[Federal Register Volume 64, Number 131 (Friday, July 9, 1999)]
[Notices]
[Pages 37089-37092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17406]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


National School Lunch, Special Milk, and School Breakfast 
Programs; National Average Payments/Maximum Reimbursement Rates

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice.

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SUMMARY: This Notice announces the annual adjustments to: The 
``national average payments,'' the amount of money the Federal 
Government provides States for lunches, afterschool snacks and 
breakfasts served to children participating in the National School 
Lunch and School Breakfast Programs; the ``maximum reimbursement 
rates,'' the maximum per lunch rate from Federal funds that a State can 
provide a school food authority for lunches served to children 
participating in the National School Lunch Program; and the rate of 
reimbursement for a half-pint of milk served to nonneedy children in a 
school or institution which participates in the Special Milk Program 
for Children. The payments and rates are prescribed on an annual basis 
each July. The annual payments and rates adjustments for the National 
School Lunch and School Breakfast Programs reflect changes in the Food 
Away From Home series of the Consumer Price Index for All Urban 
Consumers. The annual rate adjustment for the Special Milk Program 
reflects changes in the Producer Price Index for Fluid Milk Products. 
These payments and rates are in effect from July 1, 1999 through June 
30, 2000.

EFFECTIVE DATE: July 1, 1999.

FOR FURTHER INFORMATION CONTACT: Ms. Mary Jane Whitney, Section Chief, 
School Programs Section, Policy and Program Development Branch, Child 
Nutrition Division, Food and Nutrition Service, USDA, 3101 Park Center 
Drive, Room 1007, Alexandria, VA 22302 or phone (703) 305-2620.

SUPPLEMENTARY INFORMATION:

Background

    Special Milk Program for Children--Pursuant to section 3 of the 
Child Nutrition Act of 1966, as amended (42 U.S.C. 1772), the 
Department announces the rate of reimbursement for a half-pint of milk 
served to nonneedy children in a school or institution which 
participates in the Special Milk Program for Children. This rate is 
adjusted annually to reflect changes in the Producer Price Index for 
Fluid Milk Products (Code 0231), published by the Bureau of Labor 
Statistics of the Department of Labor.
    For the period July 1, 1999 to June 30, 2000, the rate of 
reimbursement for a half-pint of milk served to a nonneedy child in a 
school or institution which participates in the Special Milk Program is 
12.75 cents. This reflects a decrease of 1.41 percent in the Producer 
Price Index for Fluid Milk Products (Code 0231) from May 1998 to May 
1999 (from a level of 141.7 in May 1998 to 139.7 in May 1999).
    As a reminder, schools or institutions with pricing programs which 
elect to serve milk free to eligible children continue to receive the 
average cost of a half-pint of milk (the total cost of all milk 
purchased during the claim period divided by the total number of 
purchased half-pints) for each half-pint served to an eligible child.
    National School Lunch and School Breakfast Programs--Pursuant to 
sections 11 and 17A of the National School Lunch Act, (42 U.S.C. 1759a 
and 1766a), and section 4 of the Child Nutrition Act of 1966, (42 
U.S.C. 1773), the Department annually announces the adjustments to the 
National Average Payment Factors and to the maximum Federal 
reimbursement rates for lunches and afterschool snacks served to 
children participating in the National School Lunch Program and 
breakfasts served to children participating in the School Breakfast 
Program. Adjustments are prescribed each July 1, based on changes in 
the Food Away From Home series of the Consumer Price Index for All 
Urban Consumers, published by the Bureau of Labor Statistics of the 
Department of Labor. The changes in the national average payment rates 
for schools and residential child care institutions for the period July 
1, 1999 through June 30, 2000 reflect a 2.49 percent increase in the 
Price Index during the 12-month period May 1998 to May 1999 (from a 
level of 160.6 in May 1998 to 164.6 in May 1999).
    Section 103(b) of the William F. Goodling Child Nutrition 
Reauthorization Act of 1998, Pub. L. 105-336, enacted October 31, 1998 
amended section 11(a)(3)(B) of the National School Lunch Act (42 U.S.C. 
1759a(a)(3)(B)) and changed the method of computing the annual 
adjustments to the national average payment rates for meals and 
afterschool snacks served to needy children. Effective July 1, 1999, 
the annual adjustments to the payment rates for free and reduced price 
meals under section 11(a)(2) of the National School Lunch Act (42 
U.S.C. 1759a(a)(2)), section 4 of the Child Nutrition Act of 1966 (42 
U.S.C. 1773) and section 17A(c) of the National School Lunch Act (42 
U.S.C. 1766a(c)), authorized under section 11(a)(3)(B) of the National 
School Lunch Act are rounded down to the nearest whole cent. This 
complements section 704(b) of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, Pub. L. 104-193, enacted August 
22, 1996, which amended section 11(a)(3)(B) of the National School 
Lunch Act (42 U.S.C. 1759a(a)(3)(B)) to change the method for computing 
the annual adjustments to the national average payment rates for meals 
and afterschool snacks served to nonneedy children. Effective July 1, 
1997, the annual adjustments to the payment rates for paid meals under 
Section 4 of the National School Lunch Act (42 U.S.C. 1753), and 
Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773)

