NMFS National Appeals Office Rules of Procedure

This proposed rule would establish procedures governing the National Appeals Office (NAO), a division of NMFS' Office of Management and Budget within NOAA. NAO's central mission is to provide an efficient means of adjudicating appeals by providing due process and consistency to NMFS' administrative decisions. This proposed rule would establish a process by which NMFS could review, and if necessary correct, decisions about certain limited access privilege programs under Section 303A of the Magnuson-Steven Fishery Conservation and Management Act. The proposed procedures could also be used to adjudicate appeals from other offices that incorporate these rules into their regulations or otherwise notify potential appellants of the procedures' applicability to their proceedings.

DATES: NMFS invites interested persons to submit comments on this proposed rule. To ensure consideration, comments must be in writing and must be received by July 9, 2012.

ADDRESSES: You may submit comments, identified by NOAA-NMFS-2011-0266, 

by one of the following methods:

     Electronic Submission: Submit all electronic public 

comments via Federal e-Rulemaking Portal at www.regulations.gov. To 

submit comments via the e-Rulemaking Portal, first click the ``submit a 

comment'' icon, then enter NOAA-NMFS-2011-0266 in the keyword search. 

Locate the document you wish to comment on from the resulting list and 

click on the ``Submit a Comment'' icon on the right of that line.

     Mail: Submit written comments to Steven Goodman, National 

Appeals Office, Office of Management and Budget, NMFS, 1315 East West 

Hwy., Room 9553, Silver Spring, MD 20910.

     Fax: 301-713-2384; Attn: Steven Goodman.


Instructions: Comments must be submitted by one of the above methods to 

ensure that the comments are received, documented, and considered by 

NMFS. Comments sent by any other method, to any other address or 

individual, or received after the end of the comment period, may not be 

considered. All comments received are a part of the public record and 

will generally be posted for public viewing on www.regulations.gov 

without change. All personal identifying information (e.g., name, 

address, etc.) submitted voluntarily by the sender will be publicly 

accessible. Do not submit confidential business information, or 

otherwise sensitive or protected information. NMFS will accept 

anonymous comments (enter ``N/A'' in the required fields if you wish to 

remain anonymous). Attachments to electronic comments will be accepted 

in Microsoft Word or Excel, WordPerfect, or Adobe PDF file formats 



FOR FURTHER INFORMATION CONTACT: Steven Goodman, National Appeals 

Office, Office of Management & Budget, NMFS, 1315 East West Hwy., Room 

9553, Silver Spring, MD 20910; nmfs.nao.contact@noaa.gov; (301) 427-

8774. (This is not a toll-free number.) Individuals with hearing or 

speech impairments may access the telephone number above via TTY by 

calling the Federal Information Relay Service at (800) 877-8339.






    In 2007, Congress added section 303A to the Magnuson-Stevens 

Fishery Conservation and Management Act (MSA). Section 303A authorizes 

limited access privilege programs (LAPP) and requires NMFS to ``include 

an appeals process for administrative review of the Secretary's 

decisions regarding initial


[[Page 33981]]


allocation of limited access privileges.'' Most of the appeals 

processes currently used by NMFS pre-date the new MSA requirement. 

Further, the current infrastructure for LAPP appeals does not achieve 

optimum economies of scale, or efficient use of resources.

    LAPPs may provide benefits to certain members of the public, while 

excluding others. Thus, a transparent, unbiased and clear appeals 

process is essential. LAPP applicants across the country should be 

provided with a uniform level of due process and consistent procedures 

for filing and deciding appeals. Further, a robust administrative 

appeals process provides a means for an agency to make corrections and 

avoid costly litigation. Accordingly, NMFS is proposing to adopt 

procedural regulations at 15 CFR part 906, which would designate NAO, a 

division within NMFS Office of Management and Budget, as adjudicator 

for all future appeals arising under section 303A of the MSA. NAO may 

also be used for other Department of Commerce adjudications if the 

proposed regulations are adopted by regulation or other means and 

potential appellants are given notice. For example, other programs that 

may opt into the NAO process may include the Alaska Charter Halibut 

Limited Access Program or the North Pacific Groundfish Observer 


    NAO adjudicates initial administrative determinations, defined in 

the proposed rule as agency actions that directly and adversely affect 

an appellant. Typically, although not exclusively, NAO proceedings are 

for appeals of denials of permits or other limited access privileges. 

