45 CFR Parts 160 & 164 (CFR Annual Edition) nancial reports under § 98.65(g); and (3) Annual quality progress reports under § 98.53(g). [63 FR 39981, July 24, 1998, as amended at 81 FR 67592, Sept. 30, 2016; 89 FR 52397, June 24, 2024] § 98.71 Content of report. (a) At a minimum, a State or terri- torial Lead Agency’s quarterly case- level report to the Secretary, as re- quired in § 98.70, shall include the fol- lowing information on services pro- vided under CCDF grant funds, includ- ing Federal Discretionary (which in- cludes any funds transferred from the TANF Block Grant), Mandatory, and Matching Funds; and State Matching and Maintenance-of-Effort (MOE) Funds: (1) The total monthly family income and family size used for determining eligibility; (2) Zip code of residence of the family and zip code of the location of the child care provider; 747 § 98.71 45 CFR Subtitle A (10–1–24 Edition) (3) Gender and month/year of birth of children; (4) Ethnicity and race of children; (5) Whether the head of the family is a single parent (6) The sources of family income and assistance from employment (including self-employment), cash or other assist- ance under the Temporary Assistance for Needy Families program under Part A of title IV ) The sources of family income and assistance from employment (including self-employment), cash or other assist- ance under the Temporary Assistance for Needy Families program under Part A of title IV of the Social Security Act (42 U.S.C. 609(a)(7)), cash or other as- sistance under a State program for which State spending is counted to- ward the maintenance of effort require- ment under section 409(a)(7) of the So- cial Security Act, housing assistance, assistance under the Food Stamp Act of 1977, and other assistance programs; (7) The month/year child care assist- ance to the family started; (8) The type(s) of child care in which the child was enrolled (such as family child care, in-home care, or center- based child care; (9) Whether the child care provider was a relative; (10) The total monthly child care co- payment by the family; (11) [Reserved] (12) The total expected dollar amount per month to be received by the pro- vider for each child; (13) The total hours per month of such care; (14) Unique identifier of the head of the family unit receiving child care as- sistance, and of the child care provider; (15) Reasons for receiving care; (16) Whether the family is experi- encing are; (14) Unique identifier of the head of the family unit receiving child care as- sistance, and of the child care provider; (15) Reasons for receiving care; (16) Whether the family is experi- encing homelessness; (17) Whether the parent(s) are in the military service; (18) Whether the child has a dis- ability; (19) Primary language spoken at home; (20) Date of the child care provider’s most recent health, safety and fire in- spection meeting the requirements of § 98.42(b)(2); (21) Indicator of the quality of the child care provider; and (22) Any additional information that the Secretary shall require. (b) At a minimum, a State or terri- torial Lead Agency’s annual aggregate report to the Secretary, as required in § 98.70(b), shall include the following in- formation on services provided through all CCDF grant funds, including Fed- eral Discretionary (which includes any funds transferred from the TANF Block Grant), Mandatory, and Matching Funds; and State Matching and MOE Funds: (1) The number of child care pro- viders that received funding under CCDF as separately identified based on the types of providers listed in section 658P(5) of the amended Child Care and Development Block he number of child care pro- viders that received funding under CCDF as separately identified based on the types of providers listed in section 658P(5) of the amended Child Care and Development Block Grant Act; through (2) The number of children served by payments certificates or vouchers, contracts or grants, and cash under public benefit programs, listed by the primary type of child care serv- ices provided during the last month of the report period (or the last month of service for those children leaving the program before the end of the report period); (3) The manner in which consumer education information was provided to parents and the number of parents to whom such information was provided; (4) The total number (without dupli- cation) of children and families served under CCDF; (5) For Lead Agencies implementing presumptive eligibility in accordance with § 98.21(e): (i) The number of presumptively eli- gible children ultimately determined fully eligible; (ii) The number of presumptively eli- gible children for whom the family does not complete the documentation for full eligibility verification; and, (iii) The number of presumptively el- igible children who are determined no mptively eli- gible children for whom the family does not complete the documentation for full eligibility verification; and, (iii) The number of presumptively el- igible children who are determined not to be eligible after full verification; (6) The number of child fatalities by type of care; and (7) Any additional information that the Secretary shall require. (c) A Tribal Lead Agency’s annual re- port as required in § 98.70(c), shall in- clude such information as the Sec- retary shall require. [81 FR 67592, Sept. 30, 2016, as amended at 89 FR 15416, Mar. 1, 2024] 748 Dept. of Health and Human Services § 98.81 Subpart I—Indian Tribes § 98.80 General procedures and re- quirements. An Indian Tribe or tribal organiza- tion (as described in subpart G of these regulations) may be awarded grants to plan and carry out programs for the purpose of increasing the availability, affordability, and quality of child care and childhood development programs subject to the following conditions: (a) An Indian Tribe applying for or receiving CCDF funds shall be subject to the requirements under this part as specified in this section based on the size of the awarded funds. The Sec- retary shall establ Indian Tribe applying for or receiving CCDF funds shall be subject to the requirements under this part as specified in this section based on the size of the awarded funds. The Sec- retary shall establish thresholds for Tribes’ total CCDF allotments pursu- ant to §§ 98.61(c) and 98.62(b) to be di- vided into three categories: (1) Large allocations; (2) Medium allocations; and (3) Small allocations. (b) An Indian Tribe applying for or receiving CCDF funds shall: (1) Have at least 50 children under 13 years of age (or such similar age, as de- termined by the Secretary from the best available data) in order to be eligi- ble to operate a CCDF program. This limitation does not preclude an Indian Tribe with fewer than 50 children under 13 years of age from participating in a consortium that receives CCDF funds; and (2) Demonstrate its current service delivery capability, including skills, personnel, resources, community sup- port, and other necessary components to satisfactorily carry out the proposed program. (c) A consortium representing more than one Indian Tribe may be eligible to receive CCDF funds on behalf of a particular Tribe if: (1) The consortium adequately dem- onstrates that proposed program. (c) A consortium representing more than one Indian Tribe may be eligible to receive CCDF funds on behalf of a particular Tribe if: (1) The consortium adequately dem- onstrates that each participating Tribe authorizes the consortium to receive CCDF funds on behalf of each Tribe or tribal organization in the consortium; (2) The consortium consists of Tribes that each meet the eligibility require- ments for the CCDF program as defined in this part, or that would otherwise meet the eligibility requirements if the Tribe or tribal organization had at least 50 children under 13 years of age; (3) All the participating consortium members are in geographic proximity to one another (including operation in a multi-State area) or have an existing consortium arrangement; and (4) The consortium demonstrates that it has the managerial, technical and administrative staff with the abil- ity to administer government funds, manage a CCDF program and comply with the provisions of the Act and of this part. (d) The awarding of a grant under this section shall not affect the eligi- bility of any Indian child to receive CCDF services provided by the State or States in which the Indian Tr and of this part. (d) The awarding of a grant under this section shall not affect the eligi- bility of any Indian child to receive CCDF services provided by the State or States in which the Indian Tribe is lo- cated. (e) For purposes of the CCDF, the de- termination of the number of children in the Tribe, pursuant to paragraph (b)(1) of this section, shall include In- dian children living on or near reserva- tions, with the exception of Tribes in Alaska, California and Oklahoma. [63 FR 39981, July 24, 1998, as amended at 81 FR 67592, Sept. 30, 2016] § 98.81 Application and Plan proce- dures. (a) In order to receive CCDF funds, a Tribal Lead Agency shall apply for funds pursuant to § 98.13, except that the requirement at § 98.13(b)(2) does not apply. (b) Tribal Lead Agencies with large and medium allocations shall submit a CCDF Plan, as described at § 98.16, with the following additions and exceptions: (1) The Plan shall include the basis for determining family eligibility. (i) If the Tribe’s median income is below a certain level established by the Secretary, then, at the Tribe’s option, any Indian child in the Tribe’s service area shall be considered eligible to re- ceive CCDF fu Tribe’s median income is below a certain level established by the Secretary, then, at the Tribe’s option, any Indian child in the Tribe’s service area shall be considered eligible to re- ceive CCDF funds, regardless of the family’s income, work, or training sta- tus, provided that provision for serv- ices still goes to those with the highest need. (ii) If the Tribe’s median income is above the level established by the Sec- retary, then a tribal program must de- termine eligibility for services pursu- ant to § 98.20(a)(2). A tribal program, as specified in its Plan, may use either: (A) 85 percent of the State median in- come for a family of the same size; or 749 § 98.82 45 CFR Subtitle A (10–1–24 Edition) (B) 85 percent of the median income for a family of the same size residing in the area served by the Tribal Lead Agency. (2) For purposes of determining eligi- bility, the following terms shall also be defined: (i) Indian child; and (ii) Indian reservation or tribal serv- ice area. (3) The Tribal Lead Agency shall also assure that: (i) The applicant shall coordinate, to the maximum extent feasible, with the Lead Agency in the State in which the applicant shall carry out CCDF pro- g The Tribal Lead Agency shall also assure that: (i) The applicant shall coordinate, to the maximum extent feasible, with the Lead Agency in the State in which the applicant shall carry out CCDF pro- grams or activities, pursuant to § 98.82; and (ii) In the case of an applicant lo- cated in a State other than Alaska, California, or Oklahoma, CCDF pro- grams and activities shall be carried out on an Indian reservation for the benefit of Indian children, pursuant to § 98.83(b). (4) The Plan shall include any infor- mation, as prescribed by the Secretary, necessary for determining the number accordance with in of §§ 98.61(c), 98.62(c), and 98.80(b)(1). children (5) The Plan shall include a descrip- tion of the Tribe’s payment rates, how they are established, and how they sup- port quality including, where applica- ble, cultural and linguistic appro- priateness. (6) The Plan is not subject to the fol- lowing requirements: (i) The early learning and develop- requirement at mental guidelines § 98.15(a)(9); (ii) The certification to develop the CCDF Plan in consultation with the State Advisory Council at § 98.15(b)(1); (iii) The licensing requirements ap- plicable to child care services at § 98.15(a)(9); (ii) The certification to develop the CCDF Plan in consultation with the State Advisory Council at § 98.15(b)(1); (iii) The licensing requirements ap- plicable to child care services at §§ 98.15(b)(6) and §§ 98.16(u); (iv) The identification of the public or private entities designated to re- ceive private funds at § 98.16(d)(2); (v) A definition of very low income at § 98.16(g)(8); (vi) A description at § 98.16(i)(4) of how the Lead Agency will meet the needs of certain families specified at § 98.50(e); (vii) The description of the sliding fee scale at § 98.16(k); (viii) The description of the market rate survey or alternative methodology at § 98.16(r); (ix) The description relating to Matching Funds at § 98.16(w); (x) The description of how the Lead Agency uses grants or contracts for supply building at § 98.16(z); (xi) The description of how the Lead Agency prioritizes increasing access to high-quality child care in areas with high concentration of poverty at § 98.16(aa); and (xii) The description of provider pay- ment practices at § 98.16(ee). (7) In its initial Plan, an Indian Tribe shall describe its current service deliv- ery capability pursuant to § 98.80(b)( aa); and (xii) The description of provider pay- ment practices at § 98.16(ee). (7) In its initial Plan, an Indian Tribe shall describe its current service deliv- ery capability pursuant to § 98.80(b)(2). (8) A consortium shall also provide the following: (i) A list of participating or con- stituent members, including dem- onstrations from these members pursu- ant to § 98.80(c)(1); (ii) A description of how the consor- tium is coordinating services on behalf of its members, pursuant to § 98.83(c)(1); and (iii) As part of its initial Plan, the information required at additional § 98.80(c)(4). (9) Plans for Tribal Lead Agencies with medium allocations are not sub- ject to the following requirements un- less the Tribe chooses to include such services, and, therefore, the associated requirements, in its program: (i) The assurance at § 98.15(a)(2) re- garding options for services; (ii) A description of any limits estab- lished for the provision of in-home care at § 98.16(i)(2), or (iii) A description of the child care system(s) at certificate payment § 98.16(q). (c) Tribal Lead Agencies with small allocations shall submit an abbreviated CCDF Plan, as described by the Sec- retary. [63 FR scription of the child care system(s) at certificate payment § 98.16(q). (c) Tribal Lead Agencies with small allocations shall submit an abbreviated CCDF Plan, as described by the Sec- retary. [63 FR 39981, July 24, 1998, as amended at 81 FR 67593, Sept. 30, 2016; 89 FR 15416, Mar. 1, 2024] § 98.82 Coordination. Tribal applicants shall coordinate the development of the Plan and the provision of services, to the extent practicable, as required by §§ 98.12 and 98.14 and: 750 Dept. of Health and Human Services § 98.83 (a) To the maximum extent feasible, with the Lead Agency in the State or States in which the applicant will carry out the CCDF program; and (b) With other Federal, State, local, and tribal child care and childhood de- velopment programs. [81 FR 67593, Sept. 30, 2016] § 98.83 Requirements for tribal pro- grams. (a) The grantee shall designate an agency, department, or unit to act as the Tribal Lead Agency to administer the CCDF program. (b) With the exception of Alaska, California, and Oklahoma, programs and activities for the benefit of Indian children shall be carried out on or near an Indian reservation. (c) In the case of a tribal grantee that is a consortium: (1) A b ornia, and Oklahoma, programs and activities for the benefit of Indian children shall be carried out on or near an Indian reservation. (c) In the case of a tribal grantee that is a consortium: (1) A brief description of the direct child care services funded by CCDF for each of their participating Tribes shall be provided by the consortium in their three-year CCDF Plan; and (2) Variations in CCDF programs or requirements and in child care licens- ing, regulatory and health and safety requirements shall be specified in writ- ten agreements between the consor- tium and the Tribe. (3) If a Tribe elects to participate in a consortium arrangement to receive one part of the CCDF (e.g., Discre- tionary Funds), it may not join an- other consortium or apply as a direct grantee to receive the other part of the CCDF (e.g., Tribal Mandatory Funds). (4) If a Tribe relinquishes its mem- bership in a consortium at any time during the fiscal year, CCDF funds awarded on behalf of the member Tribe will remain with the tribal consortium to provide direct child care services to other consortium members for that fis- cal year. (d)(1) Tribal Lead Agencies shall not be subject to: (i) The requirements to emain with the tribal consortium to provide direct child care services to other consortium members for that fis- cal year. (d)(1) Tribal Lead Agencies shall not be subject to: (i) The requirements to use grants or contracts to build supply for certain populations at § 98.30(b); education website (ii) The requirement to produce a consumer at § 98.33(a). Tribal Lead Agencies still must collect and disseminate the pro- vider-specific consumer education in- § 98.33(a) formation described at through (d), but may do so using meth- ods other than a website; (iii) The requirement to have licens- ing applicable to child care services at § 98.40; (iv) The requirement for a training and professional development frame- work at § 98.44(a); (v) The market rate survey or alter- native methodology at § 98.45(b)(2) and the related require- ments at § 98.45(c), (d), (e), and (f); described (vi) The requirement for a sliding fee scale at § 98.45(l); (vii) The requirement to have pro- vider payment practices that reflect generally accepted payment practices at § 98.45(m); (viii) The requirement that Lead Agencies shall give priority for serv- ices to children of families with very low family income at ces that reflect generally accepted payment practices at § 98.45(m); (viii) The requirement that Lead Agencies shall give priority for serv- ices to children of families with very low family income at § 98.46(a)(1); (ix) The requirement that Lead Agen- cies shall prioritize increasing access to high-quality child care in areas with significant concentrations of poverty and unemployment at § 98.46(b); (x) The requirements to use grants or contracts at § 98.50(a)(3); (xi) The requirements about Manda- tory and Matching Funds at § 98.50(e); (xii) The requirement to complete the quality progress report at § 98.53(g); (xiii) The requirement that Lead Agencies shall expend no more than five percent from each year’s allotment on administrative costs at § 98.54(a); and (xiv) The Matching fund require- ments at §§ 98.55 and 98.63. (2) Tribal Lead Agencies with large, medium, and small allocations shall be subject to the provision at § 98.42(b)(2) to require inspections of child care pro- viders and facilities, unless a Tribal Lead Agency describes an alternative monitoring approach in its Plan and provides adequate justification for the approach. (3) Tribal Lead Agencies with large, medium, and facilities, unless a Tribal Lead Agency describes an alternative monitoring approach in its Plan and provides adequate justification for the approach. (3) Tribal Lead Agencies with large, medium, and small allocations shall be subject to the requirement at § 98.43 to conduct comprehensive criminal back- ground checks, unless the Tribal Lead Agency describes an alternative back- ground check approach in its Plan and provides adequate justification for the approach. 751 § 98.84 45 CFR Subtitle A (10–1–24 Edition) (e) Tribal Lead Agencies with me- dium and small allocations shall not be subject to the requirement for certifi- cates at § 98.30(a) and (d). (f) Tribal Lead Agencies with small allocations must spend their CCDF funds in alignment with the goals and purposes described in § 98.1. These Tribes shall have flexibility in how they spend their CCDF funds and shall be subject to the following require- ments: (1) The health and safety require- ments described in § 98.41; (2) The monitoring requirements at §§ 98.42 and 98.83(d)(2); and (3) The background checks require- and described §§ 98.43 in ments 98.83(d)(3); (4) The requirements to spend funds on activities to improve the onitoring requirements at §§ 98.42 and 98.83(d)(2); and (3) The background checks require- and described §§ 98.43 in ments 98.83(d)(3); (4) The requirements to spend funds on activities to improve the quality of child care described in §§ 98.83(g) and 98.53; (5) The use of funds requirements at § 98.56 and cost allocation requirement at § 98.57; (6) The financial management re- quirements at subpart G of this part that are applicable to Tribes; (7) The reporting requirements at subpart H of this part that are applica- ble to Tribes; (8) The eligibility definitions at § 98.81(b)(2); (9) The 15 percent limitation on ad- ministrative activities at § 98.83(i); (10) The monitoring, non-compliance, and complaint provisions at subpart J of this part; and (11) Any other requirement estab- lished by the Secretary. (g) Of the aggregate amount of funds expended (i.e., Discretionary and Man- datory Funds): (1) For Tribal Lead Agencies with large, medium, and small allocations, no less than nine percent shall be used for activities designed to improve the quality of child care services and in- crease parental options for, and access to, high-quality child care as described at § 98.53; and (2) F rcent shall be used for activities designed to improve the quality of child care services and in- crease parental options for, and access to, high-quality child care as described at § 98.53; and (2) For Tribal Lead Agencies with large and medium allocations, no less than three percent shall be used to carry out activities at § 98.53(a)(4) as such activities relate to the quality of care for infants and toddlers. (3) Nothing in this section shall pre- clude the Tribal Lead Agencies from reserving a larger percentage of funds to carry out activities described in paragraph (g)(1) and (2) of this section. (h) The base amount of any tribal grant is not subject to the administra- tive cost limitation at paragraph (i) of this section, the direct services re- quirement at § 98.50(f)(2), or the quality expenditure requirement at § 98.53(a). The base amount may be expended for any costs consistent with the purposes and requirements of the CCDF. (i) Not more than 15 percent of the aggregate CCDF funds expended by the Tribal Lead Agency from each fiscal year’s (including amounts used for con- struction and renovation in accordance with § 98.84, but not including the base amount provided under funds expended by the Tribal Lead Agency from each fiscal year’s (including amounts used for con- struction and renovation in accordance with § 98.84, but not including the base amount provided under paragraph (h) of this section) shall be expended for administrative activities. Amounts used for construction and major ren- ovation in accordance with § 98.84 are not considered administrative costs. (j)(1) CCDF funds are available for costs incurred by the Tribal Lead Agency only after the funds are made available by Congress for Federal obli- gation unless costs are incurred for planning activities related to the sub- mission of an initial CCDF Plan. (2) Federal obligation of funds for planning costs, pursuant to paragraph (i)(1) of this section is subject to the actual availability of the appropria- tion. [81 FR 67593, Sept. 30, 2016, as amended at 82 FR 3186, Jan. 11, 2017; 89 FR 15416, Mar. 1, 2024; 89 FR 52397, June 24, 2024] § 98.84 Construction and renovation of child care facilities. (a) Upon requesting and receiving ap- proval from the Secretary, Tribal Lead Agencies may use amounts provided under §§ 98.61(c) and 98.62(b) to make payments for construction or major renovation ies. (a) Upon requesting and receiving ap- proval from the Secretary, Tribal Lead Agencies may use amounts provided under §§ 98.61(c) and 98.62(b) to make payments for construction or major renovation of child care facilities (in- cluding paying the cost of amortizing the principal and paying interest on loans). (b) To be approved by the Secretary, a request shall be made in accordance with uniform procedures established by program instruction and, in addition, shall demonstrate that: 752 Dept. of Health and Human Services § 98.84 (1) Adequate facilities are not other- wise available to enable the Tribal Lead Agency to carry out child care programs; (2) The lack of such facilities will in- hibit the operation of child care pro- grams in the future; and (3) The use of funds for construction or major