TITLE 4. AGRICULTURE

PART 1. TEXAS DEPARTMENT OF AGRICULTURE

CHAPTER 1. GENERAL PROCEDURES

The Texas Department of Agriculture (the Department) proposes the repeal of Title 4, Part 1, Chapter 1, Subchapter P, concerning the appeal procedures for the food and nutrition programs administered by the Department. In conjunction with this proposed repeal, new rules are proposed in this issue of the Texas Register.

The proposed repeal of existing rules for appeal procedures for the food and nutrition programs and proposed new rules are the result of a comprehensive review of the subchapter pursuant to the four-year rule review prescribed by Texas Government Code §2001.039. The repeal of existing rules and proposed new rules will eliminate duplicative and unnecessary provisions and will provide for a more simple and efficient appeals process for the Department's food and nutrition programs. The new rules are proposed in Chapter 26 to consolidate rules for food and nutrition programs.

Ms. Lena Wilson, Assistant Commissioner, Food & Nutrition Division, has determined that for each year of the first five years the proposed repeals are in effect, enforcing or administering the repeals does not have foreseeable implications relating to cost or revenues of the state or local governments.

Ms. Wilson has also determined that for each year of the first five years the proposed repeals are in effect, the public benefit will be improved readability and clarity of the rules and appeals process.

Ms. Wilson has determined there are no anticipated economic costs to persons required to comply with the proposed repeals.

Ms. Wilson has provided the following government growth impact statement, as required pursuant to Texas Government Code, §2001.0221. During the first five years the proposed repeals are in effect:

1. the proposed repeals do not create or eliminate a government program;

2. implementation of the proposed repeals does not require the creation or elimination of employee positions;

3. implementation of the proposed repeals does not require an increase or decrease in future legislative appropriations to the Department;

4. the proposed repeals do not require an increase or decrease in fees paid to the Department;

5. the proposed repeals do not create a new regulation;

6. the proposed repeals will repeal existing regulations;

7. the proposed repeals do not increase or decrease the number of individuals subject to the rule's applicability; and

8. the proposed repeals do not positively or adversely affect this state's economy.

The Department has determined the proposed repeals will not affect a local economy within the meaning of Government Code §2001.022 and will not have an adverse economic effect on small businesses, micro-businesses, or rural communities.

Written comments on the proposal may be submitted by mail to Ms. Tanya Vermeeren, Assistant General Counsel for Food & Nutrition, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711, or by email to tanya.vermeeren@texasagriculture.gov. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register.

SUBCHAPTER P. APPEAL PROCEDURES FOR THE FOOD AND NUTRITION PROGRAMS

DIVISION 1. APPEAL PROCEDURES FOR THE CHILD AND ADULT CARE FOOD PROGRAM (CACFP)

4 TAC §§1.1000 - 1.1004

The repeal of Chapter 1, Subchapter P, Division 1, §§1.1000-1.1004 is proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposal is Texas Agriculture Code, Chapter 12.

§1.1000.Definitions.

§1.1001.Requests for Appeal Concerning Institutions, Responsible Principals and Responsible Individuals.

§1.1002.Abbreviated Appeal.

§1.1003.Suspension Review for Submitting False or Fraudulent Claims.

§1.1004.Appeals for Day Care Homes.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202463

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360


DIVISION 2. APPEAL PROCEDURES FOR THE SUMMER FOOD SERVICE PROGRAM (SFSP)

4 TAC §1.1010, §1.1011

The repeal of Chapter 1, Subchapter P, Division 2, §§1.1010-1.1011 is proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposed repeal is Texas Agriculture Code, Chapter 12.

§1.1010.Definitions.

§1.1011.Requests for Appeal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202464

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360


DIVISION 3. APPEAL PROCEDURES FOR THE NATIONAL SCHOOL LUNCH PROGRAM (NSLP)

4 TAC §1.1020, §1.1021

The repeal of Chapter 1, Subchapter P, Division 3, §§1.1020-1.1021 is proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposed repeal is Texas Agriculture Code, Chapter 12.

§1.1020.Definitions.

§1.1021.Request for Appeal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202465

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360


DIVISION 4. APPEAL PROCEDURES FOR THE SCHOOL BREAKFAST PROGRAM (SBP)

4 TAC §1.1030, §1.1031

The repeal of Chapter 1, Subchapter P, Division 4, §§1.1030-1.1031 is proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposed repeal is Texas Agriculture Code, Chapter 12.

§1.1030.Definitions.

§1.1031.Request for Appeal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202466

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360


DIVISION 5. APPEAL PROCEDURES FOR THE SPECIAL MILK PROGRAM FOR CHILDREN (SMP)

4 TAC §1.1040, §1.1041

The repeal of Chapter 1, Subchapter P, Division 5, §§1.1040-1.1041 is proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposed repeal is Texas Agriculture Code, Chapter 12.