The proposed rule does not encompass proceedings made available 

pursuant to 15 CFR part 904. The regulations at 15 CFR part 904 are for 

administrative proceedings over cases involving a Notice of Violation 

and Assessment of civil penalty, permit sanctions, written warnings, or 

seizure and forfeiture of property for violating 34 statutes NOAA 

enforces. The regulations codified at 15 CFR part 904 provide distinct 

procedures, including a different administrative process that includes 

the agency as a party to an appeal.

    The proposed action should avoid future unnecessary costs and 

redundancies through a centralized administrative appeals process for 

review of initial administrative determinations. A centralized system 

for adjudicating appeals is more cost effective than duplicating the 

appeals function in each region. Historically, administrative appeals 

were processed by NMFS' regional offices. Each NMFS region has had a 

different structure and process for resolving appeals.

    The proposed action will promote consistency in decision making and 

responsiveness to due process considerations. A centralized office will 

use experienced, full-time adjudicators to decide appeals, and programs 

would benefit from their collective experience and institutional 

memory. A cadre of experienced and well-trained appellate officers 

would free other employees to use their time performing duties within 

their area of expertise. Under the current proposal, NAO could 

adjudicate appeals in one location. This will allow for economies of 

scale and freeing-up of resources for use in regional offices.

    Typically, NAO will be used for informal administrative appeals. 

The proposed rule allows flexibility in determining what type and how 

many pre-hearing conferences are needed. An appellate officer has the 

discretion to hold a scheduling and/or pre-hearing conference if he or 

she thinks one is needed to materially advance the proceeding. An 

appellate officer's discretion in determining whether to hold a 

scheduling and/or pre-hearing conference will be guided by the 

following: settlement, if allowed under applicable law; clarification 

of the issues under review; stipulations; hearing(s) date, time, and 

location; identification of witnesses for the hearing(s); development 

of the NAO case record, and; other matters that may aid in the 

disposition of the proceedings.

    Hearings are also held at the discretion of an appellate officer or 

if the appellate officer considers such hearing will materially advance 

his or her evaluation of the issues under appeal. In determining 

whether to hold a hearing, an appellate officer's discretion will be 

guided by whether the appellate officer believes oral testimony is 

required to resolve a material issue of fact or whether oral 

presentation is needed to probe a party's position on a material issue 

of law. Conferences and hearings may be in person, but more likely, 

they will be held by telephone or by other electronic means. The rule 

does not bar face-to-face hearings, but it is not intended to require 

expenditure of funds in order for an appellant to participate, or at 

its discretion, the agency to participate, in a hearing.

    The proposed regulations address operations as well as events that 

occur during the course of adjudicating an appeal filed with NAO. The 

proposed rule provides who may file, how and when to initiate an 

appeal, and what constitutes the agency record and transmittal for 

inclusion in the NAO case record for the appeal. During a hearing and 

while the record is open, the appellate officer determines whether 

additional evidence should be admitted in the NAO case record. The 

proposed rule prohibits ex parte communications, but clarifies that 

non-substantive communications or communications about procedural 

matters are permissible. The proposed rule establishes time frames and 

deadlines for actions to ensure a reasonably expeditious review, and 

while that may be modified, that would not be the norm.

    NAO will produce written decisions upholding or reversing the 

administrative determination under review. The proposed rule 

establishes parameters for written decisions. The appellant has the 

burden of proving by a preponderance of the evidence that he or she 

should prevail. Thus it is incumbent upon the appellant to garner and 

present evidence to support his or her claim.

    Generally, under the proposed rule a decision issued by NAO becomes 

final 30 days after issuance. The effective date of the final decision 

is subject to delay for reconsideration by NAO, or review by a Regional 

Administrator of NMFS or other appropriate official. NAO will follow 

applicable federal law and policy which may include publishing NAO and 

Regional Administrator decisions on NAO's Web site.




Regulatory Flexibility Act


    The Chief Counsel for Regulation of the Department of Commerce 

certified to the Chief Counsel for Advocacy of the Small Business 

Administration that this proposed rule, if adopted, would not have a 

significant economic impact on a substantial number of small entities. 

This regulation does not create any new regulatory requirements, but 

instead codifies procedural rules for certain administrative 

adjudication proceedings. The proposed rule would not create any new 

obligations for small entities; rather, it would ensure a standardized 

and centralized appeals process for decisions regarding initial 

allocation of limited access privileges. As a result, any potential 

economic impact on small entities would be nominal. While it is 

possible that a substantial number of small entities could participate 

in the adjudication proceedings, the procedures being established here 

would not have a significant economic impact on those entities. 

