National Appeals Division Rules of Procedure

Proposed Rules

Federal Register

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Rules

DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 11

National Appeals Division Rules of Procedure

AGENCY: Office of the Secretary, National Appeals Division, USDA.

ACTION: Proposed rule.

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SUMMARY: The National Appeals Division (NAD) in the Office of the

Secretary proposes to add a new rule to implement Title II, Subtitle H,

of the Federal Crop Insurance Reform and Department of Agriculture

Reorganization Act of 1994 by setting forth procedures for program

participant appeals of adverse decisions by United States Department of

Agriculture (USDA) agency officials to the National Appeals Division

(NAD). This action also defines those appeals over which NAD has

jurisdiction.

DATES: Written comments via letter, facsimile, or Internet are invited

from interested individuals and organizations and must be received on

or before June 21, 1995.

ADDRESSES: Comments should be sent to L. Benjamin Young, Jr., Office of

the General Counsel, Research and Operations Division, AgBox 1415,

United States Department of Agriculture, Washington, D.C. 20250-1415;

fax number: 202/720-5837; Internet: hqdomain.lawpo.young@

sies.wsc.ag.gov.

FOR FURTHER INFORMATION CONTACT:

L. Benjamin Young, Jr. at the above address or 202/690-1979.

SUPPLEMENTARY INFORMATION:

Classification

be sent to L. Benjamin Young, Jr., Office of

the General Counsel, Research and Operations Division, AgBox 1415,

United States Department of Agriculture, Washington, D.C. 20250-1415;

fax number: 202/720-5837; Internet: hqdomain.lawpo.young@

sies.wsc.ag.gov.

FOR FURTHER INFORMATION CONTACT:

L. Benjamin Young, Jr. at the above address or 202/690-1979.

SUPPLEMENTARY INFORMATION:

Classification

This proposed rule has been reviewed under E.O. 12866, and it has

been determined that it is not a ``significant regulatory action'' rule

because it will not have an annual effect on the economy of $100

million or more or adversely and materially affect a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities. This rule will not create any serious inconsistencies or

otherwise interfere with actions taken or planned by another agency. It

will not materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs, or the rights and obligations of

recipients thereof, and does not raise novel legal or policy issues

arising out of legal mandates, the President's priorities, or

principles set forth in E.O. 12866.

Regulatory Flexibility Act

The Department certifies that this proposed rule will not have a

significant impact on a substantial number of small entities as defined

in the Regulatory Flexibility Act, Pub. L. 96-534, as amended (5 U.S.C.

601, et seq.).

Background and Purpose

al or policy issues

arising out of legal mandates, the President's priorities, or

principles set forth in E.O. 12866.

Regulatory Flexibility Act

The Department certifies that this proposed rule will not have a

significant impact on a substantial number of small entities as defined

in the Regulatory Flexibility Act, Pub. L. 96-534, as amended (5 U.S.C.

601, et seq.).

Background and Purpose

On December 27, 1994 (see 59 FR 66,517), the Secretary of

Agriculture noticed that the NAD was established pursuant to Title II,

Subtitle H of Pub. L. 103-354, the Federal Crop Insurance Reform and

Department of Agriculture Reorganization Act of 1994. NAD was assigned

responsibility for all administrative appeals formerly performed by the

National Appeals Division of the former Agricultural Stabilization and

Conservation Service and by the National Appeals Staff of the former

Farmers Home Administration, appeals arising from decisions of the

Federal Crop Insurance Corporation and the former Soil Conservation

Service, appeals arising from decisions of the successor agencies to

the foregoing agencies established by the Secretary, and such other

administrative appeals arising from decisions of agencies and offices

of USDA as may in the future be assigned by the Secretary. Conforming

changes to the regulations of the affected agencies will be published

with the final rule.

This proposed part sets forth the jurisdiction of the NAD and the

procedures appellants and agencies must follow upon appeal of adverse

decisions by covered USDA program ``participants'' as defined in detail

in the proposed part

ces

of USDA as may in the future be assigned by the Secretary. Conforming

changes to the regulations of the affected agencies will be published

with the final rule.

This proposed part sets forth the jurisdiction of the NAD and the

procedures appellants and agencies must follow upon appeal of adverse

decisions by covered USDA program ``participants'' as defined in detail

in the proposed part.

The proposed part defines ``adverse decisions'' to include denial

of equitable relief to a program participant by an officer, employee,

or committee of an agency or the failure of an officer, employee, or

committee of an agency to issue a decision or otherwise act on the

request or right of the participant, but to exclude decisions over

which the Agriculture Board of Contract Appeals would have

jurisdiction. ``Agency'' includes the Consolidated Farm Service Agency,

the Commodity Credit Corporation, the Farmers Home Administration, the

Federal Crop Insurance Corporation, the Rural Business and Cooperative

Development Service, the Rural Development Administration, the Rural

Housing and Community Development Service, the Natural Resources and

Conservation Service, a State, county, or area committee established

under section 8(b)(5) of the Soil Conservation and Domestic Allotment

Act (16 U.S.C. 590h(b)(5)), any successor agency to the above-named

agencies, and any other agency or office of the Department that the

Secretary may designate. Designation of other agencies or offices by

the Secretary shall be accomplished by virtue of a delegation of

authority to NAD by the Secretary, or by future amendment of these

rules by the Secretary.

