[Federal Register Volume 64, Number 181 (Monday, September 20, 1999)]
[Rules and Regulations]
[Pages 50735-50744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24297]
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Rules and Regulations
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Federal Register / Vol. 64, No. 181 / Monday, September 20, 1999 /
Rules and Regulations
[[Page 50735]]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR parts 210, 215, 220, 235 and 245
RIN 0584-AC01
School Nutrition Programs: Nondiscretionary Technical Amendments
AGENCY: Food and Nutrition Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule makes a number of technical changes to the
regulations governing the National School Lunch Program, the Special
Milk Program for Children, the School Breakfast Program, State
Administrative Expense Funds, Determining Eligibility for Free and
Reduced Price Meals and Free Milk in Schools. A number of these changes
are a direct result of statutory changes made under the Child Nutrition
and WIC Reauthorization Act of 1989, the Healthy Meals for Healthy
Americans Act of 1994, the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, and the William F. Goodling Child Nutrition
Reauthorization Act of 1998. This rule also removes and updates
obsolete provisions in these regulations. These amendments are
nondiscretionary and technical in nature and will conform these
regulations to statutory requirements.
EFFECTIVE DATE: October 20, 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 at 703-305-2620.
SUPPLEMENTARY INFORMATION:
Background
Four different public laws, Public Law (Pub. L.) 101-147 (the Child
Nutrition and WIC Reauthorization Act of 1989), Pub. L. 103-448 (the
Healthy Meals for Healthy Americans Act of 1994), Pub. L. 104-193 (the
Personal Responsibility and Work Opportunity Reconciliation Act of
1996), and Pub. L. 105-336 (the William F. Goodling Child Nutrition
Reauthorization Act of 1998), made specific changes to the National
School Lunch Act and the Child Nutrition Act of 1966, necessitating
changes in the regulations that guide the National School Lunch
Program, the School Breakfast Program, the Special Milk Program, State
Administrative Expense Funds, and Determining Eligibility for Free and
Reduced Price Meals and Free Milk in Schools.
In section 201 of Pub. L. 101-147, the Child Nutrition and WIC
Reauthorization Act of 1989, enacted on November 10, 1989, Congress
amended the National School Lunch Act (NSLA) (42 U.S.C. 1751 et. seq.)
to make changes in the way the National School Lunch Program (NSLP) and
School Breakfast Program (SBP) operate. Specifically, section 201
amended Section 8 of the NSLA by making permanent the agreements
between the State agencies (SA) and school food authorities (SFA) for
carrying out the school lunch program and school breakfast program.
In section 112 of Pub. L. 103-448, the Healthy Meals for Healthy
Americans Act of 1994, enacted on November 2, 1994, Congress amended
the definition of School in section 12(d) of the NSLA to make child
care centers in Puerto Rico ineligible to participate in the NSLP and
SBP. Additionally, section 202 of Pub. L. 103-448 amended section 7(a)
of the Child Nutrition Act of 1966 (CNA) (42 U.S.C. 1771 et seq.) to
authorize the Secretary to withhold State Administrative Expense (SAE)
funds when the Secretary determines that the SA's administration of the
program is seriously deficient.
Section 703 of Pub. L. 104-193, the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, amended section 9(b)(2) of
the NSLA. The amendment requires that after initial submission, an SFA
would not be required to submit a new free and reduced price policy
statement to a State educational agency unless there is a substantive
change in the free and reduced price policy of the SFA. Section 707 of
Pub. L. 104-193 amended section 14(e) of the NSLA by removing the
requirement for States to have State food distribution advisory
councils and adding in its place a requirement that SAs which receive
food assistance payments for any school year must consult with schools
regarding the selection and distribution of donated foods. Furthermore,
section 723 of Pub. L. 104-193 removed section 4(f) of the CNA which
dealt with breakfast outreach activities. Section 724(b) of Pub. L.
104-193 amended section 7(e) of the CNA by removing the requirement
that State administrative expense plans be submitted annually by State
agencies for approval by FNS and revising the regulation to require
that States only need submit substantive changes to approved plans. In
section 726 of Pub. L. 104-193 Congress amended section 11(a) of the
CNA by revising the prohibition regarding the imposition of any
requirements with respect to teaching personnel, curriculum,
instruction and methods and materials of instruction. Section 726
removed references to State, thus directing the prohibition only to
USDA.
In section 102(c) of Pub. L. 105-336, the William F. Goodling Child
Nutrition Reauthorization Act of 1998, Congress added section 9(h) to
the NSLA to establish new requirements regarding annual food safety
inspections for schools participating in the NSLP or SBP. Section
102(d) added section 9(i) to the NSLA to require each SFA to submit a
single agreement and a common claim form for programs administered by
the SA. Section 104(b) amended section 12(g) of the NSLA to make
changes in criminal penalties for attempting to defraud the program.
Section 104(d) added section 12(n) to the NSLA to incorporate a
provision to require that schools purchase, to the maximum extent
practicable, domestic commodities or products. Finally, section 202(b)
revised section 7(a)(6) of the CNA to eliminate the 10% transfer
limitation for SAE funds.
The following chart summarizes the statutory provisions:
[[Page 50736]]
------------------------------------------------------------------------
Regulatory section
Statute Provision affected
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Pub. L. 101-147:
Section 201................. Mandates permanent Secs. 210.9,
agreements. 215.7 and
220.7(e).
Pub. L. 103-448:
Section 112................. Revises definition Secs. 210.2 and
of ``school''. 220.2(u).
Section 202................. Authorizes USDA to Sec. 235.4.
withhold SAE
funds when State
agencies are
deemed seriously
deficient.
Pub. L. 104-193:
Section 703................. Mandates permanent Sec. 245.10.
Free and Reduced
Price Policy
Statement.
Section 707................. Removes Sec. 210.28
requirement for
State Food
Distribution
Advisory Council.
Section 723................. Removes breakfast Sec. 220.13(k).
outreach
activities.
Section 724................. Replaces annual Sec. 235.5
State
Administrative
Expense Plan with
a permanent base
plan updated for
substantive
changes.
Section 726................. Revises Sec. Sec. 210.27
educational and 220.17(a).
prohibitions.
Pub. L. 105-336:
Section 102(c).............. Mandates food Secs. 210.13(b),
safety 220.7(a-2).
inspections.
Section 102(d).............. Mandates single Secs. 210.8(c),
agreements and 210.9(b),
common claim 215.7(d),
forms for SFAs. 215.10(b),
220.7(e) and
220.11(b).
Section 104(b).............. Changes criminal Secs. 210.26,
penalties for 215.6(b),
fraud. 220.6(b), 2356(g)
and 245.12.
Section 104(d).............. Mandates purchase Secs. 210.21(d)
of domestic and 220.16d.
commodities or
products.
Section 202(b).............. Eliminates 10% Sec. 235.6(a).
transfer for SAD
funds.