renovation will not result in a decrease in the level of child care serv- ices provided by the Tribal Lead Agen- cy as compared to the level of services provided by the Tribal Lead Agency in the preceding fiscal year. The Sec- retary shall waive this requirement if: (i) The Secretary determines that the decrease in the level of child care serv- ices provided by the Indian tribe or tribal the preceding fiscal year. The Sec- retary shall waive this requirement if: (i) The Secretary determines that the decrease in the level of child care serv- ices provided by the Indian tribe or tribal organization is temporary; and (ii) The Indian tribe or tribal organi- zation submits to the Secretary a plan that demonstrates that after the date on which the construction or renova- tion is completed: (A) The level of direct child care services will increase; or (B) The quality of child care services will improve. (c)(1) Tribal Lead Agency may use CCDF funds for reasonable and nec- essary planning costs associated with assessing the need for construction or renovation or for preparing a request, in accordance with the uniform proce- dures established by program instruc- tion, to spend CCDF funds on construc- tion or major renovation. (2) A Tribal Lead Agency may only use CCDF funds to pay for the costs of an architect, engineer, or other con- sultant for a project that is subse- quently approved by the Secretary. If the project later fails to gain the Sec- retary’s approval, the Tribal Lead Agency must pay for the architectural, engineering or consultant costs using non-CCDF funds. y approved by the Secretary. If the project later fails to gain the Sec- retary’s approval, the Tribal Lead Agency must pay for the architectural, engineering or consultant costs using non-CCDF funds. (d) Tribal Lead Agencies that receive approval from the Secretary to use CCDF funds for construction or major renovation shall comply with the fol- lowing: (1) Federal share requirements and use of property requirements at 45 CFR 75.318; (4) Cost principles and allowable cost requirements at subpart E of this part; (5) Program income requirements at 45 CFR 75.307; (6) Procurement procedures at 45 CFR 92.36; 75.326 through 75.335; and (7) Any additional requirements es- tablished by program instruction, in- cluding requirements concerning: (i) The recording of a Notice of Fed- eral Interest in the property; (ii) Rights and responsibilities in the event of a grantee’s default on a mort- gage; (iii) Insurance and maintenance; (iv) Submission of plans, specifica- tions, inspection reports, and other legal documents; and (v) Modular units. (e) In lieu of obligation and liquida- tion requirements at § 98.60(e), Tribal Lead Agencies shall obligate CCDF funds used for construction or major re d other legal documents; and (v) Modular units. (e) In lieu of obligation and liquida- tion requirements at § 98.60(e), Tribal Lead Agencies shall obligate CCDF funds used for construction or major renovation by the end of the second fis- cal year following the fiscal year for which the grant is awarded. Tribal con- struction and major renovation funds must be liquidated at the end of the second succeeding fiscal year following this obligation deadline. Any Tribal construction and major renovation funds that remain unliquidated by the end of this period will revert to the Federal government. (f) Tribal Lead Agencies may expend funds, without requesting approval pursuant to paragraph (a) of this sec- tion, for minor renovation. (g) A new tribal grantee (i.e., one that did not receive CCDF funds the preceding fiscal year) may spend no more than an amount equivalent to its Tribal Mandatory allocation on con- struction and renovation. A new tribal grantee must spend an amount equiva- lent to its Discretionary allocation on activities other than construction or renovation (i.e., direct services, quality activities, or administrative costs). (h) A construction or renovation project that to its Discretionary allocation on activities other than construction or renovation (i.e., direct services, quality activities, or administrative costs). (h) A construction or renovation project that requires and receives ap- proval by the Secretary must include as part of the construction and renova- tion costs: (1) planning costs as allowed at (2) Transfer and disposition of prop- § 98.84(c); erty requirements at 45 CFR 75.318(c); (3) Title requirements at 45 CFR 75.318(a); (2) labor, materials and services nec- essary for the functioning of the facil- ity; and 753 § 98.90 45 CFR Subtitle A (10–1–24 Edition) (3) initial equipment for the facility. Equipment means items which are tan- gible, nonexpendable personal property having a useful life of more than five years. [63 FR 39981, July 24, 1998, as amended at 81 FR 3020, Jan. 20, 2016; 81 FR 67594, Sept. 30, 2016; 89 FR 15417, Mar. 1, 2024] Subpart J—Monitoring, Non- compliance and Complaints § 98.90 Monitoring. (a) The Secretary will monitor pro- grams funded under the CCDF for com- pliance with: (1) The Act; (2) The provisions of this part; and (3) The provisions and requirements set forth in the CCDF Plan approved under § 98.1 l monitor pro- grams funded under the CCDF for com- pliance with: (1) The Act; (2) The provisions of this part; and (3) The provisions and requirements set forth in the CCDF Plan approved under § 98.18; (b) If a review or investigation re- veals evidence that the Lead Agency, or an entity providing services under contract or agreement with the Lead Agency, has failed to substantially comply with the Plan or with one or more provisions of the Act or imple- menting regulations, the Secretary will issue a preliminary notice to the Lead Agency of possible non-compli- ance. The Secretary shall consider comments received from the Lead Agency within 60 days (or such longer period as may be agreed upon between the Lead Agency and the Secretary). (c) Pursuant to an investigation con- ducted under paragraph (a) of this sec- tion, a Lead Agency shall make appro- priate books, documents, papers, manuals, instructions, and records available to the Secretary, or any duly authorized representatives, for exam- ination or copying on or off the prem- ises of the appropriate entity, includ- ing subgrantees and contractors, upon reasonable request. (d)(1) Lead Agencies and subgrantees shall retain all for exam- ination or copying on or off the prem- ises of the appropriate entity, includ- ing subgrantees and contractors, upon reasonable request. (d)(1) Lead Agencies and subgrantees shall retain all CCDF records, as speci- fied in paragraph (c) of this section, and any other records of Lead Agencies and subgrantees that are needed to substantiate compliance with CCDF re- quirements, for the period of time spec- ified in paragraph (e) of this section. (2) Lead Agencies and subgrantees shall provide through an appropriate provision in their contracts that their contractors will retain and permit ac- cess to any books, documents, papers, and records of the contractor that are directly pertinent to that specific con- tract. (e) Length of retention period. (1) Ex- cept as provided in paragraph (e)(2) of this section, records specified in para- graph (c) of this section shall be re- tained for three years from the day the Lead Agency or subgrantee submits the Financial Reports required by the Sec- retary, pursuant to § 98.65(g), for the program period. (2) If any litigation, claim, negotia- tion, audit, disallowance action, or other action involving the records has been started before the Sec- retary, pursuant to § 98.65(g), for the program period. (2) If any litigation, claim, negotia- tion, audit, disallowance action, or other action involving the records has been started before the expiration of the three-year retention period, the records shall be retained until comple- tion of the action and resolution of all issues that arise from it, or until the end of the regular three-year period, whichever is later. § 98.91 Non-compliance. (a) If after reasonable notice to a Lead Agency, pursuant to § 98.90 or § 98.93, a final determination is made that: (1) There has been a failure by the Lead Agency, or by an entity providing services under contract or agreement with the Lead Agency, to comply sub- stantially with any provision or re- quirement set forth in the Plan ap- proved under § 98.16; or (2) If in the operation of any program for which funding is provided under the CCDF, there is a failure by the Lead Agency, or by an entity providing serv- ices under contract or agreement with the Lead Agency, to comply substan- tially with any provision of the Act or this part, the Secretary will provide to the Lead Agency a written notice of a finding of non-compliance. Th agreement with the Lead Agency, to comply substan- tially with any provision of the Act or this part, the Secretary will provide to the Lead Agency a written notice of a finding of non-compliance. This notice will be issued within 60 days of the pre- liminary notification in § 98.90(b), or within 60 days of the receipt of addi- tional comments from the Lead Agen- cy, whichever is later, and will provide the opportunity for a hearing, pursuant to part 99. (b) The notice in paragraph (a) of this section will include all relevant find- ings, as well as any penalties or sanc- tions to be applied, pursuant to § 98.92. 754 Dept. of Health and Human Services § 98.93 (c) Issues subject to review at the hearing include the finding of non-com- pliance, as well as any penalties or sanctions to be imposed pursuant to § 98.92. § 98.92 Penalties and sanctions. (a) Upon a final determination that the Lead Agency has failed to substan- tially comply with the Act, the imple- menting regulations, or the Plan, one of the following penalties will be ap- plied: (1) The Secretary will disallow any improperly expended funds; (2) An amount equal to or less than the improperly expended funds will be deduc e Plan, one of the following penalties will be ap- plied: (1) The Secretary will disallow any improperly expended funds; (2) An amount equal to or less than the improperly expended funds will be deducted from the administrative por- tion of the State allotment for the fol- lowing fiscal year; or (3) A combination of the above op- tions will be applied. (b) In addition to imposing the pen- alties described in paragraph (a) of this section, the Secretary may impose other appropriate sanctions, including: (1) Disqualification of the Lead Agen- cy from the receipt of further funding under the CCDF; or (2)(i) A penalty of not more than four percent of the funds allotted under § 98.61 (i.e., the Discretionary Funds) for a Fiscal Year shall be withheld if the Secretary determines that the Lead Agency has failed to implement a provision of the Act, these regulations, or the Plan required under § 98.16; (ii) This penalty will be withheld no earlier than the second full quarter fol- lowing the quarter in which the Lead Agency was notified of the proposed penalty; (iii) This penalty will not be applied if the Lead Agency corrects the failure or violation before the penalty is to be applied or uarter in which the Lead Agency was notified of the proposed penalty; (iii) This penalty will not be applied if the Lead Agency corrects the failure or violation before the penalty is to be applied or if it submits a plan for cor- rective action that is acceptable to the Secretary; or (iv) The Lead Agency may show cause to the Secretary why the amount of the penalty, if applied, should be re- duced. (3)(i) A penalty of five percent of the funds allotted under § 98.61 (i.e., the Discretionary Funds) for a Fiscal Year shall be withheld for any For Fiscal Year the Secretary determines that the Lead Agency has failed to give priority for service in accordance with § 98.46(a); (ii) This penalty will be withheld no earlier than the first full Fiscal Year following the determination to apply the penalty; (iii) This penalty will not be applied if the Lead Agency corrects its failure to comply and amends its CCDF Plan within six months of being notified of the failure; and (iv) The Secretary may waive a pen- alty for one year in the event of ex- traordinary circumstances, such as a natural disaster. (4)(i) A penalty of five percent of the funds allotted under § 98.61 (i.e., the Discretionar y waive a pen- alty for one year in the event of ex- traordinary circumstances, such as a natural disaster. (4)(i) A penalty of five percent of the funds allotted under § 98.61 (i.e., the Discretionary Funds) for a Fiscal Year shall be withheld for any Fiscal Year that the Secretary determines that the State, Territory, or Tribe has failed to comply substantially with the criminal background check requirements at § 98.43; (ii) This penalty will be withheld no earlier than the first full Fiscal Year following the determination to apply the penalty; and (iii) This penalty will not be applied if the State, Territory, or Tribe cor- rects the failure before the penalty is to be applied or if it submits a plan for corrective action that is acceptable to the Secretary. (c) If a Lead Agency is subject to ad- ditional sanctions as provided under paragraph (b) of this section, specific identification of any additional sanc- tions being imposed will be provided in the notice provided pursuant to § 98.91. (d) Nothing in this section, or in § 98.90 or § 98.91, will preclude the Lead Agency and the Department from in- formally resolving a possible compli- ance issue without following all of the § 98.91. (d) Nothing in this section, or in § 98.90 or § 98.91, will preclude the Lead Agency and the Department from in- formally resolving a possible compli- ance issue without following all of the steps described in §§ 98.90, 98.91 and 98.92. Penalties and/or sanctions, as de- scribed in paragraphs (a) and (b) of this section, may nevertheless be applied, even though the issue is resolved infor- mally. (e) It is at the Secretary’s sole discre- tion to choose the penalty to be im- posed under paragraphs (a) and (b) of this section. [63 FR 39981, July 24, 1998, as amended at 81 FR 67594, Sept. 30, 2016] § 98.93 Complaints. (a) This section applies to any com- plaint (other than a complaint alleging 755 § 98.100 45 CFR Subtitle A (10–1–24 Edition) violation of the nondiscrimination pro- visions) that a Lead Agency has failed to use its allotment in accordance with the terms of the Act, the implementing regulations, or the Plan. The Secretary is not required to consider a complaint unless it is submitted as required by this section. Complaints with respect to discrimination should be referred to the Office of Civil Rights of the Depart- ment. (b) Complaints with respect to the CCDF ss it is submitted as required by this section. Complaints with respect to discrimination should be referred to the Office of Civil Rights of the Depart- ment. (b) Complaints with respect to the CCDF shall be submitted in writing to the Assistant Secretary for Children and Families. The complaint shall identify the provision of the Plan, the Act, or this part that was allegedly violated, specify the basis for alleging the violation(s), and include all rel- evant information known to the person submitting it. (c) The Department shall promptly furnish a copy of any complaint to the affected Lead Agency. Any comments received from the Lead Agency within 60 days (or such longer period as may be agreed upon between the Lead Agen- cy and Department) shall be considered by the Department in responding to the complaint. The Department will conduct an investigation of com- plaints, where appropriate. (d) The Department will provide a written response to complaints within 180 days after receipt. If a final resolu- tion cannot be provided at that time, the response will state the reasons why additional time is necessary. (e) Complaints that are not satisfac- torily resolved through communicat If a final resolu- tion cannot be provided at that time, the response will state the reasons why additional time is necessary. (e) Complaints that are not satisfac- torily resolved through communication with the Lead Agency will be pursued through the process described in § 98.90. [63 FR 39981, Sept. 24, 1998, as amended at 81 FR 67595, Sept. 30, 2016] Subpart K—Error Rate Reporting SOURCE: 72 FR 50898, Sept. 5, 2007, unless otherwise noted. § 98.100 Error Rate Report. (a) Applicability—The requirements of this subpart apply to the fifty States, the District of Columbia and Puerto Rico. (b) Generally—States, the District of Columbia and Puerto Rico shall cal- culate, prepare and submit to the De- partment, a report of errors occurring in the administration of CCDF grant funds, at times and in a manner speci- fied by the Secretary in instructions. States, the District of Columbia and Puerto Rico must use this report to calculate their error rates, which is de- fined as the percentage of cases with an error (expressed as the total number of cases with an error compared to the total number of cases); the percentage of cases with an improper payment (ex- pressed as the total number of f cases with an error (expressed as the total number of cases with an error compared to the total number of cases); the percentage of cases with an improper payment (ex- pressed as the total number of cases with an improper payment compared to the total number of cases); the percent- age of improper payments (expressed as the total amount of improper pay- ments in the sample compared to the total dollar amount of payments made in the sample); the average amount of improper payment; and the estimated annual amount of improper payments. The report also will provide strategies for reducing their error rates and allow States, the District of Columbia and Puerto Rico to set target error rates for the next cycle. (c) Error Defined—For purposes of this subpart, an ‘‘error’’ shall mean any violation or misapplication of stat- utory, contractual, administrative, or other legally applicable requirements governing the administration of CCDF grant funds, regardless of whether such violation results in an improper pay- ment. (d) Improper Payment Defined—For purposes of this subpart, ‘‘improper payment.’’ (1) Means any payment of CCDF grant funds that should not have been made or that was made i s in an improper pay- ment. (d) Improper Payment Defined—For purposes of this subpart, ‘‘improper payment.’’ (1) Means any payment of CCDF grant funds that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, con- tractual, administrative, or other le- gally applicable requirements gov- erning the administration of CCDF grant funds; and (2) Includes any payment of CCDF grant funds to an ineligible recipient, any payment of CCDF grant funds for an ineligible service, any duplicate payment of CCDF grant funds and pay- ments of CCDF grant funds for services not received. Because a child meeting eligibility requirements at the most re- cent eligibility determination or rede- termination is considered eligible be- tween redeterminations as described in 756 Dept. of Health and Human Services § 98.102 § 98.21(a)(1), any payment for such a child shall not be considered an error or improper payment due to a change in the family’s circumstances, as set forth at § 98.21(a) and (b). (e) Costs of Preparing the Error Rate Report—Provided the error rate cal- culations and reports focus on client eligibility, expenses incurre amily’s circumstances, as set forth at § 98.21(a) and (b). (e) Costs of Preparing the Error Rate Report—Provided the error rate cal- culations and reports focus on client eligibility, expenses incurred by the States, the District of Columbia and Puerto Rico in complying with this rule, including preparation of required reports, shall be considered a cost of di- rect service related to eligibility deter- mination and therefore is not subject to the five percent limitation on CCDF administrative to § 98.54(a). costs pursuant [72 FR 50898, Sept. 5, 2007, as amended at 81 FR 67595, Sept. 30, 2016] § 98.101 Case Review Methodology. (a) Case Reviews and Sampling—In pre- paring the error reports required by this subpart, States, the District of Co- lumbia and Puerto Rico shall conduct comprehensive reviews of case records using a methodology established by the Secretary. For purposes of the case re- views, States, the District of Columbia and Puerto Rico shall select a random sample of case records which is esti- mated to achieve the calculation of an estimated annual amount of improper payments with a 90 percent confidence interval of ±5.0 percent. (b) Methodology and Forms—States, the D ecords which is esti- mated to achieve the calculation of an estimated annual amount of improper payments with a 90 percent confidence interval of ±5.0 percent. (b) Methodology and Forms—States, the District of Columbia and Puerto Rico must prepare and submit forms issued by the Secretary, following the accompanying setting forth the methodology to be used in conducting case reviews and calcu- lating the error rates. instructions (c) Reporting Frequency and Cycle— States, the District of Columbia and Puerto Rico shall conduct case reviews and submit error rate reports to the Department according to a staggered three-year cycle established by the Secretary such that each State, the District of Columbia, and Puerto Rico will be selected once, and only once, in every three years. (d) Access to Federal Staff—States, the District of Columbia and Puerto Rico must provide access to Federal staff to participate and provide oversight in case reviews and error rate calcula- tions, including access to forms related to determining error rates. (e) Record Retention—Records perti- nent to the case reviews and submis- sion of error rate reports shall be re- tained for a period of five years from ss to forms related to determining error rates. (e) Record Retention—Records perti- nent to the case reviews and submis- sion of error rate reports shall be re- tained for a period of five years from the date of submission of the applica- ble error rate report or, if the error rate report was revised, from the date of submission of the revision. Records must be made available to Federal staff upon request. § 98.102 Content of Error Rate Re- ports. (a) Baseline Submission Report—At a minimum, States, the District of Co- lumbia and Puerto Rico shall submit an initial error rate report to the De- partment, as required in § 98.100, which includes the following information on errors and resulting improper pay- ments occurring in the administration of CCDF grant funds, including Federal Discretionary Funds (which includes any funds transferred from the TANF Block Grant), Mandatory and Matching Funds and State Matching and Mainte- nance-of-Effort (MOE Funds): (1) Percentage of cases with an error (regardless of whether such error re- sulted in an over or under payment), expressed as the total number of cases in the sample with an error compared to the total number of cases in the sample; rror (regardless of whether such error re- sulted in an over or under payment), expressed as the total number of cases in the sample with an error compared to the total number of cases in the sample; (2) Percentage of cases with an im- proper payment (both over and under payments), expressed as the total num- ber of cases in the sample with an im- proper payment compared to the total number of cases in the sample; (3) Percentage of improper payments (both over and under payments), ex- pressed as the total dollar amount of improper payments in the sample com- pared to the total dollar amount of payments made in the sample; (4) Average amount of improper pay- ments (gross over and under payments, divided by the total number of cases in the sample that had an improper pay- ment (both over and under payments)); (5) Estimated annual amount of im- proper payments (which is a projection of the results from the sample to the universe of cases statewide during the 12-month review period) calculated by multiplying the percentage of improper 757 § 98.102 45 CFR Subtitle A (10–1–24 Edition) payments by the total dollar amount of child care payments that the State, the District of Columbia or P ated by multiplying the percentage of improper 757 § 98.102 45 CFR Subtitle A (10–1–24 Edition) payments by the total dollar amount of child care payments that the State, the District of Columbia or Puerto Rico paid during the 12-month review pe- riod; (6) For each category of data listed above, targets for errors and improper payments in the next reporting cycle; (7) Summary of methodology used to arrive at estimate, including fieldwork preparation, sample generation, record review and error rate computation processes; (8) Discussion