CABINET FOR HEALTH AND FAMILY SERVICES

Department for Community Based Services

Division of Family Support

(Amendment)

 

      921 KAR 3:060. Administrative disqualification hearings and penalties.

 

      RELATES TO: KRS 205.231, 7 C.F.R. 273.15, 273.17, 7 U.S.C. 2015

      STATUTORY AUTHORITY: KRS Chapter 13B, 194A.010(2), 194A.050(1), 7 C.F.R. 271.4, 273.16

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 194A.010(2) requires the Cabinet for Health and Family Services to administer income-supplement programs that protect, develop, preserve, and maintain families and children in the Commonwealth. KRS 194A.050(1) requires the secretary to promulgate administrative regulations necessary to implement programs mandated by federal law or to qualify for the receipt of federal funds and necessary to cooperate with other state and federal agencies for the proper administration of the cabinet and its programs. 7 C.F.R. 271.4 requires each state to administer a Supplemental Nutrition Assistance Program (SNAP). 7 C.F.R. 273.16 requires the agency administering SNAP to provide a hearing process for individuals accused of intentionally violating a SNAP regulation and to implement penalties and disqualifications for such violations. KRS Chapter 13B establishes the hearing process to be followed in the Commonwealth. This administrative regulation establishes the procedures used by the cabinet in determining if an intentional program violation (IPV) has occurred and the penalties that shall be applied for an IPV.

 

      Section 1. Administrative Disqualification Hearings. (1) Unless a different procedure is specified in this administrative regulation, an administrative disqualification hearing shall:

      (a) Be conducted in accordance with 921 KAR 3:070 and KRS Chapter 13B; and

      (b) Include[:

1.] the issuance of an[a recommended order;

2. Procedures for written exceptions; and

3. The issuance of a final] order in accordance with the Correspondence from the Office of the Attorney General dated April 5, 2012.

      (2) The cabinet shall retain:

      (a) The official record of an administrative disqualification hearing until all appeals have been exhausted; and

      (b) A case record with an IPV disqualification indefinitely.

 

      Section 2. Intentional Program Violations. (1) If the cabinet suspects that an individual committed an IPV, as defined in 921 KAR 3:010, the cabinet shall:

      (a) Initiate an administrative disqualification hearing; or

      (b) If warranted by the facts of the case, refer the suspected IPV claim to the Office of the Inspector General (OIG) for investigation or referral for prosecution.

      (2) An administrative disqualification hearing may be initiated regardless of the current eligibility of an individual.

      (3) If the OIG determines that the IPV does not warrant investigation or referral for prosecution, the cabinet shall initiate an administrative disqualification hearing as specified in this administrative regulation.

 

      Section 3. Notification. (1) Form FS-80, Notice of SNAP Suspected Intentional Program Violation, shall serve as the notification to a household of the:

      (a) Cabinet's suspicion that an IPV has been committed;

      (b) Amount and period of the overpayment for the suspected IPV; and

      (c) Household's right to an administrative disqualification hearing.

      (2) The cabinet shall provide an individual suspected of an IPV a Form FS-80, Supplement A, Voluntary Waiver of SNAP Administrative Disqualification Hearing, which allows the individual to waive the right to an administrative disqualification hearing, with or without admitting an IPV was committed.

      (3) If the household does not return the FS-80 Supplement A, the cabinet shall schedule an administrative disqualification hearing in accordance with 7 C.F.R. 273.16(e)(3) and (4).

      (4) In accordance with KRS 13B.050, the administrative disqualification hearing notice shall be sent:

      (a) By certified mail, return receipt requested, to the individual; or

      (b) By another method, such as electronic or first class mail, if the individual waives his or her right to certified mail delivery under KRS 13B.050[To the addressee only; and

(c) With a return receipt requested].

      (5) The administrative disqualification hearing notice shall provide information as specified in 7 C.F.R. 273.16(e)(3)(iii).

