The purpose of this rulemaking is to update definitions and clarify appeals procedures and penalties for violations of Chapter 595, F.S., the rules adopted under Chapter 595, F.S., and federal regulations incorporated by ....

 

DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

Division of Food, Nutrition and Wellness

RULE NO.: RULE TITLE:

5P-1.001: Definitions

5P-1.002: Appeals

5P-1.004: Penalties and Sanctions

PURPOSE AND EFFECT: The purpose of this rulemaking is to update definitions and clarify appeals procedures and penalties for violations of Chapter 595, F.S., the rules adopted under Chapter 595, F.S., and federal regulations incorporated by reference relative to all programs administered by the division.

SUMMARY: Rule 5P-1.001: The terms Inventory Reconciliation, Notice of Action, Production and Menu Records, Recipient Agency Review, Site and Web-Based Supply Chain Management (WBSCM) are added to the definitions. The term Successive Purchasing Agreements is stricken. The term Sponsor was revised to clarify the agreement referenced in the definition.

 

Rule 5P-1.002: Updates the method of delivery for the Notice of Action to email; specifies when the Notice of action is deemed received; provides for entry of default final determination for failure to timely appeal; updates delivery method for request for appeal to email and provides email address; clarifies the date the request for appeal and written documentation are due; provides hearing procedures.

 

Rule 5P-1.004: Corrected or added references to regulations; expanded individuals who shall be declared seriously deficient; added review types for which failure to provide corrective action shall result in being declared seriously deficient; included the termination of Recipient Agency from a Child Nutrition Program upon revocation of tax exempt status as a reason to be declared seriously deficient; updates the method of delivery for the Notice of Action to email; updates division domain name; adds penalty for failure to remit payment for fiscal action assessed within required timeframe; adds penalty for failure to disclose, or for the identification of, conflicts of interest in procurement; expanded the list of individuals who shall be suspended due to failure to submit corrective action or to implement corrective action, and expanded the activities in which those individuals shall not participate while suspended; expanded the actions required by Sponsor or Recipient Agency after one year suspension in order to reapply; specified the Sponsor of Recipient Agency declared seriously deficient for operation of the same program twice in one year or two consecutive years of operation will be immediately suspended; expanded actions by Sponsor or Recipient Agency upon returning from one (1) year suspension that would result in 7 year termination; added additional activity that is considered fraud for purposes of this rule; specified Sponsor whose tax-exempt status is revoked will be suspended until documentation is provided by Sponsor showing the effective date of exemption.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Department’s economic analysis of the adverse impact or potential regulatory costs of the proposed rule did not exceed any of the criteria established in Section 120.541(2)(a), Florida Statutes. As part of this analysis, the Department relied upon the Office’s experience and knowledge with the industry. Additionally, no interested party submitted additional information regarding the economic impact.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 570.07(23); 595.404(4); 595.404(10); 595.404(11), F.S.

LAW IMPLEMENTED: 595.402; 595.404, 595.501; 570.971; 1001.42(16), F.S.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Nedra Harrington, 600 S. Calhoun Street, Suite 120 (H2), Tallahassee, FL 32399, [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

CHAPTER 5P-1

NUTRITION ASSISTANCE FOOD SERVICE PROGRAMS, GENERALLY

5P-1.001Definitions

5P-1.002Appeals

5P-1.004Penalties and Sanctions

 

5P-1.001 Definitions.

For the purposes of this chapter and chapters 5P-2 and 5P-3, the definitions in Section 595.402, F.S., and Sections 7 CFR 210.2, 7 CFR 215.2, 7 CFR 220.2, 7 CFR 225.2, 7 CFR 245.2, 7 CFR 247.1, 7 CFR 248.2, 7 CFR 250.2, 7 CFR 251.3, 7 CFR 252.2, all revised as of January 1, 2021 2018, and hereby adopted and incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX, and www.ecfr.gov, and the following shall apply:

(1) through (21) No change.