of the causes of im- proper payments identified and actions that will be taken to correct those causes in order to reduce the error rates; (9) Description of the information systems and other infrastructure that assist the State, the District of Colum- bia and Puerto Rico in identifying and reducing improper payments, or if the State, the District of Columbia or Puerto Rico does not have these tools, a description of actions that will be taken to acquire the necessary infor- mation systems and other infrastruc- ture; and (10) Such other information as speci- fied by the Secretary. (b) Standard Report—At a minimum, the State, the District of Columbia a the necessary infor- mation systems and other infrastruc- ture; and (10) Such other information as speci- fied by the Secretary. (b) Standard Report—At a minimum, the State, the District of Columbia and Puerto Rico shall submit an error rate report to the Department, as required in § 98.100, made subsequent to the baseline submission report as set forth in § 98.102(a) which includes the fol- lowing information on errors and re- sulting improper payments occurring in the administration of CCDF grant funds, including Federal Discretionary Funds (which includes any funds trans- ferred from the TANF Block Grant), Mandatory and Matching Funds and State Matching and Maintenance-of- Effort (MOE Funds): (1) All the information reported in the baseline submission, as set forth in § 98.102(a), updated for the current cycle; (2) For each category of data listed in § 98.102(a)(1) through (5), States, the District of Columbia and Puerto Rico must include data and targets from the prior cycle in addition to data from the current cycle and targets for the next cycle; (3) Description of whether the State, the District of Columbia or Puerto Rico met error rate targets set in the prior cycle and, if ition to data from the current cycle and targets for the next cycle; (3) Description of whether the State, the District of Columbia or Puerto Rico met error rate targets set in the prior cycle and, if not, an explanation of why not; (4) Discussion of the causes of im- proper payments identified in the prior cycle and actions that were taken to correct those causes, in addition to a discussion on the causes of improper payments identified in the current cycle and actions that will be taken to correct those causes in order to reduce the error rates; and (5) Such other information as speci- fied by the Secretary. (c) Any Lead Agency with an im- proper payment rate that exceeds a threshold established by the Secretary must submit to the Assistant Sec- retary for approval a comprehensive corrective action plan, as well as subse- quent reports describing progress in implementing the plan. (1) The corrective action plan must be submitted within 60 days of the deadline for submitting the Lead Agen- cy’s standard error rate report required by paragraph (b) of this section. (2) The corrective action plan must include the following: (i) Identification of a senior account- able official; (ii) Agen- cy’s standard error rate report required by paragraph (b) of this section. (2) The corrective action plan must include the following: (i) Identification of a senior account- able official; (ii) Root causes of error as identified on the Lead Agency’s most recent ACF–404 and other root causes identi- fied; (iii) Detailed descriptions of actions to reduce improper payments and the name and/or title of the individual re- sponsible for ensuring actions are com- pleted; (iv) Milestones to indicate progress towards action completion and error reduction goals; (v) A timeline for completing each action of the plan within 1 year, and for reducing the improper payment rate below the threshold established by the Secretary; and (vi) Targets for future improper pay- ment rates. (3) Subsequent progress reports in- cluding updated corrective action plans must be submitted as requested by the Assistant Secretary until the Lead Agency’s improper payment rate no longer exceeds the threshold. 758 Dept. of Health and Human Services § 99.5 (4) Failure to carry out actions as de- scribed in the approved corrective ac- tion plan or to fulfill requirements in this paragraph (c) will be grounds for a pt. of Health and Human Services § 99.5 (4) Failure to carry out actions as de- scribed in the approved corrective ac- tion plan or to fulfill requirements in this paragraph (c) will be grounds for a penalty or sanction under § 98.92. [72 FR 50898, Sept. 5, 2007, as amended at 81 FR 67595, Sept. 30, 2016; 89 FR 15417, Mar. 1, 2024] PART 99—PROCEDURE FOR HEAR- INGS FOR THE CHILD CARE AND DEVELOPMENT FUND Subpart A—General Sec. 99.1 Scope of rules. 99.2 Presiding officer. 99.3 Records to be public. 99.4 Suspension of rules. 99.5 Filing and service of papers. Subpart B—Preliminary Matters—Notice and Parties 99.11 Notice of hearing or opportunity for hearing. 99.12 Time of hearing. 99.13 Place. 99.14 99.15 Request to participate in hearing. Issues at hearing. Subpart C—Hearing Procedures 99.21 Authority of presiding officer. 99.22 Rights of parties. 99.23 Discovery. 99.24 Evidentiary purpose. 99.25 Evidence. 99.26 Unsponsored written material. 99.27 Official transcript. 99.28 Record for decision. Subpart D—Posthearing Procedures, Decisions 99.31 Posthearing briefs. 99.32 Decisions following hearing. 99.33 Effective date of Assistant Secretary’s decision. AUTHORITY: 42 U.S.C. 618, 9858. cision. Subpart D—Posthearing Procedures, Decisions 99.31 Posthearing briefs. 99.32 Decisions following hearing. 99.33 Effective date of Assistant Secretary’s decision. AUTHORITY: 42 U.S.C. 618, 9858. SOURCE: 57 FR 34428, Aug. 4, 1992, unless otherwise noted. EDITORIAL NOTE: Nomenclature changes to part 99 appear at 63 FR 39998, July 24, 1998. Subpart A—General § 99.1 Scope of rules. (a) The rules of procedure in this sec- tion govern the practice for hearings afforded by the Department to Lead Agencies pursuant to § 98.18(c) or § 98.91, and the practice relating to the deci- sions of such hearings. (b) Nothing in this part is intended to preclude or limit negotiations between the Department and the Lead Agency, whether before, during, or after the hearing, to resolve the issues which are, or otherwise would be, considered at the hearing. Such negotiations and resolution of issues are not part of the hearing and are not governed by the rules in this part, except as expressly provided herein. § 99.2 Presiding officer. (a) (1) The presiding officer at a hear- ing shall be the Assistant Secretary or the Assistant Secretary’s designee. (2) The designation of the presiding officer shall erein. § 99.2 Presiding officer. (a) (1) The presiding officer at a hear- ing shall be the Assistant Secretary or the Assistant Secretary’s designee. (2) The designation of the presiding officer shall be in writing. A copy of the designation shall be served on all parties. (b) The presiding officer, for all hear- ings, shall be bound by all applicable laws and regulations. § 99.3 Records to be public. All pleadings, correspondence, exhib- its, transcripts of testimony, excep- tions, briefs, decisions, and other docu- ments filed in the docket in any pro- ceeding may be inspected and copied in the office of the Assistant Secretary. Inquiries may be made at the Adminis- tration for Children and Families, 370 L’Enfant Promenade SW., Washington, DC 20447. § 99.4 Suspension of rules. With notice to all parties, the Assist- ant Secretary for Children and Fami- lies or the presiding officer, with re- spect to pending matters, may modify or waive any rule in this part upon de- termination that no party will be un- duly prejudiced and the ends of justice will thereby be served. § 99.5 Filing and service of papers. (a) An original and two copies of all papers in the proceedings shall be file no party will be un- duly prejudiced and the ends of justice will thereby be served. § 99.5 Filing and service of papers. (a) An original and two copies of all papers in the proceedings shall be filed with the presiding officer. For exhibits and transcripts of testimony, only the originals need be filed. (b) All papers in the proceedings shall be served on all parties by personal de- livery or by certified mail. Service on 759 § 99.11 45 CFR Subtitle A (10–1–24 Edition) the party’s designated attorney will be deemed service on the party. Subpart B—Preliminary Matters— Notice and Parties § 99.11 Notice of hearing or oppor- tunity for hearing. Proceedings commence when the As- sistant Secretary mails a notice of hearing or opportunity for hearing to the Lead Agency. The notice shall state the time and place for the hear- ing, and the issues which will be con- sidered. A copy of the notice shall be published in the FEDERAL REGISTER. § 99.12 Time of hearing. The hearing shall be scheduled not less than 30 days nor more than 90 days after the date of the notice of the hear- ing furnished to the applicant or Lead Agency, unless otherwise agreed to, in writing, by the parties. § 99.13 Pl not less than 30 days nor more than 90 days after the date of the notice of the hear- ing furnished to the applicant or Lead Agency, unless otherwise agreed to, in writing, by the parties. § 99.13 Place. The hearing shall be held in the city in which the regional office of the De- partment responsible for oversight of the Lead Agency is located or in such other place as the Assistant Secretary determines, considering both the cir- cumstances of the case and the conven- ience and necessity of the parties or their representatives. § 99.14 Issues at hearing. (a) The Assistant Secretary may, prior to a hearing under § 98.91 of this part, notify the Lead Agency in writing of additional issues which will be con- sidered at the hearing. Such notice shall be published in the FEDERAL REG- ISTER. If such notice is received by the Lead Agency less than 20 days before the date of the hearing, a postpone- ment of the hearing shall be granted at the request of the Lead Agency or any other party. The hearing shall be held on a date 20 days after such notice was received, or on such later date as agreed to by the Assistant Secretary. (b) If, as a result of negotiations be- tween the Department an e hearing shall be held on a date 20 days after such notice was received, or on such later date as agreed to by the Assistant Secretary. (b) If, as a result of negotiations be- tween the Department and the Lead Agency, the submittal of a Plan amendment, a change in the Lead Agency program, or other action by the Lead Agency, any issue is resolved in whole or in part, but new or modi- fied issues are presented, as specified by the Assistant Secretary, the hearing shall proceed on such new or modified issues. A notice of such new or modi- fied issues shall be published in the FEDERAL REGISTER. If such notice is re- ceived by the Lead Agency less than 20 days before the date of the hearing, a postponement of the hearing shall be granted at the request of the Lead Agency or any other party. The hear- ing shall be held on a date 20 days after such notice was received, or on such later date as agreed to by the Assistant Secretary. (c)(1) If, at any time, the Assistant Secretary finds that the Lead Agency has come into compliance with Federal statutes and regulations on any issue, in whole or in part, the Assistant Sec- retary shall remove such issue from the proceedings, in whole or in p e Lead Agency has come into compliance with Federal statutes and regulations on any issue, in whole or in part, the Assistant Sec- retary shall remove such issue from the proceedings, in whole or in part, as may be appropriate. If all issues are re- moved, the Assistant Secretary shall terminate the hearing. (2) Prior to the removal of any issue from the hearing, in whole or in part, the Assistant Secretary shall provide all parties other than the Department and the Lead Agency (see § 99.15(b)) with written notice of the intention, and the reasons for it. Such notice shall include a copy of the proposed CCDF Plan provision on which the Lead Agency and Assistant Secretary have settled. The parties shall have 15 days from the receipt of such notice to file their views or any information on the merits of the proposed Plan provi- sion and the merits of the Assistant Secretary’s reasons for removing the issue from the hearing. (d) The issues considered at the hear- ing shall be limited to those issues of which the Lead Agency is notified, as provided in paragraph (a) of this sec- tion, and new or modified issues de- scribed in paragraph (b) of this section; they shall not include issues hose issues of which the Lead Agency is notified, as provided in paragraph (a) of this sec- tion, and new or modified issues de- scribed in paragraph (b) of this section; they shall not include issues or parts of issues removed from the proceedings pursuant to paragraph (c) of this sec- tion. § 99.15 Request to participate in hear- ing. (a) The Department and the Lead Agency are parties to the hearing with- out making a specific request to par- ticipate. 760 Dept. of Health and Human Services § 99.21 (b)(1) Other individuals or groups may be recognized as parties, if the issues to be considered at the hearing have directly caused them injury and their interest is immediately within the zone of interests to be protected by the governing Federal statute and reg- ulations. (2) Any individual or group wishing to participate as a party shall file a pe- tition with the presiding officer within 15 days after notice of the hearing has been published in the FEDERAL REG- ISTER and shall serve a copy on each party of record at that time, in accord- ance with § 99.5(b). Such petition shall concisely state: (i) Petitioner’s interest in the pro- ceeding; (ii) Who will appear for petitioner; (iii copy on each party of record at that time, in accord- ance with § 99.5(b). Such petition shall concisely state: (i) Petitioner’s interest in the pro- ceeding; (ii) Who will appear for petitioner; (iii) The issues on which petitioner wishes to participate; and (iv) Whether petitioner intends to present witnesses. (3) Any party may, within 5 days of receipt of such petition, file comments on it. (4) The presiding officer shall promptly determine whether each peti- tioner has the requisite interest in the proceedings and shall permit or deny participation accordingly. Where peti- tions to participate as parties are made by individuals or groups with common interests, at the presiding officer’s dis- cretion, the presiding officer may re- quest that all such petitioners des- ignate a single representative or may recognize one or more of such peti- tioners to represent all such peti- tioners. The presiding officer shall give each petitioner written notice of the decision on the petition, and if the pe- tition is denied, the presiding officer shall briefly state the grounds for de- nial. If the petition is denied, the pre- siding officer may recognize the peti- tioner as an amicus curiae. if the pe- tition is denied, the presiding officer shall briefly state the grounds for de- nial. If the petition is denied, the pre- siding officer may recognize the peti- tioner as an amicus curiae. (c)(1) Any interested person or orga- nization wishing to participate as an amicus curiae shall file a petition with the presiding officer before the com- mencement of the hearing. Such peti- tion shall concisely state: (i) The petitioner’s interest in the hearing; (ii) Who will represent the petitioner; and (iii) The issues on which petitioner intends to present argument. An amicus curiae is not a party but may participate as provided in this paragraph. (2) The presiding officer may grant the petition upon finding that the peti- tioner has a legitimate interest in the proceedings, that such participation will not unduly delay the outcome, and it may contribute materially to the proper disposition of the issues. (3) An amicus curiae may present a brief oral statement at the hearing, at the point in the proceedings specified by the presiding officer. The amicus cu- riae may submit a written statement of position to the presiding officer prior to the beginning of a hearing and shall ser e point in the proceedings specified by the presiding officer. The amicus cu- riae may submit a written statement of position to the presiding officer prior to the beginning of a hearing and shall serve a copy on each party. The amicus curiae may also submit a brief or written statement at such time as the parties submit briefs and shall serve a copy on each party. Subpart C—Hearing Procedures § 99.21 Authority of presiding officer. (a) The presiding officer shall have the duty to conduct a fair hearing, to avoid delay, maintain order, and make a record of the proceedings. The pre- siding officer shall have all powers nec- essary to accomplish these ends, in- cluding, but not limited to, the power to: (1) Change the date, time, and place of the hearing, upon due notice to the parties. This authority includes the power to continue the hearing in whole or in part; (2) Hold conferences to settle or sim- plify the issues in a proceeding, or to consider other matters that may aid in the expeditious disposition of the pro- ceeding; (3) Regulate participation of parties and amici curiae and require parties and amici curiae to state their position with respect to the various issues in the editious disposition of the pro- ceeding; (3) Regulate participation of parties and amici curiae and require parties and amici curiae to state their position with respect to the various issues in the pro- ceeding; (4) Administer oaths and affirma- tions; (5) Rule on all pending motions and other procedural including issuance of protective orders or other relief to a party against whom dis- covery is sought; items 761 § 99.22 45 CFR Subtitle A (10–1–24 Edition) (6) Regulate the course of the hearing and conduct of counsel therein; (7) Examine witnesses; (8) Receive, rule on, exclude or limit evidence or discovery; (9) Fix the time for filing motions, petitions, briefs, or other items in mat- ters pending; (10) If the presiding officer is the As- sistant Secretary, make a final deci- sion; (11) If the presiding officer is not the Assistant Secretary, certify the entire record including the recommended findings and proposed decision to the Assistant Secretary; and (12) Take any action authorized by the rules in this part or in conformance with the provisions of 5 U.S.C. 551 through 559. (b) The presiding officer does not have authority to compel by subpoena the production of witnesses horized by the rules in this part or in conformance with the provisions of 5 U.S.C. 551 through 559. (b) The presiding officer does not have authority to compel by subpoena the production of witnesses, papers, or other evidence. § 99.22 Rights of parties. All parties may: (a) Appear by counsel or other au- thorized representative, in all hearing proceedings; (b) Participate in any prehearing conference held by the presiding offi- cer; (c) Agree to stipulations as to facts which will be made a part of the record; (d) Make opening statements at the hearing; (e) Present relevant evidence on the issues at the hearing; (f) Present witnesses who then must be available for cross-examination by all other parties; (g) Present oral arguments at the hearing; and (h) Submit written briefs, proposed findings of fact, and proposed conclu- sions of law, after the hearing. § 99.23 Discovery. The Department, the Lead Agency, and any individuals or groups recog- nized as parties shall have the right to conduct discovery (including deposi- tions) against opposing parties. Rules 26–37 of the Federal Rules of Civil Pro- cedure shall apply to such proceedings; there will be no fixed rule on priority of conduct discovery (including deposi- tions) against opposing parties. Rules 26–37 of the Federal Rules of Civil Pro- cedure shall apply to such proceedings; there will be no fixed rule on priority of discovery. Upon written motion, the presiding officer shall promptly rule upon any objection to such discovery action initiated pursuant to this sec- tion. The presiding officer shall also have the power to grant a protective order or relief to any party against whom discovery is sought and to re- strict or control discovery so as to pre- vent undue delay in the conduct of the hearing. Upon the failure of any party to make discovery, the presiding offi- cer may, at the presiding officer’s dis- cretion, issue any order and impose any sanction (other than contempt or- ders) authorized by rule 37 of the Fed- eral Rules of Civil Procedure. § 99.24 Evidentiary purpose. The purpose of the hearing is to re- ceive factual evidence and expert opin- ion testimony related to the issues in the proceeding. Argument will not be received in evidence; rather, it should be presented in statements, memo- randa, or briefs, as determined by the presiding officer. Brief opening state- ments, which shall be ing. Argument will not be received in evidence; rather, it should be presented in statements, memo- randa, or briefs, as determined by the presiding officer. Brief opening state- ments, which shall be limited to state- ment of the party’s position and what the party intends to prove, may be made at hearings. § 99.25 Evidence. (a) Testimony. Testimony shall be given orally under oath or affirmation by witnesses at the hearing. Witnesses shall be available at the hearing for cross-examination by all parties. (b) Stipulations and exhibits. Two or more parties may agree to stipulations of fact. Such stipulations, or any ex- hibit proposed by any party, shall be exchanged at the prehearing con- ference or otherwise prior to the hear- ing if the presiding officer so requires. (c) Rules of evidence. Technical rules of evidence shall not apply to hearings conducted pursuant to this part, but rules or principles designed to assure production of the most credible evi- dence available and to subject testi- mony to test by cross-examination shall be applied where reasonably nec- essary by the presiding officer. A wit- ness may be cross-examined on any matter material to the proceeding without ect testi- mony to test by cross-examination shall be applied where reasonably nec- essary by the presiding officer. A wit- ness may be cross-examined on any matter material to the proceeding without regard to the scope of direct examination. The presiding officer may 762 Dept. of Health and Human Services § 99.33 exclude irrelevant, immaterial, or un- duly repetitious evidence. All docu- ments and other evidence offered or taken for the record shall be open to examination by the parties, and oppor- tunity shall be given to refute facts and arguments advanced on either side of the issues. § 99.26 Unsponsored written material. Letters expressing views or urging action and other unsponsored written material regarding matters at issue in a hearing will be placed in the cor- respondence section of the docket of the proceeding. These data are not deemed part of the evidence or record in the hearing. § 99.27 Official transcript. The Department will designate the official reporter for all hearings. The official transcripts of testimony taken, together with any stipulations, exhib- its, briefs, or memoranda of law filed therewith shall be filed with the De- partment. Transcripts of testimo rings. The official transcripts of testimony taken, together with any stipulations, exhib- its, briefs, or memoranda of law filed therewith shall be filed with the De- partment. Transcripts of testimony in hearings may be obtained from the of- ficial reporter by the parties and the public at rates not to exceed the max- imum rates fixed by the contract be- tween the Department and the re- porter. Upon notice to all parties, the presiding officer may authorize correc- tions to the transcript which involve matters of substance. § 99.28 Record for decision. The transcript of testimony, exhib- its, and all papers and requests filed in the proceedings, except the correspond- ence section of the docket, including rulings and any recommended or initial decision, shall constitute the exclusive record for decision. Subpart D—Posthearing Procedures, Decisions § 99.31 Posthearing briefs. The presiding officer shall fix the time filing posthearing briefs, which may contain proposed findings of fact and conclusions of law. The pre- for siding officer shall also fix the time for reply briefs, if permitted. § 99.32 Decisions following hearing. (a) If the Assistant Secretary is the presiding offic t and conclusions of law. The pre- for siding officer shall also fix the time for reply briefs, if permitted. § 99.32 Decisions following hearing. (a) If the Assistant Secretary is the presiding officer, the Assistant Sec- retary shall issue the decision within 60 days after the time for submission of posthearing briefs has expired. (b)(1) If the presiding officer is not the Assistant Secretary, the presiding officer shall certify the entire record, including the recommended findings and proposed decision, to the Assistant Secretary within 60 days after the time for submission of posthearing briefs has expired. The Assistant Secretary shall serve a copy of the recommended findings and proposed decision upon all parties, and amici, if any. (2) Any party may, within 20 days of receipt of the recommended findings and proposed decision, file exceptions and a supporting brief or statement with the Assistant Secretary. (3) The Assistant Secretary shall thereupon review the recommended de- cision and, within 45 days after the re- ceipt of the exceptions to the rec- ommended findings and proposed deci- sion, issue the decision. (c) The decision of the Assistant Sec- retary under this secti sion and, within 45 days after the re- ceipt of the exceptions to the rec- ommended findings and proposed deci- sion, issue the decision. (c) The decision of the Assistant Sec- retary under this section shall be the final decision of the Secretary and shall constitute ‘‘final agency action’’ within the meaning of 5 U.S.C. 704. The Assistant Secretary’s decision shall be promptly served on all parties, and amici, if any. § 99.33 Effective date of Assistant Sec- retary’s decision. If, in the case of a hearing pursuant to § 98.18(b) of this chapter, the Assist- ant Secretary concludes that a Plan amendment does not comply with the Federal statutes and regulations, the decision that further payments will not be made to the Lead Agency, or pay- ments will be limited to categories under other parts of the CCDF Plan not affected, shall specify the effective date for the withholding of Federal funds. 