These rules would apply to any adverse decision issued by any

agency on or after October 20, 1994, and to any appeals or requests

pending before an agency, including any predecessor agency, prior to

October 20, 1994.

The proposed part would be applicable to adverse decisions with

respect to: (1) Denial of participation in any program of an agency;

amendment of these

rules by the Secretary.

These rules would apply to any adverse decision issued by any

agency on or after October 20, 1994, and to any appeals or requests

pending before an agency, including any predecessor agency, prior to

October 20, 1994.

The proposed part would be applicable to adverse decisions with

respect to: (1) Denial of participation in any program of an agency;

(2) compliance with program requirements; and (3) the making or amount

of payments or other program benefits to a participant in any program

of an agency.

The proposed part preserves participants' rights to avail

themselves of certain informal agency review processes prior to

instituting an appeal under the proposed part.

The proposed part states that the Administrative Procedure Act, the

Equal Access to Justice Act, and the Federal Rules of Evidence do not

apply to proceedings under the proposed part.

The proposed part provides filing requirements and deadlines,

evidentiary hearing procedures for appeals of adverse decisions

(including rules applicable to the issuance of subpoenas), procedures

for NAD Director review of an agency determination that

a decision is not appealable, and procedures for NAD Director review of

hearing officer determinations.

The proposed part provides for judicial review of final

determinations of NAD.

List of Subjects in 7 CFR Part 11

Administrative practice and procedure, Agriculture, Agricultural

commodities, Crop insurance, Ex parte communications, Farmers, Federal

aid programs, Loan programs, Price support programs, Soil conservation.

For the reasons set out in the preamble, Title 7, Subtitle A, of

the Code of Federal Regulations is amended by adding Part 11 to read as

follows:

PART 11--NATIONAL APPEALS DIVISION RULES OF PROCEDURE

practice and procedure, Agriculture, Agricultural

commodities, Crop insurance, Ex parte communications, Farmers, Federal

aid programs, Loan programs, Price support programs, Soil conservation.

For the reasons set out in the preamble, Title 7, Subtitle A, of

the Code of Federal Regulations is amended by adding Part 11 to read as

follows:

PART 11--NATIONAL APPEALS DIVISION RULES OF PROCEDURE

Sec.

11.1 Definitions.

11.2 General statement.

11.3 Applicability.

11.4 Inapplicability of other laws and regulations.

11.5 Informal agency hearings and exhaustion.

11.6 Right of participants to Division hearing or Director review

of agency determination of appealability.

11.7 Division hearings.

11.8 Director review of determinations of Hearing Officers.

11.9 Bases for determinations.

11.10 Effective date and implementation of final determinations of

the Division.

11.11 Judicial review.

11.12 Filing of appeals and computation of time.

Authority: 5 U.S.C. 301; Title II, Subtitle H, Pub. L. 103-354,

108 Stat. 3228 (7 U.S.C. 6991); Reorganization Plan No. 2 of 1953 (5

U.S.C. App.).

Sec. 11.1 Definitions.

For purposes of this part:

Adverse decision means an administrative decision made by an

officer, employee, or committee of an agency that is adverse to a

participant. The term includes a denial of equitable relief by an

agency or the failure of an agency to issue a decision or otherwise act

on the request or right of the participant within timeframes specified

by agency program regulations. The term does not include a decision

over which the Board of Contract Appeals has jurisdiction.

Agency means:

(1) The Consolidated Farm Service Agency;

(2) The Commodity Credit Corporation;

(3) The Farmers Home Administration;

(4) The Federal Crop Insurance Corporation;

(5) The Rural Business and Cooperative Development Service;

(6) The Rural Development Administration;

(7) The Rural Housing and Community Development Service;

(8) The Natural Resources Conservation Service;

as jurisdiction.

Agency means:

(1) The Consolidated Farm Service Agency;

(2) The Commodity Credit Corporation;

(3) The Farmers Home Administration;

(4) The Federal Crop Insurance Corporation;

(5) The Rural Business and Cooperative Development Service;

(6) The Rural Development Administration;

(7) The Rural Housing and Community Development Service;

(8) The Natural Resources Conservation Service;

(9) A State, county, or area committee established under section

8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C.

590h(b)(5)); and

(10) Any successor agency to the above-named agencies, and any other

agency or office of the Department which the Secretary may designate.

Agency record means all the materials maintained by an agency

related to an adverse decision which are submitted to the Division by

an agency for consideration in connection with an appeal under this

part , but shall not include records or information not directly

related to the adverse decision at issue. All materials contained in

the agency record submitted to the Division shall be deemed admitted as

evidence for purposes of a hearing or a record review under Sec. 11.7.