§1.1040.Definitions.

§1.1041.Request for Appeal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202467

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360


DIVISION 6. ADMINISTRATIVE HEARING PROCEDURES FOR CONDUCTING THE APPEALS OF THE FOOD AND NUTRITION PROGRAMS

4 TAC §§1.1050 - 1.1053

The repeal of Chapter 1, Subchapter P, Division 6, §§1.1050-1.1053 is proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposed repeal is Texas Agriculture Code, Chapter 12.

§1.1050.Definitions.

§1.1051.Purpose.

§1.1052.Hearing Procedures.

§1.1053.Standard of Review.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202468

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360


CHAPTER 26. FOOD AND NUTRITION DIVISION

SUBCHAPTER E. APPEAL PROCEDURES FOR FOOD AND NUTRITION PROGRAMS

4 TAC §§26.200 - 26.208

The Texas Department of Agriculture (the Department) proposes new Chapter 26, Subchapter E, concerning Appeal Procedures for Food and Nutrition Programs. In conjunction with the proposed new rules, the repeal of existing rules for appeal procedures for the food and nutrition programs is proposed in this issue of the Texas Register.

The proposed new rules for appeal procedures for the food and nutrition programs and the repeal of existing rules are the result of a comprehensive review of Chapter 1, Subchapter P pursuant to the four-year rule review prescribed by Texas Government Code §2001.039. The proposed rules eliminate duplicative and unnecessary provisions and will provide for a more simple and efficient appeals process for the Department's food and nutrition programs.

New §26.200 explains the purpose of these rules.

New §26.201 defines important terms for the subchapter.

New §26.202 enumerates actions that are subject to appeal.

New §26.203 sets forth the appeal procedures for the food and nutrition programs administered by the Department.

New §26.204 provides the procedures for filing documents.

New §26.205 sets forth the procedures for a hearing.

New §26.206 describes the abbreviated appeal process.

New §26.207 explains the suspension review process.

New §26.208 describes the standard of review.

Ms. Lena Wilson, Assistant Commissioner, Food & Nutrition Division, has determined that for each year of the first five years the proposed rules are in effect, enforcing or administering the rules does not have foreseeable implications relating to cost or revenues of the state or local governments.

Ms. Wilson has also determined that for each year of the first five years the proposed rules are in effect, the public benefit will be improved readability and clarity of the rules and appeals process.

Ms. Wilson has determined there are no anticipated economic costs to persons required to comply with the proposed rules.

Ms. Wilson has provided the following government growth impact statement, as required pursuant to Texas Government Code, §2001.0221. During the first five years the proposed rules are in effect:

1. the proposed rules do not create or eliminate a government program;

2. implementation of the proposed rules does not require the creation or elimination of employee positions;

3. implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the Department;

4. the proposed rules do not require an increase or decrease in fees paid to the Department;

5. the proposed rules create new regulations;

6. the proposed rules will not repeal an existing regulation;

7. there may be an increase in the number of individuals subject to the rules, depending on the number of applicants who seek to participate in the programs; and

8. the proposed rules do not positively or adversely affect this state's economy.

The Department has determined the proposed rules will not affect a local economy within the meaning of Government Code §2001.022 and will not have an adverse economic effect on small businesses, micro-businesses, or rural communities.

Written comments on the proposal may be submitted by mail to Ms. Tanya Vermeeren, Assistant General Counsel for Food & Nutrition, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711, or by email to tanya.vermeeren@texasagriculture.gov. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register.

The new rules are proposed under Texas Agriculture Code §12.016, which provides authority for the Department to adopt rules to administer its duties under the Texas Agriculture Code.

The code affected by the proposal is Texas Agriculture Code, Chapter 12.

§26.200.Purpose.

(a) The purpose of these rules is to provide for a simple and efficient system for appeals of the federal food and nutrition programs administered by the department and the actions affecting participation in such programs.

(b) Appeals for FND Programs shall be conducted in accordance with the appeal procedures established by the U.S. Department of Agriculture Food and Nutrition Service (FNS) in Title 7 of the Code of Federal Regulations (CFR) Parts 210, 215, 220, 225, and 226, as applicable, this subchapter, and the FND program handbooks which are available on the department's website.

(c) The rules in this subchapter supplement the procedures set forth in the federal regulations.

§26.201.Definitions.

In addition to the definitions set out in 7 CFR Parts 210, 215, 220, 225, and 226, the following words, names, and terms shall have the following meanings, unless the context clearly indicates otherwise.

(1) Appellant--A person who files an appeal.

(2) ARO--Administrative Review Official; the independent and impartial official who conducts the appeal held in accordance with the federal food and nutrition program regulations (7 CFR Parts 210, 215, 220, 225, and 226, as applicable).