763 Pt. 100 45 CFR Subtitle A (10–1–24 Edition) PART 100—INTERGOVERNMENTAL REVIEW OF DEPARTMENT OF HEALTH AND HUMAN SERVICES PROGRAMS AND ACTIVITIES Sec. 100.1 What is the purpose of these regula- tions? 100.2 What definitions apply to these regu- lations? 100.3 What programs and activities of T OF HEALTH AND HUMAN SERVICES PROGRAMS AND ACTIVITIES Sec. 100.1 What is the purpose of these regula- tions? 100.2 What definitions apply to these regu- lations? 100.3 What programs and activities of the Department are subject to these regula- tions? [Reserved] 100.4 100.5 What is the Secretary’s obligation with respect to Federal interagency co- ordination? 100.6 What procedures apply to the selection of programs and activities under these regulations? 100.7 How does the Secretary communicate with state and local officials concerning the Department’s programs and activi- ties? 100.8 How does the Secretary provide states an opportunity to comment on proposed Federal financial assistance and direct Federal development? 100.9 How does the Secretary receive and re- spond to comments? 100.10 How does the Secretary make efforts to accommodate intergovernmental con- cerns? 100.11 What are the Secretary’s obligations in interstate situations? 100.12 How may a state simplify, consoli- date, or substitute federally required state plans? 100.13 May the Secretary waive any provi- sion of these regulations? AUTHORITY: Executive Order 12372, July 14, 1982 (47 FR 30959), as amended April 8, 198 r substitute federally required state plans? 100.13 May the Secretary waive any provi- sion of these regulations? AUTHORITY: Executive Order 12372, July 14, 1982 (47 FR 30959), as amended April 8, 1983 (48 FR 15887): sec. 401, Intergovernmental Co- operation Act of 1968, as amended (31 U.S.C. 6506); sec. 204, Demonstration Cities and Met- ropolitan Development Act of 1966, as amended (42 U.S.C. 3334). SOURCE: 48 FR 29200, June 24, 1983, unless otherwise noted. § 100.1 What is the purpose of these regulations? (a) The regulations in this part im- plement Executive Order 12372, ‘‘Inter- governmental Review of Federal Pro- grams,’’ issued July 14, 1982 and amend- ed on April 8, 1983. These regulations also implement applicable provisions of section 401 of the Intergovernmental Cooperation Act of 1968 and section 204 of the Demonstration Cities and Metro- politan Development Act of 1966. (b) These regulations are intended to foster an intergovernmental partner- ship and a strengthened Federalism by relying on state processes and on state, areawide, regional and local coordina- tion for review of proposed Federal fi- nancial assistance and direct Federal development. (c) These regulatio ralism by relying on state processes and on state, areawide, regional and local coordina- tion for review of proposed Federal fi- nancial assistance and direct Federal development. (c) These regulations are intended to aid the internal management of the De- partment, and are not intended to cre- ate any right or benefit enforceable at law by a party against the Department or its officers. § 100.2 What definitions apply to these regulations? Department means the U.S. Depart- ment of Health and Human Services (HHS). Order means Executive Order 12372, issued July 14, 1982, and amended April 8, 1983 and titled ‘‘Intergovernmental Review of Federal Programs.’’ Secretary means the Secretary of HHS or an official or employee of the De- partment acting for the Secretary under a delegation of authority. State means any of the 50 states, the District of Columbia, the Common- wealth of Puerto Rico, the Common- wealth of the Northern Mariana Is- lands, Guam, American Samoa, the U.S. Virgin Islands, or the Trust Terri- tory of the Pacific Islands. § 100.3 What programs and activities of the Department are subject to these regulations? The Secretary publishes in the FED- ERAL REGISTER a list of , or the Trust Terri- tory of the Pacific Islands. § 100.3 What programs and activities of the Department are subject to these regulations? The Secretary publishes in the FED- ERAL REGISTER a list of the Depart- ment’s programs and activities that are subject to these regulations and identifies which of these are subject to the requirements of section 204 of the Demonstration Cities and Metropolitan Development Act. § 100.4 [Reserved] § 100.5 What is the Secretary’s obliga- tion with respect to Federal inter- agency coordination? The Secretary, to the extent prac- ticable, consults with and seeks advice from all other substantially affected Federal departments and agencies in 764 Dept. of Health and Human Services § 100.9 an effort to assure full coordination be- tween such agencies and the Depart- ment regarding programs and activi- ties covered under these regulations. § 100.6 What procedures apply to the selection of programs and activities under these regulations? (a) A state may select any program or activity published in the FEDERAL REGISTER in accordance with § 100.3 of this part for intergovernmental review under these regulations. Each state, before selecting programs and elect any program or activity published in the FEDERAL REGISTER in accordance with § 100.3 of this part for intergovernmental review under these regulations. Each state, before selecting programs and activi- ties, shall consult with local elected of- ficials. (b) Each state that adopts a process shall notify the Secretary of the De- partment’s programs and activities se- lected for that process. (c) A state may notify the Secretary of changes in its selections at any time. For each change, the state shall submit to the Secretary an assurance that the state has consulted with local elected officials regarding the change. The Department may establish dead- lines by which states are required to inform the Secretary of changes in their program selections. (d) The Secretary uses a state’s proc- ess as soon as feasible, depending on in- dividual programs and activities, after the Secretary is notified of its selec- tions. § 100.7 How does the Secretary com- municate with state and local offi- cials concerning the Department’s programs and activities? (a) For those programs and activities selected by a state process under § 100.6, the Secretary, to the extent permitted by law: (1) Uses th - cials concerning the Department’s programs and activities? (a) For those programs and activities selected by a state process under § 100.6, the Secretary, to the extent permitted by law: (1) Uses the state process to deter- mine views of state and local elected officials; and, (2) Communicates with state and local elected officials, through the state process, as early in a program planning cycle as is reasonably feasible to explain specific plans and actions. (b) The Secretary provides notice to directly affected state, areawide, re- gional, and local entities in a state of proposed Federal finanical assistance or direct Federal development if: (1) The state has not adopted a proc- ess under the Order; or (2) The assistance or development invovles a program or activity not se- lected for the state process. This notice may be made by publica- tion in the FEDERAL REGISTER or other appropriate means, which the Depart- ment in its discretion deems appro- priate. § 100.8 How does the Secretary pro- vide states an opportunity to com- ment on proposed Federal financial assistance and direct Federal devel- opment? (a) Except in unusal circumstances, the Secretary gives state processes or etary pro- vide states an opportunity to com- ment on proposed Federal financial assistance and direct Federal devel- opment? (a) Except in unusal circumstances, the Secretary gives state processes or directly affected state, areawide, re- gional and local officials and entities: (1) At least 30 days from the date es- tablished by the Secretary to comment on proposed direct Federal develop- ment or Federal financial assistance in the form of noncompeting continuation awards; and (2) At least 60 days from the date es- tablished by the Secretary to comment on proposed direct Federal develop- ment or Federal financial assistance other than noncompeting continuation awards. (b) This section also applies to com- ments in cases in which the review, co- ordination, and communication with the Department have been delegated. (c) Applicants for programs and ac- tivities subject to section 204 of the Demonstration Cities and Metropolitan Act shall allow areawide agencies a 60- day opportunity for review and com- ment. § 100.9 How does the Secretary receive and respond to comments? (a) The Secretary follows the proce- dures in § 100.10 if: (1) A state office or official is des- ignated to act review and com- ment. § 100.9 How does the Secretary receive and respond to comments? (a) The Secretary follows the proce- dures in § 100.10 if: (1) A state office or official is des- ignated to act as a single point of con- tact between a state process and all Federal agencies, and (2) That office or official transmits a state process recommendation for a program selected under § 100.6. (b)(1) The single point of contract is not obligated to transmit comments from state, areawide, regional or local officials and entities where there is no state process recommendation. 765 § 100.10 45 CFR Subtitle A (10–1–24 Edition) (2) If a state process recommendation is transmitted by a single point of con- tact, all state, areawide, regional, and local officials and entities that differ from it must also be transmitted. comments from (c) If a state has not established a process, or is unable to submit a state process state, recommendation, areawide, regional and local officials and entities may submit comments ei- ther to the applicant or to the Depart- ment. (d) If a program or activity is not se- lected for review under a state process, state, areawide, regional and local offi- cials and en ubmit comments ei- ther to the applicant or to the Depart- ment. (d) If a program or activity is not se- lected for review under a state process, state, areawide, regional and local offi- cials and entities may submit com- ments either to the applicant or to the Department. In addition, if a state process recommendation for a non- selected program or activity is trans- mitted to the Department by the single point of contact, the Secretary follows the procedures of § 100.10 of this part. recommendation (e) The Secretary considers com- ments which do not constitute a state process submitted under these regulations and for which the Secretary is not required to apply the procedures of § 100.10 of this part, when such comments are provided by a single point of contact, by the appli- cant, or directly to the Department by a commenting party. (f) If an applicant receives comments under § 100.9(a)(2), (c) or (d) of this part, it must forward such comments to the Department with its application mate- rials. § 100.10 How does the Secretary make efforts to accommodate intergov- ernmental concerns? (a) If a state process provides a state process recommendation to the Depart- ment through its n mate- rials. § 100.10 How does the Secretary make efforts to accommodate intergov- ernmental concerns? (a) If a state process provides a state process recommendation to the Depart- ment through its single point of con- tact, the Secretary either: (1) Accepts the recommendation; (2) Reaches a mutually agreeable so- lution with the state process; or (3) Provides the single point of con- tact with such written explanation of the decision as the Secretary in this or her discretion deems appropriate. The Secretary may also supplement the written explanation by providing the explanation to the single point of con- tact by telephone, other telecommuni- cation, or other means. (b) In any explanation under para- graph (a)(3) of this section, the Sec- retary informs the single point of con- tact that: (1) The Department will not imple- ment its decision for at least ten days after the single point of contact re- ceives the explanation; or (2) The Secretary has reviewed the decision and determined that, because of unsual circumstances, the waiting period of at least ten days is not fea- sible. (c) For purposes of computing the waiting period under paragraph (b)(1) of this section, a single ned that, because of unsual circumstances, the waiting period of at least ten days is not fea- sible. (c) For purposes of computing the waiting period under paragraph (b)(1) of this section, a single point of con- tact is presumed to have received writ- ten explanation 5 days after the date such notification is dated. § 100.11 What are the Secretary’s obli- gations in interstate situations? (a) The Secretary is responsible for: (1) Identifying proposed Federal fi- nancial assistance and direct Federal development that have an impact on interstate areas; (2) Notifying appropriate officials and entities in states which have adopted a process and which select the Department’s program or activity. (3) Making efforts to identify and no- tify the affected state, areawide, re- gional, and local officials and entities in those states that have not adopted a process under the Order or do not se- lect the Department’s program or ac- tivity; (4) Responding pursuant to § 100.10 of this part if the Secretary receives a recommendation from a designated areawide agency transmitted by a sin- gle point of contact, in cases in which the review, coordination, and commu- nication with the Department h Secretary receives a recommendation from a designated areawide agency transmitted by a sin- gle point of contact, in cases in which the review, coordination, and commu- nication with the Department have been delegated. (b) The Secretary uses the procedures in § 100.10 if a state process provides a state process recommendation to the Department through a single point of contact. § 100.12 How may a state simplify, con- solidate, or substitute federally re- quired state plans? (a) As used in this section: (1) Simplify means that a state may develop its own format, choose its own 766 Dept. of Health and Human Services § 101.1 submission date, and select the plan- ning period for a state plan. (2) Consolidate means that a state may meet statutory and regulatory re- quirements by combining two or more plans into one document and that the state can select the format, submission date, and planning period for the con- solidated plan. (3) Substitute means that a state may use a plan or other document that it has developed for its own purposes to meet Federal requirements. (b) If not inconsistent with law, a state may decide to try to simplify, consolidate, or substitute federally re- quired cument that it has developed for its own purposes to meet Federal requirements. (b) If not inconsistent with law, a state may decide to try to simplify, consolidate, or substitute federally re- quired state plans without prior ap- proval by the Secretary. (c) The Secretary reviews each state plan that a state has simplified, con- solidated, or substituted and accepts the plan only if its contents meet Fed- eral requirements. § 100.13 May the Secretary waive any provision of these regulations? In an emergency, the Secretary may waive any provision of these regula- tions. PART 101—HEALTH RESOURCES PRI- ORITIES AND ALLOCATIONS SYS- TEM (HRPAS) 101.41 Requests for priority rating author- ity. 101.42 Examples of assistance. 101.43 Criteria for assistance. 101.44 Instances where assistance may not be provided. Subpart E—Allocation Actions 101.50 Policy. 101.51 General procedures. 101.52 Controlling the general distribution of a material in the civilian market. 101.53 Types of allocation orders. 101.54 Elements of an allocation order. 101.55 Mandatory acceptance of an alloca- tion order. 101.56 Changes or cancellations of an alloca- tion order. Subpart F—Official Actions 101.60 General pr rs. 101.54 Elements of an allocation order. 101.55 Mandatory acceptance of an alloca- tion order. 101.56 Changes or cancellations of an alloca- tion order. Subpart F—Official Actions 101.60 General provisions. 101.61 Rating Authorizations. 101.62 Directives. 101.63 Letters of Understanding. Subpart G—Compliance 101.70 General provisions. 101.71 Audits and investigations. 101.72 Compulsory process. 101.73 Notification of failure to comply. 101.74 Violations, penalties, and remedies. 101.75 Compliance conflicts. Subpart H—Adjustments, Exceptions, and Appeals Subpart A—General 101.80 Adjustments or exceptions. 101.81 Appeals. Sec. 101.1 Purpose. 101.2 Priorities and allocations authority. 101.3 Program eligibility. Subpart B—Definitions 101.20 Definitions. Subpart C—Placement of Rated Orders 101.30 Delegations of authority. 101.31 Priority ratings. 101.32 Elements of a rated order. 101.33 Acceptance and rejection of rated or- ders. 101.34 Preferential scheduling. 101.35 Extension of priority ratings. 101.36 Changes or cancellations of priority ratings and rated orders. 101.37 Use of rated orders. 101.38 Limitations on placing rated orders. Subpart D—Special Priorities Assistance 101.4 ity ratings. 101.36 Changes or cancellations of priority ratings and rated orders. 101.37 Use of rated orders. 101.38 Limitations on placing rated orders. Subpart D—Special Priorities Assistance 101.40 General provisions. Subpart I—Miscellaneous Provisions 101.90 Protection against claims. 101.91 Records and reports. 101.92 Applicability of this part and official actions. 101.93 Communications. APPENDIX 1 TO PART 101 AUTHORITY: Defense Production Act of 1950, as amended (50 U.S.C. 4501, et seq.), and Exec- utive Order 13603 (77 FR 16651, 3 CFR, March 16, 2012). SOURCE: 89 FR 9025, Feb. 9, 2024, unless oth- erwise noted. Subpart A—General § 101.1 Purpose. This part provides guidance and pro- cedures for use of Defense Production Act (DPA) of 1950 section 101 priorities and allocations authority with respect 767 § 101.2 45 CFR Subtitle A (10–1–24 Edition) to health resources necessary or appro- priate to promote the national defense. The guidance and procedures in this part are consistent with the guidance and procedures provided in other regu- lations that form the Federal Prior- ities and Allocations System (FPAS). Guidance and procedures for use of the DPA priorities and allocatio t with the guidance and procedures provided in other regu- lations that form the Federal Prior- ities and Allocations System (FPAS). Guidance and procedures for use of the DPA priorities and allocations author- ity with respect to other types of re- sources are provided for: food re- sources, food resource facilities, live- stock resources, veterinary resources, plant health resources, and the domes- tic distribution of farm equipment and commercial fertilizer in 7 CFR part 789; all forms of energy in 10 CFR part 217; all forms of civil transportation in 49 CFR part 33; and all other materials, services, and facilities, including con- struction materials in 15 CFR part 700. § 101.2 Priorities and allocations au- thority. (a) Section 201 of Executive Order (E.O.) 13603, delegates the President’s priorities and allocations authority under section 101 of the DPA. Section 101 of the DPA provides the President with authority to require acceptance and priority performance of contracts and orders (other than contracts of em- ployment) to promote the national de- fense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary ders (other than contracts of em- ployment) to promote the national de- fense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense to a num- ber of agencies. Section 201 of E.O. 13603 delegates the President’s author- ity to specific agencies as follows: (1) The Secretary of Agriculture with respect to food resources, food resource facilities, livestock resources, veteri- nary resources, plant health resources, and the domestic distribution of farm equipment and commercial fertilizer; (2) The Secretary of Energy with re- spect to all forms of energy; (3) The Secretary of Health and Human Services with respect to health resources; (4) The Secretary of Transportation with respect to all forms of civil trans- portation; (5) The Secretary of Defense with re- spect to water resources; and (6) The Secretary of Commerce for all other materials, services, and facili- ties, including construction materials. (b) Section 202 of E.O. 13603 states that the authority delegated in section 201, except as provided in section 201(e) of E.O. 13603, may be used only to sup- port program ding construction materials. (b) Section 202 of E.O. 13603 states that the authority delegated in section 201, except as provided in section 201(e) of E.O. 13603, may be used only to sup- port programs that have been deter- mined in writing as necessary or appro- priate to promote the national defense: (1) By the Secretary of Defense with respect to military production and con- struction, military assistance to for- eign nations, military use of civil transportation, stockpiles managed by the Department of Defense, space, and directly related activities. (2) By the Secretary of Energy with respect to energy production and con- struction, distribution, and use, and di- rectly related activities; and (3) By the Secretary of Homeland Se- curity with respect to all other na- tional defense programs, including civil defense and continuity of Govern- ment. (c) Section 201(e) of E.O. 13603 pro- vides that each department that is del- egated allocations authority under sec- tion 201(a) of E.O. 13603 may use this authority with respect to control of the general distribution of any mate- rial (including applicable services) in the civilian market only after: (1) Making the finding required u 13603 may use this authority with respect to control of the general distribution of any mate- rial (including applicable services) in the civilian market only after: (1) Making the finding required under section 101(b) of the DPA; and (2) The finding has been approved by the President. § 101.3 Program eligibility. Certain programs to promote the na- tional defense are approved for prior- ities and allocations support. These in- clude programs for military and energy production or construction, military or critical infrastructure assistance to any foreign nation, homeland security, stockpiling, space, and any directly re- lated activity. Other eligible programs include emergency preparedness activi- ties conducted pursuant to title VI of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.), and critical infra- structure protection and restoration. 