81_FR_10473 81 FR 10433 - Special Supplemental Nutrition Program for Women, Infants and Children (WIC): Implementation of Electronic Benefit Transfer-Related Provisions

81 FR 10433 - Special Supplemental Nutrition Program for Women, Infants and Children (WIC): Implementation of Electronic Benefit Transfer-Related Provisions

DEPARTMENT OF AGRICULTURE
Food and Nutrition Service

Federal Register Volume 81, Issue 40 (March 1, 2016)

Page Range10433-10451
FR Document2016-04261

This final rule considers public comments submitted in response to the proposed rule published February 28, 2013 and implements the provisions set forth in the Healthy, Hunger-Free Kids Act of 2010 related to electronic benefit transfer (EBT) for the WIC Program (also referred to herein as ``the Program''). The HHFKA amended provisions of the Child Nutrition Act of 1966 (CNA) and was enacted on December 13, 2010. EBT provisions of the HHFKA and other EBT implementation requirements included in this final rule are: A definition of EBT; a mandate that all WIC State agencies implement EBT delivery method by October 1, 2020; system management and reporting requirements; revisions to current provisions that prohibit imposition of costs on vendors; a requirement for the Secretary of Agriculture to establish minimum lane equipage standards; a requirement for the Secretary of Agriculture to establish technical standards and operating rules; and a requirement that State agencies use the National Universal Product Code (NUPC) database.

Federal Register, Volume 81 Issue 40 (Tuesday, March 1, 2016)
[Federal Register Volume 81, Number 40 (Tuesday, March 1, 2016)]
[Rules and Regulations]
[Pages 10433-10451]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-04261]



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Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules 
and Regulations

[[Page 10433]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 246

RIN 0584-AE21


Special Supplemental Nutrition Program for Women, Infants and 
Children (WIC): Implementation of Electronic Benefit Transfer-Related 
Provisions

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

ACTION: Final rule.

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

SUMMARY: This final rule considers public comments submitted in 
response to the proposed rule published February 28, 2013 and 
implements the provisions set forth in the Healthy, Hunger-Free Kids 
Act of 2010 related to electronic benefit transfer (EBT) for the WIC 
Program (also referred to herein as ``the Program''). The HHFKA amended 
provisions of the Child Nutrition Act of 1966 (CNA) and was enacted on 
December 13, 2010. EBT provisions of the HHFKA and other EBT 
implementation requirements included in this final rule are: A 
definition of EBT; a mandate that all WIC State agencies implement EBT 
delivery method by October 1, 2020; system management and reporting 
requirements; revisions to current provisions that prohibit imposition 
of costs on vendors; a requirement for the Secretary of Agriculture to 
establish minimum lane equipage standards; a requirement for the 
Secretary of Agriculture to establish technical standards and operating 
rules; and a requirement that State agencies use the National Universal 
Product Code (NUPC) database.

DATES: 
    Effective Date: This rule is effective on May 2, 2016.
    Implementation Dates:
     The provisions found at 7 CFR 246.12(h)(3)(xxvii) and 7 
CFR 246.12(z)(2) requiring minimum lane coverage deployment of Point of 
Sale (POS) terminals used to support the WIC Program shall be 
implemented by March 1, 2017.
     The provisions found at 7 CFR 246.12(h)(3)(xxx) and 7 CFR 
246.12(aa)(4)(i) prohibiting a State agency from paying ongoing 
maintenance, processing fees or operational costs for multi-function 
vendor systems and equipment after statewide implementation shall be 
implemented either by March 1, 2018 or the date included in a 
Department-approved plan for continued support for these efforts.
     The provisions found at 7 CFR 246.12(h)(3)(xxxi) and 7 CFR 
246.12(bb)(1) requiring each State agency, contractor and authorized 
vendor to comply with the published operating rules, standards and 
technical requirements and other industry standards identified by the 
Secretary shall be implemented either by March 1, 2018 or the date 
included in a Department-approved plan to incorporate the rules, 
standards and requirements in their system development plan.

FOR FURTHER INFORMATION CONTACT: Jerilyn Malliet, Chief, WIC EBT 
Branch, Supplemental Food Programs Division, Food and Nutrition 
Service, USDA, 3101 Park Center Drive, Room 528, Alexandria, Virginia 
22302; phone (703) 305-2746, OR email [email protected].

SUPPLEMENTARY INFORMATION: 

I. Overview

    This final rule addresses public comments submitted in response to 
the proposed rule published in the Federal Register on February 28, 
2013 (78 FR 13549) which incorporated the provisions set forth in the 
HHFKA (Pub. L. 111-296), related to EBT for the WIC Program. The 
Department had previously issued policy and guidance in WIC Policy 
Memorandum #2011-3, issued March 22, 2011, to State agencies on 
implementation of the nondiscretionary provisions of the HHFKA that 
were effective on October 1, 2010. However, select areas of the law 
were discretionary, and therefore public comment was sought in the 
proposed rule. This final rule makes adjustments to improve clarity of 
the provisions set forth in the proposed rule and implements EBT 
requirements for the Program.

II. Background

    Providing WIC participants with a specific prescription of 
supplemental nutritious foods based on their nutritional needs is a 
cornerstone of WIC's mission. Currently, the majority of WIC 
participants receive paper food instruments (FIs) containing their food 
prescription. However, in line with current trends and overall public 
expectation of doing business and receiving services electronically, 
the WIC Program has been gradually transitioning the benefit issuance 
methodology over the past several years from paper FIs to EBT. The use 
of EBT in the WIC Program allows both the WIC Program and its 
participants to use advanced technologies in the delivery of benefits 
and helps support WIC's goal to improve client services. It is well 
recognized and accepted that EBT is by far the preferred method of 
benefit delivery for the WIC Program and it is endorsed by WIC 
participants, authorized vendors and State WIC administrators. The 
Department has continued to support and promote WIC EBT through 
collaborative efforts with WIC State agencies, vendor groups, the 
banking industry, EBT processors and a variety of other EBT 
stakeholders. As State agencies move forward with WIC EBT, it is 
critical that standard business practices, policies and requirements 
are followed to collaboratively expedite EBT implementation and 
maximize resource utilization.
    Given the challenges of the food benefit and technology needed to 
support those complexities and the nationwide WIC EBT implementation 
deadline of October 1, 2020 required by the HHFKA, the provisions in 
this final rule are critical for WIC State agencies, vendors, system 
developers and EBT processors to effectively implement the mandate. 
Establishment of these provisions will promote consistency, save 
resources and streamline EBT implementation, which will ultimately 
reduce barriers as WIC moves to EBT to deliver food benefits. This 
final rule supports and facilitates this transition and addresses many 
important aspects of WIC EBT implementation.

[[Page 10434]]

III. Summary of Comments Received on the Proposed Rule Related to EBT 
in the WIC Program

    The proposed rule amending WIC regulations to incorporate WIC EBT 
provisions as set forth in the HHFKA provided a 90-day public comment 
period on the discretionary provisions of the proposed rule. The 
comment period was later extended by 30 days and ended on June 29, 
2013.
    A total of 45 comment letters were received on the proposed rule; 
of those, 12 comments were form letters. The comment letters were 
submitted from a variety of sources, including 18 WIC State agencies 
and Indian Tribal Organizations (ITOs), one from the National WIC 
Association, two from food retailer associations, seven from the 
electronic funds transfer industry including the Electronic Funds 
Transfer Association, 13 from hunger advocacy groups and four from 
members of the public.
    In general, commenters expressed broad support for the proposed EBT 
provisions. Commenters also voiced concerns about various aspects of 
the proposed rule and made recommendations for clarifying or improving 
specific provisions. The Department considered all comments; importance 
was given to the substance of the comment, rather than the number of 
times a comment was submitted.

IV. Discussion of the Final Rule Provisions

1. Definitions: Section 246.2

    The following definitions have been added or modified in the final 
rule:
    Electronic Benefit Transfer. The proposed rule would have added the 
definition of EBT as a food delivery system that provides benefits 
using a card or other access device approved by the Secretary 
permitting electronic access to WIC Program benefits. Five comments 
were received on the definition of EBT; three were in full support of 
the definition as proposed. One commenter suggested the WIC Program use 
the plural ``benefits,'' citing that the Supplemental Nutrition 
Assistance Program (SNAP) uses the plural form and the two programs 
should be consistent. After verifying SNAP EBT regulations use the 
singular ``benefit'' in its definition of EBT at 7 CFR 274.12(b)(1), 
the definition retains the singular ``benefit'' as proposed which 
results in consistency between the two programs in using ``benefit'' 
rather than ``benefits''.
    The remaining comment on the definition of EBT stated that EBT is a 
form of payment for WIC food benefits, not a food delivery system. The 
Department agrees with this comment and has modified the definition 
accordingly in the final rule. This final rule adds the definition of 
electronic benefit transfer at Sec.  246.2 as follows: Electronic 
Benefit Transfer (EBT) means a method that permits electronic access to 
WIC food benefits using a card or other access device approved by the 
Secretary.
    Cash-Value Voucher/Cash-Value Benefit. Two comments were received 
in support of expanding the definition of cash value voucher to 
acknowledge that in an EBT environment a cash value voucher is also a 
cash value benefit. Therefore, this final rule retains the definition 
of ``cash-value voucher/cash-value benefit'' at Sec.  246.2 as 
proposed.
    Participant Violation. As proposed, the definition of participant 
violation would be expanded to include the sale of cash-value vouchers, 
food instruments and EBT cards, or supplemental foods by participants 
and further expanded to specifically address the offer to sell WIC 
benefits in person, in print or online. As technology has advanced, 
opportunities to sell benefits have expanded to avenues such as the 
Internet. Protecting the integrity of the Program has always been a 
primary objective of the Department and WIC State agencies. The 
Department received 18 comments on the proposed change to the 
definition of participant violation. Three commenters were in full 
support of the change. Three commenters were in support of the change, 
but noted it is difficult for WIC State agencies to prove WIC-approved 
food items offered for sale by WIC participants are WIC benefits; 
therefore, the commenters recommended the Department establish, through 
regulation, the burden of proof required to impose a sanction on a 
participant suspected of selling WIC benefits. One of these commenters 
recommended removing the burden of proof from the WIC State agency 
altogether by making it a participant violation for a participant, 
caregiver or proxy to sell or offer to sell any item within the food 
package (or the food packages of any infants or children in his/her 
care). Since State agency administrative rules and procedures vary 
widely, the Department has opted not to establish the burden of proof 
in the regulatory definition of participant violation. It is incumbent 
upon WIC State agencies to work with their legal counsel and 
appropriate law enforcement agencies to determine the best course of 
action in situations where WIC participants are found to be selling or 
offering to sell food items they may have received as WIC benefits.
    Twelve comments noted the word ``intent,'' as used in the expanded 
definition of participant violation in the proposed rule, was too broad 
and could result in the sanctioning of a WIC participant who merely 
spoke of or thought about selling WIC benefits, but took no further 
action. The Department concurs and the word ``intent'' has been 
replaced with ``deliberate'' as this more accurately conveys what is 
meant in the revised definition.
    Eleven comments suggested the Department provide guidance on the 
types of policies WIC State agencies could develop in the future to 
address emerging issues. The WIC regulations already provide a 
framework for the types of policies State agencies may create for a 
variety of situations. The Department will continue to provide 
technical support to State agencies as issues emerge.
    One commenter opposed the change and stated that WIC participants 
should not be sanctioned unless it is proven they sold WIC benefits. 
Given the importance of giving State agencies maximum flexibility to 
manage participant violations and to improve program integrity, the 
final rule slightly modifies the proposed definition of ``participant 
violation'' by substituting the word ``deliberate'' for ``intent,'' but 
otherwise retains the definition as proposed. Further, to ensure 
participants are aware that selling or offering to sell cash value 
vouchers, food instruments, EBT cards or supplemental foods is a 
participant violation, the final rule adds, at Sec.  246.7(j)(10), a 
requirement for State agencies to include such a statement in the 
notification of rights and responsibilities provided to applicants and 
participants or their parents or caretakers.
    Three commenters suggested adding a definition for ``EBT Ready'' or 
``EBT Capable'' to clarify what equipment is required to support WIC as 
an authorized vendor and what the State agency would need to authorize 
the vendor. The Department recognizes these terms may cause confusion 
and thus a new definition of ``EBT Capable'' is added to Sec.  246.2. 
The regulations no longer refer to ``EBT Ready,'' which has the same 
meaning as EBT Capable.
    EBT Capable shall mean the WIC vendor demonstrates that their cash 
register system or payment device can accurately and securely obtain 
WIC food balances associated with an EBT card, maintain the necessary 
files such as the authorized product list, hot card file and claim file 
and successfully complete WIC EBT purchases. In accordance with the EBT 
Operating Rules, a State agency

[[Page 10435]]

may accept a cash register system or payment device as EBT Capable if 
it has been certified by another State agency. Certification criteria 
will be discussed later in this rulemaking.
    Also, based on these comments, the Department added a new 
definition for Statewide EBT. Statewide EBT means the State agency has 
converted all WIC clinics to EBT and all authorized vendors are capable 
of transacting WIC EBT purchases. This definition allows State agencies 
to identify a unique and easily verifiable date when new WIC vendors 
must prove that they are EBT Capable. The new definition for Statewide 
EBT has been added to Sec.  246.2.
    Several industry and State agency commenters indicated that the 
cost and deployment of equipment provisions in Sec.  246.12(z) and 
Sec.  246.12(aa) were confusing. The Department agrees with these 
comments and has added two definitions--one definition for single-
function equipment and one definition for multi-function equipment. The 
use of common definitions for these terms is designed to clarify the 
discussion in the preamble below and the regulation itself.
    Multi-function equipment means Point-of-Sale equipment obtained by 
a WIC vendor through commercial suppliers that is capable of supporting 
WIC EBT and other payment tender types.
    Single-function equipment means Point-of-Sale equipment, such as 
barcode scanners, card readers, PIN pads and printers, provided to an 
authorized WIC vendor solely for WIC EBT. Single-function equipment is 
provided by the State agency or its contractor.

2. Statewide Implementation of EBT by October 1, 2020 and Exemptions: 
Sections 246.12(a) and 246.12(w)(2)

    Section 17(h)(12)(B) of the CNA (42 U.S.C. 1771 et seq.) requires 
that each State agency implement EBT throughout the State by October 1, 
2020, unless the Secretary grants an exemption. The proposed rule 
reflected these requirements by amending Sec.  246.12(a) to add the 
statewide implementation requirement of EBT by October 1, 2020 and by 
providing information and requirements on allowable exemption criteria 
at Sec.  246.12(w)(2). In total, 26 comments were received on these 
provisions, of which 19 were in full support of the provisions as 
proposed.
    Generally, commenters expressed support for the EBT mandate that 
each State agency achieve statewide EBT by October 1, 2020. However, 
four commenters expressed concern that insufficient funding would delay 
or prohibit EBT implementation nationwide. The Department fully 
recognizes dedicated and sustained funding is critical to help State 
agencies implement EBT. The Department will continue to assist State 
agencies with their EBT implementation efforts, including exploring 
strategies to help make WIC EBT more affordable. As the mandate is 
legislatively required, however, the implementation date will remain as 
proposed at Sec.  246.12(a).
    Section 17(h)(12)(C) of the CNA authorizes the Secretary to grant 
exemptions to the statewide EBT requirement if the State agency can 
demonstrate one or more of the following: (1) There are unusual 
technical barriers; (2) operational costs of EBT are unaffordable 
within the nutrition services and administration (NSA) grant; or (3) it 
is in the best interest of the Program. In general, commenters 
expressed support for the exemptions provision, but again had concerns 
about the affordability of EBT, the need for a cost analysis and 
uncertainty as to what constitutes ``is in the best interest of the 
Program.''
    Pursuant to section 17(h)(12)(C) of the CNA, an exemption to EBT 
implementation may be requested if a State agency can demonstrate to 
the satisfaction of the Secretary that EBT is not operationally 
affordable. When the proposed rule was published, all WIC State 
agencies would have been required to conduct a cost analysis during 
their EBT planning process in order to ensure EBT operational costs 
after implementation are affordable within their individual NSA grant. 
The requirements of FNS Handbook 901, which outlines the approval 
requirements for State agency technical projects, to include EBT, have 
since been streamlined and a cost analysis is no longer required of a 
State agency. This procedural change addresses commenters' concerns 
regarding the requirement to conduct a cost analysis for EBT approval. 
If a State agency requests an affordability exemption, the State agency 
must analyze costs to determine EBT affordability and provide this 
analysis to the Department. Accordingly, the provision allowing an 
exemption if EBT operational costs are not affordable within a State 
agency's NSA grant is retained in the final rule at Sec.  
246.12(w)(2)(ii) as proposed.
    While the majority of commenters were in full support of the 
proposed language at Sec.  246.12(w)(2)(iii), one commenter sought 
further clarification on what constitutes an allowable exemption based 
on ``is in the best interest of the Program.'' The Department is 
hesitant to establish regulatory criteria specifying scenarios or 
situations that would constitute such an exemption. Although EBT 
implementation by October 1, 2020 is mandated by law, the Department 
remains cognizant of the impact of EBT implementation on State 
agencies, vendors and WIC participants. There may be unusual 
circumstances within the State agency which may indicate EBT would not 
improve benefit delivery or would negatively affect WIC participants. 
Since this type of exemption would arise on a situational basis, the 
Department will evaluate each request on a case-by-case basis to 
determine if such an exemption would be in the best interest of the WIC 
Program. Therefore, Sec.  246.12(w)(2)(iii) of this final rule retains 
the proposed language allowing an exemption to EBT implementation if a 
State agency demonstrates to the satisfaction of the Secretary such an 
exemption would be in the best interest of the Program.
    No comments were received on the provision regarding exemptions 
based on unusual technological barriers; therefore, this provision 
remains as proposed at Sec.  246.12(w)(2)(i).
    Under the proposed rule, Sec.  246.12(w)(3) would have limited 
approved exemptions to no more than three years, as the Department 
thought this is a reasonable timeframe for a State agency's situation 
to change relative to the ability to implement EBT. Further, if an 
exemption is granted, it would not relieve a WIC State agency of the 
annual EBT status reporting requirement proposed in Sec.  246.4(a), as 
the State agency would still have to demonstrate its progress toward 
EBT statewide implementation. One commenter noted it would be highly 
unlikely a State agency receiving a three-year exemption on the basis 
of affordability would suddenly be able to afford EBT three years 
later. The Department understands this concern; however, technology 
costs tend to trend downward over time and the concern in part rests on 
speculation regarding the State agency's ability to obtain the needed 
funds in three years. While such cost trends are not possible to 
predict at this time, an exemption of three years continues to place 
responsibility on each WIC State agency to continue exploring options 
for implementing EBT within their funding level. Additional exemptions 
may be granted on a case by case basis within the criteria described in 
this regulation. Also, the State agency may realize cost efficiencies 
in other areas of nutrition services and administration which result in 
more funds within the grant being available to support EBT costs.

[[Page 10436]]

Consequently, the provision limiting any exemption to the 2020 mandate 
to a three year period is retained in this final rule at Sec.  
246.12(w)(3).

3. Electronic Benefit Requirements. Last Date of Use--Section 
246.12(x)(2)(iii)

    The Department proposed in Sec.  246.12(x)(2)(iii) the last date on 
which the electronic benefit may be used to obtain authorized 
supplemental foods. This date must be a minimum of 30 days from the 
first date on which it may be used to obtain authorized supplemental 
foods except for the participant's first month of issuance, when it may 
be the end of the month or cycle for which the electronic benefit is 
valid. Several commenters expressed concern that because benefit months 
may vary in length from 28 to 31 days, this language required 
additional clarification. In 2007, the Department issued Policy 
Memorandum 2007-01, permitting a State agency to issue a food benefit 
from the first of the month through the last day of the month. To 
clarify further, the Department added language to Sec.  
246.12(x)(2)(iii) based upon our 2007 policy memorandum, permitting a 
State agency to shorten the 30-day benefit period for February to 28 or 
29 days. A conforming amendment has been made to Sec.  
246.12(f)(2)(iii).

4. EBT Management and Reporting: Section 246.12(y)

    Section 17(h)(12)(B) and (D) of the CNA require that each State 
agency be responsible for WIC EBT coordination and implementation and 
provide status reports on their EBT implementation progress. The 
proposed rule at Sec.  246.12(y) outlined EBT management and reporting 
requirements, to include that State agencies must follow the Advanced 
Planning Document (APD) process, consult with State officials if 
incorporating additional programs in the WIC EBT project, have an 
active EBT planning project by August 1, 2016 and submit EBT status 
reports through their annual State Plan.
    The APD process requires the State agency to submit Planning and 
Implementation APD's and appropriate updates for the Department's 
approval for their EBT project. Only one comment was received related 
to this provision. The commenter noted the need to streamline the APD 
process to promote faster implementation timeframes, especially given 
the fact that both on-line and off-line technologies are proven and 
cost-effective. After publication of the proposed rule, the Department 
revised the APD process for WIC EBT project approvals in order to 
streamline and improve the outcomes of the Planning APD (PAPD) and 
Implementation APD (IAPD). These changes have been published in a 
revised FNS Handbook 901. In particular, the PAPD no longer requires a 
cost analysis, which was discussed earlier in this preamble, or an 
alternatives analysis, which specifically evaluated on-line and off-
line technologies to determine the best option for the State agency. 
The alternatives analysis was determined to be optional as many State 
agencies already know which technology choice is optimal for their 
State. If, however, a State agency anticipates the need for an 
exemption to implement EBT based on affordability, or is unsure of the 
best technological approach to EBT, the Department continues to support 
and encourage State agencies to complete further analyses.
    Recognizing the need for and the benefits of thorough planning and 
project management to fully meet the requirements to receive approval 
for Federal funding for EBT established by the Department, the 
provision requiring State agencies to follow Department APD 
requirements is retained in this final rule as proposed at Sec.  
246.12(y)(1).
    Under the proposed rule, State agencies would have been required to 
consult with other benefit programs if they were considering obtaining 
an EBT benefit delivery method supporting WIC and one or more other 
benefit programs. One commenter representing vendors recommended the 
Department take this consultation a step further and require State 
agencies planning for WIC EBT to consult with State officials 
administering SNAP EBT in their respective State, regardless of whether 
a joint benefit delivery method is planned. The commenter noted the 
significant overlap in participation and authorized vendors between WIC 
and SNAP and suggested that every effort should be made to integrate 
the two Programs' benefit delivery methods. The Department recognizes 
the potential benefits of the two State agencies consulting on EBT 
implementation options and encourages WIC State agencies to work with 
SNAP officials when appropriate. However, we believe the provision is 
adequate as proposed due to WIC State agency variability in 
infrastructure, policy requirements or other factors. Consequently, the 
final rule retains the provision as proposed at Sec.  246.12(y)(2) 
requiring consultation with State agency officials if a State agency 
plans to incorporate additional programs in the WIC EBT system.
    To ensure progress is made towards the goal of nationwide EBT 
implementation by October 1, 2020, the proposed rule at Sec.  
246.12(y)(3) would have required each State agency to have an active 
WIC EBT project by October 1, 2015. An active EBT project is defined as 
a formal process of planning, implementation or statewide operation of 
WIC EBT. Four commenters were in full support of this requirement as 
proposed and three commenters asked for additional flexibility in the 
timeframe due to extenuating circumstances and/or lack of funding. The 
Department recognizes planning and implementation for EBT projects is a 
lengthy and complex process and lack of funding may be an inhibiting 
factor in some State agencies. However, the magnitude of executing a 
WIC EBT project requires dedicated staff and resources and should not 
be underestimated; a typical EBT project currently takes 2-3 years to 
progress from planning to implementation of EBT statewide. As the EBT 
implementation mandate is required by law, it is incumbent upon each 
State agency to begin the planning process well ahead of the mandate to 
ensure compliance. Therefore and consistent with this concern, the 
provision requiring an active EBT project by October 1, 2015, is 
modified in this final rule at Sec.  246.12(y)(3) to require each State 
agency to submit a plan 90 days after the effective date of this 
regulation.
    The Department also recognizes that some WIC State agencies operate 
in remote areas with limited access to vendors who can provide WIC 
foods. In some instances, these State agencies have implemented food 
delivery methods such as direct delivery to meet the needs of their WIC 
participants. There are other State agencies with substantial cost 
concerns or other considerations they believe would qualify for an 
exemption under the CNA. The Department understands these 
considerations but continues to expect State agencies to initiate an 
EBT planning initiative to formally explore the viability of EBT in 
their area of operation. The planning process will enable the State 
agency to gather appropriate information on available implementation 
alternatives and assess if an exemption is warranted.
    Pursuant to section 17(h)(12)(D) of the CNA, each WIC State agency 
must submit to the Department an EBT project status report to 
demonstrate the progress of the State agency toward statewide 
implementation. Under the proposed rule, Sec.  246.4(a) and Sec.  
246.12(y)(4) would have required an annual update of the State agency's 
goals and objectives regarding EBT implementation to be submitted as 
part of the State agency's State Plan of

[[Page 10437]]

Operations. The annual update would also document the State agency's 
progress toward accomplishing EBT implementation by the 2020 deadline, 
or if already implemented statewide, address any updated information 
for future EBT activities, plans for EBT updates, re-procurements, or 
other major activities impacting EBT. The Department received 11 
comments regarding the annual reporting requirement, most of which were 
supportive of the proposal. Several recommended that a report not be 
required from a State agency if there were no changes to EBT operations 
since last report. One commenter also recommended a bi-annual reporting 
cycle rather than an annual cycle.
    The Department recognizes the time and effort State agencies incur 
gathering information and reporting to the Department. However, the 
status of EBT implementation is of interest to Congress and many of the 
Program's stakeholders and has critical resource implications. Since 
the State Plan of Operations is updated annually, the Department 
believes the proposed requirement is both timely and consistent with 
current annual reporting requirements and is well understood by State 
agencies and provides the necessary information the Department requires 
for adequate oversight of the EBT implementation mandate. Regarding the 
proposed requirement at Sec.  246.12(y)(4)(ii) requiring an annual 
State Plan update for State agencies operating statewide EBT, the 
Department believes this is necessary to inform the Department of any 
information impacting EBT operations, to include new EBT procurements. 
To minimize the reporting burden, a State agency that is EBT statewide 
may indicate no changes have occurred since the previous reporting 
period, if appropriate. A State agency with an active EBT APD may cross 
reference the details from the APD in their annual State Plan update to 
minimize the reporting burden. Consequently, the provisions for 
requiring annual EBT project status reporting through the annual State 
Plan are retained in this final rule as proposed at Sec.  246.4(a) and 
Sec.  246.12(y)(4).

