[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR246.18]

[Page 379-382]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 246_SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND 
CHILDREN--Table of Contents
 
                    Subpart E_State Agency Provisions
 
Sec.  246.18  Administrative review of State agency actions.

    (a) Adverse actions subject to administrative reviews. (1) Vendor 
appeals. (i) Adverse actions subject to full administrative reviews. 
Except as provided elsewhere in paragraph (a)(1) of this section, the 
State agency must provide full administrative reviews to vendors that 
appeal the following adverse actions:
    (A) denial of authorization based on the vendor selection criteria 
for competitive price or for minimum variety and quantity of authorized 
supplemental foods (Sec.  246.12(g)(3)(i) and (g)(3)(ii)) or on a 
determination that the vendor is attempting to circumvent a sanction 
(Sec.  246.12(g)(4));
    (B) termination of an agreement for cause;
    (C) disqualification; and
    (D) imposition of a fine or a civil money penalty in lieu of 
disqualification.
    (ii) Adverse actions subject to abbreviated administrative reviews. 
The State agency must provide abbreviated administrative reviews to 
vendors that appeal the following adverse actions, unless the State 
agency decides to provide full administrative reviews for any of these 
types of adverse actions:
    (A) denial of authorization based on the vendor selection criteria 
for business integrity or for a current Food Stamp Program 
disqualification or civil money penalty for hardship (Sec.  
246.12(g)(3)(iii) and (g)(3)(iv));
    (B) denial of authorization based on a State agency-established 
vendor selection criterion if the basis of the denial is a WIC vendor 
sanction or a Food

[[Page 380]]

Stamp Program withdrawal of authorization or disqualification;
    (C) denial of authorization based on the State agency's vendor 
limiting criteria (Sec.  246.12(g)(2));
    (D) denial of authorization because a vendor submitted its 
application outside the timeframes during which applications are being 
accepted and processed as established by the State agency under Sec.  
246.12(g)(7);
    (E) termination of an agreement because of a change in ownership or 
location or cessation of operations (Sec.  246.12(h)(3)(xvii));
    (F) disqualification based on a trafficking conviction (Sec.  
246.12(l)(1)(i));
    (G) disqualification based on the imposition of a Food Stamp Program 
civil money penalty for hardship (Sec.  246.12(l)(2)(ii)); and
    (H) disqualification or a civil money penalty imposed in lieu of 
disqualification based on a mandatory sanction imposed by another WIC 
State agency (Sec.  246.12(l)(2)(iii)).
    (iii) Actions not subject to administrative reviews. The State 
agency may not provide administrative reviews pursuant to this section 
to vendors that appeal the following actions:
    (A) the validity or appropriateness of the State agency's vendor 
limiting or selection criteria (Sec.  246.12(g)(2) and (g)(3));
    (B) the validity or appropriateness of the State agency's 
participant access criteria and the State agency's participant access 
determinations;
    (C) the State agency's determination whether a vendor had an 
effective policy and program in effect to prevent trafficking and that 
the ownership of the vendor was not aware of, did not approve of, and 
was not involved in the conduct of the violation (Sec.  
246.12(l)(1)(i)(B));
    (D) denial of authorization if the State agency's vendor 
authorization is subject to the procurement procedures applicable to the 
State agency;
    (E) the expiration of a vendor's agreement;
    (F) disputes regarding food instrument payments and vendor claims 
(other than the opportunity to justify or correct a vendor overcharge or 
other error, as permitted by Sec.  246.12(k)(3); and
    (G) disqualification of a vendor as a result of disqualification 
from the Food Stamp Program (Sec.  246.12(l)(1)(vii)).
    (2) Effective date of adverse actions against vendors. The State 
agency must make denials of authorization and disqualifications imposed 
under Sec.  246.12(l)(1)(i) effective on the date of receipt of the 
notice of adverse action. The State agency must make all other adverse 
actions effective no earlier than 15 days after the date of the notice 
of the adverse action and no later than 90 days after the date of the 
notice of adverse action or, in the case of an adverse action that is 
subject to administrative review, no later than the date the vendor 
receives the review decision.
    (3) Local agency appeals. (i) Adverse actions subject to full 
administrative reviews. Except as provided in paragraph (a)(3)(ii) of 
this section, the State agency must provide full administrative reviews 
to local agencies that appeal the following adverse actions:
    (A) denial of a local agency's application;
    (B) disqualification of a local agency; and
    (C) any other adverse action that affects a local agency's 
participation.
    (ii) Actions not subject to administrative reviews. The State agency 
may not provide administrative reviews pursuant to this section to local 
agencies that appeal the following actions:
    (A) expiration of the local agency's agreement; and
    (B) denial of a local agency's application if the State agency's 
local agency selection is subject to the procurement procedures 
applicable to the State agency;
    (iii) Effective date of adverse actions against local agencies. The 
State agency must make denials of local agency applications effective 
immediately. The State agency must make all other adverse actions 
effective no earlier than 60 days after the date of the notice of the 
adverse action and no later than 90 days after the date of the notice of 
adverse action or, in the case of an adverse action that is subject to 
administrative review, no later than the date the local agency receives 
the review decision.

