[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR273.16]



[Page 755-765]

 

                          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referral was formally withdrawn by the State agency.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.

    (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 

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



[[Page 756]]



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 twelve months for the first intentional Program 

violation, except as provided under paragraphs (b)(2), (b)(3), (b)(4), 

and (b)(5) of this section;

    (ii) For a period of twenty-four months upon the second occasion of 

any intentional Program violation, except as provided in paragraphs 

(b)(2), (b)(3), (b)(4), and (b)(5) 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 benefits 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 twenty four 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 benefits 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) An individual convicted by a Federal, State or local court of 

having trafficked benefits for an aggregate amount of $500 or more shall 

be permanently ineligible to participate in the Program upon the first 

occasion of such violation.

    (5) Except as provided under paragraph (b)(1)(iii) of this section, 

an individual found to have made a fraudulent statement or 

representation with respect to the identity or place of residence of the 

individual in order to receive multiple food stamp benefits 

simultaneously shall be ineligible to participate in the Program for a 

period of 10 years.

    (6) 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) and 

(b)(3) of this section.

    (7) 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), (b)(3), (b)(4), and (b)(5) of this section 

unless it is contrary to the court order.

    (8) One or more intentional Program violations which occurred prior 

to



[[Page 757]]



April 1, 1983 shall be considered as only one previous disqualification 

when determining the appropriate penalty to impose in a case under 

consideration.

    (9) 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.

    (10) For the disqualification periods in paragraphs (b)(1), (b)(5) 

or (b)(6) of this section, if the offense occurred prior to the 

implementation of these penalties, the State agency may establish a 

policy of disqualifying these individuals in accordance with the 

disqualification periods in effect at the time of the offense. This 

policy must be consistently applied for all affected individuals.

    (11) 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.

    (12) 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 must 

be established and collected in accordance with the procedures set forth 

in Sec. 273.18.

    (13) The individual must be notified in writing once it is 

determined that he/she is to be disqualified. The disqualification 

period shall begin no later than the second month which follows the date 

the individual receives written notice of the disqualification. The 

disqualification period must continue uninterrupted until completed 

regardless of the eligibility of the disqualified individual's 

household.

    (c) Definition of 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 for the 

purpose of using, presenting, transferring, acquiring, receiving, 

possessing or trafficking of coupons, authorization cards or reusable 

documents used as part of an automated benefit delivery system (access 

device).

    (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.



[[Page 758]]



    (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.

    (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



[[Page 759]]



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 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 individual has committed an intentional Program 

violation, the household member must be disqualified in accordance with 

the disqualification periods and procedures in paragraph (b) of this 

section. The same act of intentional Program violation repeated over a 

period of time must 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



[[Page 760]]



subject to stay by a court of appropriate jurisdiction or other 

injunctive remedy.

    (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 disqualifed 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.

    (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



[[Page 761]]



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 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



[[Page 762]]



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 appropriate jurisdiction or other 

injunctive remedy.

    (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. 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



[[Page 763]]



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.

    (ii) 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



[[Page 764]]



required by this section for notifying a 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) 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

    (B) To ascertain the appropriate penalty to impose, based on past 

disqualifications, in a case under consideration.



[[Page 765]]



    (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; 66 FR 4468, 

Jan. 17, 2001]