5. EBT Cost Impositions on Vendors: Sections 246.12(h)(3)(xxvii-xxx) 
and 246.12(aa)

    Section 17(h)(12)(E)(i) of the CNA prohibits the imposition of 
costs on vendors for EBT equipment and systems used solely to support 
the program (i.e., single-function equipment). Sections 
17(h)(12)(E)(ii) and (iii) of the CNA outline requirements for cost 
sharing of EBT equipment or systems not solely dedicated to transacting 
WIC EBT and guidelines for imposing processing and interchange fees and 
costs on vendors transacting WIC benefits. The CNA provisions related 
to cost impositions on vendors were incorporated into the proposed rule 
at Sec.  246.12(h)(3)(xxvii-xxx) and Sec.  246.12(aa). A total of 73 
comments were received on these provisions and are discussed below.
    Cost Prohibitions. Section 17(h)(12)(E)(i) of the CNA prohibits the 
imposition of costs on authorized vendors for single-function EBT 
equipment and systems. Two comments were received directly related to 
this provision, voicing concern that the potentially high costs 
associated with EBT equipment incurred by the retailer might be 
prohibitive, resulting in the retailer deciding WIC authorization is no 
longer viable. While the Department understands these concerns, the 
full costs of WIC single-function equipment will be borne by the State 
agency prior to statewide implementation and appropriate cost sharing 
will occur for multi-function cash register equipment and systems. This 
should eliminate undue hardships on WIC authorized vendors prior to 
statewide implementation. Therefore, the proposed provision has been 
modified at Section 246.12(aa)(4) to clarify the State shall continue 
to pay ongoing maintenance, processing fees and operational costs of 
single-function equipment when EBT is implemented statewide.. Section 
246.12(g)(5) has been removed because the CNA superseded the prior cost 
prohibition language.
    Criteria for Cost Sharing. Section 17(h)(12)(E)(ii) of the CNA 
requires the Secretary to establish cost sharing criteria to be used by 
WIC State agencies and vendors for equipment or systems that are not 
solely dedicated to transacting EBT for the WIC Program (i.e., multi-
function equipment). Under the proposed rule at Sec.  246.12(aa)(2), 
State agencies would have been required to use cost sharing criteria in 
accordance with Federal cost principles set forth in 2 CFR part 200 
(Uniform Administrative Requirements, Cost Principals and Audit 
Requirements for Federal Awards) to establish cost sharing criteria 
with their authorized WIC vendors for costs associated with any multi-
function equipment.
    A total of 13 comments were received on the cost sharing criteria 
provision. One commenter was in full support of the provision as 
proposed. Five commenters were supportive, but requested clarification 
on terminology and expansion on the provision. Seven commenters were 
opposed to the provision, stating the proposed regulation was not 
consistent with the HHFKA, may be cost prohibitive for State agencies, 
or did not allow for State agency flexibility.
    A number of commenters wanted clarification and expressed concern 
regarding what is meant by the term ``equipment'' as it applies to this 
provision, some suggesting the term ``commercial equipment'' be used 
when referring to the need for cost sharing criteria. While the 
Department recognizes the provision applies primarily to multi-function 
equipment or systems, the Department does not want to limit the type of 
equipment or system that may be subject to cost sharing. The 
Department, as explained earlier in the preamble, refers to multi-
function equipment to include commercial equipment. To clarify, 
``equipment'' can refer to commercially-obtained hardware with WIC EBT 
software owned or leased by a vendor from any of the cash register and 
payment system providers available in the market. Multi-function 
equipment can also refer to stand-beside equipment (and appropriate 
software) such as a card reader (magnetic stripe and/or smart card), 
display screen, PIN pad, printer and barcode scanner which are not 
integrated into the cash register. The stand-beside equipment may be a 
limited Point of Sale (POS) device with WIC EBT functionality, a POS 
device supporting WIC EBT and SNAP or cash EBT payments, or it may be 
an integrated cash register system installed separately in the checkout 
lane next to the existing electronic cash register. Ownership of the 
equipment can rest with the vendor, a third-party provider such as an 
acquirer, the State agency, or the State agency contractor. Other items 
considered equipment or part of EBT include a telephone line or 
Internet connection to submit purchases for an on-line approval, to 
submit daily EBT claim files for payment in an off-line environment, or 
to exchange the Authorized Product List (APL) and other files necessary 
to support a WIC EBT purchase.
    Several commenters asked for clarification on whether the cost 
sharing requirement should be between the WIC Program and SNAP, rather 
than the vendor, if the stand-beside equipment supports both programs. 
Additional concerns were raised related to perceived discrepancies in 
the regulatory language in the cost sharing section and minimum lane 
coverage section regarding EBT equipment, with the point being made 
that as stated in the proposed rule at Sec.  246.12(aa)(2), WIC Program 
equipment would only be

[[Page 10438]]

provided for use by the State agency as Stand-beside equipment and used 
solely by the Program and would therefore not be subject to cost 
sharing agreements.
    If the equipment is single-function equipment, it is not subject to 
cost sharing. However, if the equipment is multi-function equipment, a 
cost sharing agreement between the State agency and vendor would be 
required if any costs are shared. Such agreements may reflect other 
state programs that may be included in the agreement. The Department 
has revised Sec.  246.12(aa)(2) to clarify that cost sharing agreements 
shall be developed between the State agency and the vendor, depending 
on the type, scope and capabilities of shared equipment.
    One commenter requested a review of the HHFKA language that 
corresponded with the provision set forth in the proposed rule, stating 
the proposed rule indicated State agencies shall establish cost sharing 
criteria, but the HHFKA indicated the Secretary shall establish 
criteria for cost-sharing. As discussed in the preamble language of the 
proposed rule, shared costs must be allocated, or fairly distributed, 
among all benefiting parties in accordance with the established Federal 
cost principles set out at 2 CFR part 200. Compliance with these 
Federal principles provides reasonable assurance the Federal Government 
and the State agency bear their respective fair share of costs incurred 
by the State agency to administer Federal assistance programs. To 
provide clarification and consistency and to ensure regulatory language 
does not become outdated/obsolete, this provision has been revised at 
Sec.  246.12(aa)(2), requiring State agencies to develop cost sharing 
criteria following the Federal guidance established for cost allocation 
principles. This clarification underscores that Federal cost guidance 
establishes cost allocation principles, as required by the HHFKA and 
State agencies will use these principles to develop cost sharing 
criteria. The specific proposed reference to 2 CFR part 225 has been 
replaced by a general reference to Federal cost allocation principles 
to mitigate confusion in the future should the Federal regulations be 
revised or renumbered. The cost principles now reside at 2 CFR part 
200.
    To date, the Department has remained flexible in its approval of 
proposed State agency cost sharing criteria because of differences in 
State agency funding and operations that lead to variations; 
consequently, one set of cost sharing criteria does not fit all. To 
provide reasonable assurance Federal cost allocation principles are 
being followed and the approach is applied fairly to all authorized WIC 
vendors, the State agency must furnish its allocation and/or cost 
sharing methodology to the Department for review and approval before 
incurring costs as part of the established APD approval process 
outlined in Handbook 901. As noted previously, Sec.  246.12(y)(1) of 
the final rule requires adherence to the APD process.
    Processing Fees. As provided in section 17(h)(12)(E)(iii)(I) of the 
CNA and incorporated into the proposed rule at Sec.  
246.12(h)(3)(xxviii) and Sec.  246.12(aa)(3)(i), WIC authorized vendors 
would have been required to pay commercial processing costs and fees if 
multi-function equipment was utilized for WIC and other transactions. A 
vendor using multi-function equipment would pay commercial transaction 
processing costs and fees, imposed by a third-party processor, if the 
vendor elects to use commercial providers to connect to the State's EBT 
processing system. Five comments were received on this provision. Three 
were in full support of the proposed requirement and two commenters 
requested the Department to clarify: (1) The provision applies only to 
multi-function equipment; and (2) the complete regulatory language for 
this provision. While this final rule at Sec.  246.12(h)(3)(xxviii) and 
Sec.  246.12(aa)(3)(i) retains the intent of the proposed provision 
prohibiting State agencies from incurring third-party processing costs 
and fees for vendors that elect to accept EBT using multi-function 
equipment, the regulatory language has been modified slightly at Sec.  
246.12(aa)(3)(i) for clarity.
    As noted, typically processing fees are not charged to vendors who 
accept WIC EBT equipment from a State agency or its contracted EBT 
provider if the equipment is single-function equipment. A WIC State 
agency is responsible for these processing fees and ongoing costs. The 
proposed rule at Sec.  246.12(aa)(4)(i) would have permitted such 
processing fees to be charged to all WIC vendors after statewide 
implementation whether or not the equipment was single-function or 
multi-function. In response to related comments not specific to this 
provision; the proposed language is modified in the final rule at Sec.  
246.12(aa)(4)(i) to prohibit processing fees from being charged by a 
State agency or its contractor to WIC vendors for use of single-
function equipment.
    Interchange Fees. Section 17(h)(12)(E)(iii)(II) prohibits 
interchange fees on WIC EBT transactions. An interchange fee is the 
term used in the payment card industry to describe a fee paid between 
banks for the acceptance of card based transactions. Interchange fees 
are currently paid by retail merchants for credit and debit card 
transactions in the commercial environment, but not for WIC or SNAP EBT 
transactions. Under the proposed rule, interchange fees would not have 
applied to WIC EBT. Additionally, language reflecting this prohibition 
would have been added to WIC vendor agreements, prohibiting the WIC 
vendor from charging the State agency for any interchange fees. Eight 
commenters addressed the proposed provision; seven were in full support 
of the proposed prohibition and one commenter was in support but 
requested the language be made clearer in the final rule. Consequently, 
the provisions prohibiting interchange fees from applying to WIC are 
modified slightly in the final rule at Sec.  246.12(h)(3)(xxix) and 
Sec.  246.12(aa)(3)(ii) and clearly state that a State agency shall not 
pay or reimburse the vendor for interchange fees on WIC EBT 
transactions.
    Costs After Statewide Implementation. Section 17(h)(12)(E)(iv)(I) 
of the CNA permits State agencies that have implemented EBT statewide 
to no longer be required to incur the cost of ongoing maintenance of 
EBT multi-function cash register systems and equipment. Under the 
proposed rule at Sec.  246.12(h)(3)(xxx) and Sec.  246.12(aa)(4)(i), 
all costs for ongoing maintenance, equipment and operational expenses 
essential to and directly attributable to, EBT after statewide 
expansion would have been unallowable for both single-function and 
multi-function equipment, unless the State agency determined the vendor 
was needed for participant access.
    The Department received numerous comments regarding the proposed 
regulations pertaining to vendor equipment and maintenance costs. Four 
comments in support of this requirement were received from WIC State 
agencies and participant advocates. Two large national retailer 
associations expressed concern the proposed elimination of State-
supported single-function EBT equipment was not consistent with the 
HHFKA and would require vendors to shoulder the financial costs 
associated with EBT implementation. A payment industry association 
expressed concern the proposed requirement to eliminate State agency 
financing of single-function equipment may have a chilling effect on 
expansion of WIC EBT nationwide by 2020. Several commenters from the 
industry and State agencies urged the

[[Page 10439]]

Department to clarify whether the provision applied only to commercial 
equipment owned by a WIC vendor versus equipment installed and owned by 
a State agency or its EBT contractor.
    After consideration of these comments, the Department has modified 
the final regulation to require a State agency to continue support of 
ongoing maintenance, processing fees and operational costs for single-
function equipment or multi-function equipment if the vendor is 
necessary for participant access.
    Two commenters raised concern that prohibiting ongoing maintenance 
fees after statewide implementation would not support small businesses 
or grocers in rural areas not able to afford an integrated system or 
ongoing maintenance costs, but who may be integral to the program in 
regards to participant access to benefits. The Department understands 
this concern. To remain consistent with legislative exceptions 
permitting State agencies to provide single-function equipment on 
behalf of the vendor, the provisions in this final rule at Sec.  
246.12(h)(3)(xxx) and Sec.  246.12(aa)(4)(i) have been revised to 
require the State agency to pay ongoing maintenance and operational 
costs for single-function EBT equipment. A State agency may elect to 
share in the costs for multi-function equipment if the State agency 
determines the vendor is necessary for participant access. The wording 
was changed from ``needed'' for participant access to ``necessary'' for 
participant access to align with the legislative language and to 
clarify the intent of the provision. Additionally, a technical 
amendment is added to Sec.  246.12(h)(3)(xxx) to correct a 
typographical error in the title in the proposed rule, clarifying the 
provision applies to EBT ongoing maintenance and operational costs.
    One advocate organization commented that farmers and farmers' 
markets should be given special consideration in applying the 
provisions of the post-statewide equipment installation rules which 
preclude State agencies from sharing in the cost of WIC EBT equipment. 
While the Department shares in the goal of enhancing access to fresh 
fruit and vegetables made available by farmers and farmers markets, it 
could be cost prohibitive for State agencies to equip every authorized 
farmer or farmers' market. Therefore, Sec.  246.12(h)(3)(xxx) and Sec.  
246.12(aa) of the regulation have been amended to apply to all 
authorized WIC vendors and also apply to authorized farmers and farmers 
markets and prohibit costs for ongoing maintenance, equipment and 
operational expenses of an EBT benefit delivery method after EBT 
statewide, if the equipment is multi-functional.
    Capability To Accept EBT Benefits. Section 246.12(aa)(4)(ii) of the 
proposed rule provided that once a State agency has implemented EBT 
statewide, WIC vendor applicants would have been required to 
demonstrate their capability to accept WIC EBT benefits electronically 
prior to authorization. In essence, the applying vendor would have been 
required to be ``EBT capable'' at the time they applied and there would 
have been no obligation for the State agency to provide funds to cover 
EBT costs in order for the vendor to participate in the program. When 
there is a need to ensure participant access to food benefits, a State 
agency would have been permitted, with USDA approval, to fund applicant 
vendor costs to obtain an EBT capable cash register system.
    A total of 19 comments were received on this proposed provision. 
Seven comments, all from WIC State agencies, were in full support of 
the proposal, noting it is a vendor's decision to seek WIC 
authorization and WIC Program funds should not be used for this purpose 
except if participant access is an issue. Other commenters expressed 
concerns as to the meaning of EBT capable/EBT ready, the upfront 
investment needed by the vendor to become EBT capable without 
assurances the vendor's application for WIC would be accepted and the 
disadvantage that smaller vendors would face due to cost constraints.
    To address several commenters' questions and concerns on what EBT 
capable means, a broader discussion follows. WIC EBT delivery methods 
require the capability to process WIC EBT benefits by exchanging claim 
files and hot card files in off-line environment and transmitting on-
line purchases to the EBT host for approval, which requires either a 
telephone or Internet line. Both on-line and off-line WIC EBT delivery 
methods require transmittal of the approved product list (APL), the 
electronic food list distributed by each State agency, at least every 
48 hours.
    WIC EBT also requires the vendor system to maintain the APL in 
order to match scanned food items' UPC (Universal Product Code) or 
Price Lookup Codes (PLU) to ensure they are on a States' APL. The one 
to one match is not necessary in a SNAP EBT transaction; consequently a 
SNAP authorized retailer does not necessarily have the capability to 
support WIC EBT transactions.
    Therefore, WIC EBT capable would mean the vendor equipment and 
software is able to accurately scan or enter WIC food item UPC/PLU 
codes, match them to the APL, determine if the WIC food balance on the 
participant's card is sufficient to purchase the item and calculate the 
amount of the transaction. The vendor must also submit a claim file for 
payment in off-line EBT environment. The electronic cash register 
system must do this while managing WIC and non-WIC items (if multi-
functional), the sales tax for non-WIC items and a variety of 
promotions or discounts, as appropriate.
    Several comments were received regarding concerns that significant 
investments in cash register equipment and software may be incurred by 
a vendor who is applying for authorization to accept WIC before the 
vendor is determined to be eligible by a WIC State agency. A commenter 
suggested a two-stage vendor authorization process for State agencies 
to provide provisional authorization that a vendor could receive if 
they met a State agency's vendor criteria before determining their EBT 
capability. The Department is not requiring new vendor authorization 
criteria in this rulemaking. Nonetheless, we recognize a two-step 
authorization process may be a practical approach for a State agency to 
consider. To assist applicant vendors in selecting an EBT capable 
system, State agencies should compile and maintain a list of certified 
systems the applicant can consider. This list would neither represent 
an endorsement for the listed systems nor prevent a prospective vendor 
from obtaining a different system.
    One commenter representing a State agency expressed concern that 
the return on investment made prior to statewide operations was not 
defined in the proposed rulemaking. The commenter suggested that if a 
State agency shared in the cost of implementation, policies should be 
established to allow recovery of a prorated share of the investment if 
the vendor was terminated (voluntary or involuntary). State agencies 
already have this ability, as current Department guidelines permit 
State agencies to recoup a portion of any investment in vendor 
equipment in the event of termination. The Department does not believe 
this should be included in Federal regulations; rather, the Department 
recommends this be addressed in appropriate State agency policy and 
vendor agreements.
    One commenter representing a retailer association expressed concern 
that State agencies should have flexibility to share in the cost of 
retail equipment and software certifications even after the State 
agency implements EBT statewide.

[[Page 10440]]

To date, State agencies have conducted tests to certify that a specific 
cash register system is capable of supporting all WIC EBT functions. 
The commenter further noted that the proposed rule was not clear on 
what constituted the requirements or timeframes of determining EBT 
capability. The commenter expressed concern this uncertainty could 
negatively impact the authorization of new chain stores or small 
businesses if a new EBT system or third party processor is used. The 
Department recognizes some situations may result in a significant 
increase in vendor costs for certification and may lengthen 
authorization timeframes. The Department encourages State agencies to 
work with new vendors seeking WIC authorization to minimize costs and 
timeframes to become an authorized WIC vendor. However, while the 
Department understands vendors may incur additional costs related to 
certifications after statewide EBT is achieved, the primary concern is 
to ensure participant access to WIC benefits. Therefore, as stated in 
the proposed rule, the State agency would have the option to elect to 
fund such an expense in the event there was a need to ensure WIC 
participant access.
    The Department acknowledges and appreciates the various viewpoints 
and comments submitted related to vendor capability to accept WIC EBT 
benefits. However, the language in the proposed rule that would have 
required the vendor demonstrate EBT capability prior to authorization 
unless the vendor is determined to be necessary for participant access 
is considered appropriate and necessary and complies with the CNA. The 
Department has modified the proposed language at Sec.  
246.12(aa)(4)(ii) to further clarify the requirement for vendors to 
demonstrate their systems are EBT capable.

6. Minimum Lane Coverage Guidelines

    Section 17(h)(12)(F) of the CNA requires that the Department 
establish a minimum standard for installing WIC EBT equipment, or 
terminals, in WIC vendor locations. The proposed rule at Sec.  
246.12(z)(2) provided a national WIC EBT vendor equipment coverage 
formula that would have been consistent from state-to-state and 
established a minimum level of equipage for POS terminals used to 
support the WIC Program. The proposal was consistent with the 
legislative requirement to establish national standards for 
implementation of WIC EBT, including standards for lane coverage for 
payment terminals to accept WIC EBT transactions. These minimum 
standards apply to all systems and equipment used to support WIC EBT, 
whether the equipment is multi-functional or used solely for the WIC 
Program.
    Section 246.12(z)(2) of the proposed rule would have required a WIC 
EBT equipment installation formula similar to the SNAP equipment 
installation requirements. Specifically, under the proposed rule, WIC 
vendors would have been required to install a commercial multi-function 
terminal or a government-provided stand-beside terminal in their 
checkout lanes as follows: For superstores and supermarkets, one POS 
terminal for every $11,000 in monthly WIC redemption; and, for all 
other authorized WIC vendors, one terminal for every $8,000 in monthly 
WIC redemption. As a vendor's WIC redemption reaches the next equipment 
threshold, they would be eligible for an additional terminal if 
equipped by the State agency under the formula proposed by the 
Department or an alternate formula approved by the Department. POS 
terminals would have been installed up to a maximum of four lanes, but 
not more than the number of lanes in a WIC vendor location. This 
formula does not require all lanes to be equipped for stores conducting 
more than 15 percent or more of their food sales in WIC business, which 
differs from the SNAP regulations but is consistent with the provisions 
in the CNA. The proposed rule would have allowed a State agency to use 
an alternative installation formula with Department approval. 
Additionally, Sec.  246.12(z)(2)(iii) of the proposed rule would have 
required a State agency to determine the number of terminals that would 
be installed to support authorized farmers or farmers' markets.
    This section of the proposed rule received 26 comments from State 
agencies, advocates, WIC vendor associations and members of the 
electronic funds transfer industry. Many commenters expressed concern 
that the proposed lane coverage guidelines may be cost prohibitive for 
State agencies and/or vendors and funding constraints for all 
stakeholders should be taken into consideration when establishing 
guidelines. Other concerns were that the equipage requirements did not 
allow for variances among WIC State agencies, the use of the SNAP POS 
terminal equipage formula was applied arbitrarily and the experience 
among EBT WIC State agencies to date was insufficient to require a 
single equipage formula nationally that applied to all WIC State 
agencies. Several commenters suggested adding a requirement that POS 
devices support multiple programs, most notably SNAP.
    For the purposes of this equipment formula, State agencies may use 
the U.S. Census Bureau Census on Retail Trade definition of 
supermarkets as retail establishments having sales over $2 million 
annually in food, which is consistent with the SNAP definition for 
supermarkets. Supercenters or superstores are retail establishments 
primarily engaged in retailing a general line of groceries in 
combination with general lines of new merchandise, such as apparel, 
furniture and appliances. A State agency that requires SNAP 
authorization as a criterion for authorization of a WIC vendor may also 
reference the store categories utilized by SNAP.
    The Department believes the proposed POS equipment lane coverage 
formula allows for a consistent standard for the minimum number of 
lanes necessary to permit WIC participants to purchase their WIC foods 
using an EBT card. After evaluating both current WIC EBT State agency 
practices concerning lane equipage and SNAP equipment installation 
requirements, the Department believes the proposed equipment formula 
represents a reasonable and consistent basis to allow WIC participants 
to purchase their WIC foods in the same manner as all other non-program 
customers.
    Numerous commenters suggested using a range of redemption values to 
determine lane equipage and to give State agencies more latitude in 
determining how to equip vendors with POS equipment based on State 
agency needs, technology and funding availability. The Department 
recognizes the variation among WIC State agencies and proposed a State 
agency be given flexibility to devise a formula fitting its specific 
environment if the national terminal coverage formula does not meet a 
specific State agency situation. Therefore, the proposed language at 
Sec.  246.12(z)(2)(i) and (z)(2)(ii) is retained in the final rule and 
allows WIC State agencies to utilize an alternative terminal equipage 
installation formula with Department approval. This provision should 
allay State agency concerns that the national terminal equipage formula 
does not adequately consider a State agency's unique needs.
    The Department understands there are scenarios where a vendor may 
choose not to install WIC EBT capable commercial equipment in every 
lane. As noted by a commenter, the preamble to the proposed rule 
assumed all vendors utilizing integrated multi-functional cash register 
systems would choose to equip all of their lanes with WIC

[[Page 10441]]

functionality. The Department agrees with the commenter and wishes to 
clarify that we encourage EBT transactions to be integrated into each 
WIC vendor's checkout lanes to allow WIC EBT cards to be utilized in 
all lanes both to promote efficiencies and to improve WIC benefit 
delivery, but it is not necessarily a universal business practice among 
vendors, nor is it a requirement.
    While many vendors may prefer to integrate WIC EBT into their 
existing POS equipment, vendors may find integration costs prohibitive 
and therefore elect to use a single-function POS terminal for WIC 
transactions or may choose to have limited lanes integrated to accept 
WIC EBT. One commenter noted that when a vendor elects to equip fewer 
lanes than would have been required by this regulation, the State 
agency would have been required to install the additional stand-beside 
equipment at State agency expense. Prior to statewide EBT 
implementation, this would be the case. The Department recognizes the 
need may arise to install separate single-function terminals prior to 
statewide implementation either on an interim basis in order to allow 
more time for a WIC vendor to upgrade to an integrated system or as a 
permanent POS solution. As noted earlier in the preamble, retailer 
equipage would be included as part of a State agency's retailer 
enablement plan and would address the number and type of POS equipment 
in each vendor location. Once statewide EBT is achieved, the provision 
at Sec.  246.12(aa)(4)(i) applies. Any ongoing State agency support for 
stand-beside terminals would be subject to a State agency's 
determination the vendor was necessary for participant access.
    A few commenters noted the lane coverage formula was inconsistent 
with the requirement that WIC vendors offer WIC customers the same 
courtesies as other customers as required in current regulations at 
Sec.  246.12(h)(3)(iii). The Department also recognizes the use of 
stand-beside equipment is not optimal for WIC participants because they 
must separately scan their WIC food items to complete the WIC portion 
of their purchases. Scanning and entering price information twice will 
be slower compared with the scanning process for other store customers. 
However, as noted previously, it may not be feasible or affordable for 
WIC vendors or a WIC State agency to equip all lanes with WIC 
functionality in excess of the minimal lane equipage formula using 
either additional stand-beside equipment or multi-functional terminals. 
The State agency and WIC vendor would need to take steps to ensure WIC 
customers are directed to the WIC EBT capable lane(s) without 
designating these lanes as usable only by WIC customers. This could be 
done through the use of appropriate signage such as ``WIC EBT accepted 
here.'' Provided a WIC vendor is complying with the lane equipment 
formula, a requirement to check out in specific lanes capable of 
accepting a WIC EBT card is not treating WIC customers differently than 
other customers provided the WIC lanes could also be used by other 
customers.
    Although we have noted not all WIC vendors will choose to integrate 
WIC EBT into any and/or all of their POS devices, based on the 
experience with SNAP, the Department expects the majority of WIC 
vendors to equip all of their checkout lanes when they utilize 
commercial multi-functional WIC EBT capable solutions due to increased 
efficiencies and convenience in the checkout lanes for all customers. 
Given the concerns expressed about all lanes being WIC EBT capable for 
improved customer service versus the cost prohibitions to both WIC 
State agencies and authorized WIC vendors for doing so, the final rule 
modifies Sec.  246.12(z)(2) to require that lanes be equipped according 
the formula regardless whether the equipment is single-function or 
multi-function. The final rule retains the equipage formulas at Sec.  
246.12(z)(2)(i) and (z)(2)(ii) as proposed.
    Commenters also expressed support for minimizing deployment of two 
POS terminals in a single checkout lane, one for WIC and one for SNAP, 
with one commenter suggesting joint WIC and SNAP EBT POS capabilities 
be a requirement. As noted in the preamble to the proposed rule, some 
WIC State agencies have worked with their SNAP agencies to acquire WIC 
and SNAP EBT services through a single contractor. This permits a 
single POS terminal to be installed in authorized vendor locations 
accepting both WIC and SNAP benefits. The Department expects the WIC 
State agency will consult with the SNAP EBT agency during planning to 
identify opportunities where vendor equipage could be coordinated and 
instances of duplicate equipment can be minimized. However, the 
Department recognizes separate terminals may be unavoidable in some 
instances due to contractual and funding issues and the need to upgrade 
software and other infrastructure to support transactions from the two 
programs. Because of these issues, the final rule is retained as 
proposed and does not require a single POS terminal capable of allowing 
both WIC and SNAP purchases.
    Two commenters suggested amended language to protect a State agency 
from bearing fiscal liability in instances where a vendor is removed 
from the WIC program after receiving reimbursement from a State agency 
to acquire WIC EBT capable multi-functional equipment, especially after 
statewide implementation. One commenter was concerned policy guidance 
would be needed in a situation when a vendor is removed from 
participating in the WIC Program but has accepted reimbursement from 
the State agency prior to the removal. In such situations, the State 
agency may not be able to get a full return on the funds provided. When 
a State agency has devised a retailer enablement plan that includes 
investment in equipment owned and operated by individual vendors, the 
State agency must address recoupment of this investment. Some State 
agencies have added a provision to vendor agreements which allows the 
State agency to recover a pro rata share of any funding from a WIC 
vendor terminated or removed from the program. It is appropriate for 
State agencies to include recoupment of federal investment in their WIC 
vendor agreements or other agreements entered into regarding WIC EBT 
equipment.
    Two commenters requested modification of the proposed language at 
Sec.  246.12(z)(2)(v) which would have allowed an authorized vendor who 
has been equipped with a terminal by the State agency to submit 
evidence that additional terminals are necessary after the initial POS 
terminals are installed. One commenter suggested the additional 
terminals be added at the expense of the vendor. Another commenter 
requested timeframe limitations for requesting additional terminals be 
incorporated into the regulatory language, e.g. the vendor must request 
additional terminals within one year from the initial POS installation 
or prior to statewide rollout, whichever is sooner. To allow for 
greater State agency flexibility and to provide WIC authorized vendors 
an opportunity to request additional POS equipment should their 
business operations change or expand indicating the need for additional 
WIC EBT equipment, the language at Sec.  246.12(z)(2)(v) remains as 
proposed.
    No comments were received on the proposed provisions at Sec.  
246.12(z)(2)(iv), (z)(2)(vi) and (z)(2)(vii), which dealt with 
equipping vendors necessary for participant access, terminal equipage 
for obtaining benefit balances and the removal of excess terminals in 
the event of reduced redemption activity, respectively.

[[Page 10442]]

Therefore, these provisions remain as proposed.
    Section 246.12(z)(3) of the proposed rule would have required the 
State agency to ensure vendors, farmers, farmers' markets and home food 
delivery contractors are paid promptly. Although the proposed rule did 
not mention farmers' markets which was an oversight by the Department, 
we have added farmers' markets to 246.12(z)(3) in this final rule. 
Payment must be made in accordance with the established Operating Rules 
and technical requirements after a valid electronic claim for payment 
has been submitted. Ten comments were received on this topic with the 
majority of the commenters indicating that the preamble language did 
not accurately reflect decisions made via the Operating Rules technical 
workgroup with regard to the timing of when a State agency should pay 
vendors. At the time the proposed rule was published, the Operating 
Rules required payment within two days of submitting a valid electronic 
claim for payment; subsequently the Operating Rules have been updated 
to require payment within two processing days of receipt of the claim 
for payment but allow exceptions to allow payment up to five days after 
receipt by the State agency. The Department acknowledges this generally 
accepted practice. However, the Department feels the number of days for 
submitting a valid claim for payment should not specifically be stated 
in the regulatory language, but rather is appropriately addressed in 
the Operating Rules. Consequently, the proposed language at Sec.  
246.12(z)(3) is retained as proposed.

