Appendix A - Food and Nutrition Act of 2008, sec 13 (7 U.S.C. 2022)

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(ii) if the administration of the supplemental nutrition assistance program in the area complies with
the other applicable requirements of the program.
(2) SELECTION CRITERIA.—Pilot projects shall be selected
based on criteria the Secretary establishes, which shall include—
(A) enhancing existing efforts by the Secretary to reduce fraud described in paragraph (1)(A);
(B) requiring participant States to maintain the overall level of effort of the States at addressing recipient
fraud, as determined by the Secretary, prior to participation in the pilot project;
(C) collaborating with other law enforcement authorities as necessary to carry out an effective pilot project;
(D) commitment of the participant State agency to follow Federal rules and procedures with respect to investigations described in paragraph (1)(A); and
(E) the extent to which a State has committed resources to recipient fraud and the relative success of those
efforts.
(3) EVALUATION.—
(A) IN GENERAL.—The Secretary shall evaluate the
pilot projects selected under this subsection to measure the
impact of the pilot projects.
(B) REQUIREMENTS.—The evaluation shall include—
(i) the impact of each pilot project on increasing
the capacity of the Secretary to address fraud described in paragraph (1)(A);
(ii) the effectiveness of the pilot projects in identifying, preventing and reducing fraud described in
paragraph (1)(A); and
(iii) the cost effectiveness of the pilot projects.
(4) REPORT TO CONGRESS.—Not later than September 30,
2017, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate, a report
that includes a description of the results of each pilot project,
including—
(A) an evaluation of the impact of the pilot project on
fraud described in paragraph (1)(A); and
(B) the costs associated with the pilot project.
(5) FUNDING.—Any costs incurred by a State to operate
pilot projects under this subsection that are in excess of the
amount expended under this Act to identify, investigate, and
reduce fraud described in paragraph (1)(A) in the respective
State in the previous fiscal year shall not be eligible for Federal reimbursement under this Act.
COLLECTION AND DISPOSITION OF CLAIMS