Agency representative means any person, whether or not an attorney,

who is authorized to represent the agency in an administrative appeal

under this part.

Appeal means a written request by a participant asking for review

by the National Appeals Division of an adverse decision under this

part.

Appellant means any participant who appeals an adverse decision in

accordance with this part. Unless separately set forth in this part,

the term ``appellant'' includes an authorized representative.

Authorized representative means any person, whether or not an

attorney, who is authorized in writing by a participant, consistent

with Sec. 11.6(a), to act for the participant in an administrative

appeal under this part

ticipant who appeals an adverse decision in

accordance with this part. Unless separately set forth in this part,

the term ``appellant'' includes an authorized representative.

Authorized representative means any person, whether or not an

attorney, who is authorized in writing by a participant, consistent

with Sec. 11.6(a), to act for the participant in an administrative

appeal under this part. The authorized representative may act on behalf

of the participant except when the provisions of this part require

action by the participant or appellant personally.

Case record means all the materials maintained by the Secretary

related to an adverse decision. The case record includes both the

agency record and the hearing record.

Days means calendar days unless otherwise specified.

Department means the United States Department of Agriculture.

Director means the Director of the Division or a designee of the

Director.

Division means the National Appeals Division established by this

part.

Equitable relief means relief which is authorized under section 326

of the Food and Agriculture Act of 1962 (7 U.S.C. 1339a) and other laws

administered by the agency.

Ex parte communication means an oral or written communication not

contained in the hearing record with respect to which reasonable prior

notice to all parties is not given, but it shall not include requests

for status reports on any matter or proceeding connected with the

appeal involved.

Hearing except with respect to Sec. 11.5, means a proceeding before

the Division to afford a participant the opportunity to present

testimony or documentary evidence or both in order to have a previous

determination reversed and to show why an adverse determination was not

proper.

Hearing Officer means an individual employed by the Division who

conducts the hearing and determines appeals of adverse decisions by any

agency.

Hearing record means all documents, evidence, and other materials

generated in relation to a hearing under Sec. 11.7

entary evidence or both in order to have a previous

determination reversed and to show why an adverse determination was not

proper.

Hearing Officer means an individual employed by the Division who

conducts the hearing and determines appeals of adverse decisions by any

agency.

Hearing record means all documents, evidence, and other materials

generated in relation to a hearing under Sec. 11.7.

Implement means the taking of action by an agency of the Department

in order fully and promptly to effectuate a final determination of the

Division.

Participant means any individual or entity whose right to

participate in or receive a payment, loan, loan guarantee, or other

benefit in accordance with any program of an agency to which these

regulations apply is affected by a decision of such agency, including a

decision by a reinsured company which is authorized by the Federal Crop

Insurance Corporation to issue insurance policies. The term does not

include:

(1) Participants in programs subject to adjudicatory proceedings

under the Rules of Practice Governing Formal Adjudicatory Proceedings

Instituted by the Secretary under Various Statues, 7 CFR Part 1,

Subpart H;

(2) Participants in programs governed by Federal contracting laws

and regulations (appealable under other rules and to other forums,

including to the Department's Board of Contract Appeals under 7 CFR

part 24);

(3) Appellants from decisions to deny the release of information

sought by members of the public under the Freedom of Information Act

(appealable under 7 CFR Part 1, Subpart A);

(4) Participants in suspension and debarment disputes, including,

but not limited to, those falling within the scope of 7 CFR Parts 1407

and 3017;

(5) Participants in export programs administered by the Commodity

Credit Corporation;

(6) Reinsured companies engaged in disputes with the Federal Crop

Insurance Corporation;

reedom of Information Act

(appealable under 7 CFR Part 1, Subpart A);

(4) Participants in suspension and debarment disputes, including,

but not limited to, those falling within the scope of 7 CFR Parts 1407

and 3017;

(5) Participants in export programs administered by the Commodity

Credit Corporation;

(6) Reinsured companies engaged in disputes with the Federal Crop

Insurance Corporation;

(7) Tenants prosecuting grievances or appeals pursuant to the

provisions of 7 CFR Part 1944, Subpart L, under the multi-family

housing program carried out by the Rural Housing and Community

Development Service;

(8) Persons having personnel, equal employment opportunity, and

other similar disputes with any agency or office of the Department

which arise out of the employment relationship;

(9) Persons pursuing claims against the United States arising under

the Federal Tort Claims Act, 28 U.S.C. 2671 et seq., or the Military

Personnel and Civilian Employees Claims Act of 1964, 31 U.S.C. 3721; or

(10) Program participants pursuing claims under the

nondiscrimination regulations at 7 CFR parts 15, 15a, 15b, and 15e.

Record review means an appeal considered by the Hearing Officer in

which the Hearing Officer's determination is based on the agency record

and other information submitted by the appellant and the agency,

including information submitted by affidavit or declaration.

Secretary means the Secretary of Agriculture.