7. Technical Standards and Requirements

    General. Section 17(h)(12)(G) of the CNA states that the Secretary 
shall establish technical standards and operating rules for WIC EBT and 
requires each State agency, contractor and authorized vendor 
participating in the WIC Program demonstrate compliance with 
established technical standards and operating rules. Two of the most 
comprehensive compilations of the standards and rules established for 
WIC EBT are the EBT Operating Rules and the Technical Implementation 
Guide (TIG), both of which were thoroughly discussed in the preamble of 
the proposed rule. The Department also requested comments on retail 
vendor certification procedures, the WIC Universal Management 
information System MIS-EBT Interface specification and other issues 
discussed in the preamble; and the minimum timeframes that would have 
been required for replacing participant benefits and the establishment 
of a toll-free 24-hour customer service number proposed as regulations. 
These comments and the Department's response to the comments are 
addressed below.
    As indicated in the proposed regulation, the Department has long 
recognized the standards and operating rules must be followed to 
facilitate EBT expansion efficiently and consistently from State to 
State and has worked collaboratively with State agencies and industry 
to establish WIC EBT standards. The proposed rule at Sec.  
246.12(bb)(1)(i) and (bb)(1)(ii) would have required State agencies, 
contractors and authorized WIC vendors to follow and demonstrate 
compliance with operating rules, standards and technical requirements 
as established by the Secretary, as well as to comply with other 
industry standards identified by the Secretary. Section 246.12(bb)(2) 
and (bb)(3) would have established requirements for replacing 
participant benefits and establishing a 24-hour toll free hotline 
number for customer assistance, respectively.
    Under the preamble in the proposed rule, the Department sought 
comments on several aspects of the Operating Rules and technical 
standards documents in order to determine future regulatory or policy 
updates. A total of 87 comments were received on this section of the 
proposed rule. Many of the commenters requested clarification or 
suggested corrections to preamble language or provided general comments 
to preamble discussion of the operating rules, TIG, retail 
certifications and other standards. A discussion of each area follows.
    Operating Rules and Technical Implementation Guide (TIG). The WIC 
EBT Operating Rules and the TIG were collaboratively developed over the 
past several years with State agency and industry input to address, 
respectively, the ``what'' and ``how'' of WIC EBT implementation. These 
documents have been accepted and implemented among EBT State agencies, 
their authorized vendors, processors and other stakeholders and have 
contributed to successful WIC EBT implementation and expansion. The 
Department's rationale for proposing the required use of the Operating 
Rules and TIG and maintaining these as stand-alone technical documents, 
allows for technological changes to be incorporated into the Operating 
Rules and technical standards as technology is updated and WIC EBT 
evolves. This process allows more timely updates to these detailed 
documents while still allowing stakeholder input.
    Overall, commenters were in support of the proposed requirement to 
follow and demonstrate compliance with technical standards and 
operating rules. A few commenters noted it was critical to have 
industry input to the standards and the standards remain flexible so 
WIC EBT can adapt to new technology. The Department intends for 
flexibility to be accomplished by maintaining the documents separate 
and apart from the regulatory process. One commenter stated current EBT 
State agencies should be grandfathered in and not be required to 
implement new or updated standards. The Department understands this 
concern but feels it is critical for all State agencies to incorporate 
the latest standards into their EBT benefits delivery methods as soon 
as practical so processors and vendors can cost effectively build to 
the standards. To acknowledge this concern and to allow State agencies 
flexibility in implementing the standards, State agencies currently 
operating WIC EBT delivery methods will be allowed to implement the 
standards into their EBT delivery methods up to two years from the date 
of publication of this rule.
    One large retailer association, while supporting the need for 
standards and operating rules, suggested the standards and related 
documents be published for public comment. As noted in the preamble to 
the proposed rule, the Department has established a maintenance process 
allowing all stakeholders the opportunity to submit change requests 
necessary to clarify, change or add to the rules prompted by 
implementation activity. This process permits stakeholders to submit a 
change request to the Department for consideration. Once received, 
reviewed and analyzed for potential impact, the change request will be 
published on the established collaborative Web site, discussed on a 
conference call and published in a final bulletin for a 30-day comment 
period. Once this comment period is completed, a schedule for 
implementation will be identified in the final change request. Updates 
will be issued as technical bulletins and then incorporated into the 
periodic update for each document. A copy of the WIC EBT Operating 
Rules and TIG are available on the public Web site of the Food and 
Nutrition Service at http://www.fns.usda.gov/wic/ebt-guidance. Parties 
interested in reviewing and commenting on these documents can obtain 
access to the shared WIC EBT Technical Documents PartnerWeb shared Web 
site by sending an email

[[Page 10443]]

requesting access to: [email protected].
    Several commenters suggested the Department be cautious in adopting 
commercial standards such as the Europay MasterCard Visa (EMV) 
Smartcard Payment System standards. For example, EMV includes 
technology such as Near Field Communications that, at the time of this 
writing, is not presently in use by any WIC EBT system to support 
contactless smart cards. The Department is paying close attention to 
EMV because we believe it is best to align EBT standards with 
commercial standards already in use to the greatest extent possible. 
Alignment with commercial standards sometimes referred to as `piggy-
backing' on commercial infrastructure, will help to reduce costs and 
development time for State agencies, WIC vendors and processors who 
must support WIC and other payment forms. This was the Department's 
perspective when SNAP was implementing EBT and the approach has 
continued. Consequently, should a State agency decide to adopt a smart 
card supporting Near Field Communication contactless purchases, it 
would be in the best interest of the WIC Program to consider adoption 
of the existing EMV or other industry standards.
    We would like to clarify, as a few commenters noted, that the 
Accredited Standards Committee (ASC) X9, Inc. is the organization 
responsible for financial standards in the United States rather than 
the American National Standards Institute (ANSI), which was incorrectly 
referenced in the preamble of the proposed rulemaking. The two 
pertinent standards for WIC managed by the ASC X9 are the X9.93 
messaging and file standards and the X9.131, which defines the 
interface between vendor card readers and EBT smart cards.
    A number of commenters raised questions related to enforcement of 
the Operating Rules and TIG. Questions included the process by which 
WIC vendors and EBT processors would demonstrate compliance, which 
party would be required to pay the cost of compliance and how often 
must it be demonstrated. One commenter questioned the extent a vendor 
or cash register manufacturer would be responsible for State agency 
certification costs, such as staff time for testing and quality 
assurance review and travel costs. The Department strongly urges State 
agencies to coordinate their certifications to minimize and not 
duplicate the costs imposed on the industry and take advantage of 
collaborative certifications allowing a single certification with 
several State agencies at one time, to save time, and establish policy 
and protocols to ensure standards such as the Operating Rules and TIG 
are being followed. Concerns and questions pertaining to retailer 
capability after statewide implementation will be discussed later in 
this preamble. Additionally, as many of these issues are outside the 
purview of this regulation, the Department will provide additional 
guidance and policy on these questions as necessary after publication 
of this final rule.
    The Department believes the proposed regulatory language concerning 
standards provides adequate flexibility to establish new and/or changes 
to existing standards as WIC EBT evolves and allows for appropriate 
input from EBT stakeholders. Therefore, the provisions at Sec.  
246.12(h)(3)(xxxi), (bb)(1)(i), and (bb)(1)(ii) requiring compliance 
with Operating Rules, standards and technical requirements and other 
industry standards established and/or identified by the Secretary are 
retained as proposed in this final rule. Additional discussion of these 
provisions follows.
    Retail Vendor Certification Procedures for WIC EBT Capability. In 
the proposed rule, the Department expressed interest in developing 
procedures and guidance for the certification of retail vendor 
electronic cash registers and associated payment devices, to include 
the development of common test scripts and testing criteria. The 
Department sought comments on the retailer certification process, 
noting however that discussions and comments related to retailer 
certification and consequently, what a vendor would need to demonstrate 
to the satisfaction of the WIC State agency that its system was EBT 
capable, would not be incorporated into the final rule. Rather, these 
comments would be considered in the larger discussion among all EBT 
stakeholders of what should be incorporated into associated standards 
and rules as to what constitutes a WIC EBT capable vendor system.
    Specific standards for certifying vendors or other systems that may 
affect a WIC EBT transaction were not proposed other than the 
requirement at Sec.  246.12(aa)(4)(ii) which would have required each 
WIC vendor applicant to demonstrate capability to accept WIC benefits 
electronically after statewide implementation. Several commenters 
expressed the need to provide a consistent process, to develop 
standards and processes as quickly as possible and to involve the 
retail community in the development of the vendor certification 
process.
    While no clear consensus was supported by commenters on the vendor 
system certifications, we did receive many useful suggestions. Some 
commenters suggested the Department establish a lab for manufacturers 
to get certified or use a centralized process for certifying cash 
register systems. In each of these cases, the manufacturer of the cash 
register software would present the system to the lab or the Department 
whenever modifications to software affecting WIC activities was ready 
or a new system was to be certified for WIC EBT functionality. 
Individual State agencies could then test the actual implementation by 
each WIC vendor by conducting a few purchases or accepting the 
certification conducted by another State agency. Several State agencies 
suggested the use of a lead State agency which would maintain a 
national database of certified WIC EBT capable benefit delivery 
methods. Under this approach, the lead State agency would act on behalf 
of other State agencies in conducting and coordinating vendor system 
certifications which would reduce cost and the level of resources that 
would have been required by developers and State agencies.
    The Department also established a workgroup to explore the 
feasibility of standardizing certification procedures and test scripts. 
However, after meeting for more than one year, the workgroup did not 
reach consensus on a common approach to be followed by all parties. 
While the group was unable to reach consensus on the overall approach, 
the State agencies and industry agreed to consolidate test scripts used 
during certifications for each technology to standardize this aspect of 
the testing. These test scripts are updated and are available on the 
EBT Technical Documents Partner Web site for use by State agencies and 
industry.
    As a result, the Department has determined continued Departmental 
involvement in the process of certifying retailer cash register systems 
is no longer warranted. WIC State agencies will retain responsibility 
for the prompt and accurate payment of allowable costs as discussed at 
Sec.  246.13(d). Each WIC State agency planning to implement WIC EBT 
must therefore ensure that all EBT transactions are processed 
correctly, securely and in accordance with current WIC regulations, 
policy and guidance. State agencies may conduct certification tests or 
accept certifications conducted by other State agencies of WIC vendor 
systems in accordance with the WIC EBT Operating Rules. As with the 
paper food instrument redemption by WIC vendors, State agencies shall 
take actions through

[[Page 10444]]

the provisions of their vendor agreements and associated administrative 
actions when vendors are found to be noncompliant. The Department will 
not dictate the steps the State agency must take to ensure its EBT 
benefit delivery method and the systems of its WIC authorized Vendors, 
are operating correctly.
    WIC Universal MIS-EBT Interface Specification. The WIC Universal 
Management Information System (MIS)-EBT Universal Interface (WUMEI), 
commonly referred to as the Universal Interface or simply UI, is a 
specification that guides systems development for data exchanged 
between State agency clinic MIS systems and EBT processor systems. 
Several comments were received suggesting the interface specification 
should become one of the standards identified by the Secretary as a 
requirement for implementation. The Department expects all State 
agencies to build their interfaces consistent with the Universal 
Interface specification. Therefore, the Department does not believe 
there is a need for a separate standard reiterating use of the 
Universal Interface specification.
    Other Standards and Requirements. As noted in the preamble to the 
proposed rule, other standards and requirements may be necessary over 
time and the Department must be able to establish these standards and/
or incorporate these changes into the existing technical standards and 
guidelines and State agencies must accommodate and implement these 
changes. One such proposed requirement at Sec.  246.12(bb)(2) would 
have required State agencies to establish policy permitting the 
replacement of participant benefits within five business days following 
notice by the participant to the State agency, at least one time in a 
three-month benefit issuance period. The replacement process would 
enable the remaining food balances associated with an EBT card to be 
transferred to another card (off-line) or linked to another EBT card 
with the same account (on-line). Current policy gives State agencies 
the option to replace lost or stolen food instruments.
    The Department received 20 comments on the card and benefit 
replacement provision of the proposed rule. Three commenters were in 
full support of the provision as proposed. Several commenters expressed 
concern both with the five business day replacement timeframe as well 
as with the provision requiring replacement at least once in a 
consecutive three-month period. Four commenters suggested the provision 
be made optional. Eight commenters were in support of the change, but 
requested the timeframe be extended beyond five business days to 
accurately reflect the State agencies' current WIC EBT replacement 
timeframe. Commenters also noted the background language contained in 
the proposed rule was inaccurate because it erroneously stated benefits 
can be lost when an EBT card is lost or stolen. To clarify, the balance 
of the electronic benefit at the time when a card is reported lost or 
stolen is transferred to a new card issued to the participant(s) or 
proxy and consequently, no loss of benefits occurs. Although the 
proposed rule did not specifically address card replacement if the card 
is damaged, this final rule is also applicable to replacement of 
damaged cards.
    Under the proposed rule, the maximum timeframe that would have been 
required for electronic benefit replacement by an EBT State agency was 
five business days. Though initial implementations by off-line State 
agencies followed FNS policy guidance to replace lost or stolen cards 
within five business days, one State agency commenter indicated it 
could not consistently meet the standard due to constraints such as 
part-time outreach sites with variable hours of operation. Therefore, 
this State agency had established a policy permitting the replacement 
of the EBT card and transfer of participant benefit balances within ten 
days of notification. Other State agencies increased the timeframe from 
five business days to six because clinics could not consistently meet 
the five day replacement policy because it is not always possible to 
obtain the remaining balance immediately due to delays in WIC retail 
vendor settlement and in cases where off-line States clinics only 
operate a few days per week, particularly in remote areas.
    The Department expects State agencies to replace a lost or stolen 
card as soon as possible, but no later than seven business days 
following notice by the participant or proxy to the State agency. This 
timeframe should allow for vendor settlement consistent with EBT 
business practice capabilities and recognizes limited clinic 
availability in some remote areas. Section 246.12(bb)(2) in this final 
rule has been amended to require the replacement of EBT cards and the 
transfer of associated participant benefit balances within seven 
business days following notice by the participant or proxy to the State 
agency.
    The proposed rule included a requirement to replace participant 
benefits at least one time in a consecutive three-month period when a 
card is reported lost or stolen. This final rule has been modified to 
clarify that the Department intends for card replacements and the 
remaining associated benefits to occur routinely and as soon as 
possible to afford time for the participant to obtain their WIC foods 
for the month. It is expected that should frequent card replacements 
occur, the State agency will advise the cardholder of their 
responsibilities and the need to protect the card at all times. The 
State agency may also determine if additional research is warranted to 
rule out any program integrity concerns.
    A conforming amendment was added to Sec.  246.4(a)(14)(xix) to 
include a description of the process the State agency will establish to 
replace EBT cards and transfer the associated benefits within seven 
business days.
    Under the proposed rule, Sec.  246.12(bb)(3) would have required a 
State agency to provide a toll-free 24-hour hotline number with live 
representatives for EBT cardholder assistance. The toll-free 24-hour 
hotline was proposed to enhance customer service to WIC participants 
who may need to contact the State agency or a WIC clinic to report a 
lost or stolen EBT card, request a replacement card, or to access other 
services. In proposing the toll-free 24-hour hotline number, the 
Department also recognized this requirement may have a potential impact 
on the affordability of WIC EBT and may strain State agency management 
of resources if the State agency needed to expand its operational 
hours. Therefore, the Department specifically sought comments regarding 
this proposed requirement.
    The Department received 31 comments on this provision of the 
proposed rule. Ten commenters, all from the advocacy community, were in 
support of the change, with two of these commenters recommending the 
provision be broadened to provide hotline assistance to authorized 
vendors as well. While the Department supports the potential for 
enhanced business practices and customer service that EBT may provide, 
we also recognize this could create untenable costs for State agencies 
and tax their administrative capacity. Additionally, vendors have other 
means to receive assistance through their commercial equipment and 
payment service providers or by contacting the State agency vendor 
coordinator. Therefore, the final rule will not expand the requirement 
to accommodate vendors.
    Twenty-one commenters, primarily State agencies, were opposed to 
the requirement for a toll-free 24-hour hotline number; of those, 
fourteen recommended the hotline be a State

[[Page 10445]]

agency option rather than a requirement. While many of these commenters 
were in agreement that EBT offers an opportunity for enhanced customer 
service to WIC participants, it was noted that requiring this level of 
customer service had not been determined necessary for the successful 
operations of WIC EBT in the early smart card implementations as well 
as in several on-line WIC EBT implementations. These EBT implementers, 
now statewide, found the 24-hour hotline to be of limited benefit or 
unnecessary and recommended that the Department eliminates the proposed 
requirement to establish a toll-free 24-hour hotline number. 
Furthermore, these commenters noted maintaining a 24-hour, 7 day a week 
toll-free customer service operation could create undue financial 
hardships to a State agency and should be a service a State agency may 
consider as an option if State agency resources allow.
    Several commenters noted the demonstrated need for a 24-hour 
hotline number in the smart card WIC EBT implementations, now 
statewide, had not materialized nor had advocates for participants or 
participants themselves expressed the need for this level of service. 
One State agency commenter indicated there was very little a 24-hour 
customer service representative could do to assist a WIC participant 
with a smart card until the WIC clinic was open. Unlike an on-line EBT, 
current food balances for off-line cards are not available via a 
customer service number in real time and commenters indicated few 
instances of difficulty in reporting a card lost or stolen to the WIC 
clinic have occurred even when operating statewide. Additionally, 
several State agencies have operated statewide with little demonstrated 
need for toll-free 24-hour hotline capability through the use of State 
operated customer service during business hours that transitions to a 
contractor-supported number for WIC participants or merchants to call 
outside of business hours. In these State agencies, most cardholder 
issues are resolved through participant contacts with the local WIC 
clinic staff.
    The Department concurs with the potential issues of affordability, 
unsubstantiated demand and impact on resource management that the 
proposed requirement for a 24-hour hotline available to assist 
participants may have on a State agency. Therefore, the Department is 
removing the toll-free 24-hour hotline assistance requirement and 
replacing it with the requirement for a State agency to establish 
procedures allowing WIC participants to, at a minimum, report 
cardholder issues, report a lost or stolen card and receive information 
on the current food balance and benefit expiration date during non-
business hours. While a State agency would not be required to provide a 
toll-free 24-hour hotline supported by customer service representatives 
and/or an automated Interactive Voice Response (IVR) system, this 
amended requirement leverages additional opportunities to enhance 
customer service by providing a means of access for participants to 
report issues and have fundamental services offered at all times. In 
addition, per the WIC EBT Technical Information Guide (TIG), 
participants' purchase receipts must provide food balances and benefit 
expiration date. The final rule at Sec.  246.12(bb)(3) requires each 
State agency to establish procedures and systems to enable participants 
to report cardholder issues during non-business hours as well as 
receive other services. Procedures may include a toll-free 24-hour 
hotline or other alternatives to receive services or report card issues 
in an easily accessible manner. Additionally, the Department encourages 
State agencies to provide participants with services in the most 
accessible method as possible, such as mobile balance inquiries in 
addition to IVR. Other alternatives may become available in the future 
which would provide opportunities to further improve and enhance WIC 
customer service. The procedures for meeting the customer service 
requirements at Sec.  246.12(bb)(3) must be described in the State 
Plan. A conforming amendment has been made to Sec.  246.4(a)(14)(xx) 
requiring the description of the State agency's procedures for meeting 
the customer service requirements.
    Three commenters suggested the Department provide guidance on what 
minimum services would be required in order to maintain compliance with 
the requirement for toll-free 24-hour hotline services. While this 
final regulation no longer requires a 24-hour toll-free hotline for WIC 
cardholders to report issues during non-business hours, the Department 
has set a minimum level of service participants must be able to receive 
during non-business hours.
    The minimum participant services that must be offered during non-
business hours are: (1) Receive information on the current food 
balance, (2) receive benefit expiration date and (3) report a lost or 
stolen card and other cardholder issues. The Department expects a State 
agency to respond to cardholder issues at the time the report is 
received or as soon as possible. Other customer service features may be 
included such as obtaining purchase transaction detail, selecting or 
changing a PIN and finding the locations of WIC authorized vendors. If 
a State agency seeks to implement alternatives to the minimum service 
requirements, the agency must submit the plan to FNS for approval.

8. National Universal Product Code (NUPC) Database

    Under the proposed rule at Sec.  246.12(cc), the National UPC 
(NUPC) database would be used by all State agencies providing benefits 
via WIC EBT. The minimum requirement for usage of the NUPC database 
could be met by a State agency through the submittal of a copy of the 
State agency's current authorized product list (APL) for inclusion in 
the NUPC database. The proposed rule would have also required a State 
agency to submit a copy of its current APL file prior to the APL 
becoming effective or making it available to its authorized vendors.
    As discussed in the proposed rule, the NUPC database is envisioned 
to be a repository of information about all food items authorized by 
each WIC State agency. Information in this repository will be organized 
in accordance with the National Category Subcategory Table. Additional 
food product information is included in the database to permit each 
State agency to determine whether or not to authorize the product for 
use within the State agency. The additional food product information 
would include items such as nutrition labeling, bar code symbol, 
product flat or a photograph of the container and ingredients. The 
intent of the repository is to facilitate the identification of WIC 
eligible food items and to provide the associated product information 
necessary to support EBT operations. For instance, once a State agency 
has determined a food item is eligible, the product UPC code, food 
category, subcategory and unit of measure can be easily incorporated 
into the State agency process for updating its APL file.
    The Department received 27 comments on the proposed requirements 
regarding the use of the NUPC database. Comments were received in five 
broad areas: (1) Use of UPC terminology; (2) Mandating use of the 
National Food Category/Subcategory Table by all State agencies; (3) 
Authority for WIC State agencies to authorize WIC foods; (4) Department 
approval of APL files prior to distribution to authorized WIC vendors; 
and (5) The design and functioning of the NUPC clearinghouse. These 
issues are discussed in more detail below.

[[Page 10446]]

    Use of UPC Terminology. Several commenters recommended adoption of 
the terminology used by GS1, which is a nonprofit organization setting 
industry standards for barcodes used in retail and supply chains. Under 
the GS1 umbrella, which can be found at www.gs1.org, there are Global 
Trade Identification Numbers (GTINs) which include the UPC necessary 
during a WIC purchase. The GTINs are contained as UPCs in the APL file 
a State agency distributes to its authorized vendors. There are several 
different types of GTINs such as GTIN-8, GTIN-12, GTIN-13 and GTIN-14, 
which contain UPC numbers of different lengths. There are other GTIN's 
available for different purposes such as those used on larger cases of 
product not generally sold at retail. After checking with GS1-US, which 
is the organization supporting barcode adoption in the United States, 
GS1 advised the Department that the GTIN-12 and Universal Product Code 
are used synonymously in the industry; therefore, this rule continues 
to refer to the UPC as the more commonly recognized terminology used in 
WIC EBT.
    The National UPC database also contains PLUs, which are the 
standard codes published by the International Federation of Produce 
Standards (IFPS) for fresh produce such as fruit and vegetables. We 
wish to correct the record as noted by several commenters that the PLU 
codes are 5 digits in length even though retail practice generally 
drops the initial zero for standard PLUs, unless it is genetically 
modified or organic. Under the IFPS coding structure, a fifth (leading) 
digit qualifier is allocated to some produce with specific qualities. 
As noted, the fifth digit qualifiers for global PLU codes are `0' for 
nonorganic products (referred to as non-qualified PLU codes), although 
generally this digit is omitted and `9' for organic produce. The `8' 
leading digit qualifier formerly used for genetically modified produce 
is no longer used for this purpose. One commenter urged the Department 
to remain flexible to accommodate future changes in the industry and 
technology in the supply chain. The Department agrees; during 
development of the NUPC database and within the WIC technical 
standards, future changes have been provided for where possible. For 
example, the longer length UPCs used in Europe and Asia, which are 13 
and 14 digits, have not been widely adopted by food manufacturers 
marketing products in the United States at the time of this writing. To 
plan for future industry changes, the TIG and associated standards as 
well the NUPC database currently allow these 13 and 14 digit UPC 
lengths if a WIC State agency authorizes the product for use or these 
longer UPCs become prevalent in the United States.
    Mandating Use of the National Food Category/Subcategory Table. The 
proposed rule would not have required each State agency to make use of 
the National Food Category Subcategory Table, but input was sought on 
the potential barriers, obstacles and benefits State agencies would 
incur if conformity to a national standard food classification system 
would have been required by the Department. The Department also invited 
reader comment on how conformity could be effectively instituted. While 
a national standard format would have been required for the APL file, 
WIC State agencies currently would not be required to use the national 
category/subcategory table maintained by the Department. The Department 
believes it is necessary to preserve some flexibility for State 
agencies to deviate from the national category/subcategory table 
because of differences in product availability, varying demand for 
ethnic foods and the need to ensure WIC participants can obtain 
products such as infant formula in a timely manner.
    Several comments were received specific to the National Food 
Category Subcategory Table. Most voiced concerns about making its use a 
requirement, particularly for existing EBT State agencies that may have 
compatibility issues. Two commenters requested flexibility in the use 
of the NUPC in general, one commenter suggested it be a State agency 
option and another commenter suggested all EBT stakeholders be included 
in any process and discussion concerning how conformity could 
effectively be instituted.
    The Department strongly supports and recommends use of the National 
Food Category Subcategory table by all State agencies as they begin 
their EBT projects. The Department recognizes, however, how the 
variability in State agency EBT benefit delivery methods' capability 
and differences in product selection for approved WIC foods may cause 
changes to the National Category Subcategory table over time to 
accommodate individual State agencies. We are also concerned, as many 
commenters noted, that maintaining the National Food Category 
Subcategory table consistently for all State agencies places the 
Department in the middle of food authorization decisions, which is the 
role WIC State agencies play in building their APL.
    Additionally, the current vendor cash register systems, which 
include most of the major systems available in the United States 
currently used by WIC vendors, have been able to handle variances in 
State agency-specific Category Subcategory tables. However, one State 
agency commented that the food category table and APL files are 
utilized to control food costs by assigning higher cost food items such 
as quart and half gallon milk containers to separate food 
subcategories. In this example, the maximum authorized reimbursement 
(MAR) amount is computed at the subcategory level and consequently does 
not affect larger sizes of milk. This State agency also uses its 
category and subcategory table for cost containment with the cereal, 
infant fruits and vegetables food categories. The Department recognizes 
there are high levels of variability in the approaches each State 
agency has implemented for cost containment. Therefore, while the 
Department sees value in standardized use of the National Food Category 
Subcategory Table and we require all new EBT State agencies to adopt it 
initially, this final rule does not mandate its use. In part, we are 
persuaded that flexibility is more appropriate than mandating a strict 
standard because electronic cash registers are able to successfully 
load APL files with State agency differences in the category, 
subcategory and unit of measure assigned to each product. The important 
level of standardization is accomplished by using the APL standard file 
format and adherence to the EBT Operating Rules and Technical 
Implementation Guide file formats.
    Authority for WIC State Agencies To Authorize WIC Foods. A few 
commenters expressed support for continuing to allow State agencies to 
evaluate and authorize WIC foods within their State agency. The 
proposed rule did not alter current State agency responsibilities for 
authorizing WIC foods. As previously indicated, the NUPC database is 
only a repository of information about WIC foods that a WIC State 
agency may use to identify and select food items for use within the 
State agency. The determination of which food items are authorized 
remains a State agency responsibility and does not change now that the 
NUPC database is available for State agency use.
    Submission of APL Files Prior to Distribution. Four commenters, one 
industry consultant and three State agencies expressed concern that a 
State agency must submit its APL file to the NUPC database prior to 
distributing the APL file to their authorized WIC

[[Page 10447]]

vendors. The Department wishes to clarify this requirement is only a 
submission of the APL file whenever it is updated. The APL file can be 
transmitted to the NUPC database at the same time the file is sent to 
vendors authorized by the State agency. We recognize the APL file 
contains critical information needed to accept WIC food items in WIC 
vendor checkout lanes. This information includes the effective date for 
new items, changes in the food item descriptions necessary for printing 
food balances on receipts and in some cases cost containment 
information (not-to-exceed or maximum authorized price is optional in 
an APL). It would not be practical or desirable for the Department to 
interfere with the timely distribution of the APL files.
    Having considered all comments and clarifying its intent, the 
Department has determined the requirement for the State agency to 
submit a copy of an APL file to the NUPC database will not interfere 
with State agency operations necessary to support daily EBT activity. 
In addition, State agencies are currently required to provide a copy of 
their approved food list to FNS, including any changes to that list. 
Submitting a copy to FNS's NUPC data base meets this requirement.
    Design and Function of a NUPC Clearinghouse. This portion of the 
proposed rulemaking generated a substantial number of comments on the 
future potential for enhancing the NUPC database to act as a 
clearinghouse for State agency APL files in addition to a data 
repository. Having considered these comments, the Department has 
decided to not proceed with development of a file clearinghouse 
capability at this time. The Department believes the proposed language 
in Sec.  246.12(cc) is broad in nature and allows for flexibility in 
the use of the NUPC.

Technical Amendment

    In a previous WIC final rule, ``Special Supplemental Nutrition 
Program for Women, Infants and Children (WIC): Implementation of 
Nondiscretionary, Non-Electronic Benefits Transfer-Related Provisions'' 
(76 FR 59885, September 28, 2011), Sec.  246.4 was amended by re-
designating paragraphs (a)(19) through (26) as (a)(20) through (27) and 
adding a new paragraph (a)(19); however, the amendment could not be 
incorporated due to inaccurate amendatory instruction. An Editorial 
Note was published following this section in the CFR that brought the 
new information to the readers' attention. The correct amendment is 
included within Sec.  246.4 in this rule.

Procedural Matters

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules and of promoting 
flexibility.
    This final rule has been determined to be ``Not Significant'' and 
was not reviewed by the Office of Management and Budget in conformance 
with Section 3(f) of Executive Order 12866.

Regulatory Impact Analysis

    This final rule has been designated as ``Not Significant'' by the 
Office of Management and Budget; therefore, no Regulatory Impact 
Analysis is required.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires 
Agencies to analyze the impact of rulemaking on small entities and 
consider alternatives that would minimize any significant impacts on a 
substantial number of small entities. Pursuant to that review, the 
Administrator of the Food and Nutrition Service, Audrey Rowe, has 
determined this rule will not have a significant economic impact on a 
substantial number of small entities. This final rule applies to State 
and local agencies and provides increased flexibility in food delivery 
services for the Program.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and tribal 
governments and the private sector. Under Section 202 of the UMRA, the 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to State, local, or tribal 
governments, in the aggregate, or to the private sector of $100 million 
or more in any one year. When such a statement is needed for a rule, 
Section 205 of the UMRA generally requires the Department to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the most cost effective or least burdensome alternative that achieves 
the objectives of the rule.
    This final rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) that impose costs on State, local, 
or tribal governments or to the private sector of $100 million or more 
in any one year. Thus, the rule is not subject to the requirements of 
Sections 202 and 205 of the UMRA.

Executive Order 12372

    The WIC Program is listed in the Catalog of Federal Domestic 
Assistance Programs under No. 10.557 and is subject to Executive Order 
12372, which requires intergovernmental consultation with State and 
local officials. (See 2 CFR chapter IV.)

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under Section (6)(b)(2)(B) of Executive Order 13132.
    The Department has considered the impact of this rule on State and 
local governments and has determined this rule does not have federalism 
implications. Therefore, under Section 6(b) of the Executive Order, a 
federalism summary is not required.

Executive Order 12988, Civil Justice Reform

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have preemptive 
effect with respect to any State or local laws, regulations or policies 
which conflict with its provisions or which would otherwise impede its 
full and timely implementation. This rule is not intended to have 
retroactive effect unless so specified in the Effective Dates section 
of the final rule. Prior to any judicial challenge to the provisions of 
the final rule, all applicable administrative procedures must be 
exhausted.
    In WIC, the administrative procedures are as follows: (1) State and 
local agencies, farmers, farmers' markets and roadside stands--State 
agency hearing procedures issued pursuant to Sec.  246.18; (2) 
Applicants and participants--State agency hearing procedures pursuant 
to Sec.  246.18; (3) Sanctions against State agencies (but not claims 
for repayment assessed against a State agency)

[[Page 10448]]

pursuant to Sec.  246.19--administrative appeal in accordance with 
Sec.  246.16 and (4) procurement by State or local agencies--
administrative appeal to the extent required by 2 CFR 200.318.

Civil Rights Impact Analysis

    The Department has reviewed this final rule in accordance with 
Departmental Regulations 4300-4, ``Civil Rights Impact Analysis,'' and 
1512-1, ``Regulatory Decision Making Requirements,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex, or disability. 
After a careful review of the rule's intent and provisions, the 
Department has determined this rule is not intended to limit or reduce 
in any way the ability of protected classes of individuals to receive 
benefits in the WIC Program. Federal WIC regulations specifically 
prohibit State agencies that administer the WIC Program and their 
cooperators, from engaging in actions that discriminate against any 
individual in any of the protected classes (see Sec.  246.8 for the 
nondiscrimination policy in the WIC Program). Where State agencies have 
options and they choose to implement a certain provision, they must 
implement it in such a way that it complies with the WIC Program 
regulations set forth at Sec.  246.8.