[[Page 37090]]

and paid afterschool snacks under section 17A(c) of the National School 
Lunch Act (42 U.S.C. 1766a(c)), authorized under section 11(a)(3)(B) of 
the National School Lunch Act, were rounded down to the nearest whole 
cent. Thus, these two statutory amendments implement a provision 
wherein annual adjustments to the national average payment rates for 
all lunches served under the National School Lunch Program, breakfasts 
served under the School Breakfast Program, and afterschool snacks 
served under the National School Lunch Program are rounded down to the 
nearest whole cent.
    Lunch Payment Levels--Section 4 of the National School Lunch Act 
(42 U.S.C. 1753) provides general cash for food assistance payments to 
States to assist schools in purchasing food. The National School Lunch 
Act provides two different Section 4 payment levels for lunches served 
under the National School Lunch Program. The lower payment level 
applies to lunches served by school food authorities in which less than 
60 percent of the lunches served in the school lunch program during the 
second preceding school year were served free or at a reduced price. 
The higher payment level applies to lunches served by school food 
authorities in which 60 percent or more of the lunches served during 
the second preceding school year were served free or at a reduced 
price.
    To supplement these Section 4 payments, section 11 of the National 
School Lunch Act provides special cash assistance payments to aid 
schools in providing free and reduced price lunches. The section 11 
National Average Payment Factor for each reduced price lunch served is 
set at 40 cents less than the factor for each free lunch.
    As authorized under sections 8 and 11 of the National School Lunch 
Act (42 U.S.C. 1757, 1759a), maximum reimbursement rates for each type 
of lunch are prescribed by the Department in this Notice. These maximum 
rates are to ensure equitable disbursement of Federal funds to school 
food authorities.
    Afterschool Snack Payments in Afterschool Care Programs--Section 
17A of the National School Lunch Act (42 U.S.C. 1766a) establishes 
National Average Payments for free, reduced price and paid afterschool 
snacks as part of the National School Lunch Program.
    Breakfast Payment Factors--Section 4 of the Child Nutrition Act of 
1966 (42 U.S.C. 1773) establishes National Average Payment Factors for 
free, reduced price and paid breakfasts served under the School 
Breakfast Program and additional payments for free and reduced price 
breakfasts served in schools determined to be in ``severe need'' 
because they serve a high percentage of needy children.

Revised Payments

    The following specific Section 4, Section 11 and Section 17A 
National Average Payment Factors and maximum reimbursement rates for 
lunch, the afterschool snack rates and breakfast rates are in effect 
from July 1, 1999 through June 30, 2000. Due to a higher cost of 
living, the average payments and maximum reimbursements for Alaska and 
Hawaii are higher than those for all other States. The District of 
Columbia, Virgin Islands, Puerto Rico and Guam use the figures 
specified for the contiguous States.

