[Code of Federal Regulations]
[Title 7, Volume 6]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR634.31]

[Page 424-425]
 
                          TITLE 7--AGRICULTURE
 
   CHAPTER VI--NATURAL RESOURCES CONSERVATION SERVICE, DEPARTMENT OF 
                               AGRICULTURE
 
PART 634--RURAL CLEAN WATER PROGRAM--Table of Contents
 
                  Subpart C--Participant RCWP Contracts
 
Sec. 634.31  Appeals of contract violations.

    (a) Scope. This section prescribes the regulations dealing with 
contract violations. The Administrator, NRCS, reserves the right to 
revise or supplement any of the provisions of this section at any time 
if the action does not adversely affect the participant, or if the 
participant has been officially notified before this action is taken.
    (b) Determination by administering agency. Upon notification that a 
contract violation may have occurred, the administering agency:
    (1) Determines that a violation did not occur or that the violation 
was of such a nature that no further action is to be taken; or
    (2) Determines that a violation did occur and the participant agrees 
to accept a written penalty of forfeiture, refund, payment adjustment, 
or termination. If no agreement is reached, further action is to be 
taken.
    (c) Notice of possible violation. (1) When the administering agency 
is notified that a contract violation may have occurred and the matter 
is not resolved under Sec. 634.31(b)(1) it shall notify, in writing, 
each participant who signed the contract of the alleged violation. This 
notice setting forth the alleged violation may be personally delivered 
or sent by certified or registered mail.

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A participant is considered to have received the notice at the time of 
personal receipt acknowledged in writing, at the time of delivery of a 
certified or registered letter, or at the time of the return of a 
refused certified or registered letter.
    (2) The notice shall give the participant an opportunity to appear 
at a hearing before an appeals board. The participant's request for a 
hearing shall be submitted in writing, and must be received by the 
appeals board within 30 days after receipt of the notice. The 
participant shall be notified in writing by the appeals board of the 
time, date, and place for the hearing. The participant shall have no 
right to a hearing if he does not file a written request for a hearing, 
or if he or his representative does not appear at the appointed time, 
unless the appeals board, at its discretion, permits an appearance. A 
request for a hearing filed by a participant shall be considered to be a 
request by all participants who signed the contract.
    (d) Hearing. The appeals board shall conduct an open hearing to 
obtain the facts about the alleged violation. The appeals board shall 
limit the hearing to relevant facts and evidence, and shall not be bound 
by the strict rules of evidence. Witnesses may be sworn in at the 
discretion of the appeals board.
    (1) The participant or his or her representative shall be given full 
opportunity to present oral or documentary evidence about the alleged 
violation. Likewise, the administering agency may submit statements and 
evidence. Individuals not otherwise represented at the hearing may, at 
the discretion of the appeals board, be permitted to give information or 
evidence. The appeals board, at its discretion, may permit witnesses to 
be cross-examined.
    (2) The appeals board shall make a record of the hearing. A summary 
of the testimony may be made if both the participant and the appeals 
board agree. A transcript of the hearing shall be made if requested by 
either the appeals board or the participant within 10 days prior to the 
hearing. If a transcript is requested by the participant, the 
participant may be assessed the cost of a copy of the transcript.
    (3) The appeals board shall, after a reasonable period of time, 
close the hearing if the participant or his or her representative is not 
present at the scheduled time. The appeals board may, at its discretion, 
accept information and evidence submitted by others present for the 
hearing.
    (4) The appeals board shall furnish the administering agency and the 
State Conservationist, NRCS, with a written report setting forth their 
findings, conclusions, and recommendations. The report shall include the 
summary of testimony or transcript made of the hearing and any other 
information which would aid the administering agency in reaching a 
decision.
    (e) Decision by the administering agency. The administering agency 
shall make a decision within 30 days on the basis of the appeals board 
report, recommendations of soil conservation district board, if any, and 
any other information available, including if applicable, the amount of 
the forfeiture, refund, or payment adjustment. The decision shall state 
whether the violation is of such a nature as to warrant termination of 
the contract. The administering agency shall notify, in writing, each 
participant who signed the contract of its decision. The administering 
agency may authorize or require the reopening of any hearing before the 
appeals board for any reason at any time before their decision. The 
administering agency's decision shall be final.
    (1) If the decision provides for termination of the contract, it 
shall state that the contract is terminated and that all rights to 
further cost-share payments under the contract are forfeited and that 
all cost-share payments received under the contract shall be refunded 
with interest. The decision is to state the amount of refund and method 
of payment.
    (2) If the decision does not provide for termination of the 
contract, the participant may be required to make a refund of cost-share 
payments or to accept payment adjustments. The decision shall state the 
amount and justification for refunds of cost-share payments or payment 
adjustments.

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