Rule-Making Standards and Procedures s6

Title of Proposed Rule: Penalties for Individuals Convicted of Fraud in the Low-Income Energy Assistance Program (LEAP)

Rule-making#: 15-9-29-1 Office/Division or Program: Rule Author: Aggie Berens Phone: 303-861-0337 Office of Economic Security/ E-Mail: Food and Energy Assistance [email protected]

STATEMENT OF BASIS AND PURPOSE

Summary of the basis and purpose for the rule or rule change. (State what the rule says or does, explain why the rule or rule change is necessary and what the program hopes to accomplish through this rule. How do these rule changes align with the outcomes that we are trying to achieve, such as those measured in C-Stat?)

The State Board of Human Services requested that the Department reconsider the penalties imposed due to a fraud conviction. The purpose of this proposed rule change is to revise language in Section 3.751.56 to establish an appropriate consequence for an individual convicted of committing fraud in the Low-Income Energy Assistance Program (LEAP). Individuals who are found guilty of committing fraud in LEAP, pursuant to Section 26-1-127, shall be ineligible to participate in LEAP for three years following the first conviction and permanently for the second conviction.

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

to comply with state/federal law and/or to preserve public health, safety and welfare

Explain: Authority for Rule: State Board Authority: 26-1-107, C.R.S. (2015) - State Board to promulgate rules; 26-1-109, C.R.S. (2015) - state department rules to coordinate with federal programs; 26-1-111, C.R.S. (2015) - state department to promulgate rules for public assistance and welfare activities.

Program Authority: (give federal and/or state citations and a summary of the language authorizing the rule-making) 26-2-122.5, C.R.S. (2015) - Colorado Department of Human Services is authorized to accept available moneys, including those for LEAP; 26-2-104(2) (a), (b), C.R.S. (2015) – implementation of electronic benefits transfer services and rule-making authority (continued)

Initial Review 01/08/2016 Final Adoption 02/05/2016 Proposed Effective Date 04/01/2016 EMERGENCY Adoption N/A

______[Note: “Strikethrough” indicates deletion from existing rules and “all caps” indicates addition of new rules.] 1 Title of Proposed Rule: Penalties for Individuals Convicted of Fraud in the Low-Income Energy Assistance Program (LEAP)

Rule-making#: 15-9-29-1 Office/Division or Program: Rule Author: Aggie Berens Phone: 303-861-0337 Office of Economic Security/ E-Mail: Food and Energy Assistance [email protected]

STATEMENT OF BASIS AND PURPOSE (continued)

40-8.5-101, C.R.S. (2015) – low-income energy assistance program, established in the department of human services, to determine need for assistance to indigent, elderly and persons with disabilities; 40-8.7-101, C.R.S. (2015), et seq. – Low-Income Energy Assistance Act; 40-8.7-109, C.R.S. (2015) - LEAP eligibility for qualified individuals by CDHS; 40-8.7-112(1), C.R.S. (2015) –Low Income Energy Assistance fund administered by CDHS

Does the rule incorporate material by reference? Yes X No Does this rule repeat language found in statute? If yes, please explain. Yes X No

The program has sent this proposed rule-making package to which stakeholders? Colorado Legal Services, Economic Security Sub-PAC, Energy Outreach Colorado (EOC), Colorado Energy Office (CEO), Governor’s Commission on Low Income Energy Assistance, Colorado Cross-Disability Coalition, County LEAP managers, and the County Human Services Directors Association

Attachments: Regulatory Analysis Overview of Proposed Rule Stakeholder Comment Summary

2 Title of Proposed Rule: Penalties for Individuals Convicted of Fraud in the Low-Income Energy Assistance Program (LEAP)

Rule-making#: 15-9-29-1 Office/Division or Program: Rule Author: Aggie Berens Phone: 303-861-0337 Office of Economic Security/ Food and Energy Assistance

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

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

The State LEAP unit, county staff, and clients will be positively impacted by clearly defining an appropriate consequence for an individual who is convicted of committing fraud in LEAP.

Individuals convicted of fraud would no longer be eligible for energy assistance services based upon the penalties outlined in the rule.

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

The consequence of this rule will assure the integrity of the LEAP program and possibly discourage individuals from committing fraud. There has been one reported fraud conviction.

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

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

County Fiscal Impact

Federal Fiscal Impact

The U.S. Department of Health and Human Services primarily funds LEAP.

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

REGULATORY ANALYSIS (continued)

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

A report was reviewed that compares the policies and procedures in the treatment of fraud and imposed penalties utilized in other states that offer LIHEAP assistance, which was compiled by the LIHEAP Clearinghouse.

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

No alternatives were considered because the proposed rule change is the only method available to modify the existing consequence for individuals who commit LEAP fraud.

OVERVIEW OF PROPOSED RULE

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

Section Numbers Current Regulation Proposed Change Stakeholder Comment

3.751.56 Fraud Revises the rule by changing _X_ Yes _ No the consequence for an individual who commits fraud.

STAKEHOLDER COMMENT SUMMARY

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

Members of the Commission on Low Income Energy Assistance and county LEAP stakeholders were involved in the development of this rule.

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

Colorado Legal Services, Economic Security Sub-PAC, Energy Outreach Colorado (EOC), Colorado Energy Office (CEO), Governor’s Commission on Low Income Energy Assistance, Colorado Cross-Disability Coalition, County LEAP managers, and the County Human Services Directors Association

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

Yes X No

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

X Yes No

Date presented October 8, 2015. Were there any issues raised? ____ Yes X No

If not, why.

Comments were received from stakeholders on the proposed rules:

X Yes No

STAKEHOLDER COMMENT SUMMARY (continued)

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

● Members of the Commission on Low Income Energy Assistance were opposed to revising this rule to a permanent disqualification for an individual convicted of fraud. The Commission expressed strong opposition and believes this penalty is too harsh for a first time offense and everyone deserves a second chance. The Commission proposes that the rule be revised as follows: An individual convicted of fraud should be ineligible from participating in LEAP for three years following the first conviction and permanently for a second conviction.

Response: This recommendation is reflected in the proposed rule change being presented to the State Board.

● One county stakeholder recommended keeping the rule consistent with the Intentional Program Violation process followed in Food Assistance in alignment with Section 26-1-127(1), C.R.S.

7 (9 CCR 2503-7)

3.751.56 Individuals Who are Found Guilty of Committing Fraud PENALTIES FOR INDIVIDUALS CONVICTED OF FRAUD [Eff. 11/1/15]

Individuals who are found guilty of committing fraud IN THE LOW-INCOME ENERGY ASSISTANCE PROGRAM (LEAP), pursuant to Section 26-1-127, C.R.S., in a prior program year shall be ineligible to participate in LEAP in the subsequent program year for the first violation, two program years for the second violation, and permanently for the third violation FOR THREE YEARS FOLLOWING THE FIRST CONVICTION AND PERMANENTLY FOLLOWING THE SECOND CONVICTION.

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