The definitions in this section apply throughout this chapter unless the context clearly indicates otherwise.

(1) "Administrative appeal" means a ((formal proceeding where a vendor who has received a notice of violation from the department has the opportunity to present his or her case in an impartial setting and be heard by the department))proceeding required by statute or constitutional right and conducted under the rules of this chapter, which provides an opportunity to be heard by the department prior to the entry of an order under this chapter.

(2) "Applicant" means any vendor, or person representing a vendor, or vendors reapplying for authorization, requesting authorization to participate in the WIC program by submitting a completed application for authorization and all corresponding documentation.

(3) "Approved infant formula wholesaler" means a supplier or manufacturer listed in the document titled "Washington WIC Approved Infant Formula Suppliers."

(4) "Authorized vendor" means a vendor who has met the vendor selection criteria as required by the United States Department of Agriculture (USDA) and the department, received training on WIC program requirements, and entered into a fully executed contract with the department.

(5) "Business integrity" means ((the))a store's uncompromising commitment and adherence to honesty, truthfulness, and accuracy in interactions with the department, customers, creditors, suppliers, associates, and the public at large.

(6) "Business and financial documentation" means all documents required to own and operate a business as a retailer which may include, but not be limited to, banking and financial records; property sales, leases and rental agreements; insurance records; affiliate arrangements; inventory records; accounting, sales, and tax records; records of ownership; or articles of incorporation, bylaws and operating agreements.

(7) "C.F.R." means Code of Federal Regulations.

(((7)))(8) "Cash value voucher" means a WIC food instrument used by a participant to obtain fresh fruits and vegetables.

(((8)))(9) "Civil monetary penalty" means a sum of money imposed by the WIC program for noncompliance with program requirements.

(((9)))(10) "Contract" means the department's standard WIC contract form that, once completed and signed by both parties, becomes the written legal document binding a vendor and the department to designated terms and conditions and authorizes the vendor to transact food instruments.

(((10)))(11) "Cost containment" means the process of controlling expenses required to operate the WIC program.

(((11)))(12) "Department" means the Washington state department of health.

(((12)))(13) "Disqualification" means the act of revoking the authorization and terminating the contract of an authorized vendor for a specific period of time or permanently for noncompliance with WIC program requirements.

(((13)))(14) "EBT (electronic benefits transfer)" means the electronic system that allows a participant to authorize transfer of their government food benefits from a federal account to a vendor account to pay for products they buy.

(((14)))(15) "Food instrument" means ((the method of payment used by a participant to obtain WIC approved foods. This method may include WIC checks, cash value vouchers, or EBT payment))a WIC program voucher, check, coupon, electronic benefit transfer (eWIC card), or other document which is used to obtain authorized foods.

(((15)))(16) "Minimum Inventory Requirements" means the document created, maintained and supplied by the department that lists the required minimum stock levels of department-authorized foods a store must maintain on premises at all times.

(((16)))(17) "Notice of violation" means a written document given to a vendor when the department determines the vendor has not complied with program requirements, federal WIC regulations, this chapter, or ((the))a contract.

(((17)))(18) "Participant" means a woman, infant or child receiving WIC benefits.

(((18)))(19) "Participant access" means the ability of WIC participants to purchase authorized WIC foods, with consideration made to factors including, but not limited to, geography, population density, and participant dietary needs, as determined by the department.

(((19)))(20) "Peer group" means a group of authorized vendors that share certain characteristics and can be expected to have similar business practices and prices. Peer group criteria and assignments are determined by the department. Vendors in the same peer group are subject to the same WIC maximum reimbursement levels. Peer group criteria include, but are not limited to, characteristics such as geography or size.

(((20)))(21) "SNAP" means the federal supplemental nutrition assistance program. SNAP was previously known as the food stamp program.

(((21)))(22) "Substantial interest holder" means a person who has actual or potential influence over the management or operation of any organization, association, or business entity. Evidence of substantial interest may include, but not be limited to:

(23) "Variety" means a collection of similar, but not identical, foods and products. This may include different brands, sizes or flavors of similar foods and products.

(((22)))(24) "Vendor," also known as "retailer," means a sole proprietorship, partnership, cooperative association, corporation, or other business entity operating one or more stores authorized by the state WIC program to provide WIC-approved foods to WIC participants.

(((23)))(25) "Vendor compliance activities" means on-site contract monitoring, covert compliance buys, and inventory audits.