Implementing standardized rules could actually reduce the


[[Page 33982]]


economic burden on small entities by providing procedural certainty to 

the parties participating in the proceedings.

    Because this proposed rule, if enacted, would not have a 

significant impact on a substantial number of small entities, an 

initial regulatory flexibility analysis is not required and none has 

been prepared.


Executive Order 12866


    This proposed rule has been determined to be not significant for 

purposes of Executive Order 12866.


List of Subjects in 15 CFR Part 906


    Administrative appeals, Administrative practice and procedure, 




    Dated: June 4, 2012.

Alan D. Risenhoover,

Acting Deputy Assistant Administrator for Regulatory Programs, National 

Marine Fisheries Service.

    For reasons stated in the preamble, NMFS proposes to add 15 CFR 

part 906 as follows:





906.1 Purpose and scope.

906.2 Definitions.

906.3 Requesting an appeal and agency record.

906.4 General filing requirements.

906.5 Service.

906.6 Ex parte communications.

906.7 Disqualification of appellate officer.

906.8 Scheduling and pre-hearing conferences.

906.9 Exhibits.

906.10 Evidence.

906.11 Hearing.

906.12 Closing the evidentiary portion of the NAO case record.

906.13 Failure to appear.

906.14 Burden of proof.

906.15 Decisions.

906.16 Reconsideration.

906.17 Review by the Regional Administrator.

906.18 Implementation of final decisions.


    Authority: 16 U.S.C. 1801 et seq.; 16 U.S.C. 1374, 1375 & 1416; 

16 U.S.C. 1540; 16 U.S.C. 773f; 16 U.S.C. 973f; 16 U.S.C. 1174; 16 

U.S.C. 2437; 16 U.S.C. 4013; 16 U.S.C. 5507; 16 U.S.C. 7009; 16 

U.S.C. 3637; 16 U.S.C. 5103 & 5106; 16 U.S.C. 5154 & 5158; 16 U.S.C. 

6905, and; 16 U.S.C. 5010.



Sec.  906.1  Purpose and scope.


    (a) This part sets forth the procedures governing proceedings 

before the National Appeals Office (NAO). These procedures provide 

standard rules of practice for administrative adjudications by NAO.

    (b) NAO will adjudicate appeals of initial administrative 

determinations in limited access privilege programs developed under 

section 303A of the Magnuson-Stevens Fishery Conservation and 

Management Act (MSA) and approved after the effective date of these 

regulations. Those appeals are informal proceedings.

    (c) The procedures contained in this part may be incorporated by 

reference in rules or regulations other than those promulgated pursuant 

to section 303A of the MSA. The Secretary may also request that NAO 

adjudicate appeals in any matter in controversy that requires findings 

of fact and conclusions of law, and other quasi-judicial matters that 

the Secretary deems appropriate, consistent with existing regulations. 

The Secretary shall provide notice to potential appellants and to any 

affected party in these other matters through regulations or actual 




Sec.  906.2  Definitions.


    Agency record means all material and information, including 

electronic, the office that issued the initial administrative 

determination relied on or considered in reaching its decision, or 

which otherwise is related to the initial administrative determination.

    Appeal means an appellant's petition to appeal an initial 

administrative determination and all administrative processes of the 

National Appeals Office related thereto.

    Appellant means a person who receives an initial administrative 

determination and appeals it to the National Appeals Office.

    Appellate officer means an individual designated by the Chief of 

the National Appeals Office to adjudicate the appeal. The term may 

include the Chief of the National Appeals Office.

    Day means calendar day unless otherwise specified by the Chief of 

the National Appeals Office. When computing any time period specified 

under these rules, count every day, including intermediate Saturdays, 

Sundays, and legal holidays.

    Department or DOC means the Department of Commerce.

    Ex parte communication means any oral or written communication 

about the merits of a pending appeal between one party and the National 

Appeals Office with respect to which reasonable prior notice to all 

parties is not given. However, ex parte communication does not include 

inquiries regarding procedures, scheduling, and status.

    Initial Administrative Determination or IAD means a determination 

made by an official of the National Marine Fisheries Services that 

directly and adversely affects a person's ability to hold, acquire, 

use, or be issued a limited access privilege. The term also includes 

determinations issued pursuant to other federal law, for which review 

has been assigned to the National Appeals Office by the Secretary.