Executive Order 13175

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation and other policy statements or actions 
that have substantial direct effects on one or more Indian Tribes, on 
the relationship between the Federal Government and Indian Tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian Tribes.
    FNS provides regularly scheduled quarterly consultation sessions as 
a venue for collaborative conversations with Tribal officials or their 
designees. The most recent quarterly consultation sessions were held on 
August 20, 2014; November 19, 2014; February 18, 2015; and May 20, 
2015. FNS will respond in a timely and meaningful manner to any Tribal 
government request for consultation concerning the Electronic Benefit 
Rule for the WIC program. We are unaware of any current Tribal laws 
that could be in conflict with this final rule.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
part 1320) requires that the Office of Management and Budget (OMB) 
approve all collections of information by a Federal agency from the 
public before they can be implemented. Respondents would not have been 
required to respond to any collection of information unless it displays 
a current valid OMB control number. While a conforming amendment has 
added two additional State Plan requirements in addition to the 
requirement for an annual EBT status update, the Department considers 
these to be minimal reporting burden. The annual status report replaces 
existing updates required for benefit delivery methods using paper food 
instruments. The two conforming amendments clarify content for EBT 
delivery replacing the existing paper food instrument or other food 
delivery content. This final rule contains a small increase to the 
information collection requirements that are subject to OMB approval.
    Section 246.12(y) requires each State agency to have an active EBT 
project by July 29, 2016. The Advance Planning Document (APD) is used 
to initiate the EBT planning process. Under the existing collection 
(0584-0043), it is estimated 15 APDs would be submitted each year. The 
current estimate of 15 submissions per year is unchanged. The existing 
recordkeeping and reporting requirements, related to APD documents, 
which were approved under OMB control number 0584-0043, will not change 
as a result of this rule.
    FNS has identified a small burden increase associated with 
providing data to meet the requirement for State agencies to use the 
National UPC database (NUPC database). Section 246.12(cc) requires each 
State agency to use the NUPC database, at a minimum, to submit their 
APL as they begin statewide rollout and as it is updated. The APLs are 
updated as new products are added or removed by each WIC State agency. 
FNS estimates the burden under OMB control number 0584-0043 will 
increase by 40 hours annually based on an estimate of an average of 37 
State agencies expected to have operational EBT systems and who will 
distribute APLs to their WIC-authorized vendors. We estimate 
approximately 30 seconds to submit an APL. Updates are estimated to 
occur 2.5 times per week. The resulting annual burden is increased by 
40 hours total. FNS will publish a 60-Day Federal Register Notice 
requesting comment on this burden increase concurrent with the 
publication of this rulemaking.
    FNS will submit an Information Collection Request to OMB based on 
the provisions of this final rule and comments received on the 60-day 
notice published with this rulemaking. These amended information 
collection requirements will not become effective until approved by 
OMB. When OMB concludes its review, FNS will publish a notice in the 
Federal Register of the action.

E-Government Act Compliance

    The Department is committed to complying with the E-Government Act 
of 2002, to promote the use of the Internet and other information 
technologies to provide increased opportunities for citizen access to 
Government information and services and for other purpose. State Plan 
amendments regarding the implementation of the provisions contained in 
this rule, as is the case with the entire State Plan, may be 
transmitted electronically by the State agency to the Department. Also, 
State agencies may provide WIC Program information, as well as their 
financial reports, to the Department electronically.

List of Subjects in 7 CFR Part 246

    Administrative practice and procedure, Food assistance programs, 
Grant programs--health, Grant programs--social programs, Indians, 
Infants and children, Maternal and child health, Nutrition, Penalties, 
Reporting and recordkeeping requirements, WIC, Women.

    Accordingly, for reasons set forth in the preamble, 7 CFR part 246 
is amended as follows:

PART 246--SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS 
AND CHILDREN (WIC)

0
1. The authority citation for part 246 continues to read as follows:

    Authority: 42 U.S.C. 1786.


0
2. In Sec.  246.2:
0
a. Amend the definition of ``Cash-value voucher'' by adding a second 
sentence.
0
b. Add the definitions of ``Electronic Benefit Transfer (EBT)'', ``EBT 
Capable'', ``Multi-function equipment'', ``Single-function equipment'' 
and ``Statewide EBT'' in alphabetical order; and
0
c. Revise the definition of ``Participant violation''.
    The additions and revision read as follows:

[[Page 10449]]

Sec.  246.2  Definitions.

* * * * *
    Cash-value voucher * * * Cash-value voucher is also known as cash-
value benefit (CVB) in an EBT environment.
* * * * *
    Electronic Benefit Transfer (EBT) means a method that permits 
electronic access to WIC food benefits using a card or other access 
device approved by the Secretary.
    EBT Capable means the WIC vendor demonstrates their cash register 
system or payment device can accurately and securely obtain WIC food 
balances associated with an EBT card, maintain the necessary files such 
as the authorized product list, hot card file and claim file and 
successfully complete WIC EBT purchases.
* * * * *
    Multi-function equipment means Point-of-Sale equipment obtained by 
a WIC vendor through commercial suppliers, which is capable of 
supporting WIC EBT and other payment tender types.
* * * * *
    Participant violation means any deliberate action of a participant, 
parent or caretaker of an infant or child participant, or proxy that 
violates Federal or State statutes, regulations, policies, or 
procedures governing the Program. Participant violations include, but 
are not limited to, deliberately making false or misleading statements 
or deliberately misrepresenting, concealing, or withholding facts, to 
obtain benefits; selling or offering to sell WIC benefits, including 
cash-value vouchers, food instruments, EBT cards, or supplemental foods 
in person, in print, or online; exchanging or attempting to exchange 
WIC benefits, including cash-value vouchers, food instruments, EBT 
cards, or supplemental foods for cash, credit, services, non-food 
items, or unauthorized food items, including supplemental foods in 
excess of those listed on the participant's food instrument; 
threatening to harm or physically harming clinic, farmer, or vendor 
staff; and dual participation.
* * * * *
    Single-function equipment means Point-of-Sale equipment, such as 
barcode scanners, card readers, PIN pads and printers, provided to an 
authorized WIC vendor solely for use with the WIC Program.
* * * * *
    Statewide EBT means the State agency has converted all WIC clinics 
to an EBT delivery method and all authorized vendors are capable of 
transacting EBT purchases.
* * * * *

0
3. In Sec.  246.3, revise paragraph (b) to read as follows:


Sec.  246.3  Administration.

* * * * *
    (b) Delegation to the State agency. The State agency is responsible 
for the effective and efficient administration of the Program in 
accordance with the requirements of this part; the Department's 
regulations governing nondiscrimination (7 CFR parts 15, 15a, and 15b); 
governing administration of grants (2 CFR part 200, subparts A through 
F and USDA implementing regulations 2 CFR part 400 and part 415); 
governing non-procurement debarment/suspension (2 CFR part 180, OMB 
Guidelines to Agencies on Government-wide Debarment and Suspension and 
USDA implementing regulations 2 CFR part 417); governing restrictions 
on lobbying (2 CFR part 200, subpart E and USDA implementing 
regulations 2 CFR part 400, part 415, and part 418); and governing the 
drug-free workplace requirements (2 CFR part 182, Government-wide 
Requirements for Drug-Free Workplace); FNS guidelines; and, 
instructions issued under the FNS Directives Management System. The 
State agency shall provide guidance to local agencies on all aspects of 
Program operations.
* * * * *

0
4. In Sec.  246.4:
0
a. Revise paragraph (a)(1).
0
b. Add paragraph (a)(14)(xix).
0
c. Add paragraph (a)(14)(xx).
0
d. Redesignate paragraphs (a)(19) through (a)(28) as paragraphs (a)(20) 
through (a)(29) and add a new paragraph (a)(19).
    The revision and additions read as follows:


Sec.  246.4  State plan.

    (a) * * *
    (1) An outline of the State agency's goals and objectives for 
improving Program operations, to include EBT and/or EBT implementation.
* * * * *
    (14) * * *
    (xix) A description of how the State agency will replace lost, 
stolen, or damaged EBT cards and transfer the associated benefits 
within seven business days.
    (xx) A description of the procedures established by the State 
agency to provide customer service during non-business hours that 
enable participants or proxies to report a lost, stolen, or damaged 
card, report other card or benefit issues, receive information on the 
EBT food balance and receive the current benefit end date. The 
procedures shall address how the State agency will respond to reports 
of a lost, stolen, or damaged card within one business day of the date 
of report.
* * * * *
    (19) The State agency's plan to ensure that participants receive 
required health and nutrition assessments when certified for a period 
of greater than six months.
* * * * *

0
5. In Sec.  246.7, add paragraph (j)(10).


Sec.  246.7  Certification of participants.

* * * * *
    (j) * * *
    (10) During the certification procedure, every Program applicant, 
parent or caretaker shall be informed that selling or offering to sell 
WIC benefits, including cash value vouchers, food instruments, EBT 
cards, or supplemental foods in person, in print, or on-line is a 
participant violation.
* * * * *

0
6. Section 246.12 is amended as follows:
0
a. The section heading is revised.
0
b. Paragraph (a) introductory text is amended by removing the word 
``benefits'' and adding in its place ``benefit'' and by adding a new 
sentence at the end of the paragraph.
0
c. Paragraph (b) is amended by removing the word ``three'' and adding 
in its place ``four''; and by removing the phrase ``or direct 
distribution.'' at the end of the first sentence and adding in its 
place ``direct distribution, or EBT.''
0
d. Paragraph (f)(2)(iii) is amended to add in the second sentence ``or 
in the month of February, 28 or 29 days'' after ``may be used'' and 
before ``, except''.
0
e. Remove paragraph (g)(5) and redesignate paragraphs (g)(6) through 
(g)(11) as (g)(5) through (g)(10), respectively.
0
f. Add paragraphs (h)(3)(xxvii) through (h)(3)(xxxi).
0
g. Add paragraphs (w) through (cc).
    The revision and additions read as follows:


Sec.  246.12  Food delivery methods.

    (a) * * * By October 1, 2020, each State agency shall implement EBT 
statewide, unless granted an exemption under paragraph (w)(2) of this 
section.
* * * * *
    (h) * * *
    (3) * * *
    (xxvii) EBT minimum lane coverage. Point of Sale (POS) terminals 
used to support the WIC Program shall be deployed in accordance with 
the

[[Page 10450]]

minimum lane coverage provisions of Sec.  246.12(z)(2). The State 
agency may remove excess terminals if actual redemption activity 
warrants a reduction consistent with the redemption levels outlined in 
Sec.  246.12(z)(2)(i) and (z)(2)(ii).
    (xxviii) EBT third-party processing costs and fees. The vendor 
shall not charge to the State agency any third-party commercial 
processing costs and fees incurred by the vendor from EBT multi-
function equipment. Commercial transaction processing costs and fees 
imposed by a third-party processor that the vendor elects to use to 
connect to the EBT system of the State shall be borne by the vendor.
    (xxix) EBT interchange fees. The State agency shall not pay or 
reimburse the vendor for interchange fees related to WIC EBT 
transactions.
    (xxx) EBT ongoing maintenance and operational costs. The State 
agency shall not pay for ongoing maintenance, processing fees or 
operational costs for vendor systems and equipment used to support WIC 
EBT after the State agency has implemented WIC EBT statewide, unless 
the equipment is used solely for the WIC Program or the State agency 
determines the vendor using multi-function equipment is necessary for 
participant access. This provision also applies to authorized farmers 
and farmers' markets. Costs shared by a WIC State agency will be 
proportional to the usage for the WIC Program.
    (xxxi) Compliance with EBT operating rules, standards and technical 
requirements. The vendor must comply with the Operating rules, 
standards and technical requirements established by the State agency.
* * * * *
    (w) EBT-(1) General. All State agencies shall implement EBT 
statewide in accordance with paragraph (a) of this section.
    (2) EBT exemptions. The Secretary may grant an exemption to the 
October 1, 2020 statewide implementation requirement. To be eligible 
for an exemption, a State agency shall demonstrate to the satisfaction 
of the Secretary one or more of the following:
    (i) There are unusual technological barriers to implementation;
    (ii) Operational costs are not affordable within the nutrition 
services and administration grant of the State agency; or
    (iii) It is in the best interest of the program to grant the 
exemption.
    (3) Implementation date. If the Secretary grants a State agency an 
exemption, such exemption will remain in effect until: The State agency 
no longer meets the conditions on which the exemption was based; the 
Secretary revokes the exemption or for three years from the date the 
exemption was granted, whichever occurs first.
    (x) Electronic benefit requirements--(1) General. State agencies 
using EBT shall issue an electronic benefit that complies with the 
requirements of paragraph (x)(2) of this section.
    (2) Electronic benefits. Each electronic benefit must contain the 
following information:
    (i) Authorized supplemental foods. The supplemental foods 
authorized by food category, subcategory and benefit quantity, to 
include the cash-value benefit;
    (ii) First date of use. The first date of use on which the 
electronic benefit may be used to obtain authorized supplemental foods;
    (iii) Last date of use. The last date on which the electronic 
benefit may be used to obtain authorized supplemental foods. This date 
must be a minimum of 30 days, or in the month of February 28 or 29 
days, from the first date on which it may be used to obtain authorized 
supplemental foods except for the participant's first month of issuance 
when it may be the end of the month or cycle for which the electronic 
benefit is valid; and
    (iv) Benefit issuance identifier. A unique and sequential number. 
This number enables the identification of each benefit change 
(addition, subtraction or update) made to the participant account.
    (3) Vendor identification. The State agency shall ensure each EBT 
purchase submitted for electronic payment is matched to an authorized 
vendor, farmer, or farmers' market prior to authorizing payment. Each 
vendor operated by a single business entity must be identified 
separately.
    (y) EBT management and reporting. (1) The State agency shall follow 
the Department Advance Planning Document (APD) requirements and submit 
Planning and Implementation APD's and appropriate updates, for 
Department approval for planning, development and implementation of 
initial and subsequent EBT systems.
    (2) If a State agency plans to incorporate additional programs in 
the EBT system of the State, the State agency shall consult with State 
agency officials responsible for administering the programs prior to 
submitting the Planning APD (PAPD) document and include the outcome of 
those discussions in the PAPD submission to the Department for 
approval.
    (3) Each State agency shall have an active EBT project by May 31, 
2016. Active EBT project is defined as a formal process of planning, 
implementation, or statewide implementation of WIC EBT.
    (4) Annually as part of the State plan, the State agency shall 
submit EBT project status reports. At a minimum, the annual status 
report shall contain:
    (i) Until operating EBT statewide, an outline of the EBT 
implementation goals and objectives as part of the goals and objectives 
in Sec.  246.4(a)(1), to demonstrate the State agency's progress toward 
statewide EBT implementation;
    (ii) If operating EBT statewide, any information on future EBT 
changes and procurement updates affecting present operations; and
    (iii) Such other information the Secretary may require.
    (5) The State agency shall be responsible for EBT coordination and 
management.
    (z) EBT food delivery methods: Vendor requirements-(1) General. 
State agencies using EBT for delivering benefits shall comply with the 
vendor requirements in paragraphs (g) through (l) of this section. In 
addition, State agencies shall comply with requirements that are 
detailed throughout this paragraph (z).
    (2) Minimum lane coverage. The Point-of-Sale (POS) terminals, 
whether single-function equipment or multi-function equipment, shall be 
deployed as follows:
    (i) Superstores and supermarkets. There will be one POS terminal 
for every $11,000 in monthly WIC redemption up to a total of four POS 
terminals, or the number of lanes in the location, whichever is less. 
At a minimum, terminals shall be installed for monthly WIC redemption 
threshold increments as follows: one terminal for $0 to $11,000; two 
terminals for $11,001 to $22,000; three terminals for $22,001 to 
$33,000; and four terminals for $33,001 and above. A State agency may 
utilize an alternative installation formula with Department approval. 
The monthly redemption levels used for the installation formula shall 
be the average redemptions based on a period of up to 12 months of 
prior redemption;
    (ii) All other vendors. One POS terminal for every $8,000 in 
monthly redemption up to a total of four POS terminals, or the number 
of lanes in the location; whichever is less. At a minimum, terminals 
shall be installed for monthly WIC redemption thresholds as follows: 
one terminal for $0 to $8,000; two terminals for $8,001 to $16,000; 
three terminals for $16,001 to $24,000; and four terminals for $24,001 
and above. A State agency may utilize an alternative installation 
formula with

[[Page 10451]]

Department approval. The monthly redemption levels used for the 
installation formula shall be the average redemptions based on a period 
of up to 12 months of prior redemption;
    (iii) The State agency shall determine the number of appropriate 
POS terminals for authorized farmers and farmers' markets;
    (iv) For newly authorized WIC vendors deemed necessary for 
participant access by the State agency, the vendor shall be provided 
one POS terminal unless the State agency determines other factors in 
this location warrant additional terminals;
    (v) Any authorized vendor who has been equipped with a POS terminal 
by the State agency may submit evidence additional terminals are 
necessary after the initial POS terminals are installed;
    (vi) The State agency may provide authorized vendors with 
additional POS terminals above the minimum number required by this 
paragraph in order to permit WIC participants to obtain a shopping list 
or benefit balance, as long as the number of terminals provided does 
not exceed the number of lanes in the vendor location;
    (vii) The State agency may remove excess POS terminals if actual 
redemption activity warrants a reduction consistent with the redemption 
levels outlined in paragraphs (z)(2)(i) through (ii) of this section.
    (3) Payment to vendors, farmers and farmers' markets. The State 
agency shall ensure that vendors, farmers and farmers' markets are paid 
promptly. Payment must be made in accordance with the established 
Operating Rules and technical requirements after the vendor, farmer or 
farmers' market has submitted a valid electronic claim for payment.
    (aa) Imposition of costs on vendors, farmers and farmers' markets. 
(1) Cost prohibition. Except as otherwise provided in this section, a 
State agency shall not impose the costs of any single-function 
equipment or system required for EBT on any authorized vendor, farmers 
or farmers' markets in order to transact EBT.
    (2) Cost sharing. If WIC Program equipment is multi-function 
equipment, the State agency shall develop cost sharing criteria with 
authorized WIC vendors, farmers and farmers' markets for costs 
associated with such equipment in accordance with Federal cost 
principles. Any cost sharing agreements shall be developed between a 
State agency and its vendors, farmers, or farmers' markets depending on 
the type, scope and capabilities of shared equipment. The State agency 
must furnish its allocation and/or cost sharing methodology to the 
Department as part of the Advanced Planning Document for review and 
approval before incurring costs.
    (3) Fees--(i) Third-party processor costs and fees. The State 
agency shall not pay or reimburse vendors, farmers or farmers' markets 
for third-party processing costs and fees for vendors, farmers, or 
farmers' markets that elect to accept EBT using multi-function 
equipment. The State agency or its agent shall not charge any fees to 
authorized vendors for use of single-function equipment.
    (ii) Interchange fees. The State agency shall not pay or reimburse 
the vendor, farmer or farmers' markets for interchange fees on WIC EBT 
transactions.
    (4) Statewide operations. After completion of statewide EBT 
implementation, the State agency shall not:
    (i) Pay ongoing maintenance, processing fees or operational costs 
for any vendor, farmer or farmers' market utilizing multi-function 
systems and equipment, unless the State agency determines that the 
vendor is necessary for participant access. The State agency shall 
continue to pay ongoing maintenance, processing fees and operational 
costs of single-function equipment;
    (ii) Authorize a vendor, farmer, or farmers' market that cannot 
successfully demonstrate EBT capability in accordance with State agency 
requirements, unless the State agency determines the vendor is 
necessary for participant access.
    (bb) EBT Technical standards and requirements. (1) Each State 
agency, contractor and authorized vendor participating in the program 
shall follow and demonstrate compliance with:
    (i) Operating rules, standards and technical requirements as 
established by the Secretary; and
    (ii) Other industry standards identified by the Secretary.
    (2) The State agency shall establish policy permitting the 
replacement of EBT cards and the transfer of participant benefit 
balances within no more than seven business days following notice by 
the participant or proxy to the State agency.
    (3) The State agency shall establish procedures to provide customer 
service during non-business hours that enable participants or proxies 
to report a lost, stolen, or damaged card, report other card or benefit 
issues, receive information on the EBT food balance and receive the 
current benefit end date. The State agency shall respond to any report 
of a lost, stolen, or damaged card within one business day of the date 
of report. If a State agency seeks to implement alternatives to the 
minimum service requirements, the agency must submit the plan to FNS 
for approval.
    (cc) National universal product codes (UPC) database. The national 
UPC database is to be used by all State agencies using EBT to deliver 
WIC food benefits.

    Dated: February 19, 2016.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2016-04261 Filed 2-29-16; 8:45 am]
 BILLING CODE 3410-30-P



                                                                                                                                                                                                  10433

                                                  Rules and Regulations                                                                                         Federal Register
                                                                                                                                                                Vol. 81, No. 40

                                                                                                                                                                Tuesday, March 1, 2016



                                                  This section of the FEDERAL REGISTER                      • The provisions found at 7 CFR                     to improve clarity of the provisions set
                                                  contains regulatory documents having general            246.12(h)(3)(xxvii) and 7 CFR                         forth in the proposed rule and
                                                  applicability and legal effect, most of which           246.12(z)(2) requiring minimum lane                   implements EBT requirements for the
                                                  are keyed to and codified in the Code of                coverage deployment of Point of Sale                  Program.
                                                  Federal Regulations, which is published under           (POS) terminals used to support the
                                                  50 titles pursuant to 44 U.S.C. 1510.                                                                         II. Background
                                                                                                          WIC Program shall be implemented by
                                                  The Code of Federal Regulations is sold by              March 1, 2017.                                           Providing WIC participants with a
                                                  the Superintendent of Documents. Prices of                • The provisions found at 7 CFR
                                                                                                                                                                specific prescription of supplemental
                                                  new books are listed in the first FEDERAL               246.12(h)(3)(xxx) and 7 CFR
                                                                                                                                                                nutritious foods based on their
                                                  REGISTER issue of each week.                            246.12(aa)(4)(i) prohibiting a State
                                                                                                                                                                nutritional needs is a cornerstone of
                                                                                                          agency from paying ongoing
                                                                                                                                                                WIC’s mission. Currently, the majority
                                                                                                          maintenance, processing fees or
                                                  DEPARTMENT OF AGRICULTURE                                                                                     of WIC participants receive paper food
                                                                                                          operational costs for multi-function
                                                                                                                                                                instruments (FIs) containing their food
                                                                                                          vendor systems and equipment after
                                                  Food and Nutrition Service                              statewide implementation shall be                     prescription. However, in line with
                                                                                                          implemented either by March 1, 2018 or                current trends and overall public
                                                  7 CFR Part 246                                          the date included in a Department-                    expectation of doing business and
                                                                                                          approved plan for continued support for               receiving services electronically, the
                                                  RIN 0584–AE21
                                                                                                          these efforts.                                        WIC Program has been gradually
                                                  Special Supplemental Nutrition                            • The provisions found at 7 CFR                     transitioning the benefit issuance
                                                  Program for Women, Infants and                          246.12(h)(3)(xxxi) and 7 CFR                          methodology over the past several years
                                                  Children (WIC): Implementation of                       246.12(bb)(1) requiring each State                    from paper FIs to EBT. The use of EBT
                                                  Electronic Benefit Transfer-Related                     agency, contractor and authorized                     in the WIC Program allows both the WIC
                                                  Provisions                                              vendor to comply with the published                   Program and its participants to use
                                                                                                          operating rules, standards and technical              advanced technologies in the delivery of
                                                  AGENCY:  Food and Nutrition Service                                                                           benefits and helps support WIC’s goal to
                                                                                                          requirements and other industry
                                                  (FNS), USDA.                                                                                                  improve client services. It is well
                                                                                                          standards identified by the Secretary
                                                  ACTION: Final rule.                                     shall be implemented either by March 1,               recognized and accepted that EBT is by
                                                                                                          2018 or the date included in a                        far the preferred method of benefit
                                                  SUMMARY:    This final rule considers
                                                                                                          Department-approved plan to                           delivery for the WIC Program and it is
                                                  public comments submitted in response
                                                                                                          incorporate the rules, standards and                  endorsed by WIC participants,
                                                  to the proposed rule published February
                                                                                                          requirements in their system                          authorized vendors and State WIC
                                                  28, 2013 and implements the provisions
                                                                                                          development plan.                                     administrators. The Department has
                                                  set forth in the Healthy, Hunger-Free
                                                                                                          FOR FURTHER INFORMATION CONTACT:                      continued to support and promote WIC
                                                  Kids Act of 2010 related to electronic
                                                  benefit transfer (EBT) for the WIC                      Jerilyn Malliet, Chief, WIC EBT Branch,               EBT through collaborative efforts with
                                                  Program (also referred to herein as ‘‘the               Supplemental Food Programs Division,                  WIC State agencies, vendor groups, the
                                                  Program’’). The HHFKA amended                           Food and Nutrition Service, USDA,                     banking industry, EBT processors and a
                                                  provisions of the Child Nutrition Act of                3101 Park Center Drive, Room 528,                     variety of other EBT stakeholders. As
                                                  1966 (CNA) and was enacted on                           Alexandria, Virginia 22302; phone (703)               State agencies move forward with WIC
                                                  December 13, 2010. EBT provisions of                    305–2746, OR email Jerilyn.Malliet@                   EBT, it is critical that standard business
                                                  the HHFKA and other EBT                                 fns.usda.gov.                                         practices, policies and requirements are
                                                  implementation requirements included                                                                          followed to collaboratively expedite
                                                                                                          SUPPLEMENTARY INFORMATION:
                                                  in this final rule are: A definition of                                                                       EBT implementation and maximize
                                                  EBT; a mandate that all WIC State                       I. Overview                                           resource utilization.
                                                  agencies implement EBT delivery                            This final rule addresses public                      Given the challenges of the food
                                                  method by October 1, 2020; system                       comments submitted in response to the                 benefit and technology needed to
                                                  management and reporting                                proposed rule published in the Federal                support those complexities and the
                                                  requirements; revisions to current                      Register on February 28, 2013 (78 FR                  nationwide WIC EBT implementation
                                                  provisions that prohibit imposition of                  13549) which incorporated the                         deadline of October 1, 2020 required by
                                                  costs on vendors; a requirement for the                 provisions set forth in the HHFKA (Pub.               the HHFKA, the provisions in this final
                                                  Secretary of Agriculture to establish                   L. 111–296), related to EBT for the WIC               rule are critical for WIC State agencies,
                                                  minimum lane equipage standards; a                      Program. The Department had                           vendors, system developers and EBT
                                                  requirement for the Secretary of                        previously issued policy and guidance                 processors to effectively implement the
                                                  Agriculture to establish technical                      in WIC Policy Memorandum #2011–3,                     mandate. Establishment of these
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                                                  standards and operating rules; and a                    issued March 22, 2011, to State agencies              provisions will promote consistency,
                                                  requirement that State agencies use the                 on implementation of the                              save resources and streamline EBT
                                                  National Universal Product Code                         nondiscretionary provisions of the                    implementation, which will ultimately
                                                  (NUPC) database.                                        HHFKA that were effective on October                  reduce barriers as WIC moves to EBT to
                                                  DATES:                                                  1, 2010. However, select areas of the law             deliver food benefits. This final rule
                                                    Effective Date: This rule is effective                were discretionary, and therefore public              supports and facilitates this transition
                                                  on May 2, 2016.                                         comment was sought in the proposed                    and addresses many important aspects
                                                    Implementation Dates:                                 rule. This final rule makes adjustments               of WIC EBT implementation.