Sec. 11.2 General statement.

ation regulations at 7 CFR parts 15, 15a, 15b, and 15e.

Record review means an appeal considered by the Hearing Officer in

which the Hearing Officer's determination is based on the agency record

and other information submitted by the appellant and the agency,

including information submitted by affidavit or declaration.

Secretary means the Secretary of Agriculture.

Sec. 11.2 General statement.

This part sets forth procedures for proceedings before the National

Appeals Division within the Department. The Division is an organization

within the Department which is independent from all other agencies and

offices of the Department, including Department officials at the state

and local level. The Director of the Division reports directly to the

Secretary of Agriculture. The authority of the Hearing Officers and the

Director of the Division, and the administrative appeal procedures

which must be followed by program participants who desire to appeal an

adverse decision and by the agency which issued the adverse decision,

are included in this part.

Sec. 11.3 Applicability.

(a) Subject matter. The regulations contained in this part are

applicable to adverse decisions made by an agency, including, for

example, those with respect to:

(1) Denial of participation in, or receipt of benefits under, any

program of an agency;

(2) Compliance with program requirements; and

(3) The making or amount of payments of other program benefits to a

participant in any program of an agency.

t matter. The regulations contained in this part are

applicable to adverse decisions made by an agency, including, for

example, those with respect to:

(1) Denial of participation in, or receipt of benefits under, any

program of an agency;

(2) Compliance with program requirements; and

(3) The making or amount of payments of other program benefits to a

participant in any program of an agency.

(b) Effective date. This part is applicable to:

(1) Any adverse decision issued by any agency on or after October

20, 1994; and

(2) All appeals or requests for reconsideration which were pending

before any agency, including any predecessor agency abolished by the

Secretary pursuant to the Federal Crop Insurance Reform and Department

of Agriculture Reorganization Act of 1994, Pub. L. 103-354, 108 Stat.

3178, prior to October 20, 1994.

Sec. 11.4 Inapplicability of other laws and regulations.

The provisions of the Administrative Procedure Act, as amended, 5

U.S.C. 551, et seq., are not applicable to proceedings under this part.

The Equal Access to Justice Act, as amended, 5 U.S.C. 504, does not

apply to these proceedings. The Federal Rules of Evidence, 28 U.S.C.

App., shall not apply to these proceedings.

Sec. 11.5 Informal agency hearings and exhaustion.

(a) Required exhaustion of informal hearing options. No

administrative decision issued at the field service office level by an

officer or employee of the Consolidated Farm Service Agency, or by any

employee of a county or area committee established under section

8(b)(5) of the Soil Conservation and Domestic Allotment Act, 16 U.S.C

ceedings.

Sec. 11.5 Informal agency hearings and exhaustion.

(a) Required exhaustion of informal hearing options. No

administrative decision issued at the field service office level by an

officer or employee of the Consolidated Farm Service Agency, or by any

employee of a county or area committee established under section

8(b)(5) of the Soil Conservation and Domestic Allotment Act, 16 U.S.C.

590h(b)(5), shall be considered to be an adverse decision for purposes

of the provisions of this part until a program participant has

perfected an informal appeal to and received a decision thereon from

the county or area committee with responsibility for the administrative

decision at issue, and any program participant shall be required to

exhaust his or her right to informal review by such county or area

committee prior to seeking review by the Division under the provisions

of this part.

(b) Optional informal hearings. If an officer or employee of an

agency of the Department makes an adverse decision, at the request of

the participant the agency shall hold an informal hearing on or conduct

an informal review of the decision. A participant is encouraged to

utilize an agency's informal review process initially, and may do so

without prejudice to the participant's right subsequently to appeal the

agency's decision to the Division. A participant shall also have the

right to utilize any available alternative dispute resolution or

mediation program, including any mediation program available under

title V of the Agriculture Credit Act of 1987, 7 U.S.C. 5101 et seq.,

in order to seek an informal review of any adverse decision prior to

any appeal of such decision to the Division in accordance with this

part.

Sec. 11.6 Right of participants to division hearing or Director review

of agency determination of appealability.

mediation program, including any mediation program available under

title V of the Agriculture Credit Act of 1987, 7 U.S.C. 5101 et seq.,

in order to seek an informal review of any adverse decision prior to

any appeal of such decision to the Division in accordance with this

part.

Sec. 11.6 Right of participants to division hearing or Director review

of agency determination of appealability.

(a) Right of participants. A participant has the right to appeal an

adverse decision to the Division for an evidentiary hearing by a

Hearing Officer consistent with Sec. 11.7. If an officer, employee, or

committee of an agency determines that an agency decision is not

applicable, the participant may request a review of that determination

by the Director pursuant to paragraph (b) of this section. If a

participant is represented by an unauthorized representative, the

authorized representative must file a declaration with NAD, executed in

accordance with 28 U.S.C. 1746, stating that the participant has duly

authorized the declarant in writing to represent the participant for

purposes of a specified adverse decision or decisions, and attach a

copy of the written authorization to the declaration.