    NAO means the National Appeals Office, an adjudicatory body within 

the Office of Management and Budget, National Marine Fisheries Service, 

National Oceanic and Atmospheric Administration, Department of 

Commerce. The term generally means all NAO personnel, including 

appellate officers.

    NAO case record means the Agency record and all additional 

documents and other materials related to an appeal and maintained by 

NAO in a case file.

    NMFS means the National Marine Fisheries Service, National Oceanic 

and Atmospheric Administration, Department of Commerce.

    National Oceanic and Atmospheric Administration or NOAA means the 

National Oceanic and Atmospheric Administration, Department of 


    Party means a person who files a petition for appeal with NAO. It 

can also mean an office that issued the IAD if that office participates 

in the NAO appeal.

    Person means any individual (whether or not a citizen or national 

of the United States), corporation, partnership, association, or other 

entity (whether or not organized or existing under the laws of any 

State), and any Federal, State, or local, or foreign government or 

entity of any such government.

    Regional Administrator means the administrator of one of six 

regions of NMFS: Northeast, Southeast, Northwest, Southwest, Alaska, or 

Pacific Islands. The term also includes an official with similar 

authority within the DOC, such as the Director of NMFS' Office of 

Sustainable Fisheries.

    Representative means an individual properly authorized by an 

Appellant in writing to act for the Appellant in conjunction with an 

appeal pending in NAO. The representative does not need to be a 

licensed attorney.

    Secretary means the Secretary of Commerce or a designee.



Sec.  906.3  Requesting an appeal and agency record.


    (a) Who May File. Any person who receives an initial administrative 


    (b) Petition to Appeal. (1) To request an appeal, a person shall 

submit a written petition of appeal to NAO.

    (2) The petition shall include a copy of the initial administrative 

determination the person wishes to appeal.


[[Page 33983]]


    (3) In the petition, the person shall state how the initial 

administrative determination directly and adversely affects him or her, 

why he or she believes the initial administrative determination is 

wrong, and whether he or she requests a hearing or prefers that an 

appellate officer make a decision based on the NAO case record and 

without a hearing.

    (i) Arguments not raised by the person in his or her petition to 

appeal will be deemed waived.

    (ii) The petition may include additional documentation in support 

of the appeal.

    (4) If a person requests a hearing, the written request must 

include a concise statement raising genuine and substantial issues of a 

material fact or law that cannot be resolved based on the documentary 


    (5) In the petition, a person shall state whether the person has a 

representative, and if so, the name, address, and telephone number for 

the representative.

    (c) Address of record. In the petition the person shall identify 

the address of record. Documents directed to the appellant will be 

mailed to the address of record, unless the appellant provides NAO and 

other parties with any changes to his or her address in writing.

    (1) The address of record may include a representative's address.

    (2) NAO bears no responsibility if the appellant or his or her 

representative does not receive documents because appellant or his or 

her representative changes his or her address without proper 

notification to NAO.

    (3) NAO bears no responsibility if the appellant or his or her 

representative fail to retrieve documents upon notification from the 

United States Postal Service or commercial carrier.

    (4) NAO will presume that documents addressed to an address of 

record and properly mailed or given to a commercial carrier for 

delivery are received.

    (d) Place of filing. The petition must be transmitted via 

facsimile. The facsimile number is: 301-713-2384. If the person filing 

the petition does not have access to a fax machine, he or she may file 

the petition by mail or commercial carrier to Chief, National Appeals 

Office, 1315 East-West Hwy., Room 9552, Silver Spring, MD 20910.

    (e) Time limitations. A petition must be filed within 45 days after 

the date the initial administrative determination is issued unless a 

shorter or longer filing timeframe is explicitly specified in the 

regulations governing the initial administrative determination.

    (f) Agency record. (1) Within 20 days of receipt of the copy of the 

petition to appeal, the office that issued the initial administrative 

determination that is the subject of the appeal shall transmit the 

agency record to NAO.

    (2) The office that issued the initial administrative determination 

shall organize the pages of the agency record in chronological order.

    (g) Agency participation in appeal. The office responsible for the 

initial administrative determination shall have 20 days from the date 

it receives a copy of the petition to appeal to provide NAO with 

written notice that it will be a party to the appeal.



Sec.  906.4  General filing requirements.