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Additionally, the Department is taking the opportunity to remove
obsolete provisions from and make technical corrections to 7 CFR parts
210, 215, 220, 235 and 245. For example, the obsolete references to
``handicapped'' children are removed, using instead the term ``children
with disabilities''. The rule also incorporates technical conforming
amendments to 7 CFR parts 210, 215, 220, 235 and 245. The remainder of
this preamble discusses these amendments.
What Specific Revisions and Additions are Being Made to the
Regulations?
The changes being made fall under four categories. They are:
Changes to definitions
New, updated or removed requirements
Removal of obsolete references
Technical amendments
What Changes are Being Made to the Definition Sections?
Definition of Child
The definition of the term Child in Secs. 210.2 and 220.2(c) and
the definition of the term Children in Sec. 215.2(e-1) are amended to
remove references to handicapped children, adding in their place the
term disabled, thus conforming the definition to operating terminology.
Definition of Handicapped Student
The definition of the term Handicapped student in Sec. 210.2 is
removed, in order to remove references to handicapped children. A new
definition, Student with disabilities, is used in its place.
Definition of School
Section 112(a) of Pub. L. 103-448 amended the definition of School
in section 12(d)(5) of the NSLA. This amendment removed child care
centers in the Commonwealth of Puerto Rico from the definition of
School, effective October 1, 1995. As of that date, child care centers
in Puerto Rico were no longer eligible to participate in the NSLP and
SBP. However, these child care centers could provide meals and snacks
to children under the Child and Adult Care Food Program, 7 CFR part
226, or milk under the Special Milk Program, the same as other child
care centers in the contiguous United States. Affected child care
centers were advised of their change in status. This rule codifies the
provision by amending the definition of School in Secs. 210.2 and
220.2(u) to remove child care centers in Puerto Rico from the
definition of school to conform to this nondiscretionary statutory
provision. Corresponding technical changes are made to the definition
of School in Sec. 235.2(o) to reflect these amendments.
Definition of Financial Management Circulars
The definition, 7 CFR part 3015, in Secs. 210.2, 215.2(x-1),
220.2(x-1), and 235.2(q-1) is revised to remove obsolete references to
A-124 and A-128, as well as the Single Audit Act of 1984 (31 U.S.C.
7501 et seq.). New definitions, 7 CFR part 3017, 7 CFR part 3018, and 7
CFR part 3052 are added to Secs. 210.2, 215.2, 220.2 and 235.2. Part
3017 refers to the Department's Common Rule regarding Governmentwide
Debarment and Suspension (Nonprocurement) and Governmentwide
Requirements for Drug-Free Workplace (Grants). Part 3018 refers to the
Department's Common Rule regarding New Restrictions on Lobbying. Part
3052 refers to the Department's rule regarding Audits of States, Local
Governments and Non-Profit Organizations.
Definition of State
The definition of State (Secs. 210.2; 215.2(y); 220.2(y); 235.2(r))
is revised to accommodate the elimination of the territories under the
Compact of Free Association and the block grant status of American
Samoa and the Commonwealth of the Northern Marianas. Because both
American Samoa and the Commonwealth may elect to forego the block grant
and participate under part 210, 215, 220 and 235, they continue to be
included in the definition of State agency, ``as applicable''.
What Requirements are Being Added, Updated or Removed?
Agreements/Claims
Section 201 of Pub. L. 101-147 amended section 8 of the NSLA by
making permanent the agreements between SAs and SFAs for carrying out
the NSLP and SBP. On May 28, 1991, USDA issued a proposed rule which
would have implemented the provision to make these agreements
permanent, to be amended as necessary (56 FR 24033). Fifty comments
were received on that proposed rule during the 60-day public comment
period, which closed on July 29, 1991. Commenters represented 19
different SAs, 22 SFAs, 4 State or local Departments of Human Services
and 2
[[Page 50737]]
professional organizations. Only one commenter was opposed to having
the agreement made permanent, stating that the agreement is a legal
document that should have a beginning and ending date. All other
commenters who addressed this provision viewed it as a paperwork
reduction measure and supported the proposal. On May 12, 1991, USDA
issued a memorandum implementing this provision. This memorandum stated
that, because the Department did not anticipate any changes to the
proposal for permanent agreements, the SAs would be able to accept
current agreements as permanent, at their discretion. This was
effective as of school year 1992--1993. This final rule codifies this
provision in Sec. Sec. 210.9(b), 215.7(d) and 220.7(e).
Section 102 (d) of Pub. L. 105-336 amended section 9 (c) of the
NSLA by establishing two requirements with respect to SFAs which
administer any combination of the Child Nutrition Programs under the
same State administering agency. First, the SA must use a single State/
local agreement for all programs operated by the SFA under that SA.
This also means that multiple SFA programs operated under an alternate
SA must be combined into a single agreement. This rule makes the
necessary changes to Secs. 210.9(b), 215.7(d), and 220.7(e).
Second, an SFA must be able to use a common reimbursement form to
claim meals under all of the programs. Previously, single agreements
and common claim forms were permitted at SA option for SFAs
administering multiple Child Nutrition Programs under a single SA. This
rule makes the necessary changes to 7 CFR 210.8(c), 215.10(b), and
220.11(b) to reflect the implementation of the statutory requirements.
Free and Reduced Price Policy Statement
As noted above, on May 28, 1991, the Department had proposed to
make the agreement between the SA and SFA a permanent document to be
amended as necessary (56 FR 24033). Although Pub. L. 101-147 had not
directed the Department to make the SFA's free and reduced price policy
permanent, the Department used its discretionary authority to include
the policy statement in the permanency provision, because the
Department considers the policy statement part of the agreement. The
Department had proposed in that rule to (1) Increase the number of
provisions required in an SFA's policy statement and (2) remove the
requirement for annual resubmission of the policy statement to the SA
for approval, unless there was a substantive change to the SFA's free
and reduced price policy. Of the 50 comments received on the proposal,
only one commenter supported the increase in the required provisions to
be included in the policy statement. Before the department could issue
a final rule, section 703 of Pub. L. 104-193 amended section 9(b)(2) of
the NSLA by making permanent the free and reduced price policy
statement. Unless there is a substantive change made to the free and
reduced price policy of the SFA, the policy statement need not be
changed and resubmitted. Routine changes, such as an annual adjustment
of the income eligibility guidelines, are not sufficient to require
resubmission. This rule implements this provision by making the
necessary amendments to Secs. 245.10 and 245.11.
Food Safety Inspections
Section 102(c) of Pub. L. 105-336 amended section 9 of the NSLA by
adding subsection (h) to require schools participating in the NSLP or
the SBP to obtain food safety inspections conducted by a State or local
government agency responsible for such inspections at least once a year
if a State or local governmental agency does not otherwise require
inspections. This provision does not apply to schools that must comply
with State or local requirements for food safety inspections even if
the time frames for these inspections are less frequent than annual.
Moreover, if a State or local governmental agency responsible for food
safety inspections conducts voluntary inspections in schools, these
inspections may be counted toward meeting this requirement. This rule
implements this provision by amending Secs. 210.13 and 220.7 by adding
a new paragraph, Food safety inspections.
