Rule-making Standards and Procedures



STATEMENT OF BASIS AND PURPOSE

Summary of the basis and purpose for the rule or rule change. (State what the rule says or does, explain why the rule or rule change is necessary and what the program hopes to accomplish through this rule.)

This rule change is necessary to be in compliance with Senate Bill 04-147, which revised 39-21-102, C.R.S. The revision to state statue subjected rent rebate payments to the intercept process that is outlined in 39-21-108, C.R.S.

The rules for the rent rebate program (1 CCR 201-15) also state that rebate claims are subject to all intercepts included under 39-21-108, C.R.S.

The rules for the Food Assistance Program (10 CCR 2506-1), are not in compliance with this requirement; the rules state that rent rebates are not subject to the offset procedure.

Eliminating the conflict between program rules and state statute will ensure that moneys intercepted from rent rebates are handled consistently throughout the state.

Pursuant to 39-21-108(3), C.R.S., moneys intercepted from rent rebates are applied to overpayments which have been determined by final agency or judicial decision, or reduced to judgment as certified by the department of human services.

Sections B- 4430.22, G, and B-4430.32, G, are being revised for the Food Assistance Program.

Sections B- 4430.22, D-F, and B-4430.32, B-G, are also being revised at this time for technical cleanup of outdated terminology, changing “stamp” to “assistance” and “coupon” to “benefit”.

Sections B-4430.22, E, and B-4430.32, E, are being revised to remove outdated language that states coupons are an acceptable form of payment towards an overpayment of benefits. The 2008 Farm Bill de-obligated paper coupons as legal tender as of June 18, 2009. Therefore, paper coupons no longer have any value and can no longer be redeemed.

|Initial Review | 04/06/2012 |Final Adoption | 05/04/2012 |

|Proposed Effective Date |07/01/2012 |EMERGENCY Adoption | n/a |

DOCUMENT 11

_______________

[Note: “Strikethrough” indicates deletion from existing rules, “all caps” indicates addition of new rules,

and brackets denote changes since last month.]

STATEMENT OF BASIS AND PURPOSE (continued)

An emergency rule-making (which waives the initial Administrative Procedure Act noticing requirements) is necessary:

| |to comply with state/federal law and/or |

| |to preserve public health, safety and welfare |

Explain:

Authority for Rule:

State Board Authority: 26-1-107, C.R.S. (2011) - State Board to promulgate rules; 26-1-109, C.R.S. (2011) - State Board rules to coordinate with federal programs; 26-1-111, C.R.S. (2011) - State Board to promulgate rules for public assistance and welfare activities.

Program Authority: (give federal and/or state citations and a summary of the language authorizing the rule-making)

26-2-133(4), C.R.S. (2011) - allows the department of human services to promulgate rules related to State Income Tax refund offsets;

26-2-301 to 26-2-306, C.R.S. (2011) - provides authority for the department to administer the Food Assistance Program in compliance with federal requirements;

39-21-102(4), C.R.S. (2011) - subjects rent rebates to the offset procedure outlined in 39-21-108, C.R.S.

| |Yes |X |No |

| |Yes |X |No |

Does the rule incorporate material by reference?

Does this rule repeat language found in statute?

If yes, please explain.

The program has sent this proposed rule-making package to which stakeholders?

• Food Assistance monthly meeting with the ten large counties

• Office of Economic Security Sub-Pac

• Sub-Pac for the Adult Programs

• AFDC Coalition

• Legal Aid of Metropolitan Denver

• Colorado Center on Law and Policy

• Colorado Counties Inc.

• Colorado Directors of Human Services Association

• Hunger Free Colorado

• Aurora Community Connection

• Colorado Children’s Campaign

• Share Our Strength/Cooking Matters

• Care and Share

• Weld Food Bank

Attachments:

Regulatory Analysis

Overview of Proposed Rule

Stakeholder Comment Summary

REGULATORY ANALYSIS

(complete each question; answers may take more than the space provided)

1. List of groups impacted by this rule:

Which groups of persons will benefit, bear the burdens or be adversely impacted by this rule?

Eliminating the inconsistency between program rules and state statute will benefit the state by ensuring money’s collected from rent rebates are handled consistently throughout the state.

Those adversely impacted by this rule are those who qualify for the rent rebate program and have an outstanding overpayment of public assistance benefits that is not currently being repaid. Those who qualify for the rent rebate program must be sixty five (65) years of age or older, disabled, or a surviving spouse fifty eight (58) years of age or older (39-31-101, C.R.S. and 39-31-104, C.R.S.).