(22) “Inventory Reconciliation” means the annual physical review by the department of USDA Foods inventories at all storage facilities used by a Recipient Agency reconciled with book inventories of USDA Foods.

(22) through (24) renumbered (23) through (25)

(26)(25) “Nonprofit School Food Service Account” means the account in which all revenue from all food service operations conducted by the Sponsor is held and all revenue is used solely for the operation or improvement of such food services.

(27) Notice of Action means the written document that advises of the grounds upon which the department based the action.

(26) through (27) renumbered (28) through (29).

(30) Production and menu records means records of meals produced to show how the meals offered contribute to the required food components and food quantities for each age/grade group every day.

(28) through (29) renumbered (31) through (32)

(33) “Recipient Agency Review” means an on-site review of the Recipient Agency when the department identifies actual or probable deficiencies in the use of USDA Foods by such institutions, through audits, investigations, complaints, or any other information; storage facilities at the distributing agency level (including commercial storage facilities under contract with the distributing or sub-distributing agency), on an annual basis; or Recipient Agencies and sub-distributing agencies in Commodity Supplemental Food Program and The Emergency Food Assistance Program in accordance with 7 CFR parts 247, 250, and 251, respectively, all revised as of January 1, 2021, which are hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-xxxxx, and www.ecfr.gov.

(30) through (32) renumbered (34) through (36).

(37)(33) “Site” means a physical location at which a Sponsor provides a food service for children and at which children consume meals in a supervised setting within the Summer Food Service Program or Seamless Summer Option.

(33) through (35) renumbered (38) through (40). 

(41)(36) “Sponsor” means any entity that is conducting a program under a current Child Nutrition Program agreement with the department.

(37) “Successive Purchasing Agreements,” commonly referred to as “piggybacking agreements,” means agreements awarded to Contractors by one Sponsor permitting a different Sponsor to make purchases at or below the specified prices from, and with the same terms and conditions of, contracts awarded to other Sponsors, and when such purchases are at a lower cost to the Sponsor.

(38) through (44) renumbered (42) through (48).

(49) “The Web-Based Supply Chain Management (WBSCM)” means an integrated food purchasing, tracking, and ordering system used by USDA and its customers, vendors, suppliers, and transportation personnel.

Rulemaking Authority 570.07(23), 595.404(4), (10), (11) FS. Law Implemented 595.402, 595.404 FS. History–New 4-19-73, Repromulgated 12-5-74, Formerly 6A-7.40, Amended 5-3-88, Formerly 6A-7.040, Amended 6-21-18, 12-16-18,________.

 

5P-1.002 Appeals.,

(1) No change.

(2) The department shall take agency action against issue a Notice of Action to Sponsors, Recipient Agencies, or Food Service Management Companies (“Appellant”) for proposed agency action to be taken against the Appellant in connection to eligibility and the operation of Child Nutrition Programs, Food Distribution Programs, and Farmers’ Market Nutrition Programs by issuance of a Notice of Action. The Notice of Action shall state the grounds upon which the department’s proposed agency action is based and state that the Sponsors, Recipient Agencies, or Food Service Management Companies have Appellant has the right to appeal the proposed agency action. The Notice of Action shall be sent to the Appellant by certified mail, (or its equivalent), by email or facsimile to the  last known mailing address, facsimile number, or  email address. certified mail, return receipt requested. If the notice is undeliverable, it is considered to be received by the Sponsor five (5) calendar days after being sent to the Sponsor’s last known mailing address, facsimile number, or  email address.

(3) The following agency actions to be taken against the Appellant are appealable:

(a) through (f) No change.

(g) A denial of a Sponsor’s application for a Site; or

(h) The suspension of a Sponsor or Recipient Agency, or

(h)(i) The imposition of an administrative fine.