SEC. 13.
RETARY.—

ø7 U.S.C. 2022¿ (a) GENERAL AUTHORITY

OF THE

SEC-

(1) DETERMINATION OF CLAIMS.—Except in the case of an
at-risk amount required under section 16(c)(1)(D)(i)(II), the
Secretary shall have the power to determine the amount of and
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settle and adjust any claim and to compromise or deny all or
part of any such claim or claims arising under the provisions
of this Act or the regulations issued pursuant to this Act, including, but not limited to, claims arising from fraudulent and
nonfraudulent overissuances to recipients, including the power
to waive claims if the Secretary determines that to do so would
serve the purposes of this Act. Such powers with respect to
claims against recipients may be delegated by the Secretary to
State agencies. The Secretary shall have the power to reduce
amounts otherwise due to a State agency under section 16 of
this Act to collect unpaid claims assessed against the State
agency if the State agency has declined or exhausted its appeal
rights under section 14 of this Act.
(2) CLAIMS ESTABLISHED UNDER QUALITY CONTROL SYSTEM.—To the extent that a State agency does not pay a claim
established under section 16(c)(1), including an agreement to
have all or part of the claim paid through a reduction in Federal administrative funding, within 30 days from the date on
which the bill for collection is received by the State agency, the
State agency shall be liable for interest on any unpaid portion
of such claim accruing from the date on which the bill for collection was received by the State agency, unless the State
agency appeals the claim under section 16(c)(7). If the State
agency appeals such claim (in whole or in part), the interest
on any unpaid portion of the claim shall accrue from the date
of the decision on the administrative appeal, or from a date
that is 1 year after the date the bill is received, whichever is
earlier, until the date the unpaid portion of the payment is received. If the State agency pays such claim (in whole or in
part, including an agreement to have all or part of the claim
paid through a reduction in Federal administrative funding)
and the claim is subsequently overturned through administrative or judicial appeal, any amounts paid by the State agency
shall be promptly returned with interest, accruing from the
date the payment is received until the date the payment is returned.
(3) COMPUTATION OF INTEREST.—Any interest assessed
under this paragraph shall be computed at a rate determined
by the Secretary based on the average of the bond equivalent
of the weekly 90-day Treasury bill auction rates during the period such interest accrues.
(4) JOINT AND SEVERAL LIABILITY OF HOUSEHOLD MEMBERS.—Each adult member of a household shall be jointly and
severally liable for the value of any overissuance of benefits.
(b) COLLECTION OF OVERISSUANCES.—
(1) IN GENERAL.—Except as otherwise provided in this subsection, a State agency shall collect any overissuance of benefits issued to a household by—
(A) reducing the allotment of the household;
(B) withholding amounts from unemployment compensation from a member of the household under subsection (c);
(C) recovering from Federal pay or a Federal income
tax refund under subsection (d); or
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(D) any other means.
(2) COST EFFECTIVENESS.—Paragraph (1) shall not apply if
the State agency demonstrates to the satisfaction of the Secretary that all of the means referred to in paragraph (1) are
not cost effective.
(3) MAXIMUM REDUCTION ABSENT FRAUD.—If a household
received an overissuance of benefits without any member of the
household being found ineligible to participate in the program
under section 6(b)(1) and a State agency elects to reduce the
allotment of the household under paragraph (1)(A), the State
agency shall not reduce the monthly allotment of the household under paragraph (1)(A) by an amount in excess of the
greater of—
(A) 10 percent of the monthly allotment of the household; or
(B) $10.
(4) PROCEDURES.—A State agency shall collect an
overissuance of benefits issued to a household under paragraph
(1) in accordance with the requirements established by the
State agency for providing notice, electing a means of payment,
and establishing a time schedule for payment.
(5) OVERISSUANCES CAUSED BY SYSTEMIC STATE ERRORS.—
(A) IN GENERAL.—If the Secretary determines that a
State agency overissued benefits to a substantial number
of households in a fiscal year as a result of a major systemic error by the State agency, as defined by the Secretary, the Secretary may prohibit the State agency from
collecting these overissuances from some or all households.
(B) PROCEDURES.—
(i) INFORMATION REPORTING BY STATES.—Every
State agency shall provide to the Secretary all information requested by the Secretary concerning the
issuance of benefits to households by the State agency
in the applicable fiscal year.
(ii) FINAL DETERMINATION.—After reviewing relevant information provided by a State agency, the Secretary shall make a final determination—
(I) whether the State agency overissued benefits to a substantial number of households as a result of a systemic error in the applicable fiscal
year; and
(II) as to the amount of the overissuance in
the applicable fiscal year for which the State
agency is liable.
(iii) ESTABLISHING A CLAIM.—Upon determining
under clause (ii) that a State agency has overissued
benefits to households due to a major systemic error
determined under subparagraph (A), the Secretary
shall establish a claim against the State agency equal
to the value of the overissuance caused by the systemic error.
(iv) ADMINISTRATIVE AND JUDICIAL REVIEW.—Administrative and judicial review, as provided in section
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14, shall apply to the final determinations by the Secretary under clause (ii).
(v) REMISSION TO THE SECRETARY.—
(I) DETERMINATION NOT APPEALED.—If the determination of the Secretary under clause (ii) is
not appealed, the State agency shall, as soon as
practicable, remit to the Secretary the dollar
amount specified in the claim under clause (iii).
(II) DETERMINATION APPEALED.—If the determination of the Secretary under clause (ii) is appealed, upon completion of administrative and judicial review under clause (iv), and a finding of liability on the part of the State, the appealing
State agency shall, as soon as practicable, remit to
the Secretary a dollar amount subject to the finding made in the administrative and judicial review.
(vi) ALTERNATIVE METHOD OF COLLECTION.—
(I) IN GENERAL.—If a State agency fails to
make a payment under clause (v) within a reasonable period of time, as determined by the Secretary, the Secretary may reduce any amount due
to the State agency under any other provision of
this Act by the amount due.
(II) ACCRUAL OF INTEREST.—During the period
of time determined by the Secretary to be reasonable under subclause (I), interest in the amount
owed shall not accrue.
(vii) LIMITATION.—Any liability amount established under section 16(c)(1)(C) shall be reduced by the
amount of the claim established under this subparagraph.
(c)(1) As used in this subsection, the term ‘‘uncollected
overissuance’’ means the amount of an overissuance of benefits, as
determined under subsection (b)(1), that has not been recovered
pursuant to subsection (b)(1).
(2) A State agency may determine on a periodic basis, from information supplied pursuant to section 3(b) of the Wagner-Peyser
Act (29 U.S.C. 49b(b)), whether an individual receiving compensation under the State’s unemployment compensation law (including
amounts payable pursuant to an agreement under a Federal unemployment compensation law) owes an uncollected overissuance.
(3) A State agency may recover an uncollected overissuance—
(A) by—
(i) entering into an agreement with an individual described in paragraph (2) under which specified amounts
will be withheld from unemployment compensation otherwise payable to the individual; and
(ii) furnishing a copy of the agreement to the State
agency administering the unemployment compensation
law; or
(B) in the absence of an agreement, by obtaining a writ,
order, summons, or other similar process in the nature of garJanuary 15, 2019

