Privacy Act: Proposed Revision of an Existing System of Records

DEPARTMENT OF AGRICULTURE

Office of the Secretary

Privacy Act: Proposed Revision of an Existing System of Records

AGENCY: Office of the Secretary, USDA.

ACTION: Notice of proposed revision of an existing system of Records--

USDA/FNS-9 (formerly known as USDA/FCS-9), entitled, Food Stamp Program

Retailer Information.

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SUMMARY: In accordance with the requirements of the Privacy Act of

1974, as amended, 5 U.S.C. 552a, the United States Department of

Agriculture (USDA), Food and Nutrition Service (FNS), is giving notice

that it proposes to revise the following system of records. This system

was previously published under the agency's former name, the Food and

Consumer Service, in the Federal Register on December 2, 1996 and a

subsequent correction was published in the Federal Register on June 10,

1997.

In order to be in compliance with a new statutory provision in the

Debt Collection Improvement Act of 1996 (DCIA), Pub. L. 104-134, FNS

proposes to amend the fourth routine use which addresses the reporting

of delinquent debts to the IRS for the purpose of offsetting a monetary

penalty against a tax refund due to a debtor for violations committed

under the Food Stamp Program.

In accordance with the Internal Revenue Service requirements, FNS

is also proposing to revise the eighth routine use. The routine use

will ensure that the employer identification numbers (EINs) contained

in this system of records will not be disclosed to private entities

which have contractual agreements with USDA.

In addition, FNS is proposing to add a new routine use which will

notify the public that FNS may disclose the information in this system

of records to State agencies that administer the Special Supplemental

Nutrition Program for Women, Infants and Children (WIC).

EFFECTIVE DATE: This notice will be effective, without further notice,

May 24, 1999, unless modified by a subsequent notice to incorporate

comments received from the public. Comments must be received by the

contact person listed below on or before May 12, 1999, to be assured

consideration.

ADDRESSES: Comments should be addressed to: Thomas O'Connor, Director,

Benefit Redemption Division, Food and Nutrition Service, USDA, Room

706, 3101 Park Center Drive, Alexandria, Virginia 22302. Telephone:

(703) 305-2419.

FOR FURTHER INFORMATION CONTACT: Gregory K. Evans, Senior Policy

Analyst, Room 706, 3101 Park Center Drive, Alexandria, Virginia 22302.

Telephone: (703) 305-2419.

SUPPLEMENTARY INFORMATION: The Debt Collection Act of 1982 (Pub. L. 97-

365), as amended, provides statutory authority for federal agencies to

collect debts through administrative offset. The Debt Collection

Improvement Act of 1996 (Pub. L. 104-134), expanded that statutory

authority by requiring that any federal agency owed a past due, legally

enforceable nontax debt that is over 180 days delinquent, refer such

debt to the Department of the Treasury to participate in its offset

program (also known as the Treasury Offset Program (TOP)) which

includes administrative offset, the Federal Tax Refund Offset Program

(FTROP), and Federal salary offset program. The TOP is a government-

wide delinquent debt matching and payment offset system. Thus, FNS is

proposing to amend the fourth routine use which is listed in USDA/FNS-

9, so that FNS can fully comply with these legislative mandates.

This system of records contains personal information from owners

and officers of firms and other entities currently participating in the

Food Stamp Program, and those who have previously participated in the

program. The following personal information regarding owners and

officers is contained in the system: Name, home address, Social

Security Number (SSN), and date of birth (DOB). The SSNs are collected

only from owners of sole proprietorships, partnerships, principal

shareholders of private corporations, and officers of cooperatives.

Financial data (i.e., food sales, gross sales, food stamp redemption

data) relative to each business entity currently authorized or

previously authorized is also included in this system of records.

This system of records is not a financial management system that is

used to track and identify financial payments which become delinquent;

however, in order for FNS to participate in TOP, FNS must share with

the Department of Treasury the personal identifying information (such

as the debtor's name, DOB, home address, SSN and/or EIN (which is not

considered a personal item of information)) of those individuals in

this system of records for whom there is an outstanding delinquent debt

owed to FNS. These debts originate from administrative actions (in the

form of monetary penalties) taken against store owners and officers of

stores who are found violating the Food Stamp Program regulations.

The fourth routine use which currently deals with disclosing

information from this system of records to the Internal Revenue Service

for the purpose of offsetting a debtor's tax refund in payment for a

monetary penalty for food stamp violations, will be amended to notify

the public that information (i.e., the debtor's name, home address, SSN

and/or EIN) contained in this system of records may be disclosed to

other Federal agencies (e.g., the Department of the Treasury) and other

disbursing officials for offsets that are operated under the TOP.