768 Dept. of Health and Human Services § 101.20 Subpart B—Definitions § 101.20 Definitions. The following definitions pertain to all sections of this part: Allocation means the control of the distribution of materials, services, or facilities for a purpose deemed nec- essary or appropriate to promot owing definitions pertain to all sections of this part: Allocation means the control of the distribution of materials, services, or facilities for a purpose deemed nec- essary or appropriate to promote the national defense. Allocation order means an official ac- tion to control the distribution of ma- terials, services, or facilities for a pur- pose deemed necessary or appropriate to promote the national defense. Allotment means an official action that specifies the maximum quantity or use of a material, service, or facility authorized for a specific use to promote the national defense. Approved program means a program determined by the Secretary of De- fense, the Secretary of Energy, or the Secretary of Homeland Security to be necessary or appropriate to promote the national defense, under the author- ity of the Defense Production Act and in accordance with section 202 of E.O. 13603. Construction means the erection, ad- dition, extension, or alteration of any building, structure, or project, using materials or products which are to be an integral and permanent part of the building, structure, or project. Con- struction does not include maintenance and repair. Critical infrastructu roject, using materials or products which are to be an integral and permanent part of the building, structure, or project. Con- struction does not include maintenance and repair. Critical infrastructure means any sys- tems and assets, whether physical or cyber-based, so vital to the United States that the degradation or destruc- tion of such systems and assets would have a debilitating impact on national security, including, but not limited to, national economic security and na- tional public health or safety. Defense Production Act or DPA means the Defense Production Act of 1950, as amended (50 U.S.C. 4501 et seq.). Delegate agency means a Federal Gov- ernment agency authorized by delega- tion from the Department of Health and Human Services (HHS) to place priority ratings on contracts or orders needed to support approved programs. Directive means an official action that requires a person to take or re- frain from taking certain actions in ac- cordance with its provisions. Emergency preparedness means all those activities and measures designed or undertaken to prepare for or mini- mize the effects of a hazard upon the civilian population, to deal with the immediate conditions emer reparedness means all those activities and measures designed or undertaken to prepare for or mini- mize the effects of a hazard upon the civilian population, to deal with the immediate conditions emergency which would be created by the hazard, and to effectuate emergency repairs to, or the emergency restoration of, vital utilities and facilities destroyed or damaged by the hazard. ‘‘Emergency Preparedness’’ includes the following: (1) Measures to be undertaken in preparation for anticipated hazards (in- cluding the establishment of appro- priate organizations, operational plans, and supporting agreements, the re- cruitment and training of personnel, the conduct of research, the procure- ment and stockpiling of necessary ma- terials and supplies, the provision of suitable warning systems, the con- struction or preparation of shelters, shelter areas, and control centers, and, when appropriate, the nonmilitary evacuation of the civilian population). (2) Measures to be undertaken during a hazard (including the enforcement of passive defense regulations prescribed by duly established military or civil authorities, the evacuation of per- sonnel to shelter areas, the control of traffic an hazard (including the enforcement of passive defense regulations prescribed by duly established military or civil authorities, the evacuation of per- sonnel to shelter areas, the control of traffic and panic, and the control and use of lighting and civil communica- tions). (3) Measures to be undertaken fol- lowing a hazard (including activities for firefighting; rescue; emergency medical, health and sanitation serv- ices; monitoring for specific dangers of special weapons; unexploded bomb re- connaissance; essential debris clear- ance; emergency welfare measures; and immediately essential emergency re- pair or restoration of damaged vital fa- cilities). Facilities includes all types of build- ings, structures, or other improve- ments to real property (but excluding farms, churches or other places of wor- ship, and private dwelling houses), and services relating to the use of any such building, structure, or other improve- ment. Farm equipment means equipment, machinery, and repair parts manufac- tured for use on farms in connection with the production or preparation for market use of food resources. 769 § 101.20 45 CFR Subtitle A (10–1–24 Edition) Fertilizer means any product or co s manufac- tured for use on farms in connection with the production or preparation for market use of food resources. 769 § 101.20 45 CFR Subtitle A (10–1–24 Edition) Fertilizer means any product or com- bination of products that contain one or more of the elements nitrogen, phos- phorous, and potassium for use as a plant nutrient. Food resource facilities means plants, (including on machinery, vehicles farm), and other facilities required for the production, processing, distribu- tion, and storage (including cold stor- age) of food resources, and for the do- mestic distribution of farm equipment and fertilizer (excluding transportation thereof). Food resources means all commodities and products, (simple, mixed, or com- pound), or complements to such com- modities or products, that are capable of being ingested by other human beings or animals, irrespective of other uses to which such commodities or products may be put, at all stages of processing from the raw commodity to the products thereof in vendible form for human or animal consumption. ‘‘Food resources’’ also means potable water packaged in commercially mar- ketable containers, all starches, sug- ars, vegetable and animal or thereof in vendible form for human or animal consumption. ‘‘Food resources’’ also means potable water packaged in commercially mar- ketable containers, all starches, sug- ars, vegetable and animal or marine fats and oils, seed, cotton, hemp, and flax fiber, but does not mean any such material after it loses its identity as an agricultural commodity or agri- culture product. Hazard means an emergency or dis- aster resulting from: (1) A natural disaster; or (2) An accidental or man-caused event. Health resources means drugs, biologi- cal products, medical devices, mate- rials, facilities, health supplies, serv- ices and equipment required to diag- nose, mitigate, or prevent the impair- ment of, improve, treat, cure, or re- store the physical or mental health conditions of the population. Homeland Security includes efforts— (1) To prevent terrorist attacks with- in the United States; (2) To reduce the vulnerability of the United States to terrorism; (3) To minimize damage from a ter- rorist attack in the United States; and (4) To recover from a terrorist attack in the United States. Industrial resource means all mate- rials, services, and facilities, including construction materials, st attack in the United States; and (4) To recover from a terrorist attack in the United States. Industrial resource means all mate- rials, services, and facilities, including construction materials, the authority for which has not been delegated to other agencies under E.O. 13603. The term ‘‘Industrial resource’’ does not in- clude food resources, food resource fa- cilities, livestock resources, veterinary resources, and the domestic distribu- tion of farm equipment and commer- cial fertilizer; all forms of energy; health resources; all forms of civil transportation; and water resources. Item means any raw, in process, or manufactured material, article, com- modity, supply, equipment, component, accessory, part, assembly, or product of any kind, technical information, process, or service. Maintenance and Repair and/or Oper- ating Supplies (MRO) includes the fol- lowing— (1) ‘‘Maintenance’’ is the upkeep nec- essary to continue any plant, facility, or equipment in working condition; (2) ‘‘Repair’’ is the restoration of any plant, facility, or equipment to work- ing condition when it has been ren- dered unsafe or unfit for service by wear and tear, damage, or failure of parts; (3) ‘ ) ‘‘Repair’’ is the restoration of any plant, facility, or equipment to work- ing condition when it has been ren- dered unsafe or unfit for service by wear and tear, damage, or failure of parts; (3) ‘‘Operating Supplies’’ are any re- sources carried as operating supplies according to a person’s established ac- counting practice. ‘‘Operating Sup- plies’’ may include hand tools and ex- pendable tools, jigs, dies, fixtures used on production equipment, lubricants, cleaners, chemicals, and other expend- able items; and (4) MRO does not include items pro- duced or obtained for sale to other per- sons or for installation upon or attach- ment to the property of another per- son, or items required for the produc- tion of such items; items needed for the replacement of any plant, facility, or equipment; or items for the improve- ment of any plant, facility, or equip- ment by replacing items which are still in working condition with items of a new or different kind, quality, or de- sign. Materials includes— (1) Any raw materials (including min- erals, metals, and advanced processed materials), commodities, articles, com- ponents (including critical compo- nents), products, and items of suppl ls includes— (1) Any raw materials (including min- erals, metals, and advanced processed materials), commodities, articles, com- ponents (including critical compo- nents), products, and items of supply; and (2) Any technical information or services ancillary to the use of any 770 Dept. of Health and Human Services § 101.30 such materials, commodities, articles, components, products, or items. National defense means programs for military and energy production or con- struction, military or critical infra- structure assistance to any foreign na- tion, homeland security, stockpiling, space, and any directly related activ- ity. Such term includes emergency pre- paredness activities conducted pursu- ant to title VI of the Robert T. Staf- ford Disaster Relief and Emergency As- sistance Act (42 U.S.C. 5121, et seq.) and critical infrastructure protection and restoration. Official action means an action taken by HHS under the authority of the DPA, E.O. 13603, and this part or an- other regulation under the FPAS. Such actions include the issuance of Rating Authorizations, Directives, Set Asides, Allotments, Letters of Understanding, and Demands for Information, Inspec- tion Authorizations, ion under the FPAS. Such actions include the issuance of Rating Authorizations, Directives, Set Asides, Allotments, Letters of Understanding, and Demands for Information, Inspec- tion Authorizations, and Administra- tive Subpoenas. Person includes any individual, cor- poration, partnership, association, or any other organized group of persons, or legal successor or representative thereof; or any State or local govern- ment or agency thereof; and for pur- poses of administration of this part, in- cludes the Federal Government and any authorized foreign government or international organization or agency thereof, delegated authority as pro- vided in this part. Priority rating is an identifying code assigned by HHS, a Delegate Agency or authorized person placed on all rated orders for health resources and con- sisting of the rating symbol and pro- gram identification symbol. Program Identification Symbols is an abbreviation used to indicate which ap- proved program is supported by a rated order. Rated order means a prime contract, a subcontract, or a purchase order in support of an approved program issued in accordance with the provisions of this part. Resource department means any age order. Rated order means a prime contract, a subcontract, or a purchase order in support of an approved program issued in accordance with the provisions of this part. Resource department means any agen- cy delegated priorities and allocations authority as specified in § 101.2. Secretary means the Secretary of HHS. Services includes any effort that is needed for or incidental to— (1) The development, production, processing, distribution, delivery, or use of a health resource. (2) The construction of facilities. (3) Other national defense programs and activities. Set-aside means an official action that requires a person to reserve mate- rials, services, or facilities capacity in anticipation of the receipt of rated or- ders. Stafford Act means title VI (Emer- gency Preparedness) of the Robert T. Stafford Disaster Relief and Emer- gency Assistance Act, as amended (42 U.S.C. 5121 et seq.). Water resources means all usable water, from all sources, within the ju- risdiction of the United States, that can be managed, controlled, and allo- cated to meet emergency require- ments, except ‘‘water resources’’ do not include usable water that qualifies as ‘‘food resources’’. Working day means a tes, that can be managed, controlled, and allo- cated to meet emergency require- ments, except ‘‘water resources’’ do not include usable water that qualifies as ‘‘food resources’’. Working day means any day that the recipient of an order is open for busi- ness. Subpart C—Placement of Rated Orders § 101.30 Delegations of authority. (a) The priorities and allocations au- thorities of the President under section 101 of the DPA with respect to health resources have been delegated to the Secretary under E.O. 13603. The Sec- retary may re-delegate the Secretary’s priorities authorities under the DPA to authorize a Delegate Agency to assign priority ratings to orders for health re- sources needed for use in approved pro- grams. (b) Pursuant to 87 FR 58363 published in the FEDERAL REGISTER on Sep- tember 26, 2022, the Secretary dele- gated to the Assistant Secretary for Preparedness and Response (the ASPR) within the Administration for Stra- tegic Preparedness and Response (ASPR), the authority under section 201 of E.O. 13603 to exercise priorities authority under section 101 of the DPA. This delegation authorized the ASPR, on behalf of the Secretary, to approve DO—[–[M1–M9] priority ratin y under section 201 of E.O. 13603 to exercise priorities authority under section 101 of the DPA. This delegation authorized the ASPR, on behalf of the Secretary, to approve DO—[–[M1–M9] priority rating requests for health resources that promote the national defense, though this delega- tion excludes the authority to approve 771 § 101.31 45 CFR Subtitle A (10–1–24 Edition) all priorities provisions for health re- sources that require DX—[–[M1–M9] priority ratings. § 101.31 Priority ratings. (a) Levels of priority. (1) There are two levels of priority established by the HRPAS, identified by the rating sym- bols ‘‘DO’’ and ‘‘DX’’. (2) All DO rated orders have equal priority with each other and take prec- edence over unrated orders. All DX rated orders have equal priority with each other and take precedence over DO rated orders and unrated orders. (For resolution of conflicts among rated orders of equal priority, see § 101.34(c). (3) In addition, a Directive regarding priority treatment for a given item issued by HHS for that item takes precedence over any DX rated order, DO rated order, or unrated order, as stipulated in the Directive. (For a full discussion of Directives, see § 101.6 r a given item issued by HHS for that item takes precedence over any DX rated order, DO rated order, or unrated order, as stipulated in the Directive. (For a full discussion of Directives, see § 101.62.) (b) Priority ratings. A priority rating is an identifying code assigned by a Delegate Agency or authorized person placed on all rated orders for health re- sources. It consists of the rating sym- bol and the program identification symbol. § 101.32 Elements of a rated order. (a) Each rated order must include: (1) The appropriate priority rating (e.g., DO–[M1–M9 or DX—[–[M1–M9]; (2) A required delivery date or dates. The words ‘‘immediately’’ or ‘‘as soon as possible’’ do not constitute a deliv- ery date. A ‘‘requirements contract,’’ ‘‘basic ordering agreement,’’ ‘‘prime vendor contract,’’ or similar procure- ment document bearing a priority rat- ing may contain no specific delivery date or dates and may provide for the furnishing of items or service from time-to-time or within a stated period against specific purchase orders, such as ‘‘calls,’’ ‘‘requisitions,’’ and ‘‘deliv- ery orders.’’ These purchase orders must specify a required delivery date or dates and are to be considered a period against specific purchase orders, such as ‘‘calls,’’ ‘‘requisitions,’’ and ‘‘deliv- ery orders.’’ These purchase orders must specify a required delivery date or dates and are to be considered as rated as of the date of their receipt by the supplier and not as of the date of the original procurement document; (3) The written signature on a manu- ally placed order, or the digital signa- ture or name on an electronically placed order, of an individual author- ized to sign rated orders for the person placing the order. The signature or use of the name certifies that the rated order is authorized under this part and that the requirements of this part are being followed; and (4) A statement that reads in sub- stance: (b) This is a rated order certified for national defense use, and you are re- quired to follow all the provisions of the Health Resources Priorities and Al- locations System regulation at 45 CFR part 101. (c) Additional element required for certain emergency preparedness rated orders. If the rated order is placed in support of emergency preparedness re- quirements and expedited action is necessary and appropriate to meet these following statement must be included in t rated orders. If the rated order is placed in support of emergency preparedness re- quirements and expedited action is necessary and appropriate to meet these following statement must be included in the order: ‘‘This rated order is placed for the purpose of emergency preparedness. It must be accepted or rejected within [Insert a time limit no less than the minimum applicable time limit speci- fied in § 101. 33(e)].’’ requirements, the § 101.33 Acceptance and rejection of rated orders. (a) Mandatory acceptance. (1) Except as otherwise specified in this section, a person shall accept every rated order received and must fill such orders re- gardless of any other rated or unrated orders that have been accepted. (2) A person shall not discriminate against rated orders in any manner such as by charging higher prices or by imposing different terms and condi- tions than for comparable unrated or- ders. (b) Mandatory rejection. Unless other- wise directed by HHS for a rated order involving health resources: (1) A person shall not accept a rated order for delivery on a specific date if unable to fill the order by that date. However, the person must inform the customer of the earliest date on th resources: (1) A person shall not accept a rated order for delivery on a specific date if unable to fill the order by that date. However, the person must inform the customer of the earliest date on which delivery can be made and offer to ac- cept the order on the basis of that date. Scheduling conflicts with previously accepted lower rated or unrated orders are not sufficient reason for rejection under this section. 772 Dept. of Health and Human Services § 101.34 (2) A person shall not accept a DO rated order for delivery on a date which would interfere with delivery of any previously accepted DO or DX rated orders. However, the person must offer to accept the order based on the earliest delivery date otherwise pos- sible. (3) A person shall not accept a DX rated order for delivery on a date which would interfere with delivery of any previously accepted DX rated or- ders but must offer to accept the order based on the earliest delivery date oth- erwise possible. (4) If a person is unable to fill all of the rated orders of equal priority sta- tus received on the same day, the per- son must accept, based upon the ear- liest delivery dates, only those orders which can be filled, an nable to fill all of the rated orders of equal priority sta- tus received on the same day, the per- son must accept, based upon the ear- liest delivery dates, only those orders which can be filled, and reject the other orders. For example, a person must accept order A requiring delivery on December 15 before accepting order B requiring delivery on December 31. However, the person must offer to ac- cept the rejected orders based on the earliest delivery dates otherwise pos- sible. (c) Optional rejection. Unless other- wise directed by HHS for a rated order involving health resources, rated or- ders may be rejected in any of the fol- lowing cases as long as a supplier does not discriminate among customers: (1) If the person placing the order is unwilling or unable to meet regularly established terms of sale or payment; (2) If the order is for an item not sup- plied or for a service not capable of being performed; (3) If the order is for an item or serv- ice produced, acquired, or provided only for the supplier’s own use for which no orders have been filled for two years prior to the date of receipt of the rated order. If, however, a supplier has sold some of these items or pro- vided d only for the supplier’s own use for which no orders have been filled for two years prior to the date of receipt of the rated order. If, however, a supplier has sold some of these items or pro- vided similar services, the supplier is obligated to accept rated orders up to that quantity or portion of production or service, whichever is greater, sold or provided within the past two years; (4) If the person placing the rated order, other than the U.S. Government, makes the item or performs the service being ordered; (5) If acceptance of a rated order or performance against a rated order would violate any other regulation, of- ficial action, or order of the HHS issued under the authority of the DPA or another relevant statute. (d) Customer notification requirements. (1) Except as provided in paragraph (e) of this section, a person must accept or reject a rated order in writing or elec- tronically within fifteen (15) working days after receipt of a DO-rated order and within ten (10) working days after receipt of a DX-rated order. If the order is rejected, the person must give rea- sons in writing or electronically for the rejection. (2) If a person has accepted a rated order and subseq g days after receipt of a DX-rated order. If the order is rejected, the person must give rea- sons in writing or electronically for the rejection. (2) If a person has accepted a rated order and subsequently finds that ship- ment or performance will be delayed, the person must notify the customer immediately, give the reasons for the delay, and advise of a new shipment or performance date. If notification is given verbally, written (hard copy) or electronic confirmation must be pro- vided within one (1) working day of the verbal notice. (e) Exception for emergency response conditions. If the rated order is placed for the purpose of emergency prepared- ness, and expedited action is necessary or appropriate to meet these require- ments and the order includes the state- ment as set forth in § 101.32(a)(4)(b), a person must accept or reject a rated order and transmit the acceptance or rejection in writing or in an electronic format within the time frame specified in the rated order (usually within two working days after receipt of the order). The minimum times for accept- ance or rejection that such orders may specify are six (6) hours after receipt if the order is issued by an authoriz within two working days after receipt of the order). The minimum times for accept- ance or rejection that such orders may specify are six (6) hours after receipt if the order is issued by an authorized person in response to a hazard that has occurred; or twelve (12) hours after re- ceipt if the order is issued by an au- thorized person to prepare for an immi- nent hazard. § 101.34 Preferential scheduling. (a) A person must schedule oper- ations, including the acquisition of all needed production items or services, in a timely manner to satisfy the delivery requirements of each rated order. Modifying production or delivery schedules is necessary only when re- quired delivery dates for rated orders cannot otherwise be met. 773 § 101.35 45 CFR Subtitle A (10–1–24 Edition) (b) DO rated orders must be given production preference over unrated or- ders, if necessary, to meet required de- livery