      (6) In accordance with 7 C.F.R. 273.16(e)(2)(iii), the hearing officer shall advise the household member or representative that they may refuse to answer questions during the hearing.

      (7) The cabinet shall provide a household notice regarding the IPV determination in accordance with 7 C.F.R. 273.16(e)(9) and KRS 13B.120.

 

      Section 4. Timeframes. (1) Within the ninety (90) day timeframe specified in 7 C.F.R. 273.16(e)(2)(iv), the cabinet shall:

      (a) Conduct an administrative disqualification hearing; and

      (b) Issue a final order pursuant to the provisions established in 921 KAR 3:070, Section 14[17].

      (2) In accordance with 7 C.F.R. 273.16(e)(2)(iv), a hearing may be postponed:

      (a) One (1) time; and

      (b) For no more than thirty (30) days.

      (3) If a hearing is postponed, the time limit specified in subsection (1) of this section shall be extended for as many days as the hearing is postponed.

 

      Section 5. Hearing Attendance. (1) An administrative disqualification hearing shall be conducted in accordance with 7 C.F.R. 273.16(e)(4).

      (2) If a household member or representative cannot be located or does not appear for the administrative disqualification hearing, the hearing officer shall:

      (a) Conduct the hearing without the household member or representative;

      (b) Consider the evidence; and

      (c) Determine whether an intentional program violation was committed based on clear and convincing evidence[If a household representative does not appear for the administrative disqualification hearing, the hearing officer shall review the case file to determine if the hearing shall:

(a) Proceed without household representation, because the return receipt from the hearing notice verified the notice was received by the individual; or

(b) Not be conducted, because the hearing notice or return receipt is annotated as unclaimed or undeliverable].

      (3) In accordance with 7 C.F.R. 273.16(e)(4), the cabinet shall rescind a determination of an intentional program violation and conduct a new hearing upon an order of finding if the:

      (a) Household was not represented at the hearing;

      (b) Individual was determined to have committed an IPV; [and]

      (c)1. Individual, within ten (10) days of the scheduled hearing, establishes good cause for failure to appear in accordance with 921 KAR 3:070, Section 8(2); or

      2. Individual, within thirty (30) days after the date of the notice, establishes good cause for failure to appear in accordance with 921 KAR 3:070, Section 8(2)(f) by showing nonreceipt of the notice of hearing; and

      (d) Appeal Board for Public Assistance is not considering the same matter[Hearing officer later determines the household had good cause, in accordance with 921 KAR 3:070, Section 8(2), for not appearing].

 

      Section 6. Benefits and Participation. (1) In accordance with 7 C.F.R. 273.16(e)(5), the participation of a household suspected of an IPV shall not be affected by the suspected IPV until a disqualification is implemented based on the:

      (a) IPV being substantiated by the final order or a court of appropriate jurisdiction;

      (b) Individual waiving the right to an administrative disqualification hearing by completing, signing, and returning the FS-80, Supplement A; or

      (c) Individual completing, signing, and returning the form FS-111, Deferred Adjudication Disqualification Consent Agreement, pursuant to Section 7 of this administrative regulation.

      (2) If the cabinet's determination of an IPV is later reversed, the cabinet shall:

      (a) Reinstate the individual, if eligible; and

      (b) In accordance with 7 C.F.R. 273.17, restore benefits:

      1. That were lost as a result of the disqualification; and

      2. For no more than twelve (12) months.

 

      Section 7. Deferred Adjudication. (1) The cabinet shall accept a completed form FS-111, Deferred Adjudication Disqualification Consent Agreement, in a case of deferred adjudication pursuant to 7 C.F.R. 273.16(h).

      (2) In accordance with 7 C.F.R. 273.16(h), the cabinet shall notify an individual signing a FS-111 of the:

      (a) Consequences of consenting to disqualification;

      (b) Disqualification; and

      (c) Effective date of the disqualification.