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                                                  10434               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  III. Summary of Comments Received on                    not a food delivery system. The                          Twelve comments noted the word
                                                  the Proposed Rule Related to EBT in the                 Department agrees with this comment                   ‘‘intent,’’ as used in the expanded
                                                  WIC Program                                             and has modified the definition                       definition of participant violation in the
                                                     The proposed rule amending WIC                       accordingly in the final rule. This final             proposed rule, was too broad and could
                                                  regulations to incorporate WIC EBT                      rule adds the definition of electronic                result in the sanctioning of a WIC
                                                  provisions as set forth in the HHFKA                    benefit transfer at § 246.2 as follows:               participant who merely spoke of or
                                                  provided a 90-day public comment                        Electronic Benefit Transfer (EBT) means               thought about selling WIC benefits, but
                                                  period on the discretionary provisions                  a method that permits electronic access               took no further action. The Department
                                                  of the proposed rule. The comment                       to WIC food benefits using a card or                  concurs and the word ‘‘intent’’ has been
                                                  period was later extended by 30 days                    other access device approved by the                   replaced with ‘‘deliberate’’ as this more
                                                  and ended on June 29, 2013.                             Secretary.                                            accurately conveys what is meant in the
                                                     A total of 45 comment letters were                      Cash-Value Voucher/Cash-Value                      revised definition.
                                                  received on the proposed rule; of those,                Benefit. Two comments were received                      Eleven comments suggested the
                                                  12 comments were form letters. The                      in support of expanding the definition                Department provide guidance on the
                                                  comment letters were submitted from a                   of cash value voucher to acknowledge                  types of policies WIC State agencies
                                                  variety of sources, including 18 WIC                    that in an EBT environment a cash value               could develop in the future to address
                                                  State agencies and Indian Tribal                        voucher is also a cash value benefit.                 emerging issues. The WIC regulations
                                                  Organizations (ITOs), one from the                      Therefore, this final rule retains the                already provide a framework for the
                                                  National WIC Association, two from                      definition of ‘‘cash-value voucher/cash-              types of policies State agencies may
                                                  food retailer associations, seven from                  value benefit’’ at § 246.2 as proposed.               create for a variety of situations. The
                                                                                                             Participant Violation. As proposed,                Department will continue to provide
                                                  the electronic funds transfer industry
                                                                                                          the definition of participant violation               technical support to State agencies as
                                                  including the Electronic Funds Transfer
                                                                                                          would be expanded to include the sale                 issues emerge.
                                                  Association, 13 from hunger advocacy
                                                                                                          of cash-value vouchers, food                             One commenter opposed the change
                                                  groups and four from members of the
                                                                                                          instruments and EBT cards, or                         and stated that WIC participants should
                                                  public.                                                 supplemental foods by participants and                not be sanctioned unless it is proven
                                                     In general, commenters expressed
                                                                                                          further expanded to specifically address              they sold WIC benefits. Given the
                                                  broad support for the proposed EBT
                                                                                                          the offer to sell WIC benefits in person,             importance of giving State agencies
                                                  provisions. Commenters also voiced
                                                                                                          in print or online. As technology has                 maximum flexibility to manage
                                                  concerns about various aspects of the
                                                                                                          advanced, opportunities to sell benefits              participant violations and to improve
                                                  proposed rule and made
                                                                                                          have expanded to avenues such as the                  program integrity, the final rule slightly
                                                  recommendations for clarifying or
                                                                                                          Internet. Protecting the integrity of the             modifies the proposed definition of
                                                  improving specific provisions. The
                                                                                                          Program has always been a primary                     ‘‘participant violation’’ by substituting
                                                  Department considered all comments;                     objective of the Department and WIC                   the word ‘‘deliberate’’ for ‘‘intent,’’ but
                                                  importance was given to the substance                   State agencies. The Department received               otherwise retains the definition as
                                                  of the comment, rather than the number                  18 comments on the proposed change to                 proposed. Further, to ensure
                                                  of times a comment was submitted.                       the definition of participant violation.              participants are aware that selling or
                                                  IV. Discussion of the Final Rule                        Three commenters were in full support                 offering to sell cash value vouchers,
                                                  Provisions                                              of the change. Three commenters were                  food instruments, EBT cards or
                                                                                                          in support of the change, but noted it is             supplemental foods is a participant
                                                  1. Definitions: Section 246.2                           difficult for WIC State agencies to prove             violation, the final rule adds, at
                                                     The following definitions have been                  WIC-approved food items offered for                   § 246.7(j)(10), a requirement for State
                                                  added or modified in the final rule:                    sale by WIC participants are WIC                      agencies to include such a statement in
                                                     Electronic Benefit Transfer. The                     benefits; therefore, the commenters                   the notification of rights and
                                                  proposed rule would have added the                      recommended the Department establish,                 responsibilities provided to applicants
                                                  definition of EBT as a food delivery                    through regulation, the burden of proof               and participants or their parents or
                                                  system that provides benefits using a                   required to impose a sanction on a                    caretakers.
                                                  card or other access device approved by                 participant suspected of selling WIC                     Three commenters suggested adding a
                                                  the Secretary permitting electronic                     benefits. One of these commenters                     definition for ‘‘EBT Ready’’ or ‘‘EBT
                                                  access to WIC Program benefits. Five                    recommended removing the burden of                    Capable’’ to clarify what equipment is
                                                  comments were received on the                           proof from the WIC State agency                       required to support WIC as an
                                                  definition of EBT; three were in full                   altogether by making it a participant                 authorized vendor and what the State
                                                  support of the definition as proposed.                  violation for a participant, caregiver or             agency would need to authorize the
                                                  One commenter suggested the WIC                         proxy to sell or offer to sell any item               vendor. The Department recognizes
                                                  Program use the plural ‘‘benefits,’’ citing             within the food package (or the food                  these terms may cause confusion and
                                                  that the Supplemental Nutrition                         packages of any infants or children in                thus a new definition of ‘‘EBT Capable’’
                                                  Assistance Program (SNAP) uses the                      his/her care). Since State agency                     is added to § 246.2. The regulations no
                                                  plural form and the two programs                        administrative rules and procedures                   longer refer to ‘‘EBT Ready,’’ which has
                                                  should be consistent. After verifying                   vary widely, the Department has opted                 the same meaning as EBT Capable.
                                                  SNAP EBT regulations use the singular                   not to establish the burden of proof in                  EBT Capable shall mean the WIC
                                                  ‘‘benefit’’ in its definition of EBT at 7               the regulatory definition of participant              vendor demonstrates that their cash
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                                                  CFR 274.12(b)(1), the definition retains                violation. It is incumbent upon WIC                   register system or payment device can
                                                  the singular ‘‘benefit’’ as proposed                    State agencies to work with their legal               accurately and securely obtain WIC food
                                                  which results in consistency between                    counsel and appropriate law                           balances associated with an EBT card,
                                                  the two programs in using ‘‘benefit’’                   enforcement agencies to determine the                 maintain the necessary files such as the
                                                  rather than ‘‘benefits’’.                               best course of action in situations where             authorized product list, hot card file and
                                                     The remaining comment on the                         WIC participants are found to be selling              claim file and successfully complete
                                                  definition of EBT stated that EBT is a                  or offering to sell food items they may               WIC EBT purchases. In accordance with
                                                  form of payment for WIC food benefits,                  have received as WIC benefits.                        the EBT Operating Rules, a State agency


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                         10435

                                                  may accept a cash register system or                    insufficient funding would delay or                   Department is hesitant to establish
                                                  payment device as EBT Capable if it has                 prohibit EBT implementation                           regulatory criteria specifying scenarios
                                                  been certified by another State agency.                 nationwide. The Department fully                      or situations that would constitute such
                                                  Certification criteria will be discussed                recognizes dedicated and sustained                    an exemption. Although EBT
                                                  later in this rulemaking.                               funding is critical to help State agencies            implementation by October 1, 2020 is
                                                     Also, based on these comments, the                   implement EBT. The Department will                    mandated by law, the Department
                                                  Department added a new definition for                   continue to assist State agencies with                remains cognizant of the impact of EBT
                                                  Statewide EBT. Statewide EBT means                      their EBT implementation efforts,                     implementation on State agencies,
                                                  the State agency has converted all WIC                  including exploring strategies to help                vendors and WIC participants. There
                                                  clinics to EBT and all authorized                       make WIC EBT more affordable. As the                  may be unusual circumstances within
                                                  vendors are capable of transacting WIC                  mandate is legislatively required,                    the State agency which may indicate
                                                  EBT purchases. This definition allows                   however, the implementation date will                 EBT would not improve benefit delivery
                                                  State agencies to identify a unique and                 remain as proposed at § 246.12(a).                    or would negatively affect WIC
                                                  easily verifiable date when new WIC                        Section 17(h)(12)(C) of the CNA                    participants. Since this type of
                                                  vendors must prove that they are EBT                    authorizes the Secretary to grant                     exemption would arise on a situational
                                                  Capable. The new definition for                         exemptions to the statewide EBT                       basis, the Department will evaluate each
                                                  Statewide EBT has been added to                         requirement if the State agency can                   request on a case-by-case basis to
                                                  § 246.2.                                                demonstrate one or more of the                        determine if such an exemption would
                                                     Several industry and State agency                    following: (1) There are unusual                      be in the best interest of the WIC
                                                  commenters indicated that the cost and                  technical barriers; (2) operational costs             Program. Therefore, § 246.12(w)(2)(iii)
                                                  deployment of equipment provisions in                   of EBT are unaffordable within the                    of this final rule retains the proposed
                                                  § 246.12(z) and § 246.12(aa) were                       nutrition services and administration                 language allowing an exemption to EBT
                                                  confusing. The Department agrees with                   (NSA) grant; or (3) it is in the best                 implementation if a State agency
                                                  these comments and has added two                        interest of the Program. In general,                  demonstrates to the satisfaction of the
                                                  definitions—one definition for single-                  commenters expressed support for the                  Secretary such an exemption would be
                                                  function equipment and one definition                   exemptions provision, but again had                   in the best interest of the Program.
                                                  for multi-function equipment. The use                   concerns about the affordability of EBT,                 No comments were received on the
                                                  of common definitions for these terms is                the need for a cost analysis and                      provision regarding exemptions based
                                                  designed to clarify the discussion in the               uncertainty as to what constitutes ‘‘is in            on unusual technological barriers;
                                                  preamble below and the regulation                       the best interest of the Program.’’                   therefore, this provision remains as
                                                  itself.                                                    Pursuant to section 17(h)(12)(C) of the            proposed at § 246.12(w)(2)(i).
                                                     Multi-function equipment means                       CNA, an exemption to EBT                                 Under the proposed rule,
                                                  Point-of-Sale equipment obtained by a                   implementation may be requested if a                  § 246.12(w)(3) would have limited
                                                  WIC vendor through commercial                           State agency can demonstrate to the                   approved exemptions to no more than
                                                  suppliers that is capable of supporting                 satisfaction of the Secretary that EBT is             three years, as the Department thought
                                                  WIC EBT and other payment tender                        not operationally affordable. When the                this is a reasonable timeframe for a State
                                                  types.                                                  proposed rule was published, all WIC                  agency’s situation to change relative to
                                                     Single-function equipment means                      State agencies would have been                        the ability to implement EBT. Further,
                                                  Point-of-Sale equipment, such as                        required to conduct a cost analysis                   if an exemption is granted, it would not
                                                  barcode scanners, card readers, PIN                     during their EBT planning process in                  relieve a WIC State agency of the annual
                                                  pads and printers, provided to an                       order to ensure EBT operational costs                 EBT status reporting requirement
                                                  authorized WIC vendor solely for WIC                    after implementation are affordable                   proposed in § 246.4(a), as the State
                                                  EBT. Single-function equipment is                       within their individual NSA grant. The                agency would still have to demonstrate
                                                  provided by the State agency or its                     requirements of FNS Handbook 901,                     its progress toward EBT statewide
                                                  contractor.                                             which outlines the approval                           implementation. One commenter noted
                                                                                                          requirements for State agency technical               it would be highly unlikely a State
                                                  2. Statewide Implementation of EBT by                   projects, to include EBT, have since                  agency receiving a three-year exemption
                                                  October 1, 2020 and Exemptions:                         been streamlined and a cost analysis is               on the basis of affordability would
                                                  Sections 246.12(a) and 246.12(w)(2)                     no longer required of a State agency.                 suddenly be able to afford EBT three
                                                     Section 17(h)(12)(B) of the CNA (42                  This procedural change addresses                      years later. The Department understands
                                                  U.S.C. 1771 et seq.) requires that each                 commenters’ concerns regarding the                    this concern; however, technology costs
                                                  State agency implement EBT throughout                   requirement to conduct a cost analysis                tend to trend downward over time and
                                                  the State by October 1, 2020, unless the                for EBT approval. If a State agency                   the concern in part rests on speculation
                                                  Secretary grants an exemption. The                      requests an affordability exemption, the              regarding the State agency’s ability to
                                                  proposed rule reflected these                           State agency must analyze costs to                    obtain the needed funds in three years.
                                                  requirements by amending § 246.12(a) to                 determine EBT affordability and provide               While such cost trends are not possible
                                                  add the statewide implementation                        this analysis to the Department.                      to predict at this time, an exemption of
                                                  requirement of EBT by October 1, 2020                   Accordingly, the provision allowing an                three years continues to place
                                                  and by providing information and                        exemption if EBT operational costs are                responsibility on each WIC State agency
                                                  requirements on allowable exemption                     not affordable within a State agency’s                to continue exploring options for
                                                  criteria at § 246.12(w)(2). In total, 26                NSA grant is retained in the final rule               implementing EBT within their funding
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                                                  comments were received on these                         at § 246.12(w)(2)(ii) as proposed.                    level. Additional exemptions may be
                                                  provisions, of which 19 were in full                       While the majority of commenters                   granted on a case by case basis within
                                                  support of the provisions as proposed.                  were in full support of the proposed                  the criteria described in this regulation.
                                                     Generally, commenters expressed                      language at § 246.12(w)(2)(iii), one                  Also, the State agency may realize cost
                                                  support for the EBT mandate that each                   commenter sought further clarification                efficiencies in other areas of nutrition
                                                  State agency achieve statewide EBT by                   on what constitutes an allowable                      services and administration which
                                                  October 1, 2020. However, four                          exemption based on ‘‘is in the best                   result in more funds within the grant
                                                  commenters expressed concern that                       interest of the Program.’’ The                        being available to support EBT costs.


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                                                  10436               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  Consequently, the provision limiting                    improve the outcomes of the Planning                  proposed rule at § 246.12(y)(3) would
                                                  any exemption to the 2020 mandate to                    APD (PAPD) and Implementation APD                     have required each State agency to have
                                                  a three year period is retained in this                 (IAPD). These changes have been                       an active WIC EBT project by October 1,
                                                  final rule at § 246.12(w)(3).                           published in a revised FNS Handbook                   2015. An active EBT project is defined
                                                                                                          901. In particular, the PAPD no longer                as a formal process of planning,
                                                  3. Electronic Benefit Requirements. Last
                                                                                                          requires a cost analysis, which was                   implementation or statewide operation
                                                  Date of Use—Section 246.12(x)(2)(iii)
                                                                                                          discussed earlier in this preamble, or an             of WIC EBT. Four commenters were in
                                                     The Department proposed in                           alternatives analysis, which specifically             full support of this requirement as
                                                  § 246.12(x)(2)(iii) the last date on which              evaluated on-line and off-line                        proposed and three commenters asked
                                                  the electronic benefit may be used to                   technologies to determine the best                    for additional flexibility in the
                                                  obtain authorized supplemental foods.                   option for the State agency. The                      timeframe due to extenuating
                                                  This date must be a minimum of 30                       alternatives analysis was determined to               circumstances and/or lack of funding.
                                                  days from the first date on which it may                be optional as many State agencies                    The Department recognizes planning
                                                  be used to obtain authorized                            already know which technology choice                  and implementation for EBT projects is
                                                  supplemental foods except for the                       is optimal for their State. If, however, a            a lengthy and complex process and lack
                                                  participant’s first month of issuance,                  State agency anticipates the need for an              of funding may be an inhibiting factor
                                                  when it may be the end of the month or                  exemption to implement EBT based on                   in some State agencies. However, the
                                                  cycle for which the electronic benefit is               affordability, or is unsure of the best               magnitude of executing a WIC EBT
                                                  valid. Several commenters expressed                     technological approach to EBT, the                    project requires dedicated staff and
                                                  concern that because benefit months                     Department continues to support and                   resources and should not be
                                                  may vary in length from 28 to 31 days,                  encourage State agencies to complete                  underestimated; a typical EBT project
                                                  this language required additional                       further analyses.                                     currently takes 2–3 years to progress
                                                  clarification. In 2007, the Department                     Recognizing the need for and the                   from planning to implementation of
                                                  issued Policy Memorandum 2007–01,                       benefits of thorough planning and                     EBT statewide. As the EBT
                                                  permitting a State agency to issue a food               project management to fully meet the                  implementation mandate is required by
                                                  benefit from the first of the month                     requirements to receive approval for                  law, it is incumbent upon each State
                                                  through the last day of the month. To                   Federal funding for EBT established by                agency to begin the planning process
                                                  clarify further, the Department added                   the Department, the provision requiring               well ahead of the mandate to ensure
                                                  language to § 246.12(x)(2)(iii) based                   State agencies to follow Department                   compliance. Therefore and consistent
                                                  upon our 2007 policy memorandum,                        APD requirements is retained in this                  with this concern, the provision
                                                  permitting a State agency to shorten the                final rule as proposed at § 246.12(y)(1).             requiring an active EBT project by
                                                  30-day benefit period for February to 28                   Under the proposed rule, State                     October 1, 2015, is modified in this final
                                                  or 29 days. A conforming amendment                      agencies would have been required to                  rule at § 246.12(y)(3) to require each
                                                  has been made to § 246.12(f)(2)(iii).                   consult with other benefit programs if                State agency to submit a plan 90 days
                                                                                                          they were considering obtaining an EBT                after the effective date of this regulation.
                                                  4. EBT Management and Reporting:
                                                                                                          benefit delivery method supporting WIC                   The Department also recognizes that
                                                  Section 246.12(y)
                                                                                                          and one or more other benefit programs.               some WIC State agencies operate in
                                                     Section 17(h)(12)(B) and (D) of the                  One commenter representing vendors                    remote areas with limited access to
                                                  CNA require that each State agency be                   recommended the Department take this                  vendors who can provide WIC foods. In
                                                  responsible for WIC EBT coordination                    consultation a step further and require               some instances, these State agencies
                                                  and implementation and provide status                   State agencies planning for WIC EBT to                have implemented food delivery
                                                  reports on their EBT implementation                     consult with State officials                          methods such as direct delivery to meet
                                                  progress. The proposed rule at                          administering SNAP EBT in their                       the needs of their WIC participants.
                                                  § 246.12(y) outlined EBT management                     respective State, regardless of whether a             There are other State agencies with
                                                  and reporting requirements, to include                  joint benefit delivery method is                      substantial cost concerns or other
                                                  that State agencies must follow the                     planned. The commenter noted the                      considerations they believe would
                                                  Advanced Planning Document (APD)                        significant overlap in participation and              qualify for an exemption under the
                                                  process, consult with State officials if                authorized vendors between WIC and                    CNA. The Department understands
                                                  incorporating additional programs in                    SNAP and suggested that every effort                  these considerations but continues to
                                                  the WIC EBT project, have an active                     should be made to integrate the two                   expect State agencies to initiate an EBT
                                                  EBT planning project by August 1, 2016                  Programs’ benefit delivery methods. The               planning initiative to formally explore
                                                  and submit EBT status reports through                   Department recognizes the potential                   the viability of EBT in their area of
                                                  their annual State Plan.                                benefits of the two State agencies                    operation. The planning process will
                                                     The APD process requires the State                   consulting on EBT implementation                      enable the State agency to gather
                                                  agency to submit Planning and                           options and encourages WIC State                      appropriate information on available
                                                  Implementation APD’s and appropriate                    agencies to work with SNAP officials                  implementation alternatives and assess
                                                  updates for the Department’s approval                   when appropriate. However, we believe                 if an exemption is warranted.
                                                  for their EBT project. Only one                         the provision is adequate as proposed                    Pursuant to section 17(h)(12)(D) of the
                                                  comment was received related to this                    due to WIC State agency variability in                CNA, each WIC State agency must
                                                  provision. The commenter noted the                      infrastructure, policy requirements or                submit to the Department an EBT
                                                  need to streamline the APD process to                   other factors. Consequently, the final                project status report to demonstrate the
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                                                  promote faster implementation                           rule retains the provision as proposed at             progress of the State agency toward
                                                  timeframes, especially given the fact                   § 246.12(y)(2) requiring consultation                 statewide implementation. Under the
                                                  that both on-line and off-line                          with State agency officials if a State                proposed rule, § 246.4(a) and
                                                  technologies are proven and cost-                       agency plans to incorporate additional                § 246.12(y)(4) would have required an
                                                  effective. After publication of the                     programs in the WIC EBT system.                       annual update of the State agency’s
                                                  proposed rule, the Department revised                      To ensure progress is made towards                 goals and objectives regarding EBT
                                                  the APD process for WIC EBT project                     the goal of nationwide EBT                            implementation to be submitted as part
                                                  approvals in order to streamline and                    implementation by October 1, 2020, the                of the State agency’s State Plan of


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                         10437

                                                  Operations. The annual update would                     EBT equipment or systems not solely                   provision, stating the proposed
                                                  also document the State agency’s                        dedicated to transacting WIC EBT and                  regulation was not consistent with the
                                                  progress toward accomplishing EBT                       guidelines for imposing processing and                HHFKA, may be cost prohibitive for
                                                  implementation by the 2020 deadline,                    interchange fees and costs on vendors                 State agencies, or did not allow for State
                                                  or if already implemented statewide,                    transacting WIC benefits. The CNA                     agency flexibility.
                                                  address any updated information for                     provisions related to cost impositions                   A number of commenters wanted
                                                  future EBT activities, plans for EBT                    on vendors were incorporated into the                 clarification and expressed concern
                                                  updates, re-procurements, or other                      proposed rule at § 246.12(h)(3)(xxvii–                regarding what is meant by the term
                                                  major activities impacting EBT. The                     xxx) and § 246.12(aa). A total of 73                  ‘‘equipment’’ as it applies to this
                                                  Department received 11 comments                         comments were received on these                       provision, some suggesting the term
                                                  regarding the annual reporting                          provisions and are discussed below.                   ‘‘commercial equipment’’ be used when
                                                  requirement, most of which were                            Cost Prohibitions. Section                         referring to the need for cost sharing
                                                  supportive of the proposal. Several                     17(h)(12)(E)(i) of the CNA prohibits the              criteria. While the Department
                                                  recommended that a report not be                        imposition of costs on authorized                     recognizes the provision applies
                                                  required from a State agency if there                   vendors for single-function EBT                       primarily to multi-function equipment
                                                  were no changes to EBT operations                       equipment and systems. Two comments                   or systems, the Department does not
                                                  since last report. One commenter also                   were received directly related to this                want to limit the type of equipment or
                                                  recommended a bi-annual reporting                       provision, voicing concern that the                   system that may be subject to cost
                                                  cycle rather than an annual cycle.                      potentially high costs associated with                sharing. The Department, as explained
                                                     The Department recognizes the time                   EBT equipment incurred by the retailer                earlier in the preamble, refers to multi-
                                                  and effort State agencies incur gathering               might be prohibitive, resulting in the                function equipment to include
                                                  information and reporting to the                        retailer deciding WIC authorization is                commercial equipment. To clarify,
                                                  Department. However, the status of EBT                  no longer viable. While the Department                ‘‘equipment’’ can refer to commercially-
                                                  implementation is of interest to                        understands these concerns, the full                  obtained hardware with WIC EBT
                                                  Congress and many of the Program’s                      costs of WIC single-function equipment                software owned or leased by a vendor
                                                  stakeholders and has critical resource                  will be borne by the State agency prior               from any of the cash register and
                                                  implications. Since the State Plan of                   to statewide implementation and                       payment system providers available in
                                                  Operations is updated annually, the                     appropriate cost sharing will occur for               the market. Multi-function equipment
                                                  Department believes the proposed                        multi-function cash register equipment                can also refer to stand-beside equipment
                                                  requirement is both timely and                          and systems. This should eliminate                    (and appropriate software) such as a
                                                  consistent with current annual reporting                undue hardships on WIC authorized                     card reader (magnetic stripe and/or
                                                  requirements and is well understood by                  vendors prior to statewide                            smart card), display screen, PIN pad,
                                                  State agencies and provides the                         implementation. Therefore, the                        printer and barcode scanner which are
                                                  necessary information the Department                    proposed provision has been modified                  not integrated into the cash register. The
                                                  requires for adequate oversight of the                  at Section 246.12(aa)(4) to clarify the               stand-beside equipment may be a
                                                  EBT implementation mandate.                             State shall continue to pay ongoing                   limited Point of Sale (POS) device with
                                                  Regarding the proposed requirement at                   maintenance, processing fees and                      WIC EBT functionality, a POS device
                                                  § 246.12(y)(4)(ii) requiring an annual                  operational costs of single-function                  supporting WIC EBT and SNAP or cash
                                                  State Plan update for State agencies                    equipment when EBT is implemented                     EBT payments, or it may be an
                                                  operating statewide EBT, the                            statewide.. Section 246.12(g)(5) has been             integrated cash register system installed
                                                  Department believes this is necessary to                removed because the CNA superseded                    separately in the checkout lane next to
                                                  inform the Department of any                            the prior cost prohibition language.                  the existing electronic cash register.
                                                  information impacting EBT operations,                      Criteria for Cost Sharing. Section                 Ownership of the equipment can rest
                                                  to include new EBT procurements. To                     17(h)(12)(E)(ii) of the CNA requires the              with the vendor, a third-party provider
                                                  minimize the reporting burden, a State                  Secretary to establish cost sharing                   such as an acquirer, the State agency, or
                                                  agency that is EBT statewide may                        criteria to be used by WIC State agencies             the State agency contractor. Other items
                                                  indicate no changes have occurred since                 and vendors for equipment or systems                  considered equipment or part of EBT
                                                  the previous reporting period, if                       that are not solely dedicated to                      include a telephone line or Internet
                                                  appropriate. A State agency with an                     transacting EBT for the WIC Program                   connection to submit purchases for an
                                                  active EBT APD may cross reference the                  (i.e., multi-function equipment). Under               on-line approval, to submit daily EBT
                                                  details from the APD in their annual                    the proposed rule at § 246.12(aa)(2),                 claim files for payment in an off-line
                                                  State Plan update to minimize the                       State agencies would have been                        environment, or to exchange the
                                                  reporting burden. Consequently, the                     required to use cost sharing criteria in              Authorized Product List (APL) and
                                                  provisions for requiring annual EBT                     accordance with Federal cost principles               other files necessary to support a WIC
                                                  project status reporting through the                    set forth in 2 CFR part 200 (Uniform                  EBT purchase.
                                                  annual State Plan are retained in this                  Administrative Requirements, Cost                        Several commenters asked for
                                                  final rule as proposed at § 246.4(a) and                Principals and Audit Requirements for                 clarification on whether the cost sharing
                                                  § 246.12(y)(4).                                         Federal Awards) to establish cost                     requirement should be between the WIC
                                                                                                          sharing criteria with their authorized                Program and SNAP, rather than the
                                                  5. EBT Cost Impositions on Vendors:                     WIC vendors for costs associated with                 vendor, if the stand-beside equipment
                                                  Sections 246.12(h)(3)(xxvii–xxx) and                    any multi-function equipment.                         supports both programs. Additional
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                                                  246.12(aa)                                                 A total of 13 comments were received               concerns were raised related to
                                                     Section 17(h)(12)(E)(i) of the CNA                   on the cost sharing criteria provision.               perceived discrepancies in the
                                                  prohibits the imposition of costs on                    One commenter was in full support of                  regulatory language in the cost sharing
                                                  vendors for EBT equipment and systems                   the provision as proposed. Five                       section and minimum lane coverage
                                                  used solely to support the program (i.e.,               commenters were supportive, but                       section regarding EBT equipment, with
                                                  single-function equipment). Sections                    requested clarification on terminology                the point being made that as stated in
                                                  17(h)(12)(E)(ii) and (iii) of the CNA                   and expansion on the provision. Seven                 the proposed rule at § 246.12(aa)(2),
                                                  outline requirements for cost sharing of                commenters were opposed to the                        WIC Program equipment would only be


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                                                  10438               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  provided for use by the State agency as                 and the approach is applied fairly to all             payment card industry to describe a fee
                                                  Stand-beside equipment and used solely                  authorized WIC vendors, the State                     paid between banks for the acceptance
                                                  by the Program and would therefore not                  agency must furnish its allocation and/               of card based transactions. Interchange
                                                  be subject to cost sharing agreements.                  or cost sharing methodology to the                    fees are currently paid by retail
                                                     If the equipment is single-function                  Department for review and approval                    merchants for credit and debit card
                                                  equipment, it is not subject to cost                    before incurring costs as part of the                 transactions in the commercial
                                                  sharing. However, if the equipment is                   established APD approval process                      environment, but not for WIC or SNAP
                                                  multi-function equipment, a cost                        outlined in Handbook 901. As noted                    EBT transactions. Under the proposed
                                                  sharing agreement between the State                     previously, § 246.12(y)(1) of the final               rule, interchange fees would not have
                                                  agency and vendor would be required if                  rule requires adherence to the APD                    applied to WIC EBT. Additionally,
                                                  any costs are shared. Such agreements                   process.                                              language reflecting this prohibition
                                                  may reflect other state programs that                      Processing Fees. As provided in                    would have been added to WIC vendor
                                                  may be included in the agreement. The                   section 17(h)(12)(E)(iii)(I) of the CNA               agreements, prohibiting the WIC vendor
                                                  Department has revised § 246.12(aa)(2)                  and incorporated into the proposed rule               from charging the State agency for any
                                                  to clarify that cost sharing agreements                 at § 246.12(h)(3)(xxviii) and                         interchange fees. Eight commenters
                                                  shall be developed between the State                    § 246.12(aa)(3)(i), WIC authorized                    addressed the proposed provision;
                                                  agency and the vendor, depending on                     vendors would have been required to                   seven were in full support of the
                                                  the type, scope and capabilities of                     pay commercial processing costs and                   proposed prohibition and one
                                                  shared equipment.                                       fees if multi-function equipment was                  commenter was in support but
                                                     One commenter requested a review of                  utilized for WIC and other transactions.              requested the language be made clearer
                                                  the HHFKA language that corresponded                    A vendor using multi-function                         in the final rule. Consequently, the
                                                  with the provision set forth in the                     equipment would pay commercial                        provisions prohibiting interchange fees
                                                  proposed rule, stating the proposed rule                transaction processing costs and fees,                from applying to WIC are modified
                                                  indicated State agencies shall establish                imposed by a third-party processor, if                slightly in the final rule at
                                                  cost sharing criteria, but the HHFKA                    the vendor elects to use commercial                   § 246.12(h)(3)(xxix) and
                                                  indicated the Secretary shall establish                 providers to connect to the State’s EBT               § 246.12(aa)(3)(ii) and clearly state that
                                                  criteria for cost-sharing. As discussed in              processing system. Five comments were                 a State agency shall not pay or
                                                  the preamble language of the proposed                   received on this provision. Three were                reimburse the vendor for interchange
                                                  rule, shared costs must be allocated, or                in full support of the proposed                       fees on WIC EBT transactions.
                                                  fairly distributed, among all benefiting                requirement and two commenters                           Costs After Statewide
                                                  parties in accordance with the                          requested the Department to clarify: (1)              Implementation. Section
                                                  established Federal cost principles set                 The provision applies only to multi-                  17(h)(12)(E)(iv)(I) of the CNA permits
                                                  out at 2 CFR part 200. Compliance with                  function equipment; and (2) the                       State agencies that have implemented
                                                  these Federal principles provides                       complete regulatory language for this                 EBT statewide to no longer be required
                                                  reasonable assurance the Federal                        provision. While this final rule at                   to incur the cost of ongoing
                                                  Government and the State agency bear                    § 246.12(h)(3)(xxviii) and                            maintenance of EBT multi-function cash
                                                  their respective fair share of costs                    § 246.12(aa)(3)(i) retains the intent of the          register systems and equipment. Under
                                                  incurred by the State agency to                         proposed provision prohibiting State                  the proposed rule at § 246.12(h)(3)(xxx)
                                                  administer Federal assistance programs.                 agencies from incurring third-party                   and § 246.12(aa)(4)(i), all costs for
                                                  To provide clarification and consistency                processing costs and fees for vendors                 ongoing maintenance, equipment and
                                                  and to ensure regulatory language does                  that elect to accept EBT using multi-                 operational expenses essential to and
                                                  not become outdated/obsolete, this                      function equipment, the regulatory                    directly attributable to, EBT after
                                                  provision has been revised at                           language has been modified slightly at                statewide expansion would have been
                                                  § 246.12(aa)(2), requiring State agencies               § 246.12(aa)(3)(i) for clarity.                       unallowable for both single-function
                                                  to develop cost sharing criteria                           As noted, typically processing fees are            and multi-function equipment, unless
                                                  following the Federal guidance                          not charged to vendors who accept WIC                 the State agency determined the vendor
                                                  established for cost allocation                         EBT equipment from a State agency or                  was needed for participant access.
                                                  principles. This clarification                          its contracted EBT provider if the                       The Department received numerous
                                                  underscores that Federal cost guidance                  equipment is single-function                          comments regarding the proposed
                                                  establishes cost allocation principles, as              equipment. A WIC State agency is                      regulations pertaining to vendor
                                                  required by the HHFKA and State                         responsible for these processing fees                 equipment and maintenance costs. Four
                                                  agencies will use these principles to                   and ongoing costs. The proposed rule at               comments in support of this
                                                  develop cost sharing criteria. The                      § 246.12(aa)(4)(i) would have permitted               requirement were received from WIC
                                                  specific proposed reference to 2 CFR                    such processing fees to be charged to all             State agencies and participant
                                                  part 225 has been replaced by a general                 WIC vendors after statewide                           advocates. Two large national retailer
                                                  reference to Federal cost allocation                    implementation whether or not the                     associations expressed concern the
                                                  principles to mitigate confusion in the                 equipment was single-function or multi-               proposed elimination of State-supported
                                                  future should the Federal regulations be                function. In response to related                      single-function EBT equipment was not
                                                  revised or renumbered. The cost                         comments not specific to this provision;              consistent with the HHFKA and would
                                                  principles now reside at 2 CFR part 200.                the proposed language is modified in                  require vendors to shoulder the
                                                     To date, the Department has remained                 the final rule at § 246.12(aa)(4)(i) to               financial costs associated with EBT
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                                                  flexible in its approval of proposed State              prohibit processing fees from being                   implementation. A payment industry
                                                  agency cost sharing criteria because of                 charged by a State agency or its                      association expressed concern the
                                                  differences in State agency funding and                 contractor to WIC vendors for use of                  proposed requirement to eliminate State
                                                  operations that lead to variations;                     single-function equipment.                            agency financing of single-function
                                                  consequently, one set of cost sharing                      Interchange Fees. Section                          equipment may have a chilling effect on
                                                  criteria does not fit all. To provide                   17(h)(12)(E)(iii)(II) prohibits interchange           expansion of WIC EBT nationwide by
                                                  reasonable assurance Federal cost                       fees on WIC EBT transactions. An                      2020. Several commenters from the
                                                  allocation principles are being followed                interchange fee is the term used in the               industry and State agencies urged the