(3) CFR--Code of Federal Regulations.

(4) FND--Food and Nutrition Division of the department.

(5) FND Program--Any of the federal food and nutrition programs administered by FND which include the National School Lunch Program (NSLP), School Breakfast Program (SBP), Special Milk Program (SMP), Child and Adult Care Food Program (CACFP), and Summer Food Service Program (SFSP).

(6) Notice of action--A letter sent by the department by certified mail, return receipt (or the equivalent private delivery service) or by email that describes an action proposed or taken by the department regarding program reimbursement or participation.

§26.202.Appealable Actions.

The following actions proposed or taken by the department are subject to appeal:

(1) Denial of an application for program participation;

(2) Proposed disqualification from program participation;

(3) Proposed termination of a school food authority, institution, or sponsoring organization's program agreement with the department;

(4) Denial of an application for a sponsored facility, center, or site;

(5) Termination of a sponsored facility, center, or site;

(6) Denial or disallowance of all or a part of a claim for reimbursement (except for a denial based on a late submission);

(7) Recovery of all or a part of a claim for reimbursement through direct assessment or offset of future claims for, but not limited to, the following reasons: a claim that is not properly payable, the disallowance of funds for failure to take corrective action to comply with program requirements, or the disallowance of an overclaim;

(8) Demand for the remittance of an overpayment or return of an improper or unearned payment of program funds;

(9) Withholding of payment of program funds;

(10) Suspension of program participation for health or safety reasons;

(11) Proposed suspension of participation due to submission of a false or fraudulent claim;

(12) Denial of an application for start-up or expansion payments;

(13) Denial of a request for an advance payment of program funds;

(14) Recovery of all or part of an advance payment in excess of the claim for the applicable period, either through a demand for full repayment or an adjustment of subsequent payments;

(15) Denial of a food service management company's application for registration;

(16) Revocation of a food service management company's registration;

(17) Decision of the department not to forward to FNS an exception request for payment of a late claim, or a request for an upward adjustment to a claim; and

(18) Any other action of the department affecting program reimbursement or participation, including other actions that may be subject to appeal pursuant to 7 CFR Parts 210, 215, 220, 225, and 226.

§26.203.Appeal Procedures.

(a) Who may file. A person, or authorized representative, who has received a notice of action may file an appeal of an action described in §26.202 of this subchapter (relating to Appealable Actions).

(b) Methods of filing. An appeal may be filed by any of the following methods:

(1) Certified, registered, or standard mail;

(2) Email;

(3) Facsimile;

(4) Courier service; or

(5) Hand delivery.

(c) Time for filing. An appeal must be filed within the following filing deadlines.

(1) FND Programs except the Summer Food Service Program (SFSP) and suspension reviews relating to false or fraudulent claims.

(A) Certified, registered, or standard mail: An appeal must be mailed to the department's docket clerk at the address provided in the notice of action and postmarked within fifteen (15) calendar days of the date of receipt, or deemed receipt, of the notice of action.

(B) Email or facsimile: An appeal must be received by the department's docket clerk at the email address or facsimile number provided in the notice of action before 5:00 p.m. Central Time within fifteen (15) calendar days of the date of receipt, or deemed receipt, of the notice of action.

(C) Courier service or hand delivery: An appeal must be received by the department at its headquarters in Austin, Texas, before 5:00 p.m. Central Time within fifteen (15) calendar days of the date of receipt, or deemed receipt, of the notice of action.

(2) SFSP and suspension reviews relating to false or fraudulent claims. The rules for filing an appeal specified in paragraph (1) of this subsection apply to SFSP appeals and suspension reviews relating to false or fraudulent claims, except the time for filing an appeal is within ten (10) calendar days from the date of receipt, or deemed receipt, of the notice of action.

(d) Form of appeal. An appeal must:

(1) be in writing;

(2) state the basis for the appeal and specify the action(s) being appealed;

(3) include a legible copy of the notice of action; and

(4) clearly state which type of appeal the appellant is seeking:

(A) a review of written documentation submitted to the ARO; or

(B) a hearing before the ARO, which is informal and will be held at the department's headquarters in Austin, Texas. Failure to specifically request a hearing in the appeal letter shall constitute the appellant's waiver of the right to a hearing before the ARO. The ARO shall deny a request for a hearing submitted after the appeal letter has been received by the department's docket clerk, unless good cause is shown for failure to make a timely request.

(C) The option for a hearing is not available in certain matters and is limited by §26.206 of this subchapter (relating to Abbreviated Appeals) and §26.207 of this subchapter (relating to Suspension Reviews).

§26.204.Filing of Documents.