 

      Section 8. Penalties. (1) In accordance with 7 C.F.R. 273.16(b), an individual shall be ineligible to participate in SNAP, if the individual has:

      (a) Committed an IPV, as determined by:

      1. An administrative disqualification hearing: or

      2. A court; or

      (b) Signed a waiver of right to an administrative disqualification hearing or a disqualification consent agreement.

      (2) The time periods for IPV disqualifications shall be implemented in accordance with 7 C.F.R. 273.16(b).

      (3) In accordance with 7 C.F.R. 273.16(b)(11), the cabinet shall only disqualify the individual who meets the criteria specified in subsection (1) of this section, not the entire household.

      (4) In accordance with 7 C.F.R. 273.16(b)(12), the cabinet shall hold the entire household responsible for making restitution on an overpayment, not just the disqualified individual.

      (5) The cabinet shall inform the household in writing of the disqualification penalties for committing an IPV each time the household applies for benefits.

 

      Section 9. Procedures for Appeal. In accordance with 7 C.F.R. 273.16(e)(8)(ii):

      (1) Further administrative appeal procedures shall not exist after an:

      (a) Administrative disqualification hearing determines that an IPV was committed; or

      (b) Individual waives the right to an administrative disqualification hearing;

      (2) A cabinet determination of an IPV shall not be reversed by a final order from a subsequent fair hearing; and

      (3) An individual determined to have committed an IPV may seek relief in a court having appropriate jurisdiction pursuant to KRS 13B.140.

 

      Section 10. Incorporation by Reference. (1) The following material is incorporated by reference:

      (a) The "Correspondence from the Office of Attorney General dated April 5, 2012", April 5, 2012;

      (b) "FS-80, Notice of SNAP Suspected Intentional Program Violation", 4/15[9/14];

      (c)[(b)] "FS-80, Supplement A, Voluntary Waiver of SNAP Administrative Disqualification Hearing", 9/14; and

      (d)[(c)] "FS-111, Deferred Adjudication Disqualification Consent Agreement", 9/14.

      (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Community-Based Services, 275 East Main Street, Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m.

 

TERESA C. JAMES, LCSW, Commissioner

AUDREY TAYSE HAYNES, Secretar

      APPROVED BY AGENCY: April27, 2015

      FILED WITH LRC: April 30, 2015 at 1 p.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall, if requested, be held on June 22, 2015, at 9:00 a.m. in the Health Services Auditorium, Health Services Building, First Floor, 275 East Main Street, Frankfort, Kentucky. Individuals interested in attending this hearing shall notify this agency in writing by June 15, 2015, five (5) workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. The hearing is open to the public. Any person who attends will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to attend the public hearing, you may submit written comments on the proposed administrative regulation. You may submit written comments regarding this proposed administrative regulation until June 30, 2015. Send written notification of intent to attend the public hearing or written comments on the proposed administrative regulation to:

      CONTACT PERSON: Tricia Orme, Office of Legal Services, 275 East Main Street 5 W-B, Frankfort, Kentucky 40601, phone 502-564-7905, fax 502-564-7573,  email tricia.orme@ky.gov.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact person: Elizabeth Caywood 

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation establishes the criteria used by the Cabinet for Health and Family Services, Department for Community Based Services in determining if an intentional program violation (IPV) has occurred in the Supplemental Nutrition Assistance Program (SNAP) and the penalties that shall be applied for said violation.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary in order to comply with 7 C.F.R. 273.16 and KRS Chapter 13B by establishing a hearing process for individuals suspected of intentionally violating a SNAP regulation.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: This administrative regulation conforms to the authorizing statutes by establishing a hearing process and penalties associated with intentional program violations of SNAP.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This administrative regulation currently assists in the effective administration of the statutes by developing a hearing process and establishing penalties for SNAP intentional program violations.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: The amendment to the administrative regulation incorporates an exemption to KRS Chapter 13B, administrative hearing requirements, as approved by the Office of the Attorney General to assure the state’s compliance with federally prescribed timeframes for SNAP administrative hearings. The amendment permits the individual subject to the administrative disqualification hearing to select a means for notification other than certified mail. The amendment also revises material incorporated by reference, form FS-80, Notice of SNAP Suspected Intentional Program Violation, by adding language to inform individuals of their rights during a disqualification hearing as required by the U.S. Department of Agriculture, Food and Nutrition Service (FNS). Lastly, the amendment makes technical corrections in accordance with federal requirements and KRS Chapter 13A.