(4) Requests for appeal must be postmarked by the U.S. Postal Service (or an equivalent private delivery service) or emailed to the department no more than fourteen (14) calendar days from the date the Notice of Action was deemed received by the Sponsors, Recipient Agencies or Food Service Management Companies. Failure to timely request an appeal shall result in the entry of a default final determination. The Appellant shall have ten (10) calendar days to appeal the agency action from the date the Appellant receives the Notice of Action.

(5) A request for appeal shall:

(a) No change.

(b) Include the date the Sponsor’s Recipient Agencies, or Food Service Management Companies (“Appellant”) Appellant received the Notice of Action.

(c) No change.

(d) Clearly identify the charges or action being appealed; and state an appealable action; as provided under subsection (3) in this part;

(e) Include a clear and concise statement of the specific facts alleged, including the specific facts the Appellant contends warrant reversal or modification of the department’s proposed action;

(f) A statement of the specific rules, or statutes, or regulations, if any, the Appellant contends require reversal or modification of the agency’s proposed action, including an explanation of how the alleged facts relate to the specific rules, or statutes, or regulations;

(g) through (h) No change.

(i) State whether an in-person a hearing, telephonic or video hearing, or a review of written documentation is desired to refute the charges contained in the Notice of Action and shall be signed by the authorized representative or legal counsel, if retained. If a hearing is not specifically requested, the appeal shall be by review of written documentation.

(6) From the date the department receives the appeal, the department shall make available to the Appellant upon request, any information on which the action was based. The Appellant can request to review any information upon which the action was based.

(7) To refute the Notice of Action The the Appellant may submit additional written documentation for review by the hearing official either with the request for appeal or the Appellant must indicate in its request for appeal that such documentation will be submitted to the hearing official within seven (7) calendar days of the date Appellant submitted the request for appeal. The department has seven (7) calendar days from the date the department received the request for appeal to submit written documentation to the designated hearing official. Any written documentation received after the seven-day deadline will not be considered for review.

(a) The written documentation submitted by the Appellant must be postmarked by the U.S. Postal Service (or an equivalent private delivery service) or emailed to the department no more than seven (7) calendar days from the date the Appellant’s request for appeal was postmarked by the U.S. Postal Service (or an equivalent private delivery service) or emailed to the department.

(b) The department will have seven (7) calendar days from the date the department received the Appellant’s request for appeal to submit the written documentation upon which the agency action was based to the designated hearing official.

(c) Any written documentation received after the seven-day deadline shall not be considered for review.

(8) The request for appeal and all written documentation shall should be submitted by email to the department at [e-mail], or by mail to the department at 600 S. Calhoun Street (H2), Tallahassee, FL,32399, Attention: Hearing Official. the address indicated in the Notice of Action. Regardless of whether it is emailed or mailed, the request for appeal must be postmarked by the U.S. Postal Service (or an equivalent private delivery service) or emailed to the department no more than fourteen (14) calendar days from the date the Notice of Action was deemed received by the Appellant, and all written documentation must be postmarked by the U.S. Postal Service (or an equivalent private delivery service) or emailed to the department no more than seven (7) calendar days from the date the request for appeal was postmarked by the U.S. Postal Service (or an equivalent private delivery service) or emailed to the department.

(9) If a hearing is requested, it shall be held within fourteen (14) calendar days of the date the department received the request for appeal, unless otherwise agreed to by both parties. At no time shall the The hearing shall not be held prior to the time expiration for the submission of written documentation by both parties in accordance with subsection (7) of this part. date the hearing officer receives written documentation from both parties. The Appellant shall be provided with at least five (5) calendar days’ written notice, sent via certified mail, return receipt requested, of the time and place of the hearing. The hearing official shall conduct the hearing in accordance with this part.