dates, even if this requires the diversion of items being processed or ready for delivery or services being performed against unrated orders. Similarly, DX rated orders must be given preference over DO rated orders and unrated orders. (Examples: If a per- son receives a DO rated order with a deliv ces being performed against unrated orders. Similarly, DX rated orders must be given preference over DO rated orders and unrated orders. (Examples: If a per- son receives a DO rated order with a delivery date of June 3 and if meeting that date would mean delaying produc- tion or delivery of an item for an unrated order, the unrated order must be delayed. If a DX rated order is re- ceived calling for delivery on July 15 and a person has a DO rated order re- quiring delivery on June 2 and oper- ations can be scheduled to meet both deliveries, there is no need to alter pro- duction schedules to give any addi- tional preference to the DX rated order. However, if business operations cannot be altered to meet both the June 2 and July 15 delivery dates, then the DX rated order must be given pri- ority over the DO rated order.) (c)(1) If a person finds that delivery or performance against any accepted rated orders conflicts with the delivery or performance against other accepted rated orders of equal priority status, the person shall give precedence to the conflicting orders in the sequence in which they are to be delivered or per- formed (not to the receipt dates). If the conflicting orde f equal priority status, the person shall give precedence to the conflicting orders in the sequence in which they are to be delivered or per- formed (not to the receipt dates). If the conflicting orders are scheduled to be delivered or performed on the same day, the person shall give precedence to those orders that have the earliest receipt dates. in (2) If a person is unable to resolve rated order delivery or performance conflicts under this section, the person should promptly seek special priorities assistance as provided §§ 101.40 through 101.44. If the person’s customer objects to the rescheduling of delivery or performance of a rated order, the customer should promptly seek special priorities assistance as provided in §§ 101.40 through 101.44. For any rated order against which delivery or per- formance will be delayed, the person must notify the customer as provided in § 101.33(d)(2). (d) If a person is unable to purchase needed production items in time to fill a rated order by its required delivery date, the person must fill the rated order by using inventoried production items. A person who uses inventoried items to fill a rated order may replace those items with the use of s required delivery date, the person must fill the rated order by using inventoried production items. A person who uses inventoried items to fill a rated order may replace those items with the use of a rated order as provided in § 101.37(b). § 101.35 Extension of priority ratings. (a) A person must use rated orders with suppliers to obtain items or serv- ices needed to fill a rated order. The person must use the priority rating in- dicated on the customer’s rated order, except as otherwise provided in this part or as directed by HHS. (b) The priority rating must be in- cluded on each successive order placed to obtain items or services needed to fill a customer’s rated order. This con- tinues from contractor to subcon- tractor to supplier throughout the en- tire procurement chain. § 101.36 Changes or cancellations of priority ratings and rated orders. (a) The priority rating on a rated order may be changed or canceled by: (1) An official action of HHS; or (2) Written notification from the per- son who placed the rated order (includ- ing a Delegate Agency). (b) If an unrated order is amended to make it a rated order, or a DO rating is changed to a DX rating, the supplier must give th he per- son who placed the rated order (includ- ing a Delegate Agency). (b) If an unrated order is amended to make it a rated order, or a DO rating is changed to a DX rating, the supplier must give the appropriate preferential treatment to the order as of the date the change is received by the supplier. (c) An amendment to a rated order that significantly alters a supplier’s original production or delivery sched- ule shall constitute a new rated order as of the date of its receipt. The sup- plier must accept or reject the amend- ed order according to the provisions of § 101.33. (d) The following amendments do not constitute a new rated order: a change in shipping destination; a reduction in the total amount of the order; an in- crease in the total amount of the order which has negligible impact upon de- liveries; a minor variation in size or de- sign (prior to the start of production); or a change which is agreed upon be- tween the supplier and the customer. (e) If a person no longer needs items or services to fill a rated order, any rated orders placed with suppliers for 774 Dept. of Health and Human Services § 101.38 the items or services, or the priority rating on those orders, eeds items or services to fill a rated order, any rated orders placed with suppliers for 774 Dept. of Health and Human Services § 101.38 the items or services, or the priority rating on those orders, must be can- celed. (f) When a priority rating is added to an unrated order, or is changed or can- celed, all suppliers must be promptly notified in writing. § 101.37 Use of rated orders. (a) A person must use rated orders to obtain: (1) Items which will be physically in- corporated into other items to fill rated orders, including that portion of such items normally consumed or con- verted into scrap or by-products in the course of processing; (2) Containers or other packaging materials required to make delivery of the finished items against rated orders; (3) Services, other than contracts of employment, needed to fill rated or- ders; (4) MRO needed to produce the fin- ished items to fill rated orders. (b) A person may use a rated order to replace inventoried items (including finished items) if such items were used to fill rated orders, as follows: (1) The order must be placed within 90 days of the date of use of the inven- tory. (2) A DO rating symbol and the pro- gram identification s) if such items were used to fill rated orders, as follows: (1) The order must be placed within 90 days of the date of use of the inven- tory. (2) A DO rating symbol and the pro- gram identification symbol indicated on the customer’s rated order must be used on the order. A DX rating may not be used even if the inventory was used to fill a DX rated order. (3) If the priority ratings on rated or- ders from one customer or several cus- tomers contain different program iden- tification symbols, the rated orders may be combined. (c) A person may combine DX and DO rated orders from one customer or sev- eral customers if the items or services covered by each level of priority are identified separately and clearly. (d) Combining rated and unrated or- ders. (1) A person may combine rated and unrated order quantities on one pur- chase order provided that: ‘‘This purchase read in substance: order contains rated order quantities certified for national defense use, and you are required to follow all applica- ble provisions of the Health Resources Priorities and Allocations System reg- ulations at 45 CFR part 101 only as it pertains to the rated quantities’’. (2) A supplier must accept or reje all applica- ble provisions of the Health Resources Priorities and Allocations System reg- ulations at 45 CFR part 101 only as it pertains to the rated quantities’’. (2) A supplier must accept or reject the rated portion of the purchase order as provided in § 101.33 and give pref- erential treatment only to the rated quantities as required by this part. This part may not be used to require preferential treatment for the unrated portion of the order. (3) Any supplier who believes that rated and unrated orders are being combined in a manner contrary to the intent of this part or in a fashion that causes undue or exceptional hardship may submit a request for adjustment or exception under § 101.80. (e) A person may place a rated order for the minimum commercially pro- curable quantity even if the quantity needed to fill a rated order is less than that minimum. However, a person must combine rated orders as provided in paragraph (c) of this section, if pos- sible, to obtain minimum procurable quantities. (f) A person is not required to place a priority rating on an order for less than one-half of the Simplified Acqui- sition Threshold (as established in the Federal Acquisition Regulatio le quantities. (f) A person is not required to place a priority rating on an order for less than one-half of the Simplified Acqui- sition Threshold (as established in the Federal Acquisition Regulation (FAR) (see 48 CFR 2.101) or in other author- ized acquisition regulatory or manage- ment systems) whichever amount is greater, provided that delivery can be obtained in a timely fashion without the use of the priority rating. § 101.38 Limitations on placing rated orders. (a) General limitations. (1) A person may not place a DO or DX rated order pursuant to this part unless the person in receipt of the rated order has been explicitly authorized to do so by HHS or a Delegate Agency or is otherwise permitted to do so by this part. (i) The rated quantities are sepa- (2) Rated orders may not be used to rately and clearly identified; and obtain: (ii) The four elements of a rated order, as required by § 101.32, are in- cluded on the order with the statement required in § 101.32(a)(4) modified to (i) Delivery on a date earlier than needed; (ii) A greater quantity of the item or services than needed, except to obtain 775 § 101.40 45 CFR Subtitle A (10–1–24 Edition) a minimum procurable quanti o (i) Delivery on a date earlier than needed; (ii) A greater quantity of the item or services than needed, except to obtain 775 § 101.40 45 CFR Subtitle A (10–1–24 Edition) a minimum procurable quantity. Sepa- rate rated orders may not be placed solely for the purpose of obtaining min- imum procurable quantities on each order; (iii) Items or services in advance of the receipt of a rated order, except as specifically authorized by HHS (see § 101.41(c) for information on obtaining authorization for a priority rating in advance of a rated order); (iv) Items that are not needed to fill a rated order, except as specifically au- thorized by HHS, or as otherwise per- mitted by this part; or (v) Any of the following items unless specific priority rating authority has been obtained from HHS, a Delegate Agency, or the Department of Com- merce, as appropriate: (A) Items for plant improvement, ex- pansion, or construction, unless they will be physically incorporated into a construction project covered by a rated order; or (B) Production or construction equip- ment or items to be used for the manu- facture of production equipment. [For information on requesting priority rat- ing authority, see ered by a rated order; or (B) Production or construction equip- ment or items to be used for the manu- facture of production equipment. [For information on requesting priority rat- ing authority, see § 101.41.] (C) Any items related to the develop- ment of chemical or biological warfare capabilities or the production of chem- ical or biological weapons unless such development or production has been authorized by the President or the Sec- retary of Defense. This provision does not however prohibit the use of the pri- ority and allocations authority to ac- quire or produce qualified counter- measures that are necessary to treat, identify, or prevent harm from any bio- logical or chemical agent that may pose a public health threat affecting national security. (b) Jurisdictional limitations. Unless authorized by the resource agency with jurisdiction, the provisions of this part are not applicable to the following re- sources: (1) Food resources, food resource fa- cilities, livestock resources, veterinary resources, plant health resources, and the domestic distribution of farm equipment and commercial fertilizer (Resource agency with jurisdiction— Department of Agriculture); (2) All for ces, veterinary resources, plant health resources, and the domestic distribution of farm equipment and commercial fertilizer (Resource agency with jurisdiction— Department of Agriculture); (2) All forms of energy (Resource agency with jurisdiction—Department of Energy); (3) All forms of civil transportation (Resource agency with jurisdiction— Department of Transportation); (4) Water resources (Resource agency with jurisdiction—Department of De- fense/U.S. Army Corps of Engineers); (5) All materials, services, and facili- ties, including construction materials (industrial resources) for which the au- thority has not been delegated to other agencies under E.O. 13603 (Resource agency with jurisdiction—Department of Commerce); (6) The priorities and allocations au- thority of this part may not be applied to communications services (Resource agency with jurisdiction—National Communications System under E.O. 13618 of July 6, 2012). Subpart D—Special Priorities Assistance § 101.40 General provisions. (a) Once a priority rating has been authorized pursuant to this part, fur- ther action by HHS is generally not needed. However, from time-to-time, production or delivery problems will arise i visions. (a) Once a priority rating has been authorized pursuant to this part, fur- ther action by HHS is generally not needed. However, from time-to-time, production or delivery problems will arise in connection with rated orders for health resources as covered under this part. In this event, a person should immediately contact ASPR for guid- ance, as specified in § 101.93. ASPR serves as the lead policy office for emergency preparedness and response operations on behalf of HHS and man- ages the Department’s delegated DPA authorities. If ASPR is unable to re- solve the problem or to authorize the use of a priority rating and believes ad- ditional assistance is warranted, ASPR may forward the request to another agency with resource jurisdiction, such as the Department of Commerce, as ap- propriate, for action. Special priorities assistance is provided to alleviate problems that do arise. (b) Special priorities assistance is available for any reason consistent with this part. Generally, special prior- ities assistance is provided to expedite deliveries, resolve delivery conflicts, place rated orders, locate suppliers, or to verify information supplied by cus- tomers and vendors. Spe special prior- ities assistance is provided to expedite deliveries, resolve delivery conflicts, place rated orders, locate suppliers, or to verify information supplied by cus- tomers and vendors. Special priorities 776 Dept. of Health and Human Services § 101.43 assistance may also be used to request rating authority for items that are not normally eligible for priority treat- ment. § 101.41 Requests for priority rating authority. (a) Rating authority for items or serv- ices not normally rated. If a rated order is likely to be delayed because a person is unable to obtain items or services not normally rated under this part, the person may request the authority to use a priority rating in ordering the needed items or services. (b) Rating authority for production or construction equipment. (1) A request for priority rating authority for produc- tion or construction equipment must be submitted to the U.S. Department of Commerce on Form BIS–999. (2) When the use of a priority rating is authorized for the procurement of production or construction equipment, a rated order may be used either to purchase or to lease such equipment. However, in the latter case, the equip- ment may be lease thorized for the procurement of production or construction equipment, a rated order may be used either to purchase or to lease such equipment. However, in the latter case, the equip- ment may be leased only from a person engaged in the business of leasing such equipment or from a person willing to lease rather than sell. (c) Rating authority in advance of a rated prime contract. (1) In certain cases, and upon specific request HHS may au- thorize a person to place a priority rat- ing on an order to a supplier in advance of the issuance of a rated prime con- tract. In these instances, the person re- questing authority advance-rating must obtain sponsorship of the request from HHS or the appropriate Delegate Agency. The person shall also assume any business risk associated with the placing of rated orders in the event the rated prime contract is not issued. (2) The person must state the fol- lowing in the request: It is understood that the authorization of a priority rating in advance of our receiving a rated prime contract from the Depart- ment of Health and Human Services (HHS) and our use of that priority rat- ing with our suppliers in no way com- mits HHS or any other government a our receiving a rated prime contract from the Depart- ment of Health and Human Services (HHS) and our use of that priority rat- ing with our suppliers in no way com- mits HHS or any other government agency to enter into a contract or order or to expend funds. Further, we understand that the Federal Govern- ment shall not be liable for any can- cellation charges, termination costs, or other damages that may accrue if a rated prime contract is not eventually placed and, as a result, we must subse- quently cancel orders placed with the use of the priority rating authorized as a result of this request. (3) In reviewing requests for rating authority in advance of a rated prime contract, HHS will consider, among other things, the following criteria: (i) The probability that the prime contract will be awarded; (ii) The impact of the resulting rated orders on suppliers and on other au- thorized programs; (iii) Whether the contractor is the sole source; (iv) Whether the item being produced has a long lead time; (v) The time period for which the rat- ing is being requested; (4) HHS may require periodic reports on the use of the rating authority granted under paragraph (c) of this sec- tion. a long lead time; (v) The time period for which the rat- ing is being requested; (4) HHS may require periodic reports on the use of the rating authority granted under paragraph (c) of this sec- tion. (5) If a rated prime contract is not issued, the person shall promptly no- tify all suppliers who have received rated orders pursuant to the advanced rating authority that the priority rat- ing on those orders is cancelled. § 101.42 Examples of assistance. (a) While special priorities assistance may be provided for any reason in sup- port of this part, it is usually provided in situations where: (1) A person is experiencing difficulty in obtaining delivery against a rated order by the required delivery date; or (2) A person cannot locate a supplier for an item or service needed to fill a rated order. (b) Other examples of special prior- ities assistance include: (1) Ensuring that rated orders receive preferential treatment by suppliers; (2) Resolving production or delivery conflicts between various rated orders; (3) Assisting in placing rated orders with suppliers; (4) Verifying the urgency of rated or- ders; and (5) Determining the validity of rated orders. § 101.43 Criteria for assis n various rated orders; (3) Assisting in placing rated orders with suppliers; (4) Verifying the urgency of rated or- ders; and (5) Determining the validity of rated orders. § 101.43 Criteria for assistance. Requests for special priorities assist- ance should be timely, i.e., the request 777 § 101.44 45 CFR Subtitle A (10–1–24 Edition) has been submitted promptly and enough time exists for HHS, or the Del- egate Agency to affect a meaningful resolution to the problem, and must es- tablish that: (a) There is an urgent need for the item; and (b) The applicant has made a reason- able effort to resolve the problem. § 101.44 Instances where assistance may not be provided. Special priorities assistance is pro- vided at the discretion of HHS or the Delegate Agency when it is determined that such assistance is warranted to meet the objectives of this part. Exam- ples where assistance may not be pro- vided include situations when a person is attempting to: (a) Secure a price advantage; (b) Obtain delivery prior to the time required to fill a rated order; (c) Gain competitive advantage; (d) Disrupt an industry apportion- ment program in a manner designed to provide a person with an unwarrante n delivery prior to the time required to fill a rated order; (c) Gain competitive advantage; (d) Disrupt an industry apportion- ment program in a manner designed to provide a person with an unwarranted share of scarce items; or (e) Overcome a supplier’s regularly established terms of sale or conditions of doing business. Subpart E—Allocation Actions § 101.50 Policy. (a) Allocation orders will: (1) Only be used when there is insuffi- cient supply of a material, service, or facility to satisfy national defense sup- ply requirements through the use of the priorities authority or when the use of the priorities authority would cause a severe and prolonged disrup- tion in the supply of materials, serv- ices, or facilities available to support normal U.S. economic activities; and (2) Not be used to ration materials or services at the retail level. (b) Allocation orders, when used, will be distributed equitably among the suppliers of the materials, services, or facilities being allocated and not re- quire any person to relinquish a dis- proportionate share of the civilian market. § 101.51 General procedures. Before the Department of Health and Human Services uses its allocations authority ot re- quire any person to relinquish a dis- proportionate share of the civilian market. § 101.51 General procedures. Before the Department of Health and Human Services uses its allocations authority to address a supply problem within its resource jurisdiction, it will develop a plan that includes: (a) A copy of the written determina- tion made in accordance with section 202 of Executive Order 13603, that the program or programs that would be supported by the allocation action are necessary or appropriate to promote the national defense. (b) A detailed description of the situ- ation to include any unusual events or circumstances that have created the requirement for an allocation action; (c) A statement of the specific objec- tive(s) of the allocation action; (d) A list of the materials, services, or facilities to be allocated; (e) A list of the sources of the mate- rials, services, or facilities that will be subject to the allocation action; (f) A detailed description of the pro- visions that will be included in the al- location orders, including the type(s) of allocation orders, the percentages or quantity of capacity or output to be al- located for each purpose, and the dura- ti ons that will be included in the al- location orders, including the type(s) of allocation orders, the percentages or quantity of capacity or output to be al- located for each purpose, and the dura- tion of the allocation action (i.e., an- ticipated start and end dates); (g) An evaluation of the impact of the proposed allocation action on the civilian market; and (h) Proposed actions, if any, to miti- gate disruptions to civilian market op- erations. § 101.52 Controlling the general dis- tribution of a material in the civil- ian market. No allocation action taken by HHS may be used to control the general dis- tribution of a material in the civilian market, unless the Secretary has: (a) Made a written finding that: (1) Such material is a scarce and crit- ical material essential to the national defense, and (2) The requirements of the national defense for such material cannot other- wise be met without creating a signifi- cant dislocation of the normal distribu- tion of such material in the civilian market to such a degree as to create appreciable hardship; (b) Submitted the finding for the President’s approval through the As- sistant to the President and National Security Advisor and he civilian market to such a degree as to create appreciable hardship; (b) Submitted the finding for the President’s approval through the As- sistant to the President and National Security Advisor and the Assistant to 778 Dept. of Health and Human Services § 101.55 the President for Homeland Security and Counterterrorism; and (c) The President has approved the finding. § 101.53 Types of allocation orders. There are three types of allocation orders available for communicating al- location actions. (a) Set-aside. An official action that requires a person