and any other criteria set by the prosecutor for accepting 
cases for prosecution, such as a minimum amount of overissuance which 
resulted from intentional Program violation.
    (ii) State agencies are encouraged to refer for prosecution under 
State or local statutes those individuals suspected of committing 
intentional Program violation, particularly if large amounts of food 
stamps are suspected of having been obtained by intentional Program 
violation, or the individual is suspected of committing more than one 
act of intentional Program violation. The State agency shall confer with 
its legal representative to determine the types of cases which will be 
accepted for possible prosecution. State agencies shall also encourage 
State and local prosecutors to recommend to the courts that a 
disqualification penalty as provided in section 6(b) of the Food Stamp 
Act be imposed in addition to any other civil or criminal penalties for 
such violations.
    (2) Imposition of disqualification penalties. (i) State agencies 
shall disqualify an individual found guilty of intentional Program 
violation for the length of time specified by the court. If the court 
fails to impose a disqualification period, the State agency shall impose 
a disqualification period in accordance with the provisions in paragraph 
(b) of this section, unless contrary to the court order. If 
disqualification is ordered but a date for initiating the 
disqualification period is not specified, the State agency shall 
initiate the disqualification period for currently eligible individuals 
within 45 days of the date the disqualification was ordered. Any other 
court-imposed disqualification shall begin within 45 days of the date 
the court found a currently eligible individual guilty of civil or 
criminal misrepresentation or fraud.

[[Page 741]]

    (ii) If the individual is not certified to participate in the 
Program at the time the disqualification period is to begin, the period 
shall take effect immediately after the individual applies for and is 
determined eligible for benefits.
    (iii) Once a disqualification penalty has been imposed against a 
currently participating household member, the period of disqualification 
shall continue uninterrupted until completed regardless of the 
eligibility of the disqualified member's household. However, the 
disqualified member's household shall continue to be responsible for 
repayment of the overissuance which resulted from the disqualified 
member's intentional Program violation regardless of its eligibility for 
Program benefits.
    (3) Notification of disqualification. If the court finds that the 
household member committed intentional Program violation, the State 
agency shall provide written notice to the household member. The notice 
shall be provided prior to disqualification, whenever possible. The 
notice shall inform the household member of the disqualification and the 
date the disqualification will take effect. The State agency shall also 
provide written notice to the remaining household members, if any, of 
the allotment they will receive during the period of disqualification or 
that they must reapply because the certification period has expired. The 
procedures for handling the income and resources of the disqualified 
member are described in Sec. 273.11(c). In addition, the State agency 
shall provide the written demand letter for restitution described in 
Sec. 273.18(d)(3).
    (h) Deferred adjudication. Each State agency shall have the option 
of establishing procedures to allow accused individuals to sign 
disqualification consent agreements for cases of deferred adjudication. 
State agencies are encouraged to use this option for those cases in 
which a determination of guilt is not obtained from a court due to the 
accused individual having met the terms of a court order or which are 
not prosecuted due to the accused individual having met the terms of an 
agreement with the prosecutor. For State agencies which choose the 
option of allowing individuals to sign disqualification consent 
agreements in cases referred for prosecution, the procedures shall 
conform with the requirements outlined in this section.
    (1) Advance notification. (i) The State agency shall enter into an 
agreement with the State's Attorney General's Office or, where 
necessary, with county prosecutors which provides for advance written 
notification to the household member of the consequences of consenting 
to disqualification in cases of deferred adjudication.
    (ii) The written notification provided to the household member which 
informs him/her of the consequences of consenting to disqualification as 
a part of deferred adjudication shall include, at a minimum:
    (A) A statement for the accused individual to sign that the accused 
individual understands the consequences of consenting to 
disqualification, along with a statement that the head of household must 
also sign the consent agreement if the accused individual is not the 
head of household, with an appropriately designated signature block.
    (B) A statement that consenting to disqualification will result in 
disqualification and a reduction in benefits for the period of 
disqualification, even though the accused individual was not found 
guilty of civil of criminal misrepresentation or fraud.
    (C) A warning that the disqualification periods for intentional 
Program violations under the Food Stamp Program are as specified in 
paragraph (b) of this section, and a statement of which penalty will be 
imposed as a result of the accused individual having consented to 
disqualification.
    (D) A statement of the fact that the remaining household members, if 
any, will be held responsible for repayment of the resulting claim, 
unless the accused individual has already repaid the claim as a result 
of meeting the terms of the agreement with the prosecutor or the court 
order.
    (iii) The State agency shall develop a disqualification consent 
agreement, or language to be included in the agreements reached between 
the prosecutors and accused individuals or in the court orders, which 
contains the information required by this section for notifying a