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                        10439

                                                  Department to clarify whether the                       delivery method after EBT statewide, if               enter WIC food item UPC/PLU codes,
                                                  provision applied only to commercial                    the equipment is multi-functional.                    match them to the APL, determine if the
                                                  equipment owned by a WIC vendor                            Capability To Accept EBT Benefits.                 WIC food balance on the participant’s
                                                  versus equipment installed and owned                    Section 246.12(aa)(4)(ii) of the proposed             card is sufficient to purchase the item
                                                  by a State agency or its EBT contractor.                rule provided that once a State agency                and calculate the amount of the
                                                     After consideration of these                         has implemented EBT statewide, WIC                    transaction. The vendor must also
                                                  comments, the Department has modified                   vendor applicants would have been                     submit a claim file for payment in off-
                                                  the final regulation to require a State                 required to demonstrate their capability              line EBT environment. The electronic
                                                  agency to continue support of ongoing                   to accept WIC EBT benefits                            cash register system must do this while
                                                  maintenance, processing fees and                        electronically prior to authorization. In             managing WIC and non-WIC items (if
                                                  operational costs for single-function                   essence, the applying vendor would                    multi-functional), the sales tax for non-
                                                  equipment or multi-function equipment                   have been required to be ‘‘EBT capable’’              WIC items and a variety of promotions
                                                  if the vendor is necessary for participant              at the time they applied and there                    or discounts, as appropriate.
                                                  access.                                                 would have been no obligation for the                    Several comments were received
                                                     Two commenters raised concern that                   State agency to provide funds to cover                regarding concerns that significant
                                                  prohibiting ongoing maintenance fees                    EBT costs in order for the vendor to                  investments in cash register equipment
                                                  after statewide implementation would                    participate in the program. When there                and software may be incurred by a
                                                  not support small businesses or grocers                 is a need to ensure participant access to             vendor who is applying for
                                                  in rural areas not able to afford an                    food benefits, a State agency would have              authorization to accept WIC before the
                                                  integrated system or ongoing                            been permitted, with USDA approval, to                vendor is determined to be eligible by
                                                  maintenance costs, but who may be                       fund applicant vendor costs to obtain an              a WIC State agency. A commenter
                                                  integral to the program in regards to                   EBT capable cash register system.                     suggested a two-stage vendor
                                                  participant access to benefits. The                        A total of 19 comments were received               authorization process for State agencies
                                                  Department understands this concern.                    on this proposed provision. Seven                     to provide provisional authorization
                                                  To remain consistent with legislative                   comments, all from WIC State agencies,                that a vendor could receive if they met
                                                  exceptions permitting State agencies to                 were in full support of the proposal,                 a State agency’s vendor criteria before
                                                  provide single-function equipment on                    noting it is a vendor’s decision to seek              determining their EBT capability. The
                                                  behalf of the vendor, the provisions in                 WIC authorization and WIC Program                     Department is not requiring new vendor
                                                  this final rule at § 246.12(h)(3)(xxx) and              funds should not be used for this                     authorization criteria in this
                                                  § 246.12(aa)(4)(i) have been revised to                 purpose except if participant access is               rulemaking. Nonetheless, we recognize
                                                  require the State agency to pay ongoing                 an issue. Other commenters expressed                  a two-step authorization process may be
                                                  maintenance and operational costs for                   concerns as to the meaning of EBT                     a practical approach for a State agency
                                                  single-function EBT equipment. A State                  capable/EBT ready, the upfront                        to consider. To assist applicant vendors
                                                  agency may elect to share in the costs                  investment needed by the vendor to                    in selecting an EBT capable system,
                                                  for multi-function equipment if the                     become EBT capable without assurances                 State agencies should compile and
                                                  State agency determines the vendor is                   the vendor’s application for WIC would                maintain a list of certified systems the
                                                  necessary for participant access. The                   be accepted and the disadvantage that                 applicant can consider. This list would
                                                  wording was changed from ‘‘needed’’                     smaller vendors would face due to cost                neither represent an endorsement for
                                                  for participant access to ‘‘necessary’’ for             constraints.                                          the listed systems nor prevent a
                                                  participant access to align with the                       To address several commenters’                     prospective vendor from obtaining a
                                                  legislative language and to clarify the                 questions and concerns on what EBT                    different system.
                                                  intent of the provision. Additionally, a                capable means, a broader discussion                      One commenter representing a State
                                                  technical amendment is added to                         follows. WIC EBT delivery methods                     agency expressed concern that the
                                                  § 246.12(h)(3)(xxx) to correct a                        require the capability to process WIC                 return on investment made prior to
                                                  typographical error in the title in the                 EBT benefits by exchanging claim files                statewide operations was not defined in
                                                  proposed rule, clarifying the provision                 and hot card files in off-line                        the proposed rulemaking. The
                                                  applies to EBT ongoing maintenance                      environment and transmitting on-line                  commenter suggested that if a State
                                                  and operational costs.                                  purchases to the EBT host for approval,               agency shared in the cost of
                                                     One advocate organization                            which requires either a telephone or                  implementation, policies should be
                                                  commented that farmers and farmers’                     Internet line. Both on-line and off-line              established to allow recovery of a
                                                  markets should be given special                         WIC EBT delivery methods require                      prorated share of the investment if the
                                                  consideration in applying the provisions                transmittal of the approved product list              vendor was terminated (voluntary or
                                                  of the post-statewide equipment                         (APL), the electronic food list                       involuntary). State agencies already
                                                  installation rules which preclude State                 distributed by each State agency, at least            have this ability, as current Department
                                                  agencies from sharing in the cost of WIC                every 48 hours.                                       guidelines permit State agencies to
                                                  EBT equipment. While the Department                        WIC EBT also requires the vendor                   recoup a portion of any investment in
                                                  shares in the goal of enhancing access                  system to maintain the APL in order to                vendor equipment in the event of
                                                  to fresh fruit and vegetables made                      match scanned food items’ UPC                         termination. The Department does not
                                                  available by farmers and farmers                        (Universal Product Code) or Price                     believe this should be included in
                                                  markets, it could be cost prohibitive for               Lookup Codes (PLU) to ensure they are                 Federal regulations; rather, the
                                                  State agencies to equip every authorized                on a States’ APL. The one to one match                Department recommends this be
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                                                  farmer or farmers’ market. Therefore,                   is not necessary in a SNAP EBT                        addressed in appropriate State agency
                                                  § 246.12(h)(3)(xxx) and § 246.12(aa) of                 transaction; consequently a SNAP                      policy and vendor agreements.
                                                  the regulation have been amended to                     authorized retailer does not necessarily                 One commenter representing a retailer
                                                  apply to all authorized WIC vendors and                 have the capability to support WIC EBT                association expressed concern that State
                                                  also apply to authorized farmers and                    transactions.                                         agencies should have flexibility to share
                                                  farmers markets and prohibit costs for                     Therefore, WIC EBT capable would                   in the cost of retail equipment and
                                                  ongoing maintenance, equipment and                      mean the vendor equipment and                         software certifications even after the
                                                  operational expenses of an EBT benefit                  software is able to accurately scan or                State agency implements EBT statewide.


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                                                  10440               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  To date, State agencies have conducted                  and equipment used to support WIC                     support multiple programs, most
                                                  tests to certify that a specific cash                   EBT, whether the equipment is multi-                  notably SNAP.
                                                  register system is capable of supporting                functional or used solely for the WIC                    For the purposes of this equipment
                                                  all WIC EBT functions. The commenter                    Program.                                              formula, State agencies may use the U.S.
                                                  further noted that the proposed rule was                   Section 246.12(z)(2) of the proposed               Census Bureau Census on Retail Trade
                                                  not clear on what constituted the                       rule would have required a WIC EBT                    definition of supermarkets as retail
                                                  requirements or timeframes of                           equipment installation formula similar                establishments having sales over $2
                                                  determining EBT capability. The                         to the SNAP equipment installation                    million annually in food, which is
                                                  commenter expressed concern this                        requirements. Specifically, under the                 consistent with the SNAP definition for
                                                  uncertainty could negatively impact the                 proposed rule, WIC vendors would have                 supermarkets. Supercenters or
                                                  authorization of new chain stores or                    been required to install a commercial                 superstores are retail establishments
                                                  small businesses if a new EBT system or                 multi-function terminal or a                          primarily engaged in retailing a general
                                                  third party processor is used. The                      government-provided stand-beside                      line of groceries in combination with
                                                  Department recognizes some situations                   terminal in their checkout lanes as                   general lines of new merchandise, such
                                                  may result in a significant increase in                 follows: For superstores and                          as apparel, furniture and appliances. A
                                                  vendor costs for certification and may                  supermarkets, one POS terminal for                    State agency that requires SNAP
                                                  lengthen authorization timeframes. The                  every $11,000 in monthly WIC                          authorization as a criterion for
                                                  Department encourages State agencies to                 redemption; and, for all other                        authorization of a WIC vendor may also
                                                  work with new vendors seeking WIC                       authorized WIC vendors, one terminal                  reference the store categories utilized by
                                                  authorization to minimize costs and                     for every $8,000 in monthly WIC                       SNAP.
                                                  timeframes to become an authorized                      redemption. As a vendor’s WIC                            The Department believes the
                                                  WIC vendor. However, while the                                                                                proposed POS equipment lane coverage
                                                                                                          redemption reaches the next equipment
                                                  Department understands vendors may                                                                            formula allows for a consistent standard
                                                                                                          threshold, they would be eligible for an
                                                  incur additional costs related to                                                                             for the minimum number of lanes
                                                                                                          additional terminal if equipped by the
                                                  certifications after statewide EBT is                                                                         necessary to permit WIC participants to
                                                                                                          State agency under the formula
                                                  achieved, the primary concern is to                                                                           purchase their WIC foods using an EBT
                                                                                                          proposed by the Department or an
                                                  ensure participant access to WIC                                                                              card. After evaluating both current WIC
                                                                                                          alternate formula approved by the
                                                  benefits. Therefore, as stated in the                                                                         EBT State agency practices concerning
                                                                                                          Department. POS terminals would have
                                                  proposed rule, the State agency would                                                                         lane equipage and SNAP equipment
                                                                                                          been installed up to a maximum of four
                                                  have the option to elect to fund such an                                                                      installation requirements, the
                                                                                                          lanes, but not more than the number of
                                                  expense in the event there was a need                                                                         Department believes the proposed
                                                                                                          lanes in a WIC vendor location. This                  equipment formula represents a
                                                  to ensure WIC participant access.                       formula does not require all lanes to be
                                                     The Department acknowledges and                                                                            reasonable and consistent basis to allow
                                                                                                          equipped for stores conducting more                   WIC participants to purchase their WIC
                                                  appreciates the various viewpoints and
                                                                                                          than 15 percent or more of their food                 foods in the same manner as all other
                                                  comments submitted related to vendor
                                                                                                          sales in WIC business, which differs                  non-program customers.
                                                  capability to accept WIC EBT benefits.
                                                                                                          from the SNAP regulations but is                         Numerous commenters suggested
                                                  However, the language in the proposed
                                                                                                          consistent with the provisions in the                 using a range of redemption values to
                                                  rule that would have required the
                                                                                                          CNA. The proposed rule would have                     determine lane equipage and to give
                                                  vendor demonstrate EBT capability
                                                  prior to authorization unless the vendor                allowed a State agency to use an                      State agencies more latitude in
                                                  is determined to be necessary for                       alternative installation formula with                 determining how to equip vendors with
                                                  participant access is considered                        Department approval. Additionally,                    POS equipment based on State agency
                                                  appropriate and necessary and complies                  § 246.12(z)(2)(iii) of the proposed rule              needs, technology and funding
                                                  with the CNA. The Department has                        would have required a State agency to                 availability. The Department recognizes
                                                  modified the proposed language at                       determine the number of terminals that                the variation among WIC State agencies
                                                  § 246.12(aa)(4)(ii) to further clarify the              would be installed to support                         and proposed a State agency be given
                                                  requirement for vendors to demonstrate                  authorized farmers or farmers’ markets.               flexibility to devise a formula fitting its
                                                  their systems are EBT capable.                             This section of the proposed rule                  specific environment if the national
                                                                                                          received 26 comments from State                       terminal coverage formula does not
                                                  6. Minimum Lane Coverage Guidelines                     agencies, advocates, WIC vendor                       meet a specific State agency situation.
                                                     Section 17(h)(12)(F) of the CNA                      associations and members of the                       Therefore, the proposed language at
                                                  requires that the Department establish a                electronic funds transfer industry. Many              § 246.12(z)(2)(i) and (z)(2)(ii) is retained
                                                  minimum standard for installing WIC                     commenters expressed concern that the                 in the final rule and allows WIC State
                                                  EBT equipment, or terminals, in WIC                     proposed lane coverage guidelines may                 agencies to utilize an alternative
                                                  vendor locations. The proposed rule at                  be cost prohibitive for State agencies                terminal equipage installation formula
                                                  § 246.12(z)(2) provided a national WIC                  and/or vendors and funding constraints                with Department approval. This
                                                  EBT vendor equipment coverage                           for all stakeholders should be taken into             provision should allay State agency
                                                  formula that would have been                            consideration when establishing                       concerns that the national terminal
                                                  consistent from state-to-state and                      guidelines. Other concerns were that the              equipage formula does not adequately
                                                  established a minimum level of                          equipage requirements did not allow for               consider a State agency’s unique needs.
                                                  equipage for POS terminals used to                      variances among WIC State agencies, the                  The Department understands there are
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                                                  support the WIC Program. The proposal                   use of the SNAP POS terminal equipage                 scenarios where a vendor may choose
                                                  was consistent with the legislative                     formula was applied arbitrarily and the               not to install WIC EBT capable
                                                  requirement to establish national                       experience among EBT WIC State                        commercial equipment in every lane. As
                                                  standards for implementation of WIC                     agencies to date was insufficient to                  noted by a commenter, the preamble to
                                                  EBT, including standards for lane                       require a single equipage formula                     the proposed rule assumed all vendors
                                                  coverage for payment terminals to                       nationally that applied to all WIC State              utilizing integrated multi-functional
                                                  accept WIC EBT transactions. These                      agencies. Several commenters suggested                cash register systems would choose to
                                                  minimum standards apply to all systems                  adding a requirement that POS devices                 equip all of their lanes with WIC


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                          10441

                                                  functionality. The Department agrees                    take steps to ensure WIC customers are                   Two commenters suggested amended
                                                  with the commenter and wishes to                        directed to the WIC EBT capable lane(s)               language to protect a State agency from
                                                  clarify that we encourage EBT                           without designating these lanes as                    bearing fiscal liability in instances
                                                  transactions to be integrated into each                 usable only by WIC customers. This                    where a vendor is removed from the
                                                  WIC vendor’s checkout lanes to allow                    could be done through the use of                      WIC program after receiving
                                                  WIC EBT cards to be utilized in all lanes               appropriate signage such as ‘‘WIC EBT                 reimbursement from a State agency to
                                                  both to promote efficiencies and to                     accepted here.’’ Provided a WIC vendor                acquire WIC EBT capable multi-
                                                  improve WIC benefit delivery, but it is                 is complying with the lane equipment                  functional equipment, especially after
                                                  not necessarily a universal business                    formula, a requirement to check out in                statewide implementation. One
                                                  practice among vendors, nor is it a                     specific lanes capable of accepting a                 commenter was concerned policy
                                                  requirement.                                            WIC EBT card is not treating WIC                      guidance would be needed in a situation
                                                     While many vendors may prefer to                     customers differently than other                      when a vendor is removed from
                                                  integrate WIC EBT into their existing                   customers provided the WIC lanes could                participating in the WIC Program but
                                                  POS equipment, vendors may find                         also be used by other customers.                      has accepted reimbursement from the
                                                  integration costs prohibitive and                          Although we have noted not all WIC                 State agency prior to the removal. In
                                                  therefore elect to use a single-function                vendors will choose to integrate WIC                  such situations, the State agency may
                                                  POS terminal for WIC transactions or                    EBT into any and/or all of their POS                  not be able to get a full return on the
                                                  may choose to have limited lanes                        devices, based on the experience with                 funds provided. When a State agency
                                                  integrated to accept WIC EBT. One                       SNAP, the Department expects the                      has devised a retailer enablement plan
                                                  commenter noted that when a vendor                      majority of WIC vendors to equip all of               that includes investment in equipment
                                                  elects to equip fewer lanes than would                  their checkout lanes when they utilize                owned and operated by individual
                                                  have been required by this regulation,                  commercial multi-functional WIC EBT                   vendors, the State agency must address
                                                  the State agency would have been                        capable solutions due to increased                    recoupment of this investment. Some
                                                  required to install the additional stand-               efficiencies and convenience in the                   State agencies have added a provision to
                                                  beside equipment at State agency                        checkout lanes for all customers. Given               vendor agreements which allows the
                                                  expense. Prior to statewide EBT                         the concerns expressed about all lanes                State agency to recover a pro rata share
                                                  implementation, this would be the case.                 being WIC EBT capable for improved                    of any funding from a WIC vendor
                                                  The Department recognizes the need                      customer service versus the cost                      terminated or removed from the
                                                  may arise to install separate single-                   prohibitions to both WIC State agencies               program. It is appropriate for State
                                                  function terminals prior to statewide                   and authorized WIC vendors for doing                  agencies to include recoupment of
                                                  implementation either on an interim                     so, the final rule modifies § 246.12(z)(2)            federal investment in their WIC vendor
                                                  basis in order to allow more time for a                 to require that lanes be equipped                     agreements or other agreements entered
                                                  WIC vendor to upgrade to an integrated                  according the formula regardless                      into regarding WIC EBT equipment.
                                                  system or as a permanent POS solution.                  whether the equipment is single-                         Two commenters requested
                                                  As noted earlier in the preamble, retailer              function or multi-function. The final                 modification of the proposed language
                                                  equipage would be included as part of                   rule retains the equipage formulas at                 at § 246.12(z)(2)(v) which would have
                                                  a State agency’s retailer enablement                    § 246.12(z)(2)(i) and (z)(2)(ii) as                   allowed an authorized vendor who has
                                                  plan and would address the number and                   proposed.                                             been equipped with a terminal by the
                                                  type of POS equipment in each vendor                       Commenters also expressed support                  State agency to submit evidence that
                                                  location. Once statewide EBT is                         for minimizing deployment of two POS                  additional terminals are necessary after
                                                  achieved, the provision at                              terminals in a single checkout lane, one              the initial POS terminals are installed.
                                                  § 246.12(aa)(4)(i) applies. Any ongoing                 for WIC and one for SNAP, with one                    One commenter suggested the
                                                  State agency support for stand-beside                   commenter suggesting joint WIC and                    additional terminals be added at the
                                                  terminals would be subject to a State                   SNAP EBT POS capabilities be a                        expense of the vendor. Another
                                                  agency’s determination the vendor was                   requirement. As noted in the preamble                 commenter requested timeframe
                                                  necessary for participant access.                       to the proposed rule, some WIC State                  limitations for requesting additional
                                                     A few commenters noted the lane                      agencies have worked with their SNAP                  terminals be incorporated into the
                                                  coverage formula was inconsistent with                  agencies to acquire WIC and SNAP EBT                  regulatory language, e.g. the vendor
                                                  the requirement that WIC vendors offer                  services through a single contractor.                 must request additional terminals
                                                  WIC customers the same courtesies as                    This permits a single POS terminal to be              within one year from the initial POS
                                                  other customers as required in current                  installed in authorized vendor locations              installation or prior to statewide rollout,
                                                  regulations at § 246.12(h)(3)(iii). The                 accepting both WIC and SNAP benefits.                 whichever is sooner. To allow for
                                                  Department also recognizes the use of                   The Department expects the WIC State                  greater State agency flexibility and to
                                                  stand-beside equipment is not optimal                   agency will consult with the SNAP EBT                 provide WIC authorized vendors an
                                                  for WIC participants because they must                  agency during planning to identify                    opportunity to request additional POS
                                                  separately scan their WIC food items to                 opportunities where vendor equipage                   equipment should their business
                                                  complete the WIC portion of their                       could be coordinated and instances of                 operations change or expand indicating
                                                  purchases. Scanning and entering price                  duplicate equipment can be minimized.                 the need for additional WIC EBT
                                                  information twice will be slower                        However, the Department recognizes                    equipment, the language at
                                                  compared with the scanning process for                  separate terminals may be unavoidable                 § 246.12(z)(2)(v) remains as proposed.
                                                  other store customers. However, as                      in some instances due to contractual                     No comments were received on the
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                                                  noted previously, it may not be feasible                and funding issues and the need to                    proposed provisions at
                                                  or affordable for WIC vendors or a WIC                  upgrade software and other                            § 246.12(z)(2)(iv), (z)(2)(vi) and
                                                  State agency to equip all lanes with WIC                infrastructure to support transactions                (z)(2)(vii), which dealt with equipping
                                                  functionality in excess of the minimal                  from the two programs. Because of these               vendors necessary for participant
                                                  lane equipage formula using either                      issues, the final rule is retained as                 access, terminal equipage for obtaining
                                                  additional stand-beside equipment or                    proposed and does not require a single                benefit balances and the removal of
                                                  multi-functional terminals. The State                   POS terminal capable of allowing both                 excess terminals in the event of reduced
                                                  agency and WIC vendor would need to                     WIC and SNAP purchases.                               redemption activity, respectively.


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                                                  10442               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  Therefore, these provisions remain as                   that would have been required for                     these detailed documents while still
                                                  proposed.                                               replacing participant benefits and the                allowing stakeholder input.
                                                    Section 246.12(z)(3) of the proposed                  establishment of a toll-free 24-hour                     Overall, commenters were in support
                                                  rule would have required the State                      customer service number proposed as                   of the proposed requirement to follow
                                                  agency to ensure vendors, farmers,                      regulations. These comments and the                   and demonstrate compliance with
                                                  farmers’ markets and home food                          Department’s response to the comments                 technical standards and operating rules.
                                                  delivery contractors are paid promptly.                 are addressed below.                                  A few commenters noted it was critical
                                                  Although the proposed rule did not                         As indicated in the proposed                       to have industry input to the standards
                                                  mention farmers’ markets which was an                   regulation, the Department has long                   and the standards remain flexible so
                                                  oversight by the Department, we have                    recognized the standards and operating                WIC EBT can adapt to new technology.
                                                  added farmers’ markets to 246.12(z)(3)                  rules must be followed to facilitate EBT              The Department intends for flexibility to
                                                  in this final rule. Payment must be made                expansion efficiently and consistently                be accomplished by maintaining the
                                                  in accordance with the established                      from State to State and has worked                    documents separate and apart from the
                                                  Operating Rules and technical                           collaboratively with State agencies and               regulatory process. One commenter
                                                  requirements after a valid electronic                   industry to establish WIC EBT                         stated current EBT State agencies
                                                  claim for payment has been submitted.                   standards. The proposed rule at                       should be grandfathered in and not be
                                                  Ten comments were received on this                      § 246.12(bb)(1)(i) and (bb)(1)(ii) would              required to implement new or updated
                                                  topic with the majority of the                          have required State agencies,                         standards. The Department understands
                                                  commenters indicating that the                          contractors and authorized WIC vendors                this concern but feels it is critical for all
                                                  preamble language did not accurately                    to follow and demonstrate compliance                  State agencies to incorporate the latest
                                                  reflect decisions made via the Operating                with operating rules, standards and                   standards into their EBT benefits
                                                  Rules technical workgroup with regard                   technical requirements as established by              delivery methods as soon as practical so
                                                  to the timing of when a State agency                    the Secretary, as well as to comply with              processors and vendors can cost
                                                  should pay vendors. At the time the                     other industry standards identified by                effectively build to the standards. To
                                                  proposed rule was published, the                        the Secretary. Section 246.12(bb)(2) and              acknowledge this concern and to allow
                                                  Operating Rules required payment                        (bb)(3) would have established                        State agencies flexibility in
                                                  within two days of submitting a valid                   requirements for replacing participant                implementing the standards, State
                                                  electronic claim for payment;                           benefits and establishing a 24-hour toll              agencies currently operating WIC EBT
                                                  subsequently the Operating Rules have                   free hotline number for customer                      delivery methods will be allowed to
                                                  been updated to require payment within                  assistance, respectively.                             implement the standards into their EBT
                                                  two processing days of receipt of the
                                                                                                             Under the preamble in the proposed                 delivery methods up to two years from
                                                  claim for payment but allow exceptions
                                                                                                          rule, the Department sought comments                  the date of publication of this rule.
                                                  to allow payment up to five days after
                                                                                                          on several aspects of the Operating                      One large retailer association, while
                                                  receipt by the State agency. The
                                                                                                          Rules and technical standards                         supporting the need for standards and
                                                  Department acknowledges this generally
                                                  accepted practice. However, the                         documents in order to determine future                operating rules, suggested the standards
                                                  Department feels the number of days for                 regulatory or policy updates. A total of              and related documents be published for
                                                  submitting a valid claim for payment                    87 comments were received on this                     public comment. As noted in the
                                                  should not specifically be stated in the                section of the proposed rule. Many of                 preamble to the proposed rule, the
                                                  regulatory language, but rather is                      the commenters requested clarification                Department has established a
                                                  appropriately addressed in the                          or suggested corrections to preamble                  maintenance process allowing all
                                                  Operating Rules. Consequently, the                      language or provided general comments                 stakeholders the opportunity to submit
                                                  proposed language at § 246.12(z)(3) is                  to preamble discussion of the operating               change requests necessary to clarify,
                                                  retained as proposed.                                   rules, TIG, retail certifications and other           change or add to the rules prompted by
                                                                                                          standards. A discussion of each area                  implementation activity. This process
                                                  7. Technical Standards and                              follows.                                              permits stakeholders to submit a change
                                                  Requirements                                               Operating Rules and Technical                      request to the Department for
                                                     General. Section 17(h)(12)(G) of the                 Implementation Guide (TIG). The WIC                   consideration. Once received, reviewed
                                                  CNA states that the Secretary shall                     EBT Operating Rules and the TIG were                  and analyzed for potential impact, the
                                                  establish technical standards and                       collaboratively developed over the past               change request will be published on the
                                                  operating rules for WIC EBT and                         several years with State agency and                   established collaborative Web site,
                                                  requires each State agency, contractor                  industry input to address, respectively,              discussed on a conference call and
                                                  and authorized vendor participating in                  the ‘‘what’’ and ‘‘how’’ of WIC EBT                   published in a final bulletin for a 30-day
                                                  the WIC Program demonstrate                             implementation. These documents have                  comment period. Once this comment
                                                  compliance with established technical                   been accepted and implemented among                   period is completed, a schedule for
                                                  standards and operating rules. Two of                   EBT State agencies, their authorized                  implementation will be identified in the
                                                  the most comprehensive compilations of                  vendors, processors and other                         final change request. Updates will be
                                                  the standards and rules established for                 stakeholders and have contributed to                  issued as technical bulletins and then
                                                  WIC EBT are the EBT Operating Rules                     successful WIC EBT implementation                     incorporated into the periodic update
                                                  and the Technical Implementation                        and expansion. The Department’s                       for each document. A copy of the WIC
                                                  Guide (TIG), both of which were                         rationale for proposing the required use              EBT Operating Rules and TIG are
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                                                  thoroughly discussed in the preamble of                 of the Operating Rules and TIG and                    available on the public Web site of the
                                                  the proposed rule. The Department also                  maintaining these as stand-alone                      Food and Nutrition Service at http://
                                                  requested comments on retail vendor                     technical documents, allows for                       www.fns.usda.gov/wic/ebt-guidance.
                                                  certification procedures, the WIC                       technological changes to be                           Parties interested in reviewing and
                                                  Universal Management information                        incorporated into the Operating Rules                 commenting on these documents can
                                                  System MIS–EBT Interface specification                  and technical standards as technology is              obtain access to the shared WIC EBT
                                                  and other issues discussed in the                       updated and WIC EBT evolves. This                     Technical Documents PartnerWeb
                                                  preamble; and the minimum timeframes                    process allows more timely updates to                 shared Web site by sending an email


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                         10443

