Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Any Program
violation included in this Section shall result in an adverse action including
disqualification of a food vendor or imposition of a civil money penalty in
lieu of disqualification.
(1) The Program
shall provide the food vendor with a fifteen (15) calendar day written notice
of disqualification in advance of the effective date of any proposed adverse
action, which states the cause(s) for and effective date(s) of the action
except for a disqualification based on a violation of (c) of this Section which
becomes effective on the date of receipt of the notice of
disqualification.
(2) A warning
that violations are occurring or have occurred is not required prior to any
adverse action taken against food vendors pursuant to this
Section.
(b) A food
vendor that has received a final determination of disqualification from the
Food Stamp Program and has failed to either exercise its appeal rights or has
exhausted its appeal rights under the Food Stamp Program shall be disqualified
from participation in the Program.
(1) The
disqualification shall be for the same length of time as the Food Stamp Program
disqualification, beginning from the date as stated in the Program's notice of
disqualification. This date may be a later date than the beginning date of the
Food Stamp Program disqualification, depending on the Food Stamp Program
notification to the Program.
(2) If
the disqualification of the food vendor would result in inadequate participant
access as defined in (h) of this Section, a civil money penalty shall be
assessed in lieu of disqualification.
(3) Food vendor disqualification or an
assessment of a civil money penalty based on disqualification from the Food
Stamp Program shall not be subject to appeal or judicial or administrative
review, pursuant to Title 7, Code of Federal Regulations, Section
246.18.
(c) A food vendor
shall be permanently disqualified from participation in the Program for a
conviction of trafficking in food instruments or selling firearms, ammunition,
explosives, or controlled substances, as defined in Section 102 of the
Controlled Substances Act (21 USC 802), in exchange for food
instruments.
(1) A food vendor shall not be
entitled to receive any compensation for revenues lost as a result of immediate
implementation of this disqualification.
(2) For purposes of this Article, trafficking
is defined as buying, selling, or exchanging food instruments for
cash.
(d) A food vendor
shall be disqualified for six (6) years for one incidence of trafficking in
food instruments or selling firearms, ammunition, explosives, or controlled
substances, as defined in Section 102 of the Controlled Substances Act
(21 USC
802), in exchange for food instruments. For
purposes of this Article, an incidence means one violation of a Program
regulation based on a Program determination that there is evidence that this
violation has occurred.
(e) A food
vendor shall be disqualified for three (3) years for any of the following
violations:
(1) One incidence of the sale of
alcohol or alcoholic beverages or tobacco products in exchange for food
instruments;
(2) A pattern of
claiming reimbursement for the sale of a volume of supplemental food which
exceeds the food vendor's inventory purchase documentation for a specific
period of time as identified in an audit;
(A)
For the purpose of this Article, "inventory purchase documentation" means
invoices, checking account registers and bank statements, and sales and use tax
forms.
(B) Invoices shall:
1. Identify the food vendor making the
purchase;
2. Identify the date of
purchase;
3. Identify the
quantities, package sizes, types or flavors, brand names, and cost to the food
vendor of specific supplemental foods;
4. Identify the wholesaler and be prepared
entirely by that wholesaler from whom the food vendor made the
purchase.
(C) A pattern
for this violation exists when the amount of food instrument reimbursement
which exceeds the food vendor's inventory purchase documentation identified in
a single audit is equal to or exceeds twenty (20) percent of the total food
instrument reimbursement to the food vendor during the audit
period.
(3) A pattern of
overcharging;
(A) For purposes of this
Article, overcharging means charging the Program a higher price than the non
WIC customer or charging the Program a higher price than the posted
price.
(B) A pattern for this
violation exists when either of the following occurs:
1. the percent of food instruments on which
overcharges are found in a single monitoring visit is equal to or exceeds fifty
(50) percent of the number of food instruments used during that visit,
overcharges are found on two or more food instruments, and the cumulative
overcharge amount to the Program is equal to or exceeds eight (8) dollars. The
overcharge amount on any food instrument shall be at least one (1) dollar;
or,
2. on two or more monitoring
visits within a twenty-four (24) month period the cumulative overcharge amount
to the Program by the food vendor is equal to or exceeds four (4) dollars. The
total overcharge amount for each monitoring visit shall be at least one (1)
dollar.
(4) A
pattern of receiving, transacting, and/or redeeming food instruments outside of
authorized channels;
(A) A pattern for this
violation exists when two food instruments within a twenty-four (24) month
period, have been received, transacted and/or redeemed outside of authorized
channels.
