12 2 STA T . 111 6PUBLIC LA W 11 0– 2 34—M A Y 22 , 200 8(6)byad d ing a t t he end the fol lo w ing
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‘(h) FLAGR A NTVIO LATION S.— ‘‘( 1 ) I NG E NERAL.— T he S e cr etary , in con su ltation with the Ins p ector G eneral of the D epart m ent of A griculture, shall estab - lish procedures under which the processing of program benefit redemptions for a retail food store or wholesale food concern may be immediately suspended pending administrati v e action to dis q ualify the retail food store or wholesale food concern. ‘‘( 2 ) R E QU IRE M ENTS.— U nder the procedures described in paragraph (1), if the Secretary, in consultation with the Inspector General, determines that a retail food store or whole- sale food concern is engaged in flagrant violations of this Act (including regulations promulgated under this Act), unsettled program benefits that have been redeemed by the retail food store or wholesale food concern— ‘‘(A) may be suspended
and ‘‘( B )(i) if the program disqualification is upheld, may be sub j ect to forfeiture pursuant to section 1 5 (g); or ‘‘(ii) if the program disqualification is not upheld, shall be released to the retail food store or wholesale food con- cern. ‘‘( 3 ) N O LIA B ILIT YF OR INTEREST.—The Secretary shall not be liable for the value of any interest on funds suspended under this subsection. ’ ’. SEC.413 3. MAJOR S Y S T EMS F A ILU RES. Section 13(b) of the Food and Nutrition Act of 2 0 0 8 ( 7 U.S. C . 2022(b)) is amended by adding at the end the following: ‘‘(5) OV ERISSUAN C ES CAUSE D BY SYSTEMIC STATE ERRORS.— ‘‘(A) IN GENERAL.—If the Secretary determines that a State agency overissued benefits to a substantial number of households in a fiscal year as a result of a major systemic error by the State agency, as defined by the Secretary, the Secretary may prohibit the State agency from collecting these overissuances from some or all households. ‘‘(B) P ROCEDURES.— ‘‘(i) INFORMATION RE P ORTING BY STATES.— E very State agency shall provide to the Secretary all informa- tion requested by the Secretary concerning the issuance of benefits to households by the State agency in the applicable fiscal year. ‘‘(ii) FINAL DETERMINATION.—After reviewing rel- evant information provided by a State agency, the Sec- retary shall ma k e a final determination— ‘‘(I) whether the State agency overissued bene- fits to a substantial number of households as a result of a systemic error in the applicable fiscal year; and ‘‘(II) as to the amount of the overissuance in the applicable fiscal year for which the State agency is liable. ‘‘(iii) ESTABLIS H ING A CLAIM.—Upon determining under clause (ii) that a State agency has overissued benefits to households due to a major systemic error determined under subparagraph (A), the Secretary shall establish a claim against the State agency equal Procedu re s.
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