(26) "Vendor selection criteria" means the federally approved standards the department uses to select vendors for WIC authorization.

(((24)))(27) "Wholesale supplier" means a business licensed to sell food and other goods at prices lower than retail to a retail vendor for resale to customers.

(((25)))(28) "WIC" means the federally funded special supplemental nutrition program for women, infants, and children as described in 7 C.F.R. 246.

(1) To be considered for WIC vendor authorization, an applicant must:

(a) Be a food vendor that meets or exceeds all selection criteria listed in WAC 246-790-077;

(b) Apply to the department using ((department forms))the required format;

(c) Provide complete and truthful information in the application;

(d) Allow the department to inspect the store; and

(e) Participate in training on WIC program requirements.

(2) If the department declines an application, the applicant may reapply no sooner than six months afterwards.

(3) Before declining an application for the first time, the department shall give an applicant thirty days' notice to submit missing materials or information, if such is the basis for denial.

(4) An applicant may request an exemption to the vendor selection criteria in WAC 246-790-077.

(a) The request must:

(i) Be in writing, dated, and signed by the applicant;

(ii) Explain the reasons for the request in detail;

(iii) Demonstrate how the requested exemption is consistent with the requirements, purpose, and objectives of the program; and

(iv) List, in the body of the request, the physical address of the applicant.

(b) The department may grant the requested exemption if the applicant's request conforms to (a) of this subsection and the department determines that allowing the exemption is consistent with the requirements, purpose, and objectives of the program and is necessary to assure participant access.

(c) The department shall respond in writing to a request for exemption with its decision to grant or deny the request.

At the time of application, applicants must meet the following criteria; all authorized vendors must continue to meet the following criteria throughout the period of authorization:

(1) Purchase WIC approved infant formula directly from an infant formula manufacturer or supplier named on the "WIC approved infant formula suppliers" document.

(2) ((Purchase WIC approved foods directly from a wholesale supplier or other nonretail supplier, such as a food manufacturer, wholesaler, dairy, or fresh produce supplier.

(3))) Maintain in store at all times the minimum quantities and varieties of WIC approved foods, including infant formula, as required by the "WIC minimum inventory requirements" document. Expired or spoiled foods do not count as inventory.

(((4)))(3) Maintain an active electronic mailing address to be used for department communications.

(((5)))(4) Be primarily engaged in the retail sale of food products and general merchandise as a full line grocery store. A full line grocery store carries the designated products in the following categories on a continuous basis. These requirements are separate from the "minimum inventory requirements."

(a) Canned foods: At least twenty total varieties of canned foods such as fruit, vegetables, beans, meat, poultry, chili, soup, stew, broth or sauce (excluding canned infant formula, fish, juice or other beverages).

(b) Frozen foods: At least ten total varieties of frozen foods such as dinners, pizza, fruit, or vegetables (excluding frozen juice, meat, seafood, poultry, desserts, snacks or novelties).

(c) Dairy products: At least ten total varieties of refrigerated dairy products such as butter, yogurt, cottage cheese, string cheese, cream cheese, whipped cream, sour cream or ice cream (excluding milk, WIC-approved cheeses, infant formula, or individual serving size packages of dairy products).

(d) Frozen and unfrozen meat, seafood, and poultry: At least six total varieties (all unbreaded) of frozen meat, unfrozen meat, frozen seafood, unfrozen seafood, frozen poultry, or unfrozen poultry, including at least two varieties of meat and at least two varieties of poultry (excluding precooked and deli-style products).

(e) ((Fresh))Fruit and vegetables: At least twenty total varieties of fresh or frozen fruits or fresh or frozen vegetables including at least five varieties of fruits and at least five varieties of vegetables. The store must have a minimum of five linear feet of refrigerated display space for its produce.

(f) Bread and tortillas: At least ten total varieties of bread products such as bread, rolls, bagels, and tortillas. Breads and tortillas exclude muffins, pastries, cookies, cakes, crackers, or other snack foods.

(g) Grains, pasta, and dried beans: At least ten total varieties of grains, pasta, or beans such as oatmeal, rice, bulgur, pasta, beans, peas, or lentils (excluding bread, canned products or other breakfast cereals).

(h) Baby products: At least ten total varieties of baby products such as diapers, baby bottles, baby wipes, baby shampoo, or baby lotion((, or baby bottles)) (excluding infant formula).

(i) Household cleaners and laundry products: At least ten total varieties of household cleaning or laundry products used for cleaning kitchens, dishes, bathrooms, windows, floors, furniture, clothes, or fabrics.