    (a) Date of filing. Filing refers to providing documents to NAO.

    (1) All documents filed on behalf of an appellant or related to an 

appeal shall be submitted to NAO via facsimile.

    (2) If the person filing does not have access to a fax machine, he 

or she may file by regular mail or commercial carrier to Chief, 

National Appeals Office, 1315 East-West Hwy., Room 9552, Silver Spring, 

MD 20910.

    (3) A document transmitted to NAO is considered filed upon receipt 

of the entire submission by 5 p.m. Eastern Time at NAO.

    (b) Copies. At the time of filing a submission to NAO, the filing 

party shall serve a copy thereof on every other party, unless otherwise 

provided for in these rules.

    (c) Retention. All submissions to NAO become part of a NAO case 


    (d) Computation of time. When computing any time period specified 

under these rules, count every day, including intermediate Saturdays, 

Sundays, and legal holidays. If the date that ordinarily would be the 

last day for filing with NAO falls on a Saturday, Sunday, or Federal 

holiday, or a day NAO is closed, the filing period will include the 

first NAO workday after that date.

    (e) Extension of time. (1) When a submission is required to be 

filed within a prescribed time, a party may request, in writing, an 

extension of time to file the submission, citing the specific reason or 

reasons for the need of an extension of time. A party may not request 

an extension of time to file the submission after the deadline to file 

the submission has passed.

    (2) NAO may grant the extension if an appellate officer determines 

good cause for an extension of time has been established by the party.



Sec.  906.5  Service.


    (a) Service refers to providing documents to parties to an appeal. 

(1) Service of documents may be made by first class mail (postage 

prepaid), facsimile, or commercial carrier, or by personal delivery to 

a party's address of record.

    (2) Service of documents will be considered effective upon the date 

of postmark (or as otherwise shown for government-franked mail), 

facsimile transmission, delivery to a commercial carrier, or upon 

personal delivery.

    (b) A party shall serve a copy of all documents to all other 

parties and shall file a copy of all documents with NAO the same 

business day.

    (c) NAO may serve documents by electronic mail.



Sec.  906.6  Ex parte communications.


    (a) Communication with NAO, including appellate officers, 

concerning procedures, scheduling, and status is permissible.

    (b) Ex parte communication between NAO and the parties about the 

merits of a pending appeal is not permissible unless all parties have 

been given reasonable notice and an opportunity to participate in the 


    (c) If NAO receives an ex parte communication, NAO shall document 

the communication and any responses thereto in the NAO case record. If 

the ex parte communication was in writing, NAO shall place a copy of 

the communication in the NAO case record. If the ex parte communication 

was oral, NAO shall prepare a memorandum stating the substance of the 

oral communication, which will then be included in the NAO case record. 

NAO will provide copies of any such materials included in the NAO case 

record under this paragraph to the parties to the appeal.

    (d) NAO may require a party to show cause why such party's claim or 

interest in the appeal should not be dismissed, denied, disregarded, or 

otherwise adversely affected because of an ex parte communication as 

described in paragraphs (b) and (c) of this section.

    (e) This rule may be suspended by NAO during an alternative dispute 

resolution process.



Sec.  906.7  Disqualification of appellate officer.


    (a) An appellate officer shall disqualify him or herself if the 

appellate officer has a perceived or actual conflict of interest, a 

perceived or actual prejudice or bias, for other ethical reasons, or 

based on principles found in the American Bar Association Model Code of 

Judicial Conduct for Administrative Law Judges.

    (b) Any party may request an appellate officer, at any time before 



[[Page 33984]]


filing of the appellate officer's decision, to withdraw on the ground 

of personal bias or disqualification, by filing a written motion with 

the appellate officer setting forth in detail the matters alleged to 

constitute grounds for disqualification.

    (c) The appellate officer, orally or in writing, shall grant or 

deny the motion based on the American Bar Association Model Code of 

Judicial Conduct for Federal Administrative Law Judges and other 

applicable law or policy. If the motion is granted, the appellate 

officer will disqualify himself or herself and withdraw from the 

proceeding. If the motion is denied, the appellate officer will state 

the grounds for his or her ruling and proceed with his or her review.



Sec.  906.8  Scheduling and pre-hearing conferences.


    (a) NAO may convene a scheduling and/or pre-hearing conference if, 

for example, an appellate officer in his or her discretion finds a 

conference will materially advance the proceeding.