Currently, once a determination is made to assess a fine or

monetary penalty against a store owner or officer found violating the

FSP, a demand for payment is forwarded to the individual. If the

individual does not pay the debt, depending on the circumstances, he

may receive from one to three demand letters from FNS. If the payment

is not received with the prescribed time period, FNS refers that debt

to a contract collection agency. If they cannot collect, the debt is

either written off as uncollectible or referred to the Department of

Justice for litigation and/or collection. Such collection efforts are

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in accordance with the Federal Claims Collection Standards (FCCS)

regulations, the Food Stamp Act, and the Food Stamp Program

regulations. Based on the above, FNS is also amending the fourth

routine use to notify the public that information from this system of

records may be disclosed to contracted private collection agencies for

claims collection action or the Department of Justice for litigation

and/or collection action.

Currently, the fourth routine use states that, ``USDA/FCS may

disclose information from this system of records to the Internal

Revenue Service for the purpose of offsetting a monetary penalty for

violations committed under the Food Stamp Program against a tax refund

that may be due to the debtor.''

FNS proposes to revise the fourth routine use to permit USDA/FNS to

release from this system of records information, including SSNs and

EINs, to collect and report on delinquent debt. USDA/FNS will disclose

this information to other Federal and State agencies (Note: SSNs and

EINs will only be shared with Federal agencies), as well as private

collection agencies, for purposes of claims collection actions

including, but not limited to, administrative offset and referral to

the Department of Justice for litigation.

Section 6109(f)(2)(B) of the Internal Revenue Code provides that,

for purposes of sharing certain EINs by the Secretary of Agriculture

with other agencies or instrumentalities of the United States, access

to EINs shall be restricted only to certain officers and employees of

the United States. Sections 301.6109-2(c) and (d) of the Procedure and

Administration regulations also provide that only certain officers and

employees of the United States are permitted access to EINs. The eighth

routine use currently states that the information from this system of

records can be disclosed to private entities which have contractual

agreements with USDA. Based on the above, it has been determined that

private entities which have contractual agreements with USDA are not

permitted access to EINs. Thus, FNS is revising the routine use to

reflect this position.

Lastly, the Privacy Act of 1974, as amended, provides that agencies

that maintain a system of records shall publish a notice in the Federal

Register of the existence and character of the system of records. This

includes each routine use of the records contained in the system

including categories of users and the purpose of such use. Thus, FNS is

also proposing to add a new routine use number eleven to this system of

records. The routine use will notify the public that FNS may disclose

information in this system of records to State agencies that administer

the Special Supplemental Nutrition Program for Women, Infants and

Children (WIC).

A ``Report on a Revised System,'' required by 5 U.S.C. 552a(r), as

implemented by OMB Circular A-130, was sent to the Chairman, Senate

Committee on Governmental Affairs, the Chairman, House Committee on

Government Operations, and to the Administrator, Office of Information

and Regulatory Affairs, of the Office of Management and Budget on April

5, 1999.

Since the publication of this system of records in the Federal

Register on December 2, 1996, a correction has been made and now by way

of this notice, we are amending two routine uses, adding another

routine use, and changing the name of the agency. Thus, for

clarification purposes, the proposed altered system of records is

republished in its entirety below.

Signed at Washington, DC on April 5, 1999.

Dan Glickman,

Secretary of Agriculture.

USDA/FNS-9

SYSTEM NAME:

USDA/FNS-9 Food Stamp Program Retailer Information.

SECURITY CLASSIFICATION: None.

SYSTEM LOCATION:

The paper records (i.e., the applications for authorization and

reauthorization) which contain the personal identifying information on

retail and wholesale store owners and officers, and/or owners and

officers associated with other entities, are located in a host computer

database and in FNS field offices throughout the United States. The

location of each FNS field office may be found in the local phone

books. The host computer database which contains the Store Tracking and

Redemption Subsystem (STARS) database, is located at the Benefit

Redemption Systems Branch, PO Box 135, Minneapolis, Minnesota 55440.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:

The system consists of personal information from owners and

officers of stores and other entities currently participating in the

Food Stamp Program, as well as those owners and officers who have

previously participated in the program. The individual paper records

(i.e., applications for authorization) located in FNS field offices

also contain personal information from owners and officers who applied

for authorization to participate in the FSP but were denied

authorization.

CATEGORIES OF RECORDS IN THE SYSTEM:

The applications for authorization and reauthorization are in the

STARS database and located in the files of FNS field offices. The

applications contain the following personal information regarding

owners and officers: Name, home address, social security number, and

date of birth. The SSNs are collected only from owners of sole

proprietorships, partnerships, principal shareholders of private

corporations, and officers of cooperatives. Financial data (i.e., food

sales, gross sales, food stamp redemption data) relative to each entity

currently authorized or previously authorized is in the STARS database.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:

Section 9 of the Food Stamp Act of 1977, as amended, (7 U.S.C.