(j) Health care products: At least twenty total varieties of health care products such as pain relievers, cold/cough/allergy products, digestive aids, dental care products, feminine hygiene products, or toilet paper.

(((6)))(5) Maintain prices for WIC-approved foods that are at or below the limits established by the WIC nutrition program's current price management system.

(((7)))(6) Be currently authorized and participating as a vendor in the supplemental nutrition assistance program (SNAP).

(((8)))(7) Receive or expect to receive less than fifty percent in annual food sales revenue from WIC transactions.

(((9)))(8) Be open for business at least eight hours per day, six days per week.

(((10)))(9) Submit to the department, upon request, sales information including gross sales and tax exempt food sales.

(11) Have electronic cash registers capable of producing receipts that include:

(a) The store name;

(b) Food product name and description;

(c) Quantity sold((,))and price of each item;

(d) Total actual purchase price; and

(e) The date of sale.

(12) Post food prices for all foods, including fresh fruits and vegetables, on each item, or on the shelf next to the item.

(13) Maintain a business model that promotes business integrity. The department may investigate the business integrity of a WIC vendor or applicant at any time. In its determination of business integrity, the department's considerations will include, but ((is))are not limited to, the following:

(a) Providing complete and truthful information in the application, correspondence, and other documents requested by the department.

(b) Cooperating with department requests to complete WIC authorization or compliance activities, including granting access to WIC food instruments.

(d) Ensuring all current owners, officers, managers, or representatives have had no criminal convictions or civil judgments entered against them in the last six years for fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, ((and))or obstruction of justice.

(((c)))(e) Having no uncorrected violation(s) from a previous contracting period, current disqualification, or outstanding claims owed to the department.

(((d)))(f) Not being currently disqualified from the SNAP or having a civil money penalty levied instead of SNAP disqualification.

(((e)))(g) Disclosure of any third party, agent or broker involved in any part of the application process.

(((f)))(h) Where a store has an outstanding WIC or SNAP sanction or claim, not attempting to avoid sanction or claim by reapplying after:

(i) Conveying any legal interest in a store to a relative or other person with whom the owner or owners have a financial relationship.

(ii) Accepting any legal interest in a store from a relative by blood or marriage or other person with whom the owner or owners have a financial relationship.

(iii) Reorganizing the business to another form, such as, but not limited to, corporation, general partnership, limited partnership, sole proprietorship, ((and))or limited liability company.

(14) The department may verify the identity of an applicant at any time.

(15) When evaluating business integrity, the department may take into account whether a store subject to a sanction or claim has been sold for less than fair market value.

(((15)))(16) Not own or be a substantial interest holder, have previously owned or been a substantial interest holder, or have a legal interest in a business that has a WIC sanction currently in effect. This includes any business for which a vendor may be applying.

(((16)))(17) Use a recordkeeping system that complies with the Washington state department of revenue requirements in WAC 458-20-254, maintains inventory records for Federal tax reporting, preserves original documents and records organized in a logical way that conforms to acceptable accounting methods and procedures.

(((17)))(18) Comply with all federal and state nondiscrimination laws, regulations, and policies. This includes, but is not limited to, 7 C.F.R. Parts 15, 15a, and 15b and RCW 49.60.030.

(((18)))(19) Comply with the Americans with Disabilities Act (ADA) of 1990, Public Law 101-336.

(((19)))(20) Comply with all other federal, state, county, and city required licenses, permits and certifications.

(((20)))(21) Exemptions.

(a) Oregon and Idaho vendors located on the Washington border and that serve Washington residents are exempt from Washington state business license, permit, and certification requirements. They shall meet all applicable business license, permit and certification requirements for their respective state.

(b) An "infant formula-only provider" is exempt from the full line grocery store requirement. Infant formula-only provider means an authorized vendor or pharmacy for whom WIC authorization is limited to the redemption of WIC checks issued for infant formula.

There are three primary types of vendor compliance activities:

(1) On-site contract monitoring is an overt compliance inspection conducted by department staff to confirm a vendor's compliance with state vendor agreement requirements, and state and federal WIC regulations.

(2) A compliance buy is a covert shopping experience conducted by department staff at WIC-authorized vendors. The compliance buy activity is used to test vendor staff's knowledge of compliance rules.

(3) An inventory audit is an examination of food invoices or other proof of purchase to determine whether a vendor has purchased sufficient quantities of authorized food to support the vendor's claim(s) for reimbursement for such foods from the department during a specific point in time.