National School Lunch Program Payments

    Section 4 National Average Payment Factors--In school food 
authorities which served less than 60 percent free and reduced price 
lunches in School Year 1997-98, the payments for meals served are: 
Contiguous States--paid rate--19 cents, free and reduced price rate--19 
cents, maximum rate--27 cents; Alaska--paid rate--30 cents, free and 
reduced price rate--30 cents, maximum rate--42 cents; Hawaii--paid 
rate--22 cents, free and reduced price rate--22 cents, maximum rate--31 
cents.
    In school food authorities which served 60 percent or more free and 
reduced price lunches in School Year 1997-98, payments are: Contiguous 
States--paid rate--21 cents, free and reduced price rate--21 cents, 
maximum rate--27 cents; Alaska--paid rate--32 cents, free and reduced 
price rate--32 cents, maximum rate--42 cents; Hawaii--paid rate--24 
cents, free and reduced price rate--24 cents, maximum rate--31 cents.
    Section 11 National Average Payment Factors--Contiguous States--
free lunch--179 cents, reduced price lunch--139 cents; Alaska--free 
lunch--291 cents, reduced price lunch--251 cents; Hawaii--free lunch--
210 cents, reduced price lunch--170 cents.
    Afterschool Snacks in Afterschool Care Programs--The payments are: 
Contiguous States--free snack--54 cents, reduced price snack--27 cents, 
paid snack--5 cents; Alaska--free snack--88 cents, reduced price 
snack--44 cents, paid snack--8 cents; Hawaii--free snack--63 cents, 
reduced price snack--31 cents, paid snack--5 cents.

School Breakfast Program Payments

    For schools ``not in severe need'' the payments are: Contiguous 
States--free breakfast--109 cents, reduced price breakfast--79 cents, 
paid breakfast--21 cents; Alaska--free breakfast--174 cents, reduced 
price breakfast--144 cents, paid breakfast--30 cents; Hawaii--free 
breakfast--127 cents, reduced price breakfast--97 cents, paid 
breakfast--23 cents.
    For schools in ``severe need'' the payments are: Contiguous 
States--free breakfast--130 cents, reduced price breakfast--100 cents, 
paid breakfast--21 cents; Alaska--free breakfast--208 cents, reduced 
price breakfast--178 cents, paid breakfast--30 cents; Hawaii--free 
breakfast--151 cents, reduced price breakfast--121 cents, paid 
breakfast--23 cents.

Payment Chart

    The following chart illustrates: The lunch National Average Payment 
Factors with Sections 4 and 11 already combined to indicate the per 
lunch amount; the maximum lunch reimbursement rates; the reimbursement 
rates for afterschool snacks served in afterschool care programs; the 
breakfast National Average Payment Factors including ``severe need'' 
schools; and the milk reimbursement rate. All amounts are expressed in 
dollars or fractions thereof. The payment factors and reimbursement 
rates used for the District of Columbia, Virgin Islands, Puerto Rico 
and Guam are those specified for the contiguous States.

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    This action is not a rule as defined by the Regulatory Flexibility 
Act (5 U.S.C. 601-612) and thus is exempt from the provisions of that 
Act.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), no new recordkeeping or reporting requirements have been 
included that are subject to approval from the Office of Management and 
Budget.
    This action is exempted from review by the Office of Management and 
Budget under Executive Order 12866.
    National School Lunch, School Breakfast and Special Milk Programs 
are listed in the Catalog of Federal Domestic Assistance under No. 
10.555, No. 10.553 and No. 10.556, respectively, and are subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. (See 7 CFR part 3015, 
subpart V, and the final rule related notice published at 48 FR 29114, 
June 24, 1983.)

    Authority: Sections 4, 8, 11 and 17A of the National School 
Lunch Act, as amended, (42 U.S.C. 1753, 1757, 1759a, 1766a) and 
sections 3 and 4(b) of the Child Nutrition Act, as amended, (42 
U.S.C. 1772 and 42 U.S.C. 1773(b)).

    Dated: July 2, 1999.
Samuel Chambers, Jr.,
Administrator.
[FR Doc. 99-17406 Filed 7-8-99; 8:45 am]
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