(a) If a hearing is requested, the Appellant shall appear before the hearing official and provide oral testimony in refute of the grounds for which the department’s Notice of Action is based. Any documentation the Appellant relies upon during the hearing shall be related to or in connection with the department’s Notice of Action and submitted in accordance with subsection (7) of this part. The hearing official may conduct an examination of the testimony provided by the Appellant or its representative at the hearing. The Appellant may represent itself, retain legal counsel, or may be represented by another authorized person at the hearing. Failure of the Appellant’s representative to appear at a scheduled hearing shall constitute the waiver of the right to a personal appearance before the hearing official unless the review official agrees to reschedule the hearing.

(b) A department representative shall be allowed to attend the hearing to respond to the Appellant’s testimony and written documentation and to answer questions from the hearing official. The department representative shall be allowed to answer direct questions from the Appellant to clarify the representative’s response to testimony.

(c) Any new allegations, or belated assertions or arguments, in written documentation or at hearing that have not been previously advanced shall not be considered unless the hearing official determines otherwise. Requests for rebuttal may be granted at the hearing official’s discretion.

(d) The formal rules of civil procedure may not apply. Hearings shall not include motion practice. The hearing official is not bound by the Florida Evidence Code or the Florida Rules of Evidence. The hearing official has the discretion to include hearsay evidence that is relevant and to determine witness credibility. The hearing official shall exclude irrelevant and unduly repetitious testimony, and any written documentation not related to or in connection with the department’s Notice of Action.

(e) Post-hearing. Briefs, legal memoranda and proposed final determinations will not be permitted. Written documentation shall be submitted in accordance with Rule 5P-1.002(7)-(8).

(10) through (12) No change.

(13) When computing time under this rule, if the last day is a Saturday, Sunday, or legal holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or legal holiday. Any request for appeal or written documentation received by the department by email, U.S. mail, or an equivalent private delivery service before 5:00 p.m. shall be filed as of that day but any document received after 5:00 p.m. shall be filed as of 8:00 a.m. on the next business day.

(14) No change.

(15) The determination made by the department’s hearing official is the final administrative determination to be afforded to the Appellant. The hearing official’s final determination shall be based upon a full of the administrative record, to include, oral testimony from the Appellant and the department’s response, written documentation submitted in accordance with subsection (7) of this part, and all program regulations.

(16) No change

Rulemaking Authority 570.07(23), 595.404(4), (10), (11) FS. Law Implemented 595.404 FS. History–New 3-22-66, 4-11-70, 4-19-73, Repromulgated 12-5-74, Amended 6-28-83, Formerly 6A-7.41, 6A-7.040, Amended 6-21-18, 12-16-18,__________.

 

5P-1.004 Penalties and Sanctions.

(1) Child Nutrition Programs and Food Distribution Programs.

(a) Seriously Deficient.

1. A Sponsor or Recipient Agency, and its principals and the officials identified on the Sponsor or Recipient Agency’s application in the Florida Automated Nutrition System shall may be declared by the department as Seriously Deficient if:

a. The Sponsor or Recipient Agency fails to comply with provisions outlined in the Child Nutrition Programs Agreement FDACS 01716, Rev. 04/18, previously incorporated in Rule 5P-2.002, F.A.C. 5P-1.003, F.A.C. of this chapter;

b. The Sponsor or Recipient Agency has failed to submit complete or implement a Corrective Action included in a previously issued Administrative Review, Claim Review, Sponsor Review, Site Review, Site Visit, or Technical Assistance Visit, Recipient Agency Review or Inventory Reconciliation;

c. The Sponsor or Recipient Agency is noncompliant with applicable procurement bid procedures and contract requirements of 2 CFR 200, revised as of January 1, 2021, which is hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-xxxxx, and www.ecfr.gov previously incorporated in paragraph 5P-1.003(1)(a), F.A.C.;

d. through e. No change.

f. Program violations are identified for ten percent (10%) or ten (10), whichever is greater, of the Sponsor’s or Recipient Agency’s sites. Such violations include the following:

(I) Noncompliance with the meal service time restrictions set forth in Sections 7 CFR 210.10(l)(1)-(2) or and 7 CFR 225.16(c), revised as of January 1, 2021, which are hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-xxxxx, and www.ecfr.govpreviously incorporated in paragraph 5P-1.003(1)(a), F.A.C.;

(II) Failure to maintain adequate records in accordance with Section 2 CFR 200, or Sections 7 CFR 210.15, 7 CFR 220.7(e)(13), 7 CFR 220.8(a)(3), 7 CFR 220.9(a), or 7  CFR 225.15(c) revised as of January 1, 2021, which are hereby incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-xxxxx) and www.ecfr.gov;

(III) through (VII) No change.

g. through h. No change.

i. The Sponsor or Recipient Agency has failed to safely store and control misused, at a minimum, ten percent (10%) or $10,000, whichever is greater, of USDA Foods including, but not limited to, improper distribution or foods lost, spoiled, stolen, sold or damaged as a result of improper storage, care, or handling.

j. No change.

k. The Sponsor’s or Recipient Agency’s tax exempt status is revoked by the Internal Revenue Service pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986 also resulting in immediate termination per subparagraph 5P-1.004(1)(c)4., F.A.C.

2. The department will notify the Sponsor or Recipient Agency in a Notice of Action, via email and certified mail, return receipt requested, that the Sponsor or Recipient Agency has been declared Seriously Deficient, the causes for Seriously Deficient status, and the required Corrective Actions to bring the Sponsor back into compliance with chapter 595, F.S., and the rules adopted thereunder. The Sponsor or Recipient Agency will have thirty (30) days from the date it receives the Notice of Action to submit a corrective action plan with supporting documentation to the department online at https://fans.FDACS.gov https://fans.freshfromflorida.com, or by mail to 600 S. Calhoun Street (H2), Tallahassee, FL 32399.

a. No change.

b. Upon receipt of the Sponsor or Recipient Agency’s corrective action plan, the department shall determine if the corrective action plan permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions. If the corrective action plan permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions, the department will temporarily rescind the Sponsor’s or Recipient Agency’s Seriously Deficient status and the Sponsor or Recipient Agency may continue to operate the program.

c. No change.

d. If after ninety (90) calendar days following receipt of the department’s original written demand, the Sponsor or Recipient Agency fails to remit full payment or agree to a satisfactory repayment schedule for fiscal action that has been assessed by the department  in accordance with Rule 5P-2.006, F.A.C. or Rule 5P-3.006, F.A.C., the Sponsor or Recipient Agency will be declared Seriously Deficient, and the department shall move to terminate the Sponsor or Recipient agency under paragraph (b) of this rule.

(b) Suspension.

1. Consistent with prior agency rule, Sponsors or Recipient Agencies suspended from program operations shall not participate in any Child Nutrition or Food Distribution Program from which they were suspended, including receiving USDA Foods or obtaining program-related funds. If after thirty (30) days from the date of receipt for the Notice of Action, the Sponsor or Recipient Agency fails to submit a corrective action plan with supporting documentation that permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions or fails to respond to the Notice of Action, the Sponsor or Recipient Agency will be suspended from program operations for one (1) calendar year from the original date of receipt of the Notice of Action.

2. While suspended, Sponsors or Recipient Agencies shall not participate in any Child Nutrition or Food Distribution Program from which they were suspended to include receiving USDA Foods or obtaining related funds.

2. 3. After one (1) year suspension, and, if applicable, the Sponsor or Recipient Agency has implemented the required Corrective Actions to bring the Sponsor or Recipient Agency back into compliance with chapter 595, F.S., and the rules adopted thereunder met all requirements in a written settlement agreement, the Sponsor or Recipient Agency may reapply for the Child Nutrition or Food Distribution Program from which they were suspended, subject to any deadlines for submitting applications. If applicable deadlines have already occurred at the time suspension is removed, the Sponsor or Recipient Agency must reapply for program participation the following year. When reapplying, the Sponsor or Recipient Agency must meet all federal and state requirements of a School Food Authority or organization that did not operate the program in the year prior to the current year, in the respective programs for which they are applying.