(b) Director review of agency determination of appealability. (1)

Not later than 30 days after the date on which a participant receives a

determination from an agency that an agency decision is not appealable,

the participant must submit a written request to the Director to review

the determination in order to be entitled to such review by the

Director.

tten authorization to the declaration.

(b) Director review of agency determination of appealability. (1)

Not later than 30 days after the date on which a participant receives a

determination from an agency that an agency decision is not appealable,

the participant must submit a written request to the Director to review

the determination in order to be entitled to such review by the

Director.

(2) The Director will conduct a review of a determination that an

agency decision is not appealable using any information the Director

determines is necessary. Based on such review, the Director will issue

a final determination notice that upholds or reverses the determination

of the agency. This final determination is not appealable. If the

Director will notify the participant and the agency of that decision

and inform the participant of his or her right to proceed with an

appeal.

(3) The Director may delegate his or her authority to conduct a

review under this subsection to any Deputy or Associate Directors of

the Division. In any case in which such review is conducted by a Deputy

or Associate Director under authority delegated by the Director, the

Deputy or Associate Director's determination shall be considered to be

the determination of the Director and shall be final and not

appealable.

(c) Appeals of adverse decisions. (1) To be entitled to a hearing

under Sec. 11.7, a participant personally must request

such hearing not later than 30 days after the date on

which the participant first received notice of the adverse decision. In

the case of the failure of an agency to act on the request or right of

a recipient, a participant personally must request such hearing not

later than 30 days after the participant knew or should have known that

the agency had not acted within the timeframes specified by agency

program regulations, or, where such regulations specify no timeframes,

not later than 30 days after the participant reasonably should have

known of the agency's failure to act.

r right of

a recipient, a participant personally must request such hearing not

later than 30 days after the participant knew or should have known that

the agency had not acted within the timeframes specified by agency

program regulations, or, where such regulations specify no timeframes,

not later than 30 days after the participant reasonably should have

known of the agency's failure to act.

(2) A request for a hearing shall be in writing and personally

signed by the participant, and shall include a copy of the adverse

decision to be reviewed, if available, along with a brief statement of

the participant's reasons for believing that the decision, or the

agency's failure to act, was wrong. Instead of a hearing, the

participant may request a record review.

Sec. 11.7 Division hearings.

(a) General rules. (1) The Director, the Hearing Officer, and the

appellant shall have access to the agency record or any adverse

decision appealed to the Division for a hearing.

(2) The Director and Hearing Officer shall have the authority to

administer oaths and affirmations, and to require, by subpoena, the

attendance of witnesses and the production of evidence.

(i) A subpoena requiring the production of evidence may be

requested and issued at any time while the case is pending before the

Division.

(ii) An appellant or an agency, acting through any appropriate

official, may request issuance of a subpoena requiring the attendance

of a witness by submitting such a request in writing at least 14 days

before the scheduled date of a hearing.

f evidence.

(i) A subpoena requiring the production of evidence may be

requested and issued at any time while the case is pending before the

Division.

(ii) An appellant or an agency, acting through any appropriate

official, may request issuance of a subpoena requiring the attendance

of a witness by submitting such a request in writing at least 14 days

before the scheduled date of a hearing.

(iii) A subpoena shall be issued only if the Director or a Hearing

Officer determines that:

(A) For a subpoena of documents, the appellant or the agency has

established that production of documentary evidence is necessary and is

reasonably calculated to lead to information which would affect the

final determination or is necessary to fully present the case before

the Division; or

(B) For a subpoena of a witness, the appellant or the agency has

established that either a representative of the Department or a private

individual possesses information that is pertinent and necessary for

disclosure of all relevant facts which could impact the final

determination, that the information cannot be obtained except through

testimony of the person, and that the testimony cannot be obtained

absent issuance of a subpoena.

(iv) The party requesting issuance of a subpoena shall arrange for

service. Service of a subpoena upon a person named therein may be made

by registered or certified mail, or in person. Personal service shall

be made by personal delivery of a copy of the subpoena to the person

named therein by any person who is not a party and who is not less than

18 years of age. Proof of service shall be made by filing with the

Hearing Officer or Director who issued the subpoena a statement of the

data and manner of service and of the names of the persons served,

certified by the person who made the service in person or by return

receipts for certified or registered mail.

person

named therein by any person who is not a party and who is not less than

18 years of age. Proof of service shall be made by filing with the

Hearing Officer or Director who issued the subpoena a statement of the

data and manner of service and of the names of the persons served,

certified by the person who made the service in person or by return

receipts for certified or registered mail.

(v) The party at whose instance a subpoena is issued shall be

responsible for the payment of any travel and subsistence costs

incurred by the witness in connection with his or her appearance and

any fees of a person who serves the subpoena in person. The Department

shall pay the costs associated with the appearance of Department

employees regardless of the party requesting the subpoena. The failure

to make payment of such charges on demand may be deemed by the Hearing

Officer or Director as sufficient ground for striking the testimony of

the witness and the evidence the witness has produced.