(a) To be considered, written documentation relating to a pending appeal must be filed with the department's docket clerk within the time prescribed in this section. Documents are filed only when received by the department's docket clerk. A document received after 5:00 p.m. Central Time on a business day is filed on the next business day.

(b) Parties to an appeal have the right to review any documentary materials submitted to the department's docket clerk. A party filing written materials with the docket clerk must serve, at the same time, a copy of the written materials on every other party or such party's representative or attorney of record.

(c) In all matters, except SFSP appeals and suspension reviews, an appellant must file written materials with the docket clerk within thirty (30) calendar days of the appellant's receipt, or deemed receipt, of the notice of action.

(d) In SFSP appeals, an appellant must file written materials with the docket clerk within seven (7) calendar days of submitting the appeal.

(e) In suspension reviews relating to false or fraudulent claims, an appellant must file written materials with the docket clerk within ten (10) calendar days of the appellant's receipt, or deemed receipt, of the notice of action.

(f) Documents may be filed with the docket clerk, and served on a party or such party's representative or attorney of record, by any of the filing methods specified in §26.203(b) of this subchapter (relating to Appeal Procedures).

(g) Service to the appellant or its representative shall be made to the appellant or representative's last known mailing address, email address, or facsimile number as shown by the department's records.

(h) Parties and their representatives shall immediately notify the ARO and all parties of any change in mailing address, email address, or telephone or facsimile number.

§26.205.Hearing Procedures.

(a) Motions.

(1) Motions in all matters, except in SFSP appeals, shall be filed in writing and served on all parties not less than seven (7) calendar days before the hearing, except for good cause shown. If the non-moving party files a response to the motion, the response must be filed no later than five (5) calendar days after receipt of the motion.

(2) Unless leave is granted by the ARO, motions in SFSP appeals may be filed up to forty-eight (48) hours prior to the hearing. If the non-moving party files a response to the motion, the response must be filed within forty-eight (48) hours of the receipt of the motion unless that time is extended or shortened by written order of the ARO.

(3) Motions shall set forth the specific grounds for which the moving party seeks the relief requested and shall make reference to all similar motions filed in the proceeding. The ARO shall rule on the motion in a timely fashion; however, the ARO may defer ruling on a motion until issuance of a final order.

(b) Rules of court. The formal rules of court shall not apply unless necessary for efficient conduct of the hearing.

(c) Evidence.

(1) The parties are not bound by the Rules of Evidence but shall be allowed to make lawful and pertinent objections to proffered evidence or testimony. Evidence will be admitted and given probative effect if it possesses probative value and is relevant as determined by the ARO. The ARO may limit the testimony of witnesses, or the introduction of documentary evidence, to those matters deemed probative and relevant.

(2) Service of documents on a party shall be made in accordance with §26.204 of this subchapter (relating to Filing of Documents).

§26.206.Abbreviated Appeals.

(a) This section applies only to the following actions by the department under the Child and Adult Care Food Program (CACFP):

(1) Denial of an institution's application for participation; or

(2) Proposed termination of an institution's program agreement with the department.

(b) The appeal shall be limited to a review of written information concerning the accuracy of the department's determination if the application was denied or the department proposes to terminate the institution's program agreement because:

(1) Information submitted on the application was false;

(2) The institution, one of its sponsored facilities, or one of the principals of the institution or its facilities is on the National disqualified list;

(3) The institution, one of its sponsored facilities, or one of the principals of the institution or its facilities is ineligible to participate in any other publicly funded program by reason of violation of the requirements of the program; or

(4) The institution, one of its sponsored facilities, or one of the principals of the institution or its facilities has been convicted for any activity that indicates a lack of business integrity.

§26.207.Suspension Reviews.

(a) This section applies only to a proposed suspension of an institution's participation based on a determination that the institution knowingly submitted a false or fraudulent claim.

(b) If the department determines that an institution knowingly submitted a false or fraudulent claim, the department may propose to suspend the institution's participation along with initiating actions of termination and disqualification.

(c) An institution may request a review of the proposed suspension. A suspension review shall be limited to a review of written information.

(d) A request for review and written documentation opposing the proposed suspension must be submitted to the suspension review official, as specified in the notice of proposed suspension, within ten (10) calendar days of the receipt, or deemed receipt, of the notice, in accordance with the filing procedures set forth in §26.203 of this subchapter (relating to Appeal Procedures) and §26.204 of this subchapter (relating to Filing of Documents).

§26.208.Standard of Review.

The decision of the ARO shall be based on a preponderance of the evidence. The burden of proof shall be on the department to show by a preponderance of the evidence that the action being appealed was taken or proposed in accordance with the program's regulations, rules, policy guidance, and directives.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 1, 2022.

TRD-202202469

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: August 14, 2022

For further information, please call: (512) 936-9360