State Agency Consultation With Schools
Section 707 of Pub. L. 104-193 removed the requirement for the
State to establish a food distribution advisory council and in its
place required SAs that receive food assistance payments to consult
with schools that receive commodities in order to make the best
assessment of the specific needs of that school relating to the manner
of selection and the distribution of commodity goods. This rule removes
Sec. 210.28, State Food Distribution Advisory Council, and amends
Sec. 210.19 (b) to implement this provision. To accommodate the
changes, the definition of State Food Distribution Advisory Council is
removed and sections are redesignated.
Buy American
Section 104(d) of Pub. L. 105-336 amended section 12 of the NSLA to
require SFAs participating in the NSLP and SBP in the contiguous United
States (U.S.) to purchase for those programs, to the maximum extent
practicable, domestic commodities or products. This requirement will
help ensure that Federal funds dispensed to States support the U.S.
agricultural economy to the extent feasible. For purposes of this
provision, Pub. L. 105-336 defines the term ``domestic commodity or
product'' to mean an agricultural commodity that is produced in the
U.S. and a food product that is processed in the U.S. substantially
using agricultural commodities that are produced in the U.S. The
Conference Report accompanying Pub. L. 105-336 makes it clear that the
term ``substantially'' means that over 51 percent of the processed food
comes from American produced products. Pub. L. 105-336 also stipulates
that an SFA in Hawaii is required to purchase commodities or products
that are produced in Hawaii, to the extent that such products are in
adequate supply for program purposes. This rule implements this
provision by adding new paragraphs (d), Buy American to Secs. 210.21
and 220.16.
Criminal Penalties
Section 104(b) of Pub. L. 105-336 amended section 12(g) of the NSLA
to increase from $10,000 to $25,000 the maximum fine for embezzling,
willfully misapplying, stealing or obtaining by fraud any funds, assets
or property acquired under the NSLA or CNA. This rule reflects this
provision by amending Secs. 210.26, 215.6(b), 220.6(b), 235.6(g) and
245.12(a).
Educational Prohibitions
Prior to Pub. L. 104-193, section 12 of the NSLA prohibited SAs and
USDA from imposing any educational requirements with respect to
teaching personnel, curriculum, instruction, methods of instruction,
and materials of instruction in any school. Section 726 of Pub. L. 104-
193, recognizing the educational responsibilities of the State
education agencies, amended section 11 of the CNA by removing the
reference to the State. This rule implements this provision by amending
Secs. 210.27 and 220.17 to limit the prohibition to USDA.
Removal of School Breakfast Outreach Requirements
Prior to Pub. L. 104-193, Section 4(f) of the CNA mandated that the
Department and SAs initiate outreach and education on the benefits of
the SBP. Section 723 of Pub. L. 104-193
[[Page 50738]]
removed the SBP outreach activities. This rule removes paragraph (k) of
Sec. 220.13 to implement this provision.
Withholding State Administrative Expense Funds
Section 202(a) of Pub. L. 103-448 amended section 7(a) of the CNA
to stipulate that USDA may withhold SAE funds when SAs are seriously
deficient in either their administration of the Child Nutrition
Programs or their compliance with regulations issued to implement the
Child Nutrition Programs, and that USDA may restore those withheld
funds when performance improves. This rule adds a new paragraph (h) to
Sec. 235.4 to implement this provision.
State Administrative Expense Plans
Section 724(b) of Pub. L. 104-193 amended section 7(e) of the CNA
by removing the requirement that SAE plans be submitted annually by
State agencies for approval by FNS and revising the regulation to
require that States only need submit substantive changes to approved
plans. FNS notified State agencies of this change on June 5, 1997. The
SAE plan used for fiscal year 1997 is the permanent plan document
(i.e., the ``base year'' SAE plan). For SAs not participating in the
Child Nutrition Programs in FY 1997, the first SAE plan submitted will
be considered the base year plan. After submitting the base plan, the
SA is only required to submit substantive changes, as defined in the
June 5, 1997 guidance, for approval by FNS. When those substantive
changes are submitted and the plan is amended, the fiscal year in which
those changes are effective becomes the plan's base year. This rule
implements this provision by amending Sec. 235.5.
Transfer of State Administrative Expense Funds
Section 202(b) of Pub. L. 105-336 amended section 7(a)(6) of the
CNA by eliminating the previous 10 percent limit on SAE funds that may
be transferred from one child nutrition program to another. Now, SAs
may transfer their SAE funds among the programs as they deem necessary
for efficient administration of the programs. This rule implements the
limitation by amending Sec. 235.6(a).
Which References are Being Removed as Obsolete?
The Department is taking this opportunity to remove the obsolete
Sec. 210.18a, Assessment, Improvement and Monitoring system, in its
entirety and to make technical changes throughout 7 CFR part 210 and
235 to reflect its removal. The Department is removing the Appendix to
7 CFR part 215, which shows the apportionment of funds to States for
the SMP for 1976. Finally, the Department is removing Sec. 245.13 in
its entirety because the Department of Health, Education and Welfare
Public School Civil Rights Survey no longer exists.
What Technical Amendments are Being Made?
Audit Requirements in Secs. 215.13 and 220.15
The audit requirements contained in Secs. 215.13 and 220.15 are
revised to match those set forth in Sec. 210.22. This revision will not
result in changes in program operation.
Coordinated Review
In Sec. 210.18, a technical error is corrected. The review
threshold set forth for Performance Standard I at Sec. 210.18(i)(3)(B)
is revised by revising the parenthetical phrase (but not less than 10
lunches) to read (but not less than 100 lunches).
Correction of OMB Numbers
The regulations governing the SAE funds (7 CFR part 235) are being
revised to reflect corrected Office of Management and Budget
information collection/ recordkeeping control numbers. This rule amends
Sec. 235.12 to reflect this change.
Correction of an Incorrect Reference
Section 245.5 requires SFAs to publicly announce the eligibility
criteria for free and reduced price school meals and free milk. An
announcement is not required for certain schools, including schools
defined in Sec. 210.2 paragraph (c) of the definition of School.
Section 245.5(a) currently makes an incorrect reference. This rule
corrects that error.
The following chart restates the changes affected in this
regulation:
------------------------------------------------------------------------
Affected section of
Provision regulation Reason for change
------------------------------------------------------------------------
Definition of ``child'' and Secs. 210.2, Updated to reflect
``children''. 215.2(e-1) and commonly accepted
220.2(c). terminology.
Definition of ``handicapped Sec. 210.2......... Updated to reflect
student''. commonly accepted
terminology.
Definition of ``school''.... Secs. 210.2, Excluding Puerto
220.2(u) and Rico child care
235.2(o). centers from
participation in
NSLP and SBP
because they may
now participate in
the CACFP
(Statutory
Provision).
Definition of Financial Secs. 210.2, 215.2, Updated to reflect
Management Circulars. 220.2 and 235.2. current
terminology.