(vi) If a person refuses to obey a subpoena, the Director, acting

through the Office of General Counsel of the Department and the

Department of the Justice, may apply to the United States District

Court in the jurisdiction where that person resides to have the

subpoena enforced as provided in the Federal Rules of Civil Procedure

(28 U.S.C. App.).

(3) Testimony required by subpoena pursuant to paragraph (a)(2) of

this section may, at the discretion of the Director or a Hearing

Officer, be presented at the hearing either in person or

telephonically.

(4) Ex parte communication. (i)(A) At no time between the filing of

an appeal and the issuance of a final determination by the Director

shall the Hearing Officer or the Director engage in ex parte

communications regarding the merits of the appeal with any person

having any interest in the appeal pending before the Division,

including any person in an advocacy or investigative capacity. This

prohibition does not apply to:

)(A) At no time between the filing of

an appeal and the issuance of a final determination by the Director

shall the Hearing Officer or the Director engage in ex parte

communications regarding the merits of the appeal with any person

having any interest in the appeal pending before the Division,

including any person in an advocacy or investigative capacity. This

prohibition does not apply to:

(1) Discussion of procedural matters related to an appeal; or

(2) Discussions of the merits of the appeal with such a person by

the Hearing Officer or the Director where all parties to the appeal

have been given notice and an opportunity to participate.

(B) In the case of a communication described in paragraph

(a)(4)(i)(A)(2) of this section, a memorandum of any such discussion

shall be included in the hearing record.

(ii) No interested person shall make or knowingly cause to be made

to the Hearing Officer or the Director an ex parte communications

relevant to the merits of the appeal.

(iii) If the Hearing Officer or Director receives an ex parte

communication in violation of this section, the one who receives the

communication shall place in the hearing record:

(A) All such written communications;

(B) Memoranda stating the substance of all such oral

communications; and

(C) All written responses to such communications, and memoranda

stating the substance of any oral responses thereto, made by the

Hearing Officer or Director.

(iv) Upon receipt of a communication knowingly made or knowingly

caused to be made by a party in violation of this section the Hearing

Officer or Director may, to the extent consistent with the interests of

justice and the policy of the underlying program, require the party to

show cause why such party's claim or interest in the appeal should not

be dismissed, denied, disregarded, or otherwise adversely affected on

account of such violation.

or knowingly

caused to be made by a party in violation of this section the Hearing

Officer or Director may, to the extent consistent with the interests of

justice and the policy of the underlying program, require the party to

show cause why such party's claim or interest in the appeal should not

be dismissed, denied, disregarded, or otherwise adversely affected on

account of such violation.

(b) Hearing procedures applicable to both record review and

hearings. (1) Upon the filing of an appeal under this part of an

adverse decision by any agency, the agency promptly shall provide the

Division with a copy of the agency record. If requested by the

appellant prior to the hearing, a copy of such agency record shall be

provided promptly to the appellant by the agency.

(2) The Director shall assign the appeal to a Hearing Officer and

shall notify the appellant and agency of such assignment. The notice

also shall advise the appellant and the agency of the documents

required to be submitted under paragraph (c)(2), of this section and

notify the appellant of the option of having a hearing by telephone.

(3) The Hearing Officer will receive evidence into the hearing

record without regard to whether the evidence was known to the agency

officer, employee, or committee making the adverse decision at the time

the adverse decision was made.

(c) Procedures applicable only to hearings. (1) Upon a timely

request for a hearing under Sec. 11.61(c), an appellant

has the right to have a hearing by the Division on any

adverse decision within 45 days after the date of receipt of the

request for the hearing by the Division.

(2) The Hearing Officer shall set a deadline for submission of the

following documents not less than 28 days prior to the hearing:

pplicable only to hearings. (1) Upon a timely

request for a hearing under Sec. 11.61(c), an appellant

has the right to have a hearing by the Division on any

adverse decision within 45 days after the date of receipt of the

request for the hearing by the Division.

(2) The Hearing Officer shall set a deadline for submission of the

following documents not less than 28 days prior to the hearing:

(i) By the appellant:

(A) A short statement of why the decision is wrong;

(B) A copy of our list of documents the appellant anticipates

introducing at the hearing; and

(C) A list of anticipated witnesses, or instead, brief descriptions

of the evidence the appellant's witnesses will offer.

(ii) By the agency:

(A) A copy of the adverse decision challenged by the appellant;

(B) A written explanation of the agency's position, including the

regulatory or statutory basis therefor;

(C) A copy of or list of documents the agency anticipates

introducing at the hearing; and

(D) A list of anticipated witnesses, or instead, brief descriptions

of the evidence the appellant's witnesses will offer.

(3) Not less than 21 days prior to the hearing, the Division must

provide the appellant, the authorized representative, and the agency a

notice of hearing identifying the time, date, and place of the hearing.