(1) When an authorized vendor is out of compliance with the requirements of 7 C.F.R. 246.12, this chapter, or the contract, the department will initiate appropriate enforcement action which may include notices of violation, unless the department determines that notification would compromise the investigation; claims for reimbursement; and sanctions as set forth in the applicable federal regulations or the contract.

(2) Where a violation requires disqualification, the department may impose a civil penalty in lieu of disqualification if the department determines, in its sole discretion and in accordance with the department's participant access criteria, that the continued operation of the store is necessary to assure adequate participant access.

(3) An authorized vendor's contract is terminated on the effective date of a disqualification. A multistore vendor's contract shall be amended to remove only the disqualified store on the effective date of disqualification.

(4) Where a sanction requires a pattern of violations, a "pattern" is established by ((more than one))three separate documented incidents of the same ((type of violation within a))federal or state contract violation identified during a single contract period.

(5) A disqualified vendor may reapply at the end of the disqualification period.

(6) The department will document complaints against authorized vendors and any resulting corrective action.

(7) The effective date of all sanctions is twenty-eight days after an authorized vendor receives notice of the department's decision to impose sanctions, unless otherwise specified in this chapter, the contract, or in the department's notice. The department, in its sole discretion, may temporarily suspend the contract in lieu of termination to resolve any uncertain matters, including appeals.

The definitions in this section apply to this section through WAC 246-790-570 unless the context clearly indicates otherwise.

(1) "Appeal" means a formal proceeding where a participant who has received a notice of violation from the department has the opportunity to present his or her case in an impartial setting and be heard by the department.

(2) "Applicant" means any pregnant woman, postpartum woman, infant ((or)), child, or caregiver of an infant or child who is applying to receive WIC program benefits, ((and))or a breastfeeding infant of an applicant breastfeeding woman. Applicants include individuals who are currently participating in the program but are applying because their certification period is about to expire.

(3) "Authorized supplemental foods" means those supplemental foods authorized by the department for issuance to a particular participant.

(4) "Certification" means the implementation of criteria and procedures to assess and document each applicant's eligibility for participation in the WIC program.

(5) "C.F.R." means Code of Federal Regulations.

(6) "Claim" means a type of sanction demanding repayment for misuse of ((WIC/FMNP))WIC/farmers' market nutrition program (FMNP) benefits by a WIC participant.

(7) "Deliberate" means acting intentionally, knowingly and voluntarily ((and not because of mistake or accident)).

(8) "Department" means the Washington state department of health.

(9) "Disqualification" means the act of ending the WIC program participation of a participant, whether as a punitive sanction or for administrative reasons.

(10) "Dual participation" means program participation in one or more than one WIC clinic.

(11) "Eligibility criteria" means the reasons people qualify for WIC program benefits as described in 7 C.F.R. Sec. 246.7(c).

(12) "Farmers' market nutrition program (FMNP)" means a program to provide fresh, unprepared, locally grown fruits and vegetables to WIC participants, and to expand the awareness, use of, and sales at farmers' markets.

(13) "Food instrument" means the method of payment used by a participant to obtain WIC-approved foods. ((This))These methods may include WIC checks, WIC farmers' market nutrition program checks, cash value vouchers, or electronic benefit transfer (EBT) payments.

(14) "Local agency" means:

(a) A public or private nonprofit health or human services agency that provides health services either directly or through contract with the department to provide services((,)) in accordance with 7 C.F.R. Sec. 245.5;

(b) An Indian health services unit in contract with the department to provide services;

(c) An Indian tribe, band or group recognized by the department; and/or

(d) An intertribal council or group that is an authorized representative of Indian tribes, bands or groups.

(15) "Notice of violation" means a written document given to a participant, or caregiver of an infant or child participant, when the department determines a participant or caregiver((s)) of an infant or child participant, ((have))has not complied with WIC program requirements, federal WIC regulations, this chapter, or the participant rights and responsibilities form. This notice is a type of sanction which explains the violation and provides a warning about repercussions of subsequent violations.

(16) "Nutritional risk" means detrimental or abnormal nutritional conditions detectable by biochemical or anthropomorphic measurements; other documented nutritionally related medical conditions; dietary deficiencies that impair or endanger health; conditions that directly affect the nutritional health of a person, including alcoholism or drug abuse; or conditions that predispose persons to inadequate nutritional patterns or nutritionally related medical conditions including, but not limited to, homelessness and migrancy, as specified in 7 C.F.R. Sec. 246.2.