2. Describe the qualitative and quantitative impact:

How will this rule-making impact those groups listed above? How many people will be impacted? What are the short-term and long-term consequences of this rule?

This rule change will have little impact on the state. The state infrastructure developed to intercept rent rebates, to distribute the moneys to the department of human services, and to apply the moneys to public assistance overpayments has been operable since the passage of Senate Bill 04-147. As a result, state operations will remain unchanged by this rule change.

Individuals who have money intercepted from rent rebates will be handled consistently throughout the state and across all programs.

3. Fiscal Impact:

For each of the categories listed below explain the distribution of dollars; please identify the costs, revenues, matches or any changes in the distribution of funds even if such change has a total zero effect for any entity that falls within the category. If this rule-making requires one of the categories listed below to devote resources without receiving additional funding, please explain why the rule-making is required and what consultation has occurred with those who will need to devote resources.

State Fiscal Impact (Identify all state agencies with a fiscal impact, including any Colorado Benefits Management System (CBMS) change request costs required to implement this rule change)

There are no costs associated with this rule change. Changes will be made to correspondence that is mailed to clients informing them of the interception process; no costs are associated with this change.

County Fiscal Impact

There are no costs associated with this rule change.

Federal Fiscal Impact

There are no costs associated with this rule change.

REGULATORY ANALYSIS (continued)

Other Fiscal Impact (such as providers, local governments, etc.)

There are no costs associated with this rule change.

4. Data Description:

List and explain any data, such as studies, federal announcements, or questionnaires, which were relied upon when developing this rule?

The Attorney General’s office was contacted for clarification about the statute requirement to intercept rent rebates. No other data, studies, announcements, or questionnaires were relied upon.

5. Alternatives to this Rule-making:

Describe any alternatives that were seriously considered. Are there any less costly or less intrusive ways to accomplish the purpose(s) of this rule? Explain why the program chose this rule-making rather than taking no action or using another alternative.

Since this rule change is required in order to be in compliance with state statute, there are no other alternatives to consider.

OVERVIEW OF PROPOSED RULE

Compare and/or contrast the content of the current regulation and the proposed change.

|Section Numbers |Current Regulation |Proposed Change |Stakeholder Comment |

| | | | | | | |

|B-4430.22, G |Rent rebates are not subject to the offset|Rent rebates are subject to the offset |__ |Yes |X |No |

| |procedure for agency error and advertent |procedure | | | | |

| |household error claims | | | | | |

|B-4430.22, D-F and B-4430.32, B-G |Pursuing collection for overpayment of |Technical revision of food “stamp” to |__ |Yes |X |No |

| |food assistance benefits |“assistance” and “coupon” to “benefit | | | | |

|B-4430.22, E and B-4430.32, E |Food assistance coupons can be accepted as|Remove “coupon” as a form of acceptable |__ |Yes |X |No |

| |a form of payment towards an overpayment |payment | | | | |

| |of benefits | | | | | |

|B-4430.32, G |Rent rebates are not subject to the offset|Rent rebates are subject to the offset |__ |Yes |X |No |

| |procedure for IPV/fraud claims |procedure | | | | |

| | | | | | | |

| | | | | | | |

| | | | | | | |

STAKEHOLDER COMMENT SUMMARY

DEVELOPMENT

The following individuals and/or entities were included in the development of these proposed rules (such as other Program Areas, Legislative Liaison, and Sub-PAC):

Food Assistance Program

Colorado Works Program

Adult Financial programs

THIS RULE-MAKING PACKAGE

The following individuals and/or entities were contacted and informed that this rule-making was proposed for consideration by the State Board of Human Services:

• Food Assistance Program

• Colorado Works Program

• Adult Financial programs

• Child Care Program

• Attorney General’s Office

• OES Sub-Pac

• Sub-Pac for the Adult programs

• Food Assistance monthly meeting with the ten large counties

• AFDC Coalition

• Legal Aid of Metropolitan Denver

• Colorado Center on Law and Policy

• Colorado Counties Inc.

• Colorado Directors of Human Services Association

• Hunger Free Colorado

• Aurora Community Connection

• Colorado Children’s Campaign

• Share Our Strength/Cooking Matters

• Care and Share

• Weld Food Bank

Are other State Agencies (such as Colorado Department of Health Care Policy and Financing) impacted by these rules? If so, have they been contacted and provided input on the proposed rules?

| |Yes |X |No |

STAKEHOLDER COMMENT SUMMARY (continued)

Have these rules been reviewed by the appropriate Sub-PAC Committee?

|X |Yes | |No |

Date presented _February 2, 2012_______. Were there any issues raised? ____ Yes _X_ No

If not, why. There were no objections to updating program rules to be in compliance with state statute.