(B) Food vendor
activities described as those conducted outside of authorized channels do not
include those activities described in (c) and (d) of this Section and do
include the following:
1. The use of another
authorized food vendor to redeem food instruments, including exchanging food
instruments for repayment of debt; and
2. Redeeming food instruments not received by
that food vendor in that food vendor's authorized store location, including
redeeming food instruments accepted at an unauthorized store location owned by
the food vendor.
(5) A pattern of charging the Program for
supplemental food not received by the participant, resulting in an overcharge
to the Program. The overcharge amount shall be calculated by deducting the
total of the food vendor's posted price(s) of the item(s) purchased and
received by the participant on a food instrument from the total redeemed by the
food vendor for that food instrument. The definition of pattern for this
violation is the same definition as set forth in (e)(3)(B) of this Section;
or
(6) On two occasions providing
credit or non-food items other than alcohol, alcoholic beverages, tobacco
products, cash, firearms, ammunition, explosives, or controlled substances as
defined in Section 102 of the Controlled Substances Act (21 USC
802), in exchange for food instruments within
a twenty-four (24) month period.
(f) A food vendor shall be disqualified for
one (1) year for a pattern of providing food items not permitted by the food
instrument in exchange for food instruments.
(1) A pattern exists for this violation when
any one of the following violations occurs within an eighteen (18) month
period:
(A) On any two monitoring visits, the
food vendor provides food items not permitted by the food instrument in
thirty-three (33) percent or more of the WIC food categories purchased during
each visit; or
(B) On any three
monitoring visits, the food vendor provides food items not allowed by the food
instrument:
1. in thirty three (33) percent or
more of the WIC food categories purchased in one visit; and
2. in less than thirty-three (33) percent of
the WIC food categories purchased during each of two other visits;
or
(C) On each of four
monitoring visits, the food vendor provides food items not allowed by the food
instrument in one or more of the WIC food categories
purchased.
(2) WIC food
categories are those defined in Section 246.10, Title 7, Code of Federal
Regulations, incorporated by reference herein. These food categories include:
infant formula, infant cereal, milk, cheese, eggs, cereal, juice, peanut
butter, beans, carrots and tuna.
(g) A food vendor shall be disqualified for a
one (1) year period for a pattern of charging for supplemental food items
allowed by the food instrument but provided in excess of the maximum quantity
listed on the food instrument. A pattern exists for this violation when on any
two monitoring visits, within a twenty-four (24) month period, a food vendor
charges for supplemental food items allowed by the food instrument but provided
in excess of the maximum quantity listed on at least two food
instruments.
(h) Prior to
disqualifying a food vendor for any of the violations listed in (b), (d), (e),
(f), and (g) of this Section, the Program shall make a participant access
determination.
(1) For purposes of this
Article, "adequate participant access" means the availability of another food
vendor for the participant and shall be determined using the following
criteria:
(A) The presence of another food
vendor in the same geographic area as either the violating food vendor or the
local agency clinic site closest to the violating food vendor; and
(B) The absence of geographic barriers that
prevent participants from redeeming their food instruments at the other food
vendor location described in (A), above.
(2) For purposes of this Article "same
geographic area" is defined as the following:
(A) In a rural area, the area within a five
mile radius of the violating food vendor or the local agency clinic closest to
the violating food vendor. A rural area is defined as an area with a population
of less than 10,000 persons according to the most recent United States
Decennial Census; or
(B) In an
urban area, that area within a two mile radius of the violating food vendor or
the local agency clinic closest to the violating food vendor. An urban area is
defined as an area with a population of ten thousand (10,000) or more according
to the most recent United States Decennial Census.
(3) For purposes of this Article, geographic
barriers means physical barriers or conditions which make ground travel to
another food vendor impossible. Geographic barriers include: an unbridged river
or canal; a freeway without an overpass or underpass in the same geographic
area; an expressway without an overpass, underpass or crosswalk in the same
geographic area; and train tracks without a railroad crossing in the same
geographic area.
(i)
Program determinations regarding participant access are not subject to appeal
by the disqualified food vendor or subject to administrative review pursuant to
Title 7, Code of Federal Regulations, Section 246.18.
(j) If disqualification of the food vendor
for the violations listed in (b), (d), (e), (f) and (g) of this Section would
result in inadequate participant access, the food vendor shall be subject to a
civil money penalty in lieu of disqualification, unless the disqualification is
for a third or subsequent violation pursuant to (l) of this
Section.
(k) When a food vendor who
has previously been disqualified or received a civil money penalty in lieu of
disqualification for any of the violations in (d) through (g) of this Section
receives a second disqualification or civil money penalty for any of these
violations, the disqualification or civil money penalty shall be doubled.