2018); section 1735 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Pub. L. 101-624, 104 Stat. 3359); section 205(c)(2)(C) of

the Social Security Act (42 U.S.C. 405(c)(2)(C)); and section 6109(f)

of the Internal Revenue Code of 1986 (26 U.S.C. 6109(f)).

PURPOSE(s):

This information will be shared with other Federal and State

entities to assist in the administration and enforcement of the Food

Stamp Act, as well as other Federal and State laws. The SSNs and EINs

of store owners will only be shared with Federal agencies which

maintain those numbers in their files. STARS is used primarily for

tracking the authorization and food stamp redemption activity of owners

and officers of entities currently participating in the Food Stamp

Program, as well as those owners and officers who have previously

participated in the Food Stamp Program.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES

OF USERS AND THE PURPOSES OF SUCH USES:

Limitations on Disclosure under the Following Routine Uses (1) through

(11):

Information obtained from applicants under the authority of 7

U.S.C. 2018(c) may be used or disclosed only as specified in 7 U.S.C.

2018(c). With the exception of the SSNs and EINs obtained from

applicants, 7 U.S.C. 2018(c) gives FNS the authority to

[[Page 17606]]

disclose the contents of an initial application, or other information

submitted by an applicant to other Federal and State law enforcement

and investigative agencies for the purposes of administering or

enforcing the Food Stamp Act or any other Federal or State law. 7

U.S.C. 2018(c) also limits the use of the information obtained by

applicants. That is, the above mentioned entities may only use this

information for purposes directly connected with the administration and

enforcement of the Food Stamp Act or any other Federal or State law.

Some of the information obtained from applicants is ownership

information and sales and redemption data.

The use and disclosure of SSNs and EINs obtained by applicants is

covered in the Social Security Act and the Internal Revenue Code. In

accordance with the Social Security Act and the Internal Revenue Code,

applicant social security numbers and employer identification numbers

may be disclosed only to other Federal agencies authorized to have

access to social security numbers and employer identification numbers

and maintain these numbers in their files, and only when the Secretary

of Agriculture determines that disclosure would assist in verifying and

matching such information against information maintained by such other

agency. 42 U.S.C. 405(c)(2)(C)(iii); 26 U.S.C. 6109(f).

(1) USDA/FNS may disclose information from this system of records

to the Department of Justice (DOJ), a court or other tribunal, or

another party before such tribunal, when USDA, any component thereof,

or any employee of the USDA in his or her official capacity, any USDA

employee in his or her individual capacity where DOJ (or USDA where it

is authorized to do so) has agreed to represent the employee, or the

United States where USDA determines that the litigation is likely to

affect directly the operations of USDA or any of its components, is a

party to the litigation or has an interest in such litigation, and USDA

determines that the use of such records by DOJ, the court or other

tribunal, or the other party before such tribunal is relevant and

necessary to the litigation; provided, however, that in each case, USDA

determines that such disclosure is compatible with the purpose for

which the records were collected.

(2) In the event that material in this system indicates a violation

of the Food Stamp Act or any other Federal or State law whether civil

or criminal or regulatory in nature, and whether arising by general

statute, or by regulation, rule or order issued pursuant thereto, USDA/

FNS may disclose the relevant records to the appropriate agency,

whether Federal or State, charged with the responsibility of

investigating or prosecuting such violation or charged with enforcing

or implementing the statute, or rule, regulation or order issued

pursuant thereto.

(3) USDA/FNS may disclose records from this system of records to a

congressional office from the record of an individual provided that

individual gave the congressional office permission to inquire on his

or her behalf.

(4) USDA/FNS may use information from this system of records,

including SSNs and EINs, to collect and report on delinquent debt and

may disclose the information to other Federal and State agencies, as

well as private collection agencies, for purposes of claims collection

actions including, but not limited to, administrative offset and

referral to the Department of Justice for litigation. (Note: SSNs and

EINs will only be disclosed to Federal agencies).

(5) USDA/FNS may disclose information from this system of records

to other Federal and State agencies to respond to specific requests

from such Federal and State agencies for the purpose of administering

the Food Stamp Act as well as other Federal and State laws.

(6) USDA/FNS may disclose information from this system of records

to other Federal and State agencies to verify information reported by

applicants and participating firms, and to assist in the administration

and enforcement of the Food Stamp Act as well as other Federal and

State laws.

(7) USDA/FNS may disclose information from this system of records

to other Federal and State agencies for the purpose of conducting

computer matching programs.

(8) USDA/FNS may disclose information (excluding EINs) from this

system of records to private entities having contractual agreements

with USDA for designing, developing, and operating the system, and for

verification and computer matching purposes.