The hearing will be held in the State of residence of the appellant, as

determined by the Hearing Officer, or at a location that is otherwise

convenient to the appellant and the Division. The notice also shall

notify the appellant of the right to obtain a transcript of the hearing

and the procedures for obtaining such transcript.

f hearing identifying the time, date, and place of the hearing.

The hearing will be held in the State of residence of the appellant, as

determined by the Hearing Officer, or at a location that is otherwise

convenient to the appellant and the Division. The notice also shall

notify the appellant of the right to obtain a transcript of the hearing

and the procedures for obtaining such transcript.

(4) Conduct of the hearing. (i) A hearing before a Hearing Officer

will be in person unless the appellant agrees to a hearing by

telephone.

(ii) The hearing will be conducted by the Hearing Officer in the

manner determined by the Division most likely to obtain the facts

relevant to the matter or matters at issue. The Hearing Officer will

allow the presentation of evidence at the hearing without regard to

whether the evidence was known to the agency officer, employee, or

committee making the adverse decision at the time the adverse decision

was made. The Hearing Officer may confine the presentation of facts and

evidence to pertinent matters and exclude irrelevant, immaterial, or

unduly repetitious evidence, information, or questions. The Hearing

Officer may request or permit individuals other than those appearing on

behalf of the appellant to present information or evidence at such

hearing. The appellant shall have the opportunity to present oral and

documentary evidence, oral testimony of witnesses, and arguments in

support of the appellant's appeal; controvert evidence relied on by the

agency; and question all witnesses. When appropriate, agency witnesses

requested by the appellant will be made available at the hearing. Any

evidence may be received by the Hearing Officer without regard to

whether that evidence could be admitted in judicial proceedings.

(iii)(A) Official recording of the hearing in the form of a

verbatim transcript may be made if:

evidence relied on by the

agency; and question all witnesses. When appropriate, agency witnesses

requested by the appellant will be made available at the hearing. Any

evidence may be received by the Hearing Officer without regard to

whether that evidence could be admitted in judicial proceedings.

(iii)(A) Official recording of the hearing in the form of a

verbatim transcript may be made if:

(1) The appellant or the agency requests the Hearing Officer to

arrange for such a transcript at least 14 days prior to the hearing and

agrees to pay the expenses of the transcription service; or

(2) The Director determines that such a transcript is appropriate.

(B) In cases in which the appellant requests the transcript, the

Hearing Officer will provide the appellant and the authorized

representative with the name of the transcription service and an

estimate of the cost of such service. After receiving an estimate of

such cost, the appellant may withdraw the request for transcription

services prior to the hearing, but, in such cases, the appellant will

be responsible for all costs to the Division associated with the

cancellation of such service. Unofficial recording of a hearing by a

voice recorder or the use of an unauthorized transcription service may

be permitted but such recording shall not be an official recording of

the hearing and will not be made part of either the hearing record or

the case record.

n such cases, the appellant will

be responsible for all costs to the Division associated with the

cancellation of such service. Unofficial recording of a hearing by a

voice recorder or the use of an unauthorized transcription service may

be permitted but such recording shall not be an official recording of

the hearing and will not be made part of either the hearing record or

the case record.

(5) Absence of parties. (i) If at the time scheduled for the

hearing either the appellant or the agency representative is absent,

and no appearance is made on behalf of such absent party, or no

arrangements have been made for rescheduling the hearing, the Hearing

Officer has the option to cancel the hearing, in which case the Hearing

Officer will:

(A) Treat the appeal as a record review and issue a determination

based on the agency record as submitted by the agency and the hearing

record developed prior to the hearing date;

(B) Accept evidence into the hearing record submitted by other

persons present at the hearing, and then issue a determination; or

(C) Dismiss the appeal.

(ii) In appropriate cases, the Hearing Officer will add any

additional evidence to the hearing record, provide a copy of such

evidence to the absent party or parties, and allow the absent party or

parties 10 days to provide a response to such additional evidence for

inclusion in the hearing record.

(6) Post-hearing procedure. The Hearing Officer will leave the

hearing record open after the hearing for 10 days, or for such other

period of time as the Hearing Officer shall establish, to allow the

submission of information by the appellant or the agency, to the extent

necessary to respond to new facts, information, arguments, or evidence

presented or raised at the hearing. Any such new information will be

added by the Hearing Officer to the hearing record and sent to the

other party or parties by the submitter of the information

time as the Hearing Officer shall establish, to allow the

submission of information by the appellant or the agency, to the extent

necessary to respond to new facts, information, arguments, or evidence

presented or raised at the hearing. Any such new information will be

added by the Hearing Officer to the hearing record and sent to the

other party or parties by the submitter of the information. The Hearing

Officer, in his or her discretion, may permit the other party or

parties to respond to this post-hearing submission.

(d) Interlocutory review. Interlocutory review by the Director of

rulings of a Hearing Officer are not permitted under the procedures of

this part.

(e) Burden of proof. The appellant has the burden of proving that

the adverse decision of the agency was erroneous by a preponderance of

the evidence.