Violations do not need to be identical in order to double the disqualification
or civil money penalty. For the violations in (d) through (g) of this Section,
civil money penalties may only be doubled up to the limits allowed under Title
7, Code of Federal Regulations, Section 246.12, incorporated by reference
herein.
(l) When a food vendor who
has previously been disqualified or assessed a civil money penalty in lieu of
disqualification for any of the violations listed in (d) through (g) of this
Section receives a third or subsequent disqualification for any of these
violations, the disqualification time period shall be doubled for the third or
subsequent disqualification. Civil money penalties shall not be assessed in
lieu of disqualification for a third or subsequent disqualification for any of
the violations in (d) through (g) of this Section.
(m) Voluntary withdrawal of the food vendor
from the Program or non renewal of the Food Vendor Agreement shall not be used
as alternatives to disqualification for the violations listed in (c) through
(g) of this Section. The disqualification shall be entered into the food
vendor's record.
(n) When a civil
money penalty is imposed on a food vendor in lieu of a disqualification due to
violations of this Section or Section
40741, the formula set forth in
Title 7, Code of Federal Regulations, Section 246.12, and incorporated by
reference herein, shall be used to calculate the amount of a civil money
penalty being imposed in lieu of disqualification.
(o) When, during the course of a single
investigation, the Program determines a food vendor has committed multiple
violations, the food vendor shall be disqualified for all violations. The
disqualification period shall be for the period corresponding to the most
serious violation. The most serious violation is that which requires the
longest time period of disqualification. A listing of all violations for which
the food vendor was disqualified shall be included in the notice of
administrative action.
(p) Any
administrative action against any food vendor either disqualified or subject to
a civil money penalty in lieu of disqualification for any of the violations in
(c) through (g) of this Section, shall result in a notice from the Program to
the appropriate federal office as required in Section 246.12, Title 7, Code of
Federal Regulations.
(q) If the
food vendor has been assessed a civil money penalty in lieu of
disqualification, the food vendor shall pay the civil money penalty in full
within thirty (30) days:
(1) of the food
vendor's receipt of the notification of disqualification and assessment of a
civil money penalty in lieu of disqualification; or
(2) of the Department's issuance of the final
decision of the appeal action, if the food vendor has filed an appeal of the
disqualification within the required time period pursuant to Section
40751; or
(3) of the date of the execution of a
settlement agreement, agreed upon by the food vendor and the Program during the
appeal process, if the food vendor has filed an appeal within the required time
period pursuant to Section
40751.
(r) A food vendor may request to pay one half
of the total civil money penalty amount in installments. The Program must
receive the food vendor's written request for an installment plan and an
initial payment of no less than fifty (50) percent of the total amount of the
civil money penalty within the same time limits required for full payment
stated in (q) of this Section. The food vendor shall pay the unpaid balance of
the civil money penalty as stated in an installment plan agreement entered into
by the Program and the food vendor. The installment plan agreement shall
include:
(1) An interest payment on the
unpaid balance calculated at the rate allowed by the Pooled Money Investment
Fund divided into twelve (12) consecutive monthly payments; and
(2) The unpaid balance of the civil money
penalty, after the initial payment has been deducted from the total civil money
penalty amount, divided into twelve (12) consecutive monthly payments;
and
(3) The payment schedule,
including the principal and interest amounts and the payment due dates. The
first monthly payment shall be due no later than one month following the
execution of the installment plan agreement.
(s) If a food vendor fails to pay all of a
civil money penalty within the time limit required in (q) of this Section, or
fails to timely pay any installment of a civil money penalty as stated in the
Program's installment plan agreement with the food vendor, the Program shall
provide the food vendor with a fifteen (15) day notice of disqualification for
failure to timely pay a civil money penalty. The notice shall be sent by first
class mail to the address listed on the food vendor agreement. Disqualification
of the food vendor shall be imposed effective on the disqualification date
stated in the notice. The disqualification shall be for the entire length of
time corresponding to the most serious violation for which the civil money
penalty was assessed.
1. New
section filed 9-3-2002; operative 10-3-2002 (Register 2002, No.
36).
2. Governor Newsom issued Executive Order N-40-20 (2019 CA EO
40-20), dated March 30, 2020, which allowed the director of the State
Department of Public Health to make temporary changes to certain regulations
relating to the Women, Infants, and Children Program, due to the COVID-19
pandemic.
Note: Authority cited: Sections 123280 and 123290,
Health and Safety Code. Reference: Sections 123290, 123310, 123315, 123320,
123325, 123330, 123335 and 123340, Health and Safety
Code.
