[Code of Federal Regulations]
[Title 7 Volume 4]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR276.7]

[Page 881-884]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 276--STATE AGENCY LIABILITIES AND FEDERAL SANCTIONS--Table of Contents
 
Sec. 276.7  Administrative review process.

    (a) General. (1) Whenever FNS asserts a claim against a State 
agency, the State agency may appeal the claim by requesting an 
administrative review. FNS claims that may be appealed are

[[Page 882]]

billings resulting from financial losses involved in the acceptance, 
storage, and issuance of coupons (Sec. 276.2), billings based on charges 
of negligence or fraud (Sec. 276.3), and disallowances of Federal funds 
for State agency failures to comply with the Food Stamp Act, 
regulations, or the FNS-approved State Plan of Operations (Sec. 276.4).
    (2) A State agency aggrieved by a claim shall have the option of 
requesting a hearing to present its position in addition to a review of 
the record and any written submission presented by the State agency. 
Unless circumstances warrant differently, hearings of appeals of 
negligence claims and disallowances of Federal funds shall be before an 
Appeals Board and hearings of appeals of other claims shall be before a 
single hearing official. In any case, the people reviewing the claim 
shall be people who were not involved in the decision to file the claim.
    (b) Notice of claim. FNS shall provide a notice by certified mail or 
personal service when asserting claims against State agencies.
    (c) Filing an appeal. A State agency aggrieved by claims asserted 
against it may file written appeals with the Secretary, U.S. Department 
of Agriculture, c/o the Executive Secretary, State Food Stamp Appeals 
Board, Food and Nutrition Service, USDA, Washington, DC 20250, 
requesting an opportunity to present information in support of its 
position. The State agency shall attach a copy of the FNS claim to its 
appeal. Appeals must be filed with the Executive Secretary or postmarked 
within 10 days of the date of delivery of the notice of claim. If the 
State agency does not appeal within the prescribed 10-day period, the 
FNS decision on the claim shall be final. No extension shall be granted 
in the time allowed for filing an appeal.
    (d) Computation of time. In computing any period of time prescribed 
or allowed under these procedures, the day of delivery of any notice of 
action, acknowledgment, or reply shall not be included. The last day of 
the period so computed shall be included unless it is a Saturday, Sunday 
or Federal or State holiday. In that case, the period runs until the end 
of the next day which is not a Saturday, Sunday or Federal or State 
holiday.
    (e) Stay of administrative action. With one exception, the filing of 
a timely appeal and request for administrative review shall 
automatically stay the action of FNS to collect the claim asserted 
against the State agency until a decision is reached on the 
acceptability of the appeal, and in the case of an acceptable appeal, 
until a final determination has been issued. The exceptions to this 
provision are those claims that are asserted against State agencies due 
to State agency failure to comply with an order to reduce, suspend or 
cancel benefits in accordance with Sec. 271.7. In situations where a 
State agency does not reduce, suspend or cancel benefits as directed and 
FNS takes action to disallow administrative funds or bill the State 
agency, the disallowance and/or billing shall remain in effect during 
the review process. Should the Appeals Board uphold the State agency, 
all disallowed funds and/or funds collected as a result of the billing 
shall be restored to the State agency promptly.
    (f) Acknowledging an appeal. Upon receipt of an appeal and request 
for administrative review, the Executive Secretary shall provide the 
State agency with a written acknowledgment of the appeal, including a 
statement of whether or not the appeal is timely and can be accepted. A 
copy of each acknowledgment shall be provided to FNS. The acknowledgment 
of a timely and acceptable appeal and request for administrative review 
shall also include a copy of Secretary's Memorandum No. 2003, Revised, 
``State Food Stamp Appeals Board,'' and the identity of the Appeals 
Board member(s) designated by the Secretary to review the claim.
    (g) Submitting additional information. (1) State agencies shall have 
30 days from their request for an appeal to submit five sets of the 
following information to the Executive Secretary of the Appeals Board:
    (i) A clear, concise identification of the issue or issues in 
dispute;
    (ii) The State agency's position with respect to the issue or issues 
in dispute;