[[Page 381]]

    (b) Full administrative review procedures. The State agency must 
develop procedures for a full administrative review of the adverse 
actions listed in paragraphs (a)(1)(i) and (a)(3) of this section. At a 
minimum, these procedures must provide the vendor or local agency with 
the following:
    (1) Written notification of the adverse action, the procedures to 
follow to obtain a full administrative review and the cause(s) for and 
the effective date of the action. When a vendor is disqualified due in 
whole or in part to violations in Sec.  246.12(l)(1), such notification 
must include the following statement: ``This disqualification from WIC 
may result in disqualification as a retailer in the Food Stamp Program. 
Such disqualification is not subject to administrative or judicial 
review under the Food Stamp Program.''
    (2) The opportunity to appeal the adverse action within a time 
period specified by the State agency in its notification of adverse 
action.
    (3) Adequate advance notice of the time and place of the 
administrative review to provide all parties involved sufficient time to 
prepare for the review.
    (4) The opportunity to present its case and at least one opportunity 
to reschedule the administrative review date upon specific request. The 
State agency may set standards on how many review dates can be 
scheduled, provided that a minimum of two review dates is allowed.
    (5) The opportunity to cross-examine adverse witnesses. When 
necessary to protect the identity of WIC Program investigators, such 
examination may be conducted behind a protective screen or other device 
(also referred to as an ``in camera'' examination).
    (6) The opportunity to be represented by counsel.
    (7) The opportunity to examine prior to the review the evidence upon 
which the State agency's action is based.
    (8) An impartial decision-maker, whose determination is based solely 
on whether the State agency has correctly applied Federal and State 
statutes, regulations, policies, and procedures governing the Program, 
according to the evidence presented at the review. The State agency may 
appoint a reviewing official, such as a chief hearing officer or 
judicial officer, to review appeal decisions to ensure that they conform 
to approved policies and procedures.
    (9) Written notification of the review decision, including the basis 
for the decision, within 90 days from the date of receipt of a vendor's 
request for an administrative review, and within 60 days from the date 
of receipt of a local agency's request for an administrative review. 
These timeframes are only administrative requirements for the State 
agency and do not provide a basis for overturning the State agency's 
adverse action if a decision is not made within the specified timeframe.
    (c) Abbreviated administrative review procedures. Except when the 
State agency decides to provide full administrative reviews for the 
adverse actions listed in paragraph (a)(1)(ii) of this section, the 
State agency must develop procedures for an abbreviated administrative 
review of the adverse actions listed in paragraph (a)(1)(ii) of this 
section. At a minimum, these procedures must provide the vendor with the 
following:
    (1) Written notification of the adverse action, the procedures to 
follow to obtain an abbreviated administrative review, the cause(s) for 
and the effective date of the action, and an opportunity to provide a 
written response; and
    (2) A decision-maker who is someone other than the person who 
rendered the initial decision on the action and whose determination is 
based solely on whether the State agency has correctly applied Federal 
and State statutes, regulations, policies, and procedures governing the 
Program, according to the information provided to the vendor concerning 
the cause(s) for the adverse action and the vendor's response; and
    (3) Written notification of the review decision, including the basis 
for the decision, within 90 days of the date of receipt of the request 
for an administrative review. This timeframe is only an administrative 
requirement for the State agency and does not provide a basis for 
overturning the State agency's adverse action if a decision is not made 
within the specified timeframe.

[[Page 382]]

    (d) Continuing responsibilities. Appealing an action does not 
relieve a local agency or a vendor that is permitted to continue program 
operations while its appeal is in process from the responsibility of 
continued compliance with the terms of any written agreement with the 
State agency.
    (e) Finality and effective date of decisions. The State agency 
procedures must provide that review decisions rendered under both the 
full and abbreviated review procedures are the final State agency 
action. If the adverse action under review has not already taken effect, 
the State agency must make the action effective on the date of receipt 
of the review decision by the vendor or the local agency.
    (f) Judicial review. If the review decision upholds the adverse 
action against the vendor or local agency, the State agency must inform 
the vendor or local agency that it may be able to pursue judicial review 
of the decision.

[65 FR 83266, Dec. 29, 2000]