[Federal Register Volume 64, Number 248 (Tuesday, December 28, 1999)]
[Rules and Regulations]
[Pages 72474-72488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33503]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 225

RIN 0584-AC23

Summer Food Service Program;


Implementation of Legislative Reforms

AGENCY: Food and Nutrition Service, USDA.

ACTION: Interim rule, with request for comments.

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SUMMARY: This interim rule amends Summer Food Service Program (SFSP) 
regulations to incorporate nondiscretionary changes made by 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. Program changes 
include easing restrictions of participation by private nonprofit

[[Page 72475]]

organizations and food service management companies, streamlining rules 
for schools to encourage Program sponsorship, reducing paperwork 
burdens for State agencies, and other provisions to improve Program 
operations. As required by law, these changes were implemented by the 
dates mandated by the statutes. This rule updates the SFSP regulations. 
In addition, this rule makes minor technical changes to the meal 
pattern requirements to conform the standards to those used in the 
National School Lunch Program and the School Breakfast Program.

DATES: This rule becomes effective January 27, 2000. We will consider 
comments that are submitted by the public. To be assured of 
consideration, comments must be postmarked on or before June 25, 2000.

ADDRESSES: Comments should be addressed to Mr. Robert M. Eadie, Chief, 
Policy and Program Development Branch, Child Nutrition Division, Food 
and Nutrition Service, Department of Agriculture, 3101 Park Center 
Drive, Room 1007, Alexandria, Virginia 22302-1594. All written 
submissions will be available for public inspection at this location, 
Monday through Friday, 8:30 a.m.-5 p.m. Comments will also be accepted 
via electronic mail submission at the following Internet address: CND 
[email protected]. Since comments are being accepted on several 
rules at the same time, please refer to the title of this rule in the 
subject line of your message.

FOR FURTHER INFORMATION CONTACT: Melissa Rothstein or Linda Jupin at 
the above address or by telephone at (703) 305-2620.
SUPPLEMENTARY INFORMATION:

Background

    The Summer Food Service Program (SFSP) is authorized under section 
13 of the National School Lunch Act (NSLA) (42 U.S.C. 1761). Its 
primary purpose is to provide nutritious meals to children from low-
income areas during periods when schools are closed for vacation.
    In 1994, 1996, and 1998, substantive changes to the SFSP were made 
with the enactment of three public laws. These laws are briefly 
discussed below.
     The Healthy Meals for Healthy Americans Act of 1994 (Pub. 
L. 103-448) was signed on November 2, 1994. This law reauthorized the 
SFSP through Fiscal Year 1998 and amended a number of provisions in 
section 13 of the NSLA. These provisions were implemented by the 
Department via guidance issued to State agencies on December 8, 1994.
     The Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (Pub. L. 104-193) was signed on August 22, 
1996. This statute, which made landmark changes to the Federal public 
assistance program known as the Aid to Families with Dependent Children 
(AFDC), also amended the NSLA and the Child Nutrition Act of 1966 
(CNA). The Department informed State agencies of impending changes on 
August 13, 1996 and implemented the provisions relating to the SFSP on 
January 27, 1997, in the form of guidance provided to State agencies.
     The William F. Goodling Child Nutrition Reauthorization 
Act of 1998 (Pub. L. 105-336) was signed on October 31, 1998. One 
provision affecting the SFSP amended the CNA and the remaining 
provisions amended the NSLA. The Department implemented the provisions 
affecting the SFSP on December 3, 1998 in the form of guidance provided 
to State agencies.
    The following chart summarizes the statutory provisions of Pub. L. 
103-448, Pub. L. 104-193, and Pub. L. 105-336 that are addressed in 
this interim rule:

----------------------------------------------------------------------------------------------------------------
                                                                                          Regulatory section
              Statute                                   Provision                              affected
----------------------------------------------------------------------------------------------------------------
Pub. L. 103-448:
    Section 114(a).................  Revised sponsor priority system................  Sec.  225.6(b)(5).
    Section 114(b).................  Eliminated one-year waiting period for private   Secs.  225.2 definition of
                                      nonprofit organizations (PNOs).                  PNOs, 225.6(a)(3)(iv)(B),
                                                                                       and 225.14(d)(7)(iv).
    Section 114(f).................  Eliminated warning from PNO applications.......  Sec.  225.6(a)(5).
    Section 114(e).................  Reduced requirements States must include in      Sec.  225.4(d).
                                      their Management and Administration Plans
                                      (MAPs).
    Section 114(d).................  Reduced report of food management service        Sec.  225.8(d).
                                      companies (FSMC) to just the seriously
                                      deficient.
Pub. L 104-193:
    Section 703....................  Reduced frequency of submission of Free &        Sec.  225.6(c)(3).
                                      Reduced Price Policy Statement.
    Section 706(c)(1)..............  Reduced the number of meals that can be served   Sec.  225.16(b)(1)(i) and
                                      each day at camps and migrant sites from 4       (b)(5).
                                      meals to 3 meals or 2 meals and 1 snack.
    Section 706(d).................  Eliminated academic-year National Youth Sports   Sec.  225.2 (definition of
                                      Program (NYSP); allows NYSP site eligibility     NYSP feeding site); and
                                      based on residence in ``area where poor          Sec.  225.6(c)(2)(v).
                                      economic conditions exist''.
    Section 706(e).................  Removed requirement that school food             Sec.  225.9(c)(1)(i).
                                      authorities conduct training before receiving
                                      the second month's advance program payment.
    Section 706(f).................  Provided new language on inspections for         Sec.  225.6(h)(2)(v).
                                      bacteria levels in meals.
    Section 706(g).................  Allowed school sponsors to use offer versus      Sec.  225.16(g).
                                      serve option in school site locations.
    Sections 706(j)................  Removed requirements in MAPs...................  Sec.  225.4(d).
    Section 706(k).................  Removed specific training for PNOs.............  Sec.  225.7(a).
    Section 109(g).................  Permitted categorical eligibility for            Secs.  225.2 (definitions
                                      participants in State-funded programs that       of ``documentation'' and
                                      replace AFDC (i.e., TANF).                       ``TANF''), 225.6(c)(3),
                                                                                       225.15(e), and 225.15(f).
Pub. L. 105-336:
    Section 104(b).................  Increased the maximum fine for program abuse     Sec.  225.6(a)(5)(i)(A)-(C
                                      from $10,000 to $25,000.                         ).
    Section 105(a).................  Increased the number of sites and total number   Secs.  225.2 (definition
                                      of children that PNOs may serve.                 of PNO), 225.6(b)(6)(ii),
                                                                                       and 225.14(d)(7)(ii).
    Section 105(b).................  Allowed PNOs to use commercial food vendors....  Secs.  225.2 (definition
                                                                                       of PNO),
                                                                                       225.6(a)(3)(iii),
                                                                                       225.14(d)(7)(iii), and
                                                                                       225.15(g)(3).
    Section 105(b).................  Eliminated indication of sponsor interest        Sec.  225.14(d)(7)(iv).
                                      requirement.
    Section 105(c).................  Expanded offer versus serve to all school        Sec.  225.16(g).
                                      sponsor sites.

[[Page 72476]]

 
    Section 102(d).................  Required single agreement and common claim form  Secs.  225.6(e) and
                                      requirements for schools that operate multiple   225.9(d).
                                      child nutrition programs, including the SFSP.
    Section 105(b).................  Removed Federal requirement for FSMC             Secs.  225.6(g), 225.8(d),
                                      registration and report of seriously deficient   and 225.13(a).
                                      FSMCs.
    Section 107(j).................  Transferred authority of emergency shelters      Secs.  225.2,
                                      (homeless) from SFSP to CACFP.                   225.6(c)(2)(ii),
                                                                                       225.6(d), 225.8(e),
                                                                                       225.14(d)(5), and
                                                                                       225.16.(b)(2).
    Section 104(a).................  Allowed higher SFSP reimbursement rates in       Sec.  225.9(d)(8).
                                      Alaska and Hawaii.
----------------------------------------------------------------------------------------------------------------

    The rest of this preamble discusses the specific statutory changes 
and the corresponding revisions to the SFSP regulations. The statutory 
changes are discussed under the program areas affected.

I. Private Nonprofit Organizations (PNOs)

    Significant changes were made in the SFSP statutory framework 
governing PNO sponsorship and participation with the enactment of Pub. 
L. 103-448, Pub. L. 104-193, and Pub. L. 105-336. These revisions 
represent an acknowledgment that PNO sponsors, with adequate training 
and monitoring, can successfully operate the SFSP. The 1994 amendments 
(Pub. L. 103-448) sought to facilitate participation in SFSP by PNOs 
and to acknowledge their efforts to operate quality programs. These 
amendments to the NSLA revised the sponsor eligibility priority list, 
eliminated the one-year waiting period for PNO participation in certain 
areas, and ended the practice of including a criminal penalty warning 
statement on PNO application materials. With respect to PNO sponsors, 
the 1996 amendments (Pub. L. 104-193) lifted the mandate that State 
agencies must conduct training specifically for PNO sponsors 
participating in SFSP. The provisions in the 1998 amendments to the 
NSLA (Pub. L. 105-336) eliminated a number of restrictions that had 
been placed on PNO sponsors. By easing restrictions on PNOs to sponsor 
the Program, it was hoped that more low-income children would have 
access to nutritious meals during the summer months.
    Following is a discussion of each statutory change made to PNO 
participation in the Program. Corresponding changes made to regulatory 
language are noted.

1. Sponsor Selection--Priority System

    Section 114(a) of Pub. L. 103-448 amended section 13(a)(4) of the 
NSLA to revise the sponsor eligibility priority system. Previously, 
when more than one SFSP sponsor or potential sponsor proposed to 
provide meal service at the same site or in the same area, the 
regulations required that State agencies consider PNOs last behind 
other eligible applicants. This lack of priority given PNOs reflected 
the view that PNOs tended to be the most problematic of potential SFSP 
sponsors. The results of monitoring PNOs revealed that experienced PNO 
sponsors are as able in their administration of the SFSP as are other 
sponsors. In view of this information, Congress adopted a new priority 
system. With this revision, State agencies must consider eligible SFSP 
sponsor applicants in the following order: (1) Local school food 
authorities; (2) all other government sponsors and PNOs that have 
demonstrated successful program performance in a prior year; (3) new 
government sponsors; and (4) new PNOs. If a government agency and a PNO 
apply to serve the same area, we believe that State agencies should 
have the flexibility to make the approval determination.
    Accordingly, this rule conforms the SFSP regulations at 
Sec. 225.6(b)(5) to mirror the new order of priority established in the 
law that State agencies must use in approving applicants seeking to 
serve the same area or the same group of enrolled children. We also 
clarify in this section that State agencies must approve or deny 
applications on a case-by-case basis, when experienced government and 
PNO sponsors both apply to serve the same area.

2. Eliminating the One-Year Waiting Period

    Section 114(b) of Pub. L. 103-448 struck the provision in section 
13(a)(7)(C) of the NSLA requiring a one-year waiting period with 
respect to the participation of PNOs in certain areas. Previously, PNOs 
were under a prohibition from serving a site or an area during the 12 
months after that area had been served by a school food authority or a 
government sponsor. Under the regulations, a waiver was allowed 
provided the State agency had determined that an experienced sponsor 
was discontinuing meal service to an area, regardless of the 
availability of a PNO to serve that area. Opponents of the waiting 
period maintained that a geographical area in critical need of SFSP 
meal service could remain unserved for 12 months with its imposition.
    Accordingly, this rule conforms the regulations to the statutory 
elimination of a waiting period before a PNO may apply to operate SFSP 
sites previously operated by schools or government sponsors. In doing 
so, we have removed references to the one-year waiting period in the 
definition of a PNO at Sec. 225.2, and in Secs. 225.6(a)(3)(iv)(B) and 
225.14(d)(7)(iv).

3. Eliminating Warnings on PNO Application Materials

    In earlier years of Program operation, large PNO sponsors, 
particularly those contracting with commercial food service companies 
and serving sizable numbers of children at many sites, were found to 
have committed Program fraud. Concern about fraudulent PNO sponsors 
prompted Congress to mandate that a warning of the criminal provisions, 
penalties, and termination procedures for Program violations must be 
printed in bold lettering on applications provided to PNOs. More recent 
monitoring showed that PNO sponsors administer SFSP with similar levels 
of error as other types of sponsors with comparable experience. In view 
of this updated information, section 114(f) of Pub. L. 103-448 deleted 
the requirement in section 13(q)(2) of the NSLA for the warning 
statement on applications provided to PNOs. State agencies may include 
warning statements on application materials, as long as the warning 
appears on all sponsor applications. However, State agencies may not 
single out PNO sponsors to receive warnings about Program misconduct 
and the consequences on application materials. It should be noted, 
however, that the required certification statements specified at 
Sec. 225.6(a)(4) and the procedures for program termination of any site 
or sponsor determined to be seriously deficient in its administration 
of the SFSP continue to apply.
    Accordingly, to conform with the revision in the statute, we have 
deleted specific references to PNOs at Sec. 225.6(a)(5) of the SFSP 
regulations. We

[[Page 72477]]

have made two other changes to Sec. 225.6(a)(5):
     To indicate a State agency's option to include criminal 
provisions, penalties, and termination procedures in application and 
preapplication materials; and,
     To quote the most current statutory language containing 
maximum fines that may be levied against violators.
    Fines for having been criminally convicted of fraud, embezzlement 
or similar improprieties in connection with Program activities have 
been revised upward from $10,000 to $25,000 in accordance with section 
104(b) of Pub. L. 105-336, which amended section 12(g) of the NSLA. We 
note with interest that Congress did not amend section 13(o) of the 
NSLA, which provides language for criminal fines and penalties in 
connection with submitting false information on applications and other 
program-related reports. The maximum fine at section 13(o) of the NSLA 
for these crimes remains at $10,000. However, section 12(g) of the NSLA 
specifically includes all programs covered under the NSLA and the CNA. 
In the absence of any reference to this apparent conflict in any 
conference or committee reports, we have decided to include the 
language from section 12(g) rather than section 13(o) of the NSLA. The 
statutory language at section 12(g) of the NSLA contains the most 
recent Congressional statement with regard to criminal fines and 
penalties that may be levied against program violators. In addition, it 
is preferable, in our view, to maintain consistency across all Child 
Nutrition Programs in this matter.

4. Monitoring and Training

    Prior to the 1994 amendments to the NSLA, State agencies were 
required to establish and implement an ongoing training and technical 
assistance program specifically for PNOs. The training focused on 
program requirements, procedures, and accountability for PNO sponsors. 
Section 706(k) of Pub. L. 104-193 struck the requirement in section 
13(q) of the NSLA for special PNO sponsor training.
    Accordingly, this rule removes the special training requirements 
outlined in Sec. 225.7(a) of the SFSP regulations for PNO sponsors. 
However, State agencies remain responsible for providing training and 
technical assistance to all SFSP sponsors, including PNOs, as described 
in this paragraph of the Program regulations.

5. Numbers of Sites and Children Served

    A priority of the 1998 reauthorization statute was to increase SFSP 
participation and aid eligible sponsors in reaching more needy 
children. Thus, section 105(a) of Pub. L. 105-336 amended section 
13(a)(7)(B)(i) of the NSLA to modify the limit on the number of sites a 
PNO may operate as well as the number of children a site may serve. 
With this modification, a PNO may be approved by a State agency to 
operate up to 25 SFSP sites, in any combination of urban or rural 
sites. Also, the previous 2,500 limit on the total daily attendance for 
all PNO sponsor sites was lifted. However, Congress kept both the 
statutory limit of 300 children that PNOs may serve at any one site, 
and the provision allowing State agencies to waive that limit and allow 
up to 500 children to be served by PNOs at any one site.
    Accordingly, this rule conforms the SFSP regulations at Secs. 225.2 
(the definition of a PNO), 225.6(b)(6)(ii), and 225.14(d)(7) to the 
statutory revisions concerning the number of sites and number of 
children that PNOs may serve with State agency approval.

6. Authority to Obtain Meals From Commercial Vendors

    Section 105(b) of Pub. L. 105-336 removed section 13(a)(7)(B)(ii) 
and amended section 13(l)(1) of the NSLA. The effect of these changes 
is to end prohibition on PNO sponsors from contracting with food 
service management companies for the furnishing of meals. Ending the 
prohibition on commercial contracting should improve program access. In 
particular, rural areas should benefit from increased access to 
commercial vendors, since non-commercial vendors are more limited in 
those localities. With this action, PNO sponsors have the options of 
preparing meals themselves, or purchasing unitized meals from schools, 
public facilities, or commercial vendors.
    Accordingly, to conform to this revision in the NSLA, we have 
revised the following sections in the SFSP regulations: Secs. 225.2 
(the definition of a PNO), 225.6(a)(3), 225.14(d)(7), and 225.15(g)(3).

7. Indication of Interest Requirement

    Section 105(b) of Pub. L. 105-336 also struck the requirement in 
section 13(a)(7)(B)(iii) of the NSLA that limited PNO sponsors to SFSP 
participation only in areas where a school food authority or a 
government sponsor had not indicated an interest in operating the 
Program by March 1 of each year. As with the previous two amendments, 
improving access to nutritious meals for poor children was the goal of 
eliminating this qualifying condition for PNO sponsors.
    Accordingly, we have eliminated reference to the March 1 indication 
of interest requirement in Secs. 225.2 (the definition of a PNO) and 
225.14(d)(7)(iv)

II. Paperwork Reduction

1. Management and Administration Plans

    In an ongoing effort to simplify the administration of the SFSP and 
reduce paperwork burdens, Pub. L. 103-448 and Pub. L. 104-193 amended 
section 13(n) of the NSLA to decrease the number of areas that State 
agencies must address in their management and administration plans. The 
laws eliminated the following eight criteria from the management and 
administrative plan:
     The State's schedule for application by sponsors;
     The actions to be taken to maximize the use of meals 
prepared by sponsors and the use of school food service facilities;
     The State's plan and schedule for registering food service 
management companies;
     The State's plan for determining the amounts of program 
payments to sponsors and for disbursing such payments;
     The State procedure for granting a hearing and prompt 
determination to any sponsor wishing to appeal a State's ruling denying 
the sponsor's application for program participation or for program 
reimbursement;
     The State's needs assessment plan;
     The best estimate of the number of sponsors and children 
expected to participate; and
     The schedule for providing technical assistance and 
training to eligible sponsors.
    With this action, paperwork was reduced without compromising the 
operational and financial management of the Program.
    Accordingly, this rule makes conforming revisions to Sec. 225.4(d) 
of the SFSP regulations. This rule also makes a technical change to 
this paragraph of the regulations due to the expiration of an outreach 
requirement made by Pub. L. 101-147. That law deleted the requirement 
that each State agency include a description of its plans to inform 
private nonprofit organizations of their potential eligibility to 
participate in SFSP. Finally, outdated references to implementation of 
procurement monitoring requirements, health inspections, and meal 
quality tests are also deleted from this section. With these revisions, 
eight criteria remain for inclusion in management and administration 
plans. They are:

[[Page 72478]]

     The State's administrative budget for the fiscal year;
     The State's plans to use Program funds and any additional 
State funds to reach needy children;
     The State's plans for providing technical assistance and 
training eligible sponsors;
     The State's plans for monitoring and inspecting sponsors, 
feeding sites, and food service management companies;
     The State's plan for action against Program violators;
     The State's plan for ensuring fiscal integrity of sponsors 
not subject to auditing requirements.;
    Tthe State's plan for ensuring compliance with the food 
service management company procurement monitoring requirements; and
     An estimate of the State's need, if any, for funds to pay 
for health inspections and meal quality tests.

2. Free and Reduced Price Policy Statement

    In a statutory change applicable only to school food authority SFSP 
sponsors, Section 703 of Pub. L. 104-193 amended section 9(b)(2)(D) of 
the NSLA to eliminate the requirement for annual submission of a free 
and reduced price policy statement to the State agency by a school food 
authority. After the initial submission, the school food authority need 
not submit a policy statement in subsequent years unless there is a 
substantive change in the free and reduced price policy of the school 
food authority.
    As specified in the amendment, a routine policy change, such as an 
annual adjustment of the income eligibility guidelines for free and 
reduced price meals, would not necessitate the submission of a policy 
statement by the school food authority. However, a State agency may 
determine which changes are significant enough to justify a policy 
statement revision. Circumstances that might trigger a resubmission 
include when a sponsor designates new approval or hearing officials, 
when application collection procedures change, or when significant 
revisions are made in the media release, the notice to households, or 
the income eligibility statements.
    Accordingly, this rule revises Sec. 225.6(c)(3) of the SFSP 
regulations to reflect the change in the free and reduced price policy 
statement submission requirement. The revised regulations state that 
each new applicant sponsor must submit a statement of its policy for 
serving free meals at all sites under its jurisdiction. After the 
initial submission, a school food authority sponsor applying to 
continue program participation need revise its statement only when one 
or more substantive changes have been made in its nondiscrimination 
policies.

III. Food Service Management Companies

1. Registration Requirement

    Section 105(b)(2)(A)(i)(II) of Pub. L. 105-336 removed the Federal 
requirement for registering food service management companies and the 
specific standards for the registration in section 13(l)(2) of the 
NSLA. However, Congress allowed States the discretion to require 
registration and to implement their own registration procedures. 
Section 105 (b)(2)(C) of Pub. L. 105-336 also removed the requirement 
formerly in section 13(l)(3) of the NSLA that the Secretary maintain a 
list of food service management companies that have been seriously 
deficient while participating in the SFSP.
    Accordingly, this rule revises Sec. 225.6(g) to make the 
registration of food service management companies optional rather than 
mandatory. Also, the State agency reporting requirement concerning food 
service management companies at Sec. 225.8(d) is removed. To conform 
the appeal procedure requirements to the optional nature of 
registration, we have revised paragraph (a) of Sec. 225.13.

2. Food Service Management Company Contract Requirements

    Section 706(f) of Pub. L. 104-193 amended section 13(f)(5) of the 
NSLA by making a technical change to existing language on requirements 
for inspections of bacteria levels in SFSP meals. The new, more general 
language requires that contracts between SFSP sponsors and food service 
management companies include mandatory periodic inspections of meals in 
order to determine bacteria levels present in meals and conformance 
with standards set by independent agencies or the local health 
department for the locality in which the meals are served.
    Accordingly, this rule revises Sec. 225.6(h)(2)(v) to reflect this 
technical change in the inspections and certifications included in 
contracts between SFSP sponsors and food service management companies.

IV. School Food Authorities

1. Advance Program Payments

    Section 706(e)(2) of Pub. L. 104-193 amended section 13(e)(1) of 
the NSLA to alter the policy governing advance reimbursement payments 
for SFSP school sponsors. The amendment to the NSLA exempts school food 
authorities from the requirement that sponsors and sites conduct 
training before receiving an advance of program payments for their 
second month of operation.
    Before this amendment, a State agency was required to certify that 
all sponsors had conducted training for SFSP personnel on program 
requirements before releasing the second month's advance operating 
costs' payment. Providing the payments helps sponsors to meet program 
expenses, as they occur, and aids them in maintaining a positive cash 
flow.
    This provision in Pub. L. 104-193 has simplified reporting for 
school food authorities and State agencies. However, the training 
requirements that school food authorities must fulfill were not 
affected. In addition, this exemption does not apply to requests for 
advances on administrative costs. To qualify for a second advance 
payment for administrative costs, all sponsors, including schools, must 
continue to certify that their programs operate in accordance with 
their approved administrative budget.
    Accordingly, this rule revises SFSP regulations at 
Sec. 225.9(c)(1)(i) to exclude school food authorities from the 
requirement that sponsors must have conducted training for all sponsor 
and site personnel to be eligible for their second advance operating 
payments.

2. Offer Versus Serve

    The 1996 and 1998 statutes extended the ``offer versus serve'' 
provision to school food authorities that are operating SFSP sites. The 
offer versus serve option has long been a fixture in the National 
School Lunch Program (42 U.S.C. 1758(a)(3)). Section 706(g) of Pub. L. 
104-193 amended section 13(f)(7) of the NSLA to permit school SFSP 
sponsors to use the offer versus serve option only at school sites, on 
the same basis as the option is used during the school year under the 
NSLP. Later, section 105(c) of Pub. L. 105-336 amended the same section 
of the NSLA to expand the offer versus serve option further by allowing 
its use at any site operated by a school food authority.
    This meal planning option provides children the opportunity to 
refuse either one or two food items they do not intend to consume. Its 
use has aided schools in reducing plate waste and food costs in the 
school meals programs. The option can also promote choice and menu 
variety as well as enhance food service productivity. Schools with 
adequate cafeteria facilities and proper supervision are especially 
able to increase their productivity under offer versus serve.

[[Page 72479]]

    In implementing the offer versus serve option in SFSP, lunches and 
suppers served in schools must meet the appropriate meal service 
requirements and nutrition standards of their NSLP, and breakfasts must 
conform with SBP meal service requirements. The option is not permitted 
for snacks. In addition, schools must have utilized the option during 
the school year when serving school meals in order to use it under 
SFSP. Each child must be offered a complete meal and the serving size 
of each item must equal the minimum quantities specified in NSLP and 
SBP regulations. SFSP participants may refuse one or more items of a 
meal, but they may not be encouraged to decline offered items.
    With respect to reimbursement, SFSP meals served under the offer 
versus serve option are eligible for the same reimbursement as other 
SFSP meals. This option does not alter the requirement that school 
sites with accredited summer school programs should participate in the 
NSLP and in that event are not eligible to operate SFSP. A SFSP site 
operated in a school must open its food service to all children 
residing in the area served by the site.
    Accordingly, we have added a new paragraph to Sec. 225.16(g) that 
permits a school food authority to use the ``offer versus serve'' 
option at the SFSP sites it operates. This means that a child may 
refuse one or more items of a meal that he/she does not intend to 
consume. A school food authority must apply this option under its 
school meal program rules. The regulatory language also clarifies that 
the amount of payments made to a school for a meal will not be affected 
by the refusal of an offered item.

3. Single Permanent Agreement/Common Claims Form

    Section 102(d) of Pub. L. 105-336 added section 9(i) to the NSLA to 
establish two requirements with respect to school food authorities 
which administer any combination of the Child Nutrition Programs under 
the same State administering agency. First, the State agency must use a 
single State/local agreement for all programs operated by the school 
food authority under that State agency. This also means that multiple 
programs operated under an alternate State agency must be combined into 
a single agreement. While these agreements are permanent, they may be 
amended as necessary. Second, a State agency must use a common 
reimbursement form to claim meals under all of the programs. 
Previously, single agreements and common claim forms were permitted at 
State agency option for school food authorities administering multiple 
Child Nutrition Programs under a single State agency.
    Congress intended these provisions to provide both State agencies 
and school districts with additional administrative flexibility. In the 
Conference Report for Pub. L. 105-336, the Conference Committee stated 
that when the same school food service personnel administer the SFSP as 
well as the school meal programs, the State agency need not conduct a 
review of the summer program in the same year in which the school food 
service operations have been reviewed and determined to be 
satisfactory. The Conference Committee expected this flexibility to 
result in savings at the State level, but noted that States may conduct 
additional reviews when they deem it appropriate.
    Implementing this provision, we notified State agencies in December 
1998 of a general waiver for two years for this provision as it 
pertains to claims, because many State agencies have insufficient 
computer resources to make the necessary changes due to the potential 
difficulties rising from the preparations for the year 2000. We also 
provided a waiver of the requirement for single agreements until the 
school year 1999-2000, since agreements for the 1998-1999 school year 
had already been signed prior to the passage of Pub. L. 105-336.
    This rule revises Sec. 225.6(e) to require the use of single 
permanent agreements for SFSP school sponsors that report to a single 
State administering agency. We have also revised Sec. 225.9(d) to 
require the use of a single claim form for requesting reimbursement for 
meals or snacks served under multiple child nutrition programs. In 
addition, we have revised )225.7(d)(2) to include the provision for 
State agency review of SFSP sites that are operated by school food 
authorities also operating NSLP.

V. Temporary Assistance for Needy Families (TANF)

    Section 109(g) of Pub. L. 104-193 struck all references in the NSLA 
to the former Aid to Families with Dependent Children (AFDC) program, 
and inserted the term ``State program-funded''. This new terminology 
referred to the block grant program, TANF, that replaced AFDC. The 
summary effect of this provision is that children who had been 
categorically eligible for free SFSP meals under AFDC, continue that 
same eligibility if they are now receiving State-funded (TANF) 
benefits. The stipulation is that the State-funded program has to have 
the same or more restrictive eligibility rules than the AFDC program 
had in effect on June 1, 1995.
    Establishing categorical eligibility for TANF households requires 
the completion of an abbreviated income eligibility statement. Sponsors 
are allowed to determine free meal eligibility using information 
obtained from the TANF agency. The movement to a block grant assistance 
program does not modify existing SFSP eligibility procedures for 
households receiving benefits under the State-funded program. However, 
as stated earlier, the State-funded program eligibility rules must be 
comparable or more restrictive than the AFDC rules that were in effect 
on June 1, 1995.
    In addition to the name change from AFDC to TANF, we are amending 
the list of program benefits that trigger automatic eligibility to 
receive free meals in the SFSP to include the Food Distribution Program 
on Indian Reservations (FDPIR). The FDPIR has the same income standards 
as the Food Stamp Program; the primary difference between the two 
programs is that FDPIR participants receive USDA commodities instead of 
food stamps. Procedurally, FDPIR households apply for SFSP benefits by 
providing their FDPIR identification numbers on the free and reduced 
price application forms, in lieu of family and income information.
    Accordingly, this interim rule makes the following revisions: The 
definition of ``AFDC assistance unit'' is removed at Sec. 225.2 and all 
references to AFDC are removed in this part; new definitions of 
``documentation'', ``FDPIR household'', and ``TANF'' are added at 
Sec. 225.2; Secs. 225.6(c)(3), 225.15(e), and 225.15(f) are amended to 
indicate that children of families receiving food stamp, FDPIR, or TANF 
benefits are automatically eligible for free meals in SFSP. Finally, we 
have revised Sec. 225.15(f) by simplifying the language where possible 
and reorganizing the information to improve the readability of 
information that must be printed on the application for Program 
benefits or must be given in written materials to applicant households. 
A conforming change is made to the definition of ``current income'' in 
Sec. 225.2.

VI. National Youth Sports Program (NYSP)

    Section 706(d) of Pub. L. 104-193 struck the provision in section 
13(c) of the NSLA allowing SFSP participation by NYSP participants 
during the academic year. The NSLA was further amended to specify that 
NYSP children are eligible for free meals on showing

[[Page 72480]]

residence in areas in which poor economic conditions exist or by 
showing income eligibility statements enrolling them in the NYSP.
    The NYSP is a program of supervised sports training for low-income 
youths, administered by the National Collegiate Athletic Association 
through grant awards by the U.S. Department of Health and Human 
Services. In 1988, Congress extended SFSP sponsor eligibility to public 
and private nonprofit colleges and universities that participate in 
NYSP. The following year, Congress allowed year-round SFSP 
participation by college and university sponsors that had implemented 
drug awareness and counseling projects as part of NYSP. These sponsors 
could receive SFSP reimbursement for as many as two meals per day on no 
more than thirty days between October 1 and April 30.
    With the enactment of section 706(d) of Pub. L. 104-193, effective 
August 22, 1996, authority expired for academic-year participation in 
SFSP by NYSP sponsors. Thus, NYSP sponsors may participate in the SFSP 
only during the months of May through September and are subject to the 
same rules governing other sponsors.
    This rule removes the definition in Sec. 225.2 of ``Academic-Year 
NYSP'' and all references to ``academic year'' or ``NYSP sponsors 
participating during the months of October through April'' from this 
part.
    With regard to the issue of NYSP site eligibility, section 706(d) 
of Pub. L. 104-193 amended the NSLA to specify that all participants at 
a NYSP site may receive reimbursable SFSP meals, if at least 50 percent 
reside in areas where poor economic conditions exist, or if at least 50 
percent are individually determined to meet income eligibility 
guidelines. With this modification in the eligibility criteria, NYSP 
sponsors may qualify a potential site for program participation using 
either school data or census data. Such data would reveal that at least 
50 percent of the children in the local area from which the site would 
draw its attendance are eligible for free and reduced price meals. NYSP 
sponsors may also collect free and reduced price program applications 
to document the site's eligibility.
    Accordingly, this rule revises the definition of ``NYSP feeding 
site'' at Sec. 225.2 and the application requirements at 
Sec. 225.6(c)(2)(v) to specify that sites may be qualified for program 
participation by means of enrollment or area conditions.

VII. Consolidated Benefits for Homeless Children

    Section 107(j)(2)(A) of Pub. L 105-336 amended sections 13(a)(3)(C) 
and 17 of the NSLA by transferring authority over SFSP homeless sites 
to the Child and Adult Care Food Program (CACFP). Section 
107(j)(2)(C)(i) of Pub. L. 105-336 also abolished the Homeless Children 
Nutrition Program under section 17B of the NSLA. Section 107(g) and 
added a new paragraph (q), ``Participation by emergency shelters'', to 
section 17 of the NSLA to consolidate the administration and delivery 
of benefits to homeless children under a single program. Moving 
homeless sites from SFSP into CACFP has provided an opportunity to 
expand the delivery of important nutrition benefits to children through 
the age of 12 because CACFP benefits are provided year-round. It allows 
sponsors to serve each eligible child up to three meals or two meals 
and one snack, each day.
    This change was effective July 1, 1999. We issued guidance to State 
agencies on March 30, 1999, on the implementation of provisions 
concerning homeless children in CACFP and the transition of program 
authority from the SFSP to CACFP. We urged State agencies to encourage 
sponsors of homeless sites participating in the SFSP to apply to 
participate in CACFP in order to continue receiving meal benefits for 
children after June 30, 1999. It should be clarified, however, that a 
homeless shelter may still operate the SFSP, but it must meet other 
criteria as an open or enrolled SFSP site, as described in 
Sec. 225.6(c) of the regulations. There no longer exists a special 
category of homeless SFSP sites.
    This rule implements the transfer of homeless provisions from the 
SFSP to the CACFP by deleting references to homeless emergency shelters 
found at Secs. 225.2, 225.6(c)(2), 225.6(d), 225.8(e), 225.14(c)(3), 
225.14(d)(5), 225.15(a)(2), and 225.16(b)(2).

VIII. Program Payments

1. Per-Meal Reimbursements

    Section 706(b) of Pub. L. 104-193 amended section 13(b) of the NSLA 
to set the reimbursement rates for each breakfast, lunch, snack, and 
supper served in the SFSP. It also required an adjustment in the rates 
on January 1, 1997, and each January 1 thereafter to the nearest lower 
cent increment, based on the changes in the Consumer Price Index for 
all Urban Consumers for the previous 12-month period (ending November 
30). The stipulation of the law that reimbursement rates be adjusted to 
the nearest lower cent represents a change from the previous 
requirement of rounding down to the nearest quarter cent.
    The per-meal payment changes made by Pub. L. 104-193 do not require 
a corresponding amendment of the SFSP regulations. The adjustment of 
the reimbursement rates was reflected in the SFSP Rates Notice that was 
published in the Federal Register on January 9, 1997 (63 FR 71616).

2. Adjustments to Program Reimbursement Rates for Alaska and Hawaii

    Section 104(a)(1) of Pub. L. 105-336 amended section 12(f) of the 
NSLA to allow adjustments to SFSP rates for sponsors in Alaska and 
Hawaii. The Department has long had the statutory authority to make 
these adjustments in the other child nutrition programs. The State 
agencies in Alaska and Hawaii have already demonstrated the higher cost 
of providing meals in those areas in the context of the other Child 
Nutrition Programs, and the Department has adjusted rates for those 
States.
    Through the 1998 reauthorization statute, this authority was 
extended to SFSP. Beginning January 1, 1999, SFSP operating and 
administrative rates were adjusted upward to reflect the higher cost of 
providing meals in Alaska and Hawaii. The adjustments were announced in 
the annual SFSP Rate Notice that was published in the Federal Register 
on December 29, 1998 (63 FR 71616).
    Accordingly, this rule revises Sec. 225.9(d)(8) to reference the 
higher reimbursement rates that are provided to Alaska and Hawaii.

IX. Number of Meals and Meal Pattern Requirements

1. Number of Meals for Camps and Migrant Sites

    Section 706(c)(1) of Pub. L. 104-193 amended section 13(b)(2) of 
the NSLA to reduce the number of meals per day that camps and migrant 
feeding sites may claim for reimbursement. Congress stipulated that 
these sites may only be reimbursed for up to three meals or two meals 
and one snack per day. Previously, these sites were eligible for up to 
four meals per child per day. This reduction more closely aligns 
reimbursable meals for sponsors of camps and migrant sites with the 
reimbursements that sponsors of other SFSP sites may claim on a daily 
basis. We notified State agencies of this change on August 13, 1996 by 
a guidance memorandum.
    Accordingly, we have revised paragraphs (b)(1)(i) and (b)(5) in

[[Page 72481]]

Sec. 225.16 to conform to this statutory change.

2. Conforming Changes in Nomenclature and Meal Pattern Requirements

    Finally, we are making two revisions in this rule to update the 
language in this part to conform to changes in other Child Nutrition 
Programs.
    First, we have changed the use of the word ``supplement'' or 
``supplements'' to ``snack'' or ``snacks'', which are the preferred 
terms to use in reference to the light meal that is served between 
lunch and supper in the SFSP. While the NSLA uses the term supplement, 
we believe most people are more familiar with the term snack. This 
change is made wherever these terms appear throughout this part. This 
language conforms to the new Child Nutrition Program that was 
authorized by sections 107(h) and 108(a)(1) and (2) of Pub. L. 105-336 
and that is referred to the ``Afterschool Snack Program'' within the 
NSLP, section 17A(a) of the NSLA (42 U.S.C. 1766a(a)), and the ``At-
Risk Afterschool Care Program'' within the CACFP, section 17(r) of the 
NSLA (42 U.S.C. 1766(r).
    The second change we have made in this rule is to conform the egg 
to meat or meat alternative equivalencies in the SFSP meal patterns for 
breakfast, lunch, snack, and supper to those equivalencies used in the 
NSLP at Sec. 210.10(k)(2) or the School Breakfast Program (SBP) at 
Sec. 220.8(g)(iii)(B)(a). A similar revision is being made to these 
equivalencies in the CACFP in another rulemaking. These minor revisions 
to the meal pattern requirements have been made in Sec. 225.16 of the 
SFSP Regulations.
    Currently, the egg to meat/meat alternate equivalencies at 
Sec. 225.16(d) of the SFSP regulations, allow one large egg to equal 
either one ounce or two ounces of meat/meat alternates, depending on 
the meal being served. However, the regulations for the NSLP and the 
SBP include the following standard egg to meat/meat alternate 
equivalencies: one large egg to two ounces of meat/meat alternate and 
one-half large egg to one ounce of meat/meat alternate. Accordingly, we 
have revised Sec. 225.16(d) to reflect these equivalencies. We believe 
that this change, though minor in scope, increases consistency in the 
standards across child nutrition programs. It should also eliminate any 
confusion that variable equivalencies among the child nutrition 
programs may have caused.

X. Procedural Matters

Executive Order 12866

    This interim 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), Pub. 
L. 104-4, requires 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 generally must 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 the Food and Nutrition Service to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the 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 rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

Executive Order 12372

    The Summer Food Service Program is listed in the Catalog of Federal 
Domestic Assistance under No. 10.559. For the reasons set forth in the 
final rule in 7 CFR part 3015, subpart V, and related notices (48 FR 
29114 and 49 FR 2276), this program is included in the scope of 
Executive Order 12372, which requires intergovernmental consultation 
with State and local officials.

Regulatory Flexibility Act

    This interim rule has been reviewed with regard to the requirements 
of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Samuel 
Chambers, Jr., Administrator of the Food and Nutrition Service (FNS), 
has certified that this rule will not have a significant economic 
impact on a substantial number of small entities. Simplifying and 
streamlining the administration of the SFSP is the intended effect of 
this rule when implemented.

Executive Order 12988

    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This 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 otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the ``Dates'' section of the preamble of the 
rule. Prior to any judicial challenge to the provisions of this rule or 
the applications of its provisions, all applicable administrative 
procedures must be exhausted. This includes any administrative 
procedures available through State or local governments. SFSP 
administrative procedures are set forth at: (1) 7 CFR 225.13, which 
outlines appeals procedures for use by a sponsor or a food service 
management company; and (2) 7 CFR 225.17 and 7 CFR part 3015, which 
address administrative appeal procedures for disputes involving 
procurement by State agencies and sponsors.

Paperwork Reduction Act

    This interim rule seeks to reduce the reporting requirements for 
State agencies and service institutions administering the SFSP. In 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), 
the Food and Nutrition Service announces its intention to request the 
Office of Management and Budget's (OMB) review of the information 
collections associated with the implementation of the interim rule, 
Summer Food Service Program: Implementation of Legislative Reforms.
    Written comments on this notice must be received by February 28, 
2000, to be assured of consideration.
    Comments concerning the information collection aspects of this 
interim rule should be sent to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), Room 3208, New 
Executive Office Building, Washington, DC 20503, Attention: Lori 
Schack, Desk Officer for FNS. A Copy of these comments may also be sent 
to Mr. Eadie at the address listed in the ADDRESSES section of this 
preamble. Commentors are asked to separate their comments on the 
information collection requirements from their comments on the 
remainder of this interim rule.
    OMB is required to make a decision concerning the collection of 
information contained in this interim rule between 30 and 60 days after 
the publication of this document in the Federal Register.

[[Page 72482]]

Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the interim 
regulation.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of collection of information on those who are to 
respond, including through the use of appropriate automated, 
electronic, mechanical or other technological collection techniques or 
other forms of information technology.
    The title, description, and respondent description of the 
information collections are shown below with an estimate of the annual 
reporting burdens. Included in the estimates is the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed and completing and reviewing the collection 
of information.
    Title: Summer Food Service Program.
    OMB Number: 0584-0280.
    Expiration Date: 12/31/99.
    Type of Request: Revision of a currently approved collection.
    Abstract: The interim rule, Summer Food Service Program: 
Implementation of Legislative Reforms, amends the regulations for the 
Summer Food Service Program (SFSP) to incorporate changes made by the 
Healthy Meals for Healthy Americans Act of 1994 (Pub. L. 103-448), the 
Personal Responsibility and Work Reconciliation Act of 1996 (Pub. L. 
104-193), and the William F. Goodling Child Nutrition Reauthorization 
Act of 1998 (Pub. L. 105-336). Section 114(e) of Public Law 103-448 
significantly decreased the number of requirements to be included in 
each State's management and administration plan. Section 703 of Public 
Law 104-193 prohibits requiring the annual submission of a free and 
reduced price policy statement after the initial submission, unless 
there is a substantive change. Section 102(d) of Public Law 105-336 
amended section 9 of the National School Lunch Act to require State 
agencies to use a single State/local agreement for all programs 
operated by the same school food authority under the administration of 
the State agency. The Section also requires State agencies to use a 
common reimbursement form to claim meals served under the programs. The 
affected SFSP requirements and their applicable burden changes are 
listed in the table below:

                                                            Estimated Annual Reporting Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  Average       Annual
                                                       Section                  Annual number of  respondents        Annual     burden per      burden
                                                                                                                   frequency     response       hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
State agencies (SAs), by Feb 15 of
 each year, submit to FNSRO a program
 Management and Administration Plan
 for that fiscal year:
    Total Existing....................  7 CFR 225.4 (a)....................  50 SAs.............................            1        80            4,000
    Total Proposed....................  7 CFR 225.4 (a)....................  50 SAs.............................            1        40            2,000
Sponsor must submit a statement of its
 policy for serving free meals:
    Total Existing....................  7 CFR 225.6(c)(3)..................  3,616 sponsors.....................            1         1            3,616
    Total Proposed....................  7 CFR 225.6(c)(3)..................  0..................................            0         0                0
Sponsors approved for participation in
 SFSP enter into written agreements
 with SAs to operate program in
 accordance with regulatory
 requirements (FNS-80):
    Total Existing....................  7 CFR 225.6 (e)....................  3,616 sponsors.....................            1          .123          445
    Total Proposed....................  7 CFR 225.6 (e)....................  3,000 sponsors.....................            1          .123          369
SAs forward the final claim form for
 reimbursement:
    Total Existing....................  7 CFR 225.9(b) (5).................  50 SAs.............................            3         1              150
    Total Proposed....................  7 CFR 225.9(b) (5).................  40 SAs.............................            3         1              120
                                                                                                                              --------------------------
        Total Existing Burden for 7     ...................................  ...................................  ...........  ............      301,404
         CFR Part 225.
        Total Proposed Burden for 7     ...................................  ...................................  ...........  ............      295,682
         CFR Part 225.
        Difference....................  ...................................  ...................................  ...........  ............       -5,722
--------------------------------------------------------------------------------------------------------------------------------------------------------

Good Cause Determination

    This interim rule is being issued without prior notice or public 
comment under authority of 5 U.S.C. 553(b)(3)(a) and (b). On December 
8, 1994, and September 26, 1995, guidance memoranda were issued to 
State agencies on implementing SFSP provisions of the Healthy Meals for 
Healthy Americans Act of 1994, Pub. L. 103-448. To aid the State 
agencies in implementing the requirements of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 
104-193, guidance memoranda were issued on August 13, 1996, January 27, 
1997, and May 19, 1997. Finally, on December 3, 1998, a guidance 
memorandum was issued for use by State agencies in implementing SFSP 
provisions of the William F. Goodling Child Nutrition Reauthorization 
Act of 1998, Pub. L. 105-336. In each instance, the guidance memoranda 
were implementing statutory provisions that made nondiscretionary 
changes to the SFSP. Based upon this determination, the Administrator 
of FNS finds good cause to adopt this rule on an interim basis without 
prior public comment because such comment is unnecessary. In developing 
final rulemaking, however, the Administrator believes a

[[Page 72483]]

solicitation of public comment would be beneficial given that States 
and local entities have acquired substantial operational experience to 
date. As stated earlier in this preamble, comments received within 180 
days of publication will be considered.

List of Subjects in 7 CFR Part 225

    Food and Nutrition Service, Food assistance programs, Grant 
programs-health, Infants and children, Labeling, Reporting and 
recordkeeping requirements.

    Accordingly, 7 CFR Part 225 is amended as follows:

PART 225--SUMMER FOOD SERVICE PROGRAM

    1. The authority citation for part 225 continues to read as 
follows:

    Authority: Secs. 9, 13, and 14, National School Lunch Act, as 
amended (42 U.S.C. 1758, 1761, and 1762a).

    2. In Sec. 225.2:
    a. Remove the definitions of Academic-Year NYSP, AFDC assistance 
unit, and Homeless feeding site;
    b. Revise the definitions of Current income, Documentation, NYSP 
feeding site, Private nonprofit organization, and Sponsor; and
    c. Add in alphabetical order the new definitions of FDPIR household 
and TANF.
    The additions and revisions read as follows:


Sec. 225.2  Definitions.

* * * * *
    Current income means income, as defined in Sec. 225.15(f)(4)(vi), 
received during the month prior to application for free meals. If such 
income does not accurately reflect the household's annual income, 
income must be based on the projected annual household income. If the 
prior year's income provides an accurate reflection of the household's 
current annual income, the prior year may be used as a base for the 
projected annual income.
* * * * *
    Documentation means:
    (a) The completion of the following information on a free meal 
application:
    (1) Names of all household members;
    (2) Income received by each household member, identified by source 
of income (such as earnings, wages, welfare, pensions, support 
payments, unemployment compensation, social security and other cash 
income);
    (3) The signature of an adult household member; and
    (4) The social security number of the adult household member who 
signs the application, or an indication that he/she does not possess a 
social security number; or
    (b) For a child who is a member of a household receiving food 
stamp, FDPIR, or TANF benefits, ``documentation'' means completion of 
only the following information on a free meal application:
    (1) The name(s) and appropriate food stamp, FDPIR, or TANF case 
number(s) for the child(ren); and
    (2) the signature of an adult member of the household.
* * * * *
    FDPIR household means any individual or group of individuals which 
is currently certified to receive assistance as a household under the 
Food Distribution Program on Indian Reservations.
* * * * *
    NYSP feeding site means a site at which all of the children 
receiving Program meals are enrolled in the NYSP and which qualifies 
for Program participation on the basis of documentation that the site 
meets the definition of ``areas in which poor economic conditions 
exist'' as provided in this section.
* * * * *
    Private nonprofit organization means an organization (other than 
private nonprofit residential camps, school food authorities, or 
colleges or universities participating in the NYSP) which meets the 
definition of ``private nonprofit'' in this section and which:
    (a) Administers the Program:
    (1) At no more than 25 sites, with not more than 300 children being 
served at any approved meal service at any one site; or
    (2) With a waiver granted by the State in accordance with 
Sec. 225.6(b)(ii), not more than 500 children being served at any 
approved meal service at any one site;
    (b) Operates in areas where a school food authority has not 
indicated that it will operate the Program in the current year;
    (c) Exercises full control and authority over the operation of the 
Program at all sites under its sponsorship;
    (d) Provides ongoing year-round activities for children or 
families;
    (e) Demonstrates that it possesses adequate management and the 
fiscal capacity to operate the Program; and
    (f) Meets applicable State and local health, safety, and sanitation 
standards.
* * * * *
    Sponsor means a public or private nonprofit school food authority, 
a public or private nonprofit residential summer camp, a unit of local, 
municipal, county or State government, a public or private nonprofit 
college or university currently participating in the NYSP, or a private 
nonprofit organization which develops a special summer or other school 
vacation program providing food service similar to that made available 
to children during the school year under the National School Lunch and 
School Breakfast Programs and which is approved to participate in the 
Program. Sponsors are referred to in the Act as ``service 
institutions''.
* * * * *
    TANF means the State funded program under part A of title IV of the 
Social Security Act that the Secretary determines complies with 
standards established by the Secretary that ensure that the standards 
under the State program are comparable to or more restrictive than 
those in effect on June 1, 1995. This program is commonly referred to 
as Temporary Assistance for Needy Families, although States may refer 
to the program by another name.
* * * * *
    3. In Sec. 225.3, amend paragraph (b) by removing the third 
sentence and by revising the second sentence to read as follows:


Sec. 225.3  Administration.

* * * * *
    (b) * * * Each State agency must notify the Department by November 
1 of the fiscal year regarding its intention to administer the 
Program.* * *
* * * * *
    4. In Sec. 225.4, revise paragraph (d) to read as follows:


Sec. 225.4  Program management and administration plan.

* * * * *
    (d) The Plan must include, at a minimum, the following information:
    (1) The State's administrative budget for the fiscal year, and the 
State's plan to comply with any standards prescribed by the Secretary 
for the use of these funds;
    (2) The State's plan for use of Program funds and funds from within 
the State to the maximum extent practicable to reach needy children;
    (3) The State's plans for providing technical assistance and 
training to eligible sponsors;
    (4) The State's plans for monitoring and inspecting sponsors, 
feeding sites, and food service management companies and for ensuring 
that such companies do not enter into contracts for more meals than 
they can provide effectively and efficiently;
    (5) The State's plan for timely and effective action against 
Program violators;

[[Page 72484]]

    (6) The State's plan for ensuring the fiscal integrity of sponsors 
not subject to auditing requirements prescribed by the Secretary;
    (7) The State's plan for ensuring compliance with the food service 
managment company procurement monitoring requirements set forth at 
Sec. 225.6(h); and
    (8) An estimate of the State's need, if any, for monies available 
to pay for the cost of conducting health inspections and meal quality 
tests.
    5. In Sec. 225.6:
    a. Revise the last sentence in paragraph (a)(2);
    b. Remove paragraph (a)(3) and redesignate paragraphs (a)(4) and 
(a)(5) as paragraphs (a)(3) and (a)(4), respectively;
    c. Revise newly redesignated paragraph (a)(4);
    d. Revise paragraph (b)(1), (b)(5), and (b)(6);
    e. Amend paragraph (c)(2)(ii) introductory text by removing the 
words ``or a homeless feeding site'';
    f. Revise paragraph (c)(2)(iv) and (c)(2)(v), paragraph (c)(3) 
introductory text, paragraph (c)(3)(i), paragraph (c)(3)(ii) 
introductory text, and paragraph (c)(3)(ii)(B);
    g. Remove the words ``or a homeless feeding site,'' from paragraph 
(d)(1)(i);
    h. Revise paragraph (e) introductory text and paragraphs (e)(1) and 
(e)(2);
    i. Redesignate paragraphs (e)(3) through (e)(15) as paragraphs 
(e)(4) through (e)(16), and add a new paragraph (e)(3);
    j. Revise paragraph (g); and
    k. Revise paragraph (h)(2)(v).
    The revisions and addition read as follows:


Sec. 225.6  State agency responsibilities.

    (a) * * *
    (2) * * * State agencies shall identify priority outreach areas in 
accordance with FNS guidance and target outreach efforts in these 
areas.
* * * * *
    (4) In addition to the warnings specified in paragraph (a)(3) of 
this section, State agencies may include the following information on 
applications and pre-application materials distributed to prospective 
sponsors:
    (i) The criminal penalties and provisions established in section 
12(g) of the National School Lunch Act (42 U.S.C. 1760(g)) that states 
substantially: Whoever embezzles, willfully misapplies, steals, or 
obtains by fraud any funds, assets, or property that are the subject of 
a grant or other form of assistance under this Act or the Child 
Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), whether received 
directly or indirectly from the United States Department of 
Agriculture, or whoever receives, conceals, or retains such funds, 
assets, or property to personal use or gain, knowing such funds, 
assets, or property have been embezzled, willfully misapplied, stolen, 
or obtained by fraud shall, if such funds, assets, or property are of 
the value of $100 or more, be fined not more than $25,000 or imprisoned 
not more than five years, or both, or, if such funds, assets, or 
property are of a value of less than $100, shall be fined not more than 
$1,000 or imprisoned for not more than one year, or both.
    (ii) The procedures for termination from Program participation of 
any site or sponsor which is determined to be seriously deficient in 
its administration of the Program. In addition, the application may 
also state that appeals of sponsor or site terminations will follow 
procedures mandated by the State agency and will also meet the minimum 
requirements of 7 CFR 225.13.
    (b) Approval of sponsor applications. (1) Each State agency must 
inform all of the previous year's sponsors which meet current 
eligibility requirements and all other potential sponsors of the 
deadline date for submitting a written application for participation in 
the Program. The State agency must require that all applicant sponsors 
submit written applications for Program participation to the State 
agency by June 15. However, the State agency may establish an earlier 
deadline for the Program application submission.
* * * * *
    (5) The State agency must use the following priority system in 
approving applicants to operate sites that propose to serve the same 
area or the same enrolled children:
    (i) Public or nonprofit private school food authorities;
    (ii) Public agencies and private nonprofit organizations that have 
demonstrated successful program performance in a prior year;
    (iii) New public agencies; and
    (iv) New private nonprofit organizations.
    (v) If two or more sponsors that qualify under paragraph (b)(5)(ii) 
of this section apply to serve the same area, the State agency must 
determine on a case-by-case basis which sponsor or sponsors it will 
select to serve the needy children in the area. The State agency should 
consider the resources and capabilities of each applicant.
    (6) The following limitations apply on the number of sites and 
children that may be served per day:
    (i) The State agency must not approve any school food authority or 
public agency to operate more than 200 sites or to serve more than an 
average of 50,000 children per day. However, the State agency may 
approve exceptions if the applicant can demonstrate that it has the 
capability of managing a program larger than these limits.
    (ii) The State agency must not approve any private nonprofit 
organization to operate more than 25 sites. In addition, the State 
agency must not approve any private nonprofit organization to serve 
more than 300 children at any one site for any approved meal service. 
However, the State agency may grant a waiver to allow up to 500 
children served at any one site operated by a private nonprofit 
organization. To be approved for the waiver, the private nonprofit 
organization must demonstrate that it is fully capable of managing a 
site with more than 300 children and that there are no other sponsors 
capable of serving the children in excess of 300.
* * * * *
    (c) * * *
    (2) * * *
    (iv) For sites that serve homeless children, information sufficient 
to demonstrate that the sites are not residential child care 
institutions, as defined in paragraph (c) of the definition of School 
in Sec. 210.2 of this chapter. If cash payments, food stamps, or any 
in-kind service are required of any meal recipient at these sites, 
sponsors must describe the method(s) used to ensure that no such 
payments or services are received for any Program meal served to 
children. In addition, sponsors must certify that these sites employ 
meal counting methods to ensure that reimbursement is claimed only for 
meals served to children.
    (v) For NYSP sites, certification from the sponsor that all the 
children who will receive Program meals are enrolled participants in 
the NYSP.
* * * * *
    (3) Each applicant must submit a statement of nondiscrimination in 
its policy of serving meals to children. The statement must consist of 
an assurance that all children are served the same meals and that there 
is no discrimination in the course of the food service. A school 
sponsor must submit the policy statement only once, with the initial 
application to participate as a sponsor. However, if there is a 
substantive change in the school's free and reduced price policy, a 
revised policy statement must be provided at the State agency's 
request.

[[Page 72485]]

    (i) In addition to the policy of service/nondiscrimination 
statement described in paragraph (c)(3) of this section, all applicants 
except camps must include a statement that the meals served are free at 
all sites.
    (ii) In addition to the policy of service/nondiscrimination 
statement described in paragraph (c)(3) of this section, all applicants 
that are camps that charge separately for meals must include the 
following:
* * * * *
    (B) A description of the method or methods to be used in accepting 
applications from families for Program meals. Such methods must ensure 
that households are permitted to apply on behalf of children who are 
members of households receiving food stamp, FDPIR, or TANF benefits 
using the categorical eligibility procedures described in 
Sec. 225.15(f).
* * * * *
    (e) State-Sponsor Agreement. A sponsor approved for participation 
in the Program must enter into a written agreement with the State 
agency. If the sponsor is a school food authority that operates more 
than one child nutrition program (e.g., the National School Lunch 
Program, the School Breakfast Program, or the Child and Adult Care Food 
Program) under a single State agency, a single permanent agreement that 
includes all the child nutrition programs must be executed with the 
State agency, as described in Sec. 210.9(b) of this chapter. All 
sponsors must agree in writing to:
    (1) Operate a nonprofit food service during any period from May 
through September for children on school vacation; or, at any time of 
the year, in the case of sponsors administering the Program under a 
continuous school calendar system;
    (2) For school food authorities, offer meals which meet the 
requirements and provisions set forth in Sec. 225.16 during times 
designated as meal service periods by the sponsor, and offer the same 
meals to all children;
    (3) For all other sponsors, serve meals which meet the requirements 
and provisions set forth in Sec. 225.16 during times designated as meal 
service periods by the sponsor, and serve the same meals to all 
children;
* * * * *
    (g) Food service management company registration. A State agency 
may require each food service management company, operating within the 
State, to register based on State procedures. A State agency may 
further require the food service management company to certify that the 
information submitted on its application for registration is true and 
correct and that the food service management company is aware that 
misrepresentation may result in prosecution under applicable State and 
Federal statutes.
    (h) * * *
    (2) * * *
    (v) The food service management company must have State or local 
health certification for the facility in which it proposes to prepare 
meals for use in the Program. It must ensure that health and sanitation 
requirements are met at all times. In addition, the food service 
management company must ensure that meals are inspected periodically to 
determine bacteria levels present in the meals and that the bacteria 
levels found to be present in the meals conform with the standards set 
by local health authorities. The results of the inspections must be 
submitted promptly to the sponsor and to the State agency.
* * * * *
    6. In Sec. 225.7:
    a. Remove the last sentence in paragraph (a);
    b. Amend paragraph (d)(2) introductory text by adding a sentence 
before the last sentence;
    c. Remove paragraph (d)(2)(ii); and
    d. Redesignate paragraph (d)(2)(iii) as paragraph (d)(2)(ii).
    The addition reads as follows:


Sec. 225.7  Program monitoring and assistance.

* * * * *
    (d) * * *
    (2) Sponsor and site reviews. * * * When the same school food 
authority personnel administer this Program as well as the National 
School Lunch Program (part 210 of this chapter), the State agency is 
not required to conduct a review of the Program in the same year in 
which the National School Lunch Program operations have been reviewed 
and determined to be satisfactory. * * *
* * * * *


Sec. 225.8  [Amended]

    7. In Sec. 225.8, remove paragraphs (d) and (e).
    8. In Sec. 225.9:
    a. Amend paragraph (c)(1)(i) by removing the second sentence and 
adding in its place two new sentences;
    b. Remove paragraph (d)(10);
    c. Redesignate paragraphs (d)(1) through (d)(9) as paragraphs 
(d)(2) through (d)(10);
    d. Add a new paragraph (d)(1);
    e. Revise newly redesignated paragraphs (d)(7), (d)(8) and (d)(9); 
and
    f. Amend the second sentence in paragraph (f) by removing the words 
``paragraph (d)(4)'' and adding in their place ``paragraph (d)(5)''.
    The revisions read as follows:


Sec. 225.9  Program assistance to sponsors.

* * * * *
    (c) * * *
    (1) Operating costs. (i) * * * Except for school food authorities, 
sponsors must conduct training sessions before receiving the second 
advance payment. Training sessions must cover Program duties and 
responsibilities for the sponsor's staff and for site personnel.* * *
* * * * *
    (d) * * *
    (1) School food authorities that operate the Program, and operate 
more than one child nutrition program under a single State agency, must 
use a common claim form (as provided by the State agency) for claiming 
reimbursement for meals served under those programs.
* * * * *
    (7) Payments to a sponsor for operating costs must equal the lesser 
of the following totals:
    (i) The actual operating costs incurred by the sponsor; or
    (ii) The sum of the amounts derived by multiplying the number of 
meals, by type, actually served under the sponsor's program to eligible 
children by the current rates for each meal type, as adjusted in 
accordance with paragraph (d)(9) of this section.
    (8) Payments to a sponsor for administrative costs must equal the 
lowest of the following totals:
    (i) The amount estimated in the sponsor's approved administrative 
budget (taking into account any amendments);
    (ii) The actual administrative costs incurred by the sponsor; or
    (iii) The sum of the amounts derived by multiplying the number of 
meals, by type, actually served under the sponsor's program to eligible 
children by the current administrative rates for each meal type, as 
adjusted in accordance with paragraph (d)(9) of this section. Sponsors 
must be eligible to receive additional administrative reimbursement for 
each meal served to participating children at rural or self-preparation 
sites, and the rates for such additional administrative reimbursement 
must be adjusted in accordance with paragraph (d)(9) of this section.
    (9) On each January 1, or as soon thereafter or as practicable, FNS 
will publish a notice in the Federal Register announcing any adjustment 
to the reimbursement rates described in paragraphs (d)(7)(ii) and 
(d)(8)(iii) of this section. Adjustments will be based

[[Page 72486]]

upon changes in the series for food away from home of the Consumer 
Price Index(CPI) for all urban consumers since the establishment of the 
rates. Higher rates will be established for Alaska and Hawaii, based on 
the CPI for those States.
* * * * *


Sec. 225.13  [Amended]

    9. In Sec. 225.13, amend the first sentence of paragraph (a) by 
adding the words ``, if applicable'' after the word ``registration'' 
wherever it appears.
    10. In Sec. 225.14:
    a. Amend paragraphs (c)(3) and (d)(1) by removing the words ``or a 
homeless feeding site'';
    b. Redesignate paragraphs (d)(6) through (d)(7) as paragraphs 
(d)(5) through (d)(6), respectively; and revise them to read as 
follows:


Sec. 225.14  Requirements for sponsor participation.

* * * * *
    (d) * * *
    (5) If the sponsor administers NYSP sites, it must ensure that all 
children at such sites are enrolled participants in the NYSP.
    (6) If the sponsor is a private nonprofit organization, it must 
certify that it:
    (i) Administers the Program:
    (A) At no more than 25 sites, with not more than 300 children being 
served at any approved meal service at any one site or,
    (B) With a waiver granted by the State agency in accordance with 
Sec. 225.6(b)(ii), not more than 500 children being served at any 
approved meal service at any one site;
    (ii) Operates in areas where a school food authority has not 
indicated that it will operate the Program in the current year;
    (iii) Exercises full control and authority over the operation of 
the Program at all sites under its sponsorship;
    (iv) Provides ongoing year-round activities for children or 
families;
    (v) Demonstrates that it possesses adequate management and the 
fiscal capacity to operate the Program; and
    (vi) Meets applicable State and local health, safety, and 
sanitation standards.
    11. In Sec. 225.15:
    a. Amend paragraph (a)(2) by removing the second sentence and by 
adding in its place two new sentences;
    b. Amend the last sentence of paragraph (e) by removing the words 
``food stamp households or AFDC assistance units'' and adding in their 
place ``households receiving food stamp, FDPIR, or TANF benefits'';
    c. Revise paragraph (f);
    d. Remove paragraph (g)(2) and redesignate paragraphs (g)(3) 
through (g)(8) as paragraphs (g)(2) through (g)(7), respectively;
    e. Amend newly redesignated paragraph (g)(2) by removing the words 
``except a private nonprofit organization'' in the first sentence;
    f. Remove newly redesignated paragraph (g)(4)(x) and redesignate 
newly redesignated paragraphs (g)(4)(xi) through (g)(4)(xiii) as 
paragraphs (g)(4)(x) through (g)(4)(xii), respectively.
    The revisions and addition read as follows:


Sec. 225.15  Management responsibilities of sponsors.

    (a) * * *
    (2) * * * In addition, the sponsor must ensure that records of any 
site serving homeless children accurately reflect commodity allotments 
received as a ``charitable institution'', as defined in Secs. 250.3 and 
250.41 of this chapter. Commodities received for Program meals must be 
based only on the number of eligible children's meals served. * * *
* * * * *
    (f) Application for free Program meals.--(1) Purpose of application 
form. The application is used to determine the eligibility of children 
attending camps and the eligibility of sites that are not open sites as 
defined in paragraph (a) of the definition of ``areas in which poor 
economic conditions exist'', in Sec. 225.2. In these situations, 
parents or guardians of children enrolled in camps or these other sites 
must be given application forms to provide information described in 
paragraph (f)(2) or (f)(3) of this section, as applicable. Applications 
are not necessary if other information sources are available and can be 
used to determine eligibility of individual children in camps or sites.
    (2) Application procedures based on household income. The household 
member completing the application on behalf of the child enrolled in 
the Program must provide the following information:
    (i) The names of all children for whom application is made;
    (ii) The names of all other household members;
    (iii) The social security number of the adult household member who 
signs the application or an indication that the household member does 
not have a social security number;
    (iv) The income received by each household member identified by 
source of income;
    (v) The signature of an adult household member;
    (vi) The date the application is completed and signed.
    (3) Application based on the household's receipt of food stamp, 
FDPIR, or TANF benefits. Households may apply on the basis of receipt 
of food stamp, FDPIR, or TANF benefits by providing the following 
information:
    (i) The name(s) and food stamp, FDPIR, or TANF case number(s) of 
the child(ren) who are enrolled in the Program; and
    (ii) The signature of an adult household member.
    (4) Information or notices required on application forms. 
Application forms or descriptive materials given to households about 
applying for free meals must contain the following information:
    (i) The family-size and income levels for reduced price school meal 
eligibility with an explanation that households with incomes less than 
or equal to these values are eligible for free Program meals (Note: The 
income levels for free school meal eligibility must not be included on 
the application or in other materials given to the household).

    (ii) A statement that a child who is a member of a household that 
receives food stamp, FDPIR, or TANF benefits is automatically eligible 
to receive free meals in the Program;
    (iii) A statement that reads, ``In certain cases, foster children 
are eligible for free meals regardless of household income. If such 
children are living with you and you wish to apply for such meals, 
please contact us.'';
    (iv) The following statement that provides notice to the household 
member whose social security number is disclosed: ``We are required by 
the National School Lunch Act in section 9 to ask for a social security 
number. Unless a food stamp, FDPIR, or TANF case number is provided for 
your child, the application cannot be approved without either the 
social security number of the person who signs the application or an 
indication that he or she does not have a social security number. The 
social security number provided may be used to identify the person in 
checking the correctness of the information provided on the 
application. This may occur during reviews, audits or investigations of 
the Program, and it may involve contacting employers to determine 
income. It also may involve contacting the food stamp or welfare office 
to determine if your household is receiving benefits. It may be 
necessary to check with the State employment security office to 
determine the amount of benefits your household

[[Page 72487]]

is receiving. Other income information provided by you may be checked. 
If the information you provide is incorrect, your household may lose 
benefits and/or claims or legal action may be taken against your 
household.''
    (v) The statement used to inform the household about the use of 
social security numbers must comply with the Privacy Act of 1974 (Pub. 
L. 93-579). If a State or local agency plans to use the social security 
numbers for uses not described in paragraph (f)(4)(iv) of this section, 
the notice must be revised to explain those uses.
    (vi) Examples of income that should be provided on the application, 
including: Earnings, wages, welfare benefits, pensions, support 
payments, unemployment compensation, social security, and other cash 
income;
    (vii) A notice placed immediately below the signature block stating 
that the person signing the application certifies that all information 
provided is correct, that the household is applying for Federal 
benefits in the form of free Program meals, that Program officials may 
verify the information on the application, and that purposely providing 
untrue or misleading statements may result in prosecution under State 
or Federal criminal laws; and
    (viii) A statement that if food stamp, FDPIR, or TANF case numbers 
are provided, they may be used to verify the current food stamp, FDPIR, 
or TANF certification for the children for whom free meals benefits are 
claimed.
    (5) Verifying information on Program applications. Households 
selected to verify information on their Program applications must be 
notified in writing. State agencies must ensure that the notice of 
information about the use of social security numbers provided on 
applications complies with section 7 of Pub. L. 93-579 (Privacy Act of 
1974). Households must be informed of the following:
    (i) They must provide a social security number for each adult 
household member, or indicate that an adult household member does not 
have a social security number, or provide proof that they are receiving 
food stamp, FDPIR, or TANF benefits;
    (ii) They will lose Program benefits or be terminated from 
participation if they do not cooperate with the verification process;
    (iii) Social security numbers may be used to determine the 
correctness of information on applications and continued eligibility 
for Program benefits;
    (iv) They will be given the name and phone number of an official 
who can assist in the verification process;
    (v) Verification may occur during program reviews, audits, and 
investigations;
    (vi) Verification may include contacting employers, food stamp or 
welfare offices, or State employment offices to determine the accuracy 
of statements on the application about income, receipt of food stamp, 
FDPIR, TANF, or unemployment benefits; and
    (vii) They may lose benefits or face claims or legal action if 
incorrect information is reported on the application.
* * * * *
    12. In Sec. 225.16:
    a. Revise paragraph (b) introductory text and paragraph (b)(1)(i);
    b. Remove paragraph (b)(2) and redesignate paragraphs (b)(3), 
(b)(4), and (b)(5) as paragraphs (b)(2), (b)(3), and (b)(4), 
respectively;
    c. Revise newly redesignated paragraphs (b)(2), (b)(3), and the 
first sentence of (b)(4);
    d. Revise the first sentence in paragraph (c)(1);
    e. Amend the introductory text of paragraph (d) by adding a 
sentence at the end;
    f. Revise paragraph (d)(1) introductory text;
    g. Revise the entry for ``Eggs'' in the table under Meat and Meat 
Alternates (Optional) in paragraph (d)(1);
    h. Revise paragraph (d)(2) introductory text;
    i. Revise the centered heading and the introductory text of 
paragraph (d)(3);
    j. Revise the entry for ``Eggs'' in the table under Meat and Meat 
Alternates in paragraph (d)(3);
    k. Remove paragraph (e) and redesignate paragraphs (f) and (g) as 
paragraphs (e) and (f), respectively; and
    l. Revise newly redesignated paragraph (f)(1).
    The revisions and addition read as follows:


Sec. 225.16  Meal service requirements.

* * * * *
    (b) Meal services. The meals which may be served under the Program 
are breakfast, lunch, supper, and supplements, referred to from this 
point as ``snacks''. No sponsor may be approved to provide more than 
two snacks per day. A sponsor may only be reimbursed for meals served 
in accordance with this section.
    (1) * * *
    (i) Each day a camp may serve up to three meals or two meals and 
one snack;
* * * * *
    (2) NYSP Sites. Sponsors of NYSP sites shall only be reimbursed for 
meals served to enrolled NYSP participants at these sites.
    (3) Restrictions on the number and type of meals served. Food 
service sites other than camps and sites that primarily serve migrant 
children may serve either:
    (i) One meal each day, a breakfast, a lunch, or snack; or
    (ii) Two meals each day, if one is a lunch and the other is a 
breakfast or a snack.
    (4) Sites which serve children of migrant families. Food service 
sites that primarily serve children from migrant families may be 
approved to serve each day up to three meals or two meals and one 
snack. * * *
    (c) Time restrictions for meal service. (1) Three hours must elapse 
between the beginning of one meal service, including snacks, and the 
beginning of another, except that 4 hours must elapse between the 
service of a lunch and supper when no snack is served between lunch and 
supper. * * *
* * * * *
    (d) * * * Children age 12 and up may be served larger portions 
based on the greater food needs of older boys and girls.
    (1) The minimum amount of food components to be served as breakfast 
are as follows:

------------------------------------------------------------------------
              Food components                      Minimum amount
------------------------------------------------------------------------
 
                  *        *        *        *        *
Meat and Meat Alternates (Optional)
 
                  *        *        *        *        *
Eggs......................................  \1/2\ large egg.
 
                  *        *        *        *        *
------------------------------------------------------------------------

* * * * *
    (2) The minimum amounts of food components to be served as lunch or 
supper are as follows:
* * * * *
Snacks
    (3) The minimum amounts of food components to be served as snacks 
are as follows. Select two of the following four components. (Juice may 
not be served when milk is served as the only other component.)

------------------------------------------------------------------------
              Food components                      Minimum amount
------------------------------------------------------------------------
Meat and Meat Alternates
 
                  *        *        *        *        *
Eggs......................................  \1/2\ large egg.
 
                  *        *        *        *        *
------------------------------------------------------------------------

* * * * *

[[Page 72488]]

    (f) Exceptions to and variations from the meal pattern.--(1) Meals 
provided by school food authorities.--(i) Meal pattern substitution. 
School food authorities that are Program sponsors and that participate 
in the National School Lunch or School Breakfast Program during any 
time of the year may substitute the meal pattern requirements of the 
regulations governing those programs (Parts 210 and 220 of this 
chapter, respectively) for the meal pattern requirements in this 
section.
    (ii) Offer versus serve. School food authorities that are Program 
sponsors may permit a child to refuse one or more items that the child 
does not intend to eat. The school food authority must apply this 
``offer versus serve'' option under the rules followed for the National 
School Lunch Program, as described in part 210 of this chapter. The 
reimbursements to school food authorities for Program meals served 
under the ``offer versus serve'' must not be reduced because children 
choose not to take all components of the meals that are offered.
* * * * *


Sec. 225.18  [Amended]

    13. In Sec. 225.18, remove paragraph (i).

    Dated: December 21, 1999.
Samuel Chambers, Jr.,
Administrator.
[FR Doc. 99-33503 Filed 12-27-99; 8:45 am]
BILLING CODE 3410-30-U