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nishment from a court of competent jurisdiction to require the
withholding of amounts from the unemployment compensation.
(d) The amount of an overissuance of benefits, as determined
under subsection (b)(1), that has not been recovered pursuant to
such subsection may be recovered from Federal pay (including salaries and pensions) as authorized by section 5514 of title 5 of the
United States Code or a Federal income tax refund as authorized
by section 3720A of title 31, United States Code.
ADMINISTRATIVE AND JUDICIAL REVIEW

SEC. 14. ø7 U.S.C. 2023¿ (a)(1) Whenever an application of a
retail food store or wholesale food concern to participate in the supplemental nutrition assistance program is denied pursuant to section 9 of this Act, or a retail food store or wholesale food concern
is disqualified or subjected to a civil money penalty under the provisions of section 12 of this Act, or a retail food store or wholesale
food concern forfeits a bond under section 12(d) of this Act, or all
or part of any claim of a retail food store or wholesale food concern
is denied under the provisions of section 13 of this Act, or a claim
against a State agency is stated pursuant to the provisions of section 13 of this Act, notice of such administrative action shall be
issued to the retail food store, wholesale food concern, or State
agency involved.
(2) DELIVERY OF NOTICES.—A notice under paragraph (1)
shall be delivered by any form of delivery that the Secretary
determines will provide evidence of the delivery.
(3) If such store, concern, or State agency is aggrieved by such
action, it may, in accordance with regulations promulgated under
this Act, within ten days of the date of delivery of such notice, file
a written request for an opportunity to submit information in support of its position to such person or persons as the regulations
may designate.
(4) If such a request is not made or if such store, concern, or
State agency fails to submit information in support of its position
after filing a request, the administrative determination shall be
final.
(5) If such request is made by such store, concern, or State
agency, such information as may be submitted by the store, concern, or State agency, as well as such other information as may be
available, shall be reviewed by the person or persons designated by
the Secretary, who shall, subject to the right of judicial review
hereinafter provided, make a determination which shall be final
and which shall take effect thirty days after the date of the delivery or service of such final notice of determination.
(6) Determinations regarding claims made pursuant to section
16(c) (including determinations as to whether there is good cause
for not imposing all or a portion of the penalty) shall be made on
the record after opportunity for an agency hearing in accordance
with section 556 and 557 of title 5, United States Code, in which
one or more administrative law judges appointed pursuant to section 3105 of such title shall preside over the taking of evidence.
(7) Such judges shall have authority to issue and enforce subpoenas in the manner prescribed in sections 13 (c) and (d) of the
Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 499m
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