[[Page 742]]

household member suspected of intentional Program violation of the 
consequences of signing a disqualification consent agreement.
    (2) Imposition of disqualification penalties. (i) If the household 
member suspected of intentional Program violation signs the 
disqualification consent agreement, the household member shall be 
disqualified in accordance with the disqualification periods specified 
in paragraph (b) of this section, unless contrary to the court order. 
The period of disqualification shall begin within 45 days of the date 
the household member signed the disqualification consent agreement. 
However, if the court imposes a disqualification period or specifies the 
date for initiating the disqualification period, the State agency shall 
disqualify the household member in accordance with the court order.
    (ii) If the individual is not certified to participate in the 
Program at the time the disqualification period is to begin, the period 
shall take effect immediately after the individual applies for and is 
determined eligible for benefits.
    (iii) Once a disqualification penalty has been imposed against a 
currently participating household member, the period of disqualification 
shall continue uninterrupted until completed regardless of the 
eligibility of the disqualified member's household. However, the 
disqualified member's household shall continue to be responsible for 
repayment of the overissuance which resulted from the disqualified 
member's intentional Program violation regardless of its eligibility for 
Program benefits.
    (3) Notification of disqualification. If the household member 
suspected of intentional Program violation signs the disqualification 
consent agreement, the State agency shall provide written notice to the 
household member. The notice shall be provided prior to 
disqualification, whenever possible. The notice shall inform the 
household member of the disqualification and the date the 
disqualification will take effect. The State agency shall also provide 
written notice to the remaining household members, if any, of the 
allotment they will receive during the period of disqualification or 
that they must reapply because the certification period has expired. The 
procedures for handling the income and resources of the disqualified 
member are described in Sec. 273.11(c). In addition, the State agency 
shall provide the written demand letter for restitution described in 
Sec. 273.18(d)(3).
    (i) Reporting requirements. (1) Each State agency shall report to 
FNS information concerning individuals disqualified for intentional 
Program violation, including those individuals disqualified based on the 
determination of an administrative disqualification hearing official or 
a court of appropriate jurisdiction and those individuals disqualified 
as a result of signing either a waiver of right to a disqualification 
hearing or a disqualification consent agreement in cases referred for 
prosecution. This information shall be submitted to FNS so that it is 
received no later than 30 days after the date the disqualification took 
effect, or would have taken effect for a currently ineligible individual 
whose disqualification is pending future eligibility.
    (2) Each State agency shall report information concerning each 
individual disqualified for intentional Program violation in a format 
designed by FNS. This format shall include the individual's social 
security number, date of birth, and full name, the number of the 
disqualification (1st, 2nd, or 3rd), 
the State and county in which the disqualification took place, the date 
on which the disqualification took effect, and the length of the 
disqualification period imposed.
    (3) Each State agency shall submit the required information on each 
individual disqualified for intentional Program violation through a 
reporting system in accordance with procedures specified by FNS.
    (4) All the data submitted by State agencies will be available for 
use by any State Welfare Agency.
    (i) State agencies shall, at a minimum, use the data for the 
following:
    (A) To determine the eligibility of individual Program applicants 
prior to certification in cases where the State agency has reason to 
believe a household member is subject to disqualification in another 
political jurisdiction, and

[[Page 743]]

    (B) To ascertain the appropriate penalty to impose, based on past 
disqualifications, in a case under consideration.
    (ii) State agencies may also use the data in other ways, such as the 
following:
    (A) To screen all program applicants prior to certification, and
    (B) To periodically match the entire list of disqualified 
individuals against their current caseloads.
    (5) The disqualification of an individual for intentional Program 
violation in one political jurisdiction shall be valid in another. 
However, one or more intentional Program violations which occurred prior 
to April 1, 1983 shall be considered as only one previous 
disqualification when determining the appropriate penalty to impose in a 
case under consideration, regardless of where the disqualification(s) 
took place. State agencies are required to identify any individuals 
disqualified for fraud prior to implementation of this rule and to 
submit the information required by this section on such individuals.
    (6) In cases where the imposition of a disqualification penalty is 
being held pending the future eligibility of a household member found to 
have committed intentional Program violation, the State agency shall 
submit a report revising the original disqualification report once the 
individual begins the period of disqualification in accordance with 
instructions provided by FNS.
    (7) In cases where the disqualification for intentional Program 
violation is reversed by a court of appropriate jurisdiction, the State 
agency shall submit a report to purge the file of the information 
relating to the disqualification which was reversed in accordance with 
instructions provided by FNS.
    (j) Reversed disqualifications. In cases where the determination of 
intentional program violation is reversed by a court of appropriate 
jurisdiction, the State agency shall reinstate the individual in the 
program if the household is eligible. The State agency shall restore 
benefits that were lost as a result of the disqualification in 
accordance with the procedures specified in Sec. 273.17(e).


[Amdt. 242, 48 FR 6855, Feb. 15, 1983, as amended by Amdt. 269, 51 FR 
10793, Mar. 28, 1986; Amdt. 357, 60 FR 43515, Aug. 22, 1995]