(17) "Participant" means a woman, infant or child receiving WIC benefits.

(18) "Participant violation" means any deliberate action of a participant, parent or caretaker of an infant or child participant, or proxy that violates federal or state statutes, regulations, policies, or procedures governing the WIC program.

(19) "Proxy" means an individual who is designated by a participant or a child or infant participant's parent, guardian, or caretaker to receive ((food instruments and to))and redeem food instruments for the participant and whose name is ((on file at))filed with the local agency.

(20) "Restitution" means reimbursement to the department of the cash value of ((the)) WIC program benefits received by a participant as the result of a sanction imposed for a violation.

(21) "Sanction" means a penalty imposed by the department of health WIC program because of a violation. The three types of sanctions are notice of violation, disqualification, and claim.

(22) "SNAP" means the federal Supplemental Nutrition Assistance Program. SNAP was previously known as the Food Stamp Program.

(23) "Vendor" means a sole proprietorship, partnership, cooperative association, corporation, or other business entity operating one or more stores authorized by the state WIC program to provide WIC-approved foods to WIC participants.

(24) "Violation" means any deliberate action of a WIC participant or caregiver of an infant or child participant, including actions listed in WAC 246-790-520 that violate federal or state statutes, regulations, policies, or procedures governing the WIC program.

(25) "WIC" means the federally funded special supplemental nutrition program for women, infants, and children as described in 7 C.F.R. Sec. 246.

(26) "WIC benefits" means benefits a participant receives that include, but are not limited to, food, infant formula, and breast pumps.

(27) "WIC Participant Rights and Responsibilities form" means a document signed by a WIC participant or proxy ((has signed)) showing she or he has been advised of and agrees to WIC program rights and obligations.

(1) When any WIC participant or caregiver deliberately violates ((the)) federal or state statutes, regulations, policies or procedures governing the WIC program, the department will initiate appropriate enforcement action, which may include establishment of claims under WAC 246-790-550 or disqualification under WAC 246-790-560. Violations and applicable sanctions are listed below:

(2) During each certification visit, participants will be informed of their rights and responsibilities, program rules, and that there ((are))may be potential sanctions should they deliberately violate a program rule.

(3) Whenever the department assesses a claim of misappropriated WIC program benefits of one hundred dollars or more resulting from a participant violation, assesses a claim for dual participation, or assesses a second or subsequent claim of any amount resulting from a participant violation, the department must disqualify the participant for one year.

(4) The department may decide not to impose a disqualification if, within thirty days of the date the letter was mailed demanding repayment, full restitution is made or a repayment schedule is agreed upon. In the case of a violation committed by the parent or caretaker of an infant or child participant, or by a participant under the age of eighteen, the department may approve the designation of a proxy in order to continue program benefits to these participants.

(5) Participants may reapply for benefits at any time after the disqualification period ((is over))concludes.

(6) The department must consider designating a substitute caregiver instead of disqualification for infants, children, and women under eighteen years of age.

(7) Second and subsequent instances of violations are assessed based on a twelve-month period from the first notice that a violation has occurred.

(1) In addition to the disqualifications set forth in the table under WAC 246-790-530, whenever the department assesses a claim under WAC 246-790-550 of one hundred dollars or more, or assesses a second or subsequent claim of any amount resulting from a participant violation, the department must disqualify the participant for one year. In addition, a claim may be assessed for misuse of WIC/FMNP benefits. Dual participation violations will result in disqualification regardless of claim amount.

(2) The department will count any violation occurring within the consecutive twelve-month period following the first notice of violation as a second or subsequent violation. Second or subsequent violations do not have to be for the same violation type.

(3) The department will count any second or subsequent violation as a second or subsequent violation even if:

(a) Another member of the WIC participant's household commits the violation; or

(b) The violation affects the WIC benefits of another WIC participant in the same household.

(4) The department shall provide a written notice to the WIC participant describing the violations and specifying the sanction.

(5) For a violation involving a claim, the department may decline to impose a disqualification if the WIC participant makes full restitution, or agrees to a repayment schedule, within thirty days of the date the notice of disqualification was sent.

(6) Where a parent or caregiver of an infant or child participant or a WIC participant under the age of eighteen has committed ((the))a violation, the department must consider designating a substitute caregiver to continue providing WIC benefits to the participant.

(7) Participants my reapply for benefits at any time after the end of the disqualification period.