(f) Timing of issuance of determination. The Hearing Officer will

issue a notice of the determination on the appeal to the appellant,

personally, the authorized representative, and the agency not later

than 30 days after a hearing or the closing date of the hearing record

in cases in which the Hearing Officer receives additional evidence from

the agency or appellant after a hearing. In the case of a record

review, the Hearing Officer will issue a notice of determination within

45 days of receipt of the appellant's request for a record review. Upon

the Hearing Officer's request, the Director may establish an earlier or

later deadline. If the determination is not appealed to the Director

for review under Sec. 11.8, the notice provided by the Hearing Officer

shall be considered to be an notice of a final determination under this

part.

Sec. 11.8 Director review of determinations of Hearing Officers.

nd such other

arguments or information as may be accepted by the Director. Based on

such review, the Director will issue a final determination notice that

upholds, reverses, or modifies the determination of the Hearing

Officer. The Director's determination upon review of a Hearing

Officer's decision shall be considered to be the final determination

under this part and shall not be appealable. However, if the Director

determines that the hearing record is inadequate, the Director may

remind all or a portion of the determination to the Hearing Officer for

further proceedings to complete the hearing record or, at the option of

the Director, to hold a new hearing.

(2) The Director will complete the review and either issue a final

determination or remand the determination not later than--

(i) 10 business days after receipt of the request for review, in

the case of a request by the head of an agency; or

(ii) 30 business days after receipt of the request for review, in

the case of a request by an appellant.

(3) In any case or any category of cases, the Director may delegate

his or her authority to conduct a review under this section to any

Deputy or Associate Directors of the Division. In any case in which

such review is conducted by a Deputy or Associate Director under

authority delegated by the Director, the Deputy or Associate Director's

determination shall be considered to be the determination of the

Director under this part and shall be final and not appealable.

(d) Equitable relief. In reaching a decision on an appeal, the

Director shall have the authority to grant equitable relief under this

part in the same manner and to the same extent as such authority is

provided an agency under applicable laws and regulations.

Sec. 11.9 Bases for determinations.

(a) The Hearing Officers and the Director are not bound by previous

findings of facts by the agency in making a determination.

ching a decision on an appeal, the

Director shall have the authority to grant equitable relief under this

part in the same manner and to the same extent as such authority is

provided an agency under applicable laws and regulations.

Sec. 11.9 Bases for determinations.

(a) The Hearing Officers and the Director are not bound by previous

findings of facts by the agency in making a determination.

(b) In making a determination on the appeal, Hearing Officers and

the Director shall ensure that the decision is consistent with the laws

and regulations of the agency, and with the generally applicable

interpretations of such laws and regulations.

(c) All determinations of the Hearing Officers and the Director

must be based on information from the case record, laws applicable to

the matter at issue, and applicable regulations published in the

Federal Register and in effect on the date of the adverse decision or

the date on which the acts that gave rise to the adverse decision

occurred, whichever date is appropriate under the applicable agency

program laws and regulations.

Sec. 11.10 Effective date and implementation of final determinations

of the Division.

(a) On the return of a case to an agency pursuant to the final

determination of the Division, the head of the agency shall implement

the final determination not later than 30 days after the effective date

of the notice of the final determination.

(b) A final determination will be effective as of the date of

filing of an application, the date of the transaction or event in

question, or the date of the original adverse decision, whichever is

applicable under the applicable agency program statutes or regulations.

Sec. 11.11 Judicial review.

(a) A final determination of the Division shall be reviewable and

enforceable by any United States District Court of competent

jurisdiction in accordance with chapter 7 of title 5, United States

Code.

ransaction or event in

question, or the date of the original adverse decision, whichever is

applicable under the applicable agency program statutes or regulations.

Sec. 11.11 Judicial review.

(a) A final determination of the Division shall be reviewable and

enforceable by any United States District Court of competent

jurisdiction in accordance with chapter 7 of title 5, United States

Code.

(b) An appellant may not seek judicial review of any agency adverse

decision appealable under this part without receiving a final

determination from the Division pursuant to the procedures of this

part.

Sec. 11.12 Filing of appeals and computation of time.

(a) An appeal, a request for Director review, or any other document

will be considered ``filed'' when delivered in writing to the Division,

when postmarked, or when a complete facsimile copy is received by the

Division.

(b) Whenever the final date for any requirement of this part falls

on a Saturday, Sunday, Federal holiday, or other day on which the

Division is not open for the transaction of business during normal

working hours, the time for filing will be extended to the close of

business on the next working day.

(c) The time for filing an appeal, a request for Director review,

or any other document, with the Division expires at 5:00 p.m. Eastern

Standard Time or Eastern Daylight Savings time as applicable on the

last day on which such filing may be made.

Done at Washington, D.C., this 12 day of May, 1995.

Dan Glickman,

Secretary of Agriculture.

[FR Doc. 95-12261 Filed 5-19-95; 8:45 am]

BILLING CODE 3410-01-M