    (b) NAO shall notify the parties in writing 10 days prior to a 

conference unless the Chief of NAO orders a shorter period of time for 

providing notice or conducting a conference.

    (c) The following will guide an appellate officer in determining 

whether to exercise his or her discretion to hold a scheduling and/or 

pre-hearing conference.

    (1) Settlement, if possible under applicable law;

    (2) Clarifying the issues under review;

    (3) Stipulations;

    (4) Hearing(s) date, time, and location;

    (5) Identifying witnesses for the hearing(s);

    (6) Development of the NAO case record, and;

    (7) Other matters that may aid in the disposition of the 


    (d) NAO may record the conference.

    (e) Format. At the discretion of the appellate officer, conferences 

may be conducted by telephone, in person, or by teleconference or 

similar electronic means.

    (f) NAO may issue an order showing the matters disposed of in the 

conference and may include in the order other matters related to the 




Sec.  906.9  Exhibits.


    (a) The parties shall mark all exhibits in consecutive order in 

whole Arabic numbers and with a designation identifying the party 

submitting the exhibit(s).

    (b) Parties shall exchange all exhibits that will be offered at the 

hearing at least 10 days before the hearing.

    (c) Parties shall provide all exhibit(s) to NAO at least 10 days 

before the hearing.

    (d) NAO may modify the timeframe for exchanging or submitting 

exhibits if an appellate officer determines good cause exists.

    (e) NAO may deny the admission into evidence of exhibits that are 

not marked and exchanged pursuant to this rule.

    (f) Each exhibit offered in evidence or marked for identification 

shall be filed and retained in the NAO case record.



Sec.  906.10  Evidence.


    (a) The Federal Rules of Evidence do not apply to NAO proceedings.

    (b) NAO will decide whether to admit evidence into the NAO case 


    (1) An appellate officer may exclude unduly repetitious, 

irrelevant, and immaterial evidence. An appellate officer may also 

exclude evidence to avoid undue prejudice, confusion of the issues, 

undue delay, waste of time, or needless presentation of cumulative 


    (2) An appellate officer may consider hearsay evidence.

    (c) Copies of documents may be offered as evidence, provided they 

are of equal legibility and quality as the originals, and such copies 

shall have the same force and effect as if they were originals. If an 

appellate officer so directs, a party shall submit original documents 

to the appellate officer.

    (d) An appellate officer may take official notice of Federal or 

State public records and of any matter of which courts may take 

judicial notice.

    (e) An appellate officer may contact the program office that issued 

the initial administrative determination in the case before the 

appellate officer in order to obtain the interpretation(s) of the law 

and regulation(s) made by the program office and applied to the facts 

in the case. The program office will provide to NAO the 

interpretation(s) of the law and regulation(s) made by that office in 

the case.



Sec.  906.11  Hearing.


    (a) Procedures. (1) An appellate officer in his or her discretion 

may order a hearing taking into account the information provided by an 

Appellant pursuant to Sec.  906.3(b)(3) or if an appellate officer 

considers that a hearing will materially advance his or her evaluation 

of the issues under appeal. In exercising his or her discretion, an 

appellate officer may consider whether oral testimony is required to 

resolve a material issue of fact or whether oral presentation is needed 

to probe a party's position on a material issue of law. If an appellate 

officer determines that a hearing is not necessary, then the appellate 

officer will base his or her decision on the NAO case record. In the 

absence of a hearing an appellate officer may, at his or her 

discretion, permit the parties to submit additional materials for 


    (2) If an appellate officer convenes a hearing, the hearing will be 

conducted in the manner determined by NAO most likely to obtain the 

facts relevant to the matter or matters at issue.

    (3) NAO shall schedule the date, time and place for the hearing. 

NAO will notify the parties in writing of the hearing date, time and 

place at least 10 days prior to the hearing unless the Chief of NAO 

orders a shorter period for providing notice or conducting the hearing.

    (4) At the hearing, all testimony will be under oath or affirmation 

administered by an appellate officer. In the event a party or a witness 

refuses to be sworn or refuses to answer a question, an appellate 

officer may state for the record any inference drawn from such refusal.

    (5) An appellate officer may question the parties and the 


    (6) An appellate officer will allow time for parties to present 

argument, question witnesses and other parties, and introduce evidence.

    (7) Parties may not compel discovery or the testimony of any 


    (b) Recording. An appellate officer may record the hearing.