Comments were received from stakeholders on the proposed rules:

| |Yes |X |No |

If “yes” to any of the above questions, summarize and/or attach the feedback received by specifying the section and including the Department/Office/Division response. Provide proof of agreement or ongoing issues with a letter or public testimony by the stakeholder.

10 CCR 2506-1

FOOD STAMP PROGRAM - CERTIFICATION B-4430.22 - Cont.

B-4430.22 Collecting Agency Error and Inadvertent Household Error Claims (continued)

Add eff. A claim awaiting a fair hearing decision shall not be considered delinquent.

9/1/01 If the hearing officer determines that a claim does, in fact, exist against the household, the household shall be sent another demand letter. Delinquency shall be based on the due date of this subsequent demand letter and not on the initial pre-hearing demand letter sent to the household. If the hearing officer determines that a claim does not exist, the claim is deleted from the automated system or recalculated to zero.

Rev. eff. D. Food stamp assistance offices may pursue collection action against any

9/1/01 household which has a member who was an adult member, a sponsor, or an authorized representative of any household that received an overissuance. The claim may also be offset against restored benefits owed to any household which contains a member who was an adult member, sponsor, or authorized representative of the original household.

Under no circumstances shall the office collect more than the amount of the claim.

Food stamp assistance offices may pursue other collection actions, as appropriate, to obtain restitution of a claim against any household which fails to respond to a written demand letter for repayment of an agency error, or inadvertent household error claim. If the food stamp assistance office chooses to pursue other collection actions and the household pays the claim, payments shall be submitted to the Colorado Department of Human Services as required by Section B-4430.6, “Submission of Payments”. The food stamp assistance office's retention of recoveries shall be based on the actual amount collected from the household through such collections actions.

Rev. eff. E. Food stamp coupons assistance benefits will be accepted as full or partial

1/1/88 payment of an agency error or inadvertent household error claim if the household chooses to use this method of repayment. Full uncancelled, undamaged coupon books received in payment shall be handled in accordance with the section, Submission of Payments.

Rev. eff. F. Other collection actions which the food stamp assistance office may pursue

4/1/94 include the use of a collection agent or a civil action.

Added G. Offset Against Taxpayer's State Income Tax Refund

eff.

10/1/91 In accordance with Sections 26-2-133, and 39-21-108, C.R.S., the state and county departments may recover overpayments of public or medical assistance benefits through the offset (intercept) of a taxpayer's state income tax refund. Rent rebates are not subject to the offset procedure. This method may be used to recover overpayments which have been:

Rev. eff. • determined by final agency action, or

4/1/94 • ordered by a court as restitution, or

• reduced to judgment.

|THIS REVISION: |IVB-01-5 |LAST REVISION: |IVB-94-1 |REVISION NUMBER |

|Adopted: |7/6/2001 |Adopted: |2/4/94 |8 |

|Effective Date: |9/1/2001 |Effective Date: |4/1/94 |

|COLORADO DEPARTMENT OF HUMAN SERVICES |

|STAFF MANUAL VOLUME 4B |

|FOOD STAMPS |

10 CCR 2506-1

FOOD STAMP PROGRAM - CERTIFICATION B-4430.32 - Cont.

B-4430.32 Collecting Intentional Program Violation/Fraud Claims (continued)

Rev. eff. B. Collection action shall be initiated by sending the household and adult members

8/1/94 a written demand letter for the overissuance, Form FS-14A (Demand Letter for Overissuance). This letter informs the household of its rights and responsibilities concerning repayment of the claim as well as providing information on the availability of free legal service.

Rev. eff. If the household against which collection action has been initiated for the

7/1/98 repayment of an intentional program violation/fraud claim is currently participating in the program and does not respond to the written demand letter within three business days (two days for mailing plus one business day) of the date the notice is mailed, the food stamp assistance office shall reduce the household’s food stamp assistance allotment with the first allotment issued TEN (10) calendar days from the date given for the household to respond. A total of THIRTEEN (13) calendar days is actually given prior to invoking an allotment reduction.

Rev. eff. If a household is not participating when collection action is initiated, and does not

1/1/88 respond to the first demand letter, additional demand letters shall be sent at reasonable intervals, such as THIRTY (30) days. These letters shall be sent until the household has responded by paying or agreeing to pay the claim, until the criteria for suspending collection action have been met, or until the food stamp assistance office initiates other collection actions.

Add eff. C. Section B-4430.22, “Collecting Agency Error and Inadvertent

9/1/01 Household Error Claims”, Item C, contains guidelines on when a claim is considered delinquent. The same guidelines apply for an IPV claim.