to reserve materials, services, or facilities capacity in an- ticipation of the receipt of rated or- ders. (b) Directive. An official action that requires a person to take or refrain from taking certain actions in accord- ance with its provisions. A directive can require a person to: Stop or reduce production of an item; prohibit the use of selected materials, services, or fa- cilities; or divert the use of materials, services, or facilities from one purpose to another; and (c) Allotment. An official action that specifies the maximum quantity of a material, service, or facility authorized for a specific use to promote the na- tional ties from one purpose to another; and (c) Allotment. An official action that specifies the maximum quantity of a material, service, or facility authorized for a specific use to promote the na- tional defense. § 101.54 Elements of an allocation order. Allocation orders may be issued di- rectly to the affected persons or by constructive notice through publica- tion in the FEDERAL REGISTER. This section describes the elements that each order must include. (a) Each allocation order must in- clude: (1) A detailed description of the re- quired allocation action(s), including its relationship to any received DX rated orders, DO rated orders, and unrated orders; (2) Specific start and end calendar dates for each required allocation ac- tion; (3) The written signature on a manu- ally placed order or the digital signa- ture on an electronically placed order of the Secretary of HHS. (b)(1) Elements to be included in or- ders issued directly to affected persons: (2) A statement that reads in sub- stance: ‘‘This is an allocation order certified for national defense use. [In- sert the name of the person receiving the order] is required to comply with this order, in accordance with the pro- visio stance: ‘‘This is an allocation order certified for national defense use. [In- sert the name of the person receiving the order] is required to comply with this order, in accordance with the pro- visions of the Health Resources Prior- ities and Allocations System regula- tion (45 CFR part 101); (c)(1) Elements to be included in an allocation order that gives construc- tive notice through publication in the FEDERAL REGISTER: (2) A statement that reads in sub- stance: ‘‘This is an allocation order certified for national defense use. [In- sert the name(s) of the person(s) to whom the order applies or a description of the class of persons to whom the order applies] is (are) required to com- ply with this order, in accordance with the provisions of the Health Resources Priorities and Allocations System reg- ulation (45 CFR part 101). § 101.55 Mandatory acceptance of an allocation order. (a) Except as otherwise specified in this section (see paragraph (c) of this section), a person shall accept and comply with every allocation order re- ceived. (b) A person shall not discriminate against an allocation order in any manner such as by charging higher prices for materials, services, or facili pt and comply with every allocation order re- ceived. (b) A person shall not discriminate against an allocation order in any manner such as by charging higher prices for materials, services, or facili- ties covered by the order or by impos- ing terms and conditions for contracts and orders involving allocated mate- rials, services, or facilities that differ from the person’s terms and conditions for contracts and orders for the mate- rials, services, or facilities prior to re- ceiving the allocation order. (c) If a person is unable to comply fully with the required action(s) speci- fied in an allocation order, the person must notify the ASPR, as specified in § 101.93, immediately, explain the ex- tent to which compliance is possible, and give the reasons why full compli- ance is not possible. If notification is given verbally, then written or elec- tronic confirmation must be provided within one (1) working day. Such noti- fication does not release the person from complying with the order to the fullest extent possible, until the person is notified by HHS that the order has been changed or cancelled. 779 § 101.56 45 CFR Subtitle A (10–1–24 Edition) § 101.56 Changes or cancellations der to the fullest extent possible, until the person is notified by HHS that the order has been changed or cancelled. 779 § 101.56 45 CFR Subtitle A (10–1–24 Edition) § 101.56 Changes or cancellations of an allocation order. An allocation order may be changed or canceled by an official action of HHS. Notice of such changes or can- cellations may be provided directly to persons to whom the order being can- celled or modified applies or construc- tive notice may be provided by publica- tion in the FEDERAL REGISTER. Subpart F—Official Actions § 101.60 General provisions. (a) HHS may take specific official ac- tions to implement the provisions of this part. (b) These official actions include, but are not limited to, Rating Authoriza- tions, Directives, and Letters of Under- standing (See § 101.20.) § 101.61 Rating Authorizations. (a) A Rating Authorization is an offi- cial action granting specific priority rating authority that: (1) Permits a person to place a pri- ority rating on an order for an item or service not normally ratable under this part; or (2) Authorizes a person to modify a priority rating on a specific order or series of contracts or orders. (b) To request priority ratin for an item or service not normally ratable under this part; or (2) Authorizes a person to modify a priority rating on a specific order or series of contracts or orders. (b) To request priority rating author- ity, see § 101.41. § 101.62 Directives. (a) A Directive is an official action that requires a person to take or re- frain from taking certain actions in ac- cordance with its provisions. (b) A person must comply with each Directive issued. However, a person may not use or extend a Directive to obtain any items from a supplier, un- less expressly authorized to do so in the Directive. (c) A Directive takes precedence over all DX rated orders, DO rated orders, and unrated orders previously or subse- quently received, unless a contrary in- struction appears in the Directive. § 101.63 Letters of Understanding. (a) A Letter of Understanding is an official action that may be issued in re- solving special priorities assistance cases to reflect an agreement reached by all parties including HHS, the De- partment of Commerce (if applicable), a Delegate Agency (if applicable), the supplier, and the customer. (b) A Letter of Understanding is not used to alter scheduling between rated orde g HHS, the De- partment of Commerce (if applicable), a Delegate Agency (if applicable), the supplier, and the customer. (b) A Letter of Understanding is not used to alter scheduling between rated orders, to authorize the use of priority ratings, to impose restrictions under this part. Rather, Letters of Under- standing are used to confirm produc- tion or shipping schedules that do not require modifications to other rated or- ders. Subpart G—Compliance § 101.70 General provisions. (a) HHS may take specific official ac- tions for any reason necessary or ap- propriate to the enforcement or the ad- ministration of the Defense Production Act and other applicable statutes, this part, or an official action. Such actions include Administrative Subpoenas, De- mands for Information, and Inspection Authorizations. (b) Any person who places or receives a rated order or an allocation order must comply with the provisions of this part. (c) Willful violation of the provisions of title I or section 705 of the DPA and other applicable statutes, this part, or an official action of HHS is a criminal act, punishable as provided in the DPA and other applicable statutes, and as set forth in § 101.74. § 5 of the DPA and other applicable statutes, this part, or an official action of HHS is a criminal act, punishable as provided in the DPA and other applicable statutes, and as set forth in § 101.74. § 101.71 Audits and investigations. (a) Audits and investigations are offi- cial examinations of books, records, documents, other writings, and infor- mation to ensure that the provisions of the DPA and other applicable statutes, this part, and official actions have been properly followed. An audit or inves- tigation may also include interviews and a systems evaluation to detect problems or failures in the implemen- tation of this part. (b) When undertaking an audit or in- vestigation, HHS shall: (1) Define the scope and purpose in the official action given to the person under investigation; and (2) Have ascertained that the infor- mation sought, or other adequate and authoritative data are not available 780 Dept. of Health and Human Services § 101.72 from any Federal or other responsible agency. (c) In administering this part, HHS may issue the following documents that constitute official actions: (1) Administrative Subpoenas. An Ad- ministrative Subpoena requires a per- son to appear a ency. (c) In administering this part, HHS may issue the following documents that constitute official actions: (1) Administrative Subpoenas. An Ad- ministrative Subpoena requires a per- son to appear as a witness before an of- ficial designated by HHS to testify under oath on matters of which that person has knowledge relating to the enforcement or the administration of the DPA and other applicable statutes, this part, or official actions. An Ad- ministrative Subpoena may also re- quire the production of books, papers, records, documents and physical ob- jects or property. (2) Demands for Information. A De- mand for Information requires a person to furnish to a duly authorized rep- resentative of HHS any information necessary or appropriate to the en- forcement or the administration of the DPA and other applicable statutes, this part, or official actions. (3) Inspection Authorizations. An In- spection Authorization requires a per- son to permit a duly authorized rep- resentative of HHS to interview the person’s employees or agents, to in- spect books, records, documents, other writings, and information, including electronically-stored information, in the person’s possession or contr to interview the person’s employees or agents, to in- spect books, records, documents, other writings, and information, including electronically-stored information, in the person’s possession or control at the place where that person usually keeps them or otherwise, and to in- spect a person’s property when such interviews and inspections are nec- essary or appropriate to the enforce- ment or the administration of the DPA and related statutes, this part, or offi- cial actions. (d) The production of books, records, documents, other writings, and infor- mation will not be required at any place other than where they are usu- ally kept, if, prior to the return date specified in the Administrative Sub- poena or Demand for Information, a duly authorized official of HHS is fur- nished with copies of such material that are certified under oath to be true copies. As an alternative, a duly au- thorized representative of HHS may enter into a stipulation with a person as to the content of the material. (e) An Administrative Subpoena, De- mand for Information, or Inspection Authorization shall include the name, title, or official position of the person to be served, the evidence sought to be ad rial. (e) An Administrative Subpoena, De- mand for Information, or Inspection Authorization shall include the name, title, or official position of the person to be served, the evidence sought to be adduced, and its general relevance to the scope and purpose of the audit, in- vestigation, or other inquiry. If em- ployees or agents are to be interviewed; if books, records, documents, other writings, or information are to be pro- duced; or if property is to be inspected; the Administrative Subpoena, Demand for Information, or Inspection Author- ization will describe them with par- ticularity. (f) Service of documents shall be made in the following manner: (1) Service of a Demand for Informa- tion or Inspection Authorization shall be made personally, or by Certified Mail-Return Receipt Requested at the person’s last known address. Service of an Administrative Subpoena shall be made personally. Personal service may also be made by leaving a copy of the document with someone at least 18 years old at the person’s last known dwelling or place of business. (2) Service upon other than an indi- vidual may be made by serving a part- ner, corporate officer, or a managing or general agent author s old at the person’s last known dwelling or place of business. (2) Service upon other than an indi- vidual may be made by serving a part- ner, corporate officer, or a managing or general agent authorized by appoint- ment or by law to accept service of process. If an agent is served, a copy of the document shall be mailed to the person named in the document. (3) Any individual 18 years of age or over may serve an Administrative Sub- poena, Demand for Information, or In- spection Authorization. When personal service is made, the individual making the service shall prepare an affidavit as to the manner in which service was made and the identity of the person served, and return the affidavit, and in the case of subpoenas, the original doc- ument, to the issuing officer. In case of failure to make service, the reasons for the failure shall be stated on the origi- nal document. § 101.72 Compulsory process. (a) If a person refuses to permit a duly authorized representative of HHS to have access to any premises or to the source of information necessary to the administration or the enforcement of the DPA and other applicable stat- utes, this part, or official actions, HHS, through its auth ess to any premises or to the source of information necessary to the administration or the enforcement of the DPA and other applicable stat- utes, this part, or official actions, HHS, through its authorized representative 781 § 101.73 45 CFR Subtitle A (10–1–24 Edition) may seek compulsory process. Compul- sory process means the institution of appropriate legal action, including ex parte application for an inspection warrant or its equivalent, in any forum of appropriate jurisdiction. (b) Compulsory process may be sought in advance of an audit, inves- tigation, or other inquiry, if, in the judgment of the Secretary there is rea- son to believe that a person will refuse to permit an audit, investigation, or other inquiry, or that other cir- cumstances exist which make such process desirable or necessary. § 101.73 Notification of failure to com- ply. (a) At the conclusion of an audit, in- vestigation, or other inquiry, or at any other time, HHS may inform the per- son in writing of HHS’ position regard- ing that person’s non-compliance with the requirements of the DPA and other applicable statutes, this part, or an of- ficial action. (b) In cases where HHS determines that failure to position regard- ing that person’s non-compliance with the requirements of the DPA and other applicable statutes, this part, or an of- ficial action. (b) In cases where HHS determines that failure to comply with the provi- sions of the DPA and other applicable statutes, this part, or an official action was inadvertent, the person may be in- formed in writing of the particulars in- volved and the corrective action to be taken. Failure to take corrective ac- tion may then be construed as a willful violation of the DPA and other applica- ble statutes, this part, or an official ac- tion. § 101.74 Violations, penalties, and rem- edies. (a) Willful violation of the provisions of the DPA, and related statutes (when applicable), this part, or an official ac- tion, is a crime and upon conviction, a person may be punished by fine or im- prisonment, or both. The maximum penalties provided by the DPA are a $10,000 fine, or one year in prison, or both. (b) The Government may also seek an injunction from a court of appropriate jurisdiction to prohibit the continu- ance of any violation of, or to enforce compliance with, the DPA, this part, or an official action. (c) In order to secure the effect from a court of appropriate jurisdiction to prohibit the continu- ance of any violation of, or to enforce compliance with, the DPA, this part, or an official action. (c) In order to secure the effective en- forcement of the DPA and other appli- cable statutes, this part, and official actions, the following are prohibited: (1) No person may solicit, influence, or permit another person to perform any act prohibited by, or to omit any act required by, the DPA and other ap- plicable statutes, this part, or an offi- cial action. (2) No person may conspire or act in concert with any other person to per- form any act prohibited by, or to omit any act required by, the DPA and other applicable statutes, this part, or an of- ficial action. (3) No person shall deliver any item if the person knows or has reason to be- lieve that the item will be accepted, re- delivered, held, or used in violation of the DPA and other applicable statutes, this part, or an official action. In such instances, the person must imme- diately notify HHS that, in accordance with this provision, delivery has not been made. § 101.75 Compliance conflicts. If compliance with any provision of the DPA and other applicable rson must imme- diately notify HHS that, in accordance with this provision, delivery has not been made. § 101.75 Compliance conflicts. If compliance with any provision of the DPA and other applicable statutes, this part, or an official action would prevent a person from filling a rated order or from complying with another provision of the DPA and other appli- cable statutes, this part, or an official action, the person must immediately notify HHS, as specified in § 101.93, for resolution of the conflict. Subpart H—Adjustments, Exceptions, and Appeals § 101.80 Adjustments or exceptions. (a) A person may submit a request to HHS for an adjustment or exception on the ground that: (1) A provision of this part or an offi- cial action results in an undue or ex- ceptional hardship on that person not suffered generally by others in similar situations and circumstances; or (2) The consequences of following a provision of this part or an official ac- tion are contrary to the intent of the DPA and other applicable statutes, or this part. (b) Each request for adjustment or exception must be in writing and con- tain a complete statement of all the facts and circumstances related to the provision other applicable statutes, or this part. (b) Each request for adjustment or exception must be in writing and con- tain a complete statement of all the facts and circumstances related to the provision of this part or official action 782 Dept. of Health and Human Services § 101.91 from which adjustment is sought and a full and precise statement of the rea- sons why relief should be provided. (c) The submission of a request for adjustment or exception shall not re- lieve any person from the obligation of complying with the provision of this part or official action in question while the request is being considered unless such interim relief is granted in writ- ing by the Secretary or the Secretary’s designated representative. (d) A decision of the Secretary or the Secretary’s designated representative under this section may be appealed to the Secretary. (For information on the appeal procedure, see § 101.81.) § 101.81 Appeals. (a) Any person whose request for ad- justment or exception was denied by the Secretary or the Secretary’s des- ignated representative under § 101.80, may appeal to the Secretary who, through the Secretary’s designated representative, shall review and recon- side denied by the Secretary or the Secretary’s des- ignated representative under § 101.80, may appeal to the Secretary who, through the Secretary’s designated representative, shall review and recon- sider the denial. (b)(1) Except as provided in para- graph (b)(2) of this section, an appeal must be received by the Secretary no later than 45 business days after re- ceipt of a written notice of denial. After this 45-business day period, an appeal may be accepted at the discre- tion of the Secretary. (2) For requests for adjustment or ex- ception involving rated orders placed for the purpose of emergency prepared- ness (see § 101.33(e)), an appeal must be received by the Secretary, no later than 15 business days after receipt of a written notice of denial. Contract per- formance under the order shall not be stayed pending resolution of the ap- peal. (c) Each appeal must be in writing and contain a complete statement of all the facts and circumstances related to the action appealed from and a full and precise statement of the reasons the decision should be modified or re- versed. (d) In addition to the written mate- rials submitted in support of an appeal, an appellant may request, in wri full and precise statement of the reasons the decision should be modified or re- versed. (d) In addition to the written mate- rials submitted in support of an appeal, an appellant may request, in writing, an opportunity for an informal hear- ing. This request may be granted or de- nied at the discretion of the Secretary or the Secretary’s designated rep- resentative. (e) When a hearing is granted, the Secretary may designate an HHS em- ployee to act as the Secretary’s rep- resentative and hearing officer to con- duct the hearing and to prepare a re- port. The hearing officer shall deter- mine all procedural questions and im- pose such time or other limitations deemed reasonable. In the event that the hearing officer decides that a print- ed transcript is necessary, all expenses shall be borne by the appellant. (f) When determining an appeal, the Secretary may consider all informa- tion submitted during the appeal as well as any recommendations, reports, or other relevant information and doc- uments available to HHS or consult with any other persons or groups. (g) The submission of an appeal under this section shall not relieve any per- son from the obligation of complying with the nd doc- uments available to HHS or consult with any other persons or groups. (g) The submission of an appeal under this section shall not relieve any per- son from the obligation of complying with the provision of this part or offi- cial action in question while the appeal is being considered unless such relief is granted in writing by the Secretary. Subpart I—Miscellaneous Provisions § 101.90 Protection against claims. A person shall not be held liable for damages or penalties for any act or failure to act resulting directly or indi- rectly from compliance with any provi- sion of this part, or an official action, notwithstanding that such provision or action shall subsequently be declared invalid by judicial or other competent authority. § 101.91 Records and reports. (a) Persons are required to make and preserve for at least three years, accu- rate and complete records of any trans- action covered by this part or an offi- cial action. (b) Records must be maintained in sufficient detail to permit the deter- mination, upon examination, of wheth- er each transaction complies with the provisions of this part or any official action. However, this part does not specify any method or sys l to permit the deter- mination, upon examination, of wheth- er each transaction complies with the provisions of this part or any official action. However, this part does not specify any method or system to be used. (c) Records required to be maintained by this part must be made available for 783 § 101.92 45 CFR Subtitle A (10–1–24 Edition) examination on demand by duly au- thorized representatives of HHS as pro- vided in § 101.71. (d) In addition, persons must develop, maintain, and submit any other records and reports to HHS that may be required for the administration of the DPA and other applicable statutes, and this part. (e) DPA section 705(d), as imple- mented by E.O. 13603, provides that in- formation obtained under this section which the Secretary deems confiden- tial, or with reference to which a re- quest for confidential treatment is made by the person furnishing such in- formation, shall not be published or disclosed unless the Secretary deter- mines that the withholding of this in- formation is contrary to the interest of the national defense. Information re- quired to be submitted to HHS in con- nection with the enforcement or ad- ministration of the DPA, this part, o this in- formation is contrary to the interest of the national defense. Information re- quired to be submitted to HHS in con- nection with the enforcement or ad- ministration of the DPA, this part, or an official action, is deemed to be con- fidential under DPA section 705(d) and shall be handled in accordance with ap- plicable Federal law. § 101.92 Applicability of this part and official actions. (a) This part and all official actions, unless specifically stated otherwise, apply to transactions in any state, ter- ritory, or possession of the United States and the District of Columbia. (b) This part and all official actions apply not only to deliveries to other persons but also include deliveries to affiliates and subsidiaries of a person and deliveries from one branch, divi- sion, or section of a single entity to an- other branch, division, or section under common ownership or control. (c) This part shall not be construed to affect any administrative actions taken by HHS, or any outstanding con- tracts or orders placed pursuant to any of the regulations, orders, schedules, or delegations of authority previously issued by HHS pursuant to authority granted to HHS, by the President tanding con- tracts or orders placed pursuant to any of the regulations, orders, schedules, or delegations of authority previously issued by HHS pursuant to authority granted to HHS, by the President under the DPA and E.O. 13603. Such ac- tions, contracts, or orders shall con- tinue in full force and effect under this part unless modified or terminated by proper authority. § 101.93 Communications. All communications concerning this part, including requests for copies of the part and explanatory information, requests for guidance or clarification, and requests for adjustment or excep- tion shall be addressed to the Adminis- tration for Strategic Preparedness and Response, U.S. Department of Health and Human Services, Washington, DC 20201. Ref: HRPAS, email aspr.dpa@hhs.gov. or APPENDIX 1 TO PART 101 Program identifica- tion symbol Approved program Agency M1 ......... Emergency Support Function 8 Public Health and Medical Services. Department of Health and Human Services. M2 ......... Strategic National Department of Health Stockpile. and Human Services. M3 ......... Biodefense and Re- Department of Health lated Medical Coun- termeasures. and Human Services. M4 ......... ASPR Critica rategic National Department of Health Stockpile. and Human Services. M3 ......... Biodefense and Re- Department of Health lated Medical Coun- termeasures. and Human Services. M4 ......... ASPR Critical Infra- Department of Health structure Protection Program. and Human Services. PART 102—ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR IN- FLATION Sec. 102.1 Applicability. 