                                                  requesting access to: WICEBTTECH@                       agencies at one time, to save time, and                  While no clear consensus was
                                                  fns.usda.gov.                                           establish policy and protocols to ensure              supported by commenters on the vendor
                                                     Several commenters suggested the                     standards such as the Operating Rules                 system certifications, we did receive
                                                  Department be cautious in adopting                      and TIG are being followed. Concerns                  many useful suggestions. Some
                                                  commercial standards such as the                        and questions pertaining to retailer                  commenters suggested the Department
                                                  Europay MasterCard Visa (EMV)                           capability after statewide                            establish a lab for manufacturers to get
                                                  Smartcard Payment System standards.                     implementation will be discussed later                certified or use a centralized process for
                                                  For example, EMV includes technology                    in this preamble. Additionally, as many               certifying cash register systems. In each
                                                  such as Near Field Communications                       of these issues are outside the purview               of these cases, the manufacturer of the
                                                  that, at the time of this writing, is not               of this regulation, the Department will               cash register software would present the
                                                  presently in use by any WIC EBT system                  provide additional guidance and policy                system to the lab or the Department
                                                  to support contactless smart cards. The                 on these questions as necessary after                 whenever modifications to software
                                                  Department is paying close attention to                 publication of this final rule.                       affecting WIC activities was ready or a
                                                  EMV because we believe it is best to                       The Department believes the                        new system was to be certified for WIC
                                                  align EBT standards with commercial                     proposed regulatory language                          EBT functionality. Individual State
                                                  standards already in use to the greatest                concerning standards provides adequate                agencies could then test the actual
                                                  extent possible. Alignment with                         flexibility to establish new and/or                   implementation by each WIC vendor by
                                                  commercial standards sometimes                          changes to existing standards as WIC                  conducting a few purchases or accepting
                                                  referred to as ‘piggy-backing’ on                       EBT evolves and allows for appropriate                the certification conducted by another
                                                  commercial infrastructure, will help to                 input from EBT stakeholders. Therefore,               State agency. Several State agencies
                                                  reduce costs and development time for                   the provisions at § 246.12(h)(3)(xxxi),               suggested the use of a lead State agency
                                                  State agencies, WIC vendors and                         (bb)(1)(i), and (bb)(1)(ii) requiring                 which would maintain a national
                                                  processors who must support WIC and                     compliance with Operating Rules,                      database of certified WIC EBT capable
                                                  other payment forms. This was the                       standards and technical requirements                  benefit delivery methods. Under this
                                                  Department’s perspective when SNAP                      and other industry standards                          approach, the lead State agency would
                                                  was implementing EBT and the                            established and/or identified by the                  act on behalf of other State agencies in
                                                  approach has continued. Consequently,                   Secretary are retained as proposed in                 conducting and coordinating vendor
                                                  should a State agency decide to adopt a                 this final rule. Additional discussion of             system certifications which would
                                                  smart card supporting Near Field                        these provisions follows.                             reduce cost and the level of resources
                                                  Communication contactless purchases,                                                                          that would have been required by
                                                                                                             Retail Vendor Certification
                                                  it would be in the best interest of the                                                                       developers and State agencies.
                                                                                                          Procedures for WIC EBT Capability. In
                                                  WIC Program to consider adoption of                                                                              The Department also established a
                                                                                                          the proposed rule, the Department
                                                  the existing EMV or other industry                                                                            workgroup to explore the feasibility of
                                                                                                          expressed interest in developing
                                                  standards.                                                                                                    standardizing certification procedures
                                                     We would like to clarify, as a few                   procedures and guidance for the                       and test scripts. However, after meeting
                                                  commenters noted, that the Accredited                   certification of retail vendor electronic             for more than one year, the workgroup
                                                  Standards Committee (ASC) X9, Inc. is                   cash registers and associated payment                 did not reach consensus on a common
                                                  the organization responsible for                        devices, to include the development of                approach to be followed by all parties.
                                                  financial standards in the United States                common test scripts and testing criteria.             While the group was unable to reach
                                                  rather than the American National                       The Department sought comments on                     consensus on the overall approach, the
                                                  Standards Institute (ANSI), which was                   the retailer certification process, noting            State agencies and industry agreed to
                                                  incorrectly referenced in the preamble                  however that discussions and comments                 consolidate test scripts used during
                                                  of the proposed rulemaking. The two                     related to retailer certification and                 certifications for each technology to
                                                  pertinent standards for WIC managed by                  consequently, what a vendor would                     standardize this aspect of the testing.
                                                  the ASC X9 are the X9.93 messaging and                  need to demonstrate to the satisfaction               These test scripts are updated and are
                                                  file standards and the X9.131, which                    of the WIC State agency that its system               available on the EBT Technical
                                                  defines the interface between vendor                    was EBT capable, would not be                         Documents Partner Web site for use by
                                                  card readers and EBT smart cards.                       incorporated into the final rule. Rather,             State agencies and industry.
                                                     A number of commenters raised                        these comments would be considered in                    As a result, the Department has
                                                  questions related to enforcement of the                 the larger discussion among all EBT                   determined continued Departmental
                                                  Operating Rules and TIG. Questions                      stakeholders of what should be                        involvement in the process of certifying
                                                  included the process by which WIC                       incorporated into associated standards                retailer cash register systems is no
                                                  vendors and EBT processors would                        and rules as to what constitutes a WIC                longer warranted. WIC State agencies
                                                  demonstrate compliance, which party                     EBT capable vendor system.                            will retain responsibility for the prompt
                                                  would be required to pay the cost of                       Specific standards for certifying                  and accurate payment of allowable costs
                                                  compliance and how often must it be                     vendors or other systems that may affect              as discussed at § 246.13(d). Each WIC
                                                  demonstrated. One commenter                             a WIC EBT transaction were not                        State agency planning to implement
                                                  questioned the extent a vendor or cash                  proposed other than the requirement at                WIC EBT must therefore ensure that all
                                                  register manufacturer would be                          § 246.12(aa)(4)(ii) which would have                  EBT transactions are processed
                                                  responsible for State agency certification              required each WIC vendor applicant to                 correctly, securely and in accordance
                                                  costs, such as staff time for testing and               demonstrate capability to accept WIC                  with current WIC regulations, policy
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                                                  quality assurance review and travel                     benefits electronically after statewide               and guidance. State agencies may
                                                  costs. The Department strongly urges                    implementation. Several commenters                    conduct certification tests or accept
                                                  State agencies to coordinate their                      expressed the need to provide a                       certifications conducted by other State
                                                  certifications to minimize and not                      consistent process, to develop standards              agencies of WIC vendor systems in
                                                  duplicate the costs imposed on the                      and processes as quickly as possible and              accordance with the WIC EBT Operating
                                                  industry and take advantage of                          to involve the retail community in the                Rules. As with the paper food
                                                  collaborative certifications allowing a                 development of the vendor certification               instrument redemption by WIC vendors,
                                                  single certification with several State                 process.                                              State agencies shall take actions through


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                                                  10444               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  the provisions of their vendor                          change, but requested the timeframe be                rule has been modified to clarify that
                                                  agreements and associated                               extended beyond five business days to                 the Department intends for card
                                                  administrative actions when vendors are                 accurately reflect the State agencies’                replacements and the remaining
                                                  found to be noncompliant. The                           current WIC EBT replacement                           associated benefits to occur routinely
                                                  Department will not dictate the steps                   timeframe. Commenters also noted the                  and as soon as possible to afford time
                                                  the State agency must take to ensure its                background language contained in the                  for the participant to obtain their WIC
                                                  EBT benefit delivery method and the                     proposed rule was inaccurate because it               foods for the month. It is expected that
                                                  systems of its WIC authorized Vendors,                  erroneously stated benefits can be lost               should frequent card replacements
                                                  are operating correctly.                                when an EBT card is lost or stolen. To                occur, the State agency will advise the
                                                     WIC Universal MIS–EBT Interface                      clarify, the balance of the electronic                cardholder of their responsibilities and
                                                  Specification. The WIC Universal                        benefit at the time when a card is                    the need to protect the card at all times.
                                                  Management Information System (MIS)–                    reported lost or stolen is transferred to             The State agency may also determine if
                                                  EBT Universal Interface (WUMEI),                        a new card issued to the participant(s)               additional research is warranted to rule
                                                  commonly referred to as the Universal                   or proxy and consequently, no loss of                 out any program integrity concerns.
                                                  Interface or simply UI, is a specification              benefits occurs. Although the proposed                   A conforming amendment was added
                                                  that guides systems development for                     rule did not specifically address card                to § 246.4(a)(14)(xix) to include a
                                                  data exchanged between State agency                     replacement if the card is damaged, this              description of the process the State
                                                  clinic MIS systems and EBT processor                    final rule is also applicable to                      agency will establish to replace EBT
                                                  systems. Several comments were                          replacement of damaged cards.                         cards and transfer the associated
                                                  received suggesting the interface                          Under the proposed rule, the                       benefits within seven business days.
                                                  specification should become one of the                  maximum timeframe that would have                        Under the proposed rule,
                                                  standards identified by the Secretary as                been required for electronic benefit                  § 246.12(bb)(3) would have required a
                                                  a requirement for implementation. The                   replacement by an EBT State agency                    State agency to provide a toll-free 24-
                                                  Department expects all State agencies to                was five business days. Though initial                hour hotline number with live
                                                  build their interfaces consistent with the              implementations by off-line State                     representatives for EBT cardholder
                                                  Universal Interface specification.                      agencies followed FNS policy guidance                 assistance. The toll-free 24-hour hotline
                                                  Therefore, the Department does not                      to replace lost or stolen cards within                was proposed to enhance customer
                                                  believe there is a need for a separate                  five business days, one State agency                  service to WIC participants who may
                                                  standard reiterating use of the Universal               commenter indicated it could not                      need to contact the State agency or a
                                                  Interface specification.                                consistently meet the standard due to                 WIC clinic to report a lost or stolen EBT
                                                     Other Standards and Requirements.                    constraints such as part-time outreach                card, request a replacement card, or to
                                                  As noted in the preamble to the                         sites with variable hours of operation.               access other services. In proposing the
                                                  proposed rule, other standards and                      Therefore, this State agency had                      toll-free 24-hour hotline number, the
                                                  requirements may be necessary over                      established a policy permitting the                   Department also recognized this
                                                  time and the Department must be able                    replacement of the EBT card and                       requirement may have a potential
                                                  to establish these standards and/or                     transfer of participant benefit balances              impact on the affordability of WIC EBT
                                                  incorporate these changes into the                      within ten days of notification. Other                and may strain State agency
                                                  existing technical standards and                        State agencies increased the timeframe                management of resources if the State
                                                  guidelines and State agencies must                      from five business days to six because                agency needed to expand its operational
                                                  accommodate and implement these                         clinics could not consistently meet the               hours. Therefore, the Department
                                                  changes. One such proposed                              five day replacement policy because it                specifically sought comments regarding
                                                  requirement at § 246.12(bb)(2) would                    is not always possible to obtain the                  this proposed requirement.
                                                  have required State agencies to establish               remaining balance immediately due to                     The Department received 31
                                                  policy permitting the replacement of                    delays in WIC retail vendor settlement                comments on this provision of the
                                                  participant benefits within five business               and in cases where off-line States clinics            proposed rule. Ten commenters, all
                                                  days following notice by the participant                only operate a few days per week,                     from the advocacy community, were in
                                                  to the State agency, at least one time in               particularly in remote areas.                         support of the change, with two of these
                                                  a three-month benefit issuance period.                     The Department expects State                       commenters recommending the
                                                  The replacement process would enable                    agencies to replace a lost or stolen card             provision be broadened to provide
                                                  the remaining food balances associated                  as soon as possible, but no later than                hotline assistance to authorized vendors
                                                  with an EBT card to be transferred to                   seven business days following notice by               as well. While the Department supports
                                                  another card (off-line) or linked to                    the participant or proxy to the State                 the potential for enhanced business
                                                  another EBT card with the same account                  agency. This timeframe should allow for               practices and customer service that EBT
                                                  (on-line). Current policy gives State                   vendor settlement consistent with EBT                 may provide, we also recognize this
                                                  agencies the option to replace lost or                  business practice capabilities and                    could create untenable costs for State
                                                  stolen food instruments.                                recognizes limited clinic availability in             agencies and tax their administrative
                                                     The Department received 20                           some remote areas. Section                            capacity. Additionally, vendors have
                                                  comments on the card and benefit                        246.12(bb)(2) in this final rule has been             other means to receive assistance
                                                  replacement provision of the proposed                   amended to require the replacement of                 through their commercial equipment
                                                  rule. Three commenters were in full                     EBT cards and the transfer of associated              and payment service providers or by
                                                  support of the provision as proposed.                   participant benefit balances within                   contacting the State agency vendor
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                                                  Several commenters expressed concern                    seven business days following notice by               coordinator. Therefore, the final rule
                                                  both with the five business day                         the participant or proxy to the State                 will not expand the requirement to
                                                  replacement timeframe as well as with                   agency.                                               accommodate vendors.
                                                  the provision requiring replacement at                     The proposed rule included a                          Twenty-one commenters, primarily
                                                  least once in a consecutive three-month                 requirement to replace participant                    State agencies, were opposed to the
                                                  period. Four commenters suggested the                   benefits at least one time in a                       requirement for a toll-free 24-hour
                                                  provision be made optional. Eight                       consecutive three-month period when a                 hotline number; of those, fourteen
                                                  commenters were in support of the                       card is reported lost or stolen. This final           recommended the hotline be a State


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                         10445

                                                  agency option rather than a                             report a lost or stolen card and receive              transaction detail, selecting or changing
                                                  requirement. While many of these                        information on the current food balance               a PIN and finding the locations of WIC
                                                  commenters were in agreement that EBT                   and benefit expiration date during non-               authorized vendors. If a State agency
                                                  offers an opportunity for enhanced                      business hours. While a State agency                  seeks to implement alternatives to the
                                                  customer service to WIC participants, it                would not be required to provide a toll-              minimum service requirements, the
                                                  was noted that requiring this level of                  free 24-hour hotline supported by                     agency must submit the plan to FNS for
                                                  customer service had not been                           customer service representatives and/or               approval.
                                                  determined necessary for the successful                 an automated Interactive Voice
                                                  operations of WIC EBT in the early                      Response (IVR) system, this amended                   8. National Universal Product Code
                                                  smart card implementations as well as                   requirement leverages additional                      (NUPC) Database
                                                  in several on-line WIC EBT                              opportunities to enhance customer                        Under the proposed rule at
                                                  implementations. These EBT                              service by providing a means of access                § 246.12(cc), the National UPC (NUPC)
                                                  implementers, now statewide, found the                  for participants to report issues and                 database would be used by all State
                                                  24-hour hotline to be of limited benefit                have fundamental services offered at all              agencies providing benefits via WIC
                                                  or unnecessary and recommended that                     times. In addition, per the WIC EBT                   EBT. The minimum requirement for
                                                  the Department eliminates the proposed                  Technical Information Guide (TIG),                    usage of the NUPC database could be
                                                  requirement to establish a toll-free 24-                participants’ purchase receipts must                  met by a State agency through the
                                                  hour hotline number. Furthermore,                       provide food balances and benefit                     submittal of a copy of the State agency’s
                                                  these commenters noted maintaining a                    expiration date. The final rule at                    current authorized product list (APL) for
                                                  24-hour, 7 day a week toll-free customer                § 246.12(bb)(3) requires each State                   inclusion in the NUPC database. The
                                                  service operation could create undue                    agency to establish procedures and                    proposed rule would have also required
                                                  financial hardships to a State agency                   systems to enable participants to report              a State agency to submit a copy of its
                                                  and should be a service a State agency                  cardholder issues during non-business                 current APL file prior to the APL
                                                  may consider as an option if State                      hours as well as receive other services.              becoming effective or making it
                                                  agency resources allow.                                 Procedures may include a toll-free 24-                available to its authorized vendors.
                                                     Several commenters noted the                         hour hotline or other alternatives to                    As discussed in the proposed rule, the
                                                  demonstrated need for a 24-hour hotline                 receive services or report card issues in             NUPC database is envisioned to be a
                                                  number in the smart card WIC EBT                        an easily accessible manner.                          repository of information about all food
                                                  implementations, now statewide, had                     Additionally, the Department                          items authorized by each WIC State
                                                  not materialized nor had advocates for                  encourages State agencies to provide                  agency. Information in this repository
                                                  participants or participants themselves                 participants with services in the most                will be organized in accordance with
                                                  expressed the need for this level of                    accessible method as possible, such as                the National Category Subcategory
                                                  service. One State agency commenter                     mobile balance inquiries in addition to               Table. Additional food product
                                                  indicated there was very little a 24-hour               IVR. Other alternatives may become                    information is included in the database
                                                  customer service representative could                   available in the future which would                   to permit each State agency to
                                                  do to assist a WIC participant with a                   provide opportunities to further                      determine whether or not to authorize
                                                  smart card until the WIC clinic was                     improve and enhance WIC customer
                                                                                                                                                                the product for use within the State
                                                  open. Unlike an on-line EBT, current                    service. The procedures for meeting the
                                                                                                                                                                agency. The additional food product
                                                  food balances for off-line cards are not                customer service requirements at
                                                  available via a customer service number                                                                       information would include items such
                                                                                                          § 246.12(bb)(3) must be described in the
                                                  in real time and commenters indicated                                                                         as nutrition labeling, bar code symbol,
                                                                                                          State Plan. A conforming amendment
                                                  few instances of difficulty in reporting                                                                      product flat or a photograph of the
                                                                                                          has been made to § 246.4(a)(14)(xx)
                                                  a card lost or stolen to the WIC clinic                                                                       container and ingredients. The intent of
                                                                                                          requiring the description of the State
                                                  have occurred even when operating                                                                             the repository is to facilitate the
                                                                                                          agency’s procedures for meeting the
                                                  statewide. Additionally, several State                                                                        identification of WIC eligible food items
                                                                                                          customer service requirements.
                                                  agencies have operated statewide with                      Three commenters suggested the                     and to provide the associated product
                                                  little demonstrated need for toll-free 24-              Department provide guidance on what                   information necessary to support EBT
                                                  hour hotline capability through the use                 minimum services would be required in                 operations. For instance, once a State
                                                  of State operated customer service                      order to maintain compliance with the                 agency has determined a food item is
                                                  during business hours that transitions to               requirement for toll-free 24-hour hotline             eligible, the product UPC code, food
                                                  a contractor-supported number for WIC                   services. While this final regulation no              category, subcategory and unit of
                                                  participants or merchants to call outside               longer requires a 24-hour toll-free                   measure can be easily incorporated into
                                                  of business hours. In these State                       hotline for WIC cardholders to report                 the State agency process for updating its
                                                  agencies, most cardholder issues are                    issues during non-business hours, the                 APL file.
                                                  resolved through participant contacts                   Department has set a minimum level of                    The Department received 27
                                                  with the local WIC clinic staff.                        service participants must be able to                  comments on the proposed
                                                     The Department concurs with the                      receive during non-business hours.                    requirements regarding the use of the
                                                  potential issues of affordability,                         The minimum participant services                   NUPC database. Comments were
                                                  unsubstantiated demand and impact on                    that must be offered during non-                      received in five broad areas: (1) Use of
                                                  resource management that the proposed                   business hours are: (1) Receive                       UPC terminology; (2) Mandating use of
                                                  requirement for a 24-hour hotline                       information on the current food balance,              the National Food Category/Subcategory
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                                                  available to assist participants may have               (2) receive benefit expiration date and               Table by all State agencies; (3) Authority
                                                  on a State agency. Therefore, the                       (3) report a lost or stolen card and other            for WIC State agencies to authorize WIC
                                                  Department is removing the toll-free 24-                cardholder issues. The Department                     foods; (4) Department approval of APL
                                                  hour hotline assistance requirement and                 expects a State agency to respond to                  files prior to distribution to authorized
                                                  replacing it with the requirement for a                 cardholder issues at the time the report              WIC vendors; and (5) The design and
                                                  State agency to establish procedures                    is received or as soon as possible. Other             functioning of the NUPC clearinghouse.
                                                  allowing WIC participants to, at a                      customer service features may be                      These issues are discussed in more
                                                  minimum, report cardholder issues,                      included such as obtaining purchase                   detail below.


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                                                  10446               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                     Use of UPC Terminology. Several                      standards as well the NUPC database                     Additionally, the current vendor cash
                                                  commenters recommended adoption of                      currently allow these 13 and 14 digit                 register systems, which include most of
                                                  the terminology used by GS1, which is                   UPC lengths if a WIC State agency                     the major systems available in the
                                                  a nonprofit organization setting industry               authorizes the product for use or these               United States currently used by WIC
                                                  standards for barcodes used in retail and               longer UPCs become prevalent in the                   vendors, have been able to handle
                                                  supply chains. Under the GS1 umbrella,                  United States.                                        variances in State agency-specific
                                                  which can be found at www.gs1.org,                        Mandating Use of the National Food                  Category Subcategory tables. However,
                                                  there are Global Trade Identification                   Category/Subcategory Table. The                       one State agency commented that the
                                                  Numbers (GTINs) which include the                       proposed rule would not have required                 food category table and APL files are
                                                  UPC necessary during a WIC purchase.                    each State agency to make use of the                  utilized to control food costs by
                                                  The GTINs are contained as UPCs in the                  National Food Category Subcategory                    assigning higher cost food items such as
                                                  APL file a State agency distributes to its              Table, but input was sought on the                    quart and half gallon milk containers to
                                                  authorized vendors. There are several                   potential barriers, obstacles and benefits            separate food subcategories. In this
                                                  different types of GTINs such as GTIN–                  State agencies would incur if conformity              example, the maximum authorized
                                                  8, GTIN–12, GTIN–13 and GTIN–14,                        to a national standard food classification            reimbursement (MAR) amount is
                                                  which contain UPC numbers of different                  system would have been required by the                computed at the subcategory level and
                                                  lengths. There are other GTIN’s                         Department. The Department also                       consequently does not affect larger sizes
                                                  available for different purposes such as                invited reader comment on how                         of milk. This State agency also uses its
                                                  those used on larger cases of product                   conformity could be effectively                       category and subcategory table for cost
                                                  not generally sold at retail. After                     instituted. While a national standard                 containment with the cereal, infant
                                                  checking with GS1–US, which is the                      format would have been required for the               fruits and vegetables food categories.
                                                  organization supporting barcode                         APL file, WIC State agencies currently                The Department recognizes there are
                                                  adoption in the United States, GS1                      would not be required to use the                      high levels of variability in the
                                                  advised the Department that the GTIN–                   national category/subcategory table                   approaches each State agency has
                                                  12 and Universal Product Code are used                  maintained by the Department. The                     implemented for cost containment.
                                                  synonymously in the industry;                           Department believes it is necessary to                Therefore, while the Department sees
                                                  therefore, this rule continues to refer to              preserve some flexibility for State                   value in standardized use of the
                                                  the UPC as the more commonly                            agencies to deviate from the national                 National Food Category Subcategory
                                                  recognized terminology used in WIC                      category/subcategory table because of                 Table and we require all new EBT State
                                                  EBT.                                                    differences in product availability,                  agencies to adopt it initially, this final
                                                                                                          varying demand for ethnic foods and the               rule does not mandate its use. In part,
                                                     The National UPC database also                       need to ensure WIC participants can                   we are persuaded that flexibility is more
                                                  contains PLUs, which are the standard                   obtain products such as infant formula                appropriate than mandating a strict
                                                  codes published by the International                    in a timely manner.                                   standard because electronic cash
                                                  Federation of Produce Standards (IFPS)                    Several comments were received                      registers are able to successfully load
                                                  for fresh produce such as fruit and                     specific to the National Food Category                APL files with State agency differences
                                                  vegetables. We wish to correct the                      Subcategory Table. Most voiced                        in the category, subcategory and unit of
                                                  record as noted by several commenters                   concerns about making its use a                       measure assigned to each product. The
                                                  that the PLU codes are 5 digits in length               requirement, particularly for existing                important level of standardization is
                                                  even though retail practice generally                   EBT State agencies that may have                      accomplished by using the APL
                                                  drops the initial zero for standard PLUs,               compatibility issues. Two commenters                  standard file format and adherence to
                                                  unless it is genetically modified or                    requested flexibility in the use of the               the EBT Operating Rules and Technical
                                                  organic. Under the IFPS coding                          NUPC in general, one commenter                        Implementation Guide file formats.
                                                  structure, a fifth (leading) digit qualifier            suggested it be a State agency option                   Authority for WIC State Agencies To
                                                  is allocated to some produce with                       and another commenter suggested all                   Authorize WIC Foods. A few
                                                  specific qualities. As noted, the fifth                 EBT stakeholders be included in any                   commenters expressed support for
                                                  digit qualifiers for global PLU codes are               process and discussion concerning how                 continuing to allow State agencies to
                                                  ‘0’ for nonorganic products (referred to                conformity could effectively be                       evaluate and authorize WIC foods
                                                  as non-qualified PLU codes), although                   instituted.                                           within their State agency. The proposed
                                                  generally this digit is omitted and ‘9’ for               The Department strongly supports                    rule did not alter current State agency
                                                  organic produce. The ‘8’ leading digit                  and recommends use of the National                    responsibilities for authorizing WIC
                                                  qualifier formerly used for genetically                 Food Category Subcategory table by all                foods. As previously indicated, the
                                                  modified produce is no longer used for                  State agencies as they begin their EBT                NUPC database is only a repository of
                                                  this purpose. One commenter urged the                   projects. The Department recognizes,                  information about WIC foods that a WIC
                                                  Department to remain flexible to                        however, how the variability in State                 State agency may use to identify and
                                                  accommodate future changes in the                       agency EBT benefit delivery methods’                  select food items for use within the
                                                  industry and technology in the supply                   capability and differences in product                 State agency. The determination of
                                                  chain. The Department agrees; during                    selection for approved WIC foods may                  which food items are authorized
                                                  development of the NUPC database and                    cause changes to the National Category                remains a State agency responsibility
                                                  within the WIC technical standards,                     Subcategory table over time to                        and does not change now that the NUPC
                                                  future changes have been provided for                   accommodate individual State agencies.                database is available for State agency
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                                                  where possible. For example, the longer                 We are also concerned, as many                        use.
                                                  length UPCs used in Europe and Asia,                    commenters noted, that maintaining the                  Submission of APL Files Prior to
                                                  which are 13 and 14 digits, have not                    National Food Category Subcategory                    Distribution. Four commenters, one
                                                  been widely adopted by food                             table consistently for all State agencies             industry consultant and three State
                                                  manufacturers marketing products in                     places the Department in the middle of                agencies expressed concern that a State
                                                  the United States at the time of this                   food authorization decisions, which is                agency must submit its APL file to the
                                                  writing. To plan for future industry                    the role WIC State agencies play in                   NUPC database prior to distributing the
                                                  changes, the TIG and associated                         building their APL.                                   APL file to their authorized WIC


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                         10447

                                                  vendors. The Department wishes to                       Procedural Matters                                    effective or least burdensome alternative
                                                  clarify this requirement is only a                                                                            that achieves the objectives of the rule.
                                                                                                          Executive Orders 12866 and 13563                         This final rule contains no Federal
                                                  submission of the APL file whenever it
                                                  is updated. The APL file can be                            Executive Orders 12866 and 13563                   mandates (under the regulatory
                                                  transmitted to the NUPC database at the                 direct agencies to assess all costs and               provisions of Title II of the UMRA) that
                                                  same time the file is sent to vendors                   benefits of available regulatory                      impose costs on State, local, or tribal
                                                  authorized by the State agency. We                      alternatives and, if regulation is                    governments or to the private sector of
                                                  recognize the APL file contains critical                necessary, to select regulatory                       $100 million or more in any one year.
                                                  information needed to accept WIC food                   approaches that maximize net benefits                 Thus, the rule is not subject to the
                                                  items in WIC vendor checkout lanes.                     (including potential economic,                        requirements of Sections 202 and 205 of
                                                  This information includes the effective                 environmental, public health and safety               the UMRA.
                                                  date for new items, changes in the food                 effects, distributive impacts and equity).            Executive Order 12372
                                                  item descriptions necessary for printing                Executive Order 13563 emphasizes the
                                                  food balances on receipts and in some                   importance of quantifying both costs                    The WIC Program is listed in the
                                                  cases cost containment information                      and benefits, of reducing costs, of                   Catalog of Federal Domestic Assistance
                                                  (not-to-exceed or maximum authorized                    harmonizing rules and of promoting                    Programs under No. 10.557 and is
                                                  price is optional in an APL). It would                  flexibility.                                          subject to Executive Order 12372, which
                                                  not be practical or desirable for the                      This final rule has been determined to             requires intergovernmental consultation
                                                  Department to interfere with the timely                 be ‘‘Not Significant’’ and was not                    with State and local officials. (See 2 CFR
                                                  distribution of the APL files.                          reviewed by the Office of Management                  chapter IV.)
                                                     Having considered all comments and                   and Budget in conformance with                        Federalism Summary Impact Statement
                                                  clarifying its intent, the Department has               Section 3(f) of Executive Order 12866.
                                                  determined the requirement for the                                                                              Executive Order 13132 requires
                                                  State agency to submit a copy of an APL                 Regulatory Impact Analysis                            Federal agencies to consider the impact
                                                  file to the NUPC database will not                                                                            of their regulatory actions on State and
                                                                                                             This final rule has been designated as             local governments. Where such actions
                                                  interfere with State agency operations
                                                                                                          ‘‘Not Significant’’ by the Office of                  have federalism implications, agencies
                                                  necessary to support daily EBT activity.
                                                                                                          Management and Budget; therefore, no                  are directed to provide a statement for
                                                  In addition, State agencies are currently
                                                                                                          Regulatory Impact Analysis is required.               inclusion in the preamble to the
                                                  required to provide a copy of their
                                                  approved food list to FNS, including                    Regulatory Flexibility Act                            regulations describing the agency’s
                                                  any changes to that list. Submitting a                                                                        considerations in terms of the three
                                                  copy to FNS’s NUPC data base meets                         The Regulatory Flexibility Act of 1980             categories called for under Section
                                                  this requirement.                                       (5 U.S.C. 601–612) requires Agencies to               (6)(b)(2)(B) of Executive Order 13132.
                                                     Design and Function of a NUPC                        analyze the impact of rulemaking on                     The Department has considered the
                                                  Clearinghouse. This portion of the                      small entities and consider alternatives              impact of this rule on State and local
                                                  proposed rulemaking generated a                         that would minimize any significant                   governments and has determined this
                                                  substantial number of comments on the                   impacts on a substantial number of                    rule does not have federalism
                                                  future potential for enhancing the NUPC                 small entities. Pursuant to that review,              implications. Therefore, under Section
                                                  database to act as a clearinghouse for                  the Administrator of the Food and                     6(b) of the Executive Order, a federalism
                                                  State agency APL files in addition to a                 Nutrition Service, Audrey Rowe, has                   summary is not required.
                                                  data repository. Having considered                      determined this rule will not have a
                                                                                                          significant economic impact on a                      Executive Order 12988, Civil Justice
                                                  these comments, the Department has
                                                                                                          substantial number of small entities.                 Reform
                                                  decided to not proceed with
                                                  development of a file clearinghouse                     This final rule applies to State and local              This final rule has been reviewed
                                                  capability at this time. The Department                 agencies and provides increased                       under Executive Order 12988, Civil
                                                  believes the proposed language in                       flexibility in food delivery services for             Justice Reform. This rule is not intended
                                                  § 246.12(cc) is broad in nature and                     the Program.                                          to have preemptive effect with respect
                                                  allows for flexibility in the use of the                Unfunded Mandates Reform Act                          to any State or local laws, regulations or
                                                  NUPC.                                                                                                         policies which conflict with its
                                                                                                             Title II of the Unfunded Mandates                  provisions or which would otherwise
                                                  Technical Amendment                                     Reform Act of 1995 (UMRA), Public                     impede its full and timely
                                                     In a previous WIC final rule, ‘‘Special              Law 104–4, establishes requirements for               implementation. This rule is not
                                                  Supplemental Nutrition Program for                      Federal agencies to assess the effects of             intended to have retroactive effect
                                                  Women, Infants and Children (WIC):                      their regulatory actions on State, local              unless so specified in the Effective Dates
                                                  Implementation of Nondiscretionary,                     and tribal governments and the private                section of the final rule. Prior to any
                                                  Non-Electronic Benefits Transfer-                       sector. Under Section 202 of the UMRA,                judicial challenge to the provisions of
                                                  Related Provisions’’ (76 FR 59885,                      the Department generally must prepare                 the final rule, all applicable
                                                  September 28, 2011), § 246.4 was                        a written statement, including a cost                 administrative procedures must be
                                                  amended by re-designating paragraphs                    benefit analysis, for proposed and final              exhausted.
                                                  (a)(19) through (26) as (a)(20) through                 rules with ‘‘Federal mandates’’ that may                In WIC, the administrative procedures
                                                  (27) and adding a new paragraph (a)(19);                result in expenditures to State, local, or            are as follows: (1) State and local
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                                                  however, the amendment could not be                     tribal governments, in the aggregate, or              agencies, farmers, farmers’ markets and
                                                  incorporated due to inaccurate                          to the private sector of $100 million or              roadside stands—State agency hearing
                                                  amendatory instruction. An Editorial                    more in any one year. When such a                     procedures issued pursuant to § 246.18;
                                                  Note was published following this                       statement is needed for a rule, Section               (2) Applicants and participants—State
                                                  section in the CFR that brought the new                 205 of the UMRA generally requires the                agency hearing procedures pursuant to
                                                  information to the readers’ attention.                  Department to identify and consider a                 § 246.18; (3) Sanctions against State
                                                  The correct amendment is included                       reasonable number of regulatory                       agencies (but not claims for repayment
                                                  within § 246.4 in this rule.                            alternatives and adopt the most cost                  assessed against a State agency)