Rev. eff. D. The food stamp assistance office may also pursue other collection action, as

1/1/95 appropriate, to obtain restitution of a claim against any household which fails to respond to a written demand letter for repayment of an intentional program violation/fraud claim. If the food stamp assistance office chooses to pursue other collection actions and the household pays the claim, payments shall be submitted to the Colorado Department of Human Services in accordance with procedures in the Section B- 4430.6, “Submission of Payments”. The food stamp assistance office’s retention of recoveries shall be based on the actual amount collected from the household through such collection actions.

Rev. eff. E. Food stamp coupons assistance benefits will be accepted as full or partial

1/1/88 payment of an intentional program violation/fraud claim if the household chooses to use this method of repayment. Full, uncancelled, undamaged coupon books received in payment shall be handled in accordance with the section, Submission of Payments.

Rev. eff. F. Other collection actions which the food stamp assistance office may pursue

8/1/94 include the use of a collection agent or a civil action.

|THIS REVISION: |IVB-01-5 |LAST REVISION: |IVB-98-2 |REVISION NUMBER |

|Adopted: |7/6/2001 |Adopted: |5/1/98 |15 |

|Effective Date: |9/1/2001 |Effective Date: |7/1/98 |

|COLORADO DEPARTMENT OF HUMAN SERVICES |

|STAFF MANUAL VOLUME 4B |

|FOOD STAMPS |

10 ccr 2506-1

FOOD STAMP PROGRAM - CERTIFICATION B-4430.32 - Concl.

B-4430.32 Collecting Intentional Program Violation/Fraud Claims (continued)

Add eff. G. Offset against Taxpayer’s State Income Tax Refund

10/1/91

In accordance with Sections 26-2-133 and 39-21-108, C.R.S., the state and county departments may recover overpayments of public or medical assistance benefits through the offset (intercept) of a taxpayer’s state income tax refund. Rent rebates shall not be subject to the offset procedure. This method may be used to recover overpayments which have been:

• determined by final agency action, or

• ordered by a court as restitution, or

• reduced to judgment.

Rev. eff. Prior to certifying the taxpayer’s name and other information to the Department

8/1/94 of Revenue, Colorado Department of Human Services shall notify the taxpayer in writing at his/her last known address that the state intends to use the tax refund offset to recover the IPV/fraud overpayment. In addition to the requirements of Section 26-2-133(2), C.R.S., the pre-offset notice shall include the name of the food stamp assistance office claiming the overpayment, a reference to food stamps assistance as the source of the overpayment, and the current balance owed.

Rev. eff. Effective August 1, 1991, the taxpayer is entitled to object to the offset by filing a

9/1/01 request for an evidentiary conference or state hearing within THIRTY (30) calendar days from the date that the State Department mails its pre-offset notice to the taxpayer. In all other respects, the procedures applicable to such hearings shall be those which are stated elsewhere in this staff manual. At the hearing on the offset, the county department or ALJ shall not consider whether an overpayment has occurred, but may consider the following issues if raised by the taxpayer in his/her request for a hearing: whether:

Rev. eff. 1. The taxpayer was properly notified of the overpayment

5/1/92 2. The taxpayer is the person who owes the overpayment

3. The amount of the overpayment has been paid or is incorrect

Rev. eff. 4. The debt created by the overissuance has been discharged through

12/1/97 bankruptcy.

Rev. eff. H. Federal Treasury Offset Program (TOP)

9/1/01

A delinquent IPV claim may also be submitted for a Federal Treasury Offset Program. The claim must be past due and legally enforceable.

A delinquent claim for the Federal Treasury Offset Program (TOP) is one which is past due more than NINETY (90) calendar days but less than TEN (10) years. A delinquent claim which is based on a debt which has been reduced to final judgment by a court order may be more than 10 years past due but must be less than twenty years past due. A clam is not considered delinquent if a fair hearing is pending concerning the claim. A claim is not considered delinquent if the claim has either been discharged by bankruptcy or is subject to the automatic stay of the bankruptcy court.

Rev. eff. The same criteria and procedures that apply for an agency claim/inadvertent

7/1/98 household error being referred for the Federal Treasury Offset Program will apply to the IPV claim. See Section B-4430.22, entitled “Collecting Agency Error and Inadvertent Household Error Claims”, for the detailed procedures.

|THIS REVISION: |IVB-01-5 |LAST REVISION: |IVB-98-2 |REVISION NUMBER |

|Adopted: |7/6/2001 |Adopted: |5/1/98 |14 |

|Effective Date: |9/1/2001 |Effective Date: |7/1/98 |

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