102.2 Applicability date. 102.3 Penalty adjustment and table. AUTHORITY: Pub. L. 101–410, Sec. 701 of Pub. L. 114–74, 31 U.S.C. 3801–3812. SOURCE: 81 FR 61565, Sept. 6, 2016, unless otherwise noted. § 102.1 Applicability. This part applies to each statutory provision under the laws administered by the Department of Health and Human Services concerning the civil monetary penalties which may be as- sessed or enforced by an agency pursu- ant to Federal law or is assessed or en- forced pursuant to civil judicial ac- tions in the Federal courts or adminis- trative proceedings. The regulations cited in this part supersede existing HHS regulations setting forth civil monetary penalty amounts. If applica- ble, the HHS agencies responsible for specific civil monetary penalties will 784 Dept. of Health and Human Services § 102.3 ng HHS regulations setting forth civil monetary penalty amounts. If applica- ble, the HHS agencies responsible for specific civil monetary penalties will 784 Dept. of Health and Human Services § 102.3 amend their regulations to reflect the adjusted amounts and/or a cross-ref- erence to 45 CFR part 102 in separate actions as soon as practicable. § 102.2 Applicability date. The increased penalty amounts set forth in the right-most column of the table in Section 102.3, ‘‘Maximum Ad- justed Penalty ($)’’, apply to all civil monetary penalties which are assessed after August 1, 2016, including those penalties whose associated violations occurred after November 2, 2015. § 102.3 Penalty adjustment and table. The adjusted statutory penalty pro- visions and their applicable amounts are set out in the following table. The right-most column in the table, ‘‘Max- imum Adjusted Penalty ($)’’, provides the maximum adjusted civil penalty amounts. The civil monetary penalty amounts are adjusted annually. 785 TABLE 1 TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS U.S.C. section(s) CFR 1 HHS agency Description 2 Date of last penalty figure or adjustment 3 2023 Maximum adjusted pena y. 785 TABLE 1 TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS U.S.C. section(s) CFR 1 HHS agency Description 2 Date of last penalty figure or adjustment 3 2023 Maximum adjusted penalty ($) 2024 Maximum adjusted penalty ($) 4 21 U.S.C.: 333(b)(2)(A) .......................... ........................................ FDA Penalty for violations related to drug 2023 123,965 127,983 333(b)(2)(B) .......................... ........................................ FDA Penalty for violation related to drug 2023 2,479,282 2,559,636 samples resulting in a conviction of any representative of manufacturer or distributor in any 10-year period. 333(b)(3) .............................. ........................................ FDA Penalty for failure to make a report 2023 247,929 255,964 samples resulting in a conviction of any representative of manufacturer or distributor after the second con- viction in any 10-yr period. 7 8 6 333(f)(1)(A) ........................... ........................................ FDA 333(f)(2)(A) ........................... ........................................ FDA FDA FDA FDA required by 21 U.S.C. 353(d)(3)(E) relating to drug samples. Penalty f ........................... FDA 333(f)(2)(A) ........................... ........................................ FDA FDA FDA FDA required by 21 U.S.C. 353(d)(3)(E) relating to drug samples. Penalty for any person who violates a requirement related to devices for each such violation. Penalty for aggregate of all violations related to devices in a single pro- ceeding. Penalty for any individual who intro- duces or delivers for introduction into interstate commerce food that is adulterated per 21 U.S.C. 342(a)(2)(B) or any individual who does not comply with a recall order under 21 U.S.C. 350l. Penalty in the case of any other per- son (other than an individual) for such introduction or delivery of adulterated food. Penalty for aggregate of all such vio- lations related to adulterated food adjudicated in a single proceeding. 2023 33,483 34,568 2023 2,232,281 2,304,629 2023 94,128 97,179 2023 470,640 485,893 2023 941,280 971,787 § 1 0 2 . 3 4 5 C F R S u b t i t l e A ( 1 0 – 1 – 2 4 E d i t i o n ) 333(f)(3)(A) ........................... ........................................ FDA 333(f)(3)(B) ........................... ........................................ FDA 333(f)(4)(A)(i) i t i o n ) 333(f)(3)(A) ........................... ........................................ FDA 333(f)(3)(B) ........................... ........................................ FDA 333(f)(4)(A)(i) ....................... ........................................ FDA 7 8 7 333(f)(4)(A)(ii) ....................... ........................................ FDA FDA FDA Penalty for all violations adjudicated in a single proceeding for any per- son who violates 21 U.S.C. 331(jj) by failing to submit the certification required by 42 U.S.C. 282(j)(5)(B) or knowingly submitting a false certification; by failing to submit clinical trial information under 42 U.S.C. 282(j); or by submitting clin- ical trial information under 42 U.S.C. 282(j) that is false or mis- leading in any particular under 42 U.S.C. 282(j)(5)(D). Penalty for each day any above vio- lation is not corrected after a 30- day period following notification until the violation is corrected. Penalty for any responsible person that violates a requirement of 21 U.S.C. 355(o) (post-marketing studies, clinical trials, labeling), 21 U.S.C. 355(p) (risk evaluation and mitigation (REMS)), or 21 U.S.C. 355–1 (REMS). Penalty for aggregat iolates a requirement of 21 U.S.C. 355(o) (post-marketing studies, clinical trials, labeling), 21 U.S.C. 355(p) (risk evaluation and mitigation (REMS)), or 21 U.S.C. 355–1 (REMS). Penalty for aggregate of all such above violations in a single pro- ceeding. Penalty for REMS violation that con- tinues after written notice to the re- sponsible person for the first 30- day period (or any portion thereof) the responsible person continues to be in violation. Penalty for REMS violation that con- tinues after written notice to re- sponsible person doubles for every 30-day period thereafter the viola- tion continues, but may not exceed penalty amount for any 30-day pe- riod. 2023 14,262 14,724 2023 14,262 14,724 2023 356,580 368,137 2023 1,426,319 1,472,546 2023 356,580 368,137 2023 1,426,319 1,472,546 FDA Penalty for aggregate of all such 2023 14,263,186 14,725,456 above violations adjudicated in a single proceeding. D e p t . o f H e a l t h a n d H u m a n S e r v c e s i § 1 0 2 . 3 TABLE 1 TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS—Continued U.S.C. section(s) CFR 1 HHS agency Description 2 333(f)(9)(A) ........................... ................................. TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS—Continued U.S.C. section(s) CFR 1 HHS agency Description 2 333(f)(9)(A) ........................... ........................................ FDA FDA 333(f)(9)(B)(i)(I) .................... ........................................ FDA FDA 7 8 8 333(f)(9)(B)(i)(II) ................... ........................................ FDA FDA FDA Penalty for any person who violates a requirement which relates to to- bacco products for each such vio- lation. Penalty for aggregate of all such vio- lations of tobacco product require- ment adjudicated in a single pro- ceeding. Penalty per violation related to viola- tions of tobacco requirements. Penalty for aggregate of all such vio- lations of tobacco product require- ments adjudicated in a single pro- ceeding. Penalty in the case of a violation of tobacco product requirements that continues after written notice to such person, for the first 30-day period (or any portion thereof) the person continues to be in violation. Penalty for violation of tobacco prod- uct requirements that continues after written notice to such person shall double for every 30-day pe- riod thereafter the v person continues to be in violation. Penalty for violation of tobacco prod- uct requirements that continues after written notice to such person shall double for every 30-day pe- riod thereafter the violation con- tinues, but may not exceed penalty amount for any 30-day period. Penalty for aggregate of all such vio- lations related to tobacco product requirements adjudicated in a sin- gle proceeding. Date of last penalty figure or adjustment 3 2023 Maximum adjusted penalty ($) 2024 Maximum adjusted penalty ($) 4 2023 20,678 21,348 2023 1,378,541 1,423,220 2023 344,636 355,806 2023 1,378,541 1,423,220 2023 344,636 355,806 2023 1,378,541 1,423,220 2023 13,785,420 14,232,205 § 1 0 2 . 3 4 5 C F R S u b t i t l e A ( 1 0 – 1 – 2 4 E d i t i o n ) 7 8 9 333(f)(9)(B)(ii)(I) ................... ........................................ FDA Penalty for any person who either 2023 344,636 355,806 333(f)(9)(B)(ii)(II) .................. ........................................ FDA FDA does not conduct post-market sur- veillance and studies to determine impact of a modified risk tobacco product for which the HHS Sec- retary has provided them an order to sell, or who does not submit a protocol t duct post-market sur- veillance and studies to determine impact of a modified risk tobacco product for which the HHS Sec- retary has provided them an order to sell, or who does not submit a protocol to the HHS Secretary after being notified of a require- ment to conduct post-market sur- veillance of such tobacco products. Penalty for aggregate of for all such above violations adjudicated in a single proceeding. Penalty for violation of modified risk tobacco product post-market sur- veillance that continues after writ- ten notice to such person for the first 30-day period (or any portion thereof) that the person continues to be in violation. 2023 1,378,541 1,423,220 2023 344,636 355,806 FDA Penalty for post-notice violation of 2023 1,378,541 1,423,220 333(g)(1) .............................. ........................................ FDA modified risk tobacco product post- market surveillance shall double for every 30-day period thereafter that the tobacco product require- ment violation continues for any 30-day period, but may not exceed penalty amount for any 30-day pe- riod. Penalty for aggregate above tobacco product requirement violations ad- judicated in a single proceeding. Pen continues for any 30-day period, but may not exceed penalty amount for any 30-day pe- riod. Penalty for aggregate above tobacco product requirement violations ad- judicated in a single proceeding. Penalty for any person who dissemi- nates or causes another party to disseminate a direct-to-consumer advertisement that is false or mis- leading for the first such violation in any 3-year period. Penalty for each subsequent above violation in any 3-year period. 2023 13,785,420 14,232,205 2023 356,580 368,137 2023 713,160 736,274 D e p t . o f H e a l t h a n d H u m a n S e r v c e s i § 1 0 2 . 3 TABLE 1 TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS—Continued U.S.C. section(s) CFR 1 HHS agency Description 2 333 note ............................... ........................................ FDA 7 9 0 FDA FDA FDA FDA Penalty to be applied for violations of 21 U.S.C. 387f(d)(5) or of viola- tions of restrictions on the sale or distribution of tobacco products promulgated under 21 U.S.C. 387f(d) (e.g., violations of regula- tions in 21 CFR part 1140) with re- spect to a retailer with an ap- proved training program in the case of a second regulation viola- tion within a 12- r 21 U.S.C. 387f(d) (e.g., violations of regula- tions in 21 CFR part 1140) with re- spect to a retailer with an ap- proved training program in the case of a second regulation viola- tion within a 12-month period. Penalty in the case of a third viola- tion of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 24-month period. Penalty in the case of a fourth viola- tion of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 24-month period. Penalty in the case of a fifth violation of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 36-month period. Penalty in the case of a sixth or sub- sequent violation of 21 U.S.C. 387f(d)(5) or of the tobacco prod- uct regulations within a 48-month period as determined on a case- by-case basis. Date of last penalty figure or adjustment 3 2023 Maximum adjusted penalty ($) 2024 Maximum adjusted penalty ($) 4 2023 345 356 2023 687 709 2023 2,757 2,846 2023 6,892 7,115 2023 13,785 14,232 § 1 0 2 . 3 4 5 C F R S u b t i t l e A ( 1 0 – 1 – 2 4 E d i t i o n ) 7 9 1 FDA FDA FDA FDA FDA FDA Penalty to be applied for violations of 21 U.S.C. 387f(d)(5) or of viola- tions of restrictions on the sale or di C F R S u b t i t l e A ( 1 0 – 1 – 2 4 E d i t i o n ) 7 9 1 FDA FDA FDA FDA FDA FDA Penalty to be applied for violations of 21 U.S.C. 387f(d)(5) or of viola- tions of restrictions on the sale or distribution of tobacco products promulgated under 21 U.S.C. 387f(d) (e.g., violations of regula- tions in 21 CFR part 1140) with re- spect to a retailer that does not have an approved training program in the case of the first regulation violation. Penalty in the case of a second vio- lation of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 12-month period. Penalty in the case of a third viola- tion of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 24-month period. Penalty in the case of a fourth viola- tion of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 24-month period. Penalty in the case of a fifth violation of 21 U.S.C. 387f(d)(5) or of the tobacco product regulations within a 36-month period. Penalty in the case of a sixth or sub- sequent violation of 21 U.S.C. 387f(d)(5) or of the tobacco prod- uct regulations within a 48-month period as determined on a case- by-case basis. 2023 345 356 2023 687 709 2023 1,379 1,424 h or sub- sequent violation of 21 U.S.C. 387f(d)(5) or of the tobacco prod- uct regulations within a 48-month period as determined on a case- by-case basis. 2023 345 356 2023 687 709 2023 1,379 1,424 2023 2,757 2,846 2023 6,892 7,115 2023 13,785 14,232 D e p t . o f H e a l t h a n d H u m a n S e r v c e s i § 1 0 2 . 3 TABLE 1 TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS—Continued U.S.C. section(s) CFR 1 HHS agency Description 2 335b(a) ................................. ........................................ FDA 7 9 2 FDA 360pp(b)(1) .......................... ........................................ FDA 42 U.S.C ............................................. 262(d) ................................... ........................................ ........................................ FDA FDA 263b(h)(3) ............................ ........................................ FDA 300aa–28(b)(1) .................... ........................................ FDA Penalty for each violation for any in- dividual who made a false state- ment or misrepresentation of a material fact, bribed, destroyed, al- tered, removed, or secreted, or procured the destruction, alter- ati or each violation for any in- dividual who made a false state- ment or misrepresentation of a material fact, bribed, destroyed, al- tered, removed, or secreted, or procured the destruction, alter- ation, removal, or secretion of, any material document, failed to dis- close a material fact, obstructed an investigation, employed a consult- ant who was debarred, debarred individual provided consultant serv- ices. Penalty in the case of any other per- son (other than an individual) per above violation. Penalty for any person who violates any such requirements for elec- tronic products, with each unlawful act or omission constituting a sep- arate violation. Penalty imposed for any related se- ries of violations of requirements relating to electronic products. ............................................................ Penalty per day for violation of order of recall of biological product pre- senting imminent or substantial hazard. Penalty for failure to obtain a mam- mography certificate as required. Penalty per occurrence for any vac- cine manufacturer that intentionally destroys, alters, falsifies, or con- ceals any record or report required. Date of last penalty figure or adjustmen as required. Penalty per occurrence for any vac- cine manufacturer that intentionally destroys, alters, falsifies, or con- ceals any record or report required. Date of last penalty figure or adjustment 3 2023 Maximum adjusted penalty ($) 2024 Maximum adjusted penalty ($) 4 2023 525,406 542,434 2023 2,101,618 2,169,731 2023 3,446 3,558 2023 1,174,680 1,212,751 2023 2023 270,180 278,937 2023 21,018 21,699 2023 270,180 278,937 § 1 0 2 . 3 4 5 C F R S u b t i t l e A ( 1 0 – 1 – 2 4 E d i t i o n ) 256b(d)(1)(B)(vi) ................... ........................................ HRSA 299c–3(d) ............................. ........................................ AHRQ 653(l)(2) ................................ 45 CFR 303.21(f) .......... ACF 262a(i)(1) .............................. 42 CFR 1003.910 .......... OIG Penalty for each instance of over- charging a 340B covered entity. Penalty for using or disclosing identi- fiable information obtained in the course of activities undertaken pur- suant to Title IX of the Public Health Service Act, for a purpose other than that for which the infor- mation was supplied, without con- sent to do so. Penalty for Misuse of Information in the National D nt to Title IX of the Public Health Service Act, for a purpose other than that for which the infor- mation was supplied, without con- sent to do so. Penalty for Misuse of Information in the National Directory of New Hires. Penalty for each individual who vio- lates safety and security proce- dures related to handling dan- gerous biological agents and tox- ins. 2023 6,813 7,034 2023 17,717 18,291 2023 1,818 1,877 2023 410,932 424,250 7 9 3 violates safety and security proce- dures related to handling dan- gerous biological agents and tox- ins. 42 CFR 1003.1410 ........ OIG Penalty for any other person who 2023 821,868 848,505 300jj–51 ................................ OIG Penalty per violation for committing 2023 1,252,992 1,293,601 1320a–7a(a) ......................... 42 CFR 1003.210(a)(1) OIG information blocking. Penalty for knowingly presenting or causing to be presented to an offi- cer, employee, or agent of the United States a false claim. 2023 24,164 24,947 OIG Penalty for knowingly presenting or 2023 24,164 24,947 42 CFR 1003.210(a)(2) OIG 42 CFR 1003.210(a)(3) OIG causing to be presented a request for payment which violates the terms of an assignment, agree- ment, or PPS ag gly presenting or 2023 24,164 24,947 42 CFR 1003.210(a)(2) OIG 42 CFR 1003.210(a)(3) OIG causing to be presented a request for payment which violates the terms of an assignment, agree- ment, or PPS agreement. Penalty for knowingly giving or caus- ing to be presented to a partici- pating provider or supplier false or misleading information that could reasonably be expected to influ- ence a discharge decision. Penalty for an excluded party retain- ing ownership or control interest in a participating entity. 2023 36,246 37,421 2023 24,164 24,947 D e p t . o f H e a l t h a n d H u m a n S e r v c e s i § 1 0 2 . 3 TABLE 1 TO § 102.3—CIVIL MONETARY PENALTY AUTHORITIES ADMINISTERED BY HHS—Continued U.S.C. section(s) CFR 1 HHS agency Description 2 42 CFR 1003.1010 ........ OIG Penalty for remuneration offered to induce program beneficiaries to use particular providers, practi- tioners, or suppliers. Date of last penalty figure or adjustment 3 2023 Maximum adjusted penalty ($) 2024 Maximum adjusted penalty ($) 4 2023 24,164 24,947 42 CFR 1003.210(a)(4) OIG Penalty for employing or contracting 2023 24,164 24,947 42 CFR 1003.310(a)(3) OIG 7 9 4 42 CFR 1003.210(a)(1) OIG with an excluded ind justed penalty ($) 4 2023 24,164 24,947 42 CFR 1003.210(a)(4) OIG Penalty for employing or contracting 2023 24,164 24,947 42 CFR 1003.310(a)(3) OIG 7 9 4 42 CFR 1003.210(a)(1) OIG with an excluded individual. Penalty for knowing and willful solici- tation, receipt, offer, or payment of remuneration for referring an indi- vidual for a service or for pur- chasing, leasing, or ordering an item to be paid for by a Federal health care program. Penalty for ordering or prescribing medical or other item or service during a period in which the per- son was excluded. 2023 120,816 124,732 2023 24,164 24,947 42 CFR 1003.210(a)(6) OIG Penalty for knowingly making or 2023 120,816 124,732 42 CFR 1003.210(a)(8) OIG causing to be made a false state- ment, omission or misrepresenta- tion of a material fact in any appli- cation, bid, or contract to partici- pate or enroll as a provider or sup- plier. Penalty for knowing of an overpay- ment and failing to report and re- turn. 2023 24,164 24,947 42 CFR 1003.210(a)(7) OIG Penalty for making or using a false 2023 68,128 70,336 42 CFR 1003.210(a)(9) OIG record or statement that is material to a false or fraudulent claim. Penalty for failure to grant timel 3.210(a)(7) OIG Penalty for making or using a false 2023 68,128 70,336 42 CFR 1003.210(a)(9) OIG record or statement that is material to a false or fraudulent claim. Penalty for failure to grant timely ac- cess to HHS OIG for audits, inves- tigations, evaluations, and other statutory functions of HHS OIG. 2023 36,246 37,421 § 1 0 2 . 3 4 5 C F R S u b t i t l e A ( 1 0 – 1 – 2 4 E d i t i o n ) 7 9 5 1320a–7a(b) ......................... ........................................ OIG OIG 42 CFR 1003.210(a)(10) OIG Penalty for payments by a hospital or critical access hospital to induce a physician to reduce or limit serv- ices to individuals under direct care of physician or who are enti- tled to certain medical assistance benefits. Penalty for physicians who knowingly receive payments from a hospital or critical access hospital to induce such physician to reduce or limit services to individuals under direct care of physician or who are enti- tled to certain medical assistance benefits. Penalty for a physician who executes a document that falsely certifies home health needs for Medicare beneficiaries. 2023 6,040 6,236 2023 6,040 6,236 2023 12,081 12,473 1320a–7a(o) ..................