Definition of ``State''..... Secs. 210.2, 215.2 Accommodates the
(y), 220.2 (y),and elimination of the
235.2(r). territories under
the Compact of Free
Association and the
block grant status
of American Samoa
and the
Commonwealth of the
Northern Marianas.
Single Agreements/Claims.... Secs. 210.8(c), Paperwork reduction
210.9(b), 215.7(d), (Statutory
215.10(b), 220.7(e) Provision).
and 220.11(b).
Permanent Free and Reduced Secs. 245.10 and Paperwork reduction
Price Policy Statement. 245.11. (Statutory
Provision).
Food safety inspections..... Secs. 210.13 and Raising health
220.7(a-2). standards
(Statutory
Provision).
State agency consultation Secs. 210.2, Food distribution
with schools. 210.19(b) and advisory council
210.28. was eliminated
(Statutory
Provision).
Buy American................ Secs. 210.21 and Supporting American
220.16. farmers and
industries
(Statutory
Provision).
Criminal penalties.......... Secs. 210.26, Updating penalties
215.6(b), 220.6(b) for fraud
235.6(g) and (Statutory
245.12(a). Provision).
[[Page 50739]]
Educational prohibitions.... Secs. 210.27 and Recognizing
220.17. educational
responsibilities of
SAs (Statutory
Provision).
Removal of School Breakfast Sec. 220.13(k)..... No longer required
Outreach Requirements. by law (Statutory
Provision).
Withholding SAE funds....... Sec. 235.4(h)...... Monitoring SA
performance
(Statutory
Provision).
Permanent State Sec. 235.5......... Paperwork reduction
Administrative Expense (Statutory
Plans. Provision).
Transfer of SAE funds....... Sec. 235.6(a)...... Greater efficiency
in program
administration
(Statutory
Provision).
Removal of Sec. 210.18a.... Technical changes Obsolete reference.
throughout 210 and
235.
Removal of Appendix, Sec. Sec. 215, Appendix. The appendix is
215. obsolete.
Removal of Welfare Public Sec. 245.13........ Obsolete reference
School Civil Rights Survey. to a Department of
Health and Human
Services Civil
Rights survey that
no longer exists.
Audit requirements.......... Secs. 215.13 and Intent to show
220.15. continuity
throughout the
administration of
the programs.
Coordinated review.......... Sec. 210.18(i)(3)(B Corrects technical
). error.
OMB numbers................. Sec. 235.12........ Reflect corrected
numbers.
Announcement of eligibility Sec. 245.5(a)...... Corrects technical
criteria. error.
------------------------------------------------------------------------
Executive Order 12866
This rule has been determined to be not significant for purposes of
Executive Order 12866 and therefore has not been reviewed by the Office
of Management and Budget.
Public Law 104-4
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, the
Food and Nutrition Service (FNS) must generally prepare a written
statement, including a cost-benefit analysis, for proposed and final
rules with ``Federal mandates'' that may result in expenditures to
State, local, or tribal governments, in the aggregate, or to the
private sector, of $100 million or more in any one year. When such a
statement is needed for a rule, section 205 of the UMRA generally
requires FNS to identify and consider a reasonable number of regulatory
alternatives and adopt the least costly, most cost-effective or least
burdensome alternative that achieves the objectives of the rule.
This final rule contains no Federal mandates (under regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector of $100 million or more in any one
year. Thus, this final rule is not subject to the requirements of
Sections 202 and 205 of the UMRA.
Regulatory Flexibility Act
This final rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act (5 U.S.C. 601 through 612). The
Administrator of the FNS has certified that this rule will not have a
significant economic impact on a substantial number of small entities.
Additionally, the Department of Agriculture (the Department or USDA)
does not anticipate any adverse fiscal impact on local schools.
Executive Order 12372
The National School Lunch Program, Special Milk Program for
Children, School Breakfast Program, and State Administrative Expense
Funds are listed in the Catalog of Federal Domestic Assistance under
Nos. 10.555, 10.556, 10.553, and 10.560, respectively. They are subject
to the provisions of Executive Order 12372, which requires
intergovernmental consultation with State and local officials. (7 CFR
part 3015, subpart V and final rule-related notice at 48 FR 29112. June
24, 1983.)
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This final rule is intended to have preemptive
effect with respect to any State or local laws, regulations or policies
which conflict with its provisions or which would impede its full
implementation. This final rule is not intended to have retroactive
effect unless so specified in the EFFECTIVE DATE section of this
preamble. Prior to any judicial challenge to the provisions of this
final rule, all applicable administrative procedures must be exhausted.
In the National School Lunch Program, the Special Milk Program, and
School Breakfast Program, the administrative procedures are set forth
under the following regulations: (1) SFA appeals of SA fiscal action
resulting from an administrative review must follow SA hearing
procedures as established pursuant to 7 CFR 210.18(q); (2) SFA appeals
of FNS fiscal action resulting from an administrative review must
follow FNS hearing procedures as established pursuant to 7 CFR
210.30(d)(3); (3) FNS claims against SAs must follow hearing procedures
as established pursuant to 7 CFR 215.12(e); and (4) SA appeals of State
Administrative Expense fund sanctions (7 CFR 235.11(b)) must follow the
FNS administrative review process as established pursuant to 7 CFR
235.11(f).
Paperwork Reduction Act
This final rule does not contain reporting or recordkeeping
requirements subject to approval by the Office of Management and Budget
(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507).
Public Participation
This action is being finalized without prior notice or public
comment under authority of 5 U.S.C. 553(b)(3)(A) and (B). The
amendments contained herein are nondiscretionary in nature and
therefore not subject to change as a result of public comment. Thus,
the Department has determined in accordance with 5 U.S.C. 553(b) that
Notice of Proposed Rulemaking and Opportunity for Public Comments is
unnecessary and contrary to the public interest and, in accordance with
5 U.S.C. 553(d), that this action will be effective 30 days after the
date of publication.
List of Subjects
7 CFR Part 210
Food and Nutrition Service, Grant programs-education, Grant
programs-health, Infants and children, Nutrition, Penalties, Reporting
and recordkeeping requirements, School breakfast and lunch programs,
Surplus agricultural commodities.
[[Page 50740]]
7 CFR Part 215
Food and Nutrition Service, Food assistance programs, Grant
programs-education, Grant programs-health, Infants and children, Milk,
Reporting and recordkeeping requirements.
7 CFR Part 220
Food and Nutrition Service, Grant programs-education, Grant
programs-health, Infants and children, Nutrition, Reporting and
recordkeeping requirements, School breakfast and lunch programs.
7 CFR Part 235
Administrative practice and procedure, Food and Nutrition Service,
Food assistance programs, Grant programs-education, Grant programs-
health, Infants and children, reporting and recordkeeping requirements,
School breakfast and lunch programs.
7 CFR Part 245
Civil rights, Food and Nutrition Service, Food assistance programs,
Grant programs-education, Grant programs-health, Infants and children,
Milk, Reporting and recordkeeping requirements, School breakfast and
lunch programs.