(9) USDA/FNS may disclose an owner's home address to a financial

institution to verify information contained on a redemption certificate

(Form FCS-278B, formerly Form FNS-278B) submitted by a participating

retailer. Authorized entities use these certificates when depositing

food coupons at financial institutions. On occasion, particularly with

small businesses, the owner's business address may also be the owner's

home address.

(10) USDA/FNS will disclose information from this system of records

to the Internal Revenue Service, for the purpose of reporting

delinquent retailer and wholesaler monetary penalties of $600 or more

for violations committed under the Food Stamp Program. USDA/FNS will

report each delinquent debt to the Internal Revenue Service on Form

1099-C (Cancellation of Debt). USDA/FNS will report these debts to the

Internal Revenue Service under the authority of the Income Tax

Regulations (26 CFR parts 1 and 602) under section 6050P of the

Internal Revenue Code.

(11) USDA/FNS may disclose information from this system of records

to State agencies that administer the Special Supplemental Nutrition

Program for Women, Infants, and Children (WIC), authorized under

section 17 of the Child Nutrition Act of 1966 for purposes of

administering that Act and the regulations issued under that Act.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING,

AND DISPOSING OF RECORDS IN THE SYSTEM:

STORAGE:

File folders, magnetic tapes, and computer disks.

RETRIEVABILITY:

In STARS, the personal identifying information is retrievable by

owner's name and by SSN.

SAFEGUARDS:

1. Authorized Users: When designing, developing and/or operating a

system of records on individuals, contractors are required to comply

with all provisions of the Privacy Act. Contractors are required to

maintain and protect the personal data and cannot release or share data

without consulting with FNS. Access to records maintained within FNS is

limited to those staff officials responsible for the subject system of

records. Otherwise, access is limited to persons authorized and needing

to use the records, including project directors, contract officers,

programmers, analysts, statisticians, statistical clerks and key punch

operators on the staff of the contractors or in the FNS.

2. Physical Safeguards: Paper records are stored in locked safes,

locked files, and locked offices when not in use. Computer terminals

used to process personal identifiable data are located in secured areas

and are accessible only to authorized users. Back up records which are

stored off-site shall be used and stored under the same secure

conditions.

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3. Procedural Safeguards: In order to access STARS, each authorized

individual is given a personal access ID and password. The individual's

password must be changed at least every 45 days or whenever the

individual feels it might have been compromised.

Access to personal information contained in the STARS database and

to the paper record files is restricted to those individuals who have

been authorized by FNS and who have a need to know such information in

the performance of their official duties in administering the Food

Stamp Act and other Federal and State laws. SSNs cannot be viewed on

screen in STARS by those individuals who are not specifically

authorized to view them.

FNS personnel, project officers, and contract officers oversee

compliance with these requirements. When appropriate, FNS personnel

will review the site facilities to ensure that records have been

maintained in accordance with the terms of this notice.

RETENTION AND DISPOSAL:

In STARS, the personal identifying information is maintained

indefinitely. The applications for authorization and reauthorization

are kept in the FNS field offices for three years and then destroyed

pursuant to the applicable document retention and disposal schedule.

SYSTEM MANAGER(s) AND ADDRESS:

Thomas O'Connor, Director, Benefit Redemption Division, Food and

Nutrition Service, United States Department of Agriculture, Room 706,

3101 Park Center Drive, Alexandria, Virginia 22302.

NOTIFICATION PROCEDURE:

Any individual may request information regarding this system of

records from the System Manager. The request must be in writing.

RECORD ACCESS PROCEDURES:

An individual who wishes to request access to records in the system

which pertains to him or her may submit a written request to the System

Manager. The envelope and the letter should be marked, ``Privacy Act

Request''. An individual may be required to reference the record by

furnishing name, address, Social Security Number, and/or other

identifiers needed by FNS.

CONTESTING RECORD PROCEDURES:

Individuals desiring to contest or amend information maintained in

the system should direct their request to the System Manager. The

request should include, as appropriate, the reasons for contesting it,

and the proposed amendment to the information with supporting

information to show how the record is inaccurate, incomplete, untimely,

or irrelevant.

RECORD SOURCE CATEGORIES:

Information in this system comes from the authorization and

reauthorization applications of stores and other entities which are

currently participating in the Food Stamp Program, as well as

information on file for those entities which have previously

participated in the program. Personal information in this system of

records is also obtained from the owners and officers of such entities

as reported on the authorization and reauthorization applications.

The STARS database also keeps a food stamp redemption history on

such entities. The database maintains the dollar amount of food stamp

benefits accepted by each entity currently authorized or previously

authorized.

EXEMPTIONS CLAIMED FOR THE SYSTEM:

None.

[FR Doc. 99-8976 Filed 4-9-99; 8:45 am]

BILLING CODE 3410-30-U