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                                                  10448               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  pursuant to § 246.19—administrative                     Paperwork Reduction Act                               burden increase concurrent with the
                                                  appeal in accordance with § 246.16 and                                                                        publication of this rulemaking.
                                                  (4) procurement by State or local                         The Paperwork Reduction Act of 1995                   FNS will submit an Information
                                                  agencies—administrative appeal to the                   (44 U.S.C. Chap. 35; see 5 CFR part                   Collection Request to OMB based on the
                                                                                                          1320) requires that the Office of                     provisions of this final rule and
                                                  extent required by 2 CFR 200.318.
                                                                                                          Management and Budget (OMB)                           comments received on the 60-day notice
                                                  Civil Rights Impact Analysis                            approve all collections of information                published with this rulemaking. These
                                                                                                          by a Federal agency from the public                   amended information collection
                                                     The Department has reviewed this                     before they can be implemented.
                                                  final rule in accordance with                                                                                 requirements will not become effective
                                                                                                          Respondents would not have been                       until approved by OMB. When OMB
                                                  Departmental Regulations 4300–4,                        required to respond to any collection of
                                                  ‘‘Civil Rights Impact Analysis,’’ and                                                                         concludes its review, FNS will publish
                                                                                                          information unless it displays a current              a notice in the Federal Register of the
                                                  1512–1, ‘‘Regulatory Decision Making                    valid OMB control number. While a                     action.
                                                  Requirements,’’ to identify any major                   conforming amendment has added two
                                                  civil rights impacts the rule might have                additional State Plan requirements in                 E-Government Act Compliance
                                                  on program participants on the basis of                 addition to the requirement for an                       The Department is committed to
                                                  age, race, color, national origin, sex, or              annual EBT status update, the                         complying with the E-Government Act
                                                  disability. After a careful review of the               Department considers these to be                      of 2002, to promote the use of the
                                                  rule’s intent and provisions, the                       minimal reporting burden. The annual                  Internet and other information
                                                  Department has determined this rule is                  status report replaces existing updates               technologies to provide increased
                                                  not intended to limit or reduce in any                  required for benefit delivery methods                 opportunities for citizen access to
                                                  way the ability of protected classes of                 using paper food instruments. The two                 Government information and services
                                                  individuals to receive benefits in the                  conforming amendments clarify content                 and for other purpose. State Plan
                                                  WIC Program. Federal WIC regulations                    for EBT delivery replacing the existing               amendments regarding the
                                                  specifically prohibit State agencies that               paper food instrument or other food                   implementation of the provisions
                                                  administer the WIC Program and their                    delivery content. This final rule                     contained in this rule, as is the case
                                                  cooperators, from engaging in actions                   contains a small increase to the                      with the entire State Plan, may be
                                                  that discriminate against any individual                information collection requirements that              transmitted electronically by the State
                                                  in any of the protected classes (see                    are subject to OMB approval.                          agency to the Department. Also, State
                                                  § 246.8 for the nondiscrimination policy                  Section 246.12(y) requires each State               agencies may provide WIC Program
                                                  in the WIC Program). Where State                        agency to have an active EBT project by               information, as well as their financial
                                                  agencies have options and they choose                   July 29, 2016. The Advance Planning                   reports, to the Department
                                                  to implement a certain provision, they                  Document (APD) is used to initiate the                electronically.
                                                  must implement it in such a way that it                 EBT planning process. Under the
                                                                                                          existing collection (0584–0043), it is                List of Subjects in 7 CFR Part 246
                                                  complies with the WIC Program
                                                  regulations set forth at § 246.8.                       estimated 15 APDs would be submitted                    Administrative practice and
                                                                                                          each year. The current estimate of 15                 procedure, Food assistance programs,
                                                  Executive Order 13175                                   submissions per year is unchanged. The                Grant programs—health, Grant
                                                     Executive Order 13175 requires                       existing recordkeeping and reporting                  programs—social programs, Indians,
                                                  Federal agencies to consult and                         requirements, related to APD                          Infants and children, Maternal and child
                                                                                                          documents, which were approved under                  health, Nutrition, Penalties, Reporting
                                                  coordinate with Tribes on a
                                                                                                          OMB control number 0584–0043, will                    and recordkeeping requirements, WIC,
                                                  government-to-government basis on
                                                                                                          not change as a result of this rule.                  Women.
                                                  policies that have Tribal implications,
                                                  including regulations, legislative                        FNS has identified a small burden                     Accordingly, for reasons set forth in
                                                  comments or proposed legislation and                    increase associated with providing data               the preamble, 7 CFR part 246 is
                                                  other policy statements or actions that                 to meet the requirement for State                     amended as follows:
                                                  have substantial direct effects on one or               agencies to use the National UPC
                                                  more Indian Tribes, on the relationship                 database (NUPC database). Section                     PART 246—SPECIAL SUPPLEMENTAL
                                                  between the Federal Government and                      246.12(cc) requires each State agency to              NUTRITION PROGRAM FOR WOMEN,
                                                  Indian Tribes, or on the distribution of                use the NUPC database, at a minimum,                  INFANTS AND CHILDREN (WIC)
                                                  power and responsibilities between the                  to submit their APL as they begin
                                                                                                          statewide rollout and as it is updated.               ■ 1. The authority citation for part 246
                                                  Federal Government and Indian Tribes.
                                                                                                          The APLs are updated as new products                  continues to read as follows:
                                                     FNS provides regularly scheduled                     are added or removed by each WIC State                    Authority: 42 U.S.C. 1786.
                                                  quarterly consultation sessions as a                    agency. FNS estimates the burden under
                                                  venue for collaborative conversations                   OMB control number 0584–0043 will                     ■ 2. In § 246.2:
                                                  with Tribal officials or their designees.               increase by 40 hours annually based on                ■ a. Amend the definition of ‘‘Cash-
                                                  The most recent quarterly consultation                  an estimate of an average of 37 State                 value voucher’’ by adding a second
                                                  sessions were held on August 20, 2014;                  agencies expected to have operational                 sentence.
                                                  November 19, 2014; February 18, 2015;                   EBT systems and who will distribute                   ■ b. Add the definitions of ‘‘Electronic
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                                                  and May 20, 2015. FNS will respond in                   APLs to their WIC-authorized vendors.                 Benefit Transfer (EBT)’’, ‘‘EBT Capable’’,
                                                  a timely and meaningful manner to any                   We estimate approximately 30 seconds                  ‘‘Multi-function equipment’’, ‘‘Single-
                                                  Tribal government request for                           to submit an APL. Updates are                         function equipment’’ and ‘‘Statewide
                                                  consultation concerning the Electronic                  estimated to occur 2.5 times per week.                EBT’’ in alphabetical order; and
                                                  Benefit Rule for the WIC program. We                    The resulting annual burden is                        ■ c. Revise the definition of ‘‘Participant
                                                  are unaware of any current Tribal laws                  increased by 40 hours total. FNS will                 violation’’.
                                                  that could be in conflict with this final               publish a 60-Day Federal Register                       The additions and revision read as
                                                  rule.                                                   Notice requesting comment on this                     follows:


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                               10449

                                                  § 246.2   Definitions.                                  vendors are capable of transacting EBT                benefit issues, receive information on
                                                  *     *     *     *     *                               purchases.                                            the EBT food balance and receive the
                                                     Cash-value voucher * * * Cash-value                  *     *     *      *     *                            current benefit end date. The
                                                  voucher is also known as cash-value                     ■ 3. In § 246.3, revise paragraph (b) to
                                                                                                                                                                procedures shall address how the State
                                                  benefit (CVB) in an EBT environment.                    read as follows:                                      agency will respond to reports of a lost,
                                                                                                                                                                stolen, or damaged card within one
                                                  *     *     *     *     *
                                                                                                          § 246.3   Administration.                             business day of the date of report.
                                                     Electronic Benefit Transfer (EBT)
                                                                                                          *      *    *     *     *                             *     *     *     *     *
                                                  means a method that permits electronic
                                                                                                             (b) Delegation to the State agency.                  (19) The State agency’s plan to ensure
                                                  access to WIC food benefits using a card
                                                                                                          The State agency is responsible for the               that participants receive required health
                                                  or other access device approved by the
                                                                                                          effective and efficient administration of             and nutrition assessments when
                                                  Secretary.
                                                                                                          the Program in accordance with the                    certified for a period of greater than six
                                                     EBT Capable means the WIC vendor                     requirements of this part; the                        months.
                                                  demonstrates their cash register system                 Department’s regulations governing
                                                  or payment device can accurately and                                                                          *     *     *     *     *
                                                                                                          nondiscrimination (7 CFR parts 15, 15a,               ■ 5. In § 246.7, add paragraph (j)(10).
                                                  securely obtain WIC food balances                       and 15b); governing administration of
                                                  associated with an EBT card, maintain                   grants (2 CFR part 200, subparts A                    § 246.7    Certification of participants.
                                                  the necessary files such as the                         through F and USDA implementing                       *       *    *     *     *
                                                  authorized product list, hot card file and              regulations 2 CFR part 400 and part                      (j) * * *
                                                  claim file and successfully complete                    415); governing non-procurement                          (10) During the certification
                                                  WIC EBT purchases.                                      debarment/suspension (2 CFR part 180,                 procedure, every Program applicant,
                                                  *     *     *     *     *                               OMB Guidelines to Agencies on                         parent or caretaker shall be informed
                                                     Multi-function equipment means                       Government-wide Debarment and                         that selling or offering to sell WIC
                                                  Point-of-Sale equipment obtained by a                   Suspension and USDA implementing                      benefits, including cash value vouchers,
                                                  WIC vendor through commercial                           regulations 2 CFR part 417); governing                food instruments, EBT cards, or
                                                  suppliers, which is capable of                          restrictions on lobbying (2 CFR part 200,             supplemental foods in person, in print,
                                                  supporting WIC EBT and other payment                    subpart E and USDA implementing                       or on-line is a participant violation.
                                                  tender types.                                           regulations 2 CFR part 400, part 415,                 *       *    *     *     *
                                                  *     *     *     *     *                               and part 418); and governing the drug-
                                                                                                                                                                ■ 6. Section 246.12 is amended as
                                                     Participant violation means any                      free workplace requirements (2 CFR part
                                                                                                                                                                follows:
                                                  deliberate action of a participant, parent              182, Government-wide Requirements for                 ■ a. The section heading is revised.
                                                  or caretaker of an infant or child                      Drug-Free Workplace); FNS guidelines;                 ■ b. Paragraph (a) introductory text is
                                                  participant, or proxy that violates                     and, instructions issued under the FNS                amended by removing the word
                                                  Federal or State statutes, regulations,                 Directives Management System. The                     ‘‘benefits’’ and adding in its place
                                                  policies, or procedures governing the                   State agency shall provide guidance to                ‘‘benefit’’ and by adding a new sentence
                                                  Program. Participant violations include,                local agencies on all aspects of Program              at the end of the paragraph.
                                                  but are not limited to, deliberately                    operations.                                           ■ c. Paragraph (b) is amended by
                                                  making false or misleading statements                   *      *    *     *     *                             removing the word ‘‘three’’ and adding
                                                  or deliberately misrepresenting,                        ■ 4. In § 246.4:                                      in its place ‘‘four’’; and by removing the
                                                  concealing, or withholding facts, to                    ■ a. Revise paragraph (a)(1).                         phrase ‘‘or direct distribution.’’ at the
                                                  obtain benefits; selling or offering to sell            ■ b. Add paragraph (a)(14)(xix).                      end of the first sentence and adding in
                                                  WIC benefits, including cash-value                      ■ c. Add paragraph (a)(14)(xx).                       its place ‘‘direct distribution, or EBT.’’
                                                  vouchers, food instruments, EBT cards,                  ■ d. Redesignate paragraphs (a)(19)                   ■ d. Paragraph (f)(2)(iii) is amended to
                                                  or supplemental foods in person, in                     through (a)(28) as paragraphs (a)(20)                 add in the second sentence ‘‘or in the
                                                  print, or online; exchanging or                         through (a)(29) and add a new                         month of February, 28 or 29 days’’ after
                                                  attempting to exchange WIC benefits,                    paragraph (a)(19).                                    ‘‘may be used’’ and before ‘‘, except’’.
                                                  including cash-value vouchers, food                        The revision and additions read as                 ■ e. Remove paragraph (g)(5) and
                                                  instruments, EBT cards, or                              follows:                                              redesignate paragraphs (g)(6) through
                                                  supplemental foods for cash, credit,                                                                          (g)(11) as (g)(5) through (g)(10),
                                                                                                          § 246.4   State plan.
                                                  services, non-food items, or                                                                                  respectively.
                                                  unauthorized food items, including                        (a) * * *                                           ■ f. Add paragraphs (h)(3)(xxvii)
                                                  supplemental foods in excess of those                     (1) An outline of the State agency’s                through (h)(3)(xxxi).
                                                  listed on the participant’s food                        goals and objectives for improving                    ■ g. Add paragraphs (w) through (cc).
                                                  instrument; threatening to harm or                      Program operations, to include EBT                       The revision and additions read as
                                                  physically harming clinic, farmer, or                   and/or EBT implementation.                            follows:
                                                  vendor staff; and dual participation.                   *     *     *    *      *
                                                                                                            (14) * * *                                          § 246.12    Food delivery methods.
                                                  *     *     *     *     *                                                                                       (a) * * * By October 1, 2020, each
                                                                                                            (xix) A description of how the State
                                                     Single-function equipment means                      agency will replace lost, stolen, or                  State agency shall implement EBT
                                                  Point-of-Sale equipment, such as                        damaged EBT cards and transfer the                    statewide, unless granted an exemption
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                                                  barcode scanners, card readers, PIN                     associated benefits within seven                      under paragraph (w)(2) of this section.
                                                  pads and printers, provided to an                       business days.                                        *     *    *     *     *
                                                  authorized WIC vendor solely for use                      (xx) A description of the procedures                  (h) * * *
                                                  with the WIC Program.                                   established by the State agency to                      (3) * * *
                                                  *     *     *     *     *                               provide customer service during non-                    (xxvii) EBT minimum lane coverage.
                                                     Statewide EBT means the State agency                 business hours that enable participants               Point of Sale (POS) terminals used to
                                                  has converted all WIC clinics to an EBT                 or proxies to report a lost, stolen, or               support the WIC Program shall be
                                                  delivery method and all authorized                      damaged card, report other card or                    deployed in accordance with the


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                                                  10450               Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations

                                                  minimum lane coverage provisions of                     longer meets the conditions on which                  Active EBT project is defined as a
                                                  § 246.12(z)(2). The State agency may                    the exemption was based; the Secretary                formal process of planning,
                                                  remove excess terminals if actual                       revokes the exemption or for three years              implementation, or statewide
                                                  redemption activity warrants a                          from the date the exemption was                       implementation of WIC EBT.
                                                  reduction consistent with the                           granted, whichever occurs first.                         (4) Annually as part of the State plan,
                                                  redemption levels outlined in                              (x) Electronic benefit requirements—               the State agency shall submit EBT
                                                  § 246.12(z)(2)(i) and (z)(2)(ii).                       (1) General. State agencies using EBT                 project status reports. At a minimum,
                                                     (xxviii) EBT third-party processing                  shall issue an electronic benefit that                the annual status report shall contain:
                                                  costs and fees. The vendor shall not                    complies with the requirements of                        (i) Until operating EBT statewide, an
                                                  charge to the State agency any third-                   paragraph (x)(2) of this section.                     outline of the EBT implementation goals
                                                  party commercial processing costs and                      (2) Electronic benefits. Each electronic           and objectives as part of the goals and
                                                  fees incurred by the vendor from EBT                    benefit must contain the following                    objectives in § 246.4(a)(1), to
                                                  multi-function equipment. Commercial                    information:                                          demonstrate the State agency’s progress
                                                  transaction processing costs and fees                      (i) Authorized supplemental foods.                 toward statewide EBT implementation;
                                                  imposed by a third-party processor that                 The supplemental foods authorized by                     (ii) If operating EBT statewide, any
                                                  the vendor elects to use to connect to                  food category, subcategory and benefit                information on future EBT changes and
                                                  the EBT system of the State shall be                    quantity, to include the cash-value                   procurement updates affecting present
                                                  borne by the vendor.                                    benefit;                                              operations; and
                                                     (xxix) EBT interchange fees. The State                  (ii) First date of use. The first date of             (iii) Such other information the
                                                  agency shall not pay or reimburse the                   use on which the electronic benefit may               Secretary may require.
                                                                                                          be used to obtain authorized                             (5) The State agency shall be
                                                  vendor for interchange fees related to
                                                                                                          supplemental foods;                                   responsible for EBT coordination and
                                                  WIC EBT transactions.
                                                                                                             (iii) Last date of use. The last date on           management.
                                                     (xxx) EBT ongoing maintenance and                                                                             (z) EBT food delivery methods:
                                                  operational costs. The State agency shall               which the electronic benefit may be
                                                                                                          used to obtain authorized supplemental                Vendor requirements–(1) General. State
                                                  not pay for ongoing maintenance,                                                                              agencies using EBT for delivering
                                                  processing fees or operational costs for                foods. This date must be a minimum of
                                                                                                          30 days, or in the month of February 28               benefits shall comply with the vendor
                                                  vendor systems and equipment used to                                                                          requirements in paragraphs (g) through
                                                  support WIC EBT after the State agency                  or 29 days, from the first date on which
                                                                                                          it may be used to obtain authorized                   (l) of this section. In addition, State
                                                  has implemented WIC EBT statewide,                                                                            agencies shall comply with
                                                  unless the equipment is used solely for                 supplemental foods except for the
                                                                                                          participant’s first month of issuance                 requirements that are detailed
                                                  the WIC Program or the State agency                                                                           throughout this paragraph (z).
                                                  determines the vendor using multi-                      when it may be the end of the month or
                                                                                                          cycle for which the electronic benefit is                (2) Minimum lane coverage. The
                                                  function equipment is necessary for                                                                           Point-of-Sale (POS) terminals, whether
                                                  participant access. This provision also                 valid; and
                                                                                                             (iv) Benefit issuance identifier. A                single-function equipment or multi-
                                                  applies to authorized farmers and                                                                             function equipment, shall be deployed
                                                                                                          unique and sequential number. This
                                                  farmers’ markets. Costs shared by a WIC                                                                       as follows:
                                                                                                          number enables the identification of
                                                  State agency will be proportional to the                                                                         (i) Superstores and supermarkets.
                                                                                                          each benefit change (addition,
                                                  usage for the WIC Program.                                                                                    There will be one POS terminal for
                                                                                                          subtraction or update) made to the
                                                     (xxxi) Compliance with EBT operating                                                                       every $11,000 in monthly WIC
                                                                                                          participant account.
                                                  rules, standards and technical                             (3) Vendor identification. The State               redemption up to a total of four POS
                                                  requirements. The vendor must comply                    agency shall ensure each EBT purchase                 terminals, or the number of lanes in the
                                                  with the Operating rules, standards and                 submitted for electronic payment is                   location, whichever is less. At a
                                                  technical requirements established by                   matched to an authorized vendor,                      minimum, terminals shall be installed
                                                  the State agency.                                       farmer, or farmers’ market prior to                   for monthly WIC redemption threshold
                                                  *       *      *     *      *                           authorizing payment. Each vendor                      increments as follows: one terminal for
                                                     (w) EBT–(1) General. All State                       operated by a single business entity                  $0 to $11,000; two terminals for $11,001
                                                  agencies shall implement EBT statewide                  must be identified separately.                        to $22,000; three terminals for $22,001
                                                  in accordance with paragraph (a) of this                   (y) EBT management and reporting.                  to $33,000; and four terminals for
                                                  section.                                                (1) The State agency shall follow the                 $33,001 and above. A State agency may
                                                     (2) EBT exemptions. The Secretary                    Department Advance Planning                           utilize an alternative installation
                                                  may grant an exemption to the October                   Document (APD) requirements and                       formula with Department approval. The
                                                  1, 2020 statewide implementation                        submit Planning and Implementation                    monthly redemption levels used for the
                                                  requirement. To be eligible for an                      APD’s and appropriate updates, for                    installation formula shall be the average
                                                  exemption, a State agency shall                         Department approval for planning,                     redemptions based on a period of up to
                                                  demonstrate to the satisfaction of the                  development and implementation of                     12 months of prior redemption;
                                                  Secretary one or more of the following:                 initial and subsequent EBT systems.                      (ii) All other vendors. One POS
                                                     (i) There are unusual technological                     (2) If a State agency plans to                     terminal for every $8,000 in monthly
                                                  barriers to implementation;                             incorporate additional programs in the                redemption up to a total of four POS
                                                     (ii) Operational costs are not                       EBT system of the State, the State                    terminals, or the number of lanes in the
                                                  affordable within the nutrition services                agency shall consult with State agency                location; whichever is less. At a
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                                                  and administration grant of the State                   officials responsible for administering               minimum, terminals shall be installed
                                                  agency; or                                              the programs prior to submitting the                  for monthly WIC redemption thresholds
                                                     (iii) It is in the best interest of the              Planning APD (PAPD) document and                      as follows: one terminal for $0 to
                                                  program to grant the exemption.                         include the outcome of those                          $8,000; two terminals for $8,001 to
                                                     (3) Implementation date. If the                      discussions in the PAPD submission to                 $16,000; three terminals for $16,001 to
                                                  Secretary grants a State agency an                      the Department for approval.                          $24,000; and four terminals for $24,001
                                                  exemption, such exemption will remain                      (3) Each State agency shall have an                and above. A State agency may utilize
                                                  in effect until: The State agency no                    active EBT project by May 31, 2016.                   an alternative installation formula with


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                                                                      Federal Register / Vol. 81, No. 40 / Tuesday, March 1, 2016 / Rules and Regulations                                               10451

                                                  Department approval. The monthly                        furnish its allocation and/or cost sharing            report of a lost, stolen, or damaged card
                                                  redemption levels used for the                          methodology to the Department as part                 within one business day of the date of
                                                  installation formula shall be the average               of the Advanced Planning Document for                 report. If a State agency seeks to
                                                  redemptions based on a period of up to                  review and approval before incurring                  implement alternatives to the minimum
                                                  12 months of prior redemption;                          costs.                                                service requirements, the agency must
                                                     (iii) The State agency shall determine                  (3) Fees—(i) Third-party processor                 submit the plan to FNS for approval.
                                                  the number of appropriate POS                           costs and fees. The State agency shall                  (cc) National universal product codes
                                                  terminals for authorized farmers and                    not pay or reimburse vendors, farmers                 (UPC) database. The national UPC
                                                  farmers’ markets;                                       or farmers’ markets for third-party                   database is to be used by all State
                                                     (iv) For newly authorized WIC                        processing costs and fees for vendors,                agencies using EBT to deliver WIC food
                                                  vendors deemed necessary for                            farmers, or farmers’ markets that elect to            benefits.
                                                  participant access by the State agency,                 accept EBT using multi-function                        Dated: February 19, 2016.
                                                  the vendor shall be provided one POS                    equipment. The State agency or its agent              Audrey Rowe,
                                                  terminal unless the State agency                        shall not charge any fees to authorized               Administrator, Food and Nutrition Service.
                                                  determines other factors in this location               vendors for use of single-function
                                                  warrant additional terminals;                                                                                 [FR Doc. 2016–04261 Filed 2–29–16; 8:45 am]
                                                                                                          equipment.
                                                     (v) Any authorized vendor who has                       (ii) Interchange fees. The State agency            BILLING CODE 3410–30–P
                                                  been equipped with a POS terminal by                    shall not pay or reimburse the vendor,
                                                  the State agency may submit evidence                    farmer or farmers’ markets for
                                                  additional terminals are necessary after                                                                      DEPARTMENT OF AGRICULTURE
                                                                                                          interchange fees on WIC EBT
                                                  the initial POS terminals are installed;                transactions.                                         Agricultural Marketing Service
                                                     (vi) The State agency may provide                       (4) Statewide operations. After
                                                  authorized vendors with additional POS                  completion of statewide EBT                           7 CFR Part 905
                                                  terminals above the minimum number                      implementation, the State agency shall
                                                  required by this paragraph in order to                  not:                                                  [Doc. No. AO–13–0163; AMS–FV–12–0069;
                                                  permit WIC participants to obtain a                        (i) Pay ongoing maintenance,                       FV13–905–1]
                                                  shopping list or benefit balance, as long               processing fees or operational costs for
                                                  as the number of terminals provided                                                                           Oranges, Grapefruit, Tangerines, and
                                                                                                          any vendor, farmer or farmers’ market                 Tangelos Grown in Florida; Order
                                                  does not exceed the number of lanes in                  utilizing multi-function systems and
                                                  the vendor location;                                                                                          Amending Marketing Order No. 905
                                                                                                          equipment, unless the State agency
                                                     (vii) The State agency may remove                    determines that the vendor is necessary               AGENCY:  Agricultural Marketing Service,
                                                  excess POS terminals if actual                          for participant access. The State agency              USDA.
                                                  redemption activity warrants a                          shall continue to pay ongoing                         ACTION: Final rule.
                                                  reduction consistent with the                           maintenance, processing fees and
                                                  redemption levels outlined in                           operational costs of single-function                  SUMMARY:    This final rule amends
                                                  paragraphs (z)(2)(i) through (ii) of this               equipment;                                            Marketing Order No. 905 (order), which
                                                  section.                                                   (ii) Authorize a vendor, farmer, or                regulates the handling of oranges,
                                                     (3) Payment to vendors, farmers and                  farmers’ market that cannot successfully              grapefruit, tangerines, and tangelos
                                                  farmers’ markets. The State agency shall                demonstrate EBT capability in                         (citrus) grown in Florida. The
                                                  ensure that vendors, farmers and                        accordance with State agency                          amendments were proposed by the
                                                  farmers’ markets are paid promptly.                     requirements, unless the State agency                 Citrus Administrative Committee
                                                  Payment must be made in accordance                      determines the vendor is necessary for                (Committee), which locally administers
                                                  with the established Operating Rules                    participant access.                                   the order, and is comprised of growers
                                                  and technical requirements after the                       (bb) EBT Technical standards and                   and handlers. These amendments:
                                                  vendor, farmer or farmers’ market has                   requirements. (1) Each State agency,                  Authorize regulation of new varieties
                                                  submitted a valid electronic claim for                  contractor and authorized vendor                      and hybrids of citrus fruit; authorize the
                                                  payment.                                                participating in the program shall follow             regulation of intrastate shipments of
                                                     (aa) Imposition of costs on vendors,                 and demonstrate compliance with:                      fruit; revise the process for redistricting
                                                  farmers and farmers’ markets. (1) Cost                     (i) Operating rules, standards and                 the production area; change the term of
                                                  prohibition. Except as otherwise                        technical requirements as established by              office and tenure requirements for
                                                  provided in this section, a State agency                the Secretary; and                                    Committee members; authorize mail
                                                  shall not impose the costs of any single-                  (ii) Other industry standards                      balloting procedures for Committee
                                                  function equipment or system required                   identified by the Secretary.                          membership nominations; increase the
                                                  for EBT on any authorized vendor,                          (2) The State agency shall establish               capacity of the financial reserve fund;
                                                  farmers or farmers’ markets in order to                 policy permitting the replacement of                  authorize pack and container
                                                  transact EBT.                                           EBT cards and the transfer of participant             requirements for domestic shipments
                                                     (2) Cost sharing. If WIC Program                     benefit balances within no more than                  and authorize different regulations for
                                                  equipment is multi-function equipment,                  seven business days following notice by               different markets; eliminate the use of
                                                  the State agency shall develop cost                     the participant or proxy to the State                 separate acceptance statements in the
                                                  sharing criteria with authorized WIC                    agency.                                               nomination process; and require
                                                  vendors, farmers and farmers’ markets                      (3) The State agency shall establish               handlers to register with the Committee.
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                                                  for costs associated with such                          procedures to provide customer service                All of the proposals were favored by
                                                  equipment in accordance with Federal                    during non-business hours that enable                 Florida citrus growers in a mail
                                                  cost principles. Any cost sharing                       participants or proxies to report a lost,             referendum, held September 14 through
                                                  agreements shall be developed between                   stolen, or damaged card, report other                 October 5, 2015. Of the 200 votes cast,
                                                  a State agency and its vendors, farmers,                card or benefit issues, receive                       96 percent or more of the vote by
                                                  or farmers’ markets depending on the                    information on the EBT food balance                   number and 99 percent or more by
                                                  type, scope and capabilities of shared                  and receive the current benefit end date.             volume approved all nine amendments.
                                                  equipment. The State agency must                        The State agency shall respond to any                 The amendments are intended to


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Document Created: 2018-02-02 15:00:12
Document Modified: 2018-02-02 15:00:12
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective Date: This rule is effective on May 2, 2016.
ContactJerilyn Malliet, Chief, WIC EBT Branch, Supplemental Food Programs Division, Food and Nutrition Service, USDA, 3101 Park Center Drive, Room 528, Alexandria, Virginia 22302; phone (703) 305-2746, OR email [email protected]
FR Citation81 FR 10433 
RIN Number0584-AE21
CFR AssociatedAdministrative Practice and Procedure; Food Assistance Programs; Grant Programs-Health; Grant Programs-Social Programs; Indians; Infants and Children; Maternal and Child Health; Nutrition; Penalties; Reporting and Recordkeeping Requirements; Wic and Women

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