Accordingly, 7 CFR parts 210, 215, 220, 235, and 245 are amended as
follows:
Part 210--NATIONAL SCHOOL LUNCH PROGRAM
1. The authority citation for 7 CFR part 210 continues to read as
follows:
Authority: 42 U.S.C. 1751-1760, 1779.
2. In Sec. 210.2,
a. The definition of Child is amended by removing the words
``handicapped'' and ``handicaps'' wherever they appear and adding in
their place the words ``disabled'' and ``disabilities'' respectively.
b. The definition of Handicapped student is amended by removing the
words ``Handicapped student'', adding in their place the words
``Student with disabilities'', and redesignating the paragraph in
alphabetical order.
c. The definition of School is amended by adding the word ``or''
before paragraph (c) and by removing the words ``; or (d) with respect
to the Commonwealth of Puerto Rico, nonprofit child care centers
certified as such by the Governor of Puerto Rico''.
d. The definition of 7 CFR part 3015 is revised, and the Note
following the definition is removed.
e. New definitions 7 CFR part 3017, 7 CFR part 3018 and 7 CFR part
3052 are added.
f. The definition of State is revised, and
g. The definition of State food distribution advisory council is
removed in its entirety.
The additions and revisions read as follows:
Sec. 210.2 Definitions.
* * * * *
7 CFR part 3015 means the Uniform Federal Assistance Regulations
published by the Department to implement OMB Circulars A-21, A-87, A-
102, A-110, and A-122; and Executive Order 12372. (For availability of
OMB Circulars referenced in this definition, see 5 CFR 1310.3.)
7 CFR part 3017 means the Department's regulation to implement
Executive Order 12549, covering governmentwide rules on suspension and
debarment as well as The Drug Free Workplace Act of 1988.
7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
7 CFR part 3052 means the Department's regulations implementing OMB
Circular A-133, ``Audits of State, Local Governments, and Non-Profit
Organizations.'' (For availability of OMB Circulars referenced in this
definition, see 5 CFR 1310.3.)
State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
* * * * *
3. In Sec. 210.8, a new sentence is added to the end of paragraph
(c)(1) to read as follows:
Sec. 210.8 Claims for reimbursement.
* * * * *
(c) * * *
(1) * * * If a single State agency administers any combination of
the Child Nutrition Programs, a school food authority shall be able to
use a common claim form with respect to claims for reimbursement for
meals served under those programs.
* * * * *
4. In Sec. 210.9, the heading of paragraph (b) and the first two
sentences of the introductory text are revised, and a new sentence is
added after the second sentence.
The addition and revisions read as follows:
Sec. 210.9 Agreement with State agency.
* * * * *
(b) Agreement. Each school food authority approved to participate
in the program shall enter into a written agreement with the State
agency that may be amended as necessary. Nothing in the preceding
sentence shall be construed to limit the ability of the State agency to
suspend or terminate the agreement in accordance with Sec. 210.25. If a
single State agency administers any combination of the Child Nutrition
Programs, that State agency shall provide each school food authority
with a single agreement with respect to the operation of those
programs. * * *
* * * * *
5. In Sec. 210.13, paragraph (b) is redesignated as paragraph (c),
and a new paragraph (b) is added, to read as follows:
Sec. 210.13 Facilities management.
* * * * *
(b) Food safety inspections.--(1) In general. Except as provided in
paragraph (b)(2) of this section, schools shall, at least once during
each school year, obtain a food safety inspection conducted by a State
or local governmental agency responsible for food safety inspections.
(2) Exception. Paragraph (b)(1) of this section shall not apply to
a school if a food safety inspection of the school is required by a
State or local governmental agency responsible for food safety
inspections.
* * * * *
Sec. 210.18 [Amended]
6. In Sec. 210.18,
a. The third sentence of paragraph (a) is amended by removing the
words ``, in lieu of implementing the provisions of Sec. 210.18a of
this part for school year 1991/1992''.
b. The fourth sentence of paragraph (a) is amended by removing the
reference ``Sec. 210.30 of this part'' and adding in its place the
reference ``Sec. 210.29''.
c. The undesignated paragraph after paragraph (i)(3)(i)(B) is
amended by removing the parenthetical phrase ``(but not less than 10
lunches)'' and adding in its place the new parenthetical phrase ``(but
not less than 100 lunches)''.
d. The seventh sentence of paragraph (j) is amended by removing the
reference ``Sec. 210.30 (d)(3)'' and adding in its place the reference
``Sec. 210.29 (d)(3)''.
e. The first sentence paragraph (q) is amended by removing the
reference ``Sec. 210.30 (d)(2) of this part'' and adding in its place
the reference ``Sec. 210.29 (d)(2)'', and
[[Page 50741]]
f. The first sentence of paragraph (r) is amended by removing the
reference ``Sec. 210.30 (d)(2) of this part'' and adding in its place
the reference ``Sec. 210.29 (d)(2)''.
Sec. 210.18a [Removed]
7. Section 210.18a is removed in its entirety.
8. In Sec. 210.19,
a. The third sentence of paragraph (a)(6) is amended by removing
the reference ``or Sec. 210.18a of the part''.
b. Paragraph (b) is revised.
c. The third sentence of paragraph (c)(2)(ii) is amended by
removing the reference ``or Sec. 210.18a of this part''.
The revision reads as follows:
Sec. 210.19 Additional responsibilities.
* * * * *
(b) Donated food distribution information. Information on schools
eligible to receive donated foods available under section 6 of the
National School Lunch Act (42 U.S.C. 1755) shall be prepared each year
by the State agency with accompanying information on the average daily
number of lunches to be served in such schools. This information shall
be prepared as early as practicable each school year and forwarded no
later than September 1 to the Distributing agency. The State agency
shall be responsible for promptly revising the information to reflect
additions or deletions of eligible schools, and for providing such
adjustments in participation as are determined necessary by the State
agency. Schools shall be consulted by the Distributing agency with
respect to the needs of such schools relating to the manner of
selection and distribution of commodity assistance.
* * * * *
Sec. 210.20 [Amended]
9. In Sec. 210.20,
a. Paragraph (a)(7) is amended by removing the reference
``Sec. 210.28 (d)'' adding in its place the reference ``Sec. 250.13(k)
of this chapter''.
b. Paragraph (b)(11) is amended by removing the reference
``Sec. 210.28 (d)'' and adding in its place the reference
``Sec. 250.13(k) of this chapter''.
10. In Sec. 210.21, a new paragraph (d) is added to read as
follows:
Sec. 210.21 Procurement.
* * * * *
(d) Buy American.--(1) Definition of domestic commodity or product.
In this paragraph (d), the term `domestic commodity or product' means--
(i) An agricultural commodity that is produced in the United
States; and
(ii) A food product that is processed in the United States
substantially using agricultural commodities that are produced in the
United States.
(2) Requirement. (i) In general. Subject to paragraph (d)(2)(ii) of
this section, the Department shall require that a school food authority
purchase, to the maximum extent practicable, domestic commodities or
products.
(ii) Limitations. Paragraph (d)(2)(i) of this section shall apply
only to--
(A) A school food authority located in the contiguous United
States; and
(B) A purchase of domestic commodity or product for the school
lunch program under this part.
(3) Applicability to Hawaii. Paragraph (d)(2)(i) of this section
shall apply to a school food authority in Hawaii with respect to
domestic commodities or products that are produced in Hawaii in
sufficient quantities to meet the needs of meals provided under the
school lunch program under this part.
Sec. 210.23 [Amended]
11. In Sec. 210.23, the first sentence of paragraph (b) is amended
by removing the word ``handicap'' and adding in its place the word
``disability''.
Sec. 210.26 [Amended]
12. In Sec. 210.26, the first sentence of the paragraph is amended
by removing the word ``$10,000'' and adding in its place the word
``$25,000''.
Sec. 210.27 [Amended]
13. In Sec. 210.27, the paragraph is amended by removing the words
``neither the Department nor the State agency shall'' and adding the
words ``the Department shall not''.
Sec. 210.28 [Removed]
14. Sec. 210.28 is removed in its entirety.
Secs. 210.29, 210.30, 210.31, and 210.32 [Redesignated as
Secs. 210.28, 210.29, 210.30 and 210.31]
15. Sections 210.29, 210.30, 210.31, and 210.32 are redesignated as
210.28, 210.29, 210.30, and 210.31, respectively.
Part 215--SPECIAL MILK PROGRAM FOR CHILDREN
1. The authority citation for 7 CFR part 215 continues to read as
follows:
Authority: 42 U.S.C. 1772, 1779.
2. In Sec. 215.2,
a. Paragraph (e-1) is amended by removing the word ``handicapped''
wherever it appears and adding in its place the word ``disabled''.
b. Paragraph (x-1) is revised, and the Note following the
definition is removed.
c. Paragraph (x-2) is redesignated as paragraph (x-5).
d. New paragraphs (x-2), (x-3) and (x-4) are added, and
e. Paragraph (y) is revised.
The additions and revisions read as follows:
Sec. 215.2 Definitions.
* * * * *
(x-1) 7 CFR part 3015 means the Uniform Federal Assistance
Regulations published by the Department to implement OMB Circulars A-
21, A-87, A-102, A-110, and A-122; and Executive Order 12372. (For
availability of OMB Circulars referenced in this definition, see 5 CFR
1310.3.)
(x-2) 7 CFR part 3017 means the Department's regulation to
implement Executive Order 12549, covering governmentwide rules on
suspension and debarment as well as The Drug Free Workplace Act of
1988.
(x-3) 7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
(x-4) 7 CFR part 3052 means the Department's regulations
implementing OMB Circular A-133, ``Audits of State, Local Governments,
and Non-Profit Organizations.'' (For availability of OMB Circulars
referenced in this definition, see 5 CFR 1310.3.)
* * * * *
(y) State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
* * * * *
Sec. 215.6 [Amended]
3. In Sec. 215.6, paragraph (b) is amended by removing ``$10,000''
and adding in its place ``$25,000''.
4. In Sec. 215.7,
a. The second sentence of paragraph (b) introductory text is
amended by removing the words ``and thereafter at least annually'', and
b. The first sentence of paragraph (d) introductory text is removed
and three sentences are added in its place to read as follows:
Sec. 215.7 Requirements for participation.
* * * * *
(d) Each school food authority or child care institution approved
to participate in the program shall enter into a written agreement with
the State agency or FNSRO, as applicable, that may be amended as
necessary. Nothing in the preceding sentence shall be construed to
limit the ability of the State
[[Page 50742]]
agency to suspend or terminate the agreement in accordance with
Sec. 215.15. If a single State agency administers any combination of
the Child Nutrition Programs, that State agency shall provide each SFA
with a single agreement with respect to the operation of those
programs. * * *
* * * * *
5. In Sec. 215.10, paragraph (b) is amended by adding a new
sentence between the second and third sentences to read as follows:
Sec. 215.10 Reimbursement procedures.
* * * * *
(b) * * * If a single State agency administers any combination of
the Child Nutrition Programs, the SFA shall be able to use a common
claim form with respect to claims for reimbursement for meals served
under those programs. * * *
* * * * *
6. In Sec. 215.13,
a. Paragraphs (a) through (c) are removed.
b. Paragraphs (d) and (e) are redesignated as (c) and (d),
respectively, and
c. New paragraphs (a) and (b) are added to read as follows:
Sec. 215.13 Management evaluations and audits.
(a) State agencies and school food authorities shall comply with
the requirements of part 3015 of this title concerning the audit
requirements for recipients and subrecipients of the Department's
financial assistance.
(b) These requirements call for organization-wide financial and
compliance audits to ascertain whether financial operations are
conducted properly; financial statements are presented fairly;
recipients and subrecipients comply with the laws and regulations that
affect the expenditures of Federal funds; recipients and subrecipients
have established procedures to meet the objectives of federally
assisted programs; and recipients and subrecipients are providing
accurate and reliable information concerning grant funds. States and
school food authorities shall use their own procedures to arrange for
and prescribe the scope of independent audits, provided that such
audits comply with the requirements set forth in part 3015 of this
title.
* * * * *
Appendix to Part 215 [Removed]
7. In part 215, the Appendix is removed in its entirety.
PART 220--SCHOOL BREAKFAST PROGRAM
1. The authority citation for 7 CFR part 220 continues to read as
follows:
Authority: 42 U.S.C. 1773, 1779, unless otherwise noted.
2. In Sec. 220.2,
a. Paragraph (c) is amended by removing the word ``handicapped''
wherever it appears and adding in its place the word ``disabled''.
b. Paragraph (u) is amended by adding the word ``or'' before
paragraph (u)(3), and by removing the words ``; or (4) with respect to
the Commonwealth of Puerto Rico, nonprofit child care centers certified
as such by the Governor of Puerto Rico''.
c. Paragraph (x-1) is revised, and the Note following the
definition is removed.
d. New paragraphs (x-2), (x-3) and (x-4) are added, and
e. Paragraph (y) is revised.
The additions and revisions read as follows:
Sec. 220.2 Definitions.
* * * * *
(x-1) 7 CFR part 3015 means the Uniform Federal Assistance
Regulations published by the Department to implement OMB Circulars A-
21, A-87, A-102, A-110, and A-122; and Executive Order 12372. (For
availability of OMB Circulars referenced in this definition, see 5 CFR
1310.3.)
(x-2) 7 CFR part 3017 means the Department's regulation to
implement Executive Order 12549, covering governmentwide rules on
suspension and debarment as well as The Drug Free Workplace Act of
1988.
(x-3) 7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
(x-4) 7 CFR part 3052 means the Department's regulations
implementing A-133, ``Audits of State, Local Governments, and Non-
Profit Organizations.'' (For availability of OMB Circulars referenced
in this definition, see 5 CFR 1310.3.)
(y) State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
* * * * *
Sec. 220.6 [Amended]
3. In Sec. 220.6, paragraph (b)(1) is amended by removing
``$10,000'' and adding in its place ``$25,000''.
4. In Sec. 220.7, a.
a. New paragraph (a-2) is added, and
b. The first sentence of paragraph (e) introductory text is removed
and three new sentences are added in its place.
The additions read as follows:
Sec. 220.7 Requirements for participation.
* * * * *
(a-2) Schools shall, at least once during each school year, obtain
a food safety inspection conducted by a State or local governmental
agency responsible for food safety inspections. However, this
requirement shall not apply to a school if a food safety inspection of
the school is required by a State or local governmental agency
responsible for food safety inspections.
* * * * *
(e) Each school food authority approved to participate in the
program shall enter into a written agreement with the State agency or
the Department through the FNSRO, as applicable, that may be amended as
necessary. Nothing in the preceding sentence shall be construed to
limit the ability of the State agency or the FNSRO to suspend or
terminate the agreement in accordance with Sec. 220.18. If a single
State agency administers any combination of the Child Nutrition
Programs, that State agency shall provide each SFA with a single
agreement with respect to the operation of those programs.* * *
* * * * *
5. In Sec. 220.11, paragraph (b) is amended by adding a new
sentence between the second and third sentences to read as follows:
Sec. 220.11 Reimbursement procedures.
* * * * *
(b) * * * If a single State agency administers any combination of
the Child Nutrition Programs, the SFA shall be able to use a common
claim form with respect to claims for reimbursement for meals served
under those programs. * * *
* * * * *
Sec. 220.13 [Amended]
6. In Sec. 220.13, paragraph (k) is removed in its entirety.
7. In Sec. 220.15,
a. Paragraphs (a), (b), (c), and (d) are removed and paragraphs (e)
and (f) are redesignated as paragraphs (c) and (d), respectively, and
b. New paragraphs (a) and (b) are added.
The additions read as follows:
[[Page 50743]]
Sec. 220.15 Management evaluations and audits.
(a) State agencies and school food authorities shall comply with
the requirements of part 3015 of this title concerning the audit
requirements for recipients and subrecipients of the Department's
financial assistance.
(b) These requirements call for organization-wide financial and
compliance audits to ascertain whether financial operations are
conducted properly; financial statements are presented fairly;
recipients and subrecipients comply with the laws and regulations that
affect the expenditures of Federal funds; recipients and subrecipients
have established procedures to meet the objectives of federally
assisted programs; and recipients and subrecipients are providing
accurate and reliable information concerning grant funds. States and
school food authorities shall use their own procedures to arrange for
and prescribe the scope of independent audits, provided that such
audits comply with the requirements set forth in part 3016 of this
title.
* * * * *
8. In Sec. 220.16, a new paragraph (d) is added to read as follows:
Sec. 220.16 Procurement standards.
* * * * *
(d) Buy American.--(1) Definition of domestic commodity or product.
In this paragraph (d), the term ``domestic commodity or product''
means--
(i) An agricultural commodity that is produced in the United
States; and
(ii) A food product that is processed in the United States
substantially using agricultural commodities that are produced in the
United States.
(2) Requirement.--(i) In general. Subject to paragraph (d)(2)(ii)
of this section, the Department shall require that a school food
authority purchase, to the maximum extent practicable, domestic
commodities or products.
(ii) Limitations. Paragraph (d)(2)(i) of this section shall apply
only to--
(A) A school food authority located in the contiguous United
States; and
(B) A purchase of domestic commodity or product for the school
breakfast program under this part.
(3) Applicability to Hawaii. Paragraph (d)(2)(i) of this section
shall apply to a school food authority in Hawaii with respect to
domestic commodities or products that are produced in Hawaii in
sufficient quantities to meet the needs of meals provided under the
school breakfast program under this part.
Sec. 220.17 [Amended]
9. In Sec. 220.17, paragraph (a) is amended by removing the words
``neither the Department nor the State shall'' and adding the words
``the Department shall not''.
Part 235--STATE ADMINISTRATIVE EXPENSE FUNDS
1. The authority citation for 7 CFR part 235 continues to read as
follows:
Authority: Secs. 7 and 10 of the Child Nutrition Act of 1966, 80
Stat. 888, 889, as amended (42 U.S.C. 1776, 1779).
2. In Sec. 235.2,
a. Paragraph (o) is revised.
b. Paragraph (q-1) is revised, and the Note following the
definition is removed.
c. New paragraphs (q-2), (q-3) and (q-4) are added, and
d. Paragraph (r) is revised.
The additions and revisions read as follows:
Sec. 235.2 Definitions.
* * * * *
(o) School means the term as defined in sections 210.2, 215.2(v),
220.2(u), and 226.2 of this chapter, as applicable.
* * * * *
(q-1) 7 CFR part 3015 means the Uniform Federal Assistance
Regulations published by the Department to implement OMB Circulars A-
21, A-87, A-102, A-110, and A-122; and Executive Order 12372. (For
availability of OMB Circulars referenced in this definition, see 5 CFR
1310.3.)
(q-2) 7 CFR part 3017 means the Department's regulation to
implement Executive Order 12549, covering governmentwide rules on
suspension and debarment as well as The Drug Free Workplace Act of
1988.
(q-3) 7 CFR part 3018 means the Department's Common Rule regarding
Governmentwide New Restrictions on Lobbying. Part 3018 implements the
requirements established by section 319 of the 1990 Appropriations Act
for the Department of Interior and Related Agencies (Pub. L. 101-121).
(q-4) 7 CFR part 3052 means the Department's regulations
implementing OMB Circular A-133, ``Audits of State, Local Governments,
and Non-Profit Organizations.'' (For availability of OMB Circulars
referenced in this definition, see 5 CFR 1310.3.)
(r) State means any of the 50 States, District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and, as
applicable, American Samoa and the Commonwealth of the Northern
Marianas.
* * * * *
3. In Sec. 235.4,
a. Paragraph (b) is amended by removing the words ``or Sec. 210.18a
of this title'' wherever they appear; and
b. A new paragraph (h) is added to read as follows.
Sec. 235.4 Allocation of funds to States.
* * * * *
(h) Withholding SAE funds. The Secretary may withhold some or all
of the funds allocated to the State agency under this section if the
Secretary determines that the State agency is seriously deficient in
the administration of any program for which State administrative
expense funds are provided under this part or in the compliance of any
regulation issued pursuant to those programs. On a subsequent
determination by the Secretary that State agency administration of the
programs or compliance with regulations is no longer seriously
deficient and is operated in an acceptable manner, the Secretary may
allocate some or all of the funds withheld.
4. In Sec. 235.5,
a. The third sentence of paragraph (a) introductory text is amended
by removing the words ``for the fiscal year'',
b. The fifth sentence of paragraph (a) is amended by removing the
word ``fiscal'' and adding in its place the word ``base'',
c. Paragraphs (b) and (c) are revised, and
d. The fourth sentence of paragraph (d) is revised.
The revisions read as follows:
Sec. 235.5 Payments to States.
* * * * *
(b) Administrative plan. (1) Each State agency shall submit,
subject to FNS approval, an initial State Administrative Expense plan
based upon guidance provided by FNS. This base year plan shall include:
(i) The staffing pattern for State level personnel;
(ii) A budget for the forthcoming fiscal year showing projected
amounts (combined SAE and State funds) by cost category;
(iii) The total amount of budgeted funds to be provided from State
sources;
(iv) The total amount of budgeted funds to be provided under this
part;
(v) The State agency's estimate of the total amount of budgeted
funds (combined SAE and State funds) attributable to administration of
the School Nutrition Programs (National School Lunch, School Breakfast
and Special Milk Programs), Child and Adult Care Food Program, and/or
Food
[[Page 50744]]
Distribution Program in schools and child and adult care institutions
and to each of the major activity areas of the State agency; and
(vi) The State agency's estimate of the total Child and Adult Care
Food Program audit funds to be used for the forthcoming fiscal year.
(2) These activity areas shall be defined and described by the
State agency in accordance with guidance issued by FNS and may include
such activities as program monitoring, technical assistance, Federal
reporting/claims processing, policy implementation, and allocation of
foods to recipient agencies.
(3) Except in specific instances where determined necessary by FNS,
State agencies shall not be required to maintain expenditure records by
activity area or program. State agencies shall refer to Office of
Management and Budget Circular A-87, Attachment B, to establish cost
categories.
(4) FNS shall approve a State agency's plan, or any amendment to
such plan under paragraph (c) of this section, if it determines that
the plan or amendment is consistent with program administrative needs
and SAE requirements under this part.
(5) To the extent practicable, State agencies shall implement their
approved plans (as amended). FNS shall monitor State agency
implementation of the plans through management evaluations, State
agency reports submitted under this part, audits, and through other
available means.
(6) FNS may expand plan requirements for individual State agencies
in order to address specific administrative deficiencies which affect
compliance with program requirements and which have been identified by
FNS through its monitoring activities.
(c) Amendments to the administrative plan. A State agency may amend
its plan at any time to reflect changes in funding or activities,
except that, if such changes are substantive as defined in the June 5,
1997 guidance, and any amendments or updates to this guidance, the
State agency shall amend its plan in accordance with guidance provided
by FNS. Plan amendments shall provide information in a format
consistent with that provided in the State agency's plan, but shall
only require FNS approval if it results in a substantive change as
defined by FNS.
(d) * * * Reallocated funds shall be made available for payment to
a State agency upon approval by FNS of the State agency's amendment to
the base year plan which covers the reallocated funds, if applicable. *
* *
* * * * *
Sec. 235.6 [Amended]
5. In Sec. 235.6,
a. The second sentence of paragraph (a) is amended by removing the
words ``up to ten percent of the'',
b. Paragraph (a-2) is amended by removing the reference ``or
Sec. 210.18a of this title'', and
c. Paragraph (g)(1) is amended by removing ``$10,000'' and adding
in its place ``$25,000''.
Sec. 235.11 [Amended]
6. In Sec. 235.11, paragraph (b)(2) is amended by removing the
references ``or Sec. 210.18a of this title'', ``or Sec. 210.18a'' and
``, Sec. 210.18a,'' wherever they appear.
7. Section 235.12 is revised to read as follows:
Sec. 235.12 Information collection/recordkeeping-OMB assigned control
numbers.
------------------------------------------------------------------------
Current OMB
7 CFR section where requirements are described control number
------------------------------------------------------------------------
235.3(b)0584-0067.......................................
235.4(d), (e)........................................... 0584-0067
235.7(a)................................................ 0584-0067
235.7(b)................................................ 0584-0067
235.7(c)................................................ 0584-0067
235.8(a), (b)........................................... 0584-0067
235.9(c), (d)........................................... 0584-0067
235.11(b)(2)............................................ 0584-0067
235.11(b)(5)(ii)........................................ 0584-0067
235.11(f)............................................... 0584-0067
------------------------------------------------------------------------
PART 245--DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS
AND FREE MILK IN SCHOOLS
1. The authority citation for 7 CFR part 245 continues to read as
follows:
Authority: Secs. 3, 4, and 10 of the Child Nutrition Act of
1966, 80 Stat. 885, 886, 889, as amended (42 U.S.C. 1772, 1773,
1779); secs. 2-12, 60 Stat. 230, as amended (42 U.S.C. 1751-1760).
Sec. 245.5 [Amended]
2. In Sec. 245.5,
a. The first sentence of paragraph (a) introductory text, is
amended by removing the reference ``(o)(2) of part 210''; and
b. Paragraph (a)(1)(x) is amended by removing the word ``handicap''
and adding in its place the word ``disability''.
Sec. 245.6a [Amended]
3. In Sec. 245.6a, paragraph (d) is amended by removing the word
``handicap'' and adding in its place the word ``disability''.
4. In Sec. 245.10,
a. Paragraph (a) introductory text is amended by adding a sentence
between the first and second sentences.
b. Paragraph (a)(2) is revised, and
c. Paragraph (c) is amended by adding two new sentences to the
beginning of the paragraph.
The revision and additions read as follows:
Sec. 245.10 Action by School Food Authorities.
(a) * * * Once approved, the policy statement shall be a permanent
document which may be amended as necessary, except as specified in
paragraph (c) of this section. * * *
* * * * *
(2) An assurance that for children who are not categorically
eligible for free and reduced price benefits the school food authority
will determine eligibility for free and reduced price meals or free
milk in accordance with the current Income Eligibility Guidelines.
* * * * *
(c) Each school food authority shall amend its permanent free and
reduced price policy statement to reflect substantive changes. Any
amendment to a policy shall be approved by the State agency prior to
implementation, or as provided in paragraph (e) of this section. * * *
* * * * *
5. In Sec. 245.11, the first sentence of paragraph (a)(1) revised
to read as follows:
Sec. 245.11 Action by State agencies and FNSRO's.
(a) * * *
(1) As necessary, each State agency or FNSRO, as applicable, shall
issue a prototype free and reduced price policy statement and any other
instructions to ensure that each school food authority is fully
informed of the provisions of this part. * * *
* * * * *
Sec. 245.12 [Amended]
6. In Sec. 245.12, paragraph (a)(1) is amended by removing
``$10,000'' and adding in its place ``$25,000''.
Sec. 245.13 [Removed]
7. Section 245.13 is removed in its entirety.
Sec. 245.14 [Redesignated as Sec. 245.13]
8. Section 245.14 is redesignated as Sec. 245.13.
Dated: September 10, 1999.
Samuel Chambers, Jr.,
Administrator, Food and Nutrition Service.
[FR Doc. 99-24297 Filed 9-17-99; 8:45 am]
BILLING CODE 3410-30-U