4. Sponsors or Recipient Agencies that are declared Seriously Deficient twice in one year of operation, or in two consecutive years of operation, regardless of any subsequent actions taken by the department, will be immediately suspended.

(c) Termination.

1. If the department initially determines that the Sponsor’s or Recipient Agency’s corrective action is complete, but later determines that the serious deficiency(ies) has recurred, If after a one (1) year suspension, the Sponsor or Recipient Agency is declared Seriously Deficient within the first year of operation since returning to the program the Sponsor or Recipient Agency has failed to submit a corrective action plan with supporting documentation that permanently corrects all causes for being declared Seriously Deficient and implements the required Corrective Actions, the Sponsor or Recipient Agency has failed to repay all assessed fiscal action, or meet all requirements of its repayment schedule agreement, the Sponsor or Recipient Agency will be terminated from the program for seven (7) years.

2. If any Sponsor or Recipient Agency commits a Child Nutrition Programs and Food Distribution Programs violation involving fraud, the Sponsor or Recipient Agency will be immediately terminated for seven (7) years. For purposes of this rule, fraud includes:

a. No change.

b. Intentionally withholding information pertaining to eligibility or ineligibility; or

c. Selling commodities obtained in Food Distribution Programs, or exchanging them for non-food items; or.

d. Distributing or permitting the distribution of unrelated program materials or conducting unrelated activities at a food distribution site in a manner inconsistent with the provisions of 7 CFR 251.10(f)(1), incorporated in Rule 5P-1.001, F.A.C.

3. No change.

4. A Sponsor whose tax -exempt status is revoked by the Internal Revenue Service (IRS) pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986 shall be terminated from a Child Nutrition Program without first being suspended until such time as the Sponsor’s tax-exempt status is reinstated by the IRS and documentation is provided by the Sponsor showing the effective date of exemption.

5. A Sponsor or Recipient Agency that has an organizational conflict of interest and is unable, or appears to be unable, to be impartial in conducting a procurement action involving a related organization, or a Sponsor or Recipient Agency or an employee, officer, or agent of the Sponsor or Recipient Agency that has a real or apparent conflict of interest in the selection, award, or administration of a purchase or contract shall be terminated.

6. While terminated, Sponsors or Recipient Agencies, and its principals identified on the Sponsor or Recipient Agency’s application in the Florida Automated Nutrition System at the time of the conduct resulting in the termination shall not participate in any Child Nutrition or Food Distribution Program, to include receiving USDA Foods, conducting business as a contractor, providing consulting services, or obtaining program related funds by any other means.

(2) Farmers’ Market Nutrition Programs.

(a) This rule sets forth the guidelines the department will follow in imposing the penalties authorized under 7 CFR 248, revised as of January 1, 2018 2021, which is adopted and incorporated by reference and available online at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX, and www.ecfr.gov, and section 595.501, F.S. The purpose of the guidelines is to give notice of the range of penalties that will be imposed for a single violation. These guidelines list aggravating and mitigating factors that, if present, will reduce or increase the penalties to be imposed against the Farmer or Farmers’ Market by the department. No aggravating factors will be applied to increase a fine imposed for a single violation above the maximum as provided in 7 CFR 248.20 or $5,000 for violations of chapter 595, F.S., or the rules adopted thereunder. The guidelines in this rule chapter are based upon a single count violation of each provision listed. Multiple counts of the violated provision or a combination of the listed violations will be added together to determine a total penalty and will be grounds for enhancement of penalties.

(b) through (j) No change.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Vianka Colin, Director, Division of Food, Nutrition and Wellness

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Commissioner of Agriculture Nicole Fried

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: July 12, 2022

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: February 8, 2022