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    (iii) The pertinent facts and reasons in support of the State 
agency's position with respect to the issue or issues in dispute;
    (iv) All pertinent documents, correspondence and records which the 
State agency believes are relevant and helpful toward a more thorough 
understanding of the issue or issues in dispute;
    (v) The relief sought by the State agency;
    (vi) The identity of the person(s) presenting the State agency's 
position when a hearing is involved; and
    (vii) A list of prospective State agency witnesses when a hearing is 
involved.
    (2) At the request of the Executive Secretary, FNS shall promptly 
submit five complete sets of all documents, correspondence and records 
compiled by FNS in support of its claim.
    (3) The Executive Secretary shall provide each person hearing an 
appeal and FNS with a complete set of the State agency information when 
it is received. The Executive Secretary shall also provide each person 
hearing an appeal and the State agency with a complete set of the 
information supplied by FNS when it is received.
    (h) Scheduling and conducting hearings. When a hearing is afforded, 
the Appeals Board or hearing official has up to 60 days from receipt of 
the State agency's information, outlined in paragraph (g) of this 
section, to schedule and conduct the hearing. The Executive Secretary 
shall advise the State agency of the time, date and location of the 
hearing at least 10 days in advance of the hearing. The State agency is 
solely responsible for ensuring the attendance of all State agency 
witnesses at the hearing.
    (1) A hearing is an informal proceeding designed to permit the State 
agency an opportunity to present its position before a neutral third 
party. Because the final determination is subject to judicial review and 
trial de novo, the Appeals Board and hearing official shall not be bound 
by the rules of civil procedure applicable in the court or by the 
adjudicatory requirements of the Administrative Procedures Act.
    (2) The Appeals Board Chairman, his designee or the hearing official 
is the presiding officer at the hearing. The presiding officer shall 
have full authority to ensure a fair and impartial proceeding, avoid 
delays, maintain order and decorum, receive evidence, examine witnesses, 
and otherwise regulate the course of the hearing. The State agency may 
represent itself at the hearing or be represented by counsel.
    (3) The Appeals Board or hearing official shall receive into 
evidence the oral testimony of State agency witnesses and any documents 
which are relevant and material. Neither the Department nor FNS is 
required to present witnesses at the hearing. However, the Department 
and FNS shall make staff available to provide any information or 
clarification requested by the Appeals Board or hearing official. Under 
no circumstances shall the Department or FNS introduce new evidence at 
the hearing. Departmental and FNS staff, as well as State agency 
witnesses, shall be subject to examination by the Appeals Board or 
hearing official. Departmental and FNS staff shall not be subject to 
cross-examination by State agency representative or counsel. Likewise, 
State agency witnesses shall not be subject to cross-examination by 
Departmental or FNS staff. Each side shall be permitted to make a 
closing statement to the Appeals Board or hearing official upon 
completion of the taking of evidence and testimony.
    (4) FNS and the State agency shall have the opportunity to submit 
additional written information to the Appeals Board or hearing official 
within 10 days after the close of the hearing. No new factual material 
may be introduced except as it directly relates to evidence or testimony 
presented at the hearing. Five complete sets of such information must be 
filed with the Executive Secretary or postmarked prior to the expiration 
of the 10-day deadline for it to be considered.
    (5) An official verbatim transcript of each hearing shall be kept on 
file in the Office of the Executive Secretary for public inspection. A 
copy shall be furnished to FNS and the State agency. Anyone wishing to 
purchase a copy may make arrangements to do so with the commercial 
reporting service involved.

[[Page 884]]

    (i) Final determination. (1) When a hearing is afforded, a final 
determination shall be made within 30 days of the hearing, and the final 
determination shall take effect 30 days after delivery of the notice of 
this final decision to the State agency. When a hearing is not held, a 
final determination shall be made within 30 days after receipt of the 
State agency's information. The final determination shall take effect 30 
days after delivery of the notice of the final decision to the State 
agency.
    (2) The Appeals Board or hearing official shall either uphold the 
claim, deny the claim, or adjust the claim downward in such amounts and 
for such reasons as the Appeals Board or hearing official shall 
determine and declare. The final determination is not subject to 
reconsideration.
    (j) Judicial review. State agencies aggrieved by the final 
determination may obtain judicial review and trial de novo by filing a 
complaint against the United States within 30 days after the date of 
delivery of the final determination, requesting the court to set aside 
the final determination. The final determination shall remain in effect 
during the period the judicial review or any appeal therefrom is pending 
unless the court temporarily stays such administrative action after a 
showing that irreparable injury will occur absent a stay and that the 
State agency is likely to prevail on the merits of the case.
    (k) Extension of time. (1) No extension of time shall be permitted a 
State agency in which to file an initial request for an administrative 
review. All other requests from the State agency or from FNS for the 
extension of any deadline contained in Sec. 276.7 of these regulations 
or imposed by the Appeals Board or hearing official shall be granted 
only for good cause shown and only when received by the Executive 
Secretary before the expiration of the particular deadline involved. All 
requests for an extension shall be in writing. Filing a request for an 
extension stops the running of the prescribed period of time. When a 
request for an extension is granted, the requester shall be notified in 
writing of the amount of additional time granted. When a request is 
denied for being untimely or for cause, the requester shall be notified 
and the prescribed period of time shall resume from the date of denial.
    (2) The Appeals Board or hearing official may grant itself such 
additional time as it may reasonably require to complete any of its 
assigned responsibilities. If the Appeals Board or hearing official does 
find it necessary to grant itself an extension of time, the Executive 
Secretary shall notify all parties in writing.

[Amdt. 168, 45 FR 77263, Nov. 21, 1980, as amended by Amdt. 274, 51 FR 
18752, May 21, 1986; Amdt. 356, 59 FR 29714, June 9, 1994]