    (c) Format. At the discretion of NAO, hearings may be conducted by 

telephone, in person, or by teleconference or similar electronic means.



Sec.  906.12  Closing the evidentiary portion of the NAO case record.


    (a) At the conclusion of the NAO proceedings, an appellate officer 

will establish the date upon which the evidentiary portion of the NAO 

case record will close. Once an appellate officer closes the 

evidentiary portion of the NAO case record, with or without a hearing, 

no further submissions or argument will be accepted into the NAO case 


    (b) NAO in its discretion may reopen the evidentiary portion of the 

NAO case record or request additional information from the parties at 




Sec.  906.13  Failure to appear.


    If any party fails to appear at a pre-hearing conference or hearing 

after proper notice, an appellate officer may:

    (a) Dismiss the case, or;

    (b) Deem the failure of a party to appear after proper notice a 

waiver of any right to a hearing and consent to the


[[Page 33985]]


making of a decision based on the NAO case record.



Sec.  906.14  Burden of proof.


    On issues of fact, the appellant bears the burden of proving he or 

she should prevail by a preponderance of the evidence. Preponderance of 

the evidence is the relevant evidence in the NAO case record, 

considered as a whole, that a reasonable person would accept as 

sufficient to find a contested fact is more likely than not. Appellant 

has the obligation to obtain and present evidence to support the claims 

in his or her petition.



Sec.  906.15  Decisions.


    (a) After an appellate officer closes the evidentiary portion of 

the NAO case record, NAO will issue a written decision that is based on 

the NAO case record. In making a decision, NAO shall determine whether 

the appellant has shown by a preponderance of the evidence that the 

initial administrative determination is inconsistent with applicable 

laws and regulations. In making a decision, NAO shall give deference to 

the reasonable interpretation(s) of applicable ambiguous laws and 

regulations made by the office issuing in the initial administrative 


    (b) At any time before a decision is implemented pursuant to Sec.  

906.18, NAO may issue a corrected decision.

    (c) NAO shall serve a copy of its decision upon the appellant and 

the Regional Administrator.

    (d) Except as provided in Sec. Sec.  906.16 and 906.17, NAO's 

decision takes effect 30 days after the date it is issued and, upon 

taking effect, is the final decision of the Department for the purposes 

of judicial review.



Sec.  906.16  Reconsideration.


    (a) Any party may file a motion for reconsideration of NAO's 

decision. The request must be filed with NAO within 10 calendar days 

after service of NAO's decision.

    (b) The motion must be in writing and contain a detailed statement 

of an error of fact or law material to the decision.

    (c) If an appellate officer grants the motion for reconsideration, 

then NAO will stay the effective date of its decision under 

reconsideration review.

    (d) In response to a motion for reconsideration, NAO will either:

    (1) Reject the motion because it does not meet the criteria of 

paragraph (a) or (b) of this section; or

    (2) Issue a revised decision which will take effect 30 days after 

it is issued and is the final decision of the Department for the 

purposes of judicial review, unless the Regional Administrator remands, 

reverses or modifies it pursuant to Sec.  906.17.



Sec.  906.17  Review by the Regional Administrator.


    (a) Regional Administrator authority and procedures. (1) A decision 

issued pursuant to Sec.  906.15 or revised decision issued pursuant to 

Sec.  906.16 is subject to review by the Regional Administrator. After 

10 days of the date of the decision issued by NAO, the Regional 

Administrator may remand, reverse, or modify NAO's decision. In 

reviewing NAO's findings of fact, the Regional Administrator may only 

consider the evidentiary record including arguments, claims, evidence 

of record and other documents of record which were before NAO when it 

rendered its decision.

    (2) The Regional Administrator must provide a written decision 

explaining why NAO's decision has been remanded, reversed, or modified. 

The Regional Administrator must serve a copy of the remanded, reversed 

or modified decision on NAO and the appellant promptly.

    (b) The Regional Administrator's written decision to reverse or 

modify NAO's decision is the final decision of the Department for the 

purposes of judicial review.

    (c) If the Regional Administrator does not remand, reverse, or 

modify NAO's decision under paragraphs (a) and (b) of this section, 

NAO's decision is the final decision of the Department for the purposes 

of judicial review.



Sec.  906.18  Implementation of final decisions.


    The final decision shall be implemented by the office that issued 

the initial administrative determination within 30 days after issuance 

of the final decision to the extent practicable and consistent with 

program regulations.