      (b) The necessity of the amendment to this administrative regulation: The amendment to this administrative regulation is necessary to address findings from a recent federal review of the program and to avoid federal financial penalty.

      (c) How the amendment conforms to the content of the authorizing statutes: The amendment to this administrative regulation conforms to the content of the authorizing statutes by assuring conformity with federal requirements.

      (d) How the amendment will assist in the effective administration of the statutes: The amendment to this administrative regulation will assist in the effective administration of the statutes by informing individuals of their rights during a disqualification hearing as required by the federal administrating agency.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: This administrative regulation will affect SNAP recipients and potential applicants. There were 777,300 individuals comprising 373,355 households receiving SNAP benefits in Kentucky during February 2015.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: The amendment to this administrative regulation will not require any additional action on the part of SNAP applicants or recipients.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): Neither the amendment nor the administrative regulation involves any cost to SNAP applicants or recipients.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): All SNAP applicants and recipients will benefit from timely administrative hearings and their rights during a disqualification hearing more clearly stated on the program form. SNAP applicants and recipients may also indirectly benefit from the state maintaining federal resources to support the provisions of SNAP benefits.

      (5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:

      (a) Initially: The amendment to this administrative regulation is technical and conforming in nature and has no initial cost to implement.

      (b) On a continuing basis: The amendment to this administrative regulation is technical and conforming in nature and has no fiscal impact on a continuing basis.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: SNAP benefits are 100 percent federally funded through the United States Department of Agriculture. Program administrative costs are fifty (50) percent federally funded and fifty (50) percent state funded. Funding has been appropriated in the enacted budget.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment: The implementation of the amendment to this administrative regulation will not create an increase in fees or funding.

      (8) State whether or not this administrative regulation established any fees or directly or indirectly increased any fees: This administrative regulation does not establish any fees or directly or indirectly increase any fees

      (9) TIERING: Is tiering applied? Tiering is not applied, because this administrative regulation will be applied in a like manner on a statewide basis.

 

FEDERAL MANDATE ANALYSIS COMPARISON

 

      1. Federal statute or regulation constituting the federal mandate. 7 C.F.R. 271.4, 7 C.F.R 273.16

      2. State compliance standards. KRS Chapter 13B, KRS 194A.010(2), KRS 194A.050(1)

      3. Minimum or uniform standards contained in the federal mandate. The provisions of the administrative regulation comply with the federal mandate.

      4. Will this administrative regulation impose stricter requirements, or additional or different responsibilities or requirements, than those required by the federal mandate? The amendment to this administrative regulation will impose no stricter requirements, or additional or different responsibilities or requirements, than those required by the federal mandate.

      5. Justification for the imposition of the stricter standard, or additional or different responsibilities or requirements. Justification for the imposition of a stricter standard, or additional or different responsibilities or requirements, is not applicable.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      1. What units, parts, or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Cabinet for Health and Family Services, Department for Community Based Services will be impacted by this administrative regulation.

      2. Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS Chapter 13B, 194A.010(2), 194A.050(1), 7 C.F.R. 271.4, 7 C.F.R. 273.16

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? This administrative regulation does not generate revenue and will not generate any revenue for the state or local government in the first year.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? This administrative regulation does not generate revenue and will not generate any revenue for the state or local government in subsequent years.

      (c) How much will it cost to administer this program for the first year? No additional costs are necessary to administer this program for the first year.

      (d) How much will it cost to administer this program for subsequent years? No additional costs are necessary to administer this program for subsequent years.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

      Revenues (+/-):     

      Expenditures (+/-):     

      Other Explanation: