[Federal Register Volume 65, Number 197 (Wednesday, October 11, 2000)]
[Proposed Rules]
[Pages 60502-60539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25817]



[[Page 60501]]

-----------------------------------------------------------------------

Part II





Department of Agriculture





-----------------------------------------------------------------------



Food and Nutrition Service



-----------------------------------------------------------------------



7 CFR Part 210 et al.



National School Lunch Program, Child and Adult Care Food Program, State 
Administrative Expense Funds, Determining Eligibility for Free and 
Reduced Price Meals and Free Milk in Schools: Reimbursement for Snacks 
in Afterschool Care Programs; Proposed Rule

  Federal Register / Vol. 65, No. 197 / Wednesday, October 11, 2000 / 
Proposed Rules  

[[Page 60502]]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 210, 226, 235, 245

RIN 0584-AC 72


National School Lunch Program, Child and Adult Care Food Program, 
State Administrative Expense Funds, Determining Eligibility for Free 
and Reduced Price Meals and Free Milk in Schools: Reimbursement for 
Snacks in Afterschool Care Programs

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would incorporate the provisions of the 
William F. Goodling Child Nutrition Reauthorization Act of 1998 
regarding reimbursement of afterschool snacks in the regulations 
governing the National School Lunch Program and the Child and Adult 
Care Food Program. Corresponding technical amendments are also proposed 
to the regulations governing the State Administrative Expense Funds and 
Determining Eligibility for Free and Reduced Price Meals and Free Milk 
in Schools. Under this proposed rule, certain afterschool care programs 
would earn reimbursement for snacks served which meet program 
requirements. This rule, as proposed, would be expected to increase 
consumption of nutritious snacks in afterschool care programs.

DATES: To be assured of consideration, written comments must be 
postmarked on or before January 9, 2001.

ADDRESSES: Comments may be mailed to Robert M. Eadie, Chief, Policy and 
Program Development Branch, Child Nutrition Division, Room 1007, Food 
and Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, 
Virginia 22302. You may also submit comments electronically at 
[email protected]. All written submissions will be available for 
public inspection in Room 1007 at this address during regular business 
hours (8:30 am to 5 pm) Monday through Friday. Since comments are being 
accepted simultaneously on several separate rulemakings, commentors on 
this proposed rule are asked to label their comments ``Reimbursement 
for Snacks in Afterschool Care Programs.''

FOR FURTHER INFORMATION CONTACT: Mary Jane Whitney (National School 
Lunch Program and Commodity Schools Program) or Ron Ulibarri (Child and 
Adult Care Food Program) at the above address or by telephone at (703) 
305-2590.

SUPPLEMENTARY INFORMATION:

Background

    On October 31, 1998, President Clinton signed Public Law 105-336, 
the William F. Goodling Child Nutrition Reauthorization Act of 1998 
(Child Nutrition Reauthorization Act). The Child Nutrition 
Reauthorization Act (Act) expanded the availability of snacks for both 
the National School Lunch Program (NSLP) and the Child and Adult Care 
Food Program (CACFP). Specifically, the Act expanded the availability 
of snacks in the CACFP so that snacks served to children aged 12 to 18 
in afterschool care programs located in the area of a school in which 
at least 50 percent of the children enrolled are certified as eligible 
to receive free or reduced price meals can be claimed for 
reimbursement. The Act also expanded the NSLP to permit the service of 
afterschool snacks to children aged 12 to 18 and further expanded the 
eligibility of schools to ensure more schools can avail themselves of 
reimbursement for snacks served afterschool.
    For ease of reference, we refer only to the NSLP and CACFP in this 
preamble. The proposed rule makes clear that the afterschool supplement 
would also be available in the Commodity School Program. The statutory 
authority for the NSLP afterschool supplement is in section 17A of the 
Richard B. Russell National School Lunch Act (NSLA) (42 U.S.C. 1766a); 
the CACFP provisions are in section 17(r) of the NSLA (42 U.S.C. 
1766(r)). Throughout this preamble, the commonly used terms 
``afterschool snack(s)'' and ``snack(s)'' are used in lieu of the term 
``supplement(s).'' Commenters will find additional discussion of this 
terminology in Part 4.I of this preamble.
    The new afterschool snack component provides reimbursement for 
snacks served to children in certain afterschool care programs. 
According to the Conference Report that accompanied this law (House 
Report 105-786), Congress intended that these new components provide 
nutrition assistance to programs that offer the types of activities 
known to help reduce or prevent involvement in juvenile crime. The 
House Committee on Education and the Workforce further noted in its 
report (House Report 105-633) that ``afterschool programs, which 
operate between the end of a school day and time when parents return 
from work, provide a quality alternative to juveniles with too much 
time on their hands.'' The proposed afterschool snack components in the 
NSLP and CACFP are an effort to support and promote these afterschool 
programs.
    This preamble is divided into five parts. Part 1 discusses the 
proposed core requirements for both the NSLP and CACFP afterschool 
snack components. Part 2 is a chart showing the requirements with their 
regulatory citations for the two programs as contained in this proposed 
rule. We included this chart in lieu of a detailed preamble discussion 
of each provision of this rule as an easy way to show the proposed 
changes and to compare the NSLP and CACFP requirements. Part 3 is a 
discussion, by program, of the particular provisions of this proposed 
rule that we think warrant elaboration. Part 4 discusses some related 
changes this rule proposes to make to the regulations. Part 5 addresses 
implementation dates.

Part 1--What Are the Proposed Core Requirements?

Section I. What Are the Proposed Core Requirements Under the NSLP?

A. Eligible Afterschool Care Programs
    Under this proposal and in accordance with the criteria set forth 
under the NSLA, to be approved for reimbursement under the new 
afterschool snack component of the NSLP, snacks must be served in an 
eligible afterschool care program which is operated or sponsored by a 
school or school district which participates in the NSLP (see Part 
3.I.A below) and:
     Is organized primarily to provide care for children after 
school;
     Has organized, regularly scheduled activities (i.e., in a 
structured and supervised environment); and
     Includes education or enrichment activities.
    These provisions are proposed at 7 CFR 210.4a, paragraphs (a) and 
(b). Hereinafter, references to proposed amendments to part 210 and 226 
of Title 7 of the Code of Federal Regulations are made to the 
appropriate section number only.
    Afterschool care programs would be permitted to limit participation 
for space, security considerations, special needs or, where applicable, 
licensing requirements. For example, afterschool care programs designed 
to accommodate special needs or with other limiting factors, such as 
programs targeted to children with learning disabilities or to children 
who are academically gifted, would be eligible for reimbursement.
    Programs could include supervised athletic activity along with 
education or enrichment activities, such as those typically sponsored 
by the Police Athletic League, Boys and Girls Clubs

[[Page 60503]]

and the YWCA. The key requirement for afterschool programs that include 
sports would be that they are ``open to all'' and would not limit 
membership for reasons of athletic ability, or would not exist 
principally for the pursuit of competitive athletics.
B. Ineligible Afterschool Care Programs
    Under this proposal, organized interscholastic athletic programs or 
community level competitive sports programs would not be approved as 
afterschool care programs under the NSLP. In the Conference Report that 
accompanied the Child Nutrition Reauthorization Act, the Conference 
Committee declared its intent that support for afterschool snacks would 
not be provided to members of athletic teams. This limitation is found 
at Sec. 210.4a(b)(2) of this proposed rule.
C. Eligible Children
    Under the proposal, children would be eligible to participate in 
the afterschool snack service in traditional schools (see paragraphs 
(a) and (b) in the definition of ``School,'' Sec. 210.2), if they 
participate in an approved afterschool care program and are age 18 or 
under. However, the Conference Report that accompanied the Child 
Nutrition Reauthorization Act indicated that snacks could be claimed 
for children who turn 19 during the school year. Therefore, this 
proposed rule would allow reimbursement to be claimed for snacks served 
to these children until the end of the school year in which they turn 
19.
    Reimbursement could also be claimed for students with disabilities 
(see definition of ``Student with disabilities'', Sec. 210.2), 
regardless of their age, who participate in a school program of high 
school grade or under. This provision is found at Sec. 210.4a(c) of 
this proposed rule.
    Children enrolled in a residential child care institution (RCCI) 
would be eligible to participate in an approved afterschool care 
program's snack service if they are age 18 or under at the start of the 
school year. Snacks could be claimed for children who turn 19 during 
the school year. This provision is also found at Sec. 210.4a(c) of this 
proposed rule.
    There would be no minimum age for participation. Even snacks served 
after school to pre-primary children could be claimed as long as the 
children are attending class in a school (e.g., Head Start or Even 
Start) and are participating in an approved afterschool care program 
after their regularly scheduled school day.
D. Days of Service
    Under this proposal, the afterschool snack component in the NSLP 
would only operate on days that school is in session. This would 
include snacks served in afterschool care programs operated for 
children attending summer school, but would not include weekends, 
holidays, or school vacations. Snacks served after school to children 
attending schools that operate on a year-round basis also would be 
claimed through the afterschool snack component of the NSLP, assuming 
the other eligibility requirements are met. These provisions are found 
at Sec. 210.4a(m) of this proposed rule. Organizations that offer 
programs during summer vacations may be eligible to participate in the 
Summer Food Service Program (SFSP).
E. Number of Afterschool Snacks Claimed
    Under the proposal, school food authorities would claim 
reimbursement for no more than one afterschool snack per child per day. 
Any excess afterschool snacks that are produced could be offered, but 
would not be claimed for reimbursement. This provision is found at 
Sec. 210.4a(k) of this proposed rule.
F. Afterschool Snack Meal Pattern
    The proposal would require that afterschool snacks meet the meal 
pattern requirements set forth in Sec. 210.10(n), What are the 
requirements for afterschool snacks?. This provision is consistent with 
section 17A(c) of the Act which requires that the content of meal 
supplements specified under the CACFP be applied to the content of 
snacks served under the NSLP. Portions for children ages 13 through 18 
would follow the portions stipulated for children ages 6 through 12. 
Even though this proposed rule does not require larger portions for 
children ages 13-18, we would recommend that older children in 
afterschool care programs be offered larger portions based on their 
greater food energy requirements. Under the proposal, if schools offer 
choices of snacks or choices within the snack meal pattern, children 
who are eligible for free or reduced price snacks would be allowed to 
take any snack or choice offered as a part of the reimbursable snack. 
This requirement is found at Sec. 210.4a(l) of this proposed rule.
G. Reimbursement
    Under this proposal and consistent with the provisions of section 
17A of the Act, school food authorities may claim reimbursement for 
afterschool snacks served in any facility selected as a site of an 
eligible afterschool care program, but only those afterschool care 
program sites that are ``area eligible'' would automatically receive 
reimbursement at the free rate for all snacks. (``Area eligibility'' is 
discussed in Part 1.I.H of this preamble.) In this case, free and 
reduced price applications would not be required.
    Reimbursement for snacks served at schools or sites that are not 
``area eligible'' would depend on the eligibility status of the child 
(i.e. free, reduced price, or paid). In this case, free and reduced 
price applications would be required to establish eligibility status. 
Generally, sites would not need to distribute new free and reduced 
price applications. In most cases, the families of children 
participating in the afterschool care program would have already 
applied for free and reduced price meals in connection with the lunch 
component of the NSLP or the School Breakfast Program. In these cases, 
the school food authority sponsoring the afterschool care program would 
use the free and reduced price meal determinations made for purposes of 
school lunches or breakfasts as documentation for free and reduced 
price afterschool snacks. If children in a school's afterschool care 
program are from another school, the school sponsoring the afterschool 
care program would use the determinations made by the children's 
regular school as long as it documents the source of the eligibility 
information.
    However, if the afterschool care program that is not area eligible 
includes children from schools that do not participate in the NSLP 
lunch component or the School Breakfast Program, then the families for 
those children would not have had the opportunity to apply for free and 
reduced price meals. Only in this limited circumstance would a school 
food authority sponsoring the afterschool care program need to 
distribute free and reduced price applications and make eligibility 
determinations for purposes of afterschool snacks. These determinations 
must be made in accordance with 7 CFR part 245. These provisions are 
found at Sec. 210.4a(n) and (o) of this proposed rule.
H. Area Eligibility
    Under this proposal and consistent with the provisions of section 
17A of the Act, a school would be ``area eligible'' if at least 50 
percent of the enrolled children are certified eligible for free or 
reduced price meals. Additionally, a school or site would be considered 
area eligible if it is located

[[Page 60504]]

in the attendance area of an elementary, middle, or high school in 
which at least 50 percent of its enrolled children are certified 
eligible for free or reduced price meals. This provision is found at 
Sec. 210.4a(i) of this proposed rule.
    The State agency would determine ``area eligibility'' for each 
afterschool care program site seeking to qualify as area eligible based 
on information provided by the school food authority. This provision is 
found at Sec. 210.4a (f) of this proposed rule.
    Area eligibility determinations would be made each school year, 
although FNS, the State agency, or the school food authority could 
change the determination if updated data indicates that a school or 
site is no longer area eligible. However, the State agency would not 
routinely require redeterminations of area eligibility status based on 
updated data before the school year has expired. We recognize that 
frequent re-evaluation of area eligibility is disruptive to program 
operations and have tried to balance this concern with the need for 
accountability.
    Area eligibility determinations would be made using the free and 
reduced price meal data for the preceding October, or the other month 
the State agency has designated pursuant to Sec. 210.9(b), Agreements 
with State agency, paragraph (20). School food authorities would make 
area eligibility determinations prior to beginning snack service each 
school year. Typically, the school food authority would make the 
determination before the start of the school year using the preceding 
October's free and reduced price meal data. Area eligibility provisions 
are found at Sec. 210.4a(i) of this proposed rule.
    School food authorities could, at any time during the school year, 
submit more recent area eligibility data that would qualify a site that 
was previously not area eligible. However, only data for October, or 
the other month designated by the NSLP State agency for free and 
reduced price data collection, would be used. For example, a particular 
site is not area eligible at the beginning of the school year (August 
1999) based on the most recent October data (October 1998). That site 
could be determined to be area eligible in January 2000 if the new 
October data (October 1999) shows an appropriate change.
    In order to facilitate area eligibility determinations, this rule 
proposes to amend Sec. 210.9(b)(20). School food authorities would be 
required to provide their State agency with a list of all middle and 
high schools in their jurisdictions in which at least 50 percent of the 
enrolled children are certified eligible for free or reduced price 
meals the preceding October, or another State agency-designated month. 
This is in addition to the list of elementary schools that meet these 
requirements that is currently required by Sec. 210.9(b)(20).
I. Claiming Reimbursement
    Sections 210.7, Reimbursement for school food authorities, and 
210.8, Claims for reimbursement, of existing regulations establish 
procedures which are designed to ensure the fiscal accountability of 
the lunch and snack service. Prior to the 1998 authorization of the 
afterschool snack service, section 106(a) of the Child Nutrition and 
WIC Reauthorization Act of 1989 added section 17A (42 U.S.C.1766a) to 
the NSLA. Under section 17A, elementary and secondary schools that were 
participating in the CACFP as of May 15, 1989 could be reimbursed for 
meal supplements served in afterschool care programs. Implementing 
regulations issued in 1993 (58 FR 42483) made a number of changes to 
the reimbursement process specified in Sec. Sec. 210.7 and 210.8 to 
ensure that Federal reimbursement is being properly paid.
    This proposed rule would make a number of technical revisions to 
Sec. Sec. 210.7 and 210.8 to reflect the use of the term ``afterschool 
snacks'' in lieu of ``meal supplements''. Additionally, this proposal 
would make several revisions to these sections in order to ensure the 
fiscal integrity of the afterschool snack service.
    Under paragraph (c)(1)(iii) of existing Sec. 210.7, school food 
authorities are required to base Claims for Reimbursement on lunch 
counts, taken daily at the point of service, which correctly identify 
the number of free, reduced price and paid lunches served to eligible 
children. This proposed rule would revise this paragraph to require 
school food authorities to base Claims for Reimbursement on daily lunch 
and afterschool snack counts. In recognition of the unconventional 
nature of many afterschool care programs, the Department has determined 
not to extend the requirement for point of service meal counts to the 
afterschool snack service. However, as discussed further in part 1.I.J, 
we are requiring schools to maintain daily attendance rosters or sign-
in sheets.
    Not requiring a point of service meal count is expected to provide 
some operational flexibility. However, school food authorities are 
reminded that they must continue to ensure that the Claim for 
Reimbursement accurately reflects the number of free, reduced price and 
paid lunches and afterschool snacks that are served to children 
eligible for such meals for each day of operation, Further, the Claim 
for Reimbursement cannot request payment for more than one lunch and 
afterschool snack per child per day.
    This proposal would also make revisions to the internal controls 
set forth under existing Sec. 210.8(a). Currently, school food 
authorities are required to establish internal controls which ensure 
the accuracy of lunch counts prior to the submission of the monthly 
Claim for Reimbursement.
    Under the proposed rule, the existing on-site review requirements 
for afterschool snack service would be modified. These proposed 
modifications are further discussed in Part 1.I.K of this preamble.
    This proposal would also revise Sec. 210.8(a) to expand the 
comparisons of daily free, reduced price and paid lunch counts to 
include comparisons of afterschool snack counts against data which will 
assist in the identification of snack counts in excess of the number of 
free, reduced price and paid snacks served each day to eligible 
children. The Department is not proposing specific data comparisons in 
order to provide school food authorities with the flexibility to design 
comparisons which ensure the fiscal integrity of the afterschool snack 
service under their jurisdiction.
    Finally, under the proposal, school food authorities would be 
required to expand the system for following up on lunch counts which 
suggest the likelihood of counting problems to include afterschool 
snack counts which also have the likelihood of problems.
J. Recordkeeping and Reporting Requirements
    In recognition of the fact that many afterschool care programs 
operate on a drop-in basis, this proposed rule would not require school 
food authorities to maintain traditional enrollment records for the 
children who attend their afterschool care programs. Instead, the rule 
would require school food authorities to maintain daily attendance 
rosters, sign-in sheets or, with State agency approval, other methods 
of accurately recording attendance. This information is needed to 
confirm the child care aspects of the operation and to support the meal 
counts reported on the Claim for Reimbursement. This provision is found 
at Sec. 210.4a(q) of this proposed rule.
    The school food authority would report the number of afterschool 
snacks served by eligibility category and, for

[[Page 60505]]

each October, the number of schools and sites claiming reimbursement 
for afterschool snacks under the NSLP on the monthly Claim for 
Reimbursement. These provisions are found at Sec. 210.4a(r) and at 
Sec. 210.8(c) of this proposed rule.
K. School Food Authority Monitoring
    This rule proposes to revise the current monitoring requirements 
for the NSLP afterschool care programs. Under Sec. 210.9(c), 
Afterschool care requirements, paragraph (7) of existing regulations, 
school food authorities are required to review each afterschool snack 
service site twice each year; the first review must be made during the 
first four weeks that school is in operation. Under this proposal, the 
first review would be required to be made during the first six weeks of 
snack service, thus providing school food authorities with an 
additional two weeks for review activities. The proposed rule also 
clarifies that the school food authority must review the afterschool 
snack counting and claiming system and compliance with meal pattern 
requirements. These provisions are found at Sec. 210.4a(s) of this 
proposed rule.
L. State Agency Monitoring
    This proposed rule would add State agency monitoring requirements 
to Sec. 210.19(a), General Program management. Under the proposed 
paragraph, each State agency would be required to determine whether 
school food authorities claiming reimbursement for afterschool snacks 
under Sec. 210.4a meet the requirements of this part in order to 
establish whether Claims for Reimbursement are properly payable. Each 
State agency would be required to conduct on-site reviews of at least 
10 percent, but not less than 1 site, of each school food authority's 
afterschool snack service sites on the same schedule required of 
administrative reviews under Sec. 210.18(c). Such reviews could be 
conducted at the same time the school food authority is scheduled for 
an administrative review in accordance with Sec. 210.18. State agencies 
could also conduct these evaluations in conjunction with technical 
assistance visits, other reviews, or separately. These requirements are 
cross-referenced at Sec. 210.4a(t).

Section II. What Are the Proposed Core Requirements Under the CACFP?

A. Eligible Institutions
    Under this proposed rule, an ``at-risk afterschool care center'' is 
a public or private nonprofit organization (or proprietary title XX 
center) eligible to participate in the CACFP that provides 
nonresidential care to children through an approved afterschool care 
program in an eligible area. (Area eligibility is discussed in Part 
1.II.I of this preamble.) At-risk afterschool care centers receive 
reimbursement at the free rate for all snacks served to eligible 
children. Like other centers in the CACFP, an at-risk afterschool care 
center may participate as an independent center by entering into an 
agreement directly with the State agency, or under the auspices of a 
sponsoring organization which enters into the agreement. This rule 
proposes to include a definition of ``at-risk afterschool care center'' 
in Sec. 226.2. (Licensing is discussed in Part 4.II of this preamble.)
B. Eligible Afterschool Care Programs
    Under the proposal, to receive reimbursement under the afterschool 
snack component of the CACFP, an at-risk afterschool care center must 
serve snacks to eligible children in an eligible afterschool care 
program. An eligible afterschool care program:
     Is organized primarily to provide care for children after 
school;
     Has organized, regularly scheduled activities (i.e., in a 
structured and supervised environment); and
     Includes education or enrichment activities.
    Afterschool care program requirements are found at Sec. 226.17a(b) 
of this proposed rule.
    Afterschool care programs would be permitted to limit participation 
for space, security considerations, special needs or, where applicable, 
licensing requirements. For example, afterschool care programs designed 
to accommodate special needs or with other limiting factors, such as 
programs targeted to children with learning disabilities or to children 
who are academically gifted, would be eligible for reimbursement.
    Programs could include supervised athletic activity along with 
education or enrichment activities, such as those typically sponsored 
by the Police Athletic League, Boys and Girls Clubs and the YWCA. The 
key requirement for afterschool programs that include sports would be 
that they are ``open to all'' and would not limit membership for 
reasons of athletic ability, or would not exist principally for the 
pursuit of competitive athletics.
C. Ineligible Afterschool Care Programs
    Under the proposal, organized interscholastic athletic programs or 
community level competitive sports programs would not be approved as 
afterschool care programs under the CACFP. This prohibition is found at 
Sec. 226.17a (b)(2) of this proposed rule.
D. Eligible Children
    Under the proposal, children would be eligible to participate if 
they are students who participate in an approved afterschool care 
program and are age 18 or under. However, the Conference Report that 
accompanied the Child Nutrition Reauthorization Act indicated that 
snacks could be claimed for children who turn 19 during the school 
year. Therefore, this proposed rule would allow reimbursement to be 
claimed for snacks served to these children until the end of the school 
year in which they turn 19. Reimbursement may also be claimed for 
persons, regardless of age, who meet the other requirements and are 
determined by the State agency to have one or more disabilities and are 
enrolled in a child care institution which serves a majority of persons 
age 18 and under. This provision is found at Sec. 226.17a(c) of this 
proposed rule.
    As in the NSLP, there would be no minimum age for participation. 
Even snacks served after school to pre-primary children could be 
claimed as long as the children are attending class in a school (e.g., 
Head Start or Even Start) and are participating in an approved 
afterschool care program after their regularly scheduled school day.
E. Days of Service
    Under this proposal, the CACFP at-risk afterschool care centers 
would receive reimbursement for snacks served on any day during the 
regular school year, including weekends, holidays, and school vacations 
that fall during the regular school year. In fact, a CACFP at-risk 
afterschool care center could choose to operate only on weekends, 
holidays and school vacations during the regular school year. However, 
CACFP at-risk afterschool care centers would not be reimbursed for 
snacks served during summer vacations, because the Child Nutrition 
Reauthorization Act explicitly limits reimbursement to snacks served 
during the ``regular'' school year. These provisions are found at 
Sec. 226.17a(l) of this proposed rule.
    Organizations that offer programs during summer vacations may also 
be eligible to participate in the Summer Food Service Program (SFSP). 
CACFP at-risk afterschool care centers that qualify for the SFSP would 
be able to claim 2 meals, or 1 meal and 1 snack, per child per day 
under that Program. For schools that operate on a year-round basis, 
snacks served afterschool in the summer to children could be claimed 
through the afterschool care

[[Page 60506]]

components of either the NSLP or CACFP, assuming the other eligibility 
requirements are met.
F. Number of Snacks Claimed
    Under the proposal, reimbursement may be claimed for one snack per 
child per day. An at-risk afterschool care center that provides care to 
a child under another component of the CACFP during the same day could 
not claim reimbursement for more than two meals and one snack, or one 
meal and two snacks, per child per day, including the afterschool 
snack. All meals and any snacks would be claimed in accordance with the 
requirements for the applicable component of the CACFP (e.g., child 
care centers, outside-school-hours care centers). This provision is 
found at Sec. 226.17a(j) of the proposed rule.
G. Snack Meal Pattern
    The proposal would require that snacks meet the meal pattern for 
supplemental food (snacks) in Sec. 226.20(a)(4) or (c)(4). Portions for 
children ages 13 through 18 would follow the portions stipulated for 
children ages 6 through 12. This provision is found at Sec. 226.17a(k) 
of this proposed rule. Even though this proposed rule does not require 
larger portions for children ages 13-18, we would recommend that 
afterschool care programs offer larger portions for older children 
based on their greater food energy requirements.
H. What Reimbursement Do At-Risk Afterschool Care Centers Earn?
    Under the proposal, CACFP afterschool care programs must be ``area 
eligible'' in order to qualify as at-risk afterschool care centers. As 
such, all snacks would be reimbursed at the free rate. Applications for 
free and reduced price meals would not be required for at-risk 
afterschool care centers. This provision is found at Sec. 226.17a(m) of 
the proposed rule.
    Afterschool care programs that do not meet area eligibility 
criteria would not receive reimbursement for afterschool snacks under 
the at-risk component of the CACFP. However, such programs could be 
eligible to participate in the CACFP as outside-school-hours care 
centers, provided they meet all of the requirements established for 
these facilities under the CACFP regulations. If they meet the criteria 
set forth in Sec. 210.4a, they may be eligible to participate in the 
NSLP afterschool snack component.
I. Area Eligibility
    As mentioned above, only those afterschool care programs that are 
``area eligible'' (i.e., located in an eligible area) could claim 
reimbursement as an at-risk afterschool care center. Under this 
proposal, an afterschool care program site would be located in an 
``eligible area'' if it is located in the attendance area of an 
elementary, middle, or high school in which at least 50 percent of the 
enrolled children are certified eligible for free or reduced price 
meals. Area eligibility requirements are found at Sec. 226.17a(h) of 
this proposed rule.
    Under this proposed rule, the State agency would determine the area 
eligibility for each afterschool care program site seeking to qualify 
as area eligible based on information provided by the at-risk 
afterschool care center (for independent centers), or by the sponsoring 
organization of the at-risk afterschool care center(s). This provision 
is found at Sec. 226.17a(e) of this proposed rule. We would encourage 
State agencies to provide technical assistance to sponsoring 
organizations and independent at-risk afterschool care centers in 
obtaining the necessary documentation of area eligibility.
    Area eligibility determinations for the CACFP would be made once 
every three years. FNS, the State agency or the sponsoring organization 
could change the determination if updated data indicates that an at-
risk afterschool care center is no longer area eligible. However, the 
State agency may not routinely require redeterminations of area 
eligibility status based on updated data before the three-year period 
has expired. We decided to propose to make the CACFP determinations 
valid for three years to be consistent with the statutory mandate for 
tiering determinations for day care homes participating in the CACFP. 
Tier I day care home determinations based on school data are valid for 
three years.
    Area eligibility determinations would be made using free and 
reduced price school meal data for the preceding October, or the other 
month the NSLP State agency has designated pursuant to 
Sec. 210.9(b)(20) of this proposed rule. At-risk afterschool care 
centers could begin program operations at any time during the year. For 
example, if a particular site is not area eligible at the beginning of 
the school year (August 1999) based on the most recent October data 
(October 1998), that site could be determined to be area eligible in 
January 2000 if the new October data (October 1999) shows an 
appropriate change. These provisions are found at Sec. 226.17a(h)(2) of 
this proposed rule.
    As previously mentioned, in order to facilitate area eligibility 
determinations, this rule proposes to expand current Sec. 210.9(b)(20) 
to require school food authorities to provide their State agency with a 
list of all middle and high schools in their jurisdictions in which at 
least 50 percent of the enrolled children are certified eligible for 
free or reduced price meals the preceding October, or another State 
agency-designated month. This is in addition to the list of elementary 
schools that meet these requirements that is currently required by 
Sec. 210.9(b)(20) to assist with tiering determinations for day care 
homes in the CACFP.
    Under this proposed rule, Sec. 210.19(f) is similarly expanded to 
require this information to be provided to the CACFP State agency along 
with the list of the qualifying elementary schools already required to 
be provided. Commenters should note that, unlike tiering 
determinations, area eligibility determinations for at-risk afterschool 
care centers would be based on the attendance area for any school in 
whose attendance area the afterschool care program is located, not just 
elementary schools. Also unlike tiering determinations, area 
eligibility could not be established using census data since, unlike 
tiering, the use of census data is not authorized by statute.
J. Recordkeeping and Reporting Requirements
    This proposed rule would require at-risk afterschool care centers 
to maintain a daily attendance roster, sign-in sheet or, with State 
agency approval, other methods of accurately recording attendance. This 
information is needed to confirm the child care aspects of the 
operation and to support the meal counts reported on the Claim for 
Reimbursement. This provision is found in Sec. 226.17a(n) of this 
proposed rule.
    This rule would not require at-risk afterschool care centers to 
maintain traditional enrollment records for the children who attend 
their afterschool care programs. This is in recognition that many 
afterschool care programs operate on a drop-in basis and do not have 
specific enrollment procedures and schedules for attendance. We are 
proposing to amend the definition of ``Enrolled child'' in Sec. 226.2 
to include this approach for at-risk afterschool care centers. All 
other types of facilities participating in the CACFP (i.e., day care 
homes, child care centers, outside-school-hours centers, and adult care 
centers) would continue to be required to have signed enrollment forms 
for each child or adult in care.
K. Monitoring Requirements
    This rule proposes to require sponsors of at-risk afterschool care 
centers to monitor their centers three times a year.

[[Page 60507]]

Although they serve similar populations, sponsors of outside-school-
hours care centers will still be required to monitor their centers six 
times a year (Sec. 226.16(d)(4)(iv)). We are evaluating whether to 
reduce the frequency for monitoring sponsored outside-school-hours care 
centers in the CACFP and expect to address this provision in an 
upcoming rule on CACFP management improvement. This provision for at-
risk afterschool care centers is found at Sec. 226.16(d)(4)(iii) and 
Sec. 226.17a(p) of this proposed rule.
    In addition, this rule proposes to require State agencies to 
conduct a technical assistance visit to each newly participating 
independent at-risk afterschool care center. The visit would be 
required during the first 90 days of the center's program operations. 
At the visit, the State agency would be required to examine meal 
pattern compliance. The State agency would also confirm the accuracy of 
the documentation submitted and used by the State agency to determine 
the eligibility of the center's afterschool care program and the 
center's area eligibility. These visits are expected to ensure that the 
new at-risk afterschool centers are off to a strong start. Without this 
new requirement, it would be possible under the current review 
requirements in Sec. 226.6(l) that the State agency would not visit a 
new at-risk afterschool care center until its fourth year of operation. 
These provisions are found at Sec. 226.6(l)(4) and Sec. 226.17a(p) of 
this proposed rule.

Part 2--How Do the Afterschool Snack Components in the NSLP and 
CACFP Compare in This Proposed Rule?

    The chart below summarizes the proposed requirements for 
afterschool care programs in the NSLP and CACFP and provides the 
regulatory citations established by this proposed rule. A more detailed 
discussion of some of the requirements follows in Part 3 of this 
preamble.
BILLING CODE 3410-30-P

[[Page 60508]]

[GRAPHIC] [TIFF OMITTED] TP11OC00.000


[[Page 60509]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.001


[[Page 60510]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.002


[[Page 60511]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.003


[[Page 60512]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.004


[[Page 60513]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.005

BILLING CODE 3410-30-C

[[Page 60514]]

Part 3--What Are the Program-Specific Issues?

    This part highlights issues raised by the afterschool snack 
component that are program specific.

Section I. Issues Specific to the NSLP

A. Must the Afterschool Care Program Be Operated Directly by the 
School?
    Under the proposal, a school seeking to participate in the NSLP 
afterschool snack component would participate through its school food 
authority (Sec. 210.4a(a)). There may be individual afterschool care 
programs sponsored by one or more schools under the jurisdiction of the 
school district or a single afterschool care program operated by the 
school district at one or more sites. At least one school in the school 
food authority would have to participate in the NSLP lunch component.
    While the afterschool care program would be ``sponsored or 
operated'' by a school or school district, this does not mean that the 
school or school district would have to carry out the day-to-day 
management of the program. A school or school district could contract 
with another organization (such as the YWCA or a Boys and Girls Club) 
to manage the afterschool care program on its behalf. However, the 
school or school district would be required to retain overall 
administrative responsibility for the afterschool care program and the 
school food authority must retain administrative and fiscal 
responsibility for the snack service. Furthermore, the school food 
authority would be the party that enters into the agreement with the 
State agency and would assume full responsibility for meeting all 
program requirements.
B. Do the Point of Service Requirements Apply to the Afterschool Snack 
Component?
    This proposed rule would not impose point of service count 
requirements (as discussed in Part 1.I.I of this preamble). However, 
accurate daily meal counts would continue to be required. State 
agencies may require point of service counts.
C. Does the Competitive Foods Requirement Apply?
    This proposed rule would amend the competitive foods provision 
found at Sec. 210.11(b) to extend the prohibition on the sale of foods 
of minimal nutritional value in food service areas to the afterschool 
snack periods.
D. May Schools Choose To Claim Snacks Through the CACFP Instead?
    Under the proposal, schools may claim reimbursement for afterschool 
snacks either under the NSLP or CACFP. If a school claims afterschool 
snacks under the CACFP, the school would be required to meet all 
requirements for at-risk afterschool care centers, outside-school-hours 
care centers, or child care centers in that Program and keep CACFP 
records separate from the NSLP records. Afterschool snacks may not be 
claimed by CACFP at-risk afterschool care centers in the summer. 
Therefore, schools wishing to claim reimbursement for afterschool 
snacks served in afterschool care programs after summer school classes 
would do so: (1) Through the NSLP; (2) as a CACFP child care center or 
outside-school-hours care center; or (3) as an area eligible ``open 
site'' through the Summer Food Service Program (Refer to 7 CFR 225.2).

Section II. Issues Specific to the CACFP

A. What Would Be the Difference Between At-Risk Afterschool Care 
Centers and Outside-School-Hours Care Centers?
    Prior to enactment of the Child Nutrition Reauthorization Act, 
organizations operating afterschool care programs could participate in 
the CACFP as either outside-school-hours care centers, or, if they also 
provided child care during the school day, as traditional child care 
centers with an afterschool care program. The new afterschool snack 
component adds another possibility--participation as an at-risk 
afterschool care center. Under this proposed rule, the main differences 
between participation as an outside-school-hours care center and an at-
risk afterschool care center would be:
     All snacks served in at-risk afterschool care centers are 
reimbursed at the free rate; reimbursement in outside-school-hours care 
centers is based on the child's eligibility for free, reduced price, or 
paid meals;
     Snacks served to all children through age 18 may be 
reimbursed in at-risk afterschool care centers; only meals and snacks 
served to children through age 12 may be reimbursed in outside-school-
hours care centers;
     At-risk afterschool care centers must be area eligible;
     Only one snack per child per day may be claimed by at-risk 
afterschool care centers; outside-school-hours care centers may claim 
two meals and one snack or one meal and two snacks per child per day;
     At-risk afterschool care centers may only receive 
reimbursement for snacks served after school; outside-school-hours care 
centers may receive reimbursement for meals and snacks served before 
and after school; and
     At-risk afterschool care centers may only receive 
reimbursement during the regular school year, including weekends and 
holidays; outside-school-hours care centers can receive reimbursement 
during periods of school vacation, including weekends, holidays, and 
summer.
    The following chart compares the requirements for the existing 
afterschool care centers to the proposed at-risk afterschool care 
center requirements.
BILLING CODE 3410-30-P

[[Page 60515]]

[GRAPHIC] [TIFF OMITTED] TP11OC00.006


[[Page 60516]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.007


[[Page 60517]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.008

BILLING CODE 3410-30-C

[[Page 60518]]

B. May For-Profit Organizations Participate as At-Risk Afterschool Care 
Centers?
    A proprietary title XX center is a for-profit organization that 
provides nonresidential child care for which it receives funds under 
Title XX of the Social Security Act for not less than 25 percent of its 
enrolled children, or 25 percent of its licensed capacity, whichever is 
less. Under this proposal, a proprietary title XX center could 
participate in the CACFP as an at-risk afterschool care center, but 
only if it also participates as a child care center or an outside-
school-hours care center.
    Due to the drop-in nature of many afterschool care programs, 
children who only participate in the afterschool care program would not 
be counted in determining an organization's eligibility as a 
proprietary title XX center. This means that a for-profit organization 
seeking to serve as an at-risk afterschool care center could 
participate only if it qualifies as a proprietary title XX center based 
on the enrollment of its traditional child care program (i.e., the 
center receives funds under title XX of the Social Security Act for not 
less than 25 percent of the children enrolled in the traditional child 
care program). If the center qualifies as a proprietary title XX 
center, then it could claim reimbursement for snacks served in an at-
risk afterschool care center if: (1) It operates an approved 
afterschool care program; (2) it is located in an eligible area; and 
(3) the snacks are served to eligible children after their school day. 
Similarly, private for-profit organizations participating in the Iowa/
Kentucky demonstration projects under section 17(p) of the NSLA could 
serve as at-risk afterschool care centers, under the requirements 
described above.
C. Should the Children Participating in the At-Risk Afterschool 
Component Be Included in a Center's Enrollment for the Purpose of 
Determining the Claiming Percentage or Blended Rate?
    Under this proposal, children who only participate in the at-risk 
afterschool component would not be counted as enrolled children for the 
purposes of determining claiming percentages/blended rates. Children 
who participate in both the at-risk snack component of the program and 
in at least one meal service of the traditional child care program at a 
center would be required to have signed income eligibility statements 
on file. Such children would be included in the center's enrollment for 
the purpose of determining claiming percentages/blended rates. We are 
proposing to amend Sec. 226.9(b)(2) of the regulations to reflect this 
requirement.

Part 4--What Other Changes Does This Proposed Rule Make?

I. Terminology

    As mentioned previously, this rule proposes to use the terms 
``afterschool snack'' (for the NSLP) and ``snack'' (for the CACFP) 
rather than ``meal supplement'' in order to conform to the more 
commonly used terminology. We have proposed conforming changes 
throughout the NSLP and CACFP regulations, including the addition of 
the definition of ``Afterschool snack'' in Sec. 210.2 and the 
definition of ``Snack'' in Sec. 226.2.

II. CACFP Licensing

    The Child Nutrition Reauthorization Act also revised the current 
CACFP licensing requirements in section 17(a)(1)(C) of the NSLA to 
facilitate CACFP participation of organizations that provide care 
outside of school hours. This applies both to outside-school-hours care 
centers and to the new at-risk afterschool care centers. Under the 
change, these centers are required to be licensed only if Federal, 
State, or local licensing is required. If licensing is not required, 
they must only meet State or local health and safety requirements. This 
change is found in Sec. 226.6(d)(1)(vi) of this proposed rule.

III. Maximum Number of Meals

    Section 708(d) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (Pub. L. 104-193) amended section 
17(f)(2)(B) of the NSLA (42 U.S.C. 1766(f)(2)(B)) to reduce the number 
of meals that may be claimed by participating centers in the CACFP. The 
statutorily revised maximum is two meals and one supplement and took 
effect August 22, 1996. State agencies were informed of this change in 
an August 13, 1996, memorandum. This proposed rule makes conforming 
changes throughout the CACFP regulations and clarifies that one meal 
and two supplements also satisfies the new limit.

IV. Correction to Part 235

    The statute authorizing State administrative expense (SAE) funds 
does not reference the NSLP afterschool care component. Thus, State 
expenditures for the NSLP afterschool snack component will not ``earn'' 
SAE funds. However, the CACFP at-risk afterschool snack expenditures 
(which are made under section 17 of the NSLA) will. This proposed rule 
would correct an error in the SAE regulations that may cause confusion 
on this matter. Section 235.4(a)(1) incorrectly states that the amount 
of SAE funds allocated to each State agency is equal to one percent of 
the funds expended by the State in the second preceding fiscal year 
under sections 4 and 11 of the NSLA, and sections 3, 4, and 17A of the 
Child Nutrition Act of 1966. However, there is no section 17A in the 
Child Nutrition Act; therefore, this rule proposes to delete that 
reference. We wish to point out that this provision is taken directly 
from section 7(a)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 
1776(a)(1)); that section does not contain the erroneous cite to 
section 17A of the Child Nutrition Act. Nor does that section reference 
funds expended under section 17A of the NSLA (the authorizing statute 
for the afterschool snack component in the NSLP).

Part 5--What Are the Implementation Dates?

    The afterschool snack provisions of the Child Nutrition 
Reauthorization Act were made effective retroactive to October 1, 1998. 
To facilitate immediate implementation of these provisions, we provided 
guidance to State agencies on how to claim reimbursement for 
afterschool snacks under this new law.

Executive Order 12866

    This proposed rule has been determined to be ``significant'' and 
was reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866. The Department has prepared a regulatory impact 
analysis which indicates an estimated USDA cost of $308 million over 5 
years. The regulatory impact analysis can be obtained from Mr. Eadie at 
the address listed in the ADDRESSES section of this preamble.

Regulatory Flexibility Act

    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). 
Pursuant to that review, Shirley R. Watkins, Under Secretary for Food, 
Nutrition, and Consumer Services, has certified that this proposed rule 
would not have a significant impact on a substantial number of small 
entities because of the optional nature of the snack service. Schools 
or institutions choose whether they wish to participate in this 
additional meal service. Because most schools or institutions that will 
choose to add a snack service are already participating in the NSLP or 
the CACFP, the snack service will not have a significant paperwork or 
reporting burden because it is incorporated under

[[Page 60519]]

the existing agreement and Claim for Reimbursement.

Executive Order 12372

    The NSLP, SAE funds, and CACFP are listed in the Catalog of Federal 
Domestic Assistance Programs under 10.555, 10.560, and 10.558, 
respectively. For the reasons set forth in the final rule in 7 CFR part 
3015, subpart V, and related Notice (48 FR 29115), these programs are 
included in the scope of Executive Order 12372 which requires 
intergovernmental consultation with State and local officials. Since 
enactment of the Act in 1998, the Department informally consulted with 
State administering agencies, Program sponsors, and NSLP and CACFP 
advocates on ways to effectively implement the service of afterschool 
snacks. Discussions with State agencies took place at the Biennial 
State Directors' Meeting held in 1999 and at multiple State agency 
meetings held at various times throughout 1999 and 2000. Discussions 
with school food service personnel took place at various meetings 
sponsored by the American School Food Service Association and in a 
variety of other small and large group meetings.

Executive Order 12988

    This proposed 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. Prior to any judicial challenge to the application 
of the provisions of this rule, all applicable administrative 
procedures must be exhausted.
    In the NSLP, the administrative procedures are set forth under the 
following regulations: (1) School food authority appeals of State 
agency findings as a result of an administrative review must follow 
State agency hearing procedures as established pursuant to 7 CFR 
210.18(q); (2) school food authority appeals of FNS findings as a 
result of an administrative review must follow FNS hearing procedures 
as established pursuant to 7 CFR 210.30(d)(3); and (3) State agency 
appeals of SAE fund sanctions (7 CFR 235.11(b)) must follow FNS 
Administrative Review Process as established pursuant to 7 CFR 
235.11(f).
    In the CACFP, the administrative procedures are set forth at: (1) 7 
CFR 226.6(k), which establishes appeal procedures; and (2) 7 CFR 226.22 
and 7 CFR part 3015, which address administrative appeal procedures for 
disputes involving procurement by State agencies and institutions.

Public Law 104-4

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
FNS 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 the private sector, of $100 million 
or more in any one year. When such a statement is needed for a rule, 
section 205 of the UMRA generally requires FNS to identify and consider 
a reasonable number of regulatory alternatives and adopt the least 
costly, more cost-effective or least burdensome alternative that 
achieves the objectives of the rule.
    This proposed 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 proposed rule is not subject to the requirements 
of sections 202 and 205 of the UMRA.

Paperwork Reduction Act of 1995

    This proposed rule contains paperwork burdens that are subject to 
review and approval by the Office of Management and Budget. In 
accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 3507, 
this notice invites the general public and other public agencies to 
comment on the information collection contained in this proposed rule.
    Written comments must be received on or before December 11, 2000. 
Comments concerning the information collection aspects of this proposed 
rule should be sent to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), Room 10235, New 
Executive Office Building, Washington, DC 20503, Attention: Desk 
Officer for the 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 information collection 
requirements comments from their comments on the remainder of this 
proposed rule.
    OMB is required to make a decision concerning the collection of 
information contained in this proposed rule between 30 and 60 days 
after the publication of this document in the Federal Register. 
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 
proposed regulation. These information collection requirements will not 
become effective until approved by OMB.
    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 the collection of information on those who 
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 and recordkeeping 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: 7 CFR part 210, National School Lunch Program.
    OMB Number: 0584-0006.
    Expiration Date: March 31, 2003.

    Title: 7 CFR part 226, Child and Adult Care Food Program.
    OMB Number: 0584-0055.
    Expiration Date: May 31, 2001.

    Title: 7 CFR part 245, Determining Eligibility for Free and Reduced 
Price Meals and Free Milk in Schools.
    OMB Number: 0584-0026.
    Expiration Date: September 30, 2001.
    Type of Request: Revision of currently approved collections.
    Abstract: This rule proposes to codify the provisions of the 
William F. Goodling Child Nutrition Reauthorization Act of 1998 
regarding reimbursement of afterschool snacks in the NSLP and the 
CACFP. Corresponding technical amendments are also proposed to the 
regulations governing the SAE Funds and Determining Eligibility for 
Free and Reduced Price Meals and Free Milk in Schools.

[[Page 60520]]

    Provisions for operating the afterschool snack component are 
similar under the two programs, yet are distinguished enough to fit 
easily into the two larger programs, the NSLP or CACFP. For example, 
the afterschool snack component under both programs serves the same age 
group (ages 18 and under at the start of the school year) and must 
provide care that includes education or enrichment activities. On the 
other hand, the times that the component is available vary between the 
NSLP and CACFP. Under the NSLP, afterschool snacks may be provided only 
on days when school is in session, whereas afterschool snacks under the 
CACFP may be provided on weekends, holidays, or during vacations that 
occur during the regular school year. These similarities and 
differences illustrate how the afterschool snack component mirrors the 
features and goals of the larger programs.
    By utilizing similar features of the ``parent'' program (i.e., the 
NSLP or the CACFP), this proposed rule would place fewer new 
information collection burdens on State agencies and local program 
administrators than might have otherwise been necessary. Thus, we 
estimate that most of the reporting or recordkeeping burdens that 
normally would accompany a new program can be contained within existing 
burdens.
    In accordance with the Paperwork Reduction Act of 1995, the 
Department is providing the public with the opportunity to provide 
comments on the information collection requirements of the proposed 
rule as noted below:
BILLING CODE 3410-30-P

[[Page 60521]]

[GRAPHIC] [TIFF OMITTED] TP11OC00.009


[[Page 60522]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.010


[[Page 60523]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.011


[[Page 60524]]


[GRAPHIC] [TIFF OMITTED] TP11OC00.012

BILLING CODE 3410-30-C

[[Page 60525]]

List of Subjects

7 CFR Part 210

    Food and Nutrition Service, Grant programs--education, Grant 
programs--health, Infants and children, Nutrition, Penalties, Reporting 
and recordkeeping requirements, School breakfast and lunch programs, 
Surplus agricultural commodities.

7 CFR Part 226

    Accounting, Aged, Day care, Food and Nutrition Service, Food 
assistance programs, Grant programs--health, Indians, Individuals with 
disabilities, Infants and children, Intergovernmental relations, Loan 
programs, Reporting and recordkeeping requirements, Surplus 
agricultural commodities.

7 CFR Part 235

    Food and Nutrition Service, Food assistance programs, Grant 
programs--education, Grant programs--health, Infants and children, 
Reporting and recordkeeping requirements, School breakfast and lunch 
programs.

7 CFR Part 245

    Civil rights, Food and Nutrition Service, Food assistance programs, 
Grant programs--education, Grant programs--health, Infants and 
children, Milk, Reporting and recordkeeping requirements, School 
breakfast and lunch programs.

    For reasons set forth in the preamble, 7 CFR Parts 210, 226, 235, 
and 245 are proposed to be amended as follows:

PART 210--NATIONAL SCHOOL LUNCH PROGRAM

    1. The authority citation for part 210 is revised to read as 
follows:

    Authority: 42 U.S.C. 1751-1760, 1766a, 1769,1779.

    2. In Sec. 210.1:
    a. Revise the last two sentences of paragraph (a); and
    b. Remove the word ``lunches'' in the second sentence of paragraph 
(b) and add in its place the word ``meals''.
    The revision reads as follows:


Sec. 210.1  General purpose and scope.

    (a) * * * Pursuant to this Act, the Department provides States with 
cash assistance and donated foods to assist schools with serving 
nutritious meals to children each school day. To meet the Program's 
objectives, schools must serve meals that are nutritionally adequate in 
accordance with the applicable provisions of this part 210 to assist 
participating children with learning the relationship between proper 
eating habits and good health.
* * * * *
    3. In Sec. 210.2:
    a. Remove the definitions of ``Afterschool care program'', ``Free 
lunch'', ``Reduced price lunch'', and ``Subsidized lunch'';
    b. Add definitions for ``Afterschool snack'', ``Area eligibility'', 
``Free meal'', ``Meal'', ``Paid meal'', and ``Reduced price meal'';
    c. Revise the first sentence of the definition of ``Average Daily 
Participation'';
    d. Revise paragraph (c) in the definition of ``Child'' and add a 
new paragraph (d);
    e. Remove the words ``lunch program'' in the first sentence of the 
definition of ``Commodity School Program'' and add in their place the 
words ``school food service'';
    f. Revise the definition of ``Donated foods'';
    g. Remove the word ``meal'' in the second sentence of the 
definition of ``Menu item'' and add in its place the word ``lunch'';
    h. Revise the definition of ``National School Lunch Program'';
    i. Remove the reference to ``1954'' in the definition of 
``Nonprofit'' and add in its place a reference to ``1986''; and
    j. Remove the word ``lunches'' in the definition of 
``Reimbursement'' and add in its place the word ``meals''.
    The additions and revisions read as follows:


Sec. 210.2  Definitions.

* * * * *
    Afterschool snack means a meal supplement that meets the meal 
pattern requirements specified in Sec. 210.10(n).
    Area eligibility means a determination that an afterschool care 
program site is located in a needy area as provided for in 
Sec. 210.4a(i).
* * * * *
    Average Daily Participation means the average number of children, 
by eligibility category, participating in the lunch service each 
operating day. * * *
    Child means--* * * (c) for purposes of reimbursement for 
afterschool snacks in a ``School'', that term is defined in paragraphs 
(a) and (b) of the definition of that term, a student participating in 
an approved afterschool care program who is either age 18 or under at 
the start of the school year or is a student of any age who meets the 
definition of a ``Student with disabilities'' and who is participating 
in a school program as authorized by paragraph (a) of this definition; 
or (d) for purposes of reimbursement for afterschool snacks in a 
``School'' as provided for in paragraph (c) of that definition, a 
student participating in an approved afterschool care program must be 
age 18 or under at the start of the school year.
* * * * *
    Donated foods means food commodities donated by the Department for 
use in the National School Lunch Program or the Commodity School 
Program.
* * * * *
    Free meal means a meal served under the Program to a child eligible 
for free meals under part 245 of this chapter or to a child 
participating in an approved afterschool care program at an area 
eligible site. Neither the child nor any member of the household may be 
required to pay or to work in order to receive the free meal.
* * * * *
    Meal means food that meets the requirements for a lunch or an 
afterschool snack in Sec. 210.10.
* * * * *
    National School Lunch Program means the Program under which 
participating schools operate a nonprofit school food service in 
accordance with this part 210. The Program may include serving both 
lunches and afterschool snacks.
* * * * *
    Paid meal means a meal served under the Program to a child who is 
either not eligible for or who elects not to receive free or reduced 
price meals under part 245 of this chapter.
* * * * *
    Reduced price meal means a meal served under the Program to a child 
eligible for reduced price meals under part 245 of this chapter, for 
which the price is less than the school food authority's full price of 
the meal and which does not exceed the maximum allowable reduced price 
specified under part 245 of this chapter or in Sec. 210.4a(j)(2). 
Neither the child nor any member of the household may be required to 
work in order to receive a reduced price meal.
* * * * *
    4. In Sec. 210.4:
    a. Revise paragraph (a);
    b. Add a new sentence at the end of paragraph (b)(2);
    c. Revise paragraph (b)(3);
    d. Remove paragraph (b)(4); and
    e. Amend paragraph (c) introductory text by adding a new second 
sentence.
    The revisions and additions read follows:

[[Page 60526]]

Sec. 210.4  Cash and donated food assistance to States.

    (a) General. To the extent funds are available, FNS will make cash 
assistance available in accordance with this section to each State 
agency for meals served to children under the Program.
    (b) * * *
    (2) * * * FNS will provide additional donated foods for use in 
lunches and afterschool snacks when they are available.
    (3) Cash assistance for afterschool snacks. (i) Cash assistance is 
provided to each State agency for all afterschool snacks served to 
children in accordance with the provisions of Sec. 210.4a. The total 
cash assistance provided to a State agency may not exceed the lesser 
of:
    (A) The amounts reported to FNS as paid to school food authorities 
in accordance with Sec. 210.5(d)(3); or
    (B) The total calculated by multiplying the number of afterschool 
snacks reported to FNS in accordance with Sec. 210.5(d)(1) for each 
month during the fiscal year by the applicable rate.
    (ii) The cash assistance rates for afterschool snacks are adjusted 
annually to reflect changes in the food away from home series of the 
Consumer Price Index for all Urban Consumers. These adjustments are 
announced by Notice in the Federal Register in July of each year and 
are effective on July 1 of each year.
    (c) * * * FNS will also make cash assistance available to each 
State agency for afterschool snacks served in commodity schools in the 
same manner as it is provided in the National School Lunch Program. * * 
*
* * * * *
    5. Add a new Sec. 210.4a to read as follows:


Sec. 210.4a  Afterschool snacks.

    (a) When is a school food authority eligible to receive 
reimbursement for afterschool snacks? A school food authority is 
eligible to receive reimbursement for afterschool snacks when it has an 
agreement with the State agency for one or more schools to serve 
lunches under the National School Lunch Program and a school or school 
district operates or sponsors an eligible afterschool care program as 
provided in paragraph (b) of this section.
    (b) What is an eligible afterschool care program? (1) Eligible 
program. For the purposes of paragraph (a) of this section, an eligible 
afterschool care program is one which:
    (i) Is organized primarily to provide care for children after 
school;
    (ii) Has organized, regularly scheduled activities (i.e., in a 
structured and supervised environment);
    (iii) Includes education or enrichment activities; and
    (iv) Is sponsored or operated by the school or school district.
    (2) Eligibility limitation. Organized athletic programs engaged in 
interscholastic or community level competitive sports are not eligible 
afterschool care programs.
    (c) What are the eligibility requirements for children 
participating in an approved afterschool care program?
    (1) Requirements for children in schools. In schools, as provided 
for in paragraphs (a) and (b) of the definition of ``School'' in 
Sec. 210.2, school food authorities may claim reimbursement for 
afterschool snacks served to children who meet the conditions in 
paragraph (c) of the definition of ``Child'' in Sec. 210.2 . In such 
schools, a school food authority may claim reimbursement for a 
``Student with disabilities'' (as defined in Sec. 210.2) who is any 
age.
    (2) Requirements for children in residential child care 
institutions. In residential child care institutions, as provided for 
in paragraph (c) of the definition of ``School'' in Sec. 210.2, school 
food authorities may claim reimbursement for afterschool snacks served 
who meet the conditions in paragraph (d) of the definition of ``Child'' 
in Sec. 210.2.
    (d) Must the afterschool care program be located in a school? No. 
Any facility selected as a site of an eligible afterschool care program 
may participate in the afterschool snack service.
    (e) How does a school food authority apply for the afterschool 
snack component of the Program?
    (1) Application. An official of the school food authority must make 
written application to the State agency for any school or site in which 
it desires to operate an afterschool snack service under National 
School Lunch Program.
    (2) Required information. At a minimum, the school food authority 
must submit:
    (i) A description of how the afterschool care program meets the 
eligibility criteria in paragraph (b) of this section;
    (ii) A list of all schools and/or sites;
    (iii) An indication of which schools and/or sites the school food 
authority is requesting area eligibility for; and
    (iv) Documentation which permits the State agency to confirm that 
schools and/or sites for which area eligibility is requested meet the 
criteria in paragraph (i)(1) of this section.
    (f) How does the State agency approve the application?
    (1) State agency approval. The responsibility for approval rests 
with the State agency. The State agency must evaluate the 
description(s) of the afterschool care program(s) to determine if they 
meet the criteria in paragraph (b) of this section. The State agency 
must review the documentation provided by the school food authority for 
any school or site requesting area eligibility.
    (2) Agreement. Upon approval, the State agency amends the existing 
agreement between the State agency and the school food authority 
outlined in Sec. 210.9. The amendment must describe the approved 
afterschool care program(s), list the approved sites and indicate 
whether they meet the criteria for area eligibility as provided for in 
paragraph (i)(1) of this section. The amendment must also require the 
school food authority to comply with the applicable requirements of 
this part 210 for the afterschool snack service.
    (g) What is the application process in subsequent years? Prior to 
beginning afterschool snack service in each subsequent year, the school 
food authority must provide the information described in paragraphs 
(e)(2)(ii) through (e)(2)(iv) of this section for all schools and/or 
sites. The school food authority must also provide information about 
any substantive changes to the afterschool care program(s) to determine 
if it continues to meet the criteria in paragraph (e)(2)(i) of this 
section. The State agency reviews and approves the application and 
amends the agreement as discussed in paragraph (f) of this section.
    (h) What if school food authorities wish to add new at-risk 
afterschool care sites after application approval? School food 
authorities wishing to add new afterschool care sites after application 
approval must provide the State agency with the information specified 
in paragraph (e) of this section. The State agency would then follow 
the procedures established under paragraph (f) of this section.
    (i) What is area eligibility?
    (1) General. A school is area eligible if at least 50 percent of 
its enrolled children are certified as eligible for free or reduced 
price meals or if it is located in the attendance area of an 
elementary, middle, or high school in which at least 50 percent of the 
enrolled children are certified eligible for free or reduced price 
meals. A site is area eligible if it is located in the attendance area 
of an elementary, middle, or high school in which at least 50 percent 
of the enrolled children are certified eligible for free or reduced 
price meals.
    (2) Data used. Area eligibility determinations must be based on the

[[Page 60527]]

total number of children approved for free and reduced price meals for 
the preceding October or another month the State agency has designated 
pursuant to Sec. 210.9(b)(20). If the State agency decides to choose 
another month, it must do so for the entire State.
    (j) What may a school food authority charge for afterschool snacks?
    (1) Free afterschool snacks. School food authorities may not charge 
for afterschool snacks served to children who are eligible for free 
meals or who participate at an area eligible school or site.
    (2) Reduced price afterschool snacks. School food authorities may 
charge no more than 15 cents for afterschool snacks served to children 
eligible for reduced price meals at non-area eligible schools or sites.
    (3) Paid afterschool snacks. School food authorities may set the 
charge for afterschool snacks served to children from households who 
are not eligible for free or reduced price meals at non-area eligible 
sites.
    (k) How many snacks may be claimed for reimbursement? School food 
authorities may claim reimbursement for no more than one afterschool 
snack per child per day. Any excess afterschool snacks that are 
produced may be offered, but may not be claimed for reimbursement.
    (l) What are the meal pattern requirements for afterschool snacks? 
Afterschool snacks must meet the meal pattern requirements for 
afterschool snacks in Sec. 210.10(n). If schools or sites offer choices 
of snacks or choices within the snack meal pattern, children who are 
eligible for free or reduced price snacks must be allowed to take any 
snack or choice offered as a part of the reimbursable snack. The 
afterschool snack must be priced as a unit.
    (m) When may snacks be served? School food authorities may claim 
reimbursement only for afterschool snacks served in an afterschool care 
programs after a child's school day on days when school is in session. 
School food authorities may claim afterschool snacks served in approved 
afterschool care programs operated for children attending a summer 
school program which is an integral part of the curriculum or an actual 
extension of the local educational program. School food authorities may 
not claim afterschool snacks served on days when school is not in 
session (i.e. weekends, holidays, or school vacations).
    (n) What reimbursements do schools earn?
    (1) At area eligible sites. All afterschool snacks served in area 
eligible sites are reimbursed at the free afterschool snack rate.
    (2) At non-area eligible sites. For afterschool snacks served in 
sites that are not area eligible, the reimbursement rate depends on the 
eligibility status of the child (i.e. free, reduced price, or paid).
    (o) How do schools determine eligibility status in non-area 
eligible sites? School food authorities must determine and document the 
income eligibility (in accordance with part 245 of this chapter) of the 
children served in sites that are not area eligible. School food 
authorities may use the free and reduced price determinations made for 
purposes of free and reduced price lunches and/or breakfasts as 
documentation for free and reduced price afterschool snacks.
    (p) How do schools claim reimbursement? To be entitled to 
reimbursement under this part 210, each school food authority must 
ensure that Claims for Reimbursement are limited to the number of free, 
reduced price and paid afterschool snacks that are served to children 
eligible for free, reduced price and paid afterschool snacks for each 
day of operation. In order to obtain reimbursement for afterschool 
snacks, school food authorities must follow the procedures set forth in 
Sec. 210.7 and Sec. 210.8, as applicable.
    (q) What additional recordkeeping is required for the snack 
service? In addition to the other records required by this part 210, 
school food authorities or schools must maintain daily attendance 
rosters, sign-in sheets or, with State agency approval, other methods 
which result in accurate recording of daily attendance.
    (r) What additional reporting is required for the snack service? In 
addition to other reporting requirements under this part 210, school 
food authorities must submit a claim for reimbursement as specified in 
Sec. 210.8.
    (s) What are the monitoring requirements for the school food 
authority? Twice each school year, the school food authority must 
review each afterschool care program site's afterschool snack counting 
and claiming system and compliance with the afterschool snack meal 
pattern requirements. The first review must be made during the first 
six weeks of snack service each school year.
    (t) What are the monitoring requirements for State agencies? State 
agency monitoring requirements are set forth in Sec. 210.19(a)(7).
    (u) What are the other requirements for afterschool snacks? School 
food authorities must comply with all applicable requirements in this 
part 210 except point of service counts as specified in 
Sec. Sec. 210.7(c)(1)(iii), 210.7(c)(2), and 210.9(b)(9)).
    6. In Sec. 210.5, revise the third sentence of paragraph (d)(1) to 
read as follows:


Sec. 210.5  Payment process to States.

* * * * *
    (d) * * *
    (1) * * * For the month of October as of the last day of operation, 
the final report must include the total number of children approved for 
free lunches; the total number of children approved for reduced priced 
lunches; the total number of children enrolled in participating public 
schools, private schools, and residential child care institutions, 
respectively; and the total number of public schools/sites, private 
schools/sites and residential child care institutions, respectively, 
claiming reimbursements for meals under the National School Lunch 
Program. * * *
* * * * *


Sec. 210.6  [Amended]

    7. In Sec. 210.6, remove the words ``lunches and meals 
supplements'' in the first sentence and add in their place the word 
``meals''.
    8. In Sec. 210.7:
    a. Revise paragraph (a);
    b. Revise the heading and first sentence of paragraph (b);
    c. Revise the introductory text in paragraph (c);
    d. Revise paragraph (c)(1) introductory text;
    e. Revise paragraph (c)(1)(i);
    f. Revise paragraph (c)(1)(ii) introductory text;
    g. Revise paragraph (c)(1)(iii);
    h. Revise paragraph (c)(1)(iv);
    i. Revise paragraph (c)(1)(v); and
    j. Revise paragraph (d).
    The revisions read as follows:


Sec. 210.7  Reimbursement for school food authorities.

    (a) General. Reimbursement payments to finance nonprofit school 
food service operations must be made only to school food authorities 
operating under a written agreement with the State agency. Subject to 
the provisions of Sec. 210.8(c), such payments may be made for meals 
served in accordance with provisions of this part 210 and part 245 of 
this chapter in the calendar month preceding the calendar month in 
which the agreement is executed. These reimbursement payments include 
general cash assistance for all lunches served to children under the 
National School Lunch Program. Reimbursement payments also include 
special cash assistance payments for free or reduced price lunches 
served to children

[[Page 60528]]

determined eligible for such benefits under the National School Lunch 
and Commodity School Programs. Reimbursement payments will also be made 
for afterschool snacks served in approved afterschool care programs in 
accordance with Sec. 210.4a.
    (b) Assignment of rates for lunch. At the beginning of each school 
year, State agencies must establish the per meal rates of reimbursement 
for lunches for school food authorities participating in the Program. * 
* *
    (c) Reimbursement limitations. To be entitled to reimbursement 
under this part 210, each school food authority must ensure that Claims 
for Reimbursement are limited to the number of free, reduced price and 
paid meals that are served to children eligible for free, reduced price 
and paid meals, respectively, for each day of operation.
    (1) Meal count system. To ensure that the Claim for Reimbursement 
accurately reflects the number of meals, by eligibility category, 
served to eligible children for each day of operation, the school food 
authority must, at a minimum:
    (i) Correctly approve each child's eligibility for free and reduced 
price meals based on the requirements prescribed under part 245 of this 
chapter;
    (ii) Maintain a system to issue benefits and to update the 
eligibility of children approved for free or reduced price meals. The 
system must:
* * * * *
    (iii) Base Claims for Reimbursement on meal counts, taken daily, 
that correctly identify the number of free, reduced price and paid 
lunches and afterschool snacks served to eligible children each day. 
For lunches, the counts must be taken daily, at the point of service, 
or in accordance with a point of service alternative authorized under 
paragraph (c)(2) of this section;
    (iv) Correctly record, consolidate and report those lunch and 
afterschool snack counts on the Claim for Reimbursement; and
    (v) Ensure that Claims for Reimbursement do not request payment for 
any excess meals produced, as prohibited in Sec. 210.10(a)(2) or non-
Program meals (i.e., a la carte or adult lunches) or for more than one 
lunch and one afterschool snack per child per day.
* * * * *
    (d) Reimbursement for afterschool snacks. State agencies must 
reimburse school food authorities for afterschool snacks at the rates 
set in Sec. 210.4(b)(3).
    9. In Sec. 210.8:
    a. Revise paragraph (a) introductory text;
     b. Add a new sentence at the end of paragraph (a)(1);
    c. Revise paragraph (a)(2) introductory text and paragraph 
(a)(2)(i) introductory text;
    d. Remove the word ``meal'' in paragraphs (a)(2)(ii) and (a)(3)(ii) 
and add in its place the word ``lunch'';
    e. Revise paragraph (a)(4);
    f. Revise paragraph (b)(2) introductory text;
    g. Revise the second sentence of paragraph (b)(2)(ii);
    h. Remove the word ``lunch'' in paragraph (b)(3) and add in its 
place the word ``meal'';
    i. Revise the first sentence of paragraph (b)(4);
    j. Revise the second sentence of paragraph (c) introductory text;
    k. Revise the second sentence of paragraph (c)(1);
    l. Revise the first sentence of paragraph (c)(2); and
    m. Revise the second sentence of paragraph (d).
    The revisions and addition read as follows:


Sec. 210.8  Claims for reimbursement.

    (a) Internal controls. The school food authority must establish 
internal controls which ensure the accuracy of meal counts prior to the 
submission of the monthly Claim for Reimbursement. At a minimum, these 
internal controls for meal counting and claiming must include: An on-
site review of the counting and claiming system employed by each school 
within the jurisdiction of the school food authority; comparisons of 
daily free, reduced price and paid meal counts against data which will 
assist in the identification of meal counts in excess of the number of 
free, reduced price and paid meals served each day to children eligible 
for such meals; and a system for following up on those meal counts 
which suggest the likelihood of counting problems.
    (1) * * * On-site review requirements for afterschool snacks are 
set forth in Sec. 210.4a(s).
    (2) School food authority claims review process. Prior to the 
submission of a monthly Claim for Reimbursement, each school food 
authority must review the meal count data for each school under its 
jurisdiction to ensure the accuracy of the monthly Claim for 
Reimbursement. The objective of this review is to ensure that monthly 
claims include only the number of free, reduced price and paid lunches 
and afterschool snacks served on any day of operation to children 
currently eligible for such lunches and afterschool snacks.
    (i) Any school food authority that was found by its most recent 
administrative review conducted in accordance with Sec. 210.18, to have 
no lunch counting and claiming violations may:
* * * * *
    (4) Follow-up activity. The school food authority must promptly 
follow-up through phone contact, on-site visits or other means when the 
internal controls used by schools in accordance with paragraph (a)(2) 
of this section or the claims review process used by schools suggest 
the likelihood of meal count problems. When problems or errors are 
identified, the meal counts must be corrected prior to submission of 
the monthly Claim for Reimbursement. Improvements to the meal count 
system must also be made to ensure that the meal counting system 
consistently results in meal counts of the actual number of 
reimbursable free, reduced price and paid lunches and afterschool 
snacks served for each day of operation.
* * * * *
    (b) * * *
    (2) State agency claims review process. The State agency must 
review each school food authority's Claim for Reimbursement, on a 
monthly basis, in an effort to ensure that monthly claims are limited 
to the number of free and reduced price lunches and afterschool snacks 
served, by type, to eligible children.
* * * * *
    (ii) * * * Such alternative analyses must meet the objective of 
ensuring that the monthly Claims for Reimbursement are limited to the 
numbers of free and reduced price lunches and afterschool snacks 
served, by type, to eligible children.
* * * * *
    (4) Corrective action. The State agency must promptly take 
corrective action with respect to any Claim for Reimbursement which 
includes more than the number of lunches and/or afterschool snacks 
served, by type, to eligible children. * * *
    (c) * * * Such data must include, at a minimum, the number of free, 
reduced price and paid lunches and afterschool snacks served to 
eligible children. * * *
    (1) * * * Unless otherwise approved by FNS, the Claim for 
Reimbursement for any month must include only lunches and afterschool 
snacks served in that month except if the first or last month of 
operation for any school year contains 10 operating days or less, such 
month may be combined with the Claim for Reimbursement for the 
appropriate adjacent month. * * *
    (2) October data. For the month of October as of the last day of 
operation, the State agency must also obtain, either through the Claim 
for Reimbursement or

[[Page 60529]]

other means: the total number of children approved for free lunches; 
the total number of children approved for reduced price lunches; the 
total number of children enrolled in the school food authority and the 
total number of schools and sites claiming reimbursement for meals 
under the National School Lunch Program. * * *
    (d) * * * Following the receipt of claims, the State agency must 
make adjustments, as necessary, to ensure that the total amount of 
payments received by the school food authority for the fiscal year does 
not exceed an amount equal to the number of lunches and afterschool 
snacks by reimbursement type served to children times the respective 
payment rates assigned by the State in accordance with Sec. 210.7(b). * 
* *
    10. In Sec. 210.9:
    a. Revise paragraphs (b)(5) through (b)(7);
    b. Revise the first sentence of paragraph (b)(8);
    c. Revise paragraph (b)(9);
    d. Remove the word ``lunches'' in first sentence of paragraph 
(b)(18) and add in its place the word ``meals'';
    e. Revise paragraphs (b)(19) and (b)(20); and
    f. Remove paragraph (c).
    The revisions read as follows:


Sec. 210.9  Agreement with State agency.

* * * * *
    (b) * * *
    (5) Serve lunches, during the lunch period, which meet the minimum 
requirements prescribed in Sec. 210.10; and serve snacks after the end 
of the school day which meet the applicable requirements in 
Sec. 210.10;
    (6) Price the lunch and afterschool snack as units;
    (7) Serve meals free or at a reduced price to all children who are 
determined by the school food authority to be eligible for such meals 
under part 245 of this chapter and serve afterschool snacks free to all 
children at area eligible sites in accordance with Sec. 210.4a(i);
    (8) Claim reimbursement at the assigned rates only for reimbursable 
free, reduced price and paid meals served to eligible children in 
accordance with part 210. * * *
    (9) Count the number of meals in accordance with Sec. 210.7(c);
* * * * *
    (19) Retain the individual applications for free and reduced price 
meals submitted by families for a period of 3 years after the end of 
the fiscal year to which they pertain or as otherwise specified under 
paragraph (b)(17) of this section.
    (20) No later than December 31, provide the State agency with a 
list of all elementary, middle and high schools under its jurisdiction 
in which 50 percent or more of enrolled children have been determined 
eligible for free or reduced price meals as of the last operating day 
the preceding October. The State agency may designate a month other 
than October for the collection of this information, in which case the 
list must be provided to the State agency within 60 calendar days 
following the end of the month designated by the State agency. In 
addition, each school food authority must provide information on the 
boundaries of the attendance areas for the elementary, middle and high 
schools identified as having 50 percent or more of enrolled children 
certified for free or reduced price meals. Each school food authority 
must provide this information when available for the schools under its 
jurisdiction, and upon the request of:
    (i) At-risk afterschool care center;
    (ii) Sponsoring organization of at-risk afterschool care centers; 
or
    (iii) A sponsoring organization of day care homes participating in 
the Child and Adult Care Food Program.
    11. In Sec. 210.10, revise paragraph (n) to read as follows:


Sec. 210.10  What are the nutrition standards and menu planning 
approaches for lunches and the requirements for afterschool snacks?

* * * * *
    (n) What are the requirements for afterschool snacks? (1) Minimum 
components. In order to be reimbursed, afterschool snacks must contain 
two different components from the following four:
    (i) A serving of fluid milk, as defined in paragraph (m)(1)(ii) of 
this section, as a beverage, or on cereal, or used in part for each 
purpose;
    (ii) A serving of meat or meat alternate. Nuts and seeds and their 
butters listed in program guidance are nutritionally comparable to meat 
or other meat alternates based on available nutritional data. Acorns, 
chestnuts, and coconuts are excluded and must not be used as meat 
alternates due to their low protein content. Nut or seed meals or 
flours must not be used as a meat alternate except as defined under 
appendix A to this part: Alternate Foods for Meals;
    (iii) A serving of vegetable(s) or fruit(s) or full-strength 
vegetable or fruit juice, or an equivalent quantity of any combination 
of these foods. Juice may not be served when milk is served as the only 
other component;
    (iv) A serving of whole-grain or enriched bread; or an equivalent 
serving of cornbread, biscuits, rolls, muffins, etc., made with whole-
grain or enriched meal or flour; or a serving of cooked whole-grain or 
enriched pasta or noodle products such as macaroni, or cereal grains 
such as rice, bulgur, or corn grits; or an equivalent quantity of any 
combination of these foods.
    (2) Afterschool snacks for infants. Afterschool snacks for infants 
must contain the following:
    (i) Birth through 3 months: 4-6 fluid ounces of breast milk or 
iron-fortified infant formula.
    (ii) 4 through 7 months: 4-6 fluid ounces of breast milk or iron-
fortified infant formula.
    (iii) 8 through 11 months: 2-4 fluid ounces of breast milk or iron-
fortified infant formula or full strength fruit juice; 0-\1/2\ slice of 
crusty bread or 0-2 cracker type products made from whole-grain or 
enriched meal or flour that are suitable for an infant for use as a 
finger food when appropriate. To improve the nutrition of participating 
children over one year of age, additional foods may be served with the 
afterschool snacks as desired.
    (3) Minimum quantities. In order to be reimbursed, afterschool 
snacks must contain the following quantities of the required 
components. (Note: Juice may not be served when milk is served as the 
only other component.) Children older than age 12 may be served larger 
portions based on the greater food needs of older boys and girls, but 
must be served no less than the minimum quantities specified for 
children age 6 through 12.

[[Page 60530]]

[GRAPHIC] [TIFF OMITTED] TP11OC00.013

[GRAPHIC] [TIFF OMITTED] TP11OC00.014

BILLING CODE 3410-30-C
* * * * *


Sec. 210.11  [Amended]

    12. In Sec. 210.11:
    a. Remove the word ``lunch'' and add the word ``meal'' in its place 
in paragraph (a)(1); and
    b. In paragraph (b):
    (i) Remove the word ``lunches'' and add in its place the word 
``meals'' in the first sentence;
    (ii) Remove the word ``lunch'' and add in its place the word 
``meal'' in the second sentence; and
    (iii) Remove the words ``lunch period'' and add in their place the 
words ``meal periods'' in the third sentence.
    13. In Sec. 210.15, revise paragraphs (b)(3) and (b)(4) to read as 
follows:


Sec. 210.15  Reporting and recordkeeping.

* * * * *
    (b) * * *
    (3) Participation records to demonstrate positive action toward 
providing one lunch per child per day as required under 
Sec. 210.10(a)(2) and one afterschool snack per child per day under 
Sec. 210.4a;
    (4) Currently approved and denied applications for free and reduced 
price meals and a description of the verification activities, including 
verified applications, and any accompanying source documentation in 
accordance with Sec. 245.6a of this chapter.

[[Page 60531]]

    14. In Sec. 210.16:
    a. revise the second sentence in paragraph (a); and
    b. revise the first sentence in paragraph (b)(1).
    The revisions read as follows:


Sec. 210.16  Food service management companies.

    (a) * * * However, no school or school food authority may contract 
with a food service management company to operate an a la carte food 
service unless the company agrees to offer free, reduced price and paid 
reimbursable meals to all eligible children. * * *
* * * * *
    (b) * * *
    (1) The invitation to bid or request for proposal contains a 21-day 
cycle menu developed in accordance with the provisions of Sec. 210.10 
to be used as a standard for the purpose of basing bids or estimating 
average cost per lunch and/or afterschool snack. * * *
* * * * *
    15. In Sec. 210.18:
    a. revise paragraph (i)(4)(iv);
    b. revise the second sentence of paragraph (l)(2); and
    c. revise the last sentence of paragraph (l)(4).
    The revisions read as follows:


Sec. 210.18  Administrative reviews.

* * * * *
    (i) * * *
    (4) * * *
    (iv) If the State agency did not evaluate the certification, count 
and milk/meal service procedures for the School Breakfast Program (part 
220) and/or the Special Milk Program for Children (part 215) or the 
afterschool snack service (Sec. 210.4a) in those schools selected for 
the administrative review and participating in those Programs, the 
State agency must do so for those schools selected for the first 
follow-up review.
* * * * *
    (1) * * *
    (2) * * * Subsequent to the State agency's acceptance of the 
corrective actions (and a follow-up review, when required), payments 
will be released for all meals served in accordance with the provisions 
of this part during the period the payments were withheld. * * *
* * * * *
    (4) * * * Subsequent to the documentation of compliance, any 
withheld administrative funds will be released and payment will be 
released for any meals served in accordance with the provisions of this 
part during the period the payments were withheld.
* * * * *
    16. In Sec. 210.19:
    a. Remove the word ``lunches'' and add the word ``meals'' in its 
place in the fifth sentence of paragraph (a)(2);
    b. Add a new paragraph (a)(7);
    c. Revise paragraph (c)(2)(i);
    d. Revise the last sentence of paragraph (c)(2)(ii);
    e. Revise paragraph (c)(2)(iii); and
    f. Revise paragraph (f).
    The revisions and addition read as follows:


Sec. 210.19  Additional responsibilities.

    (a) * * *
    (7) Compliance with afterschool snack requirements. Each State 
agency shall determine whether school food authorities claiming 
reimbursement for afterschool snacks comply with the provisions of 
Sec. 210.4a. Each State agency shall conduct on-site reviews of at 
least 10 percent, but not less than 1 site, of each school food 
authority's afterschool snack service sites on the same schedule 
required of administrative reviews under Sec. 210.18(c). Such reviews 
may be conducted at the same time the school food authority is 
scheduled for an administrative review in accordance with Sec. 210.18. 
State agencies may also conduct these evaluations in conjunction with 
technical assistance visits, other reviews, or separately.
* * * * *
    (c) * * *
    (2) * * *
    (i) The State agency must identify the school food authority's 
correct entitlement and take fiscal action when any school food 
authority claims or receives more Federal funds than earned under 
Sec. 210.7. In order to take fiscal action, the State agency must 
identify accurate counts of reimbursable lunches and afterschool snacks 
through available data, if possible. In the absence of reliable data, 
the State agency must reconstruct the lunch and afterschool snack 
counts in accordance with procedures established by FNS.
    (ii) * * * The State agency must ensure that any Claim for 
Reimbursement, filed subsequent to the reviews conducted under 
Sec. 210.18 and prior to the implementation of corrective action, is 
limited to meals eligible for reimbursement under this part 210.
    (iii) In taking fiscal action, State agencies must assume that 
children determined by the reviewer to be incorrectly approved for free 
and reduced price meals participated at the same rate as correctly 
approved children in the corresponding category.
* * * * *
    (f) Cooperation with the Child and Adult Care Food Program. On an 
annual basis, the State agency must provide the State agency which 
administers the Child and Adult Care Food Program with a list of all 
elementary, middle, and high schools in the State participating in the 
National School Lunch Program in which 50 percent or more of enrolled 
children have been determined eligible for free or reduced price meals 
as of the last operating day of the preceding October, or another month 
specified by the State agency. Lists must be provided by February 1 of 
each year or, if data is based on a month other than October, within 90 
calendar days following the end of the month designated by the State 
agency. The State agency may provide updated free and reduced price 
enrollment data on individual schools to the State agency which 
administers the Child and Adult Care Food Program only when unusual 
circumstances render the initial data obsolete. In addition, the State 
agency must provide the current list, upon request, to at-risk 
afterschool care centers and sponsoring organizations of at-risk 
afterschool care centers or sponsoring organizations of day care homes 
participating in the Child and Adult Care Food Program.
    17. In Sec. 210.23, revise paragraph (a) to read as follows:


Sec. 210.23  Other responsibilities.

    (a) Free and reduced price meals. State agencies and school food 
authorities must ensure that meals are made available free or at a 
reduced price to all children who are determined by the school food 
authority to be eligible for such benefits. The determination of a 
child's eligibility for free or reduced price meals is to be made in 
accordance with part 245 of this chapter.
* * * * *
    18. In Sec. 210.24, revise the last sentence to read as follows:


Sec. 210.24  Withholding payments.

    * * * Subsequent to the State agency's acceptance of the corrective 
actions, payments will be released for any meals served in accordance 
with the provisions of this part during the period the payments were 
withheld.

PART 226--CHILD AND ADULT CARE FOOD PROGRAM

    1. The authority citation for part 226 is revised to read as 
follows:

    Authority: 42 U.S.C. 1758, 1759a, 1765, and 1766.

    2. In part 226:
    a. Remove the words ``supplement'' or ``supplements'' wherever they 
appear in

[[Page 60532]]

the following sections and add the words ``snack'' or ``snacks'', 
respectively, in their place:

Sec. 226.4(b)(7);
Sec. 226.4(b)(8);
Sec. 226.4(b)(9);
Sec. 226.13(b);
Sec. 226.15(e)(4);
Sec. 226.17(b)(8);
Sec. 226.19(b)(4);
Sec. 226.19(b)(6);
Sec. 226.19a(b)(9);
Sec. 226.20(b)(4) introductory text;
Sec. 226.25(g)(1)(i)(C); and

    b. remove the words ``supplemental food'' wherever they appear in 
the following sections and add the word ``snacks'' in their place:

Sec. 226.20(a)(4);
Sec. 226.20(b)(1)(iii)
Sec. 226.20(b)(2)(iii);
Sec. 226.20(b)(3)(iii);
Sec. 226.20(c)(4); and
Sec. 226.20(d)(2).
    3. In Sec. 226.2:
    a. Add new definitions of ``At-risk afterschool care center'', 
``Eligible area'', ``Iowa/Kentucky demonstration project center'', 
``Person with disabilities'', and ``Snack'' in alphabetical order;
    b. Revise the definitions of ``CACFP child care standards'', 
``Child care facility'', ``Children'', ``Nonpricing program'', 
``Pricing program'', ``Proprietary title XX center'', ``Reduced price 
meal'', and ``Sponsoring organization'';
    c. Add a new sentence to the end of the definition of ``Enrolled 
child'';
    d. Revise the first sentence in the definition of ``Free meal'';
    e. Add the words ``at-risk afterschool care center,'' in the 
definition of ``Independent center'' after the words ``child care 
center,'';
    f. Add the words ``at-risk afterschool care center,'' in the 
definition of ``Institution'' after the words ``child care center,''; 
and
    g. Add the words ``in accordance with Sec. 226.6(d)(1)'' in the 
first sentence of the definition of ``Outside-school-hours care 
center'' after the words ``licensed or approved''.
    The new definitions and revisions read as follows:


Sec. 226.2  Definitions.

* * * * *
    At-risk afterschool care center means a public or private nonprofit 
organization (or a proprietary title XX center, as defined in this 
section) eligible to participate in the CACFP that provides 
nonresidential child care to children after school through an approved 
afterschool care program in an eligible area. An at-risk afterschool 
care center may participate in the Program as an independent center or 
under the auspices of a sponsoring organization.
    CACFP child care standards means the Child and Adult Care Food 
Program child care standards developed by the Department for alternate 
approval of child care centers and day care homes by the State agency 
under the provisions of Sec. 226.6(d)(2) and (d)(3).
* * * * *
    Child care facility means a child care center, day care home, at-
risk afterschool care center, or outside-school-hours care center under 
the auspices of a sponsoring organization.
    Children means:
    (a) Persons age 12 and under;
    (b) Persons age 15 and under who are children of migrant workers;
    (c) ``Person with disabilities'' as defined in this section; and
    (d) For at-risk afterschool care centers, students who are enrolled 
in an approved afterschool care program and who either are age 18 or 
under at the start of the school year or who are any age and meet the 
definition of ``Person with disabilities'' as defined in this section.
* * * * *
    Eligible area means the attendance area of an elementary, middle, 
or high school in which at least 50 percent of the enrolled children 
are certified eligible for free or reduced price school meals.
    Enrolled child * * * For at-risk afterschool care centers, 
``enrolled child'' means a child participating in an approved 
afterschool care program.
* * * * *
    Free meal means a meal served under the Program to: a participant 
from a family that meets the income standards for free school meals; a 
child who is automatically eligible for free meals by virtue of food 
stamp, FDPIR or AFDC recipiency; a child who is a Head Start 
participant; a child participating in an approved at-risk afterschool 
care program; or an adult participant who is automatically eligible for 
free meals by virtue of food stamp or FDPIR recipiency or is a SSI or 
Medicaid participant. * * *
* * * * *
    Iowa/Kentucky demonstration project center means any private for-
profit center:
    (a) Providing nonresidential child care;
    (b) In which at least 25 percent of the enrolled children or 25 
percent of the licensed capacity, whichever is less, meet the income 
eligibility criteria for free or reduced price meals. However, children 
who only participate in the at-risk afterschool snack component of the 
Program must not be considered in determining this percentage; and
    (c) Participating in the demonstration project under section 17(p) 
of the National School Lunch Act.
* * * * *
    Nonpricing program means an institution, child care facility, or 
adult day care facility in which there is no separate identifiable 
charge made for meals served to participants.
* * * * *
    Person with disabilities means a person of any age who has one or 
more disabilities, as determined by the State agency, and who is 
enrolled in an institution or child care facility serving a majority of 
persons who are age 18 and under.
* * * * *
    Pricing program means an institution, child care facility, or adult 
day care facility in which a separate identifiable charge is made for 
meals served to participants.
* * * * *
    Proprietary title XX center means:
    (a) Any private, for profit center which provides nonresidential 
child care services for which it receives compensation from amounts 
granted to the States under title XX of the Social Security Act; and in 
which title XX child care beneficiaries were at least 25 percent of 
enrolled eligible participants or licensed capacity, whichever is less, 
during the calendar month before initial application or annual 
reapplication for Program participation. (Children who only participate 
in the at-risk afterschool snack component of the Program must not be 
considered in determining this percentage); or
    (b) Any private, for profit center which provides nonresidential 
adult day care services for which it receives compensation from amounts 
granted to the States under title XX of the Social Security Act; and in 
which title XX adult beneficiaries were at least 25 percent of enrolled 
eligible participants during the calendar month before initial 
application or annual reapplication for Program participation.
    Reduced price meal means a meal served under the Program to a 
participant from a family which meets the income standards for reduced 
price school meals. Any separate charge imposed must be less than the 
full price of the meal, but in no case more than 40 cents for a lunch 
or supper, 30 cents for a breakfast, and 15 cents for a snack. Neither 
the participant nor any member of his family may be required to work

[[Page 60533]]

in the food service program for a reduced price meal.
* * * * *
    Snack means a meal supplement which meets the meal pattern 
requirements specified in Sec. 226.20(a)(4).
    Sponsoring organization means a public or nonprofit private 
organization which is entirely responsible for the administration of 
the food program in:
    (a) One or more day care homes;
    (b) A child care center, at-risk afterschool care center, outside-
school-hours care center, or adult day care center which is a legally 
distinct entity from the sponsoring organization;
    (c) Two or more child care centers, at-risk afterschool care 
centers, outside-school-hours care center, or adult day care centers; 
or
    (d) Any combination of child care centers, at-risk afterschool care 
centers, outside-school-hours care centers, adult day care centers, and 
day care homes. The term ``sponsoring organization'' also includes a 
for-profit organization which is entirely responsible for 
administration of the Program in any combination of two or more child 
care centers, at-risk afterschool care centers, adult day care centers 
and outside-school-hours care centers which are part of the same legal 
entity as the sponsoring organization, and which are proprietary title 
XIX or XX centers, as defined in this section.
* * * * *
    4. In Sec. 226.4:
    a. Revise paragraph (a);
    b. Redesignate paragraphs (c) through (j) as paragraphs (d) through 
(k), respectively;
    c. Add a new paragraph (c);
    d. Remove the word ``supplements'' wherever it appears in newly 
redesignated paragraphs (d)(7) through (d)(9), and add in its place the 
word ``snacks'';
    e. Revise the first sentence of newly redesignated paragraph 
(h)(2).
    The revisions and addition read as follows:


Sec. 226.4  Payments to States and use of funds.

    (a) Availability of funds. For each fiscal year based on funds 
provided to the Department, FNS must make funds available to each State 
agency to reimburse institutions for their costs in connection with 
food service operations, including administrative expenses, under this 
part 226. Funds must be made available in an amount no less than the 
sum of the totals obtained under paragraphs (b), (c), (d), (e), (f), 
and (i) of this section. However, in any fiscal year, the aggregate 
amount of assistance provided to a State under this part 226 must not 
exceed the sum of the Federal funds provided by the State to 
participating institutions within the State for that fiscal year and 
any funds used by the State under paragraphs (i) and (k) of this 
section.
* * * * *
    (c) At-risk afterschool care center funds. For snacks served to 
children in at-risk afterschool care centers, funds will be made 
available to each State agency in an amount equal to the total 
calculated by multiplying the number of snacks served in the Program 
within the State to such children by the national average payment rate 
for free snacks under section 11 of the National School Lunch Act.
* * * * *
    (h) * * *
    (2) The rate for snacks served in child care centers, at-risk 
afterschool care centers, adult day care centers and outside-school-
hours care centers will be adjusted annually, on July 1, on the basis 
of changes in the series for food away from home of the Consumer Price 
Index for All Urban Consumers published by the Department of Labor. * * 
*
* * * * *
    5. In Sec. 226.6:
    a. Revise paragraph (b)(7);
    b. Remove the first sentence and add three sentences in its place 
in paragraph (b)(8);
    c. Add a new paragraph (b)(11);
    d. Revise the heading of paragraph (d) and paragraph (d)(1) 
introductory text;
    e. Remove the period at the end of paragraph (d)(1)(v) and add in 
its place the word ``; or'';
    f. Add a new paragraph (d)(1)(vi);
    g. Remove the words ``and outside-school-hours care centers'' in 
paragraph (d)(2)(i)(A)(2);
    h. Remove paragraph (d)(2)(ii);
    i. Revise the second sentence of paragraph (d)(3) and paragraph 
(f)(9);
    j. Add new paragraphs (f)(12) and (l)(4); and
    k. Remove the words ``, outside-school-hours care centers,'' and 
``,outside-school-hours care center,'' wherever they appear in 
paragraph (n).
    The additions and revisions read as follows:


Sec. 226.6  State agency administrative responsibilities.

* * * * *
    (b) * * *
    (7) Submission of documentation that all child care centers, at-
risk afterschool care centers, adult day care centers, outside-school-
hours care centers and day care homes for which application is made are 
in compliance with Program licensing/approval provisions;
    (8) For proprietary title XX child care centers and proprietary 
title XX at-risk afterschool care centers, submission of documentation 
that they are currently providing nonresidential day care services for 
which they receive compensation under title XX of the Social Security 
Act. Each such center must also certify that at least 25 percent of its 
enrolled children or 25 percent of its licensed capacity (whichever is 
less) were title XX beneficiaries during the most recent calendar 
month. However, children who only participate in the at-risk 
afterschool snack component of the Program must not be considered in 
determining this percentage. * * *
* * * * *
    (11) For at-risk afterschool care centers:
    (i) Documentation sufficient to determine if each afterschool care 
program meets the eligibility requirements in Sec. 226.17a(a);
    (ii) Information about any substantive changes to the afterschool 
care program whenever such changes occur (even if the changes do not 
affect the eligibility of the afterschool care program); and
    (iii) Documentation of area eligibility at least once every three 
years thereafter.
* * * * *
    (d) Licensing/approval for child care centers, at-risk afterschool 
care centers, outside-school hours care centers and day care homes. * * 
*
    (1) General. Each State agency must establish procedures to 
annually review information submitted by institutions to ensure that 
all participating child care centers, at-risk afterschool care centers 
and outside-school hours care centers and day care homes either:
* * * * *
    (vi) If Federal, State or local licensing or approval is not 
otherwise required, at-risk afterschool care centers and outside-
school-hours care centers must meet State or local health and safety 
standards.
* * * * *
    (3) * * * Licensing or approval is not available when no Federal, 
State, or local licensing/approval standards have been established for 
child care centers or day care homes; or no mechanism exists to 
determine compliance with licensing/approval standards. * * *
* * * * *
    (f) * * *
    (9) The State agency must comply with the requirements of this 
paragraph (f) for tiering and at-risk afterschool center area 
eligibility determinations.
    (i) General. Coordinate with the State agency which administers the 
National School Lunch Program to ensure the receipt of a list of 
elementary, middle,

[[Page 60534]]

and high schools in the State in which at least one-half of the 
children enrolled are certified eligible to receive free or reduced 
price meals.
    (ii) Tiering data. The State agency must provide the list of 
elementary schools to sponsoring organizations of day care homes by 
February 15 each year unless the State agency that administers the 
National School Lunch Program has elected to base data for the list on 
a month other than October. In that case, the State agency must provide 
the list to sponsoring organizations of day care homes within 15 
calendar days of its receipt from the State agency that administers the 
National School Lunch Program. The State agency also must provide each 
sponsoring organization of day care homes with census data (as provided 
to the State agency by FNS upon its availability on a decennial basis) 
showing areas in the State in which at least 50 percent of the children 
are from households meeting the income standards for free or reduced 
price meals.
    (iii) Tiering determinations. The State agency must ensure that the 
most recent available data is used when the determination of a day care 
home's eligibility as a tier I day care home (as defined in Sec. 226.2) 
is made using elementary school or census data. Determinations of a day 
care home's eligibility as a tier I day care home are valid for one 
year if based on a provider's household income, three years if based on 
elementary school data, or until more current data are available if 
based on census data. However, a sponsoring organization, the State 
agency, or FNS may change the determination if information becomes 
available indicating that a home is no longer in a qualified area. The 
State agency may not routinely require annual redeterminations of the 
tiering status of tier I day care homes based on updated elementary 
school data during the three-year period.
    (iv) Area eligibility data. The State agency must provide the list 
of elementary, middle, and high schools to at-risk afterschool care 
centers and sponsoring organizations of at-risk afterschool care 
centers upon request.
    (v) At-risk afterschool care center area eligibility 
determinations. The State agency must determine the area eligibility 
for each independent at-risk afterschool care center. The State agency 
must use the most recent data available pursuant to paragraph (f)(9)(i) 
of this section. The State agency must use attendance area information 
that it has obtained, or verified with the appropriate school officials 
to be current, within the last school year. Area eligibility 
determinations are valid for three years. However, the State agency, a 
sponsoring organization, or FNS may change the determination if 
information becomes available indicating that an at-risk afterschool 
care center is no longer area eligible. The State agency may not 
routinely require redeterminations of area eligibility based on updated 
school data during the three-year period.
* * * * *
    (12) Determine whether the afterschool care programs of at-risk 
afterschool care centers meet the requirements of Sec. 226.17a(a) 
before the centers begin participating in the Program and whenever 
information on changes to the afterschool care programs is submitted or 
otherwise becomes available. The determinations must be based on 
information submitted by the sponsoring organization or, for 
independent centers, by the at-risk afterschool care centers.
* * * * *
    (l) * * *
    (4) Technical assistance visits to independent at-risk afterschool 
care centers. In addition to these reviews, State agencies must conduct 
a technical assistance visit to each newly participating independent 
at-risk afterschool care center. The visit must be made during the 
first 90 days of program operations. At the visit, the State agency 
must confirm the accuracy of the documentation provided by the at-risk 
afterschool care center and used by the State agency to determine 
eligibility. The State agency must also examine meal pattern 
compliance.
* * * * *
    6. In Sec. 226.7, revise paragraph (f) to read as follows:


Sec. 226.7  State agency responsibilities for financial management.

* * * * *
    (f) Rate assignment. Each State agency must require institutions 
(other than at-risk afterschool care centers, sponsoring organizations 
of at-risk afterschool care centers, and sponsoring organizations for 
day care homes) to submit, not less frequently than annually, 
information necessary to assign rates of reimbursement as outlined in 
Sec. 226.9.
* * * * *


Sec. 226.8  [Amended]

    7. In Sec. 226.8, remove the references to ``Sec. 226.4(h)'' in the 
first sentence of paragraph (b), the first sentence of paragraph (c), 
and the first and second sentences of paragraph (d), and add in their 
places references to ``Sec. 226.4(i)''.
    8. In Sec. 226.9:
    a. Add a new second sentence in paragraph (a);
    b. Revise paragraph (b) introductory text; and
    c. Revise paragraph (b)(2).
    The addition and revisions read as follows:


Sec. 226.9  Assignment of rates of reimbursement for centers.

    (a) * * * However, no rates should be assigned for at-risk 
afterschool care centers. * * *
    (b) Except for at-risk afterschool care centers, the State agency 
must either:
* * * * *
    (2) Establish claiming percentages, not less frequently than 
annually, for each institution on the basis of the number of enrolled 
participants eligible for free, reduced price, and paid meals. Children 
who only participate in the at-risk afterschool snack component of the 
Program must not be considered to be enrolled participants for the 
purpose of claiming percentages; or
* * * * *
    9. In Sec. 226.10, revise the third sentence of paragraph (c) and 
add a new fourth sentence to read as follows:


Sec. 226.10  Program payment procedures.

* * * * *
    (c) * * * Independent proprietary title XX child care centers and 
independent proprietary title XX at-risk afterschool care centers must 
submit the number and percentage of the enrolled participants, or the 
licensed capacity receiving title XX benefits for the month claimed for 
months in which not less than 25 percent of the enrolled children or 25 
percent of licensed capacity, whichever is less, were title XX 
beneficiaries. However, children who only participate in the at-risk 
afterschool snack component of the Program must not be considered in 
determining this percentage. * * *
* * * * *
    10. In Sec. 226.11:
    a. Revise the section heading, and paragraphs (a), (b) and (c); and
    b. Add a heading to paragraphs (d) and (e).
    The revisions and additions read as follows:


Sec. 226.11  Program payments for child care centers, at-risk 
afterschool care centers, adult day care centers and outside-school-
hours care centers.

    (a) Requirement for agreements. Payments must be made only to 
institutions operating under an agreement with the State agency for the 
meal types specified in the agreement served at approved child care 
centers, at-risk afterschool care centers, adult

[[Page 60535]]

day care centers and outside-school-hours care centers. A State agency 
may make payment for meals served in accordance with provisions of the 
Program in the calendar month preceding the calendar month in which the 
agreement is executed.
    (b) Institution reporting.--(1) Child and adult care institutions. 
Each child care institution and each adult day care institution must 
report each month to the State agency the total number of Program 
meals, by type (breakfasts, lunches, suppers, and snacks), served to 
children or adult participants, respectively, except as provided in 
paragraph (b)(2) of this section.
    (2) Exception for proprietary title XIX and title XX centers. For 
proprietary title XX child care centers and proprietary title XX at-
risk afterschool care centers, the reports required in paragraph (b)(1) 
of this section must be made only for calendar months during which at 
least 25 percent of enrolled children or 25 percent of licensed 
capacity (whichever is less) were title XX beneficiaries. Children who 
only participate in the at-risk afterschool snack component of the 
Program must not be considered in determining this percentage. For 
proprietary title XIX and title XX adult day care centers, the reports 
required in paragraph (b)(1) of this section must be made only for 
calendar months during which at least 25 percent of enrolled adult 
participants were title XIX or title XX beneficiaries.
    (c) Reimbursement.--(1) Child and adult care institutions. Each 
State agency must base reimbursement to each approved child care 
institution and adult day care institution on the number of meals, by 
type, served to children or adult participants multiplied by the 
assigned rates of reimbursement, except as provided in paragraph (c)(3) 
of this section.
    (2) At-risk afterschool care institutions. Each State agency must 
base reimbursement to each at-risk afterschool care institution on the 
number of snacks served to children multiplied by the free rate for 
snacks, except as provided in paragraph (c)(3) of this section.
    (3) Exception for proprietary title XIX and title XX centers. For 
proprietary title XX child care centers and proprietary title XX at-
risk afterschool care centers, reimbursement must be payable only for 
calendar months during which at least 25 percent of enrolled children 
or 25 percent of licensed capacity (whichever is less) were title XX 
beneficiaries. Children who only participate in the at-risk afterschool 
snack component of the Program must not be considered in determining 
this percentage. For proprietary title XIX and title XX adult day care 
centers, reimbursement must be payable only for calendar months during 
which at least 25 percent of enrolled adult participants were title XIX 
or title XX beneficiaries.
    (4) Computation of reimbursement. Except for at-risk afterschool 
care centers, in computing reimbursement, the State agency must either:
    (i) Actual counts. Base reimbursement to institutions on actual 
daily counts of meals served, and multiply the number of meals, by 
type, served to participants eligible to receive free meals, 
participants eligible to receive reduced price meals, and participants 
not eligible for free or reduced price meals by the applicable national 
average payment rate; or
    (ii) Claiming percentages. Apply the applicable claiming percentage 
or percentages to the total number of meals, by type, served to 
participants and multiply the product or products by the assigned rate 
of reimbursement for each meal type; or
    (iii) Blended rates. Multiply the assigned blended per meal rate of 
reimbursement by the total number of meals, by type, served to 
participants.
    (d) Limits on reimbursement. * * *
    (e) Institution recordkeeping. * * *
    11. In Sec. 226.15:
    a. Revise paragraphs (b)(4) and (b)(6);
    b. Remove paragraph (e)(5) and redesignate paragraphs (e)(6) 
through (e)(14) as paragraphs (e)(5) through (e)(13), respectively; and
    c. Redesignate paragraphs (g) through (k) as paragraphs (h) through 
(l), respectively, and add a new paragraph (g).
    The revisions and addition read as follows:


Sec. 226.15  Institution provisions.

* * * * *
    (b) * * *
    (4) If an independent child care center, independent at-risk 
afterschool care center or independent outside-school hours care 
center, documentation that it meets the licensing/approval requirements 
of Sec. 226.6(d)(1); or, if an independent adult day care center, the 
licensing/approval requirements of Sec. 226.19a(b)(3).
* * * * *
    (6) For each proprietary title XX child care center and proprietary 
title XX at-risk afterschool care center, documentation that it 
provides nonresidential day care services for which it receives 
compensation under title XX of the Social Security Act. Such centers 
must also certify that at least 25 percent of the enrolled children or 
25 percent of the licensed capacity (whichever is less) were title XX 
beneficiaries during the most recent calendar month. However, children 
who only participate in the at-risk afterschool snack component of the 
Program must not be considered in determining this percentage. For each 
proprietary title XIX or title XX adult day care center, documentation 
that it provides nonresidential day care services for which it receives 
compensation under title XIX or title XX of the Social Security Act. 
Such centers must also certify that at least 25 percent of the adult 
participants enrolled during the most recent calendar month were title 
XIX or title XX beneficiaries. Sponsoring organizations must provide 
documentation and certification for each proprietary title XIX or title 
XX center under its jurisdiction.
* * * * *
    (g) Area eligibility determinations for at-risk afterschool care 
centers. Sponsoring organizations of at-risk afterschool care centers 
must provide information, as required by the State agency, which 
permits the State agency to determine whether the centers they sponsor 
are located in eligible areas. Such information may include the most 
recent free and reduced price school data available pursuant to 
Sec. 226.6(f)(9) and attendance area information that it has obtained, 
or verified with the appropriate school officials to be current, within 
the last school year.
* * * * *
    12. In Sec. 226.16:
    a. Remove the word ``and'' at the end of paragraph (d)(4)(ii), 
redesignate paragraph (d)(4)(iii) as paragraph (d)(4)(iv) and add a new 
paragraph (d)(4)(iii); and
    b. Revise paragraphs (f) and (h).
    The addition and revisions read as follows:


Sec. 226.16  Sponsoring organization provisions.

* * * * *
    (d) * * *
    (4) * * *
    (iii) Three times each year at each at-risk afterschool care 
center, provided at least one review is made during each at-risk 
afterschool care center's first six weeks of Program operations and not 
more than six months elapse between reviews; and
* * * * *
    (f) The State agency may require a sponsoring organization to enter 
into separate agreements for the administration of separate types of 
facilities (child care centers, at-risk afterschool care centers, day 
care

[[Page 60536]]

homes, adult day care centers and outside-school-hours care centers).
* * * * *
    (h) Sponsoring organizations must make payments of program funds to 
child care centers, at-risk afterschool care centers, adult day care 
centers and outside-school-hours care centers within five working days 
of receipt from the State agency. These payments must be made on the 
basis of the management plan approved by the State agency. In addition, 
payments must not exceed the Program costs documented at each facility 
during any fiscal year, except in those States where the State agency 
has chosen the option to implement a meals times rates payment system. 
In those States which implement this optional method of reimbursement, 
such disbursements must not exceed the rates times the number of meals 
documented at each facility during any fiscal year.
* * * * *
    13. In Sec. 226.17:
    a. Revise paragraph (b)(1) introductory text;
    b. Revise paragraph (b)(3);
    c. Add in the second sentence of paragraph (b)(4), the words 
``(excluding children receiving snacks in an approved afterschool care 
program),'' after the words ``enrolled children''; and
    d. Revise paragraph (b)(5)
    The revisions read as follows:


Sec. 226.17  Child care center provisions.

* * * * *
    (b) * * *
    (1) Child care centers (except for at-risk afterschool care centers 
and outside-school-hours care centers) must have Federal, State, or 
local licensing or approval to provide day care services to children. 
If Federal, State or local licensing or approval is not otherwise 
required, at-risk afterschool care centers and outside-school-hours 
care centers must meet State or local health and safety standards. 
Child care centers which are complying with applicable procedures to 
renew licensing or approval may participate in the Program during the 
renewal process, unless the State agency has information which 
indicates that renewal will be denied. If licensing or approval is not 
available, a center may participate if:
* * * * *
    (3) Each child care center participating in the Program must serve 
one or more of the following meal types: breakfast; lunch; supper; and 
snack. Reimbursement may not be claimed for more than two meals and one 
snack or one meal and two snacks provided daily to each child.
* * * * *
    (5) A child care center with preschool children may also be 
approved to serve a breakfast, snack, and supper to school-age children 
enrolled in an outside-school-hours care program meeting the criteria 
of Sec. 226.19(b) which is distinct from its day care program for 
preschool-age children. The State agency may authorize the service of 
lunch to such enrolled children who attend a school which does not 
offer a lunch program provided the limit of two meals and one snack, or 
one meal and two snacks, per child per day is not exceeded. A child 
care center with preschool children may also be approved to serve a 
snack to school age children enrolled in an afterschool care program 
meeting the requirements of Sec. 226.17a which is distinct from its day 
care program for preschool children, provided the limit of two meals, 
and one snack, or one meal and two snacks, per child per day is not 
exceeded.
* * * * *
    14. Add a new Sec. 226.17a to read as follows:


Sec. 226.17a  At-risk afterschool care center provisions.

    (a) When is an organization eligible to receive reimbursement for 
afterschool snacks?
    (1) Eligible organizations. In order to be eligible to receive 
reimbursement, organizations must meet all of the following criteria.
    (i) Organizations must meet the definition of an ``at-risk 
afterschool care center'' in Sec. 226.2. An organization may 
participate in the Program either as an independent center or under the 
auspices of a sponsoring organization. Independent centers must comply 
with the provisions of Sec. 226.15. Public and private nonprofit 
centers may not participate under the auspices of a for-profit 
sponsoring organization.
    (ii) Organizations must operate an eligible afterschool care 
program, as described in paragraph (b) of this section.
    (iii) Organizations must meet the licensing/approval requirements 
in Sec. 226.6(d)(1).
    (iv) Except for proprietary title XX centers, at-risk afterschool 
care centers must be public, or have tax-exempt status under the 
Internal Revenue Code of 1986 or be currently participating in another 
Federal program requiring nonprofit status.
    (2) Limitations. At-risk afterschool care centers may only claim 
reimbursement for snacks served to children who are participating in an 
approved afterschool care program. In addition, such centers may only 
claim reimbursement for snacks served at any one time to children 
within the at-risk afterschool care center's authorized capacity, and 
for snacks served at a proprietary title XX center during a calendar 
month in which at least 25 percent of the enrolled children or 25 
percent of the licensed capacity (whichever is less) were title XX 
beneficiaries. However, children who only participate in the at-risk 
afterschool snack component of the Program must not be considered in 
determining this percentage.
    (b) What is an eligible at-risk afterschool care program?
    (1) Eligible program. To be eligible for reimbursement, an 
afterschool care program must:
    (i) Be organized primarily to provide care for children after 
school or on weekends, holidays, or school vacations (except summer 
vacation) during the regular school year;
    (ii) Have organized, regularly scheduled activities (i.e., in a 
structured and supervised environment);
    (iii) Include education or enrichment activities; and
    (iv) Be located in an eligible area, as described in paragraph (h) 
of this section.
    (2) Eligibility limitation. Organized athletic programs engaged in 
interscholastic or community level competitive sports are not eligible 
afterschool care programs.
    (c) What are the eligibility requirements for children? At-risk 
afterschool care centers may claim reimbursement only for snacks served 
to children who participate in an approved afterschool care program and 
who either are age 18 or under at the start of the school year or meet 
the definition of ``Person with disabilities'' in Sec. 226.2.
    (d) How does an organization apply to be an at-risk afterschool 
care center?
    (1) Application. An official of the organization must make written 
application to the State agency for any afterschool care program which 
it wants to operate as an at-risk afterschool care center.
    (2) Required information. At a minimum, an organization must 
submit:
    (i) An indication that the applicant organization meets the 
eligibility criteria for organizations as specified in paragraph (a) of 
this section;
    (ii) A description of how the afterschool care program(s) meets the 
eligibility criteria in paragraph (b) of this section;
    (iii) In the case of a sponsoring organization, a list of all 
applicant afterschool care centers;
    (iv) Documentation which permits the State agency to confirm that 
all applicant afterschool care centers are

[[Page 60537]]

located in an eligible area, as described in paragraph (h) of this 
section.
    (e) How does the State agency approve the application?
    (1) State agency approval. In addition to establishing applicant 
eligibility (in accordance with Secs. 226.6(b), 226.15(b), and 
226.16(b)), the State agency must determine the eligibility of the 
afterschool care program for each sponsored afterschool care center 
based on the information submitted by the sponsoring organization (see 
Sec. 226.6(f)(12)). The State agency must determine the eligibility of 
the afterschool care programs of independent afterschool care centers 
(see Sec. 226.6(f)(12)). An approved organization must enter into an 
agreement with the State agency as described in paragraph (e)(2) of 
this section.
    (2) Agreement. The State agency must enter into an agreement or 
amend an existing agreement with an approved at-risk afterschool care 
center pursuant to Sec. 226.6(f)(1). The amendment must describe the 
approved afterschool care program and list the approved centers. The 
amendment must also require the at-risk afterschool care center to 
comply with the applicable requirements of this part.
    (f) What is the application process in subsequent years? In 
addition to renewing applicant eligibility (as described in 
Secs. 226.6(b), 226.15(b), 226.16(b)), the independent at-risk 
afterschool care center or sponsoring organization must advise the 
State agency of any substantive changes to the afterschool care program 
consistent with the timeframes described in paragraph (h)(2) of this 
section.
    (g) What if sponsoring organizations want to add new at-risk after 
school care centers after application approval? Sponsoring 
organizations that want to add new at-risk afterschool care centers 
must provide the State agency with the information sufficient to 
demonstrate its compliance with the requirements of this section.
    (h) What is ``area eligibility''? In order to receive reimbursement 
for snacks served in at-risk afterschool care centers, such centers 
must be located in an ``Eligible area'' as defined in Sec. 226.2.
    (1) Definition. An at-risk afterschool care center is in an 
``eligible area'' when it is located in the attendance area of an 
elementary, middle, or high school in which at least 50 percent of the 
enrolled children are certified eligible for free or reduced price 
school meals.
    (2) Data used. Area eligibility determinations must be based on the 
total number of children approved for free and reduced price school 
meals for the preceding October, or another month designated by the 
State agency that administers the National School Lunch Program, 
pursuant to Sec. 210.9(b)(20) of this chapter. If the State agency 
chooses a month other than October, it must do so for the entire State. 
Area eligibility determinations are valid for three years from the 
beginning of the month in which the determination was made.
    (i) May an at-risk afterschool care center charge for a snack? No, 
all afterschool snacks served under this section must be made available 
to participating children at no charge.
    (j) How many snacks may be claimed for reimbursement? At-risk 
afterschool care programs may claim reimbursement only for one 
afterschool snack per child per day. A center that provides care to a 
child under another component of the Program during the same day may 
not claim reimbursement for more than two meals and one snack, or one 
meal and two snacks, per child per day, including the afterschool 
snack. All meals and any snacks in addition to one snack per child per 
day must be claimed in accordance with the requirements for the 
applicable component of the Program.
    (k) What are the meal pattern requirements for afterschool snacks? 
Afterschool snacks must meet the meal pattern requirements for snacks 
in Secs. 226.20(a)(4) and (c)(4).
    (l) When may snacks be served? At-risk afterschool care centers may 
claim only snacks served in approved afterschool care programs after a 
child's school day or on weekends, holidays, or school vacations 
(except summer vacation) during the regular school year.
    (m) What reimbursements do at-risk afterschool care centers earn? 
All snacks served in at-risk afterschool care centers will be 
reimbursed at the free snack rate.
    (n) What additional recordkeeping is required for at-risk 
afterschool care centers? In addition to the other records required by 
this part, at-risk afterschool care centers must maintain:
    (1) Daily attendance rosters, sign-in sheets or, with State agency 
approval, other methods which result in accurate recording of daily 
attendance;
    (2) The number of snacks prepared or delivered for each snack 
service;
    (3) The number of snacks served to participating children for each 
snack service; and
    (4) Menus for each snack service.
    (o) What additional reporting is required for the snack service? In 
addition to other reporting requirements under this part, at-risk 
afterschool care centers must report the total number of snacks served 
to eligible children.
    (p) What are the monitoring requirements for at-risk afterschool 
care centers? State agencies must monitor independent centers in 
accordance with Sec. 226.6(l). Sponsoring organizations of at-risk 
afterschool care centers must monitor their centers in accordance with 
Sec. 226.16(d)(4)(iii).
    15. In Sec. 226.18, revise paragraph (c) to read as follows:


Sec. 226.18  Day care home provisions.

* * * * *
    (c) Each day care home must serve one or more of the following meal 
types--breakfast, lunch, supper, and snack. Reimbursement may not be 
claimed for more than two meals and one snack, or one meal and two 
snacks, provided daily to each child.
* * * * *
    16. In Sec. 226.19, revise paragraph (b)(1) and (b)(5) to read as 
follows:


Sec. 226.19  Outside-school-hours care center provisions.

* * * * *
    (b) * * *
    (1) For purposes of Program participation, outside-school-hours 
care centers must have current Federal, State or local licensing or 
approval to provide organized child care services to enrolled school-
age children outside of school hours only if Federal, State or local 
licensing or approval is otherwise required. If Federal, State or local 
licensing or approval is not otherwise required, outside-school-hours 
care centers must meet State or local health and safety standards. The 
main purpose of the center must be the care and the supervision of 
children. In cases where Federal, State or local licensing or approval 
is required, outside-school-hours care centers which are complying with 
applicable procedures to renew licensing or approval may participate in 
the Program during the renewal process, unless the State agency has 
information which indicates the renewal will be denied.
* * * * *
    (5) Each outside-school-hours care center participating in the 
Program must claim only the meal types specified in its approved 
application and served in compliance with the meal pattern requirements 
of Sec. 226.20. Reimbursement may not be claimed for more than two 
meals and one snack or one meal and two snacks provided daily to each 
child. In addition, reimbursement may not be claimed for meals served 
to children who are not enrolled, or meals served to children at any 
one time in excess of authorized

[[Page 60538]]

capacity, or for any meal served at a proprietary title XX center 
during a calendar month when less than 25 percent of enrolled children, 
or 25 percent of licensed capacity, whichever is less, were title XX 
beneficiaries.
* * * * *
    17. In Sec. 226.19a, revise paragraph (b)(5) to read as follows:


Sec. 226.19a  Adult day care center provisions.

* * * * *
    (b) * * *
    (5) Each adult day care center participating in the Program must 
serve one or more of the following meal types--breakfast, lunch, 
supper, and snack. Reimbursement may not be claimed for more than two 
meals and one snack, or one snack and two meals, provided daily to each 
adult participant.
* * * * *


Sec. 226.20  [Amended]

    18. In Sec. 226.20(b)(4), remove the words ``Supplement (snack)'' 
in the table and add in their place the word ``Snack''.
    19. In Sec. 226.23:
    a. Revise the first sentence in paragraph (b);
    b. Revise paragraph (c)(6);
    c. Revise the second and third sentences of paragraph (d); and
    d. Add in the first sentence of paragraph (e)(1)(i), the words 
``other than at-risk afterschool care centers'' after the word 
``institutions''.
    The revisions read as follows:


Sec. 226.23  Free and reduced-price meals.

* * * * *
    (b) At-risk afterschool care centers, sponsoring organizations of 
at-risk afterschool care centers, and sponsoring organizations of day 
care homes (which may not serve meals at a separate charge to children) 
and other institutions which elect to serve meals at no separate 
charge, must develop a policy statement consisting of an assurance to 
the State agency that all participants are served the same meals at no 
separate charge, regardless of race, color, national origin, sex, age, 
or handicap and that there is no discrimination in the course of the 
food service. * * *
    (c) * * *
    (6) An assurance that the charges for a reduced price lunch or 
supper will not exceed 40 cents, that the charge for a reduced price 
breakfast will not exceed 30 cents, and that the charge for a reduced 
price snack will not exceed 15 cents.
    (d) * * * All media releases issued by institutions other than at-
risk afterschool care centers, sponsoring organizations of at-risk 
afterschool care centers, and sponsoring organizations of day care 
homes, must include the Secretary's Income Eligibility Guidelines for 
Free and Reduced Price Meals. The release issued by all at-risk 
afterschool care centers, sponsoring organizations of at-risk 
afterschool care centers and sponsoring organizations of day care 
homes, and by other institutions which elect not to charge separately 
for meals, must announce the availability of meals at no separate 
charge. * * *
* * * * *

PART 235--STATE ADMINISTRATIVE EXPENSE FUNDS

    1. The authority citation for 7 CFR part 235 continues to read as 
follows:

    Authority: Secs. 7 and 10 of the Child Nutrition Act of 1966, 80 
Stat. 888, 889, as amended (42 U.S.C. 1776, 1779).

    2. In Sec. 235.4, revise the first sentence of paragraph (a)(1) and 
paragraph (b)(3)(iii) to read as follows:


Sec. 235.4  Allocation of funds to States.

    (a) * * *
    (1) To each State which administers the National School Lunch, 
School Breakfast or Special Milk Programs an amount equal to one (1) 
percent of the funds expended by such State during the second preceding 
fiscal year under sections 4 and 11 of the National School Lunch Act, 
as amended, and sections 3 and 4 of the Child Nutrition Act of 1966, as 
amended. * * *
* * * * *
    (b) * * *
    (3) * * *
    (iii) The ratio of the number of free and reduced price lunches 
served in school food authorities under the jurisdiction of the State 
agency during the second preceding fiscal year to the number of free 
and reduced price lunches served in all States in the second preceding 
fiscal year times twenty (20) percent of the funds designated by FNS 
for reviews conducted under Sec. 210.18 of this chapter.
* * * * *

PART 245--DETERMINING ELIGIBLITY FOR FREE AND REDUCED PRICE MEALS 
AND FREE MILK IN SCHOOLS

    1. The authority citation for 7 CFR part 245 continues to read as 
follows:

    Authority: 42 U.S.C. 1772, 1773, 1779; and 42 U.S.C. 1751-60.

    2. In Sec. 245.1, revise the second sentence of paragraph (a) to 
read as follows:


Sec. 245.1  General purpose and scope.

    (a) * * * Section 9 of the National School Lunch Act, as amended, 
and sections 3 and 4 of the Child Nutrition Act of 1966, as amended, 
require schools participating in any of the programs and commodity 
schools to make available, as applicable, free and reduced price 
breakfasts, lunches, and afterschool snacks and, at the option of the 
School Food Authority for schools participating only in the Special 
Milk Program, free milk to eligible children.
* * * * *
    3. In 245.2, revise paragraphs (f) and (g) to read as follows:


Sec. 245.2  Definitions.

* * * * *
    (f) Meal means a lunch, afterschool snack, or breakfast which meets 
the applicable requirements in Sec. 210.10 and Sec. 220.8 of this 
chapter.
* * * * *
    (g) Reduced price meal means a meal which meets all of the 
following criteria:
    (1) The price must be less than the full price of the meal;
    (2) The price must not exceed 40 cents for a lunch, 30 cents for a 
breakfast, and 15 cents for afterschool snacks; and
    (3) Neither the child nor any member of his family must be required 
to supply an equivalent value in work for the school or the school's 
food service.
* * * * *
    4. In Sec. 245.5, redesignate paragraphs (a)(1)(ii) through 
(a)(1)(xi) as paragraphs (a)(1)(iii) through (a)(1)(xii) and add a new 
paragraph (a)(1)(ii) to read as follows:


Sec. 245.5  Public announcement of the eligibility criteria.

    (a) * * *
    (1) * * *
    (ii) In schools participating in the afterschool snack meal service 
in area eligible sites, an explanation that all children attending the 
afterschool care program will receive free snacks;
* * * * *


Sec. 245.8  [Amended]

    5. In Sec. 245.8(e), remove the words ``lunch or breakfast'' and 
add in their place the words ``lunch, breakfast, or
    6. In Sec. 245.9, revise paragraph (a) introductory text to read as 
follows:


Sec. 245.9  Special assistance certification and reimbursement 
alternatives.

    (a) A school food authority of a school having at least 80 percent 
of its enrolled children determined eligible for free or reduced price 
lunches may, at its option, authorize the school to reduce annual 
certification and public

[[Page 60539]]

notification for those children eligible for free meals to once every 
two consecutive school years. This alternative is known as Provision 1 
and the following requirements must apply:
* * * * *
    7. In Sec. 245.11, revise the second sentence of paragraph (a)(1) 
to read as follows:


Sec. 245.11  Action by State agencies and FNSROs.

    (a) * * *
    (1) * * * If the State agency elects to establish a maximum price 
for reduced price lunches, breakfasts, or afterschool snacks in all 
schools that is less than the maximum charge permitted under this part, 
the State agency must establish the price in its prototype policy. * * 
*
* * * * *

    Dated: September 22, 2000.
Shirley R. Watkins,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 00-25817 Filed 10-10-00; 8:45 am]
BILLING CODE 3410-30-P